<PAGE>



                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C.  20549


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

                                     FORM 10-QSB

(Mark one)
[x]    Quarterly Report under section 13 or 15(d) of the Securities 
       Exchange Act of 1934

                       For the quarter ended June 30, 1997

[ ]    Transition Report under section 13 or 15(d) of the Securities 
       Exchange Act of 1934

                              Commission File No. 0-27908

                      Semiconductor Laser International Corporation
  ------------------------------------------------------------------------
       (Exact Name of Small Business Issuer as Specified in its Charter)

             New York                                    16-1446679
----------------------------------------              -------------------
(State or other Jurisdiction of                         (I.R.S. Employer
Incorporation or Organization)                         Identification No.)

15 Link Drive, Binghamton, New York                          13904
----------------------------------------              -------------------
(Address of principal executive offices)                   (Zip code)

Registrant's telephone number, including area code: (607) 722-3800

     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 a 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 1, 1997, there were outstanding 3,570,242 shares of the 
issuers common stock, par value $.01 per share.

Transitional Small Business Disclosure Format

               Yes    [ ]                        No    [x]

<PAGE>

                         Part I. Financial Information

Item 1. Financial Statements


                   Semiconductor Laser International Corporation
                         

                                   Balance Sheet
<TABLE>
<CAPTION>

                                                   December 31,      June 30,
                                                       1996            1997 
                                                                    (unaudited)
                                                   ------------     ------------
<S>                                               <C>              <C>
Assets
Current assets
  Cash and cash equivalents                       $  4,266,168     $  1,595,674
  Accounts Receivable, net of allowance for
   doubtful accounts of $25,000 and $25,000,             
   respectively                                         61,047          186,070
  Inventory                                              6,316           17,301
                                                   ------------     ------------
                  Total current assets               4,333,531        1,799,045

Property, plant and equipment, net                   3,035,929        2,699,274
Intangible assets, net                                   1,348            1,011
Deposits and other assets                              655,928          599,416
                                                   ------------     ------------
                  Total assets                    $  8,026,736     $  5,098,746   
                                                   ============     ============

Liabilities and Shareholders' Equity
Current liabilities
  Accounts payable                                $  1,142,272     $    635,209
  Accrued expenses and other liabilities                92,199           38,975
  Current portion of long-term debt                     25,948           32,344
                                                   ------------     ------------
                  Total current liabilities          1,260,419          706,528

Long-term debt                                         809,926          818,866
Accrued royalty payments                               100,000          100,000
                                                   ------------     ------------
                  Total liabilities                  2,170,345        1,625,394
                                                   ------------     ------------
Commitments and contingencies (Note 6)

Shareholders' Equity
Common stock, $.01 par value, 20,000,000 shares
 authorized, 3,409,607 issued and outstanding
 at December 31, 1996, and 3,540,689 issued and
 outstanding at June 30, 1997                           34,096           35,407
Common stock issuable                                1,123,438           51,250
Treasury stock                                        (248,241)        (248,241)
Additional paid-in capital                          10,081,464       11,152,830
Accumulated deficit                                 (5,134,366)      (7,517,894)
                                                   ------------     ------------
                  Total Shareholders' Equity         5,856,391        3,473,352
                                                   ------------     ------------
                  Total liabilities and 
                    Shareholders' Equity          $  8,026,736     $  5,098,746   
                                                   ============     ============
</TABLE>

                  See accompanying notes to financial statements      

<PAGE>

                  Semiconductor Laser International Corporation
                        

                             Statement of Operations

<TABLE>
<CAPTION>
                                        Three Months Ended             Six Months Ended
                                             June 30,                       June 30,
                                         1996         1997            1996             1997
                                      (Unaudited)  (Unaudited)      (Unaudited)     (Unuadited)
                                      -----------  -----------     -------------   -------------
<S>                                   <C>          <C>             <C>             <C>

Sales                                 $    -       $   178,528     $     -         $     178,528

Cost of Sales                              -          (353,577)          -              (353,577)
                                       ----------   ----------      ------------    ------------
     Gross Profit                                     (175,049)                         (175,049)

Operating expenses:

Research and development expenses         166,128        5,710           249,448         514,526
Selling general and administrative
    expenses                              275,121    1,211,161           579,591       1,770,223
                                       ----------   ----------      ------------    ------------
         Total operating expenses         441,249    1,216,871           829,039       2,284,759
                                       ----------   ----------      ------------    ------------

         Loss from operations             441,249    1,391,920           829,039       2,459,808

Interest income                            86,666       32,790           103,853          76,280
                                       ----------   ----------      ------------    ------------
         Loss before extraordinary
           item                           354,583    1,359,130           725,186       2,383,528

Extraordinary loss on the early 
  extinguishment of debt                    -            -               305,301           -                                       
         Net loss after extraordinary
           item                       $   354,583  $ 1,359,130     $   1,030,487   $   2,383,528
                                       ==========   ==========      ============    ============
Net loss per share

        Loss before extraordinary 
           item                          $  (0.11)    $  (.39)          $  (0.28)       $  (0.68)
        Extraordinary item                    -           -                (0.12)            -
                                          -------      -------           -------         -------
Net loss                                 $  (0.11)    $  (.39)          $  (0.40)       $  (0.68)
                                          =======      =======           =======         =======

Weighted average shares outstanding     3,293,850    3,500,030         2,548,206       3,491,483
                                        =========    =========         =========       =========

</TABLE>



                  See accompanying notes to financial statements

<PAGE>


                  Semiconductor Laser International Corporation

                            Statement of Cash Flows

<TABLE>
<CAPTION>
                                            Three Months Ended                 Six Months Ended
                                                 June 30,                          June 30,
                                             1996          1997             1996            1997
                                          (unaudited)   (unaudited)      (unaudited)     (Unaudited)
                                          ------------  ------------   -------------   ------------- 
<S>                                       <C>           <C>            <C>             <C>
Cash flows from operating activities:
Net loss                                  $  (354,583)  $(1,359,130)   $ (1,030,487)   $ (2,383,528)
Adjustments to reconcile net loss to
  net cash used in operating 
  activities:
   Depreciation                                14,863        34,153          25,896          59,347
   Amortization of debt discount                                             51,585
   Amortization of deferred expenses                                                         23,294
   Extraordinary loss on early                
     extinguishment of debt                                                 305,301
   Gain on sale of equipment                                                                (17,364)
Change in assets and liabilities:
   (Increase)decrease in accounts
     receivable, net                          (3,950)      (112,579)        (16,785)       (125,024)
   Decrease (increase)in inventory            (7,921)        12,514          (8,661)        (10,985) 
   (Increase) decrease in deposits
     and other assets                         (8,910)        23,991          (8,910)       (309,049)
   (Increase) decrease in deferred
     financing costs                                                        134,431   
   Increase (decrease) in accounts
     payable                                  (55,647)      120,528          47,845         271,647
   Increase(decrease) in accrued 
     expenses and other liabilities          (115,010)       (4,670)        (51,060)        (53,224)
   Increase in accrued royalty 
     payments                                                           
                                           -----------   -----------     -----------     -----------
Net cash used in operating activities        (531,158)   (1,285,193)       (550,845)     (2,544,886)
                                           -----------   -----------     -----------     -----------
Cash flows from investing activities:
Purchase of plant, property and 
   equipment                                 (308,935)     (271,838)       (339,904)     (2,818,291)
Sale of equipment                                                                         2,676,855    
Increase in intangible assets                                             
                                           -----------   -----------     -----------     -----------
Net cash provided from (used for)
   investing activities                      (308,935)     (271,838)       (339,904)       (141,436)   
                                           -----------   -----------     -----------     -----------
Cash flows from financing activities
Proceeds from long-term debt                                                455,000          31,306
Payments on long-term debt                    (20,434)       (7,762)       (859,223)        (15,971)
Issuance of common stock, net of
   expenses                                   243,457           493       7,567,442             493
                                           -----------   -----------     -----------     -----------
Net cash provided by financing
   activities                                 223,023        (7,269)      7,163,219          15,828
                                           -----------   -----------     -----------     -----------
Net (decrease) increase in cash, cash
   equivalents and restricted cash           (617,070)   (1,564,300)      6,272,470      (2,670,494)
Cash, cash equivalents and restricted
   cash at beginning of period              7,420,582     3,159,974         531,042       4,266,168
                                           -----------   -----------     -----------     -----------
Cash, cash equivalents and restricted 
   cash at end of period                  $ 6,803,512   $ 1,595,674     $ 6,803,512     $ 1,595,674
                                           ===========   ===========     ===========     ===========  
                           
       
</TABLE>


                  See accompanying notes to financial statements

<PAGE>


                  Semiconductor Laser International Corporation


                          Notes to Financial Statements
                                  June 30, 1997



1. Organization
     
   Semiconductor Laser International Corporation (the "Company") was 
   incorporated in New York State on September 21, 1993 to produce high power
   semiconductor diode laser wafers and bars ("HPDLs") and to market these
   products worldwide.

   The Company's primary activities since incorporation as a development 
   stage enterprise had been research and development, business planning,
   raising capital, and constructing and equipping its manufacturing 
   facility. The Company had previously relied on facilities provided 
   through the Wright Cooperative Research and Development Agreement (CRDA) 
   with the U.S. Air Force for the development and quality control testing 
   of its HPDLs.  The Company has since completed the construction of its
   manufacturing facility in Binghamton, New York where it is conducting all
   activities.

   Production of the Company's products has begun at the Company's new
   facility in Binghamton, New York.  Effective April 1, 1997 the Company is
   no longer considered a development stage enterprise. As a result, the
   accompanying financial statements are presented on the same basis as those
   of fully operating enterprises.
  
2. Basis of Presentation

   The accompanying unaudited financial statements have been prepared by the
   Company.  Certain information and footnote disclosures normally included
   in financial statements prepared in conformity with generally accepted 
   accounting principles have been condensed or omitted.  In the opinion of
   the Company's  management, the disclosures made are adequate to make the 
   information presented not misleading, and the financial statements 
   contain all adjustments necessary to present fairly the financial 
   position as of June 30, 1997 and the results of operations and cash 
   flows for the three and six month periods ended June 30,1997 and 1996.
   The results of operations for the three and six month periods ended
   June 30,1997 are not necessarily indicative of the results to be expected
   for the full year.

3. Summary of Significant Accounting Policies

   Use of Estimates

   The preparation of financial statements in conformity with generally 
   accepted accounting principles requires management to make estimates 
   and assumptions that affect the reported amounts of assets and 
   liabilities and disclosure of contingent assets and liabilities at the
   date of the financial statements and the reported amount of revenue 
   and expenses during the period.  Actual results could differ from those 
   estimates.

   Cash Equivalents

   The Company considers all highly liquid debt instruments purchased with
   an initial maturity of three months or less to be cash equivalents.

<PAGE>

   Inventory

   Inventory is valued at the lower of cost or market.  Cost is determined
   by the first in, first out (FIFO) method and the cost of finished goods
   includes costs to purchase materials and subcontracted labor costs.


   Depreciation and Amortization

   Property plant and equipment are recorded at cost and depreciated over
   the assets' estimated useful lives ranging from three to thirty years.
   Depreciation is computed using the straight line method for financial 
   reporting and the modified accelerated cost recovery system for income 
   tax purposes.  Expenditures for major renewals and betterments that 
   extend the useful lives of the property and equipment are capitalized.
   Expenditures for maintenance and repairs are charged to expense as 
   incurred.

   Intangible assets are amortized using the straight-line method over 
   five years.

   Research and Development

   Research and development costs are expended as incurred.  Included in 
   research and development expenses are costs related to the development
   of prototypes of $508,816 for the six month period ended June 30, 1997.

   Income Taxes

   The Company follows the asset and liability approach for deferred income
   taxes.  This method provides that deferred tax assets and liabilities 
   are recorded, using currently enacted tax rates, based upon the 
   difference between the tax bases of assets and liabilities and their 
   carrying amounts for financial statement purposes.  A valuation 
   allowance is recorded when it is more likely than not that deferred 
   tax assets will not be realized.

   Net Loss Per Share

   Net loss per share is computed using the weighted average number of 
   common shares outstanding and dilutive common share equivalents.  Common 
   shares issued, and options and warrants granted, by the Company during 
   the twelve months preceding the initial public offering have been 
   included in the calculation of common and common equivalent shares 
   outstanding as if they were outstanding for all periods presented using 
   the Treasury Stock method and an initial public offering price of $5.00 
   per share.  Options and warrants granted before the aforementioned 
   twelve-month period and subsequent to the Company's initial public 
   offering have been included in the calculation of common and common 
   equivalent shares outstanding when dilutive.

   In February 1997, the Financial Accounting Standards Board issued
   Statement of Accounting Standards No. 128, "Earnings per Share"
   ("FAS 128"), which requires the presentation of basic earnings per share
   in financial statements for reporting periods ending subsequent to
   December 15, 1997. Early adoption of FAS 128 is not permitted.  The
   adoption of FAS 128 is not expected to have a material impact on the
   Company's financial statements.

   As of June 30, 1997, the Company had outstanding warrants and options
   to purchase 2,176,334 and 163,308 shares of Common Stock, respectively,
   which are not included in the calculation of earnings per share for the
   three and six month periods ended June 30, 1997, and would not be included
   in such calculation under the guidance prescribed by FAS 128, due to the
   anti-dilutive nature of these instruments.


4. Commitment, Contingencies and Other Matters

   Operating Leases

   In October 1996, the Company entered into a master equipment lease 
   agreement with FINOVA Technology Finance, Inc. ("FINOVA").  The agreement
   provides for the sale and leaseback by the Company of up to $3,850,000 of
   equipment, furnishings and fixtures.  As part of the consideration for
   the agreement, the Company issued a warrant certificate for 58,334
   warrants, entitling FINOVA to purchase a corresponding number of shares
   of the Company's common stock at $5.00 per share.  The warrants cannot
   be assigned, sold, transferred or otherwise disposed of prior to
   February 27, 1998. The warrants are currently exercisable and have been
   valued at $167,710 and are being amortized over the term of the lease.

   Rent expense under non-cancellable operating leases, including the FINOVA
   leases, was $459,455 for the six months ended June 30,1997.

   Future minimum payments under non-cancellable operating leases, including 
   the FINOVA lease agreement, at June 30, 1997, are as follows:

<TABLE>
<CAPTION>

                                 Year ending
                                 December 31,      Commitment
                                -------------     -------------
<S>                                 <C>            <C>
                                    1997           $  535,000
                                    1998            1,009,000
                                    1999            1,009,000
                                    2000            1,009,000
                                    2001              213,000
                                                  -------------
                                                   $3,775,000
                                                  =============

</TABLE>

   Litigation

   The Company is currently engaged in a dispute with Theodore Konopelski
   ("Konopelski"), a former director, employee and officer of the Company.
   The dispute involves the termination of Konopelski's employment for 
   cause. An arbitration proceeding was instituted by Konopelski in 
   Syracuse, New York challenging his termination under his employment 
   contract.  Konopelski is seeking damages in the aggregate of $500,000.
   The arbitration is in process and the Company believes the termination 
   was proper and that no amount should be awarded to Konopelski.  
   Subsequent to the commencement of the arbitration, the Company brought 
   an action against Konopelski in the New York Supreme Court (Broome 
   County) alleging violation by Konopelski of his obligations under the 
   terms of a non-disclosure agreement between Konopelski and the Company. 
   The Court had issued a temporary restraining order barring Konopelski from 
   making any disclosures or using confidential information or trade 
   secrets.  Subsequently, the Court ruled that the issue of the
   non-disclosure agreement was not in their jurisdiction and rescinded the
   temporary restraining order and referred the issue of the non-disclosure
   agreement to the arbitration process.

   Mr. Konopelski was not proposed for reelection as a director and was not
   reelected as a director of the Company at the Annual Meeting of
   Stockholders held on June 20, 1997.

   The Company believes it will prevail in the arbitration as well as in all 
   matters with respect to the enforcement of Konopelski's non-disclosure
   obligations.  

<PAGE>

Item 2.  Managements Discussion and Analysis of Financial Condition and
         Results of Operations

   The following information should be read in conjunction with the 
   unaudited financial statements included herein.  See Item 1.

 OVERVIEW

  The Company's future results of operations and the other forward 
  looking statements contained in this discussion involve a number of risks
  and uncertainties.  In addition to the factors discussed below are other 
  factors that could cause actual results to differ materially such as 
  business conditions, growth in the industry and the general economy.

  The Company has begun the production of its products at its new facility
  in Binghamton, New York. Since its inception in 1993, the Company had been
  engaged primarily in research and development, business and financial
  planning, recruitment of key management and technical personnel, raising
  capital to fund operations and the development of its HPDL prototypes.  As
  a result, the Company has not generated any significant product sales through
  March 31, 1997.  The Company has completed the construction and equipping of
  the first phase of its manufacturing facility and has begun production of its
  products and the generation of sales revenues.  The Company also continues to
  secure licensing and other agreements for the production, marketing and sale
  of technologically improved products which complement its product line.

  As of August 1, 1997, the Company's orders backlog approximated $4,000,000.

 RESULTS OF OPERATIONS

  Three months ended June 30, 1997, compared to three months ended June 30,
  1996.
  
  Effective April 1, 1997, the Company is no longer considered to be in the
  Development Stage Enterprise. During the period in which the Company was
  considered a Development Stage enterprise, sales and the costs associated
  therewith were insignificant and were offset against research and
  development expenses.

  Sales were $179,000 compared to $0 for the same period in the prior
  year primarily the result of increasing commercial production during the
  three months ended June 30, 1997. Sales from prototypes in the same period
  in the prior year were insignificant and were offset against research and
  development expenses.
  
  Cost of Sales, which includes materials, production labor and certain
  overheads was $354,000 compared to $0 for the same period in the prior year.
  The increase is primarily associated with increased levels of labor
  and materials associated with the production process. Cost of sales levels
  are expected to exceed sales levels until sales levels commensurate with
  production capacity are achieved. It is currently expected
  that such levels will be achieved during the fourth quarter of 1997.

  Research and development expenditures were $5,710 for the three months
  ended June 30, 1997 as compared to $166,128 for the three months ended 
  June 30, 1996. The decrease of approximately $160,000 is primarily 
  associated with labor, materials and subcontract work being reflected as
  cost of sales where previously such costs were charged to research and
  development. Pure research and development expenditures were lower as a
  result of a concentration of resources on the production process.

  Selling, general and administrative expenses were $ 1,211,161 for the three
  months ended June 30, 1997 as compared to $275,121 for the same period in
  1996, an increase of approximately $936,000.  The increase is attributable
  to increased levels of employment, increased levels of employee benefits and
  overheads associated with higher levels of employment, increased levels of
  marketing expenses associated with the sales effort, increased legal and
  professional fees associated with ongoing litigation and patent activities,
  increased equipment leasing expenses, increased depreciation, increased
  utility costs and increases in expendable supplies.

  Interest income was $32,790 for the three months ended June 30, 1997, a
  decrease of approximately $54,000.  The decrease is attributable to lower
  levels of invested cash during the three months period ended June 30,1997.


  Six months ended June 30, 1997 compared to six months ended June 30, 1996.

  Increases in sales ($178,828) and increases in cost of sales ($353,577) are
  attributable to increased commercial production during the period.  In the
  six months ended June 30, 1996, sales of prototype products were
  insignificant and were reported as a reduction of research and development
  expenses.

  Research and development expenses for the six month period ended June 30,
  1997 were $514,526 as compared to $249,448 for the six month period ended
  June 30, 1996, an increase of approximately $265,000.  This increase is
  primarily attributable to increased levels of research and
  development activities during the first quarter of 1997, offset by the
  the concentrated effort on production versus research activities.

  Selling, general and administrative expenses increased approximately
  $1,500,000 for the six months ended June 30, 1997 as compared to the six
  months ended June 30, 1996 as a result of increased levels of employment,
  increased employee benefits and overhead associated with increased number
  of employees, increased insurance as a result of increased investment in
  capital assets, increased marketing expenses associated with the sales
  effort, increased professional fees associated with ongoing litigation,
  patent activities and ongoing requirements associated with reporting as a
  public Company, increased lease expenses associated with increased
  levels of leased equipment and increases in utility costs and depreciation
  associated with the Company's new production facility.

  Interest income decreased approximately $27,000 as a result of lower levels
  of cash available for investment purposes.

  The loss associated with the early extinguishment of debt decreased as a
  result of a non-recurrence of the event giving rise to such loss.


LIQUIDITY AND CAPITAL RESOURCES

  The Company's cash requirements have been significant and are expected to
  remain significant.  The Company's cash and cash equivalents at June 30,
  1997 were $1,595,674 as compared to $4,266,168 at December 31, 1996, a
  decrease of approximately $ 2,671,000 for the six months ended June 30,
  1997.

  The net cash used in operating activities for the six month period ended
  June 30, 1997 was $2,544,886 which funded the operating loss of $2,383,528
  and net changes in other working capital of $226,935, and which were offset
  by net non-cash expenditures of $65,277.

  Net cash used in investing activities of $141,436 was primarily the result
  of the excess of purchases of property and equipment over that which was
  sold to and leased back from FINOVA under the terms of that agreement.

  Although cash expenditures have been significant over the period and are
  expected to increase, additional cash flow is expected to result from full
  production levels and the increased sales of the Company's products.
  However, the timing of these sales cannot be assured and, based upon present
  cash levels and projected cash needs, the Company expects to raise additional
  capital in the near term to meet not only it present working capital
  requirements but also it needs associated with an expansion of its facilities
  to meet projected sales demand.  The Company believes sources of capital will
  be available to meet these demands.

<PAGE>


                          PART II. - OTHER INFORMATION

Item 1. Legal Proceedings.

     The Company is involved in litigation described in Note 4 in the 
     financial statements.  This litigation does not involve more than
     10% of the Company's assets


Item 2. Change in Securities.

     None


Item 3. Defaults Upon Senior Securities.

     None


Item 4. Submission of Matters to a Vote of Security Holders.

        (a) The Annual Meeting of Shareholders of Semiconductor Laser
            International Corporation was held on June 20, 1997

        (b) The following five Directors were elected at the Annual Meeting:

                               Dr. Geoffrey T. Burnham
                               Susan M. Burnham
                               George W. Barrett
                               David L. Koffman
                               Brian J. Thompson

        (c) The vote was as follows for the ratification of Price Waterhouse
            LLP as the Company's independent Public Accountants:

                          For                   2,883,981
                          Against                   3,000
                          Abstain                  11,550


Item 5. Other Information.

        On July 15, 1997, the Board of Directors ratified the appointment
        of Mr. Michael P. Murphy, Esq. to the Board Of Directors of
        Semiconductor Laser International Corporation.  Mr. Murphy is a
        partner in the firm of Arter & Haden and is based in their Washington,
        D.C. office.


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

         (a)   Exhibits.

               No. 11   Statement re: Computation of Weighted Average
                          Shares Outstanding

               No. 27   Financial Data Schedule

         (b)   Reports on Form 8-K.
               
                     None

<PAGE>

                                 SIGNATURES

  Pursuant to the requirements of the Securities and Exchange Act of 1934, the
  Registrant has duly caused this report to be signed on its behalf by the 
  undersigned thereto duly authorized.


                    Semiconductor Laser International Corporation
                    ---------------------------------------------
                                     (Registrant)



  Date:August 14, 1997                 By:/s/ Geoffrey T Burnham
                                          ----------------------------
                                          Geoffrey T. Burnham
                                          Chairman, President and 
                                            Chief Executive Officer


  Date: August 14, 1997                By:/s/ Nicholas L.Prioletti, Jr.
                                          -----------------------------
                                          Nicholas L. Prioletti, Jr.
                                          Chief Financial Officer, 
                                            Principal Financial Officer
                                            and Principal Accounting 
                                            Officer