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 quarterly period ended December 31, 1995

    (   ) 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 0-16055

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

               California                         95-3267788
    -------------------------------        ------------------------
    (State or other jurisdiction of        (I.R.S. Employer
    incorporation or organization)         Identification Number)

    6285 Nancy Ridge Drive, San Diego, California           92121
    ---------------------------------------------         ---------
    (Address of principal executive offices)              (Zip Code)
                                    (619) 457-5091
                 ----------------------------------------------------
                 (Registrant's telephone number, including area code)

                 ----------------------------------------------------
                 (Former name, former address and former fiscal year,
                            if changed since last report)


 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 such shorter period that the
 registrant was required to file such reports), and (2) has been subject to
 such filing requirements for the past 90 days.

               Yes    X            No 
                    -----             -----
 At December 31, 1995, 5,742,000 shares of Common Stock of the Registrant were
 outstanding.






                               Exhibit Index on Page 15


                                     Page 1 of 16                       <PAGE>


                                      INDEX
                               XSCRIBE CORPORATION




                                                                    Page
                                                                    ----
     PART I - FINANCIAL INFORMATION

         ITEM 1:  FINANCIAL STATEMENTS (UNAUDITED)

             Condensed consolidated balance sheets as of
                 December 31, 1995 and March 31, 1995........         3

             Condensed consolidated statements of income
                 for the three months ended December 31, 1995
                 and 1994....................................         4

             Condensed consolidated statements of income
                 for the nine months ended December 31, 1995
                 and 1994....................................         5

             Condensed consolidated statements of cash flows
                 for the nine months ended December 31, 1995
                 and 1994....................................         6

             Notes to condensed consolidated financial
                 statements..................................         7


         ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF
                    OPERATIONS...............................         8


     PART II - OTHER INFORMATION

         ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K...........        13


     SIGNATURES..............................................        14

















                                     Page 2 of 16                       <PAGE>
                      XSCRIBE CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                   AS OF DECEMBER 31, 1995 AND MARCH 31, 1995


                                           December 31, 1995
                                              (Unaudited)      March 31, 1995
                                           -----------------   --------------

  CURRENT ASSETS:
     Cash and cash equivalents              $   444,000        $   311,000
     Accounts receivable, net                 3,256,000          3,623,000
     Inventories                              4,654,000          3,897,000
     Prepaid expenses and other                 484,000            509,000
                                            -----------        -----------
  TOTAL CURRENT ASSETS                        8,838,000          8,340,000

  PROPERTY AND EQUIPMENT, NET                 2,153,000          2,491,000

  INTANGIBLES AND OTHER ASSETS, NET           4,047,000          4,322,000
                                            -----------        -----------
                                            $15,038,000        $15,153,000
                                            ===========        ===========
  CURRENT LIABILITIES:

     Accounts payable                       $ 1,785,000        $ 2,182,000
     Accrued liabilities and other              840,000            735,000
     Customer deposits                        1,258,000            680,000
     Line of Credit                                  --            500,000
     Current portion of notes payable           387,000            108,000
                                            -----------        -----------
  TOTAL CURRENT LIABILITIES                   4,270,000          4,205,000

  NON-CURRENT LIABILITIES                     1,253,000            699,000

  COMMITMENTS AND CONTINGENCIES

  SHAREHOLDERS' EQUITY:

     Common stock (5,742,000 and
     5,719,000 shares outstanding)           20,098,000         20,132,000
     Accumulated deficit                    (10,611,000)       ( 9,887,000)
     Other                                       28,000              4,000
                                            -----------        -----------
  TOTAL SHAREHOLDERS' EQUITY                  9,515,000         10,249,000
                                            -----------        -----------
                                            $15,038,000        $15,153,000
                                            ===========        ===========

     The accompanying notes are an integral part of these condensed
     consolidated balance sheets.







                                     Page 3 of 16                       <PAGE>

                      XSCRIBE CORPORATION AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
              FOR THE THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994
                                   (Unaudited)

                                                    1995           1994
                                                ----------    -----------

       REVENUES                                 $5,025,000     $5,974,000

       COST OF REVENUES                          3,347,000      3,840,000
                                                ----------     ----------
       GROSS PROFIT                              1,678,000      2,134,000
                                                ----------     ----------

       OPERATING EXPENSES:

          Selling, general and administrative    1,529,000      1,579,000

          Research and development                 175,000        103,000
                                                ----------     ----------
       TOTAL OPERATING EXPENSES                  1,704,000      1,682,000
                                                ----------     ----------
       OPERATING INCOME (LOSS)                     (26,000)       452,000

       OTHER INCOME (EXPENSE), NET                 (61,000)       (44,000)
                                                ----------     ----------

       INCOME (LOSS) FROM CONTINUING
       OPERATIONS BEFORE INCOME TAXES              (87,000)       408,000

       PROVISION FOR INCOME TAXES                    1,000          3,000
                                                ----------     ----------
       INCOME (LOSS) FROM CONTINUING
       OPERATIONS                                  (88,000)       405,000

       LOSS FROM DISCONTINUED OPERATION                 --       (104,000)
                                                ----------     ----------
       NET INCOME (LOSS)                        $  (88,000)    $  301,000
                                                ==========     ==========
       INCOME (LOSS) PER COMMON SHARE:

          CONTINUING OPERATIONS                 $    (0.02)    $     0.07
                                                ==========     ==========
          DISCONTINUED OPERATION                        --     $    (0.02)
                                                ==========     ==========
          NET INCOME (LOSS)                     $    (0.02)    $     0.05
                                                ==========     ==========
       Weighted average number of common
          and common stock equivalent
          shares outstanding                     5,742,000      5,931,000
                                                ==========     ==========

          The accompanying notes are an integral part of these condensed
          consolidated financial statements.




                                     Page 4 of 16                       <PAGE>
                      XSCRIBE CORPORATION AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
              FOR THE NINE MONTHS ENDED DECEMBER 31, 1995 AND 1994
                                   (Unaudited)

                                                   1995           1994   
                                               -----------    -----------
  REVENUES                                     $14,059,000    $16,240,000

  COST OF REVENUES                               9,397,000     10,200,000
                                               -----------    -----------
  GROSS PROFIT                                   4,662,000      6,040,000
                                               -----------    -----------

  OPERATING EXPENSES:

     Selling, general and administrative         4,621,000      4,699,000

     Research and development                      567,000        361,000
                                               -----------    -----------
  TOTAL OPERATING EXPENSES                       5,188,000      5,060,000
                                               -----------    -----------

  OPERATING INCOME (LOSS)                         (526,000)       980,000

  OTHER  INCOME (EXPENSE), NET                    (182,000)       (91,000)
                                               -----------    -----------

  INCOME (LOSS) FROM CONTINUING OPERATIONS
  BEFORE INCOME TAXES                             (708,000)       889,000

  PROVISION FOR INCOME TAXES                         1,000          8,000
                                               -----------     ----------
  INCOME (LOSS) FROM CONTINUING OPERATIONS        (709,000)       881,000

  LOSS FROM DISCONTINUED OPERATION                 (15,000)      (274,000)
                                               -----------    -----------
  NET INCOME (LOSS)                            $  (724,000)   $   607,000
                                               ===========    ===========

  INCOME (LOSS) PER COMMON SHARE:

     CONTINUING OPERATIONS                     $     (0.12)   $      0.15
                                               ===========    ===========
     DISCONTINUED OPERATION                             --    $     (0.05)
                                               ===========    ===========
     NET INCOME (LOSS)                          $    (0.13)   $      0.10
                                               ===========    ===========

  Weighted average number of common and
  common stock equivalent shares outstanding     5,748,000      6,013,000
                                               ===========    ===========
     The accompanying notes are an integral part of these condensed
     consolidated financial statements.





                                     Page 5 of 16                       <PAGE>
                    XSCRIBE CORPORATION AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE NINE MONTHS ENDED DECEMBER 31, 1995 AND 1994
                                (Unaudited)

                                                  1995           1994    
                                               -----------    -----------
  CASH FLOWS FROM OPERATIONS:
     Income (loss) from continuing operations  $  (709,000)   $   881,000

     Adjustments:
        Depreciation and amortization            1,262,000      1,246,000
        Changes in assets and liabilities:
           Accounts receivable                     367,000       (646,000)
           Inventories                            (757,000)      (628,000)
           Prepaid expenses and other               40,000       (117,000)
           Accounts payable                       (397,000)      (324,000)
           Accrued liabilities and other           109,000         61,000
           Customer deposits                       578,000          8,000
                                               -----------    -----------
     Net cash flow provided by continuing
           operations                              493,000        481,000
     Net operating cash flows provided (used)
           by discontinued operation                 9,000       (312,000)
                                               -----------    -----------

  NET CASH PROVIDED BY OPERATIONS                  502,000        169,000

  CASH FLOWS FROM INVESTING ACTIVITIES:
     Capital expenditures                         (688,000)    (1,236,000)
                                               -----------    -----------

  NET CASH (USED) FOR INVESTING ACTIVITIES        (688,000)    (1,236,000)
                                               -----------    -----------
  CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from credit facility, net            500,000        690,000
     Repayment of notes payable                   (171,000)       (59,000)
     Other                                         (34,000)        53,000
                                               -----------    -----------

  CASH FLOWS PROVIDED BY FINANCING ACTIVITIES      295,000        684,000
                                               -----------    -----------
  EFFECTS OF EXCHANGE RATES ON CASH                 24,000         (6,000)
                                               -----------    -----------
  NET INCREASE (DECREASE) TO CASH                  133,000       (389,000)

  CASH - BEGINNING OF PERIOD                       311,000        557,000
                                               -----------    -----------
  CASH - END OF PERIOD                         $   444,000    $   168,000
                                               ===========    ===========

     The accompanying notes are an integral part of these condensed
     consolidated financial statements.






                                     Page 6 of 16                       <PAGE>
                      XSCRIBE CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
               AS OF DECEMBER 31, 1995 AND MARCH 31, 1995 AND FOR
                THE NINE MONTHS ENDED DECEMBER 31, 1995 AND 1994
                                   (Unaudited)


       1.   GENERAL

            Basis of presentation
            ---------------------

            The accompanying unaudited condensed consolidated financial
       statements reflect the accounts of Xscribe Corporation (the
       "Company"), together with its majority-owned subsidiaries.  All
       significant intercompany transactions and balances have been
       eliminated.

            These unaudited condensed consolidated financial statements
       have been prepared pursuant to the rules and regulations of the
       Securities and Exchange Commission.  Certain information and
       disclosures normally included in annual financial statements
       prepared in accordance with generally accepted accounting
       principles have been condensed or omitted pursuant to those rules
       and regulations, although the Company believes that the
       disclosures made are adequate to prevent the information from
       being misleading.  These unaudited condensed consolidated
       financial statements reflect, in the opinion of management, all
       adjustments (which include only normal recurring adjustments)
       necessary to present the results of operations and financial
       position as of the dates and for the periods presented.  These
       unaudited condensed consolidated financial statements should be
       read in conjunction with the audited financial statements and
       related notes included in the Company's Form 10-K filed with the
       Securities and Exchange Commission for the year ended March 31,
       1995.  The results for the interim periods presented are not
       necessarily indicative of results to be expected for a full year.

       2.   SUPPLEMENTARY FINANCIAL INFORMATION

            Inventories
            -----------

            As of December 31, 1995, inventories consist of the
            following:

            Raw materials and        
            spare parts              $2,233,000

            Work in process             965,000

            Finished goods            1,456,000
                                     ----------
                                     $4,654,000
                                     ==========




                                     Page 7 of 16                       <PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                              RESULTS OF OPERATIONS

            Management's discussion and analysis of financial condition
       and results of operations should be read in conjunction with the
       condensed consolidated financial statements and notes to condensed
       consolidated financial statements included elsewhere herein.

                              Results of Operations

       Three months ended December 31, 1995 compared to the three months
       ended December 31, 1994
       ---------------------------------------------------------------

            Consolidated revenues in the quarter ended December 31, 1995
       decreased $949,000 (16%) to $5,025,000 from $5,974,000 in the
       quarter ended December 31, 1994.  Revenues in the Solutions
       Segment decreased $964,000 (30%) from $3,245,000 in prior quarter
       to $2,281,000 in the current quarter due to a continued decline in
       the computer-aided-transcription (CAT) system prices and units
       sold as well as a $597,000 decrease in groupware sales.  Revenues
       in the Imaging Segment increased $15,000 (1%) to $2,744,000 in the
       quarter ended December 31, 1995 from $2,729,000 in the quarter
       ended December 31, 1994.  This slight increase in the Imaging
       Segment revenues reflects a 57% decrease in computer-output-
       microfiche (COM) related revenue offset by a 34% increase in
       scanner product and service revenue.

            Consolidated gross margin decreased $456,000 (21%) from
       $2,134,000 in the quarter ended December 31, 1994 to $1,678,000 in
       the quarter ended December 31, 1995.  Gross margin in the
       Solutions Segment decreased $653,000 (56%) from $1,163,000 in the
       prior quarter to $510,000 in the current quarter.  This decrease
       in gross margin was due to volume and price decreases in the CAT
       business and the $597,000 decrease in groupware sales.  Gross
       margin as a percent of sales in the Solutions Segment decreased
       from 36% in the quarter ended December 31, 1994 to 22% in the
       quarter ended December 31, 1995 primarily due to eroding CAT
       prices and a change in the mix of groupware sales from higher
       margin software sales to lower margin hardware sales.  Gross
       margin in the Imaging Segment increased $197,000 (20%) from
       $971,000 to $1,168,000 in the quarters ended December 31, 1994 and
       1995, respectively.  Gross margin as a percent of sales in the
       Imaging Segment increased from 36% in the quarter ended December
       31, 1994 to 43% in the quarter ended December 31, 1995.  This
       increase resulted from volume efficiencies as well as a change in
       the mix from lower-margin COM duplicators towards higher-margin
       aperture card scanners.  

            Selling, general and administrative expenses decreased
       $50,000 from $1,579,000 to $1,529,000 in the quarters ended
       December 31, 1994 and 1995, respectively.  This decrease consists
       of a $140,000 increase in costs at Photomatrix to develop its
       sales and marketing channels, offset by $190,000 of cost
       reductions in the Solutions Segment and corporate headquarters. 
       As a percent of sales, SG&A increased from 26% to 30% in the



                                     Page 8 of 16                       <PAGE>
       quarters ended December 31, 1994 and 1995, respectively, primarily
       due to the decrease in revenues referred to above.

            Product development expenses increased $72,000 from $103,000
       in the quarter ended December 31, 1994 to $175,000 in the quarter
       ended December 31, 1995.  Product development expenditures that
       were capitalized because they related to technologically feasible
       projects were $148,000 in the current quarter compared to $149,000
       in the prior quarter.  Total product development spending
       increased $71,000 from $252,000 in the prior quarter to $323,000
       in the current quarter.  This increased spending was due primarily
       to increased scanner-development activity at Photomatrix.  

            Other income (expense), which consists primarily of interest
       expense, increased $17,000 from $44,000 to $61,000 in the quarters
       ended December 31, 1994 and 1995, respectively.  This increase was
       due to an increase in borrowings under the Company's credit
       facility in the current quarter as compared to the prior quarter.

            The Company's provisions for income taxes were $1,000 and
       $3,000 in the quarters ended December 31, 1995 and 1994,
       respectively.  These amounts are substantially less than the
       provision calculated using the statutory rates because of the
       effects of net operating losses and related carryforwards, net of
       valuation allowances.

            The decreases in revenues and gross margin and the increased
       product development and interest expenses, offset slightly by
       decreased SG&A expenses, resulted in a net loss from continuing
       operations of $88,000 for the quarter ended December 31, 1995. 
       This compares to income from continuing operations of $405,000 for
       the quarter ended December 31, 1994.

            In the quarter ended December 31, 1994, the Company operated
       a scanning service bureau.  Subsequent thereto, this service
       bureau was discontinued.  Including the prior-quarter loss from
       discontinued operation of $104,000, net income decreased from
       $301,000 ($.05 per share) in the prior quarter to a net loss of
       $88,000 ($.02 per share) in the current quarter.


       Nine months ended December 31, 1995 compared to the nine months
       ended December 31, 1994
       ---------------------------------------------------------------

            Consolidated revenues for the period ended December 31, 1995
       decreased $2,181,000 (13%) to $14,059,000 from $16,240,000 for the
       period ended December 31, 1994.  Revenues in the Solutions Segment
       decreased $1,934,000 (21%) to $7,062,000 in the current period
       from $8,996,000 in the prior period.  This decrease was due to
       decreased CAT sales volumes and continued price erosion as well as
       a $706,000 decrease in groupware sales.  Revenues in the Imaging
       Segment decreased $247,000 (3%) to $6,997,000 in the period ended
       December 31, 1995 from $7,244,000 in the period ended December 31,
       1994.  The decrease in revenue in the Imaging Segment was due to a




                                     Page 9 of 16                       <PAGE>
       46% decrease in COM duplicator sales, offset by a 30% increase in
       scanner product and service revenue.

            Consolidated gross margins for the period ended December 31,
       1995 decreased $1,378,000 (23%) to $4,662,000 from $6,040,000 in
       the period ended December 31, 1994.  Gross margin in the Solutions
       Segment decreased $1,495,000 (42%) to $2,044,000 in the current
       period from $3,539,000 in the prior period.  The decrease in gross
       margin was due to declining prices and sales volumes in the CAT
       marketplace, coupled with a decrease in groupware sales.  Gross
       margin as a percent of sales in the Solution Segment decreased
       from 39% in the prior period to 29% in the current period due to
       continued CAT price erosion and product-mix issues.  Gross margin
       in the Imaging Segment increased $117,000 (5%) to $2,618,000 in
       the period ended December 31, 1995 from $2,501,000 in the period
       ended December 31, 1994.  Gross margin as a percent of sales in
       the Imaging Segment increased from 35% in the prior period to 37%
       in the current period due primarily to volume efficiencies and
       product mix issues.

            Sales, general and administrative expenses decreased $78,000
       from $4,699,000 in the prior period to $4,621,000 in the current
       period.  The decrease represents a $317,000 increase in SG&A
       expenses at Photomatrix to develop its sales and marketing
       channels, offset by $395,000 of cost reductions in the Solutions
       Segment and corporate headquarters.  As a percent of sales, SG&A
       increased from 29% in the prior period to 33% in the current
       period, primarily due to the decreased revenues in the current
       period.

            Product development expenses increased $206,000 from $361,000
       in the period ended December 31, 1994 to $567,000 in the period
       ended December 31, 1995.  Product development expenditures that
       were capitalized because they related to technologically feasible
       projects were $481,000 in the current period compared to $508,000
       in the prior period.  Total product development spending increased
       $179,000 from $869,000 in the prior period to $1,048,000 in the
       current period.  This increased spending was due primarily to
       increased scanner-development activity at Photomatrix.  

            Other income (expense), which consists primarily of interest
       expense, increased $91,000 from $91,000 in the period ended
       December 31, 1994 to $182,000 in the period ended December 31,
       1995.  This increase was due to an increase in borrowings under
       the Company's credit facility in the current period as compared to
       the prior period.

            The Company's provisions for income taxes were $1,000 and
       $8,000 in the periods ended December 31, 1995 and 1994,
       respectively.  These amounts are substantially less than the
       provision calculated using the statutory rates because of the
       effects of net operating losses and related carryforwards, net of
       valuation allowances.

            The decreases in revenues and gross margin, and the increased
       product development and interest expenses, offset slightly by the



                                    Page 10 of 16                       <PAGE>
       reduction in SG&A costs,  resulted in a net loss from continuing
       operations of $709,000 ($.12 per share) for the period ended
       December 31, 1995.  This compares to income from continuing
       operations of $881,000 ($.15 per share) for the period ended
       December 31, 1994.  

            In the period ended December 31, 1994, the Company operated a
       scanning service bureau.  Subsequent thereto, this service bureau
       was discontinued.  Including the loss from discontinued operation
       of $274,000 and $15,000 in the prior and current periods,
       respectively, net income decreased from $607,000 ($.10 per share)
       in the period ended December 31, 1994 to a net loss of $724,000
       ($.13 per share) in the period ended December 31, 1995.


                         Liquidity and Capital Resources

            Following is a discussion of Xscribe's recent and future
       sources of and demands on liquidity as well as an analysis of
       liquidity levels.


       Recent and Future Sources of and Demands on Liquidity and Capital
       Resources
       ---------------------------------------------------------------

            During the nine months ended December 31, 1995, the Company's
       primary sources of liquidity were cash generated by operations
       (net loss plus depreciation and amortization) of $553,000,
       reductions in the Company's accounts receivable of $367,000,
       increases in the Company's accrued liabilities of $109,000,
       increases in customer deposits of $578,000, proceeds from the
       Company's credit facility of $500,000, and cash reserves.  Primary
       uses of cash in the period ended December 31, 1995 were to
       increase inventories ($757,000), reduce accounts payable
       ($397,000), capital expenditures ($688,000), and to repay notes
       payable ($171,000).  In the period ended December 31, 1995, the
       Company's cash balance increased $133,000 from $311,000 to
       $444,000.

            In August 1995, the Company increased its total credit
       facility with a bank from $1.5 million to $2.0 million and
       converted $1.0 million of outstanding borrowings into a 48-month
       amortizing term loan at prime plus 1-1/2% per annum; monthly
       principal payments on this term note are $21,000.  The remaining
       $1.0 million line of credit accrues interest on outstanding
       borrowings at prime plus 1-1/4% per annum.  Outstanding borrowings
       under the credit facility are collateralized by all of the
       Company's assets.  The Company is required to maintain certain
       financial balances and ratios, the most restrictive of which is a
       maximum debt to tangible net worth ratio of 1.0 to 1.0.  The line
       expires in August 1996.  The Company had a zero outstanding
       balance on the line of credit as of December 31, 1995.

            The Company is obligated under a series of notes payable
       totalling $777,000.  These notes bear interest at a rate of 8% per



                                    Page 11 of 16                       <PAGE>
       annum and mature in April 2000.  Interest and principal payments
       totalling $16,000 are due monthly.

            The Company's assured sources of future short-term liquidity
       as of December 31, 1995 are its cash balance of $444,000 and the
       unused portion of its line of credit of $1,000,000.

            The Company is currently obligated to pay approximately
       $40,000 per month in lease payments.  Aside from these
       commitments, the Company has not made any material capital
       commitments.


       Analysis of Liquidity Levels
       ----------------------------

            The Company expects that the capital expenditures required to
       maintain and grow its consolidated operations will approximate
       $1.2 million per year for the coming three years.  The capital
       expenditures required in future periods will consist primarily of
       software development costs needed to maintain products at
       competitive levels and demonstration equipment needed to sell the
       Company's products.  However, the Company may be required to
       reallocate or increase its capital expenditures due to competitive
       conditions or other unforeseen circumstances and the Company
       reserves the right to change its strategy and to reallocate or
       change the amount of its capital expenditures.  Future additional
       working capital requirements will depend on future growth rates,
       if any, and will stem from the need to finance increased inventory
       and accounts receivable levels commensurate with the growth rate. 
       The Company believes that the future capital expenditures and
       working capital increases will be financed from internally
       generated funds (i.e. profits before depreciation and
       amortization).  Accordingly, the Company believes that it
       currently has sufficient liquidity to fund its consolidated
       operating needs for at least three years, assuming that Xscribe
       can improve profitability and reduce inventory levels.






















                                    Page 12 of 16                       <PAGE>
                           PART II - OTHER INFORMATION


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

                 a.   Exhibits
                      --------
                      Exhibit 27 - Financial Data Schedule

                 b.   Reports on Form 8-K
                      -------------------
                      There were no reports on Form 8-K filed during the
                      quarter ended December 31, 1995.













































                                    Page 13 of 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.



                                          XSCRIBE CORPORATION



       Date:     February 12, 1996        By   /s/ Suren G. Dutia
                                              ---------------------------
                                               Suren G. Dutia
                                               President
                                               Chief Executive Officer



       Date:     February 12, 1996        By   /s/ Bruce C. Myers
                                              ---------------------------
                                               Bruce C. Myers
                                               Chief Financial Officer



       Date:     February 12, 1996        By   /s/ Peter B. Harker
                                              ---------------------------
                                               Peter B. Harker
                                               Controller
                                               Principal Accounting      
                                               Officer


























                                    Page 14 of 16                       <PAGE>
                                  EXHIBIT INDEX
                                  -------------


       Exhibit        Description                                  Page
       -------        -----------                                  ----

         27           Financial Data Schedule                       16



















































                                    Page 15 of 16                       <PAGE>