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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
                                   (MARK ONE)

(X)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934  [FEE REQUIRED]

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

                                       OR

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

             FOR TRANSITION PERIOD FROM ___________ TO ____________

                         COMMISSION FILE NUMBER 1-12532

                         RENAISSANCE GOLF PRODUCTS, INC.
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

            DELAWARE                                     86-0664849
 (STATE OR OTHER JURISDICTION OF            (I.R.S. EMPLOYER IDENTIFICATION NO.)
 INCORPORATION OR ORGANIZATION)

   12187 SOUTH BUSINESS PARK DRIVE, SUITE 100,
               DRAPER, UTAH                               84020
  (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)               (ZIP CODE)

        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (801) 501-0200

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

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

<TABLE>
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                                                NAME OF EACH EXCHANGE
         TITLE OF EACH CLASS                     ON WHICH REGISTERED:
<S>                                             <C>
                None                                    None
</TABLE>

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

                         COMMON STOCK -- $.001 PAR VALUE
                                (TITLE OF CLASS)

     Check whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No ___

     Check if there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-B contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-KSB. [ ]

Revenues of the registrant for the fiscal year ended December 31, 1998 were
$6,987,509.

     The aggregate market value of the Common Stock held by non-affiliates of
the registrant on December 31, 1998 was approximately $2,111,070 based upon the
average of the bid and asked prices of the Common Stock, as reported by the
National Quotation Bureau Incorporated.

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     The number of shares of the Common Stock of the registrant outstanding as
of December 31, 1998 was 7,474,653.

     Transitional Small Business Disclosure Format (check one):

     Yes            No  X
        ----          ----











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                                     PART I

     All statements, other than statements of historical fact, included in this
Form 10-KSB, including the statements under "Management's Discussion and
Analysis of Financial Condition and Results of Operations," are, or may be
deemed to be, "forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Securities Exchange Act of 1934 (the "Exchange Act"). Such
forward-looking statements involve assumptions, known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of Renaissance Golf Products, Inc. (the "Company") to be
materially different from any future results, performance, or achievements
expressed or implied by such statements contained in this Form 10-KSB. Such
potential risks and uncertainties include, without limitation, competitive
pricing and other pressures from other golf equipment manufacturers, economic
conditions generally and in the Company's primary markets, consumer spending
patterns, perceived quality and value of the Company's products, availability of
capital, cost of labor (foreign and domestic), cost of raw materials, occupancy
costs, and other risk factors detailed herein and in other of the Company's
filings with the Securities and Exchange Commission. The Company assumes no
obligation to update the forward-looking statements or to update the reasons
actual results could differ from those projected in such statements. Readers are
cautioned not to place undue reliance on these forward-looking statements.


ITEM 1.  BUSINESS

OVERVIEW

     The Company designs, develops, assembles, and distributes high-quality golf
products and golf accessories in North and South America, Europe, the Middle
East, and Africa (the "Licensed Territory") utilizing the Fila trademark and
logo under license from Fila Sport S.p.A. of Biella, Italy ("Fila Sport"), a
subsidiary of Fila Holding, S.p.A. Fila Sport has cultivated a high quality
image for its athletic footwear, active sportswear, and leisure and casual wear,
and the Company capitalizes on the worldwide identification with other products
bearing the Fila trademark. The Company has the exclusive right to market golf
products bearing the Fila trademark in the Licensed Territory with the exception
of head wear and towels, which are marketed on a non-exclusive basis in the
Licensed Territory.

     The Company's products include golf clubs, bags, balls, gloves, head wear,
headcovers, travel covers, umbrellas, towels, and other golf accessories. The
Company offers full lines of both men's and women's woods and irons. The Company
also sells putters, wedges, utility woods, and oversized woods. Golf club
components are manufactured by independent suppliers, primarily in the United
States and the Far East, and are assembled and distributed by the Company.

     The Company also runs the World Golf Corporation (WGC"), a wholly owned
subsidiary, through which it operates golf tour events throughout the U.S. under
the name of The World Golf Tour. WGC developed a handicapping system for golf
which assists in leveling the playing field for golfers of all handicaps.
Marketing of golf tour events occurs principally through word-of-mouth.
Participants invite friends and golfing acquaintances to participate in tour
events. The Company currently conducts tournaments for men and women and intends
to offer tours to junior players and other specialty categories in the future.
Each tour event utilizes the Company's proprietary handicapping system to
determine event winners who receive cash, prizes, or both. WGC is a network
marketing company. Interested individuals are encouraged to become independent
distributors of tournament participation and golf equipment.

     The Company was originally incorporated in Arizona in July 1990 and
commenced sales in January 1991. In September 1993, the Company was
reincorporated in Delaware. In November 1993, the Company completed an initial
public offering of its shares. The Company's securities are traded on the OTC
Electronic Bulletin Board under the symbols "FGLF."

     In October 1996, the Company, through a private placement (the
"Financing"), sold 100 "Units" at an issue price of $25,000 per Unit, each Unit
consisted of a convertible Debenture; and 15,625 Unit Shares at a price of $.80
per share for a total of $12,500 for the Unit Shares. The Unit Shares were
ultimately subject to a 4:1 reverse stock split ("Reverse Split"), approved by
the stockholders at the annual meeting of stockholders held on October 24, 1997
and effectuated on November 12, 1997. The Debentures were ultimately converted
pursuant to their conversion provision on December 15, 1997 at the rate of $.50
per share after the closing price of the Company's Common Stock exceeded $1.50
per share for 20 consecutive trading days. In conjunction with the Financing,
the 

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Company experienced a change of control which included the Company
appointing a new Chairman of the Board, and reconstituting the Board of
Directors.

     Since the time of the Financing, the Company has entered into a series of
Loan and Credit Agreements with the AKA Charitable Remainder Unitrust #1
("AKA"). The first line of credit was for a maximum amount of up to $1,000,000,
and the second line of credit provides for the Company to draw the maximum
aggregate principal amount of the lesser of $5,000,000, or 80% of the Company's
current assets. The Company was not in compliance with conditions of the Loan
and Credit Agreement on December 31, 1998 by having drawn on the credit line
beyond 80% of the Company's current assets and having not made interest payments
for approximately five months. To remedy any potential defaults under the loan
with AKA, the Company entered into an agreement with AKA on January 11, 1999 to
issue shares of its Common Stock in lieu of any cash payment of interest due or
to become due on or before June 30, 1999.

     Subsequent to the year end, in March 1999, the Company issued to AKA 
50,000 shares of Convertible Preferred Stock for $1,000,000. The Shares are 
convertible at any time into shares of Common Stock at the rate of 20 shares 
of Common Stock for one share of Preferred Stock. In the event the Company 
fails to comply with the repayment terms of the loan agreements with AKA, the 
conversion rate increases from 20 to one, to 200 to one. The Preferred Stock 
pays dividends at the rate of 5% during 1999 (payable in shares of Common 
Stock), and 6% thereafter (payable in shares of Common Stock or cash at AKA's 
election).

     In addition to the credit lines secured by the Company during the past
several years, a private placement of the Company's shares of Common Stock was
undertaken on March 2, 1998. The Company sold a total of approximately 556,000
units, raising $1,668,000. Each unit consisted of one share of its Common Stock,
par value $.001 per share, and a warrant to purchase one share of Common Stock.
The purchase price was $3.00 per unit. The Warrants are immediately exercisable
and transferable separately from the shares of Common Stock. Each Warrant
entitles its holder to purchase one share of Common Stock at an exercise price
of $5.00 per share, subject to adjustment in certain events. The Warrants may be
exercised at any time and from time to time until December 31, 2002. The Company
has the right to redeem the Warrants at $0.01 per Warrant upon not less than 30
days' notice if the Closing Price of the Common Stock for a period of 20
consecutive trading days, ending not earlier than 10 days prior to the date of
such redemption notice, equals or exceeds $7.00 per share, subject to adjustment
in certain events.

     During November 1998, the Company's Class "A" Warrants issued in
conjunction with the Company's initial public offering expired.

BUSINESS STRATEGY

     During 1997, the Company re-focused it attention on its best selling
product lines and entered the mass merchandise market. The Company intends to
continue this renewed focus while continuing with its general business strategy
of providing unique, innovative, quality products which utilize and promote the
Fila Sport image.

     The Company concentrates its business strategy on developing and
manufacturing innovative, technically-superior golf equipment and bags
identified as premium products by the Fila trademark. The Company markets its
product lines through a network of qualified sales representatives and
distributors in golf specialty shops and more recently in mass merchandise
retail outlets. Some of the elements of the Company's marketing strategy
include:

     PRODUCT INNOVATION. The Company designs and markets golf equipment intended
to appeal to both average and skilled golfers. The Company has experienced
minimal returns of its products because of its attention to product design and
manufacturing.

     UTILIZING AND PROMOTING THE FILA IMAGE. Because of the success of Fila
Sport in developing a worldwide, premium brand franchise in its athletic
footwear, active sportswear, and leisure and casual wear, the Company believes
it has its products immediately identified with a high-quality,
high-performance, high-fashion image.

     PROTECTION OF PROPRIETARY RIGHTS. As the licensee of Fila Sport, the
Company aggressively seeks to protect the mutual interests of the Company and
Fila Sport in the value of the Fila trademark. The Company believes that its WGC
handicapping system, golf club designs, manufacturing processes, and trade names
represent valuable intellectual property rights. The Company will seek to
protect its proprietary interests in licenses, trademarks, trade secrets, trade
dress, patents (if any are obtained), and other intellectual property rights.

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GOLF PRODUCTS

     The Company currently offers a variety of golf products including golf
clubs, bags, balls, gloves, head wear, headcovers, travel covers, umbrellas,
towels, and other golf accessories. During 1998, the Company continued to market
its professional line through specialty shops and began to more actively sell
its mass merchandise line through mass retailers.

     GOLF BAGS. The Company believes its golf bags complement the current core
business and marketing efforts of Fila Sport and are an item strongly associated
with the fashion and function design concept of Fila Sport. The Company's golf
bags are technically innovative and fashion oriented. Golf bag models feature
full-length club dividers, fur lined tops, four to seven pocket configurations,
deluxe harnesses with padded slings, bottom assist handles, hidden umbrella
wells, towel clips, and matching rain hoods.

     The Company's bag line includes a selection from light weight carry golf
bags to cart size golf bags. The 1998 and 1999 models include the following:

          PROFESSIONAL SERIES:

     Lite Carry and Lite Stand golf bags are offered in five color combinations
     with a suggested retail price range of $125.00 to $130.00.

     Allegra golf bags for women come in five color combinations and feature
     fur-lined, graphite-safe top and three full length dividers with a
     suggested retail price of $155.00.

     Biella Series golf bags for men come in eight color combinations. This
     series has historically been the Company's best seller and is offered at a
     suggested retail of $190.00.

     Biella II Series 8 1/2" model features men's and women's styles in cordura
     and textured nylon fabric, solid core construction, with a hidden valuables
     pouch. This bag is a modified version of the Biella model with a hidden
     shoe pocket, a very popular feature of the Company's bags. The suggested
     retail price is $205.00.

     Renaissance Series golf bags have a very stylish design featuring a
     built-in shoe pocket that keeps golf shoes separate from the clothing
     pocket. This series is offered in seven color combinations for men and five
     color combinations for women with a suggested retail of $180.00.

     M.D. Plus Series is a men's bag in 720-D nylon fabric offering oversize
     pockets to keep shoes and clothing separate. The Suggested retail price is
     $240.00.

          MASS MERCHANDISE SERIES:

     C Series and Lite Stand golf bags are offered in five color combinations
     with a suggested retail price range of $78.00 to $128.00.

     Tour Series golf bags for both men and women come in six color combinations
     with a suggested retail price of $139.00.

     Divider series golf bags, featuring 14 individual club full length cloth
     dividers for greater shaft protection, are available in men's and women's
     styles in fade and water resistant polyester fabric, one full-length
     garment compartment, and one oversized utility pocket. The suggested retail
     price is $129.00.

     CLUBS. Many of the Company's lines of golf clubs include innovations and
refinements developed by management and independent equipment designers, from
whom the Company obtains licenses. Clubs, priced from $340 to $1,500 for a set
of eleven clubs, include the following:

          PROFESSIONAL SERIES:

     F-2000 Titanium Drivers made with varying degrees of loft are constructed
     from cast 6AL4V titanium. Three flexes of shafts are available with the
     drivers and the Four Plus fairway wood.

                                       5
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     Men's WGT model irons are forged carbon steel and feature a cavity back
     design, providing optimum feel with the forgiveness of a cast club. Retail
     pricing for 8 irons in steel shafts is $1,040.00 and in graphite shafts is
     $1,280.00. This model is available in 1 iron, 2 iron, 3-pw, and sand wedge.

     Men's Tour Oversize Irons are investment cast 4-31 stainless steel and
     feature a progressive offset, cavity back radiused sole, and a beveled
     leading edge. The irons are available in steel and graphite shafts. Retail
     pricing for irons is $850.00 for steel and $1,120.00 for graphite, and for
     woods is $240.00 and $375.00 for steel and graphite respectively.

     Men's Avatar Oversize Irons and Woods feature woods made from investment
     cast 15-5 and 17-4 stainless steel and irons made from investment cast 4-31
     stainless steel. The irons are constructed with a modified sole design
     which promote smooth take-a-ways and greater playability from the fairway
     and rough. Retail pricing for irons is $480.00 for steel and $680.00 for
     graphite, and for woods is $240.00 and $375.00 for steel and graphite
     respectively.

     Men's Oversize Irons and Woods feature woods made from investment cast 15-5
     and 17-4 stainless steel and irons made from investment cast 4-31 stainless
     steel. The irons are constructed with optimum perimeter weighting for a
     larger sweet spot and progressive offset U-grooves for more consistent ball
     control. Retail pricing for irons is $440.00 for steel and $656.00 for
     graphite, and for woods is $234.00 and $360.00 for steel and graphite
     receptively.

     Ladies Oversize Irons and Woods feature woods made from investment cast
     15-5 and 17-4 stainless steel and irons made from investment cast 4-31
     stainless steel. The irons are constructed with optimum perimeter weighting
     for a larger sweet spot and progressive offset U-grooves for more
     consistent ball control. Retail pricing for irons is $440.00 for steel and
     $656.00 for graphite, and for woods is $234.00 and $360.00 for steel and
     graphite respectively.

     Ladies Milano Irons and Woods feature woods constructed from composition
     alloy and irons from cast Z-alloy. Retail pricing for irons is $330.00 for
     steel and $450.00 for graphite, and for woods is $150.00 and $210.00 for
     steel and graphite respectively.

          MASS MERCHANDISE SERIES:

     F-100 Oversize for men, recently introduced, include three woods and eight
     irons. The oversize woods are manufactured from titanium alloy for maximum
     impact response and feature perimeter weighting and an expanded sweet spot.
     The oversize irons are investment cast with 4-31 stainless steel with a
     cavity-back design. Shafts are available in steel and graphite. The
     suggested retail price is $499.00.

     Volt for men, introduced in 1997, include three woods and eight irons. The
     woods are manufactured from titanium alloy for maximum impact response. The
     oversize irons are investment cast with 4-31 stainless steel. Shafts are
     available in steel and graphite. The suggested retail price is $549.00.

     Lady Volt, introduced in 1997, include three woods and eight irons. The set
     features oversized TI Matrix metal woods. The oversize irons are investment
     cast with 17-4 stainless steel. Shafts are available in steel and graphite.
     The suggested retail price is $499.00.

     Junior Series feature four to seven clubs and a lightweight nylon golf bag.
     The suggested retail price is from $129.00 to $179.00.

     TOURNAMENTS. Dedicated to honesty and integrity in the game of golf, the
Company through WGC offers golfers an opportunity to participate in tournaments
on a level playing field through the use of the Company's proprietary
handicapping system. The Company believes its tour will experience increasing
participation as golfers are exposed to the tournaments through fellow golfers
who enjoy honest competition with an opportunity to win prizes and money. The
Company intends to offer junior tour events and other specialty tournaments in
the future. The Company can provide no assurance that the tour concept will be
accepted by a sufficient number of golfers or be run efficiently enough to be a
financial success.

     Other golf products include various utility wedges, putters, golf balls,
and a variety of accessory packs. Accessories include travel covers, headcovers,
umbrellas, golf gloves, caps, visors, bracelets, and straw golf hats. 

                                       6
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Through constant research and development and market planning, the Company plans
to continually develop new products and enhance existing product lines.

MARKET SEGMENTS

     MEN'S GOLF PRODUCTS. By offering a full line of clubs suited for men of all
playing abilities, the Company anticipates continuing to supply this market with
product.

     WOMEN'S GOLF PRODUCTS. The Company's line for the women's market include a
full package of coordinated bag, headcovers, and equipment in various color
categories focusing on fashion and function.

     JUNIOR GOLF PRODUCTS. The Company introduced equipment for children and
teenage golfers during 1997 to capture a portion of this growing market segment.
The Company offers junior sets consisting of a wood, three irons and putter,
designed for the five to nine year old, and a package suited in weight and
length for the ten to 13 year olds including two woods, four irons and a putter.
Both sets include a bag that is smaller in size and lighter in weight than
standard golf bags to accommodate the junior golfer.

MARKETING AND DISTRIBUTION STRATEGY

     The Company's historical focus on sales to retail outlets located at golf
courses and golf retail shops specializing in golf products has been redirected
to include the retail sporting goods market. The sporting goods retail market
segment already has an acute awareness of the Fila brand because of clothing and
shoe sales. The Company will continue to produce and supply specialty accounts
with a product line of superior quality, fashion, and technology designed to
maintain the image of the Fila brand in these prestige accounts.

     DOMESTIC MARKET. The Company targets golf shops, pro shops, various
specialty shops, and the golf departments of mass merchants as approved by Fila
Sport Italy for the sale of its products. Distribution in the domestic market is
coordinated directly by the Company and through manufacturer's representative
firms and independent sales representatives who are assigned individual
territories and compensated with a commission of 2% to 10% at the time of
shipment. Generally, the Company appoints manufacturer representative firms and
independent sales representatives that do not carry product lines which directly
compete with the product lines offered by the Company; although, some exceptions
are made based on individual representatives and their related territory.

     INTERNATIONAL MARKET. The Company currently has a European distributor
which is providing the Company's product to various countries in Europe.
International sales last year totaled approximately $239,351, or 3% of the
Company's total revenues.

     NETWORK MARKETING. The Company through WGC currently provides golf products
via network marketing. Network marketing consists of establishing a network of
individuals through word-of-mouth who have an interest in becoming independent
distributors for a company's products. WGC distributors are paid a sales
commission on products they sell and products sold by other individuals who sign
on with the company to become independent distributors through the efforts of
the initial distributor. The Company believes it can effectively market
tournament participation, golf balls, and other related products through a
network marketing structure by providing a high quality product at a price which
is competitive with traditional outlets. The Company can provide no assurance
that it will be successful in the network marketing industry.

FILA LICENSE

     In November 1990, the Company entered into a license agreement with Fila
Sport pursuant to which Fila Sport granted the Company the right to design,
manufacture, and market certain golf-related products under the Fila brand name.
The agreement was terminated on June 30, 1996 because the Company was in default
under the agreement. In October 1996, the Company entered into a new license
agreement with Fila Sport (the "License Agreement") which provides that the
Company has the exclusive right to manufacture golf clubs, balls, headcovers,
travel covers, gloves, bags, and umbrellas for sale in North and South America,
Europe, the Middle East, and Africa. The Company has a non-exclusive right to
market golf head wear and towels in the Territory. The terms of the License
Agreement do not limit Fila Sport from manufacturing and marketing articles for
active sport, such as jackets, women's tops, sweaters, all styles of hats, all
styles of towels, sports bags, some of which items may compete with the
Company's products. The initial term of the License Agreement extends through
December 31, 2000 with an option to renew the license for an additional
five-year period. The License Agreement also required that the 

                                       7
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Company pay to Fila Sport $675,000 in past due royalties on or before November
21, 1996. As of December 31, 1998, all past due royalties to Fila Sport were
paid in full.

     In consideration for the trademark license, the Company pays Fila Sport a
royalty on net sales. The royalty is 6% of annual net sales up to $7,500,000,
5.5% of annual net sales from $7,500,000 up to $15,000,000, and 5% of annual net
sales in excess of $15,000,000. Annual minimum royalties are due and payable in
installments of 25% of the annual minimum on the 15th day prior to the end of
each calendar quarter. Royalties of $500,000 were paid during 1998. Future
minimum annual royalties are as follows $600,000 in 1999; and $700,000 in 2000.
During the renewal period, minimum annual royalties are as follows: $800,000 in
2001; $900,000 in 2002; and $1,000,000 in each year from 2003 through 2005.

     The Company is required to obtain an irrevocable letter of credit in 
favor of Fila Sport each year equal to the amount of the applicable minimum 
royalty. The 1999 letter of credit has not yet been obtained; although, the 
first quarter royalty for 1999 has been paid. The license is terminable by 
Fila Sport if, among other things, the Company fails to meet its obligations 
under the License Agreement, fails to meet certain agreed upon product 
introduction dates in the Licensed Territory, fails to maintain product 
liability insurance, or fails to properly utilize the trademark. The Company 
also is required to expend in each year for the duration of the License 
Agreement an amount equal to 5% of net sales on advertising the Company's 
products and 3% of net sales on promotions.

     The License Agreement also requires the submission to Fila Sport of
quarterly royalty reports, sample advertising, sample products, price lists, and
an annual marketing and advertising plan. New product design plans and
prototypes must also be submitted to Fila Sport for approval prior to marketing
Fila Sport has the right to withhold approval of marketing approaches or
products if it determines that such new product or promotion would reflect
adversely on Fila Sport or impair the quality or image of the Fila trademark.

     The License Agreement may be terminated by Fila Sport in whole, or in part,
upon the occurrence of certain events, including the following: failure to
perform or any material breach of the obligations under the agreement where
there is no remedy within 30 days of the receipt of written notice of intent to
terminate the License Agreement; failure to make timely royalty payments, use
best efforts to meet established product introduction dates, maintain required
levels of product liability insurance, or meet established guidelines for
quality control; failure to meet advertising, promotional, and sales targets
within a country included in the Territory; and sale or disposal of
substantially all of the Company's business or assets to a third party, transfer
of control of the company to a third party, or the cessation of the Company's
relationship with Miles T. Doody.

     Further, Fila Sport may terminate the License Agreement if the Company's
financial condition becomes unstable, as evidenced by, among other matters,
insolvency or the Company's inability to pay its debts as they become due. There
can be no assurance that the Company will be able to obtain a sufficient level
of sales to meet the licensing fee requirements or to achieve profit margins
necessary to enable the Company to operate profitably. The loss of the license
would have a material adverse effect on the Company's operations.

COMPETITION

     The golf products business is intensely competitive and the Company
competes with numerous companies providing similar products. The Company
believes that there are over 50 companies manufacturing and marketing golf
equipment which each have annual golf equipment sales in excess of $1,000,000.
The Company also believes that the 10 largest golf equipment manufacturers
account for a substantial majority of wholesale golf equipment sales. Most of
the Company's competitors have substantially greater capital resources, depth of
management, and brand name identification in the golf business than the Company.
In addition, there are several golf equipment manufacturers not currently
producing premium quality products which could affect sales if they did so.

     A company's ability to compete is in part dependent upon its ability to
satisfy various subjective requirements of golfers, including the look and
"feel" of the equipment and its level of acceptance among professional and other
golfers. Equipment designs and concepts developed by one manufacturer which gain
popularity have been widely imitated by other manufacturers. The subjective
preferences of consumers may also be subject to rapid and unanticipated changes.
There can be no assurances as to the Company's ability to achieve or maintain
market acceptance sufficient to enable the Company to operate profitably. A
decline in the size of the golf equipment market, whether from a decrease in the
popularity of particular equipment or otherwise, could have a material adverse
effect on the Company's business.

                                       9
<PAGE>

MANUFACTURE AND ASSEMBLY

     The components of the Company's golf clubs, primarily club heads, shafts,
and grips, are manufactured by suppliers in the United States and the Far East.
Suppliers are carefully selected and continuously evaluated by the Company on
the basis of the quality of raw materials utilized, quality of the workmanship,
and attention to quality control. The Company believes that its relationships
with key suppliers are good; however, the Company was late with payments to some
of its suppliers during 1998 which could have a negative effect on the Company's
ability to obtain product on account. There are numerous suppliers of
high-quality components and management believes that the loss of a supplier may
result in production delays, but would not have a material adverse impact on the
Company's long-term business.

     The Company assembles its golf clubs at its facility in Huntington Beach,
California. During the assembly process, the equipment is spot checked and
tested extensively to assure a quality product. Completed inventory is also
stored at the Company's facility prior to shipment. Bags, gloves, and other golf
accessories sold by the Company are manufactured by independent vendors,
primarily in the Far East. Products are either shipped to the Company's
facilities or drop shipped directly to distributors in the case of international
sales. The Company anticipates that some of its club lines will continue to be
manufactured and assembled in the Far East in an effort to reduce certain
expenses while maintaining a high-quality product. In addition, the Company
anticipates the development of a subcontracting relationship to assemble clubs
in Southern California.

WARRANTY

     The Company currently supports all of its golf clubs with a five year
warranty to the original consumer against any defects in workmanship or
material, provided that the product has not been subject to abuse or alteration.
Golf bags are covered by a limited warranty covering manufacturing defects only.
The Company has experienced minimal problems with respect to its products and
the warranty granted.

YEAR 2000 MATTERS

     The inability of computers, software, and other equipment utilizing
microprocessors to recognize and properly process date fields containing a two
digit year reference such as "00" for the year 2000 is commonly referred to as
the Year 2000 issue. Any of the Company's computer programs that utilize two
digit years may recognize "00" as the year 1900 rather than the year 2000. Such
recognition problems could cause disruptions of operations, including the
inability to process transactions, send invoices, or engage in similar essential
business activities.

     The Company has identified all significant applications that will require
modification to address the Year 2000 issue. Internal and external resources are
being used to make the required modifications and test Company systems for the
year 2000. The modifications process of all significant applications is
substantially complete, and the Company intends to complete modifications this
summer and continue to conduct testing through the end of 1999.

     The Company is also communicating with third party vendors to determine
their compliance with the Year 2000 issue. The Company can provide no assurance
that the systems of third parties will be in compliance by the turn of the
century. The inability of the Company to complete modifications and the failure
of third party vendors to complete compliance with the Year 2000 issue, or both,
could have a material adverse effect on the Company's ability to perform
essential business tasks which could have a material adverse effect on the
Company's business.

EMPLOYEES

     As of December 31, 1998, the Company employed 29 employees, including two
salaried employees on a full-time basis who are considered executive personnel,
14 salaried full-time employees in administrative, supervisory, and clerical
positions, nine hourly full-time employees, and four part-time employee. None of
the Company's employees are covered by a collective bargaining agreement, the
Company has never experienced a work stoppage, and the Company considers its
labor relations to be excellent.

ITEM 2.  DESCRIPTION OF PROPERTY

     The Company currently occupies approximately 15,000 square feet of office,
manufacturing, and warehouse space located at 12187 South Business Park Drive,
Suite 100, Draper, Utah 84020. The lease provides for rent of $94,636.00 per
year and expires in January 2000. The Company leases an additional 12,000 square
feet of space at 5812 Machine Drive, Huntington Beach, California, for $2,275.00
per month. The lease is month to month.

                                       9
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

     The Company is currently maintaining a legal action in the Utah Third
District Court on January 6, 1999 entitled Renaissance Golf Products, Inc. vs.
Brad Oliver, case number 990900097, for Breach of Contract, Quantum Meruit,
Fraud and Intentional Interference with Prospective Economic Advantage. The
essence of the case is Brad Oliver receiving inventory valued at approximately
$131,951.04 for resale and not making payment for the goods received. Settlement
discussions are ongoing and the Company intends to obtain a settlement for the
full amount of the goods received by Mr. Oliver. The prospects for obtaining a
judgement against Mr. Oliver for the full amount of the claim are good. The
prospects for collecting any awarded damages from Mr. Oliver are unknown due to
Mr. Oliver's personal financial circumstances.

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

     No matters were submitted to the stockholders for vote during the fourth
quarter of 1998.


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The following table sets forth, for the period from January 1997 to
March 31, 1999, the high and low bid quotations for the Common Stock as reported
by the OTC Bulletin Board. The prices represent quotations between dealers,
without adjustment for retail markup, mark down or commission, and do not
necessarily represent actual transactions. The table reflects the price as
adjusted for the 1997 4:1 Reverse Split.

COMMON STOCK PRICE ACTUAL AND ADJUSTED

<TABLE>
<CAPTION>

                                 High                   Low
                                 ----                   ---
<S>                            <C>                  <C>
   1999
1st Quarter                    $0.6250               $0.2813

   1998
1st Quarter                     4.5000                2.9375
2nd Quarter                     4.0938                2.8750
3rd Quarter                     3.0625                1.2500
4th Quarter                     1.2813                0.2500

   1997
1st Quarter                     2.6225                1.1252
2nd Quarter                     2.1252                1.1252
3rd Quarter                     2.6240                1.0000
4th Quarter                     3.8750                1.5625
</TABLE>


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

     The Company has not paid any cash dividends on its Common Stock since its
incorporation and anticipates that, for the foreseeable future, earnings, if
any, will continue to be retained for use in its business. As of December 31,
1998, the approximate number of record holders of the Company's Common Stock
275.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS

     The following discussion and analysis should be read in conjunction with
the Financial Statements and Notes thereto appearing elsewhere in this report.

     The golf industry and sporting goods industry in general suffered during
1998 due to several factors including adverse whether conditions and the Asian
economic crisis. These conditions resulted in overproduction which led to
inventory accumulation. The Company has suffered along with the industry during
1998, although it has managed to keep its sales constant from last year. The
Company anticipates improved conditions in the golf industry during 1999, but it
cannot predict outside events which may occur to positively or negatively affect
industry or Company sales.

                                       10

<PAGE>

RESULTS OF OPERATIONS

     The Company's successful efforts to raise funding for working capital needs
and move to supply the mass merchandise retail market during 1998 resulted in
sales increases over 1997. The Company's operations during 1998 and the first
quarter of 1999 required additional access to working capital. During the first
quarter of 1999, the Company raised $1,000,000 through the sale of 50,000 shares
of Class "A" Preferred Stock to AKA. The capital infusion allowed the Company to
bring its license commitment to Fila current and pay suppliers providing product
for the Company's mass merchandise line.

     COMPARISON OF YEAR ENDED DECEMBER 31, 1998 TO THE YEAR ENDED DECEMBER 31,
1997. Net sales for the year ended December 31, 1998 were $6,988,000 compared to
$5,375,000 for the comparable period in 1997, an increase of $1,613,000 or 30%.
This increase is attributable to the Company's move into the mass retail channel
and the commencement of operations of the WGC.

     Cost of sales increased from $4,822,000 for the year ended December 31,
1997 to $6,194,000 for the comparable period in 1998, an increase of $1,372,000
or 28%. The gross profit margin increased from 10% during 1997 to 11% for the
comparable period in 1998.

     Selling, general, and administrative costs were $5,259,000 during 1998 
compared to $2,392,000 for the comparable period in 1997, an increase of 
$2,867,000 or 120%. This increase in selling, general, and administrative 
costs is due mainly to the continuing efforts of the Company to expand 
operations into the mass retail market and commencing WGC operations.

     The Company experienced a net loss of $5,168,000 during 1998 compared to a
net loss of $1,845,000 for the comparable period in 1997, an increase in losses
of $3,323,000. The increase in losses is attributable to the Company acquiring
two entities to combine into the WGC and commencing network marketing
operations. Additionally, the Company wrote down in excess of $500,000 in
inventory during 1998.

     The Company's inventory increased substantially from $758,000 at December
31, 1997 to $2,274,000 at December 31, 1998 as a result of the Company having
sufficient working capital from newly invested capital and borrowed funds to
fund operations and meet inventory purchase requirements. The increase in 
inventory is also due to the general industry market conditions during 1998 
which created an inventory surplus.

     COMPARISON OF YEAR ENDED DECEMBER 31, 1997 TO THE YEAR ENDED DECEMBER 31,
1996. Net sales for the year ended December 31, 1997 were $5,375,000 compared to
$2,403,000 for the comparable period in 1996, an increase of $2,972,000 or 124%.
This increase was attributable to the Company's re-focused business strategy and
improved working capital. The Company re-focused its business strategy and
marketing efforts to place greater emphasis on market niches which have been the
most consistently productive since the Company's inception and which were the
most closely aligned with Fila Sport's interests and marketing emphasis;
high-fashion design and value.

     Cost of sales increased from $2,488,000 for the year ended December 31,
1996 to $4,822,000 for the comparable period in 1997, an increase of $2,334,000
or 94%.

     Selling, general, and administrative costs were $2,392,000, during 1997
compared to $2,425,000 for the comparable period in 1996, a decrease of $33,000
or 1%. This decrease in selling, general, and administrative costs, while
increasing sales by 124%, was due mainly to the continuing efforts of the
Company to reduce operating expenses throughout the restructuring process.

     The Company experienced a net loss of $1,845,000 during 1997 compared to a
net loss of $2,541,000 for the comparable period in 1996, a decrease in losses
of $696,000. The increase in sales volume, particularly to mass retailers during
1997, accounted for the decrease in losses. The increase in inventory is also 
due to the general industry market conditions during 1998 which created an 
inventory surplus.

PLAN OF OPERATION - LIQUIDITY AND CAPITAL RESOURCES

     Subsequent to the year end in March 1999, the Company issued to AKA 50,000
shares of Convertible Preferred Stock for $1,000,000. The Shares are convertible
at any time into shares of Common Stock at the rate of 20 shares of Common Stock
for one shares of Preferred Stock. In the event the Company fails to comply with
the terms of its loan agreements with AKA, the conversion rate increases from 20
to one, to 200 to one. The Preferred Stock pays dividends at the rate of 5%
during 1999 (payable in shares of Common Stock), and 6% thereafter (payable in
shares of Common Stock or cash at AKA's election).

                                       11
<PAGE>

     The Company has entered into a series of credit lines with the AKA
Charitable Remainder Unitrust #1. The first line of credit was for a maximum
amount of up to $1,000,000 and the second line of credit, still being utilized
by the Company, is for a maximum amount of up to $5,000,000. The lines of credit
have provided the Company with an indispensable cash resource to utilize as the
Company has come back from insolvency. Each line of credit bearing interest at
12%.

     In addition to the credit lines secured by the Company during the past
several years, a private placement of the Company's shares of Common Stock was
undertaken on March 2, 1998 to raise up to $2,400,000. The Company ultimately
sold a total of approximately 556,000 units, raising $1,668,000.

     In October 1998, the Company entered into a promissory note agreement with
a lender to provide the Company with $500,000 of which $50,000 of principal has
been repaid.

     The Company's cash from operations is generated by sales of golf products
to distributors at wholesale prices. Sales to domestic accounts are typically
due 30 to 90 days after shipment while sales to international distributors are
paid by letter of credit facilities or by wire transfer upon shipment.

     Based upon the operating history, the Company's auditors during the past
several years have expressed concern about the Company's ability to continue
operations. The Company believes these concerns are primarily founded upon the
Company's lack of working capital resulting from the Company operating at a loss
which causes the Company to rely upon outside capital to fund ongoing
operations. During 1998, the Company took action to cut operating expenses by
reducing its work force and bringing certain independent contractor functions in
house. The Company also intends to pursue a new marketing plan to increase
sales. The Company believes these changes will help move existing inventory and
reduce its cash flow concerns, but it is unlikely that these changes alone will
provide sufficient capital to fund ongoing operations.

     Net cash used in operating activities for 1998, 1997, and 1996 was
$4,247,000, $4,738,000, and $1,000,000, respectively. Working capital at the end
of 1998, 1997, and 1996, was $(4,239,000), $(810,000), and $(502,000),
respectively. Cash and cash equivalents at December 31, 1998 were $63,000
compared to $776,000 at December 31, 1997. Inventories, net of reserves at
December 31, 1998 were $2,273,601 compared to $758,000 at December 31, 1997.
Also, accounts receivable decreased from $758,000 at December 31, 1997 to
$411,000 at December 31, 1998. Notes payable for $875,000 were outstanding at
December 31, 1998. Total liabilities increased $2,765,000 from December 31, 1997
to December 31, 1998.

     The Company strives to maintain a sufficient inventory of golf club
components, bags, and accessories to fulfill orders. Management believes that
all of the golf club components and other products manufactured for the Company
by suppliers are readily available from a variety of sources.

     Historically the Company has funded itself through operations, the sale of
stock, and borrowing. Most recently the Company has raised equity through a
private offering of its stock and through negotiation loan agreements as are
outlined in this report. The Company plans to continue to use these methods to
fund operations and agreed with AKA, one of its lenders, to accept equity as
payment for interest and principal due on it's note through June 1999. Potential
investors are also being approached to lend to or invest in the Company. The
Company will need to substantially reduce operations if it is unable to raise
outside capital within the next several months to help fund operations.

     In February 1997, FASB issued SFAS No. 128, "Earning Per Share" ("EPS").
SFAS No. 128 requires dual presentation of basic EPS and diluted EPS on the face
of all income statements issued after December 15, 1997 for all entities with
complex capital structures. Basic EPS is computed as net income divided by the
weighted average number of common shares outstanding for the period. Diluted EPS
reflects the potential dilution that could occur from common shares issuable
through stock options, warrants, and other convertible securities. There was no
effect 

                                       12
<PAGE>

on EPS upon the adoption of the provisions of SFAS No. 128 for all years
presented. Loss per common share has been computed on the weighted average
number of common and equivalent shares outstanding. Basic and diluted net loss
per share are approximately the same.

     In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income,
and SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information. SFAS No. 130 requires that an enterprise report, by major
components and as a single total, the change in its net assets during the period
from nonowner sources; and SFAS No. 131 establishes annual and interim reporting
standards for an enterprise's operating segments and related disclosures about
its products, services, geographic areas, and major customers. Adoption of these
statements will not impact the Company's financial position, results of
operations, or cash flows and any effect will be limited to the form and content
of its disclosures. Both statements are effective for fiscal years beginning
after December 15, 1997, with earlier application permitted.

ITEM 7.  FINANCIAL STATEMENTS

     The financial statements listed in the accompanying Index to Financial
Statements are attached hereto and filed as a part of this Report under Item 13.

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

CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT

     Corbin & Wertz acted as the Company's independent public accountants for
the years ending December 31, 1996 and 1997. Upon the recommendation of the
Board of Directors, Corbin & Wertz, located in Irvine, California, was dismissed
effective April 30, 1998 by the Company in order for the Company to appoint
Deloitte & Touche LLP, located in Salt Lake City, Utah, as its principal
accountants following the Company's move to Salt Lake City. The Company filed an
8-K on April 30, 1999, concerning this change of accountants.

     Deloitte & Touche LLP performed no audit functions and provided no opinions
concerning the Company's financial condition or statements. Effective March 15,
1999, Deloitte & Touche resigned as the Company's principal accountants.

     The Board of Directors has approved the appointment of Jones, Jensen &
Company as its principal accountant, as of March 15, 1999, to prepare the annual
audit. To the knowledge of the Company, at no time has Jones, Jensen & Company
provided any accounting services to the Company prior to this new engagement,
and they have no direct or indirect financial interest in the Company.

     During the two most recent fiscal years, there have been no disagreements
with the former accountants on any matters of accounting principles or
practices, financial statement disclosure or auditing scope or procedure of any
reportable event. On March 19, 1999, the Company filed an 8-K, which is
incorporated herein by reference concerning the change of accountants.


                                    PART III

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

SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16 (a) of the Securities Exchange Act of 1934 requires the
Company's officers, directors, and persons who own more than 10% of a registered
class of the Company's equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the "SEC") and
NASDAQ. Officers, directors, and greater than 10% beneficial owners are required
by SEC regulation to furnish the Company with copies of all Section 16 (a) forms
they file. During 1998, the Officers or Directors, none of whom sold any of the
Company securities during 1998, failed to timely file the required forms under
Section 16 (a) indicating total share ownership. During April 1999, the
requisite forms were filed to bring officers, directors, and 10% stockholders
current.

                                       13
<PAGE>

EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES

     The names, ages and positions of the Company's  Directors and executive  
officers as of January 1, 1999 are listed below:

<TABLE>
<CAPTION>

Name                          Age                Position With the Company                        First Elected
----                          ---                -------------------------                        -------------
<S>                          <C>                 <C>                                             <C>
John B. Hewlett               46                 Chairman of the Board, Director                      1996
Steven L. Flint               48                 President, CEO, CFO, Director                        1998
Ralph W. Rasmussen            53                 Director                                             1998
Dennis L. Crockett            47                 Director                                             1996
Kurt A. Moore                 41                 Executive Vice President                             1997
Bruce H. Haglund              47                 Secretary                                            1994
</TABLE>

     JOHN B. HEWLETT has served as Chairman of the Board and a Director of the
Company since October 1996. He also served and as Chief Executive Officer from
September 1997 through 1998. Mr. Hewlett is President of Hewlett Financial
Corporation. He has 22 years of experience in the insurance field, specializing
in sales and long and short-term planning. From 1985 to the present, Mr. Hewlett
has been a nationally recognized consultant and seminar leader on closely held
business succession and financial planning. He is a member of the Million Dollar
Round Table, Court of the Table, and one of three Top of the Table members in
the Intermountain West with career insurance sales approaching $640,000,000. Mr.
Hewlett is a member of the National Basketball Association Utah Jazz 100 Club
and Advisory Board.

     DR. STEVEN L. FLINT has been a Director of the Company since April 1998 and
became the President, CEO, and CFO during the first quarter of 1999. Dr. Flint
had been the Senior Vice President and Chief Financial Officer of The Alexander
Group, Inc., a national marketing and sales consulting firm since 1993. Dr.
Flint managed all of the firms Human Resources, Legal, Information Technology,
Accounting, and Finance functions for the corporate headquarters and five
regional offices. Before joining the Alexander Group, Dr. Flint was the Chief
Financial Officer for a software firm. He is a former University professor
having taught at Brigham Young University, Stanford University, Amos Tuck
Graduate School of Management at Dartmouth College, and The University of Texas.
He was an Ayers Fellow at the Stonier Graduate School of Banking. Dr. Flint has
served on the board of directors for the Arizona Shakespeare Festival and
Dimensional Visions Group. Dr. Flint has also served as a consultant to a number
of firms in a wide range of industries and is actively involved in numerous
community activities including The Boy Scouts of America and the Mesa Public
Elementary Schools' Advisory Board. Dr. Flint holds B.A. and M.S. degrees from
Brigham Young University and a Ph.D. from the Stanford Graduate School of
Business.

     RALPH W. RASMUSSEN JR. has served as a Director of the Company since
January 1998. Mr. Rasmussen graduated from Brigham Young University with a
Bachelor of Science degree in 1969 and a law degree in 1989. From 1969 to 1986,
he provided accounting and business management services for several large
farming operations in southern Idaho. From 1989 to 1996, Mr. Rasmussen practiced
law with the firm of Bradford and Brady in Provo, Utah. In September 1996, Mr.
Rasmussen sold his law practice and began working full time for one of his
clients, the Alan Ashton family and their businesses.

     DENNIS L. CROCKETT has been a Director of the Company since October 1996.
He is co-founder and Chief Operations Officer of Broadcast International, Inc.,
a communications firm specializing in the delivery of business information via
satellite, FM wireless and cable television technologies, which recently merged
with Data Broadcasting Corporation. Further, Mr. Crockett co-founded the Instore
Satellite Network, one of the nation's largest private satellite communications
networks providing private audio, video, voice, and data broadcasts to retail
clients including Safeway Stores, Osco/Savon Drug, Lucky Stores, and RE/MAX
Reality. Mr. Crockett is a nationally published composer, arranger, vocalist,
and keyboardist as well as a respected musical producer of both record, radio,
and television entertainment. Mr. Crockett attended Brigham Young University in
Provo, Utah.

     KURT A. MOORE has served as the Executive Vice President since September
1997. Mr. Moore worked with Carbon Fiber Products ("CFP"), a publicly traded
company, as a sales manager from 1983 to 1993, and as the company's President
from 1993 to 1995. He also served as a director for CFP from 1992 to 1995.
During 1996, Mr. Moore worked as a mortgage loan officer with Zions Bank and
Bank of Utah. Mr. Moore attended Weber State University from 1975 to 1979, where
he was a marketing major.

     BRUCE H. HAGLUND has served as Secretary of the Company since January 1994
and as a Director since 1998. Mr. Haglund is a principal in the law firm of
Gibson, Haglund & Johnson in Orange County, California where he has been engaged
in the private practice of law since 1980. He is member of the Board of
Directors of Santa Barbara 

                                       14
<PAGE>

Restaurant Group, Inc. and the Secretary of Metalclad Corporation, a public
company whose stock is traded on the NASDAQ Small Cap Market. Mr. Haglund is
also the Secretary and a member of the Board of Directors of Aviation
Distributors, Inc. and Renaissance Golf Products, Inc., public companies whose
stock is traded on the OTC:BB. He is a graduate of the University of Utah
College of Law.

BOARD OF DIRECTORS

     The Board of Directors has the responsibility for establishing broad
corporate policies and for overseeing the overall performance of the Company.
However, in accordance with corporate governance principles, the Board is not
involved in day-to-day operating details. Members of the Board of Directors are
kept informed of the Company's business through discussions with the Chairman
and other officers, by reviewing analyses and reports sent to them, and by
participating in Board and committee meetings.

     All Directors attended more than 75% of the Meetings held during their
tenures as Directors.

COMMITTEES OF THE BOARD

     In November 1996, the Board of Directors established a number of
committees, including a Finance Committee, an Audit Committee, and a
Compensation Committee, each of which is briefly described below.

     The Finance Committee was established to oversee Company expenditures and
approve contracts entered into by the Company. The committee consists of two
outside Directors, John B. Hewlett and Bruce H. Haglund, and one employee
Director, Steven L. Flint.

     The Audit Committee was established to meet with management to consider the
adequacy of the internal controls and the objectivity of financial reporting;
the committee meets with the independent auditors and with appropriate Company
financial personnel about these matters. The committee recommends to the Board
of Directors the appointment of the independent auditors, subject to
ratification by the Stockholders at the Annual Meeting. Both the internal
auditors and the independent auditors periodically meet alone with the committee
and always have unrestricted access to the committee. The committee consists of
two non-employee Directors, Ralph W. Rasmussen and Bruce H. Haglund, and one
employee Director, Steven L. Flint.

     The Compensation Committee negotiates employment contracts, recommends to
the Board of Directors compensation for officers, Directors, and employees, and
administers management incentive compensation plans, including stock option
plans. The committee consists of three non-employee Directors, Ralph W.
Rasmussen, Dennis L. Crockett, and Bruce H. Haglund.

COMPENSATION OF DIRECTORS

     The Company's policy is not to pay cash compensation to directors for 
their services as directors, but reimburses reasonable out-of-pocket expenses 
of directors for attendance at meetings. Additionally on October 1, 1998, the 
Company granted each Director elected in 1998 an option to purchase 25,000 
shares of the Company's Common Stock at $1.25 per share. The options vest in 
one quarter increments for each quarter of service rendered and expire on 
December 31, 2002.

LIMITATION ON LIABILITY AND INDEMNIFICATION MATTERS

     The Company's Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law provides
that directors of a corporation will not be personally liable for monetary
damages for breach of their fiduciary duties as directors, except liability for
(i) any breach of their duty of loyalty to the corporation or its stockholders,
(ii) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) unlawful payments of dividends or unlawful
stock repurchases or redemptions, or (iv) any transaction from which the
director derived an improper personal benefit. Such limitation of liability does
not apply to liabilities arising under the federal securities laws and does not
affect the availability of equitable remedies such as injunctive relief or
rescission.

     The Company's Bylaws provide that the Company shall indemnify its directors
and executive officers and may indemnify its other officers and employees and
other agents to the fullest extent permitted by law. The Company believes that
indemnification under its Bylaws covers at least negligence and gross negligence
on the part of indemnified parties. The Company's Bylaws also permit it to
secure insurance on behalf of any officer, director, 

                                       15
<PAGE>

employee, or other reagent for any liability arising out of his or her actions
in such capacity, regardless of whether the Bylaws permit such indemnification.

     The Company has entered into agreements to indemnify its directors and
officers, in addition to the indemnification provided for in the Company's
Bylaws. These agreements, among other things, indemnify the Company's directors
and executive officers for certain expenses (including attorneys' fees),
judgments, fines, and settlement amounts incurred by any such person in any
action or proceeding, including any action by or in the right of the Company,
arising out of such person's services as a director or executive officer of the
Company, any subsidiary of the Company or any other Company or enterprise to
which the person provides services at the request of the Company.

     At present, there is no pending litigation or proceeding involving any
director, officer, employee, or agent of the Company where indemnification will
be required or permitted. The Company is not aware of any threatened litigation
or proceeding that might result in a claim for such indemnification.

ITEM 10.  EXECUTIVE COMPENSATION

     The Company's compensation programs are designed to link executives'
compensation to the performance of the Company. The annual salary paid to
executives over the past two years reflect fixed amounts that are deemed
competitive or lower the industry standards for executives with comparable
ability and experience in the industry. Additionally, because of cash flow
issues for the Company, executives have not received increases in salary for two
years, and in some instances, executives have taken a salary cut.

COMPENSATION OF OFFICERS

     The compensation paid to John B. Hewlett, the Chief Executive Officer
during 1998 and a portion of 1997, and Kenneth W. Craig, the President for a
portion of 1997 are reflected in the Summary Compensation Table. Messrs. Hewlett
and Craig joined the Company in 1996. No other executive officers are listed
because none received compensation in excess of $100,000.

     SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

                                       ANNUAL COMPENSATION                       LONG-TERM COMPENSATION
                              ------------------------------------   -----------------------------------------
                                                         OTHER                 AWARDS                PAYOUTS    
       Name and                                         ANNUAL       -------------------------    ------------
       Principal                                        COMPEN-       Restricted      options/       LTIP          ALL     
       Position      YEAR     SALARY ($)   BONUS ($)   SATION ($)      stock ($)      SARs (#)    Payouts ($)    OTHER (1) 
-----------------    ----     ----------   ---------   ----------    -----------      --------    ------------  -----------
<S>                  <C>      <C>          <C>         <C>           <C>          <C>             <C>           <C>
 John Hewlett,       1998          -0-         -0-         -0-            -0-        400,000(2)        -              -     
                     -------------------------------------------------------------------------------------------------------
   CHAIRMAN,CEO      1997          -0-         -0-         -0-(3)         -0-        225,000(4)        -              -     
                     -------------------------------------------------------------------------------------------------------
Kenneth Craig,       1998          -0-         -0-         -0-            -0-            -0-           -              -     
                     -------------------------------------------------------------------------------------------------------
   V.P. PRODUCTS(5)  1997       48,000      53,000         -0-            -0-         50,000           -              -    
                     -------------------------------------------------------------------------------------------------------
</TABLE>

(1)  The remuneration described in the table does not include the cost to the
     Company of benefits furnished to the named executive officers, including
     premiums for health insurance and other personal benefits provided to such
     individual that are extended to all employees of the Company in connection
     with their employment. The value of such benefits cannot be precisely
     determined; however, the executive Officers named above did not receive
     other compensation in excess of the lesser of $50,000 or 10% of such
     Officers' cash compensation.

(2)  A total of $400,000 priced at $4.00.

(3)  During 1997, John B. Hewlett's affiliate exercised 400,000 options which it
     assigned to a charitable organization.

(4)  Priced at $3.00 per Share.

                                       16

<PAGE>

     OPTION GRANTS IN LAST FISCAL YEAR--INDIVIDUAL GRANTS

<TABLE>
<CAPTION>
                 (a)                   (b)                  (c)                   (d)                   (e)
                                    Number of           % of Total
                                   Securities             Options
                                   Underlying            Granted to
                                     Options            Employees in         Exercise or Base         Expiration
                Name               Granted (#)          Fiscal Year(1)         Price ($/Sh)              Date
<S>                               <C>                 <C>                    <C>                      <C>                 
         John B. Hewlett             500,000                100%                  $4.00               3/17/2008
</TABLE>

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth information concerning the beneficial
ownership of the Company's Shares as of December 31, 1999 for (i) each current
Director and each nominee for Director (ii) each named executive officer of the
Company as defined in 402(a)(2) of Regulation S-B of the Securities Act of 1933,
(iii) all persons known by the Company to beneficially own more than 5% of the
Company's voting Shares, and (iv) all Officers and Directors of the Company as a
group.


<TABLE>
<CAPTION>

         NAME AND ADDRESS OF
         BENEFICIAL OWNER(1)                        NUMBER OF SHARES (2)        PERCENT OF TOTAL (3)
         -------------------                        --------------------        --------------------
<S>                                                 <C>                         <C>                   
         John B. Hewlett                 (4)              2,194,792                     22.89%
         Steven L. Flint                 (5)                 12,500                         *
         Dennis L. Crockett              (6)                369,375                      4.87%
         Ralph W. Rasmussen              (7)                 12,500                         *
         AKA Charitable Trust            (8)                846,875                     10.62%
         Bruce H. Haglund                (9)                863,750                     11.32%

         All officers and Directors      (10)             3,452,917                     34.91%
            as a group (five persons)
</TABLE>

* less than one percent                              
-----------------------------------------

(1)  Unless otherwise noted, the Company believes that all Shares are
     beneficially owned and that all persons named in the table or family
     members have sole voting and investment power with respect to all Shares
     owned by them. Unless otherwise indicated, the address of each Stockholder
     is 12187 South Business Park Drive, Suite 100, Draper, Utah 84020.

(2)  A person is deemed to be the beneficial owner of securities that can be
     acquired by such person within 60 days from the date hereof upon the
     exercise of warrants or options.

(3)  Assumes 7,474,653 Shares outstanding plus, for each individual, any
     securities that specific person has the right to acquire upon exercise of
     presently exercisable stock options. Each beneficial owner's percentage
     ownership is determined by assuming that options or warrants that are held
     by such person (but not those held by any other person) and which are
     exercisable within 60 days from the date hereof have been exercised.

(4)  Includes 600,000 Shares issuable to Mr. Hewlett, and affiliates which he
     controls, upon the exercise of currently vested stock options at a price of
     $0.50 per Share, 1,000,000 Shares issuable at a price of $1.00 per Share,
     12,500 shares issuable at $1.25 per Share, and 500,000 Shares issuable at
     $4.25 per Share. Mr. Hewlett's address is 2919 East Granite Hollow Street,
     Sandy, Utah 84092.

(5)  Includes 12,500 Shares issuable upon the exercise of presently exercisable
     stock options at a price of $1.25 per Share.

(6)  Includes 100,000 Shares issuable upon the exercise of presently exercisable
     stock options at a price of $0.50 per Share and 12,500 Shares issuable at
     $1.25. Mr. Crockett's address is 7050 Union Park Center, Suite 600,
     Midvale, Utah 84047.

(7)  Includes 12,500 Shares issuable upon the exercise of presently exercisable
     stock options at a price of $1.25 per Share.

(8)  Includes 200,000 Shares issuable to AKA upon the exercise of stock options
     at a price of $0.50 per Share, 150,000 Shares issuable at $1.00 per Share,
     50,000 Shares issuable at $3.00 per Share, and 100,000 Shares issuable at
     5.00 per Share. Ralph W. Rasmussen is trustee of the AKA Charitable
     Remainder Trust.

(9)  Includes 50,000 Shares issuable upon the exercise of presently exercisable
     stock options at a price of $0.50 per Share, 100,000 Shares issuable at
     $3.00 per Share, and 12,500 Shares issuable at $1.25 per Share. Mr.
     Haglund's address is Jamboree Center, 2 Park Plaza, Suite 450, Irvine,
     California 92614.

                                       17
<PAGE>

(10) Includes all executive officers and directors.

ITEM  12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

TRANSACTIONS SUBSEQUENT TO 1998

     Subsequent to the year end, in March 1999 the Company issued to AKA 
50,000 shares of Convertible Preferred Stock for $1,000,000. The Shares are 
convertible at any time into shares of Common Stock at the rate of 20 shares 
of Common Stock for one shares of Preferred Stock. In the event the Company 
fails to comply with the repayment terms of the loan agreements with AKA, the 
conversion rate increases from 20 to one to 200 to one. The Preferred Stock 
pays dividends at the rate of 5% during 1999 (payable in shares of Common 
Stock), and 6% thereafter (payable in shares of Common Stock or cash at AKA's 
election).

     The Company was not in compliance with conditions of the AKA Loan and 
Credit Agreement on December 31, 1998 by having drawn on the credit line 
beyond 80% of the Company's current assets and having not made interest 
payments for approximately five months. To remedy any potential defaults 
under the loan with AKA, the Company entered into an agreement with AKA on 
January 11, 1999 to issue shares of its Common Stock in lieu of any cash 
payment of interest due or to become due on or before June 30, 1999.

TRANSACTIONS DURING 1998

     On March 17, 1998, the Board of Directors acted to grant Mr. Hewlett
500,000 options exercisable at $4.00 per Share, which price was greater than the
previous trading day's close of $3.812, for his efforts during 1997 in securing
adequate financing for the Company to permit ongoing operations and for his
efforts in guiding the growth of the Company. The options are exercisable at any
time on or before March 17, 2008 and are not subject to price adjustment.

     In March 1998, pursuant to the terms of a stock option agreement, Bruce H.
Haglund exercised 500,000 stock options at $0.50 per share in consideration of
the forgiveness of $250,000 of legal fees owed to Mr. Haglund by the Company,
including principal and accrued interest on a $150,000 note due June 1999 from
the Company to Mr. Haglund for a portion of such fees.

     Gibson, Haglund & Johnson billed the Company approximately $125,000 in 
legal fees during 1998. Bruce H. Haglund, a principal of the firm, exercised 
200,000 stock options at $0.50 per share; and an associate of the firm, 
exercised 20,000 stock options at $1.25 per share, in consideration of the 
forgiveness of accrued legal fees owed to Gibson, Haglund & Johnson by the 
Company.

     On May 7, 1997, the Company borrowed $225,000 from Tracy and Glenda Jones
Charitable Support Foundation and entered into a Promissory Note for the capital
received. The note, which was due on or before June 30, 1998, has been assigned
to John B. Hewlett who granted an extension on the due date of the note to on or
before June 30, 1999. The Company also borrowed an additional $125,000 from John
B. Hewlett September 13, 1998 and entered into a Promissory Note for the capital
received. The note is due in one year. The interest rate on each of the notes to
Mr. Hewlett is 12% per annum.

     In October 1998, the Company entered into a promissory note agreement with
a lender to provide the Company with $500,000 of which $50,000 of principal has
been repaid.

TRANSACTIONS DURING 1997

     In October 1997, the Board of Directors of the Company approved and granted
an aggregate of 500,000 options exercisable at $3.00 per share to key management
personnel and service providers during 1997. The options vested upon grant and
expire ten years after the grant. The following Directors and Officers received
options in the 

                                       18
<PAGE>

following amounts: John B. Hewlett, 225,000 options; Wade Mitchell, 50,000
options; Kenneth W. Craig, 50,000 options, Kurt A. Moore, 75,000 options; and
Bruce H. Haglund, 100,000 options. During the first quarter of 1998, the Company
acted to register the shares into which the options can be converted by filing a
Form S-8 with the Securities and Exchange Commission.

     During 1997, the Company entered into credit arrangements with the AKA
Charitable Remainder Unitrust #1. The first line of credit was for a maximum
amount of up to $1,000,000 and the second line of credit, still being utilized
by the Company, is for a maximum amount of up to $5,000,000. The lines of credit
have provided the Company with an indispensable cash resource to utilize as the
Company has emerged from near insolvency experienced in the 4th quarter of 1996.
Each line of credit, bearing interest at 12%, has been made possible through the
personal guaranty of the credit line by John B. Hewlett, the Company's Chairman
of the Board and Chief Executive Officer.

     In December 1997, pursuant to the terms of a Stock Option Agreement, an
affiliate of John B. Hewlett exercised 400,000 stock options at $0.50 per Share
in consideration of the forgiveness of $200,000 of consulting fees owed to Mr.
Hewlett's affiliate by the Company. The Shares were donated to a charitable
organization controlled by a board of directors consisting of five directors,
one of which is Mr. Hewlett.

     During September 1997, the Board of Directors of the Company approved and
granted an aggregate of 150,000 options to Kurt A Moore. These options vest in
one-third increments upon the earlier of achieving certain performance goals or
ratably over ten years and are subject to cancellation upon termination of
employment. The performance goals are that the Company achieves sales of
$8,000,000 in 1998, $12,000,000 in 1999, and $18,000,000 in 2000.

ITEM  13. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of this report on Form 10-KSB:

      1.   Financial Statements for the periods ended December 31, 1997 and 
           1998:

          Independent Auditors' Reports
          Balance Sheet
          Statements of Operations
          Statements of Stockholders' Equity
          Statements of Cash Flows
          Notes to Financial Statements

      2.  Exhibits

      The following exhibits are being filed with this Annual Report on Form
10-KSB and/or are incorporated by reference therein in accordance with the
designated footnote references:

<TABLE>
<S>       <C>

     4.1    Certificate of Determination concerning the rights and preferences
            of Series "A" convertible preferred stock.

     10.1   Amendment to Loan and Security Agreement dated January 11, 1999.

     10.2   AKA Charitable Remainder Unitrust #1 Subscription Agreement to
            Purchase 50,000 shares of Series A Preferred Stock.

     10.3   Warrant Certificate for the purchase of 1,637,669 shares of Common
            Stock at $0.345 per share issued to AKA Charitable Remainder
            Unitrust #1 on January 11, 1999.

     10.4   Warrant Certificate for the purchase of 600,000 shares of Common
            Stock at $0.345 per share issued to AKA Charitable Remainder
            Unitrust #1 on January 11, 1999.

     10.5   Warrant Certificate for the purchase of 1,000,000 shares of Common
            Stock at $1.00 per share issued to AKA Charitable Remainder Unitrust
            #1 on March 10, 1999.
</TABLE>


                                       19
<PAGE>

<TABLE>
<S>         <C>
     10.6   Amendmentto Warrant Certificates for the purchase of 200,000
            Warrants at $1.50 per share, 100,000 Warrants at $2.00 per share,
            100,000 warrants at $3.00 per share, and 100,000 warrants at $5.00
            per share previously issued to AKA Charitable Remainder Unitrust #1
            on October 29, 1997 and June 1, 1998.

     10.7   Assignment of Promissory Note to John B. Hewlett.

     10.8   Promissory Notes entered into with Alvin Emery.

     21.1   List of Subsidiaries.

     23.1   Consent of Auditors--Corbin & Wertz.

     23.2   Consent of Auditors--Jones, Jensen & Company.

     27.1   Financial Data Schedule.
</TABLE>

(b)  Reports on Form 8-K.

     Change of Accountants filed on April 30, 1998.

     Change of Accountants filed on March 19, 1999 as amended.
<PAGE>


                         RENAISSANCE GOLF PRODUCTS, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 1998



<PAGE>

                                 C O N T E N T S


<TABLE>
<S>                                                                          <C>
Independent Auditors' Report................................................. 3

Consolidated Balance Sheet................................................... 4

Consolidated Statements of Operations........................................ 6

Consolidated Statements of Stockholders' Equity (Deficit).................... 7

Consolidated Statements of Cash Flows........................................ 9

Notes to the Consolidated Financial Statements.............................. 11
</TABLE>


<PAGE>

                                  [LETTERHEAD]

                          INDEPENDENT AUDITORS' REPORT

Board of Directors
Renaissance Golf Products, Inc.

We have audited the accompanying consolidated balance sheet of Renaissance Golf
Products, Inc. and Subsidiaries (the "Company") as of December 31, 1998, and the
related consolidated statements of operations, stockholders' equity (deficit)
and cash flows for the year then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Renaissance Golf Products, Inc. and Subsidiaries as of December 31, 1998, and
the results of their operations and their cash flows for the year then ended in
conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that Renaissance Golf Products, Inc. and Subsidiaries will continue as a going
concern. As discussed in Note 1c to the consolidated financial statements,
certain conditions raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans concerning these matters are
also discussed in Note 1c. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

/s/ Jones, Jensen & Company

Jones, Jensen & Company
Salt Lake City, Utah

April 14, 1999


<PAGE>

                         RENAISSANCE GOLF PRODUCTS, INC.
                           CONSOLIDATED BALANCE SHHET

                                     ASSETS
<TABLE>
<CAPTION>
                                                                              December 31,
                                                                                  1998
                                                                           -----------------
<S>                                                                        <C>
CURRENT ASSETS

   Cash and cash equivalents                                               $          63,184
   Accounts receivable, net of allowance for doubtful accounts                       411,311
   Inventories, net (Note 2)                                                       2,273,601
   Deposits made on inventory (Note 2)                                               497,838
   Prepaid expenses and other current assets                                          15,900
                                                                           -----------------

     Total Current Assets                                                          3,261,834
                                                                           -----------------
PROPERTY AND EQUIPMENT, NET (Note 3)                                                 465,413
                                                                           -----------------

OTHER ASSETS

   Goodwill (net) (Note 1)                                                           780,000
                                                                           -----------------

     Total Other Assets                                                              780,000
                                                                           -----------------
     TOTAL ASSETS                                                          $       4,507,247
                                                                           -----------------
                                                                           -----------------
</TABLE>


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


                                        4
<PAGE>

                         RENAISSANCE GOLF PRODUCTS, INC.
                     CONSOLIDATED BALANCE SHEET (CONTINUED)

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
                                                                          December 31,
                                                                              1998
                                                                       -----------------
<S>                                                                    <C>
CURRENT LIABILITIES

   Revolving line of credit, net of discount (Note 4)                  $       4,936,766
   Current portion of notes payable (Note 6)                                     855,000
   Accounts payable                                                              772,848
   Accrued interest                                                              288,793
   Accrued liabilities                                                           403,660
   Accrued royalties                                                             243,355
                                                                       -----------------

     Total Current Liabilities                                                 7,500,422
                                                                       -----------------
LONG-TERM LIABILITIES

   Notes payable, less current portion (Note 6)                                   20,000
                                                                       -----------------

     Total Long-Term Liabilities                                                  20,000
                                                                       -----------------
     Total Liabilities                                                         7,520,422
                                                                       -----------------
COMMITMENTS AND CONTINGENCIES (Note 8)

STOCKHOLDERS' EQUITY (DEFICIT)

   Preferred stock, $0.01 par value, 150,000 shares
    authorized: 250 shares issued and outstanding                                      3
   Common stock, $0.001 par value, 40,000,000 shares
    authorized; 7,498,153 shares issued and outstanding                            7,498
   Additional paid-in capital                                                 17,870,841
   Accumulated deficit                                                       (20,891,517)
                                                                       -----------------

     Total Stockholders' Equity (Deficit)                                     (3,013,175)
                                                                       -----------------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)              $       4,507,247
                                                                       -----------------
                                                                       -----------------
</TABLE>


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


                                        5
<PAGE>

                         RENAISSANCE GOLF PRODUCTS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                  For the Years Ending
                                                                      December 31,
                                                        ---------------------------------------
                                                              1998                  1997
                                                        -----------------     -----------------
<S>                                                     <C>                   <C>

NET SALES                                               $       6,987,509     $       5,375,160

COST OF SALES                                                   6,194,129             4,821,704
                                                        -----------------     -----------------

GROSS PROFIT                                                      793,380               553,456
                                                        -----------------     -----------------

SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES                                        5,258,662             2,391,659
                                                        -----------------     -----------------

OPERATING LOSS                                                 (4,465,282)           (1,838,203)
                                                        -----------------     -----------------

OTHER INCOME (EXPENSE)

   Interest income                                                 -                      8,111
   Interest expense                                              (701,425)             (332,467)
                                                        -----------------     -----------------

     Total Other Income (Expense)                                (701,425)             (324,356)
                                                        -----------------     -----------------

LOSS BEFORE PROVISION FOR INCOME
 TAXES AND EXTRAORDINARY ITEM                                  (5,166,707)           (2,162,559)

PROVISION FOR INCOME TAXES                                            900                   800
                                                        -----------------     -----------------

LOSS BEFORE EXTRAORDINARY ITEM                                 (5,167,607)           (2,163,359)

EXTRAORDINARY GAIN FROM FORGIVENESS
 OF DEBT (NET OF INCOME TAXES OF $-0-) (Note 7)                    -                    318,228
                                                        -----------------     -----------------

LOSS BEFORE COMPREHENSIVE INCOME                               (5,167,607)           (1,845,131)

OTHER COMPREHENSIVE INCOME                                         -                     -
                                                        -----------------     -----------------

NET LOSS                                                $      (5,167,607)    $      (1,845,131)
                                                        -----------------     -----------------
                                                        -----------------     -----------------

BASIC LOSS PER COMMON SHARE                             $           (1.95)    $           (0.65)
                                                        -----------------     -----------------
                                                        -----------------     -----------------

FULLY DILUTED LOSS PER COMMON SHARE                     $           (0.64)    $           (0.65)
                                                        -----------------     -----------------
                                                        -----------------     -----------------

WEIGHTED AVERAGE COMMON SHARES
 OUTSTANDING                                                    2,655,538             2,855,538
                                                        -----------------     -----------------
                                                        -----------------     -----------------
</TABLE>


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


                                        6
<PAGE>

                         RENAISSANCE GOLF PRODUCTS, INC.
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>


                                       Preferred Stock           Common Stock          Common Stock Subscribed    Additional
                                   -----------------------   -----------------------   -----------------------     Paid-In
                                     Shares       Amount       Shares       Amount       Shares       Amount       Capital
                                   ----------   ----------   ----------   ----------   ----------   ----------   ------------
<S>                                <C>          <C>          <C>          <C>          <C>          <C>          <C>
Balance, December 31, 1996                250   $        3    1,365,291   $    1,365      953,125   $      953   $ 12,524,384

Issuance of common stock,
previously subscribed                       -            -      953,125          953     (953,125)        (953)             -

Issuance of common stock
 for cash                                   -            -      703,125          703            -            -        561,797

Issuance of common stock
 upon conversion of debt                    -            -    1,607,816        1,608            -            -        802,300

Common stock subscribed
 upon conversion of debt                    -            -            -            -    1,096,276        1,096        547,038

Common stock subscribed
 upon exercise of stock options             -            -            -            -      400,000          400        199,600

Issuance of stock options
 and warrants                               -            -            -            -            -            -        160,375

Fractional share adjustment as
 a result of reverse split                  -            -      (15,695)         (15)           -            -             15

Net loss for the year ended
December 31, 1997                           -            -            -            -            -            -              -
                                   ----------   ----------   ----------   ----------   ----------   ----------   ------------

Balance, December 31, 1997                250   $        3    4,613,662   $    4,614    1,496,276   $    1,496   $ 14,795,509
                                   ----------   ----------   ----------   ----------   ----------   ----------   ------------
                                   ----------   ----------   ----------   ----------   ----------   ----------   ------------


<CAPTION>


                                                      Total
                                                   Stockholders'
                                     Accumulated      Equity
                                       Deficit      (Deficit)
                                    ------------   ------------
<S>                                 <C>            <C>
Balance, December 31, 1996          $(13,878,779)  $ (1,352,074)

Issuance of common stock,
previously subscribed                          -              -

Issuance of common stock
 for cash                                      -        562,500

Issuance of common stock
 upon conversion of debt                       -        803,908

Common stock subscribed
 upon conversion of debt                       -        548,134

Common stock subscribed
 upon exercise of stock options                -        200,000

Issuance of stock options
 and warrants                                  -        160,375

Fractional share adjustment as
 a result of reverse split                     -              -

Net loss for the year ended
December 31, 1997                     (1,845,131)    (1,845,131)
                                    ------------   ------------

Balance, December 31, 1997          $(15,723,910)  $   (922,288)
                                    ------------   ------------
                                    ------------   ------------
</TABLE>


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


                                        7
<PAGE>

                         RENAISSANCE GOLF PRODUCTS, INC.
      CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>
                                       Preferred Stock           Common Stock          Common Stock Subscribed
                                   -----------------------   -----------------------   -----------------------
                                     Shares       Amount       Shares       Amount       Shares       Amount
                                   ----------   ----------   ----------   ----------   ----------   ----------
<S>                                <C>          <C>          <C>          <C>          <C>          <C>
Balance, December 31, 1997                250   $        3    4,613,662   $    4,614    1,496,276   $    1,496

Issuance of subscribed stock                -            -    1,496,276        1,496   (1,496,276)      (1,496)

Issuance of stock for cash                  -            -      560,000          546            -            -

Issuance of stock for assets                -            -      250,000          250            -            -

Issuance of stock for services              -            -      278,215          292            -            -

Issuance of stock upon
 conversion of debt                         -            -      300,000          300            -            -

Net loss for the year ended
 December 31, 1998                          -            -            -            -            -            -
                                   ----------   ----------   ----------   ----------   ----------   ----------

Balance, December 31, 1998                250   $        3    7,498,153   $    7,498            -   $        -
                                   ----------   ----------   ----------   ----------   ----------   ----------
                                   ----------   ----------   ----------   ----------   ----------   ----------
<CAPTION>

                                                                      Total
                                      Additional                   Stockholders'
                                       Paid-In       Accumulated      Equity
                                       Capital         Deficit      (Deficit)
                                     ------------   ------------   ------------
<S>                                  <C>            <C>            <C>
Balance, December 31, 1997           $ 14,795,509   $(15,723,910)  $   (922,288)

Issuance of subscribed stock                    -              -              -

Issuance of stock for cash              1,682,787              -      1,683,333

Issuance of stock for assets              999,750              -      1,000,000

Issuance of stock for services            243,095              -        243,387

Issuance of stock upon
 conversion of debt                       149,700              -        150,000

Net loss for the year ended
 December 31, 1998                              -     (5,167,607)    (5,167,607)
                                     ------------   ------------   ------------

Balance, December 31, 1998           $ 17,870,841   $(20,891,517)  $ (3,013,175)
                                     ------------   ------------   ------------
                                     ------------   ------------   ------------
</TABLE>


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


                                        8
<PAGE>

                         RENAISSANCE GOLF PRODUCTS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                     For the Years Ending
                                                                                         December 31,
                                                                            --------------------------------------
                                                                                   1998                1997
                                                                            ------------------  ------------------
<S>                                                                         <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES

   Net loss                                                                 $       (5,167,607) $       (1,845,131)
   Adjustments to reconcile net loss to net cash
    used in operating activities:
     Depreciation and amortization                                                     100,162              28,081
     Provision for doubtful accounts                                                    -                  307,971
     Provision for allowance for inventory obsolescence                                 75,000             177,000
     Gain on forgiveness of debt                                                        -                 (318,228)
     Expense recorded in connection with non-employee options                           -                   23,375
     Expense recorded in connection with discount amortized                             -                   52,538
   Changes in operating assets and liabilities:
     (Increase) decrease in accounts receivable                                        576,010          (1,152,753)
     (Increase) decrease in inventories                                             (1,590,644)           (586,317)
     (Increase) decrease in deposits on inventory                                      669,188          (1,167,026)
     (Increase) decrease) in prepaid expenses
      and other current assets                                                          41,610             (47,195)
     (Increase) decrease in other assets                                                34,199             (13,056)
     Increase (decrease) in accounts payable
      and accrued liabilities                                                          890,402            (130,971)
     Increase (decrease) in accrued royalties                                          125,000             (65,791)
                                                                            ------------------  ------------------

       Net Cash Used in Operating Activities                                        (4,246,680)         (4,737,503)
                                                                            ------------------  ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Purchases of property and equipment                                                 (48,602)            (32,460)
                                                                            ------------------  ------------------

       Net Cash Used in Investing Activities                                           (48,602)            (32,460)
                                                                            ------------------  ------------------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Net proceeds on lines of credit                                                   1,299,279           3,763,949
   Net payments on long-term debt                                                     (200,000)            (44,144)
   Proceeds from long-term debt                                                        650,000             225,000
   Proceeds from issuance of subordinated convertible debentures                     1,668,000             562,500
   Proceeds from issuance of common stock for cash                                     104,863             562,500
   Proceeds from exercise of stock options                                              60,470             200,000
                                                                            ------------------  ------------------

       Net Cash Provided by Financing Activities                                    $3,582,612          $5,269,805
                                                                            ------------------  ------------------
</TABLE>


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


                                        9
<PAGE>

                         RENAISSANCE GOLF PRODUCTS, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

<TABLE>
<CAPTION>
                                                              For the Year Ending
                                                                  December 31,
                                                     --------------------------------------
                                                            1998                1997
                                                     ------------------  ------------------
<S>                                                  <C>                 <C>
NET CHANGE IN CASH AND CASH EQUIVALENTS              $         (712,670) $          499,842

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                    775,854             276,012
                                                     ------------------  ------------------

CASH AND CASH EQUIVALENTS, END OF YEAR               $           63,184  $          775,854
                                                     ------------------  ------------------
                                                     ------------------  ------------------

Cash Paid For:

   Interest                                          $          404,369  $          227,857
   Income taxes                                      $              800  $              800

SCHEDULE OF NON-CASH FINANCING ACTIVITIES

   Common stock issued for debt conversion           $          150,000  $          803,908
   Common stock subscribed for debt conversion                                      548,134
   Stock for assets                                  $        1,000,000
   Stock for services                                $          243,387
</TABLE>


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


                                       10
<PAGE>


                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          a.  Nature of Operations

          Renaissance Golf Products, Inc. and Subsidiaries (the "Company")
          assembles and distributes golf clubs and accessories.  The Company's
          products are sold domestically and internationally under a license
          agreement with FILA Sport S.p.A. ("FILA").

          b.  Principles of Consolidation

          The consolidated financial statements include those of World  Golf
          Corporation, Sports Marketing, Inc. and RGPI, Inc.  All significant
          intercompany accounts and transactions have been eliminated.

          c.  Basis of Presentation - Going Concern

          The accompanying consolidated financial statements have been prepared
          on a going concern basis, which contemplates the realization of assets
          and satisfaction of liabilities in the normal course of business.  The
          Company has suffered substantial recurring losses from operations and
          has a stockholders' deficit at December 31, 1998.  These matters,
          among others, raise substantial doubt about the Company's ability to
          continue as a going concern.  The consolidated financial statements do
          not include any adjustments that might be necessary should the Company
          be unable to continue as a going concern.  The Company's continuation
          as a going concern is dependent on its ability to generate sufficient
          cash flow to meet its obligations on a timely basis, to obtain
          additional debt and/or equity financing as may be required, to satisfy
          its debt and license covenants (see Notes 4 and 8) and ultimately to
          attain profitable operations.  Management's plans to address these
          matters are as follows:

          -    Obtain additional financing through third party investors;

          -    Focus current marketing strategy on strength of bag and accessory
               product lines;

          -    Increase the marketing efforts regarding its products;

          -    Refocus product lines; and

          -    Continue restructuring the operations of the Company.

          Management of the Company believes that the proceeds from the
          additional financing, plus increased marketing efforts, will enable
          the Company to fund operations through the end of fiscal 1999,
          although there can be no assurance that it will.  The Company will
          likely require additional capital for future development and the
          marketing of existing and future product lines.  In the event the
          Company cannot fund operations through sales after the initial
          infusion of capital from the aforementioned sources, resolve its
          current debt and any license covenant violation, and if the Company is
          unable to secure additional financing in the future, its ability to
          pursue its business strategy, its consolidated financial position, and
          its results of operations for future periods may be adversely
          impacted.


                                          11
<PAGE>

                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          d.  Concentrations of Credit Risk

          CASH

          On occasion, the Company maintains cash balances at certain financial
          institutions in excess of amounts insured by Federal agencies.

          ACCOUNTS RECEIVABLE

          The accounts receivable are from a diverse customer base.  The Company
          provides credit in the normal course of business to customers
          throughout the United States and foreign markets.  Accounts deemed
          uncollectible have been charged against the allowance.  The Company
          does not obtain collateral with which to secure its accounts
          receivable.  As of December 31, 1998, the Company had accounts
          receivable from one customer which represented 64% of net accounts
          receivable.

          SALES

          One customer accounted for 27% and 14% of net sales for the years
          ended December 31, 1998 and 1997, respectively.

          ACCOUNTS PAYABLE

          One vendor accounted for 11% of inventory purchases for the year ended
          December 31, 1998, and four vendors accounted for 19%, 17%, 15% and
          14% of inventory purchases for the year ended December 31, 1997,
          respectively.  No other vendor accounted for 10% or more of inventory
          purchases for these periods.  As of December 31, 1998, the Company had
          accounts payable to one vendor which represented 25% of accounts
          payable.  The Company believes that it could purchase such inventory
          from other vendors without a materially adverse effect to the Company.

          FOREIGN SALES

          The Company had sales to foreign markets of approximately  $239,351
          (3%) and $103,000 (2%) for the years ended December 31, 1998 and 1997,
          respectively.

          e.   Use of Estimates in the Preparation of Consolidated Financial
               Statements

          The preparation of consolidated financial statements in conformity
          with generally accepted accounting principles requires management to
          make estimates and assumptions that affect the reported amounts of
          assets and liabilities and disclosure of contingent assets and
          liabilities at the date of the consolidated financial statements, and
          the reported amounts of revenues and expenses during the reported
          periods.  Significant estimates made by the Company's management
          include, but are not limited to, allowances for trade receivables and
          the net realizable value of inventories.  Actual results could
          materially differ from those estimates.


                                          12

<PAGE>

                           RENAISSANCE GOLF PRODUCTS, INC.
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

          f.  Fair Value of Financial Instruments

          The Company has financial instruments whereby the fair market value of
          the financial instruments could be different than that recorded on a
          historical basis.  The Company's financial instruments consist of its
          cash and cash equivalents, accounts receivable, revolving line of
          credit, notes payable and accounts payable.  The carrying amounts of
          the Company's financial instruments generally approximate their fair
          values at December 31, 1998.

          g.  Cash Equivalents

          For the purpose of the statements of cash flows, the Company considers
          cash equivalents to be highly liquid investments with remaining
          maturities when purchased of three months or less.

          h.  Inventories

          Inventories are stated at the lower of cost or market, and consist
          primarily of golf clubs, golf bags, golf accessories and related
          components.  Cost is determined on the first-in, first-out method.
          Cost includes materials, direct labor and an allocable portion of
          direct and indirect manufacturing overhead based on estimates derived
          from historical trends and experience factors.  Market is determined
          by comparison with recent purchases or net realizable value. The
          Company did write-down inventory in 1998.

          i.  Property and Equipment

          Property and equipment are recorded at cost and are depreciated using
          the straight-line method over the estimated useful lives of the
          related assets, ranging from five to seven years.  Leasehold
          improvements are amortized over the lesser of the estimated useful
          lives of the improvements or the related lease term.  Depreciation
          expense relating to property and equipment for the years ended
          December 31, 1998 and 1997 amounted to $80,163 and $28,081,
          respectively, of which $13,613 and $6,549, respectively, is included
          in cost of sales in the accompanying consolidated statements of
          operations.

          Maintenance and repairs are charged to expense as incurred.  Renewals
          and improvements of a major nature are capitalized.  Gains or losses
          are recognized upon sale or disposal of assets.

          j.  Revenue Recognition

          Revenues on product sales are recognized upon shipment of the
          merchandise.

                                          13
<PAGE>

                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

          k.  Stock-Based Compensation

          During 1995, the Financial Accounting Standards Board issued Statement
          of Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting
          for Stock-Based Compensation," which defines a fair value based method
          of accounting for stock-based compensation.  However, SFAS 123 allows
          an entity to continue to measure compensation cost related to stock
          and stock options issued to employees using the intrinsic method of
          accounting prescribed by Accounting Principles Board Opinion No. 25
          ("APB 25"), "Accounting for Stock Issued to Employees."  Entities
          electing to remain with the accounting method of APB 25 must make pro
          forma disclosures of net income and earnings per share, as if the fair
          value method of accounting defined in SFAS 123 had been applied.  The
          Company has elected to account for its stock-based compensation to
          employees under APB 25.

          l.  Advertising

          The Company expenses advertising costs as incurred.  Advertising
          expense for the years ended December 31, 1998 and 1997 was $589,318
          and $224,282, respectively.

          m.  Income Taxes

          The Company accounts for income taxes in accordance with Statement of
          Financial Accounting Standards No. 109, "Accounting for Income Taxes"
          ("SFAS 109").  Under SFAS 109, the asset and liability method is used
          in accounting for income taxes.  Under this method, deferred tax
          assets and liabilities are determined based on differences between the
          financial reporting and the tax basis of assets and liabilities and
          are measured using enacted tax rates and laws that will be in effect
          when the differences are expected to reverse. A valuation allowance is
          established when necessary to reduce deferred tax assets to the amount
          expected to be realized.

          n.  Limitations on Dividends

          Pursuant to state laws, the Company is currently restricted, and may
          be restricted for the foreseeable future, from making dividends to its
          stockholders as a result of its accumulated deficit as of December 31,
          1998.


                                          14
<PAGE>

                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

          o.  Basic Loss Per Common Share

          In February 1997, the Financial Accounting Standards Board ("FASB")
          issued Statement of Financial Accounting Standards No. 128 ("SFAS No.
          128"), "Earnings Per Share" ("EPS").  SFAS No. 128 requires dual
          presentation of basic EPS and diluted EPS on the face of all income
          statements issued after December 15, 1997 for all entities with
          complex capital structures.  Basic EPS is computed as net income
          divided by the weighted average number of common shares outstanding
          for the period.  Diluted EPS reflects the potential dilution that
          could occur from common shares issuable through stock options,
          warrants and other convertible securities.  There was no effect on EPS
          upon the adoption of the provisions of SFAS No. 128 for all years
          presented.  Loss per common share has been computed on the weighted
          average number of common and equivalent shares outstanding.  Basic and
          diluted net loss per share are approximately the same.

          q.  Reverse Stock Split and Change in Authorized Shares

          During November 1997, the Company effected a 4:1 reverse stock split.
          All share information has been adjusted to reflect the reverse stock
          split for both periods presented.  The Company, during 1997, also
          amended its articles of incorporation to change its total authorized
          shares for common stock to 40,150,000 from 20,150,000

          r.  Change in Accounting Principle

          In June 1997, the Financial Accounting Standards Board issued
          Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
          Comprehensive Income."  SFAS No. 130 establishes standards for
          reporting and display of comprehensive income and its components
          (revenues, expenses, gains, and losses) in a full set of general
          purpose consolidated financial statements.  This statement requires
          that an enterprise (a) classify items of other comprehensive income by
          their nature in a consolidated financial statement and (b) display the
          accumulated balance of other comprehensive income separately from
          retained earnings and additional paid-in capital in the equity section
          of a statement of financial position.  SFAS No. 130 is effective for
          fiscal years beginning after December 15, 1997.  The Company has
          retroactively applied the provisions of this new standard by showing
          the other comprehensive income for all years presented.

          s.  Goodwill

          In April 1998, the Company recognized goodwill of $800,000 from the
          purchase the assets of World Golf Federation, Inc. and Ball Marketing
          Co. LLC.  The Company recognizes goodwill from the excess of the
          purchase price of its acquisitions over the fair value of the net
          assets acquired.

          The Company evaluates the recoverability of goodwill and long lived 
          assets and reviews the amortization period on an annual basis.  
          Several factors are used to evaluate goodwill, including but not 
          limited to: management's plans for future operations, recent operating
          results and projected, undiscounted cash flows.  The primary method is
          projected, undiscounted cash flows.


                                          15
<PAGE>

                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued)

          t.  Reclassification

          Certain December 31, 1997 balances have been reclassified to 
          conform with the December 31, 1998 financial statement presentation.

NOTE 2 -  INVENTORIES

          Inventories consist of the following at December 31, 1998

<TABLE>
             <S>                                                   <C>
             Component parts                                       $         844,335
             Finished goods - golf clubs                                     431,678
             Finished goods - golf bags and accessories                    1,072,588
                                                                   -----------------
                                                                           2,348,601

             Less inventory reserve                                           75,000
                                                                   -----------------
             Net Inventory                                         $       2,273,601
                                                                   -----------------
                                                                   -----------------
</TABLE>

          As of December 31, 1998, the Company has made cash deposits on
          inventory to be received during 1999 totaling $497,838.

NOTE 3 -  PROPERTY AND EQUIPMENT

          Property and equipment consists of the following at December 31, 1998:

<TABLE>
             <S>                                                   <C>
             Manufacturing and tooling equipment                   $          89,252
             Office furniture and equipment                                   68,408
             Computer equipment and software                                 496,843
             Automotive equipment                                              6,942
             Leasehold improvements                                          120,588
                                                                   -----------------
                                                                             782,033
             Less accumulated depreciation                                  (316,620)
                                                                   -----------------

             Net Property and Equipment                            $         465,413
                                                                   -----------------
                                                                   -----------------
</TABLE>


NOTE 4 -  LINES OF CREDIT

          In January 1997, the Company entered into a line of credit (line)
          agreement with a bank in which the Company could borrow up to $400,000
          in connection with a letter of credit established in accordance with
          the FILA license agreement (see below).  The line bore interest at the
          bank's prime rate plus 1.5% and was collateralized by essentially all
          of the Company's assets and was guaranteed by the Chairman of the
          Board of Directors.  The line expired January 31, 1998.

          In connection with the FILA license, the Company established a letter
          of credit with an accredited bank in the amount of $400,000.  The
          letter of credit was secured by the line of credit discussed above.
          The letter of credit expired January 31, 1998.


                                          16
<PAGE>

                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 4 -  LINES OF CREDIT (Continued)


          The Company and the Company's Chairman of the Board of Directors
          jointly entered  into a loan and security agreement with a lender on
          October 29, 1997 to provide the Company the maximum aggregate
          principal amount of the lesser of $5,000,000, or 80% of the company's
          current assets.  The amount outstanding on the loan and revolving
          promissory note is adjusted upward or downward on a monthly basis,
          throughout the term of the note, based on total current assets, which
          for purposes of the agreement mean cash, accounts receivable aged less
          than 90 days, and inventory.  The revolving promissory note executed
          pursuant to this agreement bears an interest rate of 12% and expires
          December 31, 1999.  As further consideration for this loan and
          security agreement, warrants to purchase 400,000 shares of the
          Company's common stock were issued to the lender (see Note 9).
          Amounts outstanding under the agreement are collateralized by the
          Company's inventory, open orders, accounts receivable, and other
          assets of the Company.  As of December 31, 1998, the Company had
          borrowed $5,000,000 on this revolving promissory note.  The revolving
          credit line is shown net of the discount of $63,234 as discussed in
          Note 9.  The line provides for various warranties, covenants and
          restrictions and other financial and non-financial matters requiring
          compliance on a continuing basis.  Default on any warranty, covenant
          or restriction could effect the lender's commitment to lend, and if
          not waived or corrected, could accelerate the maturity of any
          borrowings outstanding under the line.  As of December 31, 1998, the
          Company was in default of certain warranties, covenants and
          restrictions, including the borrowing of funds substantially in excess
          of qualifying collateral.

NOTE 5 -  SUBSEQUENT EVENTS

          In January 1999, the Company approved a plan to grant warrants in lieu
          of cash to meet its interest payments on the Company's line-of-credit.
          The exercise price at the date of grant would be $0.345 per share,
          which represents the average closing price of the Company's common
          stock.  The number of shares offered total 1,637,669, In addition, the
          Company issued 600,000 warrants to the same entity for waiving any
          potential defaults under the terms of the line-of-credit.

          In March 1999, the Company sold 50,000 shares of its newly authorized
          Series "A" Preferred Stock for $1,000,000.  The above shares have a
          warrant attached to purchase 1,000,000 shares of common stock at $1.00
          per share.

                                          17
<PAGE>

                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 6 -  LONG-TERM DEBT

<TABLE>


          <S>                                                                   <C>
          Notes payable at December 31, 1998 consist of the following:

          Unsecured note payable to a shareholder bearing interest at
           10% per annum, all unpaid interest and principle due

           June 30, 1999.                                                       $          50,000

          Unsecured note payable to a shareholder bearing interest at
           10% per annum, all unpaid interest and principle due

           June 30, 2000.                                                                  20,000

          Unsecured note payable to a shareholder bearing interest at
           12% per annum, all unpaid interest and principle due

           January 7, 1999.                                                               450,000

          Unsecured note payable to an officer of the Company bearing
           interest at 12% per annum, all unpaid interest and principle due

           June 30, 1999.                                                                 225,000

          Unsecured note payable to an officer of the Company bearing
           interest at 12% per annum, all unpaid interest and principle

           due September 13, 1999.                                                        125,000

          Unsecured note payable to a shareholder bearing interest at
           10% per annum, all unpaid interest and principle due

           June 30, 1999.                                                                   5,000
                                                                                -----------------
                                                                                          875,000

          Less: current maturities                                                       (855,000)
                                                                                -----------------

                                                                                $          20,000
                                                                                -----------------
                                                                                -----------------
</TABLE>

          Annual maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
                                         Years Ending
                                         December 31,
                                         ------------
                                         <S>                                    <C>
                                              1999                              $         855,000
                                              2000                                         20,000
                                              2001                                         -
                                              2002                                         -
                                              2003                                         -
                                                                                -----------------

                                                                                $         875,000
                                                                                -----------------
                                                                                -----------------
</TABLE>


          Total interest expense incurred in connection with the related party
          debt was $119,292 and $35,750 for the years ended December 31, 1998 
          and 1997, respectively.


                                          18
<PAGE>

                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 7 -  EXTRAORDINARY GAINS ON FORGIVENESS OF DEBT

          In prior years, the Company entered into a royalty agreement with a
          Japanese distributor who designs clubs for Asian markets and
          distributes using the FILA name and trademark.  Royalties due to the
          Company related to such agreement are 9% on sales of bags, head covers
          and gloves designed and distributed by the Japanese distributor.  In
          fiscal 1997, the distributor released the Company from any obligation
          to repay the prepaid royalties and required no additional services
          from the Company.  The Company recorded extraordinary gain on
          forgiveness of debt in the amount of $267,723 in the 1997 statement of
          operations related thereto.

          In addition, during 1998 and 1997, certain other vendors forgave
          certain payables.  The Company recorded $-0- and $50,505 as
          extraordinary gains on forgiveness of debt for the years ended
          December 31, 1998 and 1997, respectively.

NOTE 8 -  COMMITMENTS AND CONTINGENCIES

          Operating Leases

          The Company leases its office and certain equipment under several
          non-cancelable lease agreements accounted for as operating leases
          expiring through June 30, 2003.  Real estate taxes, insurance and
          maintenance expenses are obligations of the Company.

          Minimum rental payments under non-cancelable operating leases on
          certain equipment are as follows:

<TABLE>
<CAPTION>
                           Years Ending
                           December 31,
                           ------------
                           <S>                                <C>
                                1999                          $          77,300
                                2000                                     69,850
                                2001                                     41,356
                                2002                                     16,767
                           All other years                                5,097
                                                              -----------------

                                                              $         210,365
                                                              -----------------
                                                              -----------------
</TABLE>

          Rent expense were approximately $74,000 and $98,000 for the years
          ended December 31, 1998 and 1997, respectively.  It is expected that
          expiring leases will be renewed in the ordinary course of business.


                                          19
<PAGE>

                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 8 -  COMMITMENTS AND CONTINGENCIES, (Continued)

          Royalty and Licensing Agreements

          FILA License

          In October 1996, the Company entered into an exclusive licensing
          agreement which granted the Company the right to use the FILA name and
          trademark on defined hard products for sale in the United States and
          foreign countries, excluding Asia and a non-exclusive license to use
          the FILA name and trademark on defined soft products for sale in the
          United States and foreign countries, excluding Asia.  The new license
          agreement expires December 31, 2000 and can be renewed for an
          additional five-year period provided that the Company is not in
          default of any obligation under the agreement.  The Company was in
          default with the FILA license agreement at December 31, 1998 (see Note
          4).  The FILA licensing agreement was not impacted by the change of
          control as a result of the equity transactions discussed in Notes 8
          through 10.  Royalty expense under this agreement was $500,000 and
          $400,000 for the years ended December 31, 1998 and 1997, respectively.
          There were no royalties due to FILA at December 31, 1998.

          The terms of the revised licensing agreement include the following
          minimum payments:

<TABLE>
                                <S>                          <C>
                                1999                         $         600,000
                                2000                                   700,000
                                                             -----------------

                                                             $       1,300,000
                                                             -----------------
                                                             -----------------
</TABLE>

          Percentage royalty payments are due if such amounts exceed the
          minimum royalty payments and are based on annual sales as follows:

<TABLE>
                      <S>                                    <C>
                      Sales up to $7,500,000                 6.0%
                      Sales from $7,500,001 to $15,000,000   5.5%
                      Sales over $15,000,000                 5.0%
</TABLE>

          FILA can terminate the license if the Company does not have annual
          sales of licensed product equal to or exceeding the following
          amounts of the respective years:

<TABLE>
                                <S>                          <C>
                                1998                         $       6,250,000
                                1999                                 7,500,000
                                2000                                 8,333,333
</TABLE>

          The Company must expend annually not less than five percent (5%) of
          net sales for  advertising and not less than three percent (3%) of net
          sales for promotions.


                                          20
<PAGE>

                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 8 -  COMMITMENTS AND CONTINGENCIES (Continued)

          Royalty and Licensing Agreements (Continued)

          FILA License (Continued)

          The Company shall not offer discounts on current products greater than
          twenty-five percent (25%) without first obtaining approval from FILA.
          The Company shall not sell discontinued product lines at a discount
          exceeding fifty percent (50%).

          The Company must establish an irrevocable letter of credit for the
          minimum annual royalty for each contract year which shall be renewed
          annually for the minimum annual royalty for each subsequent contract
          year.  The Company has not renewed its letter of credit that expired
          January 31, 1998 and, therefore, is not in compliance with this
          covenant as of the issuance of these consolidated financial
          statements.  The Company shall pay one fourth (1/4) of the minimum
          annual royalty to FILA fifteen (15) days prior to the end of each
          quarter.  If the Company fails to make the required payment, FILA may
          draw the required payment amount from the letter of credit on the last
          day of the quarter.

          The Company must submit a prototype of each product, as defined, for
          FILA's approval prior to the manufacture, distribution or sale of such
          product.  The Company must submit to FILA for approval the Company's
          price lists and a description of any plans to offer discounted prices
          (to eliminate overstock or otherwise).

          FILA may terminate the agreement in whole, or in part, upon the
          occurrence of certain events, including the following:

          -    Failure to perform or otherwise materially breach any of the
               obligations under the agreement and there is not remedy within 30
               days of the receipt of written notice of intent to terminate the
               agreement from FILA.

          -    Failure to make timely royalty payments, use best efforts to meet
               established product introduction dates, maintain required levels
               of product liability insurance or meet established guidelines for
               quality control.

          -    Failure to meet advertising, promotional and/or sales targets
               within a country included in the territory, as defined.

          -    Sale or disposal of substantially all of the Company's business
               or assets to a third party or transfer of control of the Company
               to a third party or the cessation of an employment relationship
               with Miles Doody.

          Further, FILA may terminate the license agreement if the Company's
          financial condition becomes unstable, as evidenced by, among other
          matters, insolvency or the Company's inability to pay its debts as
          they become due.


                                          21
<PAGE>

                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 8 -  COMMITMENTS AND CONTINGENCIES (Continued)

          Royalty and Licensing Agreements (Continued)

          Japanese Sublicense

          FILA granted an exclusive licensing agreement to Kanebo, Ltd.
          ("Kanebo") covering Japan, prior to granting the Company its licensing
          agreement.  This licensing agreement gave Kanebo an exclusive right
          and license to use FILA trademarks in connection with the manufacture
          and sale of certain items including golf bags, head covers and gloves
          sold in Japan, but not including golf clubs or balls.  Accordingly,
          the Company entered into a sublicensing agreement with Kanebo giving
          the Company a non-exclusive right to sell golf bags, head covers and
          gloves in Japan.  The sublicensing agreement was terminated as of June
          30, 1996 upon the termination of the Company's license agreement with
          FILA.  Royalty expense in connection with this sublicense was $-0- and
          $-0- for the years ended December 31, 1998 and 1997, respectively.
          Past due royalties related to the sublicense agreement totaled $-0- at
          December 31, 1998.

          Letters of Credit

          In connection with the FILA license discussed above, the Company is
          required to establish a letter of credit with an accredited Italian
          bank in the amount of $500,000, the minimum royalty for fiscal 1998.
          As of the date of this report, the Company has not established the
          required letter of credit.

          The FILA license agreement requires that a letter of credit is
          maintained annually in the amount of the minimum royalty payments
          outlined therein.  Subsequent to year end, the Company had not
          received the letter of credit for the 1999 minimum royalty payments as
          required by the FILA Agreement.  Subsequent to year end, the Company
          has met its minimum royalty payments without the established letter of
          credit.

          As discussed above, the Company is currently not in compliance with
          one of the covenants pursuant to the FILA license.  Non-compliance may
          cause the agreement to be terminated. The loss of the license would
          have a material adverse effect on the Company's operations.  These
          consolidated financial statements do not include any adjustments that
          might result from the outcome of this uncertainty.

NOTE 9 -  STOCK OPTIONS

          In July 1993, the Board of Directors adopted, and the stockholders
          approved, the 1993 Omnibus Stock Option Plan ("1993 Plan") which is
          intended to provide incentives to key employees, directors,
          consultants and others.  Pursuant to the 1993 Plan, up to 150,000
          shares may be granted on a discretionary basis by the Board of
          Directors in the form of incentive stock options for full-time
          employees and directors and non-statutory stock options for
          non-employees.

          In July 1993, incentive stock options were granted to certain officers
          and directors for the purchase of 100,000 shares of the Company's
          common stock at $16.00 per share.  Of these options, 40,000 were
          canceled in October 1996.  The remaining 60,000 options expired on
          July 12, 1998.


                                          22
<PAGE>

                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 9 -  STOCK OPTIONS (Continued)

          In January 1994, non-statutory stock options were granted outside of
          the 1993 Plan to professional golfers for the purchase of 6,375 shares
          of the Company's common stock at $13.00 per share.  Of these options,
          3,875 vested on issuance and 2,500 were to vest based on the golfers
          achieving certain performance goals (the 2,500 were canceled).  The
          remaining 3,875 options expired during the year ended December 31,
          1998.

          In June 1994, incentive stock options were granted outside of the 1993
          Plan to certain employees for the purchase of 9,625 shares of the
          Company's common stock at $10.00 per share.  Of these options, 2,500
          were canceled during fiscal 1995 and 6,250 expired during 1997.

          In October 1996, non-statutory stock options were granted outside of
          the 1993 Plan to non-employee members of the Company's Board of
          Directors and various consultants for services provided to the Company
          for the purchase of 1,700,000 shares of the Company's common stock at
          $0.50 per share.  These options expire on December 31, 2006.  These
          options were assumed to be vested as of December 31, 1996 as a result
          of the successful completion of the private placement memorandum as
          discussed in Note 10.  These options were not subject to adjustment as
          a result of the split of the Company's stock.  Because the company
          anticipated the 4:1 reverse stock split, the fair market value of the
          Company's common stock was assumed to be $0.50 per share, the trading
          price of the Company's common stock ($0.125) prior to the private
          placement discussions, times four.  The Company expensed $14,000
          during the year ended December 31, 1998 in connection with the
          issuance of these options.  During 1998, 500,000 of such options were
          exchanged for debt and services.  An additional 1,050,000 options were
          granted to non-employees in connection with the 1996 private
          placement.  Because the private placement consisted of 50% debt and
          50% equity, one-half of the 1,050,000 options were attached to the
          debt piece and an original issue discount was recorded.  Accordingly,
          the Company recorded of debt issuance costs, which was amortized in
          its entirety to interest expense during 1998.

          In October 1996, incentive stock options were granted outside of the
          1993 Plan to certain officers and key employees for the purchase of
          1,377,000 shares of the Company's common stock at $0.50 per share.  Of
          these options, 717,000 vest upon the earlier of achieving certain
          performance goals or ratably over ten years and 660,000 were assumed
          to be vested as of December 31, 1996 as a result of the successful
          completion of the private placement memorandum as discussed in Note
          10.  These options were not subject to adjustment as a result of the
          split of the Company's stock.  Because the company anticipated the 4:1
          reverse stock split, the fair market value of the Company's common
          stock was assumed to be $0.50 per share, the trading price of the
          Company's common stock ($0.125) prior to the private placement
          discussions, times four.  These options expire on December 31, 2006.
          During 1998 and 1997, 643,000 and 6,000 of such options were canceled,
          respectively.


                                          23
<PAGE>

                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 9 -  STOCK OPTIONS (Continued)

          In October 1996, the Company granted to a director an option to
          acquire 200,000 shares of common stock at an exercise price of $0.50
          per share and an option to acquire 150,000 shares of common stock at
          an exercise price of $1.00 per share in connection with the director's
          services performed in 1996.  The Company also granted to another
          director an option to acquire 1,000,000 shares of common stock at an
          exercise price of $1.00 per share in connection with the director's
          services performed in 1996.  The options vested immediately and expire
          December 31, 2006.  These options were not subject to adjustment as a
          result of the split of the Company's stock.  Because the Company
          anticipated the 4:1 reverse stock split, the fair market value of the
          Company's common stock was assumed to be $0.50 per share, the trading
          price of the Company's common stock ($0.125) prior to the private
          placement discussions, times four.

          In September 1997, the Company granted non-qualified options outside
          of the 1993 Plan to acquire 281,000 shares of common stock at $1.25
          per share to employees of the company and 18,750 shares of common
          stock at $1.25 per share to non-employees of the Company.  Of the
          employee options, 195,000 vest upon the earlier of achieving certain
          performance goals or ratably over ten years, 56,000 vested
          immediately, and 30,000 vest ratably over a three-year period.  The
          non-employee options vested immediately.  None of these options were
          subject to adjustment as a result of the split of the Company's stock.
          Because the Company anticipated the 4:1 reverse stock split, the fair
          market value of the Company's common stock was assumed to be $1.25 per
          share, the trading price of the Company's common stock ($0.3125) at
          the date of grant, times four.  The aforementioned options expire
          September 15, 2007. The Company recorded $9,375 in consulting 
          expense during 1997 as a result of the issuance of non-employee 
          options.

          In October 1997, the Company granted non-qualified options outside of
          the 1993 Plan to acquire 500,000 shares of common stock at $3.00 per
          share to employees of the company.  None of these options were subject
          to adjustment as a result of the split of the Company's stock.
          Because the Company anticipated the 4:1 reverse stock split, the fair
          market value of the Company's common stock was assumed to be $2.63 per
          share, the trading price of the Company's common stock ($0.65625) at
          the date of grant, times four.  The aforementioned options all vested
          immediately and expire October 27, 2007.  During 1998, 15,000 shares
          were exercised.

          In March 1998, the Company granted to a director non-qualified options
          to acquire 500,000 shares of common stock at $4.00 per share.  These
          option shares shall not be subject to adjustment upon a change in
          capitalization.  In October 1998, the Company also granted options to
          four officers the right for each party to acquire 25,000 shares at the
          current trading price of the stock as of October 1, 1998.

          In September 1998, the Company granted options to an individual to
          acquire 150,000 shares of common stock at $5.00 per share.  The
          options carried a vesting requirement that certain sales volume must
          be obtained by the individual during each of the next three years.

                                          24

<PAGE>

                           RENAISSANCE GOLF PRODUCTS, INC.
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 9 -  STOCK OPTIONS (Continued)

          A summary of stock option activity for 1998 and 1997 follows:

<TABLE>
<CAPTION>
                                                      1993 Plan         Outside Plan           Price
                                                    ------------        ------------       ------------
             <S>                                    <C>                 <C>                <C>
             Balance at January 1, 1997                   60,000           5,670,749       $   .50-16.0
             Granted                                        --               799,750          1.25-3.00
             Expired/canceled                               --               (12,250)         .50-10.00
             Exercised                                      --              (400,000)               .50
                                                    ------------        ------------       ------------
             Balance at December 31, 1997                 60,000           6,058,249          .50-16.00
             Granted                                        --             1,331,000          1.50-5.00
             Expired/canceled                             60,000            (427,500)         .50-16.00
             Exercised                                      --              (777,000)          .50-3.00
                                                    ------------        ------------       ------------

             Balance at December 31, 1998                   --             6,184,749       $  .50-16.00
                                                    ------------        ------------       ------------
                                                    ------------        ------------       ------------

             Exercisable at December 31, 1998               --             5,987,249       $  .50-16.00
                                                    ------------        ------------       ------------
                                                    ------------        ------------       ------------
</TABLE>

          Pro Forma Stock Option Information

          Pro forma information regarding net income (loss) is required by SFAS
          123 and has been determined as if the Company had accounted for its
          employee stock options under the fair value method pursuant to SFAS
          123, rather than the method pursuant to APB 25 as discussed herein.
          The fair value for these options was estimated at the date of grant
          using a Black-Scholes option pricing model with the following
          assumptions: stock price, as determined by the Board of Directors, of
          between $.50 and $2.63 per share; a risk-free interest rate of 6.5%;
          dividend yields of 0.0%; volatility factors of the expected market
          price of the Company's common stock of between 40.0% and 72.0%; and
          expected term of two and one-half years.

          The Black-Scholes valuation model was developed for use in estimating
          the fair value of traded options which have no vesting restrictions
          and are fully transferable.  In addition, option valuation models
          require the input of highly subjective assumptions including the
          expected stock price volatility.  Because the Company's employee stock
          options have characteristics significantly different from those of
          traded options, and because changes in the subjective input
          assumptions can materially affect the fair value estimate, in
          management's opinion, the existing models do not necessarily provide a
          reliable single measure of the fair value of its employee stock
          options.

          For purposes of pro forma disclosure, the estimated fair value of the
          options are amortized to expense over the options' vesting period.
          The Company's pro forma information follows.

<TABLE>
<CAPTION>
                                                    1998           1997
                                              --------------  --------------
              <S>                             <C>             <C>
              Net loss:
                      As reported             $   (5,167,607) $   (1,845,131)
                      Pro forma               $   (5,167,607) $   (2,459,507)

              Net loss per share:
                      As reported             $        (1.95) $        (0.65)
                      Pro forma               $        (1.95) $        (0.86)
</TABLE>


                                          25
<PAGE>

                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 10 - STOCK WARRANTS

          The Company is authorized to issue Class A warrants.  In connection
          with the offering of convertible debentures, bridge financing
          arrangements and the initial public offering completed prior to 1995,
          the Company issued warrants which expired between November 15, 1996
          and November 15, 1998.  The terms of the warrants outstanding are 
          summarized as follows:

          -    Class A warrants entitle the holder to purchase one share of
               common stock at a price of $5.50 (as adjusted) per share.  The
               warrants are exercisable for five years from the date of issuance
               and may be redeemed by the Company at $.01 per warrant if the
               closing bid price of the common stock exceeds $7.00 for 10
               consecutive trading days.   As of December 31, 1997, 852,060 (as
               adjusted) Class A warrants are outstanding which expired November
               15, 1998.  No warrants were exercised in 1998.

          During 1997, the Company granted 400,000 warrants to acquire shares of
          the Company's common stock at exercise prices ranging from $1.50 to
          $3.00 to a lender (see Note 4).  The warrants are not subject to
          adjustment as a result of the split of the Company's stock.  Because
          the Company anticipated the 4:1 reverse stock split, the fair market
          value of the Company's common stock was assumed to be $2.63 per share,
          the trading price of the Company's common stock ($0.65625) at the date
          of grant, times four.  The warrants expire December 31, 2002, are
          immediately exercisable and carry piggy-back registration rights.  The
          Company recorded an original issue discount of $137,000 as a result of
          the issuance of these warrants which will be amortized over the
          twenty-six month life of the debt.  During 1998 and 1997, 
          approximately $63,000 and $11,000, respectively, of the discount was 
          amortized to interest expense.

NOTE 11 - STOCKHOLDERS' DEFICIT

          In March 1998, the Company approved a private placement memorandum to
          sell 800,000 units.  Each unit consists of one share of common stock
          at $3.00 per share and one warrant for one additional share of common
          stock at $5.00 per share.  The offering expired on June 30, 1998.  The
          Company sold 556,000 units during the offering.


                                          26
<PAGE>

                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 12 - PROVISION FOR INCOME TAXES

          The provision for income taxes for the years ended December 31, 1998
          and 1997 consists of the following:

<TABLE>
<CAPTION>
                                            Current         Deferred         Total    
                                         --------------  --------------  --------------
<S>                                      <C>             <C>             <C>
          Year ended December 31, 1998
            U.S. Federal                 $          -    $          -    $          -
            State and local                         900             -               900
                                         --------------  --------------  --------------
                                         $          900  $          -    $          900
                                         --------------  --------------  --------------
                                         --------------  --------------  --------------

          Year ended December 31, 1997
            U.S. Federal                 $          -    $          -    $          -
            State and local                         800             -               800
                                         --------------  --------------  --------------
                                         $          800  $          -    $          800
                                         --------------  --------------  --------------
                                         --------------  --------------  --------------

          Income tax expense was $900 and $800 for each of the years ended December 31,
          1998 and 1997, respectively, and differed from the amounts computed by applying
          U.S. Federal income tax rate of 34 percent to loss from operations before 
          provision for income taxes and extraordinary item as a result of the following:
</TABLE>

<TABLE>
<CAPTION>
                                                                          1998            1997
                                                                     --------------  --------------
          <S>                                                        <C>             <C>
          Computed "expected" benefit                                $   (1,756,333) $     (735,270)
          Increase (reduction) in income taxes resulting from:
             Change in valuation allowance for deferred
               tax assets                                                 1,752,113         728,559
             Non-deductible expenses                                          3,320           2,590
             Change in deferred tax assets                                  --                4,393
             State taxes, net of benefit                                    --                  528
                                                                     --------------  --------------

                                                                     $          900  $          800
                                                                     --------------  --------------
                                                                     --------------  --------------
</TABLE>

          The tax effects of temporary differences that give rise to significant
          portions of the deferred tax assets at December 31, 1998 are presented
          below:

<TABLE>
          <S>                                                                        <C>
          Deferred tax assets:
              Net operating loss carryforwards
                  Total gross deferred tax assets                                         6,797,036
                  Less valuation allowance                                               (6,797,036)
                                                                                     --------------

                  Net deferred tax assets                                            $      -
                                                                                     --------------
                                                                                     --------------
</TABLE>


                                          27
<PAGE>

                          RENAISSANCE GOLF PRODUCTS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997


NOTE 12 - PROVISION FOR INCOME TAXES (Continued)

          The valuation allowance for deferred tax assets as of January 1, 1998
          was $5,044,923.  The net change in the total valuation allowance for
          the year ended December 31, 1998 was an increase of $1,752,113.

          At December 31, 1998, the Company had net operating loss carryforwards
          of approximately $17,043,974 available to offset future taxable
          Federal and state income.  The Company's utilization of California
          state operating loss carryforwards is unlikely due to the Company's
          move to Utah in early 1998.  The carryforward amounts expire in
          varying amounts between 1998 and 2012.

          Due to the change in ownership provisions of the Tax Reform Act of
          1986, net operating loss carryforwards for Federal income tax
          reporting purposes are subject to annual limitations.  Should a change
          in ownership occur, net operating loss carryforwards maybe limited as
          to use in future years.


                                          28


<PAGE>

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Draper, State of Utah, on the 15th day
of April 1999.

         By:/s/Steven L. Flint
         ------------------------
         Steven L. Flint, Chief Executive Officer, President

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

<TABLE>
<S>                                         <C>                                          <C>
         SIGNATURE                                   TITLE                                   DATE

/s/Steven L. Flint                          Chief Executive Officer, President          April 15, 1999
------------------------------------         Director (Principal Accounting Officer)
Steven L. Flint


/s/John B. Hewlett                          Chairman of the Board, Director             April 15, 1999
------------------------------------
John B. Hewlett

/s/Ralph W. Rasmussen                       Director                                    April 15, 1999
------------------------------------
Ralph W. Rasmussen

/s/Dennis L. Crockett                       Director                                    April 15, 1999
------------------------------------
Dennis L. Crockett

/s/Bruce H. Haglund                         Secretary, Director                         April 15, 1999
------------------------------------
Bruce H. Haglund

</TABLE>