SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                    FORM 10-Q

(X)  Quarterly report pursuant to Section 13 or 15(d) of the
     Securities Exchange Act of 1934

     For the quarterly period ended September 30, 1997 or

( )  Transition report pursuant to Section 13 or 15(d)of the 
     Securities Exchange Act of 1934
                                                                

     For the transition period from ___________to___________


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                      16,548,344
    $.10 per share


<PAGE>
                                      INDEX


PART I  FINANCIAL INFORMATION

   ITEM 1.  Financial Statements

          Condensed Consolidated Balance Sheet September               3
               30, 1997 and December 31, 1996

          Condensed Consolidated Statement Of Operations               5
              Three Months and Nine Months Ended September
              30, 1997 and September 30, 1996

          Condensed Consolidated Statement Of Cash Flows               6 
              Nine Months Ended September 30, 1997 and
              September 30, 1996

          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                            10


SIGNATURES                                                            11

EXHIBIT INDEX                                                         12

                                       2
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
<TABLE>

                      SIBONEY CORPORATION AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET

                      CONDENSED CONSOLIDATED BALANCE SHEET
                    SEPTEMBER 30, 1997 AND DECEMBER 31, 1996


                                     ASSETS

<CAPTION>
                                                                                                  DECEMBER 31,
                                                                    SEPTEMBER 30,                  1996 (SEE
                                                                       1997                       NOTE BELOW)
                                                                  --------------------------------------------------

<S>                                                               <C>                           <C>    
Current Assets                                                    
         Cash and cash equivalents                                $   449,123                   $   775,830
         Accounts and notes receivable                                217,009                       152,437
         Inventories (Note 3)                                         174,976                       174,939
                                                                  
         Prepaid expenses and deposits                                164,586                       160,033  
                                                                  -----------                   -----------     
                  Total Current Assets                              1,005,694                     1,263,239      
                                                                 
Property, Plant and Equipment                                         139,274                       172,553
(Net of Accumulated Depreciation      
of $496,195 at September 30, 1997
and $451,942 at December 31, 1996)

Investments in Natural Resources                                        5,101                         5,101
                                                                  -----------                  ------------
                                                                  $ 1,150,069                  $  1,440,893
                                                                  ===========                  ============

</TABLE>


NOTE:  The balance  sheet at December  31, 1996 has been taken from the audited
        financial statements at that date and condensed.

        See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>
<TABLE>

                      SIBONEY CORPORATION AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET

                                   (CONTINUED)

                    SEPTEMBER 30, 1997 AND DECEMBER 31, 1996

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<CAPTION>

                                                                                           DECEMBER 31,
                                                                    SEPTEMBER 30,           1996 (SEE
                                                                        1997                NOTE BELOW)
                                                                        ----                -----------

<S>                                                                 <C>                     <C>  
Current Liabilities
         Accounts payable                                           $   113,911             $    75,280
         Accrued expenses                                                91,314                  91,191
                                                                    -----------             -----------
                  Total Current Liabilities                             205,225                 166,471

Stockholders'Equity
         Common stock:
           Authorized 20,000,000 shares at $.10
       Par value; issued and outstanding
       15,766,694 shares at 12/31/96 and                            
       16,548,344 shares at 9/30/97                                   1,654,835               1,576,670
    Additional paid-in capital                                              300                  13,028
         Retained earnings (deficit)                                   (710,291)               (315,276)
                                                                    ------------            ------------
             Total Stockholders' Equity                                 944,844               1,274,422
                                                                    ------------            ------------
                                                                    $ 1,150,069             $ 1,440,893
                                                                    ============            ===========
</TABLE>


NOTE:   The balance  sheet at December  31, 1996 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

                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

<CAPTION>

                                                      NINE MONTHS ENDED                       THREE MONTHS ENDED
                                                        SEPTEMBER 30,                           SEPTEMBER 30,
                                                -------------------------------------------------------------------------
                                                   1997                1996                1997                1996
                                                   ----                ----                ----                ----

<S>                                            <C>                  <C>                   <C>                 <C>    
 Revenues                                      $1,561,480           1,690,704             412,258             509,122

 Cost of Product Sales                            261,103             318,620              83,731             112,853

 Selling, General and
 Administrative Expenses                        1,639,361           1,583,195             518,480             554,259
                                                ---------         -----------         -----------          ----------

 Loss from Operations
                                                 (338,984)           (211,111)           (189,953)           (157,990)
                                                ---------           ---------         -----------         -----------
 Other Income (Expense)
  Interest Income                                  13,120              17,775               4,444               6,343
  Gain on Sale of Assets                               --             118,288                  --             118,288
  Miscellaneous                                   (24,107)            (32,052)             (6,979)            (10,208)
                                                 ---------        -----------         -----------         -----------
 Total Other Income (Expense)                     (10,987)            104,011              (2,535)            114,423
                                               -----------        -----------         -----------         -----------

 Net Loss                                      $ (349,971)         $ (107,100)         $ (192,488)         $  (43,567)
                                               ===========        ===========         ===========         ===========
 Weighted Average Shares Outstanding           16,168,756          15,566,694          16,168,756          15,566,694
                                               ===========        ===========         ===========         ===========
  Loss Per Share                                $ (.022)            $ (.007)            $ (.012)            $ (.003)
                                               ===========        ===========        =============       ============
 
</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, 1997 AND 1996
<CAPTION>

                                                                                    1997                 1996
                                                                             -------------------- --------------------

<S>                                                                              <C>                  <C>    
 Cash Flows From Operating Activities
     Net loss from continuing operations                                         $(349,971)           $(107,100)
     Adjustments to reconcile net loss
       from continuing operations to net
       cash provided by operating activities:
       Depreciation                                                                 44,253               92,657
       Gain on sale of assets                                                           --             (118,288)
       Change in assets and liabilities:
          Increase in accounts and notes                                           (64,572)             (52,589)
          receivable
          (Increase) decrease in inventory                                             (37)              32,068
          (Increase) decrease in prepaid expenses
              and deposits                                                          (4,553)               8,810
          Increase in accounts payable
              and accrued expenses                                                  38,754              133,255
                                                                                 ----------           ---------
 Net Cash Used In Operations                                                      (336,126)             (11,187)
                                                                                 ----------           ----------
 Cash Flows From Investing Activities
  Proceeds from sale of assets                                                          --              230,000
  Payments for equipment                                                           (10,964)             (35,111)
                                                                                 ----------           ----------
 Net Cash Provided By (Used In) Investing Activities                               (10,964)             194,889
                                                                                 ----------           ---------
 Cash Flows From Financing Activities
  Proceeds from issuance of common stock                                            20,383                   --
                                                                                 ----------           ---------
 Net Cash Provided By Financing Activities                                          20,383                   --
                                                                                 ----------           ---------

 Net Increase (Decrease) In Cash and Cash Equivalents                             (326,707)             183,702

 Cash And Cash Equivalents - Beginning Of Period                                   775,830              599,924
                                                                                 ----------           ---------
 Cash And Cash Equivalents - End Of Period                                       $ 449,123            $ 783,626
                                                                                 ==========           =========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       6
<PAGE>
                      SIBONEY CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                          SEPTEMBER 30, 1997 AND 1996

1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    The  condensed  consolidated  balance  sheet as of September  30, 1997,  the
    condensed  consolidated  statement of operations for the nine-month  periods
    and the  three-month  periods  ended  September  30,  1997  and 1996 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, 1997 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, 1996.  The results of  operations
    for the period ended  September 30, 1997 are not  necessarily  indicative of
    the operating results for the full year.

2.  INVENTORIES

    Inventories consist of the following:

                               SEPTEMBER 30, 1997            DECEMBER 31, 1996
                               ------------------            -----------------

    Raw materials                  $  58,505                     $ 135,710

    Finished goods                   116,471                        39,229
                                   ---------                     --------- 
                                   $ 174,976                     $ 174,939
                                   =========                     =========
3.  STOCKHOLDERS' EQUITY

   During the nine months ended  September  30, 1997,  stockholders'  equity was
changed by the net loss for the period,  which was partially  offset by proceeds
from issuance of common stock upon exercise of certain stock options.

<TABLE>
<CAPTION>


                                 Common Stock                  Additional Paid in           Retained               Totals
                                                                     Capital                 Earnings
                                                                                            (Deficit)
                           Shares             Amount
                          ------------------------------------------------------------------------------------------------

<S>                      <C>                <C>                   <C>                      <C>                  <C>       
Balance - January        15,766,694         $1,576,670            $ 13,028                 $(315,276)           $1,274,422
1,1997

Issuance of Common          781,650             78,165             (12,728)                  (45,044)               20,393
Stock                

Net Loss                         --                 --                  --                  (349,971)             (349,971)
---------------------------------------------------------------------------------------------------------------------------
Balance - September      16,548,344         $1,654,835            $    300                 $(710,291)           $  944,844
30,1997
===========================================================================================================================
</TABLE>

                                       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  wholly-owned  subsidiary,  in  the
     publishing and distribution of educational  software.  The Company has been
     serving  the  educational  market  for more  than 35 years.  The  Company's
     proprietary   educational   software  is  produced  for  use  on  IBM,  IBM
     compatible,  Macintosh  and Apple II  computers.  Of Gamco's  total  sales,
     approximately 97% is generated by proprietary  software,  and the remainder
     is represented by  non-proprietary  educational  software and other related
     products.  Sales are made to public and private  schools,  grades 1 through
     12,  through a network of  independent  distributors  throughout the United
     States as well as through its own catalogs.  Popular Gamco software  titles
     include Money  Challenge,  Discover Time,  Undersea Reading for Meaning and
     the Touchdown Math series.

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

The Company has 127 educational software products, which it is actively involved
in  converting  to the  Macintosh  and Windows  platforms  which have become the
predominant  systems  used in schools.  Of such  products,  49 have already been
converted to a Macintosh platform and the Company plans to convert an additional
two products during the current year.  Fifteen programs have been converted to a
Windows  format,  with an additional 24 scheduled to be converted this year. The
Company  has  released  its  first  CD-ROM  products  this  Fall  with 10 titles
converted to a hybrid Macintosh/Windows  format, with an additional 24 scheduled
to be converted this year.

The Company has also  licensed 12  Macintosh/Windows  hybrid  multimedia  CD-ROM
titles,  which help young readers from kindergarten  through third grade develop
their reading and writing skills. These new titles were released this Fall.

During  1997,  the  Company  has also  expanded  its  distribution  network.  In
connection with this  expansion,  it launched a new product line called Orchard:
Teacher's  Choice  Software  through a network of 25 exclusive  dealers who will
sell  Siboney  Learning  Group  software as a broader  curriculum  solution  for
students  who are  struggling  to master key skills.  In  addition,  the Company
recently   expanded  its  inside  sales  efforts  by  hiring   additional  sales
representatives   who  will  focus  on  selling   proprietary   software   by  a
telemarketing effort addressed to its customer base of over 10,000 schools.

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.

                                       8
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)

          THREE MONTHS ENDED SEPTEMBER 30, 1997 vs. SEPTEMBER 30, 1996

Revenues  decreased  during  the three  month  period  ended  September  30,1997
compared  to the  same  period  in 1996  due to the  discontinued  marketing  of
non-proprietary  products and resulting  lower sales of these products at Gamco.
Siboney  Learning Group and Gamco are currently in the process of converting and
adding new products on current platforms (Macintosh,  Windows and CD-ROM), which
is expected to result in increased sales in the future.

Cost of product  sales  decreased  during the 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 20.4%  compared to 22.2%
in the prior year.

Selling,  general  and  administrative  expenses  decreased  during the  quarter
compared to the same period in 1996.  While  research and  development  costs at
Gamco were 35% higher, other selling,  general and administrative costs were 15%
lower for the three month period.

Other income  decreased  during the three month period ended  September 30, 1997
compared  to the  same  period  in 1996 due to the sale of  Gamco's  print  shop
equipment during the third quarter of 1996.

As a result of the lower  level of sales,  net loss  increased  for the  quarter
ended September 30, 1997, compared to the same period in 1996.

           NINE MONTHS ENDED SEPTEMBER 30, 1997 vs. SEPTEMBER 30. 1996

Revenues  decreased  during the nine  month  period  ended  September  30,  1997
compared to the same period in 1996,  primarily  due to lower  revenues by 7% of
Siboney Learning Group and Gamco.

In addition, royalties earned by Siboney Coal Company decreased 20% for the nine
month  period  compared  to the same  period in 1996.  Coal lease  revenues  are
dependent on third party mining operations, which are temporarily suspended from
time to time.

Cost of product  sales  decreased  during the nine month period  compared to the
previous year as a result of a successful  effort to increase the  percentage of
proprietary (currently 97%) versus  non-proprietary  product sales. As a result,
Gamco's cost of product  sales as a percentage  of revenue was reduced to 17.4%,
compared to 19.8% in the prior year.

Selling,  general and  administrative  expenses  increased during the nine month
period  ended  September  30, 1997  compared to the same period in 1996,  due to
higher employment expenses,  the expense of printing the Company's Annual Report
at an outside printer and higher legal fees.

Other income  decreased  during the nine month period ended  September  30, 1997
compared  to the  same  period  in 1996 due to the sale of  Gamco's  print  shop
equipment during the third quarter of 1996.

                                       9
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Continued)

                         LIQUIDITY AND CAPITAL RESOURCES

Cash  decreased at September  30, 1997  compared to December 31, 1996 due to the
impact of  expenses  exceeding  income and an  increase in the level of accounts
receivable.  The  Company  considers  its  cash  position  adequate  to fund its
anticipated operations and capital expenditures.

The increase in accounts  receivable at the end of the nine month period of 1997
was due to larger sales  volume at Gamco during  September  1997  compared  with
December  1996,  which was  consistent  with Gamco's  experience in the previous
year.

Accounts  payable  increased at September 30, 1997,  primarily due to the amount
which became  payable for the printing of Gamco's latest  catalog,  which amount
will be paid during the 4th quarter.


                           PART II - OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K


        a) Exhibits: See Exhibit Index on page 11.

        b) Reports on Form 8-K: No reports on Form 8-K were filed by the
           Registrant during the quarter ended September 30, 1997.


                                       10
<PAGE>
                                   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 12, 1997        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