<PAGE>
 
                   U. S. SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                  FORM 10-QSB

[X ]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934  For the quarterly period ended December 31, 1997

                                      or

[  ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

        For the transition period from ________________ to ______________


                          Commission file No. 0-18139

                           CREATIVE RESOURCES, INC.
                (Name of small business issuer in its charter)

      Nevada                                    22-2798898
      (State or other jurisdiction of       (I.R.S. Employer
      incorporation or organization)               Identification No.)

      26 Mill Plain Road, Suite 2B
           Danbury, CT                                06811
 (Address of principal executive offices)           (Zip Code)

        Issuer's telephone number, including area code:  (203) 778-5002

      Check whether the Registrant (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 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 stock as of February 2, 1998.

                Class                           Outstanding
                -----                           -----------

       Common Stock ($.01 par value)             34,983,110

                                       1
<PAGE>
 
                        PART I.  FINANCIAL INFORMATION
 
Item 1. Financial Statements

 
                   CREATIVE RESOURCES, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
<TABLE> 
<CAPTION> 
                                                                     Dec. 31,      March 31,
                                                                       1997          1997  
                                                                       ----          ----  
                ASSETS                                             (unaudited)              
<S>                                                             <C>           <C> 
CURRENT ASSETS:
  Cash and cash equivalents                                     $     1,828   $    68,549
  Prepaid expenses                                                    5,000             -
  Notes receivable                                                    1,597         2,236
                                                                 ----------    ----------
      TOTAL CURRENT ASSETS                                            8,425        70,785
 
Furniture, fixtures and equipment, at cost, less accumulated
  depreciation of $7,039 and $6,024 at Dec. 31, and
  March 31, 1997 respectively                                         3,462         4,477
                                                                 ----------    ----------
 
                                                                $    11,887   $    75,262
                                                                 ==========    ==========
 
   LIABILITIES AND CAPITAL DEFICIT
 
CURRENT LIABILITIES:
  Accounts payable and accrued expenses                         $    39,180   $    12,107
  Officer loan payable                                                  500             -
  Dividends payable                                                  25,200        25,200
  Accrued compensation                                              100,000       257,650
  Current maturities of capital lease obligations                       606         3,129
                                                                 ----------    ----------
      TOTAL CURRENT LIABILITIES                                     165,486       298,086
                                                                 ----------    ----------

      TOTAL LIABILITIES                                             165,486       298,086
                                                                 ----------    ----------
 
CAPITAL DEFICIT:
  Preferred stock, $1 par value, 500,000 shares authorized:
   Series A, 8% cumulative convertible preferred stock,
   $1 redemption value, 210,000 shares issued and outstanding       210,000       210,000
  Common stock, $.01 par value, 100,000,000 shares authorized,
   34,983,110 shares issued and outstanding                         349,831       349,831
  Additional paid-in capital                                        758,600       758,600
  Deficit                                                        (1,472,030)   (1,541,255)
                                                                 ----------    ----------
      TOTAL CAPITAL DEFICIT                                        (153,599)     (222,824)
                                                                 ----------    ----------
 
                                                                $    11,887   $    75,262
                                                                 ==========    ==========
</TABLE>

                                       2
<PAGE>
 
                   CREATIVE RESOURCES, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
 
 
                                                                    Three months ended
                                                                          Dec. 31,
                                                                    1997             1996
                                                                    ----             ----
                                                                         (unaudited)
<S>                                                                 <C>            <C>
Income
  Other income                                                  $      9         $  2,735  
 
Expense
  General and administrative expenses                             12,573           81,686   
                                                                 -------          -------

      Loss from continuing operations before income taxes        (12,564)         (78,951)  
 
Taxes on income                                                        -                -  
                                                                 -------          ------- 

Net loss from continuing operations                              (12,564)         (78,951)  
 
Income from discontinued operations                                1,485          560,058  
                                                                 -------          -------
 
      (Loss) income before extraordinary items                   (11,079)         481,107
 
Extraordinary item - gain on extinguishment
       of debt                                                   162,554                -  
                                                                 -------          -------
 
      NET INCOME                                                $151,475         $481,107  
                                                                 =======          =======
Earnings per common share:

  Loss from continuing operations                                $     -          $     -
                                                                  ======           ======

  Income from discontinued operations                            $     -          $   .01
                                                                  ======           ======

  (Loss) income before extraordinary items                       $     -          $   .01
                                                                  ======           ======

  Extraordinary items                                            $     -          $     -
                                                                  ======           ======

  Net income                                                     $     -          $   .01
                                                                  ======           ======

WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING                                     34,983,110       34,483,110
                                                              ==========       ==========

</TABLE>

                                       3
<PAGE>
 
                   CREATIVE RESOURCES, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
 
 
                                                                     Nine months ended
                                                                          Dec. 31,
                                                                    1997            1996
                                                                    ----            ----
                                                                        (unaudited)
<S>                                                            <C>               <C>  
Income
  Other income                                                 $     400       $   8,900   
  Management fees                                                      -             519   
                                                                --------        --------   

                                                                     400           9,419                   
Expense                                                                                    
  General and administrative expenses                            102,130         213,433   
                                                                --------        --------   
                                                                                           
      Loss from continuing operations before income taxes       (101,730)       (204,014)  
                                                                                           
Taxes on income                                                        -               -   
                                                                --------        --------   

Net loss from continuing operations                             (101,730)       (204,014)  
                                                                                           
Income from discontinued operations                                8,401         570,347   
                                                                --------        --------
                           
      (Loss) income before extraordinary items                   (93,329)        366,333   
                                                                                           
Extraordinary item-gain on extinguishment                                                 
      of debt                                                    162,554               -   
                                                                --------        --------   
                                                                                           
      NET INCOME                                               $  69,225       $ 366,333   
                                                                ========        ========
Earnings per common share:

  Loss from continuing operations                                 $    -          $ (.01)
                                                                   =====           ===== 

  Income from discontinued operations                             $    -          $  .02
                                                                   =====           ===== 

  (Loss) income before extraordinary items                        $    -          $  .01
                                                                   =====           ===== 

  Extraordinary items                                             $    -          $    -
                                                                   =====           ===== 

  Net income                                                      $    -          $  .01
                                                                   =====           ===== 

WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING                                     34,983,110      34,483,110
                                                              ==========      ==========

</TABLE>

                                       4
<PAGE>
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                     DECREASE IN CASH AND CASH EQUIVALENTS

<TABLE>
<CAPTION>
 
                                                                     Nine months ended
                                                                          Dec. 31,
                                                                    1997            1996
                                                                    ----            ----
                                                                         (unaudited)
<S>                                                             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                    $  69,225       $ 366,333
  Adjustments to reconcile net income
   to net cash used in
   operating activities:
 
   Depreciation and amortization                                   1,015           1,316 
   Elimination of loss provision                                       -        (530,162) 
                                                                                         
   Changes in assets and liabilities:                                                    
    Prepaid expenses                                              (5,000)        (11,233) 
    Accounts payable and accrued expenses                         27,073        (120,287) 
    Accrued compensation                                        (157,650)         34,737 
    Liabilities from discontinued operations                           -         (20,749) 
                                                                --------        --------                        
       Net cash used in                                                                  
       operating activities                                      (65,337)       (280,045) 
                                                                --------        --------                        
                                                                                         
CASH FLOWS FROM INVESTING ACTIVITIES:                                                    
 Collection of notes receivable                                      639             604 
 Purchase of equipment                                                 -          (2,096) 
                                                                --------        --------                        
       Net cash provided by (used in)                                                    
       investing activities                                          639          (1,492) 
                                                                --------        --------                        
                                                                                         
CASH FLOWS FROM FINANCING ACTIVITIES:                                                    
 Repayments of long-term debt                                     (2,523)         (2,122) 
 Proceeds from officer loan                                          500               - 
                                                                --------        --------                        
       Net cash used in                                                                  
       financing activities                                       (2,023)         (2,122) 
                                                                --------        --------                        
                                                                                         
NET DECREASE IN CASH                                                                     
AND CASH EQUIVALENTS                                             (66,721)       (283,659) 
                                                                                         
CASH AND CASH EQUIVALENTS at beginning of period                  68,549         399,405 
                                                                --------        --------                        

CASH AND CASH EQUIVALENTS at end of period                     $   1,828       $ 115,746  
                                                                ========        ========
</TABLE>

                                       5
<PAGE>
 
                   CREATIVE RESOURCES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - PRINCIPLES OF CONSOLIDATION:
------------------------------------

        The consolidated financial statements include the accounts of Creative
Resources, Inc. and its wholly owned subsidiaries.  All significant intercompany
transactions and balances have been eliminated.

        The consolidated balance sheet as of December 31, 1997 and the related
consolidated statements of operations for the three month and the nine month
periods ended December 31, 1997 and 1996 and statements of cash flows for the
nine month periods ended December 31, 1997 and 1996 are unaudited.  In the
opinion of management, all adjustments necessary for a fair presentation of such
financial statements have been included and consist only of normal recurring
items.

        The financial statements and notes are presented as permitted by Form 
10-QSB and do not contain certain information proscribed by generally accepted
accounting principles. For further information concerning the Company's
accounting policies and certain transactions, refer to the Company's annual
report on Form 10-KSB.


NOTE 2 - DESCRIPTION OF BUSINESS:
--------------------------------

        Creative Resources, Inc. ("CRI") and subsidiaries, collectively (the
"Company"), has disposed of or discontinued all significant operations. It is
presently meeting its working capital requirements through its cash balances.

        The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company has suffered losses
and has a legal proceeding pending against it. See Note 9 of the Company's March
31, 1997 annual report on Form 10-KSB. As a result, these matters raise
substantial doubt as to the Company's ability to continue as a going concern.
The Company's plan is to acquire or merge with a viable business and defend or
resolve the legal proceeding against it. There can be no assurance that the
Company will be successful in achieving any objective of its plan. The financial
statements do not include any adjustment that might result from the outcome of
these uncertainties.


NOTE 3 - EARNINGS PER SHARE:
---------------------------

        Net income per common share is based on the weighted average number of
common shares outstanding during the three and nine month periods ended December
31, 1997 and 1996 respectively.

                                       6
<PAGE>
 
NOTE 4 - CASH FLOW INFORMATION:
------------------------------
 
The Company had the following transactions:

                                                         Nine months ended  
                                                              Dec. 31,    
                                                         1997         1996
                                                         ----         ---- 
                                                                          
Cash paid for income taxes                              $   -        $   -
                                                         ====         ==== 
                                                                          
Cash paid for interest                                  $ 122        $ 306
                                                         ====         ==== 
 

NOTE 5 - COMMITMENTS AND CONTINGENCIES:
--------------------------------------

        The Company has a legal proceeding pending against it. See Note 9 of the
Company's March 31, 1997 annual report on Form 10-KSB. The Company has agreed to
indemnify its current and former directors and officers against any losses or
liabilities arising out of their service with the Company, including any losses
or liabilities arising out of this legal proceeding. The Company believes that
no material liability will result from the outcome of this proceeding.


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

Introduction
------------

        The Company has disposed of or discontinued all significant operations.
It is presently meeting its working capital requirements through its cash
balances. The Company is actively seeking a viable business to acquire or with
which to merge.


Operating Results
-----------------

        Income, which consists of interest and management fee income, was $9 and
$2,735 for the three months ended December 31, 1997 and 1996 respectively and
was $400 and $9,419 for the nine months ended December 31, 1997 and 1996
respectively. The decrease for the three and nine month periods in 1997 was
attributable to a decrease in management fee income and a decrease in the cash
balances on which interest income was earned. Income from management fees is not
expected to recur.

        Expenses, which consist of general and administrative, salaries and
interest, were $12,573 and $81,686 for the three months ended December 31, 1997
and 1996 respectively and were $102,130 and $213,433 for the nine months ended
December 31, 1997 and 1996 respectively. The decrease for the three and nine
month periods in 1997 was primarily attributable to a decrease in salary and
professional services expenses.

                                       7
<PAGE>
 
Impact of Inflation
-------------------

        The Company believes its operations are not significantly affected by
inflation.


Liquidity and Future Outlook
----------------------------

        The Company is presently meeting its working capital requirements from
its cash balances. Although there can be no assurance, the Company believes it
has sufficient financial resources to sustain its operations for the next month.
The Company must raise additional funds or execute its business plan in order to
continue operations.

        The Company's financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has suffered losses and
has a legal proceeding pending against it. These conditions raise substantial
doubt as to the Company's ability to continue as a going concern.

        The Company's plan is to acquire or merge with a viable business and
defend or resolve the legal proceeding against it. There can be no assurance
that the Company will be successful in achieving any objectives of its plan. The
Company's plan is being implemented by its sole officer, who is currently
serving without regular cash compensation.


                          PART II.  OTHER INFORMATION

ITEM 1:  LEGAL PROCEEDINGS
            There are no changes from the Annual Report filed on Form 10-KSB for
            the year ended March 31, 1997.

ITEM 2:  CHANGES IN SECURITIES
            None

ITEM 3:  DEFAULTS UPON SENIOR SECURITIES
            None

ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
            None

ITEM 5:  OTHER INFORMATION
            None

ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K
            None

                                       8
<PAGE>
 
                                  SIGNATURES
                                  ----------

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

                 CREATIVE RESOURCES, INC.
                   (Registrant)



                 By:  /s/ Dennis R. Williamson
                     --------------------------
                       Dennis R. Williamson
                           President
February 5, 1998

                                       9