<Page>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 31, 2001

REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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

FORM SB-2

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------

PRO ELITE, INC.

<Table>

NEW JERSEY 5190 22-3161866
(State or Other Jurisdiction (Primary Standard (I.R.S. Employer
of Incorporation or Organization) Industrial Identification Number)
Classification Code Number)
</Table>

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

100 DORIGO LANE,
SECAUCUS, NEW JERSEY 07094
(201) 601-0400
(Address and Telephone Number of Principal Executive Offices)

ROBERT POLSKY
CEO, PRESIDENT, CHAIRMAN OF THE BOARD
100 DORIGO LANE,
SECAUCUS, NEW JERSEY 07094
(201) 601-0400
(Name, Address and Telephone Number for Agent for Service)
------------------------------

Copies to:

JEFFREY A. RINDE, ESQ.
BONDY & SCHLOSS LLP
6 EAST 43RD STREET, 25TH FLOOR
NEW YORK, NEW YORK 10017
TELEPHONE (212) 661-3535
FACSIMILE (212) 972-1677

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /

If delivery of the Prospectus is expected to be made pursuant to Rule 434,
check the following box: / /

CALCULATION OF REGISTRATION FEE

<Table>
<Caption>
PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE (1) PRICE (1) FEE (2)

Common Stock, par value $0.0001 per share
(3)........................................... 11,000,000 $0.048 $ 528,000
Common Stock, par value $0.0001 per share(4)... 1,450,000 $ 0.30 435,000
Common Stock, par value $0.0001 per share(5)... 200,000 $ 1.25 250,000
Common Stock, par value $0.0001 per share(6)... 200,000 $ 2.50 500,000
Common Stock, par value $0.0001 per share(7)... 12,000,000 $0.048 576,000
TOTAL........................................ 24,850,000 $2,289,000 $572.25
</Table>

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.

(2) The total amount of the Registration Fee has been paid in connection with
the filing of the Registration Statement.

(3) Represent 10,000,000 shares issuable upon conversion of a 10% Convertible
Promissory Note at a conversion price of $.048 per share and 1,000,000 as
interest thereon for the one year term of the note.

(4) Represent shares of common stock held by selling shareholders.

(5) Represent 180,000 shares underlying Class A Common Stock Purchase Warrants
exercisable until January 31, 2002 and 20,000 shares underlying Class C
Common Stock Purchase Warrants exercisable until May 31, 2002, each at a
price of $1.25 per share.

(6) Represent 180,000 shares underlying Class B Common Stock Purchase Warrants
exercisable until January 31, 2002 and 20,000 shares underlying Class D
Common Stock Purchase Warrants exercisable until May 31, 2002, each at a
price of $2.50 per share.

(7) Represent shares underlying Series A Convertible Preferred Stock, each of
which is convertible into ten shares of Pro Elite's common stock.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8 (A), MAY DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Page>
SUBJECT TO COMPLETION, DATED AUGUST 31, 2001

PROSPECTUS

PRO ELITE, INC.
24,850,000 SHARES

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

This prospectus covers up to 24,850,000 shares of the common stock, par
value $.0001 per share of Pro Elite, Inc., a New Jersey corporation, which may
be sold by certain shareholders named in this prospectus.

The shares of common stock offered by this prospectus may be sold by the
selling shareholders from time to time in transactions on the open market or in
negotiated transactions, in each case at prices satisfactory to them. Pro Elite
will bear all of the expenses of this offering but will receive none of the
proceeds from any shares sold.

LOOK CAREFULLY AT THE RISK FACTORS BEGINNING ON PAGE 7 OF THIS PROSPECTUS.

THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY
PROSPECTUS IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

NEITHER THE SEC NOR ANY OTHER REGULATORY BODY HAS APPROVED THESE SHARES OR
DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. IT IS ILLEGAL FOR
ANYONE TO TELL YOU OTHERWISE.

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

The date of this prospectus is , 2001
<Page>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY HIGHLIGHTS INFORMATION THAT WE PRESENT MORE FULLY
ELSEWHERE IN THIS PROSPECTUS. YOU SHOULD READ THIS ENTIRE PROSPECTUS CAREFULLY.

OUR BUSINESS

Pro Elite, Inc. was incorporated in New Jersey in 1992. We are in the
business of marketing premium "branded apparel" which in this context means
apparel, such as shirts, hats, and sweaters, that have had a sports or corporate
logo, name and/or slogan applied by means of embroidering to the apparel. We
deal only in premium quality apparel and embroidering as opposed to mass
merchandised apparel exhibiting printed sports logos and names. We engage
various contractors for the supply of apparel and then contract with other
companies to apply specified embroidered logos, names and/or slogans to the
apparel. Once the finished goods are delivered, we then distributes the finished
product through a variety of distribution channels.

OUR EXECUTIVE OFFICES

Our executive offices are located at 100 Dorigo Lane, Secaucus, New Jersey
07094. Our telephone number is (201) 601-0400.

THE OFFERING

<Table>

Description of shares........................ Common stock par value $.0001 per share.

Common stock outstanding before this
offering................................... 3,036,377 shares

Common stock offered by selling
securityholders............................ 24,850,000 shares

Common stock outstanding after conversion or
exercise of preferred stock, notes or
warrants held by selling securityholders... 25,436,377 shares

Proceeds..................................... Because we are conducting the offering on
behalf of selling securityholders, they will
receive all of the proceeds from the sale of
their shares. To the extent that they convert
outstanding notes into shares of our common
stock or exercise their warrants to purchase
such shares, Pro Elite will receive the
amount of the forgiven note principal or the
exercise price of any such warrants. We plan
to use these amounts for general working
capital. Although we will not receive the
proceeds from the sale of shares in this
offering, we will pay all of the expenses of
the offering, including, without limitation,
professional fees and printing expenses.

Risk Factors................................. An investment in our common stock involves a
high degree of risk, and should be considered
only by persons who can afford the loss of
their entire investment. See "Risk Factors."
</Table>

We are registering the common stock covered by this prospectus in order to
fulfill obligations we have under various agreements with the selling
securityholders.

2
<Page>
11,000,000 of the shares being offered underlie an Amended and Restated 10%
Convertible Promissory Note, dated as of April 13, 2001, in the original
principal amount of $450,000. The note is convertible at a rate of $.045 per
share. 10,000,000 of these shares are issuable upon conversion of the original
note principal, and 1,000,000 represent one year's interest on the note. An
additional 500,000 of the shares being offered were issued to the holder of this
note in exchange for such holder's agreement to subordinate up to $50,000 of his
note principal to a new lender.

180,000 of the shares being offered underlie Class A Common Stock Purchase
Warrants which were issued to investors in a private offering commencing
January 30, 2001. Each of these warrants entitles the holder to purchase one
share of our common stock at a price of $1.25 per share until January 31, 2002.
180,000 of the shares being offered underlie Class B Common Stock Purchase
Warrants, which were also issued in the January 30, 2001 private offering. Each
Class B warrant entitles the holder to purchase one share of our common stock at
$2.50 per share until January 31, 2002.

20,000 of the shares being offered underlie Class C Common Stock Purchase
Warrants which were issued to investors in a private offering commencing
May 31, 2001. Each of these warrants entitles the holder to purchase one share
of our common stock at a price of $1.25 per share until May 31, 2002. 20,000 of
the shares being offered underlie Class D Common Stock Purchase Warrants, which
were also issued in the January 30, 2001 private offering. Each Class D warrant
entitles the holder to purchase one share of our common stock at $2.50 per share
until May 31, 2002.

12,000,000 of the shares being offered underlie 1,200,000 shares of our
preferred stock, $.0001 par value, which are held by two of our executive
officer/directors.

The remaining 1,450,000 shares being offered are held directly by selling
shareholders and were issued in private offerings.

3
<Page>
SUMMARY HISTORICAL FINANCIAL DATA

The following table presents summary historical financial information for
the three months ended May 31, 2001 and the fiscal years ended February 28, 2001
and February 29, 2000, and certain balance sheet information. The data was taken
from our financial statements appearing elsewhere in this prospectus, and you
should read the actual financial statements for a complete presentation of this
information.

<Table>
<Caption>
FOR THE THREE FOR THE YEAR ENDED
MONTHS ---------------------------
ENDED FEBRUARY 28, FEBRUARY 29,
MAY 31, 2001 2001 2000
------------- ------------ ------------
(UNAUDITED)

BALANCE SHEET DATA
Current assets........................................... 544,590 642,688
Total assets............................................. 630,511 728,655
Current liabilities...................................... 703,402 1,247,597
Long term liabilities.................................... 81,425 310,757
Stockholders' deficiency................................. (153,416) (829,699)
Working Capital (deficit)................................ (158,812) (604,909)
</Table>

4
<Page>
RISK FACTORS

You should carefully consider the following risk factors before purchasing
our common stock. If any of the following risks actually occurs, our business,
financial condition and operating results could be adversely affected. If that
happens, the trading price of our common stock could decline, and you could lose
part or all of your investment.

WE HAVE INCURRED SIGNIFICANT OPERATING LOSSES AND HAVE AN ACCUMULATED DEFICIT.

For the fiscal years ended February 28, 2001 and February 29, 2000, we
incurred net losses of $714,644 and $688,131, respectively. Although, we had net
income of $495,383 for the three months ended May 31, 2001, income for that
period includes $683,439 from nonrecurring gains. In addition, we had a total
stockholders deficiency of $154,316 and an accumulated deficit of $1,579,671 at
May 31, 2001.

OUR AUDITORS HAVE EXPRESSED DOUBT ABOUT OUR VIABILITY AS GOING CONCERN.

Pro Elite's independent auditors have included an explanatory paragraph in
their report on our financial statements as of and for the year ended
February 29, 2001 which states that our operations have generated recurring
losses and we had working capital and stockholders' deficiencies as of
February 28, 2001. Such matters raise substantial doubt about our ability to
continue as a going concern. See "Financial Statements and Report of Independent
Public Accountants" included elsewhere in this prospectus.

WE WILL REQUIRE ADDITIONAL FINANCING IN ORDER TO GROW

If we do not have sufficient cash resources, our growth could be limited
unless we are able to obtain additional capital through additional debt or
equity financing. There can be no assurance that we will be able to obtain such
financing if and when it is needed. As a result, we may be unable to implement
or manage our expansion strategy, which may have an adverse effect on our
business or future prospects.

WE CANNOT BE CERTAIN OF PRO ELITE'S ABILITY TO IMPLEMENT ITS GROWTH STRATEGY

As part of our growth strategy, Pro Elite seeks to develop existing
merchandise categories and increase distribution. We cannot be certain that
these strategies will be successful. Our success depends on various factors,
including strength of Pro Elite's brand name, competitive conditions, our
ability to manage increased sales and expansion, the availability of desirable
locations and the negotiation of terms with retailers.

OUR INDUSTRY IS HIGHLY COMPETITIVE

The market for branded apparel is highly competitive. Within each of our
geographic markets, we face significant competition from global and regional
branded apparel companies, as well as retailers that market apparel under their
own labels. These and other competitors pose significant challenges to our
potential market share in our major U.S. markets and make it more difficult to
make gains in newer markets. Pro Elite also competes with other apparel
companies for the production capacity of independent manufacturers that produce
our apparel. Many of our competitors are significantly larger and have
substantially greater financial, distribution, marketing and other resources and
have achieved greater recognition for their brand names for product lines or
certain products than Pro Elite. Increased competition by existing and future
competitors could result in reductions in display areas in retail locations,
reductions in sales or in prices of our products.

5
<Page>
WE DEPEND ON INDEPENDENT MANUFACTURERS

Our products are produced by various independent manufacturers. The
inability of a manufacturer to ship orders of Pro Elite's products in a timely
manner or to meet our quality standards could cause us to miss the delivery
requirements of our customers for those items, which could result in
cancellation of orders, refusal to accept deliveries or a reduction in purchase
prices, any of which could have a material adverse effect on our business.
Although Pro Elite enters into a number of purchase order commitments each
season, we do not have long-term contracts with any manufacturer. None of the
manufacturers used by Pro Elite produces our products exclusively, and we must
compete with other apparel companies for manufacturers' production capacity.

Although our internal and vendor operating guidelines promote ethical
business practices, and our sourcing personnel periodically visit and monitor
the operations of our independent manufacturers, we do not control these vendors
or their labor practices. The violation of labor or other laws by an independent
manufacturer of Pro Elite, or their divergence from ethical labor practices,
could result in adverse publicity for Pro Elite and could have a material
adverse effect on our business.

PRO ELITE DEPENDS ON KEY SUPPLIERS

Certain of the specialty fabrics used by Pro Elite and manufactured to our
custom specification may be available, in the short-term, from only one or a
very limited number of sources. While Pro Elite believes we could identify and
qualify additional factories to produce these materials, the unavailability of
such manufacturers could have a material adverse effect on our business.

PRO ELITE ENGAGES IN ADVANCE PURCHASES OF PRODUCTS

To minimize purchasing costs, the time necessary to fill customer orders and
the risk of non-delivery, we place orders for our products with its
manufacturers prior to the time we have received all of its customers' orders
and maintains an inventory of certain products that we anticipate will be in
greater demand. There is no assurance, however, that we will be able to sell the
products it has ordered from manufacturers or that it has in its inventory.
Customers may cancel orders 45 days prior to the date of the shipment of the
products. Inventory levels in excess of customer demand may result in inventory
write-downs and the sale of excess inventory at discounted prices, which could
have a material adverse effect on our business.

PRO ELITE DEPENDS ON THE COLLECTIBILITY OF RECEIVABLES

We extend credit to our customers based on an assessment of a customer's
financial circumstances, generally without requiring collateral. To assist in
the scheduling of production and the shipping of seasonal products, we offer
customers discounts for placing pre-season orders and extended payment terms for
taking delivery before the peak shipping season. These extended payment terms
increase our exposure to the risk of uncollectible receivables. Financial
difficulties of customers could have a material adverse effect on our business.

WE DEPEND ON PROPRIETARY RIGHTS

Pro Elite uses trademarks, some of which are registered, and licenses and
distributes trademarked items from third parties. We believe these registered
and common law trademarks have significant value and are important to our
ability to create and sustain demand for our products. There is no assurance
that these trademarks do not or will not violate the proprietary rights of
others, that they would be upheld if challenged or that we would, in that event,
not be prevented from using these trademarks any of which could have a material
adverse effect on our business. We could incur substantial costs in legal
actions relating to our use of intellectual property or the use of our

6
<Page>
intellectual property rights by others, which, even if successful, could have a
material adverse effect on our business.

EFFECTS OF WEATHER COULD INFLUENCE DEMAND FOR OUR OUTERWEAR

Sales of our outerwear are dependent in part on the weather and may decline
in years in which weather conditions do not favor the use of our outerwear. For
example, we believe unseasonably warm weather in the northern United States
would cause customers to delay, and in some cases reduce or cancel, orders for
our outerwear, which could have an adverse effect on our net sales. Sustained
periods of unseasonably warm weather could have a material adverse effect on our
business.

WE DEPEND UPON KEY PERSONNEL FOR FUTURE SUCCESS

Our future success will depend to a large extent on the continued
contributions of Robert Polsky, our Chairman and Chief Executive Officer, and
Michael Polsky, our President and Secretary. In addition, while each of these
officers has signed an employment agreement with Pro Elite, the existence of
such an agreement does not assure us of their continued services. Our future
success and plans for growth also depend on our ability to attract, train and
retain personnel in all areas of our business. The loss of the services of
either of Messrs. Polsky or one or more of our other key personnel, or the
inability of Pro Elite to continue to attract qualified personnel, could have a
material adverse effect on our business, financial condition and results of
operations.

SEASONAL FLUCTUATIONS AND ECONOMIC CYCLICALITY COULD AFFECT OUR OPERATING
RESULTS

Our results of operations have fluctuated and may continue to fluctuate
significantly from period to period. Our products are marketed on a seasonal
basis. This seasonality, along with other factors that are beyond our control,
including general economic conditions, changes in consumer behavior and weather
conditions, could adversely affect Pro Elite and cause our results of operations
to fluctuate. Results of operations in any period should not be considered
indicative of the results to be expected for any future period. The sale of Pro
Elite's products is subject to substantial cyclical fluctuation. Sales tend to
decline in periods of recession or uncertainty regarding future economic
prospects that affect consumer spending, particularly on discretionary items.
This cyclicality and any related fluctuation in consumer demand could have a
material adverse effect on our results of operations and financial condition.

WE DEPEND ON CONSUMER PREFERENCES

Any change in consumer preferences or consumer interest in our products
could have a material adverse effect on our business. In addition, although we
believe our products have not been significantly affected by past fashion
trends, changes in fashion trends could have a greater impact as we expand our
product offerings. Furthermore, decisions about product designs often are made
in advance of consumer acceptance. Although we attempt to manage our inventory
risk through early commitments by retailers, production orders must generally be
placed with manufacturers before all of a season's orders are received by us.
Failure to anticipate and respond to changes in consumer preferences and demands
could lead to, among other things, lower sales, excess inventories and lower
margins, which could have a material adverse effect on our business.

WE HAVE NEVER DECLARED OR PAID CASH DIVIDENDS ON OUR COMMON STOCK

We currently intend to retain future earnings in its business and does not
intend to pay any cash dividends on shares of its Common Stock in the
foreseeable future. Furthermore, certain of our credit facilities prevent us
from declaring or paying any dividends on its capital stock without the prior
written consent.

7
<Page>
THERE IS ONLY A LIMITED PUBLIC MARKET FOR OUR SHARES

The shares of our common stock are publicly traded, but their market is
limited. We cannot be certain that this market can be sustained. Our shares have
been delisted from the OTC Bulletin Board because it is not a reporting company
under the Securities Exchange Act of 1934. Pro Elite does intend to become a
reporting company in order for the trading of its common stock to resume on the
OTC Bulletin Board. However, if we cannot maintain a market for our common
stock, an investor runs the risk of having to hold the Shares underlying the
Units indefinitely.

CONTROL BY PRINCIPAL SHAREHOLDERS

Currently, Robert Polsky, the Chief Executive Officer and Michael Polsky,
the President, beneficially own a substantial percentage of the outstanding
Common Stock. In addition, after giving effect to the issuance to
Messrs. Polsky of the 1,200,000 shares in the aggregate of our preferred stock
as of the date of the offering, they will have authority to cast ten votes for
each preferred share held in any action taken by the common stockholders either
by consent or at a meeting. As a result, acting together they will be able to
control all matters requiring approval by the shareholders of Pro Elite,
including the election of directors and the amendment of our articles of
incorporation, without the cooperation of other shareholders.

SHARES ELIGIBLE FOR FUTURE SALE

Sales of a substantial number of shares of the Common Stock in the public
market, or the prospect of such sales, could adversely affect the market price
of the Common Stock and our ability to raise capital in the future in the equity
markets.

POTENTIAL ISSUANCE OF PREFERRED STOCK

Our Certificate of Incorporation, as amended, permits the board of directors
to designate and issue up to 12,000,000 shares of preferred stock without
additional action by the Company's shareholders. Only 1,200,000 such shares are
currently issued and outstanding.

THIS DOCUMENT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE ASSUMPTIONS BY US
AND ARE UNCERTAIN.

Although we believe that the assumptions underlying the forward-looking
statements contained herein are reasonable, any of the assumptions could be
inaccurate, and therefore, there can be no assurance that the forward-looking
statements included herein will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as a
representation by us or any other person that our objectives and plans will be
achieved.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company is seeking to re-establish its listing on the OTC Bulletin
Board, which now requires all listed companies to be registered with the SEC
under Section 13 or 15(d) of the Securities Exchange Act of 1934 and to be
current in its required filings once so registered. Our common stock currently
trades on the over-the-counter "pink sheets" under the symbol PETE.

The table below sets forth the quarterly high and low bid prices for the
Company's Common Stock for each calendar quarter during the period from
March 1, 1999 through February 28, 2001. These

8
<Page>
prices are from the OTC Bulletin Board for the period March 1, 1999 through
March 9, 2000 thereafter the prices are as quoted in the Pink Sheets:

<Table>
<Caption>
1999 2000 2001
------------------- ------------------- -------------------
QUARTER HIGH LOW HIGH LOW HIGH LOW
- ------- -------- -------- -------- -------- -------- --------

1st.................. $1.125 $0.625 $ 0.50 $0.125 $0.1875 $0.03

2nd.................. $0.812 $0.625 $0.125 $0.125 $ 0.375 $0.22

3rd.................. $0.593 $0.343 $0.125 $0.125 $ 0.375 $0.16

4th.................. $0.500 $0.160 $0.187 $0.125 $ 2.00 $0.20
</Table>

The last reported sale price of our common stock as of August 7, 2001 was
$0.30 per share, as reported by Pink Sheets.com. The prices represented above
are bid and ask prices, which represent prices between broker-dealers, do not
include retain mark-ups, mark-downs or any commissions to broker-dealers and may
not reflect prices in actual transactions. Effective January 13, 2001, we
effected a 1:6 reverse split of our common stock. The prices quoted above for
periods prior to that date do not give effect to the reverse split. As of
August 30, Pro Elite had approximately 46 holders of record.

We have never paid cash dividends and do not intend to pay any cash
dividends with respect to our common stock in the foreseeable future. We intend
to retain any earnings for use in the operation of our business. Our board of
directors will determine dividend policy in the future based upon, among other
things, our results of operations, financial condition, contractual restrictions
and other factors deemed relevant at the time. We intend to retain appropriate
levels of our earnings, if any, to support our business activities.

9
<Page>
CAPITALIZATION

The following table sets forth our capitalization as of May 31, 2001. The
table should be read in conjunction with our consolidated financial statements
and related notes appearing elsewhere in this prospectus.

<Table>
<Caption>
MAY 31, 2001
------------

Short term debt............................................. $ 472,778 (1)
-----------
Long term debt.............................................. 81,425
-----------
Stockholders' deficiency
Series A Preferred stock, par value $.0001 per share;
authorized--12,000,000 shares; issued and
outstanding--1,200,000 shares........................... 120
Common stock, par value $.0001 per share;
authorized--20,000,000 shares; issued and
outstanding--2,536,377 shares........................... 253
Additional paid-in capital.................................. 2,000,982
Subscription receivable for 1,200,000 shares of Series A
Preferred Stock........................................... (576,000)
Accumulated deficit......................................... (1,579,671)
-----------
Total stockholders' deficiency........................ (154,316)
-----------
Total capitalization.................................. $ 399,887
===========
</Table>

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

(1) Excludes accounts payable and accrued expenses of $230,624.

10
<Page>
SELECTED FINANCIAL DATA

The following selected financial data has been derived from the financial
statements of Pro Elite as of and for the three months ended May 31, 2001 and
for the years ended February 28, 2001 and February 29, 2000. The following
selected financial data should be read in conjunction with and are qualified in
their entirety by Pro Elite's audited and unaudited Financial Statements and the
notes thereto as well as "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere in this prospectus.

<Table>
<Caption>
FOR THE THREE FOR THE YEAR ENDED
MONTHS ---------------------------
ENDED FEBRUARY 28, FEBRUARY 29,
MAY 31, 2001 2001 2000
------------- ------------ ------------
(UNAUDITED)

OPERATING DATA
Sales.................................................... $ 196,540 $1,250,112 $1,668,680
Cost of Sales............................................ 140,797 928,552 1,361,318
Selling, general and administrative expenses............. 234,554 972,722 969,214
Net Income (loss)........................................ 495,383(1) (714,644) (688,131)
Basic net Income (loss) per common share outstanding..... $ 0.29(2) ($ 1.25) (1.38)(3)
Weighted average number of shares of common stock
outstanding............................................ 1,727,562 572,298 497,355
BALANCE SHEET DATA
Current assets........................................... 544,590 642,688
Total assets............................................. 630,511 728,655
Current liabilities...................................... 703,402 1,247,597
Long term liabilities.................................... 81,425 310,757
Stockholders' deficiency................................. (153,416) (829,699)
Working Capital (deficit)................................ (158,812) (604,909)
</Table>

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

(1) Includes $621,685 and $61,754 of income from litigation settlement and gain
on extinguishment of debt, respectively.

(2) Includes $.04 per shares applicable to extraordinary gain.

(3) Includes $.08 per share applicable to extraordinary gain.

11
<Page>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION

GENERAL

Our business is the marketing of branded apparel. The two primary
distribution channels we have developed are (1) the sale of sports branded
apparel through a license with Collegiate Licensing, and (2) the sale of
corporate branded apparel through contacts with individual companies. In keeping
with our corporate strategy we seek to develop new sports licenses and to
implement new product presentations for corporate branded apparel.

We are investigating branding licenses with additional sports organizations
and intend to seek licenses with such sports associations where research
indicates that a market for branded apparel exists. As we identify specific
potential markets for sports branded apparel, we intend to seek out new
licenses. For those licenses that do not perform we plan either to terminate the
licenses or allow them to expire. Pro Elite's new marketing strategies for
corporate apparel will continue to focus on providing our corporate clients with
appropriate casual wear suitable for today's corporate casual look, in addition
to casual wear that will carry the client's name into corporate sponsored
extracurricular activities such as golf tournaments. However, there can be no
assurance that our corporate strategies can be successfully executed or that
increased revenues will result from these strategies. Consumer tastes and
preferences may not be attracted to Pro Elite's licensed brands, and our
corporate branding strategy may not result in improved sales.

RESULTS OF OPERATIONS

As of March 31, 2001, our license agreement with National Football League
Properties (NFLP) expired. This license accounted for a substantial portion of
our sales during fiscal 2000 and 2001. As part of a litigation settlement with
NFLP, we agreed to liquidate our NFL branded merchandise by June 30, 2001. In
order to do so, we had to sharply reduce our sale prices for this merchandise.
This affected our sales, costs of sales and net income (loss) for fiscal 2001
and for the three months ended May 31, 2001.

THREE MONTHS ENDED MAY 31, 2001 COMPARED WITH THREE MONTHS ENDED MAY 31, 2000

Sales increased $2,533 (1%) to $196,540 for the three months ended May 31,
2001 from $194,007 for the three months ended May 31, 2000. This increase
resulted from an increase in our corporate logo business for which we added
additional sales force. The increase was partially offset by reduced pricing on
NFL branded sportswear in our effort to liquidate the line prior to the deadline
imposed by the litigation settlement.

Cost of sales increased $55,198 (64%) to $140,797 for the three months ended
May 31, 2001 from $85,599 for the three months ended May 31, 2000. This
disproportionately large increase in cost of sales, as compared with the (1%)
increase in sales, resulted from our need to close-out our inventory of NFL
merchandise prior to the deadline under our settlement with them.

Selling, general and administrative expenses decreased $11,914 (5%) to
$234,554 for the three months ended May 31, 2001 from $246,468 in the three
months ended May 31, 2000. The decrease in operating expenses resulted from a
reduction in the percentage commission paid to our national sales force.

Interest expense declined $6,005 (39%) to $9,245 for the three months ended
May 31, 2001 from $15,250 for the three months ended May 31, 2000. The decrease
resulted from the discontinuation of our financing arrangement with our primary
lender.

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We had net income of $495,383 for the three months ended May 31, 2001 as
compared to a net loss of $153,310 for the three months ended May 31, 2000.
However, in addition, we had (i) a gain on the litigation settlement with the
NFLP of $621,685 (see Note 11 to our Audited Financial Statements) and (ii) an
extraordinary gain of $61,754 from the extinguishment of loan debt which
contributed to our net income.

YEAR ENDED FEBRUARY 28, 2001 COMPARED WITH YEAR ENDED FEBRUARY 29, 2000

Sales declined $418,568 (25%) to $1,250,112 for the year ended February 28,
2001 from $1,668,680 in the year ended February 29, 2000. This decrease resulted
from the loss of our NFL license and the resulting decline in sales prices on
NFL branded apparel. An additional factor resulting in reduced sales was a shift
in consumer taste from sports branded apparel to designer or equipment branded
apparel such as "Nike", "No Fear" and "Tommy Hilfiger".

Cost of sales declined $432,766 (32%) to $928,552 for the year ended
February 28, 2001 from $1,361,318 in the year ended February 29, 2000. This
corresponded to, and resulted from, the decline in sales.

Selling, general and administrative expenses increased $3,508 (0.4%) to
$972,722 for the year ended February 28, 2001 from $969,214 in the year ended
February 29, 2000. The relatively insignificant increase in operating expenses
resulted mainly from an increase in legal and accounting fees.

Interest expense declined $1,297 (2%) to $63,482 for the year ended
February 28, 2001 from $64,779 for the year ended February 29, 2000. The
decrease resulted from the general decline in our business which resulted in
reduced borrowing against receivables and inventory.

As a result of the foregoing factors, we experienced a net loss of $714,644
for the year ended February 28, 2001 as compared to a net loss of $688,131 for
the year ended February 29, 2000. Excluding the extraordinary gain, our net
operating loss was $726,631 in the year ended February 29, 2000.

LIQUIDITY AND CAPITAL RESOURCES

We had a deficit in working capital of $158,812 and a cash balance of
$17,370 at May 31, 2001. Net cash used for our operating activities during the
three months ended May 31, 2001 was $58,547. Our working capital deficit for the
year ended February 28, 2001 was $604,909. Net cash used for our operating
activities for that year was $284,331.

Our independent auditors have included an explanatory paragraph in their
report on our financial statements as of and for the year ended February 28,
2001 which states that our operations have generated recurring losses and we had
working capital and stockholders' deficiencies as of February 28, 2001. Such
matters raise substantial doubt about our ability to continue as a going
concern.

In April of 2000 we sold 250,000 shares of our common stock for a total
aggregate consideration of $100,000, or $0.40 per share. We sold an additional
100,000 shares of common stock for an aggregate consideration of $25,000, or
$0.25 per share in July of 2000. Since April of 2000 to date the Company issued
183,990 shares of Common Stock having a fair market value of $60,355 as
compensation for services provided by various vendors, consultants, and
attorneys. The number of shares stated does not give effect to a 1:6 reverse
split of our common stock effective January 13, 2001.

On April 13, 2001, we issued an Amended and Restated 10% Convertible
Promissory Note in the original principal amount of $450,000. $255,000 of the
proceeds were used to make full payment in settlement of a litigation with
Connecticut Bank of Commerce, formerly our primary lender.

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In August 2001, we received $50,000 in funding on an additional convertible
promissory note from another lender. Our existing lender agreed to subordinate
up to $50,000 of his loan to the new lender. We have applied the proceeds of the
loan to additional inventory and working capital.

Commencing January 31, 2001, we issued 180,000 units at $0.50 per unit in a
private placement pursuant to Rule 506 of Regulation D to accredited investors
only. Each unit consisted of one share of the Company's common stock, one
Class A Common Stock Purchase Warrant to purchase one share of our common stock
at a price of $1.25 per share until January 31, 2002 and one Class B Common
Stock Purchase Warrant to purchase one share of the Company's common stock
exercisable at $2.50 per share until January 31, 2002.

In April 2001, we issued an additional 750,000 shares of common stock to a
single investor at a price of $.14 per share in a private sale.

On May 31, 2001, the Company issued 20,000 units at $0.50 per unit in a
private placement pursuant to Rule 506 of Regulation D to one accredited
investor only. Each unit consisted of one share of the Company's common stock,
one Class C Common Stock Purchase Warrant to purchase one share of our common
stock at a price of $1.25 per share until May 31, 2002 and one Class D Common
Stock Purchase Warrant to purchase one share of the Company's common stock
exercisable at $2.50 per share until May 31, 2002.

We believe our current operations can sustain us through at least May 31,
2002. In order to achieve our sales and marketing goals, we will need
approximately $1,000,000 in additional financing. While there are no written
commitments for this financing we have verbal commitments from investors to
provide us with the necessary financing.

In order to implement our long term corporate strategy, we will need
additional working capital to fund inventory necessary to support our sales
initiatives. In order to meet our liquidity needs, we will have to engage in
additional financing either by taking on additional debt or issuing additional
equity. We believe that if we are able to re-list our common stock on the OTC
Bulletin Board, this will significantly enhance our ability to obtain funding
through the issuance of equity securities. We cannot be certain that we will
obtain funds necessary to support our corporate strategy or that if funded, that
strategy will succeed. In the event funds are not available, we intend to focus
on increasing sales for self-funding and implementing our strategic plan on a
reduced scale. No assurance can be given that we will be able to achieve
profitability through increased sales or self-funding our strategy.

OUR STRATEGY

In response to the sales decline our strategy is to increase sales by
focusing on making up for lost marketing opportunities with NFL branded apparel,
bringing in new licensed brands and expanding our branded corporate apparel
market. This strategy is contingent on a number of factors that may not occur
and no assurance can be made that sales in the next fiscal year will improve.
Factors that could adversely affect sales would be a lack of customer acceptance
of our branded apparel and a lack of working capital to secure the necessary
finished product to make sales. See "Liquidity and Capital Resources."

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BUSINESS

INTRODUCTION

Pro Elite was founded in 1992 by Bob and Michael Polsky. Both had experience
in the apparel business and in the "branded apparel" business (described below)
and sought to develop their own business. Pro Elite is a New Jersey corporation
with its offices located at 100 Dorigo Lane, Secaucus, New Jersey 07094. We may
be reached by telephone at (201) 601 0400.

Pro Elite is in the business of marketing premium "branded apparel" which in
this context means apparel, such as shirts, hats, and sweaters, that have had a
sports or corporate logo, name and/or slogan applied by means of embroidering to
the apparel. We deal only in premium quality apparel and embroidering as opposed
to mass merchandised apparel exhibiting printed sports logos and names. We
engage various contractors for the supply of apparel and then contract with
other companies to apply specified embroidered logos, names and/or slogans to
the apparel. Once the finished goods are delivered, we then distributes the
finished product through a variety of means further discussed below.

We have two primary markets in which we operate for branded apparel. The
first market consists of the sale and distribution of apparel exhibiting
licensed sports logos, names and/or slogans. The second market is the sale and
distribution of apparel exhibiting corporate logos, names and/or slogans to
specific corporate customers at their request.

LICENSED PRODUCTS

In the licensed sports logos market, we work with the Collegiate Licensing
Company (CLC) to market apparel exhibiting the logos and names of collegiate
teams associated with the CLC. As discussed further below in the Trademarks and
Licensing section, Pro Elite contracts with CLC on a periodic basis for the
production of collegiate branded apparel. The apparel exhibiting collegiate
logos and names is directed at fans of those sports teams interested in premium
quality branded apparel. Given the specialty market for this type of quality
branded apparel, we concentrate on distribution through stadium shops,
department stores, specialty shops, and other retailers such as the QVC
television-shopping channel. Pro Elite generates approximately 5% of its
revenues from the sale of CLC logo products.

The NFLP license was a significant source of revenue for Pro Elite. However,
we propose to increase business through the acquisition of additional sports
franchise licenses. Pro Elite is actively seeking licenses with the National
Basketball Association, and the World Wrestling Federation. However, there can
be no assurance that we can obtain licenses with these organizations, or that
licenses with these entities will result in significant revenues to Pro Elite.

CORPORATE PRODUCTS

We employ the same product development process in the corporate logos market
as the licensed products market. That is, the contracting for quality pieces of
apparel that are then provided to a different contractor for the application of
embroidered logos, names, and slogans. However, our marketing and distribution
of corporate branded apparel is distinctly different from that of our licensed
products market. Our strategy in the corporate branded apparel market is not
directed to retail distribution for the general public. Rather, it is directed
at corporations seeking to provide employees with appropriate corporate casual
apparel and/or promotional branded apparel for the corporation to either sell or
give away to the public. Consequently, licenses for the marketing of corporate
apparel are not needed.

We believe that the corporate branded apparel market is underserved and
growing due to the advent of casual Fridays and the overall move toward causal
dress in the workplace. As companies struggle to define appropriate dress codes
for both the back office and those offices dealing with the

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public, many businesses are finding that making corporate branded apparel
available to employees is the answer. Additionally, companies are discovering
that branded apparel is an effective way to engage in self-promotion and
advertising through Company sponsored catalogs, made available to employees and
customers, and giveaways connected with sponsored media events such as golf
tournaments and concerts. Regardless of the client's corporate purpose, Pro
Elite seeks to be the preferred provider of premium quality corporate branded
apparel.

OTHER MARKETS

Pro Elite has entered two additional markets related to our core business of
branded apparel. We have recently developed a new embroidered apparel line
trademarked as "Just Hafta". The line consists of embroidered shirts featuring
activities such as golf, fishing, and tennis. While we have the license to use
the the Just Hafta-TM- trademark and stylized logos, we are not presently
distributing any products under them. Eventually, we may market and distribute
Just Hafta-TM- apparel through department stores and specialty shops, in
addition to licensing other apparel marketers to produce and sell apparel using
the Just Hafta-TM- trademark and stylized logos. We have also licensed our
corporate name and logo to a Japanese sportswear company to be exhibited on
sportswear sold in Japan. The Just Hafta-TM- and Japanese license markets do not
constitute significant markets at present for Pro Elite.

DISTRIBUTION

Distribution of our products as discussed above varies by market. The
distribution of licensed branded apparel is accomplished through manufacture's
representatives, direct marketing to collegiate stadium shops, college
bookstores, and marketers such as the QVC shopping channel, Boise Marketing, SFX
Entertainment, and Host Marriott. Marketing of corporate branded apparel is
accomplished through manufacture's representatives, trade shows and direct
marketing. Just Hafta is presently marketed in the same manner as licensed
products. The Company also belongs to and markets through the "Specialty
Advertising Trade Information Center".

COMPETITION

The marketing of logo embroidered apparel is keenly competitive in the
United States. There are several companies that compete directly with us in
several of our marketing venues from professional sports team logo apparel to
corporate logo apparel. Some of these companies have greater market recognition
and substantially greater financial, technical, marketing, distribution, and
other resources than we possess. The competition is based primarily on brand
recognition, product differentiation and quality, style and production
flexibility. Our future growth and financial success depend on our ability to
further penetrate and expand our distribution channels. The barriers to entry in
the logo embroidered apparel market are low given the various contractors
available for the production of embroidered apparel and the non-exclusive nature
of Pro Elite's licenses. This along with the rapid changes in consumer
preferences in leisure apparel constitutes significant risk factors in our
operations.

SUPPLIERS AND CUSTOMERS

Pro Elite has established relationships with its contractors for the supply
of apparel and contract embroidering. The Company's major suppliers (and the
percentage of revenue attributable to such) are: Gold Seven, Inc. (50%),
Amrav, Inc. (10%), Ready Made Garment Corporation (10%), and Y & Z, LLC (5%). No
customer accounted for more than ten percent of our sales during fiscal 2001 or
the three months ended May 31, 2001.

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TRADEMARKS AND LICENSES

The Company has registered its name and logo as a trademark with the United
States Office of Patents and Trademarks. The mark consists of Pro Elite's logo
and the Company's name in stylized text. The Company obtained the registration
on May 27, 1997. As was discussed above, the Company has entered into a
licensing agreement regarding this trademark with a Japanese company. The
licensee has the right to use the Pro Elite trademark on athletic sportswear
sold in Japan through March 15, 2005 with an option to renew.

In February 1999, the Company was a party plaintiff in an action against the
NFLP. The action was filed to prevent the NFLP from terminating the Company's
license. On September 9, 1999, the parties settled the action with a new
non-exclusive license agreement that ran through March 31, 2001.

CLC is licensed by various colleges and universities for the purpose of
sub-licensing the production of branded apparel. Pro Elite contracts with CLC on
an as needed basis at pre-published prices from CLC for the production of
collegiate branded apparel for those colleges and universities represented by
CLC. CLC has over 100 colleges and universities that it represents for licensing
purposes, many of which are the premier college sports teams of the country. Pro
Elite's arrangement with CLC is non-exclusive.

OTHER INFORMATION

The Company's research and development activities are limited to
investigations of consumer preferences to identify appropriate apparel to brand
and identify markets that may exist for sports franchise branded apparel. The
company also engages in limited research and development to target businesses
that would be interested in corporate branded apparel. To date, the Company has
not invested a significant amount of funds in research and development. The
Company is unaware of any governmental regulations, environmental or otherwise,
that would have a material effect or cost on the Company. The Company currently
employs seven people on a full time basis.

LEGAL PROCEEDINGS

We are not a party to any pending legal proceeding, and none of the
Company's property is the subject of a pending legal proceeding.

DESCRIPTION OF PROPERTY

The Company's principal place of business and warehouse is leased. The
Company has no significant ownership interest in any real or personal property
beyond normal office and warehouse equipment and furniture.

The Company has no investments in real estate, interests in real estate,
real estate mortgages, or securities of or interests in persons primarily
engaged in real estate activities. Further, the Company has no policy respecting
investments in real estate, interests in real estate, real estate mortgages, or
securities of or interests in persons primarily engaged in real estate
activities.

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MANAGEMENT

The following table sets forth information regarding the Company's executive
officers and directors:

<Table>
<Caption>
NAME AGE POSITION
- ---- -------- --------

Robert Polsky............................. 75 Chairman of the Board, Chief Executive
Officer and Director
Michael Polsky............................ 34 President, Secretary and Director
</Table>

The following is a summary of the business experience of each of our
executive officers and directors:

Robert Polsky has been the Chief Executive Officer of Pro Elite, Inc. since
he co-founded it in 1992. Before starting Pro Elite with his son, Michael,
Mr. Polsky was the President and founder of Cliff Engle, Ltd., a licensed
product supplier to all major sports. Prior to 1984, Mr. Polsky was President of
Act III and Rosemary Reid Swimwear, both were divisions of Jonathan Logan Co. In
addition, Mr. Polsky also worked with Puritan Fashions Calvin Klein Jeans
Divisions and was President of Dianne Von Furstenburg Sportswear Division.

Michael Polsky has been the President of Pro Elite since 1992. Prior to
co-founding Pro Elite, Mr. Polsky was a Vice President of Sales for Cliff
Engle, Ltd. Mr. Polsky attended Blair Academy and North Eastern University.

EMPLOYMENT AGREEMENTS

Messrs. Polsky have entered into Employment Agreements with Pro Elite, each
dated as of January 31, 2001. The agreement for Robert Polsky is for a term of
five years and automatic renewal thereafter unless either party gives the other
sixty (60) days written notice. The agreement provides for a base salary of
$60,000 during the first year which is subject to adjustment for subsequent
years by the board of directors. The agreement also provides for a bonus of up
to $30,000 for each year of the term.

The agreement for Michael Polsky is for a term of ten years and automatic
renewal thereafter unless either party gives the other sixty (60) days written
notice. The agreement provides for a base salary of $125,000 during the first
year which is subject to adjustment for subsequent years by the board of
directors. The agreement further provides that for any year in which our
revenues increase over the preceding year, Mr. Polsky's salary shall be
increased by a minimum of $25,000. The agreement also provides for a bonus of up
to $90,000 for each year of the term.

Both agreements allow for participation in Pro Elite's standard benefit
plans. They also contain non-competition and non-disclosure provisions.

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PRINCIPAL AND SELLING SECURITY HOLDERS

The shares of common stock may be offered and sold from time to time by the
shareholders or by their transferees, pledgees, donees or their successors
pursuant to this prospectus. The following table sets forth certain information
about the selling shareholders. Except as otherwise provided, none of the
selling shareholders has, or within the past three years has had, any position,
office or other material relationship with Pro Elite or any of its predecessors
or affiliates.

In addition, the table sets forth certain information concerning the
beneficial ownership of our common stock as of the date of this prospectus, by
(i) each person known by us to be the beneficial owner of more than 5% of our
common stock, (ii) each of our named executive officers, (iii) each of our
directors, and (iv) all directors and executive officers as a group. Unless
otherwise indicated, each of the stockholders has sole voting and investment
power with respect to the shares beneficially owned.

<Table>
<Caption>
SHARES
SHARES BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
OFFERING(2) OFFERING(2)
--------------------- NUMBER OF -------------------
NAME AND ADDRESS(1) CLASS NUMBER PERCENT SHARES OFFERED NUMBER PERCENT
- ------------------- ------------ ---------- -------- -------------- -------- --------

Robert Polsky, Chairman of the Board,
Chief Executive Officer and
Director........................... Preferred(3) 300,000 25% -- -0- --
Common(3) 3,000,000 49% 3,000,000 -0- --

Michael Polsky, President and
Director........................... Preferred(3) 900,000 75% -- -0- --
Common(3) 9,157,197 76% 9,000,000 157,197

Nicole Polsky........................ Common 157,197 25% -0- 157,197

Joseph M. Blumenthal................. Common 11,500,000(4) 88% 11,500,000 -0- --

George Bally......................... Common 1,050,000(5) 26% 1,050,000 -0- --

Bradley P. Barnes.................... Common 150,000(6) 5% 150,000 -0- --

Carmine J. Russo..................... Common 30,000(7) 1% 30,000 -0- --

W. Ray Wallace....................... Common 60,000(8) 2% 60,000 -0- --
</Table>

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

(1) The address for Messrs. Robert and Michael Polsky is c/o Pro Elite, Inc.,
100 Dorigo Lane, Secaucus, New Jersey 07094.

(2) Percentage ownership is calculated for each holder on a fully diluted basis,
giving effect to all shares beneficially owned and treating all such shares
as issued and outstanding for purposes of the calculation. Shares
beneficially owned after the offering assumes sale of all shares offered for
sale by each selling shareholder.

(3) Each share of Series A Convertible Preferred Stock is convertible into ten
shares of Pro Elite's common stock and its holder is entitled to ten votes
per share for each matter brought before the shareholders.

(4) 11,000,000 of such shares underlie a 10% Convertible Promissory Note in the
original principal amount of $450,000, which is convertible into Pro Elite's
common stock at a conversion price of $.045 per share. 10,000,000 shares
represent the principal of the note, and 1,000,000 shares represent interest
for the first year of the note paid in advance.

(5) Includes 100,000 shares underlying Class A Common Stock Purchase Warrants
and 100,000 Class B Common Stock Purchase Warrants. The Class A warrants
entitle the holder thereof to purchase shares of common stock at an exercise
price of $1.25 per share, and the Class B warrants entitle

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the holder thereof to purchase shares of common stock at an exercise price
of $2.50 per share. The warrants are currently exercisable and expire
January 31, 2002.

(6) Includes 50,000 shares underlying Class A Common Stock Purchase Warrants and
50,000 Class B Common Stock Purchase Warrants. The Class A warrants entitle
the holder thereof to purchase shares of common stock at an exercise price
of $1.25 per share, and the Class B warrants entitle the holder thereof to
purchase shares of common stock at an exercise price of $2.50 per share. The
warrants are currently exercisable and expire January 31, 2002.

(7) Includes 10,000 shares underlying Class A Common Stock Purchase Warrants and
10,000 Class B Common Stock Purchase Warrants. The Class A warrants entitle
the holder thereof to purchase shares of common stock at an exercise price
of $1.25 per share, and the Class B warrants entitle the holder thereof to
purchase shares of common stock at an exercise price of $2.50 per share. The
warrants are currently exercisable and expire January 31, 2002.

(8) Includes 20,000 shares underlying Class C Common Stock Purchase Warrants and
20,000 Class D Common Stock Purchase Warrants. The Class C warrants entitle
the holder thereof to purchase shares of common stock at an exercise price
of $1.25 per share, and the Class B warrants entitle the holder thereof to
purchase shares of common stock at an exercise price of $2.50 per share. The
warrants are currently exercisable and expire May 31, 2002.

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PLAN OF DISTRIBUTION

All shares to be registered pursuant to this prospectus will be sold by the
selling security holders. See "Selling Security Holders." The selling
stockholders may, from time to time, sell all or a portion of the shares of
common stock on any market upon which the common stock may be quoted, in
privately negotiated transactions or otherwise, at fixed prices that may be
changed, at market prices prevailing at the time of sale, at prices related to
such market prices or at negotiated prices. The shares of common stock may be
sold by the selling stockholders by one or more of the following methods,
without limitation,

- block trades in which the broker or dealer so engaged will attempt to sell
the shares of common stock as agent but may position and resell a portion
of the block as principal to facilitate the transaction,

- purchases by broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this prospectus,

- an exchange distribution in accordance with the rules of such exchange,

- ordinary brokerage transactions and transactions in which the broker
solicits purchasers,

- privately negotiated transactions,

- market sales (both long and short to the extent permitted under the
federal securities laws), and

- a combination of any such methods of sale.

In effecting sales, brokers and dealers engaged by the selling stockholders
may arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions or discounts from the selling stockholders (or, if any such
broker-dealer acts as agent for the purchaser of such shares, from such
purchaser) in amounts to be negotiated which are not expected to exceed those
customary in the types of transactions involved. Broker-dealers may agree with
the selling stockholders to sell a specified number of such shares of common
stock at a stipulated price per share, and, to the extent such broker-dealer is
unable to do so acting as agent for the selling stockholders, to purchase as
principal any unsold shares of common stock at the price required to fulfill the
broker-dealer commitment to the selling stockholders. Broker-dealers who acquire
shares of common stock as principal may thereafter resell those shares of common
stock from time to time in transactions (which may involve block transactions
and sales to and through other broker-dealers, including transactions of the
nature described above) in the over-the-counter market or otherwise at prices
and on terms then prevailing at the time of sale, at prices then related to the
then-current market price or in negotiated transactions and, in connection with
such resales, may pay to or receive from the purchasers of such shares of common
stock commissions as described above. The selling stockholders may also sell the
shares of common stock in accordance with Rule 144 under the Securities Act,
subject to satisfaction of the requirements under the rule, rather than pursuant
to this prospectus.

From time to time, the selling stockholders may pledge their shares of
common stock under the margin provisions of customer agreements. Upon default by
the selling stockholders, the broker may offer and sell the pledged shares of
common stock from time to time. Upon sales of the shares of common stock, the
selling stockholders intend to comply with the prospectus delivery requirements,
under the Securities Act, by delivering a prospectus to each purchaser in the
transaction. We intend to file any amendments or other necessary documents in
compliance with the Securities Act which may be required in the event a selling
stockholder defaults under any customer agreement with brokers.

To the extent required under the Securities Act, a supplemental prospectus
will be filed, disclosing, the name of any broker-dealers, the number of shares
of common stock involved, the price at which the common stock is to be sold, the
commissions paid or discounts or concessions allowed to such broker-

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<Page>
dealers, where applicable, that such broker-dealers did not conduct any
investigation to verify the information set out or incorporated by reference in
this prospectus, as supplemented, and other facts material to the transaction.

We and the selling stockholders will be subject to applicable provisions of
the Exchange Act and the rules and regulations under it, including, without
limitation, Rule 10b-5 and, insofar as the selling stockholders are distribution
participants and we, under certain circumstances, may be a distribution
participant, Regulation M. All of the foregoing may affect the marketability of
the common stock.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There were no material interests, direct or indirect, of directors,
executive officers or senior officers of the Company or any known associate or
affiliate in any transaction since the commencement of the Company's last fiscal
year, or in any proposed transaction, which has materially affected or would
materially affect the Company or any of its subsidiaries and which is not
otherwise disclosed herein.

DESCRIPTION OF SECURITIES

Pro Elite is presently authorized to issue 20,000,000 shares of common
stock, $.0001 par value per share. The Company presently has 3,036,377 shares of
common stock outstanding.

Pro Elite is authorized to issue 12,000,000 shares of preferred stock,
$.0001 par value per share. 1,200,000 of such shares are currently outstanding
and held by Messrs. Robert and Michael Polsky, our Chairman and Chief Executive
and our President.

The shareholders of the Company do not have a preemptive right to acquire
the Company's un-issued shares. There are no provisions, other than the articles
and by-laws of the Company and the New Jersey Statutes, that govern the voting
of the Company's shares. The Company has not to date paid any dividends on its
common stock. There are no provisions, other than as may be set forth in the New
Jersey Statutes, that prohibit or limit the payment of dividends. There are no
provisions in the Company's Articles or by-laws that would delay, defer or
prevent a change in control of the Company.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, Pro Elite will have outstanding 3,036,377
shares of common stock, assuming no exercise or conversion of any convertible
debt, warrants or options outstanding. Of these shares, only 2,597,136 shares
will be freely tradable without restriction (except for restrictions imposed by
certain state regulatory authorities) or registration under the Securities Act,
except that any shares purchased by an "affiliate" of Pro Elite (as defined in
the rules and regulations promulgated under the Securities Act) will be subject
to the resale limitations under Rule 144 under the Securities Act. The remaining
439,241 shares of outstanding Common Stock were issued and sold by Pro Elite in
private transactions in reliance upon exemptions from registration under the
Act. Such shares may be sold only pursuant to an effective registration
statement filed by Pro Elite or an applicable exemption, including the exemption
contained in Rule 144 promulgated under the Act.

In general, under Rule 144 as currently in effect, a shareholder, including
an affiliate of Pro Elite may sell shares of Common Stock after at least one
year has elapsed since such shares were acquired from Pro Elite or an affiliate
of Pro Elite. The number of shares of Common Stock which may be sold within any
three-month period is limited to the greater of: (i) one percent of the then
outstanding Common Stock or (ii) the average weekly trading volume in the Common
Stock during the four calendar weeks preceding the date on which notice of such
sale was filed under Rule 144.

Certain other requirements of Rule 144 concerning availability of public
information, manner of sale and notice of sale must also be satisfied. In
addition, a shareholder who is not an affiliate of Pro

22
<Page>
Elite (and who has not been an affiliate of Pro Elite for 90 days prior to the
sale) and who has beneficially owned shares acquired from Pro Elite or an
affiliate of Pro Elite for over two years may resell the shares of Common Stock
without compliance with the foregoing requirements under Rule 144.

No predictions can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the market
price of the Common Stock prevailing from time to time. Nevertheless, sales of
substantial amounts of Common Stock, or the perception that such sales may
occur, could have a material adverse effect on prevailing market prices.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for Pro
Elite by Bondy & Schloss LLP, New York, New York.

EXPERTS

The financial statements of Pro Elite as of and for the year ended
February 28, 2001, appearing in this prospectus, have been audited by J.H. Cohn
LLP, independent public accountants, as set forth in their report thereon which
contains an explanatory paragraph with respect to Pro Elite's ability to
continue as a going concern. The financial statements of Pro Elite for the year
ended February 29, 2000, appearing in this prospectus, have been audited by
Feinberg & Co., independent public accountants, as set forth in their report
thereon. The financial statements are included in reliance upon such reports
given upon the authority of each of these firms as experts in accounting and
auditing.

WHERE YOU CAN FIND MORE INFORMATION ABOUT US

This prospectus is a part of a registration statement on Form SB-2 we filed
with the SEC under the Securities Act. This prospectus omits certain information
contained in the registration statement, and we refer you to the registration
statement and to the exhibits to the registration statement for additional
information about the common stock and us. Upon registration we will file
annual, quarterly and special reports, and other information with the SEC. You
may read and copy any document we file with the SEC at the SEC's public
reference room located at 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the SEC's public reference rooms located at it's regional offices in New York,
New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0300 for
further information on the operation of public reference rooms. You can also
obtain copies of this material from the SEC's Internet web site
(http://www.sec.gov) that contains reports, proxy statements and other
information regarding registrants that file electronically with the SEC.

23
<Page>
PRO ELITE, INC.
INDEX TO FINANCIAL STATEMENTS

<Table>
<Caption>
PAGE
--------

Reports of Independent Accountants.......................... F-2/3

Balance Sheet February 28, 2001............................. F-4

Statements of Operations Years Ended February 28, 2001 and
February 29, 2000......................................... F-5

Statements of Changes in Stockholders' Deficiency Years
Ended February 28, 2001 and February 29, 2000............. F-6

Statements of Cash Flows Years Ended February 28, 2001 and
February 29, 2000......................................... F-7

Notes to Financial Statements............................... F-8/17

Condensed Balance Sheet May 31, 2001........................ F-18

Condensed Statements of Operations Three Months Ended May
31, 2001 and 2000......................................... F-19

Condensed Statement of Changes in Stockholders' Deficiency
Three Months Ended May 31, 2001........................... F-20

Condensed Statements of Cash Flows Three Months Ended May
31, 2001 and 2000......................................... F-21

Notes to Condensed Financial Statements..................... F-22/25
</Table>

F-1
<Page>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
Pro Elite, Inc.

We have audited the accompanying balance sheet of Pro Elite, Inc. as of
February 28, 2001, and the related statements of operations, changes in
stockholders' deficiency and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Pro Elite, Inc. as of
February 28, 2001, and its results of operations and cash flows for the year
then ended, in conformity with accounting principles generally accepted in the
United States of America.

The financial statements referred to above have been prepared assuming that
the Company will continue as a going concern. As further discussed in Note 3 to
the financial statements, the Company's operations have generated recurring
losses and it had working capital and stockholders' deficiencies as of
February 28, 2001. Such matters raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans concerning these
matters are also described in Note 3. The accompanying financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.

J.H. COHN LLP

Roseland, New Jersey
July 11, 2001

F-2
<Page>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
Pro Elite, Inc.

We have audited the accompanying statements of operations, changes in
stockholders' deficiency and cash flows of Pro Elite, Inc. for the year ended
February 29, 2000. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of operations and cash flows of Pro
Elite, Inc. for the year ended February 29, 2000, in conformity with accounting
principles generally accepted in the United States of America.

Feinberg & Company

Fair Lawn, New Jersey
June 15, 2000

F-3
<Page>
PRO ELITE, INC.

BALANCE SHEET

FEBRUARY 28, 2001

<Table>

ASSETS

Current assets:
Cash...................................................... $ 55,436
Accounts receivable, net of allowance for doubtful
accounts of $20,802..................................... 203,147
Inventories............................................... 324,559
Advances to officers...................................... 55,543
Other current assets...................................... 4,003
-----------
Total current assets.................................... 642,688
Furniture and equipment, net of accumulated depreciation and
amortization of $101,468.................................. 41,182
Other assets................................................ 44,785
-----------
Total................................................... $ 728,655
===========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
Accounts payable.......................................... $ 149,944
Accrued expenses.......................................... 679,615
Line of credit borrowings................................. 397,727
Current portion of notes payable.......................... 20,311
-----------
Total current liabilities............................... 1,247,597
Convertible debentures payable.............................. 225,000
Notes payable, net of current portion....................... 85,757
-----------
Total liabilities....................................... 1,558,354
-----------

Commitments and contingencies

Stockholders' deficiency:
Series A preferred stock, par value $.0001 per share;
12,000,000 shares authorized; 1,200,000 shares issued
and outstanding......................................... 120
Common stock, par value $.0001 per share; 20,000,000
shares authorized; 716,377 shares issued and
outstanding............................................. 71
Additional paid-in capital................................ 1,821,164
Subscription receivable for 1,200,000 shares of Series A
preferred stock......................................... (576,000)
Accumulated deficit....................................... (2,075,054)
-----------
Total stockholders' deficiency.......................... (829,699)
-----------
Total................................................... $ 728,655
===========
</Table>

See Notes to Financial Statements.

F-4
<Page>
PRO ELITE, INC.

STATEMENTS OF OPERATIONS

YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000

<Table>
<Caption>
2001 2000
---------- ----------

Sales....................................................... $1,250,112 $1,668,680
Cost of sales............................................... 928,552 1,361,318
---------- ----------
Gross profit................................................ 321,560 307,362
---------- ----------
Operating expenses:
Selling expenses.......................................... 254,820 184,919
General and administrative expenses....................... 717,902 784,295
---------- ----------
Totals.................................................. 972,722 969,214
---------- ----------
Loss from operations........................................ (651,162) (661,852)
Interest expense............................................ 63,482 64,779
---------- ----------
Loss before extraordinary item.............................. (714,644) (726,631)
Extraordinary item--gain on extinguishment of debt.......... 38,500
---------- ----------
Net loss.................................................... $ (714,644) $ (688,131)
========== ==========
Basic loss per common share:
Loss before extraordinary item............................ $ (1.25) $ (1.46)
Extraordinary gain........................................ .08
---------- ----------
Net loss.................................................. $ (1.25) $ (1.38)
========== ==========
Basic weighted average common shares outstanding............ 572,298 497,355
========== ==========
</Table>

See Notes to Financial Statements.

F-5
<Page>
PRO ELITE, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY

YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000
<Table>
<Caption>
SERIES A SUBSCRIPTION RECEIVABLE
PREFERRED STOCK COMMON STOCK ADDITIONAL FOR PREFERRED STOCK
-------------------- --------------------- PAID-IN ------------------------- ACCUMULATED
SHARES AMOUNT SHARES AMOUNT CAPITAL SHARES AMOUNT DEFICIT
--------- -------- ---------- -------- ---------- ---------- ------------ ------------

Balance, March 1, 1999...... 2,984,152 $298 $ 994,702 $ (672,279)
Net loss.................... (688,131)
---------- ---- ---------- -----------
Balance, February 29,
2000...................... 2,984,152 298 994,702 (1,360,410)
Effect of 1-for-6 reverse
split..................... (2,486,773) (249) 249
Effects of issuance of
common stock in exchange
for services.............. 30,665 3 60,352
Sale of shares of common
stock through private
placements................ 58,333 6 124,994
Sale of units of common
stock and warrants through
private placements........ 130,000 13 64,987
Subscription for purchase of
Series A preferred
stock..................... 1,200,000 $120 575,880 1,200,000 $(576,000)
Net loss.................... (714,644)
--------- ---- ---------- ---- ---------- ---------- --------- -----------
Balance, February 28,
2001...................... 1,200,000 $120 716,377 $ 71 $1,821,164 1,200,000 $(576,000) $(2,075,054)
========= ==== ========== ==== ========== ========== ========= ===========

TOTAL
---------

Balance, March 1, 1999...... $ 322,721
Net loss.................... (688,131)
---------
Balance, February 29,
2000...................... (365,410)
Effect of 1-for-6 reverse
split.....................
Effects of issuance of
common stock in exchange
for services.............. 60,355
Sale of shares of common
stock through private
placements................ 125,000
Sale of units of common
stock and warrants through
private placements........ 65,000
Subscription for purchase of
Series A preferred
stock.....................
Net loss.................... (714,644)
---------
Balance, February 28,
2001...................... $(829,699)
=========
</Table>

See Notes to Financial Statements.

F-6
<Page>
PRO ELITE, INC.

STATEMENTS OF CASH FLOWS

YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000

<Table>
<Caption>
2001 2000
--------- ---------

Operating activities:
Net loss.................................................. $(714,644) $(688,131)
Adjustments to reconcile net loss to net cash provided by
(used in)
operating activities:
Provision for bad debts................................. 22,478 1,371
Depreciation and amortization........................... 15,677 15,384
Effects of issuance of common stock in exchange for
services.............................................. 60,355
Gain on extinguishment of debt.......................... (38,500)
Changes in operating assets and liabilities:
Accounts receivable................................... (15,481) 501,525
Inventories........................................... 272,887 379,796
Advances to officers.................................. (53,617) (1,926)
Other current assets.................................. 7,945 69,310
Other assets.......................................... 9,279 (53,914)
Accounts payable and accrued expenses................. 110,790 56,467
--------- ---------
Net cash provided by (used in) operating
activities........................................ (284,331) 241,382
--------- ---------
Investing activities--purchases of furniture and
equipment................................................. (8,757) (28,286)
--------- ---------

Financing activities:
Net repayments of line of credit borrowings............... (45,660) (183,038)
Repayments of notes payable............................... (23,279) (47,153)
Proceeds from issuance of convertible debentures.......... 225,000
Proceeds from sale of common stock and units of common
stock and warrants...................................... 190,000
--------- ---------
Net cash provided by (used in) financing
activities........................................ 346,061 (230,191)
--------- ---------
Net increase (decrease) in cash............................. 52,973 (17,095)

Cash, beginning of year..................................... 2,463 19,558
--------- ---------
Cash, end of year........................................... $ 55,436 $ 2,463
========= =========
Supplemental disclosure of cash flow information:
Interest paid............................................. $ 62,376 $ 64,112
========= =========
</Table>

See Notes to Financial Statements.

F-7
<Page>
PRO ELITE, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1--ORGANIZATION AND BUSINESS:

Pro Elite, Inc. (the "Company") was incorporated during 1992 in New Jersey.
It is in the business of marketing and distributing premium "branded apparel"
such as shirts, hats and sweaters that have a sports or corporate logo, name or
slogan applied by means of embroidering to the apparel.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

USE OF ESTIMATES:

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America ("USGAAP")
requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could differ from
those estimates.

REVENUE RECOGNITION:

Sales are recognized upon the shipment of the related product. Commission
income is recognized when earned.

INVENTORIES:

Inventories, consisting primarily of raw materials (apparel that has not
been embroidered) are stated at the lower of cost or market. Cost is determined
by the first-in, first-out method.

FURNITURE AND EQUIPMENT:

Furniture and equipment is stated at cost, net of accumulated depreciation.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets which range from five to seven years.

ADVERTISING:

The Company expenses the cost of advertising and promotions as incurred.
Advertising costs charged to operations amounted to approximately $91,000 and
$10,000 in 2001 and 2000, respectively.

INCOME TAXES:

The Company accounts for income taxes pursuant to the asset and liability
method which requires deferred income tax assets and liabilities to be computed
annually for temporary differences between the financial statement and tax bases
of assets and liabilities that will result in taxable or deductible amounts in
the future based on enacted tax laws and rates applicable to the periods in
which the differences are expected to affect taxable income. Valuation
allowances are established when necessary to reduce deferred tax assets to the
amount expected to be realized. The income tax provision or credit is the tax
payable or refundable for the period plus or minus the change during the period
in deferred tax assets and liabilities.

F-8
<Page>
PRO ELITE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
REVERSE SPLIT:

The numbers of common shares and the per share amounts in these notes and
the accompanying financial statements have been retroactively adjusted, where
appropriate, for a 1-for-6 reverse split effected on February 13, 2001.

NET EARNINGS (LOSS) PER COMMON SHARE:

The Company presents "basic" earnings (loss) per common share and, if
applicable, "diluted" earnings per common share pursuant to the provisions of
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("SFAS 128"). Basic earnings (loss) per common share is calculated by dividing
the income or loss applicable to common stock by the weighted average number of
common shares outstanding during each period. The calculation of diluted
earnings per common share is similar to that of basic earnings per common share,
except that the income or loss applicable to common stock and the weighted
average number of common shares outstanding during each period are adjusted for
the effects of the assumed issuance of all potentially dilutive common shares,
such as those issuable upon the exercise of warrants and the conversion of
convertible debentures and preferred stock.

Diluted earnings per share amounts have not been presented in the
accompanying statement of operations for 2001 because the Company had a net loss
for that year and, accordingly, the assumed effects of the exercise of
outstanding warrants and the application of the treasury stock method, the
assumed effects of the conversion of outstanding convertible debentures,
including any related adjustments to interest expense, and the assumed effects
of the conversion of shares of preferred stock, all of which are subject to
subscription agreements (see Note 9), and the application of the treasury stock
method would have been anti-dilutive. Diluted earnings per share amounts have
not been presented in the accompanying statement of operations for 2000 because
the Company did not have any potentially dilutive common shares outstanding in
that year.

STOCK BASED COMPENSATION:

In accordance with Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("SFAS 123"), the Company will
recognize the cost of preferred or common shares, options, warrants and other
equity instruments issued to nonemployees as consideration for services as
expense over the periods in which the related services are rendered by a charge
to compensation cost or another appropriate expense account and a corresponding
credit to additional paid-in capital. Generally, cost will be determined based
on the fair value of the equity instruments at the date of issuance. The fair
value of shares, options, warrants and similar equity instruments will be
estimated based on the Black-Scholes option-pricing model, which meets the
criteria set forth in SFAS 123, and the assumption that all of the options or
other equity instruments will ultimately vest. The effect of actual forfeitures
will be recognized as they occur.

RECENT ACCOUNTING PRONOUNCEMENTS:

The Financial Accounting Standards Board and the Accounting Standards
Executive Committee of the American Institute of Certified Public Accountants
had issued certain accounting pronouncements as of February 28, 2001 that will
become effective in subsequent periods; however, management of the Company does
not believe that any of those pronouncements would have significantly affected
the

F-9
<Page>
PRO ELITE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
Company's financial accounting measurements or disclosures had they been in
effect during 2001 and 2000 or that they will have a significant affect at the
time they become effective.

NOTE 3--BASIS OF PRESENTATION:

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. However, the Company incurred a net
loss of approximately $715,000 in 2001 and a loss before extraordinary gain of
approximately $727,000 in 2000. As of February 28, 2001, the Company had a cash
balance of only $55,000 and working capital and stockholders' deficiencies of
approximately $605,000 and $830,000, respectively. Sales decreased from
$1,669,000 in 2000 to $1,250,000 in 2001. In addition, the Company's right to
sell apparel embroidered with National Football League logos terminated
effective as of June 30, 2001. Sales of such apparel accounted for approximately
45% of the Company's total sales in 2001. Although the Company was able to
reduce its working capital deficiency primarily through a settlement in,
effectively, March 2001 of a portion of its obligations arising from sales of
products with National Football League logos (see Note 11), management believes
that, in the absence of a substantial increase in sales, it is probable that the
Company will continue to incur losses from operations and negative cash flows
from operating activities through at least February 28, 2002 and that the
Company will need to obtain additional equity or debt financing and/or extend
the due dates of or restructure some of its obligations to be able to sustain
its operations until it can achieve profitability.

Management believes that the commercial success and profitability of the
Company will depend primarily on whether the Company can increase sales by
making potential corporate customers aware of its ability to develop and
distribute premium apparel with corporate logos and developing a proprietary
line of sportswear. To enable the Company to sustain its operations through at
least February 28, 2002 and, ultimately, complete its marketing and development
program and achieve profitability, management plans to: (i) seek additional
financing for the Company through private sales of debt and equity securities,
loans from financial institutions and/or investments by strategic partners in
joint ventures established to sell merchandise developed by the Company,
(ii) issue equity securities in lieu of cash to pay for certain services
provided to the Company, (iii) ask the holder to convert convertible debentures
issued by the Company into shares of common stock (see Notes 8 and 13) and/or
(iv) seek the extension of due dates of certain other obligations of the
Company. However, management cannot assure that the Company will be able to
obtain any additional equity or debt financing or extend the due dates of or
restructure any of its obligations and, accordingly, management cannot assure
that the Company will be able to sustain its operations through at least
February 28, 2002.

The accompanying financial statements do not include any adjustments related
to the recoverability and classification of assets or the amount and
classifications of liabilities that might be necessary should the Company be
unable to continue as a going concern.

NOTE 4--ADVANCES TO OFFICERS:

As of February 28, 2001, the Company had receivables of $55,543 from
officers that were noninterest bearing and due on demand. Management believes
that the advances will be repaid prior to February 28, 2002.

F-10
<Page>
PRO ELITE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 5--FURNITURE AND EQUIPMENT:

Furniture and equipment consisted of the following at February 28, 2001:

<Table>
<Caption>
ESTIMATED
USEFUL
LIVES AMOUNT
--------- --------

Furniture............................................... 7 years $ 41,283
Computer hardware....................................... 5 years 43,995
Equipment............................................... 5 years 27,064
Computer software....................................... 5 years 30,308
--------
142,650
Less accumulated depreciation and amortization.......... 101,468
--------
Total................................................... $ 41,182
========
</Table>

NOTE 6--REVOLVING LINE OF CREDIT:

As of February 28, 2001, the Company had outstanding borrowings of $397,727
under a line of credit provided by a bank that was due to expire on January 31,
2001. The agreement with the bank originally provided for borrowings based on
specified percentages of the Company's accounts receivable and inventories up to
a maximum of $600,000, with interest payable at 2.5% above the prime interest
rate. Since, among other things, the Company did not repay the outstanding
borrowings as of the scheduled expiration date, it was in default under the
terms of the agreement and, as a result, the interest rate increased to 5.5%
above the prime rate, an effective rate of 15.25% at February 28, 2001. On
April 2, 2001, the Company and the bank entered into a settlement agreement with
respect to the amount payable by the Company (see Note 13).

NOTE 7--NOTES PAYABLE:

Notes payable consisted of the following at February 28, 2001:

<Table>

Note payable in installments through:
January 1, 2003(A)........................................ $42,016
August 23, 2003(B)........................................ 59,500
Other notes payable......................................... 4,552
-------
106,068
Less current portion........................................ 20,311
-------
Long term portion........................................... $85,757
=======
</Table>

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

(A) The remaining balance of the note is payable in varying monthly installments
of principal and interest ranging from $1,000 to $5,000 and a final
installment of approximately $31,000 on January 1, 2003. The note was issued
to an investor (the "First Investor") to settle disputes related to an
obligation that arose prior to March 1, 1999 when the First Investor made a
noninterest bearing advance of $50,000 to the Company with the understanding
that the amount advanced would be convertible into shares of the Company's
common stock pursuant to terms that would be subsequently negotiated, but
without any formal agreement as to the specific terms related to the

F-11
<Page>
PRO ELITE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 7--NOTES PAYABLE: (CONTINUED)
conversion rate or eventual repayment if the obligation was not converted.
The Company is accounting for the excess of the amounts to be paid pursuant
to the settlement agreement over the amount originally advanced
prospectively as interest expense. Based on the repayment terms set forth in
the settlement agreement, the note bears an effective interest rate of
41.8%.

(B) The remaining balance of this noninterest bearing note is payable in monthly
installments of $1,000 and a final installment of $29,500 on August 23,
2003. The note was issued with an original principal balance of $126,500 in
September 1999 to a lender to settle disputes related to the repayment of an
obligation that arose prior to March 1, 1999 when the lender made a
noninterest bearing loan of $165,000 to the Company that had no specific due
date. Under USGAAP, the excess of the principal balance of the original loan
over the principal balance of the note issued as a result of the debt
restructuring which totaled $38,500 is reflected as an extraordinary gain on
extinguishment of debt in the accompanying 2000 statement of operations, and
there are no charges to interest expense in periods subsequent to the
restructuring.

Principal payment requirements for the notes payable in each of the years
subsequent to February 28, 2001 are as follows:

<Table>
<Caption>
YEAR ENDING
FEBRUARY 28, AMOUNT
- ------------ --------

2002........................................................ $20,311

2003........................................................ 50,257

2004........................................................ 35,500
</Table>

NOTE 8--CONVERTIBLE DEBENTURES:

During the year ended February 28, 2001, another investor (the "Second
Investor") advanced $225,000 to the Company for the purchase of convertible
debentures with the understanding that the conversion rate and the other
specific terms of the convertible debentures would be subsequently negotiated.
Pursuant to an agreement between the Company and the Second Investor dated
April 12, 2001, the principal balance of the convertible debentures will become
payable on April 12, 2002 unless they are converted into common stock at any
time prior thereto at a conversion rate of $.045 per share, which approximated
the fair value of the Company's common stock as of the date of the agreement.
The convertible debentures will bear interest at 10%, which will be payable
through the issuance of shares of common stock based on the conversion rate of
$.045 per share.

NOTE 9--STOCKHOLDERS' EQUITY:

PREFERRED STOCK:

On January 30, 2001, the Company's Articles of Incorporation were amended to
authorize the issuance of up to 12,000,000 shares of Series A preferred stock
with a par value of $.0001 per share. Holders of Series A preferred stock are
entitled to per share dividends equivalent to any dividends declared on the
Company's common stock and may convert each share of Series A preferred stock at
any time into ten shares of common stock. Holders of Series A preferred stock
are also entitled to cast

F-12
<Page>
PRO ELITE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 9--STOCKHOLDERS' EQUITY: (CONTINUED)
ten votes for each share of Series A preferred stock held on all matters to be
voted on by the Company's common stockholders.

On January 31, 2001, two officers of the Company entered into subscription
agreements whereby they were issued a total of 1,200,000 shares of Series A
preferred stock and became obligated to pay the Company aggregate consideration
of $576,000 (or $.48 per share), which approximated the fair value of the
Company's common stock as of the date of the agreement. The subscriptions are
payable in five installments totaling $115,200 annually commencing on
December 31, 2001. The Company is considering the unpaid shares to be the
equivalent of options and warrants subject to the application of the treasury
stock method in its computations of diluted earnings per share.

SALE OF COMMON STOCK:

During 2001, the Company sold a total of 58,333 shares of common stock
through private placements intended to be exempt from registration under the
Securities Act of 1933 (the "Act") for aggregate gross proceeds of $125,000, of
which $100,000 was attributable to the sale of 41,667 shares of common stock at
$2.40 per share and $25,000 was attributable to the sale of 16,666 shares of
common stock at $1.50 per share. The Company did not incur any material
incremental costs in connection with the private placements.

On January 31, 2001, the Company commenced an offering for the sale of up to
2,000,000 units of common stock and warrants at $.50 per unit through a private
placement intended to be exempt from registration under the Act. Each unit
consists of one share of common stock, one Class A warrant and one Class B
warrant. Each Class A warrant is exercisable at $1.25 per share and each
Class B warrant is exercisable at $2.50 per share through January 31, 2002. The
warrants are redeemable at the option of the Company at $.05 per warrant upon
30-days' written notice provided the Company's common stock has a closing bid
price for the 20 consecutive trading days prior to the date of notice of at
least $2.50 per share with respect to the redemption of the Class A warrants and
$5.00 per share with respect to the redemption of the Class B warrants. As of
February 28, 2001, the Company had received aggregate gross proceeds of $65,000
from the sale of 130,000 units (see Note 13).

ISSUANCE OF COMMON STOCK IN EXCHANGE FOR SERVICES:

During 2001, the Company issued 30,665 shares of common stock with an
estimated aggregate fair value of $60,355 for professional and other services
which was charged to general and administrative expenses.

NOTE 10--INCOME TAXES:

As of February 28, 2001, the Company had net operating loss carryforwards of
approximately $1,784,000 available to reduce future Federal and state taxable
income which, if not used, will expire at various dates through 2021.

F-13
<Page>
PRO ELITE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 10--INCOME TAXES: (CONTINUED)
As of February 28, 2001, the Company's deferred tax assets consisted of the
effects of temporary differences attributable to the following:

<Table>

Net operating loss carryforwards............................ $ 713,000
Allowance for doubtful accounts............................. 8,000
Valuation of inventories.................................... 30,000
---------
751,000
Less valuation allowance.................................... (751,000)
---------
Total..................................................... $ --
=========
</Table>

Due to the uncertainties related to, among other things, the changes in the
ownership of the Company, which could subject those loss carryforwards to
substantial annual limitations, and the extent and timing of its future taxable
income, the Company offset the deferred tax assets by an equivalent valuation
allowance as of February 28, 2001.

The Company had also offset the potential benefits of approximately $471,000
and $222,000 from its net deferred tax assets by equivalent valuation allowances
as of February 29, 2000 and February 28, 1999, respectively. As a result of the
increase in the valuation allowance of $280,000 and $249,000 during 2001 and
2000, respectively, there are no credits for income taxes reflected in the
accompanying statements of operations to offset pre-tax losses.

NOTE 11--COMMITMENTS AND CONTINGENCIES:

EMPLOYMENT AGREEMENTS:

On January 31, 2001, the Company entered into employment agreements with two
of its officers that provide for aggregate minimum annual compensation of
$185,000 for the period from February 1, 2001 through January 31, 2006 and
$125,000 for the period from February 1, 2006 through January 31, 2011.

LITIGATION SETTLEMENT WITH MAJOR LICENSOR:

Approximately 45% and 37% of the Company's sales during 2001 and 2000,
respectively, were of products embroidered with the National Football League
logos pursuant to a license agreement with National Football League
Properties, Inc. ("NFLP") which expired effectively on June 30, 2001.

In September 1999, the Company entered into a settlement agreement with NFLP
with respect to the payment of license and royalty fees by the Company which
NFLP claimed were owed and past due. Pursuant to the terms of the settlement
agreement, the Company and NFLP agreed that if the Company complied with all of
the terms of the license and royalty agreement through March 31, 2001, the NFLP
would waive the payment of license and royalty fees aggregating $621,685 it
claimed the Company owed prior to the settlement. The Company has accrued
license and royalty fees in that amount as of February 28, 2001. Management
believes the Company complied with all of the terms of license and royalty
agreement through March 31, 2001 and, accordingly, the Company will reverse the
amount accrued and recognize an equivalent gain from the litigation settlement
during the three months ending May 31, 2001.

F-14
<Page>
PRO ELITE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 11--COMMITMENTS AND CONTINGENCIES: (CONTINUED)
CONCENTRATIONS OF CREDIT RISK:

Financial instruments that potentially subject the Company to concentrations
of credit risk consist primarily of cash and accounts receivable. The Company
maintains cash in bank deposit accounts the balances of which, at times, may
exceed Federal insurance limits (there was no such excess as of February 28,
2001). Exposure to credit risk is reduced by placing such deposits in major
financial institutions and monitoring their credit ratings.

Exposure to concentration of credit risk with respect to accounts receivable
is generally limited by the Company closely monitoring the extension of credit
to its customers, the short payment terms extended by the Company, the large
number of customers comprising the Company's customer base and the Company's
maintenance of appropriate allowances for potential credit losses.

NOTE 12--FAIR VALUE OF FINANCIAL INSTRUMENTS:

The Company's material financial instruments at February 28, 2001 for which
disclosure of estimated fair value is required by certain accounting standards
consisted of cash, accounts receivable, advances to officer, accounts payable,
accrued expenses, line of credit borrowings, notes payable and convertible
debentures payable. In the opinion of management, cash, accounts receivable,
accounts payable and accrued expenses were carried at values that approximated
their fair values because of their liquidity and/or their short term maturities.
However management does not believe that it is practicable to estimate the fair
values of (i) the advances to officers because these loans were made to related
parties or (ii) the fair values of the line of credit borrowings, notes payable
and convertible debentures payable because such obligations are subject to the
terms of various settlement or restructuring agreements resulting in part from
the Company's financial condition which could not be obtained from any
independent source.

NOTE 13--SUBSEQUENT EVENTS:

On April 2, 2001, the Company and the bank that provided it with the
revolving line of credit (see Note 6) entered into a settlement agreement
whereby the Company was only required to repay a total of $325,000. Accordingly,
the Company will recognize an extraordinary gain from the extinguishment of this
debt of approximately $62,000 during the three month period ending May 31, 2001
which represents the difference between the amount paid and the outstanding
principal balance and accrued interest as of that date of approximately
$387,000.

As explained in Note 9, the Company commenced a private offering for the
sale of up to 2,000,000 units of common stock and warrants at $.50 per unit on
January 31, 2001. During the period from March 1, 2001 through April 30, 2001,
the date the offering expired, the Company received aggregate gross proceeds of
$25,000 from the sale of an additional 50,000 units.

On May 31, 2001, the Company commenced another offering for the sale of up
to 2,000,000 units of common stock and warrants at $.50 per unit through a
private placement intended to be exempt from registration under the Act. During
the period from May 31, 2001 through July 15, 2001, the date the offering
expired, the Company received aggregate gross proceeds of $10,000 from the sale
of 20,000 units. Each unit consists of one share of common stock, one Class C
warrant and one Class D warrant. Each Class C warrant is exercisable at $1.25
per share and each Class D warrant is exercisable at $2.50 per share through
May 31, 2002. The warrants will be redeemable at the option of the Company at

F-15
<Page>
PRO ELITE, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 13--SUBSEQUENT EVENTS: (CONTINUED)
$.05 per warrant upon terms equivalent to those of the Company's Class A and
Class B warrants (see Note 9).

On April 6, 2001, the Company sold 750,000 shares of common stock for
aggregate cash consideration of $100,000 or $.133 per share.

Pursuant to the agreement described in Note 8 between the Company and the
Second Investor dated April 12, 2001, the Second Investor made an additional
purchase of convertible debentures that also have an aggregate principal balance
of $225,000. The convertible debentures will also become payable on April 12,
2002, unless they are converted into common stock at any time prior thereto at a
conversion rate of $.045 per share, and will also bear interest at 10%, which
will be payable through the issuance of shares of common stock based on the
conversion rate of $.045 per share.

* * *

F-16
<Page>
PRO ELITE, INC.

CONDENSED BALANCE SHEET

MAY 31, 2001
(UNAUDITED)

<Table>

ASSETS

Current assets:
Cash...................................................... $ 17,370
Accounts receivable, net of allowance for doubtful
accounts of $19,101..................................... 157,689
Inventories............................................... 273,495
Advances to officers...................................... 56,686
Prepaid interest.......................................... 39,350
----------
Total current assets.................................... 544,590
Furniture and equipment, net of accumulated depreciation and
amortization of $104,867.................................. 39,465
Other assets................................................ 46,456
----------
Total................................................... $ 630,511
==========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:

Accounts payable.......................................... $ 187,189
Accrued expenses.......................................... 43,435
Convertible debentures payable............................ 450,000
Current portion of notes payable.......................... 22,778
----------
Total current liabilities............................... 703,402
Notes payable, net of current portion....................... 81,425
----------
Total liabilities....................................... 784,827
----------
Commitments and contingencies

Stockholders' deficiency:
Series A preferred stock, par value $.0001 per share;
12,000,000 shares authorized; 1,200,000 shares issued
and outstanding......................................... 120
Common stock, par value $.0001 per share; 20,000,000
shares authorized; 2,536,377 shares issued and
outstanding............................................. 253
Additional paid-in capital................................ 2,000,982
Subscription receivable for 1,200,000 shares of Series A
preferred stock......................................... (576,000)
Accumulated deficit....................................... (1,579,671)
----------
Total stockholders' deficiency.......................... (154,316)
----------
Total................................................... $ 630,511
==========
</Table>

See Notes to Condensed Financial Statements.

F-17
<Page>
PRO ELITE, INC.

CONDENSED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MAY 31, 2001 AND 2000

(UNAUDITED)

<Table>
<Caption>
2001 2000
---------- ---------

Sales....................................................... $ 196,540 $ 194,007
Cost of sales............................................... 140,797 85,599
---------- ---------
Gross profit................................................ 55,743 108,408
---------- ---------

Operating expenses:
Selling expenses.......................................... 84,565 90,700
General and administrative expenses....................... 149,989 155,768
---------- ---------
Totals.................................................. 234,554 246,468
---------- ---------
Loss from operations........................................ (178,811) (138,060)
---------- ---------

Other income (expense):
Income from litigation settlement......................... 621,685
Interest expense.......................................... (9,245) (15,250)
---------- ---------
Totals.................................................. 612,440 (15,250)
---------- ---------
Income (loss) before extraordinary item..................... 433,629 (153,310)
Extraordinary item--gain on extinguishment of debt.......... 61,754
---------- ---------
Net income (loss)........................................... $ 495,383 $(153,310)
========== =========

Basic earnings (loss) per common share:
Income (loss) before extraordinary item................... $ .25 $ (.29)
Extraordinary gain........................................ .04 --
---------- ---------
Net income (loss)......................................... $ .29 $ (.29)
========== =========

Diluted earnings per common share:
Income before extraordinary item.......................... $ .07 $ --
Extraordinary gain........................................ .01 --
---------- ---------
Net income................................................ $ .08 $ --
========== =========
Basic weighted average common shares outstanding............ 1,727,562 526,161
========== =========
Diluted weighted average common shares outstanding.......... 6,353,935
==========
</Table>

See Notes to Condensed Financial Statements.

F-18
<Page>
PRO ELITE, INC.

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY

THREE MONTHS ENDED MAY 31, 2001
(UNAUDITED)
<Table>
<Caption>
SUBSCRIPTION
SERIES A RECEIVABLE
PREFERRED STOCK COMMON STOCK ADDITIONAL FOR PREFERRED STOCK
-------------------- -------------------- PAID-IN --------------------- ACCUMULATED
SHARES AMOUNT SHARES AMOUNT CAPITAL SHARES AMOUNT DEFICIT
--------- -------- --------- -------- ---------- --------- --------- ------------

Balance, March 1, 2000.... 1,200,000 $120 716,377 $ 71 $1,821,164 1,200,000 $(576,000) $(2,075,054)
Sale of units of common
stock and warrants
through private
placements.............. 820,000 82 134,918
Effects of issuance of
common stock for payment
of interest on
convertible
debentures.............. 1,000,000 100 44,900
Net income................ 495,383
--------- ---- --------- ---- ---------- --------- --------- -----------
Balance, May 31, 2001..... 1,200,000 $120 2,536,377 $253 $2,000,982 1,200,000 $(576,000) $(1,579,671)
========= ==== ========= ==== ========== ========= ========= ===========

TOTAL
---------

Balance, March 1, 2000.... $(829,699)
Sale of units of common
stock and warrants
through private
placements.............. 135,000
Effects of issuance of
common stock for payment
of interest on
convertible
debentures.............. 45,000
Net income................ 495,383
---------
Balance, May 31, 2001..... $(154,316)
=========
</Table>

See Notes to Condensed Financial Statements.

F-19
<Page>
PRO ELITE, INC.

CONDENSED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MAY 31, 2001 AND 2000

(UNAUDITED)

<Table>
<Caption>
2001 2000
-------- ---------

Operating activities:
Net income (loss)......................................... $495,383 $(153,310)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Provision for bad debts................................. (1,701) (3,878)
Depreciation and amortization........................... 3,411 3,694
Effects of issuance of common stock in exchange for
services.............................................. 38,273
Income from litigation settlement....................... (621,685)
Gain on extinguishment of debt.......................... (61,754)
Changes in operating assets and liabilities:
Accounts receivable................................... 47,159 56,908
Inventories........................................... 51,064 31,033
Advances to officers.................................. (1,143) (8,672)
Other current assets.................................. 4,003 (335)
Other assets.......................................... (1,684)
Accounts payable and accrued expenses................. 28,400 20,015
-------- ---------
Net cash used in operating activities............... (58,547) (16,272)
-------- ---------
Investing activities--purchases of furniture and equipment (1,681) (251)
-------- ---------
Financing activities:
Net repayments of line of credit borrowings............... (335,973) (79,273)
Repayments of notes payable............................... (1,865) (3,730)
Proceeds from issuance of convertible debentures.......... 225,000
Proceeds from sale of common stock and units of common
stock and warrants...................................... 135,000 100,000
-------- ---------
Net cash provided by financing activities........... 22,162 16,997
-------- ---------
Net increase (decrease) in cash............................. (38,066) 474
Cash, beginning of period................................... 55,436 2,463
-------- ---------
Cash, end of period......................................... $ 17,370 $ 2,937
======== =========
</Table>

See Notes to Condensed Financial Statements.

F-20
<Page>
PRO ELITE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1--UNAUDITED CONDENSED FINANCIAL STATEMENTS:

In the opinion of management, the accompanying unaudited condensed financial
statements reflect all adjustments, consisting of normal recurring accruals,
necessary to present fairly the financial position of Pro Elite, Inc. (the
"Company") as of May 31, 2001, its results of operations and cash flows for the
three months ended May 31, 2001 and 2000 and its changes in stockholders'
deficiency for the three months ended May 31, 2001. Pursuant to the rules and
regulations of the United States Securities and Exchange Commission (the "SEC"),
certain information and disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America ("USGAAP") have been condensed or omitted from these
financial statements unless significant changes have taken place since the end
of the most recent fiscal year. Accordingly, these unaudited condensed financial
statements should be read in conjunction with the Company's audited financial
statements as of February 28, 2001 and for the years ended February 28, 2001 and
February 29, 2000 and the notes to those financial statements (the "Audited
Financial Statements") and the other information included elsewhere herein.

The results of operations for the three months ended May 31, 2001 are not
necessarily indicative of the results to be expected for the year ending
February 28, 2002.

NOTE 2--BASIS OF PRESENTATION:

The accompanying unaudited condensed financial statements have been prepared
assuming that the Company will continue as a going concern. However, the Company
incurred a loss from operations of $179,000 in the three months ended May 31,
2001 and, as shown in the Audited Financial Statements, a net loss of
approximately $715,000 in the year ended February 28, 2001 and a loss before
extraordinary gain of approximately $727,000 in the year ended February 29,
2000. As of May 31, 2001, the Company had a cash balance of only $17,000 and
working capital and stockholders' deficiencies of approximately $159,000 and
$154,000, respectively. In addition, the Company's right to sell apparel
embroidered with National Football League logos terminated on June 30, 2001.
Sales of such apparel accounted for approximately 13% of the Company's total
sales in the three months ended May 31, 2001 and 45% and 37% of the Company's
total sales in the years ended February 28, 2001 and February 29, 2000,
respectively. Management believes that, in the absence of a substantial increase
in sales, it is probable that the Company will continue to incur losses from
operations and negative cash flows from operating activities through at least
May 31, 2002 and that the Company will need to obtain additional equity or debt
financing and/or extend the due dates of or restructure some of its obligations
to be able to sustain its operations until it can achieve profitability.

Management believes that the commercial success and profitability of the
Company will depend primarily on whether the Company can increase sales by
making potential corporate customers aware of its ability to develop and
distribute premium apparel with corporate logos and developing a proprietary
line of sportswear. To enable the Company to sustain its operations through at
least May 31, 2002 and, ultimately, complete its marketing and development
program and achieve profitability, management plans to: (i) seek additional
financing for the Company through private sales of debt and equity securities,
loans from financial institutions and/or investments by strategic partners in
joint ventures established to sell merchandise developed by the Company,
(ii) issue equity securities in lieu of cash to pay for certain services
provided to the Company, (iii) ask the holder to convert convertible debentures
issued by the Company into shares of common stock (see Notes 8 and 13 to the

F-21
<Page>
PRO ELITE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

NOTE 2--BASIS OF PRESENTATION: (CONTINUED)
Audited Financial Statements and Notes 5 and 9 herein) and/or (iv) seek the
extension of due dates of certain other obligations of the Company. However,
management cannot assure that the Company will be able to obtain any additional
equity or debt financing or extend the due dates of or restructure any of its
obligations and, accordingly, management cannot assure that the Company will be
able to sustain its operations through at least May 31, 2002.

The accompanying unaudited condensed financial statements do not include any
adjustments related to the recoverability and classification of assets or the
amount and classifications of liabilities that might be necessary should the
Company be unable to continue as a going concern.

NOTE 3--NET EARNINGS (LOSS) PER COMMON SHARE:

As explained in Note 2 to the Audited Financial Statements, the Company
presents "basic" earnings (loss) per common share and, if applicable, "diluted"
earnings per common share pursuant to the provisions of Statement of Financial
Accounting Standards No. 128, "Earnings per Share" ("SFAS 128"). Pursuant to
SFAS 128, basic earnings (loss) per share amounts were computed based on the
weighted average number of common shares actually outstanding during the three
months ended May 31, 2001 and 2000.

In addition, pursuant to SFAS 128, diluted earnings per share amounts for
the three months ended May 31, 2001 were computed by assuming that outstanding
convertible debentures in with a principal balance of $450,000 as of May 31,
2001 (see Notes 8 and 13 to the Audited Financial Statements and Note 5 herein)
were converted at $.45 per share as of the date they were issued and,
accordingly, the related interest expense thereon (which was not material) was
eliminated and the weighted average number of common shares actually outstanding
had been adjusted as shown below:

<Table>

Basic weighted average common shares outstanding............ 1,727,562
Adjustments for assumed conversion of convertible
debentures:
Weighted average shares issuable upon conversion.......... 5,164,835
Elimination of weighted average shares issued as payment
of interest expense on convertible debentures........... (538,462)
---------
Diluted weighted average shares outstanding................. 6,353,935
=========
</Table>

The assumed effects on the computation of diluted earnings per share amounts
for the three months ended May 31, 2001 of the exercise of outstanding warrants
and the conversion of shares of Series A preferred stock, all of which are
subject to subscription agreements, and the application of the treasury stock
method would have been anti-dilutive or insignificant (see Notes 9 and 13 to the
Audited Financial Statements and Note 6 herein).

There were no potentially dilutive common shares outstanding during that
period. the three months ended May 31, 2000.

F-22
<Page>
PRO ELITE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

NOTE 4--INCOME TAXES:

As of May 31, 2001, the Company had net operating loss carryforwards of
approximately $1,315,000 available to reduce future Federal and state taxable
income which, if not used, will expire at various dates through 2022.

As of May 31, 2001, the Company's deferred tax assets consisted of the
effects of temporary differences attributable to the following:

<Table>

Net operating loss carryforwards............................ $526,000
Allowance for doubtful accounts............................. 8,000
Valuation of inventories.................................... 30,000
--------
564,000
Less valuation allowance.................................... (564,000)
--------
Total..................................................... $ --
========
</Table>

The Company had also offset the potential benefits from its net deferred tax
assets by an equivalent valuation allowance during the year ended February 29,
2000. As a result of a decrease in the valuation allowance of $187,000 during
the three months ended May 31, 2001 and an increase in the valuation allowance
of $83,000 during the three months ended May 31, 2000, no provision or credit
for income taxes has been reflected in the accompanying statements of operations
to offset the pre-tax income for the three months ended May 31, 2001 and the
pre-tax loss for the three months ended May 31, 2000.

NOTE 5--CONVERTIBLE DEBENTURES:

As explained in Note 8 to the Audited Financial Statements, during the year
ended February 28, 2001, an investor (the "Second Investor") advanced $225,000
to the Company for the purchase of convertible debentures with the understanding
that the conversion rate and the other specific terms of the convertible
debentures would be subsequently negotiated. On April 12, 2001, the Second
Investor made an additional purchase of convertible debentures that also have an
aggregate principal balance of $225,000. Pursuant to an agreement between the
Company and the Second Investor dated April 12, 2001, the principal balance of
the convertible debentures will become payable on April 12, 2002 unless they are
converted into common stock at any time prior thereto at a conversion rate of
$.045 per share, which approximated the fair value of the Company's common stock
as of the date of the agreement. The convertible debentures bear interest at
10%, which was prepaid on April 12, 2001 through the issuance of 1,000,000
shares of common stock with a fair value of $45,000 ($.045 per share). On
August 3, 2001, the rights to the repayment of the convertible debentures held
by the Second Investor were subordinated to the rights of the holder of another
note (see Note 9 herein).

F-23
<Page>
PRO ELITE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

NOTE 6--STOCKHOLDERS' EQUITY:

As explained in Notes 9 and 13 to the Audited Financial Statements, on
January 31, 2001, the Company commenced an offering for the sale of up to
2,000,000 units of common stock and warrants at $.50 per unit through a private
placement intended to be exempt from registration under the Securities Act of
1933 (the "Act"). During the period from March 1, 2001 through April 30, 2001,
the date the offering expired, the Company received aggregate gross proceeds of
$25,000 from the sale of an additional 50,000 units.

As explained in Note 13 to the Audited Financial Statements, on May 31,
2001, the Company commenced another offering for the sale of up to 2,000,000
units of common stock and warrants at $.50 per unit through a private placement
intended to be exempt from registration under the Act. During the period from
May 31, 2001 through July 15, 2001, the date the offering expired, the Company
received aggregate gross proceeds of $10,000 from the sale of 20,000 units.

On April 6, 2001, the Company sold 750,000 shares of common stock for
aggregate cash consideration of $100,000 or $.133 per share.

As explained in Note 5 herein, on April 12, 2001, the Company issued
1,000,000 shares of common stock with a fair value of $45,000 as a prepayment of
interest on convertible debentures.

As of May 31, 2001, the Company had 22,400,000 shares of common stock
reserved for issuance upon the conversion or exercise of convertible debentures,
Series A preferred stock and warrants as follows:

<Table>

Shares issuable upon conversion of:
Convertible debentures.................................... 10,000,000
Preferred stock........................................... 12,000,000
Shares issuable upon exercise of:
Class A warrants exercisable at $1.25 per share through
January 31, 2002........................................ 180,000
Class B warrants exercisable at $2.50 per share through
January 31, 2002........................................ 180,000
Class C warrants exercisable at $1.25 per share through
May 31, 2002............................................ 20,000
Class D warrants exercisable at $2.50 per share through
May 31, 2002............................................ 20,000
----------
Total................................................... 22,400,000
==========
</Table>

As of May 31, 2001, the Company was only authorized to issue 20,000,000
shares of common stock. Accordingly, its Articles of Incorporation would have to
be amended to increase the number of authorized shares before all of the shares
reserved could be issued.

NOTE 7--LITIGATION SETTLEMENT WITH MAJOR LICENSOR:

As explained in Note 11 to the Audited Financial Statements, in
September 1999, the Company entered into a settlement agreement with National
Football League Properties, Inc. ("NFLP") with respect to the payment of license
and royalty fees by the Company which NFLP claimed were owed and past due.
Pursuant to the terms of the settlement agreement, the Company and NFLP agreed
that if the Company complied with all of the terms of the license and royalty
agreement through March 31, 2001, the NFLP would waive the payment of license
and royalty fees aggregating $621,685 it claimed the Company owed prior to the
settlement. The Company had accrued license and royalty fees in that

F-24
<Page>
PRO ELITE, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

NOTE 7--LITIGATION SETTLEMENT WITH MAJOR LICENSOR: (CONTINUED)
amount as of February 28, 2001. The Company complied with all of the terms of
license and royalty agreement through March 31, 2001 and, accordingly, it
reversed the amount accrued and recognized an equivalent gain from the
litigation settlement during the three months ended May 31, 2001.

NOTE 8--EXTRAORDINARY GAIN ON EXTINGUISHMENT OF DEBT:

On April 2, 2001, the Company and the bank that provided it with the
revolving line of credit (see Note 6 to the Audited Financial Statements)
entered into an agreement whereby the Company was only required to repay a total
of $325,000 to settle its obligation to repay the outstanding principal balance
of its line of credit borrowings and the accrued interest thereon as of that
date which totaled $386,754. Accordingly, the Company recognized an
extraordinary gain from the extinguishment of this debt of $61,754 during the
three months ended May 31, 2001.

NOTE 9--SUBSEQUENT EVENTS:

On August 3, 2001, an investor (the "Third Investor") purchased a $50,000
note from the Company which bears interest at 10% and is payable on November 3,
2001. As additional consideration for the loan, the Third Investor received
warrants to purchase 25,000 shares of the Company's common stock that are
exercisable at $.50 per share through August 1, 2006 and options to purchase
250,000 shares of the Company's common stock that are exercisable at $.20 per
share through August 1, 2006.

In addition, concurrent with the purchase of the note by the Third Investor,
the Second Investor entered into an agreement to subordinate the repayment of
the Company's outstanding convertible debentures to the repayment of the note
purchased by the Third Investor in exchange for 500,000 shares of the Company's
common stock.

* * *

F-25
<Page>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company is organized under the laws of the State of New Jersey.
Section 14A:3-5 of the New Jersey Revised Statutes, in general, empowers a New
Jersey corporation to indemnify any person who was or is a party or is
threatened to be made a party to any lawsuit or proceeding (other than an action
by or in the right of that corporation) due to the fact that such person is or
was a director, officer, employee or agent of that corporation, or is or was
serving at the request of that corporation as a director, officer, employee or
agent of another corporation or entity. A corporation is also allowed, in
advance of the final disposition of a lawsuit or proceeding, to pay the expenses
(including attorneys' fees) incurred by any officer, director, employee or agent
in defending the action, as long as the person undertakes to repay this amount
if it is ultimately determined that he or she is not entitled to be indemnified
by the corporation. In addition, New Jersey law allows a corporation to
indemnify these persons against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by any of
them in connection with the lawsuit or proceeding if (a) he or she acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the corporation, and (b) with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful.

A New Jersey corporation also can indemnify its officers and directors in an
action by or in the right of the corporation to procure a judgment in its favor
under the same conditions, except that judicial approval is needed to indemnify
any officer or director who is adjudged to be liable to the corporation. Where
an officer or director is successful on the merits or otherwise in the defense
of any such action, the corporation must indemnify him or her against the
expenses (including attorneys' fees) which he or she actually and reasonably
incurred in connection with this action. The indemnification provided by New
Jersey law is not deemed to be exclusive of any other rights to which an officer
or director may be entitled under any corporation's own organizational
documents, agreements or otherwise.

As permitted by Section 14A:3-5 of the Revised New Jersey Statutes, Article
Seven of our restated certificate of incorporation provides that we will
indemnify each person who is or was our director, officer, employee or agent
(including the heirs, executors, administrators or estate of these individuals)
or is or was serving at our request as a director, officer, employee or agent of
another entity, to the fullest extent that the law permits. This indemnification
is exclusive of any other rights to which any of these individuals otherwise may
be entitled. The indemnification also continues after a person ceases to be a
director, officer, employee or agent of our company and inures to the benefit of
the heirs, executors and administrators of these individuals. Expenses
(including attorneys' fees) incurred in defending any lawsuit or proceeding are
also paid by us in advance of the final disposition of these lawsuits or
proceedings after we receive an undertaking from the indemnified person to repay
this amount if it is ultimately determined that he or she is not entitled to be
indemnified by us. Article Seven further provides that a director or officer
shall not be personally liable, or shall be liable only to the extent therein
provided, to the corporation or its shareholders for damages for breach of any
duty owed to the corporation or its shareholders, except that such provision
shall not relieve a director or officer from liability for any breach of duty
based upon an act or omission (a) in breach of such person's duty of loyalty to
the corporation or its shareholders, (b) not in good faith or involving a
knowing violation of law or (c) resulting in receipt by such person of an
improper personal benefit. As used above, an act or omission in breach of a
person's duty of loyalty means an act or omission which that person knows or
believes to be contrary to the best interests of the corporation or its
shareholders in connection with a matter in which he has a material conflict of
interest. The Company's By-laws also provide that, to the fullest extent
permitted by law, we will indemnify any person who is a party or

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otherwise involved in any proceeding because of the fact that he or she is or
was a director or officer of our company or was serving at our request.

INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT
OF 1933 MAY BE PERMITTED TO OUR DIRECTORS, OFFICERS AND CONTROLLING PERSONS
PURSUANT TO ANY OF THESE FOREGOING PROVISIONS, OR OTHERWISE, WE HAVE BEEN
ADVISED THAT IN THE OPINION OF THE SEC SUCH INDEMNIFICATION IS AGAINST PUBLIC
POLICY AS EXPRESSED IN THE SECURITIES ACT AND IS, THEREFORE, UNENFORCEABLE.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the various expenses incurred in connection
with the issuance and distribution of the securities being registered hereby
expected to be incurred by the Company:

<Table>

SEC registration fee....................................... $575.25
State securities law fees and expenses..................... $ *
Printing and engraving expenses............................ $ *
Legal fees and expenses.................................... $ *
Accounting fees and expenses............................... $ *
Transfer Agent Fee......................................... $ *
-------
Total.................................................... $ *
=======
</Table>

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

* To be completed by amendment.

All amounts in the above table are estimated except the SEC registration
fee.

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

In April of 2000 the Company made a private sale of 250,000 shares of Common
Stock for a total aggregate consideration of $100,000, or $0.40 per share.

The Company sold an additional 100,000 shares of Common Stock for an
aggregate consideration of $25,000, or $0.25 per share in July of 2000.

Since April of 2000 to date the Company issued 183,990 shares of common
stock having a fair value of $160,355 as compensation for services provided by
various vendors, consultants, and attorneys

All of the above issuances were performed under and in reliance on
Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act").
The number of shares reflected for each issuance listed above does not give
effect to a 1:6 reverse stock split of the Company's common stock as of
January 13, 2001.

Commencing January 31, 2001, the Company issued 180,000 units at $0.50 per
unit in a private placement pursuant to Rule 506 of Regulation D to accredited
investors only. Each unit consisted of one share of the Company's common stock,
one Class A Common Stock Purchase Warrant to purchase one share of our common
stock at a price of $1.25 per share until January 31, 2002 and one Class B
Common Stock Purchase Warrant to purchase one share of the Company's common
stock exercisable at $2.50 per share until January 31, 2002.

In April 2001, the Company issued 750,000 shares of its common stock to
Mr. George Bally at a price of $.14 per share in a private sale in reliance on
Section 4(2) of the Securities Act.

On April 13, 2001, the Company issued to Mr. Joseph Blumenthal a 10%
Convertible Promissory Note in the original principal amount of $450,000. The
note is convertible at a rate of $.045 per share into 10,000,000 shares. The
Company issued this note also in reliance on Section 4(2) of the Securities Act.

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On May 31, 2001, the Company issued 20,000 units at $0.50 per unit in a
private placement pursuant to Rule 506 of Regulation D to one accredited
investor only. Each unit consisted of one share of the Company's common stock,
one Class C Common Stock Purchase Warrant to purchase one share of our common
stock at a price of $1.25 per share until May 31, 2002 and one Class D Common
Stock Purchase Warrant to purchase one share of the Company's common stock
exercisable at $2.50 per share until May 31, 2002.

ITEM 27. EXHIBITS

<Table>
<Caption>
EXHIBIT NO. DESCRIPTION
- ----------- -----------

3.1 Certificate of Incorporation, as amended

3.2 By-Laws

4.1 Specimen certificate for common stock*

4.2 Specimen certificate for preferred stock*

4.3 Class A Common Stock Purchase Warrant*

4.4 Class B Common Stock Purchase Warrant*

4.5 Class C Common Stock Purchase Warrant*

4.6 Class D Common Stock Purchase Warrant*

4.7 Convertible Promissory Note*

5.1 Opinion of Bondy & Schloss LLP*

10.1 Employment Agreement of Mr. Robert Polsky

10.2 Employment Agreement of Mr. Michael Polsky

23.1 Consent of J.H. Cohn LLP

23.2 Consent of Feinberg & Company

23.3 Consent of Bondy & Schloss LLP (included as part of Exhibit
5.1)*
</Table>

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

* To be filed by amendment.

(B) FINANCIAL STATEMENT SCHEDULES

Report of Independent Accountants

All schedules are omitted because they are not applicable or the required
information is shown in the consolidated financial statements or the related
notes.

ITEM 28. UNDERTAKINGS

(a) The undersigned Registrant hereby undertakes to:

(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to;

(i) Include any prospectus required by Section 10(a)(3) for the
Securities Act of 1933, as amended (the "Securities Act");

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(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information set forth in the Registration Statement; and

(iii) Include any additional changed material information on the plan
of distribution.

(2) For determining liability under the Securities Act, treat each such
post- effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
BONA FIDE offering thereof.

(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the small
business issuer pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the small business
issuer will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.

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<Page>
SIGNATURES

In accordance with the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements of filing on Form SB-2 and authorized this
registration statement to be signed on its behalf by the undersigned, in the
City of Secaucus, State of New Jersey on August 31, 2001.

<Table>

PRO ELITE, INC.

By: /s/ ROBERT POLSKY
-----------------------------------------
Robert Polsky
CEO AND CHAIRMAN OF THE BOARD
</Table>

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<Table>
<Caption>
NAME TITLE DATE
---- ----- ----

/s/ ROBERT POLSKY
-------------------------------------- Chairman of the Board August 31, 2001
Robert Polsky Executive Officer and Director

/s/ MICHAEL POLSKY
-------------------------------------- President, Secretary and Director August 31, 2001
Michael Polsky
</Table>

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