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 September 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 Identification No.)
 Incorporation or Organization)

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 10/31/97 is 23,274,039.


<PAGE>
Item 1.      FINANCIAL STATEMENTS

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

<CAPTION>

                                                                                     September 30, 1997          December 31, 
                                                                                         (Unaudited)                     1996


<S>                                                                                <C>                          <C> 

ASSETS
Current assets:
     Cash and cash equivalents                                                            $      118            $          64
     Trade accounts receivable, net                                                            6,004                    5,274
     Inventories                                                                               6,999                    7,957
     Prepaid expenses and other current assets                                                   780                      362
     Deferred tax benefit                                                                        363                      363
                                                                                              ------                   ------    
                    Total current assets                                                      14,264                   14,020

Fixed assets, net                                                                              1,791                    1,822
Other assets                                                                                     226                      320
Deferred tax benefit                                                                             756                      756
Goodwill                                                                                       1,676                    1,709
                                                                                            --------                  -------       
                   Total assets                                                            $  18,713             $     18,627
                                                                                           =========                =========      

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
      Notes payable to affiliates                                                          $   1,108             $        885
      Notes payable to bank                                                                    2,340                    6,104
      Current portion of capital lease                                                             6                        9
      Accounts payable                                                                         3,508                    3,107
      Accrued expenses                                                                           828                      567
                                                                                            --------                  -------     
                    Total current liabilities                                                  7,790                   10,672

Notes payable to affiliates - long term                                                        2,828                        -
Notes payable to banks - long term                                                             6,460                    5,196 
Long term portion of capital lease                                                                14                       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 100,000,000 shares authorized, 23,274,039
            shares outstanding                                                                   233                      233
Additional paid-in capital                                                                     9,313                    9,313
Accumulated deficit                                                                          (12,137)                 (11,016)
                                                                                             -------                  --------     
            Total stockholders' equity                                                         1,621                    2,742
                                                                                             -------                  --------
            Total liabilities and stockholders' equity                                     $  18,713              $    18,627
                                                                                             =======                  ========    















                                                                                           1




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


<CAPTION>
                                                                   Three Months                                 Nine  Months
                                                                Ended September 30,                           Ended September 30,
                                                           1997                  1996                       1997              1996

<S>                                                <C>                    <C>                       <C>               <C>  

Net sales                                           $      6,854           $     4,730               $     24,039      $     19,317

Cost of sales                                              6,248                 4,022                     20,356            15,824
                                                          ------                ------                    -------            -------
      Gross profit                                           606                   708                      3,683             3,493

Selling, general and                                       1,248                 1,253                      3,710             3,711
   administrative expenses
                                                          ------                ------                    -------            -------
      Operating income                                      (642)                 (545)                       (27)             (218)

Non-operating expense:
      Interest expense, net                                  330                   263                       1046               840
      Other, net                                              24                    14                         44                19
                                                          ------                ------                    -------            -------
      Total non-operating expense                            354                   277                       1090               859
                                                          ------                ------                    -------            -------
Income (loss) before income taxes                           (996)                 (822)                    (1,117)           (1,077)

Income tax expense (benefit)                                   -                  (280)                          -             (360)
                                                          ------                ------                    -------            -------
Net income (loss)                                   $       (996)          $      (542)              $     (1,117)       $     (717)
                                                          =======               =======                    =======           =======
Income (loss) per common share outstanding*         $       (.05)          $      (.03)              $       (.06)       $     (.04)
                                                          =======               =======                    =======           =======
Income (loss) per common share & equivalents        $       (.05)          $      (.03)              $       (.06)       $     (.04)
outstanding**
                                                          =======               =======                    =======           =======
Weighted average common shares outstanding                 23,274                23,257                     23,274           23,264
                                                          =======               =======                    =======           =======




*  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.




















                                                                                      2
</TABLE>

<PAGE>
<TABLE>
                                                                                         AJAY SPORTS, INC. AND SUBSIDIARIES
                                                                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                           (IN THOUSANDS), (UNAUDITED)          



<CAPTION>
                                                                                                          Nine   Months
                                                                                                      Ended  September 30,
                                                                                                 1997                         1996

<S>                                                                                  <C>                           <C>            


Cash flows from operating activities:
     Net income (loss)                                                                 $       (1,117)               $        (717)
      Adjustments to reconcile net cash flows from
      operating activities:
                  Depreciation and amortization                                                   292                          286
      Change in assets [(increase)/decrease] and
       liabilities [increase/(decrease)]:
                   Trade accounts receivable, net                                                (730)                         592
                    Inventories                                                                   958                          703
                    Prepaid expenses and other current assets                                    (418)                        (192)
                    Other assets                                                                   86                         (162)
                    Deferred tax benefits                                                           -                         (360)
                    Accounts payable                                                              401                          356
                    Accrued expenses                                                              333                          (19)
                    Goodwill                                                                        -                         (300)
                                                                                             ---------                    ---------
                    Net cash used in
                    operating activities                                                         (195)                         187
                                                                                             ---------                    ---------
Cash flows from investing activities:
       Acquisitions of property, plant, equipment                                                (220)                        (194)
      Dispositions  of  fixed assets                                                                 -                         (64)
                                                                                             ---------                    ---------
                     Net cash used in
                     investing activities                                                        (220)                        (258)
                                                                                             ---------                    ---------
Cash flows from financing activities:
        Net change in bank loans                                                               (2,500)                        (396)
        Net change in notes payable to affiliates                                               3,051                          560
        Preferred stock conversion                                                                  -                           12
        Dividends                                                                                 (82)                        (228)
                                                                                             ---------                    ---------
                      Net cash provided by
                      financing activities                                                        469                          (52)
                                                                                             ---------                    ---------
Net increase in cash and cash equivalents                                                          54                         (123)
Cash and cash equivalents at beginning of period                                                   64                          362
                                                                                             ---------                    ---------
Cash and cash equivalents at end of period                                             $          118                  $       239
                                                                                             =========                    =========
Supplemental disclosures of cash flow information:
       Cash paid for interest                                                          $          880                  $       881
                                                                                             =========                    =========
       Cash paid for income tax                                                                     -                            -
                                                                                             =========                    =========













                                                                                   3
</TABLE>
<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 September 30, 1997 and the results of operations  for
the three-month and nine-month periods ended September 30, 1997 and 1996 and the
cash flows for the same nine-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.  It is suggested that
these condensed  financial  statements 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 preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect certain  reported amounts and  disclosures.  Accordingly,  actual results
could differ from those estimates.

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:


                           September 30,                         December 31,
                                   1997                                 1996
                       -------------------                   ------------------
Raw Materials                    $2,042                               $4,153
Work in Process                     825                                  995
Finished Goods                    4,132                                2,809
                                  -----                                -----
                                 $6,999                              $ 7,957
                                  =====                                =====


                                      4
<PAGE>

Note 3.  DEBT


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 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 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
Company is in compliance with the covenants of the Loan Agreement as of 9/30/97.
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.


                                        5

<PAGE>



Note 3.  DEBT (Cont'd)


Williams  has made  loans and  provided  capital  to the  Company  to assist the
Company in meeting  its  financing  requirements.  In  addition  to  $560,000 at
closing,  the Company  borrowed  $2,268,000  from Williams in order to close the
loan.  The Company agreed to grant  Williams a security  interest  junior to the
bank's security interest.  The  characterization of the Company's  obligation to
Williams as equity or debt has not yet been determined. The Company and Williams
have, however,  agreed that this is a  long-term  investment.  Accordingly,  the
obligation is reported as a long-term liability. The Company, however, continues
to rely on extended  vendor terms and affiliate  financing to meet its financing
needs.

Ajay continues to focus on obtaining 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 nine months
ended September 30, 1997 (unaudited) are as follows (in thousands):

<TABLE>

                        Quarter Ended September 30, 1997
<CAPTION>
                              Furniture                Golf          Corporate     Consolidated
                             ----------             --------         ---------     ------------
<S>                          <C>                    <C>              <C>           <C>    

Net Sales                        $  403              $6,451          $        -     $   6,854
Operating Profit/(Loss)            (340)               (174)               (128)         (642)
Total Assets                      2,365              16,348                   -        18,713
Depreciation/Amortization            31                  68                   -            99
Capital Expenditures                 47                  74                   -           121

                        Nine Months Ended September 30, 1997
                                Furniture                Golf          Corporate    Consolidated
                               ----------            ---------         ---------    ------------  
Net Sales                         $3,764             $20,275           $       -     $ 24,039
Operating Profit/(Loss)              103                 107               (237)          (27)
Total Assets                       2,365              16,348                   -       18,713
Depreciation/Amortization             67                 225                   -          292
Capital Expenditures                 102                 118                   -          220
</TABLE>


Note 5.  DIVIDENDS

Dividends on Series C Convertible Preferred Stock have not been declared for the
first three 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.





                                        6

<PAGE>




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

FINANCIAL  CONDITION - At September 30, 1997 the Company had working  capital of
$6,474,000  as compared  with  $3,348,000  at December  31,  1996.  The ratio of
current  assets to  current  liabilities  at  September  30,  1997 was 1.8 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 the short-term debt to long-term debt.

At September 30, 1997 the Company had increased its borrowings by $551,000 since
December 31, 1996. This was primarily due to operating  losses  sustained by its
Palm Springs Golf, Inc. subsidiary.

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.

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.

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 and is
$5,662,000 as of September 30, 1997.  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 three  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.




                                        7

<PAGE>



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


RESULTS OF OPERATIONS - The Company's  operations  are highly  seasonal with the
greatest  revenue  and  operating  profits  traditionally  generated  during the
January to June  period of its year.  Operating  losses are  typical  during its
second half ending December 31.

During  the  quarter  ended  September  30,  1997 the  Company  had net sales of
$6,854,000,  compared to  $4,730,000  for the same  period in 1996.  The overall
sales  increase of 45% was a result of a 126%  increase  ($225,000) in furniture
sales  and a 42%  increase  in golf  sales.  For  the  nine-month  period  ended
September  30, 1997  overall  sales were up 24% with  furniture  up 98% and golf
sales up 16%.

Gross profit for the three  months ended  September 30 1997 was 9% of net sales,
compared  to 15% for the same  period in 1996.  Furniture  gross  profit for the
present  quarter,  as compared to the same  quarter of the prior year,  was down
$103K  because  of  the  introduction  of a  new  product  line.  As  a  result,
manufacturing expenses increased in developing the new line and keeping staffing
levels  higher  in  anticipation  of  introducing  the new line  during  the 4th
quarter.  Gross  profit on sales of golf  clubs  was down  $159K  due to  market
conditions  which required the lowering of prices to reduce  inventories of golf
club products.  During the quarter,  additional  costs of $140,000 were incurred
from   expediting   shipments   of  raw  and  finished   goods  and   production
inefficiencies due to a shortage of cash. Gross profit for the nine-months ended
September  30,  1997 was 15%  compared  to 18% for the same  period of the prior
year. Margins as a percent of sales were further reduced by a shift in sales mix
where increased sales consisted of a larger  percentage of  purchased-for-resale
goods as compared to  manufactured-for-sale  goods.  Purchased-for-resale  goods
carry  lower  gross  profit  margins  and  correspondingly   lower  selling  and
administrative expenses.

Selling,  general and administrative expenses expressed as a percentage of sales
were 18.2% for the third  quarter of 1997,  versus  26.4% for the same period in
1996. This reflects a growth in sales. For the nine-months  ended 9/30/97,  SG&A
was  unchanged as to amount when compared to the same period for the prior year.
As a percent  of sales,  SG&A  declined  from  19.2% for the  nine-months  ended
9/30/96 to 15.4% in the nine-months ended 9/30/97.

Operating loss for the third quarter of 1997 was $642,000  compared to operating
loss of  $545,000  for the third  quarter  of 1996.  As  discussed  above,  this
reflects increased  manufacturing  expenses in developing and staffing for a new
shelving product line, low margins from sales of golf clubs and additional costs
from expediting raw materials and production inefficiencies due to a shortage of
cash.  Operating  loss for the  nine-months  ended  9/30/97  was  $27,000  which
compares to a loss of $218,000 in the same period of the prior year.

Interest expense  increased $67,000 or 25% in the third quarter of 1997 compared
to the third  quarter of 1996 as a result of a 15% increase in interest  bearing
debt and an increase in interest  rates.  Interest  expense for the  nine-months
ended  September  30, 1997 was up $206,000 due to rate  increases  and increased
interest bearing debt.



                                       8
<PAGE>



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

As a result of the above,  the third quarter loss before income taxes  increased
$174,000 when compared to the same period in the prior year. The nine-month loss
before income taxes was $40,000 more than for the same period in the prior year.

The Company has maintained golf manufacturing and  administrative  operations in
two  locations,  Cathedral  City,  California  (Palm  Springs Golf,  Inc.),  and
Delavan,  Wisconsin (Ajay Leisure Products,  Inc.). This dual facility operation
results in duplicate expenses,  less efficiency in execution and reduced service
levels.  In its  continuing  effort to improve  results,  the  Company  plans to
consolidate  the  manufacturing  and  administration  facility  into the Delavan
facility during the quarter ending  12/31/97.  Management  anticipates that this
consolidation  and its  resulting  benefits  will  contribute  significantly  to
improving the future financial results of the Company.
                                      

                                        9

<PAGE>




PART II.  OTHER INFORMATION



Item 6.  EXHIBITS AND REPORTS ON FORM 8-K


     a) No reports on Form 8-K were filed during the quarter ended September 30,
        1997.

     b) Exhibit #27:   Financial Data Schedule.






                                        10

<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:   November  14, 1997





















                                        11