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 June 30, 1997


                                       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 No. 1-13048


                         HEALTHY PLANET PRODUCTS, INC.
                         -----------------------------
             (Exact name of registrant as specified in its charter)


          Delaware                                     94-2601764
          --------                                     ----------
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
 incorporation or organization)


1700 Corporate Circle, Petaluma, California                            94954
-------------------------------------------                            -----
(Address of principal executive offices)                             (Zip Code)


Registrant's telephone number, including area code:   (707) 778-2280

--------------------------------------------------------------------------------

Former  name,  former  address and former  fiscal  year,  if changed  since last
report.


     Check  whether  the Issuer (1) 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  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
                       -----                             -----

     As of August 4, 1997, there were issued and outstanding 1,827,362 shares of
common stock of the  registrant  (exclusive of 186,341 shares of voting Series D
Preferred Stock convertible into 186,341 shares of common stock).


     Transitional Small Business Disclosure Format    Yes           No   X
                                                          -----        -----

                                  Page 1 of 13

<PAGE>

                         HEALTHY PLANET PRODUCTS, INC.

                                     INDEX

                                                                           Page
                                                                           ----

Form 10-QSB Cover Page                                                      1

Index                                                                       2


PART I.      FINANCIAL INFORMATION


     Item 1.   Financial Statements

            Balance Sheet at June 30, 1997                                  3

            Statements of Operations for the three-months ended             5
               and six months ended June 30, 1997 and 1996

            Statements of Cash Flows for the three-months ended             6
               and six months ended June 30, 1997 and 1996

            Notes to the Financial Statements                               7


     Item 2.   Management's Discussion and Analysis of Financial
               Condition and Results of Operations                          9


PART II.     OTHER INFORMATION


     Item 4.   Submission of Matters to a Vote of Securityholders          13

     Item 6.   Exhibits and Reports on Form 8-K, Signature                 13

                                  Page 2 of 13

<PAGE>

                                     PART I
                             FINANCIAL INFORMATION


Item 1.   Financial Statements


                         HEALTHY PLANET PRODUCTS, INC.

                                 BALANCE SHEET

                                     ASSETS


                                                                      June 30,
                                                                        1997
                                                                      ----------
                                                                     (Unaudited)
CURRENT ASSETS
         Cash and cash equivalents                                    $  657,520
         Marketable securities                                         1,996,035
         Accounts receivable - net of allowances for doubtful
                  accounts and returns of $98,235                        756,406
         Inventories                                                   1,861,706
         Advance on royalties                                            225,850
         Prepaid expenses                                                131,773
         Deferred income taxes                                           194,080
                                                                      ----------

                  Total current assets                                 5,823,370
                                                                      ----------

PROPERTY AND EQUIPMENT, at cost, net of accumulated
         depreciation and amortization                                   454,361
                                                                      ----------

OTHER ASSETS
         Deferred income taxes                                         1,471,000
         Security deposits                                                34,277
         Publishing rights - net of accumulated
            amortization of $366,962                                     113,275
         Other                                                           122,156
                                                                      ----------

                  Total other assets                                   1,740,708
                                                                      ----------

TOTAL ASSETS                                                          $8,018,439
                                                                      ==========


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

                                  Page 3 of 13

<PAGE>

                         HEALTHY PLANET PRODUCTS, INC.

                           BALANCE SHEET (Continued)

                      LIABILITIES AND SHAREHOLDERS' EQUITY


                                                                      June 30,
                                                                        1997
                                                                     -----------
                                                                     (Unaudited)


CURRENT   LIABILITIES   
     Accounts payable                                                $  244,602
     Royalties  payable                                                  10,019
     Commissions payable                                                 45,525
     Income taxes payable                                                 4,700
     Dividends payable                                                   61,500
     Accrued wages, bonus' and payroll taxes                             26,316
     Accrued liabilities                                                  7,297
                                                                     -----------

             Total current liabilities                                  399,959


ACCRUED RENT PAYABLE                                                     65,782
                                                                     -----------

TOTAL LIABILITIES                                                       465,741
                                                                     -----------


SHAREHOLDERS' EQUITY
     Common stock, $.01 par value, 12,000,000 shares
        authorized, 1,827,362 shares issued and outstanding              18,273
     Preferred  stock,   Series  B,  $.10  par  value,
        with  aggregate   liquidation preferences  of 
        $100,080,  14,250  shares  authorized,  834 
        shares issued and outstanding                                        83
     Preferred  stock,   Series  D,  $.10  par  value,
        with  aggregate   liquidation preferences  of  
        $952,203  371,009  shares  authorized,  186,341
        issued  and outstanding                                          18,634

     Additional paid-in capital                                      12,308,071

     Accumulated deficit                                             (4,792,363)
                                                                     -----------

             Total shareholders' equity                               7,552,698
                                                                     -----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                           $8,018,439
                                                                     ===========


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


                                  Page 4 of 13

<PAGE>

<TABLE>
                                                   HEALTHY PLANET PRODUCTS, INC.

                                                      STATEMENTS OF OPERATIONS

                                                            (Unaudited)

<CAPTION>
                                                                Three Months Ended June 30,            Six Months Ended June 30,
                                                               ------------------------------        ------------------------------
                                                                  1997               1996               1997                1996
                                                               -----------        -----------        -----------        -----------
<S>                                                            <C>                <C>                <C>                <C>        
NET SALES                                                      $   884,912        $   979,702        $ 1,713,193        $ 1,820,396

COST OF GOODS SOLD                                                 416,775            357,155            779,773            640,807
                                                               -----------        -----------        -----------        -----------

GROSS PROFIT                                                       468,137            622,547            933,420          1,179,589
                                                               -----------        -----------        -----------        -----------

OPERATING EXPENSES:
       Selling, shipping and marketing                             230,628            235,199            458,045            382,811
       General and administrative                                  373,156            372,763            790,284            732,402
                                                               -----------        -----------        -----------        -----------
                                                                   603,784            607,962          1,248,329          1,115,213
                                                               -----------        -----------        -----------        -----------

OPERATING  INCOME (LOSS)                                          (135,647)            14,585           (314,909)            64,376
                                                               -----------        -----------        -----------        -----------

OTHER INCOME:
       Interest income                                              28,439             34,750             73,405             81,917
       Other income                                                     28             94,691              4,671            135,009
                                                               -----------        -----------        -----------        -----------
                                                                    28,467            129,441             78,076            216,926
                                                               -----------        -----------        -----------        -----------

INCOME (LOSS) BEFORE TAXES                                        (107,180)           144,026           (236,833)           281,302
                                                               -----------        -----------        -----------        -----------

PROVISION FOR INCOME TAXES
       Income Taxes                                                   --               57,611               --              112,521
       Valuation allowance on
          deferred taxes (see Note 4.)                             222,000               --              222,000               --
                                                               -----------        -----------        -----------        -----------
                                                                   222,000             57,611            222,000            112,521
                                                               -----------        -----------        -----------        -----------


NET  INCOME (LOSS)                                                (329,180)            86,415           (458,833)           168,781

DIVIDENDS ACCUMULATED
       ON PREFERRED STOCK                                             --               (4,504)              --               (4,504)

INCOME (LOSS) APPLICABLE TO
       COMMON STOCK                                            ($  329,180)       $    86,415        ($  458,833)       $   168,781
                                                               ===========        ===========        ===========        ===========

EARNINGS (LOSS) PER SHARE                                      ($      .18)       $       .04        ($      .25)       $       .08
                                                               ===========        ===========        ===========        ===========


WEIGHTED AVERAGE COMMON
       SHARES OUTSTANDING                                        1,827,362          2,043,279          1,827,362          2,033,280
                                                               ===========        ===========        ===========        ===========

<FN>
                                               The accompanying notes are an integral
                                                 part of these financial statements.
</FN>
</TABLE>

                                                            Page 5 of 13

<PAGE>

<TABLE>
                                                    HEALTHY PLANET PRODUCTS, INC.

                                                      STATEMENT OF CASH FLOWS

                                                            (Unaudited)

<CAPTION>
                                                                      Three Months Ended June 30,        Six Months Ended June 30,
                                                                     ----------------------------      ----------------------------

                                                                         1997            1996             1997              1996
                                                                     -----------      -----------      -----------      -----------
<S>                                                                  <C>              <C>              <C>              <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
         Net Income (Loss)                                           ($  329,180)     $    86,415      ($  458,833)     $   168,781
         Non-cash items included in net income (loss)
             Depreciation and amortization                                48,761           46,894           99,429           91,932
             Increase/(decrease) in allowances for
                      doubtful accounts and returns                      (21,961)          17,572         (296,387)        (365,086)
             Change in inventory reserves                                 81,000          (25,000)          81,000          (25,000)
             Increase decrease in deferred income taxes                 (217,920)          52,611         (217,920)          99,341
             Abandonment of leasehold improvements                          --             12,493             --             12,493


         Changes in:
             Accounts receivables                                         (6,644)        (216,692)         543,386          264,821
             Inventories                                                (141,223)        (255,683)        (524,766)        (501,546)
             Advances on royalties                                        85,594           58,821         (225,850)        (215,895)
             Prepaid expenses                                             45,099           37,796           (6,554)         (75,765)
             Accounts payable                                           (163,860)         (31,959)        (150,181)          45,255
             Royalties payable                                             1,400              141            2,604            1,853
             Commissions payable                                           5,719           28,720          (72,455)        (101,224)
             Accrued wages, bonus and payroll taxes                      (16,988)         (17,870)         (44,257)        (105,185)
             Income taxes payable                                           --               --            (16,300)            --
             Accrued liabilities                                         (14,327)          23,802          (41,158)            (621)
             Accrued rent payable                                         10,660          (85,529)          25,270          (85,496)
                                                                     -----------      -----------      -----------      -----------
             Net cash used by operating activities                      (198,030)        (267,468)        (867,132)        (791,342)
                                                                     -----------      -----------      -----------      -----------


CASH FLOWS FROM INVESTING ACTIVITIES:
             Purchase/sale of marketable securities                       18,798             --             (6,816)            --
             Purchases of equipment and color separations                (32,758)         (54,190)         (62,882)         (77,281)
             Security deposits                                             2,075           39,665            2,075          (20,367)
             Other                                                       (15,510)        (138,897)         (58,436)        (157,550)
             Net cash used by investing activities                       (27,395)        (153,422)        (126,059)        (255,198)
                                                                     -----------      -----------      -----------      -----------


CASH FLOWS FROM FINANCING ACTIVITIES:
             Proceeds from stock options exercised                          --             90,000             --             90,000
                                                                     -----------      -----------      -----------      -----------
             Net cash from financing activities                              -0-           90,000              -0-           90,000
                                                                     -----------      -----------      -----------      -----------


DECREASE IN CASH EQUIVALENTS                                            (225,425)        (330,890)        (993,191)        (956,540)
CASH AND CASH EQUIVALENTS,
      BEGINNING OF PERIOD                                                882,945        3,516,481        1,650,711        4,142,131
                                                                     -----------      -----------      -----------      -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD                             $   657,520      $ 3,185,591      $   657,520      $ 3,185,591
                                                                     ===========      ===========      ===========      ===========



SUPPLEMENTARY CASH FLOW INFORMATION INCLUDES THE FOLLOWING:


         Cash paid during the period for:
             Interest                                                $         0      $         0      $         0      $         0
             Income taxes                                            $     4,080      $     5,000      $    20,380      $    22,780


<FN>
                             The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>

                                                            Page 6 of 13

<PAGE>


                         HEALTHY PLANET PRODUCTS, INC.

                         NOTES TO FINANCIAL STATEMENTS

                                  (Unaudited)


NOTE 1 - BASIS OF PRESENTATION

     The financial statements included herein have been prepared by the Company,
without  audit,  pursuant to the rules and  regulations  of the  Securities  and
Exchange  Commission.  Certain  information  and footnote  disclosures  normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been omitted pursuant to such rules and regulations.
It is  believed,  however,  that  the  disclosures  are  adequate  to  make  the
information presented not misleading.

     The  financial  statements,  in the  opinion  of  management,  reflect  all
adjustments  necessary,  which are of a normal recurring nature, to fairly state
the  financial  position and the results of  operations.  These  results are not
necessarily to be considered indicative of the results for the entire year.


NOTE 2 - INVENTORIES

     Inventories consist of the following:                            
                                                                       June 30,
                                                                         1997
                                                                      ----------

Raw materials                                                         $  115,906
Work-in-process                                                        1,187,144
Finished goods                                                           558,656
                                                                      ----------
                                                                      $1,861,706
                                                                      ==========

NOTE 3 - PROPERTY AND EQUIPMENT

     Property and equipment consist of the following:


                                                                      June 30,
                                                                        1997
                                                                    -----------
                  Machinery, equipment and leasehold improvements   $   696,312
                  Color separations                                     220,169
                  Furniture and fixtures                                 72,664
                  Computer software                                      38,171
                                                                    -----------

                                                                      1,027,316


                  Less accumulated depreciation and amortization       (572,955)
                                                                    -----------

                                                                    $   454,361
                                                                    ===========

                                  Page 7 of 13

<PAGE>


                          HEALTHY PLANET PRODUCTS, INC

                   NOTES TO FINANCIAL STATEMENTS (Continued)

                                  (Unaudited)


NOTE 4 - INCOME TAXES

     Deferred income tax assets and liabilities are recognized using enacted tax
rates and reflect the expected future tax consequences of temporary  differences
between  recorded  amounts of assets and  liabilities  for  financial  reporting
purposes and tax basis of such assets and liabilities.  A valuation allowance is
recognized to offset a deferred tax asset if the eventual  realization of all or
a portion of the asset is uncertain.

     The provision for income taxes is based on pre-tax  earnings as reported in
the financial  statements and adjusted for  requirements of current tax law, and
changes in deferred taxes.

     The  provision  for income  taxes at June 30, 1997  consists of a valuation
allowance on deferred taxes.

     As of January 1, 1997 the Company had available  federal net operating loss
carryovers of  approximately  $4,664,000 to be applied  against  future  federal
taxable  income,  of which  $2,862,000 of net operating  losses are subject to a
limitation  under Section 382 of the Internal Revenue Code of $476,950 per year.
Also  available  are  approximately  $25,500 of  alternative  minimum tax credit
carryforwards to reduce future federal and California  regular income taxes over
an indefinite period.

     The Company has  substantial net operating loss  carryforwards  and credits
available to offset  future income tax  liabilities.  The expected tax effect of
these  losses  and  credits  are   reflected  as  deferred  tax  assets  on  the
accompanying balance sheet. A valuation allowance has been established since the
realization of tax benefits of net operating loss  carryforwards is not assured.
The amount of the  valuation  allowance  will be reviewed on a quarterly  basis.
Deferred tax assets consist of the following:


                  Net operating loss carryforwards                  $ 1,645,800
                  AMT carryforwards                                      25,500
                  Other                                                 215,780
                                                                    -----------
                                                                      1,887,080
                  Valuation allowance on net operating
                      loss carryforwards                               (222,000)


                  Deferred income taxes expected
                     to be utilized currently                          (194,080)
                                                                    -----------
                  Deferred income taxes                             $ 1,471,000
                                                                    ===========

                                  Page 8 of 13

<PAGE>

Item 2.              MANAGEMENT'S DISCUSSION AND ANALYSIS OF

                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Special Note Regarding Forward-Looking Statements

     Certain  statements in this Form 10-QSB,  including  information  set forth
under this Item 2 "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations"  constitute  "forward-looking  statements" within the
meaning of the Private  Securities  Litigation  Reform Act of 1995 (the  "Act").
Healthy Planet Products, Inc. (the "Company") desires to avail itself of certain
"safe harbor" provisions of the Act and is therefore including this special note
to enable the Company to do so. Forward-looking statements included in this Form
10-QSB or hereafter  included in other publicly  available  documents filed with
the Securities and Exchange  Commission,  reports to the Company's  stockholders
and other  publicly  available  statements  issued or  released  by the  Company
involve known and unknown  risks,  uncertainties,  and other factors which could
cause the  Company's  actual  results,  performance  (financial or operating) or
achievements  to differ  from the  future  results,  performance  (financial  or
operating)  achievements expressed or implied by such forward looking statement.
Such  future  results  are based upon  management's  best  estimates  based upon
current  conditions  and the most recent  results of  operations.  These include
management's  forecasts  for sales,  the decrease in net sales for the six month
period ended June 30, 1997, purchasing plans and programs of certain large chain
buyers relating to holiday product recently  experienced decline in gross margin
as well as marginal increases in general and administrative expenses, the recent
adverse trend in the general retail  environment,  general economic  conditions,
competition  generally  and  specifically  relating  to  greeting  cards  having
environmental,  nature or  wildlife  themes and the  ability  of the  Company to
sustain  consumer demand for the Company's  principal  Sierra Club card line. In
addition,  the  ability of the Company to enhance and expand its product mix and
to successfully  introduce new products which will meet with consumer acceptance
may also  affect  future  results.  The  Company  to date  has  been  materially
dependent  upon the efforts of Messrs.  Bruce  Wilson and M. Scott  Foster,  who
constitute the Company's core senior management. The loss of either Mr. Wilson's
or Mr. Foster's services may have a materially  adverse effect upon the business
or operations of the Company.

Sales

     For the six months ended June 30, 1997, the Company's net sales amounted to
$1,713,193  which reflected a decrease of $107,203 or 5.9% versus the prior year
level of  $1,820,396.  Christmas  returns  exceeded  1996  reserves by $131,000.
Factoring  out  these  returns,  six month  sales  actually  reflect a  marginal
increase  over last year as a result of the  introduction  of new  products  for
1997.

     For the three months ended June 30,  1997,  net sales  amounted to $884,912
which  reflected  a decrease  of $94,790 or 9.7%  versus the prior year level of
$979,702. Gains in the sale of new products were offset by a decline in sales of
the Sierra Club line.

                                  Page 9 of 13

<PAGE>

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF

           FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)


Gross Profit

     For the six months ended June 30, 1997,  gross profit  amounted to $933,420
or 54.4% of sales. For the comparable prior year quarter,  gross profit amounted
to $1,179,589 or 64.8% of sales.  One-time new product  introductory  allowances
and one-time fixturing cost associated with the new product  introduction eroded
gross profit by 10%.

     For the three months ended June 30, 1997, gross profit amounted to $468,137
or 52.9% of sales. For the comparable prior year quarter,  gross profit amounted
to $622,547 or 63.5% of sales. New product introductory  allowances and one time
fixturing  costs  associated with the new product  introduction  resulted in the
decline at gross profit.

Operating Expenses

     For the six months ended June 30,  1997,  selling,  shipping and  marketing
expenses amounted to $458,045 reflecting an increase of $75,234 versus the prior
year's level of $382,811.  Increased  commissions,  advertising and travel costs
associated with the new product launch accounted for the year to year increase.

     For the three months ended June 30, 1997,  selling,  shipping and marketing
expenses amounted to $230,628 reflecting a slight decrease of $4,571 versus last
year's level of $235,199. Lower commissions and shipping expenses on lower sales
offset  increases  in  advertising  and travel  costs to account  for the slight
decrease.

     General and administrative expenses amounted to $790,284 for the six months
ended June 30, 1997,  reflecting an increase of $57,882 versus last year's level
of $732,402. Increased rent and insurance costs associated with the new facility
were offset in part by lower staffing costs.

     For the three  months  ended  June 30,  1997,  general  and  administrative
expenses  amounted to $373,156  reflecting a slight  increase of $393 versus the
prior  year  level of  $372,763.  Increased  rent and  higher  triple  net costs
associated with the new facility were offset by reducing staffing costs.

Income

     An  operating  loss of $314,909 or $.17 per share was  incurred for the six
months  ended June 30, 1997.  Interest  and other income of $78,076  reduced the
operating  loss to result in a loss before  income taxes of $236,833 or $.13 per
share.  For the prior year period,  operating income amounted to $64,376 or $.03
per share and income  before taxes  amounted to $281,302 or $.14 per share.  The
decline at gross margin and increased  operating  costs  resulted in the current
year to date loss. Net loss for the six months ended June 30, 1997,  amounted to
$458,833 or $.25 per share,  compared to the prior year's net income of $168,781
o $.08 per

                                 Page 10 of 13

<PAGE>

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF

           FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)


Income   (continued)

share.  During the current quarter a $222,000 valuation  allowance was placed on
deferred tax assets.  Under Statement of Financial  Accounting Standard No. 109,
"Accounting for Income Taxes",  a valuation  allowance is recognized to offset a
deferred tax asset if the eventual  realization of all or a portion of the asset
is  uncertain.  Due to the loss for the six  months  ended  June 30,  1997,  the
realization of tax benefts from net operating loss carryforwards  expected to be
used in 1997 is not  assured.  The  amount of the  valuation  allowance  will be
reviewed and may be adjusted on a quarterly basis.

Balance Sheet

     Total assets of $8,018,439 as of June 30, 1997 declined versus the December
31, 1996 level of  $8,773,900 by $755,461.  The period to period  decrease was a
result  of a  valuation  allowance  on  deferred  taxes and  decreased  cash and
accounts  receivable  offset  in  part  by  increased  inventories  and  royalty
advances.  Total  current  liabilities  amounted to $399,959 as of June 30, 1997
versus the December 31, 1996 level of $721,800. The decrease was a result of the
paydown  of  seasonal  commissions  and  bonuses  and the  payment of trade debt
associated with the new products launched in 1997.

Liquidity and Capital Resources

     At June 30, 1997, the Company's working capital was $5,423,411 reflecting a
decrease of $418,289  over working  capital at December 31, 1996 of  $5,841,700.
Cash of  $867,132  was used during the period to support  operating  activities.
Cash of  $126,059  was used during the period for  capital  expenditures.  Major
capital  expenditures for the period included the purchase of new product rights
and  separations in support of the new product launch and an automated  labeling
machine.

     The  present  primary  sources  of the  Company's  liquidity  has been cash
internally  generated from operations,  proceeds obtained by the Company through
the public sale of its  securities,  and the  availability  of a secured line of
credit. The Company has a $500,000 secured line of credit from Westamerica Bank.
The Company  draws on this line from time to time on a short term  basis.  As of
June 30, 1997, there was no outstanding amount under this line of credit.

Effects of Inflation

     The  Company  does not view the effects of  inflation  as having a material
effect upon its business. Increases in paper and labor costs have been offset by
increases  in the price of the  Company's  cards and through  higher print runs,
which  have  reduced  the unit cost of the  Company's  card  product.  While the
Company has in the past increased its prices to its customers, it has maintained
its relative  competitive  price  position  within the general range of greeting
cards.

                                 Page 11 of 13