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

                                   FORM 10-KSB/A

(Mark One)
/X/      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
         OF 1934 (Fee Required)

         For the fiscal year ended December 31, 1996.

/ /      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934 (No Fee Required)

For the transition period from __________ to _________

                         Commission File Number: 0-25334

                     THE GREAT AMERICAN BACKRUB STORE, INC.
--------------------------------------------------------------------------------
                 (Name of small business issuer in its charter)

                           NEW YORK                       13-3729043
--------------------------------------------------------------------------------
      (State or other jurisdiction of                (I.R.S. Employer
      incorporation or organization)                 Identification No.)

425 MADISON AVENUE SUITE 605 NEW YORK, NEW YORK             10017
--------------------------------------------------------------------------------
     (Address of principal executive offices)            (Zip Code)

Issuer's telephone number (212) 750-7046

Securities registered under Section 12(b) of the Act:

                                                   Name of each exchange
          Title of each class                       on which registered
          -------------------                       -------------------

       Common Stock, $.001 par value               Nasdaq SmallCap Market
       -----------------------------               ----------------------


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to the filing requirements for the past 90 days. Yes /X/. No / /.

Check if 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. / /

State issuer's revenues for its most recent fiscal year:  $3,045,937

State the  aggregate  market  value of the voting  stock held by  non-affiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and asked prices of such stock,  as of February 12, 1997. (See definition of
affiliate in Rule 12b-2 of the Exchange Act) $11,368,432

NOTE:  If  determining  whether  a  person  is  an  affiliate  with  involve  an
unreasonable  effort and expense,  the issuer may calculate the aggregate market
value of the  common  equity  held by  non-affiliates  on a basis of  reasonable
assumptions, if the assumptions are stated.

The number of shares of Common  Stock of the issuer  outstanding  as of February
28, 1997 is 2,416,841.

Transition Small Business Disclosure Format (check one):  Yes / /    No  /X/


<PAGE>

                                     PART II

         ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         On February  28,  1995,  the Common  Stock was listed for  quotation on
Nasdaq under the symbol "RUBB." Prior to such listing, the Common Stock had been
traded on the OTC Bulletin  Board since October 18, 1993.  The  following  table
sets forth, for the periods indicated, the high and low bid for the Common Stock
as  reported  by the OTC  Bulletin  Board (as  adjusted  to reflect  the 1 for 8
reverse stock split effected on February 23, 1995),  as well as the high and low
bid for the Common Stock on Nasdaq.  Quotations  reflect prices between dealers,
without  retail  mark-up,  mark-down  or  commissions  and may  not  necessarily
represent actual transactions.

                                                High Bid           Low Bid
                                                ---------          --------

1995
        1st Quarter........................       $ 9.00           $ 2.75
        2nd Quarter........................       $ 3.94           $ 1.84
        3rd Quarter........................       $ 2.94           $ 1.88
        4th Quarter........................       $ 4.00           $ 1.75

1996
        1st Quarter........................       $ 4.125          $ 3.06
        2nd Quarter........................       $ 6.63           $ 3.25
        3rd Quarter........................       $ 4.88           $ 2.50
        4th Quarter........................       $ 4.625          $ 3.25



                  The Company  has not  declared  or paid any  dividends  on the
Common  Stock and does not intend to declare or pay any  dividends on the Common
Stock in the  foreseeable  future.  The  Company  currently  intends to reinvest
earnings, if any, in development and expansion of its business.  The declaration
of dividends in the future will be at the election of the Board of Directors and
will depend upon earnings,  capital  requirements and financial  position of the
Company, general economic conditions and other relevant factors.

         On December 27, 1996,  the Company sold the following  securities,  the
terms of which are  described  in Item 1  (Description  of Business - Recent and
Proposed Financing Transactions):

                          Amount of Securities  Offering
          Title                   Sold           Price         Purchaser
-------------------------------------------------------------------------------
Promissory Note/Warrants   $36,142.94/550,400   $36,693.34   William Zanker
Promissory Note/Warrants   $19,115.57/291,100   $19,406.66   Terrance C. Murray
Promissory Note/Warrants   $10,408.16/158,500   $10,566.67   Keith Dee
Promissory Note/Warrants  $65,666.67/1,000,000  $66,666.67   Dune Holdings, Inc.
Promissory Note/Warrants  $65,666.67/1,000,000  $66,666.67   RAASAY, S.A.
Promissory Note/Warrants  $65,666.67/1,000,000  $66,666.67   HANDA, S.A.


         The  placement  agent for these sales was Investors  Associates,  Inc.,
which   received  an  aggregate   commission  of  $26,666.67  and  an  aggregate
non-accountable expense allowance of $8,000 in connection therewith. The Company
believes that the sales set forth above are exempt from  registration  under the
Securities  Act of 1933,  as  amended,  pursuant  to Section  4(2)  thereof,  as
transactions by an issuer not involving any public offering.

                                       -2-
<PAGE>

         ITEM 13. EXHIBITS LIST AND REPORTS ON FORM 8-K.

         (A) EXHIBITS.

EXHIBIT NO.                     DESCRIPTION
-----------                     -----------

  11.1             Statement Re: Computation of Per Share Earnings.

  27.1             Financial Data Schedule



         (B) REPORTS  ON FORM 8-K.  No  reports  were  filed  on Form 8-K in the
quarter ended December 31, 1996.


                                      -3-
<PAGE>
                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d) of the  requirements  of the
Exchange  Act,  the  registrant  has duly  caused the report to be signed on its
behalf by the  undersigned,  thereunto duly  authorized in the City of New York,
State of New York, on the 12th day of June, 1997.

                              THE GREAT AMERICAN BACKRUB STORE, INC.


                              By: /s/ William Zanker
                                  -----------------------------------
                                  William Zanker
                                  Chairman of the Board and President

         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  registrant  and in the capacities on
the dates indicated.


    SIGNATURE                         TITLE                      DATE
    ---------                         -----                      ----

/s/ William Zanker         Chairman of the Board, President   June 12, 1997
-------------------------  and Director
    William Zanker         

/s/Terrance C. Murray      Chief Executive Officer and        June 12, 1997
-------------------------  Director (principal executive
   Terrance C. Murray      officer)

/s/ Keith Dee              Chief Financial Officer and        June 12, 1997
-------------------------  Secretary (principal financial
    Keith Dee              and accounting officer)

/s/ Stephen Seligman       Director                           June 12, 1997
-------------------------
    Stephen Seligman

/s/ Edward E. Faber        Director                           June 12, 1997
-------------------------
    Edward E. Faber

/s/ Peter Hanelt           Director                           June 12, 1997
-------------------------
    Peter Hanelt

/s/ Donald R. Fleischer    Director                           June 12, 1997
-------------------------
    Donald R. Fleischer

/s/ Andrew L. Hyams        Director                           June 4, 1997
--------------------------
    Andrew L. Hyams


                                       -4-

<PAGE>
INDEX TO EXHIBITS

Exhibit No.              Description
-----------              -----------

     11.1                Statement Re: Computation of Per Share Earnings

     27.1                Financial Data Schedule