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 QUARTERLY PERIOD ENDED September 30, 1997

Commission file number 0-21151


                           PROFILE TECHNOLOGIES, INC.
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

DELAWARE                                                     91-1418002
--------                                                     ----------
(State or other jurisdiction of                           (I.R.S. Employer
 incorporation or organization)                          Identification No.)


1077 Northern Blvd., Roslyn, NY                                 11576
-------------------------------                                 -----
(Address of principal executive offices)                      (Zip Code)


                                  516-365-1909
                                  ------------
                           (Issuer's telephone number)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act 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
                                                              ---     ---

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

     There were  4,262,600  shares of common  stock  issued and  outstanding  on
November 6, 1997.

Transitional Small Business Disclosure Format
(Check one):

Yes     No    X
    ---      ---

                                                   

<PAGE>

Item 1.   Financial Statements

                           PROFILE TECHNOLOGIES, INC.
                        (A Development Stage Enterprise)

                            Condensed Balance Sheets
================================================================================
                                                     September 30,    June  30,
                                                         1997           1997 
================================================================================
                                     Assets
                                     ------
                                                      (unaudited)

Current assets:
  Cash and cash equivalents                          $ 4,742,046      4,936,600
  Accounts receivable                                     50,000              0
  Contract work-in-progress                                 --           20,000
  Prepaid expenses                                        30,658         52,798
                                                     -----------    -----------

      Total current assets                             4,822,704      5,009,398

Property and equipment, net                               72,134         34,941
Patents                                                  189,037        189,037
Other assets                                               3,530          3,350
                                                     -----------    -----------

      Total assets                                   $ 5,087,405      5,236,726
                                                     -----------      ---------

                      Liabilities and Stockholders' Equity
                      ------------------------------------

Current liabilities:
  Accounts payable - stockholder                            --            2,500
  Other accounts payable                                  16,107          5,919
  Accrued wages                                            6,520         20,614
  Other accrued liabilities                              103,132        122,142
                                                     -----------    -----------

      Total current liabilities                          125,759        151,175
                                                     -----------    -----------

Stockholders' equity:
  Common stock, $0.001 par value 
   Authorized 10,000,000 shares; issued
   and outstanding 4,262,600 shares at
   September 30, 1997 and June 30,1997                     4,263          4,263
  Additional paid-in capital                           7,514,145      7,514,145
  Deficit accumulated during the development stage    (2,556,762)    (2,432,857)
                                                     -----------    -----------

      Total stockholders' equity                       4,961,646      5,085,551

Commitments
================================================================================
      Total liabilities and stockholders' equity     $ 5,087,405    $ 5,236,726
================================================================================





            See accompanying notes to condensed financial statements


                                       2

<PAGE>
<TABLE>
<CAPTION>


                                                  PROFILE TECHNOLOGIES, INC.
                                                (A Development Stage Enterprise)

                                               Condensed Statements of Operations
                                                          (unaudited)

                                                  Period from
                                                 July 1, 1988
                                             (inception) through                Three months ended
                                                 September 30,                     September 30,
                                                ----------------        ---------------------------------
                                                      1997                  1997                   1996
=========================================================================================================
<S>                                                 <C>                  <C>                  <C>   
Revenues - testing services and research and
development fees                                  $   512,189                30,000                30,000
                                                  -----------           -----------           -----------

Costs and expenses:
    Research and development                        1,437,234                79,544                66,593
    General and administrative                        948,455               141,710                26,130
    Excess of fair market value over
      exercise price of extended
      and assigned existing common stock
      purchase warrants                               350,000                  --                    --

Fair value of common stock purchase
 warrants granted to consultants                      509,154                  --                    --
                                                  -----------           -----------           -----------
         Total costs and expenses                   3,244,843               221,254                92,723
                                                  -----------           -----------           -----------

         Loss from operations                      (2,732,654)             (191,254)              (62,723)
                                                  -----------           -----------           -----------

Interest income                                       175,792                67,349                 1,055
Other income                                              100                  --                    --
                                                  -----------           -----------           -----------

         Net loss                                 $(2,556,762)             (123,905)              (61,668)
                                                  -----------           -----------           -----------

Net loss per share                                                      $     (0.03)                (0.02)

Weighted average common and common share
     equivalents outstanding                                              4,262,600             3,756,350

=========================================================================================================

                            See accompanying notes to condensed financial statements

</TABLE>
                                                        3
<PAGE>
<TABLE>
<CAPTION>
                                               PROFILE TECHNOLOGIES, INC.
                                             (A Development Stage Enterprise)

                                           Statements of Stockholders' Equity
                                                        (unaudited)
                                                                                                  Deficit
                                                                                                accumulated       Total
                                                            Common stock         Additional      during the       stock-
                                                      -------------------------  paid-in         development     holders'
                                                       Shares           Amount    capital         stage          equity
========================================================================================================================
<S>                                                     <C>         <C>             <C>          <C>             <C>
Sale at inception (July 1, 1988),
 $.0005 per share                                     1,000,000    $      500         --            --             500
Sale of common stock in July,
 $.0005 per share                                       600,000           300         --            --             300
Sale of common stock in  September,
 $.25 per share                                         400,000         1,200       98,800          --         100,000
Net loss                                                   --            --           --         (85,749)      (85,749)
                                                     ----------    ----------    ----------    ----------    ----------

Balances at June 30, 1989                             2,000,000         2,000       98,800       (85,749)       15,051


Sale of common stock in September,
 $.25 per share                                          80,000            80       19,920          --          20,000
Net loss                                                   --            --           --         (13,683)      (13,683)
                                                     ----------    ----------    ----------    ----------    ----------

Balances at June 30, 1990                             2,080,000         2,080      118,720       (99,432)       21,368
Sale of common stock in October,
 $.25 per share                                         114,000           114       28,386          --          28,500
Issuance of common stock for
 services in November, $.25
 per share                                               40,000            40        9,960          --          10,000
Net loss                                                   --            --           --         (30,593)      (30,593)
                                                     ----------    ----------    ----------    ----------    ----------

Balances at June 30, 1991                             2,234,000         2,234      157,066      (130,025)       29,275

Sale of common stock in September,
 $.625 per share                                        296,000           296      184,704          --         185,000
Sale of common  stock in
 May, $1.50 per share                                   141,268           141      211,761          --         211,902
Net loss                                                   --            --           --        (267,186)     (267,186)
                                                     ----------    ----------    ----------    ----------    ----------


Balances at June 30, 1992                             2,671,268         2,671      553,531      (397,211)      158,991

Sale of common stock in January,
 $1.50 per share                                         51,000            51       76,449          --          76,500
Net loss                                                   --            --           --         132,905)     (132,905)
                                                     ----------    ----------    ----------    ----------    ----------

Balances at June 30, 1993                             2,722,268         2,722      629,980      (530,116)      102,586

Net loss                                                   --            --           --         (13,503)      (13,503)
                                                     ----------    ----------    ----------    ----------    ----------

Balances at June 30, 1994                             2,722,268         2,722      629,980      (543,619)       89,083

Repurchases of common stock in
 October                                                (16,000)           16)     (13,984)         --         (14,000)
Sale of common  stock
 in  December, $1.75 per share,
 net of issuance costs of $22,115                       268,332           269      447,196          --         447,465
Excess of fair value over
 exercise price of existing common
 stock purchase warrants extended
 in December                                               --            --        210,000          --         210,000
Net loss                                                   --            --           --         453,382)      453,382)
                                                     ----------    ----------    ----------    ----------    ----------

Balances at June 30, 1995                             2,974,600         2,975    1,273,192      (997,001)      279,166

Issuance of common stock for services
 in October, $1.00 per share                             20,000            20       19,980          --          20,000
Sale of common stock in
 December-March, $2.00 per share
 net of  issuance  costs of $34,600                     218,000           218      401,182          --         401,400
Excess of fair value over
 exercise price of existing common 
 stock purchase warrants extended in March                 --            --         90,000          --          90,000
Net loss                                                   --            --           --         400,853)     (400,853)
                                                     ----------    ----------    ----------    ----------    ----------

                             See accompanying notes to condensed financial statements
                                                          4


<PAGE>
                                                     PROFILE TECHNOLOGIES, INC.
                                                  (A Development Stage Enterprise)

                                           Statements of Stockholders' Equity (Continued)
                                                           (unaudited)
                                                                                                  Deficit
                                                                                                accumulated       Total
                                                            Common stock         Additional      during the       stock-
                                                      -------------------------  paid-in         development     holders'
                                                       Shares           Amount    capital         stage          equity
========================================================================================================================

Balances at June 30, 1996                             3,212,600       $3,213     1,784,354    (1,397,854)      389,713

Fair value of common stock purchase
 warrants granted to consultants                           --            --        509,154          --         509,154
Excess of fair market value over exercise
  price of existing common stock purchase
  warrants assigned by principal
  stockholder to others                                    --            --         50,000          --          50,000
Sale of common stock in
 February - March, $6.00 per share,
 net of issuance costs of $1,128,313                  1,050,000         1,050    5,170,637          --       5,171,687
Net loss                                                   --            --           --      (1,035,003)   (1,035,003)
                                                     ----------    ----------    ----------    ----------    ----------

Balances at June 30, 1997                             4,262,600         4,263    7,514,145    (2,432,857)    5,085,551

Net loss                                                   --            --           --        (123,905)     (123,905)
======================================================================================================================

Balances at September 30, 1997                        4,262,600         4,263    7,514,145    (2,556,762)    4,961,646
======================================================================================================================

                                     See accompanying notes to condensed financial statements


</TABLE>
                                                                5
<PAGE>
<TABLE>
<CAPTION>
                                              PROFILE TECHNOLOGIES, INC.
                                           (A Development Stage Enterprise)

                                          Condensed Statements of Cash Flows
                                                       (unaudited)

                                                  Period from
                                                  July 1, 1988
                                              (inception) through                    Three months ended
                                                 September 30                          September 30
                                                                             ---------------------------------
                                                     1997                       1997                    1996
==============================================================================================================
<S>                                              <C>                         <C>                        <C> 
Cash flows from  operating  activities:
 Net loss                                         $(2,556,762)               (123,905)                (61,668)
 Adjustments to reconcile net
  loss to net cash used in
  operating activities:
   Depreciation and amortization                      125,614                   8,272                   5,053
   Services received in exchange
    for common stock                                   10,000                    --                      --
   Excess of fair value over exercise
    price of extended and assigned
    existing common stock purchase
    warrants                                          350,000                    --                      --
   Fair value of common stock
    purchase warrants granted to
    consultants                                       509,154                    --                      --   
   Changes in assets andliabilities:
    Accounts receivable                                50,000)                (50,000)                   --
    Contract work-in-progress                            --                    20,000                 (30,000)
    Accounts receivable/payable -                       
     stockholder                                         --                    (2,500)                (12,154)
    Prepaid expenses                                  (30,658)                 22,140                     249
    Other assets                                       (3,530)                   (180)                   --
    Other accounts payable                             16,107                  10,188                  (2,965)
    Accrued wages                                       6,520                 (14,094)                   --
    Other accrued liabilities                         103,132                 (19,010)                 26,954
                                                  -----------             -----------             -----------

        Net cash used in operating
          activities                               (1,520,423)               (149,089)                (74,531)
                                                   ----------             -----------             ----------- 
Cash flows from investing activities:
  Patents                                            (169,037)                   --                      (452)
  Purchase of property and
   equipment                                         (193,647)                (45,465)                   (345)
                                                  -----------             -----------             -----------

        Net cash used in investing
         activities                                  (362,684)                (45,465)                   (797)
                                                  -----------             -----------             ----------- 
Cash flows from financing activities:
  Proceeds from issuance of common
   stock, net of issuance costs                     6,643,254                    --                      --   
  Repurchase of common stock                          (14,000)                   --                      --
  Deferred IPO costs                                     --                      --                   (17,910)
  Organizational costs                                 (4,101)                   --                      --
                                                  -----------             -----------             -----------

        Net cash provided by
         financing activities                       6,625,153                       0                 (17,910)
                                                  -----------             -----------             -----------
        Increase (decrease) in
         cash and cash equivalents                  4,742,046                (194,554)                (93,238)
Cash and cash equivalents at
  beginning of period                                    --                 4,936,600                 212,689
                                                  -----------             -----------             -----------

Cash and cash equivalents
  at end of period                                  4,742,046               4,742,046                 119,451
                                                  -----------             -----------             -----------

Supplemental  disclosure  of  noncash
financing and investing activities -                  
 Patent costs in exchange for
 common stock                                     $    20,000                    --                      --   

=============================================================================================================

                           See accompanying notes to condensed financial statements
</TABLE>
                                                       6
<PAGE>


                           PROFILE TECHNOLOGIES, INC.
                        (A Development Stage Enterprise)

                    Notes to Condensed Financial Statements

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

(1) Basis of Presentation

     The unaudited interim condensed financial statements and related notes have
     beenprepared  pursuant  to the  instructions  to Form  10QSB.  Accordingly,
     certain information and footnote disclosures normally included in financial
     statements  prepared  in  accordance  with  generally  accepted  accounting
     principles   have  been  omitted   pursuant  to  such   instructions.   The
     accompanying  condensed  financial  statements  and related notes should be
     readin conjunction with the audited financial  statements and notes thereto
     included in the annual report Form 10KSB for the year ended June 30, 1997.

     The  information  furnished  reflects,  in the opinion of  management,  all
     adjustments,  consisting of only normal recurring items, necessary for fair
     presentation  of the  results for the interim  periods  presented.  Interim
     results are not necessarily indicative of results for a full year.

(2) Net Loss Per Share

     Net loss per share is computed by dividing net loss by the weighted average
     number of shares of common stock and common stock  equivalents  outstanding
     during each year. Common stock  equivalents  include all warrants and stock
     options  which would have a dilutive  effect,  applying the treasury  stock
     method.  Additionally,  for fiscal  year 97,  common and common  equivalent
     shares issued during the twelve  months  immediately  preceding the date of
     the Company's initial public offering have been included in the calculation
     of common and common  equivalent shares as if they were outstanding for all
     periods presented, including loss years where the impact of the incremental
     shares is antidilutive, using the treasury stock method and the anticipated
     initial public offering price.
  
                                       7

<PAGE>


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

GENERAL

     The Company is in the business of developing and commercializing  potential
processes for the non-destructive, non-invasive testing of both above ground and
buried  pipeline to evaluate the condition  and  integrity of the pipeline.  The
Company believes that the development of its pulse propagation  analyzer process
and the further refinement of the technology associated therewith has progressed
to the point where it  believes  commercial  utilization  is now  feasible.  The
Company  has not,  as of yet,  obtained  significant  revenues  from its planned
primary source of revenues and has no commercial  contracts in place for the use
of its process or technology. The goal of the Company has been the establishment
of  technological  feasibility  associated  with its services to  electronically
measure corrosion in piping of all kinds. The Company's process identifies areas
of  corrosion,  areas  that lack  cathodic  protection  and areas  that may have
defective  coating  on both  below  ground  and above  ground  pipes.  The pulse
propagation analyzer consists of a computer,  software to enhance collection and
processing  of data,  a precision  multi-channel  pulse  generator  and a signal
analyzer.  During fiscal 1996,  the Company  began to see rapid  progress in the
development  of its  technology  and its  ability  to meet the  expectations  of
potential  customers.  By that time,  the  Company had begun to  accelerate  its
efforts  and expend  more  resources  to develop its  technology  faster.  Thus,
expenses have been generally  increasing at a faster pace than in prior periods.
The Company  expects these trends to continue as its  technological  development
continues  at this  accelerated  pace.  The  Company  believes  that it attained
technological feasibility of its process with the completion of its research and
development activity in a controlled environment in July of 1996.

     In order for the Company to obtain significant revenues from the use of its
technology,  the Company must establish a sales and marketing  organization that
is effective  and obtains  customers  for its pulse  propagation  analyzer.  The
Company must also be able to supply and train work crews in  sufficient  numbers
to satisfy the requirements of its customers.  From inception  through September
30, 1997, the Company  incurred  losses of $2,556,762 and losses are expected to
continue at least  through the second  quarter of the year ending June 30, 1998;
no assurances can be given that losses will not continue thereafter.

RESULTS OF OPERATIONS

Quarter Ended September 30, 1997 Compared to the Quarter
Ended September 30, 1996
---------------------------------------------------------

     The Company had  revenues of $30,000 for the quarter  ended  September  30,
1997 compared to $30,000 for the quarter ended September 30, 1996. The loss from
operations for the quarter ended  September 30, 1997 was $191,254  compared to a
loss from  operations of $62,723 for the quarter ended  September 30, 1996.  The
operating loss for the quarter ended  September 30, 1997 was offset  somewhat by
interest  income in the  amount of $67,349  representing  interest  earned  from
proceeds of the  Company's  public  offering  which was completed in February of
1997.  This resulted in a net loss of $123,905 for the quarter  ended  September
30, 1997 compared to a net loss of $61,668 for the quarter  ended  September 30,
1996.  Research and development  expenses  increased slightly to $79,544 for the
quarter  ended  September  30, 1997  compared  to $66,593 for the quarter  ended
September 30, 1996. General and administrative  expenses increased substantially


                                        8

<PAGE>



to  $141,710  for the quarter  ended  September  30,  1997 from  $26,130 for the
quarter  ended  September  30, 1996,  primarily  because of  increased  expenses
associated  with  setting  up  new  corporate   offices  in  New  York  and  the
establishment  of a research and  development  facility in Ferndale,  Washington
following  the  completion  of the public  offering.  The Company also  incurred
increased  salary  expense  because it was in the financial  position to pay the
salaries and  consulting  fees that it had been limited in paying in the quarter
ended September 30, 1996. In addition,  professional fees related to various tax
and accounting matters and board of directors  liability insurance were incurred
during the  quarter  ended  September  30, 1997 which were  necessitated  by the
Company's status as a publicly traded company.

LIQUIDITY AND CAPITAL RESOURCES

     Revenues for the period from July 1, 1988 (inception) through September 30,
1997,  were $512, 189 while expenses were  $3,244,843,  resulting in a loss from
operations,   since  inception,  of  $2,732,654.  Net  cash  used  in  operating
activities from inception  through  September 30, 1997 was  $1,520,423.  Of this
amount,  $149,089 was spent in the three month period ended  September 30, 1997.
Thus, while the revenues derived from research and development activities funded
by  multi-national  oil companies and major  utilities  have been  indicative of
financial support for the Company's efforts to develop its technology, they have
not been sufficient to cover expenses.  Accordingly,  the Company has maintained
adequate  liquidity and cash reserves  through the private  placement and public
offering of its common stock.  Such private  placements,  from inception through
the period  ended  March 31,  1996,  totaled  $1,471,567.  The  Company  has not
conducted  any  private  placements  of its common  stock  since  that date.  In
December 1994 the Company  extended the expiration  date on certain Common Stock
purchase  warrants which,  pursuant to the  requirements  of generally  accepted
accounting principals, resulted in the recognition of an additional contribution
of capital in the amount of $210,000  together  with a  corresponding  charge to
compensation  expense.  Such warrants were further extended in the quarter ended
March 31, 1996 and the  Company  incurred  an  additional  expense of $90,000 in
connection  therewith.  Additional  noncash expenses relating to the issuance of
new warrants or the  extension of  previously  issued  warrants in the amount of
$559,154  were  incurred  in  the  quarter  ended   December  31,  1996.   These
transactions had no effect on aggregate  stockholders'  equity.  The Company did
not have difficulty  arranging for private placements of its common stock in the
past and these  placements  provided  sufficient  liquidity  for the  Company to
operate.  The Company's  available cash and equivalents as of September 30, 1997
increased  substantially  because of the public offering proceeds.  At September
30, 1997,  the Company had working  capital of  $4,696,945  and no material long
term commitments or material commitments for capital expenditures.

     In February of 1997, the Company  completed an initial  public  offering of
its common stock,  selling  1,000,000  shares at a price of $6.00 per share,  as
well as an Underwriter's  overallotment option of 50,000 shares, also at a price
of $6.00 per share.  Net  offering  proceeds of  approximately  $5,172,000  were
realized  by the  Company  from  this  public  offering.  The  Company,  pending
utilization  of the net proceeds in  operations,  has invested  such proceeds in
short-term, high grade,  interest-bearing instruments. The Company believes that
its current  capital  resources and liquidity are adequate for at least the next
twelve months.  Other than equipment purchases for field crews if the Company is
successful  in  obtaining  commercial  contracts,  the Company does not have any
plans for  significant  capital  expenditures.  To date,  the  Company  has only
obtained small research and  development  contracts,  the proceeds of which were
used to defray a portion of the Company's research and development costs.

                                        9

<PAGE>





RESOURCES

     As of September 30, 1997 the Company did not have any material  commitments
for capital  expenditures.  However, it is management's  intention to direct the
Company's  activities  towards obtaining fee for service  contracts,  which will
necessitate the Company attracting,  hiring,  training and outfitting  qualified
technicians. The Company's intention is to purchase such equipment for its field
crews for the foreseeable future, until such time as the scope of the operations
may require alternate  sources of financing such equipment.  The timing of these
events  is  dependent  upon the  Company's  ability  to obtain  fee for  service
contracts,   which  is  dependent  upon  the  Company's  continuing  ability  to
demonstrate the  effectiveness of its technology.  The Company believes that its
cash position is  sufficient to satisfy its operating  needs for the next twelve
months.  Management believes it is well on the way to reaching these milestones,
but there can be no assurance that the Company's process will be accepted within
any particular time frame, or at all. The Company recently  acquired  commercial
office space in the NewYork City area as well as space to carry out research and
development  activities  in Ferndale,  Washington.  The Company will continue to
incur increased expenses  associated with the leasing of such space. The Company
will also incur additional personnel expenses as it hires and trains field crews
and support personnel related to the successful receipt of commercial contracts.

                                     PART II

Item 1.  Legal Proceedings.

     The Company is not a party to any pending or threatened legal proceedings.

Item 2.  Changes in Securities.

     None.

Item 3.  Defaults Upon Senior Securities.

     None.

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

     None.

Item 5.  Other Information.

     None.




                                       10

<PAGE>



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

         (a) Exhibits.
                  None

         (b) Reports on Form 8-K.
                  None



                                       11

<PAGE>


                                   SIGNATURES

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



                                                PROFILE TECHNOLOGIES, INC.
                                                       (Registrant)


Date: November 12, 1997                          /s/ G.L. Scott
                                                ---------------
                                                G.L. SCOTT
                                                Chief Executive Officer



                                                 /s/Henry Gemino
                                                HENRY GEMINO
                                                Chief Financial Officer


                                       12