UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[ ]  Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
     of 1934 For the quarter ended ___________________

[X]  Transition report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934 For the  transition  period  from January 1, 1997 to March 31, 1997
                                               ---------------    --------------

                       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)

                                   December 31
--------------------------------------------------------------------------------
(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  X   No 
    ---     ---

Number of shares of Common Stock,  $.001 par value,  outstanding as of March 31,
1997:

                                4,256,895 shares
                                ----------------

Transitional Small Business Disclosure Format (check one):  Yes      No  X
                                                                ---     ---






                             ANNIE'S HOMEGROWN, INC.

                                      Index
                                      -----
<TABLE>
<CAPTION>

                                                                                          Page No.
                                                                                          --------
<S>            <C>                                                                      <C>
Part I.           Financial Information

                  Item 1. Financial Statements
                  Balance Sheet as of March 31, 1997  (unaudited)                            3

                  Statements of Operations for the Three Months Ended
                  March 31, 1997 and 1996 (unaudited)                                        4

                  Statements of Cash Flows for the Three Months Ended
                  March 31, 1997 and 1996 (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                                   8

                  Signatures                                                                 9

</TABLE>

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

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
<TABLE>
<CAPTION>

                                                                                      March 31,1997
                                                                                      -------------
                                     Assets

Current assets
<S>                                                                                   <C>       
    Cash and cash equivalents                                                         $  483,420
    Accounts receivable
       Trade                                                                              36,578
       Related parties                                                                    42,073
    Inventory                                                                          1,162,391
    Other current assets                                                                     776
                                                                                     -----------
         Total current assets                                                          1,725,238

Office equipment, plates and dies                                                         85,641
Accumulated depreciation                                                                 (39,964)
                                                                                     -----------
         Office equipment, plates and dies, net                                           45,677

Due from officer                                                                          75,000
Other assets                                                                              26,809
                                                                                     -----------

         Total assets                                                                $ 1,872,724
                                                                                     ===========

                           Liabilities and Stockholders' Equity
Current liabilities
    Notes payable                                                                    $     -
    Accounts payable, trade                                                              594,820
    Accrued expenses                                                                      87,493
    Deferred revenue from distributor                                                    424,224
    Due to employees                                                                      41,706
                                                                                      ----------
         Total current liabilities                                                     1,148,243

Commitments

Stockholders' equity 
    Common stock, $.001 par value.
    Authorized 10,000,000 shares:
      issued 4,368,801 shares                                                              4,369

    Additional paid in capital                                                         1,761,932
    Accumulated deficit                                                                 (950,070)
    Note receivable stockholder                                                           (1,750)
    Treasury stock, 111,906 common shares at cost                                        (90,000)
                                                                                     -----------
         Total stockholders equity                                                       724,481

         Total liabilities and stockholders' equity                                  $ 1,872,724
                                                                                     ===========
</TABLE>

                                      -3-







                             ANNIE'S HOMEGROWN, INC.
                            Statements of Operations
                                    Unaudited
<TABLE>
<CAPTION>
                                                                        Three months ended

                                                                            March 31,____
                                                                            -------------
                                                                    1996                     1997  
                                                                    ----                     ----  

<S>                                                            <C>                      <C>        
Net sales                                                      $ 1,408,483              $ 1,948,272

Cost of sales                                                      888,505                1,193,518
                                                               -----------               ----------

         Gross profit                                              519,978                  754,754

Operating expenses:
     Selling                                                       405,350                  479,429
     General and administrative                                    187,058                  226,394
     Slotting fees                                                  57,727                   12,842
     Compensation of outside directors                               9,000                     -
                                                                ----------             ------------

         Total operating expenses                                  659,135                  718,665
                                                                   -------             ------------

         Operating income (loss)                                  (139,157)                  36,089

Other income (loss)
     Interest expense and other charges                            (10,789)                 (18,582)
     Interest and other income                                         521                    3,705
                                                               -----------              -----------

         Income (loss) before income tax                          (149,425)                  21,212

Income tax expense                                                   2,050                    1,050
                                                               -----------               ----------

         Net income (loss)                                      $ (151,475)              $   20,162
                                                               ===========               ==========

Weighted average common
  shares outstanding                                             4,090,700                4,990,127

Net income (loss) per share                                         $ (.04)              $      .00

</TABLE>

                                      -4-





                             ANNIE'S HOMEGROWN, INC.
                            Statements of Cash Flows
                                    Unaudited
<TABLE>
<CAPTION>

                                                                               Three months ended
                                                                                    March 31,        
                                                                          -----------------------------
                                                                            1996                 1997  
                                                                      --------------         -------------
Cash flows from operating activities:

<S>                                                                     <C>                   <C>       
    Net income (loss)                                                   $ (151,475)           $   20,162
    Adjustments to reconcile net income (loss) to net
     cash (used in) provided by operating activities:

         Depreciation and amortization                                       3,000                 4,500
         Outside directors compensation                                      9,000                  -
         Changes in:

             Accounts receivable - trade                                  (149,682)               49,518
             Affiliate accounts, net                                        (6,623)               55,617
             Inventory                                                     172,688                71,719
             Other assets                                                  (25,994)                4,060
             Accounts payable - trade                                      (88,913)             (422,810)
             Accrued expenses                                               (9,205)              (17,560)
               Deferred revenue from distributor                               -                (110,844)
             Due to employees                                                  -                  (2,955)
                                                                      ------------           -----------
                  Net cash (used in) provided by
                   operating activities                                   (247,204)             (348,593)

Cash flows from investing activities:
     Purchases of equipment                                                 (1,891)              (10,975)
                                                                        ----------          ------------
                  Net cash (used in) investing activities                   (1,891)              (10,975)

Cash flows from financing activities:
     Repayment of notes payable                                                -                 (17,514)
     Net proceeds from notes payable                                        95,441                -
     Issuance of common stock and exercise
      of stock options, net                                                185,624                -
                                                                           -------           -----------
                  Net cash (used in) provided by
                   financing activities                                    281,065               (17,514)

Net (decrease) increase in cash and cash equivalents                        31,970              (377,082)
Cash and cash equivalents, beginning of period                              35,463               860,502
                                                                            ------            ----------

Cash and cash equivalents, end of period                                 $  67,433           $   483,420
                                                                         =========           ===========

Supplemental disclosure of cash flow information
     Cash paid for interest                                              $  10,789           $    18,582
                                                                        ==========          ============
     Cash paid for income taxes                                          $   2,050           $     1,050
                                                                       ===========          ============
</TABLE>


                                      -5-





                             ANNIE'S HOMEGROWN, INC.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

OVERVIEW

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) . In January 1997, the Company introduced a new line of
all natural pasta dinners called Annie's One-Step. The dinners combine different
pasta shapes with five sauce recipes which provide the  convenience of one-step,
one-pot  cooking as follows:  Annie's  One-Step  Rotini with Four Cheese  Sauce,
Annie's  One-Step Penne Pasta with Alfredo  Sauce,  Annie's  One-Step  Radiatore
Pasta with Sundried  Tomato and Basil Sauce,  Annie's  One-Step  Corkscrew Pasta
with Savory Herb and Garlic Sauce,  and Annie's  One-Step Curly  Fettuccine with
White  Cheddar and Broccoli  Sauce.  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 formula together with elbow macaroni.

In October 1996, the Company signed a master distribution agreement with Liberty
Richter, Inc. ("Liberty").  The agreement calls for Liberty to distribute all of
the Company's  products except for the private label and mail order lines in the
continental United States. The Company sells the products to Liberty who in turn
sells the  products  to its two main  classes of trade;  supermarket  chains and
natural and specialty food stores.  Liberty has two  warehouses,  one located in
New Jersey and the other located in California.

Liberty  distributes and sells Annie's  products within the territory  utilizing
its own  sales  force and sub  distributors  that they  maintain.  In  addition,
Liberty  provides other  services such as order  processing,  invoicing,  record
management, sales coverage, broker management,  promotion execution,  management
of sales  allowances  and food show  participation.  All promotions and slotting
presentations  as well as sub  distributors  and  brokers are subject to Annie's
approval.

Under the Liberty  Agreement,  Liberty must  distribute  all new  products  that
Annie's chooses to distribute  through  Liberty's  channels unless Liberty has a
preexisting  non compete  provision with another  vendor.  The initial  contract
expires December 31, 1997, with automatic  renewals  scheduled on a year to year
basis.

The Company's  cost of sales  consists of the cost of finished  product  shipped
from a co-packer.  The raw materials  are purchased by the Company  according to
the  specifications   provided  by  the  Company,   which  include  the  recipe,
ingredients,  graphics  and  packaging  for  the  product  and  shipped  to  the
co-packer.  The co-packer  packages the raw materials into the appropriate boxes
and cases according to orders specified by the Company. The products are shipped
directly  from the  co-packer  via  common  carrier to either of  Liberty's  two
warehouses.  The Company distributes its products through Liberty's distribution
system to either 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.  Liberty retains brokers at the
approval of the Company 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 as indicated.  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  distribution
nationally in addition to developing new and unique all-natural food products to
sell to its existing  customer base.  The Company  believes it will benefit from
greater trade relations due to Liberty's  favorable  position in the supermarket
and natural food trade.  Management believes its consolidated  distribution with
Liberty's other products will provide the Company greater access to key accounts
in expansion  markets as well as facilitate new product  introductions  into its
existing customers.


                                      -6-





                             ANNIE'S HOMEGROWN, INC.

                MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996

NET SALES.  Net sales increased by $539,789 or 38.32% from $1,408,483 in 1996 to
$1,948,272 in 1997.  The net sales increase was primarily a result in two areas:
(1) expansion of the current market base including an increase in sales of Whole
Wheat and Mild  Mexican(TM)  products,  and (2) the introduction of the One-Step
meals.

GROSS PROFIT.  As a percentage of net sales,  gross profit increased from 36.92%
in 1996 to  38.73%  in 1997.  This  increase  was  primarily  the  result of the
Company's decision to purchase all its raw materials directly from suppliers and
having the  co-packers  produce the  product  using  these raw  materials.  This
enabled the Company to achieve  better  pricing  than  purchasing  the  finished
product from the co-packer where the co-packer provided the raw materials.

SELLING EXPENSES.  Selling expenses increased by $74,079 or 18.27% from $405,350
in 1996 to  $479,429 in 1997 and  decreased  as a  percentage  of net sales from
28.78%  in 1996 to 24.61%  in  1997.   The  increase  in  selling  expenses  was
primarily a result of an increase in marketing costs, including price reductions
and trade  show  appearances,  associated  with the  continued  roll-out  of the
Company's new products in 1997 and the increase in sales in the first quarter of
1997.

GENERAL  AND  ADMINISTRATIVE  EXPENSES.   General  and  administrative  expenses
increased  by $39,336 or 21.03%  from  $187,058  in 1996 to $226,394 in 1997 and
decreased  as a  percentage  of net sales from 13.28% in 1996 to 11.62% in 1997.
The  increase in general and  administrative  expenses is a result of  increased
legal fees  relating to reporting  requirement  of the  Securities  and Exchange
Commission as well as an increase in printing costs relating to new products.

SLOTTING FEES.  Slotting expenses decreased by $44,885 or 77.75% from $57,727 in
1996 to $12,842 in 1997,  and  decreased as a percentage of net sales from 4.10%
in 1996 to 0.66% in 1997. The decrease was due to the Company's decision to slow
down 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,  $9,000 in compensation  for stock
options granted was recorded for the four outside directors of the Company.

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 March 31, 1997, the Company had working capital surplus of
$576,995.  The increase in working capital was primarily generated by the amount
of working capital received through the Company's initial public offering.

Most of the Company's  sales are made to Liberty under  contract  terms allowing
certain rights of return on unsold  product held by Liberty.  The contract calls
for  Liberty to pay the  Company  based on terms  relating to the receipt of the
Company's  products by Liberty.  The Company  defers  recognition  of such sales
until  the  product  is sold  by  Liberty  to its two  main  classes  of  trade;
supermarket chains and natural and specialty food stores.


                                      -7-





                             ANNIE'S HOMEGROWN, INC.

                MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED

Net cash used in operating  activities for the three months ended March 31, 1997
was $348,593, consisting primarily of payments made against accounts payable.

Net cash used in investing activities consisted of capital expenditures totaling
$10,975 which related principally to the purchase of plates and dies for the new
products.

The  Company  has a $10,000  unsecured  line of credit  with a bank which  bears
interest  at the prime  rate plus 8.9%.  At March 31,  1997 the  Company  had no
outstanding borrowings under the line of credit.

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 believes
that the net proceeds from the public offering, together with the funds that may
be generated from operations, will be sufficient to fund the Company's currently
anticipated  working capital  requirement  and  expenditure  requirements for at
least the next twelve months.

In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting Standards No. 128, Earnings per Share (FASB No. 128). FASB
No. 128 supersedes APB No. 15 and specifies the computation,  presentation,  and
disclosure  requirements  and earnings per share.  FASB No. 128 is effective for
financial  statements  for both interim and annual periods ending after December
15, 1997 and early application is not permitted.  Accordingly,  the Company will
apply FASB No. 128 for the quarter  ended  December  31, 1997 and restate  prior
period  information as required under the statement.  The Company has determined
that if the FASB No. 128 had been applied for the first quarter ending March 31,
1997, the impact on earnings per share as currently stated would be immaterial.


                             ANNIE'S HOMEGROWN, INC.

                           PART II - OTHER INFORMATION

 EXHIBITS LIST AND REPORTS ON FORM 8-K

(A) EXHIBITS

     Exhibit Number
     --------------

         11                    Statement Re: Computation of Per Share Earnings
         27.1                  Financial Data Schedule


 (B) REPORTS ON FORM 8-K

 The company filed a current report on Form 8-K dated March 27, 1997 reporting a
change in the Company's fiscal year end from December 31 to March 31.


                                      -8-




                                   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: May 14, 1997                            /s/ Paul B. Nardone
      ------------                           ----------------------------
                                             Paul B. Nardone
                                             President

Date: May 14, 1997                            /s/ Neil Raiff
      ------------                           ----------------------------
                                             Neil Raiff
                                             Chief Financial Officer & Treasurer


                                      -9-





                                   EXHIBIT 11
                 STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS

                             ANNIE'S HOMEGROWN, INC.
                    COMPUTATION OF EARNINGS PER COMMON SHARE
                       (IN 000S EXCEPT FOR PER SHARE DATA)
                        THREE MONTHS ENDED MARCH 31, 1996

<TABLE>
<CAPTION>
Primary Computation
-------------------
<S>                                                                    <C>   
     Net loss per statement of operations                              $(151)
                                                                       ======

     Weighted average number of common
      shares outstanding                                               4,091

     Weighted average number of common
      stock equivalents                                                  -
                                                                       ----
     Weighted average number of common
      shares as adjusted                                               4,091

     Primary loss per common share                                    $ (.04)
                                                                      =======


Fully Diluted Computation
-------------------------
     Net loss per statement of operations                              $(151)
                                                                       ======

     Weighted average number of common
      shares outstanding                                               4,091

     Weighted average number of common
      stock equivalents                                                  733
                                                                         ---

     Weighted average number of common
      shares as adjusted                                               4,824

     Fully diluted loss per common share                              $ (.03) (A)
                                                                      =======
</TABLE>


(A) This  computation is submitted as an exhibit to the Company's Form 10-QSB in
accordance  with  Regulation  S-K  Item  601(b)(11),   although  presenting  the
computation is not in accordance with paragraph 40 of APB Opinion 15 because the
computation produces an anti-dilutive result.


                                      -10-






                             ANNIE'S HOMEGROWN, INC.
              COMPUTATION OF EARNINGS PER COMMON SHARE (CONTINUED)
                       (IN 000S EXCEPT FOR PER SHARE DATA)
                        THREE MONTHS ENDED MARCH 31, 1997

<TABLE>
<CAPTION>
Primary Computation

<S>                                                                    <C>  
     Net income per statement of operations                            $  20
                                                                       =====

     Weighted average number of common
      shares outstanding                                               4,257

     Weighted average number of common
      stock equivalents                                                  733
                                                                         ---
     Weighted average number of common
      shares as adjusted                                               4,990
                                                                       -----
     Primary loss per common share                                    $  .00
                                                                      ======

Fully Diluted Computation

     Net income per statement of operations                           $   20
                                                                       =====
     Weighted average number of common
      shares outstanding                                               4,257

     Weighted average number of common
      stock equivalents                                                  733
                                                                         ---
     Weighted average number of common
      shares as adjusted                                               4,990
                                                                       -----
     Fully diluted loss per common share                              $  .00
                                                                      ======

</TABLE>

                                      -11-