<PAGE>


                          SECURITIES AND EXCHANGE COMMISSION

                               WASHINGTON, D.C.  20549

                                     FORM 10-QSB

                  X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                        OF THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1996

                    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                                     EXCHANGE ACT


                             COMMISSION FILE NO. 1-12888


                                  SPORT-HALEY, INC.
                (Exact name of registrant as specified in its charter)

         COLORADO                                              84-1111669
    (State of other jurisdiction of                        (I.R.S. Employer
    incorporation or organization)                         Identification No.)

                     4600 E. 48TH AVENUE, DENVER, COLORADO  80216
                       (Address of principal executive offices)
                                    (303) 320-8800
                 (Registrant's telephone number including area code)

     Check whether the issuer (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act 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
               ----      ---- 

     State the number of shares outstanding in each of the issuer's classes 
of common stock, as of the latest practicable date.

               CLASS                         OUTSTANDING AT JANUARY 29, 1997
       COMMON STOCK, NO PAR VALUE                        4,434,139

     Transitional Small Business Disclosure Format (check one):
         Yes     No  X
            ---     ---
<PAGE>

                                    INDEX

                                                                    PAGE
                                                                   ------
PART 1 - FINANCIAL INFORMATION


          ITEM 1 - FINANCIAL STATEMENTS

            BALANCE SHEETS                                           3

            STATEMENTS OF INCOME                                     4

            STATEMENTS OF CASH FLOWS                               5-6

            NOTES TO FINANCIAL STATEMENTS                          7-9

          ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
             FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS      10-13


PART II - OTHER INFORMATION                                         14


SIGNATURES                                                          15


<PAGE>
                                       
                               SPORT-HALEY, INC.
                                BALANCE SHEETS
                                (IN THOUSANDS)


                                                       DECEMBER 31,     JUNE 30,
                                                          1996            1996  
                                                       ------------     --------
                                                       (UNAUDITED)       (NOTE) 
                                     ASSETS
Current assets:
    Cash and cash equivalents                            $ 4,383        $ 8,648
    Short-term investments and marketable securities           -          2,750
    Accounts receivable, net of allowances of 
      $83,000 and $90,000, respectively                    4,116          4,549
    Inventories                                           10,992          7,716
    Other current assets                                   1,341          1,097
                                                         -------        -------
                                                          20,832         24,760
                                                         -------        -------
Property and equipment                                     2,905          2,294
Property held under capital leases                             7              7
    Less, accumulated depreciation                          (594)          (601)
                                                         -------        -------
                                                           2,318          1,700
                                                         -------        -------
Other assets:
    Long-term investments                                  3,783          1,274
    Other assets                                             322             32
                                                         -------        -------
                                                           4,105          1,306
                                                         -------        -------
                                                         $27,255        $27,766
                                                         -------        -------
                                                         -------        -------
                                       
                     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable                                     $ 1,459        $ 2,141
    Capital lease obligations maturing within 
      one year                                                 -              2
    Accrued income taxes                                       -            464
    Accrued commissions and other expenses                   956            725
                                                         -------        -------
                                                           2,415          3,332
                                                         -------        -------
Long-term liabilities:
    Capital lease obligations, net of 
      current maturities                                       2              2
    Other                                                     88             66
                                                         -------        -------
                                                              90             68
                                                         -------        -------
                                                           2,505          3,400
                                                         -------        -------
Stockholders' equity:
    Preferred stock, no par value; 1,500,000 shares 
      authorized; none issued and outstanding                  -              -
    Common stock, no par value; 
      15,000,000 shares authorized; 4,344,647 and
      4,419,271 shares issued and outstanding, 
      respectively                                        18,952         20,166
    Additional paid in capital                                52             63
    Additional paid in capital - deferred 
      option compensation                                     50              -
    Unrealized losses on available for sale securities      (209)          (140)
    Retained earnings                                      5,905          4,277
                                                         -------        -------
                                                          24,750         24,366
                                                         -------        -------
                                                         $27,255        $27,766
                                                         -------        -------
                                                         -------        -------
                                       
           Note:  Taken from the audited balance sheet at that date.



                                       3

<PAGE>


                                SPORT-HALEY, INC.
                              STATEMENTS OF INCOME
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
                                              THREE MONTHS ENDED         SIX MONTHS ENDED
                                                  DECEMBER 31,              DECEMBER 31,
                                               1996         1995         1996         1995
                                           -----------  -----------  -----------  -----------
                                           (UNAUDITED)  (UNAUDITED)  (UNAUDITED)  (UNAUDITED)
<S>                                           <C>           <C>         <C>           <C>
Net sales                                     $5,733       $3,774      $11,999       $7,942

Cost of goods sold                             3,266        2,167        6,902        4,539
                                              ------       ------      -------       ------

Gross profit                                   2,467        1,607        5,097        3,403

Selling, general and administrative expense    1,646          979        3,148        2,027
                                              ------       ------      -------       ------

Income from operations                           821          628        1,949        1,376

Other income (expense):
  Other income                                   289           71          459          155
  Interest and other expense                       -          (10)           -          (10)
                                              ------       ------      -------       ------

Income before income taxes                     1,110          689        2,408        1,521

Provision for income taxes (Note 3)              279          261          780          571
                                              ------       ------      -------       ------

Net income                                    $  831       $  428      $ 1,628       $  950
                                              ------       ------      -------       ------
                                              ------       ------      -------       ------

Net income per common share                   $ 0.18       $ 0.12      $  0.35       $ 0.27
                                              ------       ------      -------       ------
                                              ------       ------      -------       ------

Weighted average number of common and
 common equivalent shares outstanding          4,677        3,512        4,712        3,493
                                              ------       ------      -------       ------
                                              ------       ------      -------       ------
</TABLE>




                                                    4

<PAGE>

                              SPORT-HALEY, INC.
                           STATEMENTS OF CASH FLOWS
                                (IN THOUSANDS)

                                                     FOR THE SIX MONTHS ENDED
                                                           DECEMBER 31,
                                                        1996          1995
                                                     -----------   -----------
                                                     (UNAUDITED)   (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income                                             $ 1,628       $   950

Adjustments to reconcile net income to net cash
 provided by operating activities:
  Depreciation and amortization                            198           133
  Depreciation recorded as prepaid expense                  (8)          (12)
  Deferred taxes, net                                        7            15
  Increase in allowance for doubtful accounts               (7)          (20)
  Deferred option compensation                              50             -
  Deferred rents                                             2             2

(Increase) decrease in assets:
  Short-term investments to maturity                     2,749             -
  Accounts receivable                                      297            88
  Inventory                                             (3,324)       (1,426)
  Other current assets                                    (331)           78

(Increase) decrease in liabilities:
  Accounts payable                                        (683)         (525)
  Accrued commissions and other expenses                   231           254
  Accrued income taxes                                    (464)         (406)
  Deferred rent                                              -            (2)
                                                       -------       -------
  Net cash used by operating activities                    345          (871)
                                                       -------       -------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments on capital lease obligation            (1)           (1)
  Net proceeds from issuance of common stock               271           266
  Stock purchased and retired                           (1,485)         (190)
                                                       -------       -------
  Net cash provided by financing activities            $(1,215)      $    75
                                                       -------       -------
                                                       -------       -------

                                     5

<PAGE>



                               SPORT-HALEY, INC.
                            STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)


                                                      FOR THE SIX  MONTHS ENDED
                                                            DECEMBER 31,
                                                         1996          1995
                                                     -----------   -----------
                                                     (UNAUDITED)   (UNAUDITED)
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of fixed assets                             $  (814)     $  (195)
  Disposal of assets                                         -            -
  Investment in "available to sell" securities, net     (2,581)         (51)
                                                       -------      -------

  Net cash used by investing activities                 (3,395)        (246)
                                                       -------      -------

  Net increase (decrease) in cash                       (4,265)      (1,042)

CASH AND CASH EQUIVALENTS, BEGINNING                     8,648        4,758
                                                       -------      -------

CASH AND CASH EQUIVALENTS, ENDING                      $ 4,383      $ 3,716
                                                       -------      -------
                                                       -------      -------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the period for:

    Income taxes                                       $ 1,352      $   743
                                                       -------      -------
                                                       -------      -------

    Interest                                           $     -      $     -
                                                       -------      -------
                                                       -------      -------

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:

At December 31, 1996, the Company has unrealized holding losses on marketable 
securities of approximately $209,000.









                                       6

<PAGE>
                                       
                               SPORT-HALEY, INC.
                         NOTES TO FINANCIAL STATEMENTS


NOTE 1  CONDENSED FINANCIAL STATEMENTS

        The financial statements included herein have been prepared by 
        Sport-Haley, Inc. (the "Company") without audit, pursuant to the 
        rules and regulations of the Securities and Exchange Commission.  
        Certain information and footnote disclosures normally included in 
        the financial statements prepared in accordance with generally 
        accepted accounting principles have been condensed or omitted as 
        allowed by such rules and regulations.  The Company believes that 
        the disclosures are adequate to make the information presented not 
        misleading.  It is suggested that these financial statements be 
        read in conjunction with the Company's annual financial statements 
        dated June 30, 1996.  While management believes the procedures 
        followed in preparing these financial statements are reasonable, 
        the accuracy of the amounts are, in some respects, dependent upon 
        the facts that will exist, and procedures that will be accomplished 
        by the Company, later in the year.

        The management of the Company believes that the accompanying 
        unaudited condensed financial statements prepared in conformity 
        with generally accepted accounting principles, which requires the 
        use of management estimates, contain all adjustments (including 
        normal recurring adjustments) necessary to present fairly the 
        operations and cash flows for the period presented.

NOTE 2  INVENTORIES

        Inventories at December 31, 1996 consist of the following:

             Raw materials          $ 3,625,197
             Finished goods           7,366,425
                                    -----------
                                    $10,991,622
                                    -----------
                                    -----------

NOTE 3  INCOME TAXES

        The components of the deferred tax asset and net deferred tax liability
        recognized in the accompanying balance sheet as of December 31, 1996, 
        are as follows:

                                          CURRENT     LONG-TERM 
                                          -------     ---------
             Deferred tax (liability)     $     -     $(84,325)
             Deferred tax asset            51,694            -
                                          -------     --------
                                          $51,694     $(84,325)
                                          -------     --------
                                          -------     --------



                                       7
<PAGE>
                                       
                               SPORT-HALEY, INC.
                         NOTES TO FINANCIAL STATEMENTS


NOTE 3  INCOME TAXES (Continued)

        The types of temporary differences between the tax bases of assets 
        and liabilities and the financial reporting amounts that give rise 
        to a significant portion of the deferred tax liability and their 
        appropriate tax effects at December 31, 1996, are as follows:

                                                                 TAX EFFECT
                                                DIFFERENCE   CURRENT   LONG-TERM
                                                ----------   -------   ---------
             Allowance for doubtful accounts     $ 83,436    $32,540   $      -
             Stock option compensation             49,513     19,154          -
             Accumulated depreciation             216,218          -    (84,325)
                                                             -------   --------
                                                             $51,694   $(84,325)
                                                             -------   --------
                                                             -------   --------

        The components of income tax expenses are as follows:

             Current:
               Federal                           $678,000
               State                               95,200
                                                 --------
                                                  773,200
                                                 --------

             Deferred:
               Federal                              6,270
               State                                  880
                                                 --------
                                                    7,150
                                                 --------
                                                 $780,350
                                                 --------
                                                 --------

NOTE 4  REPURCHASE OF COMMON STOCK

        During December 1994, the Company's Board of Directors authorized 
        the repurchase of up to 150,000 shares of the Company's issued and 
        outstanding common stock.  The shares may be purchased from time to 
        time in open market transactions at prevailing market prices.  The 
        Company has no commitment or obligation to purchase all or any 
        portion of the shares.  All shares purchased by the Company will be 
        cancelled and returned to the status of authorized but unissued 
        common stock.  In October, 1996, the Company's Board of Directors 
        authorized an increase of an additional 150,000 common shares that 
        the Company may repurchase thus bringing the total common shares 
        authorized for repurchase under the plan to 300,000 shares.  During 
        the second quarter ended December 31, 1996, the Company repurchased 
        117,290 shares of its common stock at a cost of approximately 
        $1,484,800.  As of December 31, 1996, the Company had repurchased a 
        total of 150,000 shares of its common stock.



                                       8
<PAGE>
                                       
                               SPORT-HALEY, INC.
                         NOTES TO FINANCIAL STATEMENTS


NOTE 5  COMMON STOCK OPTIONS

        At December 31, 1996, the Company had 466,365 options granted to 
        purchase common stock at prices ranging from $1.60 to $12.75, with 
        expiration dates between March 15, 2002 and July 1, 2006.  During 
        the six months ended December 31, 1996, option holders exercised 
        and purchased 42,666 shares of the Company's common stock.  The 
        Company realized gross proceeds of approximately $270,700 from the 
        exercise of such options.

        During May 1996, the Company's Board of Directors authorized the 
        Company to prepare and issue a "net issuance" offer to the holders 
        of the Company's non-qualified stock options, to purchase the 
        interests of the option holders.  The Company will pay the 
        difference between the exercise price of the non-qualified stock 
        option and the fair market value of the Company's common stock on 
        the date the option holder accepts the offer.  As of December 31, 
        1996, the Company had repurchased 7,228 options for approximately 
        $83,100.  At December 31, 1996 the Company had outstanding 
        approximately 278,000 non-qualified stock options.  Accordingly, 
        the Company's net issuance cost to repurchase these options would 
        be approximately $2.5 million if substantially all of the 
        non-qualified option holders elected to accept the Company's offer.

        Included in the Company's six month net income is a charge of 
        approximately $30,400 which is a result of the Company's 
        implementation of FASB 123-Accounting for Stock Based Compensation.

NOTE 6  SUBSEQUENT EVENTS

        REGISTRATION OF WARRANTS

        During January 1997 the Company filed a Registration Statement on 
        Form S-3 to register 90,000 shares of the Company's common stock, 
        70,000 shares of which are to be issued upon exercise of the 
        representative's warrants (the "Representative's Warrants") sold to 
        Schneider Securities, Inc. (the "Representative") in connection 
        with an underwritten public offering undertaken in April 1994 and 
        20,000 shares of which are issuable upon exercise of the advisor's 
        warrants (the "Advisor's Warrants") issued to Cruttenden Roth 
        Incorporated (the "Advisor") in connection with an investment 
        banking agreement between the Company and the Advisor in July 1995. 
        The Company will receive $6.50 per share upon exercise of the 
        Representative's Warrants and $8.125 per share upon exercise of the 
        Advisor's Warrants. The Company has agreed to pay the expenses of 
        registering the shares offered which is estimated at $15,000.

        Subsequent to the effective date of the registration, 32,376 
        Representative's Warrants were exercised resulting in gross 
        proceeds of approximately $210,444 to the Company.



                                       9
<PAGE>

                               SPORT-HALEY, INC.

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


FINANCIAL CONDITION

The Company's financial position continues to demonstrate strength from 
growth in its net sales, gross profit margin and net income.  The Company 
intends to rely on its cash generated from operations and the net proceeds 
realized from the March 1996 public offering to finance its working capital 
requirements for at least the next 12 months.  To the extent such amounts are 
insufficient to finance the Company's working capital requirements, the 
Company may also make periodic borrowings under its revolving line of credit.

During the six months ended December 31, 1996, current assets and current 
liabilities decreased by approximately $3.928 million and $917,000, 
respectively.  The Company utilized cash and cash equivalents to purchase and 
retire approximately $1.5 million of common stock, $2.5 million was used for 
the acquisition of investments in "available to sell" securities, $814,000 
was used to acquire property and equipment, and a net of $345,000 was used in 
operating activities to acquire inventory and reduce current liabilities.

For the six months ended December 31, 1996, the Company spent approximately 
$814,000 for property and equipment.  These expenditures relate to equipment 
and leasehold improvements for the headwear and embroidery operations.  Also, 
at the beginning of the fiscal year the Company removed approximately 
$200,000 of fully depreciated and disposed assets.

Other assets increased $2.799 million during the six months ending December 
31, 1996 mainly from increases in long-term investments.

During the period ended December 31, 1996, long-term liabilities increased by 
approximately $22,000 primarily due to an increase in deferred income tax 
liability.

The Company received proceeds of approximately $271,000 from the exercise of 
stock options during the six months ended December 31, 1996.  Also, during 
the second quarter, the Company repurchased on the open market 117,290 shares 
of its common stock for approximately $1.485 million.  The shares repurchased 
have been cancelled.  As a result, the outstanding shares of common stock 
decreased by 74,624 shares.  Stockholders' equity increased by approximately 
$384,000 for the six month period ended December 31, 1996.

RESULTS OF OPERATIONS

The Company's business is seasonal in nature, and therefore the results for 
any one or more quarters are not necessarily indicative of the annual results 
or continuing trends.


                                       10
<PAGE>

                                SPORT-HALEY, INC.

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

RESULTS OF OPERATIONS (CONTINUED)

Net sales for the second quarter ended December 31, 1996, were approximately 
$5.733 million, an increase of approximately $1.959 million, or 52%, from net 
sales of $3.774 million for the same quarter in the prior fiscal year.  Net 
sales for the six months ended December 31, 1996, were $11.999 million, an 
increase of approximately $4.057 million, or 51%, from net sales of $7.942 
million for the same six month period in the prior fiscal year.  The increase 
in net sales is due to a combination of factors, including a greater number 
of products within each of the women's and men's lines, an increase in the 
number of golf course professional shops that carry the Company's apparel an 
increase in corporate and international sales.

The Company's gross profit increased by approximately $860,000 or 54% to 
$2.467 million for the quarter ended December 31, 1996 from approximately 
$1.607 million for the same quarter in the prior fiscal year.  The gross 
profit for the six month period increased by approximately $1.694 million or 
50% to $5.097 million from $3.403 million for the same six month period in 
the prior fiscal year.  Gross profit as a percentage of net sales remained at 
43% for the quarters ended December 31, 1996 and 1995, respectively.  For the 
six month periods ended December 31, 1996 and 1995 the Company's gross profit 
was 42% and 43%, respectively.  The Company has continued to maintain control 
on its cost of goods sold on higher sales volume.

Selling, general and administrative expenses increased by approximately 
$667,000 or 68% to $1.646 million for the second quarter ended December 31, 
1996 from $970,000 for the same quarter in the prior fiscal year.  For the 
six months ended December 31, 1996 selling, general and administrative 
expenses increased approximately $1.121 million or 55% to $3.148 million from 
approximately $2.027 million for the same six month period in the prior 
fiscal year.  The increase in both the second quarter and the six months 
period can be attributed to costs associated with the Company's new headwear 
division and retail store operation and commissions paid to independent sales 
representatives on a higher sale volume, increased advertising expenditures.

Other income for the second quarter and six months ended December 31, 1996 
increased by approximately $228,000 and $314,000, respectively.  The increase 
in both the quarter and the six month period can be attributed to an increase 
in interest income generated by short and long-term investments and tax 
refunds of approximately $165,000.

Income before provision for income taxes increased by approximately $421,000 
or 61% to $1.110 million for the quarter ended December 31, 1996, from 
approximately $689,000 for the same quarter in the prior fiscal year.  For 
the six months ended December 31, 1996 income before provision for income 
taxes increased approximately $887,000 or 58% to $2.408 million from $1.521 
million for the same six month period in the prior fiscal year.


                                     11
<PAGE>
                              SPORT-HALEY, INC.

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

RESULTS OF OPERATIONS (CONTINUED)

For the three month and six month periods ended December 31, 1996 net income 
increased approximately $403,000 or 94% and $678,000 or 71%, respectively, 
when compared to the same three and six month periods in the prior fiscal 
year.

Earnings were $.18 per share for the quarter ended December 31, 1996 as 
compared to $.12 for the same quarter ended in the prior fiscal year.  These 
per share earnings are based on 4,676,545 and 3,511,668 weighted average 
shares outstanding for the 1996 and 1995 quarters, respectively.  Earnings 
per share for the six month periods ended December 31, 1996 and 1995 were 
$.35 and $.27 and were based on 4,711,827 and 3,493,417 weighted average 
shares outstanding, respectively.

FACTORS THAT MAY AFFECT OPERATING RESULTS

The statements contained in this Report on Form 10-QSB that are not purely 
historical are forward-looking statements within the meaning of Section 27A 
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act 
of 1934, including statements regarding the Company's expectations, hopes, 
intentions, beliefs or strategies regarding the future.  All forward-looking 
statements included in this document are based on information available to 
the Company on the date hereof, and the Company assumes no obligation to 
update any such forward looking statements.  It is important to note that the 
Company's actual results could differ materially from those in such 
forward-looking statements.  You should consult the risk factors listed from 
time to time in the Company's Form 10-KSB, annual reports to shareholders and 
registration statements filed under the Securities Act of 1933.  
Forward-looking statements include those relating to (i) development and 
maintenance of brand loyalty for Haley apparel, (ii) enhancement of sales of 
outerwear and headwear as a result of existing relationships among the 
Company, its independent sales representatives and golf course professional 
shop customers, (iii) success of additional marketing initiatives to be 
undertaken by the Company, (iv) increases in international sales as a result 
of distribution being obtained in the United Kingdom, Ireland and Japan and 
new distribution in other countries, (v) increased distribution through 
expansion of its network of independent sales representatives and the golf 
professional shop customer base, (vi) expansion of sales to corporate and 
tournament customers and capitalizing on additional embroidery capacities, 
(vii) the Company's success in establishing its factory outlet store, as well 
as its ability to obtain retail prices for its close-out apparel sold to the 
factory outlet store, (viii) success of the Company in forecasting demand for 
particular apparel styles and its success in establishing production 
schedules and forecasts which accurately anticipate market demand, (ix) that 
the Company will achieve increases in per-account sales, (x) the Company's 
success in diversifying its market through increasing sales to large 
corporate accounts and universities, and (xi) achievement of high gross 
profit margins by targeting the premium and mid-priced fashion golf apparel 
market, controlling manufacturing costs and expansion of the Company's 
apparel lines to include other high margin products.  As a result of the 
foregoing or other factors, there can be no assurance that the Company will 
not experience material fluctuations in future operating results on a 
quarterly or annual basis, which would materially and adversely affect the 
Company's business, financial condition and results of operations.


                                       12
<PAGE>

                               SPORT-HALEY, INC.

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

FACTORS THAT MAY AFFECT OPERATING RESULTS (CONTINUED)

Forward-looking statements included herein are based on assumptions that the 
Company will continue to develop and introduce new products on a timely 
basis, that competitive conditions within the fashion golf apparel industry 
will not change materially or adversely, that demand for the Company's 
fashion golf apparel will remain strong, that the market will accept the 
Company's new apparel lines, that inventory risks due to shifts in market 
demand will be minimized, that the Company's forecast will accurately 
anticipate market demand, and that there will be no material adverse change 
in the Company's operations or business.  Assumptions relating to the 
foregoing involve judgments with respect to, among other things, future 
economic, competitive and market conditions, and future business decisions, 
all of which are difficult or impossible to predict accurately and many of 
which are beyond the control of the Company,  Although the Company believes 
that the assumptions underlying the forward-looking statements are 
reasonable, any of the assumptions could prove inaccurate and, therefore, 
there can be no assurance that the forward-looking information will prove to 
be accurate.  In light of the significant uncertainties inherent in the 
forward-looking information included herein, the inclusion of such 
information should not be regarded as a representation by the Company or any 
other person that the objectives or plans of the Company will be achieved.






                                      13
<PAGE>

                               SPORT-HALEY, INC.
                                    PART II
                               OTHER INFORMATION




ITEM 1   LEGAL PROCEEDINGS - NONE

ITEM 2   CHANGES IN SECURITIES - NONE

ITEM 3   DEFAULTS UPON SENIOR SECURITIES - NONE

ITEM 4   SUBMISSION TO MATTERS TO A VOTE OF SECURITY HOLDERS - NONE

ITEM 5   OTHER INFORMATION - NONE

ITEM 6   EXHIBITS AND REPORTS ON FORM 8-K

              (A)  EXHIBITS

                     27   FINANCIAL DATA SCHEDULE

              (B)  REPORTS ON FORM 8-K - NONE





                                     14
<PAGE>


                               SIGNATURES




In accordance with the requirements of the Securities Exchange Act of 1934, 
the Registrant caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                                   SPORT-HALEY, INC.
                                   (Registrant)



Date: February 12, 1997            /s/ Robert G. Tomlinson
                                   ------------------------------
                                   Robert G. Tomlinson
                                   Chief Executive Officer


Date: February 12, 1997           /s/ Steve S. Auger
                                  -------------------------------
                                  Steve S. Auger
                                  Chief Accounting Officer







                                     15