

       This document  consists of 37 pages,  of which this is page Number 1. The
       index to Exhibits is on Page 18.


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                 For the Fiscal Quarter Ended April 30, 1997, or

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

               For the Transition period from _____ to _________.

                         Commission file number: 0-27446

                               LANDEC CORPORATION
             (Exact name of registrant as specified in its charter)

           California                                      94-3025618
 (State or other jurisdiction of                         (IRS Employer
 incorporation or organization)                       Identification Number)

                                3603 Haven Avenue
                          Menlo Park, California 94025
                    (Address of principal executive offices)

               Registrant's telephone number, including area code:
                                 (415) 306-1650

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for at least the past 90 days.

                              Yes   X   No
                                   ---      ---

         As of May 31, 1997,  11,221,910 shares of the Registrant's common stock
were outstanding.

                                      -1-
<PAGE>


                               LANDEC CORPORATION

                 FORM 10-Q For the Quarter Ended April 30, 1997

                                      INDEX

                                                                            Page

          Facing sheet                                                        1

          Index                                                               2

Part I.   Financial Information

Item 1.   Financial Statements:

          a)  Consolidated  condensed  balance sheets as of April 30, 1997
              and October 31, 1996                                            3

          b)  Consolidated  statements of operations for the three and six
              months ended April 30, 1997 and 1996                            4

          c)  Consolidated  statements  of cash  flows for the six  months
              ended April 30, 1997 and 1996                                   5

          d)  Notes to consolidated financial statements                      6

Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations                                               7

Part II.  Other Information

          Signature                                                          17

          Index to Exhibits                                                  18

                                      -2-
<PAGE>

                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

                               LANDEC CORPORATION
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (Unaudited)
                                 (In thousands)

                                                         April 30,   October 31,
                                                           1997         1996
                                                         --------    --------
                                     Assets

Current Assets:
     Cash and cash equivalents                           $  2,043    $ 14,185
     Short-term investments                                19,114      22,325
     Restricted investment                                  8,838        --
     Accounts receivable, net                               2,046          23
     Inventories                                            2,295         549
     Prepaid expenses and other current assets                356         188
                                                         --------    --------
Total Current Assets                                       34,692      37,270

Property and equipment, net                                 3,888         963
Intangible assets, net                                      7,057        --
Other assets                                                  126         125
                                                         --------    --------
                                                         $ 45,763    $ 38,358
                                                         ========    ========

                      Liabilities and Stockholders' Equity

Current Liabilities:
     Accounts payable                                    $  1,398    $    484
     Accrued compensation                                     459         250
     Other accrued liabilities                                482         259
     Payable related to acquisition of Dock 
       Resins Corporation                                   9,528        --
     Current portion of long term debt                        321         229
     Deferred revenue                                         292         166
                                                         --------    --------
Total Current Liabilities                                  12,480       1,388

Non-current portion of long term debt                         159         330
Deferred compensation                                         127        --

Stockholder's Equity:
     Common stock                                          70,433      68,242
     Notes receivable from shareholders                       (13)        (13)
     Deferred compensation                                   (255)       (311)
                                                         --------    --------
     Accumulated deficit                                  (37,168)    (31,278)
                                                         --------    --------
Total Stockholders' Equity                                 32,997      36,640
                                                         --------    --------
                                                         $ 45,763    $ 38,358
                                                         ========    ========

                             See accompanying notes.

                                      -3-
<PAGE>



<TABLE>
                               LANDEC CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                      (In thousands, except per-share data)
<CAPTION>

                                                        Three Months Ended April 30,       Six Months Ended April 30,
                                                          1997             1996              1997             1996
                                                          ----             ----              ----             ----
<S>                                                    <C>              <C>                <C>              <C>      
Revenues:
     Product sales                                     $    767         $    281           $    940         $    412 
     License fees                                          --                600               --                600
     Research and development revenues                      242              394                459              682
                                                       --------         --------           --------         -------- 
Total revenues                                            1,009            1,275              1,399            1,694
                                                                                                            
Operating costs and expenses:                                                                               
     Cost of product sales                                  634              295                943              539
     Research and development                             1,030              945              1,946            1,898
     Selling, general and administrative                  1,316              733              2,250            1,224
     Purchase of in-process research and                                                                    
       development                                         --               --                 --               --
                                                          3,022             --                3,022             --
                                                       --------         --------           --------         -------- 
Total operating costs and expenses                        6,002            1,973              8,161            3,661
                                                       --------         --------           --------         -------- 
Loss from operations                                     (4,993)            (698)            (6,762)          (1,967)
                                                                                                            
Interest income                                             438              439                932              506
Interest expense                                            (17)              (8)               (37)             (54)
                                                       --------         --------           --------         -------- 
Net loss                                               $ (4,572)        $   (267)          $ (5,867)        $ (1,515)
                                                       ========         ========           ========         ======== 
                                                                                                            
Net loss per share                                     $  (0.42)        $  (0.03)          $  (0.54)        $  (0.32)
                                                       ========         ========           ========         ======== 
                                                                                                            
Shares used in computation of net loss per share         10,829            8,874             10,794            4,713
                                                       ========         ========           ========         ======== 

<FN>
                             See accompanying notes.
</FN>
</TABLE>
                                      -4-
<PAGE>


<TABLE>
                               LANDEC CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)
<CAPTION>
                                                                                Six Months Ended April 30,
                                                                                   1997            1996
                                                                                   ----            ----
<S>                                                                                <C>         <C>      
Cash flows from operating activities:
     Net loss                                                                      $ (5,867)   $ (1,515)
Adjustments to reconcile net loss to net cash used in operating activities:
     Depreciation and amortization of assets under capital leases                       251         195
     Amortization of intangibles                                                         17        --
     Amortization of deferred compensation                                               56          56
     Write-off of purchased in-process research and development                       3,022        --
     Changes in current  assets and  liabilities  (net of effects of Dock Resins
       acquisition):
         Accounts receivable                                                            (69)        (10)
         Inventories                                                                     91         (20)
         Prepaid expenses and other current assets                                      (63)       (122)
         Accounts payable                                                              (177)          7
         Accrued compensation                                                           114          24
         Other accrued liabilities                                                      (71)        142
         Deferred revenue                                                               125         175
                                                                                   --------    -------- 
     Total adjustments                                                                3,296         447
                                                                                   --------    -------- 
Net cash used in operating activities                                                (2,571)     (1,068)
                                                                                   --------    -------- 

Cash flows from investing activities:
     Purchases of property and equipment                                               (675)       (189)
     Increase in other assets                                                             1          26
     Acquisition of Dock Resins, net of cash acquired                                (3,230)       --
     Purchases of available-for-sale securities                                     (14,404)    (20,108)
     Sale of available-for-sale securities                                            4,041        --
     Maturities of available-for-sale securities                                     13,550       3,000
                                                                                   --------    -------- 
Net cash used in investing activities                                                  (717)    (17,271)
                                                                                   --------    -------- 
Cash flows from financing activities:
     Purchase of restricted investment                                               (8,838)       --
     Proceeds from sale of common stock                                                  94      35,062
     Proceeds from repayment of notes receivable                                       --             9
     Payments of long-term debt                                                        (110)       (136)
                                                                                   --------    -------- 
Net cash (used in) provided by financing activities                                  (8,854)     34,935
                                                                                   --------    -------- 

Net (decrease) increase in cash and cash equivalents                                (12,142)     16,596

Cash and cash equivalents at beginning of period                                     14,185       3,585
                                                                                   --------    -------- 
Cash and cash equivalents at end of period                                         $  2,043    $ 20,181
                                                                                   ========    ========
<FN>
                             See accompanying notes.
</FN>
</TABLE>

                                      -5-
<PAGE>


                               LANDEC CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    Unaudited

1.   Basis of Presentation

         The accompanying  unaudited consolidated financial statements of Landec
Corporation  (the "Company" or "Landec")  have been prepared in accordance  with
generally accepted accounting  principles for interim financial  information and
with the  instructions  for Form 10-Q and Article 10 of  Regulation  S-X. In the
opinion of management, all adjustments necessary to present fairly the financial
position,  results of operations,  and cash flows at April 30, 1997, and for all
periods  presented,  have been made.  Although  the  Company  believes  that the
disclosures in these  financial  statements are adequate to make the information
presented not misleading,  certain  information  normally  included in financial
statements and related footnotes  prepared in accordance with generally accepted
accounting  principles have been condensed or omitted  pursuant to the rules and
regulations  of  the  Securities  and  Exchange  Commission.   The  accompanying
financial  data  should be reviewed in  conjunction  with the audited  financial
statements  and notes thereto  included in the  Company's  Annual Report on Form
10-K for the fiscal year ended October 31, 1996.

         The results of  operations  for the three and six month  periods  ended
April  30,  1997  are not  necessarily  indicative  of the  results  that may be
expected for the fiscal year ended October 31, 1997.

2.   Acquisition of Dock Resins

         On April 18, 1997, the Company acquired Dock Resins  Corporation ("Dock
Resins") a privately-held  manufacturer  and marketer of specialty  acrylics and
other polymers  located in Linden,  New Jersey for  approximately  $15.8 million
comprised  of $13.7  million in cash, a secured  promissory  note due in January
1998 and direct  acquisition  costs along with  396,039  shares of common  stock
valued at $2.1 million. A payable of $9.5 million has been recorded to recognize
the  promissory  note and  other  liabilities  related  to the  acquisition.  An
investment  of $8.8  million has been set aside as  security  for payment of the
promissory note. In addition,  $1.5 million of the cash consideration and all of
the  equity  consideration  was set  aside  in  escrow  to  cover  future  costs
associated with  obligations  under the  representations  and warranties made by
Dock  Resins  in  connection  with the  acquisition.  The  acquisition  has been
accounted for using the purchase  method.  The purchase price has been allocated
to the acquired  assets and  liabilities  based on their  relative  fair values.
These  allocations were based on independent  valuations and other studies as of
the date of  acquisition.  The  following  is a summary  of the  purchase  price
allocation (in thousands):

               Net assets and liabilities                       $     3,181
               Property, plant and equipment                          2,501
               Covenant not to compete                                   77
               Customer base                                            496
               Work force in place                                      690
               Trademark                                                775
               Developed technology                                   5,036
               In-process research and development                    3,022
                                                                -----------
                                                                $    15,778
                                                                ===========

         The  intangible  assets are being  amortized  over five to twenty years
based on their individually  estimated useful lives. The $3,022,000 allocated to
in-process research and development technology,  as determined by an independent
appraisal,  was  expensed  during the  quarter  ended April 30, 1997 as required
under generally  accepted  accounting  principles.  The $2,501,000  allocated to
property,  plant and  equipment is based on its fair value as  determined  by an
independent appraisal.

         The Company's results of operations and cash flows for the three months
and six months  ended  April 30,  1997  include  the results of Dock Resins from
April 18, 1997 through April 30, 1997.

                                      -6-
<PAGE>

3.   Inventories

     Inventories are stated at the lower of cost (first-in, first-out method) or
market after writing-up inventories acquired from Dock Resins to their estimated
fair  market  values  net of  estimated  selling  costs,  and  consisted  of the
following:

                                                April 30,        October 31,
                                                  1997              1996
                                                  ----              ----
                                                      (in thousands)
     Raw materials . . . . . . . . . . . . . .   $   690          $  149
     Work in process . . . . . . . . . . . . .       173             245
     Finished goods  . . . . . . . . . . . . .     1,432             155
                                                 -------          ------
                                                 $ 2,295          $  549
                                                 =======          ======



                                      -7-

<PAGE>

Item 2.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         The  following  discussion  should  be read  in  conjunction  with  the
unaudited  consolidated  financial statements and notes thereto included in Part
I--Item 1 of this Form 10Q and the audited consolidated financial statements and
notes thereto and  Management's  Discussion and Analysis of Financial  Condition
and Results of Operations  for the year ended October 31, 1996  contained in the
Company's Annual Report on Form 10-K for the fiscal year ended October 31, 1996.

         Except for the historical  information  contained  herein,  the matters
discussed in this report are  forward-looking  statements  that involve  certain
risks and  uncertainties  that could cause actual  results to differ  materially
from those in the forward-looking statements.  Potential risks and uncertainties
include,  without limitation,  those mentioned in this report and, in particular
the factors  described  below under  "Additional  Factors That May Affect Future
Results," and those  mentioned in the  Company's  Annual Report on Form 10-K for
the fiscal year ended October 31, 1996, under "Risk Factors."

Overview

         Since its  inception in October  1986,  the Company has been  primarily
engaged in the research  and  development  of its  Intelimer(R)  technology  and
related  products.  The Company  launched its first product line,  QuickCast(TM)
splints and casts, in April 1994. The Company  launched its second product line,
Intellipac(TM)  breathable membranes for the fresh-cut produce packaging market,
in September  1995. To date,  the Company has  recognized  $2.1 million in total
QuickCast  product and Intellipac  breathable  membrane sales. On April 18, 1997
the  Company   acquired  Dock  Resins,   which  is  primarily   engaged  in  the
manufacturing  and marketing of specialty  acrylics and other polymers.  For the
period  from the  acquisition  date to April  30,  1997 the  Company  recognized
$516,000 in revenue from Dock Resins' product sales.  The balance of revenues to
date have  resulted  from license  fees,  collaborative  arrangements  and Small
Business   Innovative   Research   government   grants.  The  Company  has  been
unprofitable  since  its  inception  and  expects  to incur  additional  losses,
primarily due to the continuation of its research and development activities and
expenditures  necessary  to further  develop  its  manufacturing  and  marketing
capabilities.  From inception through April 30, 1997, the Company's  accumulated
deficit was $37.2 million.

Results of Operations

         Total  revenues were $1.0 million for the second quarter of fiscal year
1997  compared  to $1.3  million  for the second  quarter  of fiscal  year 1996.
Revenues  from  product  sales  increased  to $767,000 in the second  quarter of
fiscal  year 1997 from  $281,000  in the second  quarter of fiscal year 1996 due
primarily  to $516,000 of product  sales from Dock  Resins  partially  offset by
lower sales of  Intellipac  breathable  membrane  products due to lower per unit
sale prices.  There were no revenues from license fees during the second quarter
of fiscal year 1997  compared to  $600,000  during the second  quarter of fiscal
year 1996. The decrease in license fees revenue was due to a one time payment in
the second quarter of 1996 under an expanded  agreement with Nitta  Corporation.
Revenues from  research and  development  funding  decreased to $242,000 for the
second  quarter of fiscal  year 1997 from  $394,000  for the  second  quarter of
fiscal  year 1996.  The  decrease in research  and  development  revenue was due
primarily to fewer research and development contracts.  For the first six months
of fiscal year 1997 total  revenues  were $1.4 million  compared to $1.7 million
during the same period in 1996.  Revenue  from  product  sales for the first six
months in fiscal year 1997  increased to $940,000 from $412,000  during the same
period in 1996 due to  $516,000  of  product  sales  from Dock  Resins,  a small
increase in sales of QuickCast  products partially offset by a small decrease in
sales of Intellipac  breathable  membrane products.  There were no revenues from
license  fees  during  the first six  months of  fiscal  year 1997  compared  to
$600,000  during the same period in 1996.  Revenue from research and development
funding for the first six months in fiscal year 1997  decreased to $459,000 from
$682,000  during  the same  period in 1996 due to a  decrease  in  research  and
development  contracts in fiscal year 1997. The Company expects product sales to
increase  during  the  remainder  of fiscal  year 1997  based on the  historical
results of Dock Resins.

         Cost of product sales consists of material, labor and overhead. Cost of
product  sales was $634,000 for the second  quarter of fiscal year 1997 compared
to $295,000  for the second  quarter of fiscal  year 1996,  an increase of 115%.
Cost of product sales as a percentage  of product sales  decreased to 83% in the
second  quarter of fiscal  year 1997 from 105% in the  second  quarter of fiscal
year 1996.  Cost of product  sales for the first six months of fiscal  year 1997
was $943,000 compared to $539,000 during the same period in 1996, an increase of
75%. Cost of product  sales as a percentage  of product sales  decreased to 100%
for the first six months of fiscal year 1997 from 131% during the same period in
1996.  These  decreases in the cost of product  sales as a percentage of product
sales were primarily the result of a lower  percentage  cost of product sales in
the Dock Resins  product line. The Company  anticipates  that gross margins will
improve  during the  remainder  of

                                      -8-
<PAGE>

fiscal  year  1997 due to  revenues  from  Dock  Resins  product  sales  and the
historically  higher  margins  derived  by  Dock  Resins.  However,  longer-term
improvement is unpredictable due to the early stage commercialization of several
of the Company's products and integration of certain of these products into Dock
Resins' manufacturing process.

         Research  and  development  expenses  were $1.0  million for the second
quarter of fiscal  year 1997  compared  to  $945,000  for the second  quarter of
fiscal year 1996,  an  increase of 9%. For the first six months of fiscal  years
1997 and 1996 research and  development  expenses were  relatively  flat at $1.9
million in both six-month periods.  Research and development  expenses increased
in the second quarter of fiscal year 1997 from the second quarter of fiscal year
1996 primarily due to increased  development  costs for the Company's  Intelimer
polymer systems and  Intellicoat(TM)  products.  In future periods,  the Company
expects that spending for research and development  will continue to increase in
absolute dollars, although it may vary as a percentage of total revenues.

         Selling,  general and administrative expenses were $1.3 million for the
second  quarter of fiscal year 1997 compared to $733,000 for the second  quarter
of fiscal year 1996, an increase of 80%. For the first six months of fiscal year
1997 selling,  general and administrative expenses were $2.2 million compared to
$1.2  million  during the same  period in 1996,  an  increase  of 84%.  Selling,
general and administrative expenses increased primarily as a result of increased
sales and marketing expenses and the additional  administrative costs associated
with supporting a public company for an entire  six-month  period (the Company's
initial public  offering was completed on February 15, 1996).  Selling,  general
and  administrative  expenses consist primarily of sales and marketing  expenses
associated  with the Company's  product sales,  business  development  expenses,
staff and  administrative  expenses.  Sales and marketing  expenses increased to
$744,000 for the second quarter of fiscal year 1997 from $378,000 for the second
quarter of fiscal year 1996.  For the first six months of fiscal year 1997 sales
and marketing expenses increased to $1.3 million compared to $583,000 during the
same period in 1996. The increase in sales and marketing  expenses was primarily
attributable  to the  costs to  support  four  national  U.S.  distributors  for
QuickCast  products  including the creation of an internal sales  department for
QuickCast  products and the creation of marketing  departments for the Intelimer
polymer  systems and  Intellicoat  products.  The Company  expects that selling,
general and administrative  spending will increase in absolute dollars in future
periods, although it may vary as a percentage of total revenues.

         Net interest  income of $421,000 for the second  quarter of fiscal year
1997 was  relatively  unchanged  compared to $431,000 for the second  quarter of
fiscal  year  1996.  For the first six months of fiscal  year 1997 net  interest
income was  $895,000  compared to $452,000  during the same period in 1996.  Net
interest  income  increased due to more cash being  available for investing from
the Company's initial public offering in February 1996.

Liquidity and Capital Resources

         As  of  April  30,  1997  the  Company  had  unrestricted   cash,  cash
equivalents and short-term investments of $21.2 million, a net decrease of $15.3
million from $36.5  million as of October 31, 1996.  This decrease was primarily
due to  funding  operating  losses of $2.6  million  for the first six months of
fiscal  year 1997,  and the net  payment of $3.2  million  and  restricted  cash
related to the  acquisition  of Dock Resins.  The Company has payables  totaling
$9.5 million related to the acquisition of Dock Resins which will be distributed
by the first  quarter of fiscal 1998.  An  investment  totaling $8.8 million has
been set aside for payment of the related promissory note.

         During the first six months of fiscal year 1997, the Company  purchased
seed processing  equipment and incurred leasehold  improvements  expenditures to
support the development of Intellicoat products.  These expenditures represented
the  majority of the  $675,000 of property and  equipment  purchased  during the
first six months of fiscal year 1997.

         The  Company   believes  that  existing  cash,  cash   equivalents  and
short-term investments will be sufficient to finance its operational and capital
requirements  through at least the next  twelve  months.  The  Company's  future
capital  requirements,  however,  depend  on  numerous  factors,  including  the
progress of its research and development programs; the development of commercial
scale  manufacturing  capabilities;  the  development  of  marketing,  sales and
distribution  capabilities;  the  ability of the  Company to  maintain  existing
collaborative   arrangements  and  establish  and  maintain  new   collaborative
arrangements;  the assimilation and integration of Dock Resins into Landec;  the
timing and amount,  if any, of payments  received under research and development
agreements; the costs involved in preparing, filing, prosecuting,  defending and
enforcing  intellectual  property rights;  the ability to comply with regulatory
requirements;  the emergence of competitive  technology  and market forces;  the
effectiveness  of product  commercialization  activities and  arrangements;  and
other factors.  If the Company's  currently  available funds,  together with the
internally  generated  cash flow are not  sufficient  to satisfy  its  financing
needs,  the Company would be required to seek  additional  funding through other
arrangements with collaborative  partners, bank borrowings and public or private
sales of its  securities.  The Company has no credit facility or

                                      -9-
<PAGE>

other  committed  sources of capital.  There can be no assurance that additional
funds, if required, will be available to the Company on favorable terms.

Additional Factors That May Affect Future Results

         The Company  desires to take advantage of the "Safe Harbor"  provisions
of the  Private  Securities  Litigation  Reform Act of 1995.  Specifically,  the
Company wishes to alert readers that the following important factors, as well as
other factors,  could in the future affect,  and in the past have affected,  the
Company's  actual  results  and could  cause the  Company's  results  for future
quarters  to differ  materially  from  those  expressed  in any  forward-looking
statements made by or on behalf of the Company.

         History of Operating  Losses and Accumulated  Deficit.  The Company has
incurred net losses in each year since its  inception,  including  net losses of
$4.6  million  and  $267,000  during the second  quarter of fiscal year 1997 and
1996,  respectively,  and the Company's accumulated deficit as of April 30, 1997
totaled $37.2 million.  The Company expects to incur  additional  losses for the
foreseeable  future.  The amount of future net losses and time  required  by the
Company  to  reach  profitability  are  highly  uncertain  and  there  can be no
assurance that the Company will be able to reach profitability at all.

         Uncertainty  Relating  to  Integration  of Dock Resins. The  successful
combination of the Company and Dock Resins will require  substantial effort from
each  organization.  The  diversion  of the  attention  of  management  and  any
difficulties  encountered in the transition process could have an adverse impact
on the Company's ability to realize the anticipated benefits of the acquisition.
The successful  combination of the two companies will also require  coordination
of their  research  and  development,  manufacturing,  and sales  and  marketing
efforts. In addition, the process of combining the two organizations could cause
the interruption of, or a loss of momentum in, the Company's  activities.  There
can be no  assurance  that the Company  will be able to retain Dock  Resins' key
management, technical, sales and customer support personnel, or that the Company
will realize the anticipated benefits of the acquisition.

         Early  Commercialization;  Dependence on New Products and Technologies;
Uncertainty of Market Acceptance. While the Company recently commenced marketing
certain of its Intelimer polymer  products,  it is in the early stage of product
commercialization  of these  products and many of its potential  products are in
development.  The Company  believes that its future success will depend in large
part on its ability to develop and market new products in its target markets and
in new markets.  In particular,  the Company expects that its ability to compete
effectively with existing industrial,  food packaging,  medical and agricultural
companies will depend substantially on successfully developing, commercializing,
achieving market  acceptance of and reducing the cost of producing the Company's
products.  In addition,  commercial  applications  of the Company's  temperature
switch  polymer  technology  are  relatively  new and evolving.  There can be no
assurance that the Company will be able to successfully develop,  commercialize,
achieve  market  acceptance  of or reduce the cost of  producing  the  Company's
products,   or  that  the  Company's  competitors  will  not  develop  competing
technologies  that are less  expensive  or  otherwise  superior  to those of the
Company.  There can be no assurance that the Company will be able to develop and
introduce new products and  technologies in a timely manner or that new products
and technologies will gain market acceptance.  The failure to develop and market
successfully  new products could have a material adverse effect on the Company's
business, operating results and financial condition.

         The  success of the  Company  in  generating  significant  sales of its
products  will depend in part on the ability of the Company and its  partners to
achieve market acceptance of the Company's  products and technology.  The extent
to which, and rate at which,  market  acceptance and penetration are achieved by
the  Company's  current  and future  products  is a function  of many  variables
including, but not limited to, price, safety, efficacy, reliability,  conversion
costs and marketing and sales efforts,  as well as general  economic  conditions
affecting  purchasing  patterns.  There can be no assurance that markets for the
Company's  products will develop or that the Company's  products and  technology
will be accepted and adopted.  The failure of the Company's  products to achieve
market  acceptance  could  have a  material  adverse  effect  on  the  Company's
business, operating results and financial condition.

         Dependence on Collaborative  Partners.  The Company's  strategy for the
development,  clinical and field testing,  manufacturing,  commercialization and
marketing of certain of its current and future products  includes  entering into
various  collaborations with corporate partners,  licensees and others. To date,
the Company has entered  into  collaborative  arrangements  with The  BFGoodrich
Company and Hitachi  Chemical  Co.,  Ltd.  ("Hitachi")  in  connection  with its
Intelimer polymer systems, Fresh Express Farms and PrintPack,  Inc. ("PrintPack)
in  connection  with  its  Intellipac   breathable   membrane  products,   Nitta
Corporation  ("Nitta") and Hitachi in connection with its adhesive  products and
Smith & Nephew Medical Limited ("Smith & Nephew"), Physician Sales and Services,
Inc., North Coast Medical, Inc. and Sammons Preston, Inc. in connection with its
QuickCast  orthopedic  products.  The  Company  is  dependent  on its  corporate
partners to

                                      -10-
<PAGE>

develop, test,  manufacture and/or market certain of its products.  Although the
Company  believes  that its  partners in these  collaborations  have an economic
motivation  to succeed in performing  their  contractual  responsibilities,  the
amount and timing of resources to be devoted to these  activities are not within
the control of the Company.  A significant  portion of the Company's revenues to
date have been derived from commercial  research and development  collaborations
and license agreements.  In the second quarter of fiscal year 1997,  development
funding from these collaborative arrangements comprised approximately 24% of the
Company's total revenues. Development funding from Hitachi and Nitta represented
approximately  19% of the  Company's  revenues for the second  quarter of fiscal
year 1997.  There can be no assurance  that such  partners  will  perform  their
obligations as expected or that the Company will derive any  additional  revenue
from such  arrangements.  There can be no assurance that the Company's  partners
will pay any additional  option or license fees to the Company or that they will
develop and market any products under the agreements.  Moreover,  certain of the
collaborative  agreements  provide that they may be terminated at the discretion
of the corporate  partner,  and certain of the collaborative  agreements provide
for termination under certain circumstances.

         In March of 1997, the Company  terminated its relationship with Smith &
Nephew for the sales and distribution of QuickCast  products in certain European
and Pacific Rim countries, Canada and South Africa.

         In May of 1997,  the  Company  agreed to amend its  co-development  and
marketing agreement with PrintPack in the Intellipac breathable membrane area by
removing  the  exclusivity  restrictions.  This  amendment  will allow Landec to
explore  other  sources of packaging  material  and  application  equipment  and
product  development  opportunities  while  continuing  the  collaboration  with
PrintPack on a non-exclusive basis.

         There can be no assurance  that the Company's  partners will not pursue
existing or alternative  technologies in preference to the Company's technology.
Furthermore,  there  can be no  assurance  that  the  Company  will  be  able to
negotiate  additional  collaborative  arrangements  in the future on  acceptable
terms, if at all, or that such collaborative arrangements will be successful. To
the  extent  that the  Company  chooses  not to or is unable to  establish  such
arrangements,  it would experience  increased capital  requirements to undertake
research, development,  manufacture, marketing or sale of its current and future
products in such  markets.  There can be no  assurance  that the Company will be
able to  independently  develop,  manufacture,  market,  or sell its current and
future products in the absence of such collaborative agreements.

         Competition and  Technological  Change.  The Company operates in highly
competitive and rapidly  evolving  fields,  and new developments are expected to
continue at a rapid pace.  Competition  from large  industrial,  food packaging,
medical and agricultural  companies is expected to be intense. In addition,  the
nature of the Company's  collaborative  arrangements may result in its corporate
partners  becoming  competitors of the Company.  Many of these  competitors have
substantially  greater  financial and technical  resources  and  production  and
marketing  capabilities  than the Company,  and may have  substantially  greater
experience  in  conducting  clinical  and  field  trials,  obtaining  regulatory
approvals and manufacturing and marketing commercial  products.  There can be no
assurance  that these  competitors  will not succeed in  developing  alternative
technologies  and  products  that  are  more  effective,  easier  to use or less
expensive  than those which have been or are being  developed  by the Company or
that  would  render  the  Company's   technology   and  products   obsolete  and
non-competitive.

         Limited  Manufacturing  Experience;  Dependence on Third  Parties.  The
Company's  success is  dependent  in part upon its  ability to  manufacture  its
products in commercial quantities in compliance with regulatory requirements and
at acceptable costs.  There can be no assurance that the Company will be able to
achieve this. The Company has  experienced  negative gross margins on certain of
its product sales to date. Although Dock Resins will provide practical knowledge
in the scale-up of Intelimer  polymer products,  production in  commercial-scale
quantities  may  involve  technical  challenges  for the  Company.  The  Company
anticipates  that a  substantial  portion  of the  Company's  products  will  be
manufactured in the Linden, New Jersey facility acquired in the purchase of Dock
Resins.  The  Company's  reliance on this  facility  involves a number of risks,
including  the  absence  of  adequate   capacity,   the  unavailability  of,  or
interruption in access to, certain process technologies and reduced control over
delivery  schedules,  and  manufacturing  yields and costs. The Company may also
need to consider  seeking  collaborative  arrangements  with other  companies to
manufacture  certain of its  products.  If the Company is  dependent  upon third
parties for the manufacture of its products,  then the Company's  profit margins
and its ability to develop and deliver  such  products on a timely  basis may be
adversely affected.  Moreover,  there can be no assurance that such parties will
adequately perform and any failures by third parties may delay the submission of
products  for  regulatory  approval,  impair  the  Company's  ability to deliver
products  on a timely  basis,  or  otherwise  impair the  Company's  competitive
position.  The occurrence of any of these factors could have a material  adverse
effect on the Company's business, operating results and financial condition. The
manufacture of the Company's products will be subject to periodic  inspection by
regulatory authorities.  There can be no assurance that the Company will be able
to obtain necessary  regulatory approvals on a timely basis or at all. Delays in
receipt of or failure to receive such  approvals or loss of

                                      -11-
<PAGE>

previously  received  approvals  would  have a  material  adverse  effect on the
Company's business, financial condition and results of operations.

         Dependence on Single Source  Suppliers.  Many of the raw materials used
in manufacturing  certain of the Company's products are currently purchased from
a  single  source,  including  certain  monomers  used to  synthesize  Intelimer
polymers and substrate materials for the Company's breathable membrane products.
Upon  manufacturing  scale-up,  the  Company may enter into  alternative  supply
arrangements.  Although  to date  the  Company  has not  experienced  difficulty
acquiring  materials for the  manufacture  of its products,  no assurance can be
given that  interruptions  in supplies  will not occur in the  future,  that the
Company will be able to obtain substitute  vendors,  or that the Company will be
able to  procure  comparable  materials  at similar  prices  and terms  within a
reasonable  time. Any such  interruption of supply could have a material adverse
effect on the Company's  ability to manufacture its products and,  consequently,
could materially and adversely affect the Company's business,  operating results
and financial condition.

         Customer Concentration. In the past, a limited number of customers have
accounted for a substantial portion of Dock Resins' net revenues.  For the three
months ended March 31, 1997 and the twelve months ended December 31, 1996, sales
to Dock  Resins' top five  customers  accounted  for  approximately  51% of Dock
Resins'  net  revenues,  with  the top  customer  accounting  for  28% and  29%,
respectively,  of Dock Resins' net  revenues.  The Company  expects that for the
foreseeable  future a limited  number of customers may account for a substantial
portion of its net revenues from the Linden, New Jersey facility acquired in the
purchase of Dock Resins.  Dock Resins has in the past  experienced  changes from
year to year in the  composition  of its  major  customer  base and the  Company
believes this pattern may continue. Dock Resins does not have long-term purchase
agreements  with any of its customers.  The reduction,  delay or cancellation of
orders  from one or more  major  customers  for any reason or the loss of one or
more of such major customers could materially and adversely affect the Company's
business,  financial condition and results of operations. In addition, since the
products  manufactured  in the Linden  facility  are often  sole  sourced to its
customers,  the Company's  operating  results could be materially  and adversely
affected if one or more of its major  customers were to develop other sources of
supply.  There can be no assurance  that Dock  Resins'  current  customers  will
continue to place  orders with the  Company,  that orders by existing  customers
will not be canceled or will continue at the levels of previous  periods or that
the Company will be able to obtain orders from new customers.

         Patents and Proprietary  Rights. The Company's success depends in large
part on its ability to obtain  patents,  maintain  trade secret  protection  and
operate without infringing on the proprietary rights of third parties. There can
be no assurance that any pending patent applications will be approved,  that the
Company will develop additional  proprietary products that are patentable,  that
any patents  issued to the Company  will  provide the Company  with  competitive
advantages or will not be challenged by any third parties or that the patents of
others will not  prevent the  commercialization  of products  incorporating  the
Company's technology.  The Company has received,  and may in the future receive,
from third parties, including some of its competitors,  notices claiming that it
is infringing third party patents or other proprietary rights. For example,  the
Company has received a letter alleging that its Intellipac  breathable  membrane
product  infringes  patents of another party. The Company has investigated  this
matter and believes that its  Intellipac  breathable  membrane  product does not
infringe  the  specified  patents of such party.  The  Company  has  received an
opinion of patent counsel that the Intellipac  breathable  membrane product does
not infringe any valid claims of such patents. If the Company were determined to
be  infringing  any  third-party  patent,  the Company  could be required to pay
damages,  alter its  products or  processes,  obtain  licenses or cease  certain
activities.  If the Company is required to obtain any licenses,  there can be no
assurance  that  the  Company  will be able to do so on  commercially  favorable
terms,  if at all.  Litigation,  which could result in substantial  costs to and
diversion of effort by the Company, may also be necessary to enforce any patents
issued or  licensed  to the Company or to  determine  the scope and  validity of
third-party proprietary rights. Any such litigation or interference  proceeding,
regardless of outcome,  could be expensive and time  consuming and could subject
the Company to significant liabilities to third parties, require disputed rights
to be  licensed  from third  parties or require  the Company to cease using such
technology  and,  consequently,  could  have a  material  adverse  effect on the
Company's business, operating results and financial condition.

         Government  Regulation.  The  Company's  products  and  operations  are
subject to  substantial  regulation in the United States and foreign  countries.
Although  Landec  believes  that it will be able to comply  with all  applicable
regulations  regarding  the  manufacture  and sale of its  products  and polymer
materials,  such  regulations are always subject to change and depend heavily on
administrative  interpretations  and the country in which the products are sold.
There can be no assurance that future changes in regulations or  interpretations
relating  to  such  matters  as  safe   working   conditions,   laboratory   and
manufacturing  practices,  environmental  controls, and disposal of hazardous or
potentially  hazardous  substances  will  not  adversely  effect  the  Company's
business.  There can be no  assurance  that the Company  will not be required to
incur  significant costs to comply with such laws and regulations in the future,
or that such laws or regulations  will not have a material adverse effect on the
Company's business, operating results and financial condition. Failure to comply
with the

                                      -12-
<PAGE>

applicable  regulatory  requirements  can, among other things,  result in fines,
injunctions, civil penalties, suspensions or withdrawal of regulatory approvals,
product recalls,  product  seizures,  including  cessation of manufacturing  and
sales, operating restrictions and criminal prosecution.

         Environmental  Regulations.  Federal state and local regulations impose
various  environmental  controls on the discharge or disposal of toxic, volatile
or  otherwise  hazardous  chemicals  and  gases  used in  certain  manufacturing
processes.  Dock Resins is involved in various  investigations  and  proceedings
conducted  by the federal  Environmental  Protection  Agency and  certain  state
environmental  agencies  regarding  disposal of waste  materials.  Although  the
factual situations and the progress of each of these matters differ, the Company
believes  it has  retained  adequate  reserves  to  account  for  any  resultant
liability,  including any New Jersey  Industrial  Site Recovery Act  remediation
regarding  its  Linden,  New  Jersey  facility.  In most  cases,  the  Company's
liability will be limited to sharing clean-up or other remedial costs with other
potentially  responsible  parties. Any failure by the Company to control the use
of, or to restrict  adequately  the discharge  of,  hazardous  substances  under
present or future regulations could subject it to substantial liability or could
cause its  manufacturing  operations to be suspended.  There can be no assurance
that  changes  in  environmental  regulations  will  not  impose  the  need  for
additional capital equipment or other requirements.

         Limited  Sales  or  Marketing  Experience.  Although  Dock  Resins  has
experience  in  marketing  products  in certain  common  markets  with  Landec's
Intelimer polymer products,  the Company has only limited  experience  marketing
and selling  its  Intelimer  polymer  products.  While Dock Resins will  provide
consultation and in some cases direct marketing  support for Landec's  Intelimer
polymer  products,  the Company  intends to  distribute  certain of its products
through its corporate  partners and other distributors and to sell certain other
products  through a direct sales force.  Establishing  sufficient  marketing and
sales capability may require  significant  resources.  There can be no assurance
that the Company will be able to recruit and retain  skilled  sales  management,
direct salespersons or distributors, or that the Company's sales efforts will be
successful.  The Company has recently  changed its  distribution  approach  with
respect to the QuickCast  product line in the United  States to include  several
national  distributors.  To the extent that the Company enters into distribution
arrangements for the sale of its products,  the Company will be dependent on the
efforts of third  parties.  There can be no assurance  that such efforts will be
successful.

         International Operations and Sales. In the second quarter of the fiscal
year 1997 and 1996,  approximately 22% and 66%,  respectively,  of the Company's
total revenues were derived from product sales to and  collaborative  agreements
with  international  customers,  and  the  Company  expects  that  international
revenues will  continue to be an important  component of its total  revenues.  A
number of risks are inherent in international transactions.  International sales
and operations may be limited or disrupted by the regulatory  approval  process,
government controls, export license requirements,  political instability,  price
controls, trade restrictions, changes in tariffs or difficulties in staffing and
managing  international  operations.  Foreign  regulatory  agencies  have or may
establish product standards  different from those in the United States,  and any
inability to obtain foreign regulatory approvals on a timely basis could have an
adverse  effect  on the  Company's  international  business  and  its  financial
condition  and results of  operations.  While the  Company's  foreign  sales are
priced in dollars, fluctuations in currency exchange rates may reduce the demand
for the Company's  products by increasing the price of the Company's products in
the currency of the  countries  to which the products are sold.  There can be no
assurance  that  regulatory,  geopolitical  and other factors will not adversely
impact the  Company's  operations in the future or require the Company to modify
its current business practices.

         Quarterly Fluctuations in Operating Results. In the past, the Company's
results of operations have varied significantly from quarter to quarter and such
fluctuations are expected to continue in the future. Quarterly operating results
will depend upon several  factors,  including  the timing and amount of expenses
associated with expanding the Company's operations,  the timing of collaborative
agreements  with,  and  performance  of,  potential  partners,   the  timing  of
regulatory  approvals  and new  product  introductions,  the mix  between  pilot
production of new products and full-scale manufacturing of existing products and
the mix between  domestic  and export  sales.  In addition,  the Company  cannot
predict  rates of licensing  fees and  royalties  received  from its partners or
ordering  rates by its  distributors,  some of which place  infrequent  stocking
orders, while others order at regular intervals.  As a result of these and other
factors, the Company expects to continue to experience significant  fluctuations
in quarterly  operating results,  and there can be no assurance that the Company
will become or remain consistently profitable in the future.

         Product Liability Exposure and Availability of Insurance.  The testing,
manufacturing,  marketing,  and  sale of the  products  being  developed  by the
Company involve an inherent risk of allegations of product  liability.  While no
product liability claims have been made against the Company to date, if any such
claims  were made and  adverse  judgments  obtained,  they could have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.  Although the Company has taken and intends to continue to take what
it  believes  are  appropriate  precautions  to  minimize  exposure  to  product
liability  claims,  there can be no  assurance  that it will  avoid  significant
liability.  The Company

                                      -13-
<PAGE>

currently maintains medical product liability insurance in the minimum amount of
$2.0  million  per  occurrence  with a minimum  annual  aggregate  limit of $2.0
million and  non-medical  product  liability  insurance in the minimum amount of
$5.0  million  per  occurrence  with a minimum  annual  aggregate  limit of $5.0
million.  There can be no  assurance  that such  coverage  is  adequate  or will
continue to be available at an acceptable  cost, if at all. A product  liability
claim, product recall or other claim with respect to uninsured liabilities or in
excess of  insured  liabilities  could  have a  material  adverse  effect on the
Company's business, operating results and financial condition.

         Possible  Volatility of Stock Price.  Factors such as  announcements of
technological  innovations,  the attainment of (or failure to attain) milestones
in the commercialization of the Company's technology,  new products, new patents
or changes in existing  patents,  the  acquisition  or disposal of a part of the
business, or development of new, collaborative  arrangements by the Company, its
competitors  or  other  parties,  as well as  government  regulations,  investor
perception of the Company,  fluctuations in the Company's  operating results and
general  market  conditions  in the  industry  may cause the market price of the
Company's Common Stock to fluctuate significantly. In addition, the stock market
in general has recently experienced extreme price and volume fluctuations, which
have particularly  affected the market prices of technology  companies and which
have been unrelated to the operating performance of such companies.  These broad
fluctuations  may  adversely  effect the market  price of the  Company's  common
stock.



                                      -14-
<PAGE>


                           PART II. OTHER INFORMATION



Item 1.  Legal Proceedings

         None.

Item 2.  Changes in Securities

         In connection  with the  acquisition  of Dock Resins on April 18, 1997,
the Company  acquired  all of the  outstanding  capital  stock of Dock Resins in
exchange for an aggregate of 396,039  shares of the  Company's  common stock and
$13.7 million in cash, a secured  promissory note and direct  acquisition costs.
The  issuance  of  securities  in  this  Item 2 was  deemed  to be  exempt  from
registration  under  the  Securities  Act of 1933,  as  amended  (the  "Act") in
reliance on Section 4(2) of the Act as a transaction  by an issuer not involving
any  public  offering.  The  recipient  of the  securities  in such  transaction
represented  his intention to acquire the securities for investment only and not
with a view to or for sale in  connection  with  any  distribution  thereof  and
appropriate  legends were affixed to the securities  issued in such transaction.
The recipient was given adequate access to information about the Company.

Item 3.  Defaults in Senior Securities

         None

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

         At the Company's Annual Meeting of Shareholders  held on March 19, 1997
the following proposals were adopted by the margins indicated:

                                                               Number of Shares
                                                               ----------------
                                                Voted For         Withheld
                                                ---------         --------

1.   Three   Class  I   directors   were
     elected by the margins indicated to
     serve  until the next odd  numbered
     year Annual  Meeting  (1999) during
     which  their   successors  will  be
     elected and qualified:

         Ray F. Stewart                          6,729,788           12,600

         Stephen E. Halprin                      6,729,288           13,100

         Richard S. Schneider, Ph.D.             6,729,288           13,100

     The four  Class II  directors  were
     not up for  election  at the Annual
     Meeting.   These   four   Class  II
     directors, Gary T. Steele, Kirby L.
     Cramer,  Richard Dulude, and Damion
     E.  Wicker,  M.D.,  will  serve  as
     Class II  directors  until the next
     even-numbered     Annual    Meeting
     (1998),  when their successors will
     be elected and qualified.


                                      -15-

<PAGE>

<TABLE>
<CAPTION>
                                                                 Voted          Voted                       Broker
                                                                  For          Against        Abstain      Non-Votes
                                                                  ---          -------        -------      ---------

<S>                                                             <C>             <C>             <C>        <C>      
2.    To approve the adoption of the Company's 1996 Stock       5,073,371       502,099         18,200     1,148,718
      Option Plan

3.    To approve an amendment to the Company's 1995             6,241,859        83,954          9,700       406,875
      Directors' Stock Option Plan to provide that the
      options granted thereunder vest in full on the date
      of grant.

4.    To ratify the appointment of Ernst & Young LLP as         6,735,884         3,404          3,100             0
      independent public accountants of the Company for
      the fiscal year ending October 31, 1997.

</TABLE>

Item 5.  Other Information

         None.

Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits

                  10.17    1996 Stock Option Plan and Form of Option Agreements

                  27.1     Financial Data Schedule

         (b) There were no reports on Form 8-K filed  during the  quarter  ended
April 30,  1997.  On May 6, 1997,  the Company  filed a Form 8-K  reporting  the
acquisition of Dock Resins.


                                      -16-



<PAGE>


                                   SIGNATURES


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

                               LANDEC CORPORATION


                               By:/s/                 JOY T. FRY
                                  ----------------------------------------------
                                                      Joy T. Fry
                                      Vice President, Finance and Administration
                                              and Chief Financial Officer
                                           (Duly Authorized and Principal 
                                          Financial and Accounting Officer)


Date:    June 13, 1997


                                      -17-
<PAGE>


                               LANDEC CORPORATION

                                INDEX TO EXHIBITS

Exhibit                                                            Sequentially 
-------                                                            ------------
Number                              Exhibit                        Numbered Page
------                              -------                        -------------

10.17     1996 Stock Option Plan and Form of Option Agreement            19

27.1      Financial Data Schedule                                        37


                                      -18-

