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 September 30, 1996

                           Commission File No. 1-11282

                        PACESETTER OSTRICH FARM, INC.
                        -----------------------------
                 (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
---------------------------------------------------------------
(Address of Principal Executive Offices)             (Zip Code)

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

---------------------------------------------------------------
         (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 __X___ No _____

                      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: 3,542,224 shares of Common
Stock at October 18, 1996.
<PAGE>


                          PACESETTER OSTRICH FARM, INC.


                                      INDEX


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements (unaudited)

Balance Sheets - September 30, 1996 and December 31, 1995

Statement of Operations - Three Months Ended September 30, 1995, and Three
Months Ended September 30, 1996; Nine Months Ended September 30, 1995, and Nine
Months Ended September 30, 1996

Statements of Cash Flows - Nine Months Ended September 30, 1996 and Nine Months
Ended September 30, 1995

Notes to Financial Statements


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


PART II.  OTHER INFORMATION

                                       2
<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

Item 1. Financial Statements
<TABLE>
<CAPTION>

                          PACESETTER OSTRICH FARM, INC.
                                 BALANCE SHEETS

                                     ASSETS
                                                                          September 30,  December 31,
                                                                           (unaudited)
                                                                              1996            1995
                                                                              ----            ----

<S>                                                                        <C>              <C>
CURRENT ASSETS:
  Cash and short term investments                                          $   32,696     
  Accounts receivable (net of allowance of $30,267 at
   September 30, 1996 and December 31, 1995)                                  243,204           67,187
  Livestock inventory                                                         261,801          344,677
  Other current assets                                                                           9,733
                                                                           ------------    ------------
          Total current assets                                                537,701          421,597

PROPERTY, PLANT, AND EQUIPMENT, net                                         1,144,346        1,267,986

NOTE RECEIVABLE FROM STOCKHOLDER                                               42,500           42,500

OTHER ASSETS                                                                    3,173            3,173
                                                                           ------------    ------------
    
                                                                           $1,727,720       $1,735,256
                                                                           ============    ============
                                                                             
                                 LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable and accrued liabilities                                 $  214,507       $  220,280
  Notes payable                                                               476,267          476,267
  Accrued interest
  Advances from stockholders                                                  169,317          152,960
                                                                           ------------    ------------
          Total current liabilities                                           860,091          849,507




STOCKHOLDERS' EQUITY:
Common stock, $.001 par value, 10,000,000
shares authorized, 3,590,244 and 3,542,224
shares issued and outstanding as of
September 30, 1996 and December 31, 1995,
respectively                                                                    3,590            3,590
  Additional paid-in-capital                                                3,779,217        3,779,217
  Retained earnings (deficit)                                              (2,915,178)      (2,897,058)
                                                                           ------------    ------------
                                                                              867,629          885,749
                                                                           ------------    ------------
                                                                           $1,727,720       $1,735,256
                                                                           ============    ============
</TABLE>

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

                                       3
<PAGE>

                          PACESETTER OSTRICH FARM, INC.
                            STATEMENTS OF OPERATIONS
                                 (unaudited)
<TABLE>
<CAPTION>

                                                            Three Months Ended                 Nine Months Ended
                                                              September 30,                       September 30,
                                                           1995             1996            1995                1996
                                                           ----             ----            ----                ----
<S>                                                     <C>             <C>              <C>                 <C>      
SALES                                                   $ 51,717        $ 324,305        $ 425,105           $ 610,746

COST OF SALES                                              4,609          125,552          116,301             137,035
                                                     --------------   -------------- ---------------      --------------
          Gross profit                                    47,108          198,753          308,804             473,711

OPERATING EXPENSES:
  Operating                                              185,892          217,625          668,170             474,173
  General and administrative                              26,236           10,727          111,557              36,132
                                                    --------------   --------------  --------------       --------------
  Operating Income (loss)                               (165,020)         (29,599)        (470,923)            (36,594)

OTHER INCOME (EXPENSES):
  Interest                                               (12,037)         (14,225)         (36,734)            (38,501)
  Other                                                    1,828           18,993           10,630              56,975
                                                    --------------   --------------  --------------       --------------
INCOME (LOSS) BEFORE INCOME TAXES                       (175,229)         (24,831)        (497,027)            (18,120)

INCOME TAX (EXPENSE) BENEFIT                              --               --                 --                  --
                                                    --------------   --------------  --------------       --------------
          Net income (loss)                           $ (175,229)       $ (24,831)      $ (497,027)          $ (18,120)
                                                    ==============   ==============  ==============       ==============


NET INCOME (LOSS) PER SHARE                            $ (0.05)         $ (0.01)         $ (0.14)             $ (0.01)
                                                    ==============   ==============  ==============       ==============

AVERAGE COMMON SHARES OUTSTANDING                      3,542,224        3,590,244        3,542,224           3,590,244
                                                    ==============   ==============  ==============       ==============

</TABLE>

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

                                       4
<PAGE>

                          PACESETTER OSTRICH FARM, INC.
                             STATEMENT OF CASH FLOWS
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                          Nine Months Ended
                                                                             September 30,
                                                                        1996           1995
                                                                        ----           ----
     
<S>                                                             <C>             <C>           
     CASH FLOWS FROM OPERATING ACTIVITIES:
       Net Income (loss)                                        $     (18,120)  $    (497,027)
       Adjustments to reconcile net income to
       net cash provided (used) by operating activities:
         Depreciation                                                 106,944         128,277
         Amortization                                                     --            2,214
         Change in deferred revenue                                       --          895,000
         Gain (Loss) on sale of assets                                 16,696            --
         Decrease (increase) in :
           Accounts receivable, net                                  (176,017)       (921,850)
           Livestock Inventory                                         82,876          74,049
           Deposit                                                        --             --
           Prepaid assets                                                 --             --
           Other current assets                                         9,733            --
           Other assets                                                   --             --
         Increase (decrease) in -
           Accounts payable and accrued liabilities                    (5,773)        372,022
           Accrued interest payable                                       --          (11,750)     
           Borrowings from stockholders                                16,357          20,578
           Deferred revenue                                               --             --
                                                                    ------------   ------------
             Net cash provided (used) by operating activities          32,696          61,513

     CASH FLOWS FROM INVESTING ACTIVITIES:
       Acquisition of property, plant, and equipment                      --          (12,073)
                                                                    ------------   ------------
             Net cash used by investing activities                        --          (12,073)

     CASH FLOWS FROM FINANCING ACTIVITIES:
       Net proceeds from note payable                                     --             --
       Net proceeds from exercise of overallotment
       Offering costs                                                     --             --
       Repayment of notes payable                                         --           (2,234)
                                                                    ------------    ------------
             Net cash provided (used) by financing activities             --           (2,234)

             Net increase (decrease) in cash                           32,696          47,206
     CASH AND SHORT-TERM                                            ------------   ------------
     INVESTMENTS AT BEGINNING OF PERIOD                                   --            7,596
     CASH AND SHORT-TERM
     INVESTMENTS AT END OF PERIOD                               $      32,696     $    54,802
                                                                    ============   ============
     INCOME TAXES PAID                                          $        --       $        --
                                                                    ============   ============
     INTEREST PAID                                              $        --       $    34,976
                                                                    ============   ============
</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 nine months ended September 30, 1996
         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         September 30, 1996               December 31, 1995
                                                     (Lives)

<S>                                                 <C>                         <C>                               <C>        
      Land                                              --                   $   144,727                       $   144,727
      Buildings and Improvements
                                                     10 to 30                  1,027,995                         1,050,592
      Equipment                                       5 to 7                     396,687                           396,687
      Vehicles                                          5                         60,447                            60,447
      Construction
      in Progress                                                                 31,193                            31,193
                                                                               ---------                         ---------
                                                                             $ 1,661,049                       $ 1,683,646

      Accumulated Depreciation
                                                                                (516,703)                        (415,660)
                                                                              ----------                        ----------
                                                                             $ 1,144,346                       $ 1,267,986
                                                                              ==========                        ==========
</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 September 30, 1996, sales
         increased by $272,588 from $51,717 for the quarter ended September 30,
         1995 to $324,305 for the quarter ended September 30, 1996. The increase
         in revenues during this period was attributable mostly to increases in
         international sales of birds as compared to the same quarter in the
         prior year.

                  Cost of sales as a percentage of sales increased from 9% for
         the quarter ended September 30, 1995, to 39% for the quarter ended
         September 30, 1996. This increase in cost of sales as a percentage of
         sales was attributable to a portion of the Company's international
         sales being derived from adult birds having a higher inventory cost
         basis which was recorded in prior years. There were no charges for
         ostrich mortality included in cost of sales for the quarter ended
         September 30, 1996, and 1995, respectively. The decrease in mortality
         reflects the decrease in the number of birds acquired and physically
         transported compared to a year ago, as well as the implementation of
         additional internal procedures as a means of reducing the incidence of
         mortality. The Company's gross profit increased from $47,108 for the
         quarter ended September 30, 1995 to $198,753 for the quarter ended
         September 30, 1996, representing an increase of $151,645 as a result of
         its international sales described above.

                  Operating expenses increased from $185,892 for the quarter
         ended September 30, 1995 to $217,625 for the quarter ended September
         30, 1996 representing an increase of $31,733 or 17% due to costs in
         conjunction with its international shipments of live birds compared to
         the same period a year ago. General and administrative expenses
         decreased from $26,236 for the quarter ended September 30, 1995 to
         $15,509 for the quarter ended September 30, 1996 mostly due to the
         continued voluntary reductions in salaries of the Company's senior
         management.

                  The Company incurred a net loss of $24,831 or $0.01 per share
         for the quarter ended September 30, 1996 compared to a net loss of
         $175,229 or $0.05 per share for the quarter ended September 30, 1995.
         The net loss for the quarter ended September 30, 1996 was reduced from
         the prior year due not only to the Company's international sales, but
         also to the continued voluntary reduction in general and administrative
         costs.


                                       7
<PAGE>






         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. The Company signed a
         significant ostrich delivery contract in 1995 and received
         approximately $1 million in October 1995. Since that time, the Company
         has operated on a combination of both international and domestic sales.
         Although international sales have represented a higher return than
         domestic sales, there are no assurances that such shipments will be
         completed or that the contract will be profitable. As a result, there
         can be no assurances that the Company will continue as a going concern.
         In absence of such shipments, 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 or as to the timeliness of such liquidation.

                  Net cash provided by operating activities was $61,513 for the
         nine months ended September 30, 1995 compared to $32,696 for the nine
         months ended September 30, 1996 mostly as a result of the increases in
         accounts payable in the nine months ended September 30, 1995 compared
         to a slight decrease in accounts payable in the nine months ended
         September 30, 1996. Cash used by investing activities decreased from
         $12,073 to $0 for the nine months ended September 30, 1995 and 1996,
         respectively, due to the elimination of expansion at the Willcox,
         Arizona facility compared to the prior year. Net cash used by financing
         activities decreased from cash used of $2,234 for the nine months ended
         September 30, 1995 compared to $0 for nine months ended September 30,
         1996, reflecting repayments of notes payable in 1995 that did not exist
         in 1996. Cash and short term investments for the Company decreased from
         $54,802 at September 30, 1995 to $32,696 at September 30, 1996
         reflecting the receipt of cash near the end of the prior year's third
         quarter which was not paid out until early in the prior year's fourth
         quarter.

                  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.



                                       8
<PAGE>




         As of September 30, 1996, the Company held proprietary livestock with a
         cost basis of $261,801, which management estimates to have a current
         fair market value in excess of 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.

         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>




         ITEM 7.  FINANCIAL STATEMENTS

                  The financial statements and supplementary data are included
under Item 13(a)(1) and (2) of this Report.


         ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING 
                  AND FINANCIAL DISCLOSURE

                  None.





                                       10
<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 24th day of March, 1998.

                                              PACESETTER OSTRICH FARM, INC.

                                              By: /s/ WALTER REID GREEN,JR.
                                                  -------------------------
                                                      Walter R. Green, Jr.
                                                      Chief Financial &
                                                      Accounting Officer