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

                                  FORM 10-QSB

[X] Quarterly Report Pursuant to Section 13 or 15(d)of the Securities
Exchange Act of 1934
     For the quarterly period ended September 30, 1997

Commission File Number 33-6859-D

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


        Colorado                                 84-0827610      
(State or other jurisdiction of              (I.R.S. Employer
 incorporation or organization)            Identification Number)  

 1500 Cherry Street,   Louisville, CO   80027                    
(Address of principal executive offices)      (Zip Code)

        (303) 666-9400                                           
(Registrant's telephone number including area code)

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


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

                                   [X] Yes      [ ] No    

Number of shares of Common Stock Outstanding at September 30, 1997.

          Common Stock, No Par Value          349,205      
                    (Class)               (Number of Shares)

Transitional Small Business Disclosure Format (check one):
 [ ]Yes       [X] No

<PAGE>



                                ZEON CORPORATION



                                     INDEX



                                                            Page

Part I - Financial Information                                

Balance Sheets September 30, 1997 and December 31, 1996            3

Statements of Operations - Three Months Ended September 30,
     1997 and 1996                                                 5

Statements of Operations - Nine Months Ended
     September 30, 1997 and 1996                                   6  

Statements of Cash Flows - Nine Months Ended
     September 30, 1997 and 1996                                   7

Notes to Financial Statements                                      8

Management's Discussion and Analysis of Financial 
     Condition and Results of Operations                          11

Part II - Other Information                                       14

Signature Page                                                    15

<PAGE>

<TABLE>

                                ZEON CORPORATION
                                 BALANCE SHEETS


                                    September 30, 1997      December 31, 1996
                                          (unaudited)
<S>                                       <C>                 <C>
CURRENT ASSETS
Cash                                      $ 144,399           $ 133,778
Trade Receivables, Net of Allowance          
     for Doubtful Accounts                  342,132             234,113
Inventories                                 273,817             200,285
Prepaid Expenses and Other                   21,360              38,505

     TOTAL CURRENT ASSETS                   781,708             606,681


Property and Equipment (net of              
     accumulated depreciation and
     amortization)                           69,503              75,640
Other                                        35,780              41,766

     TOTAL NON-CURRENT ASSETS               105,583             117,406


     TOTAL ASSETS                         $ 886,991           $ 724,087
                                                 
</TABLE>



<PAGE>

<TABLE>

                              ZEON CORPORATION
                           BALANCE SHEETS (Continued)

                                   September 30, 1997       December 31, 1996
                                          (unaudited)
<S>                                      <C>                   <C>
CURRENT LIABILITIES
Accounts Payable                         $  168,638            $ 116,450
Accrued Expenses                             66,286               71,346 

     TOTAL LIABILITIES                      234,924              187,796

Shareholders' Equity:
Common stock, no par, $.10 stated
value; authorized 1,000,000; 
issued 349,205 September 30, 1997 
and 350,205 December 31, 1996                34,920               35,020

Capital in Excess of Stated Value           938,423              939,338
Deficit                                    (321,278)            (438,067)
                                            652,065              538,291

TOTAL LIABILITIES AND 
     SHAREHOLDERS' EQUITY                $  886,991            $ 724,087
                                         
</TABLE>
<PAGE>

<TABLE>
                                ZEON CORPORATION
                            STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

                         Three Months Ended    Three Months Ended 
                         September 30, 1997    September 30, 1996
<S>                            <C>                <C>
Net Sales                      $ 667,695          $ 552,618 
Cost of Sales                    427,099            353,620 

Gross Profit                     240,596            198,998        
Operating Expenses:
     Selling                      70,331             80,974           
     General                      92,952             86,182
     Research & Development       31,011             25,937           
                                 194,294            193,093       

Income (Loss) From Operations     46,302              5,905

Other Charges (Credits):
     Interest Expense                                                 
     Interest Income                (373)            (3,885)          
     Other (Income) Expenses      (7,106)            (4,227)              
                                  (7,479)            (8,112)      


Net Income (Loss)              $  53,781          $  14,017
                                
Earning per share:
  Net Income (Loss)             $    .15            $   .04                 
                                 
Weighted Average Common
  Shares Outstanding             349,427            350,205
</TABLE>
<PAGE>
<TABLE>
                             ZEON CORPORATION
                         STATEMENTS OF OPERATIONS
                                (UNAUDITED)

                          Nine Months Ended    Nine Months Ended
                          September 30, 1997   September 30, 1996
<S>                           <C>                 <C>
Net Sales                     $1,921,341          $1,628,516
Cost of Sales                  1,237,018           1,043,617

Gross Profit                     684,323             584,899

Operating Expenses:
     Selling                     219,707             263,576  
     General                     278,379             263,940
     Research & Development       92,371              87,999
                                 590,457             615,515   

Income (Loss) From Operations     93,866             (30,616)

Other Charges (Credits):
     Interest Expense                  4                 105
     Interest Income              (1,725)             (5,215)    
     Other (Income) Expenses     (21,201)            (15,965)
                                 (22,922)            (21,075)

Net Income (Loss)              $ 116,788            $ (9,541)     
                                

Earning per share:
  Net Income (Loss)              $  .33             $  (.03)
                                                  
Weighted Average Common
  Shares Outstanding             349,427             350,205
</TABLE>
<PAGE>
<TABLE>
     
                                ZEON CORPORATION
                            STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

                                      Nine Months Ended  Nine Months Ended
                                      September 30,1997  September 30,1996
<S>                                        <C>                <C>
Cash Flows From Operating Activities:
    Net Income (Loss)                      $ 116,788          $  (9,541)
Adjustments to Reconcile Net Income 
 (Loss) to Net Cash Provided By (Used
 In) Operating Activities:
    Depreciation & Amortization               41,184             37,359
    Provisions for Losses on
       Accounts Receivable                     4,500              2,750
Change in Operating Assets & Liabilities:
    Decrease (Increase) in Accts Recvble    (112,519)           (32,177)
    Decrease (Increase) in Inventory         (73,720)               692
    Decrease (Increase) in Prepaid Assets     23,319             31,451
    Increase (Decrease) in Accts Payable      52,188             32,312
    Increase (Decrease) in Accrued Expenses   (5,060)           (22,672)    
   Total Adjustments:                        (70,108)                 49,715

Net Cash Provided By (Used In) Operating
 Activities:                                  46,680             40,174 

Cash Flows From Investing Activities:
    Purchase of Capital Assets               (35,047)           (10,500)
 

Net Cash Provided By (Used In) Investing
 Activities:                                 (35,047)           (10,500)  

Cash Flows From Financing Activities:
     Purchase of Common Stock                 (1,012)                 0

Net Cash Provided By (Used In) Financing
 Activities:                                  (1,012)                 0     

Net Increase (Decrease) In Cash:              10,621             29,674
Cash At Beginning Of Period:                 133,778            126,229
                                              
Cash At End Of Period:                     $ 144,399          $ 155,903     

</TABLE>
<PAGE>
  
                            ZEON CORPORATION
                         NOTES TO FINANCIAL STATEMENTS

1.   Summary of significant accounting policies:

     Inventories:
     Inventories are valued at the lower of cost or market.  Cost is
     determined at standard, which approximates first-in, first-out.

     Property, Equipment and Depreciation:
     Property and equipment are stated at cost.  For financial reporting
     purposes, depreciation is calculated using the straight-line method over
     the related assets estimated useful lives, which approximate five years. 
     For income tax reporting purposes, depreciation is calculated using
     accelerated methods.

     Revenue Recognition:
     Sales are recorded in the periods that product is shipped.

     Taxes on Income:
     The Company follows the provisions of Statement of Financial Accounting
     Standards No. 109 - Accounting for Income Taxes (SFAS No. 109).  Under
     SFAS No. 109, the Company's policy is to provide deferred income taxes
     on differences between the financial reporting and tax basis of assets
     and liabilities.  

     Earnings (Loss) Per Share:
     Effective June 30, 1995 the shareholders of the Company approved a
     reverse split of one share for every 100 shares of common stock  
     outstanding.  As a result, earnings (loss) per share amounts have been
     restated for all periods presented to reflect the reverse stock split.

     Income (loss) per common share is computed on the basis of the weighted
     average number of common shares outstanding during each period.  The
     average number of shares outstanding was 349,427 and 350,205 during each
     of the periods ended September 30, 1997 and December 31, 1996.

     Reclassifications:
     Certain reclassifications have been made to the accompanying financial
     statements for comparative purposes.
<TABLE>
2.   Inventories:
     Inventories consist of the following:
                                             (Unaudited)
                                           September 30   December 31,        
                                                1997          1996
          <S>                                <C>           <C> 
          Finished Goods                     $ 72,881      $ 50,723
          Work-in-process                      11,512        14,318
          Raw Materials                       289,424       135,244
                                             $273,817      $200,285    
</TABLE>
<PAGE>                                             







                                ZEON CORPORATION
                   NOTES TO FINANCIAL STATEMENTS (Continued)

3.   Notes payable and long-term debt:

     The Company has a line-of-credit commitment from its bank for 
     borrowings of up to $100,000, with interest on any borrowing at 1% above
     the bank's reference rate to be paid monthly.  The loan commitment, if
     exercised, is collateralized by trade receivables, inventories, property
     and equipment and intangibles.  Under the terms of the agreement, the
     Company is subject to certain restrictions on borrowings and dividend
     payments.  At September 30, 1997 and December 31, 1996, no amount was
     outstanding under the line-of-credit agreement.

4.   Commitments and related party transactions:

     In December 1992, the Company entered into an operating lease to
     consolidate its primary manufacturing and office facilities.  The
     property is leased through January 2003 from an entity of which T. Bryan
     Alu, President and Chief Executive Officer of the Company, is a partner. 
     The lease contains an option to renew for two additional five-year
     periods and requires monthly payments of approximately $8,400 with the
     Company also responsible for maintenance and operating costs.

     The Company has an operating lease agreement with an unrelated party
     which requires monthly payments of approximately  $5,700 through
     December 31, 2000 including renewal options.  The Company has entered
     into a sublease agreement for this space with an unrelated  party
     through December 31, 2000 at an initial monthly rent rate of     
     approximately  $9,200.    

     Effective July, 1991 the Company adopted a directors' compensation plan 
     whereby directors will be compensated with restricted common stock of  
     the Company in exchange for services provided.  Shares issued will be  
     valued based upon the market value of the stock as determined by the   
     Company.  As of September 30, 1997, no shares had been issued under this
     plan.

     Effective June 21,1995 at the annual shareholders' meeting, the  
     Company's shareholders approved a stock option incentive plan proposed
     by the Board of Directors.  Stock options may be granted to any employee
     or director of the Company at the discretion of the Board of Directors. 
     As of September 30, 1997, no stock options had been granted.

<PAGE>     







                                ZEON CORPORATION
                   NOTES TO FINANCIAL STATEMENTS (Continued)


     
5.   Taxes on income and available carryforwards:   
 

     At December 31, 1996, the Company had net operating loss carryforwards
     for income tax purposes of approximately $345,000 and investment credit
     and research and development credits of approximately $45,000.  The net
     operating losses expire in varying amounts from 2003 through 2011, and
     the investment credit and research and development credits expire in
     varying amounts from 1996 through 2000.

6.   Supplement:

     During 1995, the Company sold certain assets (formerly referred to as
     the "Display Division") of the Company having a net book value of
     approximately $28,000 in exchange for cash proceeds of $37,000 and a
     note receivable of $35,000.




<PAGE>

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

Factors That May Affect Operating Results

The statements contained in this Form 10-QSB that are not purely historical
are forward looking statements within the meaning of federal securities
laws, including statements regarding the Company's expectations, hopes,
intentions or strategies regarding the future.  All forward looking
statements included in this document are based on information available to
the Company on the date hereof, and the Company assumes no obligation to
update any such forward looking statements.  It is important to note that
the Company's actual results could differ materially from those in such
forward looking statements.

Financial Condition:

The liquidity of Zeon Corporation remained stable with a current ratio of
3.3 to 1 at September 30, 1997 and 3.2 to 1 at December 31, 1997.  The
current assets and liabilities increased over last year as sales volume
rose 18%.  Cash position improved at September 30 with consistent
collection efforts and debt free status realized in 1996 was held
throughout 1997.  Trade receivables did increase with the third quarter
sales increase, but their collection is proceeding in normal fashion. 
Current capital equipment expenditures are $35,047 versus $10,500 as of
September 30 ,1996. The additional cash outlays are for additional capacity
equipment.  Funds generated from operations are deemed sufficient.

Results of Operations:

Results of operations for the three months ending September 30, 1997 and
1996
<TABLE>
                        THREE MONTHS ENDED SEPTEMBER 30,
          <S>                      <C>            <C> 
                                      1997           1996     
          Sales:                   $667,695       $552,618    
          Gross Profit:             240,596        198,998
          Income (Loss):             53,781         14,017    
</TABLE>

Third quarter sales increased by 21% over 1996.  The 1997 third quarter
showed a significant increase in franchise sales.  Gross profit for 1997 and
1996's third quarter was 36%.  The Company had an income of $53,781 or
$39,764 over 1996's third quarter.  The increase was primarily due to the
increased volume with total expenses remaining relatively constant.





<PAGE>


                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED):

Overall expenses increased a slight $1,834.  Quarterly selling expenses
decreased $10,643 or 13% over 1996.  The majority of the decrease resulted
from commissions paid to third parties in 1996 third quarter.

General expenses increased by 7.8 percent over last year's third quarter.  
Additional staff expenses accounted for the increase. 

Research and Development costs increased by approximately $5,074 as 
payroll and prototype supplies slightly increased.

Other income was approximately $633 lower than 1996 third quarter with the
absence of interest  income from a paid-off note related to the sale of
Data Display Division in 1995.  


Results of operations for the nine months ending September 30, 1997 and
1996
<TABLE>
                    NINE MONTHS ENDED SEPTEMBER 30, 
          <S>                    <C>           <C>                                  
                                     1997           1996        
          Sales                  $1,921,341    $1,628,516      
          Gross Profit              684,323       584,899
          Income (Loss)             116,788        (9,541)         
</TABLE>
The Company's year-to-date sales showed 18% increase over prior 1996's first
three quarters.  With solid performance in 1997 franchise orders, third (and
second) quarters have experienced record shipment sales.  Gross profit
percent fell slightly from 1996's 35.9% to 1997's 35.6%.  The gross profit
change is primarily product mix.  Income changed $126,329 from 1996's loss.
Margin from additional volume ($99,424) and less total expenses ($26,905)
contributed to this change.

Selling expense decreased by $43,869 over last year. The decrease resulted
from absence of 1996 dealer marketing/selling department expenses and sales
representative commissions. Dealer sales were folded into overall Company
selling effort.  

For the first nine months of 1997, general and administrative expenses
increased by $14,439.  Payroll adjustments and additional staff accounted for
the increase.



<PAGE>






                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED):

Research and Development expenses were up by $4,372 over the first nine
months of the year.  Increased payroll and supplies expenses were
experienced as marketing brochure design was brought inhouse and
prototype/custom sign efforts grew.

Other income for 1997's first nine months was $1,847 better than 1996. 
While interest income dropped from payoff of Data Display Division sale
related note, income from subleased space increased to the point of net
overall increase.  
















<PAGE>
                          PART II - OTHER INFORMATION


Item 4. Submission of matters to a vote of Security-Holders

     None
 
Item 5.  Other information

     None

Item 6.  Exhibits and Reports on Form 8-K

     None.     
<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.




Date:     November 18, 1997               /s/ T. Bryan Alu       
                                        T. Bryan Alu
                                        President 



                                          /s/ R.G. Routt              
                                        R. G. Routt
                                        Corporate Controller