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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

(Mark One)

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

      For the quarter period ended     September 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     0-12595  

                               MicroENERGY, Inc.                             
           (Exact Name of Registrant as specified in its Charter)

       Delaware                                             36-3262274
      (State or other Jurisdiction of(I.R.S. Employer   
Incorporation or Organization                           Identification No.)

350 Randy Road, Carol Stream, IL                               60188       
 (Address of Executive Offices)                              (Zip Code)    

   Registrant's Telephone Number, including Area Code: (630) 653-5900

Indicated 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 report(s), and (2) has been subject
to such filing requirements for the past 90 days.

                       Yes   X                  No       

Indicate the  number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date.

As of September 30, 1997 there were outstanding 2,018,839 shares of Common
Stock, $.01 par value.
                                                                                



                               MICROENERGY, INC.


                                     INDEX


Part 1 - Financial Information

     Item 1 - Financial Statements

              Condensed Balance Sheets for September 30, 1997 (unaudited)
              and June 30, 1997 (audited).

              Condensed Statements of Operations (unaudited) for the
              quarters ending September 30, 1997 and September 30, 1996.

              Condensed Statements of Cash Flows (unaudited) for the three 
              months ending September 30, 1997 and September 30, 1996.

              Notes to Condensed Financial Statements (unaudited)

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


                               MICROENERGY, INC.
                            CONDENSED BALANCE SHEETS

                                                       1st Quarter
                                                    Ending      Year Ended
                                                    9/30/97      6/30/97  
                                                  (unaudited)    (audited)
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<S>                                             <C>             <C>
ASSETS
Current assets:
  Cash                                           $    12,018    $  110,086    
  Accounts receivable                              2,164,940     2,122,302 
  Inventories                                      4,027,323     4,068,524 
  Other current assets                               514,120       586,870
    Total current assets                           6,718,401     6,887,782
Property and equipment                             6,248,189     6,225,214  
Accumulated depreciation                          (4,059,457)   (3,869,092)
                                                   2,188,732     2,356,122   
Other assets, net                                    102,274       102,275
                                                 $ 9,009,407    $9,346,179

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LIABILITIES AND STOCKHOLDERS' EQUITY
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<S>                                           <C>            <C>
Current liabilities:
  Current portion of long-term obligations       $  901,508       948,326
  Accounts payable                                1,102,837     1,579,539
  Accrued expenses                                  448,277       455,563
     Total current liabilities                    2,452,622     2,983,428
Long-term obligations                             4,151,779     3,873,622
    Total liabilities                             6,604,401     6,857,050
Stockholders' equity:                
  8% cumulative Series A preferred stock,    
   $7.00 liquidation preference, 4,000,000,
   494,500 shares issued in 1997                  2,605,282     2,605,282
  Common stock, $.01 par value - 4,000,000
   shares authorized; 2,018,839 shares
   issued in 1998 and 421,477 in 1997                20,218        20,218
  Additional paid-in capital                      6,423,535     6,423,535
  Accumulated deficit                            (5,255,998)   (5,255,998)
  Unearned restricted stock compensation         (1,334,050)   (1,347,550)
  Common stock purchase warrants,                        75            75
  Preferred stock warrants                          112,725       112,725 
  Treasury stock, at cost 1,898 shares              (16,386)      (16,386)
  Unrealized loss on marketable securities          (52,772)      (52,772)
  Current Year Earnings/(Loss)                      (97,623)         --       
Total stockholders' equity                         2,405,006     2,489,129
                                                  $9,009,407    $9,346,179
                                                  ==========    ==========
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                                MICROENERGY,INC
                          STATEMENTS OF OPERATIONS

                             Three Months   Three Months
                                 Ended         Ended
                                 9/30/97      9/30/96  
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<S>                               <C>            <C>

Sales                               $3,694,813    $3,442,990              

Expenses:
  Facility, pre-production,
   and production                    2,876,360     2,743,737
  Research and development             358,300       311,934
  Selling,General and
   Administrative                      448,235       412,840

     Operating Income/(Loss)            11,918       (25,521)

  Interest expense, net                109,541        71,676
     Net Income/(Loss)              $  (97,623)    $ (97,197)
                                     ==========     =========     
For earnings per share caculation:
     Net Income/(Loss)              $  (97,623)    $ (97,197)
     Preferred stock dividends         (69,230)     (104,230)

   Net Income/(Loss) available
     to common shareholders         $ (166,853)    $(201,427)  
                                     ==========     =========                 
   
   Net Income/(loss) per share      $    (.08)    $    (.48)

Weighted average number
 of shares of common
 stock outstanding                    2,018,824      421,477              

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                               MICROENERGY, INC.
                            STATEMENTS OF CASH FLOWS

                               Three Months  Three Months
                                  Ending       Ending  
                                  9/30/97      9/30/96  
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<S>                                  <C>           <C>
Cash flows from operating
 activities:
 Net (losses) earnings         $   (97,623)   $ (97,197)             
 Adjustments to reconcile net
  (losses) earnings to net cash
   provided by operations:
   Depreciation                    190,365      165,741

   Changes in assets and 
     liabilities:
     Accounts receivable          ( 42,638)    (354,458)
     Inventories                    41,201     (114,602)
     Other current assets           72,751      148,355
     Accounts payable             (476,702)    (695,413)
     Accrued expenses             (  7,286)    (133,875)
                                  (222,309)    (984,252)  
 Net cash provided (used) by
  operating activities          (  319,932)  (1,081,449)             
Cash flows (used in) provided by 
 investing activities:
 Additions to equipment            (22,975)     (49,859)             
Cash flows provided by (used in)
 financing activities:
 Notes Payable                          --     (521,019)             
 Long-term debt, net of payments   231,339   (1,061,016)             
 Equity Transactions                13,500    2,703,728              
Net cash provided by (used in)
 financing activities              244,839    1,121,693
Net increase (decrease) in cash    (98,068)      (9,615)             
Cash at beginning of period        110,086       19,615              
Cash at end of period           $   12,018   $   10,000              


</TABLE>                     MICROENERGY, INC.
                  NOTES TO CONDENSED FINANCIAL STATEMENTS
                                (UNAUDITED)
1. CONDENSED FINANCIAL STATEMENTS

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<S> <C>                                                       <C>
The condensed balance sheet as of September 30, 1997, the consolidated
statement of income for the three month periods ending September 30, 1997
and September 30, 1996 and the condensed statement of cash flows for the
three month period ending September 30, 1997 and September 30, 1996 have
been prepared by the Company, without audit.  In the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary
to present fairly the financial position, results of operations and changes
in financial position at September 30, 1997 and for all periods presented
have been made.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  It is suggested that these
condensed statements be read in conjunction with the financial statements
and notes thereto included in the Company's June 30, 1997 10K report.
The results of operations for the period ended September 30, 1997 are not
necessarily indicative of the operating results for the full year.


Part 1
Item 2
                             MICROENERGY, INC.

                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Net sales for the three months ended September 30, 1997 were $3,694,813,
representing a 7% increase over the prior year period of $3,442,990. The
fiscal first quarter revenues were approximately 8% below the sales level
budgeted by the Company. The cause of the shortfall and the likely impact
for the balance of the year relative to budgeted shortfalls is being
researched to determine possible consequences in future quarters.  A net
loss of  $97,623 was incurred for the current quarter, which was essentially
equivalent to the loss in the prior year period of $97,197.

Manufacturing costs decreased to 77.8% of revenues as compared to 79.7% in
the prior year.  The major reason for the decrease was  increased
productivity as a result of the new production equipment installed last
year. In the non-direct cost areas, total costs for Research & Development
and SG&A increased by $46,366 and $35,395. Interest cost for the quarter
were $109,541 as compared to $71,676 in the prior year period. The increase
in interest was a result of the fixed asset financing for the purchases made
in the last fiscal year and a higher utilization of the line of credit.



Liquidity and Capital Resources

The Company at September 30, 1997, had positive working capital of
$4.3 million as compared $3.9 million at the end of the fiscal year
June 30, 1997.  The improvement is due mainly to a reduction of Trade
Accounts Payable by approximately $477,000. Accounts Receivable and
Inventory balances are not significantly different than the fiscal year end
June 30, 1996.  The Company has approximately $500,000 available on its Line
of Credit as of the end of the quarter. 

The Company is current with all of its debt obligations.  Management expects
that its current cash and working capital position, combined with cash
expected to be generated from operations will be sufficient to service the
Company's debt and fund the Company for the coming fiscal year.







                                SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1933,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.



Date: November 14, 1997                 By(s)   Robert G. Gatza   
                                                Robert G. Gatza
                                                President and CEO



Date: November 14, 1997                 By(s)   Robert J. Fanella  
                                                Robert J. Fanella
                                                Chief Financial Officer
                                                and Treasurer



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