U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

   X    Quarterly report pursuant to section 13 or 15(d) of the Securities
        Exchange Act of 1934 for the quarterly period ended September 30, 1996

        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 0-28058

                              BIG CITY BAGELS, INC.
        (Exact Name of Small Business Issuer as Specified in its Charter)

                  New York                             11-3137508
         (State or Other Jurisdiction of             (I.R.S. Employer
         Incorporation of Organization)              Identification No.)

                     99 Woodbury Road, Hicksville, NY 11801
                    (Address of Principal Executive Offices)

                                 (516) 932-5050
                 (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  preceding 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing requirements for the past 90 days. Yes X No

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practicable  date:  At November 13, 1996,  Issuer had
outstanding 4,808,750 shares of Common stock, par value $.001 per share.

                               Page 1 of 14 Pages
                             Exhibit Index - Page 13


<PAGE>




PART 1.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                                               BIG CITY BAGELS, INC.
                                            CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
    
                                                                                            December 31, 1995     September 30,1996
                        ASSETS
                        <S>                                                                           <C>                   <C>

                 Current Assets:
                  Cash ...............................................................           $    37,991            $ 1,362,180
                  United States Treasury Bills .......................................                     0                978,800
                  Accounts Receivable ................................................                19,580                 94,447
                  Inventory ..........................................................                47,933                 57,736
                  Promissory Note Receivable .........................................                     0                 40,000
                  Prepaid Expenses and Other Current Assets ..........................                 9,572                 41,864
                                                                                                ------------            -----------
                      Total Current Assets ...........................................           $   115,076            $ 2,575,027

                 Fixed Assets, Net of Accumulated Depreciation .......................               934,378                902,813
                 Intangible Assets, Net of Accumulated ...............................                31,230                307,485
                 Amortization
                 Deferred Registration Costs .........................................                25,000                      0
                 Security Deposits ...................................................                31,947                 33,312
                                                                                                 -----------            -----------
                      TOTAL ..........................................................           $ 1,137,631            $ 3,818,637
                                                                                                 ===========            ===========

LIABILITIES AND STOCKHOLDERS' EQUITY AND PARTNERS' CAPITAL
                 Current Liabilities:
                  Stockholder and Partner Loans ......................................           $   200,000            $    72,000
                  Notes Payable ......................................................                87,712                 10,485
                  Unearned Franchise Fee Income ......................................               309,250                242,000
                  Accounts Payable ...................................................               278,390                174,457
                  Accrued Expenses ...................................................                35,660                  8,408
                                                                                                 -----------            -----------
                      Total Current Liabilities ......................................           $   911,012            $   507,350

                 Deferred Rent Payable ...............................................                26,261                 20,997
                 Loans Payable, Noncurrent ...........................................                11,044                  5,654
                 Stockholder and Partner Loans, Noncurrent ...........................               262,468                 43,347
                                                                                                 -----------            -----------
                      Total Liabilities ..............................................           $ 1,210,785            $   577,348
                                                                                                 -----------            -----------

                 Stockholders' Equity and Partners' Capital:
                   Preferred Stock $.001 par value; 1,000,000
                   shares authorized; no shares outstanding
                 Common Stock $.001 par value; 10,000,000
                   shares authorized; 2,818,750 shares issued and
                   outstanding, December 31, 1995; and
                   4,808,750 shares issued and outstanding
                   September 30, 1996 ................................................                 2,819                  4,809
                 Additional Paid-In Capital ..........................................               972,181              4,185,288
                 Partners' Capital ...................................................               255,456                      0
                 Accumulated Deficit .................................................            (1,303,610)              (903,808)
                 Unearned Portion of Compensatory Stock ..............................                     0                (45,000)
                                                                                                   ----------           -----------
                      Total Stockholders' Equity(Deficiency)
                           and Partners' Capital .....................................               (73,154)             3,241,289
                                                                                                 ------------           -----------
                      TOTAL ..........................................................           $ 1,137,631            $ 3,818,637
                                                                                                ============           ============
</TABLE>

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

                                                            -2-

<PAGE>



                                                   BIG CITY BAGELS, INC.
                                           CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>


                                                          Nine Months Ended                  Three Months Ended
                                                             September 30,                      September  30,
                                                          1996            1995            1996              1995
<S>                                                       <C>              <C>            <C>               <C> 

REVENUES:

 Product Sales by Company-Owned                       $1,033,914         $973,893        $352,864         $333,389
      Stores

 Product Sales to Franchisees and                        303,350          110,745         105,062           37,260
      Others

 Franchise Fees                                          271,000           10,000          85,500                0

 Royalty Income                                           89,031           13,069          36,886            4,641
                                                    -----------------------------------------------------------------------------

     Total Revenues                                    1,697,295        1,107,707         580,312          375,290
                                                    -----------------------------------------------------------------------------



COSTS AND EXPENSES:

 Cost of Sales                                           591,337          390,180         206,349          138,535

 Selling, General and Administrative                   2,220,445        1,326,053         894,696          457,540

 Amortization of Debt Discount                           683,542                0               0                0
        on Bridge Loan

 Interest Expense (Income), Net                           14,226           18,853         (25,182)           8,326
                                                    -----------------------------------------------------------------------------

     Total Costs and Expenses                          3,509,550        1,735,086       1,075,863          604,401
                                                    -----------------------------------------------------------------------------



NET LOSS                                             $(1,812,255)       $(627,379)      $(495,551)       $(229,111)
                                                    =============================================================================



Net Loss Per Common Share                                 $(0.46)          $(0.21)         $(0.10)          $(0.08)
                                                    =============================================================================


Weighted Average Common Shares
   Outstanding                                         3,933,079        3,000,000       4,808,750        3,000,000
                                                    =============================================================================

</TABLE>




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

                                                            -3-

<PAGE>



                              BIG CITY BAGELS, INC.
      CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND PARTNERS' CAPITAL
<TABLE>
<CAPTION>

                                                              Additional                            Unearned Portion of
                                             Common Stock      Paid-In     Partners' Accumulated    Compensatory Stock
                                         Shares      Amount    Capital     Capital     Deficit        Shares     Amount     Total
                                         ------      ------    -------     -------     -------        ------     ------     -----
<S>                                        <C>        <C>        <C>        <C>         <C>            <C>        <C>       <C>

BALANCE, January 1, 1996               2,818,750     $2,819    $972,181    $255,456  $(1,303,610)                         $(73,154)

Issuance of Rights to Receive Bridge                            683,542                                                    683,542
    Units and Warrants

Exchange of Partnership Interests        181,250        181     500,565    (211,199)                                       289,547
    For Common Stock

Termination of S Corporation Status                          (2,167,800)               2,167,800                                 0

Shares Issued Through Public           1,293,750      1,294   4,137,315                                                  4,138,609
Offering

Exercise of Rights to Receive Bridge     500,000        500        (500)                                                         0
    Units

Shares Issued as Compensation             15,000         15      59,985                               15,000  $(60,000)          0

Amortization of Compensatory Stock                                                                              15,000      15,000

Net Loss                                                                    (44,257)  (1,767,998)                       (1,812,255)
                                       --------------------------------------------------------------------------------------------



BALANCE, September 30, 1996            4,808,750    $4,809   $4,185,288          $0    $(903,808)     15,000  $(45,000) $3,241,289
                                       ============================================================================================

</TABLE>





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

                                                            -4-

<PAGE>



                              BIG CITY BAGELS, INC.
                       CONSOLIDATED CASH FLOWS STATEMENTS
                     FOR THE NINE MONTHS ENDED SEPTEMBER 30,

<TABLE>
<CAPTION>

                                                                             1996                    1995
                                                                           -------                -------
<S>                                                                         <C>                      <C>   

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss                                                                  $(1,812,255)              $(627,379)
                                                                        --------------------------------------------------

Adjustments to Reconcile Net Loss to Net Cash Used
in Operating Activities:
   Depreciation and Amortization                                              121,786                82,971
   Amortization of Debt Discount on Bridge Loans                              683,542                     0
   (Increase) Decrease in:
     Accounts Receivable                                                      (74,867)               (8,756)
     Inventory                                                                 (9,803)               (9,137)
     Notes Receivable                                                         (40,000)                    0
     Prepaid Expenses and Other Current Assets                                (32,292)               (6,176)
   Increase (Decrease) in:
     Unearned Franchise Fee Income                                            (67,250)              216,000
     Deferred Rent Payable                                                     (5,264)                1,242
     Accounts Payable                                                        (103,933)               56,391
     Accrued Expenses                                                         (27,252)               99,392
                                                                        --------------------------------------------------
Total Adjustments                                                             444,667               431,927
                                                                        --------------------------------------------------
Net Cash Used in Operating Activities                                      (1,367,588)             (195,452)
                                                                        --------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of Fixed Assets                                                  (61,929)              (15,379)
   Increase in Security Deposits                                               (1,365)               (1,922)
   Purchase of United States Treasury Bills                                  (978,800)                    0
                                                                        --------------------------------------------------
Net Cash Used in Investing Activities                                      (1,042,094)              (17,301)
                                                                        --------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net Proceeds from Public Offering                                        4,163,609                     0
   Proceeds from Bridge Loan                                                1,000,000                     0
   Repayment of Bridge Loan                                                (1,000,000)                    0
   Proceeds from Stockholder Loans                                                  0               203,468
   Repayment of Stockholder Loans                                            (347,121)                    0
   Repayment of Notes Payable                                                 (82,617)                    0
                                                                        --------------------------------------------------
Net Cash Provided by Financing Activities                                   3,733,871               203,468
                                                                        --------------------------------------------------

NET INCREASE (DECREASE) IN CASH                                             1,324,189                (9,285)
Cash, Beginning                                                                37,991                51,594
                                                                        --------------------------------------------------
Cash, Ending                                                               $1,362,180               $42,309
                                                                        ==================================================

Supplemental Disclosure of Cash Paid:
   Interest                                                                   $89,519                    $0
   Income Taxes                                                                 1,925                 2,778

Supplemental Disclosure of Noncash Financing Transactions:
     (1)      Upon the completion of the public offering, the Company acquired the limited partners
              interest in Pumpernickel Partners, L.P. and the capital stock of Bagel Partners, Inc.  for
              181,250 shares of common stock.
     (2)      The Company issued to an employee 15,000 shares of its common stock which vest over
              two years.

</TABLE>

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

                                                            -5-

<PAGE>



                              BIG CITY BAGELS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(NOTE A) -        The Company and Basis of Presentation:

                  The information herein is unaudited.  However,  in the opinion
                  of  management,  such  information  reflects  all  adjustments
                  (consisting  only of normal recurring  accruals)  necessary to
                  make the financial statements not misleading. Additionally, it
                  should be noted that the accompanying  consolidated  financial
                  statements do not purport to contain  complete  disclosures in
                  conformity with generally accepted accounting principles.

                  The results of operations for the nine months ended  September
                  30,  1996 are not  necessarily  indicative  of the  results of
                  operations for the full fiscal year ending December 31, 1996.

                  These  statements  should  be read  in  conjunction  with  the
                  Company's  financial  statements  for the  fiscal  year  ended
                  December 31, 1995 appearing in the Company's  Prospectus dated
                  May 7, 1996.

                  The Company  commenced  operations  in 1993.  Big City Bagels,
                  Inc. ("Big City") operates and franchises  retail bagel stores
                  and sells its products  wholesale to  commercial  accounts and
                  food   service   operators.    Pumpernickel   Partners,   L.P.
                  ("Pumpernickel") operates two such bagel stores. The financial
                  statements of the Company  prior to May 13, 1996,  include the
                  combined accounts of Big City and Pumpernickel  (collectively,
                  the  "Company"),  which were under common control through such
                  date, as the principal  stockholders of Big City were also the
                  principal   stockholders  of  Bagel  Partners,   Inc.  ("Bagel
                  Partners"),  the general partner of  Pumpernickel.  At May 13,
                  1996,   the   limited   partners  of   Pumpernickel   and  the
                  stockholders   of  Bagel  Partners,   Inc.,   exchanged  their
                  partnership   interests   and   all   their   capital   stock,
                  respectively,  for  181,250  shares  of the  Company's  common
                  stock.   Accordingly,   from  May  13,  1996,   the  financial
                  statements of the Company reflect the consolidated  results of
                  Big City and its wholly-owned  subsidiaries,  Pumpernickel and
                  Bagel  Partners.  All  significant  intercompany  balances and
                  transactions have been eliminated.

                  The  transaction  described  in the  preceding  paragraph  was
                  accounted   for  as  a  purchase  of  the   interests  of  the
                  unaffiliated  limited  partners  in  Pumpernickel.  The common
                  stock  issued to the  stockholders  of Bagel  Partners and the
                  affiliated  limited  partners  of  Pumpernickel  was valued at
                  their respective equity interests in Pumpernickel.  The excess
                  of the fair  value of the  shares  of  common  stock  (144,535
                  shares)  issued to such limited  partners over the book amount
                  of their  interest in  Pumpernickel  has been  assigned to the
                  franchise  costs and included  with  intangible  assets in the
                  accompanying balance sheet ($289,547).

                  In February  1996,  the Company  amended  its  certificate  of
                  incorporation,  increasing its authorized shares, and in March
                  1996, the Company effected a 28,187.5 for 1 stock split of its
                  common  stock  in the  form of a  stock  dividend  payable  to
                  shareholders  of record on April 1, 1996 at the closing of the
                  Company's   initial   public   offering   of  its   securities
                  ("Offering").  The accompanying  financial  statements reflect
                  these transactions retroactively.

                  On  May  13,  1996  the  Company  completed  the  Offering.  
                  In  connection therewith, the Company raised  gross  proceeds
                  of  $5,175,000.  The  Offering consisted of 1,293,750

                                                            -6-

<PAGE>



                  units  (including the  underwriters  over-allotment  option of
                  168,750  units),  at a price  of $4.00  per  unit,  each  unit
                  consisting  of one  share  of  common  stock  and one  Class A
                  warrant  which  entitles  the holder  thereof to purchase  one
                  share of common  stock at $4.50  per  share  for a  three-year
                  period  commencing  one year after the  effective  date of the
                  Offering.

(NOTE B) -        Net (Loss) Per Share:

                  Net (loss) per share is computed on the basis of the  weighted
                  average number of common shares outstanding during each period
                  adjusted  for  the  28,187.5  to 1 stock  split  and as if the
                  exchange  described in Note A had occurred on January 1, 1995.
                  Warrants to purchase shares of common stock are  anti-dilutive
                  and are excluded from the calculation.

(NOTE C) -        Bridge Financing:

                  In January  1996,  the Company  completed a bridge  financing,
                  pursuant  to which it issued (i) an  aggregate  of  $1,000,000
                  principal amount of promissory  notes,  which bear interest at
                  the rate of 8% per annum  ("Bridge  Notes") and (ii) the right
                  to receive upon the completion of the Offering an aggregate of
                  500,000  bridge units and 500,000  Class B  redeemable  common
                  stock purchase warrants ("Class B warrants"). Each bridge unit
                  consists  of  one  share  of  common  stock  and  one  warrant
                  identical  to the Class A  warrants  described  in Note A. Two
                  Class  B  warrants,  together,  will  entitle  the  holder  to
                  purchase  one share of  common  stock  for  $8.00  during  the
                  three-year  period commencing one year after the completion of
                  the  Offering.  The bridge units and Class B warrants  contain
                  registration rights and the Company registered such securities
                  simultaneously with the Offering.  The units and warrants have
                  been valued at $684,000 and have been  accounted for as a debt
                  discount  increasing the effective  interest rate on the notes
                  to 169%. The promissory notes were repaid with the proceeds of
                  the Offering.

(NOTE D) -        Stockholder and Partner Loans:

                  $375,000 of the  proceeds of the  Offering  were used to repay
                  stockholder and partner loans, including accrued interest. The
                  balance is to be paid monthly with interest at 10%  commencing
                  January 1997.

(NOTE E)-         Common Stock:

                  The  Company  adopted  its 1996  Performance  Equity Plan (the
                  "Plan")  which  provides  for the  issuance of awards of up to
                  350,000  shares  of  common  stock  to  employees,   officers,
                  directors and consultants. The awards may consist of incentive
                  stock options,  nonqualified options, restricted stock awards,
                  deferred  stock awards,  stock  appreciation  rights and other
                  awards as  described  in the Plan.  The  Company  has  granted
                  options to purchase  7,500  shares of common  stock to each of
                  two independent consultants of the Company, at exercise prices
                  of $4.00 per share.  The Company also has granted a restricted
                  stock award of 15,000 shares of common  stock,  that will vest
                  in two years, to an employee.



                                                            -7-

<PAGE>



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

The following  discussion and analysis  should be read in  conjunction  with the
Company's financial  statements and the notes hereto. The discussion of results,
causes and trends  should not be  construed  to imply any  conclusion  that such
results or trends will necessarily continue in the future.

RESULTS OF OPERATIONS

Revenues for the three and nine months ended  September  30, 1996 were  $580,312
and   $1,697,295,   respectively,   a  54.63%  and  53.23%   increase  from  the
corresponding periods of the previous year. This increase is attributable to the
gains in the following  areas:  store and commissary  products sales,  franchise
fees,  and royalty  income.  Store and commissary  products  sales  increased to
$87,277 and  $252,626 for the three and nine months  ended  September  30, 1996,
respectively, a 23.55% and 23.29% increase from the corresponding periods of the
previous  year.  This  increase is due to the maturing of  Company-owned  retail
operations,  the growth of the wholesale business,  and the increased commissary
sales to franchise stores which opened in 1996. Franchise fees for the three and
nine months ended September 30, 1996,  were $85,500 and $271,000,  respectively.
No  franchise  fees were  recognized  during  the three  and nine  months  ended
September  30, 1995.  Franchise  fees  increased by $261,000 for the nine months
ended  September  30, 1996.  Revenue  under  franchise  agreements  is generally
recognized when the franchise stores are opened.  Three stores opened during the
three months ended  September 30, 1996; no stores opened during the three months
ended  September  30,  1995.  Nine stores  opened  during the nine months  ended
September  30,  1996 (one  stored  closed  during the nine month  period and the
franchisee was relieved of its franchise  obligations);  no stores opened during
the nine months ended September 30, 1995.

The Company had unearned  franchise  fee income of $242,000 as of September  30,
1996.  The  Company  had  $281,000  of  unearned  franchise  fee  income for the
corresponding  period  of the  previous  year.  Unearned  franchise  fee  income
represents  non-refundable franchise fees which will be recognized as revenue as
the related  franchise stores are opened.  In the first nine months of 1996, the
Company entered into three new franchise agreements and two new area development
agreements (one twelve-store agreement and one three-store  agreement).  For the
nine months ended  September  30,  1995,  the Company  signed  three  individual
franchise agreements,  and entered into three area development  agreements (each
being a  three-store  agreement).  One of these  three-  store area  development
agreements, entered into in 1995, was terminated in 1996.

Royalty  income for the three and nine months  ended  September  30,  1996,  was
$36,886 and  $89,031,  respectively,  a 694.79% and  581.24%  increase  from the
corresponding  periods of the  previous  year.  This is due to the  maturing  of
operations  of existing  franchise  stores and the initial  operations  of three
franchise  stores and nine  franchise  stores  during the three and nine  months
ended September 30, 1996, respectively.

Cost of sales were  $206,349  and $591,337 or 45.06% and 44.22% of net sales for
the three and nine months ended  September 30, 1996, as compared to $138,535 and
$390,180 or 37.38% and 35.97% for the  corresponding  periods of the prior year.
The  increase  in the cost of sales is  attributable  to an increase in sales to
franchisees  which are at a lower gross profit  percentage  and that the Company
has not raised the selling  price of its product  while its material  costs have
increased.  The Company raised retail prices at the Company-owned stores in July
1996.

Selling,  general and  administrative  expenses (SG&A) increased by $437,156 and
$894,392,  respectively,  a 95.54%  and  67.45%  increase  in the three and nine
months ended September 30, 1996, as compared to the corresponding periods of the
previous  year.  This  increase  was  primarily  due to  increases  in salaries,
advertising,  insurance,  professional  fees and travel that were  mandated by a
growing business.

                                                            -8-

<PAGE>




Amortization  of debt  discount on the Bridge  Notes for the nine  months  ended
September  30,  1996  was  $683,542.  There  was no  such  amortization  for the
corresponding period in 1995.

Interest  expense for the three and nine  months  ended  September  30, 1996 was
$6,196 and  $64,566,  respectively,  as  compared  to $8,357 and $18,948 for the
corresponding  periods of the previous  year.  This change is  primarily  due to
interest on the  $1,000,000  of Bridge  Notes and  shareholder  loans.  Interest
income for the three and nine months  ended  September  30, 1996 was $31,378 and
$50,340,  respectively,  as compared to nominal  amounts in the preceding  year.
This  increase is primarily  due to the  investments  of the  proceeds  from the
Offering.

Net losses for the three and nine months ended  September 30, 1996 were $495,551
and $1,812,255, respectively, as compared to net losses of $229,111 and $627,379
for the  corresponding  periods of the prior year. The primary reasons for these
increases  are due to the  amortization  of debt discount on the Bridge Notes in
the first six months of 1996,  increases in officers'  and  operating  salaries,
interest,  advertising,   professional  fees,  insurance,  travel,  storage  and
distribution expenses.

LIQUIDITY AND CAPITAL RESOURCES

In May 1996,  the  Company  completed  the  Offering,  at which time the Company
received net proceeds of approximately $4,100,000.

Cash and United States Treasury Bills at September 30, 1996 were $2,340,980,  as
compared to $37,991 at December 31, 1995. This increase in cash was attributable
to the Company's receipt of proceeds from the Offering.

Accounts  receivable  increased to $94,447 at September 30, 1996 from $19,580 at
December 31, 1995.  This  increase was  primarily due to increases in commissary
sales and the Company-owned stores' wholesale business.

Prepaid  expenses and other current assets increased to $41,864 at September 30,
1996 from $9,572 at  December  31,  1995.  The  increase  was  primarily  due to
increases in payments made on various insurance policies.

The current  portion of stockholder  and partners' loans decreased to $72,000 at
September  30,  1996 from  $200,000 at  December  31,  1995.  The  decrease  was
attributable  to the  repayment  of such loans  from the  proceeds  the  Company
received from the Offering.

The current portion of notes payable decreased to $10,485 at September 30, 1996,
from  $87,712 at  December  31,  1995.  The  Company  paid these  notes from the
proceeds of the Offering.

The combination of accounts payable and accrued  expenses  decreased to $182,865
at  September  30, 1996 from  $314,050 at December  31,  1995.  The  decrease of
$131,185  was  primarily  due to the Company  making  payments to suppliers on a
current  basis  as a  result  of the  proceeds  the  Company  received  from the
Offering.

At  September  30, 1996,  the Company had  $2,067,677  of working  capital and a
current  ratio of 5.1 to 1,  principally  due to the proceeds  received from the
Offering.

                                                            -9-

<PAGE>




The  Company's  operating  activities  used  $1,367,588  of net cash in the nine
months ended  September 30, 1996, as compared to $195,452 used in operations for
the corresponding  period of the prior year. The $1,172,136 increase of net cash
used by operations  was primarily due to the increase of the Company's net loss.
The Company  anticipates  that its current  working  capital  combined with cash
generated  from  continuing  operations  will be  sufficient  to meet  operating
requirements for a period of twelve months.

The Company does not have any specific additional capital  requirements,  either
short  term or long term,  except as  discussed  below and  except  for  general
working capital purposes.

The Company  anticipates  increasing  revenues and thereby generating  operating
cash flow in the future by implementing the following actions:

     . Increasing  Product Sales. The Company intends to open new  Company-owned
       retail  stores  and  expects  increased  sales  from  its  commissary  in
       California to new  franchise  stores.  The Company  provides a variety of
       items and  continuously  develops  new  products to increase  sales.  The
       Company is currently  servicing many wholesale  accounts and expects this
       business  to  grow  due  to an  increase  in  name  recognition,  product
       acceptance and additional sales efforts.

     . Expanding  Franchise  Operations.  The Company  will  continue to utilize
       capital to increase  franchise  sales by (i)  advertising in national and
       regional  publications  and business  magazines,  including  developing a
       franchise sales video and appearing on national  television  programs and
       (ii) possibly hiring  additional sales personnel.  The Company expects to
       increase its franchise sales by opening Company-owned  flagship stores in
       markets  that  would  generate   interest  for  experienced   multi-store
       developers to enter into area development agreements.

     . Store Operations.  The Company recently has hired experienced multi-unit
       food service operation personnel and intends to improve store operations
       and management.

     . Making Acquisitions.  The Company intends to acquire other bagel stores
       or complementary types of retail outlets which provide entry into new 
       markets.

Although  these actions will require  significant  costs and  expenditures,  the
Company  anticipates,  based on current  plans and  assumptions  relating to its
operations,  that the proceeds that it received from the Offering, together with
existing  resources and cash generated from operations,  if any, will enable the
Company to  accomplish  its  immediate  goals of  increasing  product  sales and
expanding franchise operations, although there can be no assurance of this.

                                                           -10-

<PAGE>







PART II - OTHER INFORMATION

Item 5 - Other Information

On November 5, 1996,  the Company  delisted  its Units from the Nasdaq  SmallCap
Market. The Units traded under the symbol BIGCU.

On October 16, 1996,  the Company  increased  the size of its Board of Directors
from four members to five members and elected  Stephen J. Drescher,  Director of
Corporate Finance at Monroe Parker Securities,  Inc. ("Monroe Parker"),  to fill
the newly created  directorship.  Mr. Drescher is the designee of Monroe Parker,
which is entitled to designate  one person for  nomination  as a director of the
Company until May 1999 pursuant to the  Underwriting  Agreement  entered into by
the Company in connection with the Offering.

Item 6 - Exhibits and Reports on Form 8-K.

     (a) Exhibits.

          27.  Financial Data Schedule (9/30/96).

     (b) Reports on Form 8-K.

          None

                                                           -11-

<PAGE>



                                    SIGNATURE


     Pursuant to the  requirements  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.



                                             Big City Bagels, Inc
                                             (Registrant)


     Dated:  November 14, 1996
                                       By: /s/ Mark Weinreb
                                           Mark Weinreb, Chairman of the Board,
                                           Chief Executive Officer and Chief
                                           Financial Officer (and principal
                                           accounting officer)

                                                           -12-

<PAGE>



EXHIBIT INDEX

EXHIBIT NUMBER         DESCRIPTION                             PAGE
            27         Financial Data                           14
                       Schedule (9/30/96)


                                                           -13-

<PAGE>