U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

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

                  For the Quarterly Period Ended June 30, 1997

                           Commission File No. 1-11282

                        PACESETTER OSTRICH FARM, INC.
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                 (Name of Small Business Issuer in Its Charter)

            Delaware                                      72-1186845
------------------------------------             -------------------------------
  (State or Other Jurisdiction of                     (I.R.S. Employer
   Incorporation or Organization)                    Identification No.)


10135 Hereford Road, Folsom, Louisiana                    70437
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(Address of Principal Executive Offices)                (Zip Code)

                               (504) 796-5806
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                (Issuer's Telephone Number, Including Area Code)


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   (Former Name, Former Address and Former Fiscal Year, if Changed Since Last
                                     Report)


         Check whether the issuer (1) has 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 issuer was required to file such reports, and (2)
has been subject to such filing requirements for the past 90 days.

                               Yes _____ No __X__

                      APPLICABLE ONLY TO USERS INVOLVED IN
                        BANKRUPTCY PROCEEDINGS DURING THE
                              PRECEDING FIVE YEARS

         Check whether the issuer filed all documents and reports required to be
filed by section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.

                                Yes _____ No ____

                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 3,665,244 shares of Common
Stock at August 11, 1997.


<PAGE>


                          PACESETTER OSTRICH FARM, INC.


                                      INDEX
                                      -----


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements (unaudited)

Balance Sheets - June 30, 1997 and December 31, 1996

Statement of Operations - Three Months Ended June 30, 1996, and Three Months
Ended June 30, 1997; Six Months Ended June 30, 1996, and Six Months Ended June
30, 1997

Statements of Cash Flows - Six Months Ended June 30, 1997 and Six Months Ended
June 30, 1996

Notes to Financial Statements


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


PART II.  OTHER INFORMATION





                                       2

<PAGE>
<TABLE>
<CAPTION>

                                      PART I
                              FINANCIAL INFORMATION
Item 1. Financial Statements

                          PACESETTER OSTRICH FARM, INC.
                                 BALANCE SHEETS

                                     ASSETS
                                     ------
                                                                              June 30,         
                                                                           (unaudited)          December 31, 
                                                                               1997                1996
                                                                               ----                ----
<S>                                                                         <C>                 <C>   
CURRENT ASSETS:
  Cash and short term investments                                           $    (6,724)                 --
  Accounts receivable (net of allowance of $39,921 at
   June 30, 1997 and December 31, 1996)                                          50,998             129,521
  Livestock inventory                                                           453,919             370,775
  Other current assets                                                                                   --
                                                                           ------------        ------------
          Total current assets                                                  498,193             500,296

PROPERTY, PLANT, AND EQUIPMENT, net                                             984,499           1,110,666

NOTE RECEIVABLE FROM STOCKHOLDER                                                 42,500              42,500

OTHER ASSETS                                                                     20,718               3,173
                                                                           ------------        ------------

                                                                             $1,545,910          $1,656,635
                                                                           ============        ============
                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
CURRENT LIABILITIES:
  Accounts payable and accrued liabilities                                  $   273,749          $  212,908
  Notes payable                                                                 405,366             450,104
  Accrued interest                                                               30,853              11,253
  Advances from stockholders                                                    174,430             169,317
                                                                           ------------        ------------
          Total current liabilities                                             884,398             843,582


STOCKHOLDERS' EQUITY:
  Common stock, $.001 par value, 10,000,000 shares authorized,
  3,665,244 and 3,590,244 issued and outstanding
  as of  June 30, 1997 and December 31, 1996, respectively                        3,665               3,590
  Additional paid-in-capital                                                  3,801,642           3,779,217
  Retained earnings (deficit)                                                (3,143,795)         (2,969,754)
                                                                           ------------        ------------
                                                                                661,512             813,053
                                                                           ------------        ------------
                                                                           $  1,545,910        $  1,656,635
                                                                           ============        ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       3
<PAGE>
<TABLE>
<CAPTION>
                          PACESETTER OSTRICH FARM, INC.
                             STATEMENT OF OPERATIONS
                                   (unaudited)


                                                          Three Months Ended                      Six Months Ended
                                                               June 30,                               June 30,
                                                         1996             1997            1996                   1997
                                                         ----             ----            ----                   ----
<S>                                                   <C>               <C>              <C>               <C>        
SALES                                                 $  172,342        $ 240,010        $ 286,441         $   401,454

COST OF SALES                                             11,283          157,051           11,483             174,893
                                               -----------------   --------------   --------------      --------------
          Gross profit                                   161,059           82,959          274,958             226,561

OPERATING EXPENSES:
  Operating                                              140,318          112,867          256,548             321,001
  General and administrative                              15,589           20,855           25,405              55,021
                                                ----------------   --------------   --------------      --------------
  Operating Income (loss)                                  5,152          (50,763)          (6,995)           (149,461)

OTHER INCOME (EXPENSES):
  Interest                                               (11,250)         (19,600)         (24,276)            (25,298)
  Other                                                   18,992              717           37,982                 717
                                                ----------------  ---------------   --------------      --------------
INCOME (LOSS) BEFORE INCOME TAXES                         12,894          (69,646)           6,711            (174,012)

INCOME TAX (EXPENSE) BENEFIT                                  --               --               --                  --
                                                ----------------  ---------------   ---------------     --------------
          Net income (loss)                               12,894        $ (69,646)         $ 6,711          $ (174,712)
                                                ================  ===============   ===============     ==============


NET INCOME (LOSS) PER SHARE                             $    .00             (.02)         $   .00          $     (.05)
                                                ================  ===============   ===============     ==============

AVERAGE COMMON SHARES OUTSTANDING                      3,590,224        3,665,244        3,590,224           3,665,244
                                                ================  ===============   ===============     ==============

</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       4


<PAGE>
<TABLE>
<CAPTION>

                          PACESETTER OSTRICH FARM, INC.
                            STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                                                                                         Six Months Ended
                                                                                                              June 30,
                                                                                                        1997           1996
                                                                                                        ----           ----
<S>                                                                                              <C>           <C>   
     CASH FLOWS FROM OPERATING ACTIVITIES:
       Net Income (loss)                                                                         $   (174,012)  $       6,711
       Adjustments to reconcile net income to
       net cash provided (used) by operating activities:
         Depreciation                                                                                  71,296          71,296
         Amortization                                                                                      --          24,750
         Change in deferred revenue                                                                        --              --
         Gain (Loss) on sale of assets                                                                   (372)          5,799
         Decrease (increase) in :
           Accounts receivable, net                                                                    78,523         (98,012)
           Livestock Inventory                                                                        (83,144)         11,483
           Deposit                                                                                         --              --
           Prepaid assets                                                                                  --              --
           Other current assets                                                                       (17,545)             --
           Other assets                                                                                    --              --
         Increase (decrease) in -
           Accounts payable and accrued liabilities                                                    60,841           3,066
           Accrued interest payable                                                                    19,600         (11,250)
           Borrowings from stockholders                                                                 5,113              --
           Deferred revenue                                                                                --              --
                                                                                                 ------------    ------------
             Net cash provided (used) by operating activities                                         (39,700)            343

     CASH FLOWS FROM INVESTING ACTIVITIES:
       Acquisition of property, plant, and equipment                                                   (5,129)
       Proceeds from sale of property                                                                  60,000              --
                                                                                                 ------------    ------------
             Net cash provided (used) by investing activities                                          54,871              --

     CASH FLOWS FROM FINANCING ACTIVITIES:
       Issuance of restricted stock                                                                    22,500              --
       Offering costs                                                                                      --              --
       Repayment of notes payable                                                                     (44,738)             --
                                                                                                 ------------    ------------
             Net cash provided (used) by financing activities                                         (22,238)             --

             Net increase (decrease) in cash                                                           (7,067)            343
     CASH AND SHORT-TERM                                                                         ------------    ------------
     INVESTMENTS AT BEGINNING OF PERIOD                                                                   343              --
     CASH AND SHORT-TERM
     INVESTMENTS AT END OF PERIOD                                                                $     (6,724)   $        343
                                                                                                 ============    ============
     INCOME TAXES PAID                                                                           $         --    $         --
                                                                                                 ============    ============
     INTEREST PAID                                                                               $     25,298    $         --
                                                                                                 ============    ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       5
<PAGE>


                          Pacesetter Ostrich Farm, Inc.

                          Notes To Financial Statements
                                   (unaudited)



         1. Basis of Presentation:
            ---------------------

         The financial information included herein reflects all adjustments
         which are in the opinion of management, necessary for a fair statement
         of results for the periods. All such adjustments, in the opinion of
         management, are of normal recurring nature.

         The results of operations for the six months ended June 30, 1997 are
         not necessarily indicative of the results to be expected for the full
         year.


         2. Property, Plant, and Equipment:
            ------------------------------

         Property, plant, and equipment consist primarily of special-use assets
         for the production and raising of ostriches. The balance of property,
         plant, and equipment, stated at cost less accumulated depreciation, is
         as follows:
<TABLE>
<CAPTION>


                                              Estimated Years              June 30, 1997                  December 31, 1996
                                                  (Lives)
<S>                                                                        <C>                               <C>        
      Land                                           --                    $   144,727                       $   144,727
      Buildings and Improvements                  10 to 30                     967,995                         1,027,995
      Equipment                                    5 to 7                      401,816                           396,687
      Furniture and Fixtures                          5                         60,447                            60,447
      Construction
      in Progress                                                               31,193                            31,193
                                                                           -----------                       -----------
                                                                           $ 1,606,178                       $ 1,661,049

      Accumulated Depreciation
                                                                              (621,679)                         (550,383)
                                                                           -----------                       -----------
                                                                           $   984,499                       $ 1,110,666
                                                                           ===========                       ===========
</TABLE>

                                       6

<PAGE>


         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
                  ---------------------------------------------------------

                  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 financial statements.


         Results of Operations

                  For the calendar quarter ended June 30, 1997, sales increased
         by $67,668 from $172,342 for the quarter ended June 30, 1996 to
         $240,010 for the quarter ended June 30, 1997. Sales increased from
         $286,441 for the six months ended June 30, 1996, to $401,454 for the
         six months ended June 30, 1997. The overall increase in sales reflects
         increased international sales compared to the same periods in the prior
         year, as the Company made its first shipment to Brazil during the
         second quarter of 1997.

                  Cost of sales as a percentage of sales increased
         substantially, from $11,283, or 7% of sales, for the quarter ended June
         30, 1996, to $157,051, or 65% of sales, for the quarter ended June 30,
         1997. For the six months ended June 30, 1996 and 1997, cost of sales
         increased from $11,483, or 4% of sales, to $174,893, or 44% of sales,
         respectively. The increase in cost of sales as a percentage of sales
         from the prior year's figures was attributable to the shipping costs
         associated with the Company's first shipment of live ostriches to Sao
         Paulo, Brazil, during the second quarter of 1997. Such shipping costs
         have been recorded in full during the second quarter of 1997 based on
         the date incurred, while only those portions of the related revenue
         which were actually received from such shipment have been recognized.
         As a result, the Company expects to receive future revenues related to
         its sales in Brazil related to birds shipped in the second quarter of
         1997. The Company's gross profit decreased from $161,059 for the
         quarter ended June 30, 1996 to $82,959, or 48%, for the quarter ended
         June 30, 1997, representing an decrease of $78,100. For the six months
         ended June 30, 1996 and 1997, gross profit decreased by 18% from
         $274,958 to $226,561 respectively. Such decreases are a result of
         substantial shipping costs associated with the Company's shipment to
         Brazil in the current quarter compared to the same periods a year ago,
         as previously described.

                  Operating expenses decreased from $140,318 for the quarter
         ended June 30, 1996 to $112,867 for the quarter ended June 30, 1997
         representing a decrease of $27,451 or 20%, reflecting continued
         measures taken by the Company to reduce operating costs in
         consideration of the net operating losses experienced in the past
         several years. Operating expenses increased from $256,548 for the six
         months ended June 30, 1996, to $321,001 for the six months ended June
         30, 1997, representing an increase of $64,453 or 25%, due mostly to
         increased costs related to certain sales 

                                       7

<PAGE>

         transactions during the first quarter of 1997 which did not occur in
         the second quarter of 1997 or in any of the same periods a year ago.
         General and administrative expenses increased from $15,589 for the
         quarter ended June 30, 1996 to $20,855 for the quarter ended June 30,
         1997 representing an increase of $5,266, or 34%. General and
         administrative expenses also increased from $25,405 for the six months
         ended June 30, 1996, to $55,021 for the six months ended June 30, 1997,
         representing an increase of $29,616, or 117%. Such increases were
         mostly due to the restoration of a portion of salaries of some of the
         Company's senior management which had been voluntarily reduced in prior
         years.

                  The Company incurred a net loss of $69,646 or $0.02 per share
         for the quarter ended June 30, 1997 compared to a net profit of $12,894
         or $0.00 per share for the same quarter a year ago. The company
         incurred a net loss of $174,712 for the six months ended June 30, 1997,
         compared to a net profit of $6,711 for the six months ended June 30,
         1996. Such decreases reflect the increased initial costs previously
         described related to the Company's first shipment of ostriches to Sao
         Paulo, Brazil, as well as the conservative treatment utilized on
         recognition of related revenue which also is previously described. The
         Company also had increased general and administrative costs previously
         described which contributed to the net losses in the current year as
         compared to a year ago.


         Liquidity and Capital Resources

                  The Company has incurred substantial losses for several years
         and experienced cash flow difficulties which have caused it not to meet
         some of its obligations as they have come due. As a result, there can
         be no assurances that the Company will continue as a going concern. The
         Company believes that its ostrich inventory could be liquidated at an
         amount in excess of book value, if required. However, there is no
         guarantee that sales at such prices would be possible.

                  Net cash used by operating activities was $39,700 for the six
         months ended June 30, 1997 compared to cash provided of $343 for the
         six months ended June 30, 1996 mostly as a result of the increased net
         losses in the six months ended June 30, 1997 compared to the small net
         income of $6,711 reported the same period a year ago. Cash provided
         from investing activities increased to $54,871 for the six months ended
         June 30, 1997 compared to $0 for the six months ended June 30, 1996,
         mostly due to the completion of the Company's anticipated sale of
         property owned in Willcox, Arizona and formerly operated as a
         veterninary clinic. The Company had previously reported such
         transaction in its audited statements included with its 1996 Form
         10-KSB and 


                                       8
<PAGE>

         recorded a loss during 1996 based on the estimated sales price. Cash
         flows used in financing activities was $22,238 for the six months ended
         June 30, 1997, compared to $0 for the six months ended June 30, 1996,
         reflecting both the issuance of restricted stock and repayments of
         notes payable in the current quarter. Cash and short term investments
         for the Company decreased from $343 at June 30, 1996 to $(6,724) at
         June 30, 1997 reflecting the limited cash flow during both periods and
         as previously described.

                  The value of ostrich progeny produced by the Company's
         proprietary ostriches or derived by the Company as a result of the
         management of non-proprietary ostriches has not been reflected in the
         Company's financial statements, nor has the appreciation in value of
         ostrich chicks and yearlings acquired by the Company. In addition, no
         related costs associated with the maintenance of progeny from the
         Company's ostriches or independent owned ostriches have been assigned
         to inventory.

                  As of June 30, 1997, the Company held proprietary livestock
         with an original cost of $453,919, which management estimates to have a
         current fair market value in excess of book cost. There can be no
         assurances, however, that the Company will be able to realize such
         aggregate market value at the time of sale or other disposition.

                  As of March 13, 1997, under the Company's 1992 Incentive Stock
         Option Plan, a total of 114,500 options were issued but not exercised.
         On March 30, 1997, 10,000 additional options were issued to two of the
         Company's key employees based on an option price of $.15 per share. On
         June 15, 1997, another 10,000 options were issued to several key
         employees based on an option price of $.15 per share. As a result, a
         total of 134,500 options were issued and unexercised as of June 30,
         1997, under this Plan.

                  Additionally, as of March 31, 1997, the Company had issued
         450,000 nonqualified options, based on an option price of $.15 per
         share, to four of its senior management. As of June 30, 1997, the
         Company further issued 250,000 non-qualified options at an option price
         of $.15 per share in lieu of salary. As a result, a total of 700,000
         non-qualified options were issued and unexercised as of June 30, 1997,
         not including the total of 134,500 options issued and unexercised as of
         June 30, 1997 under the Company's 1992 Incentive Stock Option Plan as
         previously described.


         Inflation

                  While inflation has not had a material effect on the
         operations of the Company in the past, at the present time there is a
         substantial worldwide demand for ostrich products. It is anticipated
         that such market conditions will continue for the next several years,
         although as with any new commodity market, market trends and prices
         could fluctuate substantially.


                                       9
<PAGE>






                                    SIGNATURE


                  In accordance with Section 13 or 15(d) of the Exchange Act,
         the Registrant caused this report to be signed on its behalf by the
         undersigned thereunto duly authorized on this 17th day of April, 1998.

                                                PACESETTER OSTRICH FARM, INC.



                                                By:S/S Walter R. Green, Jr.
                                                   -----------------------------
                                                       Walter R. Green, Jr.
                                                       Chief Financial &
                                                       Accounting Officer