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

                                  FORM 10-QSB

[X]  Quarterly Report Under Section 13 or 15(d) of the
     Securities Exchange Act of 1934

     For the quarterly period ended June 30, 1997
                                    -------------

[ ]  Transition Report Under Section 13 or 15(d) of the
     Securities Exchange Act of 1934

     For the transition period from _________ to _________

                        Commission file number:  0-8128
                                                 ------

                              FREMONT CORPORATION
-------------------------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)

            Delaware                             76-0402886
-------------------------------            ----------------------
(State or other jurisdiction of               (I.R.S. Employer
incorporation or organization)             Identification Number)

                       9454 Wilshire Boulevard, 6th Floor
                        Beverly Hills, California 90212
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

Issuer's telephone number, including area code:  (310) 358-1006
                                                 --------------

                                 Not applicable
-----------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report.)

     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 
                                  -----      -----     

     As of July 31, 1997, the issuer had 5,861,639 shares of common stock issued
and outstanding.

Transitional Small Business Disclosure Format:
                              Yes          No   X
                                  -----       -----

Total sequentially numbered pages in this document:  26.

                                       1
<PAGE>
 
                     FREMONT CORPORATION AND SUBSIDIARIES
                     ------------------------------------

                                     INDEX
                                     -----


PART 1.  FINANCIAL INFORMATION

     Item 1.  Financial Statements

              Condensed Consolidated Balance Sheets (Unaudited) -
              December 31, 1996 and June 30, 1997

              Condensed Consolidated Statements of Operations  
              (Unaudited) - Three Months and Six Months Ended  
              June 30, 1996 and 1997                           
                                                                
              Condensed Consolidated Statements of Cash Flows
              (Unaudited) - Six Months Ended June 30, 1996 and
              1997
 
              Notes to Condensed Consolidated Financial
              Statements (Unaudited) - Three Months and Six
              Months Ended June 30, 1996 and 1997

     Item 2.  Management's Discussion and Analysis or Plan of
              Operation


PART II.  OTHER INFORMATION

     Item 5.  Other information

     Item 6.  Exhibits and Reports on Form 8-K


SIGNATURES

                                       2
<PAGE>
 
                     FREMONT CORPORATION AND SUBSIDIARIES
               CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                 (Amounts in thousands, except for share data)
<TABLE>
<CAPTION>
 
 
                                    December 31, 1996          June 30, 1997
                                   ------------------    ---------------------
                                    RMB         USD        RMB            USD
                                   ------------------    ---------------------
<S>                                  <C>          <C>        <C>           <C>
ASSETS
 
Current assets:
  Cash and cash
   equivalents                        4,806         579       6,608      796
  Accounts receivable,                                     
   net                               51,812       6,242      63,984    7,709
  Inventories (Note 2)               60,403       7,277      59,158    7,128
  Due from SCH                       62,258       7,501      59,089    7,119
  Due from Easy Keen                 35,158       4,236      29,415    3,544
  Prepayments and                                          
   other current assets              26,151       3,151      26,852    3,235
                                    -------     -------     -------   ------
    Total current assets            240,588      28,986     245,106   29,531
                                    -------     -------     -------   ------ 
                                                           
Property, plant and                                        
 equipment                          130,658      15,742     132,838   16,005
Less accumulated                                           
 depreciation                       (21,398)     (2,578)    (26,492)  (3,192)
                                    -------     -------     -------   ------ 
                                    109,260      13,164     106,346   12,813
                                    -------     -------     -------   ------ 
Prepayment to SCH for                                      
 property                            20,000       2,410      20,000    2,410
Rental deposit to SCH                25,600       3,084      24,200    2,916
Bank deposits                        19,319       2,328      19,319    2,327
Goodwill, net                        36,788       4,432      36,298    4,373
Other long-term assets                7,008         844       7,652      922
                                    -------     -------     -------   ------ 
    Total assets                    458,563      55,248     458,921   55,292
                                    =======     =======     =======  =======
                                                                                
</TABLE>                               

                                  (continued)

                                       3
<PAGE>
 
                     FREMONT CORPORATION AND SUBSIDIARIES
          CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)(continued)
                 (Amounts in thousands, except for share data)
<TABLE>
<CAPTION>
 
 
                                      December 31, 1996        June 30, 1997
                                      -----------------    -------------------
                                        RMB        USD          RMB      USD
                                      --------  --------   --------   --------
<S>                                   <C>       <C>        <C>        <C>
LIABILITIES AND                                                                      
SHAREHOLDERS' EQUITY                                                                      
                                                                                         
Current liabilities:                  
  Short-term borrowings               150,681   18,154      169,681   20,443   
  Accounts payable                     45,070    5,430       29,358    3,537   
  Accrued expenses and                                                      
   other liabilities                   41,137    4,956       37,663    4,538   
  Taxes payable                         8,795    1,060        7,164      863   
  Finance lease                                                             
   obligations, current                                                     
   portion                             12,469    1,502        8,025      967   
                                      -------   ------      -------   ------   
    Total current                                                           
     liabilities                      258,152   31,102      251,891   30,348   
                                                                            
Finance lease                                                               
 obligations                            7,089      854        7,089      854   
Loan from MTE (Note 3)                 33,280    4,010       33,280    4,010   
Other long-term payables                2,764      333        2,833      341   
                                      -------   ------      -------   ------   
    Total liabilities                 301,285   36,299      295,093   35,553   
                                      -------   ------      -------   ------   
Minority interests                     11,980    1,443       11,005    1,326   
                                      -------   ------      -------   ------   
                                                                                                                              
</TABLE>

                                  (continued)

                                       4
<PAGE>
 
                    FREMONT CORPORATION AND SUBSIDIARIES
          CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)(continued)
                 (Amounts in thousands, except for share data)

<TABLE>
<CAPTION>

                           December 31, 1996     June 30, 1997
                           -----------------    ----------------
                             RMB       USD        RMB      USD
                           -------    ------    -------   ------
<S>                         <C>       <C>      <C>       <C>
LIABILITIES AND
SHAREHOLDERS' EQUITY

Shareholders' equity
 (Note 4):
Common stock, par value
 US$ .001 per share;
 authorized -
 100,000,000 shares;
 issued and
 outstanding -
 5,821,639 shares at
 December 31, 1996 and
 5,831,639 shares at
 June 30, 1997                   48        6        48        6
Additional paid-in
 capital                    117,247   14,126   117,471   14,153
Dedicated capital            11,785    1,420    11,785    1,420
Retained earnings            16,218    1,954    23,519    2,834
                            -------   ------   -------   ------
  Total shareholders'
   equity                   145,298   17,506   152,823   18,413
                            -------   ------   -------   ------
  Total liabilities
   and shareholders'
   equity                   458,563   55,248   458,921   55,292
                            =======   ======   =======   ======
 
</TABLE>



                           See accompanying notes to
                  condensed consolidated financial statements.

                                       5
<PAGE>
 
                     FREMONT CORPORATION AND SUBSIDIARIES
          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                 (Amounts in thousands, except for share data)
<TABLE>
<CAPTION>
 
                                                  Three Months Ended June 30,
                                              ------------------------------------
                                                 1996              1997
                                              ----------   -----------------------
                                                 RMB          RMB          USD
                                              ---------    ---------    ---------
<S>                                           <C>          <C>          <C>
Sales
 - to related companies                          15,000        5,430          654
 - to others                                     27,801       41,548        5,006
                                              ---------    ---------    ---------
                                                 42,801       46,978        5,660
Cost of goods sold
 - purchases from related
   companies                                     18,894        3,884          468
 - others                                        17,079       33,483        4,034
                                              ---------    ---------    ---------
Gross profit                                      6,828        9,611        1,158
 
Selling, general and
  administrative expenses                         2,782        4,439          535
  Less:  Shared by SCH                             (588)        (979)        (118)
 
Amortization of deferred
  pre-operating costs (Note 5)                    2,133
 
Interest expense, net                               992        2,818          339
 
Other (income) expense, net                         (81)         405           49
                                              ---------    ---------    ---------   
     Income before income taxes                   1,590        2,928          353
 
Provision for income taxes                         (500)        (675)         (81)
                                              ---------    ---------    ---------
  Income before minority interests                1,090        2,253          272
 
Minority interests                                  475          657           79
                                              ---------    ---------    ---------
  Net income                                      1,565        2,910          351
                                              =========    =========    =========
Net income per common share
  (Note 7)                                          .27          .49          .06
                                              =========    =========    =========
Weighted average number of
  common shares outstanding
  (Note 7)                                    5,877,217    5,907,980    5,907,980
                                              =========    =========    =========
</TABLE>
                           See accompanying notes to
                  condensed consolidated financial statements.

                                       6
<PAGE>
 
                     FREMONT CORPORATION AND SUBSIDIARIES
          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                 (Amounts in thousands, except for share data)
<TABLE>
<CAPTION>
 
                                                   Six Months Ended June 30,
                                              ------------------------------------
                                                 1996               1997
                                              ----------   -----------------------
                                                 RMB          RMB          USD
                                              ---------    ---------    ---------
<S>                                           <C>          <C>          <C>
Sales
 - to related companies                          25,000       12,947        1,560
 - to others                                     57,978       78,246        9,427
                                              ---------    ---------    ---------
                                                 82,978       91,193       10,987
Cost of goods sold
 - purchases from related
   companies                                     18,894        7,143          861
 - others                                        47,563       63,654        7,669
                                              ---------    ---------    ---------
Gross profit                                     16,521       20,396        2,457
 
Selling, general and
  administrative expenses                         7,001        9,446        1,138
  Less:  Shared by SCH                           (1,469)      (2,277)        (274)
 
Amortization of deferred
  pre-operating costs (Note 5)                    4,267
 
Interest expense, net                             2,914        5,274          635
 
Other expense, net                                  135          452           54
                                              ---------    ---------    ---------
     Income before income taxes                   3,673        7,501          904
 
Provision for income taxes                       (1,000)      (1,175)        (142)
                                              ---------    ---------    ---------
  Income before minority interests                2,673        6,326          762
 
Minority interests                                  771          975          117
                                              ---------    ---------    ---------
  Net income                                      3,444        7,301          879
                                              =========    =========    =========
Net income per common share
  (Note 7)                                          .59         1.24          .15
                                              =========    =========    =========
Weighted average number of
  common shares outstanding
  (Note 7)                                    5,808,050    5,910,012    5,910,012
                                              =========    =========    =========
</TABLE>
                           See accompanying notes to
                  condensed consolidated financial statements.

                                       7
<PAGE>
 
                     FREMONT CORPORATION AND SUBSIDIARIES
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                        Six Months Ended June 30,
                                                        -------------------------
                                                          1996          1997
                                                        --------   ---------------
                                                          RMB       RMB       USD
                                                        -------    -------    -----
<S>                                                     <C>        <C>        <C>
Cash flows from operating
 activities:
 Net income                                             3,444      7,301       879
  Adjustments to reconcile net
   income to net cash used in
   operating activities:
    Depreciation                                        4,354      5,094       614
    Amortization                                        6,199        732        88
    Minority interests                                   (771)      (975)     (117)
    Rental expense offset
     against due from SCH                                          1,400       169
    Changes in operating
     assets and liabilities:
     (Increase) decrease in -
      Accounts receivable                              (1,733)   (12,172)   (1,466)
      Inventories                                     (20,675)     1,245       150
      Due from SCH                                    (10,000)     3,169       382
      Due from Easy Keen                                5,743        692
      Prepayments and other
       current assets                                  (1,321)      (701)      (84)
       Other long-term assets                             183       (886)     (107)
     Increase (decrease) in -
      Accounts payable                                (12,673)   (15,712)   (1,893)
      Accrued expenses and
       other liabilities                                 (521)    (3,474)     (419)
      Taxes payable                                      (588)    (1,631)     (197)
      Other long-term payables                          5,513         69         8
                                                      -------    -------    ------
       Net cash used in
        operating activities                          (28,589)   (10,798)   (1,301)
                                                      -------    -------    ------
Cash flows from investing
 activities:
  Additions to property, plant
   and equipment                                      (20,691)    (2,180)     (263)
                                                      -------    -------    ------
       Net cash used in
        investing activities                          (20,691)    (2,180)     (263)
                                                      -------    -------    ------
 
</TABLE>
                                  (continued)

                                       8
<PAGE>
 
                     FREMONT CORPORATION AND SUBSIDIARIES
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                  (continued)
                             (Amounts in thousands)
<TABLE>
<CAPTION>
 
                                     Six Months Ended June 30,
                                  -------------------------------
                                     1996             1997
                                  ----------   ------------------
                                     RMB         RMB        USD
                                  ----------   --------   -------
<S>                               <C>          <C>        <C>
Cash flows from financing
 activities:
  Net proceeds from short-term
  borrowings                         84,499     19,000     2,289
 Repayment of short-term
  borrowings                         (6,656)
 Repayment of long-term bank
  loans                             (27,726)
 Payments of finance lease
  obligations                        (3,316)    (4,444)     (535)
 Sale of common stock and
  warrants, net of costs              3,734
 Exercise of warrants, net
  of costs                                         224        27
                                    -------    -------    ------
   Net cash provided by
    financing activities             50,535     14,780     1,781
                                    -------     ------     -----
Cash and cash equivalents:
 Net increase                         1,255      1,802       217
 At beginning of period               6,507      4,806       579
                                    -------     ------     -----
 At end of period                     7,762      6,608       796
                                    =======     ======     =====
</TABLE>





                           See accompanying notes to
                  condensed consolidated financial statements.

                                       9
<PAGE>
 
                     FREMONT CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
            THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1996 AND 1997


1.   ORGANIZATION AND BASIS OF PRESENTATION

Organization - Fremont Corporation, a Delaware corporation (the "Company"), was
------------                                                                   
incorporated in the State of Utah on April 22, 1955, as Fremont Uranium
Corporation.  As of July 1, 1993, a change of domicile merger was effected, the
result of which was that the Company changed its name to Fremont Corporation and
became incorporated in the State of Delaware.

Reverse Acquisition - From 1989 through April 28, 1995, the Company was engaged
-------------------                                                            
in acquiring interests in oil and natural gas properties and in seeking
potential acquisition or merger opportunities.  The Company entered into a Share
Exchange Agreement dated as of March 23, 1995, and as amended on March 30, 1995,
with Million Treasure Enterprises Limited ("MTE") and Winfill Holdings
International Limited ("Winfill"), both of which are British Virgin Islands
corporations.  Pursuant to the Share Exchange Agreement, on April 28, 1995, the
Company acquired from MTE 41,000 shares of common stock of Winfill, representing
all of the issued and outstanding capital stock of Winfill, in exchange for the
issuance of 4,760,000 shares of the Company's common stock, together with a
warrant which allows MTE and/or its designee to receive up to 2,000,000 shares
of Class B common stock in exchange for an equivalent number of shares of common
stock.  The terms of the Class B common stock are identical to that of the
common stock (which will be designated Class A common stock) except that the
holder thereof will be entitled to three votes per share.  The warrant can be
exercised after the Company's Certificate of Incorporation is amended to
authorize the Class B common stock.

     Immediately prior to this transaction, the Company had a total of 842,639
shares of common stock issued and outstanding, after a 1-for-100 reverse stock
split effective April 28, 1995.  The 4,760,000 shares of common stock
represented approximately 85% of the outstanding shares of common stock of the
Company, after all shares were issued and the 1-for-100 reverse stock split was
effected as set forth in the Share Exchange Agreement.  All common share and per
share data in the accompanying condensed consolidated financial statements have
been restated to reflect this reverse stock split.

     Pursuant to the terms of the Share Exchange Agreement, the Company
transferred to Joseph W. Petrov, the Company's former president and controlling
shareholder, all of its operating assets existing immediately subsequent to the
closing of the previously described transaction (excluding the shares of

                                       10
<PAGE>
 
Winfill) in exchange for the assumption by Mr. Petrov of all of the liabilities
of the Company as of the closing and the delivery of a release of all
obligations owed by the Company to an affiliate of Mr. Petrov.  In addition, at
the closing, each member of the Company's Board of Directors resigned, and was
replaced by representatives of MTE and Winfill.

     South China Bicycles Winfill Limited ("SCBW") is a Sino-foreign joint
venture formed to engage in the design, manufacture and marketing of bicycles,
bicycle parts and components and steel tubes.  Winfill owns a 98% equity
interest in SCBW and South China Bicycles Company (Holdings) Limited ("SCH"), a
state-owned enterprise incorporated in the People's Republic of China, owns the
remaining 2% equity interest in SCBW.  Winfill and SCH formed SCBW effective
July 1, 1994, to acquire and operate the bicycle, bicycle parts and components
and steel tube manufacturing operations of SCH at a consideration of RMB
152,076,000.  Except for a 69% interest in South China Bicycles Co. Ltd.
("SCB"), SCBW owns 100% interests in its principal operating subsidiaries, all
of which are organized in the People's Republic of China.  The factory
operations of SCBW's subsidiaries are located at several sites in Zhaoqing City,
Guangdong Province, People's Republic of China.  SCB owns a 99.99% interest in
Fogance Industries Limited, which is the Hong Kong-based overseas purchasing and
sales agent for the Company.  For accounting purposes, the transaction has been
treated as a recapitalization of Winfill with Winfill as the acquiror (reverse
acquisition).  The consolidated financial statements have been prepared in
accordance with generally accepted accounting principles in the United States of
America.

     The 31% minority interest in SCB is owned by a company of which a director
of the Company is president. The director is also a shareholder of Easy Keen and
of MTE, the controlling shareholder of the Company. The Company conducts a
substantial portion of its sales and purchases through related parties (SCH and
Easy Keen), and has additional significant continuing transactions with such
related parties. The inability of the Company to continue to conduct a
substantial portion of its sales through related companies could have a material
adverse effect on the Company's results of operations and financial condition.

Foreign Currency Translation - In preparing the consolidated financial
----------------------------                                          
statements, the financial statements of the Company are measured using Renminbi
("RMB") as the functional currency.  All foreign currency transactions are
translated into RMB using the applicable floating rates of exchange as quoted by
the People's Bank of China prevailing at the date of the transactions.  Monetary
assets and liabilities denominated in foreign currencies are translated into RMB
using the applicable exchange rates prevailing at the balance sheet dates.  The
resulting exchange gains or losses are recorded in the consolidated statements
of operations for the periods in which they occur.

                                       11
<PAGE>
 
     The Company's share capital is denominated in United States dollars ("USD"
or "US$") and the reporting currency is the RMB.  For financial reporting
purposes, the USD share capital amounts have been translated into RMB at the
applicable rates prevailing on the transaction dates.

     Translation of amounts from RMB into USD for the convenience of the reader
has been made at the noon buying rate in New York City for cable transfers in
foreign currencies as certified for customs purposes by the Federal Reserve Bank
of New York on June 30, 1997 of US$1.00 = RMB 8.3.  No representation is made
that the RMB amounts could have been, or could be, converted into USD at that
rate or at any other certain rate.

Basis of Presentation - The accompanying consolidated financial statements are
---------------------                                                         
unaudited but, in the opinion of management of the Company, contain all
adjustments necessary to present fairly the financial position at June 30, 1997,
the results of operations for the three months and six months ended June 30,
1996 and 1997, and the changes in cash flows for the six months ended June 30,
1996 and 1997.  These adjustments are of a normal recurring nature.  The
consolidated balance sheet as of December 31, 1996 is derived from the Company's
audited financial statements.  The accompanying consolidated financial
statements include the operations of the Company and its subsidiaries.  All
significant intercompany accounts and transactions have been eliminated in
consolidation.

     Certain information and footnote disclosures normally included in financial
statements that have been prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission, although management of
the Company believes that the disclosures contained in these financial
statements are adequate to make the information presented therein not
misleading.  For further information, refer to the consolidated financial
statements and notes thereto included in the Company's Annual Report on Form 10-
KSB for the fiscal year ended December 31, 1996, as filed with the Securities
and Exchange Commission.

     The results of operations for the three months and six months ended June
30, 1997 are not necessarily indicative of the results of operations to be
expected for the full fiscal year ending December 31, 1997.

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

                                       12
<PAGE>
 
2.   INVENTORIES

     Inventories consisted of the following at December 31, 1996 and June 30,
1997:
<TABLE>
<CAPTION>
 
                              December 31, 1996         June 30, 1997
                            ---------------------   ---------------------
                               RMB         USD         RMB        USD
                            ---------   ---------   ---------   ---------   
<S>                         <C>         <C>         <C>         <C>
Raw materials               31,736,000  3,824,000   19,821,000  2,388,000
Work-in-progress             5,232,000    630,000   12,544,000  1,511,000
Finished goods              23,435,000  2,823,000   26,793,000  3,228,000
                            ----------  ---------   ----------  ---------
                            60,403,000  7,277,000   59,158,000  7,127,000
                            ==========  =========   ==========  =========
</TABLE> 

3.   LOAN FROM MTE

     The unsecured loan of RMB 33,280,000 from MTE, the parent company, is
denominated in USD, bears no interest, and has no fixed repayment terms.

4.   SALE OF SECURITIES

     During March 1996, the Company sold 166,000 units, each unit consisting of
one share of common stock and one common stock purchase warrant, which provided
net proceeds of RMB 3,720,000 (USD 448,200).  Each common stock purchase warrant
entitles the holder to purchase one share of common stock for US$3.00 per share
on or before February 28, 1998.  During February 1997, 10,000 common stock
purchase warrants were exercised, providing net proceeds of RMB 224,000 (USD
27,000), which resulted in the issuance of 10,000 shares of common stock.
During July 1997, 30,000 common stock purchase warrants were exercised,
providing net proceeds of RMB 672,000 (USD 81,000), which resulted in the
issuance of 30,000 shares of common stock.  Millennium Capital Partners, Ltd. is
entitled to a 10% fee in conjunction with this transaction.

5.   DEFERRED PRE-OPERATING COSTS

     Deferred pre-operating costs represent organization and certain start-up
costs (excluding capital expenditures) related to the new production facility.
Through December 31, 1995, such deferred pre-operating costs aggregated RMB
8,534,000, and were amortized on the straight line basis over one year
commencing January 1, 1996, the date of commencement of commercial production
from the new production facility. Amortization expense was RMB 2,133,000 and RMB
4,267,000 for the three months

                                       13
<PAGE>
 
and six months ended June 30, 1996.

6.   ANTI-DUMPING INVESTIGATION

     The Company manufactures bicycles in the People's Republic of China (the
"PRC" or "China") through its subsidiary, SCB, and exports to the United States
through various distributors and trade intermediaries.  Although there are other
markets for SCB's products, the United States market is considered an important
market for SCB.

     Pursuant to a petition filed by three United States bicycle manufacturers
in early 1995, the United States International Trade Commission (the "ITC")
launched an anti-dumping investigation against companies which manufacture
bicycles in the PRC for import into the United States.  In May 1995, the ITC
found a reasonable indication that "a U.S. industry is materially injured or
threatened with material injury by reason of imports of bicycles (from the PRC)
allegedly sold at less than fair value."  After the ITC's initial determination,
the United States Department of Commerce (the "Department of Commerce") began
its investigation of the PRC bicycle manufacturing industry, requesting
financial and other information from several Chinese bicycle manufacturers (not
including SCB), in order to calculate dumping margins and impose anti-dumping
duties.

     During November 1995, the Department of Commerce issued a preliminary
determination which calculated a 61.67% dumping margin on bicycles manufactured
by SCB and all but nine Chinese bicycle manufacturers.  As a result, each
Chinese bicycle manufacturer which continued to export product to the United
States was required to post a "single-entry bond" equal to the estimated
potential duty on bicycles exported to the United States from the date of the
preliminary notice until the date of the final determination.

     In April 1996, the Department of Commerce finalized this dumping margin and
the ITC began its investigation of Chinese bicycle manufacturers.  An
affirmative ITC injury or threat of material injury determination would have
resulted in the imposition of the Department of Commerce's dumping margin.
Throughout the investigations by the Department of Commerce and the ITC, SCB has
maintained that it has not engaged in "dumping" bicycles in the United States
market and has opposed the imposition of the anti-dumping duty.  In this regard,
SCB and other PRC bicycle manufacturers retained legal counsel to protect their
legal rights and to investigate and pursue several alternative solutions.

     On June 4, 1996, the ITC made a negative final determination in its anti-
dumping investigation on imports of bicycles from

                                       14
<PAGE>
 
China.  The negative ITC determination means that the ITC found that there is
not a reasonable indication that a United States industry is materially injured
or threatened with material injury by reason of imports of bicycles from China.
The negative ITC determination allowed all Chinese bicycle manufacturers
(including SCB) to resume exporting to the United States without the imposition
of an anti-dumping duty.

     The United States bicycle manufacturers appealed the determinations of both
the Department of Commerce and the ITC in the United States Court of
International Trade on June 30, 1996 and July 19, 1996, respectively.  Legal
counsel for SCB responded to such appeals, and, in addition, filed its own claim
pursuant to the Lanham Act to challenge the Department of Commerce's calculation
methodologies with respect to the 61.67% dumping margin.

     All litigation regarding the anti-dumping investigation was settled during
March 1997. Pursuant to the settlement, the Lanham Act claim was dismissed on or
about March 4, 1997, and the Department of Commerce action was dismissed on or
about March 26, 1997, and the ITC action was dismissed on or about March 27,
1997.

7.   NET INCOME PER COMMON SHARE

     Net income per common share for the three months and six months ended June
30, 1996 and 1997 is based on the weighted average number of shares of common
stock and common stock equivalents outstanding during each respective period.
Common stock equivalents consist of outstanding common stock purchase warrants,
and are included in the calculation of weighted average shares of common stock
outstanding pursuant to the treasury stock method as prescribed by Accounting
Principles Board Opinion No. 15, "Earnings per Share."

     In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings per Share," which is effective for financial statements
issued for periods ending after December 15, 1997. The Company will adopt this
statement and reflect its disclosures in the Company's 1997 financial
statements. At that time, the Company will be required to change the method
currently used to compute earnings per share and to restate all prior periods
presented. Under the new requirements, a dual presentation of "basic" earnings
per share and "diluted" earnings per share, as defined, will be required. Basic
earnings per share does not include the dilutive effect of stock options and
warrants. If the new pronouncement had been in effect for the three months and
six months ended June 30, 1996 and 1997, net income per share would have been as
follows:

                                       15
<PAGE>
 
<TABLE>
<CAPTION>

                        Three Months Ended      Six Months Ended
                            June 30,               June 30,
                      --------------------   --------------------
                        1996       1997         1996      1997
                      ---------  ---------   --------- ----------
<S>                   <C>        <C>         <C>       <C>
Net income - as
  reported            1,565,000  2,910,000   3,444,000  7,301,000

Net income per
  common share -
  as reported:
  Primary                   .27        .49         .59       1.24   
  Fully diluted              --         --          --         --
                      
Weighted average
  number of
  common shares
  outstanding         5,877,217  5,907,980   5,808,050  5,910,012
 
Net income per
  common share -
  pro forma:
  Basic                     .27        .50         .60       1.25
  Diluted                   .27        .49         .59       1.24
 
Weighted average
  number of
  common shares
  outstanding:
  Basic               5,768,639  5,831,639   5,699,472  5,828,306
  Diluted             5,877,217  5,907,980   5,808,050  5,910,012
 
</TABLE>

                                       16
<PAGE>
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Overview:

     Effective April 28, 1995, the Company acquired Winfill.  Winfill owns a 98%
interest in SCBW, a Sino-foreign joint venture engaged in the design,
manufacture and marketing of bicycles, bicycle parts and components, steel
tubes, and exercise equipment.  Winfill commenced operations effective July 1,
1994.  Except for a 69% interest in SCB, SCBW owns 100% interests in its
principal operating subsidiaries, all of which are organized in the People's
Republic of China.  The factory operations of SCBW's subsidiaries are located at
several sites in Zhaoqing City, Guangdong Province, People's Republic of China.
SCB owns a 99.99% interest in Fogance Industries Limited, which is the Hong
Kong-based overseas purchasing and sales agent for the Company.

     For accounting purposes, the transaction has been treated as a
recapitalization of Winfill with Winfill as the acquiror (reverse acquisition).
The consolidated financial statements include the accounts of Winfill and its
majority owned and controlled subsidiaries.

Cautionary Statement Pursuant to Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995:

     This Quarterly Report on Form 10-QSB for the quarterly period ended June
30, 1997 contains "forward-looking statements" within the meaning of the Federal
securities laws. These forward-looking statements include, among others,
statements concerning the Company's expectations regarding sales trends, gross
margin trends, the availability of short-term bank borrowings to fund capital
expenditures and operations, the repayment of loans, facility expansion plans,
and other statements of expectations, beliefs, future plans and strategies,
anticipated events or trends, and similar expressions concerning matters that
are not historical facts. The forward-looking statements in this quarterly
report and those included in the Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1996 are subject to risks and uncertainties that could
cause actual results to differ materially from those results expressed in or
implied by the statements contained herein.


Recent Developments:

     On June 4, 1996, the ITC made a negative final determination in its anti-
dumping investigation on imports of bicycles from China.  The negative ITC
determination means that the ITC found that there is not a reasonable indication
that a United States industry is materially injured or threatened with material
injury by reason of imports of bicycles from China.  The negative ITC

                                       17
<PAGE>
 
determination allowed all Chinese bicycle manufacturers (including SCB) to
resume exporting to the United States without the imposition of an anti-dumping
duty. All litigation regarding the anti-dumping investigation was settled during
March 1997. For additional information regarding this matter, see Note 6 of the
Notes to Condensed Consolidated Financial Statements.

     The Company introduced an exercise equipment product line during the fourth
quarter of 1996, and began manufacturing a bicycle with an automatic
transmission during 1997. The Company manufactures such products on a purchase
order basis for original equipment manufacturers that market their products in
the United States through infomercials, television home shopping networks and
mass market retailers. The Company does not own any rights with respect to these
products or the names under which they are marketed.

 
Consolidated Results of Operations:

     Three Months Ended June 30, 1996 and 1997 -

     Sales.  Sales for the three months ended June 30, 1997 were RMB 46,978,000,
as compared to RMB 42,801,000 for the three months ended June 30, 1996, an
increase of RMB 4,177,000 or 9.8%.  Sales to related companies for the three
months ended June 30, 1997 were RMB 5,430,000 or 11.6% of sales, as compared to
RMB 15,000,000 or 35.0% of sales for the three months ended June 30, 1996, a
decrease of RMB 9,570,000 or 63.8%.  Sales to unrelated companies for the three
months ended June 30, 1997 were RMB 41,548,000 or 88.4% of sales, as compared to
RMB 27,801,000 or 65.0% of sales for the three months ended June 30, 1996, an
increase of RMB 13,747,000 or 49.4%.  Sales to related companies are both for
domestic and export purposes.  The increase in sales in 1997 as compared to 1996
was primarily a result of the resolution of the anti-dumping investigation,
which allowed the Company to resume export sales of bicycles to the United
States during the three months ended September 30, 1996, and the introduction of
an exercise equipment product line in the fourth quarter of 1996, which was
developed primarily for export to the United States.

     For the three months ended June 30, 1997, PRC domestic sales were RMB
10,973,000 or 23.4% of sales, and export sales were RMB 36,005,000 or 76.6% of
sales. For the three months ended June 30, 1996, PRC domestic sales were RMB
11,257,000 or 26.3% of sales, and export sales were RMB 31,544,000 or 73.3% of
sales. For the three months ended June 30, 1997, sales of bicycles and bicycles
parts were RMB 22,908,000 or 48.8% of sales and sales of exercise equipment were
RMB 24,070,000 or 51.2% of sales.

     Gross Profit.  Gross profit for the three months ended June

                                       18
<PAGE>
 
30, 1997 was RMB 9,611,000 or 20.5% of sales, as compared to RMB 6,828,000 or
16.0% of sales for the three months ended June 30, 1996.  The improvement in
gross profit margin in 1997 as compared to 1996 was primarily a result of
increasing sales of higher margin exercise equipment and the resolution of the
anti-dumping investigation.

     Selling, General and Administrative Expenses.  Selling, general and
administrative expenses for the three months ended June 30, 1997 increased by
RMB 1,266,000 or 57.7%, to RMB 3,460,000 or 7.4% of sales, as compared to RMB
2,194,000 or 5.1% of sales for the three months ended June 30, 1996, net of
amounts assumed by SCH of RMB 979,000 and RMB 588,000, respectively, in 1997 and
1996.  Selling, general and administrative expenses increased on both an
absolute basis and as a percentage of sales in 1997 as compared to 1996
primarily as a result of the development expenses related to the new exercise
equipment and bicycle product lines.

     Pursuant to a cost sharing agreement between SCBW and SCH effective January
1, 1995, SCH agreed to bear 40% of certain selling, general and administrative
expenses incurred by SCBW, which represents its share of management and selling
activities incurred by SCBW on SCH's behalf.

     Deferred Pre-Operating Costs.  Amortization of deferred pre-operating costs
for the three months ended June 30, 1996 was RMB 2,133,000.  Deferred pre-
operating costs represent organization and certain start-up costs (excluding
capital expenditures) related to the new production facility.  Through December
31, 1995, such deferred pre-operating costs aggregated RMB 8,534,000, and were
amortized on the straight line basis over one year commencing January 1, 1996,
the date of commencement of commercial production from the new production
facility.

     Interest Expense.  Interest expense for the three months ended June 30,
1997 was RMB 2,818,000 or 6.0% of sales, as compared to RMB 992,000 or 2.3% of
sales for the three months ended June 30, 1996.  The increase in interest
expense in 1997 as compared to 1996 was primarily a result of an increase in
short-term borrowings to support the working capital requirements related to
increased sales of the exercise equipment product line, since exercise equipment
export sales typically have a longer collection cycle than bicycle export sales.

     Interest Income. Interest income for the three months ended June 30, 1997
and 1996 was not material. During the year ended December 31, 1996, the Company
recognized approximately RMB 4,300,000 of interest income on amounts due from
SCH primarily for the purchase of goods, which was calculated at a rate of 8.5%
per annum and was recorded in the fourth quarter of 1996. The Company has not
completed negotiations with SCH with regard to

                                       19
<PAGE>
 
the recognition of interest income in 1997.

     Net Income.  For the three months ended June 30, 1997, net income was RMB
2,910,000 (RMB .49 per share) or 6.2% of sales.  For the three months ended June
30, 1996, net income was RMB 1,565,000 (RMB .27 per share) or 3.7% of sales,
including the amortization of deferred pre-operating costs of RMB 2,133,000.


Six Months Ended June 30, 1996 and 1997 -

     Sales.  Sales for the six months ended June 30, 1997 were RMB 91,193,000,
as compared to RMB 82,978,000 for the six months ended June 30, 1996, an
increase of RMB 8,215,000 or 9.9%.  Sales to related companies for the six
months ended June 30, 1997 were RMB 12,947,000 or 14.2% of sales, as compared to
RMB 25,000,000 or 30.1% of sales for the six months ended June 30, 1996, a
decrease of RMB 12,053,000 or 48.2%.  Sales to unrelated companies for the six
months ended June 30, 1997 were RMB 78,246,000 or 85.8% of sales, as compared to
RMB 57,978,000 or 69.9% of sales for the six months ended June 30, 1996, an
increase of RMB 20,268,000 or 35.0%.  Sales to related companies are both for
domestic and export purposes.  The increase in sales in 1997 as compared to 1996
was primarily a result of the resolution of the anti-dumping investigation,
which allowed the Company to resume export sales of bicycles to the United
States during the three months ended September 30, 1996, and the introduction of
an exercise equipment product line in the fourth quarter of 1996, which was
developed primarily for export to the United States.

     For the six months ended June 30, 1997, PRC domestic sales were RMB
23,345,000 or 25.6% of sales, and export sales were RMB 67,848,000 or 74.4% of
sales. For the six months ended June 30, 1996, PRC domestic sales were RMB
22,504,000 or 27.1% of sales, and export sales were RMB 60,474 or 72.9% of
sales. For the six months ended June 30, 1997, sales of bicycles and bicycles
parts were RMB 54,823,000 or 60.1% of sales and sales of exercise equipment were
RMB 36,370,000 or 39.9% of sales.

     Gross Profit.  Gross profit for the six months ended June 30, 1997 was RMB
20,396,000 or 22.4% of sales, as compared to RMB 16,521,000 or 19.9% of sales
for the six months ended June 30, 1996.  The improvement in gross profit margin
in 1997 as compared to 1996 was primarily a result of increasing sales of higher
margin exercise equipment and the resolution of the anti-dumping investigation.

     Selling, General and Administrative Expenses.  Selling, general and
administrative expenses for the six months ended June 30, 1997 increased by RMB
1,637,000 or 29.6%, to RMB 7,169,000 or 7.9% of sales, as compared to RMB
5,532,000 or 6.7% of sales for

                                       20
<PAGE>
 
the six months ended June 30, 1996, net of amounts assumed by SCH of RMB
2,277,000 and RMB 1,469,000, respectively, in 1997 and 1996.  Selling, general
and administrative expenses increased on both an absolute basis and as a
percentage of sales in 1997 as compared to 1996 primarily as a result of the
development expenses related to the new exercise equipment and bicycle product
lines.

     Pursuant to a cost sharing agreement between SCBW and SCH effective
January 1, 1995, SCH agreed to bear 40% of certain selling, general and
administrative expenses incurred by SCBW, which represents its share of
management and selling activities incurred by SCBW on SCH's behalf.

     Deferred Pre-Operating Costs.  Amortization of deferred pre-operating costs
for the six months ended June 30, 1996 was RMB 4,267,000.  Deferred pre-
operating costs represent organization and certain start-up costs (excluding
capital expenditures) related to the new production facility.  Through December
31, 1995, such deferred pre-operating costs aggregated RMB 8,534,000, and were
amortized on the straight line basis over one year commencing January 1, 1996,
the date of commencement of commercial production from the new production
facility.

     Interest Expense.  Interest expense for the six months ended June 30, 1997
was RMB 5,274,000 or 5.8% of sales, as compared to RMB 2,914,000 or 3.5% of
sales for the six months ended June 30, 1996.  The increase in interest expense
in 1997 as compared to 1996 was primarily a result of an increase in short-term
borrowings to support the working capital requirements related to increased
sales of the exercise equipment product line, since exercise equipment export
sales typically have a longer collection cycle than bicycle export sales.

     Interest Income. Interest income for the six months ended June 30, 1997 and
1996 was not material. During the year ended December 31, 1996, the Company
recognized approximately RMB 4,300,000 of interest income on amounts due from
SCH primarily for the purchase of goods, which was calculated at a rate of 8.5%
per annum and was recorded in the fourth quarter of 1996. The Company has not
completed negotiations with SCH with regard to the recognition of interest
income in 1997.

     Net Income.  For the six months ended June 30, 1997, net income was RMB
7,301,000 (RMB 1.24 per share) or 8.0% of sales.  For the six months ended June
30, 1996, net income was RMB 3,444,000 (RMB .59 per share) or 4.2% of sales,
including the amortization of deferred pre-operating costs of RMB 4,267,000.

Consolidated Financial Condition - June 30, 1997:

     Liquidity and Capital Resources -        

                                       21
<PAGE>
 
     For the six months ended June 30, 1997, the Company's operations utilized
cash resources of RMB 10,798,000, as compared to utilizing cash resources of RMB
28,589,000 for the six months ended June 30, 1996, a reduction of RMB
17,791,000.  Despite an increase in sales in 1997 as compared to 1996, cash
utilized in operations decreased and inventories remained relatively constant.
The most significant components of the cash utilized by operations in 1997 were
the increase in accounts receivable of RMB 12,172,000 and the decrease in
accounts payable of RMB 15,712,000 and in accrued expenses and other liabilities
of RMB 3,474,000, which were partially offset by the decrease in due from SCH of
RMB 3,169,000 and in due from Easy Keen of RMB 5,743,000.

     The Company's working capital deficit had decreased by RMB 10,779,000 to
RMB 6,785,000 at June 30, 1997, as compared to a working capital deficit of RMB
17,564,000 at December 31, 1996.  As a result, the Company's current ratio at
June 30, 1997 was .97:1, as compared to .93:1 at December 31, 1996.

     Except with regard to the initial transaction pursuant to which SCBW was
organized and capitalized, the Company's primary method of financing its capital
requirements has been borrowings.  Short-term borrowings consist primarily of
bank loans, are unsecured, repayable within one year, have interest rates
ranging from 7.63% to 21.6%, and have been utilized for working capital purposes
and, prior to 1996, to finance the expansion of the production facility and the
purchase of equipment.  The Company had no long-term bank borrowings at December
31, 1996 and June 30, 1997.

     During the six months ended June 30, 1997, short-term borrowings increased
by RMB 19,000,000, which were utilized to fund operating requirements of RMB
10,798,000, additions to property, plant and equipment of RMB 2,180,000, and the
payment of finance lease obligations of RMB 4,444,000.

     During March 1996, the Company sold 166,000 units, each unit consisting of
one share of common stock and one common stock purchase warrant, which provided
net proceeds of RMB 3,720,000 (USD 448,200). Each common stock purchase warrant
entitles the holder to purchase one share of common stock for US$3.00 per share
on or before February 28, 1998. During August 1996, 5,000 common stock purchase
warrants were exercised, providing net proceeds of RMB 112,000 (USD 13,500),
which resulted in the issuance of 5,000 shares of common stock. For each common
stock purchase warrant exercised in August 1996, the Company issued an identical
common stock purchase warrant to purchase 1.5 shares. During February 1997,
10,000 common stock purchase warrants were exercised, providing net proceeds of
RMB 224,000 (USD 27,000), which resulted in the issuance of 10,000 shares of
common stock. During July 1997, 30,000 common stock purchase warrants were

                                       22
<PAGE>
 
exercised, providing net proceeds of RMB 672,000 (USD 81,000), which resulted in
the issuance of 30,000 shares of common stock.  Millennium Capital Partners,
Ltd. is entitled to a 10% fee in conjunction with this transaction.

     SCBW is considered by the government of China as an important component of
the bicycle production and exporting base of China, and has been designated for
continuing financial support by the Zhaoqing Branch of the Bank of China.  SCBW
has utilized borrowings from the Bank of China to support increases in
production and sales, and to finance the expansion of the production facility
and to purchase equipment.  Pursuant to guidelines issued by the government of
China, SCBW increased its short-term borrowings during 1995, 1996 and 1997 from
the Bank of China with loans having maturities ranging from one to two months.
The working capital loans that the Bank of China makes to SCBW are renewed so
long as SCBW's production and business operations continue to meet certain
operating and financial criteria.  Management believes that the Bank of China
will continue to renew SCBW's existing borrowings and increase its borrowing
base as necessary to support operations at current levels.

     In connection with the formation of SCBW as a Sino-foreign joint venture
between SCH and Winfill in June 1994, Winfill issued a note payable to MTE for
USD 5,000,000.  MTE assigned USD 1,000,000 of such note to a third party, which
is included in accrued expenses and other liabilities in the consolidated
balance sheets at December 31, 1996 and June 30, 1997.  The USD 4,000,000 note
payable to MTE is unsecured, bears no interest and has no fixed repayment terms.
There have been no payments on this note, which is presented as loan from MTE of
RMB 33,280,000 in the consolidated balance sheets at December 31, 1996 and June
30, 1997.  The Company believes that the terms of this loan will continue until
substantial full-scale production at the new facility is reached, which is
expected to take at least until 1998.

     Through the end of 1998, SCBW currently plans to expend approximately RMB
40,000,000 with respect to the second phase of development of the new production
complex, including the tube production line and the spare parts welding line.
Although the Company expects to fund the second phase of development through
long-term bank loans, to the extent available, and/or the sale of the Company's
debt or equity securities, there can be no assurances that the Company will be
successful in this regard.  To the extent that the Company is unable to arrange
adequate financing under acceptable terms on a timely basis, the Company will
delay the second phase of development of the new production complex.  In
addition, during 1997, SCBW plans to add a new paint and assembly line for
exercise equipment, and to upgrade and relocate the steel tube factory to the
new production complex at

                                       23
<PAGE>
 
an estimated cost of RMB 6,000,000.

     The Company believes that its cash flow provided by operations, combined
with short-term and long-term borrowings, will be sufficient to support
operations at current levels.  However, in order to increase sales and fully
utilize the expanded production capacity of the new production complex, the
Company will require operating capital substantially in excess of that available
from domestic Chinese sources.  As a result of the Company's existing capital
structure and reliance on borrowings, such additional operating capital would
most likely be in the form of some type of an equity investment.  An important
factor in the Company's ability to increase production levels is the timely
availability of sufficient operating capital at a reasonable cost.


     Inflation and Currency Matters -

     In recent years, the Chinese economy has experienced periods of rapid
economic growth as well as high rates of inflation, which in turn has resulted
in the periodic adoption by the Chinese government of various corrective
measures designed to regulate growth and contain inflation.  During the year
ended December 31, 1996, the general inflation rate in China was in excess of
10% on an annualized basis.  Since 1993, the Chinese government has implemented
an economic program designed to control inflation, which has resulted in the
tightening of working capital available to Chinese business enterprises.  The
success of the Company depends in substantial part on the continued growth and
development of the Chinese economy.

     Foreign operations are subject to certain risks inherent in conducting
business abroad, including price and currency exchange controls, and
fluctuations in the relative value of currencies.  Changes in the relative value
of currencies occur periodically and may, in certain instances, materially
affect the Company's results of operations.

     A substantial portion of the Company's revenues are denominated in RMB.  As
a result, devaluation of the RMB against the USD would adversely affect the
Company's financial performance when measured in USD, and could have material
adverse effects upon the results of operations and financial position.  In
addition, a significant portion of revenues will need to be converted into USD
on a continuing basis to meet foreign currency obligations.  Although prior to
1994 the RMB experienced significant devaluation against the USD, the RMB has
remained fairly stable during 1994, 1995 and 1996.  The swap center rate was
US$1.00 to RMB 8.70 at December 31, 1993, RMB 8.45 at December 31, 1994, RMB
8.32 at December 31, 1995, RMB 8.32 at December 31, 1996, and RMB 8.32 at June
30, 1997.

                                       24
<PAGE>
 
                          PART II.  OTHER INFORMATION
                          ---------------------------



ITEM 5.  OTHER INFORMATION

          Effective April 30, 1997, Robert N. Weingarten resigned as Chief
Financial Officer, Assistant Secretary and a Director of the Company.

          Effective May 1, 1997, Gao Wei Son and Zhen Da Qing were appointed to
the Board of Directors.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits:

          27   Financial Data Schedule (electronic filing only)

     (b)  Reports on Form 8-K - Three Months Ended June 30,
          1997 - None

                                       25
<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.



                                         FREMONT CORPORATION
                                         -------------------
                                             (Registrant)



Date:  August 18, 1997             By:  /s/ WINSTON WU
                                        ________________________
                                         Winston Wu
                                         President
                                         (Duly Authorized Officer
                                          and Acting Principal
                                          Financial Officer)

                                       26