UNITED STATES 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 quarter ended September 30, 1996

[ ]  Transition report under Section 13 or 15(d) of the Securities Exchange  Act
     of 1934 For the transition period from ____________ to ____________

                       Commission file number: 33-93982-LA

                             ANNIE'S HOMEGROWN, INC.
--------------------------------------------------------------------------------
        (Exact name of Small Business Issuer as specified in its charter)

        DELAWARE                                             06-1258214
------------------------------                    ------------------------------
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                          Identification No.)

 180 SECOND STREET, SUITE 202, CHELSEA, MA                     02150
--------------------------------------------------------------------------------
 (Address of principal executive offices)                   (Zip Code)

                                  617-889-2822
--------------------------------------------------------------------------------
                (Issuer's telephone number, including area code)

                                      NONE
--------------------------------------------------------------------------------

(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 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 _____         No __X__

Number of shares of Common Stock,  $.001 par value,  outstanding as of September
30, 1996:

                                4,256,985 shares

Transitional Small Business Disclosure Format (check one): Yes ___    No _X_



                             ANNIE'S HOMEGROWN, INC.

                                      Index


                                                                        Page No.
                                                                        --------
Part I       Financial Information

Item 1.      Financial Statements

             Balance Sheet as of September 30, 1996 (unaudited)               3

             Statements of Operations for the Nine Months Ended
             September 30, 1996 and 1995 (unaudited)                          4

             Statements of Cash Flows for the Nine Months Ended
             September 30, 1996 and 1995 (unaudited)                          5

Item 2.      Management's Discussion and Analysis of Financial Condition
             and Results of Operation                                        6-8


Part II      Other Information

Item 6.      Exhibits and Reports on Form 8-K                                  9

             Signatures                                                        9





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Statement of Fair Presentation

The  financial  information  included  herein is  unaudited.  In  addition,  the
financial  information does not include all disclosures required under generally
accepted accounting  principles because certain note information included in the
Company's  annual report to shareholders  has been omitted and such  information
should be read in conjunction with the prior year's annual report.  However, the
financial  information reflects all adjustments  (consisting of normal recurring
adjustments)  which are,  in the  opinion  of  management,  necessary  to a fair
statement  of  results  for the  interim  periods.  The  Company  considers  the
disclosures adequate to make the information presented not misleading.


                                      -2-




                             ANNIE'S HOMEGROWN, INC.
                                  Balance Sheet
                                    Unaudited

                                                              September 30, 1996
                                                              ------------------
                                     Assets
Current assets
    Cash and cash equivalents                                        $  421,996
    Accounts receivable
       Trade                                                            237,863
       Related parties                                                   53,517
    Inventory                                                           433,294
    Other current assets                                                  2,221
         Total current assets                                         1,148,542

Office equipment                                                         59,111
Accumulated depreciation                                                (33,291)
         Office equipment, net                                           25,820

Due from officer                                                         75,000
Other assets                                                             31,532
                                                                    ------------

         Total assets                                                $1,281,243

                  Liabilities and Stockholders' Equity (Deficit)
Current liabilities
    Notes payable                                                    $    7,500
    Accounts payable, trade                                             537,219
    Accrued expenses                                                    103,394
    Due to employees                                                     47,614
                                                                    ------------
         Total current liabilities                                      695,727

Commitments

Stockholders' equity (deficit) Common stock, $.001 par value.
     Authorized 10,000,000 shares
     issued 4,368,891 shares                                              4,369
    Additional paid in capital                                        1,782,808
    Accumulated deficit                                              (1,109,911)
    Note receivable stockholder
(1,750)
    Treasury stock, 111,906 common shares at cost                       (90,000)
         Total stockholders equity (deficit)                            585,516

         Total liabilities and stockholders' equity                  $1,281,243



                                      -3-




<TABLE>
<CAPTION>


                             ANNIE'S HOMEGROWN, INC.
                            Statements of Operations
                                    Unaudited

                                                   Three months ended                  Nine months ended
                                                      September 30,                      September 30,   
                                                  ----------------------             ---------------------
                                                 1995               1996             1995                1996 
                                             --------------     --------------   --------------     --------------

<S>                                           <C>                <C>               <C>                <C>        
Net sales                                     $ 1,328,834        $ 1,111,025       $ 3,519,146        $ 3,421,973

Cost of sales                                     787,841            643,628         2,068,784          2,077,951
                                             ------------       --------------   -------------      --------------

         Gross profit                             540,993            467,397         1,450,362          1,344,022

Operating expenses:
     Selling                                      367,165            259,332           966,615          1,023,758
     General and administrative                   204,457            158,048           518,748            487,063
     Slotting fees                                113,095             11,685           278,266            215,698
     Compensation of outside directors                 -                   -                -              15,000
                                             ------------      ---------------   -------------      -------------

         Total operating expenses                 684,717            429,065         1,763,629          1,741,519
                                             ------------      ---------------   -------------      -------------

         Operating income (loss)                 (143,724)            38,332          (313,267)          (397,497)

Other income (loss) 
     Interest expense and other charges            (8,277)            (6,634)          (20,945)           (32,272)
     Interest and other income                         24              2,000            19,394             13,005
                                             -------------     ---------------   -------------     --------------

         Income (loss) before income tax         (151,977)            33,698          (314,818)          (416,764)

Income tax expense                                    166                223             2,129              2,273
                                             -------------     ---------------   -------------     --------------

         Net income (loss)                     $ (152,143)         $  33,475         $(316,947)         $(419,037)
                                             =============     ===============   =============     ==============


Weighted average common
  shares outstanding                            4,000,308          4,990,222         3,966,546          4,155,550

Net income (loss) per share                          (.04)               .01              (.08)              (.10)

</TABLE>


                                      -4-







                             ANNIE'S HOMEGROWN, INC.
                            Statements of Cash Flows
                                    Unaudited
<TABLE>
<CAPTION>
                                                                                  Nine months ended
                                                                                    September 30,   
                                                                                ---------------------
                                                                           1995                       1996  
                                                                      --------------             --------------
<S>                                                                 <C>                          <C>
Cash flows from operating activities:
    Net income (loss)                                                  $ (316,947)                  $ (419,037)
    Adjustments to reconcile net income (loss) to net
     cash (used in) provided by operating activities:
         Depreciation and amortization                                      6,200                        9,000
         Outside directors compensation                                         -                       15,000
         Changes in
             Accounts receivable - trade                                  (16,261)                     (33,170)
             Affiliate accounts, net                                      265,877                      (32,764)
             Inventory                                                    130,831                      (27,530)
             Other assets                                                 (16,744)                     (14,100)
             Accounts payable - trade                                     128,003                      (54,440)
             Accrued expenses                                              58,934                      (76,189)
               Due to employees                                            (3,771)                      (2,100)
                                                                       ----------                   ----------
                  Net cash (used in) provided by
                   operating activities                                   236,122                     (635,330)

Cash flows from investing activities:
     Purchases of office equipment                                        (11,601)                      (2,489)
                                                                       ----------                   ----------
                  Net cash (used in) investing activities                 (11,601)                      (2,489)

Cash flows from financing activities:
     Repayment of notes payable                                           (91,750)                     (32,129)
     Net proceeds from notes payable                                      41,092                             -
     Issuance of common stock and exercise
      of stock options, net                                              (176,134)                   1,056,481
                                                                      -----------                  -----------
                  Net cash (used in) provided by
                   financing activities                                  (226,792)                   1,024,352

Net (decrease) increase in cash and cash equivalents                       (2,271)                     386,533
Cash and cash equivalents, beginning of period                              2,442                       35,463
                                                                      -----------                  -----------

Cash and cash equivalents, end of period                               $      171                   $  421,996
                                                                      ===========                 ============

Supplemental disclosure of cash flow information
     Cash paid for interest                                            $   20,605                   $   28,293
                                                                      ===========                 ============
     Cash paid for income taxes                                        $    2,128                   $    2,273
                                                                      ===========                 ============
Supplemental disclosure of noncash financing  activities are as follows:  
     During 1996,  $15,000 in  compensation  expense  was  recorded  
     for stock  options granted to four outside directors.


</TABLE>

                                      -5-




                             ANNIE'S HOMEGROWN, INC.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS


OVERVIEW

The Company's net sales are generated by sales to  supermarkets  and natural and
specialty food stores. Net sales are net of product returns and allowances.  The
Company  sells most of its product to its customers on a credit basis with 2% 10
day,  net 15 day terms.  The Company has  developed  four  premium  macaroni and
cheese dinners: Annie's Shells and Cheddar, Annie's Alfredo, Annie's Whole Wheat
Shells and  Cheddar,  and Annie's  Mild  Mexican(TM)  . The Company  also has an
agreement with a specialty retailer to provide a private label house brand using
the Company's  premium all natural white cheddar cheese  formulae  together with
elbow macaroni.

The Company's cost of sales consists of purchasing  cheese from cheese  supplier
as  well as  finished  product  from a  pasta  manufacturer.  The  products  are
manufactured  according to the  specifications  provided by the  Company,  which
include the recipe,  ingredients,  graphics and packaging  for the product.  The
Company  products are shipped  directly from the manufacturer via common carrier
to either of two public warehouses located in Massachusetts and California.  The
Company  generally  distributes its products by either shipping  directly to the
supermarket chains' central warehouses or to a wholesale grocery distributor.

Selling expenses include the costs of product marketing, sales commissions, cost
of product distribution and account management.  The Company retains brokers who
present the  Company's  products to  supermarket  chains and  distributors.  The
brokers  work on a commission  basis,  generally  5% of net cash  received.  The
Company  negotiates,  through  the  broker,  the cost of  acquiring  shelf space
(introductory  slotting)  as  well  as the  continuing  support  needed  for the
product.  Introductory  slotting fees can take the form of cash payments  and/or
free product allowances.

The Company's strategy is to continue to expand its supermarket and natural food
distribution  nationally  as well as to develop new and unique all natural  food
products for sale to its existing customer base.



RESULTS OF OPERATIONS


NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1995

NET SALES.  Net sales  decreased by $97,173 or 2.76% from  $3,519,146 in 1995 to
$3,421,973 in 1996.  The net sales decrease was primarily a result of our growth
in the  slotting of new  accounts  in 1995.  The  Company  believes  that it has
penetrated all major supermarket  chains in the New England states, and sells in
several major  supermarket  chains in New York and  California.  The Company has
expanded its supermarket  business into the  Mid-Atlantic  states as well as the
Rocky Mountain region.  The Company believes it has penetrated many of the major
natural  food  market  stores  across the  country.  Additionally,  the  Company
continues to produce for a specialty retailer their private label brand macaroni
and cheese dinner using the Company's white cheddar cheese formula.

GROSS PROFIT.  As a percentage of net sales,  gross profit decreased from 41.21%
in 1995 to 39.26% in 1996.  This  decrease was primarily a result of the Company
expanding its business into  supermarkets  using  distributors  instead of going
direct through their supermarket warehouse. The sale to the distributors carry a
lower margin.


                                      -6-




                             ANNIE'S HOMEGROWN, INC.

                MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED


SELLING EXPENSES. Selling expenses increased by $57,143 or 5.9% from $966,615 in
1995 to  $1,023,758  in 1996 and  increased  as a  percentage  of net sales from
27.46%  in 1995 to  29.95%  in 1996.  The  increase  in  selling  expenses  as a
percentage  of net sales  primarily  reflected  an increase in spending in three
primary  areas:  (i) the hiring of additional  personnel to sell and support the
Company's  products and customer  base,  (ii) increase in freight costs due to a
customer  base  expanding   further  away  from  the  Company's   warehouses  in
Massachusetts and California,  (iii) marketing costs, including price reductions
and trade  show  appearances,  associated  with the  continued  roll-out  of the
Company's products in 1996.

GENERAL  AND  ADMINISTRATIVE  EXPENSES.   General  and  administrative  expenses
decreased  by $33,476 or 6.45% from  $518,748  in 1995 to  $485,272  in 1996 and
decreased  as a  percentage  of net sales from 14.74% in 1995 to 14.20% in 1996.
This decrease was due primarily to controlling expenditures related to personnel
cost.  The  administrative   staff  was  reduced  as  the  need  to  handle  the
administration of the Company's initial public offering  decreased and the staff
increased their volume of normal work.

SLOTTING FEES. Slotting expenses decreased by $62,568 or 22.48% from $278,266 in
1995 to $215,698 in 1996,  and decreased as a percentage of net sales from 7.91%
in 1995 to 6.31% in 1996.  The  decrease  was due to the  Company's  decision to
scale back the expansion of  purchasing  additional  shelf space which  requires
paying  introductory  slotting  fees  for the  acquisition  of  shelf  space  at
supermarkets.  These  slotting  fees are required by most  supermarkets  and are
expensed at the time of product introduction.

COMPENSATION OF OUTSIDE  DIRECTORS.  In 1996,  $15,000 in compensation for stock
options granted was recorded for the four outside  directors of the Company.  In
1995,  the Company had $45,000 paid to the four outside  directors in the fourth
quarter.  No  compensation  was paid to its directors who also were employees of
the Company.


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

NET SALES.  Net sales decreased by $217,809 or 16.39% from $1,328,834 in 1995 to
$1,111,025 in 1996.  The net sales decrease was primarily a result of our growth
in the  slotting of new  accounts  in 1995.  The  Company  believes  that it has
penetrated all major supermarket  chains in the New England states, and sells in
several major  supermarket  chains in New York and  California.  The Company has
expanded its supermarket  business into the  Mid-Atlantic  states as well as the
Rocky Mountain  region.  The Company believes it has penetrated all of the major
natural food market stores across the country.

GROSS PROFIT.  As a percentage of net sales,  gross profit increased from 40.71%
in 1995 to 42.07% in 1996.  This  increase was primarily a result of the Company
switching to a lower price supplier in 1996 from 1995. Also, contributing to the
increase  was lower sales in less  profitable  items.  These items carry a lower
gross profit than our standard macaroni and cheese items.


SELLING EXPENSES. Selling expenses decreased by $107,833 or 29.37% from $367,165
in 1995 to  $259,332 in 1996 and  decreased  as a  percentage  of net sales from
27.63%  in 1995 to  23.34%  in 1996.  The  decrease  in  selling  expenses  as a
percentage of net sales primarily  reflected a decrease in spending in marketing
costs, including advertising and price reductions.



                                      -7-





                             ANNIE'S HOMEGROWN, INC.

                MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED

GENERAL  AND  ADMINISTRATIVE  EXPENSES.   General  and  administrative  expenses
decreased  by $46,409 or 22.70%  from  $204,457  in 1995 to $158,048 in 1996 and
decreased  as a  percentage  of net sales from 15.39% in 1995 to 14.23% in 1996.
This decrease was due primarily to controlling expenditures related to personnel
cost.  The  administrative   staff  was  reduced  as  the  need  to  handle  the
administration of the Company's initial public offering  decreased and the staff
increased their volume of normal work.

SLOTTING FEES.  Slotting expenses  decreased by $101,410 or 89.67% from $113,095
in 1995 to $11,685 in 1996,  and  decreased  as a  percentage  of net sales from
8.51% in 1995 to 1.05% in 1996.  The decrease was due to the Company's  decision
to scale back the expansion of purchasing  additional shelf space which requires
paying  introductory  slotting  fees  for the  acquisition  of  shelf  space  at
supermarkets.  These  slotting  fees are required by most  supermarkets  and are
expensed at the time of product introduction.


LIQUIDITY AND CAPITAL RESOURCES

The Company has  financed  its  operations  to date  through the initial  public
offering  of  Common  Stock,   private  sale  of  equity  and  convertible  debt
securities,  a line of credit from a financial  institution  and cash  generated
from  operations.  At  September  30, 1996,  the Company had working  capital of
$452,815. The increase in working capital was primarily generated by the initial
public offering of the Company.

The Company has a revolving  line of credit with a financial  institution in the
amount of $150,000 which bears interest at the prevailing prime rate plus 3%. In
addition,  each borrowing  incurs a service fee which varies from 0.5% to 8% (up
to 90 days)  depending on the number of days the borrowing is  outstanding.  The
line of credit is secured by the Company's accounts receivable and inventory and
guaranteed by an officer and certain directors of the Company. In June 1996, the
Company  renegotiated  its line of credit with the  financial  institution.  The
Company increased its line of credit from $150,000 to $300,000. In addition, the
service  fees  charged  were  reduced from 0.5% to 8% (up to 90 days) to 0.4% to
6.4% (up to 90 days).  The Company also has a $10,000  unsecured  line of credit
with a bank which  bears  interest  at the prime rate plus  8.9%.  At  September
30,1996 the Company had no outstanding borrowings under the lines of credit.

On July 31, 1996, the Company closed its offering. In total, 256,490 shares were
sold resulting in gross proceeds of approximately $1,500,000.  Expenses from the
inception of the offering totaled approximately  $325,000.  Some of the proceeds
were used to fund  operating  losses during the first nine months of fiscal 1996
amounting  to   approximately   $419,000,   which  included   slotting  fees  of
approximately  $215,000.  The Company  expects  profitable  operations  over the
balance of the year.

The Company's primary capital needs are for expansion into national  supermarket
distribution  and to develop new  products.  The  Company  intends to expand its
supermarket  distribution  throughout the United States by acquiring shelf space
or new "slots" (one product in one store equals one slot). The Company's planned
expenditures  for slotting  fees for the balance of 1996 are to be funded with a
portion of the net proceeds of the initial public offering. The Company believes
that the net proceeds  from the public  offering,  together  with the  Company's
increased line of credit and funds that may be generated from  operations,  will
be  sufficient  to fund the  Company's  currently  anticipated  working  capital
requirement and expenditure for at least the next twelve months.



                                      -8-








                             ANNIE'S HOMEGROWN, INC.

                           PART II - OTHER INFORMATION


 EXHIBITS LIST AND REPORTS ON FORM 8-K

(A) EXHIBITS

     Exhibit Number
     --------------
         27.1                                        Financial Data Schedule

 (B) REPORTS ON FORM 8-K

 No reports on Form 8-K were filed by the Company  during the  Company's  fiscal
quarter ended September 30, 1996.





                                   SIGNATURES

In accordance with the requirements of the Securities  Exchange Act of 1934, the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.



                                               ANNIE'S HOMEGROWN, INC.


Date: November 27, 1996               /s/ Paul B. Nardone
      -----------------               ---------------------------------
                                          Paul B. Nardone
                                          President


Date: November 27, 1996               /s/ Neil Raiff
      -----------------               ----------------------------
                                          Neil Raiff
                                          Chief Financial Officer & Treasurer



                                      -9-