<PAGE>

              UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C.  20549

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

                                   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 April 1, 2000.

                                     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 0-16611

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

                             GLOBAL SPORTS, INC.
                             -------------------
           (Exact name of registrant as specified in its charter)

              DELAWARE                                  04-2958132
   -------------------------------------------------------------------------
     (State or other jurisdiction         (I.R.S. employer identification no.)
   of incorporation or organization)

  1075 FIRST AVENUE, KING OF PRUSSIA, PA                             19406
  ----------------------------------------------------------------------------
  (Address of principal executive offices)                         (Zip code)

                                  610-265-3229
                                  ------------
                        (Registrant's telephone number,
                              including area code)

   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 May 11, 2000:

       Common Stock, $0.01 par value                          21,702,080
       -----------------------------                ---------------------------
            (Title of each class)                        (Number of Shares)


<PAGE>

                             GLOBAL SPORTS, INC.
                                  FORM 10-Q
                              QUARTERLY REPORT
                     FOR THE QUARTER ENDED APRIL 1, 2000

                              TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          ----
<S>                                                                       <C>
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements:
         Condensed Consolidated Balance Sheets as of
           January 1, 2000 and April 1, 2000 (Unaudited)................    3
         Condensed Consolidated Statements of Operations
           for the quarters ended March 31, 1999 and April 1,
           2000 (Unaudited).............................................    4
         Condensed Consolidated Statements of Cash Flows for the
           quarters ended March 31, 1999 and April 1, 2000 (Unaudited)..    5
         Notes to Unaudited Condensed Consolidated Financial
           Statements...................................................    6
Item 2.  Management's Discussion and Analysis of Results of Operations
           and Financial Condition......................................   12
Item 3.  Quantitative and Qualitative Disclosures About Market Risk.....   24

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings..............................................   25
Item 2.  Changes in Securities and Use of Proceeds......................   25
Item 3.  Defaults upon Senior Securities................................   25
Item 4.  Submission of Matters to a Vote of Security Holders............   25
Item 5.  Other Information..............................................   25
Item 6.  Exhibits and Reports on Form 8-K...............................   25

SIGNATURES..............................................................   26
</TABLE>
--------------------------------------------------------------------------------
  For all years prior to 1999 our fiscal year ended on December 31.  Effective
for 1999, we changed our fiscal year from the last day of December to the
Saturday nearest the last day of December.  Accordingly, fiscal 1999 ended on
January 1, 2000.  References to fiscal 1997, fiscal 1998, fiscal 1999 and fiscal
2000 refer to the years ended December 31, 1997 and 1998, the year ended January
1, 2000 and the year ending December 30, 2000.

  Although we refer to the traditional sporting goods retailers, general
merchandisers, Internet and media companies for which we develop and operate e-
commerce sporting goods businesses as our "partners," we do not act as an agent
or legal representative for any of our partners.  We do not have the power or
authority to legally bind any of our partners.  Similarly, our partners do not
have the power or authority to legally bind us.  In addition, we do not have the
types of liabilities for our partners that a general partner of a partnership
would have.

                                       2
<PAGE>

PART I -- FINANCIAL INFORMATION

ITEM 1 -- FINANCIAL STATEMENTS

                      GLOBAL SPORTS, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                     (In Thousands, Except Per Share Data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                     January 1,        April 1,
                                                                       2000              2000
                                                                    -----------      -----------
<S>                                                                 <C>              <C>
                                 ASSETS
Current assets:
     Cash and cash equivalents....................................     $ 27,345         $  7,891
     Accounts receivable, net.....................................        2,738            2,273
     Inventory....................................................       10,697           13,131
     Prepaid expenses and other current assets....................        2,782            3,408
     Net assets of discontinued operations........................       18,382           15,595
                                                                    -----------      -----------
       Total current assets.......................................       61,944           42,298
Property and equipment, net of accumulated depreciation
  and amortization................................................       20,682           21,237
Other assets, net.................................................          110              290
                                                                    -----------      -----------
       Total assets...............................................     $ 82,736         $ 63,825
                                                                    ===========      ===========


                  LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable and accrued expenses........................     $ 21,245         $ 14,586
     Current portion - capital lease obligation, related party....          141              144
                                                                    -----------      -----------
       Total current liabilities..................................       21,386           14,730
Capital lease obligation, related party...........................        2,040            2,003
Commitments and contingencies.....................................
Stockholders' equity:
   Preferred stock, $0.01 par value, 1,000 shares
     authorized; 8 shares issued as mandatorily redeemable
     preferred stock..............................................            -                -
   Common stock, $0.01 par value, 60,000 shares authorized;
     19,544 and 18,475 shares issued and outstanding, respectively,
     as of January 1, 2000; 18,566 shares issued and outstanding
     as of April 1, 2000..........................................          195              186
   Additional paid-in capital.....................................      102,462          104,072
   Accumulated deficit............................................      (43,133)         (57,166)
                                                                    -----------      -----------
                                                                         59,524           47,092
Less: Treasury stock, at cost.....................................          214                -
                                                                    -----------      -----------
     Total stockholders' equity...................................       59,310           47,092
                                                                    -----------      -----------
     Total liabilities and stockholders' equity...................     $ 82,736         $ 63,825
                                                                    ===========      ===========
</TABLE>

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

                                       3
<PAGE>

                      GLOBAL SPORTS, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In Thousands, Except Per Share Data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                          For the Quarter Ended
                                                                 -------------------------------------
                                                                     March 31,              April 1,
                                                                       1999                   2000
                                                                 ---------------        --------------
<S>                                                              <C>                    <C>
Net revenues................................................             $     -            $    5,719
Cost of revenues............................................                   -                 3,952
                                                                 ---------------        --------------
               Gross profit.................................                   -                 1,767
Operating expenses:
       Sales and marketing..................................                   -                 9,815
       Product development..................................                   -                 2,667
       General and administrative...........................                 817                 2,282
       Stock-based compensation.............................                 398                 1,266
                                                                 ---------------        --------------
               Total operating expenses.....................               1,215                16,030
                                                                 ---------------        --------------
Operating loss..............................................              (1,215)              (14,263)
Other (income) expenses:
       Interest (income) expense, net.......................                  57                  (230)
                                                                 ---------------        --------------
Loss from continuing operations before
     income taxes...........................................              (1,272)              (14,033)
Benefit from income taxes...................................                (509)                    -
                                                                 ---------------        --------------
Loss from continuing operations.............................                (763)              (14,033)
Discontinued operations:
       Income from discontinued operations (net of
         benefit from income taxes of $177).................               1,157                     -
                                                                 ---------------        --------------
Net income (loss)...........................................             $   394             $(14,033)
                                                                 ===============        ==============

Earnings (losses) per share--basic and diluted:
       Loss from continuing operations......................             $  (.06)          $      (.76)
       Income from discontinued operations..................                 .09                     -
                                                                 ---------------        --------------
       Net income (loss)....................................             $   .03           $      (.76)
                                                                 ===============        ==============

Weighted average shares outstanding - basic and diluted.....              12,019                18,517
                                                                 ===============        ==============
</TABLE>

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

                                       4
<PAGE>

                      GLOBAL SPORTS, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                  For the Quarter Ended
                                                                            ----------------------------------
                                                                                 March 31,          April 1,
                                                                                   1999               2000
                                                                            ---------------      -------------
<S>                                                                         <C>                  <C>
Cash Flows from Operating Activities:
Net income (loss)........................................................           $   394           $(14,033)
Deduct:
       Income from discontinued operations...............................             1,157                  -
                                                                            ---------------      -------------
       Loss from continuing operations...................................              (763)           (14,033)
Adjustments to reconcile net loss from continuing operations to
  net cash used in operating activities:
       Depreciation and amortization.....................................               138              1,449
       Stock-based compensation..........................................               398              1,266
       Changes in operating assets and liabilities:
           Accounts receivable...........................................                 -                465
           Inventory.....................................................                 -             (2,434)
           Prepaid expenses and other current assets.....................                69               (626)
           Other assets..................................................                43               (180)
           Accounts payable and accrued expenses.........................            (2,191)            (6,659)
                                                                            ---------------      -------------
       Net cash used in continuing operations............................            (2,306)           (20,752)
       Net cash (used in) provided by discontinued operations............            (2,715)             2,901
                                                                            ---------------      -------------
       Net cash used in operating activities.............................            (5,021)           (17,851)
                                                                            ---------------      -------------
Cash Flows from Investing Activities:
Acquisition of property and equipment....................................              (144)            (2,004)
                                                                            ---------------      -------------
Cash Flows from Financing Activities:
Net borrowings under lines of credit.....................................             5,631                  -
Repayments of capital lease obligation...................................               (31)               (34)
Proceeds from exercises of common stock options and warrants.............               478                435
Costs of debt issuance...................................................               (30)                 -
                                                                            ---------------      -------------
       Net cash provided by financing activities.........................             6,048                401
                                                                            ---------------      -------------
Net increase (decrease) in cash and cash equivalents.....................               883            (19,454)
Cash and cash equivalents, beginning of period...........................                83             27,345
                                                                            ---------------      -------------
Cash and cash equivalents, end of period.................................           $   966           $  7,891
                                                                            ===============      =============
</TABLE>


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

                                       5
<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

        NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 1 - BASIS OF PRESENTATION

   Global Sports, Inc. ("Global" or the "Company"), a Delaware corporation,
develops and operates the electronic commerce ("e-commerce") sporting goods
businesses of several traditional sporting goods retailers, general
merchandisers, internet companies and media companies under exclusive long-term
agreements. The Company currently derives virtually all of its revenues from the
sale of sporting goods over the Internet and other electronic media.  The
Company currently does not derive revenues from the provision of services to its
partners' e-commerce sporting goods businesses.  Each of the Company's partners'
owns the URL address of its Web site.  Based upon the terms of the agreements
with its partners, the Company owns certain components of the Web sites and the
partners own other components.

   The accompanying condensed consolidated financial statements of Global have
been prepared in accordance with generally accepted accounting principles for
interim financial information and in accordance with the instructions for Form
10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all
information and footnotes required by generally accepted accounting principles
for complete financial statements.

   The accompanying financial information is unaudited; however, in the opinion
of the Company's management, all adjustments (consisting solely of normal
recurring accruals) necessary to present fairly the financial position, results
of operations and cash flows for the periods reported have been included. The
results of operations for the periods reported are not necessarily indicative of
those that may be expected for a full year.

   This quarterly report should be read in conjunction with the financial
statements and notes thereto included in the Company's audited financial
statements presented in the Company's Annual Report on Form 10-K/A filed on May
2, 2000.

NOTE 2 - EARNINGS (LOSSES) PER SHARE

    Earnings (losses) per share for all periods have been computed in accordance
with SFAS No. 128, Earnings Per Share. Basic and diluted earnings (losses) per
share is computed by dividing net income by the weighted average number of
shares of common stock outstanding during the year. Outstanding common stock
options and warrants have been excluded from the calculation of diluted earnings
(losses) per share because their effect would be antidilutive.

   The amounts used in calculating earnings per share data are as follows:

<TABLE>
<CAPTION>
                                                                             For the Quarter Ended
                                                                         -------------------------------
                                                                            March 31,          April 1,
                                                                              1999               2000
                                                                         -------------      ------------
                                                                                 (In Thousands)
<S>                                                                        <C>                <C>
Loss from continuing operations....................................            $  (763)         $(14,033)
Income from discontinued operations................................              1,157                --
                                                                         -------------      ------------
Net income.........................................................            $   394          $(14,033)
                                                                         =============      ============
Weighted average shares outstanding - basic and diluted............             12,019            18,517
                                                                         =============      ============
Outstanding common stock options having
 no dilutive effect................................................              1,411             2,265
                                                                         =============      ============
Outstanding common stock warrants having
 no dilutive effect................................................                209               560
                                                                         =============      ============
</TABLE>

                                       6
<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

        NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 3 - COMMITMENTS AND CONTINGENCIES

Employment Agreements

   As of April 1, 2000, the Company had employment agreements with several of
its officers for an aggregate annual base salary of $1,753,000 plus bonuses and
increases in accordance with the terms of the agreements. Terms of such
contracts range from three to five years and are subject to automatic annual
extensions.

Advertising and Media Agreements

   As of April 1, 2000, the Company was contractually committed for the purchase
of future advertising totaling approximately $3,123,000 for the remainder of the
fiscal year ending December 30, 2000. One such agreement requires the Company to
pay an additional fee based upon revenues generated from the advertising. In
addition, the Company was contractually committed to provide barter media with a
value of no less than $5,000,000 for fiscal 2000. The barter media consists of
participation by a third party in joint advertising which the Company is
entitled to receive in one of its partner's retail stores and newspaper
promotions. The Company has no history of similar advertising arrangements for
cash. Accordingly, no revenue or expense will be recorded for this arrangement.
Minimum required joint advertising with the third party includes specific
quantities for combined traffic in the partner's retail stores and copies of
joint newspaper promotions.

NOTE 4 - COMPREHENSIVE INCOME

   Comprehensive income for the quarters ended March 31, 1999 and April 1, 2000
was as follows:

<TABLE>
<CAPTION>
                                                     For the Quarter Ended
                                               ---------------------------------
                                                 March 31,            April 1,
                                                   1999                 2000
                                               ------------        -------------
                                                         (In Thousands)
<S>                                              <C>                 <C>
Net income (loss)...........................          $ 394             $(14,033)
Foreign currency translation adjustments....             47                   --
                                               ------------        -------------
Comprehensive income (loss).................          $ 441             $(14,033)
                                               ============        =============
</TABLE>

NOTE 5 - EQUITY TRANSACTIONS

   During the quarter ended April 1, 2000, the Company granted options and
warrants to purchase 612,700 shares of the Company's common stock to employees,
consultants and a partner of the Company. The range of exercise prices for all
options and warrants granted was from $3.00 to $20.75 for the quarter ended
April 1, 2000. As a result of the grant of these options and warrants and the
amortization of deferred compensation from prior grants, the Company recorded
stock-based compensation expense of $1,266,000 for the quarter ended April 1,
2000, primarily as a result of non-employee grants. As of April 1, 2000, the
Company had an aggregate of $2,584,000 of deferred compensation remaining to be
amortized over the next five years.

   Options and warrants to purchase 90,617 shares of the Company's common stock
were exercised during the quarter ended April 1, 2000.   The range of exercise
prices was from $3.20 to $15.63  for the quarter ended April 1, 2000.  These
exercises resulted in cash proceeds to the Company of $435,000 for the quarter
ended April 1, 2000.

                                       7
<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

        NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

   On March 13, 2000, the Company's Board of Directors approved the retirement
of 1,069,086 shares of treasury stock held by the Company.

NOTE 6 - BUSINESS SEGMENTS

   The Company operates in one principal business segment which develops and
operates the e-commerce sporting goods businesses of traditional sporting goods
retailers, general merchandisers, internet companies and media companies in
domestic markets. All of the Company's net sales, operating results and
identifiable assets are in the United States. See Note 7 for a discussion of the
Company's discontinued operations.

NOTE 7 - DISCONTINUED OPERATIONS

   Net sales of discontinued operations for the quarters ended March 31, 1999,
and April 1, 2000 were $33,700,000 and $18,400,000, respectively.

   The discontinued operations components of amounts reflected in the balance
sheets are as follows:

<TABLE>
                                                                  January 1,                  April 1,
                                                                     2000                       2000
                                                               --------------            ---------------
                                                                            (In Thousands)
<S>                                                            <C>                       <C>
   Cash....................................................          $    591                   $  1,000
   Accounts receivable.....................................            29,692                     22,748
   Inventory...............................................             3,518                      7,629
   Property and equipment..................................             1,243                      1,250
   Goodwill and intangibles................................            11,148                     10,949
   Other assets............................................               500                        635
   Accounts payable and accrued expenses...................           (10,360)                   (12,327)
   Notes payable, other....................................           (17,950)                   (16,289)
                                                               --------------            ---------------
      Net assets of discontinued operations (1)............          $ 18,382                   $ 15,595
                                                               ==============            ===============

</TABLE>
(1) Included in current assets.

Interest Expense of Discontinued Operations

    Net interest expense incurred related to notes payable of discontinued
operations amounting to $265,000 and $347,000 for the quarters ended March 31,
1999 and April 1, 2000, respectively,  has been allocated to discontinued
operations.

Employment Agreements of Discontinued Operations

    As of April 1, 2000, the Company had employment agreements with several of
its officers of discontinued operations for an aggregate annual base salary of
$567,000 plus bonuses and increases in accordance with the terms of the
agreements. Terms of the agreements range from three to five years and are
subject to automatic annual extensions. The agreements will be terminated upon
consummation of the sale of the Company's Off-Price and Action Sports
division.

                                       8
<PAGE>

                     GLOBAL SPORTS, INC. AND SUBSIDIARIES

        NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Purchase Commitments of Discontinued Operations

     As of April 1, 2000, outstanding purchase commitments of discontinued
operations existed totaling $4,738,000, for which commercial import letters of
credit have been issued.

NOTE 8 - SIGNIFICANT TRANSACTIONS

     For the quarter ended April 1, 2000, net revenues included approximately
$1,900,000 of sales of one vendor's fitness equipment product sold primarily
through direct marketing, in addition to Web site and other 800-number sales.
The resulting accounts receivable are due over a weighted average period of nine
months.


NOTE 9 - SUBSEQUENT EVENTS

Mortgage Note

    On April 20, 2000, the Company executed a $5,300,000 mortgage note
collateralized by the land, building, improvements, furniture and equipment of
its corporate headquarters.  The mortgage note has a term of ten years and bears
interest at 8.49% per annum.

Private Placement

          On April 27, 2000, the Company agreed to sell to funds affiliated with
SOFTBANK America Inc. ("SOFTBANK") 2,500,000 shares of common stock and to TMCT
Ventures, L.P. ("TMCT") 625,000 shares of common stock at a price of $8.00 per
share for an aggregate purchase price of $25,000,000. The sale of these shares
was completed on May 1, 2000. In addition, as part of this financing, the
Company issued to SOFTBANK three-year warrants to purchase 1,250,000 shares of
common stock and to TMCT three-year warrants to purchase 312,500 shares of
common stock at an exercise price of $10.00 per share.



                                       9
<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
          AND FINANCIAL CONDITION

Forward Looking Statements

    This Quarterly Report on Form 10-Q contains forward-looking statements
relating to our operations that are based on management's current expectations,
estimates and projections about our company and the online commerce industry.
Words such as "expects," "intends," "plans," "projects," "believes,"
"estimates," "anticipates" and variations of these words and similar expressions
are used to identify the forward-looking statements.  These statements are not
guarantees of future performance and involve certain risks, uncertainties and
assumptions that are difficult to predict.  Further, we may make forward-looking
statements that are based upon assumptions as to future events that may not
prove to be accurate.  Therefore, actual outcomes and results may differ
materially from what we express or forecast in these forward-looking statements.
We undertake no obligation, and do not intend, to update or revise any forward-
looking statements, whether as a result of new information, future events or
otherwise.  A number of important factors could cause actual results to differ
materially from those indicated in our forward-looking statements.  These
factors include those set forth under the heading "Risk Factors."

Overview

    We develop and operate e-commerce sporting goods businesses for traditional
sporting goods retailers, general merchandisers, Internet companies and media
companies under exclusive long-term agreements. We enable our partners to
capitalize on their existing brand assets to exploit online opportunities in the
sporting goods retail industry. We customize the design of a partner's Web site
with a broad range of characteristics that includes a differentiated user
interface, partner-specific content pages, an extensive electronic catalog of
product descriptions and images, a searchable database and interactive
communication tools. We currently derive virtually all of our revenues from the
sale of sporting goods over the Internet and other electronic media. It is
possible, however, that in the future we may derive revenues from providing
services in connection with the design, development, operation and promotion of
our partners' e-commerce sporting goods businesses.

Company Background

    Prior to our decision to initiate our e-commerce sporting goods business, we
operated two primary businesses, our Branded division and our Off-Price and
Action Sports division.  From inception in 1986 through December 1999, we
designed, marketed and distributed high performance athletic footwear
exclusively for women under the RYKA brand name.  From December 1997 through
December 1999, as part of our Branded division, we also designed, marketed and
distributed outdoor footwear under the Yukon brand name.  During the same
period, as part of our Off-Price and Action Sports division, we purchased
closeouts, overstocks, canceled orders and excess inventories of athletic,
outdoor, casual and specialty footwear, athletic apparel and athletic equipment
from manufacturers and retailers for resale, and designed and distributed
special make-up athletic equipment.

    In April 1999, we formalized our plan to divest these divisions in
order to focus exclusively on the development of our e-commerce business.
Accordingly, for financial statement purposes, the assets, liabilities, results
of operations and cash flows of these divisions have been segregated from those
of continuing operations and are presented as discontinued operations.

    On June 10, 1999, in order to finance our e-commerce business, we agreed to
sell to funds affiliated with SOFTBANK America, Inc. (collectively "SOFTBANK")
6,153,850 shares of common stock at a price of $13.00 per share for an aggregate
purchase price of approximately $80.0 million. The purchase price reflected the
closing price of our common stock on May 26, 1999, the day prior to the day we
and SOFTBANK agreed in principle to the transaction. The sale of these shares
was completed on July 23, 1999.

    On September 24, 1999, in furtherance of our plan to sell our historical
businesses, we entered into an agreement, as amended on March 13, 2000, to sell
our Off-Price and Action Sports division for a cash payment at closing of $13.2
million and the assumption by the purchaser of $4.0 million in indebtedness. We
are seeking

                                       10
<PAGE>

stockholder approval of this sale at our annual stockholders meeting to be held
on May 25, 2000. Michael G. Rubin, our Chairman and Chief Executive Officer, who
as of the record date for the annual meeting beneficially owned approximately
43.2% of our outstanding shares, and SOFTBANK, who as of the record date for the
annual meeting beneficially owned approximately 33.2% of our outstanding shares,
have indicated that they intend to vote for approval of the sale. We expect the
sale to close soon after our annual stockholders meeting.

    On April 27, 2000, in order to continue financing our e-commerce operations,
we agreed to sell to funds affiliated with SOFTBANK 2,500,000 shares of common
stock and to TMCT Ventures, L.P. ("TMCT") 625,000 shares of common stock at a
price of $8.00 per share for an aggregate purchase price of $25.0 million. The
sale of these shares was completed on May 1, 2000. In addition, as part of this
financing, we issued to SOFTBANK three-year warrants to purchase 1,250,000
shares of common stock and to TMCT three-year warrants to purchase 312,500
shares of common stock at an exercise price of $10.00 per share.

Results of Operations

The Quarter Ended April 1, 2000 Compared to the Quarter Ended March 31, 1999

    Net Revenues. We had net revenues from continuing operations of $5.7 million
for the first quarter of fiscal 2000 and no net revenues from continuing
operations for the first quarter of fiscal 1999. We derived $3.6 million of our
net revenues from the sale of indoor sports and fitness equipment. Fitness
equipment sales included $1.9 million of sales of one of our vendor's products
sold primarily through direct marketing, in addition to Web site and other
800-number sales. We derived $1.8 million of our net revenues from sales of
sporting goods products from other categories. Other sources of revenue during
the quarter, including sales of gift certificates to our partners' retail
stores, the sale of advertising on a partner's Web site and outbound shipping
charges to consumers, accounted for the remaining $300,000 of our net revenues.

    Cost of Revenues. We incurred cost of revenues from continuing operations of
$4.0 million for the first quarter of fiscal 2000 and no cost of revenues from
continuing operations for the first quarter of fiscal 1999. As a percentage of
net revenues, cost of revenues was 69.1% for the first quarter of fiscal 2000.
These costs included the cost of the products sold and inbound freight costs
related to these products, as well as outbound shipping costs other than those
related to our temporary free shipping promotions which are included in sales
and marketing expenses.

    Gross Profit.  We had gross profit from continuing operations of $1.8
million for the first quarter of fiscal 2000 and no gross profit from continuing
operations for the first quarter of fiscal 1999.  As a percentage of net
revenues, gross profit from continuing operations was 30.9% for the first
quarter of fiscal 2000.

    Sales and Marketing Expenses. We incurred sales and marketing expenses from
continuing operations of $9.8 million for the first quarter of fiscal 2000 and
no sales and marketing expenses from continuing operations for the first quarter
of fiscal 1999. These expenses included advertising and promotional expenses,
including temporary free shipping, distribution facility expenses, order
processing fees and payroll and related expenses. Also included in this amount
are partner revenue shares, which are payments made to our partners in exchange
for the use of their brand assets, the promotion of their URL's in marketing and
communication materials, the implementation of programs to provide incentives to
in-store customers to shop online and other programs and services provided to
the customers of our partners' Web sites. Partner revenue shares were not
significant in the first quarter of fiscal 2000.

    Product Development Expenses. We incurred product development expenses from
continuing operations of $2.7 million for the first quarter of fiscal 2000 and
no product development expenses from continuing operations for the first quarter
of fiscal 1999. Product development expenses consisted primarily of expenses
associated with content development; building, developing and operating our
partners' Web sites; payroll and related expenses for engineering, production,
creative and management information systems; and depreciation expense related to
capitalized hardware and software.

                                       11
<PAGE>

    General and Administrative Expenses. We incurred general and administrative
expenses from continuing operations of $2.3 million for the first quarter of
fiscal 2000 and $800,000 for the first quarter of fiscal 1999. While our
continuing operations were not in existence in the first quarter of fiscal 1999,
the recorded expenses reflect costs for personnel, facilities and professional
fees that are currently associated with our continuing operations.

    Stock-Based Compensation Expense. We recorded stock-based compensation
expense from continuing operations of $1.3 million for the first quarter of
fiscal 2000 and $400,000 for the first quarter of fiscal 1999. The expense for
the first quarter of fiscal 2000 related to the amortization of deferred
compensation expense for options granted to employees and certain non-employees
and to the value of the options or warrants granted to certain other non-
employees. As of April 1, 2000, we had an aggregate of $2.6 million of deferred
compensation remaining to be amortized over the next five years.

    Interest (Income) Expense. Interest income consists of interest earned on
cash and short-term investments. In the first quarter of fiscal 2000, we had
interest income of $200,000, net of a small amount of interest expense. In first
quarter of fiscal 1999, we had $100,000 of interest expense, net of small amount
of interest income, related primarily to bank borrowings.

Liquidity and Capital Resources

    Historically, we financed our operations through a combination of internally
generated funds, equity financings, subordinated borrowings and bank credit
facilities. We used our bank credit facilities to fund our investment in
accounts receivable and inventory necessary to support our historical
businesses.

    In connection with our decision to focus exclusively on our e-commerce
business, we raised approximately $80.0 million in gross proceeds through our
equity financing with SOFTBANK in July 1999.  We used part of the proceeds from
this financing to repay the balance on our then outstanding lines of credit,
reduce trade payables and provide operating capital related to our historical
businesses.  We also used part of the proceeds to acquire property and equipment
and fund working capital for our partners' e-commerce businesses.  As of April
1, 2000, we had cash and cash equivalents of approximately $7.9 million and
working capital of approximately $27.6 million, which included approximately
$15.6 million of net assets of discontinued operations.

    We have incurred substantial costs to develop our e-commerce business and to
recruit, train and compensate personnel for our creative, engineering,
marketing, advertising, merchandising, customer service and administration
departments. As a result, we incurred substantial losses in fiscal 1999 and the
first quarter of fiscal 2000 and, as of April 1, 2000, had an accumulated
deficit of $57.2 million. In order to expand our e-commerce business, we intend
to invest heavily in operations, Web site development, marketing, merchandising
and additional personnel. We therefore expect to continue to incur substantial
operating losses for the foreseeable future.

    We used approximately $20.8 million in net cash for operating activities of
continuing operations in the first quarter of fiscal 2000 and approximately $2.3
million in net cash for operating activities of continuing operations in the
first quarter of fiscal 1999. Net cash used for operating activities of
continuing operations in the first quarter of fiscal 2000 was primarily the
result of net losses from continuing operations and changes in inventory and
accounts payable and accrued expenses, partially offset by changes in accounts
receivable, depreciation expense and stock-based compensation expense. Net cash
used for operating activities of continuing operations in the first quarter of
fiscal 1999 was primarily the result of net losses from continuing operations
and changes in accounts payable and accrued expenses, partially offset by stock-
based compensation expense.

    Our investing activities in the first quarter of fiscal 2000 consisted of
purchases of property and equipment. We made capital expenditures of
approximately $2.0 million in the first quarter of fiscal 2000.

                                       12
<PAGE>

    As of April 1, 2000, we had commitments of $3.1 million relating to the
implementation of advertising and promotion programs.  In addition, we have
agreed to provide Yahoo! with not less than $5.0 million of barter media during
the term of our agreement with Yahoo!.  The barter media consists of including
the Yahoo! logo on mutually agreed upon advertising in a partners' retail stores
and newspaper promotions.

    To date, we have financed our e-commerce operation primarily from the sale
of equity securities. Management expects that our current cash position combined
with the proceeds from the sale of our Off-Price and Action Sports division,
will be sufficient to meet our anticipated cash needs for at least the next 12
months. However, our revenues must increase significantly to internally fund our
anticipated operating expenses. If cash flows are insufficient to fund these
expenses, we may need to raise additional funds in future periods through public
or private financings or other arrangements to fund our operations until we
achieve profitability.

    On April 20, 2000, we received approximately $5.3 million in gross proceeds
through the mortgage financing of our corporate headquarters.

    On May 1, 2000, we received approximately $25.0 million in gross proceeds
from a private placement of our common stock with SOFTBANK and TMCT. In
addition, as part of this financing, SOFTBANK and TMCT have the right to acquire
up to an additional $15.6 million of our common stock at $10.00 per share.

    Failure to raise future capital when needed could seriously harm our
business and operating results. If additional funds are raised through the
issuance of equity securities, the percentage ownership of our stockholders
would be reduced. Furthermore, these equity securities might have rights,
preferences or privileges senior to our common stock.

Seasonality

    We expect to experience seasonal fluctuations in our revenues. These
seasonal patterns will cause quarterly fluctuations in our operating results. In
particular, we expect that the fourth fiscal quarter will account for a large
percentage of our total annual sales. We believe that results of operations for
a quarterly period may not be indicative of the results for any other quarter or
for the full year.

Inflation

    Management believes that inflation has not had a material effect on our
operations.

Risk Factors

    Any investment in shares of our common stock involves a high degree of
risk. You should carefully consider the following information about these risks,
together with the other information contained in this Quarterly Report on Form
10-Q and our Annual Report on Form 10-K/A filed on May 2, 2000. If any of the
following risks occur, our business could be materially harmed. In these
circumstances, the market price of our common stock could decline, and you may
lose all or part of the money you paid to buy our common stock. This Quarterly
Report of Form 10-Q and our Annual Report on Form 10-K/A filed on May 2, 2000
contain forward-looking statements that involve risks and uncertainties. Many
factors, including those described below, may cause actual results to differ
materially from anticipated results.

Risks Particular to Our Business

    Our future success cannot be predicted based upon our limited e-commerce
operating history.

    Although we commenced operations in 1987, we did not initiate our e-commerce
business until the first quarter of 1999 and did not begin operating the e-
commerce sporting goods businesses of our partners until the fourth

                                       13
<PAGE>

quarter of 1999. Prior to the fourth quarter of 1999, when we launched the e-
commerce sporting goods business we operate for our partners, 100% of our
revenues had been generated by our discontinued operations. Upon completion of
the sale of discontinued operations, 100% of our revenues will be generated
through our e-commerce business. Based on our limited experience with our e-
commerce business, it is difficult to predict whether we will be successful.
Thus, our chances of financial and operational success should be evaluated in
light of the risks, uncertainties, expenses, delays and difficulties associated
with operating a business in a relatively new and unproven market, many of which
may be beyond our control. Our failure to address these issues could have a
material adverse effect on our business, results of operations and financial
condition.

    We expect significant increases in our operating expenses and continuing
losses.

    We incurred substantial losses for fiscal 1999 and, as of April 1, 2000, we
had an accumulated deficit of $57.2 million. We have not achieved profitability
from our continuing operations. We may not obtain enough customer traffic or a
high enough volume of purchases from our partners' e-commerce sporting goods
businesses to generate sufficient revenues to achieve profitability. We believe
that we will continue to incur operating and net losses for the next few years.
We believe that our losses in fiscal 2000 will be significantly greater than our
losses in fiscal 1999. There can be no assurances that we will be able to
reverse these accelerating losses. We intend to increase our operating expenses
substantially as we:

     . enhance and expand our third-party distribution and order fulfillment
       capabilities or develop our own;

     . improve our order processing systems and capabilities by transitioning
       order processing from our current third-party provider to in-house;

     . develop enhanced technologies and features to improve our partners' e-
       commerce sporting goods businesses;

     . expand our customer service capabilities to better serve our customers'
       needs;

     . increase our general and administrative functions to support our growing
       operations; and

     . increase our sales and marketing activities.

     Because we will incur many of these expenses before we receive any revenues
from our efforts, our losses will be greater than the losses we would incur if
we developed our business more slowly. In addition, we may find that these
efforts are more expensive than we currently anticipate, which would further
increase our losses. Also, the timing of these expenses may contribute to
fluctuations in our quarterly operating results.

     Our success is tied to the success of the sporting goods industry and our
partners for which we operate e-commerce sporting goods businesses.

     Our future success is substantially dependent upon the success of the
sporting goods industry and our partners for which we operate e-commerce
sporting goods businesses. From time to time, the sporting goods industry has
experienced downturns. Any downturn in the sporting goods industry could
adversely affect our business. In addition, if our partners were to have
financial difficulties or seek protection from their creditors, or if we are
unable to replace our partners or obtain new partners, it could adversely affect
our business, financial condition and results of operations.

     We enter into long-term contracts with our partners. If we do not maintain
good working relationships with our partners or perform as required under these
agreements it could adversely affect our business.

     We enter into contracts with our partners with terms ranging from five to
fifteen years. These agreements establish new and complex relationships between
our partners and us. We spend a significant amount of time and effort to
maintain our relationships with our partners and address the issues that from
time to time may arise from

                                       14
<PAGE>

these new and complex relationships. If we do not maintain a good working
relationship with our partners or perform as required under these agreements,
our partners could seek to terminate the agreements prior to the end of the term
or they could decide not to renew the contracts at the end of the term. This
could adversely affect our business, financial condition and results of
operations. Moreover, our partners could decide not to renew these contracts for
reasons not related to our performance.

     Our operating results are difficult to predict. If we fail to meet the
expectations of public market analysts and investors, the market price of our
common stock may decline significantly.

     Our annual and quarterly operating results may fluctuate significantly in
the future due to a variety of factors, many of which are outside of our
control. Because our operating results may be volatile and difficult to predict,
quarter-to-quarter comparisons of our operating results may not be a good
indication of our future performance. In some future quarter our operating
results may fall below the expectations of securities analysts and investors. In
this event, the trading price of our common stock may decline significantly.

     Factors that may harm our business or cause our operating results to
fluctuate include the following:

     . our inability to retain existing partners or to obtain new partners;

     . our inability to obtain new customers at a reasonable cost, retain
       existing customers or encourage repeat purchases;

     . decreases in the number of visitors to the e-commerce sporting goods
       businesses operated by us or the inability to convert these visitors into
       customers;

     . our failure to offer an appealing mix of sporting goods, apparel,
       footwear and other products;

     . our inability to adequately maintain, upgrade and develop our partners'
       Web sites, the systems used to process customers' orders and payments or
       our computer network;

     . the ability of our competitors to offer new or superior e-commerce
       sporting goods businesses, services or products;

     . price competition that results in lower profit margins or losses;

     . our inability to obtain specific products and brands or unwillingness of
       vendors to sell their products to us;

     . unanticipated fluctuations in the amount of consumer spending on sporting
       goods and related products, which tend to be discretionary spending
       items;

     . increases in the cost of Internet or other advertising;

     . increases in the amount and timing of operating costs and capital
       expenditures relating to expansion of our operations;

     . unexpected increases in shipping costs or delivery times, particularly
       during the holiday season;

     . technical difficulties, system security breaches, system downtime or
       Internet slowdowns;

     . seasonality;

     . our inability to manage inventory levels or control inventory theft;

                                       15
<PAGE>

     . our inability to manage distribution operations or provide adequate
       levels of customer service;

     . an increase in the level of our product returns;

     . government regulations related to use of the Internet for commerce; and

     . unfavorable economic conditions specific to the Internet, e-commerce or
       the sporting goods industry.

     Seasonal fluctuations in the sales of sporting goods could cause wide
fluctuations in our quarterly results.

     We expect to experience seasonal fluctuations in our revenues. These
seasonal patterns will cause quarterly fluctuations in our operating results. In
particular, we expect that our fourth fiscal quarter will account for a large
percentage of our total annual sales. In anticipation of increased sales
activity during our fourth fiscal quarter, we may hire a significant number of
temporary employees to bolster our permanent staff and significantly increase
our inventory levels. For this reason, if our revenues were below seasonal
expectations during the fourth fiscal quarter, our annual operating results
could be below the expectations of securities analysts and investors.

     Due to the limited operating history of our e-commerce business, it is
difficult to predict the seasonal pattern of our sales and the impact of this
seasonality on our business and financial results. In the future, our seasonal
sales patterns may become more pronounced, may strain our personnel, product
distribution and shipment activities and may cause a shortfall in revenues as
compared to expenses in a given period.

     We have been unable to fund our e-commerce operations with the cash
generated from our business. If we do not generate cash sufficient to fund our
operations, we may need additional financing to continue our growth or our
growth may be limited.

     Because we have not generated sufficient cash from operations to date, we
have funded our e-commerce operations primarily from the sale of equity
securities. Cash from revenues must increase significantly for us to fund
anticipated operating expenses internally. If our cash flows are insufficient to
fund these expenses, we may need to fund our growth through additional debt or
equity financings or reduce costs. Further, we may not be able to obtain
financing on satisfactory terms. Our inability to finance our growth, either
internally or externally, may limit our growth potential and our ability to
execute our business strategy. If we issue securities to raise capital, our
existing stockholders may experience additional dilution or the new securities
may have rights senior to those of our common stock.

     We must develop and maintain relationships with key brand manufacturers to
obtain a sufficient assortment and quantity of quality merchandise on acceptable
commercial terms. If we are unable to do so, it could adversely affect our
business, results of operation and financial condition.

     We primarily purchase the products we offer directly from the manufacturers
of the products. If we are unable to develop and maintain relationships with
these manufacturers, we may be unable to obtain or continue to carry a
sufficient assortment and quantity of quality merchandise on acceptable
commercial terms and our business could be adversely impacted. We do not have
written contracts with most of our manufacturers. Manufacturers could stop
selling products to us and may ask us to remove their products or logos from our
partners' Web sites. In some circumstances, our partners purchase products
directly from manufacturers for sale on their Web sites. If we or our partners
are unable to obtain products directly from manufacturers, especially popular
brand manufacturers, we may not be able to obtain the same or comparable
merchandise in a timely manner or on acceptable commercial terms. We currently
do not offer some popular brands of sporting goods, such as Nike. There can be
no assurance that we will be able to offer these brands in the future. If we are
unable to offer a sufficient assortment and quantity of quality products at
acceptable prices, we may lose sales and market share.

                                       16
<PAGE>

     Capacity constraints or system failures could materially and adversely
affect our business, results of operations and financial condition.

     Any system failure, including network, software or hardware failure, that
causes interruption of the availability of our partners' Web sites could result
in decreased usage of these Web sites. If these failures are sustained or
repeated, they could reduce the attractiveness of our partners' Web sites to
customers, vendors and advertisers. Our operations are subject to damage or
interruption from:

     . fire, flood, earthquake or other natural disasters;

     . power losses, interruptions or brown-outs;

     . Internet, telecommunications or data network failures;

     . physical and electronic break-ins or security breaches;

     . computer viruses; and

     . other similar events.

     We launched our first six partners' e-commerce sporting goods businesses in
the fourth quarter of fiscal 1999. The limited time during which we have been
operating these businesses, as well as the inherent unpredictability of the
events described above, makes it difficult to predict whether the occurrence of
any of these events is likely. If any of these events do occur, they could
result in interruptions, delays or cessations in service to users of our
partners' Web sites, which could have a material adverse effect on our business,
results of operations and financial condition.

     In addition, we maintain our computers on which we operate our partners'
Web sites at the site of a third-party provider. We cannot control the
maintenance and operation of this site, which is also susceptible to similar
disasters and problems. We have no formal disaster recovery plan, and our
insurance policies may not adequately compensate us for any losses that we may
incur. Any system failure that causes an interruption in our service or a
decrease in responsiveness could harm our relationships with our customers and
result in reduced revenues.

     We may be unable to protect our proprietary technology or keep up with that
of our competitors.

     Our success depends to a significant degree upon the protection of our
software and other proprietary intellectual property rights. We may be unable to
deter misappropriation of our proprietary information, detect unauthorized use
and take appropriate steps to enforce our intellectual property rights. In
addition, our competitors could, without violating our proprietary rights,
develop technologies that are as good as or better than our technology. Our
failure to protect our software and other proprietary intellectual property
rights or to develop technologies that are as good as our competitors' could put
us at a disadvantage to our competitors. In addition, the failure of our
partners to protect their intellectual property rights, including their domain
names, could impair our operations. These failures could have a material adverse
effect on our business, results of operations and financial condition.

     If we do not respond to rapid technological changes, our services could
become obsolete and we could lose customers.

     We may face material delays in introducing new services, products and
enhancements. If this happens, our customers may forego the use of our partners'
e-commerce sporting goods businesses and use those of our competitors. To remain
competitive, we must continue to enhance and improve the functionality and
features of our partners' e-commerce sporting goods businesses. The Internet and
the online commerce industry are rapidly changing. If competitors introduce new
products and services using new technologies or if new industry standards and
practices emerge, our partners' existing Web sites and our proprietary
technology and systems may become obsolete.

                                       17
<PAGE>

     Developing our partners' e-commerce sporting goods businesses and other
proprietary technology entails significant technical and business risks. We may
use new technologies ineffectively or we may fail to adapt our partners' Web
sites, our order processing systems and our computer network to meet customer
requirements or emerging industry standards.

     We may be subject to intellectual property claims that could be costly and
could disrupt our business.

     Third parties may assert that our business or technologies infringe their
intellectual property rights. From time to time, we may receive notices from
third parties questioning our right to present specific images or logos on our
partners' Web sites, or stating that we have infringed their trademarks or
copyrights. We may in the future receive claims that we are engaging in unfair
competition or other illegal trade practices. We may be unsuccessful in
defending against any of these claims, which could result in substantial
damages, fines or other penalties. The resolution of a claim could also require
us to change how we do business, redesign our partners' Web sites and other
systems or enter into burdensome royalty or licensing agreements. These license
or royalty agreements, if required, may not be available on acceptable terms, if
at all, in the event of a successful claim of infringement. Our insurance
coverage may not be adequate to cover every claim that third parties could
assert against us. Even unsuccessful claims could result in significant legal
fees and other expenses, diversion of management's time and disruptions in our
business. Any of these claims could also harm our reputation.

     We rely on our developing relationships with online services, search
engines and directories to drive traffic to the e-commerce sporting goods
businesses we operate. If we are unable to develop or maintain these
relationships, our business, financial condition and results of operations could
be adversely affected.

     We are developing relationships with online services, search engines and
directories to provide content and advertising banners that link to our
partners' Web sites. We expect to rely on these relationships as significant
sources of traffic to our partners' Web sites and to generate new customers. If
we are unable to develop satisfactory relationships with high-traffic Web sites
on acceptable terms, our ability to attract new customers could be harmed.
Further, many of the Web sites with which we may have online advertising
arrangements could provide advertising services for other marketers of sporting
goods. As a result, these Web sites may be reluctant to enter into or maintain
relationships with us. Failure to achieve sufficient traffic or generate
sufficient revenue from purchases originating from third-party Web sites may
result in termination of these types of relationships. Without these
relationships, we may not be able to sufficiently increase market share and our
business, financial condition and results of operations could be adversely
affected.

     Our success is dependent upon our executive officers and other key
personnel.

     Our success depends to a significant degree upon the contribution of our
executive officers and other key personnel, particularly Michael G. Rubin,
Chairman and Chief Executive Officer. We have employment agreements with some of
our executive officers and key personnel. We cannot be sure, however, that we
will be able to retain or attract executive, managerial and other key personnel.
We have obtained key person life insurance for Mr. Rubin in the amount of $7.25
million. We have not obtained key person life insurance on any of our other
executive officers or key personnel.

     We may be unable to hire and retain the skilled personnel necessary to
develop our business.

     We intend to hire a significant number of skilled personnel in fiscal 2000
and beyond. Competition for these individuals is intense, and we may not be able
to attract, assimilate or retain highly qualified personnel in the future. Our
failure to attract and retain the highly trained personnel that are integral to
our business may limit our growth rate, which would harm our business.

                                       18
<PAGE>

     We may not be able to compete successfully against current and future
competitors, which could harm our margins and our business.

     The e-commerce market is new, rapidly evolving and extremely competitive.
In addition, there is a significant amount of capital currently available to
fund existing and potential competitors. Increased competition could result in
price reductions, reduced gross margins and loss of market share, any of which
could seriously harm our business, financial condition and results of
operations. We compete with a variety of companies, including:

     . online sporting goods retailers such as Chipshot.com, Fogdog.com and
       Gear.com;

     . general merchandise e-commerce companies such as Mercata.com, Onsale.com,
       and uBid.com;

     . full-line electronic retailers that are associated with full-line
       sporting goods stores such as Dsports.com associated with Dick's Sporting
       Goods, MVP.com, associated with Galyans, and Shopsports.com associated
       with Copeland's

     . e-commerce businesses of specialty sporting goods retailers and catalogs
       such as Footaction.com, Footlocker.com and REI.com;

     . e-commerce businesses of traditional general merchandise retailers such
       as Target.com and Wal-Mart.com; and

     . e-commerce businesses of sporting goods manufacturers such as adidas.com
       and Nike.com.

     In addition, we compete with companies that can provide part of our
solutions to companies that wish to establish e-commerce sporting goods
businesses, including:

     . Web site developers, such as Sapient, Scient and Viant; and

     . third-party fulfillment and customer services providers, such as
       Fingerhut, Keystone Internet Services and ClientLogic.

     Finally, we compete with traditional channels of distribution for sporting
goods, including full-line sporting goods retailers, specialty sporting goods
retailers, general merchandise retailers, catalogs and manufacturers' direct
stores.

     If we experience problems in our fulfillment, warehouse and distribution
operations, we could lose customers.

     We currently rely upon a third-party to handle the fulfillment of our
customer orders and the warehousing of our inventory. We also rely upon multiple
third parties to handle the shipment of our products. As a result, we are
subject to the risks associated with the ability of these third parties to
successfully and timely fulfill and ship customer orders and to successfully
handle our inventory delivery services to meet our shipping needs. The failure
of these third parties to provide these services, or the termination or
interruption of these services, could adversely affect our business, results of
operations and financial condition.

     We currently plan to assume responsibility for the fulfillment of large and
oversized product orders during fiscal 2000 and may assume responsibility for
the fulfillment of other product orders in fiscal 2000. We could experience
problems during the transition of control from third-party to us. If transition
problems arise, it could result in additional expenses and could divert
management's attention from other aspects of our business. If we are unable to
successfully, timely and cost efficiently effect this transition and perform
these fulfillment services, our business, results of operations and financial
condition could be adversely affected.

                                       19
<PAGE>

     Sporting goods and apparel are subject to changing consumer preferences. If
we fail to anticipate these changes, we could experience lower sales, higher
inventory markdowns and lower margins.

     Our success depends upon our ability to anticipate and respond to trends in
sporting goods merchandise and consumers' participation in sports. Consumers'
tastes in apparel and sporting goods equipment are subject to frequent and
significant changes, due in part to manufacturers' efforts to incorporate
advanced technologies into some types of sporting goods. In addition, the level
of consumer interest in a given sport can fluctuate dramatically. Prior to
commencing our e-commerce business, our businesses were primarily concentrated
in athletic footwear and apparel. Accordingly, we do not have experience in the
full range of sporting goods. If we fail to identify and respond to changes in
sporting goods merchandising and recreational sports participation, our sales
could suffer and we could be required to mark down unsold inventory. This would
depress our profit margins. In addition, any failure to keep pace with changes
in consumers' recreational sports habits could allow our competitors to gain
market share which could have an adverse effect on our business, results of
operations and financial condition.

     High merchandise returns could adversely affect our business, financial
condition and results of operations.

     Our policy for allowing our customers to return products is consistent with
the policies of each of our partners for which we operate e-commerce sporting
goods businesses. Our ability to handle a large volume of returns is unproven.
If merchandise returns are significant, our business, financial condition and
results of operations could be adversely affected.

     We may be subject to product liability claims that could be costly and time
consuming.

     We sell products manufactured by third parties, some of which may be
defective. If any product that we sell were to cause physical injury or injury
to property, the injured party or parties could bring claims against us as the
retailer of the product. Our insurance coverage may not be adequate to cover
every claim that could be asserted. Similarly, we could be subject to claims
that users of our partners' Web sites were harmed due to their reliance on our
product information, product selection guides, advice or instructions. If a
successful claim were brought against us in excess of our insurance coverage, it
could adversely affect our business. Even unsuccessful claims could result in
the expenditure of funds and management time and could have a negative impact on
our business.

     We may be liable if third parties misappropriate our customers' personal
information.

     If third parties are able to penetrate our network security or otherwise
misappropriate our customers' personal information or credit card information,
we could be subject to liability. This liability could include claims for
unauthorized purchases with credit card information, impersonation or other
similar fraud claims. They could also include claims for other misuses of
personal information, including unauthorized marketing purposes. These claims
could result in litigation. Liability for misappropriation of this information
could adversely affect our business. In addition, the Federal Trade Commission
and state agencies have been investigating various Internet companies regarding
their use of personal information. We could incur additional expenses if new
regulations regarding the use of personal information are introduced or if
government agencies investigate our privacy practices.

     We are controlled by certain principal stockholders.

     As of May 1, 2000, Michael G. Rubin, our Chairman and Chief Executive
Officer, beneficially owned 37.0% and SOFTBANK beneficially owned 39.9% of our
outstanding common stock. Mr. Rubin and SOFTBANK are in a position to exercise
control over most matters requiring stockholder approval, including the election
or removal of directors, approval of significant corporate transactions, and the
ability generally to direct our affairs. Furthermore, the stock purchase
agreements pursuant to which SOFTBANK acquired its shares of our common stock
provide that SOFTBANK has the right to designate up to three members of our
board, depending on the number of shares of our common stock held by SOFTBANK.
This concentration of ownership and SOFTBANK's right to designate members to our
board may have the effect of delaying or preventing a change in control of us,
including transactions where stockholders might otherwise receive a premium over
current market prices for their shares.

                                       20
<PAGE>

     There are risks associated with potential acquisitions. As a result, we may
not achieve the expected benefits of potential acquisitions.

     If we are presented with appropriate opportunities, we may make investments
in complementary companies, products or technologies or we may purchase other
companies. We may not realize the anticipated benefits of any investment or
acquisition. We may not be able to successfully assimilate the additional
personnel, operations, acquired technology and products into our business. The
proposed acquisition may further strain our existing financial and managerial
controls and reporting systems and procedures. In addition, key personnel of the
acquired company may decide not to work for us. These difficulties could disrupt
our ongoing business, distract our management and employees or increase our
expenses. Further, the physical expansion in facilities that would occur as a
result of any acquisition may result in disruptions that seriously impair our
business. Finally, we may have to incur debt or issue equity securities to pay
for any acquisitions or investments, the issuance of which could be dilutive to
our stockholders.

     We may expand our business internationally, causing our business to become
increasingly susceptible to numerous international business risks and challenges
that could affect our profitability.

     We believe that the current globalization of the economy requires
businesses to consider pursuing international expansion. In the future, we may
expand into international markets. International sales are subject to inherent
risks and challenges that could adversely affect our profitability, including:

     . the need to develop new supplier and manufacturer relationships,
       particularly because major sporting goods manufacturers may require that
       our international operations deal with local distributors;

     . unexpected changes in international regulatory requirements and tariffs;

     . difficulties in staffing and managing foreign operations;

     . longer payment cycles from credit card companies;

     . greater difficulty in accounts receivable collection;

     . potential adverse tax consequences;

     . price controls or other restrictions on foreign currency; and

     . difficulties in obtaining export and import licenses.

     To the extent we generate international sales in the future, any negative
aspects on our international business could negatively impact our business,
operating results and financial condition as a whole. In particular, gains and
losses on the conversion of foreign payments into United States dollars may
contribute to fluctuations in our results of operations and fluctuating exchange
rates could cause reduced gross revenues and/or gross margins from dollar-
denominated international sales.

     We have never paid dividends on our common stock and do not anticipate
paying dividends in the foreseeable future.

     We have never paid cash dividends on our common stock and do not anticipate
that any cash dividends will be declared or paid in the foreseeable future.

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<PAGE>

     There are risks relating to our Year 2000 compliance.

     Many existing computer software programs and operating systems were
designed such that the year 1999 is the maximum date that many computer systems
will be able to process. We addressed the potential problems posed by this
limitation in our systems software to assure that it was prepared for the Year
2000. We did not incur any Year 2000 problem as a result of the passage of
January 1, 2000. However, it is possible that problems may occur even after
arrival of the Year 2000. If we or third parties with which we conduct material
business experience problems caused by Year 2000 problems, there may be a
material adverse effect on our results of operations.

     It may be difficult for a third-party to acquire our company and this could
depress our stock price.

     Pursuant to our amended and restated certificate of incorporation, we have
authorized a class of 1,000,000 shares of preferred stock, which the board of
directors may issue with terms, rights, preferences and designations as the
board may determine and without any vote of the stockholders, unless otherwise
required by law. Issuing the preferred stock, depending upon the rights,
preferences and designations set by the board, may delay, deter or prevent a
change in control of our company. Issuing additional shares of common stock
could result in dilution of the voting power of the current holders of our
common stock. In addition, "anti-takeover" provisions of Delaware law may
restrict the ability of the stockholders to approve a merger or business
combination or obtain control of our company.

     There are limitations on the liabilities of our directors.

     Pursuant to our amended and restated certificate of incorporation and under
Delaware law, our directors are not liable to us or our stockholders for
monetary damages for breach of fiduciary duty, except for liability for breach
of a director's duty of loyalty, acts or omissions by a director not in good
faith or which involve intentional misconduct or a knowing violation of law, for
dividend payments or stock repurchases that are unlawful under Delaware law or
any transaction in which a director has derived an improper personal benefit.

Risks Related to the Internet Industry

     Our success is tied to the continued growth in the use of the Internet and
the adequacy of the Internet infrastructure.

     Our future success is substantially dependent upon continued growth in the
use of the Internet. The number of users and advertisers on the Internet may not
increase and commerce over the Internet may not become more accepted and
widespread for a number of reasons, including:

     . actual or perceived lack of security of information, including credit
       card numbers;

     . lack of access and ease of use;

     . congestion of traffic on the Internet;

     . inconsistent quality of service and lack of availability of cost-
       effective, high-speed service;

     . possible disruptions, computer viruses or other damage to the Internet
       servers or to users' computers;

     . excessive governmental regulation;

     . uncertainty regarding intellectual property ownership; and

     . lack of high-speed modems and other communications equipment.

     Published reports have also indicated that growth in the use of the
Internet has resulted in users experiencing delays, transmission errors and
other difficulties. As currently configured, the Internet may not support an
increase

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<PAGE>

in the number or requirements of users. In addition, there have been outages and
delays on the Internet as a result of damage to the current infrastructure. The
amount of traffic on our partners' Web sites could be materially affected if
there are outages or delays in the future. The use of the Internet may also
decline if there are delays in the development or adoption of modifications by
third parties that are required to support increased levels of activity on the
Internet. If none of the foregoing changes occur, or if the Internet does not
become a viable commercial medium, our business, results of operations and
financial condition could be materially adversely affected. In addition, even if
those changes occur, we may be required to spend significant capital to adapt
our operations to any new or emerging technologies relating to the Internet.

     The technology of the Internet is changing rapidly and could render the Web
sites which we operate obsolete.

     The technology of the Internet and e-commerce is evolving rapidly for many
reasons, including:

     . customers frequently changing their requirements and preferences;

     . competitors frequently introducing new products and services; and

     . industry associations and others creating new industry standards and
       practices.

     These changes could render the Web sites which we operate obsolete. Our
ability to attract customers could be seriously impaired if we do not accomplish
the following tasks:

     . continually enhance and improve our partners' Web sites;

     . identify, select and obtain leading technologies useful in our business;
       and

     . respond to technological advances and emerging industry standards in a
       cost-effective manner and timely manner.

     Customers may be unwilling to use the Internet to purchase goods.

     Our long-term future depends heavily upon the general public's willingness
to use the Internet as a means to purchase goods. The failure of the Internet to
develop into an effective commercial tool would seriously damage our future
operations. E-commerce is a new concept, and large numbers of customers may not
begin or continue to use the Internet to purchase goods. The demand for and
acceptance of products sold over the Internet are highly uncertain, and most e-
commerce businesses have a short track record. If consumers are unwilling to use
the Internet to conduct business, our business may not develop profitably. The
Internet may not succeed as a medium of commerce because of delays in developing
elements of the needed Internet infrastructure, such as a reliable network,
high-speed modems, high-speed communication lines and other enabling
technologies.

     The security risks of e-commerce may discourage customers from purchasing
goods from us.

     In order for the e-commerce market to develop successfully, we and other
market participants must be able to transmit confidential information securely
over public networks. Third parties may have the technology or know-how to
breach the security of customer transaction data. Any breach could cause
customers to lose confidence in the security of our partners' Web sites and
choose not to purchase from those Web sites. If someone is able to circumvent
our security measures, he or she could destroy or steal valuable information or
disrupt the operation of our partners' Web sites. Concerns about the security
and privacy of transactions over the Internet could inhibit the growth of the
Internet and e-commerce. Our security measures may not effectively prohibit
others from obtaining improper access to the information on our partners' Web
sites. Any security breach could expose us to risks of loss, litigation and
liability and could seriously disrupt our operations.

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<PAGE>

     Our business is subject to United States and foreign governmental
regulation of the Internet and taxation.

     Congress and various state and local governments have recently passed
legislation that regulates various aspects of the Internet, including online
content, copyright infringement, user privacy, sales and advertising of certain
products and services and taxation. In addition, federal, state, local and
foreign governmental organizations are also considering legislative and
regulatory proposals that would regulate the Internet. Areas of potential
regulation include libel, pricing, quality of products and services and
intellectual property ownership. A number of proposals have been made at the
state and local level that would impose taxes on the sale of goods and services
through the Internet. These proposals, if adopted, could substantially impair
the growth of e-commerce and could adversely affect our future business, results
of operation and financial condition.

     In addition, United States and foreign laws regulate our ability to use
customer information and to develop, buy and sell mailing lists. New
restrictions in this area could limit our ability to operate as planned and
result in significant compliance costs.

     Regulations imposed by the Federal Trade Commission may adversely affect
the growth of our Internet business or its marketing efforts.

     The Federal Trade Commission has adopted regulations regarding the
collection and use of personal identifying information obtained from children
under 13. In addition, bills pending in Congress would extend online privacy
protections to adults. Laws and regulations of this kind may include
requirements that we establish procedures to disclose and notify users of
privacy and security policies, obtain consent from users for collection and use
of information and provide users with the ability to access, correct and delete
personal information stored by us. These regulations may also include
enforcement and remedial provisions. Even in the absence of those regulations,
the Federal Trade Commission has begun investigations into the privacy practices
of other companies that collect information on the Internet. One investigation
resulted in a consent decree under which an Internet company agreed to establish
programs to implement the principles noted above. We could become a party to a
similar investigation or enforcement proceeding, or the Federal Trade
Commission's regulatory and enforcement efforts may harm our ability to collect
demographic and personal information from users, which could be costly or
adversely affect our marketing efforts.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   There have been no significant changes in market risk for the quarter ended
April 1, 2000.  See the information set forth in Item 7A of the Company's Annual
Report on Form 10-K/A for the fiscal year ended January 1, 2000  filed on May 2,
2000.

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<PAGE>

PART II -- OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

             We are involved in various routine litigation incidental to our
        current and discontinued businesses. We believe that the disposition of
        these matters will not have a material adverse effect on our financial
        position or results of operations.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

        None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        None.

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

        None.

ITEM 5. OTHER INFORMATION

        None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

    (a) Exhibits

        27.1  Financial data schedule for the quarter ended April 1, 2000
              (electronic filing only).

    (b) Reports on Form 8-K

             We filed a Current Report on Form 8-K on January 13, 2000 regarding
        the disposition of certain assets of the Branded division.

             We filed a Current Report on Form 8-K on March 23, 2000 regarding
        the change in its fiscal year.



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<PAGE>

                                   SIGNATURES


    Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, hereunto duly authorized.



                                             GLOBAL SPORTS, INC.


DATE: May 15, 2000                By:        /s/ Michael G. Rubin
                                      ---------------------------------
                                               Michael G. Rubin
                                           Chairman of the Board &
                                           Chief Executive Officer

DATE: May 15, 2000                By:        /s/ Jordan M. Copland
                                      ---------------------------------
                                               Jordan M. Copland
                                          Executive Vice President &
                                            Chief Financial Officer

                                       26