SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D. C.



                                   FORM 10-Q



                  QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934



FOR QUARTER ENDED:  SEPTEMBER 30, 1996                COMMISSION FILE NO. 0-4076
                   -------------------                                    ------



                              EXOTECH INCORPORATED
               (Exact name of Registrant as Specified in Charter)



State or Jurisdiction of
 Incorporation or Organization:                      DELAWARE

IRS Identification No:                               54-0700888

Address of Principal Office:                         8502 Dakota Drive
                                                     Gaithersburg, MD. 20877

Registrant's Telephone Number:                       (301) 948-3060



Indicate by checkmark  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
requirement for the past 90 days. Yes [x] No [ ]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the close of the period covered by this Report.

CLASS:                                             COMMON STOCK, PAR VALUE $0.10

OUTSTANDING AT
   SEPTEMBER 30, 1996                                         942,387
                                                              -------



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                              EXOTECH INCORPORATED


                                     INDEX



PART I   FINANCIAL INFORMATION                                        PAGE NO.

         CONSOLIDATED CONDENSED BALANCE SHEET
         SEPTEMBER 30, 1996  AND JUNE 30, 1996.................          2

         CONSOLIDATED CONDENSED STATEMENT OF
         OPERATIONS - THREE MONTHS ENDED
         SEPTEMBER 30, 1996 AND 1995...........................          3

         STATEMENT OF CASH FLOWS FOR THREE
         MONTHS ENDED SEPTEMBER 30, 1996 AND 1995..............          4

         NOTES TO CONSOLIDATED CONDENSED
         FINANCIAL STATEMENTS..................................          5

         MANAGEMENT'S DISCUSSION AND ANALYSIS
         OF CONSOLIDATED CONDENSED STATEMENT
         OF OPERATIONS.........................................          6


PART II  OTHER INFORMATION

         OTHER FINANCIAL INFORMATION...........................         7/8

         SIGNATURES        ....................................          9




<PAGE>



                              EXOTECH INCORPORATED
                           CONSOLIDATED BALANCE SHEET

                                     ASSETS
<TABLE>
<CAPTION>
                                                                 SEPTEMBER 30,                        June 30,
                                                                     1996                               1996
                                                                 (Unaudited)
<S><C>
CURRENT ASSETS

Accts. Receivable, Net                                             $ 18,560                           $ 11,073
Inventories
 Work in Process                                                    533,417                            505,062
 Raw Materials                                                       32,625                             32,625
 Finished Goods                                                      14,000                             14,000
Cash and Other Current Assets                                           837                                449
                                                                   --------                           --------
Total Current Assets                                               $599,439                           $563,209

PROPERTY, PLANT AND EQUIPMENT
 NET                                                                    368                                411
OTHER NON CURRENT ASSETS                                              6,689                              6,921
                                                                   --------                           --------
TOTAL ASSETS                                                       $606,496                           $570,541
                                                                   ========                           ========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Accts. Payable & Other Accrued Expenses                            $122,612                           $105,664
Other Current Liabilities                                           343,631                            347,994
Notes Payable                                                       392,294                            372,294
                                                                   --------                           --------
Total Current Liabilities                                          $858,537                           $825,952

SHAREHOLDERS EQUITY
Common Stock, Par Value $.10 per share;
 1,500,000 shares authorized; 970,135
 issued; 942,387 outstanding                                         97,014                             97,014

Paid-in-Surplus                                                   1,169,645                          1,169,645
Deficit                                                          (1,406,280)                        (1,409,650)
Treasury Stock (27,748 shares)                                     (112,420)                          (112,420)
                                                                   ---------                          ---------
Total Shareholders' Equity                                         (252,041)                          (255,411)
TOTAL LIABILITIES & SHAREHOLDERS'
 EQUITY                                                             $606,496                           $570,541
                                                                    ========                           ========
</TABLE>

See accompanying Notes to Consolidated Condensed Financial Statements.


                                       2

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                              EXOTECH INCORPORATED
                 CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

                                             1996                      1995
                                         THREE MONTHS              THREE MONTHS
                                             ENDED                     ENDED
                                         SEPTEMBER 30              SEPTEMBER 30
                                       ----------------          --------------

REVENUES

Contract Sales                             $110,796                  $ 55,517

EXPENSES

Direct Labor                                    654                       766
Overhead                                        786                     5,862
Materials                                        -                        142
General & Administrative                        144                       853
Inventory Costs                              98,712                    45,050
                                           --------                  --------

Cost of Contract Sales                      100,296                    52,531

Operating Income (Loss)                      10,500                     2,986

Other Revenue (Expenses):                         -                         -

Interest & Other                             (7,130)                   (6,601)

NET INCOME BEFORE TAXES                       3,370                    (3,615)

State Income Tax                                  -                         -
NET INCOME (LOSS)                             3,370                    (3,615)

Weighted Average Number of
Common Stock Outstanding                    942,387                   942,387

EARNINGS (LOSS) PER
COMMON SHARE                                   .004                     (.004)
DIVIDENDS PER COMMON SHARE                     NONE                      NONE


See accompanying Notes to Consolidated  Condensed  Financial  Statements.  
These statements have been prepared from the books of account without audit.




                                       3

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                      EXOTECH INCORPORATED AND SUBSIDIARY
                          STATEMENT OF CASH FLOWS FOR
                        THREE MONTHS ENDED SEPTEMBER 30,

<TABLE>
<CAPTION>
                                                                                1996                       1995
                                                                                ----                       ----
<S><C>
CASH FLOWS FROM OPERATING TRANSACTIONS

Net Income (Loss)                                                             $  3,370                   $ (3,615)
Add: Non cash Income Determinants
     Depreciation and Amortization                                                 275                        289
Add (Deduct): Changes in Current Assets & Liabilities
     (Increase) Decrease in Accounts Receivable                                 (7,487)                     5,495
     (Increase) Decrease in Prepaid Expenses                                         6                        564
     (Increase) Decrease in Inventory                                          (28,355)                   (79,339)
     Increase (Decrease) in Accts. Payable                                      16,948                     21,982
     Increase (Decrease) in Payroll/Emp. Benefits                              (11,493)                    14,744
     Increase (Decrease) in Accrued Interest                                     7,130                      6,582
                                                                              --------                   --------

Cash Provided By or (Used) For Operating Transactions                          (19,606)                   (33,298)
     -----------    ----------

CASH FLOWS FROM FINANCING TRANSACTIONS:

Proceeds from Notes                                                             30,000                     33,219
Payment on Notes                                                                10,000
                                                                              --------                   --------
Cash Provided By or (Used For) Financing Transactions                           20,000                     33,219
     -----------    ----------
CASH FLOWS FROM INVESTING TRANSACTIONS:

Deposits                                                                          -                           128
                                                                              --------                   --------

Cash Provided By or (Used For) Investing Transactions                               -0-                       128
     -----------    ----------

INCREASE (DECREASE) IN CASH                                                        394                         49

CASH BALANCE - BEGINNING                                                           105                         32
                                                                              --------                   --------
CASH BALANCE - ENDING                                                         $    499                   $     81

</TABLE>


                                       4

<PAGE>




                              EXOTECH INCORPORATED
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS



NOTE 1.

In the opinion of Management,  the accompanying unaudited consolidated condensed
financial  statements  contain  all  adjustments   (consisting  of  only  normal
recurring  accruals)  necessary to present  fairly the financial  position as of
September 30, 1996 and June 30, 1996 and the results of  operations  and changes
in financial  position for the three months ended September 30, 1996 and 1995 of
Exotech  Incorporated  and its inactive  wholly-owned  consolidated  subsidiary,
Exotech  Research  &  Analysis,  Inc.  There  are  no  significant  intercompany
transactions.


NOTE 2.

Per  share   computations  have  been  based  on  the  weighted  average  shares
outstanding of 942,387 for the three months ended September 30, 1996 and 1995.


NOTE 3.

Notes  Payable at  September  30, 1996 consist of four demand notes of $100,000,
$8,000 and  $47,000,  payable  with  interest  at 8.5% per annum to three of the
Company's former directors. In addition, notes amounting to $217,294 are payable
with  interest  at 8.5% per  annum to one  officer/employee.  Periodically,  the
Company has obtained  producer loans from Spiral Biotech,  Inc. that are secured
by inventory  instruments  (bacteria  colony  counters).  At September 30, 1996,
there was an outstanding Producer Loan of $20,000 with interest at 9% per annum.
This loan may be prepaid, in whole or in part, at any time, without penalty.



                                       5

<PAGE>



                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                     OF THE
                 CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS


The following is  Management's  discussion  and analysis of certain  significant
factors which have affected the Company's  earnings during the periods  included
in the accompanying consolidated condensed statement of operations.

A summary of the period to period changes in the principal items included in the
consolidated statement of operations is shown below:

<TABLE>
<CAPTION>
                                          ---------------------------------------- COMPARISON  OF ---------------------------------
                                                     THREE MONTHS ENDED                                    THREE MONTHS ENDED

                                            Sept 30                      June 30                     Sept 30                Sept 30
                                            1996                         1996                        1996                   1995
                                            -------                      -------                     -------                -------
<S><C>

Net Sales                                  $110,796                     $106,244                    $110,796                $55,517

Cost of Sales                                 1,440                        5,164                       1,440                  6,628

General & Administrative
 Expenses                                       144                          295                         144                    853

Inventory Costs                              98,712                      103,170                      98,712                 45,050

Interest & Other                              7,130                        7,036                       7,130                  6,601

</TABLE>

                                       6

<PAGE>



                      PART II. OTHER FINANCIAL INFORMATION



ITEM 5.

As in the past,  a shortage of working  capital  continues  to be a  significant
problem,  resulting in occasional slow payments to creditors,  and hampering the
development  of new business to the fullest extent  possible.  In the opinion of
Management,  the Company should be in a position to sustain  operations at least
until such time as the results of current  contracts  and  negotiations  for new
business is determinable.  Ultimate realization of the carrying value of prepaid
expenses and advances,  property and equipment,  and miscellaneous  other assets
shown in the accompanying  balance sheet depends upon sustained  operations as a
going concern.

The dollar  amount of the  backlog as of  September  30,  1996 was  $237,952,  a
decrease of $41,048  from the backlog of the  preceding  quarter  ended June 30,
1996.


ITEM 6 (B)

No reports on Form 8-K were filed in this quarter.




                                       7

<PAGE>




I.        CHANGE IN FINANCIAL POSITION IN THE THREE MONTHS ENDED
          SEPTEMBER 30, 1996.


          In the three months  period ended  September  30, 1996, an increase of
          working  capital of $3,645  resulted from a net profit from operations
          of $3,370 and non-fund charges of $275.



II.       INCOME AND EXPENSE IN THE MOST RECENT QUARTER AND THE SAME
          THREE MONTH PERIOD LAST YEAR.

          Revenue  for the  quarter  ended  September  30,  1996,  was higher by
          $55,279 or 96% than the results one year earlier. Operating costs were
          increased in the most recent quarter by $47,765 or 91% compared to the
          prior year.  The result was an  operating  profit of $10,500 and a net
          gain of $3,370  compared to a net loss of $3,615 in the quarter  ended
          one year earlier.




                                       8

<PAGE>



                                   SIGNATURES


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



                                                            EXOTECH INCORPORATED

                                                                 REGISTRANT




DATE:         November 19, 1996




/s/ Robert G. Lyle
---------------------------------------
    ROBERT G. LYLE, PRESIDENT AND CHIEF
    EXECUTIVE OFFICER














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