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                   U.S. SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549
                              _____________
                               
                                     
                                 FORM 10-QSB
          -------------------------------------------------------------       
                            
                                     
        QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
                            EXCHANGE ACT OF 1934
                                     
              For the quarterly period ended   March 31, 1998
                                         
                       Commission File No.:   0-10854 
                                      
                          ORS AUTOMATION, INC. 
(Exact name of small business issuer as specified in its charter)
                                   
            DELAWARE                           13-27956-75 
   (State or other jurisdiction of           (I.R.S Employer     
    incorporation or organization)         Identification No.)

          402 Wall Street, Princeton, New Jersey        08540 
          (Address of principal executive offices)   (Zip Code)

                           (609) 924-1667 
            (Issuer's telephone number, including area code)
                                      

     Check whether the issuer (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 requirements for the past 90 days.
                 Yes /X/  No 

     Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.   Yes /X/   No

     As of March 31, 1998, 8,082,443 shares of the registrants
Common Stock and 12,000,000 shares of Class A Common Stock were
outstanding.

     Transitional Small Business Format.  Yes   No /X/  

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                            ORS AUTOMATION, Inc.

                            INDEX TO FORM 10-QSB
                               March 31, 1998
                                     
                                                             Page

Part I - Financial Information

   Item 1. Financial Statements:

      Unaudited Balance Sheet - March 31, 1998                 3
                
      Unaudited Statements of Operations and Accumulated
                Deficit for the Three Months Ended
                March 31, 1998 and 1997.                       4

      Unaudited Statements of Cash Flows for the Three
                Months Ended March 31, 1998 and 1997.          5

      Notes to Financial Statements.                           6

   Item 2. Management's Discussion and Analysis of Financial
            Condition and Results of Operations.               7,8

Part II - Other Information                                    8

Signatures                                                     9






<PAGE> 3

                              ORS AUTOMATION, INC.
                            UNAUDITED BALANCE SHEET
                                 MARCH 31, 1998
<TABLE>
<S>                                                 <C>
           ASSETS

Current Assets:
   Cash                                             $    316,514
   Accounts receivable                                   361,842 
  Inventory, net                                         108,635
   Prepaid expenses                                        1,295
                                                         --------
           Total Current Assets                          788,286

Property and Equipment, net                               14,283

           TOTAL ASSETS                             $    802,569
                                                         ========

           LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable and accrued expenses            $     37,377
                                                        ---------  
           Total Current Liabilities                      37,377

Priority tax claims payable - interest                   154,573
Priority tax claims payable - Principal                  179,577
Note payable - related party                             166,102
Accrued interest payable - related party                 254,131
                                                        ---------
             Total Liabilities                           791,760

Stockholders' Equity:
   Preferred stock                                        10,000
   Common stock                                          122,824
   Capital in excess of par value                     24,914,163
   Accumulated deficit                               (25,036,178)
                                                       ----------
           Total Stockholders' Equity                     10,809
                                                       ----------
           TOTAL LIABILITIES AND STOCKHOLDERS'
             EQUITY                                 $    802,569
                                                     =============    
</TABLE> 







The Notes to Financial Statements are an integral part of this
Statement


<PAGE> 4
                               ORS AUTOMATION, INC.
            UNAUDITED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
                FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997

<TABLE>
<CAPTION>
                                          1998           1997
                                         -------        ------
<S>                                   <C>             <C>
                                        
Sales                                 $    332,869    $    376,588
Cost of Goods Sold                         202,419         228,414

                                           --------       --------
   Gross Profit                            130,450         148,174

Administrative, Marketing and General
  Expenses                                  73,964          71,605
                                           ---------       ---------
Income From Operations                      56,486          76,569 

Other (Income) Expense:
  Interest income                           (3,027)         (1,201)
  Interest expense                           9,057           9,057
  Depreciation and amortization              1,581           1,340
                                            --------       --------
        Total Other Expense, net             7,611           9,196
                                            --------        --------
Income Before Provision for Income
   Taxes                                    48,875          67,373 

Provision for Income Taxes                   --               --  
                                            ----------    ----------
Net Income                                  48,875          67,373 

Accumulated Deficit, Start of Period   (25,085,053)    (25,137,629)
                                        -----------    -------------
Accumulated Deficit, End of Period    $(25,036,178)   $(25,070,256)
                                       ============    ============
Income Per Share of Common Stock      $       .00     $       .00
                                       ============     ============ 
Weighted Average Number of Common
    Shares Outstanding                  20,082,443      20,082,443
                                        ===========     ============
</TABLE> 







The Notes to Financial Statements are an integral part of this
Statement

               
<PAGE> 5
                               ORS AUTOMATION, INC.
                        UNAUDITED STATEMENTS OF CASH FLOWS
                FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
                                              1998           1997
                                            --------        --------
<S>                                        <C>          <C>      
Cash Flows From Operating Activities:
   Net Income                              $    48,875  $   67,373
   Adjustments to reconcile net income
     to net cash provided by (used in)
     operating activities:
      Depreciation and amortization              1,581       1,340
      Cash provided by (used in) changes in:
        Accounts receivable, net              (178,290)    (51,707)
        Inventory, net                         (11,869)    (19,605)
        Prepaid expenses                        (2,290)     (1,478)
        Accounts payable and accrued expenses   19,393      10,963
        Priority tax claims payable-interest     4,074       4,074
        Accrued interest payable-related party   4,983       4,983
                                              ---------   ----------
           Net Cash Provided by (Used In)
              Operating Activities            (108,963)     15,943 

Cash Flows From Investing Activities:
   Purchase of property and equipment           (4,213)       ---
                                              ---------   ---------- 
Net (Decrease) Increase in Cash               (113,176)     15,943 

Cash at the Beginning of the Period            429,690     168,453
                                             ----------  ----------
Cash at the End of the Period             $    316,514  $  184,396
                                             ==========  ==========

Supplemental Disclosure of Cash Flow Information:
                                               
  Cash paid during the period for
      Interest                             $     --     $     --   
      Income taxes                         $       180  $     --
</TABLE>











The Notes to Financial Statements are an integral part of this
Statement


                               
<PAGE> 6

                         ORS AUTOMATION, INC.
        
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                (Unaudited)

Note 1 - Basis of Presentation

     The unaudited financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of
the Securities and Exchange Commission. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
The unaudited interim financial statements as of March 31, 1998 and
1997 reflect all adjustments (consisting of normal recurring
accruals) which, in the opinion of management, are considered
necessary for a fair presentation of the results for the periods
covered.

     The Unaudited Statements of Operations for the three months
ended March 31, 1998 and 1997 are not necessarily indicative of
results for the full year.

     While the Company believes that the disclosures presented are
adequate to make the information not misleading, these financial
statements should be read in conjunction with the financial
statements and accompanying notes included in the Company's Current
Report on Form 10-KSB dated December 31, 1997.

Note 2 - Preferred and Common Stock

     The preferred stock of the Company has a par value of $.01 per
share and 1,000,000 shares have been authorized to be issued. All
are outstanding at March 31, 1998. 

     The common stock of the Company has a par value of $.01 per
share and 10,000,000 shares have been authorized to be issued. As
of March 31, 1998, 8,082,443 shares are outstanding.

     The Company also has Class A common stock, which has a par
value of $.0035 per share and 12,000,000 shares have been
authorized to be issued. All are outstanding at March 31, 1998.

Note 3 - Income Per Share

     Income per share has been computed based upon the weighted
average number of shares of the sum of both common stock and Class
A common stock outstanding during the period.







<PAGE>  7    
                          ORS AUTOMATION, INC.

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

GENERAL

In 1996 and 1997, major product development efforts resulted in new
"Windows 95" based vision systems which accounted for approximately
95% of the total sales generated in the three months ending March
31, 1998 as compared to 73% for the three months ended March 31,
1997. An effort to broaden the Company's product base resulted in
approximately 4% of the sales in this quarter being related to
motion control systems and software.  

     RESULTS of OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998
            COMPARED TO THE THREE MONTHS ENDED MARCH 31, 1997

Sales for the three month period ended March 31, 1998 decreased
11.6% to $332,869 compared to $376,588 for the comparable period in
1997. This decrease was primarily due to the reduction in sales to
a major customer as its product line is being revised. The gross
profit percentage remained constant at 39% for the three month
periods ended March 31, and March 31, 1997.
   
The Company's administrative, marketing and general expenses
increased 3.3% to $73,964 for the three month period ended March
31, 1998 as compared to $71,605 for the three month period ended
March 31, 1997. 

As a result of the foregoing, the Company's income from operations
for the three month period ended March 31, 1998 decreased by 26% to
$56,486 as compared to $76,569 for the three month period ended
March 31, 1997. Net income was $48,875, or 0.00 per share, for the
three month period ended March 31, 1998 as compared to net income
of $67,373, or 0.00 per share, for the comparable period in 1997. 









<PAGE> 8

LIQUIDITY AND CAPITAL RESOURCES

The Company has limited funds to meet its working capital
requirements. In the event that operations do not generate funds
sufficient to cover cash expenditures, the Company will need to
obtain capital from other sources, such as financial institutions
or investors. To date the Company has been unable to obtain any
bank financing and there is no assurance that if financing is
required, it will be available to the Company.

On May 10, 1993, August 10, 1993, November 10, 1993, February 10,
1995, May 10, 1994 and August 10, 1994, payments totaling $45,500,
$31,500, $42,000, $63,000, $73,500 and $42,500, respectively, were
due to the Internal Revenue Service and various State taxing
authorities pursuant to the bankruptcy reorganization plan approved
on April 8, 1991. On December 27, 1996, payments totaling $45,500
were made to the Internal Revenue Service and various State taxing
authorities. As the Company required cash on hand for operating
capital and to implement new product development other payments
were not made on the due dates. These payments were deferred as
permitted in the Reorganization Plan. The Company is negotiating a
settlement of its outstanding federal tax obligations with the
Internal Revenue Service.  

Net cash used in operating activities was $108,963 for the first
three months of 1998 as compared to net cash provided by operating
activities of $15,943 for the comparable period in 1997. The
increase in net cash used in 1998 was primarily due to an increase
in inventory of $11,869 and an increase in accounts receivable of
$178,290, less the net income from operations as adjusted for
depreciation and amortization of $50,456 and an increase in
accounts payable, accrued expenses and accrued interest totalling
$28,450. The increase in accounts receivable was a result of
increased sales late in the quarter. The net cash used in operating
activities of $108,963 and the $4,213 used for equipment purchases
in the first three months of 1998 resulted in a net decrease in
cash of $113,176 and a cash balance of $316,514 at March 31, 1998.

 

                       PART II - OTHER INFORMATION

                             NONE











<PAGE> 9

                                   
                               SIGNATURES

     In accordance with the requirements of the Exchange Act, the
registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                       ORS AUTOMATION, INC. 
                           (Registrant)

                   
Date:   May 14, 1998                           /s/ Edward Kornstein
    
                                                 Edward Kornstein
                                                   President
                                     (Principal Accounting Officer)