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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:   June 30, 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 June 30, 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
                             June 30, 1998

                                                            Page

Part I - Financial Information

   Item 1. Financial Statements:

      Unaudited Balance Sheet - June 30, 1998                 3
                
      Unaudited Statements of Operations and Accumulated
            Deficit for the Three Months and Six Months
            Ending June 30, 1998 and 1997.                    4

      Unaudited Statements of Cash Flows for the Six 
            Months Ending June 30, 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































                                2

<PAGE>  3
                               ORS AUTOMATION, INC.
                             UNAUDITED BALANCE SHEET
                                  JUNE 30, 1997
<TABLE>
<S>                                                 <C>
             ASSETS

Current Assets:
     Cash                                           $     353,081
     Accounts receivable                                  365,196
     Inventory, net                                       140,582
     Prepaid expenses                                       1,194
                                                        ----------
     Total Current Assets                                 860,053 

Property and Equipment, net                                14,265
                                                        ---------- 
          TOTAL ASSETS                              $     874,318
                                                    ==============


           LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
     Accounts payable and accrued expenses          $      47,691
                                                     --------------
          Total Current Liabilities                        47,691 

     
Priority tax claims payable - interest                    158,647
Priority tax claims payable - Principal                   179,577
Note Payable - related party                              166,102
Accrued Interest Payable - related Party                  259,114
                                                        ----------
        Total Liabilities                                 811,131 

Stockholders' Equity:
  Preferred stock                                          10,000
  Common stock                                            122,824
  Capital in excess of par value                       24,914,163
  Accumulated deficit                                 (25,052,571)
                                                      ------------
         Total Stockholders' Equity                        63,187
                                                       -----------
         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $     874,318
                                                      ============
                                     
</TABLE>





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

                                 3               

<PAGE>  4
                              ORS AUTOMATION, INC.
           UNAUDITED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
           FOR THE THREE AND SIX MONTHS ENDING JUNE 30, 1998 AND 1997
<TABLE>
<CAPTION>
                                            Three Months Ended June 30,
                                             ---------------------------
                                                    1998        1997          
                                                   ------      ------
<S>                                           <C>            <C>

Sales                                         $     332,528  $    299,005     
Cost of Goods Sold                                  200,908       180,459     
                                              -------------  ------------     
Gross Profit                                        131,620       118,546      

Administrative, Marketing
 and General Expenses                                71,423        74,943     
                                              -------------  -------------    
Income From Operations                               60,197        43,603     
 
Other (Income) Expense:
 Bad debt expense                                      ---         16,500    
 Interest income                                     (2,929)       (1,402)    
 Interest expense                                     9,057         9,057     
 Deprecation and amortization                         1,691         1,763     
                                              -------------- -------------
   Total Other (Income) Expenses, net                 7,819        25,918     
 
Income Before Provision for Income Taxes             52,378        17,685
    
Provision for Income Taxes                               --            --     
                                              -------------  -------------
Net Income                                           52,378        17,685     
           
Accumulated Deficit, Beginning of Period        (25,036,178)   (25,070,256)
                                              -------------- --------------
Accumulated Deficit, End of Period            $ (24,983,800) $ (25,052,571)   
                                              ============== ==============
Income Per Share of Common Stock              $         .00  $         .00    
                                              ============== ==============
Weighted Average Number of
   Common Shares Outstanding                     20,082,443     20,082,443    
                                              ============== ==============
</TABLE>
<TABLE>
<CAPTION>
                                              Six Months Ended June 30,
                                             ---------------------------
                                                    1998        1997          
                                                   ------      ------
<S>                                           <C>            <C>

Sales                                         $     665,397  $     675,593
Cost of Goods Sold                                  403,327        408,873
                                              -------------  -------------
       Gross Profit                                 262,070        266,720
                                            
Administrative, Marketing
 and General Expenses                               145,387        146,548
                                              -------------  --------------
Income From Operations                              116,683        120,172 

Other (Income) Expense:
 Bad debt expense                                      --           16,500 
 Interest income                                     (5,956)        (2,603)
 Interest expense                                    18,114         18,114
 Deprecation and amortization                         3,272          3,103
                                              -------------- --------------
       Total Other (Income)
         Expenses, net                               15,430         35,114
                                              -------------- --------------   
Income Before Provision for Income Taxes            101,253         85,058 

Provision for Income Taxes                              --             --   
                                              -------------- --------------   
Net Income                                          101,253         85,058 

Accumulated Deficit, Beginning of Period        (25,085,053)   (25,137,629)
                                              -------------- --------------
Accumulated Deficit, End of Period            $ (24,983,800) $ (25,052,571)
                                              ============== ==============
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      
                                 4
<PAGE>  5
                         ORS AUTOMATION, INC.
                 UNAUDITED STATEMENTS OF CASH FLOWS          
            FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
<TABLE>
<CAPTION>
                                                       1998       1997
                                                     --------    --------
<S>                                                 <C>           <C>
Cash Flows From Operating Activities:
 Net Income                                         $  101,253    $   85,058
 Adjustments to reconcile net income to net
   cash provided by operating activities:
    Depreciation and amortization                        3,272         3,103
    Cash provided by (used in) changes in:
      Accounts receivable, net                        (181,644)       36,680
      Inventory, net                                   (43,816)      (19,726)
      Prepaid expenses                                   2,391            13
      Accounts payable and accrued expenses             29,707        25,313
      Accrued interest payable - priority tax claims     8,148         7,861
      Accrued interest payable - related party           9,966        10,253
                                                    -----------  ------------ 
         Net Cash (Used in) provided by
          Operating Activities                         (70,723)      148,555 

Cash Flows From Investing Activities:
 Purchase of property and equipment                     (5,886)       (4,107)
                                                    -----------  ------------
       Net Cash Used in Investing Activities            (5,886)       (4,107)
                                                    -----------  ------------
Net Increase (Decrease) in Cash                        (76,609)      144,448 

Cash at Beginning of the Period                        429,690       168,453
                                                    -----------  ------------ 
Cash at End of the Period                           $  353,081   $   312,901
                                                    ===========  ============ 
      
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       

                                 5

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                            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 June 30, 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 and six
months ended June 30, 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
June 30, 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 June 30, 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 June 30, 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.
  


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


                                 6

<PAGE> 7    
                             ORS AUTOMATION, INC.

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

GENERAL

In 1995 and 1996, major product development efforts resulted in new "WINDOWS"
and "Windows 95" based vision systems which accounted for approximately 91% of
the total sales generated in the six months ending June 30, 1998. An effort to
broaden the Company's product base resulted in approximately 7% of the sales
in this period being related to motion control systems and software.  

Although the Company's current products do not require date information for
operation, they have been tested and are Year 2000 compliant. Internal
computer systems are being tested and no Year 2000 compliant problems are
foreseen at this time. 


RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1998
 COMPARED TO THE THREE AND SIX MONTHS ENDED JUNE 30, 1997

Sales for the three month period ended June 30, 1998 increased 11.2% to
$332,528 compared to $299,005 for the three month period ended June 30, 1997.
Sales for the six month period ended June 30, 1998 decreased 1.5% to $665,397
compared to $675,593 for the six month period ended June 30, 1997. The gross
profit percentages were 39.6% and 39.4%, respectively, for the three and six
month periods ended June 30, 1998 as compared to 39.6% and 39.5%,
respectively, for the three and six month periods ended June 30, 1997.

A major customer has indicated that due to the economic conditions in the
Asian market, it expects the demand for its machines to decrease for the
remainder of this year. As a result it is anticipated that the sales of
machine vision and control assemblies to this customer will be delayed,
reduced or a combination of both, in the third and fourth quarters of this
year.
   
The Company's administrative, marketing and general expenses decreased by 4.7%
and 0.8% to $71,423 and $145,387, respectively, for the three and six month
periods ended June 30, 1998. This decrease was primarily due to lower travel
and marketing expenses as more efforts were placed on meeting existing order
commitments.

The income from operations for the three and six month periods ended June 30,
1998 was $60,197 and $116,683, respectively, as compared with income of
$43,603 and $120,172, respectively, for the three and six month periods ended
June 30, 1997. 

Net income of $52,378 and $101,253 was provided for the three and six months
ended June 30, 1998, as compared to net income of $17,685 and $85,058 for the
three and six months ended June 30, 1997.   






                                    7

<PAGE> 8

LIQUIDITY AND CAPITAL RESOURCES

The Company has very limited funds to meet its working capital requirements.
To date the Company has been unable to obtain any bank financing and there is
no assurance that it will be available to the Company from any other sources.

On May 10, 1993, August 10, 1993, November 10, 1993, February 10, 1994, 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. As the Company required cash
for operating capital, payments were not made on the due date; however, a
payment of $45,500 was made on December 12, 1996 and the remaining payments
have been 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 $70,723 for the first six
months of 1998 as compared to net cash provided by operating activities of
$148,555 for the comparable period in 1997. The increase in net cash used in
1998 was primarily due to an increase in inventory of $43,816 and an increase
in accounts receivable of $181,644 offset by net income from operations as
adjusted for depreciation and amortization of $104,525. The Company also used
$5,886 in investing activities for the purchase of property and equipment. The
net decrease in cash of $76,609 for the first six months of 1998 resulted in a
cash balance of $353,081 at June 30, 1998.


 

                       PART II - OTHER INFORMATION

                             NONE









                                  8
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                               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:   August 10, 1998                   /s/ Edward Kornstein      
                                            Edward Kornstein
                                            President
                                            (Principal Accounting Officer)
 






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