Commission File Number 0-29014

                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                               ------------------

                                   FORM 10-QSB

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 1999

                              TEARDROP GOLF COMPANY
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                DELAWARE                                      51-105660
     (State or other jurisdiction of                       (I.R.S. Employer
     incorporation or organization)                       Identification No.)
                                                
            1080 Lousons Road
            Union, New Jersey                                   07083
 (Address of Principal Executive Office)                      (Zip Code)

       Registrant's telephone number, including area code: (908) 688-4445

         Check whether issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 |_|

      Number of shares of Common Stock outstanding as of May 12, 1999: 5,179,890

Transitional Small Business Disclosure Format (Check One):  Yes  |_|  No |X|
<PAGE>

                              TEARDROP GOLF COMPANY

                                FORM 10-QSB INDEX

                    FOR QUARTERLY PERIOD ENDED MARCH 31, 1999

                                                                       Page No.
                                                                       --------

Part I.  Financial Information

         Item 1.  Financial Statements

                  Consolidated Statements of Operations                   3

                  Consolidated Balance Sheet                              4

                  Consolidated Statements of Cash Flows                   5

                  Notes to Consolidated Financial Statements              6-8

         Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operation                      9-15

Part II. Other Information                                                16

Signature Page                                                            17





                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION

                              TearDrop Golf Company
                      Consolidated Statements of Operations
             For the Three Months Ended March 31, 1999 and 1998 
      (All dollar amounts, except share and per share amounts, in $000's)

                                                    Three Months Ended March 31
                                                   ----------------------------
                                                       1999             1998
                                                   -----------      -----------

Net sales                                          $    15,218      $    25,000

Cost of sales                                            9,071           15,499
                                                   -----------      -----------

Gross profit                                             6,147            9,501

Selling, general and
  administrative expenses                                8,619            8,069
                                                   -----------      -----------

Income (loss) from operations                           (2,472)           1,432

Interest (expense) income, net                            (419)            (392)
                                                   -----------      -----------

Income (loss) before income taxes                       (2,891)           1,040
Income tax (expense)                                        --             (364)
Utilization of net loss
  carryforward                                              --              364
                                                   -----------      -----------

Net income (loss)                                  $    (2,891)     $     1,040
                                                   ===========      ===========

Preferred dividends                                         --               35
                                                   -----------      -----------

Income (loss) attributable to
  common shareholders                              $    (2,891)     $     1,005
                                                   ===========      ===========

Net income (loss) per common
  share - basic                                    $     (0.56)     $      0.38
                                                   ===========      ===========

Net loss per common share - diluted                $     (0.56)     $      0.33
                                                   ===========      ===========

Weighted average number of
  common shares outstanding - basic                  5,179,890        2,654,857
                                                   ===========      ===========

Weighted average number of
  common shares outstanding - diluted                5,179,890        3,029,440
                                                   ===========      ===========

          See accompanying notes to consolidated financial statements.


                                       3
<PAGE>

                              TearDrop Golf Company
                           Consolidated Balance Sheet
                                 March 31, 1999
       (All dollar amounts, except share and per share amounts, in $000's)

                                     ASSETS

CURRENT ASSETS:
  Cash                                                    $    317
  Accounts receivable less allowance for
    returns and doubtful accounts of $1,353                 17,435
  Inventories                                               15,442
  Other current assets                                       1,348
                                                          --------
    Total current assets                                               $ 34,542

PROPERTY AND EQUIPMENT, less accumulated
  depreciation                                                            4,595

GOODWILL AND INTANGIBLE ASSETS, less
  accumulated amortization                                                7,045
                                                                       --------

                                                                       $ 46,182
                                                                       ========
                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                        $  9,469
  Accrued liabilities                                        5,434
  Note payable - shareholder                                   500
  Note payable - bank                                       26,236
                                                          --------
    Total current liabilities                                          $ 41,639

STOCKHOLDERS' EQUITY:

  Preferred stock $.01 par value, authorized
    1,000,000 shares, issued and
    outstanding none
  Common stock, $.01 par value, authorized
    10,000,000 shares, issued and 5,179,890
    outstanding shares                                          52
  Capital in excess of par value                            25,186
  Accumulated other comprehensive income                      (229)
  Accumulated deficit                                      (20,466)
                                                          --------
    Total stockholders' equity                                            4,543
                                                                       --------

                                                                       $ 46,182
                                                                       ========

          See accompanying notes to consolidated financial statements.


                                       4
<PAGE>

                              TearDrop Golf Company
                      Consolidated Statements of Cash Flows
             For the Three Months Ended March 31, 1999 and 1998 
      (All dollar amounts, except share and per share amounts, in $000's)

                                                              Three Months
                                                             Ended March 31
                                                         ----------------------
                                                           1999           1998
                                                         -------        -------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                        $(2,891)       $ 1,040
Adjustments to reconcile net income
  (loss) to net cash used in
  operating activities:
    Depreciation and amortization                            246            182
    Provision for doubtful accounts                          145            157
  Changes in operating assets and
    liabilities:
    (Increase) in accounts receivable                     (7,466)        (9,025)
    Decrease in inventories                                3,584          6,885
    (Increase) in other current assets                      (986)           (96)
    Increase (decrease) in accounts
      payable and other current
      liabilities                                          1,499         (2,392)
                                                         -------        -------

NET CASH USED IN OPERATING ACTIVITIES                     (5,869)        (3,249)
                                                         -------        -------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of property and equipment                        (14)            --
                                                         -------        -------
NET CASH USED IN INVESTING ACTIVITIES                        (14)            --
                                                         -------        -------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings under financing
    agreements                                             5,327          3,401
  Proceeds from shareholder note payable                     500             --
  Preferred dividends                                         --            (35)
                                                         -------        -------

NET CASH PROVIDED BY FINANCING
  ACTIVITIES                                               5,827          3,366
                                                         -------        -------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                       --              1

NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                                           (56)           118

CASH AND CASH EQUIVALENTS:
   Beginning of year                                         373            257
                                                         -------        -------

   End of year                                           $   317        $   375
                                                         =======        =======

          See accompanying notes to consolidated financial statements.


                                       5
<PAGE>

                              TEARDROP GOLF COMPANY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            All amounts, except share and per share amounts, in $000
                                   (Unaudited)

NOTE 1 - ACCOUNTING POLICIES

The accompanying consolidated financial statements should be read in conjunction
with the consolidated financial statements in the Company's 1998 Annual Report
to Shareholders. In the opinion of management, all adjustments (consisting of
normal recurring accruals) necessary for a fair presentation have been included.
The results for the quarter ended March 31, 1999 do not necessarily indicate the
results that may be expected for the full year.

As of January 1, 1998, the Company adopted Financial Accounting Standards
Board's Statement 130, Reporting Comprehensive Income. Statement 130 establishes
new rules for the reporting and display of comprehensive income and its
components. However, the adoption of this Statement had no impact on the
Company's net income or stockholders' equity. Statement 130 requires foreign
currency translation adjustments, which prior to adoption were reported
separately in shareholders' equity, to be included in other comprehensive
income. Prior year financial statements have been reclassified to conform to the
requirements of Statement 130.

During the three month periods ended March 31, 1999 and 1998, total
comprehensive income (loss) amounted to $(2,891) and $1,040, respectively.

NOTE 2 - INVENTORIES

Inventories at March 31, 1999 consist of the following:

          Raw materials and work in process                $8,834
          Finished goods                                    6,608
                                                          -------

          Total inventories                               $15,442
                                                          =======

NOTE 3 - LONG TERM DEBT

During 1997, the Company obtained a line of credit with First Union National
Bank, successor by merger to CoreStates Bank, N.A., (the "Bank") initially for
$18,000, later increased to $25,000, collateralized by a security interest in
all the assets of the Company. The loan agreement, as amended, provides, among
other things, that the Company satisfy certain financial covenants. At various
times during the quarter ended March 31, 1999, the Company was in violation of
various of these financial covenants, which violations were subsequently waived
by the Bank.


                                       6
<PAGE>

                              TEARDROP GOLF COMPANY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            All amounts, except share and per share amounts, in $000
                                   (Unaudited)

On March 31, 1999, the Company amended its credit agreement and new covenants
have been established through the date of maturity. The line matures on November
10, 1999. The Company is currently engaged in discussions with the Bank to
extend the maturity date and may seek alternative sources of financing. However,
no assurance can be given that the Company will maintain compliance with the
covenants in the future, will reach terms for an extension of the credit
facility or will identify alternative sources of capital, if necessary.

In March 1999, the line was increased to $30,000 through June 30, 1999 and will
be reduced to $25,000 thereafter through maturity.

In March 1999, the Company's Chief Executive Officer loaned the Company $500
bearing interest at 8% due upon demand, once the Company has reached certain
reduced levels of indebtedness under the credit facility with the Bank.

NOTE 4 - SEASONALITY

The purchasing decisions of most customers are typically made in the autumn and
a vast majority of sales are expected to occur during the first six months of
the year. In addition, quarterly results may vary from year to year due to the
timing of new product introductions, orders and sales, advertising expenditures,
promotional periods and shipments. Accordingly, comparisons of quarterly
information of the Company's results of operations may not be indicative of the
Company's overall annual performance.

NOTE 5 - COMMITMENTS AND CONTINGENCIES

The Company has entered into endorsement agreements with touring golf
professionals for periods up to three years. The agreements typically provide
for a base compensation and bonuses based upon, among other things, tournament
performances, standings on the official money list and earning spots on Ryder or
President Cup teams.

Minimum compensation requirements for the years ending December 31, 1999, 2000
and 2001, are approximately $4,200, $3,100 and $1,900, respectively.
Additionally, the Company has agreed to issue options to purchase 55,000, 46,000
and 16,000 shares of common stock in connection with these agreements for the
years ending December 31, 1999, 2000, and 2001, respectively. Of the options to
be issued under these agreements, 14,000 to be granted in 1999 and 9,000 to be
granted in 2000, could be exchanged for $100 and $75, respectively.


                                       7
<PAGE>

                              TEARDROP GOLF COMPANY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            All amounts, except share and per share amounts, in $000
                                   (Unaudited)

The Company entered into an advertising agreement for the years 1999 and 2000
for which the Company has committed to spend approximately $1,500 in 1999 and
$1,551 in 2000.

The Company has obligations with respect to media placement, primarily for
television advertising which requires the Company to spend no less than $5,000,
which amounts could increase over the remainder of the year.

In November 1996, the Company entered into a three year employment agreement
with its President and Chief Executive Officer commencing December 19, 1996. The
agreement provides for annual compensation of $250 for the years ending December
31, 1998 and 1999, and performance bonuses, as defined. The employment agreement
has been extended through 2001.

The Company has been named, among others, as a defendant in a lawsuit seeking
damages of $12,000. That demand has been significantly diminished. The Company
believes that the lawsuit is without merit and will defend it vigorously.
Accordingly, no reserve has been established in this connection.

NOTE 6 - SEGMENT INFORMATION

It is management's opinion that the Company, at this time, has only one
reportable segment, and that segment is the manufacture, marketing and
distribution of golf clubs. The Company distributes from its manufacturing and
distribution facility in Morton Grove, Illinois to all areas of the world where
golf is played.

The following discussion sets forth the required disclosure regarding single
segment information:

The Company operates as a single reportable segment in the United States with
sales in the first quarter of 1999 of $15,218, of which $12,967 were sales in
the United States and $2,251 were sales outside of the United States. The
Company sells its products in the United States through its own sales force to
approximately 1,500 national accounts (such as national cataloguers, sporting
goods retail chain stores, etc.) and to over 10,000 green grass accounts (golf
course pro shops), which in turn sell directly to the end user. The Company
sells its products outside of the United States through sales offices in Canada
and the United Kingdom, and through distributors in other countries.


                                       8
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operation

The following should be read in conjunction with the Company's financial
statements and the related notes thereto included elsewhere herein.

Overview

      The Company designs, develops, manufactures and markets throughout the
world high-quality, premium priced golf clubs, including its (a) TearDrop and
Zebra line of putters, both with roll face technology; (b) its Armour line of
irons and woods; and (c) its Ram line of irons, woods and wedges. In addition,
the Company is the sole distributor of Walter Genuin shoes in the United States.
The Company's lines of products are used by golfers throughout the world,
including professional golfers on the Professional Golf Association ("PGA")
Tour, the Senior PGA Tour, the Ladies PGA Tour and the Nike Tour. In addition,
the Company operates a professional developmental golf tour for aspiring PGA
Tour players.

      The Company introduced its first product, the TearDrop putter, in 1993 and
commenced significant marketing and sales activities in 1994. The Company
completed an initial public offering of its common stock and Redeemable Common
Stock Purchase Warrants in December 1996. In January 1997, the Company commenced
a substantial television and print advertising campaign, including the
production and airing of a television infomercial and a series of television
commercials. The cost to produce and air the infomercial and television
commercials was substantial and resulted in losses as the Company continued to
roll out its advertising campaign in the first three quarters of 1997. The
advertising campaign was intended to increase awareness and exposure of the
Company's products. The Company currently spends substantial amounts on
advertising and endorsements.

      In the fourth quarter of 1997, the Company made three acquisitions:

      (a) In October, the Company acquired the assets of Pro Golf Promotions,
LLC, a professional developmental tour for aspiring PGA Tour players. The tour
was immediately renamed "The TearDrop Professional Golf Tour".

      (b) In November, the Company acquired the Tommy Armour Golf Company
("Armour"). With this acquisition, the Company expanded beyond its initial base
of putters into a well-known, well-respected line of irons and woods.

      (c) In December, the Company acquired certain assets and assumed certain
liabilities of Ram Golf Company ("Ram"). With the Ram acquisition came another
well-known and respected name in the golf business and the Company's product
line was expanded to included Ram woods, irons and wedges and Zebra putters.


                                       9
<PAGE>

      Neither Armour nor Ram were profitable in 1997 or 1996. Armour reported
losses of approximately $19.1 million and $400,000 on sales of approximately
$32.0 million and $56.2 million for the fiscal years ended September 30, 1997
and 1996, respectively; and Ram reported losses of approximately $4.1 million
and $307,000 on sales of approximately $14.0 million and $19.4 million for the
years ended December 31, 1997 and 1996, respectively. The Company, including the
combined operations of TearDrop, Armour and Ram, incurred losses of
approximately $6.1 million on revenue of approximately $60.7 million during the
year ended December 31, 1998.

      The Company believes with the combination of the three companies and the
use and endorsement of its products by touring professionals, the synergies
available with the combination of three similar companies, the elimination of
unprofitable product lines, focused marketing of the high quality products and
the elimination of unnecessary expenses, the Company can realize operating
results for the three companies that are better than if they were not combined.
However, there can be no assurance that the Company will achieve profitability.

      The Company believes that an important element for increasing awareness
and demand for its golf clubs is the building of a corps of touring professional
golfers that will endorse, use and win with the Company's clubs. Accordingly, as
an integral part of its marketing strategy, the Company continually seeks to
obtain professional endorsements of its clubs. The Company has entered into
endorsement agreements, of up to three years, with professional players,
principally on the PGA Tour, which provide for base payments in consideration of
the use of the professionals' names in connection with the marketing of the
Company's clubs and the use of the clubs and other golf accessories, such as
golf bags and hats and shirts containing the Company's logo, by such
professionals in tournament play. The Company has entered into endorsement
agreements recently which involve substantial payments to golfers who may be
well known among golf consumers. In addition, bonus payments that could be
substantial may be made based upon tournament performance, standings on the
official money list, and selection to the Ryder Cup or President Cup teams. The
Company has granted stock options to certain of its endorsing professionals and
intends to continue to do so in the future. The effect of a particular
professional's endorsement on the successful marketing of the Company's clubs,
and the heightening of awareness of the Company's name, may be directly related
to the success of such professional in tournament play. The Company, however
will be required to compensate a professional whether or not he or she is
successful. The Company has entered into endorsement agreements which will
require the payment of a minimum of approximately $4.2 million during the year
ended December 31, 1999, should each of the professionals use and endorse the
Company's products as provided in the agreements.

      The Company maintains an in-house research and development and design
department. In addition, the Company works closely with component manufacturers,
independent design consultants and the Company's endorsing golf professionals in
the design and development of new products and product improvements. The ability
of the Company to introduce new products or product improvements is directly
related to the efforts and success of this research and development effort.

      The Company does not manufacture the components required to assemble its
golf clubs, relying instead on a number of component suppliers, both domestic
and foreign. The


                                       10
<PAGE>

Company's success in assembling its products will be dependent, in part, on
maintaining its relationships with its existing suppliers and developing
relationships with new suppliers.

      The Company believes that there are readily available alternative sources
for each of the components comprising its clubs, although of this there can be
no assurance. Any significant delay or disruption in the supply of components
from the Company's suppliers or any quality problems with the supplier's
components would delay the Company's delivery of finished products and adversely
affect current sales and could adversely affect future sales potential if
customers lose faith in the Company's ability to deliver a high-quality product
on a timely basis. Further, given the highly seasonal nature of the golf
equipment industry, such adverse effect would be exacerbated should any such
supply delay or quality problem occur immediately prior to or during the
six-month period ending June 30.

      Under the rules of the Nasdaq SmallCap Market, the Company must satisfy
certain criteria so that its common stock will continue to be listed on the
SmallCap Market. Despite the Company's operational improvements, because of
recent losses, the Company's tangible net assets have declined below the
required level. Nevertheless, the Company believes that its tangible net assets
will increase to the required level in a reasonable period of time, although no
assurances can be given.

Results of Operations

      Three Months Ended March 31, 1999 Compared to Three Months Ended March 31,
1998

      The Company had net sales of $15,218,000 for the three months ended March
31, 1999 compared to net sales of $25,000,000 for the three months ended March
31, 1998, a decrease of $9,782,000. In 1998, the Company's sales included
$9,856,000 in sales of one product line to a single customer which product line
had been discontinued. Therefore, without giving effect to sales of such
products, sales of continuing products increased by approximately $74,000 from
1998 to 1999. Furthermore, management believes that the market generally for
golf equipment was weaker on an industrywide basis in 1999 as compared to 1998.
Management believes that it was able to achieve its levels of sales during a
decline in the market by introducing new products, undertaking a substantial
advertising and marketing campaign, and enlisting a team of highly regarded
touring golf professionals to promote the Company's products.

      Gross profit for the three months ended March 31, 1999 was $6,147,000, or
40.4% of sales, compared to $9,501,000 or 38.0% of sales, for the three months
ended March 31, 1998. Although the sales by the Company of discontinued product
lines during the first quarter of 1998 were made at discounted prices, which had
the effect of decreasing the gross profit percentage, because of weak market
conditions in 1999 the Company reduced its selling price on certain items in its
product line which lowered the overall gross profit percentages for the first
quarter of 1999.

      Selling, general and administrative expenses for the three months ended
March 31, 1999 were $8,619,000, or 56.6% of sales, compared to $8,069,000, or
32.3% of sales, for the three months ended March 31, 1998. The Company embarked
on a major advertising and promotion campaign during the first quarter of 1999,
which included media advertising, promotional activities and increased payments
to touring golf professionals, in order to promote both the Company's existing
product lines and its new product introductions. Management believes that
consumers typically make golf purchasing decisions early in the year, and
therefore, has devoted a disproportionately high amount of its advertising and
promotion resources to the first quarter of


                                       11
<PAGE>

the year in 1999. These expenses exceeded advertising and promotion expenses of
the prior year by approximately $1.1 million. General and administrative
expenses during the first quarter of 1999 were approximately $300,000 less than
the previous year, due principally to the realization of cost savings effected
during 1998 after the acquisition of Tommy Armour Golf and Ram Golf in the last
quarter of 1997.

      As a result of the above items, the Company experienced a loss from
operations in the three months ended March 31, 1999 of $2,472,000 compared to
income from operations of $1,432,000 for the three months ended March 31, 1998.

      Interest expense for the three months ended March 31, 1999 was $419,000
compared to $392,000 for the same period of 1998. The increase is due to
increased borrowings to support the level of business, including the advertising
levels, experienced in 1999.

      As a result of the decrease in sales, the increase in selling, general and
administrative expenses and in interest expense, the Company had a net loss for
the three months ended March 31, 1999 of $2,891,000, or $ 0.56 per common share,
compared to net income of $1,040,000, or $ 0.38 per common share - basic (after
provision for preferred dividend of $35,000) and $ 0.33 on a fully diluted
basis, for the same period of 1998.

Liquidity and Capital Resources

      At March 31, 1999, the Company had total current assets of approximately
$34,542,000 and total current liabilities of approximately $41,639,000, of which
$26,236,000 represents the amount due under the Company's credit facility which
terminates in November 1999. Therefore, the Company has a working capital
deficiency of $7,097,000. As a result, the Company's independent auditor has
noted in its report upon the financial statements for the year ended December
31, 1998 that these conditions, among others, raise doubt about the Company's
ability to continue as a going concern. The Company's Stockholders' Equity is
$4,543,000 at March 31, 1999. However, because of recent losses, the Company has
a net tangible deficiency of $2,502,000.

      Pursuant to a Loan and Security Agreement between the Company and First
Union National Bank, successor by merger to CoreStates Bank, N.A. ("First Union"
or the "Bank"), First Union provided a $30.0 million revolving credit facility
(the "Credit Facility") to the Company to finance the acquisition of the assets
of Tommy Armour and Ram and is currently being utilized by the Company to
satisfy its working capital and general corporate expenditures. The Credit
Facility terminates on November 10, 1999 and must be repaid by such date. The
Company currently does not have the resources to repay the entire Credit
Facility and will be required to either refinance the Credit Facility with the
Bank or identify an alternative source


                                       12
<PAGE>

of financing prior to such date. The Company has had discussions with certain
institutions but currently has no agreements with any alternative source of
financing and no assurance can be given that any such arrangements can be
achieved on terms that are acceptable to the Company.

Funds extended pursuant to the Credit Facility accrue interest at the prime rate
minus 1/2% or LIBOR plus 2% per annum. The Credit Facility will be reduced to
$25.0 million commencing June 30, 1999. The Credit Facility is secured by
substantially all of the assets of the Company, including the assets acquired in
connection with the acquisitions. The Loan Agreement contains restrictions on
certain of the Company's activities, including, but not limited to, the payment
of dividends, redemption of securities and the sale of assets outside the
ordinary course of the Company's business. The Loan Agreement also provides that
the Company meet certain financial covenants. At various times during the
quarter ended March 31, 1999, the Company was in violation of various of these
financial covenants, which were subsequently waived by the Bank. On March 31,
1999, the Company amended the Loan Agreement and new covenants have been
established through the date of maturity. The line matures on November 10, 1999.
The Company is currently engaged in discussions with the Bank to extend the
maturity date and may also seek alternative sources of financing. However, no
assurance can be given that the Company will maintain compliance with the
covenants in the future, will reach terms for an extension of the credit
facility or will identify alternative sources of capital, if necessary.

      In March 1999, the Company's Chief Executive Officer loaned the Company
$500,000, bearing interest at 8% and repayable on demand, once the Company has
reached certain reduced levels of indebtedness under the Credit Facility with
the Bank.

      The Company's credit terms range from 30 days to 90 days, depending on the
type of account. Cash needs are highest in the first quarter of the year, as
inventories are being purchased. The majority of sales are typically shipped to
customers in the first six months of the year. Since the cash receipts from
those sales may not be received for up to 90 days from the date of sale,
receivable balances should increase through the first six months of the year and
decrease in the second six months of the year. In addition, in 1999, the Company
made a significant financial commitment for advertising during the first quarter
of the year.

      The Company currently has approximately $5.0 million of commitments for
media advertising primarily on television for 1999. This amount does not cover
all of the Company's advertising commitments for 1999 and may increase during
the remainder of 1999. The Company has also entered into a two year agreement
with the Golf Channel, providing for expenditures of approximately $1.5 million
and $1.55 million during 1999 and 2000, respectively. In addition, the Company
has entered into endorsement agreements with golf professionals which will
require the payment of a minimum of approximately $4.2 million in 1999. The
Company has also devoted substantial significant capital to the production and
airing of a new infomercial. The Company anticipates that it will continue to
devote substantial capital to advertising and marketing during the year.

      The Company does not have any significant capital expansion plans at the
present time and any capital expenditures will be financed from internally
generated funds. There can be no


                                       13
<PAGE>

assurance, however, that the current line of credit is sufficient to allow the
Company to meet its needs, particularly if sales do not increase or if the
Company encounters operational difficulties.

      The statements of cash flows for the Company for the three months ended
March 31, 1999 and 1998 is summarized below:

                                                        1999             1998

      Net cash used in operating activities          $5,869,000      $3,249,000

      Net cash used in investing activities              14,000           --
 
      Net cash provided by financing activities       5,827,000       3,366,000

Year 2000 Modifications

      The Company relies on both information technology ("IT") and non-IT
computer systems in its operations. The mission-critical IT systems include the
Company's operating and accounting systems, such as IT software applications
that allow the Company to maintain inventory and customer information and to
communicate with its suppliers and customers. The non-IT systems are primarily
telecommunications systems and other building systems, such as security systems,
lighting, fire and safety systems.

      In 1997, the Company began to address the year 2000 problem. The issue is
one in which computer systems may recognize the designation "00" as 1900 when it
means 2000, resulting in system failure or miscalculations. The Company has
assigned its Manager of Information Systems to coordinate and implement measures
designed to prevent disruption in its business operations related to the year
2000 problem. The Company has completed the remediation of its mission-critical
IT applications software in December 1998 and intends to complete an end-to-end
test of its IT systems by July 1999. The Company is assessing the effect of the
year 2000 problem on its non-IT systems and intends to replace non-IT systems as
necessary to become year 2000 ready by July 1999. Additionally, the Company is
working with its customers and its suppliers to determine whether the year 2000
problem will have an adverse effect on the Company's relationships with them.

      During 1999, the Company anticipates it will spend approximately $165,000
above normal operating costs in order to comply with year 2000 issues funded
through regular operations.

      There can be no assurance that year 2000 remediation by the Company or
third parties will be properly and timely completed and a failure to do so could
have a material adverse effect on the Company's financial condition. The Company
cannot predict the actual effects to it of the year 2000 issue, which depends on
numerous uncertainties such as: (1) whether major third parties address this
issue properly and timely, and (2) whether broad-based or systemic economic


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<PAGE>

failures may occur. The Company is currently unaware of any events, trends, or
conditions regarding this issue that may have a material effect on the Company's
results of operations, liquidity, and financial condition. If the year 2000
issue is not resolved by December 31, 1999, the Company's results of operations
or financial condition could be materially adversely affected.

      The Company is developing contingency plans to address the risks created
by the year 2000 problem. These plans include procuring alternative suppliers,
when available, when the Company is able to conclude that an existing supplier
will not be year 2000 ready. The Company is scheduled to complete these
contingency plans by July 1999.

Seasonality

      The purchasing decisions of most customers are typically made in the
autumn and a vast majority of sales are expected to occur during the first six
months of the year. In addition, quarterly results may vary from year to year
due to the timing of new product introductions, orders and sales, advertising
expenditures, promotional periods and shipments. Accordingly, comparisons of
quarterly information of the Company's results of operations may not be
indicative of the Company's overall annual performance.

Forward Looking Statements

      When used in this and in future filings by the Company with the Securities
and Exchange Commission ("the Commission"), in the Company's press releases and
in oral statements made with the approval of an authorized executive officer of
the Company, the words or phrases "will likely result," "expects," "plans,"
`will continue," "is anticipated," "estimated", "project" or "outlook" or
similar expressions (including confirmations by an authorized executive officer
of the Company of any such expressions made by a third party with respect to the
Company) are intended to identify "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. The Company
wishes to caution readers not to place undue reliance on any such
forward-looking statements, each of which speak only as of the date made. Such
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical earnings and those presently
anticipated or projected. Such risks and other aspects of the Company's business
and operations are described in "Risk Factors" herein. The Company has no
obligation to publicly release the result of any revisions which may be made to
any forward-looking statements to reflect anticipated or unanticipated events or
circumstances occurring after the date of such statements.


                                       15
<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

      The Company has been named, among others, as a defendant in a lawsuit
entitled Izett Manufacturing, Inc. v. RAM Golf Corporation, Laser Golf
Corporation, TearDrop Golf Company and TearDrop RAM Golf Company, case number 98
CV 858, in which the plaintiff was initially seeking damages of $11.5 million.
During the course of litigation, the initial demand has been significantly
diminished. The Company believes that the lawsuit is without merit and is
defending it vigorously. Accordingly, no reserve has been established for this
legal matter.

      In March 1999, the Company received a formal notice demanding arbitration
from Pro Golf Promotions, LLC, Cal Rogers and Dara O'Neill in connection with
certain disputes between such parties and the Company relating to the purchase
by the Company from such parties of the TearDrop Professional Golf Tour. Such
parties are seeking certain money damages and the issuance of up to 65,000
shares of Common Stock related to alleged incentive obligations for 1998 and up
to 65,000 shares of Common Stock related to such obligations for 1999. The
Company believes that such parties are not entitled to the issuance of such
shares or to money damages and intends to vigorously defend such claim.

Item 6. Exhibits and Reports on Form 8-K.

      (b) Reports on Form 8-K:

      During the quarter ended March 31, 1999, the Company filed the following
Current Report on Form 8-K:

      Current Report on Form 8-K filed on March 16, 1999 to report preliminary
financial results for the fiscal year ended December 31, 1998.


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<PAGE>

                                   SIGNATURES

      In accordance with the requirements of the Securities Exchange Act of
1934, as amended, the Registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                TEARDROP GOLF COMPANY


Dated:  May 18, 1999                        /s/ Rudy A. Slucker
                                -----------------------------------------------
                                Rudy A. Slucker, President and Chief
                                Executive Officer (Principal Executive Officer)


Dated:  May 18, 1999                        /s/ Joseph Cioni
                                -----------------------------------------------
                                Joseph Cioni, Vice President of Finance and
                                Chief Financial Officer (Principal Financial
                                and Accounting Officer)


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