`SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                   FORM 10-KSB

(Mark One)

/x/           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended February 28, 2001

/ /           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to ____

                         Commission file number 0-30420

                                 LCS GOLF, INC.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


               Delaware                                  11-3200338
---------------------------------           ------------------------------------
(State or other jurisdiction of             (IRS Employer Identification Number)
incorporation or organization


            7109 Fairway Drive, Suite 100, Palm Beach, Florida 33417
--------------------------------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

       Registrant's telephone number, including area code: (561) 766-0031
                                                           --------------
           Securities registered pursuant to Section 12(b) of the Act:

                     Common Stock, par value $.001 per share

           Securities registered pursuant to Section 12(g) of the Act:

                                      None

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                                               Yes  X    No
                                                                  -----    -----



Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of the  Registrant's  knowledge,  in  definitive  proxy or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. /x/

         State the  issuer's  revenues  for its most  recent  fiscal  year:  The
issuer's revenues for the fiscal year ended February 28, 2001 were $698,536.

         The aggregate  market value of the voting stock held by  non-affiliates
of the Registrant computed by reference to the price at which the stock was sold
on June 12, 2001 was approximately  $4,322,267.  Solely for the purposes of this
calculation,  shares held by directors and officers of the Registrant  have been
excluded. Such exclusion should not be deemed a determination or an admission by
the Registrant that such individuals are, in fact, affiliates of the Registrant.

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock,  as of the latest  practicable  date: At June 12, 2001,
there were outstanding 20,582,225 shares of the Registrant's Common Stock, $.001
par value.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Certain portions of the  Registrant's  definitive proxy statement to be
filed not later than June 28, 2001 pursuant to Regulation  14A are  incorporated
by  reference  in Items 9 through 12 of Part III of this  Annual  Report on Form
10-KSB.

         Transitional Small Business Disclosure Format (check one):


         Yes / / No /x/


                                      -2-

                                     PART I


Item 1.  DESCRIPTION OF BUSINESS
          -----------------------


Business Development.

         We were  incorporated  in the State of  Delaware  on October 8, 1997 as
Linkun  Enterprise,  Inc. to design and  distribute  golf clubs and golf related
products. On October 27, 1997, we changed our name to LCS Golf, Inc.

         On October 28, 1997, LCS Golf, Inc. a New York Corporation (hereinafter
"LCS New York") was merged into our Company and we were the  surviving  company.
Pursuant to the merger,  we exchanged nine hundred eighty  thousand nine hundred
and  four  (980,904)  shares  of our  common  stock  for all of the  issued  and
outstanding shares of LCS New York on a one-share for one-share basis.

         We entered  into this  transaction  to obtain  the name LCS Golf,  Inc.
Prior to this  transaction,  our officers and directors had no affiliation  with
LCS Golf, Inc. New York.

         On May  1,  1998,  we  acquired  Golf  Universe,  Inc.,  now  known  as
PlayGolfNow, Inc., and hereinafter referred to as ("PlayGolfNow"),  which became
our  wholly  owned  subsidiary.  PlayGolfNow  was  incorporated  in the state of
Florida on  October  23,  1996.  We  acquired  all of the  outstanding  stock in
PlayGolfNow in exchange for the following consideration:

         o     400,000  shares  of our  common  stock  issued  to  PlayGolfNow's
               shareholders,
         o     A promissory  note for $100,000,  which we paid prior to February
               28, 1999, and
         o     Expenses of $16,750 associated with the transaction.

         We entered into this  transaction  to acquire  PlayGolfNow's  plans for
development of a golf related website.  Prior to this transaction,  our officers
or directors had no affiliation with PlayGolfNow.

         On November 17, 1998, we entered into a stock  purchase  agreement with
Milton Besen who  controlled all of the issued and  outstanding  common stock of
Mr. B III,  Inc. ("B III").  B III was  incorporated  in the state of Florida on
September  3, 1996.  In this  transaction,  we exchanged  150,000  shares of our
common stock and $250,000 for all of the issued and outstanding shares of B III.
In completing the transaction we also issued an additional 150,000 shares of our
common stock for expenses  related to the  acquisition.  B III became our wholly
owned  subsidiary.   We  entered  into  this  transaction  to  acquire  B  III's
manufacturing operations.  Prior to this transaction, our officers and directors
had no affiliation with B III.

         On January 26, 1999, we entered into a common stock purchase  agreement
with Alex  Bruni,  the holder of 100% of the issued  and  outstanding  shares of
PlayGolfNow. Play Golf was incorporated on November 27, 1998 in the state of New
York. We acquired all of the issued and  outstanding  shares of  PlayGolfNow  in
exchange for:

         o     350,000 shares of our common stock issued to Mr. Bruni, and
         o     An  unconditional  option  issued  to Mr.  Bruni to  purchase  an
               additional 200,000 shares of our common stock at a purchase price
               of $0.50 per share that may be  exercised  in whole or in part on
               or before January 25, 2001.

         PlayGolfNow  then became our wholly owned  subsidiary.  We entered into
this  transaction to acquire  PlayGolfNow's  golf membership  discount  program,
consisting of a network of golf courses,  driving ranges, and pro shops offering
discounted  rates  to  PlayGolfNow's  members.  Prior to this  transaction,  our
officers and directors had no affiliation with PlayGolfNow.

                                      -3-


         On February 15, 1999, we entered into a common stock purchase agreement
with Leigh Ann  Colguhoun,  the  holder of 100% of the  issued  and  outstanding
shares of Golfpromo, Inc. ("Golfpromo"). Golfpromo was incorporated in the state
of Florida on February 10, 1999.  We acquired all of the issued and  outstanding
shares  of  Golfpromo  in  exchange  for  350,000  shares of our  common  stock.
Golfpromo  then  became  our  wholly  owned  subsidiary.  We  entered  into this
transaction to acquire  Golfpromo's  mailing database list of golfers.  Prior to
this transaction, our officers and directors had no affiliation with Golfpromo.

            On August 27, 1999, we formed and incorporated I Fusion Corp.
("iFusion") as our wholly owned subsidiary, to provide both Internet and
traditional marketing services.

Business of Issuer.

            We sell products and offer information over the Internet through our
four wholly owned subsidiaries:

         o     PlayGolfNow
         o     B III
         o     Golf Promo
         o     iFusion

Internet Operations:

         PlayGolfNow.com

         o     PlayGolfNow.com  has  been  operational  since  March of 1999 and
               currently   averages   approximately   150,000   hits   per  day.
               PlayGolfNow.com  delivers  information and details on over 24,000
               golf  courses  located  world wide and over 10,000  golf  related
               businesses as well as other golf related data and information.

         o     The   PlayGolfNow   site   offers  an  online  pro  shop,   where
               golf-related  products and services are sold through  third party
               vendors. The website offers products and services from major golf
               equipment  manufacturers,   apparel  designers,  and  other  golf
               related  manufacturers.  We obtain commissions when site visitors
               purchase  products,  reserve  tee times,  and make  travel  plans
               online.

         o     The  PlayGolfNow  site offers a PlayGolfNow  Rewards Members Club
               that  provides  members  discounts on golf services and products.
               Through  alliances  with Choice  Hotels  International,  Avis(R),
               Alamo(R), Budget(R),  National(R) and Nike Golf Schools, the Club
               offers  members  discounts  at over 2000 golf  courses,  resorts,
               practice facilities, as well as equipment and apparel through the
               Online Pro Shop.  We plan to develop  benefits  for Club  members
               such as a monthly online  newsletter,  a bi-monthly  magazine,  a
               Recreation  Directory,  savings on condo  rentals,  short  notice
               airfare savings, vacation package savings,  discounts on cruises,
               motor home savings and skiing  discounts.  We do not have written
               contracts with our named allies.

         The Company intends to provide  discounts by purchasing  discount books
providing  golf and hotel  discounts from vendors and issuing these books to new
members as they subscribe to our members' program.  The vendors that we purchase
the books from will deliver the discount books to our members. We will not carry
any inventory of these discount books.



                                      -4-


         ifusionco.com

         iFusionco.com  is  a  full-service   Internet  marketing  company  that
provides the following services:

         o     creative and concept development;
         o     national marketing program implementation and management;
         o     corporate and package development; and
         o     sweepstaking, and couponing;

         iFusion generates  revenues from monthly  retainers,  subcontract work,
and per project work.

         Targetmails.com  is a website  operated by iFusion,  which utilizes our
databases. Our database of golfers includes:

         o     in excess of 3 million email addresses:
         o     1.5 permission email addresses,
         o     2 million physical mail addresses,
         o     24,000 golf course names and addresses, and
         o     over 15,000 golf retailers and pro shops.

         Additionally,  we have  databases of  individuals  associated  with the
travel,  healthcare,  and investment industries. The databases in the healthcare
and investment  industries are an extension of our existing golfers database. By
segregating the demographics and interests of our golfers into new databases, we
create  databases of  individuals  who are  interested in receiving  information
about  travel,  healthcare or  investments.  Tailoring our databases to specific
interests allows us to create  additional  revenues by increasing the population
of users to whom we can  market  our  services.  For  example,  advertisers  and
researchers may rent our healthcare and investment industry databases.

         With our diverse databases:

         o     we are able to direct  market  specific  PlayGolfNow  and Rewards
               Club products and services
         o     rent the database to advertisers,  researchers, and golf industry
               consumers; and
         o     increase traffic to the  PlayGolfNow.com  and  WallStreetGolf.com
               web sites through the targetmails.com website.

         Golfpromo.net and Golfuniverse.com are used principally as links to our
other web-sites.

         B III, Inc.

         We formerly designed and manufactured  consumer products through B III,
but we ceased our manufacturing  operations in November of 1999. The Company has
decided to shut down all operations of B III.

Industry

         Research has indicated that the Internet  direct  response  advertising
market will represent 50%-60% of the estimated $22.2 billion advertising market.
Permission email direct  marketing  response rates are three to ten times higher
than  traditional  direct  mail or  banner  advertising,  according  to  Jupiter
Communications,  a New York City based  authority  on  Internet  commerce.  This
figure is closely correlated to the traditional  advertising market where 55% is
direct response, as opposed to blind or focused advertisement  placement through
any traditional  medium or the Internet.  Costs of direct email  advertising can
often run 90% lower than other direct mail or indirect campaigns.

Strategy

         TargetMails  utilizes a  multi-tiered  approach  to attract  and retain
customers  by  internet  working  data  collection,  technology,  marketing  and
applications.  TargetMails' data collection model allows significant benefits to
affiliate  partners  ("Affiliates").  TargetMails'  Affiliates are typically Web
sites that have begun to develop  permission-based  lists. We enable our network
Affiliates  to generate  additional  revenues  from their Web site  visitors and
customers by



                                      -5-


providing  access to direct  marketing  tools such as email,  direct mail banner
advertising,  without the costs and  challenges  associated  with  building  and
maintaining  their own direct  marketing sales forces and email direct marketing
technologies.  Our network affiliates also benefit from TargetMails  proprietary
technology  that tracks the responses of their list members,  thereby  enhancing
the value of their lists to direct  marketers.  Network  Affiliates also benefit
from the scale and reach of the  network  and the  organization  of all  network
members into categories of interest and response rate histories.  Other benefits
include cost reduction,  detailed consumer  information,  steady revenue sources
and direct marketing solutions.  The Affiliate  partnership model increases both
speed to market and the universe of prospective customers.

         The data  warehousing  is driven by Microsoft  SQL,  which has powerful
querying  capabilities.  The program is  reliable,  easily  adaptable  to future
applications and is compatible with Online Database  Connectivity  (ODBC),  Java
Database  Connectivity (JDBC) and Cold Fusion middle-ware tools. The database is
carefully managed to maintain all new and relevant consumer information, as well
as to  automatically  update such occurrences as changes of address or duplicate
listings.

         TargetMails  is capable of delivering  over one million email  messages
per day and  tracks  responses  using  proprietary  software  , a  click-through
tracking system.  Messages are highly  customized and can be delivered in either
plain text or HTML format and may contain advanced  applications  such as audio,
video, interactive links and data capture forms.

         We recently formed iFusion,  a full service Internet  solutions company
that provides  marketing  expertise by offering clients  strategic  planning and
account management,  design and Internet and online promotions.  Recent packages
were designed and implemented for  organizations  such as Palm  Restaurant,  Ivy
Mckenzie and Armbrust Aviation.  Significant synergies exist between TargetMails
and iFusion  that stem from  value-added  marketing  services  for our  database
clients.   These  services  include:   (i)  integration  of  online,  email  and
traditional  campaigns  into  seamless  promotional  packages  and (ii) Web site
design  and  implementation.   Integration  of  Online,  Email  and  Traditional
Campaigns into Seamless Promotional Packages.

         By constructing all aspects of the client's marketing venture,  iFusion
can utilize  TargetMail's lists to generate campaigns precisely tailored to meet
specific  marketing  needs.  This new phase of marketing not only identifies the
most appropriate  consumers for a campaign,  but also tracks their movements and
responses  from the earliest  stage of the mailing to the final stages of either
purchase or rejection.  Complex consumer buying habits can be incorporated  into
an  algorithm  for  analysis  and  immediate  extension  or  reconfiguration  of
strategies.

            iFusion provides traditional companies the opportunity to expand or
enhance their Internet site. Developers work with management to create a Web
site that enhances the marketing programs conducted by iFusion. We have sold our
products and services to over 150 companies, ranging from small organizations to
Fortune 500 clients.

         PlayGolfNow.com,  our primary golf website  http://www.PlayGolfNow.com,
provides a  comprehensive  range of  offerings  for the  golfer,  including  the
largest  database of golf courses  worldwide,  online tee time  reservations,  a
comprehensive  golf yellow  pages,  an online Pro shop which  includes all major
golf  equipment  and related  products  at  discount  prices and free golf video
games. The Rewards Members Club, through the PlayGolf website offers substantial
discounts to a network of golf courses,  golf schools,  hotels,  restaurants and
car rental  agencies.  The members also receive  discounts on golf equipment and
apparel they purchase through the PlayGolf online pro shop.  Finally, we provide
online newsletters that reach over 500,000 subscribers  weekly,  partnering with
Golf & Travel magazine and many others.

Competition

         LCS Golf has entered into a highly  competitive  market for the sale of
golf-related products and services over the Internet. The top three competitors,
PGA Tour.com,  GolfOnLine.com,  and Golf.com are aligned with CBS, ESPN, and NBC
respectively,     making    them    formidable    competitors    that    provide
information/content  about the  "professional"



                                      -6-


golf tour. In order to develop a different  market,  we positioned  ourselves to
provide  comprehensive  information,  products and  services  for the  "average"
golfer as well as for  golfing  businesses,  much like The Golf  Channel did for
cable media.  Our  competitive  advantage  includes a database of over 2 million
golfers with 1.5 million opt-in e-mail  addresses and the only golf yellow pages
on the Internet.

Employees

         LCS Golf and its subsidiaries have 8 employees, full-time.

Government Approval and Compliance With Governmental Regulation.

         We will not collect  sales or other  similar taxes on goods sold on our
web sites except where  required by law.  Some states or the federal  government
may seek to impose sales tax collection  obligations on  out-of-state  companies
that engage in or facilitate  online  commerce.  Proposals have been made at the
state and local level that would  impose  additional  taxes on the sale of goods
and  services  through  the  Internet.   Such  proposals,   if  adopted,   could
substantially  impair the growth of  electronic  commerce,  and could  adversely
affect our opportunity to derive financial benefit from such activities.

         Due to the increasing  popularity and use of the Internet,  a number of
laws and regulations may be adopted,  covering privacy,  pricing, and quality of
products and services. The growth of Internet commerce may prompt calls for more
stringent  consumer  protection laws that may impose  additional  burdens on our
business.  The adoption of any additional  laws or regulations  may decrease the
growth of the  Internet,  which,  in turn,  could  decrease  the  demand for our
products and services or increase our cost of doing business, which could have a
material  adverse  effect on our business,  results of operations  and financial
condition.

         We sell  products and services to numerous  consumers  residing in such
states and  jurisdictions  that may claim that we are  required to qualify to do
business as a foreign  corporation  in each such state or foreign  country.  Our
failure  to  qualify  as a foreign  corporation  in a  jurisdiction  where it is
required to do so may subject us to taxes and  penalties for failure to qualify.
Any such existing or new  legislation or regulation,  including state sales tax,
or the application of laws or regulations from  jurisdictions  whose laws do not
currently  apply to our business,  could have a material  adverse  effect on our
business, results of operations and financial condition.

Agreements

         On February  16, 2000,  we entered into a series of related  agreements
with Quintel  Communications,  Inc. (now known as Traffix,  Inc. and hereinafter
referred to as "Traffix"),  including a loan  agreement to borrow  $500,000 from
Traffix in the form of a convertible  promissory  note. The promissory  note was
collateralized  by our  database of  information.  The note bears  interest at a
variable  rate not to  exceed  14%.  The note was due on demand  any time  after
August 16, 2000.  Traffix may convert the  remaining  principal  and accrued but
unpaid  interest  into shares of our common stock and such shares would have had
registration  rights as set forth in a registration  rights agreement.  Further,
any  additional  shares  issued upon  conversion  of the debt are  protected  by
anti-dilution  provisions,  subject to our right to repurchase any shares issued
under such  anti-dilution  provisions at $1.00 per share, which repurchase right
may be used once in twelve months from the date of the agreement.

         On the same date,  we entered into a marketing  agreement and licensing
agreement with Traffix.  As consideration for providing marketing services for a
period of two years, we issued options,  valued at approximately  $139,000 using
the Black-Scholes Option Pricing Model, to purchase 200,000 shares of our common
stock.  The model enables us to estimate the fair value of stock options granted
because  it takes  into  account,  as of the grant  date of the  option;  i) the
exercise price;  ii) the expected life of the option;  iii) the current price of
the  underlying  common  stock;  iv) the  stock's  expected  volatility;  v) the
expected dividends; and vi) the risk free interest rate for the expected term of
the option.  Options to purchase  100,000 shares are exercisable for a period of
two years from issuance at $1.00 per share and


                                      -7-

options to purchase  100,000  shares are  exercisable  for a period of two years
from  issuance at $2.00 per share.  The shares  underlying  these  options  have
registration  rights as described in the registration rights agreement discussed
above.

         Under the licensing  agreement,  Traffix  acquired a license to use our
database of information  in exchange for payment of $5,000 per month.  We are in
default  under the loan  agreement  and Traffix will credit this monthly  amount
towards any amounts in arrears.  The  licensing  agreement  is for a term of ten
years with an option to renew for an additional five years.

         On August 7, 2000 following certain disagreements  concerning Traffix's
use of our database,  we entered into a  forbearance  agreement and amendment of
our  security  agreement  with  Traffix.   Traffix  acknowledged  receipt  of  a
$50,000.00  payment  against  the  principal  balance  of  $500,000  due  on the
convertible  note,  funded  personally  by Dr.  Mitchell.  The related  note was
amended to provide for payment upon written demand.  If there is a default under
the terms of the forbearance agreement or the note, the interest rate will equal
the prime  rate as  defined  in the note plus 4% not to  exceed  fourteen  (14%)
percent.  Until  payment of all amounts  due under the note are made,  amendment
number 1 to the security agreement requires us to pay fifty percent (50%) of the
collections received for accounts receivable  outstanding as of August 10, 2000,
and twenty-five  percent (25%) of collections  for all new accounts  receivable,
within five days.  Payment is to be credited against amounts due under the note,
first to interest,  then to  principal.  Traffix also  receives 50% of all other
cash receipts  including  additional  loans,  cash  equivalents  and  marketable
securities  generated by us from any source  whatsoever until payment in full of
the amounts due under the note. The security  agreement  filed February 22, 2000
was amended to include all accounts of LCS Golf and all securities or guarantees
held by us in respect of the accounts and all account proceeds. In addition, Dr.
Mitchell,  President and CEO of LCS Golf,  executed and delivered a guarantee on
August 7, 2000 of up to $250,000.00 on the note (of which $150,000 has been paid
against this guaranty).

         On August 8, 2000 Traffix agreed to forbear from  demanding  payment of
the note or  commencing  any action  against us as long as Traffix  receives  at
least  $10,000.00 per month in payment of principal and interest on the Note, or
collections of the accounts  receivable or from the  guarantor,  and we generate
gross revenues of at least $75,000.00 per calendar month from the normal conduct
of  business.  On May 16,  2001,  the parties  entered  into an amendment to the
forbearance  agreement  whereby  the  Company  agreed to a payment  schedule  of
approximately  $10,000  per month to repay the  promissory  note and Traffix has
agreed not to take any actions with respect thereto.

         On August 8, 2000 American Warrant Partners,  LLC ("American  Warrant")
invested  $300,000.00 in our Company.  We issued an 8% convertible  subordinated
promissory  note to American  Warrant with a maturity  date for the principal of
August 8,  2002.  The note is  convertible  into our  common  stock at $0.25 per
share,  subject to  adjustment,  which  resulted  in a  discount  of the note of
approximately  $225,000  which  will be  amortized  over the term of the note or
until the date of  conversion,  whichever  is sooner.  Interest  is payable on a
quarterly  basis  commencing  September  30,  2000.  We also  issued to American
Warrant a warrant expiring on August 8, 2005 to purchase up to 600,000 shares of
our common stock,  at the exercise price of $0.40 per share,  to be exercised in
whole or in part.  The  value of this  warrant  at  grant  date,  utilizing  the
Black-Scholes option pricing model, was approximately  $260,000. The assumptions
used in  determining  the value was an expected  volatility  of 227%, an average
interest rate of 6.06% per annum and an expected  holding  period of five years.
The value of this  warrant  will be  amortized  over five  years or  shorter  if
exercised. In order to elect to exercise the warrant at the share price computed
using the formula in the warrant  agreement,  American  Warrant must deliver the
warrant  and a written  notice of  election  to  exercise  the warrant to us. In
addition,  we entered into a registration  rights agreement in which we promised
to register the shares with the  Commission as soon as  reasonably  practicable,
but in no event  later than  September  15,  2000 and are  subject to  penalties
because the  Registration  Statement was not declared  effective by November 15,
2000.  The  penalties  are that for each  30-day  period  that the  Registration
Statement  is not  declared  effective,  the  conversion  price  of $0.25 of the
convertible note and the warrant exercise price of $0.40 will each be reduced by
2% until the exercise price reaches $0.05. In addition, the interest rate on the
convertible note will increase 2% for each 30-day period,  not to exceed 15%. To
date,  no such  Registration  Statement  has been filed.  Certain  officers  and
directors of the Company agreed to a lock-up  provision  restricting their right
to sell,  transfer,  pledge or  hypothecate  or otherwise  encumber their shares
until the earlier of the one year  anniversary of the  agreement,  the effective
date of the  Registration  Statement,  or until we raise $1,000,000 in equity or
debt  financing.  We also agreed that without prior written  consent,  until the
earlier of 85% of the  principal  balance and  interest is paid or  converted to
common stock,  or 180 days from the date of the warrant  agreement,  we will not
offer  to sell  or sell  any of our  common  stock  at a  price  per  share  (or
conversion or exercise price per share) less than the average  closing price per
share of our common stock as quoted by the OTC Electronic  Bulletin Board on the
five days immediately  prior to the close of the transaction.  We also agreed to
recommend  and use our best  efforts to elect a designee and  representative  of
American  Warrant as a member of the Board of  Directors  until the later of one
year from the date of the agreement or until such time we receive  $1,000,000 in

                                      -8-


equity or debt  financing.  On May 16,  2001 the Company  and  American  Warrant
Partners  entered  into an  Amendment  Waiver and  Consent  with  respect to the
promissory  note,  warrant and  registration  statement,  whereby the conversion
price and exercise price of the promissory note and warrant, respectively,  have
been  amended to the lower of $.12 per share or 80% of the closing bid price per
share of the Common Stock as quoted on the NASDAQ OTC Bulletin Board on the date
immediately  preceding  the date of exercise or  conversion  and the Company has
further agreed to file a registration  statement covering such underlying common
stock no later  than 60 days  from June 15,  2001,  in  consideration  for which
American  Warrant  Partners  has  agreed to waive any  penalty  provisions  with
respect to the filing of the registration  statement and consent to the issuance
of common stock below the then  applicable  conversion or exercise  price of the
promissory  note  and  warrant  and the  issuance  of  $200,000  in  convertible
debentures.

         Debt in Default

         The  American  Warrant  loan of  $300,000  placed us in  default of the
forbearance  agreement  that we signed with  Traffix  because we did not in turn
remit fifty percent of the cash  proceeds as required  under the  agreement.  On
August 30, 2000, Dr.  Mitchell agreed to fund personally two payments of $50,000
each towards  principal and interest on the Traffix loan. We also changed to 50%
instead of 25% of  receipts  from new  accounts  receivable  that are payable to
Traffix under the amended security agreement.

         Intellectual Property.

         Through  our  acquisition  of B III,  we own the patent  serial  number
29/073.138  for a product  sold under the label  "Adorables,"  that is an animal
pillow  with  a  pouch.  We  have  not  sought  trademark  registration  of  the
"Adorables"  name  with the U.S.  Patent &  Trademark  Office.  PlayGolfNow  has
registered the following domain names:

         o     skiuniverse.com
         o     Golfpromo.net
         o     universe-online.com
         o     iFusionco.com
         o     ifusionco.net
         o     PlayGolfNow.com
         o     junior-golf.com
         o     targetmails.com
         o     myplaygolfnow.com
         o     WallStreetGolf.com
         o     freeis4me.com
         o     lcsgolf.com
         o     golfuniverse-online.com

Risk Factors That May Affect Future Results

         The Company operates in a rapidly changing  environment that involves a
number of risks, some of which are beyond the Company's  control.  The following
discussion highlights the most material of the risks.

WE ARE IN  DEFAULT  OF A SENIOR  SECURED  LOAN  WHICH MAY CAUSE US TO CURTAIL OR
CEASE OPERATIONS.


                                      -9-


         Our failure to remit 50% of the cash proceeds from the American Warrant
transaction  to Traffix  resulted in a default under the  forbearance  agreement
with Traffix.  If Traffix  elects to pursue its remedies  under the  forbearance
agreement and we are unable to reach an amicable resolution with Traffix, we may
have to  curtail  or cease  operations  unless we are able to obtain  additional
financing.  Even if we do reach an amicable  resolution  with Traffix,  which we
have no reason to believe such resolution is possible,  and continue operations,
our efforts to satisfy continuing  obligations under the Traffix agreements will
significantly  impact our cash flow.  Pursuant to arrangements with Traffix,  we
increased  the  percentage  of  receipts  which we must remit from new  accounts
receivable from 25% to 50% which will  significantly  impact our cash flow until
such time as we are able to make payment in full under the Traffix Agreement.

OUR  FINANCIAL  CONDITION  IS POOR AND WE MAY BE UNABLE TO  CONTINUE  AS A GOING
CONCERN.

         Our operations have been dependent upon short-term  borrowing and other
funding  resources.  From March 1, 1999 through February 28, 2001, our president
has made net advances of approximately $629,000. Our independent auditors report
on our  consolidated  financial  statements for the year ended February 29, 2001
included  language  that raises  substantial  doubt  exists as to our ability to
continue  as a going  concern.  Our  financial  statements  show an  accumulated
deficit of approximately $14,962,000.  We expect to continue to incur net losses
for the  foreseeable  future and negative cash flow from  operations  through at
least the fiscal year 2002.  We expect to  significantly  increase our operating
expenses as a result of expanding our sales and marketing,  product  development
and  administrative  operations and developing  new strategic  relationships  to
promote our future growth. As a result, we will need to generate increased sales
to meet these  expenses and to achieve  profitability.  In addition,  due to our
default under the agreement with Traffix,  we must now remit 50% of all accounts
receivable collected to Traffix which will further significantly reduce our cash
flow.  Therefore,  an investment  should not be made in our securities unless an
investor is prepared to lose his or her entire investment.

WE RECENTLY  REDIRECTED OUR STRATEGIC FOCUS SO OUR RECENT OPERATING  RESULTS ARE
NOT COMPARABLE TO OUR RESULTS FOR PRIOR PERIODS.

         We were founded in 1997 to design and distribute golf clubs and related
products.  In early  1999,  we began to provide  permission  email and  Internet
Services.  For the twelve  months  ended  February 28,  2000,  permission  email
marketing services represented 49% of our revenue, compared to 0 % in the twelve
months ended February 29, 1999. Accordingly, our operating results since the end
of fiscal 2000 are not comparable to our results for prior periods. We cannot be
certain that our business strategy will be successful or that we will adequately
address these risks.

         Our operating  results are difficult to predict.  Our future  quarterly
operating results may fluctuate  significantly and may not meet the expectations
of  securities  analysts or investors.  If this occurs,  the price of our common
stock  would  likely  decline,  perhaps  substantially.  Factors  that may cause
fluctuations of our operating results include the following:

         o     seasonality of direct marketing  expenditures which are typically
               higher in the second and fourth  quarters  and lower in the first
               and third quarters;
         o     the level of market acceptance of our products and services;
         o     delays we may encounter in introducing new products and services;
         o     competitive developments;
         o     demand for advertising on the Internet;
         o     changes in pricing policies and resulting margins;
         o     changes in the growth rate of Internet usage;
         o     the growth rate of our network affiliates;
         o     changes in the mix of products and services sold;
         o     changes in the mix of sales  channels  through which products and
               services are sold;
         o     costs related to acquisitions of technology or businesses; and



                                      -10-


         o     economic  conditions  generally as well as those  specific to the
               Internet and related industries.

         We expect  that our future  revenues  will be derived  from  permission
email  marketing  products  and  services.  The  volume and timing of orders are
difficult  to predict  because the market for our products is in its infancy and
the sales cycle may vary substantially from customer to customer. Currently, our
customer contracts are only for a limited period of time, typically lasting only
days or weeks, which makes revenues in any quarter substantially  dependent upon
contracts  entered into in that  quarter.  Our  customers  can  terminate  their
contracts  with us on short  notice  without  penalty.  Moreover,  our sales are
expected to fluctuate due to seasonal or cyclical marketing campaigns.

         We expect that revenue  growth in the first and third  quarters of each
year may be lower than revenue growth in the second and fourth  quarters of that
and the  preceding  year.  We  believe  this  trend may occur as a result of our
customers' annual budgetary, purchasing and sales cycles. In addition, our sales
cycle has varied from customer to customer and several customers have taken many
months to evaluate our services before making their purchase  decisions.  To the
extent significant  revenues occur earlier than expected,  our operating results
for later quarters may not compare favorably with operating results from earlier
quarters.

OUR SUCCESS DEPENDS UPON BROAD MARKET ACCEPTANCE OF PERMISSION EMAIL MARKETING
 SERVICES.

         We do not know if our  products and services  will be  successful.  The
growth of the Internet  remains  fairly recent and  advertising  on the Internet
even more so. The Internet may not be accepted as a viable long-term  commercial
marketplace  and  medium  of  commerce  for  a  number  of  reasons,   including
potentially  inadequate   development  of  necessary  Internet   infrastructure,
government  regulation  or delayed  development  of  enabling  technologies  and
performance improvements.  The market for permission email marketing services is
in its infancy,  and we are not certain whether our target customers will widely
adopt and deploy  this  technology.  Even if they do so, they may not choose our
products for technical,  cost, support or other reasons.  Adoption of permission
email marketing services,  particularly by those entities that have historically
relied upon traditional  means of direct  marketing,  such as telemarketing  and
direct mail, requires the broad acceptance of a new and substantially  different
approach to direct  marketing.  We believe that the  promotion of the concept of
permission  email marketing will require us to engage in an intensive  marketing
and  sales  effort  to  educate  prospective  customers  regarding  the uses and
benefits of our products and services.  Enterprises  that have already  invested
substantial  resources in other advertising  methods may be reluctant or slow to
adopt our new approach.

         Our future  growth also depends on the  commercial  success of our Golf
Promo l Network,  Targetmails  and Ifusionc  that  comprise our network.  If our
customers  do not widely  adopt and purchase  our  services,  our business  will
suffer.  Furthermore,  the Internet  advertising  and permission  email services
market is  characterized  by rapid  technological  change,  frequent new product
introductions, changes in customer requirements and evolving industry standards.
If we are  unable to develop  and  introduce  products  or  enhancements  to our
service offering in a timely manner, we may not be able to successfully compete.




                                      -11-



COMPETITION  IN THE MARKET FOR  INTERNET  ADVERTISING  AND DIRECT  MARKETING  IS
INTENSE AND COULD ADVERSELY AFFECT OUR BUSINESS.

         Many of our  current  and  potential  competitors,  such as 24/7 Media,
Inc.,  Postmaster Direct, Inc., Exactis,  Inc.,  DoubleClick,  Inc. and YesMail,
Inc., have greater name recognition, longer operating histories, larger customer
bases  and  significantly  greater  financial,   technical,   marketing,  public
relations,  sales,  distribution  and other  resources  than we do.  Some of our
potential  competitors are large and  well-capitalized  companies.  In addition,
some of our  competitors  may include  website owners who own  permission  email
lists. We expect to face competition from these and other competitors, including
Internet  portals,   traditional  list  brokers,  banner  advertising  managers,
independent  list  managers,   incentive-based  subscriber  lists  and  customer
management and retention service companies.

OUR  FAILURE  TO  DEVELOP  AND  MAINTAIN  OUR  SALES,   MARKETING   AND  SUPPORT
ORGANIZATION  AND  RELATIONSHIPS  WITH OUR NETWORK PARTNERS AND THIRD PARTY LIST
MANAGERS WOULD LIMIT OUR GROWTH.

         If we fail to  substantially  develop our direct and indirect sales and
marketing  operations  and our relations with our network  partners,  our growth
will be limited.  Our products and services  require a sales effort  targeted at
several people within our prospective  customers.  We have recently expanded our
direct sales force and plan to hire additional sales personnel.  We might not be
able to  hire,  train or  retain  the kind and  number  of sales  and  marketing
personnel we are targeting because competition for qualified sales and marketing
personnel is intense.  In addition,  we will  increasingly  rely on  advertising
agencies and direct marketers to resell our products and services.  If we do not
effectively manage or grow our sales and marketing  channel,  our business could
suffer.

         We must  continue to maintain  and expand  relationships  with  network
Partners, such as Click Here to Find.Com, Golf Illustrated,  Inc. and Telemundo,
who provide us with access to  permission  email  lists.  We began to enter into
agreements  with our  network  partners  in the  first  quarter  of 1999.  These
contracts  are  generally  for an initial  term of one to three  years,  with an
automatic annual renewal.  Pursuant to these  contracts,  we provide our network
partners with resale and tracking services by selling direct marketers access to
their lists, and our network  partners  receive a percentage of our revenue.  We
cannot be assured  that the growth of our  business as a result of our  entering
into these  agreements  will be  sufficient to meet our  expectations  for sales
growth and profitability.  In addition to our network partners, we have reseller
arrangements with third party list managers,  under which we pay a fixed fee for
the  nonexclusive use of their list for a specific  campaign.  These third party
list managers are not contractually obligated to provide us with access to their
lists.  A majority  of the email  addresses  that we have  access to through our
proprietary  list,  our network  partners  and our list  managers  is  currently
comprised of addresses  from list  managers.  If we fail to maintain or grow our
relationships  with our  network  partners  and third party list  managers,  our
business could suffer.

IF WE ARE UNABLE TO MANAGE OUR EXPECTED GROWTH, OUR BUSINESS WILL SUFFER.

         Our  ability  to  successfully  offer our  products  and  services  and
implement our business plan in the rapidly  evolving market for permission email
marketing  services requires an effective  planning and management  process.  We
continue to increase the scope of our operations  which has placed a significant
strain on our management  systems and resources.  We expect that we will need to
continue to improve our  operational  and financial and managerial  controls and
reporting systems and procedures, and will need to continue to expand, train and
manage our work force.

OUR  BUSINESS  WOULD  SUFFER  IF  WE  ARE  UNABLE  TO   SUCCESSFULLY   INTEGRATE
ACQUISITIONS OF OTHER COMPANIES OR SUBSCRIBER LISTS.

         From time to time, we expect to evaluate  opportunities to grow through
acquisitions  of,  or  investments  in  complementary  companies,   products  or
technologies.  If we acquire a company, we could have difficulty in assimilating
that company's personnel,  operations,  products or technology. In addition, the
key personnel of the acquired  company may decide not to work for us. If we make
acquisitions of products or technology,  we could have difficult in assimilating
the acquired  technology or products  into our  operations.  These  difficulties
could disrupt our ongoing  business,  distract

                                      -12-


our  management  and  employees  and  increase  our  expenses.   Moreover,   our
profitability  may suffer because of  acquisition-related  costs or amortization
costs for acquired  goodwill and other intangible  assets.  Furthermore,  we may
have  to  incur  debt  or  issue  equity   securities  to  pay  for  any  future
acquisitions,  the  issuance of which  could be  dilutive to us or our  existing
stockholders.  If we are unable to successfully  address any of these risks, our
business could be harmed.

THE LOSS OF ANY OF OUR EXECUTIVE  OFFICERS OR KEY PERSONNEL WOULD LIKELY HAVE AN
ADVERSE EFFECT ON OUR BUSINESS.

         We need to hire a  significant  number of  additional  sales,  support,
marketing and product development  personnel to expand our business.  If we fail
to attract qualified personnel or retain current employees, our revenues may not
increase and could decline. Competition for these individuals is intense, and we
may not be able to attract,  assimilate or retain  additional  highly  qualified
personnel in the future.  Our future  success  also  depends upon the  continued
service of our  executive  officers and other key sales,  marketing  and support
personnel.  In addition,  our products and  technologies  are complex and we are
substantially  dependent upon the continued service of our existing  engineering
personnel.  Not all of our officers or key  employees are bound by an employment
agreement.  Our relationships with these officers and key employees are at will.
Moreover,  we do not have "key person" life insurance  policies  covering any of
our employees.

PRIVACY  CONCERNS  WITH RESPECT TO OUR PRODUCTS  AND SERVICES  COULD  NEGATIVELY
AFFECT OUR BUSINESS.

         Our technology collects and utilizes data derived from user activity in
the Golf Promo Network.  Our network  enables the use of personal  profiles,  in
addition to other mechanisms,  to deliver targeted marketing materials,  to help
compile  demographic  information  and to  limit  the  frequency  with  which an
advertisement is shown to the user. The  effectiveness of our technology and the
success of our business  could be limited by any  reduction or limitation in the
use of personal  profiles.  These personal  profiles contain bits of information
keyed to a specific server, file pathway or directory location that is stored in
the user's hard  drive.  Personal  profiles  are placed on the user's hard drive
without the user's  knowledge or consent,  but can be removed by the user at any
time  through the  modification  of the user's  browser  settings.  In addition,
currently available  applications can be configured to prevent personal profiles
from being stored on their hard drive. Some commentators,  privacy advocates and
governmental  bodies have suggested  limiting or eliminating the use of personal
profiles. In the event this occurs, our business would likely suffer.

GOVERNMENT  REGULATION AND LEGAL UNCERTAINTIES OF DOING BUSINESS ON THE INTERNET
COULD NEGATIVELY IMPACT OUR BUSINESS.

         The laws governing the Internet remain largely unsettled, even in areas
where there has been some  legislative  action.  It may take years to  determine
whether and how existing laws including those governing  intellectual  property,
privacy,  libel and taxation apply to the Internet and Internet advertising.  In
addition,  the growth and  development  of the market for Internet  commerce may
prompt calls for more stringent  consumer  protection  laws,  both in the United
States and abroad,  that may impose additional  burdens on companies  conducting
business  over the  Internet.  Our  business  could  suffer with the adoption or
modification of laws or regulations relating to the Internet, or the application
of existing laws to the Internet.

WE MAY  FACE  CLAIMS  FOR  ACTIVITIES  OF OUR  CUSTOMERS  WHICH  COULD  HARM OUR
BUSINESS.

         Our customers'  promotion of their products and services may not comply
with  federal,  state and local  laws.  A wide  variety of laws and  regulations
govern the content of  advertisements  and  regulate  the sale of  products  and
services.  There is also  uncertainty as to the application of these laws to the
emerging  world of advertising  on the Internet.  We cannot predict  whether our
role in  facilitating  these marketing  activities  would expose us to liability
under  these  laws.  We may  face  civil  or  criminal  liability  for  unlawful
advertising or other activities of our customers. If we are exposed to this kind
of  liability,  we could be  required  to pay  substantial  fines or  penalties,
redesign our  business  methods,  discontinue  some of our services or otherwise
expend  resources  to avoid  liability.  Any costs  incurred as a result of that
liability or asserted liability could harm our business.



                                      -13-

Item 2.  DESCRIPTION OF PROPERTY

         We do not own any real property. Beginning on June 12, 2001, we entered
into a lease for office space  located at 7109 Fairway  Drive,  Suite 100,  Palm
beach,  Florida  33417.  Prior thereto we leased lease office space at 809 North
Dixie Highway,  Suite 200, West Palm Beach, Florida for our Internet operations.
Our new office space is  approximately  2000 square feet.  The monthly rental is
$2,200.00  and the term of the lease is three years.  This lease expires on June
15, 2004,  but provides an option to renew for an additional two years if we are
not in default of the terms in the lease.

Item 3.  LEGAL PROCEEDINGS

         None.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

                                     PART II

Item 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information.

         From mid-1998  through January 19, 2000, our common stock was traded on
the NASDAQ  Over-The-Counter  Bulletin Board and the National  Quotation  Bureau
"Pink Sheets" under the symbol  "LCSG." The following  chart sets forth the high
and low sales prices for each quarter since listing of our common stock.

1999 Quarter                                        High           Low
------------                                        ----           ---
January 1 - March 31                               $2.75          $0.75
April 1 - June 30                                  $3.62          $2.25
July 1 - September 30                              $2.63          $1.22
October 1 - December 31                            $1.63          $0.69


2000 Quarter                                        High           Low
------------                                        ----           ---
January 1 - March 31                               $2.00          $0.50
April 1 - June 30                                  $1.30          $0.33
July 1 - September 30                              $0.75          $0.25
October 1 - December 31                            $0.81          $0.15

2001 Quarter
January 1 - March 31                               $0.50          $0.14


                                      -14-


         On  January  19,  2000,  we were  de-listed  from the Over the  Counter
Bulletin Board for failure to comply with the new listing standards set forth by
the NASD before our phase-in  date.  During this time, our stock has been quoted
in the  National  Quotation  Bureau pink  sheets.  On February  16, 2001 we were
relisted on the NASDAQ OTC Bulletin Board.

         No prediction  can be made as to the effect,  if any, that future sales
of shares of common  stock or the  availability  of common stock for future sale
will have on the market price of the common stock prevailing from  time-to-time.
Sales of  substantial  amounts  of  common  stock  on the  public  market  could
adversely affect the prevailing market price of the common stock.

Holders

         As of June 12, 2001, there were 421 holders of our common stock held in
street name.

Dividends

         We have not paid a cash  dividend on the common stock since the arrival
of our current management, and we do not plan at this time to declare dividends.
Management  anticipates  that any  funds  available  will be  reinvested  in our
business. The payment of dividends may be made at the discretion of our Board of
Directors and will depend upon,  among other  things,  our  operations,  capital
requirements, and overall financial condition.

Recent Sales of Unregistered Securities

         On November 17, 1998, we issued 150,000 shares of our restricted common
stock in our acquisition of B III.

         On January 26, 1999, we issued  200,000  shares of our common stock and
an option to purchase an  additional  200,000  shares of our common stock in our
acquisition of PlayGolfNow.

         On March 8,  1999,  we issued  350,000  shares of our  common  stock in
connection with our acquisition of Golf Promo on February 15, 1999.

         The  aforementioned  share issuances were all made in reliance upon the
exemption  from  registration  provided in Section 4(2) of the Securities Act of
1933, as amended.  We believe the exemption from registration in Section 4(2) of
the  Securities  Act was available  because the  transactions  did not involve a
public offering. No commissions were paid in any of these transactions.

         We issued the  following  securities  in reliance  up on the  exemption
provided  in Rule 504 of  Regulation  D, of the  Securities  Act.  Our basis for
claiming this exemption is i) we were not a reporting company at the time of the
transactions;  ii) we  were  not an  investment  company;  iii)  we  were  not a
development  stage company  without a specific plan of business or purpose;  and
iv) we  did  not  receive  aggregate  proceeds  of  more  than  $1,000,000  in a
twelve-month period. No commissions were paid in these transactions.

         On September 21, 1998, we issued 905,000 shares of our common stock for
Consulting and Business Services rendered to us.

         On October 6, 1998,  we issued  42,000  shares of our common  stock for
Legal and Administrative Services rendered to us.

         On October 15, 1998,  we issued  18,000  shares of our common stock for
Legal Services rendered to us.

         On October 22, 1998, we issued  137,000  shares of our common stock for
Legal and  Management  Services  rendered to us. On November 3, 1998,  we issued
34,200 shares of our common stock for Legal Services rendered to us.



                                      -15-


         On November 12, 1998,  we issued  35,000 shares of our common stock for
Consulting Services rendered to us.

         On November 15, 1998,  we issued  16,500 shares of our common stock for
Legal Services rendered to us.

         On November 19, 1998,  we issued  50,000 shares of our common stock for
Consulting Services rendered to us.

         On November 23, 1998,  we issued  20,000 shares of our common stock for
Consulting Services rendered to us.

         On November 30, 1998,  we issued  11,800 shares of our common stock for
Legal Services rendered to us.

         On December  1, 1998,  we  completed  the sale of 200,000  units,  each
comprised of 1 share of common stock and 2 warrants for the purchase 7 shares of
common  stock at an exercise  price of $0.35,  at $0.10 per unit  pursuant to an
offering  under Rule 504 of  Regulation D of the  Securities  Act. Our basis for
claiming this exemption is i) we were not a reporting company at the time of the
transactions;  ii) we  were  not an  investment  company;  iii)  we  were  not a
development  stage company  without a specific plan of business or purpose;  and
iv) we  did  not  receive  aggregate  proceeds  of  more  than  $1,000,000  in a
twelve-month  period.  No  commissions  were  paid  in  these  transactions.  No
commission was paid with respect to the offering, as the shares were sold by our
officers  and  directors.  We  raised  $993,752.50  in cash  proceeds  from  the
offering.

         On December 7, 1998, we issued  125,000  shares of our common stock for
Consulting Services rendered to us.

         On December 9, 1998, we issued  350,000  shares of our common stock for
Consulting Services rendered to us.

         On December 10, 1998,  we issued  11,100 shares of our common stock for
Legal Services rendered to us.

         On December 11, 1998,  we issued  55,000 shares of our common stock for
Consulting Services rendered to us.

         On December 15, 1998, we issued  400,000 shares of our common stock for
payment of a Licensing Fee due from us.

         On December  16,  1998,  we issued 7,000 shares of our common stock for
Legal Services rendered to us.

         On December  21,  1998,  we issued 7,200 shares of our common stock for
Legal Services rendered to us

         On December 22, 1998,  we issued  35,000 shares of our common stock for
Management Services rendered to us.

         The  aforementioned  securities  were issued in reliance on Rule 504 of
Regulation D promulgated  under the  Securities  Act, as amended.  Our basis for
claiming this exemption is i) we were not a reporting company at the time of the
transactions;  ii) we  were  not an  investment  company;  iii)  we  were  not a
development  stage company  without a specific plan of business or purpose;  and
iv) we did not receive  aggregate  proceeds of more than  $1,000,000 in a twelve
month period. No commissions were paid in these transactions.

         On January 26, 1999,  we issued  25,000  shares of our common stock for
Legal Services rendered to us.

         On March 1, 1999, we issued 20,000 shares of our common stock for Legal
Services rendered to us.



                                      -16-


         On March 1, 1999,  we issued  175,000  shares of our  common  stock for
Public Relations and Consulting Services rendered to us.

         On March 3,  1999,  we issued  20,000  shares of our  common  stock for
Consulting Services rendered to us.

         On March 4, 1999,  we issued 7,500 shares of our common stock for Legal
Services rendered to us.

         On April 9, 1999,  we issued  115,000  shares of our  common  stock for
Legal Services rendered for the Company.

         On April 21,  1999,  we issued  50,000  shares of our common  stock for
Legal Services rendered for the Company.

         The  aforementioned  securities  were issued in reliance on Rule 504 of
Regulation D promulgated  under the  Securities  Act, as amended.  Our basis for
claiming this exemption is i) we were not a reporting company at the time of the
transactions;  ii) we  were  not an  investment  company;  iii)  we  were  not a
development  stage company  without a specific plan of business or purpose;  and
iv) we  did  not  receive  aggregate  proceeds  of  more  than  $1,000,000  in a
twelve-month period. No commissions were paid in these transactions.

         We issued the  following  securities  in reliance  up on the  exemption
provided in Section 4(2) of the Securities  Act. We believed that this exemption
was  available  in each of the  above  transactions,  as they did not  involve a
public offering. No commissions were paid in these transactions.

         On  September  21, 1998,  we issued  120,000  restricted  shares of our
common stock for Business Consulting Services rendered to us.

         On October 23, 1998, we issued 15,000  restricted  shares of our common
stock for Business Consulting Services rendered to us.

         On November 6, 1998, we issued 35,000  restricted  shares of our common
stock for Business Consulting Services rendered to us.

         On December 7, 1998, we issued 75,000  restricted  shares of our common
stock for the repayment of debt owed by us.

         On December 11, 1998, we issued 115,000 restricted shares of our common
stock for Business Consulting Services rendered to us.

         On December 15, 1998, we issued 200,000 restricted shares of our common
stock as payment of a Licensing Fee due by us.

         On December 21, 1998, we issued 110,000 restricted shares of our common
stock for Consulting Services rendered to us.

         On January 4, 1999,  we issued 15,000  restricted  shares of our common
stock for Public Relations Services rendered to us.

         On January 5, 1999, we issued 2,000,000 restricted shares of our common
stock to our  President,  Dr.  Michael  Mitchell,  in lieu of  compensation  for
services rendered to us.

         On January 7, 1999, we issued 1,200,000 restricted shares of our common
stock as payment of a Licensing  Fee due by us.


                                      -17-


         On January  26,  1999,  we issued  1,015,000  restricted  shares of our
common stock for various Consulting Services rendered to us.

         On February 17, 1999, we issued 265,000 restricted shares of our common
stock for Consulting Services rendered to us.

         On March 1,  1999,  we issued  80,000  restricted  shares of our common
stock for Consulting Services rendered to us.

         On March 4,  1999,  we issued  20,000  restricted  shares of our common
stock for Consulting Services rendered to us.

         On March 8,  1999,  we issued  30,000  restricted  shares of our common
stock for Consulting Services rendered to us.

         On March 25, 1999,  we issued  80,000  restricted  shares of our common
stock for Consulting Services rendered to us.

         On April 9,  1999,  we issued  15,000  restricted  shares of our common
stock for Administrative Services rendered to us.

         On May 21, 1999, we issued 30,000 restricted shares of our common stock
for Consulting Services rendered to us.

         On June 1, 1999, we issued 50,000 restricted shares of our common stock
for Consulting Services rendered to us.

         On June 24, 1999,  we issued  125,000  restricted  shares of our common
stock for Executive Services rendered to us.

         On June 28, 1999,  we issued  200,000  restricted  shares of our common
stock for Consulting Services rendered to us.

         On July 27, 1999,  we issued  200,000  restricted  shares of our common
stock for Consulting Services rendered to us.

         On August 23, 1999, we issued 275,000  restricted  shares of our common
stock for Consulting Services rendered to us.

         On September 23, 1999, we issued 3,000 restricted  shares of our common
stock for Consulting Services rendered to us.

         On October 28, 1999, we issued 200,000  restricted shares of our common
stock for settlement of an employment dispute.

         On November 30, 1999, we issued 50,000  restricted shares of our common
stock for management services rendered to us.

         On December 1, 1999, we issued 55,000  restricted  shares of our common
stock for management services rendered to us.




                                      -18-


         On December 6, 1999, we issued 25,000  restricted  shares of our common
stock for management services rendered to us.

         On December 17, 1999, we issued 82,500  restricted shares of our common
stock for employee services rendered to us.

         On January 13, 2000, we issued 170,000  restricted shares of our common
stock for settlement of an employment dispute.

         On February 6, 2000, we issued 200,000  restricted shares of our common
stock for financial consulting services rendered to us.

         On February 11, 2000, we issued 75,000  restricted shares of our common
stock for management services rendered to us.

         On March 21, 2000, we issued  150,000  restricted  shares of our common
stock for management services rendered to us.

Item 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         Except  for  historical  information,  the  discussion  in this  report
contains forward-looking statements that involve risks and uncertainties.  These
forward-looking statements include, among others, those statements including the
words  "expects,"   "anticipates,"   "intends,"  "believes"  and  other  similar
language.  Our actual  results  could  differ  materially  from those  discussed
herein. You should not place undue reliance on these forward-looking statements,
which  apply only as of the date of this  report.  Factors  that could  cause or
contribute to such differences  include, but are no limited, the risks discussed
in "Certain Factors That May Affect Future Results of Operations."

                                    OVERVIEW

         LCS Golf Inc.  is a holding  company  that  operates  as a provider  of
outsourcing of permission e-mail marketing technologies and services. We provide
permission  email  direct   marketing   services   through   Golfpromo.net   and
Targetmails.com.,  Internet and direct marketing services through Ifusionco.com.
and PlayGolfNow.com, Golf ecommerce news and information through a vertical golf
portal and discounts on golf services.

         After   identifying  the   opportunity  for  permission   email  direct
marketing,  newsletter  marketing and Internet & direct  marketing,  we began to
refocus our strategy  towards  permission  email and  Internet  marketing in the
latter  part of our fiscal  year ended  February  29,  2000.  To  implement  our
permission based email strategy, we acquired Golf Promo, created TargetMails and
started ifusionco in 1999. As a result of our new focus, we have built a network
and developed reseller relationships which collectively provide us with reach to
over 3 million self-selected  individuals,  who have given express permission to
receive promotional  messages via email on specific categories of interest.  Our
current  strategy is to focus our resources on our permission  email business by
continuing to build our network of subscribers and our customer base.

         We  derive  revenue  by  charging  fees for  sending  permission  email
messages.  Revenue  is  recognized  when  emails  are sent to  subscribers.  Our
customers are primarily  e-commerce  companies,  their  interactive  advertising
agencies, golf and golf related companies.

         We deliver  email  messages  to members of our Golf  related  division,
consisting of our own permission  email list and those of our network  partners,
and permission  email lists from third party list  managers.  We pay our network
partners or third party list  managers  either a percentage  of revenue  derived
from the  delivery of email  messages to members on the lists they  provide or a
fixed fee.  Substantially  all of our customers  purchase our  permission  email



                                      -19-


services under short-term contracts. Our revenues would suffer if we were unable
to secure new contracts  from  existing  customers or obtain new  customers.  We
expect to  continue  to  derive a  substantial  majority  of our  revenues  from
short-term contracts.

         We expect to increase  spending on sales and marketing as we expand our
sales force, increase our subscriber base and promote awareness of our brand. We
also  expect  substantially  higher  general and  administrative  expenses as we
expand our  infrastructure  to support our expected growth and as we continue to
develop new product lines and make enhancements to our existing  products.  As a
result  of these  increases,  we  expect  to incur  significant  losses  for the
foreseeable future.

         Manufacturing  operations  for Mr. B III - The  Company  has decided to
terminate all of its manufacturing  operations and has discontinued all of Mr. B
III operations as well as written-off all its good will on the contract with Mr.
Joe Namath as Mr. B III corporate representative.

         In view of the rapidly  evolving  nature of our  business,  our limited
operating  history  and our  recent  focus  on  permission  email  and  Internet
marketing services, we believe that period-to-period  comparisons of our revenue
and operating  results,  including our gross margin and operating  expenses as a
percentage of total  revenues,  are not meaningful and should not be relied upon
as an indication of future  performance.  We do not believe that our  historical
growth rates are indicative of future results.

RESULTS OF OPERATIONS

TWELVE MONTHS ENDED FEBRUARY 29, 2001 AND FEBRUARY 29, 2000

Revenues

         Our  revenues  consist  of  fees  from  providing   Internet  marketing
services, including the delivery of permission mail direct marketing messages to
members in our network,  newsletter-marketing,  ecommerce,  banner  advertising,
Internet marketing services and direct marketing campaigns. We have also entered
into agreements  with several  companies to engage and represent their company's
database and broker their client's  list.  These  agreements  should allow us to
realize  additional  revenues,  increased brand awareness and capture additional
market   shares  in  the   permission   based  and  affinity   marketing   email
communications services.

         Our  revenues  for the  twelve  months  ended  February  28,  2002 were
$698,536 on a  consolidated  basis as compared to 1,909,000 for the prior twelve
months ended  February  29,  2000.  Our  operating  expenses  (cost of sales and
selling,  general and  administrative  expenses) were  $2,272,662 as compared to
$4,630,780 for the prior  twelve-months ended February 29, 2000. In an effort to
reduce  the  strain  on our  cash  flow we  have  outsourced  our  manufacturing
operations  at B III.  This change has allowed us to reduce our fixed  operating
costs.  We incurred  substantial  non-cash  expenses such as issuance of capital
stock for services  rendered,  amortization of goodwill and write-offs  totaling
$1,269,261 which did not cause cash outflows to operate our business as compared
to $3,650,000 for the prior twelve months ended February 29, 2000.

Cost of Revenue

         Cost of revenues were $217,907 as compared to $1,197,820  for the prior
twelve months ended February 29, 2001.

Selling, General and Administrative

         Selling,  general and  administrative  expenses  consist  primarily  of
personnel  and related  costs of our direct  sales  force,  marketing  staff and
marketing  programs and the cost of personnel for general  corporate  functions,
including finance, accounting, human resources, facilities, legal, shares issued
for   consulting   fees  and   settlement  of  claims.

                                      -20-


Selling,  general and  administrative  expenses were  $2,272,662  for the twelve
months  ended  February  28,  2001  compared to  $4,630,780  for the year ending
February 29, 2000.

         The  decrease  in  selling,  general and  administrative  expenses  was
primarily due to a reduction in consulting fees partially offset by increases in
our direct sales force and increased marketing expenditures targeted at building
our  permission  email and  Internet  marketing  strategy.  We expect  sales and
marketing  expenses will increase over the next year as we hire additional sales
and marketing personnel and initiate additional marketing programs.

Goodwill Expense

         Due to changes in our business  focus during the fourth  quarter  ended
February  29,  2000,  we decided to  write-off  all of its  goodwill  Joe Namath
Contract at February 28, 2001 valued at approximately $1,269,261. We have closed
manufacturing  operations  of B III. We have changed our focus from  principally
golf related  operations  to an internet data  collection  service and marketing
company.

Interest Expense

         Interest  expense  consists of interest on debt  obligations.  Interest
expense was $ 56,000 for the twelve months ending  February 29, 2000 compared to
$6,000 for the year ending February 28, 1999.

Income Taxes

         No  provision  for  federal or state  income  taxes was  recorded as we
incurred net operating losses since inception through February 29, 2000. The tax
benefit  of the net  operating  losses  has  been  reduced  by a 100%  valuation
allowance.

Liquidity and Capital Resources

         We are currently in default of the loan agreement with Traffix. However
we have entered into a forbearance  agreement which was subsequently amended. We
anticipate  repaying  Traffix over a period of time from current sales or loans.
Our monthly cash flow will be greatly  affected by the repayment of the loan. We
have to pay 50% of our collections made on our accounts  receivables to Traffix,
creating a shortfall in our cash flow. We may have to seek additional short term
loans from our CEO,  Dr.  Michael  Mitchell or other  sources to make up for the
deficiencies  in cash flow until full  repayment is  complete.  We expect to pay
this loan in full once we have received  additional  funding.  Dr.  Mitchell has
personally guaranteed repayment of up to $250,000.00 of the Traffix loan and has
already made payments of $150,000 to Traffix.

         We are also in default under the  registration  rights  agreement  with
American  Warrant.  The  Registration  Statement  to register  the shares if the
$300,000  convertible  note is  converted  into our common  stock and the shares
underline their warrants to purchase  600,000 shares of our common stock was not
declared  effective by November 15, 2000. As a result of such  default,  we have
entered into an amendment  waiver and consent  agreement  with American  Warrant
Partners  whereby  the Company  has  agreed,  among  other  things to reduce the
conversion  price of their note and the exercise  price of their  warrant to the
lower of $.12 per share or 80% of the closing bid price and quoted on the NASDAQ
OTC Bulletin Board on the date  immediately  preceding the date of conversion or
exercise, as applicable.

         We are in the process of addressing the liquidity issues. As of May 24,
2001, we sold $150,000 of convertible debentures and have received subscriptions
for an  additional  $50,000 which convert into common stock at the lower of $.12
per share or 80% of the closing  bid price of the common  stock as quoted on the
NASDAQ OTC Bulletin Board on the day immediately  preceding such  conversion.  A
copy of the  Subscription  Agreement and form of the Note are attached hereto as
Exhibits. The $200,000 of convertible debentures have been personally guaranteed
by Dr. Mitchell  pursuant to a Guarantee  Agreement and a Stock Pledge Agreement
whereby Dr.  Mitchell has personally  pledged  750,000 shares of Common Stock of
the Company, both of which are attached hereto as exhibits.


                                      -21-


         We will need additional  funding to meet our current  operating  needs,
hire  additional  sales staff and invest in  infrastructure  and  marketing.  We
anticipate revenues to increase  proportionally to the utilization of funds, and
additional revenues should allow us to achieve a positive cash flow position for
the next twelve  months.  We will attempt to maintain our fixed cost at a steady
rate and control our variable cost in proportion to our revenue base. We believe
that with new capital,  a cost control strategy and an increase in revenues,  we
should be in a position  to continue  as a going  concern.  We expect to execute
this plan on an ongoing basis.

         If we are unable to raise capital from the sources  described  above we
will reduce our overhead by terminating  lines of business that are currently in
development or generating  inadequate cash flows. We are also prepared to reduce
staff to assure a positive cash scenario.

         The  Company  continues  to  have  a  working  captial  deficiency  and
continues to generate operating losses.


Item 7.  FINANCIAL STATEMENTS

         Reference  is  made  to the  Financial  Statements  referred  to in the
accompanying Index,  setting forth the consolidated  financial statements of LCS
Golf, Inc. and subsidiaries.

Item 8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE

         On May 31, 2000, we dismissed our independent auditors, Cornick, Garber
&  Sandler,  LLP ("Cornick") and engaged the firm of Richard A. Eisner &
Company, LLP ("Eisner") to serve as our new independent auditors. The reason for
such  dismissal was not due to any  disagreement  with  Cornick,  whether or not
resolved,  on any  matter  of  accounting  principles  or  practices,  financial
statement disclosure or auditory scope or procedure.  Rather, it was because the
audit partner most familiar with us recently left Cornick and joined Eisner. The
Company's Board of Directors approved such change in Accountants.




                                      -22-

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
         AND CONTROL PERSONS; COMPLIANCE WITH
         SECTION 16(a) OF THE EXCHANGE ACT.
         ----------------------------------------

         The information required by this item is incorporated by reference from
the  Company's  definitive  proxy  statement to be filed not later than June 28,
2001 pursuant to Regulation 14A of the General Rules and  Regulations  under the
Securities Exchange Act of 1934 ("Regulation 14A").


ITEM 10. EXECUTIVE COMPENSATION.

         The information required by this item is incorporated by reference from
the  Company's  definitive  proxy  statement to be filed not later than June 28,
2001 pursuant to Regulation 14A.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN
         BENEFICIAL OWNERS AND MANAGEMENT.

         The information required by this item is incorporated by reference from
the  Company's  definitive  proxy  statement to be filed not later than June 28,
2001 pursuant to Regulation 14A.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The information required by this item is incorporated by reference from
the  Company's  definitive  proxy  statement to be filed not later than June 28,
2001 pursuant to Regulation 14A.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a)      Exhibits

2.1      Linkun Holding Company (as filed in the Form 10-SB filing on 12/9/99).

2.2      LCS Golf, Inc. Merger (as filed in the Form 10-SB filing on 12/9/99).

2.3      Golf Universe, Inc. (as filed in the Form 10-SB filing on 12/9/99).

2.4      Mr. B III, Inc. (as filed in the Form 10-SB filing on 12/9/99).

2.5      GolfPromo, Inc. (as filed in the Form 10-SB filing on 12/9/99).

2.6      PlayGolfNow, Inc. (as filed in the Form 10-SB filing on 12/9/99).

3.1      Articles  of  Incorporation  (as  filed in the  Form  10-SB  filing  on
         12/9/99).

3.2      By-laws (as filed in the Form 10-SB filing on 12/9/99).

10.1     Namath Agreement (as filed in the Form 10-SB/A filing on 4/12/00).

10.2A    Traffix  Loan  Agreement  (as  filed  in the  Form  10-SB/A  filing  on
         4/12/00).

10.2B    Traffix  Convertible  Promissory  Note (as  filed  in the Form  10-SB/A
         filing on 4/12/00).


                                      -23-


10.2C    Traffix  Security  Agreement  (as filed in the Form  10-SB/A  filing on
         4/12/00).

10.2D    Traffix  License  Agreement  (as  filed in the Form  10-SB/A  filing on
         4/12/00).

10.2E    Traffix  Marketing  Agreement  (as filed in the Form 10-SB/A  filing on
         4/12/00).

10.2F    Traffix  Registration  Rights  Agreement  (as filed in the Form 10-SB/A
         filing on 4/12/00).

10.2G    Traffix Forbearance Agreement, dated as of August 8, 2000.

10.2H    Traffix Amendment #1 to the Security  Agreement,  dated as of August 8,
         2000.

10.2I    Guaranty signed as of August 7, 2000 by Michael Mitchell for the timely
         repayment  of the  obligations  of LCS Golf under the  promissory  note
         dated as of February 16, 2000 between Traffix and LCS Golf.*

10.3A    Agreement dated as of August 10, 2000 between American Warrant Partners
         LLC and LCS Golf (as filed in Amendment No. 1 to Form 10-SB on 9/8/00.

10.3B    Registration Rights Agreement between American Warrant Partners LLC and
         LCS Golf (a filed in  Post-effective  Amendment  No. 1 to Form 10-SB on
         9/8/00.

10.3C    American  Warrant  Partners  LLC  warrant  for up to 600,000  shares of
         common  stock  expiring  August  8,  2005 (as  filed in  Post-effective
         Amendment No. 1 to Form 10-SB on 9/8/00.

10.3D    American  Warrant Partners LLC 8% Subordinated  Convertible  Promissory
         note  (as  filed in  Post-effective  Amendment  No. 1 to Form  10-SB on
         9/8/00).

10.3E    Subscription Agreement for the purchase of Convertible Debentures.*

10.3F    Form of Convertible Debenture.*

10.3G    Guarantee  Agreement dated as of May 24, 2001 between Michael  Mitchell
         and Private Equity Group LLC.*

10.3H    Stock  Pledge  Agreement  dated  as of May  24,  2001  between  Michael
         Mitchell and Private Equity Group, LLC.*

21       Subsidiaries  of the Registrant (as filed in the Form 10-SB/A filing on
         4/12/00)

27*      Financial Data Schedule


------------------------
* Filed herewith



                                      -24-


                                   SIGNATURES

            Pursuant  to  the  requirements  of  Section  13  or  15(d)  of  the
Securities  Exchange Act of 1934,  the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.


Dated:      June 13, 2001                         LCS Golf, Inc.

                                           By:    /s/ Dr. Michael Mitchell
                                                  ------------------------
                                                  Dr. Michael Mitchell
                                                  President, Chief Executive
                                                  Officer and Chairman

            Pursuant to the requirements of the Securities Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signature                                     Title                                                  Date

/s/ Dr. Michael Mitchell                      President, Chief Executive Officer and                 June 13, 2001
-------------------------------------         Chairman (Principal Executive Officer)
Dr. Michael Mitchell

/s/ Alex Bruni                                Chief Operating Officer, Principal Financial           June 13, 2001
-------------------------------------         and Accounting  Officer
Alex Bruni

                                              Director                                               June 13, 2001
-------------------------------------
Charles A. Gargano

/s/ Kenneth Greenblatt                        Director                                               June 13, 2001
-------------------------------------
Kenneth Greenblatt



                         LCS GOLF, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                                FEBRUARY 28, 2001

LCS GOLF, INC. AND SUBSIDIARIES

Contents

                                                                                                                                                          Page

Consolidated Financial Statements

Independent auditors' reports................................................F-1

Balance sheet as of February 28, 2001........................................F-2

Statements of operations for the years ended
  February 28, 2001 and February 29, 2000....................................F-3

Statements of changes in capital deficit for the years ended
  February 28, 2001 and February 29, 2000....................................F-4

Statements of cash flows for the years ended February 28, 2000
  and February 29, 2001......................................................F-5

Notes to financial statements................................................F-6








                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
LCS Golf, Inc.

We have audited the  accompanying  consolidated  balance sheet of LCS Golf, Inc.
and subsidiaries as of February 28, 2001 and the related consolidated statements
of  operations,  changes in captial  deficit  and cash flows for the years ended
February  28, 2001 and February 29, 2000.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the financial statements enumerated above present fairly, in all
material  respects,  the consolidated  financial  position of LCS Golf, Inc. and
subsidiaries  as of February 28,  2001,  and the  consolidated  results of their
operations  and their  consolidated  cash flows for the years ended February 28,
2001 and February 29, 2000 in conformity  with accounting  principles  generally
accepted in the United States of America.

As disclosed  in Note A [3], the  accompanying  financial  statements  have been
prepared assuming that the Company will continue as a going concern. As shown in
the financial statements,  the Company as at February 28, 2001, is in a negative
working capital position,  has incurred  significant  losses from operations for
the year then ended and has relied on loans from its majority stockholder. These
factors raise  substantial  doubt about the  Company's  ability to continue as a
going concern.  Management's  plans  regarding this matter are also described in
Note A [3]. The financial  statements do not include any adjustments  that might
result from the outcome of this uncertainty.


                                              Richard A. Eisner & Company, LLP
                                              --------------------------------
New York, New York                            Certified Public Accountants
June 13, 2001


                                      F-1


                         LCS GOLF, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet
                                February 28, 2001

ASSETS
Current assets:
  Cash                                                                             $  1,514
  Accounts receivable, net of allowance for doubtful
    accounts of $105,300                                                             72,965
  Prepaid and other current assets                                                   16,453
                                                                                -----------
    Total current assets                                                             90,932
Fixed assets, net                                                                    44,164
Deferred financing costs, net                                                        48,277
Security deposits                                                                    18,000
                                                                                -----------
                                                                                  $ 201,373
                                                                                ===========

LIABILITIES
Current liabilities:
  Accounts payable and accrued expenses                                         $ 1,510,049
  Notes payable                                                                      25,000
  Loans from major stockholder/president                                            629,529
  Other current liabilities                                                           4,000
                                                                                -----------
    Total current liabilities                                                     2,168,578
Convertible debt                                                                    551,300
                                                                                -----------
    Total liabilities                                                             2,719,878
Commitments
CAPITAL DEFICIT
Common stock - $.001 par value, 50,000,000 shares authorized;                        20,282
  20,282,225 shares issued and outstanding
Additional paid-in capital                                                       12,423,420
Accumulated deficit                                                            (14,962,207)
                                                                                -----------
    Total capital deficit                                                       (2,518,505)
                                                                                -----------
                                                                                   $201,373
                                                                                ===========

See independent auditors' reports and notes to financial statements



                                      F-2

LCS GOLF, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

                                                                              Year Ended
                                                                    -------------------------------
                                                                     February 28,     February 29,
                                                                         2001             2000
                                                                    --------------   --------------
Revenues                                                                 $698,536       $1,909,297
Cost of Revenues                                                          217,907        1,197,820
                                                                    --------------   --------------
                                                                          480,609          711,477
                                                                    --------------   --------------
Operating expenses
  Selling, general and administrative expenses                          2,200,662        4,630,780
    (includes $2,150,133
    of expenses paid with common stock in 2000)
  Write-off of intangible assets                                        1,269,261        1,270,607
                                                                    --------------   --------------
  Total operating expenses                                              3,469,923        5,901,387
Loss from operations before other income (expense)                     (2,989,294)      (5,189,910)
Other income (expense):
  Other income                                                                 86           11,204
  Interest expense                                                       (496,556)         (55,336)
                                                                    --------------   --------------
Net loss                                                              $(3,485,764)     $(5,234,542)
                                                                    ==============   ==============
Net loss per share - basic and diluted                                      $(.17)           $(.27)
                                                                    ==============   ==============
Weighted average number of shares outstanding                          20,270,687       19,043,494
                                                                    ==============   ==============

       See independent auditors' report and notes to financial statements

                                      F-3


LCS GOLF, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Capital Deficit

                                                          Common Shares             Additional
                                                   ----------------------------       Paid-In      Accumulated     Unamortized
                                                      Shares          Amount          Capital        Deficit      Debt Expense
                                                   ------------    ------------    ------------   ------------    ------------
Balance - February 28, 1999                          17,519,225    $     17,519    $  8,137,066   $ (6,241,000)
Liabilities paid with Common Stock                    1,107,500           1,108       1,404,688
Shares issued in connection with acquisitions           150,000             150         144,038
Options issued in connection with loan agreement                                        139,000                    $  (139,000)
Shares issued for services                            1,355,500           1,355       2,148,778
Net loss for the year ended February 29, 2000                                                       (5,234,542)
                                                   ------------    ------------    ------------   ------------    ------------
Balance - February 29, 2000                          20,132,225          20,132      11,973,570    (11,476,443)       (139,000)
Liabilities paid with common stock                      150,000             150         149,850
Write-off of options issued in connection                                                                              139,000
  with loan agreement
Options issued in connection with loan agreement                                        300,000
Net loss for the year ended February 29, 2001                                                                       (3,485,764)
                                                   ------------    ------------    ------------   ------------    ------------
Balance - February 28, 2001                          20,282,225    $     20,282    $ 12,423,420   $(14,962,207)   $          0
                                                   ============    ============    ============   ============    ============

       See independent auditors' report and notes to financial statements

                                      F-4




LCS GOLF, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

                                                                        Year Ended
                                                           ------------------------------------
                                                           February 28, 2001  February 29, 2000
                                                           -----------------  -----------------
Cash flows from operating activities:
  Net loss                                                    $(3,485,764)     $(5,234,542)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation and amortization                                 504,609          326,431
    Write-off of fixed assets                                      29,000
    Issuance of common stock for services                                        2,150,133
    Write-off of intangible assets                              1,269,261        1,270,607
    Provisions for doubtful accounts                               40,550

    Changes in:
      Accounts receivable                                          23,500         (137,015)
      Due from factor                                              11,144           83,440
      Inventory                                                                     73,377
      Prepaid and other current assets                            106,710          404,490
      Security deposits                                                             (7,800)
      Accounts payable and accrued expenses                       870,753          209,534
      Other current liabilities                                   (64,444)          24,516
                                                              -----------      -----------
            Net cash used in operating activities                (694,681)        (836,829)
                                                              -----------      -----------
Cash flows from investing activities:
  Purchase of fixed assets                                         (8,137)         (51,412)
  Collection of (loans to) major stockholder/president                              26,515
                                                              -----------      -----------
            Net cash used in investing activities                  (8,137)         (24,897)
                                                              -----------      -----------
Cash flows from financing activities:
  Proceeds from notes issued                                      300,000          550,000
  Repayment of note                                              (177,500)         (25,000)
  Proceeds from major stockholder/president loans                 365,474          615,823
  Repayment of major stockholder/president loans                   (5,908)        (345,860)
                                                              -----------      -----------
            Net cash provided by financing activities             482,066          794,963
                                                              -----------      -----------
Net (decrease) increase in cash                                  (220,752)         (66,763)
Cash - beginning                                                   22,266          289,029
                                                              -----------      -----------
Cash - ending                                                 $     1,514      $   222,266
                                                              ===========      ===========

Supplementary disclosures of cash paid during the year for:
  Interest                                                    $     7,037      $    41,707
Noncash activity:
  Liabilities paid with common stock                          $   150,000      $ 1,405,796
  Additional common stock issued for purchase of business                      $   144,188

       See independent auditors' report and notes to financial statements

                                      F-5





LCS GOLF, INC. AND SUBSIDIARIES

Notes to Consolidated  Financial  Statements
February 28, 2001 and February 29, 2000

NOTE A -  DESCRIPTION  OF BUSINESS  AND  SUMMARY OF  SIGNIFICANT ACCOUNTING POLICIES

[1]         The Company:

            On October 28, 1997, LCS Golf, Inc. (the "Company"), an inactive New
            York corporation, was merged in a reverse merger transaction into an
            inactive Delaware corporation with the same name ("LCS Delaware") in
            exchange for 980,904  shares of LCS  Delaware's  common  stock.  The
            Company paid $50,000 as a finder's fee in connection with the merger
            which has been  charged to expense.  In addition,  3,916,360  shares
            with a value of $25,000 were issued to certain existing shareholders
            of the Company for services  rendered in connection with the merger.
            For financial  accounting  purposes,  the merger on October 28, 1997
            has been treated as the  acquisition  of LCS Delaware by the Company
            in the form of a  recapitalization.  Therefore,  no  value  has been
            ascribed to the common stock held by the LCS Delaware shareholders.

            The  Company  was formed  under the laws of the State of New York on
            March 8, 1994. On October 26, 1994, the Company  commenced  business
            operations with the purchase of substantially  all of the assets and
            the assumption of specific  liabilities of Bert Dargie Golf, Inc., a
            Tennessee   corporation   engaged  in  the  business  of  designing,
            assembling and marketing golf clubs and related accessories.

            In August 1996,  the Company  conveyed,  assigned,  transferred  and
            delivered  substantially  all of its business  assets to Dargie Golf
            Co. (the  "Purchaser")  in exchange for the: i)  cancellation of the
            remaining  debt owed to the  Purchaser  arising from the October 26,
            1994  purchase,  ii) sale by Herbert A.  Dargie III of his 5 percent
            ownership  interest  in the  Company to the  Company  and,  iii) the
            assumption of certain liabilities of the Company by the Purchaser.

            The  Company is  primarily  engaged  in the  marketing  of  database
            information  obtained from its websites and others.  These  products
            and services include magnetic therapeutic devices, discounted greens
            fees    and     other     services,     and    a    golf     website
            (http://www.playgolfnow.com)  which  provides  various  golf-related
            hyperlinks to other golf websites and golf course previews.

[2]         Principles of consolidation:

            The consolidated  financial  statements  include the accounts of LCS
            Golf,  Inc. and its  subsidiaries:  Play Golf Now, Inc.;  Golfpromo,
            Inc.;  Golf  Universe,  Inc.;  Ifusion  Corp.  and Mr.  B III,  Inc.
            (inactive), all of which are wholly owned. All material intercompany
            accounts and transactions have been eliminated in consolidation.

[3]         Basis of presentation:

            The  accompanying   consolidated   financial  statements  have  been
            prepared on a going concern basis which contemplates the realization
            of assets and the  satisfaction  of liabilities in the normal course
            of business.

            Through February 28, 2001, the Company has not been able to generate
            significant  revenues  from its  operations  to cover  its costs and
            operating expenses and at February 28, 2001 is in a negative working
            capital  position.

                                      F-6

LCS GOLF, INC. AND SUBSIDIARIES

Notes to Consolidated  Financial  Statements
February 28, 2001 and February 29, 2000

            Although  the Company has been able to issue its common  stock (Note
            H) for a  significant  portion of its expenses or has obtained  cash
            advances  from its major  stockholder/president  (Note C), it is not
            known whether the Company will be able to continue this practice, be
            able to obtain  continuing  cash  advances  or if its  revenue  will
            increase  significantly  to be  able  to  meet  its  cash  operating
            expenses.

            This, in turn, raises  substantial doubt about the Company's ability
            to continue as a going concern.  The Company is attemtping to obtain
            additional   funding  in  the  form  of  debt  or  equity  including
            arrangements which could  significantly  change the structure of the
            Company.  However,  no assurances  can be given as to the success of
            these plans. The financial statements do not include any adjustments
            that might result from the outcome of these uncertainties.

[4]         Depreciation of equipment:

            Depreciation is provided utilizing the straight-line method over the
            estimated  useful  lives  of the  related  assets.  For  income  tax
            purposes,  accelerated depreciation methods are utilized for certain
            assets.

            [5] Deferred income taxes:  Deferred income taxes are reported using
            the  liability  method.  Deferred  tax  assets  are  recognized  for
            deductible  temporary  differences  and deferred tax liabilities are
            recognized for taxable temporary differences.  Temporary differences
            are the  differences  between  the  reported  amounts  of assets and
            liabilities and their tax bases.  Deferred tax assets are reduced by
            a valuation allowance when, in the opinion of management, it is more
            likely than not that some  portion or all of the deferred tax assets
            will not be  realized.  Deferred  tax  assets  and  liabilities  are
            adjusted  for the  effects  of  changes in tax laws and rates on the
            date of enactment.

[6]         Intangible assets:

            In connection with the Company's acquisitions (Note B), the value of
            the common stock issued and the cash paid substantially exceeded the
            fair  value  of the  tangible  assets  acquired,  which  excess  was
            attributable to goodwill, customer lists and website costs. However,
            since  it was not  practicable  to  allocate  the  excess  to  these
            components  on an  individual  basis,  the excess was  reflected  as
            "Intangible  Assets" which were being  amortized on a  straight-line
            basis over ten years.

            In fiscal year 2001,  the Company  wrote off the carrying  amount of
            these intangible assets.

[7]         Concentrations:

            Financial  instruments  which  potentially  subject  the  Company to
            concentration of credit risk consist of accounts receivable and cash
            deposits.  Cash  balances  are  held  principally  at one  financial
            institution  and may exceed Federal  Deposit  Insurance  Corporation
            insured amounts.

            For  the  year  ended  February  28,  2001,  sales  to one  customer
            accounted for  approximately  24% of total sales. In addition,  four
            customers  accounted  for  approximately  18%,  15%,  15% and 10% of
            accounts  receivable  at  February  28,  2001.  For the  year  ended
            February  29,  2000,   sales  to  three   customers   accounted  for
            approximately  21%, 15% and 10% of total sales,  and three customers
            accounted for approximately 34%, 32% and 16% of accounts  receivable
            at February 29, 2000.

                                      F-7

LCS GOLF, INC. AND SUBSIDIARIES

Notes to Consolidated  Financial  Statements
February 28, 2001 and February 29, 2000

[8]         Advertising costs:
            The Company expenses its advertising  costs when incurred.  However,
            $10,000  of  expenses  relating  to  an  infomercial  which  was  in
            production  as of  February  28, 1999 were  expensed  upon the first
            showing of the infomercial during the year ended February 29, 2000.

            Advertising  costs were  approximately  $160,000  for the year ended
            February 28, 2001 and $142,000 for the year ended  February 29, 2000
            which includes approximately $133,000 of the infomercial.

[9]         Loss per share:

            Loss per share has been  computed  by  dividing  the net loss by the
            weighted  average  number of common shares  outstanding  during each
            period. The effect of outstanding potential common shares, including
            stock options,  warrants and convertible debt is not included in the
            per share calculations as it would be anti-dilutive.

[10]        Use of estimates:

            The preparation of financial statements in conformity with generally
            accepted accounting principles requires management to make estimates
            and assumptions  that affect the reported  amounts of assets,  which
            are subject to impairment consideration,  liabilities and disclosure
            of contingent  assets and  liabilities  at the date of the financial
            statements and reported  amounts of revenues and expenses during the
            reporting period. Actual results could differ from those estimates.

[11]        Revenue recognition:

(a)         Advertising revenue:

            Advertising  revenue is derived from third-party  advertising on the
            Company's  websites.  This is  comprised of banner  advertising  and
            newsletter  marketing.  Advertising  revenue  is  recognized  in the
            period  that the  advertisement  is  displayed.  Revenue  related to
            barter  transactions is not recognized  unelss the fair value of the
            advertising is  determinable  based upon the entities own historical
            practice of receiving cash.

(b)         Merchandise revenue:

            Merchandise   revenue  is  derived  principally  from  the  sale  of
            specialty  pillows,  and is  recognized  once the  product  has been
            shipped and payment is assured.

(c)         E-mail distribution revenue:

            E-mail  distribution  revenue is derived from delivering  permission
            e-mail for  third-parties  to the Company's and other mailing lists.
            E-mail  distribution  revenue  is  recognized  when  the  e-mail  is
            delivered.

(d)         Marketing revenue:

            Marketing revenue is derived from providing  marketing  services and
            related marketing  materials to third-parties.  Marketing revenue is
            recognized once the service is completed.

                                      F-8



LCS GOLF, INC. AND SUBSIDIARIES

Notes to Consolidated  Financial  Statements
February 28, 2001 and February 29, 2000

(e)         Commission income:

            Commission income is derived from e-commerce  transactions generated
            through the Company's websites for third-party products.  Commission
            revenue is recognized  once the product has been shipped and payment
            is assured.

NOTE B - INCOME TAXES

At February 28, 2001,  the Company has available for federal income tax purposes
net operating loss carryforwards of approximately  $11,600,000  expiring through
2021 which  generated  a deferred  tax asset of  approximately  $4,482,000.  The
difference  between the cumulative net losses for financial  reporting  purposes
and the net operating  loss  carryforwards  for tax purposes is primarily due to
the write-off of intangible  assets which are not currently  deductible  for tax
purposes which generated a tax asset of approximately  $521,000. The Company has
provided a valuation  reserve against these deferred tax assets of approximately
$5,003,000 since the likelihood of realization cannot be determined.

                                      F-9

LCS GOLF, INC. AND SUBSIDIARIES

Notes to Consolidated  Financial  Statements
February 28, 2001 and February 29, 2000


The  difference  between the  statutory tax rate of 34 percent and the Company's
effective  tax  rate  of 0  percent  is  due to the  increase  in the  valuation
allowance of $1,324,000 and $1,510,000 for the years ended February 28, 2001 and
February 29, 2000, respectively.

Section 382 of the Internal Revenue Code contains provisions which may limit the
loss  carryforwards  available  if  significant  changes  occur  in  stockholder
ownership  interests.  Management  believes that such  limitations  apply to the
February 28, 1999 net operating loss of approximately  $5,592,000 as a result of
changes in stockholder ownership interests and, accordingly, the Company will be
subject to an annual limitation of approximately  $395,000 on the utilization of
its February 28, 1999 net operating loss.

The Company has not filed its prior years income tax returns.

NOTE C - LOANS FROM MAJOR STOCKHOLDER/PRESIDENT

Loans from major  stockholder/president  are payable on demand with  interest at
10% a year.  These loans are  unsecured.  At February 28, 2001, the net advances
from the major  stockholder/president  were approximately  $630,000. The Company
has accrued interest expense of approximately  $68,000 and $17,000 for the years
ended February 28,2001 and February 29,2000, respectively.


NOTE D - EQUIPMENT

Equipment consists of the following:

                                                                      February 28,      Useful Lives
                                                                          2001             (Years)

                       Office equipment and computers                   $18,432               5
                       Machinery and equipment                           41,969               5

                                                                         60,401
                       Less accumulated depreciation                     31,326
                                                                        $44,164
                                                                     ===========


Depreciation expense for the years ended February 28, 2001 and February 29, 2000
was $17,816 and $11,619, respectively.

NOTE E - LICENSING AGREEMENT

In December  1998, the Company  entered into a ten year licensing  agreement for
the services of Joe Namath, a sports celebrity,  to be a spokesperson to promote
the Company's products. The license fee of approximately  $1,586,500,  which was
being amortized over the life of the agreement,  was paid for by the issuance of
1,200,000  shares  of  the  Company's  common  stock  with  a  market  value  of
$1,174,500,  the issuance of 600,000  shares of common stock with a market value
of  approximately  $387,000 to two  individuals  who assisted in  obtaining  the
agreement  and  $25,000 in cash.  During  the

                                      F-10

LCS GOLF, INC. AND SUBSIDIARIES

Notes to Consolidated  Financial  Statements
February 28, 2001 and February 29, 2000


fourth quarter of the year ended  February 28, 2001, the Company  evaluated this
asset  for  impairment  on the basis of  whether  it is fully  recoverable  from
projected  undiscounted  cash flows expected to be realized from this agreement.
The  Company  wrote  off the  remaining  value of this  asset  of  approximately
$1,269,000.  The amortization  expense for the years ended February 28, 2001 and
February 29, 2000 was  approximately  $119,000 and  $156,000,  respectively.  In
addition,  Mr. Namath is entitled to a royalty fee of 5% of the gross sales,  as
defined,  generated from products promoted in accordance with the agreement.  No
royalties are due for the years ended February 28, 2001 and February 29, 2000.

NOTE F - CONVERTIBLE DEBT

(1)         $500, 000 Convertible Promissory Note

On February 16, 2000, the Company borrowed from Traffix,  Inc. (formerly Quintel
Communications, Inc. ("Traffix"), an internet marketing and development company,
$500,000 in the form of a convertible  promissory  note ("Note").  Subsequent to
February 29, 2000,  this debt was in default.  The Note was due on demand at any
time after  August 16, 2000 and is  convertible  into  500,000  shares of common
stock of the Company at any time prior to  repayment.  Any shares  issued by the
Company will have registration and piggyback registration rights and are subject
to  anti-dilution  adjustment in certain  cases.  If any  additional  shares are
issued  under the  anti-dilution  provisions,  the Company  will have a one-time
repurchase  right at a $1.00 per share during the twelve month period  following
the date of  conversion  of the Note.  The Note was without  interest  until the
earlier of August 17, 2000 or an event of default under the Note. Interest to be
charged  will be at prime plus 4%, not to exceed 14%. The Note may be prepaid at
anytime  after giving 15 days prior written  notice.  The Note is secured by the
Company's  database and all related  records,  contract  rights and  intangibles
which has been  delivered to the lender and must be updated upon request,  until
the obligation has been paid.

The  Company  entered  into a ten year  licensing  agreement  for the use of its
database with Traffix.  Traffix will pay $5,000 per month. These payments can be
used to offset the remaining balance owed to Traffix.

The Company  also entered into a two year  marketing  agreement  with Traffix to
develop programs to market products and services and send promotional e-mails to
the  visitors  and  customers of the  Company's  websites.  Traffix will pay the
Company $.25 for each  individual who "opts in" to be registered with Traffix at
its site.  Revenues  generated from these programs (less direct  "out-of-pocket"
costs, including royalties,  cost of producing the marketing materials and other
expense   directly  related  to  the  programs)  will  be  divided  equally  and
distributed quarterly less any required reserves.

In connection with the marketing agreement,  the Company issued two-year options
to purchase  100,000  shares of the Company's  common stock at $1.00 a share and
100,000  shares at $2.00 per share.  The value of these  options at grant  date,
utilizing the Black-Scholes option pricing model, was $139,000.  The assumptions
used in  determining  the value was an expected  volatility  of 155%, an average
interest  rate of 6.68% per annum and an expected  holding  period of two years.
These  options  are  subject to certain  anti-dilution  provisions  and  provide
registration  rights for the underlying  shares. The agreement can be terminated
in the  event of a default  under the  agreement  by either  party  which is not
corrected within 30 days after notice is given.

On August 8, 2000, following certain  disagreements  concerning Traffix's use of
our database,  the Company entered into a Forbearance  Agreement and amended the
security agreement with Traffix.  The Company made a $50,000 payment against the
$500,000  convertible note (see Note H) which was funded personally by its major
stockholder/president.  The Note was  amended to provide  for payment on demand.
The amended security agreement requires the Company to remit to Traffix,  50% of
collections on the outstanding accounts receivable as of August 10, 2000 and 25%
of all subsequent accounts receivable collected,  within five days. Payments are
to be  credited,  first to interest  and then to  principal.  Traffix

                                      F-11

LCS GOLF, INC. AND SUBSIDIARIES

Notes to Consolidated  Financial  Statements
February 28, 2001 and February 29, 2000

is also to receive 50% of all other cash receipts,  including  additional loans,
until  the Note is paid.  The  amended  security  agreement  also  includes  all
accounts of the Company and all security, or guarantees held with respect to the
accounts  and  all  account   proceeds.   In  addition,   the  Company's   major
stockholder/president  personally guaranteed up to $250,000 of the Note of which
$160,000,  (including the two payments of $50,000 each discussed below) has been
paid against this guaranty).

Due to the above amendment,  Traffix agreed not to demand payment on the Note or
commence  any action  against the Company,  as long as it receives  payments for
interest  and  principal  of at least  $10,000  per month or  collection  of the
Company's accounts  receivable or money from the guarantor,  the Company's major
stockholder/president,  and the  Company  generates  gross  revenues of at least
$75,000 per month.

On August 8, 2000, the Company received $300,000 from American Warrant Partners,
LLC  ("American  Warrant")  in  the  form  of  an  8%  convertible  subordinated
promissory note (see below).  The Company did not remit 50% of the cash proceeds
of this note, as required by the  Forbearance  Agreement,  which put the Company
into default  under its agreement  with Traffix.  The Company has not obtained a
waiver of the default, however, the major  stockholder/president  agreed to fund
personally,  two payments of $50,000 each towards the  principal and interest on
the Traffix Note.  In addition,  for the required  periods,  the Company did not
generate  $75,000 per month in gross revenues as required under the  forbearance
agreement.

On May 16,  2001,  the Company  entered into an agreement  Traffix,  Inc.  which
amended the  aforementioned  Forebearance  Agreement  dated August 8, 2000.  The
Company  agreed  to pay  $10,000.  Upon  the  closing  of the  Company's  Bridge
financing (see below), Traffix will be paid an additional $10,000. Commencing on
June 1, 2001, the Company  agreed to a payment  schedule of a minimum of $10,000
per month  until the date the  registration  statement  required  to be filed in
connection with a proposed equity line becomes effective. Beginning on the first
day of the month after the registration statement is effective,  Traffix will be
paid a minimum of $25,000 per month.

(2)ab$300,000 Convertible Subordinated Promissory Note

On August 8, 2000,  American  Warrant  loaned the Company  $300,000  under an 8%
convertible subordinated promissory note with a maturity date of August 8, 2002.
The note is convertible, at the option of American Warrant, into common stock at
$.25 per share,  subject to adjustment  which resulted in a discount of the note
of approximately  $201,000. This discount was immediately recognized as interest
expense due to the ability of American  Warrant to convert the note at any time.
Interest is payable quarterly commencing on September 30, 2000. The Company also
issued a five year warrant expiring on August 8, 2005 to purchase 600,000 shares
of common stock,  exercisable at $.40 per share,  subject to  adjustment,  to be
exercised  in  whole or in  part.  The  value  of this  warrant  at grant  date,
utilizing the Black-Scholes  option pricing model, was  approximately  $260,000.
The  assumptions  used in  determining  the value was an expected  volatility of
227%, an average interest rate of 6.06% per annum and an expected holding period
of five years.  The  allocated  value of the  warrant is  $99,000,  which is the
portion attributed to the warrant due to it being issued in conjunction with the
$300,000  convertible  promissory  note. This amount is to be amortized over the
life of the two year  note,  or  shorter if  exercised  earlier.  Based upon the
values ascribed to the convertibility  feature of the note and the warrant,  the
Company has  recorded  additional  interest  expense of  approximately  $228,000
during the year ended  February  28,  2001.  In order to elect to  exercise  the
warrant at the share price computed using the formula in the warrant  agreement,
American  Warrant must  deliver the warrant and a written  notice of election to
exercise  the  warrant  to  the  Company.   The  Company  also  entered  into  a
registration rights agreement whereby a Registration Statement for the shares is
to be filed as soon as reasonably  practicable  but not later than September 15,
2000. The Company did not file the Registration  Statement by September 15, 2000
and since the Registration  Statement was not declared effective by November 15,
2000,  the  terms of

                                      F-12

LCS GOLF, INC. AND SUBSIDIARIES

Notes to Consolidated  Financial  Statements
February 28, 2001 and February 29, 2000

the agreement are that for each 30-day period that the Registration Statement is
not declared  effective,  the conversion  price of $0.25 of the convertible note
and the  warrant  exercise  price of $0.40 will each be reduced by 2% per 30-day
period,  until the exercise price reaches $0.05.  Pursuant to this, at year-end,
the  reduced  conversion  price and the  exercise  price were $0.23 and  $0.368,
respectively.  The effect of this  change was not  material.  In  addition,  the
interest rate on the  convertible  note will increase 2% for each 30-day period,
not to exceed 15%.  Pursuant to this, the Company has recorded  interest expense
of $11,000 for the year ended  February 28, 2001.  As of February  28,2001,  the
interest  rate is 15%.  Certain  officers  and  directors  agreed  to a  lock-up
agreement  restricting their right to sell,  transfer,  pledge or hypothecate or
otherwise encumber their shares until the earlier of 1) the one year anniversary
of the agreement,  2.) the effective date of the Registration  Statement.  or 3)
until the Company  raises  $1,000,000 in equity or debt  financing.  The Company
agreed  to  recommend  and use its best  efforts  to elect a  representative  of
American  Warrant to the Board of Directors  until one year from the date of the
agreement or until the Company  raises  $1,000,000 in equity or debt  financing.
The Company also agreed that, without prior written consent of American warrant,
it would  not  offer  for sale or sell  common  stock at a price  less  than the
average  closing price per share as quoted by the OTC Electronic  Bulletin Board
for the  five  days  prior to the  transaction.  When  85% of the  interest  and
principal of the note is paid or converted to common stock or 180 days from date
of the Warrant Agreement passes, no consent will be required.

On May 16,  2001,  the Company  entered  into an  amendment,  waiver and consent
relating  to the 8%  convertible  subordinated  promissory  note,  warrant,  and
registration  rights  agreement  revising the conversion price of the promissory
note and the  exercise  price of the warrant to the lower of $0.12 or 80% of the
current market price on the date immediately  preceding the date of the exercise
or conversion.  The Company is required to register the underlying  common stock
in a  registration  statement  to be filed in  connection  with a  proposed  new
investment no later than 60 days from June 15, 2001, in consideration for which,
American Warrant has agreed to waive any penalty  provisions with respect to the
filing of the registration statement and consent to the issuance of common stock
below the then  applicable  conversion or exercise price of the promissory  note
and warrant relating to the bridge financing received on May 24,2001.

Pursuant to this  amendment to Conversion and Exercise  price,  the Company will
record a charge of  approximately  $239,000 for the quarter  ended May 31, 2001,
which represents the beneficial conversion feature resulting from the difference
between the FMV of the shares at the  effective  date of the  amendment  and the
effective conversion rate of the note.

Convertible debt, as of February 28, 2001, is comprised of the following:


                Traffix Note                         $322,500
                American Warrant Note                 228,800
                                                   -------------
                                                     $551,300
                                                   =============

(3)         Bridge Financing - $200,000 Convertible Debentures

On May 24, 2001, the Company  entered into an Agreement for the sale of $200,000
of 8% convertible  debentures which  automatically  convert into common stock in
five  years at the  lower  of $0.12  per  share  or 80% of the  market  price as
defined. The $200,000 Note has been personally guaranteed by the Company's major
stockholder/president  with 750,000 of his shares of the  Company's  stock being
held in escrow. The Company also agreed to file a registration statement for the
shares is to be filed as soon as  practicable  but no later than sixty  calendar
days from June 15, 2001. At June 13, 2001, the Company has received  $150,000 of
the proceeds of this note.

F-13

LCS GOLF, INC. AND SUBSIDIARIES

Notes to Consolidated  Financial  Statements
February 28, 2001 and February 29, 2000

NOTE G - COMMITMENTS

[1]         Employment agreements:

            On June 1, 1998,  the Company  entered  into a five year  employment
            agreement  with its President  which  provides for a minimum  annual
            salary of  $260,000  with an annual  increase  of not less than four
            percent. Compensation under this agreement was $279,000 and $268,000
            for the  years  ended  February  28,  2001 and  February  29,  2000,
            respectively.  As of February  28,2001,  the Company has included in
            accrued expenses $591,000 of unpaid salary.

            On June 1, 1998,  the Company  entered  into a five year  employment
            agreement  with its President  which  provides for a minimum  annual
            salary  of  $260,000  with  annual  increases  of not less than four
            percent. Compensation under this agreement was $279,000 and $268,000
            for the  years  ended  February  28,  2001 and  February  29,  2000,
            respectively.

            In connection with the acquisition of PlayGolfNow, Inc., the Company
            entered into an employment  agreement with the seller for a two year
            period commencing on May 26, 1999 at an annual salary of $104,000.

[2]         Lease:

            In June 2001, the Company entered into a three year lease for office
            space in  Florida.  The lease can be renewed for an  additional  two
            year  term.  Rent is $2,971 a month  with an  annual  cost of living
            increase and is subject to further  adjustments for any increases in
            real estate  taxes or  insurance.  The minimum  annual base  rentals
            under this lease are as follows:

                      Year ending February 28,
               ---------------------------------
                                2002                         $ 42,754
                                2003                           35,652
                                2003                           35,652
                   Year ending
                   February 29, 2004                           11,584
                                2005
                                                       -----------------
                                                            $ 125,942
                                                       =================

            The Company's other  locations are leased space on a  month-to-month
            basis. Rent expense was $70,125 for the year ended February 28, 2001
            and $50,540for the year ended February 29, 2000.

NOTE H - STOCKHOLDERS' EQUITY

During the year ended February 28, 1999, the Company sold, under Regulation D of
the Federal  Securities Act, 200,000 units at $.10 a unit. Each unit consists of
one share of the  Company's  common  stock and two common stock  warrants.  Each
warrant is for the purchase of seven shares of common stock at $.35 a share.

                                      F-14

LCS GOLF, INC. AND SUBSIDIARIES

Notes to Consolidated  Financial  Statements
February 28, 2001 and February 29, 2000

NOTE H - STOCKHOLDERS' EQUITY  (CONTINUED)

The  Company  has  issued  shares of common  stock  for the  following  services
rendered  during the year ended February 29, 2000 (the shares have been recorded
at the quoted market value of the Company's stock) on the dates issued:

                                                     Year Ended February 29,
                                                              2000
                                               ---------------------------------
                                                   Number of          Quoted
                                                    Shares         Market Value
                                               ---------------    --------------
Employment contract settlement (Note J)               370,000          $433,438
Board of Directors fees                               200,000          $182,189
Consulting services                                   712,500        $1,361,067
Financing costs                                         8,000           $14,688
Legal fees                                             65,000          $158,751
                                               ---------------    --------------
                                                    1,355,500        $2,150,133
                                               ===============    ==============

No shares were issued for  services  during the year ended  February  28,  2001.
During the year ended  February 28, 2001,  the Company  issued 150,000 shares of
common stock in payment of $150,000 liability.

On June 25, 1999, the  stockholders  of the Company  approved an increase in the
number of authorized shares from 20,000,000 shares to 50,000,000 shares.

NOTE I - SEGMENTS

LCS Golf, Inc., through its subsidiaries,  provides products and services to the
golf playing public. The Company's two reportable  business segments are managed
separately based on fundamental differences in their operations. They consist of
the golf related and manufacturing  segments. The golf related segment commenced
operations subsequent to February 28, 1999.

The golf  related  segment  provides  diverse  services  through  its  websites,
including  direct  marketing  services  and e-mail  direct  marketing  services,
e-commerce news and information,  internet access and discounts on golf products
and services.

The manufacturing segment is involved in the design, manufacture,  marketing and
distribution of therapeutic  magnetic and specialty products.  In November 1999,
the Company ceased  manufacturing  operations and,  utilizing its  manufacturing
assets,  is  outsourcing  this phase of the  segment.  This segment is currently
inactive.

The following  table  reflects  information  for the segments as of February 28,
2001 and  February  29, 2000 and for the years then ended,  consistent  with the
Company's  management system.  Certain significant assets and expenditures which
related  to the  overall  management  and  operations  of the  Company  are  not
allocated to any segment.  These expenses include consulting fees,  professional
fees, and general  corporate  salaries of approximately  $165,000,  $457,000 and
$279,000,

                                      F-15


respectively  for the year  ended  February  28,  2001  and for the  year  ended
February 29, 2000, they include consulting fees, professional fees and officer's
salary of $1,337,000, $394,000,$433,000 and $268,000, respectively.

NOTE I - SEGMENTS  (CONTINUED)
                                                                                          Unallocated
                                                                                          Management/
                                         Total          Golf Related     Manufacturing    Operations
Total assets:

  February 29, 2000                  $ 2,030,962       $   254,260       $    57,270       $ 1,719,432

Decrease in total assets             $(1,829,589)      $   (64,855)      $   (49,270)      $(1,715,464)

Sales:

  February 29, 2000                  $ 1,909,297       $   934,482       $   974,815

Net loss:

  February 29, 2000                  $(5,234,542)      $(1,354,350)      $  (679,166)      $(3,201,023)


NOTE J - CLAIM SETTLEMENT

During  January 2000, the Company  reached a final  settlement of a claim from a
former  employee of LCS New York,  a  predecessor  company.  The Company  issued
200,000 shares of common stock in October 1999 and an additional  170,000 shares
of  common  stock  in  January  2000.  The  market  value  of  these  shares  of
approximately  $433,438 has been  reflected  in the February 29, 2000  financial
statements.  These shares are restricted and have piggyback  registration rights
should the Company file a  registration  statement,  subject to the agreement of
the managing underwriter.

                                      F-16`