SECURITIES & EXCHANGE COMMISSION
                             Washington, D.C. 20549
     -----------------------------------------------------------------------

                                   FORM 10-KSB

                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                      For the Year Ended September 30, 1996

Commission File Number:      33-7811-NY

                             GRAFIX TIME CORPORATION
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

       New York                                              93-0943925
 ----------------------                             ---------------------------
(State of Incorporation)                           (I.R.S. Employer I.D. Number)

            2901 Suffolk Ct. East, Suite 130, Fort Worth, Texas 76133
            ---------------------------------------------------------
              (Address of principal executive offices and Zip Code)

                                 (817) 923-7224
               --------------------------------------------------
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:       None.
Securities registered pursuant to Section 12(g) of the Exchange Act:       None.

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  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days:    YES  [X]     NO   [ ]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  Registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB:    [X]

Registrant's  revenues  for its most recent  fiscal year  (ended  September  30,
1996): $674,750

Aggregate  market  value of voting stock held by  non-affiliates,  and method of
computation:

$125,625,  based on approximately  670,000 Common Shares held by  non-affiliates
and an average bid/ask price of $.1875 per Share (NASDAQ  Bulletin Board) during
the 90 days prior to date of this report.

Indicate the number of shares outstanding of each of the registrant's classes of
common stock:

2,613,521 common shares were outstanding as of September 30, 1996.

Documents incorporated by reference:        Form 8-K filed on March 12, 1997.


<PAGE>



                                   Form 10-KSB
--------------------------------------------------------------------------------


                             GRAFIX TIME CORPORATION
            Form 10-KSB for the Fiscal Year ended September 30, 1996

                                Table of Contents
                                                                  Page of Report
PART I.                                                           --------------

Item 1.       Description of Business.                                         3

                       Business Development                                    3
                       Business of Registrant                                  3
 
Item 2.       Description of Property                                          5

Item 3.       Legal Proceedings                                                5

Item 4.       Submission of Matters to a Vote of Security Holders              5

PART II.

Item 5.       Market for Registrant's Common Equity and Related
              Stockholder Matters                                              6

                       Market Information                                      6
                       Holders                                                 6
                       Dividends                                               6

Item 6.       Management's Discussion and Analysis or Plan of Operation        6

Item 7.       Financial Statements                                         7 and
                                                                            8-17

Item 8.       Changes In and Disagreements With Accountants                    7

PART III.

Item 9.       Directors, Executive Officers, Promoters and Control Persons    18

Item 10.      Executive Compensation                                          19

Item 11.      Security Ownership of Certain Beneficial Owners and Management  20

Item 12.      Certain Relationships and Related Transactions                  20

Item 13.      Exhibits and Reports on Form 8-K                                21
                                                                              21




<PAGE>


PART I.

Item 1.   Description of Business.

     (a) Business  Development.  Grafix Time  Corporation  (the  "Company")  was
originally  incorporated as "Mont Blanc  Resources,  Inc." under the laws of the
State of New York on April 16, 1986.  The  Company's  name was changed to Grafix
Time  Corporation on December 11, 1989.  Through June,  1991, the Company was in
the fashion sports watch and electronic  jewelry  distribution  business.  These
product lines were sold in June, 1991. In April,  1991, the Company acquired the
rights to  develop  and market a unique  sunglass  product  known as  Industrial
Strength  Eyewear  ("ISE").  In September,  1993, the Company  discontinued  its
efforts to develop and market the ISE product line, due to product manufacturing
problems and lack of capital resources. The Company sold the ISE product line in
February,  1994.  During June,  1995 the Company  negotiated  an Asset  Purchase
Agreement   ("APA")  with  Sports   Equipment   Technology   Company,   Inc.,  a
privately-held Colorado corporation doing business as Carrera(R) Golf ("SETCO"),
whereby the Company  would  purchase  the assets and assume the  liabilities  of
SETCO,  subject to approval of the terms of the APA by the  shareholders  of the
Company and SECTO. The terms of the APA were approved by the shareholders of the
Company on August 25, 1995, and by the shareholders of SETCO on January 2, 1996,
at which date the merger of the Company and SETCO was deemed effective.

     (b) Business of the  Registrant.  The Company has  successfully  negotiated
settlement of all  liabilities,  including  those  acquired by virtue of the APA
with  SETCO.  During the fiscal  year ended  September  30,  1996,  the  Company
obtained additional  financing that was used to develop the Carrera Golf product
lines. In addition,  the Company finalized an exclusive  distribution  agreement
with Citizen Trading Group of Japan  ("Citizen"),  and obtained its first orders
for golf products from Citizen.

          (1)  Principal  products or services  and their  markets.  The Company
designs,  develops,  assembles and distributes  high-quality golf products, golf
clothing and golf accessories  worldwide utilizing the Carrera(R)  trademark and
logo,  pursuant to an exclusive  licensing  agreement with Carrera Optyl GmbH, a
subsidiary  of Safilo SpG  ("Safilo"),  owner of the "Carrera"  brand name.  The
Company,  in  conjunction  with Citizen and Safilo,  has begun to establish  the
Carrera  Golf  name as a  leading  prestige  brand  in the  golf  industry.  The
Company's market for its products will be the upscale golfing market worldwide.

          (2)  Distribution  methods.  The Company has entered into an exclusive
distribution  agreement with Citizen, for distribution of the Company's products
in Japan. In addition, the Company intends to enter into distribution agreements
with  established  distributors  in other  overseas  markets,  to  initiate  the
marketing of the Carrera Golf products.  Management  will focus on  distributors
with credentials in the golf and apparel businesses.  The Company may distribute
its products domestically through one or more distributors, or directly.

          (3) Status of any publicly announced new products. The Company has not
publicly  announced  the  roll-out  of its  products,  except for the  Company's
announcements  of its first Citizen orders.  As of the date of this report,  the
Company has designed and produced  one line of golf clubs,  bags,  apparel,  and
other golf products. The Company has entered into an agreement with Tom Stites &
Associates,  Ft. Worth, Texas, to design and and develop additional new lines of
golf clubs for the Company.


<PAGE>


          (4) Competition,  the Company's  competitive position in the industry,
and methods of competition. The golf products industry is intensely competitive,
and the Company  competes  with  numerous  companies  that  provide  golf clubs,
apparel and  accessories.  The market for golf products and accessories that the
Company sells, including golf clubs, bags, apparel, and gloves (excluding balls,
shoes,  umbrellas,  and novelty clubs) is approximately $2.375 billion per year.
Management believes there are currently more than 50 companies manufacturing and
marketing golf equipment  which have annual golf equipment  sales of at least $1
million  each.  The Company also  believes  that the 10 largest  golf  equipment
manufacturers account for a substantial majority of all wholesale golf equipment
sales.  Most of the Company's  competitors  have greater  capital  resources and
brand  name  identification  in the golf  business  than the  Company;  however,
management  believes  that  the  Carrera(R)  name is  recognized  worldwide  for
high-quality, premium products.

          The  Company has not yet  established  a  competitive  position in the
industry,  and may not be able to do so in the United States in the  foreseeable
future,  due  primarily  to the high  costs  of  penetrating  the  U.S.  market.
Worldwide,  the "golf  products"  category  has been one of the fastest  growing
industry  segments  the past 10 years.  Most  analysts  predict that this upward
trend will  continue into the next  century,  albeit at a somewhat  slower pace.
Management intends to focus its sales and distribution  efforts initially on the
Japanese and southeast  Asian markets.  The Company has  successfully  designed,
developed,  assembled and distributed one line of premium golf products carrying
the Carrera(R) logo and trademark,  through its relationship  with Citizen.  The
Company intends to compete in the category of premium golf products. The Company
has assembled an experienced  management team, and has successfully acquired the
exclusive license to use the Carrera(R) name in connection with the marketing of
golf products.  The Company  continues its efforts to design and develop unique,
top-quality  lines of golf clubs,  apparel and accessories,  and believes it can
successfully  market those products  worldwide to the target consumer group that
has above average disposable income.

          (5) Sources of raw  materials.  Raw materials for all of the Company's
proposed products are readily available from many sources worldwide.

          (6) Dependence on one or a few major customers.  The Company currently
has one major customer:  Citizen. Virtually all of the Company's sales as of the
date of this report derive from the Company's relationship with Citizen. Loss of
the Citizen  contract or  relationship  would severely  impact the Company.  The
Company  may  in the  future  rely  upon  one or a few  major  distributors  for
distribution of the Company's products in Asia and/or Europe.

          (7) Patents,  trademarks,  licenses, and royalty agreements. By virtue
of its licensing  agreement with Safilo, the Company has acquired the exclusive,
long-term  license to use the well-known  Carrera(R)  name on its golf products.
This licensing  agreement runs through December 31, 2001, with automatic renewal
for an additional  five-year period,  unless terminated  earlier by the terms of
the agreement.  Under this agreement,  the Company is obligated to pay royalties
each year.  The  licensing  agreement  has been filed  with the  Securities  and
Exchange  Commission as Exhibit 2.1 to the Form 8-K filed on March 12, 1997, the
terms of which are  incorporated  herein by  reference.  Loss of this  agreement
would negatively impact the Company's sales and income.


<PAGE>



          (8) Government  approval.  No government  approval is required for the
Company's products.

          (9) Effect of government regulations on the business. None.

          (10) Research and development expenses. As of the date of this report,
the Company had expended  $345,297 for research and  development  on the Carrera
product lines.

          (11) Costs of environmental compliance. None.

          (12)  Employees.  As of the date of this report,  the Company had four
full-time employees.

Item 2.   Description of Property.

     The Company does not own any real property. The Company leases office space
pursuant to a lease  agreement  with Power Fade,  Fort Worth,  Texas.  Under the
terms of the  lease,  the  Company  pays $ 1,390 per month for use of office and
warehouse  space.  The  Company's  office is located at 2901 Suffolk Court East,
Suite 130, Fort Worth, Texas 76133. The telephone number is (817) 923-7224;  the
facsimile number is (817) 923-7339.

Item 3.   Legal Proceedings.

     The  Company  is subject to threats  of  lawsuits  from  suppliers,  former
employees,  and other sources that are common in the industry. As of the date of
this report,  the Company was not a party to any material  exposure or liability
related to the above.

Item 4.   Submission of Matters to a Vote of Security Holders.

     No  matters  were  submitted  for  shareholder  approval  during the fourth
quarter of the fiscal year covered by this report.

PART II.

Item 5.   Market for Common Equity and Related Stockholder Matters.

     (a) Market information.  The Company's Common Stock is traded on the NASDAQ
Bulletin Board under the symbol CRRA.  Through September 30, 1995, the Company's
trading symbol was GFIX. The range of high and low bids for the Company's common
stock  for the past two  fiscal  years,  adjusted  for the  1:40  reverse  split
approved subsequent to September 30, 1995:

Quarter Ended                                        Low Bid           High Bid
-------------                                        -------           --------

December 31, 1994                                      .80               3.60
March 31, 1995                                         .40               4.00
June 30, 1995                                          .40               4.00
September 30, 1995                                     .00               3.20


<PAGE>

Quarter Ended                                        Low Bid           High Bid
-------------                                        -------           --------

December 31, 1995                                      .25               2.50
March 31, 1996                                        1.25               2.50
June 30, 1996                                         1.00               2.50
September 30, 1996                                     .75               2.75

     The  foregoing  high and low bid  information  was  obtained  from  various
over-the-counter  brokers that have effected trades in the Company's securities.
The quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission, and may not represent actual transactions.

     (b)  Holders.  As of  September  30,  1996  there  were  approximately  298
shareholders of record of the Company.

     (c)  Dividends.  As of September 30, 1996, the Company had not declared any
dividends  on its Common  Stock  since  inception.  The Company did declare a 40
percent stock  dividend on November 28, 1995. The Company does not intend to pay
any cash dividends on its common stock in the foreseeable future.

Item 6.   Management's Discussion and Analysis or Plan of Operation.

     As of the date of this report,  the Company has begun  transition  from the
development to the operating stage. In particular,  the Company has successfully
developed golf clubs and other products,  and has obtained its first orders from
Citizen.  Management  anticipates  continuing  to develop  products  and product
lines; this will result in continuing research and development expenses.

     The Company,  as of the date of this  report,  has  experienced  a positive
change in its financial  condition,  as a result of obtaining  additional equity
financing and as a result of its ongoing  relationship with Citizen.  Please see
the  Company's  Report  on Form 8-K  filed  with  the  Securities  and  Exchange
Commission on March 12, 1997. In  particular,  total assets have  increased from
$-0- at September 30, 1995 to $949,189 for  September  30, 1996,  primarily as a
result of financing  activities.  Although total liabilities have also increased
markedly  this fiscal year,  most of those  liabilities  relate to fulfilment of
orders in  process.  Likewise,  the  Company  realized  sales for the first time
during the fiscal year ended  September 30, 1996.  While losses from  operations
increased from $246,472 in 1995 to $1,320,788 in 1996,  management believes such
losses are usual and  customary as the Company  moved from the  development  (no
revenues) stage to the operating stage.

     Subsequent  to September  30, 1996,  the Company  installed  new  financial
management  and  obtained  additional  funding  from  a  principal  shareholder,
primarily  to  enable  the  Company  to  fulfill  Citizen  orders.  General  and
administrative   expenses  have  been  reduced   dramatically.   Management  now
anticipates  reporting positive net income from operations as early as March 31,
1997.

     The Company's new  management  has met with Citizen on numerous  occasions,
and is confident that the Citizen  relationship is strong.  Citizen  anticipates
rolling out a new line of Carrera golf products,  designed and  manufactured  by
the Company,  in May, 1997.  Citizen has projected orders of $5 million from the
Company for calendar 1997.  Management  anticipates changing its fiscal year-end
to  December  31 as soon as  practicable,  and  projects  pre-tax  earnings of $
600,000 for the calendar year ending December 31, 1997.


<PAGE>


     The Company is  developing  a sales and  marketing  strategy for the United
States  market.,  and is continuing to develop sales in other overseas  markets.
Costs  associated  with U.S.  marketing can be  substantial,  and may affect the
Company's earnings.

Item 7.   Financial Statements.

     Pages 8 through 17, following,  contain the audited financial statements of
the Company for the fiscal year ended September 30, 1996, and audited by Winter,
Scheifley & Associates, Certified Public Accountants, Englewood, Colorado.

Item 8.   Changes In and Disagreements With Accountants.

     None.





            (The remainder of this page is intentionally left blank)







<PAGE>

                          INDEPENDENT AUDITOR'S REPORT



Board of Directors and Shareholders
Grafix Time Corporation
(D/B/A Carrera Golf)

We have audited the balance sheet of Grafix Time Corporation as of September 30,
1996, and the related statements of operations, changes in stockholders' equity,
and  cash  flows  for each of the two  years in the  period  then  ended.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Grafix Time Corporation as of
September  30,  1996,  and the  related  statements  of  operations,  changes in
stockholders'  equity,  and cash  flows for each of the two years in the  period
then ended, in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 9 to the
financial  statements,  the Company has suffered  recurring  losses and negative
cash flows from operations, and has negative working capital and a stockholders'
deficit. These factor raise substantial doubt about its ability to continue as a
going concern.  Management's plans in regard to these matters are also discussed
in Note 9. The financial  statements do not include any  adjustments  that might
result from the outcome of this uncertainty.

                                        /s/ Winter, Scheifley & Associates, P.C.
                                        Winter, Scheifley & Associates, P.C.
                                        Certified Public Accountants

Englewood, Colorado
March 26, 1996



<PAGE>

<TABLE>
<CAPTION>
                   Grafix Time Corporation D/B/A Carrera Golf
                                  Balance Sheet
                               September 30, 1996


<S>                                                                                <C>   
Assets

Current Assets:
     Cash .................................................................        14,712
     Employee advances ....................................................        38,155
     Inventory ............................................................       398,693
     Merchandise deposits .................................................       279,066
                                                                               ----------
          Total current assets ............................................       730,656
Property and equipment, at cost, net of
  accumulated depreciation of $1,554 ......................................        13,989
Trade name license, at cost, net of
  accumulated amortization of $5,263 ......................................       194,737
Other assets ..............................................................         9,807
                                                                               ----------
                                                                                  949,189
                                                                               ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
     Notes payable-current portion ........................................       437,000
     Accounts payable .....................................................       226,086
     Accrued expenses .....................................................       279,531
     Provision for sales returns ..........................................       382,440
     Customer deposits ....................................................        55,198
                                                                               ----------
          Total current liabilities .......................................     1,380,255
Note payable ..............................................................        25,000
Commitments
Stockholders' deficit:
     Preferred stock, $.01 par value, 5,000,000 shares authorized,
       500,000 shares issued and outstanding ..............................         5,000
     Additional paid-in capital pertaining to preferred stock .............       875,500
     Common stock, $.001 par value, 50,000,000 shares authorized,
       2,613,521 shares issued and outstanding ............................         2,614

Assets
     Subscriptions to common stock ........................................       192,375
     Additional paid-in capital pertaining to common stock ................    10,043,355
     Accumulated deficit ..................................................   (11,574,910)
                                                                               ----------
                                                                                 (456,066)
                                                                               ----------
                                                                                  949,189
                                                                               ==========
</TABLE>
See accompanying notes to financial statements.

<PAGE>
<TABLE>
<CAPTION>
                   Grafix Time Corporation D/B/A Carrera Golf
                            Statements of Operations
                 For the Years Ended September 30, 1996 and 1995

                                                                                                     1996                   1995
                                                                                                     ----                   ----

<S>                                                                                                <C>                   <C>
Sales, net of returns of $382,440 ................................................                 292,310                        0
Cost of sales ....................................................................                 181,653                        0
                                                                                                ----------               ----------
Gross margin .....................................................................                 110,657                        0
Other costs and expenses:
  General and administrative .....................................................                 791,516                4,786,808
 Selling and promotion ...........................................................                 283,289                    5,524
 Research and development ........................................................                 345,297                   16,955
                                                                                                ----------               ----------
                                                                                                 1,420,102                4,809,287
                                                                                                ----------               ----------
Income (loss) from operations ....................................................              (1,309,445)              (4,809,287)
Other income and expense:
  Loss on disposal of inventory ..................................................                 (91,800)                       0
 Interest expense ................................................................                 (27,732)                  (4,838)
                                                                                                ----------               ----------
                                                                                                  (119,532)                  (4,838)
                                                                                                ----------               ----------
Income (loss) before income taxes and ............................................              (1,428,977)              (4,814,125)
  extraordinary item
Income taxes .....................................................................                 (29,250)                       0
                                                                                                ----------               ----------
Income (loss) before extraordinary item ..........................................              (1,399,727)              (4,814,125)
Extraordinary item:
 Forgiveness of debt, net of income taxes of $29,250 .............................                  56,780                        0
                                                                                                ----------               ----------
Sales, net of returns of $382,440 ................................................                 292,310                        0
Net income (loss) ................................................................              (1,342,947)              (4,814,125)
                                                                                                ----------               ----------
Earnings (loss) per share:
 Income (loss) before extraordinary item .........................................                   (0.59)                   (2.49)
  Extraordinary item .............................................................                    0.02                     --
Net income (loss) per share ......................................................                   (0.57)                   (2.49)
                                                                                                ----------               ----------
Weighted average shares outstanding ..............................................               2,379,050                1,933,777
                                                                                                ----------               ----------
</TABLE>

See accompanying notes to financial statements.

<PAGE>
<TABLE>
<CAPTION>
                   Grafix Time Corporation D/B/A Carrera Golf
                  Statement of Changes in Stockholders' Equity
                     Years Ended September 30, 1996 and 1995

                                                        Common Stock               Preferred Stock 
                                                  ------------------------     ---------------------
                                                    Shares         Amount       Shares       Amount
                                                  ---------      ---------     --------     --------

<S>                                                <C>               <C>        <C>          <C>
Balance, September 30, 1994 ................       339,045           339          --            --   

Initial Capitalization - SETCO .............       388,583           389          --            --   
Issuance of subscribed shares ..............       458,990           459          --            --   
Stock issued for cash - SETCO ..............        10,938            11          --            --   
Stock issued for cash and services -
SETCO ......................................         7,173             7          --            --   
Stock issued for services - SETCO ..........       383,335           383          --            --   
Stock issued for services ..................       876,050           876          --            --   
Stock subscrived for cash services -
SETCO ......................................          --            --            --            --   
Debentures converted to stock
subscriptions ..............................          --            --            --            --   
Net (loss) for year ........................          --            --            --            --   
Balance, September 30, 1995 ................     2,474,065         2,474          --            --   

Common stock issued for cash and
services-October 1995, $1.00 per
share ......................................        11,666            12          --            --   
Common stock issued for cash and
services-December 1995, $1.00 per
share ......................................        56,000            56          --            --   
Merger w/SETCO - January 1, 1996 ...........          --            --            --            --   

Balance, September 30, 1994 ................       339,045           339          --            --   
Common stock issued for services -
March 1996, $1.00 per share ................        41,500            41          --            --   
Common stock issued for services -
March 1996, $1.00 per share ................        13,750            14          --            --   
Cash sale of preferred stock - April
1996, $2.00 per share ......................          --            --         500,000         5,000
Common stock issued for services -
June 1996, $1.00 per share .................        16,520            17          --            --   
Net (loss) for the year ....................          --            --            --            --   

Balance, September 30, 1996 ................     2,613,521         2,614       500,000         5,000

<CAPTION>
                                                  Paid in    Accumulated        Stock
                                                  Capital      Deficit       Subscription       Total
                                                  -------    -----------     ------------       -----
<S>                                              <C>          <C>               <C>           <C> 
Balance, September 30, 1994 ................     4,553,169    (5,417,838)       461,000       (403,330)

Initial Capitalization - SETCO .............         1,236          --             --            1,625
Issuance of subscribed shares ..............       460,541          --         (461,000)          --
Stock issued for cash - SETCO ..............       114,359          --             --          114,370
Stock issued for cash and services -
SETCO ......................................        74,993          --             --           75,000
Stock issued for services - SETCO ..........     4,112,107          --             --        4,112,500
Stock issued for services ..................       249,424          --             --          250,300
Stock subscrived for cash services -
SETCO ......................................          --            --          300,000        300,000
Debentures converted to stock
subscriptions ..............................          --            --          182,376        182,376
Net (loss) for year ........................          --      (4,814,125)          --       (4,814,125)
Balance, September 30, 1995 ................     9,666,829   (10,231,963)       462,375       (161,285)

Common stock issued for cash and
services-October 1995, $1.00 per
share ......................................        11,654          --             --           11,666
Common stock issued for cash and
services-December 1995, $1.00 per
share ......................................        55,944          --             --           56,000
Merger w/SETCO - January 1, 1996 ...........       336,230          --         (290,000)        48,230

Balance, September 30, 1994 ................     4,553,169    (5,417,838)       461,000       (403,330)
Common stock issued for services -
March 1996, $1.00 per share ................        41,459          --             --           41,500
Common stock issued for services -
March 1996, $1.00 per share ................        13,736          --             --           13,750
Cash sale of preferred stock - April
1996, $2.00 per share ......................       875,500          --             --          880,500
Common stock issued for services -
June 1996, $1.00 per share .................        16,503          --             --           16,520
Net (loss) for the year ....................          --      (1,342,947)          --       (1,342,947)

Balance, September 30, 1996 ................    10,918,955   (11,574,910)       192,376       (466,066)
</TABLE>

See accompanying notes to financial statements.

<PAGE>
<TABLE>
<CAPTION>
                   Grafix Time Corporation D/B/A Carrera Golf
                             Statement of Cash Flows
                     Years Ended September 30, 1996 and 1995
                                                                                                    1996                    1995
                                                                                                    ----                    ----

<S>                                                                                              <C>                     <C>        
Net income (loss) ..................................................................             (1,342,947)             (4,814,125)
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
     Depreciation and amortization .................................................                  6,817                    --
     Stock issued for services .....................................................                129,436               4,413,071
     Stock subscribed for services .................................................                   --                   215,726
 Changes in assets and liabilities:
     (Increase) decrease in accounts receivable ....................................                 47,500                    --
     (Increase) decrease in employee advances ......................................                (38,185)                   --
     (Increase) decrease in inventory ..............................................               (398,893)                   --
     (Increase) decrease in prepaids ...............................................                 16,900                 (16,900)
     (Increase) decrease in merchandise deposits ...................................               (279,066)                   --
     (Increase) decrease in other assets ...........................................                 (9,807)                   --
     Increase (decrease) in accounts payable and accrued
    expenses .......................................................................                205,120                  47,619
     Increase (decrease) in customer deposits ......................................                437,638                    --
          Total adjustments ........................................................                117,660               4,659,516
Net cash provided by (used in) operating activities ................................             (1,225,287)               (154,609)
Cash flows from investing activities:
  Acquisition of plant and equipment ...............................................                (15,543)                   --
  Licensing agreement obtained .....................................................                (50,000)                (50,000)
  Advances to affiliate ............................................................                   --                   (14,847)
  Advances to officer ..............................................................                   --                   (14,000)
Net cash provided by (used in) investing activities ................................                (85,543)                (78,847)
Cash flows from investing activities:
  Proceeds from notes payable ......................................................                454,000                 142,750
 Repayment of notes payable ........................................................                (17,000)                (99,950)
  Preferred stock issued for cash ..................................................                880,500                    --
 Common stock issued for cash ......................................................                 10,000                 107,224
Net income (loss) ..................................................................             (1,342,947)             (4,814,125)
 Common stock subscribed for cash ..................................................                   --                    84,274
 Repayment of officers' loans ......................................................                (22,800)                   --
Net cash provided by (used in) financing activities ................................              1,304,700                 234,298
Increase (decrease) in cash ........................................................                 13,870                     842
Cash and cash equivalents, beginning of period .....................................                    842                    --
Cash and cash equivalents, end of period ...........................................                 14,712                     842
Supplemental cash flow information:
  Cash paid for interest ...........................................................                   --                      --
 Cash paid for income taxes ........................................................                   --                      --
Non-cash investing activities:
  Licensing agreement included in accounts payable .................................                100,000                    --
</TABLE>

See accompanying notes to financial statements.

<PAGE>

                   Grafix Time Corporation D/B/A Carrera Golf
                          Notes to Financial Statements
                               September 30, 1996

Note 1.  Organization and Summary of Significant Accounting Policies:

The  Company  was  incorporated  in New  York on April  16,  1986.  The  Company
previously  operated  under the names "Mont Blanc  Resources,  Inc." and "Movies
Marketing,  Inc." Its previous  business was the  distribution of fashion sports
watches and  electronic  jewelry.  These  product  lines were sold in June 1991.
During April 1991 the Company acquired the rights to continue development of and
begin marketing a unique sunglass  product known as "ISE",  Industrial  Strength
Eyewear.  During  September  1993,  due to product  manufacturing  problems  and
exhaustion of capital reserves,  the Company discontinued its efforts to develop
and  market  the ISE  product  line  and  began  searching  for a buyer  for the
business. The sale of the business was completed during February 1994.

On January 2, 1996,  the Company  completed  an asset  purchase  agreement  with
K.W.A.T.,  Inc. (formerly Sports Equipment  Technology Company,  Inc., SETCO), a
Colorado  development stage corporation engaged in design,  manufacture and sale
of golf related equipment and apparel using the licensed trade name "Carrera".

Prior to the  merger,  SETCO was  controlled  by  certain  individuals  who also
controlled  the  Company.  Accordingly,  the  merger  was  accounted  for  as  a
recapitalization  of companies  under common  control,  which most resembles the
"pooling of interests"  method of accounting.  The Company issued 800,000 shares
of its  restricted  common  stock to effect  the asset  purchase.  SETCO's  most
significant  asset at the  merger  date was a  license  agreement  with  Carrera
International,  Inc.  for the  rights to use its trade name in  connection  with
marketing the company's products.

<PAGE>


The  Company's  operations  and  sales of golf  related  equipment  and  apparel
commenced during January, 1996.

Use of Estimates:
Management of the Company uses estimates and assumptions in preparing  financial
statements in accordance with generally accepted  accounting  principles.  Those
estimates and assumptions affect the reported amounts of assets and liabilities,
the disclosure of contingent  assets and liabilities,  and the reported revenues
and expenses. Actual results could vary from the estimates that management uses.

Inventories:
Inventories  of golf  equipment  and  apparel are stated at the lower of cost or
market. Cost is determined using the first-in, first-out method.

Equipment and Depreciation:
Equipment is recorded at cost and is  depreciated  based upon  estimated  useful
lives  using  the  straight-line  method.  Estimated  useful  lives are 5 years.
Depreciation  charged  to  operations  was  $1,554  and $0 for the  years  ended
September 30, 1996 and 1995, respectively.

Trade Name License:
The Company has a licensing agreement for the use of the trade name "Carrera" in
connection with the  manufacture and  distribution of golf equipment and apparel
worldwide.  The  agreement  calls for payment fo $200,000 of which  $100,000 had
been paid at September  30, 1996 with the  remaining  $100,000 paid in February,
1997. The agreement also calls for minimum royalty payments  beginning  January,
1997.

The cost of the licensing  agreement has been capitalized and is being amortized
over the life of the agreement (19 years). Amortization charged to operations wa
$5,263 and $0 for the years ended September 30, 1996 and 1995, respectively.

Earnings Per Share:
Primary per share  amounts are basedon  the  weighted  average  number of common
shares  outstanding.  Equivalent  shares arising from the assumed  conversion of
debentures  were  not  considered  in 1996 and  1995 as  their  effect  would be
antidilutive.

Revenue Recognition:
Revenue is recognized at the time the product is shipped.  A provision for sales
returns is estimated in the period  corresponding  to the original sale based on
actual returns experienced in prior periods.

Cash:
For purposes of the  statement of cash flows,  the Company  considers all highly
liquid debt instruments  purchased with a maturity of three months or less to be
cash equivalents.

Research and Development Costs:
Research and development costs are charged to expense as incurred.

Financial Instruments:
The  Company's  short  term  financial  instruments  consist  of cash  and  cash
equivalents,  accounts and notes payable. The carrying amounts of such financial


<PAGE>


instruments approximate fair value because of the short term maturities of these
instruments.

Concentration of Credit Risk:
During the year ended  September  30, 1996,  approximately  98% of the Company's
sales were made to Citizen  Trading Company (a foreign  customer).  At September
30, 1996 the Company held a deposit of $55,198 from this customer.  Loss of this
customer  would  have  a  severe  negative  economic  impact  on  the  Company's
operations.

Advertising Costs:
The  Company's  policy  is  to  expense  advertising  costs  at  first  showing.
Advertising  and  promotion  costs  of  $211,831  and  $5,524  were  charged  to
operations during the years ended September 30, 1996 and 1995, respectively.

Note 2.  Employee Advances:

The  Company  has  made  unsecured  non-interest  bearing  advances  to  certain
employees which are payable on demand.

Note 3.  Merchandise Deposits:

Advances of  $279,066  have been made by the  Company to certain  suppliers  for
inventory which was received subsequent to September 30, 1996.

Note 4.  Notes Payable:

Notes payable consist of the following at September 30, 1996:

         Unsecured notes to various individuals with interest at 12%,
         due at various dates between November, 1996 and
         September, 1997                                                $437,000

         Unsecured note to an individual with interest at 12%,
         due September, 1998                                              25,000

The notes contain  conversion  provisions which allow the note holder to convert
the note into  shares of common  stock at any time prior to  maturity at various
prices ranging from $1.00 to $2.00 per share. In addition,  certain note holders
whose note  aggregate  $340,000  were also issued 13,750 shares of the Company's
restricted common stock when the notes were accepted.

Note 5.  Stockholders' Equity:

During the periods  covered by these  financial  statements and in periods prior
thereto,  the Company issued shares of common stock without  registration  under
the Securities Act of 1933. Although the Company believes that the sales did not
involve a pulic  offering of its securities and that the Company did comply with
the "safe  harbor"  exceptions  from  registration  under Section 4(2), it could
still be liable for rescission of the sales if such exceptions were found not to
apply.

During 1993,  the Company sold  $491,000 in principal  amount of 7%  convertible
debentures to a German  national and a partnership  of German  nationals who are
also shareholders of the Company.


<PAGE>

The  debentures  carry a mandatory  redemption  at 100% of principal and accrued
interest after ten years. The debentures may be converted to common stock of the
Company at the option of the holder at any time prior to the redemption  date at
$.18 per share.  On October 25, 1994,  $341,000 of the  debentures  plus accrued
interest  were  converted  into  subscriptions  for 54,740  shares of restricted
common stock. The subscribed  shares were issued during the year ended September
30, 1995.

On March 5, 1996, the remaining $150,000 of debentures and accrued interest were
converted to 127,860 shares of restricted common stock. The Company had recorded
this  transaction as a subscription to common stock of $182,375 in the financial
statements for the year ended September 30, 1995.

During the year ended  September 30, 1995,  the Company issued 876,060 shares of
its  restricted  common  stock  for  services  provided  by  its  employees  and
consultants.  The shares were valued at $.29 per share and were issued at a time
when there was no public market for the stock.

During the year ended  September  30,  1996,  the  Company's  Board of Directors
approved a 1.4 share for 1 share stock split and a 1 share for 40 share  reverse
stock split for its common stock.  All share and per sshare amounts  included in
the financial statements and footnotes thereto have been restated to reflect the
stock splits.

During the year ended  September 30, 1996,  the Company  issued 11,666 shares of
common  stock for cash  aggregating  $10,000 and  services of 1,666,  and 56,000
shares of common stock for services valued at $56,000,  which is equivalent on a
per share basis to the price paid by the purchaser  for cash.  In addition,  the
Company issued 41,500 shares of common stock for services pursuant to a Form S-8
registration.  The shares were valued at the bid price of $1.00 per share on the
date of issuance.  The Company also issued 13,750  shares of  restricted  common
stock to certain  individuals  who accepted the Company's notes for an aggregate
amount of  $340,000 in cash (see Note 4).  Finally,  the  Company  issued  16520
shares of is restricted  common stock for services  valued at $16,250 ($1.00 per
share).

During the year ended September 30, 1996, the Company sold 500,000 shares of its
$.01 par value  Series A  preferred  stock to a private  investor  for $2.00 per
share. The Company  realized net proceeds of $880,500 from the transaction.  The
preferred stock carries a 7% cumulative  annual dividend and is convertible into
common  stock at the option of the holder for a 25%  ownership  interest  in the
Company upno the attainment of certain  financial results or a firm underwriting
commitment for $5,000,000 or more of equity financing.

On January 2, 1996, the Company  issued 800,000 shares of its restricted  common
stock to effect asset purchase of SETCO in a recapitalization of companies under
common control. The transaction most resembles the "pooling of interests" method
of accounting (see Note 1).

Note 6.  Commitments:

The Comapny leases an  office/warehouse  location in Fort Worth, Texas under the
terms of a sublease agreement which requires montly rent of $1,390 per month and
wxpires on April 12, 1997.  Rent cahrged to operations was $17,695 and $0 during
the yeaers  ended  September  30,  1996 and 1995,  respectively.  Future  rental
commitments are $8,896 for the year ending September 30, 1997.

In addition,  the Comapny's licensing agreement discussed in Note 1 requires the
following  royalty  payments  beginning  January 1, 1997 and continuing  through
December 31, 2014:

<PAGE>



         6% on net sales up to $7,500,000
         5.5% in excess of $7,500,000 to $15,000,000
         5% on net sales in excess of $15,000,000

Note 7.  Income Taxes:

The Company had adopted Financial  Accounting Standards Board Statement No. 109,
Accounting  for Income  Taxes.  Deferred  income taxes may arise from  temporary
differences  resulting  from income and expense  items  reported  for  financial
accounting and tax purposes in different periods.  Deferred taxes are classified
as current or non-current,  depending on the  classifications  of the assets and
liabilities  to  which  the  relate.   Deferred  taxes  arising  from  temporary
differences  that are not related to an asset or  liability  are  classified  as
current  or  non-current  depending  on  the  periods  in  which  the  temporary
differences  are  expected to reverse.  The  deferred  tax asset  related to the
operating loss  carryforward of approximately  $11,500,000 at September 30, 1996
has been fully  reserved.  The net operating loss  carryforwards  expire through
2011.

Note 8.  Forgiveness of Debt:

During the year ended September 30, 1996 prior period wages and expenses owed to
a former officer aggregating $86,030 were forgiven by the officer in conjunction
with resignation.

Note 9.  Basis of Presentation:

The  accompanying  financial  statements have been prepared on a "going concern"
basis  which  contemplates  the  realization  of assets and the  liquidation  of
liabilities in the ordinary course of business.

The Company has incurred  operating  losses during the years ended September 30,
1996  and 1995  aggregating  $1,342,947  and  $4,814,125,  respectively  and has
negative  equity of  $456,066  and a working  capital  deficit  of  $649,599  at
September 30, 1996.

During the period  presented  the Company has not  generated  positive cash flow
from  operations and there can be no assurance that the trend will not continue.
Profitable  operations are dependent  upon,  among other factors,  the Company's
ability to obtain  equity or debt  financing  and its  ability  to  successfully
market its products.

The Company is unable to project a level of revenue which would allow a reversal
of its  history  of  operating  losses in the near  future.  In this  regard the
Company has undertaken the raising of additional  equity  capital.  In addition,
the Comapny is seeking to expand its customer  base and  attempting to lower its
operating expenses.

Note 10.  Subsequent Events:

During October and November, 1996, the Company received $160,000 in exchange for
notes issued to various individuals. The notes bear interest at 12%, are payable
one year from the date of each  note and may be  converted  intor  shares of the
Company's common stock at $1.00 per share any time prior to the maturity date.



<PAGE>


PART III.

Item 9.   Directors, Executive Officers, Promoters and Control Persons.

     (a)  Directors  and  executive  officers of the Company (as of Sepember 30,
1996):

Name                             Age              Position
----                             ---              --------
Walter R. Sims                   50               CEO, Chairman and Director
Ted Honda                        52               COO, President and Director
Timothy J. O'Brien               46               CFO, Treasurer and Director
Kimberly A. Pavlin               31               Secretary
Arnold P. Guttenberg             43               Asst. Secretary and Director
J. Russell Walker                56               Director

     On December 23, 1996, the Company  executed a financing  agreement with Mr.
Monte Ahuja,  as more fully set forth in the Company's  Report on Form 8-K filed
with the Securities and Exchange  Commission on March 12, 1997, and incorporated
herein by reference. As part of that financing transaction, all of the Company's
officers and directors, with the exception of Mr. Honda, resigned. Mr. Honda, as
the only  remaining  officer  and  director  of the  Company,  then  filled  the
vacancies on the Company's  Board of  Directors,  and the new Board of Directors
appointed new officers, namely:

Name                             Age      Position
----                             ---      -------
Ron R. Karani                    49       CEO, President, Treasurer and Director
Ted Honda                        52       Executive Vice President and Director
Martin A. Traber                 52       Secretary and Director
Vir Sondhi                       65       Chairman, Board of Directors
Stephen E. Duke                  45       Director

     All directors hold office until the next annual meeting of  shareholders or
until their  successors  are duly elected and  qualified.  Officers serve at the
pleasure of the board of directors.

Ron R. Karani. In 1985, Mr. Karani founded NPK Construction  Equipment,  Inc.and
served as its  President  and CEO until  1995.  Prior to that,  Mr.  Karani  was
employed in various engineering positions with International  Harvester Company,
Chicago,  Illinois and Chicago Pneumatic's  Construction Equipment subsidiary in
Cleveland, Ohio. Mr. Karani earned a Bachelor's Degree in Marine Engineering and
a Master's  Degree in  Mechanical  Engineering  from the  University  of Lowell,
Massachusetts in 1973.

Ted Honda.  Mr. Honda has almost 30 years'  experience in the golf industry.  He
has held various executive  positions within the industry,  including serving as
Executive Vice President of Cosmo World  Corporation  from 1985 to 1992. In that
capacity,  Mr.  Honda was  responsible  for  Cosmo  World  Corporation's  entire
operation  outside of Japan.  Mr.  Honda has also been a board member of The Ben
Hogan Company,  and managed that company's daily  operations.  Mr. Honda was the
Vice Chairman of The Pebble Beach Company, and also managed that company's daily
operations,  including preparations for the 1992 U.S. Open. Mr. Honda has served
as the Deputy  General  Manager of planning  and  development  of General  Coast
Enterprises, Inc. ("GCE"). He has been responsible for the acquisition, planning
and  construction of eight golf course  projects,  including three Jack Nicklaus
and five Dye designed courses.  Mr. Honda has also served as the General Manager
of the planning  department of Olympic Staff Company,  Ltd., and was responsible
for the development of custom-made  golf clubs and graphite  shafts.  GCE is the


<PAGE>


parent company of Cosmo World and Olympic group.  Mr. Honda has also represented
the  Japanese  interests  of some of the top  names in  professional  golf as an
agent.   Mr.  Honda  is  responsible  for  product   research  and  development,
international  marketing and distributor  relations,  and player sponsorship and
endorsements.

Martin A.  Traber.  Mr.  Traber is a partner  in the  Corporate  Securities  and
Finance Department of the law firm Foley & Lardner,  Tampa,  Florida. Mr. Traber
has practiced  corporate  finance and securities law for over 25 years,  and was
formerly a partner in the firm Arter & Hadden, Cleveland,  Ohio. Mr. Traber is a
directors of numerous companies,  and served as an Associate Professor of Law at
Cleveland State  University  School of Law. Mr. Traber graduated magna cum laude
and first in his class in 1980 from Indianna  University School of Law, where he
was Associate Editor of the Lw Review.

Vir  Sondhi.  Mr.  Sondhi  is  president  and  Chairman  of the  Board  of NASCO
Industries,  Inc., Medina,  Ohio, a privately held company.  He also serves as a
member of the Board of Directors of Transtar Industries,  Inc., a privately-held
company based in Walton Hills,  Ohio. Mr. Sondhi is a graduate of the University
of Cambridge  (England),  and a graduate of the  University of California at Los
Angeles.  Mr. Sondhi  previously  served as Senior Vice President of the Bank of
America and Senior Vice President of the Bank of Montreal. He has also served as
Director of International  Operations for Huntington  National Bank,  Cleveland,
Ohio.

Stephen E. Duke. Mr. Duke is currently employed by Transtar Industries,  Inc., a
private  company  headquartered  in Walton Hills,  Ohio. Mr. Duke was previously
employed at Tremco,  Inc., a subsidiary of the B.F. Goodrich  Company.  Mr. Duke
earned a BSBA degree in  Accounting  from John  Carroll  University,  Cleveland,
Ohio, in 1974, and an EMBA degree from Baldwin Wallace College in 1992. Mr. Duke
is a licensed certified public accountant.

         (b)      Other significant employees.  None.

         (c)      Family relationships.  None.

         (d)      Involvement in certain legal proceedings.  None.

Item 10.  Executive Compensation.

<TABLE>
<CAPTION>
  Name and principal                 Salary    Bonus  Other annual    Restricted    Options/   LTIP       All other
     position                Year     ($)       ($)   compensation   stock awards     SARs    payouts   compensation
  ------------------         ----    ------    -----  ------------   ------------   --------  -------   ------------
<S>                          <C>       <C>       <C>       <C>            <C>          <C>       <C>         <C>
Ron Karani, President, ....  1996      0         0         0              0            0         0           0
CEO and Treasurer
Ted Honda, Executive ......  1996   120,000      0         0              0            0         0           0
Vice President
Martin A. Traber, .........  1996      0         0         0              0            0         0           0
Secretary
</TABLE>


<PAGE>

Item 11.  Security Ownership of Certain Beneficial Owners and Management.

     (a) Security  ownership of certain beneficial owners other than management.
The table below sets forth all persons,  including groups,  known to the Company
to be the  beneficial  owner of more than five  percent (5%) of any class of the
Company's voting securities, as of September 30, 1996:

     At September 30, 1996, no person,  or group,  other than  management of the
Company,  owned more than five percent (5%) of any class of the Company's voting
securities.

     (b) Security ownership of management. The table below sets forth the number
of  shares  of each  class of the  Company's  equity  securities,  or any of its
parents  or  subsidiaries,  beneficially  owned by all  executive  officers  and
directors of the Company as of September 30, 1996  (adjusted to reflect the 1:40
reverse split  approved by the Company  subsequent to September 30, 1995 and the
40 percent stock  dividend  approved by the Company  subsequent to September 30,
1995):

<TABLE>
<CAPTION>
Title of Class           Name and Address of Beneficial        Amount and Nature          Percent of
                                   Owner                      of Beneficial Owner            Class
--------------           ------------------------------       -------------------         ----------
<S>                      <C>                                      <C>                       <C>   
Common Stock             Walter R. Sims                            577,500                   22.10%
                         4155 E. Jewell Ave., # 500
                         Denver, CO 80222
Common Stock             Kimberly A. Pavlin                         35,000                    1.34%
                         4155 E. Jewell Ave., #500
                         Denver, CO 80222
Common Stock             Arnold P. Guttenberg                      409,500                   15.67%
                         4155 E. Jewell Ave., #500
                         Denver, CO 80222
Common Stock             Timothy J. O'Brien                         52,500                    2.01%
                         4155 E. Jewell Ave., #500
                         Denver, CO 80222
</TABLE>

     (c)  Changes  in  control.  None  at  September  30,  1996.  As part of the
financing  agreement  with  Mr.  Ahuja  discussed  above  and  disclosed  in the
Company's  Report on Form 8-K filed with the Securities and Exchange  Commission
on March 12, 1997,  incorporated  by  reference  herein,  the Company  issued 12
million shares of its common stock (approximately 75 percent) to Mr. Ahuja.

Item 12.  Certain Relationships and Related Transactions.

          None.

Item 13.  Exhibits and Reports on Form 8-K.

     (a) Exhibits.


<PAGE>

     (b) Reports on Form 8-K. The Company  incorporates  by reference its Report
on Form 8-K filed with the Securities and Exchange Commission on March 12, 1997.

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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.

                                  GRAFIX TIME CORPORATION



                                  By:     /S/ RON R. KARANI
                                  ----------------------------------------------
Date:   May 22, 1997              Ron R. Karani, President, CEO, Treasurer and
                                  Director

                                  By:     /S/ TED HONDA
                                  ----------------------------------------------
Date:    May 22, 1997             Ted Honda, Executive Vice President and
                                  Director

                                  By:     /S/ MARTIN A. TRABER
                                  ----------------------------------------------
Date:   May 22, 1997              Martin A. Traber, Secretary and Director

                                  By:     /S/ VIR SOHDHI
                                  ----------------------------------------------
Date:  May 22, 1997               Vir Sondhi, Chairman of the Board of Directors

                                  By:     /S/ STEPHEN E. DUKE
                                  ----------------------------------------------
Date: May 22, 1997                Steve Duke, Director