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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   September 30, 1996
                                          
                         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
identification No.)
  incorporation or organization)

          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 September 30, 1996, 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
                               September 30, 1996
                                       
                                                             Page

Part I - Financial Information

   Item 1. Financial Statements:

      Unaudited Balance Sheet - September 30, 1996              3
                
      Unaudited Statements of Operations and Accumulated
                Deficit for the Three and Nine Months
                Ending September 30, 1996 and 1995.             4

      Unaudited Statements of Cash Flows for the Nine
                  Months Ending September 30, 1996 and 1995.    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





























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<PAGE>  3

PART I   FINANCIAL STATEMENTS

                         ORS AUTOMATION, INC.
                       UNAUDITED BALANCE SHEET
                          SEPTEMBER 30, 1996
<TABLE>
<S>                                                 <C>
             ASSETS

Current Assets:
  Cash                                              $    120,930
  Accounts receivable                                    328,876
  Inventory, net                                         121,243
  Prepaid expenses                                         1,313
                                                       ----------
      Total Current Assets                                572,362 

Property and Equipment, net                                13,236
                                                        ---------
      TOTAL ASSETS                                   $    585,598
                                                    
=============      

      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
  Accounts payable and accrued expenses              $     37,237
                                                          
-------
                           Total Current Liabilities       37,237
  
Priority Tax Claims Payable - Interest                    128,993
Priority Tax Claims Payable - Principal                   225,077
Note Payable - related party                              166,102
Accrued Interest Payable - related party                  224,233
                                                         
--------
      Total Liabilities                                   744,405 

Stockholders' Deficit:
  Preferred stock                                          10,000
  Common stock                                            122,024
  Capital in excess of par                             24,914,963
  Accumulated deficit                               
(25,243,031)
                                                      
-----------
      Total Stockholders' Deficit                      
(196,044)
                                                       
----------

      TOTAL LIABILITIES AND STOCKHOLDERS'
        DEFICIT                                      $    585,598
                                                   
===============      
</TABLE>







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

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<PAGE>  4
                           ORS AUTOMATION, INC.
         UNAUDITED STATEMENTS OF OPERATIONS AND ACCUMULATED
DEFICIT       
       FOR THE THREE and NINE MONTHS ENDED SEPTEMBER 30, 1996 AND
1995
<TABLE>
<CAPTION>
                                            Three Months Ended
September 30,
                                           
---------------------------
                                                    1996      
1995          
                                                   ------    
------
<S>                                           <C>            <C>
Sales                                         $   332,872    $
233,565
Cost of Goods Sold                                233,213     
179,776
                                                  --------    
--------  
         Gross Profit                              99,659      
53,789

Administrative, Marketing and General
   Expenses                                        69,158      
63,583
                                                  --------    
--------
Income (Loss) from Operations                      30,501       
9,794 

Other (Income) Expense
   Recovery of bad debt                              ---         
---   
   Miscellaneous Income                              ---         
---   
   Interest Income                                   (419)       
(521)
   Interest Expense                                10,147      
10,721  
   Depreciation and Amortization                    2,034       
1,344
                                                  ---------   
---------
            Total Other (Income) Expense, net      11,762      
11,544
                                                  ---------   
---------
Income (Loss) Before Provision for Income Taxes    18,739     
(21,338)

Provision for Income Taxes                            ---        
---
                                                   ---------  
---------
Net Income (Loss)                                  18,739     
(21,338)

Accumulated Deficit, Beginning of Period      (25,261,770)
(25,191,658)    
                                               ------------
-------------
Accumulated Deficit, End of Period           $(25,243,031)
$(25,212,996)
                                              =============
==============
Loss per Share of Common Stock                $      (.00)   $   
(.00)
                                               =============
=============
Weighted Average Number of Common
  Shares Outstanding                            20,070,216  
20,728,189
                                               ============
==============
</TABLE>













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

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<PAGE>  5
<TABLE>
<CAPTION>
                                              Nine Months Ended
September 30,
                                           
---------------------------
                                                    1996      
1995          
                                                   ------    
------
<S>                                           <C>            <C>
Sales                                         $   802,890    $
580,774
Cost of Goods Sold                                613,259     
463,618
                                                  --------    
--------  
         Gross Profit                             189,631     
117,156

Administrative, Marketing and General
   Expenses                                       209,044     
190,721
                                                  --------    
--------
Income (Loss) from Operations                     (19,413)    
(73,565)

Other (Income) Expense
   Recovery of bad debt                              ---      
(67,451)
   Miscellaneous Income                              ---       
(2,007)
   Interest Income                                 (3,830)     
(1,785)
   Interest Expense                                30,327      
30,958  
   Depreciation and Amortization                    5,378       
4,032
                                                  ---------   
---------
          Total Other (Income) Expense, net        31,875     
(36,253)
                                                  ---------   
---------
Income (Loss) Before Provision for Income Taxes   (51,288)    
(37,312)

Provision for Income Taxes                            ---        
---
                                                   ---------  
---------
Net Income (Loss)                                 (51,288)    
(37,312)

Accumulated Deficit, Beginning of Period      (25,191,743)
(25,175,684)    
                                               ------------
-------------
Accumulated Deficit, End of Period           $(25,243,031)
$(25,212,996)
                                              =============
==============
Loss per Share of Common Stock                $      (.00)   $   
(.00)
                                               =============
=============
Weighted Average Number of Common
  Shares Outstanding                            20,070,216  
20,728,189
                                               ============
==============
</TABLE>

















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

                               5 

<PAGE>   6
                         ORS AUTOMATION, INC.
                 UNAUDITED STATEMENTS OF CASH FLOWS          
        FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
<TABLE>
<CAPTION>
                                                        1996     
 1995
                                                       ------    
------
<S>                                                <C>         
<C>
Cash Flows From Operating Activities:
 Net (Loss)                                        $    (51,288)
$   (37,312)
 Adjustments to reconcile (loss) to net cash
   provided by (used in) operating activities:
    Depreciation and amortization                         5,378  
    4,032
    Changes in assets and liabilities:
      Accounts receivable                                96,227  
   78,088
      Inventory                                          (7,502) 
  (25,398)
      Prepaid expenses                                      691  
      514
      Accounts payable                                   (3,670) 
      788
      Accrued interest payable-related party             15,378  
    14,949
      Accrued interest payable-priority tax claims       14,949  
    16,009
       Net Cash Provided By (Used In) Operating        
---------    --------
           Activities                                    70,163  
    51,670 

Cash Flows From Investing Activities:
 Purchase of fixed assets                                (8,395) 
    (6,276)
                                                         --------
    -------
       Net Cash Used in Investing Activities             (8,395) 
    (6,276)

Net Increase in Cash                                     61,768  
    45,394 

Cash at Beginning of the Period                          59,162  
    57,420
                                                        -------- 
    -------
Cash at End of the Period                          $    120,930
$    102,814
                                                   =============
============

      
Supplemental Disclosure of Cash Flow Information:
 Cash paid during the period for:
   Interest                                        $         --
$        --  
   Income taxes                                    $        297
$        125 


Supplemental Schedule of Noncash Investing and
 Financing Activities:
   Pursuant to the Plan of Reorganization, $45,000 of 5%
convertible
   debentures and $40,000 of 11- 1/2% convertible debentures were
converted
   into 6,003 and 33,680 shares, respectively, of common stock
during the
   quarter ended March 31, and June 30, 1996, respectively.

   Pursuant to the plan $3,000 of 11-1/2 percent convertible
debentures were
   converted into 2,526 shares of common stock during the nine
month period
   ended September 30, 1995.

</TABLE>

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
ACTIVITIES:

     Pursuant to the Plan of Reorganization, $45,000 of 5%
convertible
debentures and $40,000 of 11 1/2% convertible debentures were
converted into
6,003 and 33,680 shares, respectively, of common stock during the
quarters
ended March 31, 1996, and June 30, 1996, respectively.  No
debentures were
converted for the six month period ending June 30, 1995.   
                                6

<PAGE>   7
                           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 September 30, 1996 and 1995 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 nine
months ended September 30, 1996 and 1995 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,
1995.

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
September 30, 1996. 

     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
September 30, 1996,
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 September 30, 1996.

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.
 
Note 4 - Reclassifications

     Certain reclassifications have been made to the 1995
financial statements
to conform with the 1996 financial statement presentation. 







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


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                            ORS AUTOMATION, INC.

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

GENERAL

In 1995, a major product development effort resulted in a new
"WINDOWS" based
vision system which was expanded to a "WINDOWS 95" based
operating in 1996.
These systems accounted for approximately 80% of the total sales
generated in
the nine months ending September 30, 1996. In 1996, a control
product which
integrated the vision system with motor controls was developed
and accounted
for approximately 12% of sales in the nine months ending
September 30, 1996. 

Related Party Transactions

Of the $803,327 in total sales for the nine months ending
September 30, 1996,
approximately 5% or $39,981 consisted of engineering and support
services
provided to Affiliated Manufacturers, Inc. (AMI), a principal
shareholder of
the Company. Equipment sales to AMI accounted for $203,421 or 25%
of total
sales for the same period.


 

                            RESULTS OF OPERATIONS
            FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,
1996
        COMPARED TO THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,
1995

Sales for the three month and nine month period ended September
30, 1996
increased 42.5% and 38.2% to $332,872 and $802,890, respectively,
compared to
$233,565 and $580,774, for the three and nine month periods ended
September
30, 1995. The gross profit percentage increased to 23.6% for the
nine month
period ended September 30, 1996 as compared to 20.2% for the nine
month period
ended September 30, 1995. This increase in gross profit was
largely due to
lower computer hardware costs on delivered equipment.
   
The Company's administrative, marketing and general expenses
increased by 8.8%
and 9.6% to $69,158 and $209,044, respectively, for the three
month and nine
month period ended September 30, 1996 as compared to the
corresponding periods
in 1995. This increase was primarily due to higher travel and
marketing
expenses, as more efforts were placed on developing additional
customers.

Income from operations for the three month period ended September
30, 1996 was
$30,501 as compared with a loss of $9,794 for the three month
period ended
September 30, 1995. A loss of $19,413 from operations was
incurred for the
nine month period September 30, 1996 compared to a loss from
operations of
$73,565 for the nine month period ended September 30, 1995. 

The Company had a one time recovery of bad debt in the amount of
$67,451 in
1995 which provided it with other income of $36,253 for the nine
months ended
September 30, 1995, as compared to other expenses of $31,875 for
the nine
months ended September 30, 1996. Net income of $18,739 was
provided for the
third quarter of 1996 as compared to a net loss of $21,338 for
the comparable
quarter in 1995. Net loss of $51,288 was incurred for the nine
month period
ended September 30, 1996 as compared to net loss of $37,312 for
the nine month
period ended June 30, 1995.  




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LIQUIDITY AND CAPITAL RESOURCES

The Company has limited funds to meet its working capital
requirements and
needs to obtain additional capital to expand its marketing and
sales
activities. 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.
These payments
have been deferred as permitted in the Reorganization Plan. The
Company has
had initial communications with the Internal Revenue Service
regarding
settling its outstanding obligations, however, no agreement has
been reached.



 

                       PART II - OTHER INFORMATION

                             NONE






























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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:   November 13, 1996               /s/ Benson M. Austin     
                        
                                         Benson M. Austin
                                       Chairman of The Board
                                            (Treasurer)
















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