RESEARCH

April 1998 CORPORATE PROFILE

SC & T International, Inc.

CORPORATE BUSINESS DESCRIPTION
RECENT DEVELOPMENTS
RECENT PRESS RELEASE
FUNDAMENTAL ANALYSIS
OVERVIEW
CORPORATE INFORMATION
OUR POSITION

CORPORATE BUSINESS DESCRIPTION

The Company develops and markets accessory and peripheral products for the personal computer and video game segments of the retail and Corporate markets under the company's PLATINUM SOUND and PER4MER registered trademarks. The company segregates its products into two distinctive product categories. The sound products are marketed under the Platinum Sound brand name, while the companies racing wheel and other input device accessories are marketed under the PER4MER brand name. The Company's sound products include sub-woofer, sound enhancement systems, and a broad line up of headphones, microphones, and amplified speaker systems. The PER4MER line consists of racing wheel products, designed for all IBM PC's, SEGA, Nintendo and Sony Playstation game consoles. This line also includes game controller devices, Volume Controllers, and a new Voice Recognized keyboard, targeted to the Corporate market.

The Company focuses on the multimedia, interactive, communications and the video gaming segments of the PC and consumer electronics industry. The company develops technology to furnish one-step, integrated solutions for the PC, MAC and Video Game user. The Company began operations in June 1993

Per4mer Racing Wheels Products

SC & T has 9 different racing wheel products SKU's (when you account for the Mattel's Hotwheel brand SKU's) ranging in retail price from $39.95 (with racing pedals) up to our new Force-Feed Back unit (complete with two Sega software titles valued at retail $60.00) which retails for $199.95. At this time SC & T's ultimate Per4mer UP - 300 is the only FFB product for the PC market available anywhere in the world. The company's gross margins will be much higher due to a full line of a new generation of products. The Per4mer racing line of products will represent about 80% of the company's revenue for fiscal 99. SC & T International under its Per4mer brand name is introducing a new product, internally code named, "Air Jordan", that it believes will revolutionize the game controller category at retail. This product will be available during June of fiscal 99. Three major national retailers have already committed to take on the first two months of production of this product.

Platinum Sound Products

The company's sound category consists of a well rounded line up of Sub Woofer, Equalizer-Amplifiers, Headphones, Microphones, Volume Controllers and Amplified Speaker systems. This product assortment was designed to compete head to head with top selling products offered by Altec Lansing, Yamaha, Labtec and Sony The company's development focus was on bringing Unique and Innovative products to the market under the banner of "Twice the Product For Half The Price." The company feels that its mission of delivering fully featured products at aggressive retail prices has been successful. Initial product offerings have been well received by both retailers and the industry media.

At present, the company offers three sub woofer products, one graphic equalizer-amplifier, a PC volume controller, 3 microphones, 3 headphones and six amplified PC speaker products. All products are compatible to IBM-PC's, Macintosh PC's, TV's, Stereos, CD ROM Players, or other electronic devices utilizing RCA mini-jack connectors.

7-Band Graphic Equalizer-Amplifier with SRS

The Company offers a 100 watt peak performance SRS(R) 3D Surround Sound equalizer/amplifier. This product features volume and balance controls and 7-band graphic equalization. This product offers high-fidelity SRS and is compatible with IBM and Macintosh PC's, and all computer sound cards. The equalizer/amplifier installs into a 3.5" drive bay or may be used externally, and has an autoswitch universal power supply that can be connected to a portable compact disc player, or any other electronic device utilizing RCA mini-jacks. It still remains the only product of this type available worldwide. The suggested retail price (SRP) for the SRS-OMNI is $69.95.

Sub Woofer Systems

Platinum Sound's low end entry product is the SWX-1200. This is a unique product offering, capable of 120 watts of peak power. Incorporating both a front and rear base/venting port, this item has a SRP of $79.95

The company will add an enhanced version of the SWX-1200, with full 3-D sound in January 1998. It will establish this product as the industries only retail sub woofer system with 3D-Sound at under $ 100.00. This product will have an SRP of $89.95.

The second product is the SWX-1600, a 160 watt peak performance sub-woofer satellite speaker sound system. This product features wood cabinet, volume and base controls and is available for the home stereo and PC markets. The SRP for this product is $99.95.

The SRS-2000, rounds out the line as an enhanced version of the SWX-1600, offering full 3-D Surround Sound. Higher power and larger speakers. The system maintains its wood cabinet and has a SRP of $149.95.

Many of the company's sub woofer products are available in either a black or white exterior finish, for both the PC and Home Stereo segments.

Amplified Speaker Products

Platinum Sound's speaker line currently consists of six speaker products. The line ranges in peak power ratings of 40 watts at the low end to 140 watts of peak power. From your basic replacement computer speaker product, the PS-610 right up to the company's newly introduced high end PS-490. This innovative product, apart from incorporating every user feature found in the more expensive speaker offerings, also includes a 3-D sound capability. SRP for the PS-490 is only $ 69.95, which is approximately $ 30-40 less than other competitive products with similar features.

Multimedia Volume Controller

The Company markets its own Volume Controller, a product that allows easy "finger control" access to a PC's volume control. This item may be mounted to the monitor, keyboard or PC tower. It eliminates the inconvenience of adjusting volume through the sound card or software volume control menu. The SRP is $11.99.

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Recent Developments

1. SC & T recently received a U.S. patent for its Multimedia Keyboard Technology. This also involved a legal battle with Maxiswitch, Silitek and Lite-On Peripherals, which SC & T prevailed on in May of 1997. See 10-K for additional details. This patent will now allow SC& T to demand royalties from other keyboard manufacturers who market this technology. Three that are currently known are NMB Technologies, Maxiswitch and Silitek. The company believes that over the next 3-5 years that most corporations will utilize this form of keyboard in some way shape or form. The above companies are in the process of being contacted by attorneys.
2. SC & T has two Registered Trade marks. They are; Platinum Sound for its Sound Enhancement and speaker products line, and Per4mer racing Wheels, which also includes our most recent new line up of ULTIMATE Per4mer products. This category includes our racing wheel products, and game controller products.
3. SC & T, under its ULTIMATE Per4mer brand, just introduced its Force feed back racing to the US marketplace the week of February 16th. This is the latest buzz word for the PC and Gaming platform. This product, the UP-300 retails with 2 software titles at $199.95. The first two US retailers for the product are Computer City and Babbage's Etc. Further roll-outs will continue in March. Last October Microsoft launched their Force Feed Joystick at a retail price of $149.95 to $179.95. It continually sells out and is still on allocation in North America. The UP-300 will start shipping in the UK and Europe the week of March 2nd. The company has over 10,000 of its Up-300 on back order at present. This number will explode once the retail industry is aware the product is shipping.
4. SC & T's racing wheel assortment, which totals 6 models, is larger than any other competitor in this category.
5. SC & T plans the introduction of four new products that include sound products and game controller devices in 1998. Its newest product, under the Per4mer brand name, is internally code named Air Jordan. The company believes it will revolutionize the game controller category around the world. Planned introduction for Air Jordan is June 15th. The project is on target for a planned release.
6. SC & T has negotiated a worldwide license agreement with Sega Entertainment to supply the company with software racing titles from there hottest selling racing games, convened to the Force Feed Back protocol compatible to its UP-300. Sega will also convert all racing titles to be compatible for the Per4mer race wheel. SC & T will also bundle numerous titles with its UP-300 and other Per4mer race models.
7. SC & T has also entered into a license agreement with Mattel for the use of its Mattel Hot Wheels logo, and the Kyle Petty # 44 NASCAR race identification. Mattel represents one of the strongest worldwide logos for ages 6-16. The company expects a steady increase in revenues due to this alliance.

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Recent Press Release

(February 25, 1998) - SCOTTS-DALE, ARIZONA- SC&T International Inc. (OTC BB: SCTI) announced today that it has entered into an agreement with OTC Financial Network of Needham, Massachusetts to be included in the Spotlight on Bulletin Board Stocks listing program.

Under terms of the agreement, the Company will be added to OTC Financial Network's weekly listing beginning on March 2, 1998. The Spotlight on Bulletin Board StocksTM is published in every weekend edition of Investor's Business Daily, and is found adjacent to the Nasdaq stock listings. Investor's Business Daily is a newspaper available on newsstands across the country with an audience of over 800,000.

James Copland, Chairman and CEO stated, "We are making every effort to inform our shareholders of the company's ongoing progress. I believe that OTC Financial Network's Spotlight on Bulletin Board Stocks is the perfect medium for qualified investors to track our stock on a weekly basis. This listing will be very advantageous to both shareholders and potential investors."

SCOTTSDALE, February 23, 1998 - SC&T International, Inc. has selected Computer City and Babbages Etc. as the first US retailers to receive the ULTIMATE PER4MER RACING WHEEL, the world's first controller to incorporate true force feedback technology (FFB). FFB simulates the bumps, jolts, skids and other real race/road driving conditions in software games with startling realism.

The ULTIMATE PER4MER FORCE FEEDBACK RACING WHEEL (UP-300) will debut on retail shelves February 25th with a target street price of $199.95. Initial shipments will include a dynamic Sega PC software title. SC&T has teamed up with Sega Entertainment Corp. to include some of Sega's best selling PC arcade racing games with the UP-300. Among the new force feedback titles being offered are Daytona USA Deluxe, Sega Rally Championship Force Feedback Edition and Sega Touring Car. SC&T's highly acclaimed professional racing pedals are also included. With over $2 million in back orders, the UP-300 will roll out to additional retailers next month.

Chris Richards, VP of Sales and Marketing of SC&T commented that, "The Ultimate Per4mer has undergone over 5,000 hours of live testing to ensure a high quality product and superior driving realism. Using a larger motor than our joystick counterparts, the Ultimate Per4mer provides more torque and stronger sensations than any other racing product. We think all racing enthusiasts will find this to be the most exciting and realistic FFB product."

(February 20, 1998) - SCOTTSDALE, Arizona - SC&T International, Inc. today announced the appointment of Richard W. Elwood to the position of Director of Finance and Operations.

Mr. Elwood was previously a Divisional Controller for Eaton Corporation, a Fortune 100 company, "Mr. Elwood's twenty-five years of financial and operations expertise is what SC&T requires to direct its internal cost cutting and restructuring efforts," stated James Copland, SC&T's Chairman and CEO.

Copland further stated "Future results will have a heavy focus on profitability and shareholder value. Dick is a seasoned professional with an outstanding track record of accomplishments. His management expertise, will greatly assist the company's efforts in this regard."

Mr. Elwood was attracted to SC&T because of the company's future promise. Despite the very difficult times the company has endured over the past eighteen months, he believes that the company is positioned for increased revenues and profitability, but acknowledges that aggressive internal cost controls are required. "This is the easy part," commented Elwood. "The company has a team of hard working personnel, a great assortment of exciting products, and I want to play a part in SC&T's future success."

Scottsdale, Arizona - (September 5, 1997) - SC&T International, Inc. (NASDAQ: SCTI) announced today that it has introduced new, highly featured multimedia speakers at mid-range price levels to compete with industry leaders Sony and Yamaha.

The new speakers, PS-470 and PS-490, are designed to enhance the sound quality available through today's newest multimedia computers.

According to Chris Richards, Vice President of Marketing and Sales for SC&T, "With the new sound card technology now available for multimedia computers, users expect the same sound quality and power they have with their home stereo systems. The PS-470 and PS-490 were designed to support the latest multimedia computers and provide users with home stereo quality sound and power, whether they're playing PC games or listening to a CD in the background as they work on a spreadsheet."

Richards added, "The sculptured look of the PS-470 and PS-490 is a modern, upscale design that adds to the sound quality they produce. The speaker grills are made of high grade fabric, enhancing the overall beauty and aesthetics of the units. Controls are straightforward and firm to the touch. It is truly a design that sets a new standard for the industry." The speakers are compatible to all IBM PC's and Macintosh PC's.

Scottsdale, AZ - August 19, 1997 - MATTEL, INC. (NYSE: MAT) and SC&T International, Inc. (NASDAQ: SCTI) today announced that they have entered into an agreement in which SC&T has licensed the HOT WHEELS brand name from Mattel for a new racing wheel for video game consoles. THE HOT WHEELS ULTIMATE PER4MER RACING WHEEL with pedals will be on the shelves in early October with a target street price of $69.95.

"The quality and design of ULTIMATE PER4MER embodies the power, performance, and attitude of the HOT WHEELS, brand," said Bob McCandlish, Director of Licensing at Mattel.

Chris Richards, VP Sales and Marketing of SC&T International, Inc. stated, "We are delighted to be a licensee of HOT WHEELS, America's leading die cast vehicles manufacturer. Mattel has shown consistent and enduring dominance in the toy marketplace with all of its products and especially so with its HOT WHEELS brand. We at SC&T are both honored and proud that our new PER4MER RACING WHEEL meets Mattel's standards of high quality and leading edge design that it demands of all of its products."

The packaging for the new wheel will feature the official HOT WHEELS racing team, the Kyle Petty #44 HOT WHEELS race car as well as the well-known "look" of HOT WHEELS products.

Box A Select Financial Date Years Ended June 30 6 months ending *year ended March 31 1996A 1997A Dec 31 97A 1999E 2000E Net Sales $3,771,123 $7,346,471 3,465,199 $14,950,000 $22,450,000 Net Income/loss (2,688,145) (6,097,193) (1,623,209) 1,510,000 4,659,000 Net Income/sh (.58) (.38) (.07)D .78 1.55 (Loss) Weighted Average 4,625,086 16,164,835 23,000,000 1,916,666(B) 3,000,000(C) Common Shares outstanding B. We assume a reverse split will occur during the first quarter of fiscal 99 commencing April 1998. Our belief that the reverse will be 12 for 1. C. We assume that during fiscal yr 2000 SC & T will most likely raise additional working capital by means of a secondary offering. Our assumption is that if SCTI can deliver their revenue and earnings estimates, that the share price should at least be trading at $10/share. If that is the case, selling 1.1 million shares @ $10/share should net them at least $9.5 million. D. The Company will only report revenues and earnings for fiscal 98 for the nine months ending March 31, 1998. New fiscal year will commence April 1, 1998 through March 31, 1999. E. During a management discussion concerning the 3rd and final quarter ending March 31, 1998, sales for the shortened year will equal $4.5 million and total losses for the year will equal $2.6 million or (.11). The Company has entered a major transition period. According to management, changes will start to occur during the first quarter of fiscal 99. New product introduction will lead SC&T towards the estimated revenues that have been discussed. Management also anticipates that due to cost cutting and other reduction in expenses that SC&T will save between $500K to $750K/year.

Box B Fundamental Comparison of Interactive Control Devices & Entertainment Software Earnings Est. for PE estimate for Company SymboL Price Calendar Year or Calendar Year SC&T International(D) SCTI .10 March 99 1.4x (NASDAQ BB) .07 Activision, Inc. (A) ATVI 13.25 March 99 16.1x (NASDAQ) .82 Thrust Master, Inc.(B) TMSR 11 1/8 Dec 98 12.6x (NASDAQ) .88 Recoton Corp. (C) RCOT 23 Dec 98 15.8x (NASDAQ) 1.45 A. Activision, Inc. is an international publisher and developer of interactive entertainment software in a wide variety of formats. ATVI distributes "Quake and Quake II". B. ThrustMaster designs, develops, manufactures and markets interactive control devices which allow players using computer software to interact realistically in a simulated environment. C. Recoton Corp. is a worldwide marketer and producer of consumer after market electronic products. RCOT's products include speakers, car audio products, amplifiers, accessories and enhancing joysticks and controllers for use with all of today's video games and computers. D. For this box we will not assume a reverse split. We are assuming 23 million shares outstanding and $14.9 million in sales for fiscal 99 and net income/sh of 7¢ or $1,410,800 in net income. Yield a PE est of 1.4x.

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FUNDAMENT ANALYSIS

Upon review of Select Financial Data (Box A), investors have the opportunity to review actual 6 month numbers ending December 31, 1997 and more importantly, estimates revenue an earnings growth during fiscal 1999 and 2000. Upon review-- investors should note that for fiscal 1999 and 2000 we have calculated a 12 to 1 reverse stock split and have assumed an equity financing during fiscal 2000. At present, SCTI currently trades at .11/share - if we calculate a share price based upon our 12 for 1, then our share valuation equals $1.32. According to management, sales and earnings during the next two years are very believable. Assuming that this is a real possibility, then SCTI is trading at an estimated PE of 1.7x and .85x, respectively. It is quite obvious that their valuations are extremely favorable for investors who invest in mini-micro caps. The estimated PE values for fiscal 1999 and 2000 limits downside risk. If we were to assign a conservative PE multiple of 10 and value SCTI with respect to the estimated earnings, then our share valuations would be $7.80 and $11.55, respectively (Note: remember that we are assuming a 12 to 1 reverse stock split and a current share price of $1.32. If the split did not occur and the earning estimates remains the same and we assign a PE of 10 based upon .07 for fiscal 1999, then our share price would equal 70¢, a whomping 600% above the current share price).

If we take a quick look at book value, which at present equals .13/share as of December 31, 1997, roughly 30% above the current price, one would have to assume that SCTI is cheap based upon book value, leads one to believe that downside risk is minimum. Another positive included within the balance sheet is the fact that there is no long-term debt and federal taxes will not be paid for many years due to huge NOL ($10 million).

Bottom line: SCTI (NASDAQ BB) looks attractively cheap based upon fundamental with little downside risk from current levels.

Upon review of Box B, we have prepared a comparison of peer companies. Activision, Inc. (ATVI), Thrust Master, Inc. (TMSR) and Recoton Corp. (RCOT), all are larger and more developed, as well as financially more sound than our investment opportunity, namely SCTI. Our main purpose is to valuate SCTI based upon an average of the three peer companies. Our comparison is, of course, based upon PE. The three companies have an average estimated PE of 14.8x for either current calendar or fiscal year. Our investment opportunity, that is SCTI, sports an estimated PE of 1.4x. We are not saying that SCTI should trade at an estimated PE of 14.8, but if it did, our share price would explode to a valuation of $1.06, a huge 900+% above its current price.

If we were extremely conservative and use half the value of the peer group, that is, 7.4x, then our share price would equal .52 or 400+% above the current price.

Our main interest is not to hype you on numbers, but instead to develop a model that demonstrates interesting as well as possible scenarios! SCTI has a long way to go in order to win back the confidence of the investment community. The company has had a troubled past, including misguided management, lawsuits, losses and deletion from NASDAQ. It has not been a pretty picture.

According to management, April 1, 1998 is the new beginning, new products, new growth, new business plan, new management and a new vision!

If SCTI can deliver the result that has been estimated, then this issue is going to fly. If only half the expectations are met, then SCTI is still going to fly.

When one considers all the factors involved here and the extremely low stock valuation, an astute investor could only assume one thing, that is, there is very little downside risk while the upside potential could be huge (a 10 bagger!)

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OVERVIEW

Why SC & T International, Inc. (SCTI - NASDAQ BB) deserves serious investor consideration.

1. New Management, new products, new vision.
2. No long-term debt
3. Revenue and earnings estimates for next two years could reap investors huge windfall.
4. Large NOL ($10 million will not be paying taxes for a long time).
5. Cost cutting measures are anticipated to save between $500K - $750K/yr.
6. Trading below stated book value.
7. Conduct business worldwide.
8. Investors have been slaughtered for the past two years, most want nothing to do with it, a great contrarian pick!
9. SC & T International, Inc. participates in a huge market with huge potential for growth - see Graph #1
10. Graph #2 show worldwide gaming software industry sales - again bodes well for continued growth for even the smallest electronic game company.
11. Fiscal 99 will be the first year since the company's inception that it will be going into the Christmas 1998 selling season with a full assortment of current products. SC & T's nine different SKU's are more than all of the competition (CH Products, InterAct, Thrustmaster, and MadCatz. This strongly favors robust sales for SC &T.; New products under the catergory Per4mer Racing Wheels will represent 80% of the company's revenue during fiscal 99.
12. New products being introduced according to management will generate higher gross margins which will allow SC & T International to achieve estimated revenue and earnings for fiscal 1999 and 2000.
13. Most shareholders own SCTI at much higher prices, offers little resistance on the upside.
14. Fully reporting and current 10Q on file with SEC.
15. Low risk - high upside potential.

Our Position We have decided that SC & T International will be monitored by SA Advisory in our Summer 1997 #1 and #2 portfolio for percentage gain performance. We were hired by SCTI to produce a research report. They did not purchase our BUY recommendation. Actually, they were quite surprised. Since it is now being monitored by SA Advisory, we also intend to notify Investors when to take profits.

S.A. Advisory, an advisory firm, acts as a consultant to SCTI. We have been paid for the production of this anecdotal research report We may have purchased shares in this issue and may sell or buy additional shares at our own discretion. Before investing, consult the latest 10Q and/or call the company for any questions that you may have concerning SC&T International SA Advisory's Home Page: http://www.saadvisory.com

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CORPORATE INFORMATION

SC & T International, Inc..: During the quarter ended December 31, 1995 the comapny completed a public offering of Common Stock.

Fiscal Year -March 31
Total Authorized Shares - 25,000,000
Shares outstanding as of March 1998- 22,940,000
Public Float - 22,940,000
Management Control - Under 1%
Current Price - $.10
Market Cap - $2.3 Mil
Current Book Value -3,076,283 12-31-97
PE estimate 1999 - 1.7x
PE estimate 2000 - .85x
Dividend - NM
Long term debt - $.00
Employees - 20
Legal proceeding - 3
Shareholders - 1150

Transfer Agent - AST

Auditor - Evers & Company. LTD 602-230-9480

Our Position