U.S. 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 Exchange Act of 1934

      For the quarterly period ended March 31, 1997

[   ] Transition report under Section 13 or 15(d) of the Exchange Act of 1934

      For the transition period from  to 

      Commission file number 1-9224


                              HELMSTAR GROUP, INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                DELAWARE                               13-2689850          
-----------------------------------------    ------------------------------
      (State or Other Jurisdiction of               (I.R.S. Employer
       Incorporation or Organization)              Identification No.)

             2 World Trade Center, Suite 2112, New York, N.Y. 10048
  ---------------------------------------------------------------------------
                    (Address of Principal Executive Offices)

                                  212-775-0400
                (Issuer'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 past 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  [   ]

         The number of shares  outstanding  of each of the  issuer's  classes of
common equity, as of the latest practicable date.

           Class                             Outstanding at April 30, 1997
           -----                             -------------------------------
                                                                         
Common stock - par value $.10                       5,521,373 shares     
-----------------------------                       ----------------     
<PAGE>
                                     PART I

                              FINANCIAL INFORMATION


Item l.  Financial Statements.

         The following consolidated financial statements of Helmstar Group, Inc.
and subsidiaries  (collectively referred to as the "Company," unless the context
requires otherwise) are prepared in accordance with the rules and regulations of
the  Securities  and  Exchange  Commission  for  Form  10-QSB  and  reflect  all
adjustments  (consisting of normal recurring accruals) and disclosures which, in
the opinion of management, are necessary for a fair statement of results for the
interim periods  presented.  It is suggested that these financial  statements be
read in conjunction with the financial  statements and notes thereto included in
the Company's Form 10-KSB for the year ended December 31, 1996,  which was filed
with the Securities and Exchange Commission.

         The results of operations for the three months ended March 31, 1997 are
not  necessarily  indicative of the results to be expected for the entire fiscal
year.
<PAGE>
<TABLE>
<CAPTION>
                      HELMSTAR GROUP, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS


                                                  March 31,         December 31,
                                                    1997                1996 
                                                (Unaudited)
<S>                                             <C>                <C>
                ASSETS  
Cash and cash equivalents ................      $    769,371       $  1,679,454
Marketable securities ....................         4,715,062          1,350,441
Joint ventures ...........................         1,605,301          1,418,383
Mortgage loans held for sale .............         1,448,175          2,647,692
Due from mortgage investors ..............                                4,123
Furniture, equipment and
    leasehold improvements - at cost,
    less accumulated depreciation and
    amortization of $435,411 in
    1997 and $415,504 in 1996 ............           262,252            237,673
Other assets .............................           719,443            951,132
                                                ------------       ------------

         TOTAL ...........................      $  9,519,604       $  8,288,898
                                                ============       ============
               LIABILITIES

Notes payable ............................      $  3,213,853       $  2,246,672
Accrued expenses and other
    liabilities ..........................         1,206,492            979,298
                                                ------------       ------------

         Total liabilities ...............         4,420,345          3,225,970
                                                ------------       ------------
               STOCKHOLDERS' EQUITY

Common stock - authorized
    10,000,000 shares, par value
    $.10; issued 6,749,600 shares ........           674,960            674,960
Paid-in surplus ..........................        14,984,510         14,984,510
(Deficit) ................................        (7,643,444)        (7,683,718)
                                                ------------       ------------

         Total ...........................         8,016,026          7,975,752

Less treasury stock, at cost -
    1,218,227 shares in 1997 and
    1,213,227 shares in 1996 .............        (2,916,767)        (2,912,824)
                                                ------------       ------------

         Total stockholders' equity ......         5,099,259          5,062,928
                                                ------------       ------------

         TOTAL ...........................      $  9,519,604       $  8,288,898
                                                ============       ============

      See Notes to Condensed Consolidated Financial Statements (Unaudited). 
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                      HELMSTAR GROUP, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                          Three Months Ended
                                                               March 31,  
                                                  ------------------------------
                                                        1997              1996
                                                  -----------       -----------
<S>                                               <C>               <C>
Revenues:
    Profit from joint ventures ............       $   186,918       $   167,393
    Financial Consulting Fees .............            90,000
    Loan origination fees .................           383,991           187,056
    Loan servicing fees ...................                37            12,172
    Interest income .......................            63,806           116,094
    Investment income .....................           544,564           201,575
    Other income ..........................             1,568             2,761
                                                  -----------       -----------

         Total revenues ...................         1,270,884           687,051
                                                  -----------       -----------


Expenses:
    Compensation and related costs ........           785,112           751,750
    Occupancy cost ........................            78,569            92,171
    Amortization of mortgage
         servicing rights .................                               1,339
    General and administrative ............           292,768           252,825
    Professional fees .....................            26,081            54,144
    Interest ..............................            38,300            23,329
                                                  -----------       -----------

         Total expenses ...................         1,220,830         1,175,558
                                                  -----------       -----------


Income (loss) before taxes ................            50,054          (488,507)

Provision for income taxes ................             9,780            11,819
                                                  -----------       -----------


NET INCOME (LOSS) .........................       $    40,274       $  (500,326)
                                                  ===========       ===========

Net income (loss) per common share ........       $       .01       $      (.09)
                                                  ===========       ===========

Weighted average number of
    common shares outstanding .............         5,559,707         5,546,373
                                                  ===========       ===========

     See Notes to Condensed Consolidated Financial Statements (Unaudited).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                          HELMSTAR GROUP, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       (Unaudited)

                                                                  Three Months Ended
                                                                        March 31, 
                                                             ---------------------------
                                                                1997             1996
                                                             -----------     -----------
<S>                                                          <C>             <C>
Cash flows from operating activities:
  Net income (loss) .....................................    $    40,274     $  (500,326)
  Adjustments to reconcile net income (loss) to net
     cash provided by (used in) operating activities:
    Depreciation and amortization .......................         27,045          25,253
    Unrealized (gain) on joint ventures
     and other investments ..............................       (186,918)       (167,393)
    Changes in operating assets and liabilities:
     Purchase of marketable securities - net ............     (3,364,621)
     Decrease in mortgage loans held for sale ...........      1,199,517         196,541
     Decrease (increase) in due from mortgage investors .          4,123          (5,160)
     Decrease in other assets ...........................        224,551         641,649
     Increase (decrease) in accrued expenses ............        227,194        (136,918)
                                                             -----------     -----------

Net cash provided by (used in) operating activities .....     (1,828,835)         53,646
                                                             -----------     -----------
Cash flows from investing activities:
  Sale of investment securities - net ...................                        677,931
  Distributions from joint ventures and other investments                         46,500
  Purchase of fixed assets ..............................        (44,486)        (28,376)
                                                             -----------     -----------

Net cash (used in) provided by investing activities .....        (44,486)        696,055
                                                             -----------     -----------

Cash flows from financing activities:
  Proceeds (repayment) of short term borrowings - net: ..        967,181        (943,743)
  Purchase of treasury stock ............................         (3,943)
                                                             -----------     -----------

Net cash provided by (used in) financing activities .....        963,238        (943,743)
                                                             -----------     -----------

NET (DECREASE) IN CASH AND CASH EQUIVALENTS .............       (910,083)       (194,042)
Cash and cash equivalents at beginning of period ........      1,679,454       1,358,730

CASH AND CASH EQUIVALENTS AT END OF PERIOD ..............    $   769,371     $ 1,164,688
                                                             ===========     ===========

Supplemental  disclosures of cash flow information:
  Cash paid during the period for:
    Interest ............................................    $    38,300     $    23,329
    Taxes ...............................................            688           6,278

          See Notes to Condensed Consolidated Financial Statements (Unaudited). 
</TABLE>
<PAGE>
                          HELMSTAR GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                       (Unaudited)


l.       SIGNIFICANT ACCOUNTING POLICIES

         The  accounting  policies  followed by the Company are set forth in the
notes to the Company's financial statements included in its Form 10-KSB, for the
year ended  December 3l, 1996,  which was filed with the Securities and Exchange
Commission.


2.       JOINT VENTURES

         Summary combined  operating  results of the joint ventures in which the
Company is a co-venturer are as follows:
<TABLE>
<CAPTION>

                                                   March 31,            March 31, 
                                                     1997                 1996 
                                                  ---------           ---------
<S>                                               <C>                 <C>
Rental income ..........................          $ 656,115           $ 619,058
Operating expenses .....................            (32,774)             (8,908)
                                                  ---------           ---------

Net operating income ...................            623,341             610,150
Other (expense) ........................           (363,734)           (373,774)
                                                  ---------           ---------

Net income .............................          $ 259,607           $ 236,376
                                                  =========           =========

Company's share of profit
from joint ventures ....................          $ 186,918           $ 167,393
                                                  =========           =========

</TABLE>
3.       INCOME (LOSS) PER SHARE

         Income  (loss)  per share is based on the  weighted  average  number of
common shares  outstanding  and common stock  equivalents  based on the treasury
stock method when dilutive.

4.       LITIGATION

         The Company is a defendant in various  lawsuits.  In those instances in
which any  liability  can be estimated,  provisions  have been  reflected in the
financial  statements.  The ultimate  outcome of the remaining  lawsuits  cannot
presently be determined,  and no provision for any liability that may result has
been made in the  financial  statements,  since the amounts,  if any,  cannot be
determined.

         For an update to the litigation described in the notes to the Company's
Financial  Statements  included  in its Form  10-KSB for the  fiscal  year ended
December  31,  1996,   which  was  filed  with  the  SEC,  see  Item  1,  "Legal
Proceedings."
<PAGE>
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

                  A.       Three Months Ended March 31, 1997 Compared
                           with Three Months Ended March 31, 1996

                  Total  revenues  increased to $1,270,884  for the three months
                  ended March 31, 1997 from  $687,051 for the three months ended
                  March 31, 1996.

                  Profit from joint ventures increased to $186,918 for the three
                  months ended March 31, 1997 from $167,393 for the three months
                  ended  March 31,  1996.  This  classification  represents  the
                  Company's  share of income and losses,  computed in accordance
                  with the  equity  method of  accounting,  from  various  joint
                  ventures in which the Company is participating.

                  Operating results of the two real estate ventures in which the
                  Company  participates  continue to improve.  Rental  income at
                  both  projects  and the  Company's  share  of  income  at both
                  projects  was higher for the  quarter  ended March 31, 1997 as
                  compared with the quarter ended March 31, 1996.

                  Although operating results continue to improve, some variation
                  in profit or loss for a specific interim period may result due
                  to such factors as  receiving  annual  payments of  percentage
                  rent;  incurring  periodic operating expenses which will occur
                  only every few years,  such as  painting  the entire  project;
                  accounting  adjustments between interim periods; lost rent due
                  to the turnover of a tenant  notwithstanding that a new tenant
                  has been secured at a higher rent; etc.

                  Financial  consulting  fees were $90,000 for the quarter ended
                  March 31, 1997  compared  with nil for the quarter ended March
                  31, 1996. The Company provides financial structuring advice to
                  clients on a fee basis and significant  variations in revenues
                  are  likely  because  of  the  transactional  nature  of  this
                  business.  Typically,  an  engagement  is based on a  specific
                  assignment  to assist a client to lower its cost of capital or
                  structure  the  financing  of  capital  assets.   The  Company
                  currently  is  engaged in  advising  clients  with  respect to
                  transactions  which are  expected  to  generate  fees later in
                  1997.

                  Loan  origination  fees  increased  to $383,991  for the three
                  months  ended March 31, 1997  compared  with  $187,056 for the
                  three months ended March 31, 1996. This category includes fees
                  earned in connection with making mortgage loans and net profit
                  or loss from sales of such loans to  investors.  This increase
                  was  attributable to the Company's  expanded loan  origination
                  efforts.  In  1996,  the  Company  repositioned  its  mortgage
                  banking operation to originate  residential mortgage loans and
                  sell them with their servicing rights to permanent investors.
<PAGE>
                  Loan  servicing  fees  decreased  to $37 for the three  months
                  ended March 31, 1997 compared with $12,172 in the three months
                  ended March 31,  1996.  The decrease is the result of the sale
                  of  substantially  all of  the  Company's  mortgage  servicing
                  portfolio in December  1995 and the sale of the balance of the
                  portfolio in July and August 1996. This category includes fees
                  earned  in  processing   residential   mortgage  payments  and
                  servicing loans on behalf of various investors.

                  Interest  income  decreased  to $63,806  for the three  months
                  ended March 31, 1997 from  $116,094 for the three months ended
                  March  31,  1996,  due in large  part to the loss of  interest
                  earning  escrow  deposits  as a  result  of  the  sale  of the
                  Company's  mortgage  servicing  portfolio.  In  addition,  the
                  Company  has  reduced  the time a  mortgage  loan  remains  in
                  inventory  before  being  delivered  to an  investor  and thus
                  reduced  the  interest  earning  period on  mortgages  held in
                  inventory.

                  Investment  income  increased to $544,564 for the three months
                  ended March 31, 1997 from  $201,575 for the three months ended
                  March 31,  1996.  This  category  principally  consists of net
                  profit  or  loss  from  investing  in  futures,  puts,  calls,
                  equities,  municipal  bonds,  and  other  securities  for cash
                  management,  trading and risk management  purposes relating to
                  the Company's  interest  fluctuation  exposure in its mortgage
                  banking operation.

                  Other  income was $1,568 for the three  months ended March 31,
                  1997 compared with $2,761 for the three months ended March 31,
                  1996.  This  category  consisted  primarily of sundry fees and
                  revenues  earned in  connection  with the  Company's  mortgage
                  banking business other than loan origination fees.

                  Total  expenses  increased to $1,220,830  for the three months
                  ended  March 31,  1997 from  $1,175,558  for the three  months
                  ended March 31, 1996.

                  Compensation  and related costs  increased to $785,112 for the
                  three months ended March 31, 1997 from  $751,750 for the three
                  months ended March 31, 1996.  This  increase  principally  was
                  attributable  to the addition of  professional  staff,  higher
                  commission  expense for mortgage loan  originators as a result
                  of  the  increased  volume  of  originations,  and  additional
                  salaried  employees in the mortgage loan  origination  area to
                  support the higher level of production. Increased compensation
                  in mortgage loan  originations  was partially offset by salary
                  savings from a reduction in mortgage servicing  personnel as a
                  result  of the  sale  of  substantially  all of the  Company's
                  mortgage  servicing  portfolio  and  the  curtailment  of  the
                  viatical settlement business which had commenced in May 1995.

                  Occupancy  costs  decreased  to $78,569  for the three  months
                  ended March 31, 1997 from  $92,171 for the three  months ended
                  March 31, 1996.  This decrease is due  principally  to the new
                  lease  entered into by the Company for its existing  executive
                  offices at a  significantly  lower rent and the termination of
                  the  lease  for a small  office  for the  viatical  settlement
                  activity.
<PAGE>
                  Amortization of mortgage  servicing  rights  decreased to zero
                  for the three  months ended March 31, 1997 from $1,339 for the
                  three  months  ended March 31, 1996 as a result of the sale of
                  the mortgage servicing portfolio in 1996.

                  General and administrative  expenses increased to $292,768 for
                  the three  months  ended March 31, 1997 from  $252,825 for the
                  three  months  ended March 31,  1996.  This  increase  was due
                  principally   to  greater   activity  in  the  Company's  loan
                  origination   business   including  such  direct  expenses  as
                  appraisal  fees, tax service fees,  funding fees and warehouse
                  expenses.

                  Professional  fees  decreased  to $26,081 for the three months
                  ended March 31, 1997 from  $54,144 for the three  months ended
                  March 31, 1996.

                  Interest  expense was $38,300 for the three months ended March
                  31, 1997  compared  with  $23,329 for the three  months  ended
                  March 31,  1996.  This  increase is the result of greater loan
                  origination  activity  being  financed  through the  Company's
                  lines of credit.

                  On a pre-tax  basis,  the  Company had a profit of $50,054 for
                  the three months ended March 31, 1997  compared with a loss of
                  $488,507 for the three months ended March 31, 1996.  Provision
                  for income taxes for the three months ended March 31, 1997 was
                  $9,780  compared with $11,819 for the three months ended March
                  31, 1996. These  provisions  consist solely of state and local
                  taxes.  For Federal  income tax  purposes,  as of December 31,
                  1996,  the Company had net  operating  loss  carryforwards  of
                  approximately  $13,750,000  available to reduce future taxable
                  income.  These carryforwards  expire in the years 2005 through
                  2011.

                  The  Company's net profit for the three months ended March 31,
                  1997 was $40,274  compared  with net loss of $500,326  for the
                  three months ended March 31, 1996.  On a per share basis,  the
                  net profit was $.01 for the three months ended March 31, 1997,
                  compared  with net loss of $(.09) for the three  months  ended
                  March 31,  1996.  Income per share for the three  months ended
                  March  31,  1997 is  computed  based on the  weighted  average
                  number of common shares actually  outstanding  plus the shares
                  that  would be  outstanding  assuming  the  exercise  of stock
                  options relating to the Company's incentive  compensation plan
                  which are  considered  to be  common  stock  equivalents.  The
                  assumed  exercise of stock  options  relating to the Company's
                  incentive   compensation   plan  were  not   included  in  the
                  computation  of the loss per share for the three  months ended
                  March 31, 1996, because the effect of their inclusion would be
                  antidilutive.  The number of shares  used in the  computations
                  were 5,559,707 in 1997 and 5,546,373 in 1996.
<PAGE>
                  B.       Liquidity and Capital Resources

                  Management of the Company  believes that funds  generated from
                  operations,  its warehouse facilities,  and cash distributions
                  from joint  ventures,  supplemented  by its available  assets,
                  will provide it with sufficient  resources to meet all present
                  and reasonably foreseeable future capital needs. A significant
                  portion of the Company's  assets are readily  convertible into
                  cash.

                  The Company invests excess funds in liquid securities in order
                  to preserve the ability to move quickly in funding  attractive
                  merchant  banking  ventures.  Such  investments  include  U.S.
                  Government and municipal  obligations,  futures  contracts and
                  money  market  funds.  In order to maximize  its  return,  the
                  Company  frequently   leverages  security  purchases  under  a
                  securities  brokerage  account  agreement,  the terms of which
                  provide   that   inventory   held   by  the   brokerage   firm
                  collateralize its advances.

                  Additionally,  since  commencing the mortgage loan origination
                  business,  the Company may use its own cash to carry a portion
                  of its  inventory  of mortgage  loans  originated  for resale.
                  Prior  to  funding  any  loans,   the  Company  procures  firm
                  commitments  from  investors to purchase such loans.  Fourteen
                  days is the typical time between  funding a mortgage  loan and
                  receiving payment from an investor.

                  The  Company's  primary  financing  needs are in its  mortgage
                  banking activities. In addition to its own cash resources, the
                  Company meets its mortgage  funding  requirements by borrowing
                  the necessary amounts from three separate warehouse bank lines
                  aggregating $8,250,000, down from the $12,250,000 available at
                  December 31, 1996.  This decline since year end results from a
                  warehouse  lender  notifying  the Company that it was reducing
                  the line  available  from $5 million to $1 million,  since the
                  Company was not using the amount allotted.  At March 31, 1997,
                  approximately  $1,200,000  had  been  borrowed  against  these
                  lines.  The Company can draw down up to 98% of the face amount
                  of an individual  mortgage loan from the warehouse  bank which
                  is  replenished  from the purchase  price paid by the investor
                  who had committed to purchase such loan.

                  In connection  with its interests in real estate,  the Company
                  uses  separate  subsidiaries  for each  venture.  The  Company
                  utilizes the equity method of accounting  for its interests in
                  real  estate  joint  ventures.  Accordingly,  the  assets  and
                  liabilities of such ventures are not included in the Company's
                  consolidated balance sheets.

                  The two operating real estate projects in which the Company is
                  a co-venturer,  currently have strong occupancies and positive
                  cash flow. Cash maintained by each  partnership,  supplemented
                  with cash flow from operations,  should be sufficient to cover
<PAGE>
                  all  operating  costs and debt  service  requirements  of each
                  venture,  so  that  additional  cash  contributions  from  the
                  Company or its co-venturers would not be necessary.  Facts and
                  circumstances,  however,  are  subject to change  for  reasons
                  beyond the Company's control. Based on current estimates,  the
                  Company expects to continue to receive cash distributions from
                  its real estate joint venture activities during 1997.

                  On April 1,  1997,  one of the  Company's  real  estate  joint
                  ventures  entered into an agreement  with the bank holding the
                  venture's  mortgage loan. The lender converted the loan from a
                  short-term,  fixed rate loan into a ninety day  variable  rate
                  loan.  Interest is  computed at the bank's  index rate plus 1%
                  and  is  payable   monthly  with  the  principal   balance  of
                  approximately  $3,900,000 due at maturity on July 1, 1997. The
                  Company is currently  considering  its options  regarding this
                  refinancing.

                  In April 1995,  the Company's  other real estate joint venture
                  refinanced  the mortgage  loan on its project.  The  principal
                  amount  of  the  new,  nonrecourse  loan  is  $6,550,000;  the
                  interest  rate  equals  Citibank's  six-month  LIBOR rate plus
                  3.10% and the interest  rate resets each  September and March;
                  the maximum interest rate is 13.5375%;  principal amortization
                  is based on a 25-year schedule; and the loan matures on May 1,
                  2002.  The current  interest  rate through  August 31, 1997 is
                  8.788%.  The interest  rate had been 8.3%  through  August 31,
                  1996 and 8.85% from  September  1, 1996  through  February 28,
                  1997.  The  principal  balance  of  the  refinanced  loan  was
                  $3,757,828.  The proceeds  from  refinancing,  net of expenses
                  including points,  fees, title insurance,  escrows,  etc., was
                  approximately   $2.5   million.   The   Company   received   a
                  distribution  from the joint  venture  of  approximately  $2.2
                  million.

                  Although  the   venture's   outstanding   debt  was  increased
                  substantially, at current interest rates, monthly debt service
                  decreased  slightly  because  the old  loan  required  monthly
                  principal  payments of $40,000  through  its  maturity in July
                  1995.  In addition to principal  and interest  payments,  debt
                  service  for the new loan  includes  contributions  to various
                  reserve accounts.  The funds from such reserve accounts may be
                  used, in accordance with the loan agreement,  to offset future
                  expenses, if any, for structural repairs, tenant improvements,
                  leasing commissions, and interest expense.

                  The carrying amounts  reflected on the Company's  consolidated
                  balance  sheet for its  various  joint  venture  interests  is
                  determined in accordance with the equity method of accounting.
                  Such  carrying  amounts  may  not  be  representative  of  the
                  realizable  value  on a sale of  those  interests.  Management
                  reviews the carrying amount of each venture to determine if an
                  adjustment for any impairment  other than a temporary  decline
                  is  required.  If  management  believes in good faith that any
                  impairment is other than temporary,  a loss provision equal to
                  such amount will be charged against the Company's consolidated
                  results of operations.
<PAGE>
                  Cash  distributions  from  joint  ventures  are  reflected  in
                  investing activities in the Company's consolidated  statements
                  of cash flows. Equity  contributions to joint ventures as well
                  as any  advances  to  joint  ventures  also are  reflected  in
                  investing activities in the Company's consolidated  statements
                  of cash flows.

                  While the Company believes that currently available funds will
                  provide it with  sufficient  resources to meet all present and
                  reasonably  foreseeable  future capital needs, the Company may
                  seek various  forms of credit in order to finance its merchant
                  banking,  mortgage  banking or other activities in the future.
                  The Company does not have any material commitments for capital
                  expenditures as of March 31, 1997.

                  The Company is a defendant in various  lawsuits.  Although the
                  Company  has  reached   settlements  in  some  instances,   an
                  unfavorable result in those remaining could have a significant
                  adverse  effect  upon  the  Company's  liquidity  and  capital
                  resources.
<PAGE>


                                     PART II

                                OTHER INFORMATION

Item 1.  Legal Proceedings.

                  Cross  Creek  Village v.  Housing  Authority  of the County of
                  Riverside, et al., Case No. 236813

                  At a status  conference  held on March  25,  1997,  the  Court
                  vacated its dismissal of the plaintiff's Complaint because the
                  plaintiff  had not received  notice of the order to show cause
                  regarding dismissal. The next status conference in the case is
                  now scheduled for September 22, 1997.
<PAGE>


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

                  (a) Exhibits:  -- A statement regarding the computation of per
                  share earnings is omitted because the computation is described
                  in Note 3 of the Notes to  Consolidated  Financial  Statements
                  (Unaudited) in this Form 10-QSB.

                  Exhibit 27 -- Financial Data Schedule - see below

                  (b) Reports on Form 8-K:

                  -- The Company did not file any reports on Form 8-K during the
                  three months ended March 31, 1997.
<PAGE>



                                   SIGNATURES

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

                              HELMSTAR GROUP, INC.



                                              s/ George W. Benoit   
                                              -------------------
Date: May 15, 1997                            George W. Benoit, Chairman of the
                                              Board of Directors, President, 
                                              Chief Executive Officer




                                              s/ Roger J. Burns 
                                              -----------------   
Date: May 15, 1997                            Roger J. Burns, First Vice
                                              President, Chief Financial Officer