SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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


(X)      Quarterly report for the quarterly period ended September,
         30, 1996

                                       OR

( )      Transition Report Pursuant To Section 13 Or 15(d) of The
         Securities Exchange Act of 1934

Commission file number 1-3952

                               SIBONEY CORPORATION
             (Exact name of registrant as specified in its charter)

             Maryland                                     73-0629975
 (State or other jurisdiction of                   (I.R.S. Employer I.D. No.)
 incorporation or organization)

       8000 Maryland Ave., Ste 1040, P.O. Box 16184, St. Louis, MO 63105
                    (Address of principal executive offices)
                                   (Zip Code)

                                  314-725-6141
              (Registrant's telephone number, including area code)

--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the Registrant (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 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 [ ]

         Title of class of                          Number of Shares
           common stock                    outstanding as of this Report Date
           ------------                    ----------------------------------

    Common stock, par value                            15,566,694
    $.10 per share

                                        1

<PAGE>



                                      INDEX
                                      -----


PART I  FINANCIAL INFORMATION

   ITEM 1.  Financial Statements

          Condensed Consolidated Balance Sheet September               3
               30, 1996 and December 31, 1995

          Condensed Consolidated Statement Of Operations               5
               Three Months and Nine Months Ended September
            30, 1996 and September 30, 1995

          Condensed Consolidated Statement Of Cash Flows               6
               Nine Months Ended September 30, 1996 and 1995

          Notes To Condensed Consolidated Financial                    7
               Statements

 ITEM 2.    Management's Discussion and Analysis of Financial          8
            Condition and Results of Operations


PART II  OTHER INFORMATION

 ITEM 6.    Exhibits And Reports On Form 8-K                          11
 

SIGNATURES                                                            11

EXHIBIT INDEX                                                         12





                                        2

<PAGE>



                         PART I - FINANCIAL INFORMATION

ITEM 1.        FINANCIAL STATEMENTS

                      SIBONEY CORPORATION AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET

                    SEPTEMBER 30, 1996 AND DECEMBER 31, 1995


                                     ASSETS


                                                                    DECEMBER 31,
                                               SEPTEMBER 30,         1995 (SEE
                                                  1996               NOTE BELOW)

CURRENT ASSETS
  Cash and cash equivalents                  $   783,626          $    599,924
  Accounts and notes receivable                  230,738               178,149
  Inventories (Note 3)                           184,587               230,236
  Prepaid expenses and deposits                  289,767               306,423
                                             -----------          ------------
      TOTAL CURRENT ASSETS                     1,488,718             1,314,732
      
PROPERTY, PLANT AND EQUIPMENT (NET OF            228,768               376,599
ACCUMULATED DEPRECIATION OF $697,457 AT
SEPTEMBER 30, 1996 AND $1,111,190 AT
DECEMBER 31, 1995)

INVESTMENTS IN NATURAL RESOURCES                   5,101                 5,101
                                             -----------          ------------
                                             $ 1,722,587          $  1,696,432
                                             ===========          ============





NOTE:     The balance sheet at December 31, 1995 has been taken from the audited
          financial statements at that date and condensed.

      See accompanying notes to condensed consolidated financial statements.

                                        3

<PAGE>



                      SIBONEY CORPORATION AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET

                                   (CONTINUED)

                    SEPTEMBER 30, 1996 AND DECEMBER 31, 1995

                      LIABILITIES AND STOCKHOLDERS' EQUITY




                                                                  DECEMBER 31,
                                          SEPTEMBER 30,            1995 (SEE
                                             1996                  NOTE BELOW)

CURRENT LIABILITIES
  Notes payable                          $     1,000              $     1,000
  Accounts payable                           136,414                   29,683
  Accrued expenses                           108,075                   81,551
                                         ------------             -----------
      TOTAL CURRENT LIABILITIES              245,489                  112,234
     

STOCKHOLDERS' EQUITY
  Common stock:
    Authorized 20,000,000 shares
       at $.10 par value; issued
       and outstanding 15,566,694
       shares                              1,556,670                1,556,670
  Additional paid-in capital                  27,528                   27,528
  Retained earnings (deficit)               (107,100)                      --
                                         ------------             -----------
      TOTAL STOCKHOLDERS' EQUITY           1,477,098                1,584,198
                                         ------------             -----------
                                         $ 1,722,587              $ 1,696,432
                                         ============             ===========





NOTE:     The balance sheet at December 31, 1995 has been taken from the audited
          financial statements at that date and condensed.

      See accompanying notes to condensed consolidated financial statements.

                                        4

<PAGE>

<TABLE>


                      SIBONEY CORPORATION AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS


<CAPTION>

                                                      THREE MONTHS ENDED                         NINE MONTHS ENDED
                                                         SEPTEMBER 30,                             SEPTEMBER 30,
                                                         -------------                             -------------


                                                  1996                 1995                  1996                 1995
                                                  ----                 ----                  ----                 ----

<S>                                            <C>                   <C>                     <C>                  <C>    
REVENUES                                       $1,690,704            1,923,117               509,122              526,592

COST OF PRODUCT SALES                             318,620              429,592               112,853              135,409

SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES                         1,583,195            1,477,067               554,259              470,870
                                               -----------          -----------           -----------          ----------
INCOME (LOSS) FROM
OPERATIONS                                       (211,111)              16,458              (157,990)             (79,687)
                                               -----------          -----------           -----------          -----------
OTHER INCOME (EXPENSE)
 Interest Income                                   17,775               18,169                 6,343                7,946
 Gain on Sale of Assets                           118,288                   --               118,288                   --
 Miscellaneous                                    (32,052)             (24,669)              (10,208)              (2,673)
                                               -----------          -----------           -----------          -----------
TOTAL OTHER INCOME (EXPENSE)                      104,011               (6,500)              114,423                5,273
                                               -----------          -----------           -----------          ----------

NET INCOME (LOSS)                              $ (107,100)          $    9,958            $  (43,567)          $  (74,414)
                                               ==========           ==========            ==========           ========== 
WEIGHTED AVERAGE SHARES
OUTSTANDING                                    15,566,694           15,566,694            15,566,694           15,566,694
                                               ===========          ===========           ===========          ==========
INCOME (LOSS) PER SHARE                        $ (.007)             $  .001               $ (.003)             $ (.005)
                                               ===========          ===========           ============         ==========



</TABLE>





See accompanying notes to condensed consolidated financial statements.


                                        5

<PAGE>

<TABLE>


                      SIBONEY CORPORATION AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995



<CAPTION>
                                                               1996                  1995
                                                               ----                  ----
<S>                                                         <C>                   <C> 
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss) from continuing operations            $(107,100)            $   9,958
    Adjustments to reconcile net income (loss)
      from continuing operations to net
      cash provided by operating activities:
        Depreciation                                           92,657                96,790
     Loss on disposition of assets                                 --                   427
     Gain on sale of assets                                  (118,288)                   --
        Change in assets and liabilities:
          (Increase) decrease in accounts and notes           (52,589)               49,538
             receivable
       (Increase) decrease in inventory                        32,068               (20,875)
           Decrease in prepaid expenses
             and deposits                                       8,810                36,075
           Increase in accounts payable and
             accrued expenses                                 133,255                 3,599
                                                            ----------            ---------
NET CASH PROVIDED BY (USED IN) OPERATIONS                     (11,187)              175,512
                                                            ----------            ---------

CASH FLOWS FROM INVESTING ACTIVITIES
 Proceeds from sale of assets                                 230,000                   --
 Payments for equipment                                       (35,111)              (55,995)
                                                            ----------            ----------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES           194,889               (55,995)
                                                            ----------            ----------

NET INCREASE IN CASH AND CASH EQUIVALENTS                     183,702               119,517
 

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD               599,924               570,191
                                                            ----------            ---------

CASH AND CASH EQUIVALENTS - END OF PERIOD                   $ 783,626             $ 689,708
                                                            ==========            =========

</TABLE>




See accompanying notes to condensed consolidated financial statements.


                                        6

<PAGE>



                      SIBONEY CORPORATION AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 1996 AND 1995


1.      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    The  condensed  consolidated  balance  sheet as of September  30, 1996,  the
    condensed  consolidated  statement of operations for the nine-month  periods
    and the  three-month  periods  ended  September  30,  1996  and 1995 and the
    condensed  consolidated  statement of cash flows for the nine-month  periods
    then ended have been prepared by the Company,  without audit. In the opinion
    of management,  all adjustments  (which include only recurring  adjustments)
    necessary to present fairly the financial position and results of operations
    at September 30, 1996 and for all periods have been made.

    Certain information and footnote  disclosures normally included in financial
    statements   prepared  in  accordance  with  generally  accepted  accounting
    principles  have been  condensed or omitted.  These  condensed  consolidated
    financial  statements  should  be read in  conjunction  with  the  financial
    statements and notes thereto included in the  Registrant's  Annual Report on
    Form 10-K for the year ended  December 31, 1995.  The results of  operations
    for the period ended  September 30, 1996 are not  necessarily  indicative of
    the operating results for the full year.

2.      STOCKHOLDERS' EQUITY

    During the nine months ended  September 30, 1996,  stockholders'  equity was
    changed solely by the net loss for the period.

3.      INVENTORIES

    Inventories consist of the following:

                        
                             SEPTEMBER 30, 1996         DECEMBER 31, 1995
                             ------------------         -----------------
    Raw materials                 $ 64,657                 $ 128,063
    Finished goods                 119,930                   102,173
                                  --------                  --------
                                 $ 184,587                 $ 230,236
                                  ========                  ========



                                        7

<PAGE>



                      SIBONEY CORPORATION AND SUBSIDIARIES

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

The Company's  continuing  operations for the periods  presented  consist of the
following two segments:

1)   The Company is engaged,  through its Siboney  Learning  Group  Division and
     Gamco  Industries,  Inc.  ("Gamco"),  a subsidiary,  in the  production and
     distribution of educational  software,  teaching aids and related supplies.
     The Company has been serving the educational market for more than 35 years.
     The  Company's  proprietary  educational  software is  produced  for use on
     Macintosh,  Apple II, IBM and IBM  compatible  computers.  Of Gamco's total
     sales,  approximately  85% is generated by  proprietary  software,  and the
     remainder is represented by non-proprietary  educational software and other
     related  products.  Sales are made to private and public schools,  grades 1
     through 12, by a network of independent  distributors throughout the United
     States,  as  well  as  through  catalogs   published  by  Gamco  and  other
     educational  software  distributors.  Popular Gamco software titles include
     Money  Challenge,  Undersea  Reading for Meaning and Touchdown  Math- Whole
     Numbers and Fractions.

2)   The holding of interests in certain natural resources,  including coal, oil
     and gas, through several subsidiaries.

During September 1996,  Siboney Learning Group entered into a software licensing
and distribution  agreement with Merit Audio Visual of New York, New York. Under
the license  agreement,  Siboney  Learning  Group  received a license to use and
market 21  software  programs  which  teach  skills for  reading  and writing to
elementary  through high school students.  Gamco has historically been strongest
in  areas  relating  to  mathematics.  Consequently,  the  acquisition  of these
products and their addition to the Company's  product line will add an important
dimension to the products offered by the Company.

The Company is in the process of  converting  its  existing 106 Apple II and DOS
products to Macintosh and Windows platforms,  which are becoming the predominant
systems used in schools.  Of its total products,  23 have already been converted
to a Macintosh  platform and an  additional  12 are being  converted  during the
current school year,  together with the first 20 programs  being  converted to a
Windows format and five to a CD-ROM format.  Adding to this, it is  contemplated
that the 21 newly  licensed  products,  which are also in a DOS format,  will be
converted by Siboney Learning Group to a Macintosh format within five months and
to Windows within an additional five months.

As a result,  it is anticipated  that the Company's total  educational  software
product  offerings  and the  breath  of its  educational  coverage  will  expand
significantly  during the current  school year as well as the  1997-1998  school
year. Siboney Learning Group will use Gamco's established distribution channels,
as well as new distribution programs to sell the software.



                                        8

<PAGE>



The following is  management's  discussion  and analysis of certain  significant
factors  which have  affected the  Company's  financial  position and  operating
results during the periods included in the accompanying  condensed  consolidated
financial statements.


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

          THREE MONTHS ENDED SEPTEMBER 30, 1996 vs. SEPTEMBER 30, 1995

Revenues  decreased  during the three  month  period  ended  September  30, 1996
compared to the same period in 1995.  Sales at Gamco were  marginally  improved,
with September sales showing an improvement  over August 1995 and September 1995
sales.  Gamco is releasing  more new products on current  platforms  (Macintosh,
Windows and CD-ROM) which should enhance sales in the future.

Royalties  earned by Siboney Coal Company were lower for the quarter compared to
1995.  Revenues  from  the coal  lease  are  dependent  on  third  party  mining
operations, which are temporarily suspended from time to time.

Cost of  product  sales  decreased  during  the third  quarter  compared  to the
previous  year's  quarter as a result of the  successful  effort to increase the
percentage of  proprietary  sales versus  non-proprietary  product  sales.  As a
result,  cost of product  sales as a percentage  of revenue was reduced to 22.2%
compared to 25.7% in the prior year.

Selling,  general  and  administrative  expenses  increased  during the  quarter
compared to the same period in 1995 due to higher employment expenses, increased
advertising  costs  and  costs  associated  with  the  outsourcing  for  product
conversion to new platforms.

During the quarter,  Gamco sold their print shop equipment which is reflected in
the increase in gain on sale of assets.

As a result of the above mentioned factors, net income decreased for the quarter
ended September 30, 1996 when compared to the same period in 1995.


           NINE MONTHS ENDED SEPTEMBER 30, 1996 vs. SEPTEMBER 30, 1995

Revenues  decreased  during the nine  month  period  ended  September  30,  1996
compared  to the same  period in 1995.  Sales at Gamco for the nine  months were
lower,  as was the trend in the  educational  software  industry.  Coal revenues
increased slightly for the period.

Cost of product sales decreased as a result of lower sales at Gamco. As a result
of increasing  proprietary product sales compared to non-proprietary  sales, the
cost of product  sales as a  percentage  of total  revenue  was reduced to 18.9%
during the current period as compared to 22.3% for the same period last year.

Selling,  general and  administrative  expenses  increased during the nine month
period,  as  compared  to the same  period  in  1995,  primarily  due to  higher
salaries,  severance  payments,  increased  advertising  costs at  Gamco/Siboney
Learning  Group  and the cost  associated  with the use of  outside  development
houses for product conversion to new formats.

Gain on sale of assets  increased  for the nine month  period of 1996 due to the
sale of the print shop equipment at Gamco.

Net income  decreased during the nine months ended September 30, 1996 due to the
above mentioned factors.

                                        9

<PAGE>



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


                         LIQUIDITY AND CAPITAL RESOURCES

Cash  increased at September  30, 1996 compared to December 31, 1996 due to cash
received  from the sale of the print  shop  equipment  and from a  reduction  in
inventories.

Consistent with prior years, accounts receivable increased at September 30, 1996
compared to December 31, 1995. The increase was  attributable  to a larger sales
volume at Gamco during September 1996 compared to December 1995.

Inventories decreased at September 30, 1996 compared to December 31, 1995 due to
a planned  decrease of slower selling  non-proprietary  inventory  items and the
sale of the print shop inventory.  These  decreases were partially  offset by an
increased inventory of support materials that accompany programs sold.

Prepaid  expenses and  deposits  decreased  at  September  30, 1996  compared to
December 31, 1995. As a result of the closing of the print shop, Gamco no longer
has work in progress on catalogs therefore there was no incremental  increase in
catalog expense. In previous years,  catalogs were capitalized when produced and
expensed throughout the year.

Plant,  property  and  equipment  decreased at  September  30, 1996  compared to
December  31, 1995 as a result of the closing of the print shop at Gamco and the
sale of its equipment.

Accounts payable  increased at September 30, 1996 due to an outstanding  invoice
for the most recent Gamco catalog. The invoice has subsequently been paid.

Accrued expenses  increased at September 30, 1996 compared to December 31, 1995.
Accrued expenses increase throughout the year for payment of invoices that occur
at year end.























                                       10

<PAGE>




                           PART II - OTHER INFORMATION

ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K


        a)     Exhibits: See Exhibit Index on page 11 hereof.

        b)     Reports on Form 8-K: No reports on Form 8-K were filed by the
               Registrant during the quarter ended September 30, 1996.


                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                            SIBONEY CORPORATION



Date: November 8, 1996                      By:      /s/ Timothy J. Tegeler
                                                     ----------------------
                                                     Timothy J. Tegeler
                                                     President, Chief Executive
                                                     Officer and Chief Financial
                                                     Officer




                                       11

<PAGE>


                                  EXHIBIT INDEX



    Exhibit Number              Description                    Page

        27(a)             Financial Data Schedule               12
                          (Filed in EDGAR version
                          only)




                                       12