Coyote Sports Forced to Restructure Debts

BOULDER, Colo. - Coyote Sports Inc. (NASDAQ:COYT), and Royal Precision Inc. announced Tuesday that the merger agreement between the two companies has been terminated at the request of Royal Precision Inc. due to a material change in the business of Coyote Sports Inc. resulting in an inability to obtain suitable replacement long-term debt financing.

Termination of the merger agreement and the failure to obtain replacement long-term financing will most likely have a material adverse effect on Coyote's business, operating results and financial condition. The company, which is not current with certain vendors, is undertaking a thorough review of its financial situation to develop a plan to restructure the company and its financial obligations.

Certain substantial debt obligations of the company contain a demand feature. The company is in direct communication with its lenders and hopes to be able to obtain satisfactory accommodations to restructure its obligations. If the company is not able to obtain satisfactory accommodations from its lenders or obtain other financing, it may be forced to seek relief under the United States Bankruptcy Code.

In addition, the company anticipates that its common stock is likely to be delisted from the Nasdaq SmallCap Market.

Coyote Sports Inc. is a diversified sports manufacturing company that specializes in golf (Apollo and Unifiber golf shafts), cycling (Reynolds premium cycle tubing), and the manufacture of advanced composite materials used for sporting goods products.

Certain oral and written statements of management of the company included in this press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, that involve risks and uncertainties that could cause actual results to differ materially.

Contact: Investor Relations Services Inc., New Smyrna Beach, Fla., Ray Hutchison, 904/409-0200