UNITED STATES

                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549

                                   FORM 10-Q

MARK ONE:

            (X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                   OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1997

                                      OR

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

                  For the transition period from _______ to_________

                          Commission File No. 0-18204

                                AJAY SPORTS, INC.
             ----------------------------------------------------
            (Exact name of Registrant as specified in its charter)


         Delaware                                               39-1644025
------------------------------                            --------------------  
(State or other jurisdiction of                              (I.R.S.  Employer
 Incorporation or Organization)                             Identification No.)
 

       1501 E. Wisconsin Street,
       Delavan, Wisconsin   53115                             (414) 728-5521
---------------------------------------         -------------------------------
(Address of principal executive offices        (Registrant's  Telephone Number,
including Zip Code)                                   including Area Code)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  report),  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

            Yes  /x/                              No  / /

Number of shares of common stock outstanding at 6/30/97 is 23,274,039.



<PAGE>

Item 1.      FINANCIAL STATEMENTS

                       AJAY SPORTS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)


                                                  June 30, 1997    December 31,
                                                      (Unaudited)          1996
ASSETS
Current assets:
 Cash and cash equivalents                        $          415    $        64
 Trade accounts receivable, net                            7,864          5,274
 Inventories                                               7,005          7,957
 Prepaid expenses and other current assets                   708            362
 Deferred tax benefit                                        363            363
                                                          ------         ------
    Total current assets                                  16,355         14,020

Fixed assets, net                                          1,755          1,822
Other assets                                                 231            320
Deferred tax benefit                                         756            756
Goodwill                                                   1,687          1,709
                                                          ------         ------ 
    Total assets                                  $       20,784    $    18,627
                                                          ======         ======

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Notes payable to affiliates                      $        4,740    $       885
 Notes payable to bank                                     2,340          6,104
 Current portion of capital lease                              7              9
 Accounts payable                                          2,894          3,107
 Accrued expenses                                            586            567
                                                          ------         ------ 
    Total current liabilities                             10,567         10,672

Notes payable  -  long term                                7,581          5,196
Long term portion of capital lease                            15             17

Stockholders' equity:
 Preferred stock, 10,000,000 shares authorized,   
  Series B, $0.01 par value, 12,500 shares
      outstanding at liquidation value                     1,250          1,250
  Series C, $10.00 par value, 296,170 shares
      outstanding at stated value                          2,962          2,962
 Common stock, $.01 par value 50,000,000 shares 
      authorized, 23,274,039 shares outstanding              233            233
Additional paid-in capital                                 9,313          9,313
Accumulated deficit                                      (11,137)       (11,016)
                                                          ------         ------ 
    Total stockholders' equity                             2,621          2,742
                                                          ------         ------

    Total liabilities and stockholders' equity    $       20,784    $    18,627
                                                          ======         ======










                                        1
<PAGE>
                       AJAY SPORTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                          Three Months                       Six  Months
                                                          Ended June 30,                    Ended June 30,
                                                       1997            1996              1997           1996
                                                      -----           -----             -----          -----    
<S>                                                <C>            <C>                <C>            <C> 

Net sales                                          $  9,584        $  8,325          $ 17,185       $ 14,587

Cost of sales                                         7,965           6,669            14,108         11,802

      Gross profit                                    1,619           1,656             3,077          2,785

Selling, general and                                  1,294           1,266             2,462          2,458
   administrative expenses

      Operating income                                  325             390               615            327

Non-operating expense:
      Interest expense, net                             438             298               716            577
      Other, net                                         15               3                20              5

      Total non-operating expense                       453             301               736            582

Income (loss) before income taxes                      (128)             89              (121)          (255)

Income tax expense (benefit)                             (2)             37                 -            (80)

Net income (loss)                                  $   (126)       $     52          $   (121)      $   (175)

Income (loss) per common share outstanding*        $   (.01)       $    .00          $   (.01)      $   (.01)

Income (loss) per common share & equivalents       $   (.01)       $    .00          $   (.01)      $   (.01)
outstanding**

Weighted average common shares outstanding           23,274          23,190            23,274         23,268


<FN>


*  Computed by dividing net income or loss, after reduction for preferred stock dividends, by the weighted average
    number of common shares outstanding.

**Computed by dividing net income or loss, after reduction for preferred stock dividends, by the weighted average
    number of common share and common share equivalents outstanding.

</FN>
</TABLE>

                                       2
<PAGE>
                       AJAY SPORTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (IN THOUSANDS), (UNAUDITED)
                                        
                                        
                                        
                                                             Six   Months    
                                                             Ended  June  30, 
                                                       1997                1996
                                        
                                        
Cash flows from operating activities:                                   
 Net income (loss)                                 $   (121)          $    (175)
   Adjustments to reconcile net cash flows from                              
   operating activities:                                     
     Depreciation and amortization                      188                 229
   Change in assets [(increase)/decrease] and                                 
   Liabilities [increase/(decrease)]:                                       
      Trade accounts receivable, net                 (2,590)             (1,856)
      Inventories                                       952                 448
      Prepaid expenses and other current assets        (346)               (299)
      Other assets                                       89                (179)
      Deferred tax benefits                               -                 (81)
      Accounts payable                                 (213)                260
      Accrued expenses                                   97                 (88)
                                                      -----               -----
                                    
      Net cash used in                                    
      operating activities                           (1,944)             (1,741)
                                                      -----               -----
                                        
Cash flows from investing activities:                                   
   Acquisitions of property, plant, equipment           (99)               (161)
                                                      -----               -----
                                          
      Net cash used in                                   
      investing activities                              (99)               (161)
                                                      -----               -----
                                          
Cash flows from financing activities:                                   
   Net change in bank loan                            1,371               2,001
   Net change in notes payable to affiliates          1,105                   -
   Preferred stock conversion                             -                   1
   Dividends paid                                       (82)               (154)
                                        
      Net cash provided by                                      
      financing activities                            2,394               1,848
                                                      -----               -----
                                          
Net increase in cash and cash equivalents               351                 (54)
Cash and cash equivalents at beginning of period         64                 362
                                                      -----               -----
                                          
Cash and cash equivalents at end of period         $    415           $     308
                                                      =====               =====
                                          
Supplemental disclosures of cash flow information:                        
   Cash paid for interest                          $    656           $     587
                                                      =====               =====
   Cash paid for income tax                               -                   -
                                                      =====               =====
                                        


                                       3


<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1.  BASIS OF PRESENTATION

The  condensed  consolidated  financial  statements  included  herein  have been
prepared by Ajay Sports,  Inc. (the "Company") without audit and pursuant to the
rules and regulations of the Securities and Exchange Commission.  In the opinion
of the Company, the financial statements reflect all adjustments,  which consist
only of normal recurring adjustments,  necessary to present fairly the financial
position of the Company at June 30, 1997 and the results of  operations  for the
three-month  and six month  periods  ended  June 30,  1997 and 1996 and the cash
flows for the same six-month periods.

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted pursuant to the SEC rules and regulations dealing
with  interim  financial  statements.  However,  the Company  believes  that the
disclosures  made in the  condensed  financial  statements  included  herein are
adequate to make the  information  presented  not  misleading.  These  condensed
financial statements should be read in conjunction with the financial statements
and notes thereto  included in the Company's  Annual Report on Form 10-K for the
fiscal year ended December 31, 1996.

The year-end  condensed  balance  sheet data was derived from audited  financial
statements,  but does not include all disclosures required by generally accepted
accounting principles.

The interim period results are not  necessarily  indicative of results which may
be  expected  for any other  interim  or for the full  year.  Certain  costs are
estimated for the full year and  allocated to interim  periods based on activity
associated with the interim period. Accordingly,  such costs are subject to year
end adjustment.


Note 2.  INVENTORIES

The major classes of inventories (rounded to thousands) are as follows:


                                   June 30,            December 31,
                                       1997                    1996
                                   --------            ------------

     Raw Materials                   $3,048                $  4,153
     Work in Process                  1,137                     995
     Finished Goods                   2,820                   2,809
                                     ------                  ------

                                    $ 7,005                 $ 7,957
                                     ======                   =====



<PAGE>
Note 3.  DEBT

As discussed in the  Company's  first quarter  10-Q,  the Company's  former bank
lender had advised the Company that the bank  contended  that the Company was in
technical  default under its loan agreement due to the default of the guarantor,
Williams Controls, Inc. (Williams).  Accordingly,  the former bank requested the
loan be paid by June 30, 1997.  The Company had been operating up until February
12,  1997 on a  revolver  limit of $8.5  million.  On  February  12 the line was
reduced to $7 million and the bank restricted  further advances from Williams to
the Company. The Company did and continued to make all interest payments on time
and  operated  within  the  limit  amounts   contained  in  the  loan  facility.
Restrictions  during  the  period  February  through  June  curtailed  operating
capability  and  reduced  sales  and   profitability   opportunities   otherwise
available.  On April 14 the  bank  agreed  to waive  the  existing  default  and
restructure the loan on less favorable formula advance rates and at an increased
interest  rate.  In addition,  the bank  required the Company to make on June 1,
1997 a $250,000 payment on its then outstanding $5,000,000 term loan.

On July 11, 1997,  the Company  refinanced  its bank debt through a  $34,088,000
three-year  revolving  credit and term loan  agreement  with a new  lender  (the
"Loan").  This  Loan is a joint  and  several  obligation  of the  Company  with
Williams Controls, Inc. ("Williams"),  under which Williams is the agent for all
of the borrowers. The combined Loan facility consists of a $26,000,000 revolving
loan facility (the "Revolver"),  a $2,658,000 real estate loan (the "Real Estate
Loan"),  a $4,  430,000  machinery  and  equipment  loan ("Term Loan I"),  and a
$1,000,000 term loan II ("Term Loan II").

At the closing  date,  the Company  borrowed  $6,825,000  under the Revolver and
$566,000 under Term Loan I. At the date of closing, Williams borrowed a total of
$17,141,000,  consisting of $9,619,000 under the Revolver,  $2,658,000 under the
Real Estate Loan,  $3,864,000  under Term Loan I, and $1,000,000 under Term Loan
II. The proceeds from the Company's and Williams' borrowings under the Loan were
used to repay the  Company's  and Williams'  loans from their  previous  lender,
except for  $2,340,000  which  represents  a bridge  loan to the  Company by the
previous lender. This bridge loan is to be repaid from the sale of assets and/or
excess cash flow and is guaranteed up to $1,000,000 by the Company's President.

Under the Revolver,  the Company and Williams can borrow up to $26,000,000 based
upon a borrowing base  availability  calculated  using specified  percentages of
eligible accounts  receivable and inventory.  The Revolver bears interest at the
Bank's  prime rate (8.5% at July 11,  1997) plus 0.5%.  The Real Estate Loan and
Term Loan I bear  interest at the Bank's  prime rate plus 0.75%.  At the Agent's
option,  funds may be borrowed under the Revolver,  the Real Estate Loan and the
Term Loan I at the London  InterBank  Offering Rate ("Libor") plus 2.75%, 3% and
3% respectively.  The Revolver,  Real Estate Loan and Term Loan I mature on July
11, 2000 and are secured by  substantially  all of the assets of the Company and
Williams.  The  Real  Estate  Loan is  being  amortized  over 20  years  and the
machinery and Term Loan are being  amortized over seven years with all remaining
principal  outstanding  due on July 11, 2000.  At July 11, 1997,  after the Loan
closing,  approximately  $1,545,000  was available  for borrowing  under the New
Loan. Term Loan II matures on June 1, 1999 with principal payments based upon an
amortization period of 24 months plus additional principal payments equal to

                                       5
<PAGE>
Note 3.  DEBT  (Cont'd)

to any excess  proceeds  from the sale of one of  Williams'  subsidiaries  after
repayment of any indebtedness under the Revolver borrowing due from the Williams
subsidiary being sold plus principal  payments equal to 50% of the Company's and
Williams' annual  consolidated  excess cash flow as defined.  The Loan agreement
restricts  payment of any  dividends  by the  Company,  requires the Company and
Williams in the aggregate to maintain  minimum  working  capital of  $25,000,000
exclusive  of  the  Revolver  and  maintain   minimum   tangible  net  worth  of
$11,000,000.  The Loan also restricts  additional  indebtedness and common stock
repurchases  and  restricts   combined  Company  and  Williams'  annual  capital
expenditures  and  increased  operating  lease  obligations  to  $2,500,000  and
$600,000,  respectively.  The Loan  agreement  imposes a  prepayment  penalty of
3%-5%,  which is  waived if the Loan is repaid  with  proceeds  from the sale of
assets or equity or is refinanced with an affiliate of the Bank.

Williams  has made  loans and  provided  capital  to the  Company  to assist the
Company in meeting its financing requirements.  The Company, however,  continues
to rely on extended  vendor terms and affiliate  financing to meet its financing
needs.

Ajay continues to focus on acquiring additional financing availability.


Note 4.  BUSINESS SEGMENT REPORTING

The  relative  contributions  to net sales,  operating  profit and  identifiable
assets of the  Company's  two  industry  segments for the quarter and six months
ended June 30, 1997 (unaudited) are as follows (in thousands):

--------------------------------------------------------------------------------
                                 Quarter  Ended  June 30, 1997
--------------------------------------------------------------------------------
                              Furniture       Golf   Corporate    Consolidated
Net Sales                  $   1,471      $  8,113    $      -    $      9,584
Operating Profit/(Loss)           49           322         (46)            325
Total Assets                   2,941        17,843           -          20,784
Depreciation/Amortization         20            87           -             107
Capital Expenditures              45            10           -              55
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
                                  Six  Months  Ended  June 30, 1997
--------------------------------------------------------------------------------
                              Furniture       Golf   Corporate    Consolidated
Net Sales                  $   3,361      $ 13,824    $      -    $      17,185
Operating Profit/(Loss)          443           281        (109)             615
Total Assets                   2,941        17,843           -           20,784
Depreciation/Amortization         36           152           -              188
Capital Expenditures              55            44           -               99
--------------------------------------------------------------------------------



                                       6
<PAGE>

Note 5.  DIVIDENDS


Dividends on Series C Convertible Preferred Stock have not been declared for the
first two quarters of 1997 due to  unavailability  of funds.  Series C dividends
are  permitted to be paid under the new loan  agreement  when  sufficient  funds
become available.


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

FINANCIAL  CONDITION  - At June 30,  1997 the  Company  had  working  capital of
$5,788,000  as compared  with  $3,348,000  at December  31,  1996.  The ratio of
current assets to current liabilities at June 30, 1997 was 1.5 to 1, compared to
1.3 at December 31, 1996. The improvement in working capital was a result of the
successful  refinancing of debt and the resulting  reclassification of a portion
of short-term debt to long-term debt.

At June 30, 1997 the Company had  increased its  borrowings by $2,476,000  since
December 31, 1996. This was primarily due to the seasonal  increases in accounts
receivable of $2,590,000.

LIQUIDITY - The  Company's  liquidity  is  primarily  affected by its  financing
requirements.  The seasonal  nature of the Company's  sales creates  fluctuating
cash flow, due to the temporary  build-up of inventories in anticipation of, and
receivables  during,  the peak seasonal period which  historically has been from
February  through May of each year. The Company has relied and continues to rely
heavily on revolving credit facilities and financial support from affiliates for
its working capital requirements.

 As discussed in the Company's  first quarter  10-Q,  the Company's  former bank
lender had advised the Company that the bank  contended  that the Company was in
technical  default under its loan agreement due to the default of the guarantor,
Williams Controls, Inc. (Williams).  Accordingly,  the former bank requested the
loan be paid by June 30, 1997.  Ajay had been  operating  up until  February 12,
1997 on a revolver limit of $8.5 million. On February 12 the line was reduced to
$7  million  and the bank  restricted  further  advances  from  Williams  to the
Company.  The  Company  made all  interest  payments  and  operated  within  the
limitations  in the  revised  loan  facility.  Restrictions  during  the  period
February  through  June  curtailed  operating   capability  and  reduced  sales,
profitability and opportunities otherwise available. On April 14 the bank agreed
to waive the existing default and restructure the loan on less favorable formula
advance rates and at an increased interest rate. In addition,  the bank required
the Company to make and the Company  made, a $250,000  term loan payment on June
1, 1997.

Ajay and Williams  jointly  entered into a loan  agreement with Wells Fargo Bank
dated as of July 11, 1997.  The new loan was funded during the  subsequent  week
and the Company's  former bank loan of $12,052,000  was paid down to $2,340,000.
This remaining balance represents a bridge loan payable to the former bank.

                                       7
<PAGE>
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Cont'd)

The  new  loan   agreement   with   Wells   Fargo   Bank   provides  a  combined
Company/Williams  facility with a three year  expiration.  Ajay's portion of the
facility  includes a revolver,  the availability of which is based on receivable
and  inventory  collateral  values  subject to  specified  rates and  ineligible
factors.  At the time of funding,  the new revolver balance was $6,825,000.  The
facility  also  includes a $566,000 term loan secured by machinery and equipment
and a  $2,340,000  term loan  participation  by its former  bank,  and  Williams
provided $2,268,000 to repay the previous loan in full.


Williams  has made  loans and  provided  capital  to the  Company  to assist the
Company in meeting its financing requirements.  The Company, however,  continues
to rely on extended  vendor terms and affiliate  financing to meet its financing
needs.

Ajay and Williams will continue to focus on obtaining  additional financing from
debt and equity sources as well as through the sale of certain assets.

Dividends  on Series C  Cumulative  Convertible  Preferred  Stock  have not been
declared  for the first two  quarters  of 1997 due to  unavailability  of funds.
Series C dividends  are permitted to be paid under the new loan  agreement  when
sufficient funds become available.

RESULTS OF  OPERATIONS - During the quarter  ended June 30, 1997 the Company had
net sales of $9,584,000, compared to $8,325,000 for the same period in 1996. The
overall  sales  increase  of 15% was a result of a 93%  increase  ($708,000)  in
furniture sales and a 7% increase in golf sales.  For the six-month period ended
June 30, 1997 overall sales were up 18% with  furniture  similarly  leading golf
sales.

Gross  profit for the three  months  ended  June 30,  1997 was 17% of net sales,
compared to 20% for the same period in 1996. This reflects difficulty in selling
to the golf club marketplace and additional  costs from expediting  shipments of
raw materials and  production  inefficiencies  due to a shortage of cash.  Gross
profit for the  six-months  ended June 30, 1997 was 18%  compared to 19% for the
same period in the prior year.

Selling,  general and administrative expenses expressed as a percentage of sales
were 13.5% for the second  quarter  of 1997,  versus 15% for the same  period in
1996. This reflects a growth in sales.  For the six-months  ended 6/30/97,  SG&A
was unchanged as to amount when compared to the same period for the prior year.

Operating  income  for the  second  quarter  of 1997 was  $325,000  compared  to
operating  income of  $390,000  for the second  quarter of 1996.  This  reflects
difficulty in selling to the golf club  marketplace  and  additional  costs from
expediting  raw materials  and  production  inefficiencies  due to a shortage of
cash.  Operating  income for the six-months ended 6/30/97 was up $288,000 or 88%
based on the strength of the first quarter.

Interest  expense  increased  $140,000 in the second quarter of 1997 compared to
the second  quarter of 1996 as a result of a 35% increase in interest  rates due
to technical default on the Company's loan.  Interest expense for the six-months
ended  June 30,  1997 was up  $139,000  due to the rate  increase  in the second
quarter.

Net income for the quarter ended June 30, 1997 was  substantially  impaired by a
shortage of operating  funds  primarily  brought on by a technical  loan default
situation which resulted in the bank both reducing  availability  and increasing
interest  rates.  The net loss for the quarter was $126,000  which compares to a
prior year profit of $52,000 for the same quarter.  Net loss for the  six-months
ended June 30, 1997 was $121,000 which compares to a prior year loss of $175,000
for the comparable six-month period.

                                       8
<PAGE>
PART II.  OTHER INFORMATION


Item 6.      EXHIBITS AND REPORTS ON FORM 8-K

         A)   Exhibits:

               10.1 Credit  Agreement dated July 11, 1997,  among registrant and
                    its  subsidiaries  and  Williams  Controls,   Inc.  and  its
                    subsidiaries,  as borrowers,  and Wells Fargo Bank, National
                    Association, as lender (the "Credit Agreement").

              10.2 Promissory Notes under the Credit Agreement:
                     (a)  Revolving Credit Loans Promissory Note
                     (b)  Term Loan I Promissory Note
                     (c)  Term Loan II Promissory Note
                     (d)  Real Estate Loan Promissory Note

              10.3 Patent Assignment and Security Agreements for:
                     (a)  Ajay Leisure Products, Inc.
                     (b)  Leisure Life, Inc.

              10.4 Trademark Security Agreement for Palm Springs Golf, Inc.

               10.5 Continuing Unconditional Guaranty of Thomas W. Itin in favor
                    of Wells Fargo Bank.

               10.6 Intercreditor Agreement dated July 11, 1997 among registrant
                    and subsidiaries,  Williams Controls, Inc. and subsidiaries,
                    United States National Bank of Oregon ("U.S. Bank"),  Thomas
                    W. Itin and Wells Fargo Bank, National Association.

               10.7 Consent,  Reaffirmation  and  Release  Agreement  with U. S.
                    Bank.

              10.8 Promissory Note of registrant for $2,340,000 to U. S. Bank.

              10.9 Guaranty to U. S. Bank.

              27  Financial Data Schedule.

         B)   Forms 8-K:

              The  Company  filed a Form 8-K,  dated May 5, 1997  reporting  the
extension of the expiration date of its common stock purchase warrants.


                                       9
<PAGE>

                                  SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


AJAY SPORTS, INC.




By:    /s/Robert R. Hebard
    -------------------------
Its:     Corporate Secretary





By:    /s/Duane R. Stiverson
    ------------------------
Its:    Chief Financial Officer



Date:    August 14, 1997