U.S. SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549-1004

                                    FORM 10-Q

(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934.

For the quarterly period ended November 30, 1999 or

[ ] 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: 0-22889

                              ROYAL PRECISION, INC.
             (Exact Name of Registrant as Specified in Its Charter)

          Delaware                                               06-1453896
(State or Other Jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

15170 North Hayden Road, Suite 1, Scottsdale, AZ                    85260
   (Address of Principal Executive Offices)                       (Zip code)

                                 (480) 627-0200
              (Registrant's Telephone Number, Including Area Code)


              (Former Name, Former Address and Former Fiscal Year
                         if Changed Since Last Report)

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 [ ]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date:

     Title of each class                      Outstanding at January 10, 2000
     -------------------                      -------------------------------

Common Stock, par value $.001                        5,672,885 Shares
<PAGE>
                                     PART I
                              FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                     ROYAL PRECISION, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                       November 30,   May 31,
                                                                          1999         1999
                                                                       ------------  ---------
                                   ASSETS                              (unaudited)
<S>                                                                     <C>          <C>
CURRENT ASSETS:
  Cash                                                                  $     62     $    184
  Accounts receivable, net of allowance for doubtful accounts of
    $381 at November 30, 1999 and $433 at May 31, 1999, respectively       3,513        4,617
  Inventories                                                              5,533        4,514
  Other current assets                                                       537          783
  Deferred income taxes                                                      647          647
                                                                        --------     --------
      Total current assets                                                10,292       10,745
                                                                        --------     --------

PROPERTY, PLANT AND EQUIPMENT:
  Land                                                                       123          123
  Furniture, fixtures and office equipment                                   513          499
  Buildings and improvements                                                 670          670
  Machinery and equipment                                                  4,190        4,144
  Construction in progress                                                 1,191          402
                                                                        --------     --------
                                                                           6,687        5,838
  Less - Accumulated depreciation                                         (1,284)        (929)
                                                                        --------     --------
                                                                           5,403        4,909
                                                                        --------     --------

GOODWILL, net                                                              8,614        8,857
                                                                        --------     --------

DEFERRED INCOME TAXES                                                         70           70
                                                                        --------     --------

OTHER ASSETS                                                                  74           29
                                                                        --------     --------
     Total assets                                                       $ 24,453     $ 24,610
                                                                        ========     ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Current portion of long-term debt and capital lease obligations       $    911     $  1,203
  Accounts payable                                                         1,390        1,839
  Accrued salaries and benefits                                              681          595
  Accrued pension liability                                                  193          251
  Other accrued expenses                                                   1,248        1,079
                                                                        --------     --------
     Total current liabilities                                             4,423        4,967

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, net of current portion
  included above                                                           6,219        6,191
                                                                        --------     --------
     Total liabilities                                                    10,642       11,158
                                                                        --------     --------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Preferred stock, $.001 par value; 1,000,000 shares authorized
    (reduced from 5,000,000 shares on October 19, 1999);
    no shares issued                                                          --           --
  Common stock, $.001 par value; 10,000,000 shares authorized
    (reduced from 50,000,000 shares on October 19, 1999);
    5,672,885 and 5,667,375 shares issued and outstanding at
    November 30, 1999 and May 31, 1999, respectively                           6            6
  Additional paid-in capital                                              13,898       13,897
  Accumulated deficit                                                        (46)        (404)
  Accumulated other comprehensive loss                                       (47)         (47)
                                                                        --------     --------
     Total stockholders' equity                                           13,811       13,452
                                                                        --------     --------
     Total liabilities and stockholders' equity                         $ 24,453     $ 24,610
                                                                        ========     ========
</TABLE>

              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                      -2-
<PAGE>
                     ROYAL PRECISION, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                (dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                   Three Months Ended           Six Months Ended
                                               --------------------------  --------------------------
                                               November 30,  November 30,  November 30,  November 30,
                                                   1999         1998          1999          1998
                                               ------------  ------------  ------------  ------------
<S>                                                <C>         <C>            <C>          <C>
NET SALES:
  Golf club shafts                                 $5,586      $  3,041       $10,872      $ 8,042
  Golf club grips                                     834           810         2,064        1,847
                                                   ------      --------       -------      -------
                                                    6,420         3,851        12,936        9,889
                                                   ------      --------       -------      -------
COST OF SALES:
  Golf club shafts                                  4,031         1,946         7,250        5,220
  Golf club grips                                     565           426         1,415          977
                                                   ------      --------       -------      -------
                                                    4,596         2,372         8,665        6,197
                                                   ------      --------       -------      -------

      Gross profit                                  1,824         1,479         4,271        3,692

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES        1,485         1,356         3,124        3,121

AMORTIZATION OF GOODWILL                              121           131           243          261
                                                   ------      --------       -------      -------

      Operating income (loss)                         218            (8)          904          310

INTEREST EXPENSE                                      147           228           298          389

OTHER INCOME                                           55            64           110          125
                                                   ------      --------       -------      -------

      Income (loss) from continuing operations
        before provision for (benefit from)
        income taxes                                  126          (172)          716           46

PROVISION FOR (BENEFIT FROM) INCOME TAXES              62           (60)          358          (55)
                                                   ------      --------       -------      -------

      Income (loss) from continuing operations         64          (112)          358          101

DISCONTINUED OPERATIONS:
  Loss from operations of Roxxi, Inc.                  --          (179)           --         (389)
                                                   ------      --------       -------      -------

      Net income (loss)                            $   64      $   (291)      $   358      $  (288)
                                                   ======      ========       =======      =======

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE:
  Income (loss) from continuing operations         $ 0.01      $  (0.02)      $  0.06      $  0.02
  Loss from discontinued operations                    --         (0.03)           --        (0.07)
                                                   ------      --------       -------      -------
  Net income (loss)                                $ 0.01      $  (0.05)      $  0.06      $ (0.05)
                                                   ======      ========       =======      =======
</TABLE>

              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                      -3-
<PAGE>
                     ROYAL PRECISION, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                         Six Months Ended
                                                                    --------------------------
                                                                    November 30,  November 30,
                                                                       1999          1998
                                                                    ------------  ------------
<S>                                                                   <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                   $   358       $  (288)
   Adjustments to reconcile net income (loss) to net cash
     provided by operating activities of continuing operations--
   Loss from discontinued operations                                       --           389
   Depreciation and amortization                                          603           463
   Loss on sale of fixed assets                                             7            --
   Changes in operating assets and liabilities--
     Accounts receivable, net                                           1,104         1,774
     Inventories                                                       (1,019)       (1,290)
     Other assets                                                         201            46
     Accounts payable and accrued expenses                               (252)         (900)
     Other liabilities                                                     --           (44)
                                                                      -------       -------
  Net cash provided by operating activities of
    continuing operations                                               1,002           150
                                                                      -------       -------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Payments from net investment in capital lease                            --           137
  Purchases of equipment, net                                            (861)         (617)
                                                                      -------       -------
  Net cash used in investing activities of
    continuing operations                                                (861)         (480)
                                                                      -------       -------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of long-term debt                                 --         5,140
  Proceeds from exercise of common stock options                            1            17
  Borrowings (repayments) under lines-of-credit, net                      482          (730)
  Repayments of long-term debt and capital lease obligations             (746)       (3,810)
                                                                      -------       -------

  Net cash (used in) provided by financing activities
    of continuing operations                                             (263)          617
                                                                      -------       -------

NET CASH USED IN DISCONTINUED OPERATIONS                                   --          (244)
                                                                      -------       -------

(DECREASE) INCREASE IN CASH                                              (122)           43

CASH, beginning of period                                                 184            28
                                                                      -------       -------

CASH, end of period                                                   $    62       $    71
                                                                      =======       =======

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the period for--
    Interest                                                          $   316       $   461
                                                                      =======       =======
    Income taxes                                                      $    31       $    28
                                                                      =======       =======
</TABLE>

              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                      -4-
<PAGE>
                     ROYAL PRECISION, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:

     BASIS OF PRESENTATION --

     The condensed  consolidated  financial statements of Royal Precision,  Inc.
     and  subsidiaries  (collectively,  "RP" or the "Company")  presented herein
     have been  prepared  pursuant to the rules of the  Securities  and Exchange
     Commission for quarterly reports on Form 10-Q and do not include all of the
     information and note disclosures  required by generally accepted accounting
     principles.  These condensed  consolidated  financial  statements should be
     read in conjunction with the Company's  consolidated  financial  statements
     and notes thereto for the year ended May 31, 1999 included in the Company's
     Form  10-KSB.  In the opinion of  management,  the  accompanying  unaudited
     condensed   consolidated  financial  statements  include  all  adjustments,
     consisting  of only  normal  recurring  adjustments,  necessary  to present
     fairly the consolidated financial position,  results of operations and cash
     flows of the  Company.  Quarterly  operating  results  are not  necessarily
     indicative of the results that would be expected for the full year.

     ORGANIZATION --

     The accompanying  condensed consolidated financial statements include Royal
     Precision, Inc. and its three wholly-owned subsidiaries,  FM Precision Golf
     Manufacturing  Corp.  ("FMP"),  FM Precision Golf Sales Corp. ("FMP Sales")
     and Royal Grip, Inc. ("RG") which has a wholly-owned subsidiary, Royal Grip
     Headwear Company.  All significant  intercompany  balances and transactions
     have been eliminated in consolidation.  As discussed in Note 7, the Company
     disposed of the operating assets of Royal Grip Headwear  Company  (formerly
     known as Roxxi,  Inc.  "Roxxi") in March 1999.  Results of  operations  for
     Roxxi for all periods  through May 31, 1999 are  reflected as  discontinued
     operations.

     BUSINESS --

     RP is a holding  company which carries on its business  operations  through
     its subsidiaries. FMP is a manufacturer and distributor of golf club shafts
     which  are  sold  to  original  equipment  manufacturers  ("OEMs")  and  to
     distributors  and retailers for use in the replacement  market.  RG designs
     and  distributes  golf club grips.  RP's products are sold  throughout  the
     United States as well as  internationally,  primarily in Japan,  Australia,
     the United Kingdom and Canada.

     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 and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  such as the estimate for  impairment  of  long-lived
     assets  and the  reported  amounts  of  revenues  and  expenses  during the
     reporting period. Actual results could differ from those estimates.

2.   EARNINGS (LOSS) PER SHARE:

     The Company  accounts for earnings (loss) per share in accordance with SFAS
     No. 128, "Earnings Per Share." Basic earnings (loss) per share are based on
     the average number of common shares outstanding during the period.  Diluted
     earnings  (loss) per share  assumes,  in addition to the above,  a dilutive
     effect  of  common  share  equivalents  during  the  period.  Common  share
     equivalents  represent  dilutive  stock  options  using the treasury  stock
     method.  The  number  of  shares  used  in  computing  income  (loss)  from
     continuing operations per share for the three and six months ended November
     30, 1999 and 1998 were as follows (in thousands):

                                      -5-
<PAGE>
                                                 Three Months Ended November 30,
                                                 -------------------------------
                                                      1999          1998
                                                      ----          ----
     Basic:
       Average common shares outstanding              5,670         5,663

     Diluted:
       Dilutive effect of stock options                 125            --
                                                      -----         -----
       Average common shares outstanding              5,795         5,663
                                                      =====         =====

                                                  Six Months Ended November 30,
                                                  -----------------------------
                                                      1999           1998
                                                      ----           ----
     Basic:
       Average common shares outstanding              5,669          5,632

     Diluted:
       Dilutive effect of stock options                 130             --
                                                      -----          -----
      Average common shares outstanding               5,799          5,632
                                                      =====          =====

     For the three and six months ended  November  30,  1998,  basic and diluted
     average  common  shares   outstanding  for  discontinued   operations  were
     5,663,000 and 5,632,000,  respectively.  Basic and diluted  earnings (loss)
     per share were the same for all periods presented.

3.   NEW ACCOUNTING PRONOUNCEMENT:

     In June 1998, the Financial  Accounting  Standards  Board  ("FASB")  issued
     Statement of Financial  Accounting  Standards ("SFAS") No. 133, "Accounting
     for Derivative  Instruments and Hedging Activities," which requires that an
     entity  recognize all  derivatives  as either assets or  liabilities in the
     statement  of  financial  position and measure  those  instruments  at fair
     value.  In June  1999,  the FASB  issued  SFAS No. 137 which  deferred  the
     effective  date of SFAS No. 133. The Company will be required to adopt SFAS
     No. 133 during the fiscal year ending May 31,  2001.  The Company  does not
     anticipate any material impact resulting from the adoption of SFAS No. 133.

4.   INVENTORIES:

     Inventories  are valued at the lower of cost or market.  Cost is determined
     on the first-in,  first-out method. Inventories as of November 30, 1999 and
     May 31, 1999 consisted of the following (in thousands):

                                       November 30, 1999    May 31, 1999
                                       -----------------    ------------
     Raw materials                         $  528              $  471
     Work-in-process                        2,037               1,566
     Finished goods                         2,968               2,477
                                           ------              ------
                                           $5,533              $4,514
                                           ======              ======

5.   BORROWING ARRANGEMENTS:

     FMP  has a  credit  facility  consisting  of a term  loan  and a  revolving
     line-of-credit. The FMP term loan of $3,047,000 at November 30, 1999 is due
     in  monthly  principal  installments  of  $65,000  until  its  maturity  in
     September  2002. The amount  available for  borrowings  under the revolving
     line-of-credit is based upon the levels of eligible FMP accounts receivable
     and  inventories,  as  defined,  subject  to a  maximum  borrowing  of $5.0
     million. As of November 30, 1999, FMP had $3,491,000  outstanding under its
     revolving  line-of-credit and $865,000 available for additional borrowings.
     The FMP line-of-credit expires in September 2002.

     RG  has a  credit  facility  consisting  of a  term  loan  and a  revolving
     line-of-credit. The RG term loan of $493,500 at November 30, 1999 is due in
     monthly  principal  installments of $10,500 until its maturity in September

                                      -6-
<PAGE>
     2002.   The  amount   available   for   borrowings   under  the   revolving
     line-of-credit is based upon the levels of eligible RG accounts  receivable
     and  inventories,  as  defined,  subject  to a  maximum  borrowing  of $1.5
     million.  As of November 30,  1999,  RG had $94,000  outstanding  under its
     revolving  line-of-credit and $532,000 available for additional borrowings.
     The RG line-of-credit expires in September 2002.

     The FMP and RG credit  facilities were amended and restated on November 10,
     1999  resulting in a reduction of interest rates by 1%, an extension of the
     maturity  dates  by  one  year,  and a $1.0  million  increase  in the  FMP
     line-of-credit.  Effective  November  10, 1999,  borrowings  under the term
     loans and revolving lines-of-credit of both credit facilities bear interest
     at a rate per annum equal to the prime rate (8.50% at  November  30,  1999)
     plus 0.75% and 0.25%, respectively, and are secured by substantially all of
     the Company's assets.

     The FMP and RG credit  facilities  contain  financial  and other  covenants
     which, among other things,  limit annual capital expenditures and dividends
     and require the  maintenance of minimum  monthly and quarterly  earnings or
     maximum monthly and quarterly  losses,  and minimum  quarterly debt service
     coverage  ratios,  as  defined.  The  Company  was in  compliance  with all
     financial loan covenants at November 30, 1999.

6.   INFORMATION ON SEGMENTS:

     The Company has two reportable segments in continuing operations: golf club
     shafts and golf club grips. The accounting policies of the segments are the
     same as those described in the summary of significant  accounting  policies
     in Form  10-KSB  for the  fiscal  year  ended  May 31,  1999.  The  Company
     evaluates the  performance  of these  segments  based on segment  operating
     income or loss and cash flows. The Company allocates certain administrative
     expenses to segments.  The amounts in this  illustration are the amounts in
     reports  used by the chief  operating  officer as of November  30, 1999 (in
     thousands):

                                            Three Months Ended November 30, 1999
                                            ------------------------------------
                                                  Golf      Golf
                                                 Shafts     Grips        Total
                                                 ------    --------    ---------
     Net sales                                   $ 5,586   $    834    $  6,420
     Operating income (loss)                         263        (45)        218
     Depreciation and amortization                    87        213         300
     Assets                                       12,311     18,262      30,573

     Total assets for reportable segments                              $ 30,573
     Elimination of investment in subsidiaries                           (6,120)
                                                                       --------
     Consolidated total assets                                         $ 24,453
                                                                       ========

                                            Three Months Ended November 30, 1998
                                            ------------------------------------
                                                  Golf      Golf
                                                 Shafts     Grips        Total
                                                 ------    --------    ---------
     Net sales                                   $3,041    $   810     $  3,851
     Operating income (loss)                         24        (32)          (8)
     Depreciation and amortization                   63        140          203
     Assets                                       9,698     21,229       30,927

     Total assets for reportable segments                              $ 30,927
     Assets of discontinued operation                                     1,615
     Elimination of investment in subsidiaries                           (7,271)
                                                                       --------
     Consolidated total assets                                         $ 25,271
                                                                       ========

                                      -7-
<PAGE>
                                              Six Months Ended November 30, 1999
                                              ----------------------------------
                                                  Golf       Golf
                                                 Shafts      Grips       Total
                                                 ------      -----       -----
     Net sales                                  $10,872     $ 2,064     $12,936
     Operating income (loss)                        996         (92)        904
     Depreciation and amortization                  174         429         603

                                              Six Months Ended November 30, 1998
                                              ----------------------------------
                                                  Golf       Golf
                                                 Shafts      Grips       Total
                                                 ------      -----       -----
     Net sales                                   $8,042      $1,847     $9,889
     Operating income                               284          26        310
     Depreciation and amortization                  137         326        463

7.   DISCONTINUED OPERATIONS:

     In March 1999,  the operating  assets of Roxxi were disposed of through two
     separate  transactions.  Roxxi sold its trade name,  customer list,  design
     database and related computer software and hardware for a royalty of 16% of
     the buyer's net sales of  Roxxi-licensed  products for the two-year  period
     beginning  May  1,  1999.  Roxxi  also  sold  its  headwear   manufacturing
     equipment,  headwear  inventory  and raw  materials to another  company for
     $300,000  and a royalty of 2% of the  buyer's net sales until the buyer has
     paid an  additional  $200,000.  Subsequently,  Roxxi's  name was changed to
     Royal Grip Headwear  Company.  The Company is  accounting  for royalties as
     income is earned during the two year period  beginning May 1, 1999. For the
     three and six months  ended  November  30,  1999,  royalties of $51,000 and
     $89,000 were recorded,  respectively,  and are reflected as other income in
     the accompanying condensed consolidated statements of operations.

     Selected  financial data for the discontinued  operations is as follows for
     the six months ended November 30, 1998 (in thousands):

              Net sales                            $1,446
              Loss from operations                    389
              Depreciation                            145

8.   TERMINATION OF MANUFACTURING SUPPLY CONTRACT:

     In May 1999, RG and Acushnet Rubber Company ("Acushnet")  executed a mutual
     release agreement  terminating their manufacturing and supply agreement and
     capital lease agreement (the "Termination  Agreement").  As a result in May
     1999, RG received $1.5 million in cash and $1.0 million in purchase credits
     from  Acushnet to be applied  against  current and future  amounts  owed to
     Acushnet for the production of grips. As of November 30, 1999, $0.5 million
     of the purchase credits had been utilized and the remaining $0.5 million is
     included in other current assets in the accompanying condensed consolidated
     balance sheet. In connection with the Termination Agreement, RG is entitled
     to receive the  manufacturing  equipment  which was leased to Acushnet  and
     Acushnet's  obligation to make additional  payments to RG under the capital
     lease was  terminated.  Additionally,  Acushnet  is  obligated  to continue
     producing  grips for RG through  January 2000 and to pay up to $100,000 for
     shipping and installation of the manufacturing equipment at a new location.

     RG currently  purchases  the  majority of its supply of non-cord,  injected
     grips from Acushnet and has no immediate  replacement  supply  source.  The
     Company  believes  that it can  obtain a  sufficient  supply of grips  from
     Acushnet and other  existing  vendors to satisfy  customer  demand  through
     December 31, 2000.  Included in finished goods  inventories at November 30,
     1999 are grips at a cost of approximately $0.8 million located at Acushnet.
     The Company has identified and is in various  stages of  negotiations  with
     three separate grip  manufacturers  which the Company believes can maintain
     RG's standard of product quality and will  facilitate a smooth  transition.
     There can be no assurances that the Company will be able to secure a source
     for  grips on as  favorable  terms or with the same or  better  quality  as
     Acushnet. In addition,  there can be no assurances that a transition to new
     suppliers will not result in production  delays,  the loss of sales and key
     customers  which would  materially  affect  RG's  financial  condition  and
     results of operations.

                                      -8-
<PAGE>
     Acushnet  warehoused and distributed RG's grips under the manufacturing and
     supply agreement. In connection with the Termination Agreement, the Company
     will assume  responsibility  for these  functions.  In September 1999, $0.2
     million  of grips  were  transferred  from  the  Acushnet  facility  to the
     Company's   manufacturing   and   distribution   facility  in   Torrington,
     Connecticut and are included in finished goods  inventories at November 30,
     1999. The Torrington  warehouse has been configured to accommodate  storage
     and shipment of grips.  In November 1999, the Company  entered into a lease
     of  approximately  9,000  square  feet of  warehouse  space in  Scottsdale,
     Arizona which will serve as a West Coast  distribution  center. In December
     1999,  approximately  $0.3  million  of  grips  were  transferred  from the
     Acushnet facility to the Company's Scottsdale warehouse.  When Acushnet has
     fulfilled its manufacturing  obligations  under the Termination  Agreement,
     all remaining  inventory will be transferred from the Acushnet  facility to
     the Torrington and  Scottsdale  warehouses.  The Company will warehouse and
     distribute its grips from both the Scottsdale and Torrington locations when
     the relationship with Acushnet is completed.

9.   TERMINATED MERGER AGREEMENT:

     In February 1999, the Company and Coyote Sports,  Inc.  ("Coyote")  entered
     into a merger  agreement  pursuant to which RP would become a  wholly-owned
     subsidiary of Coyote (the "RP-Coyote Merger").  In June 1999, the RP-Coyote
     Merger  agreement  was  terminated  at the  request of the Company due to a
     material  change in the  business of Coyote  resulting  in an  inability to
     obtain suitable long-term financing. The Company incurred professional fees
     of $975,000  related to the RP-Coyote  Merger during the second half of the
     fiscal year ended May 31, 1999.

10.  LITIGATION:

     In November  1999, a lawsuit was  commenced in an Arizona state court by R.
     R. Donnelley & Sons Company  ("Donnelley")  against RP.  Donnelley  alleges
     that RP is liable  for  approximately  $280,000  in fees  arising  from the
     preparation of a Joint Proxy Statement/Prospectus  related to the RP-Coyote
     Merger. Management believes that the action is without merit and intends to
     defend it vigorously.

                                      -9-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

FORWARD LOOKING STATEMENTS --

The Private  Securities  Litigation  Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. The Company believes it has made forward-looking
statements  within the meaning of the  Litigation  Reform Act in this Form 10-Q,
Forms 10-QSB, Forms 10-KSB, Forms 8-K, and other written or oral statements made
by or on behalf of RP which  reflect RP's  current  views with respect to future
events and financial performance.  These forward-looking  statements are subject
to certain  uncertainties  and other factors that could cause actual  results to
differ  materially from such statements.  These  uncertainties and other factors
include,  but are not  limited  to,  uncertainties  relating  to  international,
national,  and local  economic  conditions,  RP's  dependence  on  discretionary
consumer spending, customer concentration and their plans and commitments,  RP's
cost and available supply of raw materials, the competitive environment in which
RP  operates,   the  timeliness  and  market  acceptance  of  RP's  new  product
introductions,  RP's  limited  operating  history,  RP's  ability to protect its
intellectual  property rights,  seasonality of sales,  fluctuations in operating
results, and changes in the financial markets relating to RP's capital structure
and cost of capital.  Statements  in this Form 10-Q,  including the Notes to the
Condensed  Consolidated   Financial  Statements  ("Financial   Statements")  and
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  describe  factors,  among others,  that could contribute to or cause
such differences.  Additional  factors that could cause actual results to differ
materially from those expressed in such forward looking  statements are detailed
in RP's Form  10-KSB for the fiscal  year ended May 31,  1999.  Please  refer to
"Risk Factors" therein. The words "believe," "expect," "anticipate,"  "project,"
and similar expressions identify forward looking statements, which speak only as
of the date the statement was made.

OVERVIEW --

Royal  Precision,  Inc. ("RP" or the "Company") is a holding  company with three
wholly-owned  subsidiaries  which  are FM  Precision  Golf  Manufacturing  Corp.
("FMP"),  FM Precision  Golf Sales Corp.  ("FMP  Sales"),  and Royal Grip,  Inc.
("RG") which has a  wholly-owned  subsidiary,  Royal Grip Headwear  Company.  RP
acquired  RG on August 29,  1997 by means of a merger  whereby  FMPSUB,  Inc. (a
wholly-owned  subsidiary of RP created for such purpose) merged with and into RG
(the  "FMP-RG  Merger").   RG  was  the  surviving   corporation  and  became  a
wholly-owned  subsidiary  of  RP.  As  discussed  in  Note  7 to  the  Financial
Statements,  the Company disposed of the operating assets of Royal Grip Headwear
Company  (formerly  known as Roxxi,  Inc.  "Roxxi")  in March  1999.  Results of
operations  for Roxxi in all  periods  through  May 31,  1999 are  reflected  as
discontinued operations.

FMP is a  manufacturer  and  distributor  of golf club  shafts  that are sold to
original equipment  manufacturers ("OEMs") and to distributors and retailers for
use in the replacement market. The majority of FMP's sales are to OEMs. FMP also
sells golf club shafts in foreign markets including Japan, Australia, the United
Kingdom,  and Canada.  RG designs and distributes golf club grips. RG's products
are sold primarily throughout the United States,  Japan, and the United Kingdom.
The  majority of RG's grip sales are to its  Japanese  distributor.  In December
1996, RG outsourced the  manufacturing  of its non-cord grips to Acushnet Rubber
Company  ("Acushnet").  In May 1999, RG and Acushnet  executed a mutual  release
agreement terminating their manufacturing and supply agreement and capital lease
agreement.  See Note 8 to the Financial  Statements  and Reliance on Third Party
Suppliers under Business Environment and Future Results below.

The  Company  principally  operates  in the golf  equipment  industry  which has
historically  been seasonal in nature with consumer demand for product being the
strongest during the spring and summer months.

THREE MONTHS ENDED NOVEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED NOVEMBER
30, 1998--

NET SALES.  Net sales from  continuing  operations  for the three  months  ended
November 30, 1999 were $6.4 million, an increase of $2.6 million or 67% over net
sales from continuing operations of $3.9 million during the corresponding period
in 1998. Net sales of golf club shafts  increased by $2.5 million or 84% and net
sales of golf club grips  increased  by $24,000 or 3%. The  increased  golf club
shaft  sales  reflect  continued  strong  demand for the  Company's  proprietary
"Rifle" shafts.  Net sales of the Company's  higher priced,  pro grade golf club
shafts  including  the "Rifle"  increased by $2.6 million or 113%.  Sales of the
Company's  lower priced,  commercial  grade golf club shafts were  consistent at
$0.8 million  during both of the three month periods ended November 30, 1999 and
1998.

                                      -10-
<PAGE>
COST OF SALES.  Cost of goods  sold  from  continuing  operations  for the three
months ended November 30, 1999 was $4.6 million,  an increase of $2.2 million or
94% over cost of goods sold from  continuing  operations of $2.4 million  during
the corresponding  period in 1998. Golf club shafts cost of goods sold increased
by $2.1 million or 107% and golf club grips cost of goods sold increased by $0.1
million or 33%, both as a result of higher total net sales.

GROSS PROFIT. Gross profit from continuing operations for the three months ended
November  30, 1999 was $1.8  million,  an  increase of $0.3  million or 23% from
gross profit from  continuing  operations of $1.5 million for the  corresponding
period in 1998.  Gross  profit from sales of golf club shafts  increased by $0.5
million or 42% to $1.6 million due to higher total net sales. As a percentage of
sales,  the gross profit on sales of golf club shafts  decreased from 36% to 28%
due to several  factors,  principally  the mix of  products  sold during the two
periods.  Sales of pro grade  golf club  shafts  during the three  months  ended
November 30, 1999 consisted principally of products which are not subject to the
Company's  Frequency  Coefficient  Matching ("FCM") technology and are sold at a
lower  price  and a  lower  profit  margin  than  the  Company's  FCM  products.
Conversely,  a majority  of the pro grade shaft  sales  during the three  months
ended November 30, 1998 were FCM products.  Additionally,  the FMP manufacturing
facility was  operating at high levels of  production of pro grade shafts during
the three  months  ended  November  30, 1999 to fulfill  significant  OEM orders
during  the  quarter.  Additional  production  costs  such  as  overtime  wages,
additional  supplies  and  machinery   maintenance  were  incurred  to  ramp  up
production  to levels not typically  required  until the third and fourth fiscal
quarters.  These  additional  costs resulted in a higher average unit production
cost  during  the  three  months  ended   November  30,  1999  than  during  the
corresponding  period in 1998.  Finally,  inventory  write-downs  totaling  $0.1
million were recorded  during the three months ended November 30, 1999 to reduce
the book value of certain  slow moving  inventory  items,  principally  graphite
shafts purchased for resale, to estimated net realizable value.

Gross  profit from sales of golf club grips  decreased by $0.1 million or 30% to
$0.3 million  despite a slight  increase in net sales. As a percentage of sales,
the gross  profit on sales of golf club grips  decreased  from 47% to 32%.  This
decreased  margin  reflects a  different  mix of  products  sold  during the two
periods.  Beginning in November 1998, the Company  introduced a buffed golf club
grip product for the Japanese  market  which is being  manufactured  at a higher
cost and is being sold at a lower profit margin than other RG products. Sales of
this buffed  product  represented  25% of sales  during the three  months  ended
November 30, 1999 compared to only 1% during the corresponding period in 1998.

SELLING,   GENERAL   AND   ADMINISTRATIVE   EXPENSES.   Selling,   general   and
administrative  expenses for the three months ended  November 30, 1999 were $1.5
million, an increase of 10% from selling, general and administrative expenses of
$1.4 million during the  corresponding  period in 1998.  Additional  advertising
costs of  approximately  $175,000  were  incurred  during the three months ended
November 30, 1999 which  contributed to the higher sales volumes realized during
the period.  As a  percentage  of sales,  selling,  general  and  administrative
expenses  declined  from 35% during the three months ended  November 30, 1998 to
23% during the corresponding period in 1999.

AMORTIZATION  OF GOODWILL.  Goodwill was reduced in the fourth quarter of fiscal
1999 as a result of the utilization of pre-merger NOL  carryforwards and partial
reversal  of  the  valuation   allowance  on  pre-merger  deferred  tax  assets.
Therefore,  amortization  expense was  reduced  from  $131,000  during the three
months ended November 30, 1998 to $121,000  during the  corresponding  period in
1999.

INTEREST  EXPENSE.  In October 1998, FMP entered into a new credit facility with
RG's  lender  and  paid off all  existing  loans to  FMP's  previous  lender.  A
prepayment  penalty of $75,000 was incurred  related to this transaction and was
reflected as a component of the $0.2 million  interest  expense during the three
months ended November 30, 1998. Interest expense during the corresponding period
in 1999 was $0.1 million.

OTHER  INCOME.  Other income of $55,000 for the three months ended  November 30,
1999 is  principally  comprised of royalties  earned on sales of Roxxi  headwear
products.  Other income of $64,000 for the three months ended  November 30, 1998
is  principally  comprised  of interest  income on the  Acushnet  capital  lease
receivable.

PROVISION FOR (BENEFIT  FROM) INCOME TAXES.  A provision of $62,000 was recorded
for taxes on income from  continuing  operations  during the three  months ended
November  30,  1999 and a  benefit  of  $60,000  was  recorded  on the loss from
continuing  operations  during  the  corresponding  period  in 1998.  Taxes  are
provided based on the estimated  effective tax rate for the year which considers
the effect of nondeductible goodwill amortization.

DISCONTINUED OPERATIONS. As discussed in Note 7 to the Financial Statements, the
Company disposed of the operating assets of Roxxi in March 1999. Losses from the
operations  of Roxxi for the three  months  ended  November  30,  1998 were $0.2
million.

                                      -11-
<PAGE>
SIX MONTHS ENDED NOVEMBER 30, 1999 COMPARED TO THE SIX MONTHS ENDED NOVEMBER 30,
1998--

NET  SALES.  Net sales  from  continuing  operations  for the six  months  ended
November  30, 1999 were $12.9  million,  an increase of $3.0 million or 31% from
net sales from  continuing  operations of $9.9 million during the  corresponding
period in 1998.  Net sales of golf club shafts  increased by $2.8 million or 35%
and net sales of golf club grips increased by $0.2 million or 12%. The increased
golf  club  shaft  sales  reflect  continued  strong  demand  for the  Company's
proprietary  "Rifle" shafts. Net sales of the Company's higher priced, pro grade
golf club shafts  including the "Rifle"  increased by $3.5 million or 58%. Sales
of the Company's lower priced,  commercial  grade golf club shafts  decreased by
$0.7 million or 33%. Sales of this product have been  negatively  impacted since
the Company  instituted a significant price increase during the first quarter of
fiscal 1999. In response to these unfavorable  results, the Company subsequently
modified its pricing structure in an effort to increase sales of this product in
future  periods.  The increased  golf club grip sales reflect the success of the
new buffed product  introduced to the Japanese market in November 1998. Sales of
this  product  for the six months  ended  November  30,  1999 were $0.8  million
compared to $10,000 during the corresponding period in 1998.

COST OF SALES. Cost of goods sold from continuing  operations for the six months
ended  November  30, 1999 was $8.7  million,  an increase of $2.5 million or 40%
from cost of goods sold from  continuing  operations of $6.2 million  during the
corresponding  period in 1998.  Golf club shafts cost of goods sold increased by
$2.0  million or 39% and golf club grips  cost of goods sold  increased  by $0.4
million or 45%, both as a result of higher total net sales.

GROSS PROFIT.  Gross profit from continuing  operations for the six months ended
November  30, 1999 was $4.3  million,  an  increase of $0.6  million or 16% from
gross profit from  continuing  operations of $3.7 million for the  corresponding
period in 1998.  Gross  profit from sales of golf club shafts  increased by $0.8
million or 28% to $3.6 million due to higher total net sales. As a percentage of
sales,  the gross profit on sales of golf club shafts  decreased from 35% to 33%
due to several  factors,  principally  the mix of  products  sold during the two
periods.  Sales of pro grade  golf  club  shafts  during  the six  months  ended
November 30, 1999 consisted principally of products which are not subject to the
Company's FCM technology and are sold at a lower price and a lower profit margin
than the Company's FCM products.  Conversely,  a majority of the pro grade shaft
sales  during  the six  months  ended  November  30,  1998  were  FCM  products.
Additionally,  inventory  write-downs totaling $0.2 million were recorded during
the six months ended  November 30, 1999 to reduce the book value of certain slow
moving inventory  items,  principally  graphite shafts purchased for resale,  to
estimated net realizable value.

Gross  profit from sales of golf club grips  decreased by $0.2 million or 25% to
$0.6 million  despite an increase in net sales.  As a percentage  of sales,  the
gross  profit  on sales  of golf  club  grips  decreased  from 47% to 31%.  This
decreased  margin  reflects a  different  mix of  products  sold  during the two
periods.  Beginning  in November  1998,  the Company  introduced  the new buffed
product for the Japanese market which is being manufactured at a higher cost and
is being sold at a lower  profit  margin than other RG  products.  Sales of this
product  represented  37% of sales during the six months ended November 30, 1999
compared to only 1% during the corresponding period in 1998.

SELLING,   GENERAL   AND   ADMINISTRATIVE   EXPENSES.   Selling,   general   and
administrative expenses for the six months ended November 30, 1999 and 1998 were
consistent  at $3.1  million.  Additional  advertising  costs  of  approximately
$184,000  were  incurred  during the six months  ended  November  30, 1999 which
contributed  to the  higher  sales  volumes  realized  during the  period.  As a
percentage of sales, selling,  general and administrative expenses declined from
32%  during  the  six  months  ended   November  30,  1998  to  24%  during  the
corresponding period in 1999.

AMORTIZATION  OF GOODWILL.  Goodwill was reduced in the fourth quarter of fiscal
1999 as a result of the utilization of pre-merger NOL  carryforwards and partial
reversal  of  the  valuation   allowance  on  pre-merger  deferred  tax  assets.
Therefore,  amortization expense was reduced from $261,000 during the six months
ended November 30, 1998 to $243,000 during the corresponding period in 1999.

INTEREST  EXPENSE.  In October 1998, FMP entered into a new credit facility with
RG's  lender  and  paid off all  existing  loans to  FMP's  previous  lender.  A
prepayment  penalty of $75,000 was incurred  related to this transaction and was
reflected  as a component of the $0.4 million  interest  expense  during the six
months ended November 30, 1998. Interest expense during the corresponding period
in 1999 was $0.3 million.

                                      -12-
<PAGE>
OTHER  INCOME.  Other income of $110,000  for the six months ended  November 30,
1999 is  principally  comprised of royalties  earned on sales of Roxxi  headwear
products. Other income of $125,000 for the six months ended November 30, 1998 is
principally   comprised  of  interest  income  on  the  Acushnet  capital  lease
receivable.

PROVISION FOR (BENEFIT  FROM) INCOME TAXES. A provision of $358,000 was recorded
for taxes on income  from  continuing  operations  during the six  months  ended
November  30,  1999 and a  benefit  of  $55,000  was  recorded  on the loss from
continuing  operations  during  the  corresponding  period  in 1998.  Taxes  are
provided based on the estimated  effective tax rate for the year which considers
the effect of nondeductible goodwill amortization.

DISCONTINUED OPERATIONS. As discussed in Note 7 to the Financial Statements, the
Company disposed of the operating assets of Roxxi in March 1999. Losses from the
operations  of Roxxi  for the six  months  ended  November  30,  1998  were $0.4
million.

LIQUIDITY AND CAPITAL RESOURCES--

At November 30, 1999, RP had working capital of $5.9 million and a current ratio
of 2.3 to 1 as compared to working  capital of $5.8 million and a current  ratio
of 2.2 to 1 at May 31, 1999.

FMP  has  a  credit  facility   consisting  of  a  term  loan  and  a  revolving
line-of-credit.  The FMP term loan of  $3,047,000 at November 30, 1999 is due in
monthly principal  installments of $65,000 until its maturity in September 2002.
The amount available for borrowings under the revolving  line-of-credit is based
upon the levels of eligible FMP accounts receivable and inventories, as defined,
subject to a maximum borrowing of $5.0 million. As of November 30, 1999, FMP had
$3,491,000 outstanding under its revolving line-of-credit and $865,000 available
for additional borrowings. The FMP line-of-credit expires in September 2002.

RG  has  a  credit   facility   consisting  of  a  term  loan  and  a  revolving
line-of-credit.  The RG term loan of  $493,500  at  November  30, 1999 is due in
monthly principal  installments of $10,500 until its maturity in September 2002.
The amount available for borrowings under the revolving  line-of-credit is based
upon the levels of eligible RG accounts receivable and inventories,  as defined,
subject to a maximum borrowing of $1.5 million.  As of November 30, 1999, RG had
$94,000  outstanding under its revolving  line-of-credit  and $532,000 available
for additional borrowings. The RG line-of-credit expires in September 2002.

The FMP and RG credit  facilities were amended and restated on November 10, 1999
resulting in a reduction  of interest  rates by 1%, an extension of the maturity
dates by one  year,  and a $1.0  million  increase  in the FMP  line of  credit.
Effective  November  10,  1999,  borrowings  under the term loans and  revolving
lines-of-credit  of both  credit  facilities  bear  interest at a rate per annum
equal to the prime  rate  (8.50% at  November  30,  1999)  plus 0.75% and 0.25%,
respectively, and are secured by substantially all of the Company's assets.

The FMP and RG credit  facilities  contain  financial and other covenants which,
among other things,  limit annual capital expenditures and dividends and require
the maintenance of minimum monthly and quarterly earnings or maximum monthly and
quarterly  losses,  and minimum  quarterly  debt  service  coverage  ratios,  as
defined.  The Company was in  compliance  with all financial  loan  covenants at
November 30, 1999.

The Company  believes  that its  existing  capital  resources  and credit  lines
available are  sufficient to fund its  operations  and capital  requirements  as
presently planned over the next twelve months.

During the six months ended  November 30, 1999,  net cash  provided by operating
activities  was $1.0 million  which  primarily  resulted from net income of $0.4
million,  depreciation  and  amortization  of $0.6  million  and a  decrease  in
accounts receivable of $1.1 million.  Cash provided by operating  activities was
reduced by an increase in inventories of $1.0 million.

Net cash used in investing activities for the six months ended November 30, 1999
was $0.9 million for the purchase of property, plant and equipment.  The Company
estimates that capital expenditures for the fiscal year ending May 31, 2000 will
be approximately  $2.0 million including $0.8 million to complete the upgrade of
FMP's  wastewater  treatment  facilities.  To finance a portion of the estimated
$1.0 million total cost of the  wastewater  treatment  project,  the Company has
received a funding  commitment  of  $750,000  from the  Connecticut  Development
Authority  which can be  advanced  to the  Company  upon the  completion  of the

                                      -13-
<PAGE>
facility and approval by the Connecticut Department of Environmental Protection.
The Company is assessing its steel golf shaft manufacturing  capacities compared
to the current and anticipated  future volume of customer orders.  Based on this
assessment and the success of ongoing projects to increase  production  volumes,
significant future capital expenditures may be required at the FMP manufacturing
facility.

Net cash used in  financing  activities  for the six months  ended  November 30,
1999, was $0.3 million  resulting from  repayments of long term debt and capital
lease  obligations of $0.7 million and net borrowings under  lines-of-credit  of
$0.5 million.

YEAR 2000 ASSESSMENT --

The following Year 2000 discussion contains various  forward-looking  statements
that represent the Company's  beliefs or expectations  regarding  future events.
When  used  in  the  Year  2000  discussion,  the  words  "believe,"  "expects,"
"estimates"   and  other   similar   expressions   are   intended   to  identify
forward-looking   statements.   Forward-looking   statements  include,   without
limitation,  the  Company's  expectations  as to  when  it and  its  significant
distributors,  customers and  suppliers  will  complete the  implementation  and
compliance  phases of the Year 2000  plan,  and the  Company's  belief  that its
internal  systems and equipment  are Year 2000  compliant.  All  forward-looking
statements  involve a number of risks and  uncertainties  that  could  cause the
actual results to differ materially from the projected results. Factors that may
cause these  differences  include,  but are not limited to, the  availability of
qualified personnel and other information  technology resources;  the ability to
identify  and rectify all date  sensitive  lines of code or to replace  embedded
chips in affected systems or equipment; unanticipated delays or expenses related
to correction of the problems; and the actions of independent third-parties with
respect to Year 2000 problems.

During the previous two-year period, the Company expended approximately $100,000
to purchase  and install new computer  hardware  and  software  resulting in all
Company  hardware and software being Year 2000  compliant.  Expenses  associated
with  evaluation of the Company's  internal  systems for Year 2000 problems were
approximately  $20,000.  The Company believes that any future internal Year 2000
costs will be immaterial.

Due to the Company's extensive internal Year 2000 analysis and completion of the
Year 2000 project,  the Company determined that an internal contingency plan was
not necessary.  The Company  completed a review of its significant  suppliers to
determine  that the  suppliers'  operations  and the products and services  they
provide  are Year  2000  compliant.  All  significant  suppliers  and  utilities
indicated that their products and company are Year 2000  compliant.  The primary
supplier of the Company's golf club grips recently completed a conversion of its
accounting  system and indicated that its  operations,  products and services it
provides are Year 2000  compliant.  The Company has no practical means to verify
the information  provided by these  independent  third parties.  Based upon this
assessment and where practicable, the Company will attempt to mitigate its risks
with  respect to any  suppliers  that may not meet the  requirements,  including
seeking alternative suppliers.

Some  independent  sales   representatives   that  the  Company  uses  may  have
applications that are not Year 2000 compliant. The Company does not believe this
is a material  concern  since  product  orders are either  manually  written and
submitted via fax, or are submitted on a Company  supplied  automated order form
that is Year 2000 compliant.

The Company's  comprehensive  evaluation  of its internal  systems and equipment
addressed both information  technology  systems ("IT," i.e. business systems and
the software  development  environment)  and non-IT  systems,  (i.e.  elevators,
building security and HVAC systems) including  hardware,  software and firmware.
The Company's  critical  internal  systems  including  versions of Macola,  ADP,
Oracle, Microsoft Exchange, Microsoft Office 97, Microsoft Windows NT, Microsoft
Windows 9x, and Microsoft SQL Server products operated  successfully  during the
transition  from  1999 to 2000.  However,  there  can be no  assurance  that the
Company  will not  experience  disruptions  in its  ability to conduct  business
because of Year 2000  problems  experienced  by the  Company's  distributors  or
vendors,  such problems remain a possibility and could have an adverse impact on
the Company's results of operations and financial condition.  To the extent that
its key distributors or vendors  experience  problems relative to achieving Year
2000 compliance, the Company could suffer unanticipated revenue losses.

Some  commentators  have predicted  significant  litigation  regarding Year 2000
compliance issues. Because of the unprecedented nature of such litigation, it is
uncertain whether,  or to what extent, the Company may be affected.  However, at
this time the Company  believes that it is not likely to have a material adverse
effect on the Company or its operations.

                                      -14-
<PAGE>
BUSINESS ENVIRONMENT AND FUTURE RESULTS --

RELIANCE ON THIRD PARTY  SUPPLIERS.  In May 1999, RG and Acushnet Rubber Company
("Acushnet") executed a mutual release agreement terminating their manufacturing
and supply agreement and capital lease agreement (the "Termination  Agreement").
As a result in May 1999,  RG received  $1.5  million in cash and $1.0 million in
purchase  credits from Acushnet to be applied against current and future amounts
owed to Acushnet for the  production  of grips.  As of November  30, 1999,  $0.5
million of the purchase credits had been utilized and the remaining $0.5 million
is included in other current assets in the accompanying  condensed  consolidated
balance sheet. In connection with the Termination  Agreement,  RG is entitled to
receive the manufacturing  equipment which was leased to Acushnet and Acushnet's
obligation  to make  additional  payments  to RG under  the  capital  lease  was
terminated.  Additionally, Acushnet is obligated to continue producing grips for
RG through January 2000 and to pay up to $100,000 for shipping and  installation
of the manufacturing equipment at a new location.

RG currently  purchases the majority of its supply of non-cord,  injected  grips
from  Acushnet  and has no  immediate  replacement  supply  source.  The Company
believes that it can obtain a sufficient supply of grips from Acushnet and other
existing vendors to satisfy customer demand through December 31, 2000.  Included
in  finished  goods  inventories  at  November  30,  1999 are grips at a cost of
approximately  $0.8 million located at Acushnet.  The Company has identified and
is in various  stages of  negotiations  with three  separate grip  manufacturers
which the Company  believes can maintain  RG's  standard of product  quality and
will facilitate a smooth transition. There can be no assurances that the Company
will be able to secure a source for grips on as favorable terms or with the same
or better quality as Acushnet.  In addition,  there can be no assurances  that a
transition to new suppliers  will not result in production  delays,  the loss of
sales and key customers which would materially  affect RG's financial  condition
and results of operations.

Acushnet  warehoused  and  distributed  RG's grips under the  manufacturing  and
supply agreement. In connection with the Termination Agreement, the Company will
assume responsibility for these functions. In September 1999, approximately $0.2
million of grips were  transferred  from the Acushnet  facility to the Company's
manufacturing  and  distribution  facility in  Torrington,  Connecticut  and are
included in finished  goods  inventories  at November 30, 1999.  The  Torrington
warehouse has been  configured to accommodate  storage and shipment of grips. In
November 1999, the Company  entered into a lease of  approximately  9,000 square
feet of warehouse space in Scottsdale,  Arizona which will serve as a West Coast
distribution center. In December 1999,  approximately $0.3 million of grips were
transferred from the Acushnet  facility to the Company's  Scottsdale  warehouse.
When Acushnet has fulfilled its manufacturing  obligations under the Termination
Agreement,  all  remaining  inventory  will be  transferred  from  the  Acushnet
facility to the Torrington and Scottsdale warehouses. The Company will warehouse
and distribute its grips from both the Scottsdale and Torrington  locations when
the relationship with Acushnet is completed.

DISCONTINUED  OPERATIONS.  In March  1999,  the  operating  assets of Roxxi were
disposed  of through  two  separate  transactions.  Roxxi  sold its trade  name,
customer list,  design database and related computer software and hardware for a
royalty  of 16% of the  buyer's  net sales of  Roxxi-licensed  products  for the
two-year   period   beginning  May  1,  1999.   Roxxi  also  sold  its  headwear
manufacturing equipment, headwear inventory and raw materials to another company
for  $300,000  and a royalty of 2% of the  buyer's net sales until the buyer has
paid an  additional  $200,000.  Subsequently,  Roxxi's name was changed to Royal
Grip  Headwear  Company.  The Company is  accounting  for royalties as income is
earned during the two year period  beginning May 1, 1999.  For the three and six
months ended November 30, 1999,  royalties of $51,000 and $89,000 were recorded,
respectively,  and are reflected as other income in the  accompanying  condensed
consolidated statements of operations.

                                      -15-
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

DERIVATIVE FINANCIAL INSTRUMENTS, OTHER FINANCIAL INSTRUMENTS, AND DERIVATIVE
COMMODITY INSTRUMENTS.

At  November  30,  1999,  the  Company  did not  participate  in any  derivative
financial  instruments or other  financial and commodity  instruments  for which
fair value disclosure would be required under Statement of Financial  Accounting
Standards No. 107. The Company holds no investment securities that would require
disclosure of market risk.

PRIMARY MARKET RISK EXPOSURE.

The Company's  primary  market risk  exposure  relates to its variable rate debt
obligations which are fully described in Note 5 to the Financial  Statements.  A
one percent change in the prime lending rate would have an effect of $17,000 and
$33,000 on interest  expense  for the three and six months  ended  November  30,
1999, respectively.

                                      -16-
<PAGE>
                                     PART II
                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

     On November 2, 1999, R. R. Donnelley & Sons Company,  Plaintiff,  vs. Royal
Precision,  Inc.,  Defendant,  was filed in  Superior  Court,  Maricopa  County,
Arizona.  In the matter,  R. R. Donnelley & Sons Company  ("Donnelley")  alleges
that the Company is liable under breach of contract for  approximately  $280,000
in   printing   costs   arising   from  the   preparation   of  a  Joint   Proxy
Statement/Prospectus  related to a proposed merger agreement between the Company
and Coyote Sports,  Inc. which was terminated prior to the effective date of the
merger.  Management  believes  that the action is without  merit and  intends to
defend it vigorously.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

     The  Amended  and  Restated  Certificate  of  Incorporation  was amended on
October 19, 1999 as approved by the  stockholders of the Company at their Annual
Meeting  held  October  12,  1999,  which  amendment  decreased  the  number  of
authorized  shares of Preferred  Stock from 5,000,000 to 1,000,000 and decreased
the number of authorized  shares of Common Stock from  50,000,000 to 10,000,000.
This amendment had no effect upon the rights of the holders of such securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

     None.

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

     (a) The annual meeting of stockholders was held on October 12, 1999.

     (b) At the annual  meeting,  David E. Johnston and Thomas A. Schneider were
elected as directors, each to serve a term of three years. Other directors whose
terms of office continued after the annual meeting are Danny Edwards, Richard P.
Johnston and Raymond J. Minella.

     (c) The only  matters  voted on at the annual  meeting were the election of
directors  and approval of an amendment to the Amended and Restated  Certificate
of Incorporation. Results of the voting were as follows:

     Total  number of shares  entitled  to vote  present or  represented  at the
annual meeting: 3,334,411

     Election of Directors:

                                      For         Authority Withheld
                                      ---         ------------------
       David E. Johnston           3,334,011              400
       Thomas A. Schneider         3,334,061              350

     Approval of amendment to Certificate of Incorporation:

                                 For          Against      Abstain    Not Voted
                                 ---          -------      -------    ---------
                              3,334,211         200          -0-         -0-

ITEM 5. OTHER INFORMATION.

     None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  Exhibits.

                                      -17-
<PAGE>
     (3) Certificate of Incorporation and Bylaws

     Exhibit 3.1.  Amended and Restated  Certificate of  Incorporation  of Royal
Precision,  Inc.,  as  amended  (restated  to reflect  amendment  filed with the
Secretary of State of Delaware on October 19, 1999).

     Exhibit 3.2. Bylaws of Royal Precision,  Inc. (incorporated by reference to
Annex IV to the Company's Form S-4; No. 333-28841 (the "Form S-4")).

     (4) Instruments Defining the Rights of Security Holders

     Exhibit 4. 1. See Articles FOUR, FIVE and SEVEN of the Amended and Restated
Certificate of Incorporation at Exhibit 3.1.

     Exhibit 4.2. See Article I,  Sections 2.1 and 2.2 of Article II and Section
7.3 of  Article  VII of the Bylaws of Royal  Precision,  Inc.  (incorporated  by
reference to Exhibit 3.2 to the Form S-4).

     (10) Material Contracts

     Exhibit  10.1.  Royal  Precision  Stock  Option Plan  (restated  to reflect
amendments  adopted by the Board of Directors  on November 30, 1999  pursuant to
authority granted in the Plan).

     Exhibit 10.2. Second Amendment to Credit and Security  Agreement between FM
Precision  Golf  Manufacturing  Corp.,  FM Precision  Golf Sales Corp. and Wells
Fargo Business Credit, Inc. dated November 10, 1999.

     Exhibit 10.3.  Third  Amendment to Amended and Restated Credit and Security
Agreement  between Royal Grip, Inc., Royal Grip Headwear Company and Wells Fargo
Business Credit, Inc. dated November 10, 1999.

     Exhibit 27.

     Financial Data Schedule (submitted electronically for SEC information only)

     (b) Reports on Form 8-K.

     There  were no  reports  on Form 8-K  filed by the  Registrant  during  the
quarter ended November 30, 1999.

                                      -18-
<PAGE>
                                   SIGNATURES

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

                                      ROYAL PRECISION, INC.

Date January 10, 2000                 By  /s/ Thomas Schneider
                                          --------------------------------------
                                          Thomas Schneider, President


                                      By  /s/ Kevin Neill
                                          --------------------------------------
                                          Kevin Neill, Vice President - Finance
                                          and Chief Financial Officer
                                          (chief accounting officer)

                                      -19-
<PAGE>
                                  EXHIBIT INDEX

                                                                      PAGE IN
                                                                   SEQUENTIALLY
                                                                     NUMBERED
EXHIBIT                                                                COPY

3.1      Amended and Restated Certificate of Incorporation of           21
         Royal Precision, Inc., as amended (restated to reflect
         amendment filed with the Secretary of State of Delaware
         on October 19, 1999).

3.2      Bylaws of Royal Precision, Inc. (incorporated by reference      *
         to Annex IV to the Company's Form S-4; No. 333-28841
         (the "Form S-4")).

4.1      See Articles FOUR, FIVE and SEVEN of the Amended and
         Restated Certificate of Incorporation of the registrant
         at Exhibit 3.1.

4.2      See Article I, Sections 2.1 and 2.2 of Article II and
         Section 7.3 of Article VII of the Bylaws of Royal
         Precision, Inc. (incorporated by reference to Exhibit
         3.2 to the Form S-4).

10.1     Royal Precision Stock Option Plan (restated to reflect         26
         amendments adopted by the Board of Directors on November
         30, 1999 pursuant to authority granted in the Plan).

10.2     Second Amendment to Credit and Security Agreement between      47
         FM Precision Golf Manufacturing Corp., FM Precision Golf
         Sales Corp. and Wells Fargo Business Credit, Inc. dated
         November 10, 1999.

10.3     Third Amendment to Amended and Restated Credit and             54
         Security Agreement between Royal Grip, Inc., Royal Grip
         Headwear Company and Wells Fargo Business Credit, Inc.
         dated November 10, 1999.

27.      Financial Data Schedule (submitted electronically for
         SEC information only).

----------
*Incorporated by reference