<PAGE>
 
                                   FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



 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 or

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

      For the transition period from __________ to __________

                         Commission file Number 0-16277

                          FI LIQUIDATING COMPANY, INC.
                          ----------------------------
             (Exact name of registrant as specified in its charter)

             Delaware                                94-2666121
             --------                                ----------

    (State of other jurisdiction of                 (IRS Employer
     incorporation or organization)               Identification No.)

                                 Hughes Center
                                   Suite 200
                           3753 Howard Hughes Parkway
                            Las Vegas, Nevada 89109
                                 (702) 866-2230

(Address, including zip code and telephone number, including area code, of
registrant's principal executive officers)

Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months  (or for such shorter periods 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 ___
    ---          

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

At September 30, 1996, 9,271,453 shares of common stock of the registrant were
outstanding.

                                       
<PAGE>
 
                         PART I - FINANCIAL INFORMATION
                         ------------------------------

                         ITEM 1 - FINANCIAL STATEMENTS
                         -----------------------------



                          FI LIQUIDATING COMPANY, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                    (in thousands, except per share amounts)
                                  (unaudited)
<TABLE>
<CAPTION>

                                                   Three Months                    Six Months
                                                 Ended September 30             Ended September 30
                                                --------------------           --------------------
                                                   1996      1995                 1996      1995
                                                 -------    -------             -------    -------
<S>                                              <C>        <C>                 <C>        <C>

Net sales                                        $     -    $     -             $     -    $     -

Costs and expenses:
  Cost of sales                                        -          -                   -          -
  General and administrative                          21         68                  77         98
                                                 -------    -------             -------    -------

Loss from operations                              (   21)    (   68)             (   77)    (   98)
Realized and unrealized gain on Flex Holdings:
  Net realized gain                                    -        499                   -        990
  Change in unrealized appreciation               (    -)    (  292)              2,518      1,300
Other income (loss)                               (    2)    (   16)             (   15)    (    3)
                                                 -------    -------             -------    -------

Income (loss) before provision for taxes on
 income and extraordinary credit                  (   23)       123               2,426      2,189
Provision for taxes on income                     (    8)        42                 825        744
                                                 -------    -------             -------    -------

Income (loss) before extraordinary credit         (   15)        81               1,601      1,445

Extraordinary credits - utilization of net
 operating loss carryforward                      (    8)        42                 825        744
                                                 -------    -------             -------    -------

Net income (loss)                                $(   23)   $   123             $ 2,426    $ 2,189
                                                 =======    =======             =======    =======

Net income per share:
  Income (loss) before extraordinary credit      $     -    $   .01             $   .17    $   .15

  Extraordinary credit                                 -        .00                 .09        .08
                                                 -------    -------             -------    -------

  Net income (loss)                              $    -     $   .01             $   .26    $   .23
                                                 =======    =======             =======    =======


Shares used in computing per share amounts         9,271      9,338               9,271      9,365
                                                 =======    =======             =======    =======
</TABLE>


See accompanying notes.

                                       2
<PAGE>
 
                          FI LIQUIDATING COMPANY, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 (in thousands)
                                  (unaudited)

<TABLE>
<CAPTION>


                                                September 30      March 31
                                                    1996            1996
                                                ------------      --------

<S>                                                 <C>            <C>

Assets

Current assets:
     Cash                                           $    436       $    561
     Prepaid expenses and other                           22             25
     Assets held for sale                                 75             75
                                                    --------       --------

          Total current assets                           533            661

Investment in Flextronics International Ltd.               -          5,262
                                                    --------       --------

                                                       $ 533         $5,923
                                                    ========       ========

Liabilities and Stockholders' Equity

Current liabilities:
     Accounts payable                               $      5       $      6
     Other accrued liabilities                           167            201
                                                    --------       --------

          Total current liabilities                      172            207

Commitments and contingency
Stockholders' equity:
     Preferred Stock, $.01 par value;
       10,000 shares authorized;
     Common Stock, $.01 par value;
       25,000 shares authorized;
       9,271 shares
       in both 1995 and 1994                              93             93
     Additional paid-in capital                       29,748         29,748
     Accumulated deficit                             (29,480)       (24,125)
                                                    --------       --------

          Stockholders' equity                           361          5,716
                                                    --------       --------

                                                    $    533       $  5,923
                                                    ========       ========

</TABLE>
See accompanying notes.

                                       3
<PAGE>
 
                          FI LIQUIDATING COMPANY, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (in thousands)
                                  (unaudited)

<TABLE>
<CAPTION>
 
                                                           Six Months
                                                        Ended September
                                                       ------------------
                                                         1996      1995
                                                       --------  --------
 
<S>                                                    <C>       <C>
 
Operating activities:
     Net income                                        $ 2,426   $ 2,189
     Adjustment to reconcile net income
     to net cash used for operating activities:
       Realized and unrealized gain on
         Flextronics International Ltd.                 (2,518)   (2,290)
       Changes in operating assets and liabilities:
          Prepaid expenses and other assets                  2    (    2)
          Accounts payable and accrued liabilities      (   35)       43
                                                       -------   -------
 
          Net cash used for operating activities        (  125)   (   60)
 
Investing activities:
     Proceeds from sales of shares in Flextronics
       International Ltd.                                    -     1,653
     Purchase of marketable securities, net                  -    (1,581)
                                                       -------   -------
 
          Net cash provided by investing activities          -        72
                                                       -------   -------
 
Increase (decrease) in cash                             (  125)       12
 
Cash beginning of period                                   561        10
                                                       -------   -------
 
Cash end of period                                     $   436   $    22
                                                       =======   =======
 
</TABLE>

See accompanying notes.

                                       4
<PAGE>
 
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
             ----------------------------------------------------


1.   BASIS OF PRESENTATION

     The accompanying financial statements as of September 30, 1996 and March
     31, 1996 and for the three months and six months ended September 30, 1996
     and September 30, 1995 have been prepared on a liquidating basis of
     accounting with assets and liabilities stated at fair value.  The Company
     has wound down its operations and is continuing to implement a formal plan
     of liquidation approved by the Shareholders in June 1992.

     The condensed consolidated financial statements at September 30, 1996 and
     March 31, 1996 and for the three months and six months ended September 30,
     1996 and September 30, 1995, respectively, are unaudited but include all
     adjustments (consisting only of normal recurring adjustments) which are, in
     the opinion of management, necessary to present a fair statement of the
     results of interim periods.

     The condensed consolidated financial statements and notes thereto should be
     read in conjunction with the consolidated financial statements for the year
     ended March 31, 1996, as presented in the Registrant's Annual Report on
     Form 10-K.



2.   INVESTMENT IN FLEXTRONICS INTERNATIONAL LTD.

     At March 31, 1995, the Company held 359,576 shares of Flextronics
     International Ltd. capital stock, of which 244,076 shares were "restricted
     securities" as that term is defined in Rule 144 under the Securities Act of
     1993 (the "Act").  During fiscal 1996, the Company sold 115,500 shares of
     Flextronics International Ltd. for $2,376,594.  The 244,076 restricted
     securities were registered under the Act effective June 3, 1996 and
     distributed as a liquidating dividend to the shareholders of the Company
     that day.


3.   NET INCOME (LOSS) PER SHARE

     Net income (loss) per share is computed based on the weighted average
     number of common shares and dilutive common stock equivalents.

                                       5
<PAGE>
 
                 ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
                 ---------------------------------------------
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
               ------------------------------------------------
                                        

OVERVIEW
--------

The Company has substantially completed a major restructuring and wind down of
its worldwide business and in June 1992 adopted a plan of liquidation.  As a
result of these activities, the Company's financial position at September 30,
1996, and its operating results for the three months and six months then ended,
are not indicative of the Company's expected operating performance and liquidity
and capital resource needs.  The restructuring and wind down results in
eliminating revenues and expenses other than general and administrative expenses
needed to manage its assets and creditor relations.  The liquidation activities
of the Company will be the orderly disposal of its remaining assets to fund its
remaining obligations.  Its principal assets are cash of $436,000.



RESULTS OF OPERATIONS
---------------------

THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED SEPTEMBER
------------------------------------------------------------------------------
30, 1995
--------

Because of the restructuring and recapitalization described in the preceding
Overview, any comparison of net revenues and operating expenses for the three
months ended September 30, 1996 to those for the three months ended September
30, 1995 is, in the opinion of management, not meaningful.

For the three months ended September 30, 1996 no realized or unrealized
appreciation in Flextronics International Ltd. was recognized as all shares were
distributed on June 3, 1996.  (See Note 2 to the financial statements.)  For the
three months ended September 30, 1995 realized and unrealized gain on
Flextronics International Ltd. of $207,000 was recognized.  The market close on
June 30, 1995 was $21.875 and the market close on September 30, 1995 was $25.75.

Other income (loss) of $(2,100) for the three months ended September 30, 1996
primarily consisted of costs associated with the assets held for sale.  Other
income (loss) of $(16,000) for the three months ended September 30, 1995
primarily consisted of expenses related to the building held for sale.

A provision for taxes on income of $8,000 is provided for the three months ended
September 30, 1996 based on loss before extraordinary credit.  A provision for
taxes on income of $42,000 is provided for the three months ended September 30,
1995 based on income before extraordinary credit.

                                       6
<PAGE>
 
SIX MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO SIX MONTHS ENDED SEPTEMBER 30,
------------------------------------------------------------------------------
1995
----

Because of the restructuring and wind down described in the preceding Overview,
any comparison of net revenues and operating expenses for the six months ended
September 30, 1996 to those for the six months ended September 30, 1995 is, in
the opinion of management, not meaningful.

For the six months ended September 30, 1996 realized gain on Flextronics
International Ltd. of $2,518,000 was recognized.  (See Note 2 to the financial
statements.)  The market close on March 31, 1996 was $30.50 and the market close
on June 3, 1996 was $31.87 when the shares became unrestricted and were
distributed.  For the six months ended September 30, 1995 realized and
unrealized gain on Flextronics International Ltd. of $2,290,000 was recognized.
The market close on March 31, 1995 was $13.75 and the market close on September
30, 1995 was $25.75.

Other income (loss) of $(15,157) for the six months ended September 30, 1996
primarily consisted of expenses on the building held for sale.  Other income
(loss) of $(3,000) for the six months ended September 30, 1995 primarily
consisted of expenses on the building held for sale and reversal of provisions
for claims which can no longer be assessed.

A provision for taxes of $825,000 is provided for the six months ended September
30, 1996 based on income before extraordinary credits.  A provision for taxes of
$744,000 is provided for the six months ended September 30, 1995 based on income
before extraordinary credits.

CAPITAL RESOURCES AND LIQUIDITY
-------------------------------

For the six months ended September 30, 1996 cash decreased by $125,000 as
compared to an increase of $12,000 for the six months ended September 30, 1995.
Cash outflows from operating activities consisted primarily of winding down
operations and liquidating the assets in both years.  The cash inflow from
investing activities reflects the sales of Flextronics International Ltd. shares
for the six months ended September 30, 1995.

The Company's balance sheet at September 30, 1996 shows a shareholders' equity
of $361,000.  The Company is making current payments for expenses related to its
liquidation and administration.

The Company has cash at September 30, 1996 of $436,000.  Such amounts should be
sufficient to complete an orderly liquidation.

The timing for the Company to complete the liquidation is dependent upon its
ability obtain the necessary regulatory clearances and on the disposition of
assets.  The amount of the final liquidating distribution is primarily dependent
on the Company's ability to dispose of its remaining assets and obligations.

                                       7
<PAGE>
 
 SIGNATURES


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 thereunder duly authorized.

                                  FI LIQUIDATING COMPANY, INC.
                                  (Registrant)


Date:  November 13, 1996             By: /s/John C. Roberts
                                         ------------------
                                         John C. Roberts
                                         President, Chief Executive
                                         Officer (Principal
                                         Executive Officer)


Date:  November 13, 1996             By: /s/Michael R. Ramelot
                                         ---------------------
                                         Michael R. Ramelot
                                         Chief Financial Officer
                                         (Principal Financial
                                         Officer)

                                       8
<PAGE>
 
                          PART II - OTHER INFORMATION
                          ---------------------------



                           ITEM 1. LEGAL PROCEEDINGS
                           -------------------------

                                        
During the quarter there were no material developments in legal proceedings
since the report filed on Form 10K for the fiscal year ended March 31, 1996.


                   ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
                   -----------------------------------------

(a)       Exhibits
          --------

             27        Financial Data Schedule


(b)       Reports on Form 8-K
          -------------------

          No reports on Form 8-K were filed during the quarter ended September
          30, 1996.

                                       9