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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON D. C. 20549

                                   ----------

                                   FORM 10-QSB

                                   ----------

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

                  For the three months ended September 30, 1997

                         Commission File Number 0-10683


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


            NEW JERSEY                                22-2303576
     ------------------------                    -------------------
     (State of incorporation)                     (I.R.S. Employer
                                                 Identification No.)


35 COLUMBIA ROAD, BRANCHBURG, NEW JERSEY              08876-3518
----------------------------------------              ----------
(Address of principal executive offices)              (Zip Code)


Registrant's telephone number, including area code: (908) 526-2828
                                                    --------------

Securities registered pursuant to Section 12 (b) of the Act:   None

Securities registered pursuant to Section 12 (g) of the Act:

                         Common Stock Without Par Value
                         ------------------------------
                                (Title of class)

     Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such report(s,) and (2) has been subject to such filing requirements for the
past 90 days. Yes (X) No( )

     Indicate the number of shares outstanding or each of the issuer's classes
of Common Stock as of the close of the period covered by this report.


      Class                         Outstanding at September 30, 1997
   ----------                       ---------------------------------
                                               4,378,904

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<PAGE>




                                 HYDROMER, INC.

                              INDEX TO FORM 10-QSB
                               September 30, 1997

                                                                        Page No.
                                                                        --------
PART 1  - Financial Information
          Condensed Financial Statements

          Balance Sheets - September 30, 1997 & June 30, 1997.............  2

          Statements of Income for the three month periods
            September 30, 1997 and 1996...................................  3

          Statements of Cash Flows for the three months ended
            September 30, 1997 and 1996...................................  4

          Notes to Financial Statements...................................  5

          Management's Discussion and Analysis of the Financial 
            Condition and Results of operations ..........................  6

PART II - Other Information...............................................  8


<PAGE>

<TABLE>



                                 HYDROMER, INC.

                                 BALANCE SHEETS
<CAPTION>

                                                             
                                                             September 30,    June 30,
                                                                 1997          1997
                                                              ----------    ----------
                                                              (UNAUDITED)    (AUDITED)
<S>                                                           <C>           <C>       
ASSETS
Current Assets:
   Cash and cash equivalents ..............................   $  504,884    $  716,045
   Trade receivables less allowance for doubtful
     accounts of $8,831 and $8,831, respectively ..........      420,717       431,150
   Inventory ..............................................      150,415       148,753
   Prepaid expenses........................................      119,021        77,567
   Deferred tax asset......................................      100,000       100,000
                                                              ----------    ----------
Total Current Assets.......................................    1,295,037     1,473,515
Property and  Equipment, net...............................      273,203       271,743
Deferred Tax Asset.........................................      230,435       262,856
Other Assets...............................................       11,346        11,968
                                                              ----------    ----------
                                                              $1,810,021    $2,020,082
                                                              ==========    ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts payable........................................   $   35,897    $   29,213
   Accrued expenses........................................       50,160       167,678
   Income tax payable......................................        9,430        40,223
                                                              ----------    ----------
Total Current Liabilities .................................       95,487       237,114
                                                              ----------    ----------
Stockholders' Equity
   Common stock - no par value, authorized 6,000,000
     shares, issued and outstanding, 4,378,904 shares......    2,922,708     2,922,708
   Contributed capital.....................................      577,750       577,750
   Accumulated deficit.....................................   (1,648,416)   (1,711,350)
   Cash Dividends paid.....................................     (131,368)         --
   Treasury stock, 10,917 common shares at cost............       (6,140)       (6,140)
                                                              ----------    ----------
Total Stockholders' Equity ................................    1,714,534     1,782,968
                                                              ----------    ----------
                                                              $1,810,021    $2,020,082
                                                              ==========    ==========
</TABLE>

                                       2


<PAGE>

                               HYDROMER, INC.
                             STATEMENTS OF INCOME


                                                          Three Months Ended
                                                             September 30,
                                                      --------------------------
                                                          1997           1996
                                                      ----------     ----------
                                                       UNAUDITED       RESTATED
                                                                      UNAUDITED
REVENUES:
   Product sales and services ...................     $  153,385     $  198,853
   Royalties, options and licenses Fees .........        352,720        329,742
                                                      ----------     ----------
                                                         506,105        528,595
Cost of Product Sales ...........................         58,814         71,201
                                                      ----------     ----------
      Gross profit ..............................        447,291        457,394
Selling, General and Administrative .............        239,293        192,024
Research and Development ........................        110,634        106,332
                                                      ----------     ----------
      Operating Income ..........................         97,364        159,038
Interest Income .................................          7,421          1,898
Interest Expense ................................           --              --
Other Tax (Expense)/Benefit .....................           --          (63,700)
Other Income ....................................           --              --
                                                      ----------     ----------
      Income before provison for income taxes ...        104,785         97,236
Provision for Income Taxes Expense (Benefit) ....         41,851        (25,500)
                                                      ----------     ----------
      Net Income ................................     $   62,934     $  122,736
                                                      ==========     ==========
      Income Per Common Share ...................     $    0.015     $    0.028
                                                      ==========     ==========
      Dividends paid, $.03 per share ............     $     0.03     $    0.000
                                                      ==========     ==========
Weighted Average Common Shares Outstanding ......      4,378,904      4,367,987
                                                      ==========     ==========

                                       3

<PAGE>

<TABLE>

                                HYDROMER, INC.

                           STATEMENTS OF CASH FLOWS

<CAPTION>


                                                                   Three Months Ended
                                                                      September 30,
                                                                 ----------------------
                                                                    1997         1996
                                                                 ---------    ---------
                                                                               Restated
<S>                                                              <C>          <C>      
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income ................................................   $  62,934    $ 122,736
   Adjustments to reconcile net income to net cash
    provided by operating activities
     Depreciation and amortization ...........................      11,752        9,579
     Gain on sale of securities ..............................       --          --
     Changes in Assets and Liabilities
      Trade receivables ......................................      10,433      (75,629)
      Inventory ..............................................      (1,662)      10,434
      Prepaid expenses .......................................     (41,454)     (25,334)
      Deferred tax asset .....................................      32,421      (40,000)
      Other assets ...........................................         622         (310)
      Accounts payable and accrued liabilities ...............    (110,834)      39,425
      Income taxes payable ...................................     (30,793)      14,441
                                                                 ---------    ---------
         Net Cash (Used in) Operating Activities .............     (66,581)      55,342
                                                                 ---------    ---------
Cash Flows From Investing Activities:
   Cash dividends paid .......................................    (131,368)
   Cash purchases of property and equipment ..................     (13,212)      (6,171)
                                                                 ---------    ---------
         Net Cash Provided by (Used in) Investing 
           Activities ........................................    (144,580)      (6,171)
                                                                 ---------    ---------
Net Increase (decrease) in Cash and Cash Equivalents .........    (211,161)      49,171
Cash and Cash Equivalents at Beginning of Year ...............     716,045      167,900
                                                                 ---------    ---------
Cash and Cash Equivalents at End of Year .....................   $ 504,884    $ 217,071
                                                                 =========    =========
</TABLE>

                                       4

<PAGE>

                                 HYDROMER, INC.

                          Notes to Financial Statements

The company has filed a restated annual form 10K-SB and accordingly, has
restated the financial results for the quarter ended 9/30/96 on this 10QSB. The
prior period Financial Statements have been restated to reflect the under
reporting of royalty receivables from a licensee. The restatement affected
royalty revenues and as a result the restatement was significant enough to
classify the company as a personal holding company requiring a significant tax
accrual at year end, a portion of which was also restated in this quarter.

On August 14, 1997 the Company entered into an agreement with a consulting firm
whereby the firm will help create a business plan and assist the Company to get
listed on a regional stock exchange. Hydromer is obligated for payment of a
$2,500 monthly fee to the firm, cancelable anytime. Additionally, upon certain
criteria being met, the firm is entitled to 150,000 warrants or the Company's
common stock at an agreed upon price. Mr. Brice is a partner in the firm.

In the opinion of management, the accompanying unaudited financial statements
include all adjustments (consisting of only normal adjustments) necessary for a
fair presentation of the results for the interim periods.

                                       5
<PAGE>




                      MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
                     FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

The Company's revenues for the quarter ended September 30, 1997 were $506,105 as
compared to $528,595 for the same period last year, or down 4.3%. Revenue is
comprised of:

      Royalty revenue from patented products grew to $352,720, up 7.0% over the
      same period last year. There are 23 clients who use our patented
      technologies on their products and this growth is purely from our client's
      increased sales of their products. No new licensees were added during this
      quarter. The company is currently testing other products that have
      exclusive and non-exclusive licensing opportunities.

      Product sales of our technologies were $153,385 for the quarter ended
      September 20, 1997 as compared to $198, 853 for the same period last year,
      or down 22.9%. This shortfall is primarily due to the loss of one contract
      for condensation control in Italy. The Company's strategy is to intensely
      develop the markets for its products and license opportunities.

 The Company's gross profit was down 2.2% for the quarter ended September 30,
 1997 to $447,291 from $457,394 for the same period last year.

      Gross Profit percentage on product sales was 61.7% for the quarter ended
      September 30, 1997 as opposed to 64.2% for the same period last year. This
      drop is primarily due to the addition of production staff needed to
      respond to the pressure of the market.

      Royalty income is included in gross profit at 100%.

 SG&A expenses increased $51,570 or 17.3% to $349,927, in the quarter ended
 September 30, 1997, up from $298,357 for the same period last year.

      This increase is attributable to management's recent program to evaluate
      and upgrade staff where needed. The company needs to improve its
      technical, marketing and financial expertise to respond to the
      requirements of the business plan.

Earnings before interest and taxes were $97,364, down 38.8% from prior year's
results of $159,037.

Net earnings were $62, 934 for the quarter ended 9/30/97, down from $122,735
reported for the same period last year.

      The company did not record an accrual for personal holding company taxes
      as it will not be required to pay PHC taxes in FY 1997 due to operating
      and strategic plans in place. For the quarter ended 9/30/96, the company
      accrued $63,700 in personal holding company taxes which have been paid.

      The company recorded a tax benefit for the quarter ended September 30,
      1996 in the amount of $25,500. The quarter ended September 30, 1997
      reflects a tax accrual for Federal and State taxes of $41,851.

                                       6
<PAGE>

Financial Condition

Working capital decreased $36,851 for the quarter, which includes a dividend
payment of $131,368, which was paid to shareholders in September 1997. Excluding
the dividend payment, working capital increased by $94,517 over the prior
quarter.

                                       7
<PAGE>







PART II  - Other Information

Item 6.  Exhibits and Reports on form 8-K:

     a)  Exhibits - none
      
     b)  Reports on form 8-K - There were no reports on Form 8-K filed for the
         quarter ending September 30, 1997
   

                                       8
<PAGE>





                                   SIGNATURES

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


                                           HYDROMER, INC.


                                           /s/ KEN BRICE
                                               ---------------------------------
                                               Ken Brice
                                               Vice President
                                               Finance & Administration
                                               Chief Financial Officer

   DATE: November 10, 1997

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