U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(MARK ONE)

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

                    For the quarter ended September 30, 1996

     [   ]     TRANSITION REPORT UNDER SECTION 13 OR A5(d) OF THE SECURITIES
               EXCHANGE ACT OF 1934  (no fee required)



                         Commission file number 0-23544

                             EROX CORPORATION______
                 (Name of small business issuer in its charter)

                 California                                      94-3107202
---------------------------------------------                -------------------
(State or other jurisdiction of incorporation                 (I.R.S. employee
               or organization)                              Identification No.)


4034 Clipper Court, Fremont, California                            94538
---------------------------------------------                -------------------
(Address of principal executive offices)                         Zip code)


                    Issuer's telephone number: (510) 226-6874



     Check  whether  the Issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act 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. 
Yes [ X ]  No [  ]



                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. 10,041,905 shares of Common
Stock as of October 31, 1996.



                                                                Total Pages:  13


<PAGE>


                                EROX CORPORATION

                                      INDEX
                                                                            Page
                                                                            ----
PART I
FINANCIAL INFORMATION

    Item 1. Financial Statements

            Condensed Balance Sheets (Unaudited)
            as of September 30, 1996
            and December 31, 1995............................................  2

            Condensed Statements of Income (Unaudited)
            for the Three Months and Nine Months Ended
            September 30, 1996 and 1995......................................  3

            Statements of Cash Flows  (Unaudited)
            for the Nine Months
            Ended September 30, 1996 and 1995................................  4

            Notes to Condensed Financial Statements (Unaudited)..............  5

    Item 2. Management's Discussion and Analysis

            Management's Discussion and Analysis of Financial Condition 
            and Results of Operations........................................  6

PART II
OTHER INFORMATION

    Item 6. Exhibits and Reports on Form 8-K.................................  9

SIGNATURES................................................................... 10


<PAGE>



                                     PART I
                              FINANCIAL INFORMATION



Item 1.  Financial Statements






<PAGE>


<TABLE>
                                EROX CORPORATION

                            Condensed Balance Sheets
                                   (Unaudited)


<CAPTION>
                                                                           September 30,    December 31,
                                                                               1996             1995
                                                                           ------------     ------------
<S>                                                                        <C>              <C>
Assets

Current assets:
  Cash and cash equivalents                                                $    982,436     $  2,186,828
  Accounts receivable, net of allowances of $55,934                           2,737,225        1,954,508
   and $128,324 in 1996 and 1995, respectively
  Inventory                                                                   3,404,318        1,799,728
  Other current assets                                                          128,596          168,785
                                                                           ------------     ------------
Total current assets                                                          7,252,575        6,109,849

Property and equipment, net                                                      75,138           78,214
                                                                           ------------     ------------
                                                                           $  7,327,713     $  6,188,063
                                                                           ============     ============

Liabilities and Shareholders' equity

Current liabilities:
  Accounts payable                                                         $  2,328,551     $    731,777
  Loan payable, bank                                                               --            500,000
  Other accrued expenses                                                        543,194        1,395,056
                                                                           ------------     ------------
Total current liabilities                                                     2,871,745        2,626,833

Commitments                                                                         --              --

Shareholders' equity:
  Convertible preferred stock, issuable in series, no par value,
    10,000,000 shares authorized, no shares issued and outstanding                  --              --
  Common stock, no par value, 40,000,000 shares authorized,
    10,041,905 and 9,911,972 shares issued and outstanding
    at September 30, 1996 and December 31, 1995, respectively                17,324,734       16,823,918
  Accumulated deficit                                                       (12,868,766)     (13,262,688)
                                                                           ------------     ------------
Total shareholders' equity                                                    4,455,968        3,561,230
                                                                           ------------     ------------
                                                                           $  7,327,713     $  6,188,063
                                                                           ============     ============
<FN>

See accompanying notes.
</FN>
</TABLE>

<PAGE>

<TABLE>
                                EROX CORPORATION

                         Condensed Statements of Income
                                   (Unaudited)

<CAPTION>
                                            Three months ended September 30,   Nine months ended September 30,
                                            --------------------------------   -------------------------------
                                                   1996            1995               1996             1995
                                             -----------      ----------       ------------      -----------

<S>                                          <C>              <C>              <C>               <C>        
Net sales                                    $ 4,472,682      $2,067,835       $ 13,665,684      $ 5,189,795
Cost of goods sold                             1,227,048         634,723          3,738,410        1,530,110
                                             -----------      ----------       ------------      -----------
Gross profit                                   3,245,634       1,433,112          9,927,274        3,659,685

Expenses:
   Research and development                      140,364          67,909            301,670          214,070
   Selling, general and administrative         2,875,166       1,727,881          9,247,882        4,780,642
                                             -----------      ----------       ------------      -----------
Total expenses                                 3,015,530       1,795,790          9,549,552        4,994,712
                                             -----------      ----------       ------------      -----------
Income (loss) from operations                    230,104        (362,678)           377,722       (1,335,027)

Interest income                                   11,266          20,963             24,094          100,810
Interest expense                                     522             --               2,981              --
Other income                                      14,193             --              15,820              --
                                             -----------      ----------       ------------      -----------
Income (loss) before taxes                       255,041        (341,715)           414,655       (1,234,217)

Income taxes                                      20,733             --              20,733              --
                                             -----------      ----------       ------------      -----------
Net income (loss)                            $   234,308      $ (341,715)      $    393,922      $(1,234,217)
                                             ===========      ==========       ============      ===========

Net income (loss) per share                  $      0.02      $    (0.03)      $       0.04      $     (0.13)
                                             ===========      ==========       ============      ===========
Shares used in calculation of net 
   income (loss) per share                    10,624,096       9,853,439         10,459,904        9,852,467
                                             ===========      ==========       ============      ===========
<FN>

See accompanying notes.
</FN>
</TABLE>

<PAGE>

<TABLE>
                                EROX CORPORATION

                            Statements of Cash Flows
                                   (Unaudited)


<CAPTION>
                                                               Nine months ended September 30,
                                                                  1996             1995
                                                             -----------        ----------

<S>                                                          <C>               <C>        
Cash Flows from Operating Activities
Net income (loss)                                            $   393,922       $(1,234,217)
Adjustments to reconcile net income (loss) to net cash
  used in operating activities:
  Depreciation and amortization                                   82,296           129,708

  Changes in operating assets and liabilities:
    Accounts receivable                                         (782,717)       (1,099,436)
    Inventory                                                 (1,604,590)         (894,863)
    Other current assets                                          40,189            (1,804)
    Accounts payable and accrued liabilities                     744,912           699,586
                                                             -----------       -----------
Net cash used in operating activities                         (1,125,988)       (2,401,026)

Cash Flows from Investing Activities
Proceeds from maturity of held-to-maturity investments               --          3,461,735
Purchase of property and equipment                               (79,220)          (33,130)
                                                             -----------       -----------
Net cash provided by (used in) investing activities              (79,220)        3,428,605

Cash Flows from Financing Activities
Proceeds from issuance of common stock                           500,816            40,000
Proceeds from (payments on) bank borrowings                     (500,000)              --
                                                             -----------       -----------
Net cash provided by financing activities                            816            40,000

Net increase (decrease) in cash and cash equivalents          (1,204,392)        1,067,579
Cash and cash equivalents at beginning of the period           2,186,828           520,181
                                                             -----------       -----------
Cash and cash equivalents at end of the period               $   982,436       $ 1,587,760
                                                             ===========       ===========

<FN>

See accompanying notes.
</FN>
</TABLE>

<PAGE>


                                EROX Corporation

                     Notes to Condensed Financial Statements
                                   (Unaudited)

                               September 30, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying  unaudited condensed financial statements have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information  and  with  the  instructions  to Form  10-QSB  and  Rule  10-01  of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been  included.  Operating  results for the three  months and nine months  ended
September  30, 1996 are not  necessarily  indicative  of the results that may be
expected  for  the  calendar  year  ending   December  31,  1996.   For  further
information, refer to the financial statements and footnotes thereto included in
the Company's annual report on Form 10-KSB for the year ended December 31, 1995.

Inventory

Inventories  are  stated at the lower of cost  (first in - first out  method) or
market. The inventory at September 30, 1996 consists of finished goods inventory
valued at $923,551 work in process of $452,160 and raw materials of  $2,028,607.
At December 31, 1995,  these  balances were $352,313,  $279,177 and  $1,168,238,
respectively.


Net Income (Loss) Per Share

Net income per share is computed using the weighted  average number of shares of
common stock outstanding and common  equivalent  shares from stock options.  The
latter are excluded from the  computation  of net loss per share as their effect
is antidilutive.


<PAGE>

Item 2. Management's Discussion and Analysis

         This report contains  forward-looking  statements within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities  Exchange  Act  of  1934,  as  amended.  Except  for  the  historical
information contained in this discussion and analysis of financial condition and
results  of  operations,  the  matters  discussed  herein  are  forward  looking
statements.  These forward looking statements include but are not limited to the
Company's  plans for sales  growth and  expansion  into new  channels  of trade,
expectations  of gross  margin,  expenses,  new  product  introduction,  and the
Company's   liquidity  and  capital  needs.  These  matters  involve  risks  and
uncertainties  which  include  but  are not  limited  to the  acceptance  of new
products, the credit risk associated with consolidation in the retail trade, the
costs of components and advertising  associated with product retail roll-out and
new product  introductions,  supply  constraints or difficulties,  the impact of
competitive pricing or government regulation and the risk of diverted goods in a
slow retail  environment.  These and other  factors may cause actual  results to
differ materially from those anticipated in forward-looking statements.  Readers
are cautioned not to place undue reliance on these  forward-looking  statements,
which speak only as of the date hereof.


Three  Months  ended  September  30, 1996 as compared to the Three  Months ended
September 30, 1995

         Net sales for the third  quarter of 1996 were  $4,472,682  compared  to
$2,067,835 for the third quarter of 1995. This increase was due to the Company's
continued expansion of its US retail presence and shipments to new international
markets.  During the third  quarter of 1996,  the  Company  opened  several  new
regional chains: Carson Pirie Scott,  Gayfers, J.B. White and Kaufmann's.  These
chains  brought  the total  number  of US  department  store  doors to 1,075 and
expanded the Company's  retail  presence to include regions of the United States
not serviced by chains such as Dillards,  Federated,  and Dayton Hudson/Marshall
Fields.  In  addition  to these US chains,  the Company  expanded  its  presence
internationally by opening 31 doors of the Eaton chain in Canada.  This total of
1,106  compares  to 355 US  retail  doors in the  third  quarter  of  1995.  The
comparison of sales for these periods is as follows:

--------------------------------------------------------------------------------
Class of Trade                                             1996            1995
--------------------------------------------------------------------------------

  North American Department Store/Retail             $3,811,993      $1,905,163
  US Infomercial                                              0          33,972
  Duty Free and International                           643,917          92,798
  Direct Marketing                                       16,772          35,902
                                                      ---------       ----------

  Net Sales                                          $4,472,682      $2,067,835


         During the quarter,  the  Company's  Italian  distributor  continued to
market  the  Company's  REALM(R)  products  through  a  ten  minute  infomercial
formulated  for Italian  audiences.  The Middle  Eastern  markets  are  supplied
through two distributors and REALM products are available in fragrance boutiques
throughout the Gulf States and Saudi Arabia.  REALM products were  introduced in
the North American duty free markets during the third quarter of 1996.

         Gross margin was 73% for the third  quarter of 1996  compared to 69% in
the third quarter of 1995.  Overall gross margins have  increased as the Company
has reduced  costs on both  in-line and  promotional  products.  The Company has
continued to pursue cost reductions by reviewing  secondary  packaging  options,
exploring  new  sourcing   opportunities  and  exploiting   manufacturing   cost
efficiencies. Future quarters may have a different gross margin depending on the
demand for promotional  products and the percentage of higher margin  department
store sales in  comparison  to sales  through  third party  distributors.  Gross
margin in the third quarter of 1995,  reflected the Company's  previous  overall
higher cost of goods structure.

         Research and  Development  expenses for the third  quarters of 1996 and
1995 were $140,364 and $67,909, respectively.  During the third quarter of 1996,
the Company  increased  spending on pheromone  research and the development of a
new fragrance line for women. During 1995, these costs were principally payments
and costs under the Company's contract with Pherin Corporation.


<PAGE>

         Selling and marketing  expenses  increased to $2,461,254 (55% of sales)
in the three months ended  September 30, 1996 from  $1,340,686 (65% of sales) in
the period  ended  September  30, 1995.  This dollar  increase was the result of
advertising  and  promotional  activities  undertaken  to  support  sales in the
additional retail doors the Company opened in the current year. Headcount in the
third  quarter of 1996  expanded  to include  sales  personnel  for six  regions
covering  all of the 48  contiguous  states.  In the same  period  in 1995,  the
company was only represented in three geographic regions.  Other increased costs
in the sales and marketing  area were for radio  advertising,  in-store  special
events,  product sampling,  fragrance modeling and training for department store
sales personnel.  Distribution and general and  administrative  expenses for the
period have remained fairly constant at $413,912 and $387,195 for 1996 and 1995,
respectively.

         Interest  income  declined to $11,266 in the third quarter of 1996 from
$20,963 for the same period in 1995. The decrease in interest  income was due to
lower cash balances.

         The Company's effective tax rate for the third quarter of 1996 was 8.1%
which brings the effective tax rate for the first nine months of 1996 to 5%. The
increase in the third  quarter of 1996 is based upon  projected  profits for the
entire  year and takes into  account  utilization  of net  operating  loss carry
forwards.

Nine Months  ended  September  30,  1996 as  compared  to the Nine Months  ended
September 30, 1995

         Net  sales  for  the  nine  months  ended   September   30,  1996  were
$13,665,684.  This was a 163% increase over net sales of $5,189,795 for the same
period  in  1995.  This  increase  was  due to the  expansion  of the  Company's
distribution into new geographic areas in the United States and internationally.
One of the most  significant  changes  in the  Company's  retailer  base was the
addition in 1996 of  distribution  in  California.  The launching of 91 doors of
Federated  Department  Store's Macy's West chain was completed in 1996. In 1995,
the Company's distribution was primarily located in the Southeast, Northeast and
Southwest regions of the country. A total of 13 new retail chains with more than
500 doors have been added during 1996.  Additionally,  the Company  entered into
distribution  agreements for the Middle East,  Latin American and Caribbean duty
free  markets  and  launched  the  Realm  product  line in 31 doors  of  Eaton's
department stores in Canada. The following table shows a comparison of fthe nine
month's net sales by class of trade:

--------------------------------------------------------------------------------
Class of Trade                                            1996             1995
--------------------------------------------------------------------------------

  North American Department Store/Retail           $12,431,975       $3,875,838
  US Infomercial                                             0          947,596
  Duty Free and International                        1,167,039          237,675
  Direct Marketing                                      66,670          128,686
                                                    -----------       ----------

  Net Sales                                        $13,665,684       $5,189,795

         Gross  margin  increased to 73% from 70.5% for the first nine months of
1996  compared  to the same  period in 1995.  This  increase  was the  result of
reductions  in  the  Company's  cost  of  goods   structure.   The  Company  has
aggressively  sought  new  suppliers  and  manufacturing  processes  in order to
decrease the cost of its  distinctive  primary  packaging.  The Company has also
created gift and promotional sets using cosmetic  modifications of its signature
bottles.  The lower  cost of these  sets has  allowed  the  Company  to  achieve
targeted gross margins while providing a value to the consumer.

         Research and Development expenses increased 41% to $301,670 in the nine
months ended  September 30, 1996 as the Company  pursued new pheromone  research
projects and began  development on a new line of women's  products for launch in
1997.  In the same  time  period in 1995,  $214,070  in costs  were  principally
comprised of payments under the Company's contract with Pherin Corporation.

         As a percentage of sales,  selling and marketing  expenses decreased to
59%  ($8,119,743)  from 68%  ($3,532,216) in the nine months ended September 30,
1996 and 1995. The Company  attributes this decrease to broader  distribution of
its REALM  fragrances.  Penetration into additional  chains has made it possible
for the Company to leverage advertising  expenses.  The Company continued to use
radio as its main  method  of  advertising.  Ongoing  expenses  in the sales and
marketing  area  are  employee  staffing,  commissions,  radio  


<PAGE>

advertising and fragrance  modeling to support local in-store  promotions and to
support the REALM brand in general.  The  Company's  general and  administrative
expenses  decreased to $1,128,139 (8% of sales) from  $1,248,426  (24% of sales)
for  1996  and  1995,  respectively,   as  distribution  costs  lowered  due  to
efficiencies  gained by bringing this function  in-house and from shipping large
orders to retailers rather than single units to individuals.

         Interest  income was $24,094 and $100,810 for the first three  quarters
of 1996 and 1995, respectively. The decrease in interest income was due to lower
cash balances.  In 1996, the Company paid $2,981 in interest  expense related to
advances under its bank line of credit. During 1995, the Company had no interest
expense.

         The Company's  effective tax rate for the first nine months of 1996 was
5%. The increase in the third  quarter of 1996 is based upon  projected  profits
for the entire year and takes into account  utilization of net  opperating  loss
carry forwards.

LIQUIDITY

         At September 30, 1996, the Company had cash and cash equivalents  equal
to  $982,436  and  working  capital of  $4,380,830.  Net cash used in  operating
activities was $1,125,988 for the nine months ended  September 30, 1996.  During
1996, the Company  received  $500,816 in cash from the exercise of stock options
issued under the Company's Employee Stock Option Plan..

         On January 2, 1996, the Company repaid  $500,000 of borrowings  against
its $2,000,000 line of credit.  On March 13, 1996, the Company  renegotiated its
Business Loan Agreement with  Mid-Peninsula Bank of Palo Alto,  California.  The
Company  may borrow up to  $3,500,000  at an  interest  rate equal to the bank's
prime rate plus .5% with  borrowings  primarily  secured by the Company's  trade
receivables and inventory.  The renewable agreement,  which has a one year term,
contains certain debt to equity and working capital  covenants.  The Company has
had  discussions  with its bank about further  increasing its line of credit and
received indications the bank would entertain such a request if made. There were
no borrowings against the line of credit at September 30, 1996. During the third
quarter  of  1996,  the  Company  was  cash  positive.  Assuming  the  Company's
activities  proceed  substantially  as planned,  there is no major change in the
payment  practices of the Company's  major  customers and the Company's  line of
credit is increased if requested, the Company's current cash, line of credit and
anticipated  revenues  from product sales should be adequate to meet its working
capital needs over the next twelve months.  Working  capital  requirements  will
primarily  be for  staffing,  the  purchase of  improved  distribution/financial
software  and  hardware,  product  promotion  and training and for the supply of
inventory and accounts receivable financing related to a new product launch.

         If the  Company  fails  to  achieve  targeted  revenues  from  its 1996
marketing  efforts or if ongoing  business  proves to be more capital  intensive
than  planned or if the  Company is unable to obtain an  increase in its line of
credit if requested, additional funding may be required. Furthermore, additional
working  capital may be required  should the Company  experience  a greater than
planned success with its retail distribution and new product development.  While
the  Company  may  explore  strategic  alliances,  and  other  ways  to  provide
additional working capital, no assurances can be given that a strategic alliance
would  be  realized  or that  additional  financing  would be  available,  or if
available, could be consummated on terms acceptable to the Company.




<PAGE>



                                     PART II
                                OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibit 11-Statement Re: Computation of Per share Earnings (Loss)

         (b) The  Company  did not file any reports on Form 8-K during the three
months ended September 30, 1996.


<PAGE>


                                   SIGNATURES


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


                                      EROX CORPORATION
                                      Registrant




Date:  November 10, 1996              /s/ William P. Horgan
                                      ------------------------------------------
                                               William P. Horgan
                                      President and Chief Executive Officer




Date:  November 10, 1996              /s/ Maxine C. Harmatta
                                      ------------------------------------------
                                               Maxine C. Harmatta
                                      Vice President and Chief Financial Officer