U.S. SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549-1004

                                   FORM 10-QSB
(Mark One)

[X]      QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934

         For the quarterly period ended March 31, 1997


[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934

         For the transition period from ________________ to __________________

                        Commission File Number 0 - 22230

                                ROYAL GRIP, INC.
                                ----------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

          Nevada                                         86-0615648
-------------------------------                ---------------------------------
(State or Other Jurisdiction of                (IRS Employer Identification No.)
Incorporation or Organization)

                              444 West Geneva Drive
                              Tempe, Arizona 85282
                                 (602) 829-9000
                    ----------------------------------------
                    (Address of Principal Executive Offices)

           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
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 
                                  ---         ---

                     APPLICABLE ONLY TO ISSUERS INVOLVED IN
                        BANKRUPTCY PROCEEDINGS DURING THE
                              PRECECING FIVE YEARS

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13,or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court.

Yes________ No________

                      APPLICABLE ONLY TO CORPORATE ISSUERS

           State  the  number  of  shares  outstanding  of each of the  issuer's
classes of common  equity,  as of the  latest  practicable  date (May 8,  1997).
Common stock, $.001 par value: 2,740,928.

Transitional Small Business Disclosure Format (check one):

Yes         No  X 
    ---        ---
                                       1
<PAGE>
--------------------------------------------------------------------------------
                                ROYAL GRIP, INC.
                                 AND SUBSIDIARY

                                      INDEX

                                                                           Page
                                                                           ----

PART I.   FINANCIAL INFORMATION

          Item 1. Financial Statements (unaudited)

                    Condensed Consolidated Balance Sheets-                  3
                         March 31, 1997 and December 31, 1996

                    Condensed Consolidated Statements of Operations-        4
                         Three Months Ended
                         March 31, 1997 and March 31, 1996

                    Condensed Consolidated Statements of Cash Flows-        5
                         Three Months Ended
                         March 31, 1997 and March 31, 1996

                    Notes to Condensed Consolidated Financial Statements    6

          Item 2. Management's Discussion and Analysis of
                    Financial Condition and Results of Operations           8


PART II. OTHER INFORMATION

          Item 6.   Exhibits and Reports on Form 8-K                       13

SIGNATURE                                                                  14

EXHIBITS

          None
                                       2
<PAGE>
Part I                   ROYAL GRIP, INC. AND SUBSIDIARY
Item 1          CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                              March 31,     December 31,
                                                                                                1997            1996
                                                                                            ------------    ------------
<S>                                                                                         <C>             <C>         
ASSETS
Current assets:
     Cash and cash equivalents                                                              $       --      $     38,099
     Trade accounts receivable (net of allowance for doubtful
           accounts of  $464,511 and $549,455 as of March 31, 1997
           and December 31, 1996, respectively)                                                1,350,149       1,593,554
Inventories                                                                                      867,608       1,381,215
     Current portion of net investment in lease                                                  218,722         214,506
     Prepaid expenses and other current assets                                                   109,996         132,557
                                                                                            ------------    ------------
     Total current assets                                                                      2,546,475       3,359,931
                                                                                            ------------    ------------

Property and equipment, net                                                                    1,920,455       1,925,056
Net investment in capital lease, less current portion                                          2,868,677       2,907,494
Intangible assets, net                                                                           247,831         251,554
Other assets                                                                                      36,250          51,250
                                                                                            ------------    ------------
                                                                                            $  7,619,688    $  8,495,285
                                                                                            ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Revolving line of credit                                                               $    496,133    $     60,000
     Current portion of long-term debt and capital leases                                        226,500         207,230
     Accounts payable and accrued expenses                                                     1,013,523       1,928,037
     Deferred revenue                                                                            400,000            --
                                                                                            ------------    ------------
           Total current liabilities                                                           2,136,156       2,195,267
                                                                                            ------------    ------------

Long-term debt and capital leases, less current portion                                          632,389         671,054
Other liabilities                                                                                  8,147           8,147

Stockholders' equity:
     Preferred stock, par value $.001 per share 
        Authorized 5,000,000 shares; none issued
     Common stock, par value $.001 per share 
        Authorized 15,000,000 shares; issued and
        outstanding 2,740,928 shares at March 31, 1997
        and 2,734,678 at December 31, 1996                                                         2,741           2,735
 Additional paid-in capital                                                                   12,618,494      12,592,906
 Accumulated deficit                                                                          (7,778,239)     (6,974,824)
                                                                                            ------------    ------------
           Total stockholders' equity                                                          4,842,996       5,620,817
                                                                                            ------------    ------------
                                                                                            $  7,619,688    $  8,495,285
                                                                                            ============    ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
                                       3
<PAGE>
                         ROYAL GRIP, INC. AND SUBSIDIARY


           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

                                                         Three months ended
                                                              March 31,

                                                         1997           1996
                                                     -----------    -----------
Net sales                                            $ 2,471,683    $ 4,357,621
Cost of goods sold                                     2,072,820      3,239,546
                                                     -----------    -----------
    Gross profit                                         398,863      1,118,075
Selling, general and administrative expenses           1,217,949      1,671,455
                                                     -----------    -----------
    Loss from operation                                 (819,086)      (553,380)
Other income (expenses), net                              15,671        (15,867)
                                                     -----------    -----------
    Loss before income tax benefit                      (803,415)      (569,247)
Income tax benefit                                          --             --
                                                     -----------    -----------
    Net loss                                         $  (803,415)   $  (569,247)
                                                     ===========    ===========
Net loss per share                                   $     (0.29)   $     (0.21)
                                                     ===========    ===========
Weighted average shares used in net loss per share     2,739,275      2,734,678
                                                     ===========    ===========


     See accompanying notes to condensed consolidated financial statements.
                                       4
<PAGE>
                         ROYAL GRIP, INC. AND SUBSIDIARY

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                Three Months Ended
                                                                                    March 31,
                                                                            --------------------------
                                                                                1997           1996
                                                                                ----           ----
<S>                                                                         <C>            <C>         
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                                               $  (803,415)   $  (569,247)
     Adjustments to reconcile net loss to net cash
        used by operating activities:
         Depreciation and amortization                                          125,653        435,371
         Compensatory stock option grants                                         8,406           --
         Loss on disposition of property and equipment                             --            7,387
         (Increase) decrease in trade accounts receivable                       243,405       (968,779)
         Decrease in inventories                                                513,607         16,021
         (Increase) decrease in prepaid expenses and other current assets        22,561         (7,183)
         (Increase) decrease in other assets and intangibles                     15,000        (16,025)
         Increase in deferred revenue                                           400,000           --
         Decrease in trade accounts payable and accrued expenses               (914,514)       (74,144)
                                                                            -----------    -----------
              Net cash used by operating activities                            (389,297)    (1,176,599)
                                                                            -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property and equipment                                       (117,329)      (352,337)
     Principal payments received on capital lease receivable                     34,601           --
     Proceeds from sale of property and equipment                                  --          766,025
                                                                            -----------    -----------
     Net cash provided by (used in) investing activities                        (82,728)       413,688
                                                                            -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Principal payments under capital lease obligations                            --           (7,606)
     Net advances (payments) on notes payable                                   (19,395)         7,172
     Exercise of employee options                                                17,188           --
     Increase in revolving line of credit                                       436,133        350,000
                                                                            -----------    -----------
     Net cash provided by financing activities                                  433,926        349,566
                                                                            -----------    -----------
     Net decrease in cash                                                       (38,099)      (413,345)
     Cash at beginning of period                                                 38,099        413,345
                                                                            -----------    -----------
     Cash at end of period                                                  $      --      $      --
                                                                            ===========    ===========
</TABLE>
     See accompanying notes to condensed consolidated financial statements.
                                       5
<PAGE>
                         ROYAL GRIP, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)      Basis of Presentation
         ---------------------

         The accompanying  condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting  principles,  pursuant
to rules and  regulations  of the  Securities  and Exchange  Commission.  In the
opinion of management the accompanying  condensed  financial  statements include
all  adjustments (of a normal  recurring  nature) which are necessary for a fair
presentation  of  the  results  for  the  interim  periods  presented.   Certain
information and footnote  disclosures have been condensed or omitted pursuant to
such rules and  regulations.  It is suggested that these condensed  consolidated
financial  statements  be read in  conjunction  with  the  financial  statements
included in the Company's annual report on Form 10-K for the year ended December
31,  1996,  as filed with the  Securities  and Exchange  Commission.  Results of
operations in interim  periods are not  necessarily  indicative of results to be
expected for a full year. In February 1997, Financial Accounting Standards Board
issued Statement No. 128 "Earnings Per Share" which is required to be adopted on
December  31,  1997.  At that time,  the Company  will be required to change the
method  currently  used to compute  earnings  per share and to restate all prior
periods.  Under the new requirements for calculating primary earnings per share,
the dilutive  effect of stock options will be excluded.  The impact of Statement
No. 128 on the  calculation  of primary and fully diluted  earnings per share is
not  expected to be  material  for the first  quarters  ended March 31, 1997 and
March 31, 1996. 

(2)      Inventories
         -----------

            Inventories consist of the following:     March 31,    December 31,
                                                        1997           1996
                                                      --------       ----------
            Finished goods                            $329,706       $  804,769
            Work in process                             56,224          100,092
            Raw materials                              481,678          476,354
                                                      --------       ----------
                                                      $867,608       $1,381,215
                                                      ========       ==========
                                       6
<PAGE>
(3)      Manufacturing And Supply Agreement
         ----------------------------------

         In  December  1996 the  Company  outsourced  all of its  production  of
non-cord  grips to Acushnet  Rubber  Company.  During the first quarter of 1997.
Acushnet  experienced  startup  delays in the  production of grips.  In light of
these  difficulties the Company and Acushnet have renegotiated  their agreement.
In connection with this renegotiation Acushnet has agreed to provide the Company
with a credit of $400,000  against  future  purchases of grips,  and  additional
credits in the event  Acushnet  fails to meet  future  production  requirements.
These  credits  may be  reduced  depending  upon  Acushnet's  production  beyond
specified  levels or as a result of the cancellation of stock options granted to
Acushnet.  Because of the contingent nature of this credit, the Company recorded
the credit as deferred revenue.

(4)      Revolving line of credit and term debt
         --------------------------------------

         In  February  1997,  the  Company  entered  into a new  line of  credit
facility  of $1.75  million and term loan of $700,000  with a  commercial  bank.
These  credit  arrangements  mature on  February  10, 2000 and contain net worth
requirements,  prohibit  dividend  payments and limit capital  expenditures.  At
March 31, 1997, the Company was not in compliance  with its quarterly net income
(loss),  debt service,  and net worth debt covenants and anticipated not meeting
many of its quarterly and monthly covenants during 1997. The Company obtained an
amended  bank  agreement  which  waived the  existing  net income  (loss),  debt
service,  and net worth covenant defaults and amended the debt agreement whereby
the net income  (loss)  limits  have been  modified to a loss of no more than $1
million for the quarter  ending March 31, 1997 and a cumulative  loss of no more
than $1.6  million for the  quarter  ending  June 30,  1997,  and for each month
thereafter in 1997. The agreement  amended the net worth  covenants to correlate
with the net loss covenants  above.  The quarterly debt service and monthly loss
limit covenants were waived by the bank for 1997. In addition, the interest rate
was amended to the bank's prime rate plus 3.0 percent  effective  April 1, 1997,
subject to change based on the operating results of the Company.

(5)      Deferred Income Taxes
         ---------------------

         The Company  accounts  for income  taxes under the asset and  liability
method  of  Statement  of  Financial   Accounting   Standards  (SFAS)  No.  109,
"Accounting for Income Taxes."

         No tax benefit is available in the first  quarter of 1997 due to a l00%
valuation  allowance  on a  deferred  tax  asset.  This will have the  effect of
reducing  income tax expense in future  periods in which the net operating  loss
carry forwards are realized.
                                       7
<PAGE>
Part I

Item 2

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                 OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Forward Looking Statements

         The Private  Securities  Litigation Reform Act of 1995 provides a "safe
harbor" for forward looking statements. The Company's Form 10-K, this Form 10-Q,
any other Form 10-Q, any Form 8-K, or any other written or oral  statements made
by or on behalf of the Company  may include  forward  looking  statements  which
reflect the Company's  current views with respect to future events and financial
performance.   These  forward   looking   statements   are  subject  to  certain
uncertainties  and other  factors  that  could  cause  actual  results to differ
materially from such statements.  These uncertainties and other factors include,
but are not limited to, uncertainties relating to economic conditions,  customer
plans and  commitments,  the Company's  cost of raw materials,  the  competitive
environment in which the Company operates,  and changes in the financial markets
relating to the Company's capital  structure and cost of capital.  Statements in
this Form 10-Q,  including  the Notes to the  Condensed  Consolidated  Financial
Statements and "Management's  Discussion and Analysis of Financial Condition and
Results of Operations", describe factors, among others, that could contribute to
or cause such differences. Additional factors that could cause actual results to
differ  materially from those  expressed in such forward looking  statements are
detailed in the Company's  Securities and Exchange Commission filings. The words
"believe," "expect,"  "anticipate,"  "project," and similar expressions identify
forward  looking  statements,  which speak only as of the date the statement was
made.  The Company  undertakes no  obligation  to publicly  update or revise any
forward  looking  statements,  whether  as a result of new  information,  future
events, or otherwise.
                                       8
<PAGE>
Results of Operations

         The following table sets forth for the periods indicated the percentage
of net  sales  represented  by each  line item in the  Company's  statements  of
operations:

                                                    Three Months Ended
                                                          March 31,
                                                  ------------------------
                                                  1997                  1996
                                                  ----                  ----
Net sales                                        100.0%                100.0%
Cost of goods sold                                83.9                  74.3
                                                  ----                  ----
     Gross profit                                 16.1                  25.7
Selling, general and administrative expenses      49.2                  38.4
                                                  ----                  ----
     Loss from operations                        (33.1)                (12.7)
Other income (expense) net                         0.6                  (0.4)
                                                   ---                  -----
     Loss before income tax benefit              (32.5)                (13.1)
Income tax benefit                                (0.0)                 (0.0)
                                                  -----                 -----
     Net loss                                    (32.5)%               (13.1)%
                                                 =======               =======

         Net Sales.  Net sales for the three  months ended March 31, 1997 (first
quarter) were $2.5  million,  a decrease of 43.2% over net sales of $4.4 million
for the  corresponding  period in the prior year.  The  decrease in net sales of
$1.9  million  for the first  quarter of 1997 from the same  period of the prior
year is primarily  attributable to a decrease in grip sales of $1,733,000.  This
decrease in grip sales is due to a lack of grip  production  resulting  from the
transition  of the  Company's  entire grip  manufacturing  operation to Acushnet
Rubber Company ("Acushnet").

         The Company's headwear  subsidiary,  Roxxi Inc., reported a decrease in
sales of $152,000,  or 11.4%,  for the quarter ended March 31, 1997, as compared
to the  same  period  of the  prior  year.  This  decrease  in net  sales is due
primarily  to reduced  production  staffing in 1997 as compared to 1996.  In the
first quarter of 1996, the Company still had two headwear production facilities,
the existing  Oklahoma City facility and the Tempe plant that was closed in June
1996.
                                       9
<PAGE>
         Gross Profit.  Gross profit  decreased to $399,000 in the first quarter
of 1997 from $1.1 million in the first  quarter of 1996.  As a percentage of net
sales,  gross profit  decreased to 16.1% from 25.7%. The decline in gross profit
and the  gross  profit  percentage  primarily  was  attributable  to  Acushnet's
production  delays  resulting  in  significantly  lower grip sales than the same
quarter last year.  The decrease in grip sales caused a major shift in the sales
mix that affected the gross profit  percentage by decreasing  higher margin grip
sales as a  percentage  of the total sales mix.  During the first  quarter,  the
margin on headwear sales increased by 6.4 percentage points compared to the same
quarter last year due to  manufacturing  cost reductions and  efficiencies.  The
gross profit on grip sales decreased by 14.3  percentage  points compared to the
same quarter last year  primarily due to a reduction in sales as a result of the
transition  to  Acushnet.   Also,  the  Company  incurred  significant  expenses
associated  with  facilitating  the  transition  such as  travel  costs  for its
employees and overnight shipping costs in order to satisfy customer needs.

         During the quarter  ended  March 31,  1997,  the  Company and  Acushnet
renegotiated their agreement in light of Acushnet's production difficulties.  In
connection  with this  renegotiation  Acushnet has agreed to provide the Company
with a credit of $400,000  against  future  purchases of grips,  and  additional
credits in the event  Acushnet  fails to meet  future  production  requirements.
These  credits  may be  reduced  depending  upon  Acushnet's  production  beyond
specified  levels or as a result of the cancellation of stock options granted to
Acushnet.  Because of the contingent nature of this credit, the Company recorded
the credit as deferred revenue.

         Selling,    General   and   Administrative.    Selling,   general   and
administrative  expenses  decreased to $1.2 million in the first quarter of 1997
from $1.7  million  in the  comparable  period
                                       10
<PAGE>
of 1996. Selling,  general and administrative  expenses decreased due to several
factors.  During 1996, the Company  eliminated many  administrative  and selling
employees  resulting in a reduction in salaries of $98,000 in the first  quarter
of 1997 as compared to the same quarter last year. Also, the Company  eliminated
many of its promotional product giveaways resulting in savings of $144,000. As a
result of lower sales caused by the  production  difficulties,  the Company paid
$76,000 less in  commission in the first quarter of 1997 as compared to the same
quarter last year.

         Other Income  (Expense).  Other income was $16,000 in the first quarter
of 1997  compared to other  expense of $16,000 in the same  period of 1996.  The
Company  recorded  $62,430 in interest income  primarily  related to the capital
lease  receivable  from Acushnet.  This interest  income has been netted against
interest  expense of $28,486 on the Company's line of credit and term loan and a
$20,000 fee charged in connection  with the Company's  modified loan  covenants.
The expense in 1996  resulted  primarily  from  interest  expense  incurred on a
revolving line of credit and a loss on fixed asset dispositions.

Liquidity and Capital Resources

         During the three months ended March 31, 1997, the Company used $389,297
to fund operating activities reflecting a loss and a reduction in trade accounts
payable and other accrued  expenses.  These factors were  partially  offset by a
significant  reduction in inventory levels. The Company attributes the reduction
in trade accounts  payable to the application of the Acushnet credit to payments
due  Acushnet at March 31, 1997 and the  elimination  of its grip  manufacturing
operation  thus  eliminating  purchases of 
                                       11
<PAGE>
raw material.  The inventory levels decreased  substantially  due to the Company
ceasing  its grip  manufacturing  operation  in  December  of 1996.  Many of the
shipments  occurring in the first quarter of 1997 were from  inventory  produced
prior  to  the  transition  of  manufacturing.  As  a  result  of  the  Acushnet
transaction,  the Company intends to maintain substantially lower grip inventory
levels in future periods as compared to 1996.

         The Company funded its shortfall in cash from borrowings under its line
of credit.  Borrowings on the Company's line of credit totaled $496,000 at March
31, 1997 as compared to $60,000 at December  31, 1996.  On April 30,  1996,  the
Company had $816,000 drawn on its line of credit of $1.75 million.  See Note (4)
to the Condensed Consolidated Financial Statements.
Available borrowings on the line at March 31, 1997 were $394,000.

                  Due to Acushnet's  start-up delays in the production of grips,
the Company's ability to satisfy its new loan covenants has been impaired, which
has caused the Company to obtain a waiver of any breaches of such  covenants and
modification  of such covenants in the future.  The Company's  inability to meet
its current or future loan  covenants  could  result in an  acceleration  of its
indebtedness or restrict the Company's access to such loans,  which would impair
the  Company's  ability  to fund its  operations,  unless or until  the  Company
secures an alternative source of funding, of which there can be no assurance.

         The Company  believes its available  borrowings and expected cash flows
from  operations  will  satisfy  its working  capital  and  capital  expenditure
requirements  for  the  foreseeable  future.  However,  if  operations  were  to
deteriorate,  or the Company were unable to borrow under its line of credit, the
Company would need to seek alternative  sources of financing for its operations.
There can be no assurance that such sources would be available.
                                       12
<PAGE>
Part II

Other Information

Item 6.

                (a)      Exhibits - None

                (b)      Reports  on Form 8k.  During  the first  quarter of the
                         1997 fiscal year, the Company filed Current  Reports on
                         Form 8-k on January 6, 1997, (the "January 8-k") and on
                         February 6, 1997 (the "February  8-k").  On the January
                         8-k,  the Company  reported  that it had entered into a
                         manufacturing and supply agreement with Acushnet Rubber
                         Company, Inc. On the February 8-k, the Company reported
                         that it had entered  into a letter of intent to combine
                         with FM Precision Golf Corporation.
                                       13
<PAGE>
                                    SIGNATURE

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


                                          ROYAL GRIP, INC.




Date:    May 14, 1997                     By: /s/ Thomas A. Schneider
                                          --------------------------------
                                          Thomas A. Schneider
                                          Vice President - Finance
                                          (Principal Financial and
                                          Accounting Officer)
                                       14