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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-QSB

(MARK ONE)

|    |                                                                                            
|--- | -------------------------------------------------------------------------------------------
|[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934

| |                                              
| | ---------------------------------------------
| | For Quarterly Period Ended September 30, 2001

|      |                                                                                             
|----- | --------------------------------------------------------------------------------------------
|[   ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934

Commission File Number: 0-26804

| |                                                                     |  |                                     
| | ------------------------------------------------------------------- |  | ------------------------------------
| | PLANET POLYMER TECHNOLOGIES, INC                                    |  |                                     
| |                                                                     |  |                                     
| | (Exact name of small business issuer as specified in its character) |  |                                     
|
| | CALIFORNIA                                                          |  | 33-0502606                          
| |                                                                     |  |                                     
| | (State or other jurisdiction of incorporation or organization)      |  | (I.R.S. Employer Identification No.)
|
| | 9985 Businesspark Avenue, San Diego, California                     |  | 92131                               
| |                                                                     |  |                                     
| | (Address of principal executive offices)                            |  | (Zip Code)                          
|
| | (858) 549-5130                                                     
| |                                                                     |  |                                     
| | (Issuers telephone number, including area code)                    |  |                                     

Check whether the issuer (1) has 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.



|[X]  YES | [   ]  NO
|-------- | ---------

Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date:

|                           |  |                                   |  | 
|-------------------------- |  | --------------------------------- |  | 
|Class                      |  | Outstanding at September 30, 2001
|                           |  |                                  
|Common Stock, no par value |  | 9,237,618                         | 





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TABLE OF CONTENTS



|                            |                                                                                                |                                               |  |  |  |  |  | 
|--------------------------- | ---------------------------------------------------------------------------------------------- | --------------------------------------------- |  |  |  |  |  | 
|                            |                                                                                                | BALANCE SHEET (UNAUDITED)                    
|                            |                                                                                                | STATEMENTS OF OPERATIONS (UNAUDITED)         
|                            |                                                                                                | STATEMENT OF SHAREHOLDERS EQUITY (UNAUDITED)
|                            |                                                                                                | STATEMENTS OF CASH FLOWS (UNAUDITED)         
|                            |                                                                                                | NOTES TO UNAUDITED FINANCIAL STATEMENTS      
|                            | Item 2  Managements Discussion and Analysis of Financial Condition and Results of Operations
|PART II  OTHER INFORMATION
|                            | Item 1  Legal Proceedings:                                                                   
|                            | Item 2  Changes in Securities:                                                               
|                            | Item 3  Defaults upon Senior Securities:                                                     
|                            | Item 4  Submission of Matters to a Vote of Security Holders:                                 
|                            | Item 5  Other Information:                                                                   
|                            | Item 6  Exhibits and Reports on Form 8-K:                                                    
|SIGNATURES                 



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##### Table of Contents



Planet Polymer Technologies, Inc.
Form 10-QSB Quarterly Report
Quarter Ended September 30, 2001

INDEX

|                               |        |  |                                                                                       |          |   
|------------------------------ | ------ |  | ------------------------------------------------------------------------------------- | -------- | --
|                               |        |  |                                                                                       | Page No.
|                               |        |  |                                                                                       |         
|PART I  Financial Information |        | 
|                              
|                               | Item 1 |  | Balance Sheet (Unaudited)
September 30, 2001                                          |          | 2 
|                              
|                              
|                              
|                              
|                               |        |  | Statements of Operations (Unaudited)
Three Months Ended September 30, 2001 and 2000   |          | 3 
|                              
|                              
|                              
|                              
|                               |        |  | Statements of Operations (Unaudited)
Nine Months Ended September 30, 2001 and 2000    |          | 4 
|                              
|                              
|                              
|                              
|                               |        |  | Statement of Shareholders Equity (Unaudited)
Nine Months Ended September 30, 2001    |          | 5 
|                              
|                              
|                              
|                              
|                               |        |  | Statements of Cash Flows (Unaudited)
Nine Months Ended September 30, 2001 and 2000    |          | 6 
|                              
|                              
|                              
|                              
|                               |        |  | Notes to Unaudited Financial Statements                                               |          | 7 
|                              
|                              
|                              
|                              
|                               | Item 2 |  | Managements Discussion and Analysis of
Financial Condition and Results of Operations |          | 9 
|                              
|PART II  Other Information    |        | 
|                              
|                               | Item 1 |  | Legal Proceedings                                                                     |          | 12
|                              
|                              
|                              
|                              
|                               | Item 2 |  | Changes in Securities                                                                 |          | 12
|                              
|                              
|                              
|                              
|                               | Item 3 |  | Defaults upon Senior Securities                                                       |          | 12
|                              
|                              
|                              
|                              
|                               | Item 4 |  | Submission of Matters to a Vote of Security Holders                                   |          | 12
|                              
|                              
|                              
|                              
|                               | Item 5 |  | Other Information                                                                     |          | 12
|                              
|                              
|                              
|                              
|                               | Item 6 |  | Exhibits and Reports on Form 8K                                                       |          | 12
|                              
|SIGNATURES                     |        |  | 13                                                                                   





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PLANET POLYMER TECHNOLOGIES, INC.

BALANCE SHEET (UNAUDITED)
_______________

|                                                                    |                                                                                                              |                                            |         |               |           | 
|------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ------------------------------------------ | ------- | ------------- | --------- | 
|                                                                    |                                                                                                              |                                            |         | September 30,
|                                                                    |                                                                                                              |                                            |         | 2001         
|                                                                    |                                                                                                              |                                            |         |              
|ASSETS                                                              |                                                                                                              |                                            |         |              
|Current assets:                                                     |                                                                                                              |                                            |         |              
|                                                                    | Cash and cash equivalents                                                                                    |                                            | $       | 295,862       |          
|                                                                    | Accounts receivable                                                                                          |                                            |         | 34,931        |          
|                                                                    | Inventories                                                                                                  |                                            |         | 104,326       |          
|                                                                    | Prepaid expenses and other current assets                                                                    |                                            |         | 96,584        |          
|                                                                    |                                                                                                              |                                            |         |               |          
|                                                                    |                                                                                                              | Total current assets                       |         |               | 531,703   | 
|Property and equipment, net of accumulated depreciation of $305,700 |                                                                                                              |                                            | 160,762 |              
|Patents and trademarks, net of accumulated amortization of $145,137 |                                                                                                              |                                            | 373,443 |              
|Other assets                                                        |                                                                                                              |                                            | 6,605   |              
|                                                                    |                                                                                                              |                                            |         |               |          
|                                                                    |                                                                                                              | Total assets                               |         | $             | 1,072,513 | 
|                                                                    |                                                                                                              |                                            |         |              
|LIABILITIES AND SHAREHOLDERS EQUITY                                |                                                                                                              |                                            |         |              
|Current liabilities:                                                |                                                                                                              |                                            |         |              
|                                                                    | Accounts payable                                                                                             |                                            | $       | 114,952       |          
|                                                                    | Accrued payroll and vacation                                                                                 |                                            |         | 28,344        |          
|                                                                    | Short-term debt                                                                                              |                                            |         | 42,629        |          
|                                                                    | Current portion of capital lease obligations                                                                 |                                            |         | 10,397        |          
|                                                                    |                                                                                                              |                                            |         |               |          
|                                                                    |                                                                                                              | Total current liabilities                  |         |               | 196,322   | 
|Capital lease obligations, less current portion                     |                                                                                                              |                                            | 832     |              
|                                                                    |                                                                                                              |                                            |         |               |          
|                                                                    |                                                                                                              | Total liabilities                          |         |               | 197,154   | 
|                                                                    |                                                                                                              |                                            |         |               |          
|Shareholders equity:                                               |                                                                                                              |                                            |         |              
|                                                                    | Preferred Stock, no par value
4,250,000 shares authorizedNo shares issued or outstanding                     |                                            |         |              |          
|                                                                    | Series A Convertible Preferred Stock, no par value
750,000 shares authorized
No shares issued or outstanding |                                            |         |              |          
|                                                                    | Common Stock, no par value
20,000,000 shares authorized
9,237,618 shares issued and outstanding              |                                            |         | 14,583,703    |          
|                                                                    | Accumulated deficit                                                                                          |                                            |         | (13,708,344   | )        
|                                                                    |                                                                                                              |                                            |         |               |          
|                                                                    |                                                                                                              | Total shareholders equity                 |         |               | 875,359   | 
|                                                                    |                                                                                                              |                                            |         |               |          
|                                                                    |                                                                                                              | Total liabilities and shareholders equity |         | $             | 1,072,513 | 
|                                                                    |                                                                                                              |                                            |         |              

The accompanying notes are an integral part of the financial statements.

2



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PLANET POLYMER TECHNOLOGIES, INC.

STATEMENTS OF OPERATIONS (UNAUDITED)
_______________

|                    |                             |                            |                                                                          |        |                                  |           |        |         |         |           |  
|------------------- | --------------------------- | -------------------------- | ------------------------------------------------------------------------ | ------ | -------------------------------- | --------- | ------ | ------- | ------- | --------- | -
|                    |                             |                            |                                                                          |        | Three months ended September 30,
|                    |                             |                            |                                                                          |        |                                 
|                    |                             |                            |                                                                          |        | 2001                             |           | 2000  
|                    |                             |                            |                                                                          |        |                                  |           |       
|Revenues            |                             | $                          | 152,955                                                                  |        |                                  | $         | 76,702 |        
|Operating expenses: |                             |                            |                                                                          |        |                                  |           |        |        
|                    |                             | Cost of revenues           |                                                                          |        | 108,234                          |           |        |         | 74,224  |          
|                    |                             | General and administrative |                                                                          |        | 188,656                          |           |        |         | 206,819 |          
|                    |                             | Marketing                  |                                                                          |        | 50,702                           |           |        |         | 61,506  |          
|                    |                             | Research and development   |                                                                          |        | 54,641                           |           |        |         | 67,830  |          
|                    |                             |                            |                                                                          |        |                                  |           |        |        
|                    |                             |                            | Total operating expenses                                                 |        |                                  | 402,233   |        |         |         | 410,379   |  
|                    |                             |                            |                                                                          |        |                                  |           |        |        
|                    |                             |                            | Loss from operations                                                     |        |                                  | (249,278  | )      |         |         | (333,677  | )
|                    | Other income (expense), net |                            |                                                                          | (3,202 | )                                |           |        | 164,931 |        
|                    |                             |                            |                                                                          |        |                                  |           |        |        
|                    |                             |                            | Loss before income taxes                                                 |        |                                  | (252,480  | )      |         |         | (168,746  | )
|                    | Income tax expense          |                            |                                                                          |       |                                  |           |        |        |        
|                    |                             |                            |                                                                          |        |                                  |           |        |        
|                    |                             |                            | Net loss                                                                 |        |                                  | (252,480  | )      |         |         | (168,746  | )
|                    |                             |                            | Preferred Stock dividends                                                |        |                                  |          |        |         |         | (9,644    | )
|                    |                             |                            |                                                                          |        |                                  |           |        |        
|                    |                             |                            | Net loss applicable to common shareholders                               |        | $                                | (252,480  | )      |         | $       | (178,390  | )
|                    |                             |                            |                                                                          |        |                                  |           |        |        
|                    |                             |                            | Net loss per share applicable to common shareholders
(basic and diluted) |        | $                                | (0.03     | )      |         | $       | (0.02     | )
|                    |                             |                            |                                                                          |        |                                  |           |        |        
|                    |                             |                            | Shares used in per share computations                                    |        |                                  | 9,237,618 |        |         |         | 7,637,743 |  
|                    |                             |                            |                                                                          |        |                                  |           |        |        

The accompanying notes are an integral part of the financial statements.

3



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PLANET POLYMER TECHNOLOGIES, INC.

STATEMENTS OF OPERATIONS (UNAUDITED)
_______________

|                            |                            |   |                                                                          |         |                                 |            |         |         |   |           |  
|--------------------------- | -------------------------- | - | ------------------------------------------------------------------------ | ------- | ------------------------------- | ---------- | ------- | ------- | - | --------- | -
|                            |                            |   |                                                                          |         | Nine months ended September 30,
|                            |                            |   |                                                                          |         |                                
|                            |                            |   |                                                                          |         | 2001                            |            | 2000   
|                            |                            |   |                                                                          |         |                                 |            |        
|Revenues                    |                            | $ | 312,892                                                                  |         |                                 | $          | 616,647 |        
|Operating expenses:         |                            |   |                                                                          |         |                                 |            |         |        
|                            | Cost of revenues           |   |                                                                          | 249,026 |                                 |            |         | 481,654 |  
|                            | General and administrative |   |                                                                          | 622,106 |                                 |            |         | 720,842 |  
|                            | Marketing                  |   |                                                                          | 189,123 |                                 |            |         | 169,755 |  
|                            | Research and development   |   |                                                                          | 283,392 |                                 |            |         | 203,460 |  
|                            |                            |   |                                                                          |         |                                 |            |         |        
|                            |                            |   | Total operating expenses                                                 |         |                                 | 1,343,647  |         |         |   | 1,575,711 |  
|                            |                            |   |                                                                          |         |                                 |            |         |        
|                            |                            |   | Loss from operations                                                     |         |                                 | (1,030,755 | )       |         |   | (959,064  | )
|Other income (expense), net |                            |   | 16,230                                                                   |         |                                 |            | 197,378 |        
|                            |                            |   |                                                                          |         |                                 |            |         |        
|                            |                            |   | Loss before income taxes                                                 |         |                                 | (1,014,525 | )       |         |   | (761,686  | )
|Income tax expense          |                            |   | (800                                                                     | )       |                                 |            | (800    | )      
|                            |                            |   |                                                                          |         |                                 |            |         |        
|                            |                            |   | Net loss                                                                 |         |                                 | (1,015,325 | )       |         |   | (762,486  | )
|                            |                            |   | Preferred Stock dividends                                                |         |                                 | (10,450    | )       |         |   | (31,224   | )
|                            |                            |   |                                                                          |         |                                 |            |         |        
|                            |                            |   | Net loss applicable to common shareholders                               |         | $                               | (1,025,775 | )       |         | $ | (793,710  | )
|                            |                            |   |                                                                          |         |                                 |            |         |        
|                            |                            |   | Net loss per share applicable to common shareholders (basic and diluted) |         | $                               | (0.11      | )       |         | $ | (0.11     | )
|                            |                            |   |                                                                          |         |                                 |            |         |        
|                            |                            |   | Shares used in per share computations                                    |         |                                 | 9,021,367  |         |         |   | 7,462,708 |  
|                            |                            |   |                                                                          |         |                                 |            |         |        

The accompanying notes are an integral part of the financial statements.

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PLANET POLYMER TECHNOLOGIES, INC.

STATEMENT OF SHAREHOLDERS EQUITY (UNAUDITED)
_______________

|                                                                      |  |                          |          |              |  |             |          |        |  |         |           |       |  |   |            |  |  |   |             |   |  |   |            |  
|--------------------------------------------------------------------- |  | ------------------------ | -------- | ------------ |  | ----------- | -------- | ------ |  | ------- | --------- | ----- |  | - | ---------- |  |  | - | ----------- | - |  | - | ---------- | -
|                                                                      |  | Series A Preferred Stock |          | Common Stock |  |             |          |        |  |         |           |      
|                                                                      |  |                          |          |              |  | Accumulated |          |        |  |        
|                                                                      |  | Shares                   |          | Amount       |  | Shares      |          | Amount |  | Deficit |           | Total
|                                                                      |  |                          |          |              |  |             |          |        |  |         |           |      
|Balance at December 31, 2000                                          |  |                          | 321,500  |              |  | $           | 517,251  |        |  |         | 8,680,494 |       |  | $ | 14,008,901 |  |  | $ | (12,682,569 | ) |  | $ | 1,843,583  |  
|Conversion of Series A Preferred Stock into
Common Stock              |  |                          | (321,500 | )            |  |             | (517,251 | )      |  |         | 378,235   |       |  |   | 517,251    |  |  |   |            |   |  |   |           |  
|Issuance of Common Stock                                              |  |                          |         |              |  |             |         |        |  |         | 156,735   |       |  |   | 40,801     |  |  |   |            |   |  |   | 40,801     |  
|Issuance of Common Stock for services                                 |  |                          |         |              |  |             |         |        |  |         | 8,400     |       |  |   | 6,300      |  |  |   |            |   |  |   | 6,300      |  
|Issuance of Common Stock as a dividend on
Convertible Preferred Stock |  |                          |         |              |  |             |         |        |  |         | 13,754    |       |  |   | 10,450     |  |  |   | (10,450     | ) |  |   |           |  
|Net loss for the nine months ended September 30, 2001                 |  |                          |         |              |  |             |         |        |  |         |          |       |  |   |           |  |  |   | (1,015,325  | ) |  |   | (1,015,325 | )
|                                                                      |  |                          |          |              |  |             |          |        |  |         |           |       |  |   |            |  |  |   |             |   |  |   |            |  
|Balance at September 30, 2001                                         |  |                          |         |              |  | $           |         |        |  |         | 9,237,618 |       |  | $ | 14,583,703 |  |  | $ | (13,708,344 | ) |  | $ | 875,359    |  
|                                                                      |  |                          |          |              |  |             |          |        |  |         |           |       |  |   |            |  |  |   |             |   |  |   |            |  

The accompanying notes are an integral part of the financial statements.

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PLANET POLYMER TECHNOLOGIES, INC.

STATEMENTS OF CASH FLOWS (UNAUDITED)
_______________

|                                                 |                                                                                   |                                       |                                                      |            |                                 |          |         |          |          |          |  
|------------------------------------------------ | --------------------------------------------------------------------------------- | ------------------------------------- | ---------------------------------------------------- | ---------- | ------------------------------- | -------- | ------- | -------- | -------- | -------- | -
|                                                 |                                                                                   |                                       |                                                      |            | Nine months ended September 30,
|                                                 |                                                                                   |                                       |                                                      |            |                                
|                                                 |                                                                                   |                                       |                                                      |            | 2001                            |          | 2000   
|                                                 |                                                                                   |                                       |                                                      |            |                                 |          |        
|Cash flows from operating activities:            |                                                                                   |                                       |                                                      |            |                                 |          |         |         
|                                                 | Net loss                                                                          |                                       | $                                                    | (1,015,325 | )                               |          | $       | (762,486 | )       
|                                                 | Adjustments to reconcile net loss to net cash used
by operating activities:       |                                       |                                                      |            |                                 |          |         |          |         
|                                                 |                                                                                   | Depreciation and amortization         |                                                      |            | 64,811                          |          |         |          | 58,236   |         
|                                                 |                                                                                   | Gain on disposal of assets            |                                                      |            | (25                             | )        |         |          |         |         
|                                                 | Changes in assets and liabilities:                                                |                                       |                                                      |            |                                 |          |         |          |         
|                                                 |                                                                                   | Accounts receivable                   |                                                      |            | 22,177                          |          |         |          | 26,103   |         
|                                                 |                                                                                   | Inventories                           |                                                      |            | 14,419                          |          |         |          | 9,241    |         
|                                                 |                                                                                   | Prepaid expenses and other assets     |                                                      |            | 2,037                           |          |         |          | (9,194   | )       
|                                                 |                                                                                   | Accounts payable and accrued expenses |                                                      |            | 18,601                          |          |         |          | (1,524   | )       
|                                                 |                                                                                   | Other liabilities                     |                                                      |            |                                |          |         |          | (152,886 | )       
|                                                 |                                                                                   |                                       |                                                      |            |                                 |          |         |          |         
|                                                 |                                                                                   |                                       | Net cash used by operating activities                |            |                                 | (893,305 | )       |          |          | (832,510 | )
|Cash flows from investing activities:            |                                                                                   |                                       |                                                      |            |                                 |          |         |         
|                                                 | Purchases of property and equipment                                               |                                       |                                                      | (19,947    | )                               |          |         | (22,643  | )       
|                                                 | Proceeds from the sale of property and equipment                                  |                                       |                                                      | 25         |                                 |          |         |         |         
|                                                 | Cost of patents and other                                                         |                                       |                                                      | (5,112     | )                               |          |         | (92,848  | )       
|                                                 | Proceeds from the sale of subsidiary                                              |                                       |                                                      |           |                                 |          |         | 814,639  |         
|                                                 | Payments from note receivable                                                     |                                       |                                                      | 93,783     |                                 |          |         | 5,053    |         
|                                                 |                                                                                   |                                       |                                                      |            |                                 |          |         |          |         
|                                                 |                                                                                   |                                       | Net cash provided by investing activities            |            |                                 | 68,749   |         |          |          | 704,201  |  
|                                                 |                                                                                   |                                       |                                                      |            |                                 |          |         |          |         
|Cash flows from financing activities:            |                                                                                   |                                       |                                                      |            |                                 |          |         |         
|                                                 | Proceeds from issuance of Common Stock and exercise of warrants
and stock options |                                       |                                                      | 40,801     |                                 |          |         | 502,420  |         
|                                                 | Proceeds from issuance of warrants                                                |                                       |                                                      |           |                                 |          |         | 2,500    |         
|                                                 | Principal payments on borrowings and capital lease obligations                    |                                       |                                                      | (8,950     | )                               |          |         | (5,705   | )       
|                                                 | Repayments to related party                                                       |                                       |                                                      |           |                                 |          |         | (61,484  | )       
|                                                 |                                                                                   |                                       |                                                      |            |                                 |          |         |          |         
|                                                 |                                                                                   |                                       | Net cash provided by financing activities            |            |                                 | 31,851   |         |          |          | 437,731  |  
|                                                 |                                                                                   |                                       |                                                      |            |                                 |          |         |          |         
|                                                 |                                                                                   |                                       | Net (decrease) increase in cash and cash equivalents |            |                                 | (792,705 | )       |          |          | 309,422  |  
|Cash and cash equivalents at beginning of period |                                                                                   |                                       | 1,088,567                                            |            |                                 |          | 355,645 |         
|                                                 |                                                                                   |                                       |                                                      |            |                                 |          |         |          |         
|Cash and cash equivalents at end of period       |                                                                                   | $                                     | 295,862                                              |            |                                 | $        | 665,067 |         
|                                                 |                                                                                   |                                       |                                                      |            |                                 |          |         |          |         
|Supplemental disclosure of non-cash activity:    |                                                                                   |                                       |                                                      |            |                                 |          |         |         
|                                                 | Conversion of Series A Preferred Stock into Common Stock                          |                                       | $                                                    | 517,251    |                                 |          | $       |         |         
|                                                 | Issuance of Common Stock dividends on Preferred Stock                             |                                       |                                                      | 10,450     |                                 |          |         | 31,224   |         
|                                                 | Issuance of Common Stock for Services                                             |                                       |                                                      | 6,300      |                                 |          |         |         |         
|                                                 | Insurance purchased under a short-term financing agreement                        |                                       |                                                      | 44,134     |                                 |          |         |         |         
|                                                 | Issuance of note receivable in connection with sale of subsidiary                 |                                       |                                                      |           |                                 |          |         | 100,000  |         
|                                                 | Equipment acquired under capital lease obligations                                |                                       |                                                      |           |                                 |          |         | 3,813    |         
|                                                 | Common Stock issued in obtaining Equity Line of Credit                            |                                       |                                                      |           |                                 |          |         | 10,313   |         
|                                                 | Equity issuance costs incurred                                                    |                                       |                                                      |           |                                 |          |         | 45,495   |         

The accompanying notes are an integral part of the financial statements.

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PLANET POLYMER TECHNOLOGIES, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS
_______________

1. Basis of Presentation

The accompanying unaudited financial statements of Planet Polymer
Technologies, Inc. (Planet or the Company) have been prepared in accordance
with the interim reporting requirements of Form 10-QSB, pursuant to the rules
and regulations of the Securities and Exchange Commission. However, they do
not include all of the information and footnotes required by accounting
principles generally accepted in the United States for complete financial
statements.

In managements opinion, all adjustments (consisting of only normal
recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the nine months ended September 30, 2001 are
not necessarily indicative of results that may be expected for the year ending
December 31, 2001. For additional information, refer to the Companys
consolidated financial statements and notes thereto for the year ended December
31, 2000 contained in the Companys Form 10-KSB for the fiscal year ended
December 31, 2000.

Certain prior period amounts have been reclassified to conform to the
current period presentation.

2. Note receivable

In August 2001, the Company received approximately $84,500 in cash for
repayment of the outstanding portion of a note receivable. The note related to
the Companys sale of all its common stock shares of Deltco on January 7, 2000.
The proceeds were net of a discount for early payment of approximately $4,500,
which was recorded as an expense by the Company.
     .

3. Shareholders Equity

The holder of the Series A Convertible Preferred Stock (Series A
Preferred) was entitled to receive quarterly dividends at an annual rate of 6%
payable in shares of the Companys Common Stock. Each share of Series A
Preferred was convertible at the option of the holder into shares of Common
Stock of the Company. During March 2001, all 321,500 shares of Preferred Stock
were converted into 378,235 shares of Common Stock. Additionally, during March
2001, the Company issued dividends of 13,754 shares of Common Stock valued at
approximately $10,450.

4. Liquidity and Capital Resources

The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and satisfaction of
liabilities in the ordinary course of business. The Company has incurred
losses since inception. For the nine months ended September 30, 2001, the
Company had net losses of approximately $1,015,000. As of September 30, 2001,
the Company had an accumulated deficit of approximately $13,708,000. The
Companys management expects that the financial resources necessary to fund the
Companys planned activities after 2001 exceed its currently available working
capital. The Companys future capital requirements will be dependent upon many
factors, including, but not limited to, costs associated with continued
research and development of the Companys proprietary polymer materials, costs
associated with the filing and enforcement of the Companys patents, costs
associated with manufacturing scale-up and market acceptance, and the timing
thereof, of the Companys products. The Company will need to secure additional
financing through partnership arrangements or through the issuance of
additional equity and/or debt securities or through other
means. There can be no assurance that the Company will be able to secure
the necessary additional financing or to generate positive cash flows or
profitability in the future.

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PLANET POLYMER TECHNOLOGIES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS  (Continued)

5. Recent Accounting Pronouncements

In July 2001, the FASB issued Statement of Financial Accounting Standards
No. 142 (SFAS 142), Goodwill and Other Intangible Assets, which is
effective for fiscal years beginning after March 15, 2001. SFAS 142 changes the
accounting for goodwill from an amortization method to an impairment-only
approach. Amortization of goodwill, including goodwill recorded in past
business combinations, will cease upon adoption of this statement. The Company
has not yet determined the impact, if any, the adoption of SFAS No. 142 will
have on its results of operations and financial condition.

On October 3, 2001, the FASB issued Statement of Accounting Standards No.
144 Accounting for the Impairment or Disposal of Long-Lived Assets (FAS
144). FAS 144 supercedes FAS 121 Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of. FAS 144 applies to all
long-lived assets (including discontinued operations) and consequently amends
Accounting Principles Board Opinion No. 30 (APB 30), Reporting Results of
Operations Reporting the Effects of Disposal of a Segment of a Business. FAS
144 develops one accounting model for long-lived assets that are to be disposed
of by sale. FAS 144 requires that long-lived assets that are to be disposed of
by sale be measured at the lower of book value or fair value less cost to sell.
Additionally, FAS 144 expands the scope of discontinued operations to include
all components of an entity with operations that (1) can be distinguished from
the rest of the entity and (2) will be eliminated from the ongoing operations
of the entity in a disposal transaction. FAS 144 is effective for the Company
for all financial statements issued in fiscal 2002. The Company has not yet
determined the impact, if any, the adoption of SFAS No. 144 will have on its
results of operations and financial condition.

6. Subsequent Event

In October 2001, the Company settled certain litigation resulting in
Planet receiving a cash payment of $125,000, Planets insurance carrier paying
$25,000 to the opposing party, the return of approximately 70,000 shares of
Planet stock and the cancellation of certain unexercised stock options.

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PART I  FINANCIAL INFORMATION
Item 2  Managements Discussion and Analysis of Financial
Condition and Results of Operations

Planet Polymer Technologies, Inc.

Except for the historical information contained herein, the discussion in this
report contains forward- looking statements that involve certain risks and
uncertainties. The Companys actual results could differ materially from those
discussed in this report. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below and in the
Companys Form 10-KSB for the fiscal year ended December 31, 2000.

OVERVIEW

Since Planet Polymer Technologies, Inc. (Planet or the Company) was
founded in 1991 substantially all of the Companys resources have been devoted
to the development and commercialization of its technologies and products.
This has included the expenditure of funds to develop the Companys corporate
infrastructure, support the Companys marketing efforts and establish a pilot
production facility, in addition to research and development.

Planet has incurred operating losses since inception and had an
accumulated deficit as of September 30, 2001 of approximately $13.7 million.
Pending commercial deployment of and related volume orders for the Companys
products, the Company expects to incur additional losses.

RESULTS OF OPERATIONS

The Companys revenues increased to approximately $153,000 for the three
months ended September 30, 2001 from approximately $77,000 for the same period
in 2000. This increase was primarily attributable to higher metal injection
molding revenue resulting from customers expanding their commercial use of
Planets products, partially offset by lower Agway development income as
research projects are concluding. Revenues decreased to approximately $313,000
for the nine months ended September 30, 2001 from approximately $617,000 for
the same period in 2000. This decrease was primarily attributable to lower
EnviroPlastic® Z resin sales to the Toro Company. There was also lower Agway
development income. These decreases were partially offset by increased metal
injection molding revenue.

Cost of sales increased to approximately $108,000 for the three months
ended September 30, 2001 from approximately $74,000 for the same period in
2000. This increase was primarily attributable to increased MIM revenues and
associated higher raw material costs for MIM feedstocks. Cost of sales
decreased to approximately $249,000 for the nine months ended September 30,
2001 from approximately $482,000 for the same period in 2000. This decrease in
raw material costs was primarily attributable to lower overall revenues from
EnviroPlastic® Z resin and a significant shift in product mix from polymer
resin sales to MIM feedstock sales.

General and administrative expenses decreased to approximately $189,000
for the three months ended September 30, 2001 from approximately $207,000 for
the same period in 2000 and to approximately $622,000 for the nine months ended
September 30, 2001 from approximately $721,000 for the same period in 2000.
These decreases were primarily attributable to reduced use of outside services.
These decreases were partially offset by increased salaries resulting from the
addition of a new Chief Executive Officer in October 2000 offset by fewer
administrative staff and the reallocation of the former Chief Executive
Officers salary to research and development. During 2000, the former Chief
Executive Officers salary was allocated equally between general and administrative
expenses, marketing

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Item 2  Managements Discussion and Analysis of Financial
Condition and Results of Operations  (Continued)

Planet Polymer Technologies, Inc.

expenses and research and development expenses. Beginning
in 2001, with the addition of the new Chief Executive Officer, his duties and
salary are now entirely allocated to research and development.

Marketing expenses decreased to approximately $51,000 for the three months
ended September 30, 2001 from approximately $62,000 for the same period in
2000. This decrease was primarily attributable to reduced use of a metal
injection molding consultant. Marketing expense increased to approximately
$189,000 for the nine months ended September 30, 2001 from approximately
$170,000 for the same period in 2000. This increase was primarily attributable
to increased costs associated with the promotion of AQUAMIM®, additional trade
shows, salaries resulting from the addition of a new Chief Executive Officer in
October 2000, the payment of a bonus offset by the reallocation of the former
Chief Executive Officers salary to research and development and the reduced
use of a metal injection molding consultant.

Research and development expenses decreased to approximately $55,000 for
the three months ended September 30, 2001 from approximately $68,000 for the
same period in 2000. This decrease was primarily due to savings related to
employee terminations and lower research expenditures offset partially by the
reallocation of the former Chief Executive Officers salary. Research and
development expenses increased to approximately $283,000 for the nine months
ended September 30, 2001 from approximately $203,000 for the same period in
2000. This increase was primarily due to a decrease in customer funded
research and development, severance costs related to employee terminations, and
the reallocation of the former Chief Executive Officers salary. Beginning in
2001, with the addition of the new Chief Executive Officer, the former Chief
Executive Officers salary is now entirely allocated to research and
development.

In 1996, Planet recorded an obligation of $300,000 for outstanding
employment tax issues. During 1997, Planet resolved a portion of the
employment tax issues and reversed the original entry by approximately $34,000.
The Company subsequently determined that the remainder of such obligation of
approximately $266,000 was no longer payable. As a result, the obligation was
reversed and other income was recognized in the three months ended September
30, 1999 and 2000, in the amount of $113,000 and $153,000, respectively.

LIQUIDITY AND CAPITAL RESOURCES

On January 7, 2000, the Company sold all of its common stock shares of
Deltco. In accordance with the Purchase Agreement, the Company received total
proceeds of $1,000,000 in the form of $900,000 in cash and $100,000 in a
secured promissory note in consideration of the sale of its Deltco common
stock. In August 2001, the Company received approximately $84,500 in cash for
repayment of the outstanding portion of the note receivable. The proceeds were
net of a discount for early payment of approximately $4,500, which was recorded
as an expense by the Company.

The Company used cash of approximately $893,000 for continuing operations
for the nine months ended September 30, 2001. Such funds were used primarily
for metal injection molding commercialization efforts, ongoing research and
development activities, marketing efforts and administrative support.

Net cash provided by investing activities was approximately $69,000 for
the nine months ended September 30, 2001 resulted from the prepayment from a
note receivable partially offset by payments for the purchase of equipment.

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Item 2  Managements Discussion and Analysis of Financial
Condition and Results of Operations  (Continued)

Planet Polymer Technologies, Inc.

Net cash provided by financing activities of approximately $32,000 for the
nine months ended September 30, 2001 resulted from proceeds of approximately
$41,000 from the issuance of Common Stock partially offset by approximately
$9,000 used for payments associated with capital lease obligations.

The Company believes that its existing sources of liquidity and
anticipated revenue will satisfy the Companys projected working capital and
other cash requirements through at least December 2001. There can be no
assurance, however, that future revenue decreases or changes in the Companys
plans or other events affecting the Companys operating expenses will not
result in the expenditure of the Companys resources. The Company expects that
it will need to raise substantial additional funds to continue its current and
planned operations. The Company is seeking additional funding from existing and
potential customers. The Company continues to have outstanding a $2 million
Private Placement Offering that it is actively evaluating. The Company is also
evaluating and soliciting interest in other public or private equity or debt
financing, including the potential sale or licensing of other patents and
intellectual property which, if successfully consummated, could result in a
gain or loss to the Company. On July 18, 2001, the Companys Common Stock was
delisted from the Nasdaq Small Cap Stock Market due to non-compliance with
Nasdaqs net tangible assets and minimum bid pricing requirements. There can be
no assurance that the Companys efforts will result in additional funds or that
additional financing will be available on acceptable terms, or at all.

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PART II  OTHER
INFORMATION

Planet Polymer Technologies,
Inc.




Item 1  Legal Proceedings:

None




Item 2  Changes in Securities:

None




Item 3  Defaults upon Senior Securities:

None




Item 4  Submission of Matters to a Vote of Security Holders:

None




Item 5  Other Information:

None




Item 6  Exhibits and Reports on Form 8-K:

(a)  Exhibits:

None

(b)  Reports on Form 8-K:

None

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Planet Polymer Technologies,
Inc.

SIGNATURES

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

|                       |  |                                                                                                                                    
|---------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------
|Date: November 2, 2001 |  | Planet Polymer Technologies, Inc.                                                                                                  
|                      
|                      
|                       |  | /s/ Richard C.
Bernier                                                                                                             
|                       |  | Richard C. Bernier
Chief Executive Officer
(On behalf of Registrant and as
Registrants Principal Financial and
Accounting Officer)

13