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, 1997

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 Court East, Suite 130, Ft. 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,
1997): $3,685,321

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

$693,750,  based on approximately 3,700,000 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:

16,062,886 common shares were outstanding as of September 30, 1997.

Documents incorporated by reference:        Form 8-K filed January 27, 1998.




                                                                               1

<PAGE>

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


                             GRAFIX TIME CORPORATION
            Form 10-KSB for the Fiscal Year ended September 30, 1997

                                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            6

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
                                                                           8-20

Item 8.     Changes In and Disagreements With Accountants                  7

PART III.

Item 9.     Directors, Executive Officers, Promoters and Control Persons   21

Item 10.    Executive Compensation                                         22

Item 11.    Security Ownership of Certain Beneficial Owners and Management 23

Item 12.    Certain Relationships and Related Transactions                 23

Item 13.    Exhibits and Reports on Form 8-K                               23

SIGNATURES                                                                 24





                                                                               2

<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. During the fiscal year ended September 30, 1997,
the Company  expanded its line of golf products,  entered into new  distribution
agreements with distributors in Asia, and continued to supply golf clubs,  bags,
and accessories to 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 is the upscale golfing market worldwide.







                                                                               3

<PAGE>



          (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 has entered 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 intends to begin its
domestic U.S. marketing plan this year.

          (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  several lines of golf clubs,  bags,  apparel,
and other golf  products.  The  Company's  newest  golf club,  the 711 TI Plasma
driver,  has been well received in the Japanese market.  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.

          (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  has  initially  focused  its sales and  distribution  efforts on the
Japanese and southeast  Asian markets.  The Company has  successfully  designed,
developed,  assembled  and  distributed  several line of premium  golf  products
carrying  the  Carrera(R)  logo and  trademark,  through its  relationship  with
Citizen.  The Company intends competes in the category of premium golf products.
The  Company  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.


                                                                               4

<PAGE>



          (6) Dependence on one or a few major customers.  The Company currently
has one major  customer:  Citizen.  Over 90 percent 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.  Loss of this agreement would  negatively  impact the Company's sales
and income.

          (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.  For the fiscal year ended
September 30, 1997, the Company spent $46,550 on research and  development.  For
the fiscal year ended  September  30,  1996,  the  Company  spent  $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 two
full-time and four part-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.  On or about
December 9, 1997,  Rohinton R. Karani,  the Company's former President,  filed a
lawsuit against the Company and its majority  shareholder in the Court of Common
Pleas,  Cuyahoga  county,  Ohio.  Mr. Karani has advanced  theories of breach of
contract, breach of implied contract, promissory estoppel,  conversion, the Ohio
Wage Payment Statute, breach of implied covenant of good faith and fair dealing,
wrongful  discharge,  tortious  interference  with  a  contractual  or  business
relationship,  and conspiracy against the Company and its majority  shareholder.
Mr.  Karani is seeking  $2.5  million in damages  and  declaratory  relief.  The
Company is vigorously  contesting Mr. Karani's  claims,  and has filed an Answer
and Counterclaim.

                                                                               5

<PAGE>



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, 1995                    .25                2.50
March 31, 1996                      1.25                2.50
June 30, 1996                       1.00                2.50
September 30, 1996                   .75                2.25
December 31, 1996                   .125                1.25
March 31, 1997                       .25                .875
June 30, 1997                      .1875                .625
September 30, 1997                  .125                 .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,  1997  there  were  approximately  275
shareholders of record of the Company.

     (c)  Dividends.  As of September 30, 1997, 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 is in the early operating stage.
In  particular,  the Company  has  successfully  developed  golf clubs and other
products,  and has obtained and filled numerous orders from Citizen.  Management
anticipates  continuing to develop products and product lines;  this will result
in  continuing  research  and  development  expenses.   Management   anticipates
significant  sales and  marketing  expenses in the future,  particularly  as the
Company introduces its products into the U.S. market.


                                                                               6

<PAGE>


     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
$949,189 at September 30, 1996 to $1,986,716  for September 30, 1997,  primarily
as a result of financing  activities.  Total liabilities increased by $1,102,825
(78.5%);  most of those  liabilities  relate to fulfilment of orders in process.
The Company reported  dramatically  increased sales of $3,302,881 for the fiscal
year ended  September  30,  1997,  up from  $292,310  for the prior fiscal year.
Management  attributes this significant increase to introduction of new products
in Japan,  and the benefit of fulfilling  sales for an entire  fiscal year.  The
Company also  reported a net loss of  $(118,447),  or $(.01) per share,  for the
fiscal year ended September 30, 1997, compared with a net loss of $ (1,399,727),
or $(.59) per share, for the same period the prior fiscal year.

     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 on a continuing basis.

     The Company's new  management  has met with Citizen on numerous  occasions,
and is confident that the Citizen  relationship is strong.  Citizen introduced a
new line of  Carrera  golf  products,  the 711 TI Plasma  driver  and the 711 IC
Titanium  Plasma  Irons,  in May,  1997.  Citizen has  projected  orders of $6.5
million from the Company for calendar 1998. Management  anticipates changing its
fiscal  year-end to December 31 as soon as  practicable,  and  projects  pre-tax
earnings of $ 1,500,000  for the  calendar  and fiscal year ending  December 31,
1998.

     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 20, following,  contain the audited financial statements of
the Company for the fiscal year ended  September 30, 1997,  and audited by James
E. 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)





                                                                               7

<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,
1997, 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,  1997,  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 12 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 factors raise substantial doubt about its ability to
continueas a going  concern.  Management's  plans in regard to these matters are
also  discussed  in  Note  12.  The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.


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

Englewood, Colorado
November 7, 1997







                                                                               8

<PAGE>

<TABLE>
<CAPTION>

                   Grafix Time Corporation D/B/A Carrera Golf
                                  Balance Sheet
                               September 30, 1997


<S>                                                                              <C>    
Assets
------
Current Assets:
     Cash ................................................................       215,085
     Accounts receivable .................................................       431,678
     Inventory ...........................................................     1,137,862
     Employee advances ...................................................         7,000
                                                                            ------------
          Total current assets ...........................................     1,791,625
Property and equipment, at cost, net of
  accumulated depreciation of $4,663 .....................................        10,880
Trade name license, at cost, net of
  accumulated amortization of $15,789 ....................................       184,211
                                                                             -----------
          Total assets ...................................................     1,986,716
                                                                             -----------
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current liabilities:
     Notes payable-current portion .......................................       110,000
     Note payable - bank line of credit ..................................       939,000
     Note payable - stockholder ..........................................       500,000
     Note payable - related party ........................................       225,000
     Accounts payable ....................................................       312,923
     Accrued expenses ....................................................        38,717
     Provision for sales returns .........................................       382,440
                                                                             -----------
          Total current liabilities ......................................     2,508,080

Commitments and Contingencies
Stockholders' equity:
     Preferred stock, $.01 par value, 5,000,000 shares authorized,
       -0- shares issued and outstanding .................................          --
     Common stock, $.001 par value, 50,000,000 shares authorized,
       16,062,866 shares issued and outstanding ..........................        16,083
     Additional paid-in capital ..........................................    11,155,930
     Accumulated deficit .................................................   (11,693,357)
                                                                             -----------
          Stockholders' deficit ..........................................      (521,364)
                                                                             -----------
     Total Liabilities and Stockholders' Equity ..........................     1,986,716
                                                                             -----------
</TABLE>

See accompanying notes to financial statements.

                                                                               9

<PAGE>

<TABLE>
<CAPTION>
                   Grafix Time Corporation D/B/A Carrera Golf
                            Statements of Operations
                 For the Years Ended September 30, 1997 and 1996

                                                                                               1997                          1996
                                                                                               ----                          ----

<S>                                                                                           <C>                           <C>  
Sales, net .................................................................                  3,302,881                     292,310
Cost of sales ..............................................................                  2,089,192                     181,653
                                                                                            -----------                 -----------
Gross margin ...............................................................                  1,213,689                     110,657
Other costs and expenses:
  Selling, general and administrative ......................................                  1,331,700                   1,074,805
 Research and development ..................................................                     46,550                     345,297
                                                                                            -----------                 -----------
     Sub-total, other costs and expenses ...................................                  1,378,250                   1,420,102
                                                                                            -----------                 -----------
Income (loss) from operations ..............................................                   (164,561)                 (1,309,445)
Other income and expense:
  Gain (loss) on disposal of inventory .....................................                     96,545                     (91,800)
 Interest expense ..........................................................                   (113,124)                    (27,732)
                                                                                            -----------                 -----------
     Sub-total, other income and expense ...................................                    (16,579)                   (119,532)
                                                                                            -----------                 -----------
Income (loss) before income taxes and
  extraordinary item .......................................................                   (181,140)                 (1,428,977)
Income taxes ...............................................................                    (21,315)                    (29,250)
                                                                                            -----------                 -----------
Income (loss) before extraordinary item ....................................                   (159,825)                 (1,399,727)
Extraordinary item:
 Forgiveness of debt, net of income taxes ..................................                     41,378                      56,780
                                                                                            -----------                 -----------
Net income (loss) ..........................................................                   (118,447)                 (1,342,947)
                                                                                            -----------                 -----------
Earnings (loss) per share:
 Income (loss) before extraordinary item ...................................                      (0.01)                      (0.59)
  Extraordinary item .......................................................                       0.00                        0.02
                                                                                            -----------                 -----------
Net income (loss) per share ................................................                      (0.01)                      (0.57)
                                                                                            -----------                 -----------
Weighted average shares outstanding ........................................                 16,062,886                   2,379,050
                                                                                            -----------                 -----------
</TABLE>

See accompanying notes to financial statements.




                                                                              10
<PAGE>
<TABLE>
<CAPTION>
                   Grafix Time Corporation D/B/A Carrera Golf
                  Statement of Changes in Stockholders' Equity
                     Years Ended September 30, 1997 and 1996

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

<S>                                               <C>               <C>         <C>             <C>    
Balance, September 30, 1995 .................     2,474,086         2,474          --             --   
                                                 ----------      --------       -------        ---------
Common stock issued for cash and
services - October, 1995, $1.00 per
share .......................................        11,686            12          --             --   
Common stock issued for services
- December, 1995, $1.00 per share ...........        56,000            56          --             --   
Merger with SETCO - January 1, 1996 .........          --             --           --             --   
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 ...............        13,760            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 ...............        16,620            17          --             --   
Net (loss) for year .........................          --             --           --             --   
                                                 ----------      --------       -------        ---------
Balance, September 30, 1996 .................     2,613,621         2,614       500,000          5,000

Common stock issued for services ............       206,026           206          --             --   
Conversion of debt to common
stock .......................................       604,961           605          --             --   
Conversion of preferred stock into
shares of common stock ......................    12,000,000        12,000      (500,000)        (5,000)
Issuance of common stock for
outstanding subscriptions ...................       538,378           538          --             --   
Net income for the year .....................          --            --            --             --   
                                                 ----------      --------       -------        ---------
Balance, September 30, 1997 .................    16,062,886        16,063          --             --   

<CAPTION>
                                                   Paid in      Accumulated         Stock
                                                   Capital         Deficit       Subscription     Total
                                                   -------      -----------      ------------     -----

<S>                                               <C>          <C>                <C>           <C>      
Balance, September 30, 1995 .................     9,585,829    (10,231,963)       482,375       (181,285)
                                                 ----------      --------         -------      ---------
Common stock issued for cash and
services - October, 1995, $1.00 per
share .......................................        11,654           --             --           11,686
Common stock issued for services
- December, 1995, $1.00 per share ...........        55,944           --             --           56,000
Merger with SETCO - January 1, 1996 .........       338,230           --         (290,000)        48,230
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 year .........................          --       (1,342,947)          --       (1,342,947)
                                                 ----------      --------         -------      ---------
Balance, September 30, 1996 .................    10,918,855    (11,574,910)       192,375       (456,066)
Common stock issued for services ............        45,343           --             --           45,549
Conversion of debt to common
stock .......................................         5,995           --             --            7,600
Conversion of preferred stock into
shares of common stock ......................        (7,000)          --             --             --
Issuance of common stock for
outstanding subscriptions ...................       191,737           --         (192,375)          --
Net income for the year .....................          --         (118,447)          --         (118,447)
                                                 ----------      --------         -------      ---------
Balance, September 30, 1997 .................    11,155,930    (11,693,357)          --         (521,364)

</TABLE>

See accompanying notes to financial statements.

                                                                              11
<PAGE>

<TABLE>
<CAPTION>
                   Grafix Time Corporation D/B/A Carrera Golf
                             Statement of Cash Flows
                     Years Ended September 30, 1997 and 1996
                                                                                             1997              1996
                                                                                             ----              ----

<S>                                                                                        <C>              <C>    
Net income (loss) ...............................................................          (118,447)        (1,342,947)
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
     Depreciation and amortization ..............................................            13,635              6,817
     Stock issued for services ..................................................            45,549            129,436
 Changes in assets and liabilities:
     (Increase) decrease in accounts receivable .................................          (431,678)            47,500
     (Increase) decrease in employee advances ...................................            31,185            (38,185)
     (Increase) decrease in inventory ...........................................          (739,169)          (398,893)
     (Increase) decrease in prepaids ............................................              --               16,900
     (Increase) decrease in merchandise deposits ................................           279,066           (279,066)
     (Increase) decrease in other assets ........................................             9,807             (9,807)
     Increase (decrease) in accounts payable and accrued
      expenses ..................................................................          (153,977)           205,120
     Increase (decrease) in customer deposits ...................................           (55,198)           437,638
                                                                                         ----------         ----------
          Total adjustments .....................................................        (1,000,780)           117,660

Net cash provided by (used in) operating activities .............................        (1,119,227)        (1,225,287)
Cash flows from investing activities:
  Acquisition of plant and equipment ............................................              --              (15,543)
  Licensing agreement obtained ..................................................              --              (50,000)
  Advances to affiliate .........................................................              --                 --
  Advances to officer ...........................................................              --                 --
Net cash  provided by (used in)  investing  activities  (65,543) Cash flows from
investing activities:
  Proceeds from notes payable - stockholder .....................................           815,600            454,000
   Proceeds from note payable - bank ............................................           939,000               --
   Proceeds from note payable - related party ...................................           225,000               --
 Repayment of notes payable .....................................................          (660,000)           (17,000)
  Preferred stock issued for cash ...............................................              --              880,500
 Common stock issued for cash ...................................................              --               10,000
 Common stock subscribed for cash ...............................................              --                 --
 Repayment of officers' loans ...................................................              --              (22,800)
Net cash provided by (used in) financing activities .............................         1,319,600          1,304,700
Increase (decrease) in cash .....................................................           200,373             13,870
Cash and cash equivalents, beginning of period ..................................            14,712                842
Cash and cash equivalents, end of period ........................................           215,085             14,712
Supplemental cash flow information:
  Cash paid for interest ........................................................            71,811               --
 Cash paid for income taxes .....................................................              --                 --
Non-cash investing activities:
  Notes converted into common stock .............................................           507,600               --
  Licensing agreement included in accounts payable ..............................              --              100,000
</TABLE>

See accompanying notes to financial statements.



                                                                              12
<PAGE>

                   Grafix Time Corporation D/B/A Carrera Golf
                          Notes to Financial Statements
                               September 30, 1997

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.

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 $3,485 and $1,554 for the years  ended
September 30, 1997 and 1996, respectively.





                                                                              13

<PAGE>


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 of $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
was  $10,526  and  $5,263  for the  years  ended  September  30,  1997 and 1996,
respectively.

Earnings Per Share:
Primary per share  amounts are based on the  weighted  average  number of common
shares  outstanding.  Equivalent  shares arising from the assumed  conversion of
debentures were not considered in 1996 as their effect would be anti-dilutive.

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. Costs charged
to expense were $46,550 and $345,927 for the years ended  September 30, 1997 and
1996, respectively.

Financial Instruments:
The  Company's  short  term  financial  instruments  consist  of cash  and  cash
equivalents,  accounts  receivable/payable,  and  notes  payable.  The  carrying
amounts of such  financial  instruments  approximate  fair value  because of the
short term maturities of these instruments.

Concentration of Credit Risk:
During the years ended September 30, 1997 and September 30, 1996,  approximately
95% and 98% of the  Company's  sales  were made to  Citizen  Trading  Company (a
foreign customer).  At September 30, 1997 the Company held an account receivable
of $325,360  from this  customer  and 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.

At September  30, 1997 the Company  maintained  a cash balance of  approximately
$110,000 in excess of the FDIC coverage limit at one bank.

Advertising Costs:
The  Company's  policy  is  to  expense  advertising  costs  at  first  showing.
Advertising  and  promotion  costs of $ 74,436  and $ 211,831  were  charged  to
operations during the years ended September 30, 1997 and 1996, respectively.



                                                                              14

<PAGE>


Note 2.  Inventory:

Inventory is comprised of the following at September 30, 1997:

                  Raw materials             $  850,802
                  Finished goods               257,060
                                             ---------
                  Total inventory           $1,137,862

Note 3.  Employee Advances:

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

Note 4.  Notes Payable:

Notes payable consist of the following at September 30, 1997:

         Unsecured notes to ten different note holders with
         interest at 12%.  These notes were due and paid
         in full in October, 1997                        $110,000

Note 5.  Note Payable - Bank Line of Credit:

At  September  30,  1997  the  Company  had been  advanced  $939,000  against  a
$1,000,000  credit line facility with a bank.  The credit line bears interest at
the bank's prime rate (8.5% at October 31, 1997), expires on May 31, 1998 and is
personally guaranteed by the Company's principal shareholder.

Note 6.  Note Payable - Stockholder:

The Company has been advanced $500,000 by its principal stockholder at September
30, 1997.  The unsecured  advance is payable on demand and bears interest at the
rate of 10% per  annum.  If the  principal  is not paid  within  five days after
demand,  the note will be considered in default and a late charge of the greater
of $250 or 5% of the principal balance plus accrued interest will come due.
In addition, the default interest rate will increase to 15%.

Note 7.  Note Payable - Related Party:

A  company  affiliated  with  the  Company's  principal  stockholder  has made a
$225,000 advance at October 31, 1997. The unsecured advance is payable on demand
and bears  interest at the rate of 10% per annum.  If the  principal is not paid
within five days after demand the note will be  considered in default and a late
charge  of the  greater  of $250 or 5% of the  principal  balance  plus  accrued
interest will come due. In addition,  the default interest rate will increase to
15%.







                                                                              15

<PAGE>


Note 8.  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 public offering of its securities and that the Company did comply with
the "safe harbor"  excemptions  from  registration  under Section 4(2), it could
still be liable for rescission of the sales if such exceptions were found not to
apply.

On March 5, 1996 the  remaining  $150,000 of a 1993  debenture  issue along with
accrued  interest was converted into 127,860 shares of the Company's  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,  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 share  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).

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).

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.  During the year ended
September 30, 1997 the investor  converted the 500,000 shares of preferred stock
into 12,000,000 shares of the Company's stock.

During the year ended  September 30, 1997 the Company  issued  206,026 shares of
its common stock for services valued at $45,549.

Note  holders were issued  604,961  shares of common stock during the year ended
September 30, 1997 in conjunction with repayment of the notes.

The Company issued  638,378  shares of common stock in exchange for  outstanding
subscriptions during the year ended September 30, 1997.


                                                                              16
<PAGE>



Note 9.  Commitments:

The Company leases an  office/warehouse  location in Fort Worth, Texas under the
terms of a sublease  agreement  which requires  monthly rent of $1,390 per month
and expires on April 12, 1997. Rent charged to operations was $4,170 and $17,695
during the years ended September 30, 1997 and 1996, respectively.  Future rental
commitments are $8,896 for the year ending September 30, 1998.

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

         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

The Company paid $72,500 in royalty payments during the year ended September 30,
1997. Additional royalty payments of approximately  $125,500 have been waived by
Carrera for the year ended September 30, 1997.

At  September  30,  1997,  the Company had unused  letters of credit with a bank
totalling $52,962.

The Company is a defendant  in a civil suit filed by its former  president.  The
suit seeks  compensatory  and punitive  damages of $2.5 million for, among other
claims, breach of contract and improper dismissal. The Company vigorously denies
the  allegations and will defend its position  aggressively.  It is too early in
the proceedings to predict an outcome of the case.

Note 10.  Income Taxes:

The Company has 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  $11,380,000 at September 30, 1997
has been fully  reserved.  The net operating loss  carryforwards  expire through
2011.

Note 11.  Forgiveness of Debt:

During the year ended September 30, 1997 the Company had $62,693 of prior period
debt forgiven by creditors.

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.






                                                                              17

<PAGE>



Note 12.  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 its ordinary course of business.

The Company has incurred  operating  losses during the years ended September 30,
1997  and  1996  aggregating  $118,447  and  $1,342,947,  respectively,  and has
negative  equity of  $521,364  and a working  capital  deficit  of  $716,455  at
September 30, 1997.

During the periods  presented  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 is attempting to raise  additional  equity capital.  The Company is also
seeking to expand its customer base and attempting to lower its operating costs.

Note 13.  Subsequent Event:

On January 12,  1998,  the Company  executed a  non-exclusive  letter of funding
commitment with Merlin Venture  Partners of Sunnyvale,  California.  The Company
filed a Report on Form 8-K with the Securities and Exchange Commission reporting
this letter of commitment on January 27, 1998.

























                                                                              18

<PAGE>



PART III.

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

         (a)      Directors and executive officers of the Company:

Name                        Age      Position
----                        ---      --------

Raymond E. Theiss           43       Acting President and CEO
Ted Honda                   52       Executive Vice President and Director
Kent D. Krausman            38       Vice President, Counsel and Director (as of
                                     November 1, 1997)
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.

Raymond E. Theiss. Mr. Theiss has been the Acting President of the Company since
July,  1997.  He  is  also  Vice  President  and  General  Counsel  of  Transtar
Industries,  Inc. of Cleveland,  Ohio.  Mr.  Theiss is an attorney,  licensed to
practice  in Ohio.  He earned  his B.A.  degree in  Accounting  from Kent  State
University. Mr. Theiss also earned an M.A. degree in Economics from Case Western
Reserve  University,  and a J.D. degree from the Cleveland  Marshall  College of
Law.

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
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.

Kent D. Krausman.  Mr.  Krausman has been an officer and director of the Company
since  November 1, 1997.  He has been a licensed  Colorado  attorney  since May,
1985. Mr. Krausman has owned and operated his own law firm,  Krausman LLC, since
January,  1987. His firm specializes in securities,  corporate finance,  and SEC
reporting.  Mr.  Krausman  acted as special  counsel  to Sherman & Howard,  LLC,
representing  TeleCommunications,  Inc. in its Bell Atlantic, Liberty Media, and
QVC transactions. From January, 1991 through September, 1993, Mr. Krausman owned
the  Galleria  Theatre  (as well as the  smaller  Encore  Theatre) in the Denver
Center for the Performing Arts. Mr. Krausman was the Chief Operating Officer and
Executive Producer of those facilities, financing and engineering the turnaround

                                                                              19

<PAGE>


of the  facilities  from  bankruptcy to their current  status as one of Denver's
most successful and popular cabaret theatres.  Mr. Krausman sold the theatres to
Robert Garner Center Attractions in 1993. Mr. Krausman earned his B.A. degree in
Economics (cum laude,  Honors Program) from the University of Denver in 1981. He
earned his Juris Doctor degree from The  University of Michigan Law School,  Ann
Arbor, Michigan in 1984.

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>
                                                                              Restricted
Name and principal                     Salary       Bonus     Other annual      stock        Options/       LTIP         All other
    position               Year         ($)          ($)      compensation      awards         SARs        payouts     compensation
------------------         ----        ------       -----     ------------    ----------     --------      -------     ------------
<S>                        <C>        <C>           <C>        <C>             <C>           <C>           <C>            <C>
Raymond E. Theiss,         1997             0          0         30,000            0             0             0              0
President, CEO
Ted Honda, Executive       1997       120,000          0              0            0             0             0              0
Vice President
Kent D. Krausman, Vice     1997             0          0              0            0             0             0              0
President and Counsel
</TABLE>

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, 1997:

         Monte Ahuja             12,000,000 shares (74.7%)




                                                                              20

<PAGE>


     (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, 1997:

<TABLE>
<CAPTION>
Title of Class           Name and Address of Beneficial Owner       Amount and Nature of     Percent of 
                                                                      Beneficial Owner          Class
--------------           ------------------------------------       --------------------     ----------
<S>                      <C>                                              <C>                  <C>  
Common Stock             Ted Honda                                        363,462                2.26%
                         2901 Suffolk Ct. East, #130
                         Fort Worth, TX 76133
Common Stock             Kent D. Krausman                                 125,000                0.78%
                         6260 S. University Blvd.
                         Littleton, CO 80121
</TABLE>

     (c)  Changes  in  control.  None  at  September  30,  1997.  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.

         The Company  filed a Report on Form 8-K on January 27, 1998,  reporting
the execution of a funding letter of commitment with Merlin Venture  Partners of
Sunnyvale, California.

                                   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/ RAYMOND E. THEISS
Date:   March 3, 1998                   Raymond E. Theiss, Acting President

                               By:     /S/ TED HONDA
Date:   March 3, 1998                  Ted Honda, Executive Vice President and
                                        Director

                               By:     /S/ KENT D. KRAUSMAN
Date:   March 3, 1998                   Vice President, Counsel and Director

                               By:     /S/ VIR SOHDHI
Date:   March 3, 1998                  Vir Sondhi, Chairman of the Board of
                                        Director

                               By:     /S/ STEPHEN E. DUKE
Date:   March 3, 1998                  Stephen E. Duke, Director





                                                                              21