FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark One)

[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
         THE SECURITIES EXCHANGE ACT OF 1934 FOR THE  PERIOD
         ENDED JULY 31, 2000

                                       OR

[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
         THE SECURITIES EXCHANGE ACT OF 1934

         For the transition period from __________   to
         ____________.

                         Commission file number: 0-14922

                        ABC DISPENSING TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)


             FLORIDA                          59-2001203
--------------------------------- --------------------------------------
 (State or other jurisdiction of            (I.R.S. Employer
   incorporation or organization)          Identification No.)


       451 KENNEDY ROAD  AKRON, OHIO               44305
-----------------------------------------       ------------
(Address of principal executive offices)          (Zip Code)

     Registrant's telephone number, including area code: (330) 733-2841

     Securities registered pursuant to Section 12(b) of the Act: NONE

     Securities registered pursuant to Section 12(g) of the Act:

                                COMMON STOCK,
                                PAR VALUE $.01
                               ----------------
                               (Title of class)


     Indicate by check mark whether the registrant (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: [ X ] Yes [ ] No

     The number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date is:

     Common Stock outstanding at September 8, 2000 was 21,888,336 shares.


<PAGE>


                                      INDEX

               ABC DISPENSING TECHNOLOGIES, INC. AND SUBSIDIARIES

Part I   Financial Information                                          Page No.
--------------------------------------------------------------------------------

Item 1.  Condensed Financial Statements (Unaudited)

         Consolidated balance sheets - July 31, 2000 and April 30, 2000    3

         Consolidated statements of operations - Three months ended
         July 31,2000 and July 31, 1999                                    4

         Consolidated statements of cash flows -Three months ended
         July 31, 2000 and July 31, 1999                                   5

         Consolidated statement of stockholders' equity -
         Three months ended July 31, 2000                                  6

         Notes to consolidated financial statements                      7-9

Item 2.  Management's   Discussion  and  Analysis  of  Financial
         Condition and Results of Operations                           10-12


Part II  Other Information
--------------------------------------------------------------------------------

Item 1.  (Not Applicable)

Item 2.  (Not Applicable)

Item 3.  (Not Applicable)

Item 4.  (Not Applicable)

Item 5.  (Not Applicable)

Item 6.  (A) Exhibits and Reports                                         13



Signature                                                                 14

                                       2
<PAGE>

                        ABC DISPENSING TECHNOLOGIES, INC.

                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

ASSETS                                                                                  JULY 31, 2000       APRIL 30, 2000
---------------------------------------------------------------------------------------------------------------------------
Current Assets
<S>                                                                                   <C>                       <C>
         Cash and cash equivalents                                                    $    32,000               $   163,000
         Accounts receivable, less allowance for doubtful accounts
           of $34,000 as of July 31 and $33,000 as of April 30                            233,000                   306,000
         Inventories (Note 3)                                                           1,329,000                 1,281,000
                                                                                       ----------                ----------
         Total current assets                                                           1,594,000                 1,750,000

Property, plant, and equipment                                                            628,000                   662,000

Other assets:
         Intangible assets, less accumulated amortization of
           $495,000 as of July 31 and April 30                                             17,000                    17,000
         Other                                                                            103,000                   143,000
                                                                                       ----------                ----------
                                                                                          120,000                   160,000
                                                                                       ----------                ----------

TOTAL ASSETS                                                                          $ 2,342,000               $ 2,572,000
---------------------------------------------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)

Current Liabilities

         Current portion of long-term debt                                           $     19,000              $     19,000
         Short-term notes payable (Note 4)                                                175,000                   175,000
         Accounts payable                                                                 458,000                   409,000
         Accrued liabilities:
         Accrued interest                                                                 282,000                   226,000
         Employee compensation and benefits                                                81,000                    82,000
         Warranty reserve                                                                  14,000                    18,000
         Other                                                                            203,000                   235,000
         Deferred income                                                                  294,000                   302,000
                                                                                       ----------                ----------
         Total current liabilities                                                      1,526,000                 1,466,000

Long-term debt (Note 4)                                                                 2,221,000                 2,119,000

Stockholders' equity/(deficit) (Note 6):
         Preferred Stock - Series A, 9% cumulative;
          authorized 840 shares 399 shares issued
          and outstanding
         Series B, 9% cumulative authorized 160 shares
          24 shares issued and outstanding
         Series C, 9% cumulative authorized 200 shares
          37 shares issued and outstanding                                              5,608,000                 5,608,000
         Common Stock, $.01 par value; authorized 50,000,000
           shares; 21,888,336  shares issued                                              219,000                   219,000
         Additional paid-in capital                                                    20,654,000                20,654,000
         Accumulated deficit                                                          (27,884,000)              (27,492,000)
                                                                                       ----------                ----------
                                                                                       (1,403,000)               (1,011,000)
         Less notes receivable - stockholders                                              (2,000)                   (2,000)
                                                                                                                 ----------
            Total Stockholders' Equity/(Deficit)                                       (1,405,000)               (1,013,000)
                                                                                       ----------                ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)                                 $  2,342,000              $  2,572,000
</TABLE>

                                       3
<PAGE>

                             See accompanying notes.
                        ABC DISPENSING TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                    UNAUDITED
<TABLE>
<CAPTION>

                                                                Three Months Ended         Three Months Ended

                                                                  JULY 31, 2000                JULY 31, 1999
-------------------------------------------------------------------------------------------------------------

Revenues:
<S>                                                             <C>                         <C>
         Equipment sales                                        $     58,000                $     60,000
         Service revenues                                            329,000                     296,000
                                                                  ----------                  ----------
                                                                     387,000                     356,000

Cost and expenses:
         Cost of equipment sold                                       44,000                      28,000
         Service expenses                                            259,000                     217,000
         General and administrative                                  336,000                     396,000
         Selling and marketing                                        70,000                      75,000
         Research and development                                     37,000                      19,000
                                                                  ----------                  ----------

                                                                     746,000                     735,000
                                                                  ----------                  ----------

Loss from operations                                                (359,000)                   (379,000)


Other income (expense)
         Interest expense                                            (68,000)                    (32,000)
         Other, net                                                   35,000                           -
                                                                  ----------                  ----------
                                                                     (33,000)                     32,000)
                                                                  ----------                  ----------


Net loss                                                        $   (392,000)               $   (411,000)
                                                                  ----------                  ----------


Net loss per share - Basic and Diluted (Note 5)                 $      (0.02)               $      (0.03)
                                                                  ----------                  ----------
</TABLE>

                                       4
<PAGE>

                             See accompanying notes.
                        ABC DISPENSING TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                    UNAUDITED

<TABLE>
<CAPTION>
                                                                              Three Months Ended

                                                                     July 31, 2000         July 31, 1999
--------------------------------------------------------------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                                   <C>                   <C>
Net cash used in operating activities:                                $ (231,000)           $ (477,000)

CASH FLOWS FROM INVESTING ACTIVITIES:

      Additions to property, plant, and equipment
      Investment in joint venture                                              -                     -
                                                                         -------               --------

Net cash used in investing activities                                          -                     -

CASH FLOWS FROM FINANCING ACTIVITIES:

      Proceeds from private placement                                          -                     -
      Proceeds from collection of stockholders receivables                     -                 1,000
      Proceeds/(repayment) of notes payable                              100,000               420,000
                                                                         -------               -------

Net cash provided by financing activities                                100,000               421,000
                                                                         -------               -------

Net decrease in cash and cash equivalents                               (131,000)              (56,000)
Cash and cash equivalents at beginning of year                           163,000                65,000
                                                                         -------               -------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                            $   32,000            $    9,000
                                                                         =======               =======
</TABLE>

                                       5
<PAGE>

                             See accompanying notes.
                        ABC DISPENSING TECHNOLOGIES, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                  (Three months ended July 31, 2000 unaudited)
<TABLE>
<CAPTION>

                                     Number of          Stock                         Additional       Accumulated
                                     Shares of        $.01 Par       Preferred          Paid-in          Deficit         Treasury
                                    Common Stock        Value           Stock           Capital                            Stock


<S>                                <C>                <C>            <C>             <C>              <C>                 <C>
Balance at April 30, 2000          21,888,336         $219,000       $5,608,000      $20,654,000      $(27,492,000)       $(2,000)
                                  ------------------------------------------------------------------------------------------------



     Net loss                                                                                             (392,000)

                                  ------------------------------------------------------------------------------------------------
BALANCE AT JULY 31, 2000           21,888,336         $219,000       $5,608,000      $20,654,000      $(27,884,000)       $(2,000)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       6
<PAGE>


                             See accompanying notes.
                        ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (Information as of July 31, 2000 and for the
                 three months ended July 31, 2000 is unaudited)


         The accompanying, unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
applicable to interim financial statements. Accordingly, they do not include all
of the information and notes required for complete financial statements. In the
opinion of management, all adjustments and reclassifications considered
necessary for a fair and comparable presentation have been included and are of a
normal recurring nature. Operating results for the three months ended July 31,
2000, are not necessarily indicative of the results that may be expected for the
year ending April 30, 2001. These financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Form 10-K filed with the Securities and Exchange Commission on August
4, 2000.

1.       SIGNIFICANT ACCOUNTING POLICIES

         In fiscal year 2000, the Company changed its fiscal year end from a
52-53 week period ending on the Saturday closest to April 30 to an April 30 year
end, to more closely align closing periods with its major customers and vendors.
This change has increased the number of days included in the financials for the
three months ending July 31, 1999, from 91 calendar days to 97 calendar days. An
estimate of the impact of this six day change on a proforma basis yields sales
of $12,000, gross margin of $2,000 and allocated selling, general and
administrative expenses of $18,000 resulting in a net loss of $16,000.

2.       GOING CONCERN UNCERTAINTY

         The Company has reported a net loss for each year of operation since
its inception except for 1989, and as of July 31, 2000, has an accumulated
deficit of $27,884,000. The Company had negative cash flow from operating
activities of $1,375,000, $1,453,000, and $1,594,000 for the years ended April
30, 2000, April 24, 1999, and April 25, 1998, respectively. Management expects
that the Company will continue to incur losses and use cash in operations in the
near future.

         Management recognizes the Company must generate additional funds to
ensure continuation of operations. The Company has been able to raise $6,573,000
in capital from private investors over the past four years through private
placements of both preferred and common stock. The Company raised $1,500,000
during the fiscal year ended April 30, 2000 using interest bearing Notes
Payable. The Company is continuing in it efforts to raise capital. The Company
hopes to satisfy its short-term (i.e., the next 12-month period) capital
requirements with the use of proceeds from the private placement of its 9%
Convertible Cumulative Preferred Stock and notes payable. The Company is
currently attempting to raise additional capital through an offering of its
Convertible Preferred Stock. The exact terms of this offering have not been
finalized. The company hopes to satisfy its longer term capital needs with
additional proceeds of offerings of the Company's equity and/or debt securities,
improvements in operational cash flow, warrant exercise proceeds, and
traditional credit facilities. There can be no assurance that at any time a
sufficient market for the Company's equity offerings or debt financings will be
available upon commercially reasonable terms, if at all. Further, there can be
no assurance, assuming the Company does successfully raise additional capital,
that the Company will achieve profitable operations or positive cash flow. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern. No adjustments to the amounts or classification of assets and
liabilities which could result from the outcome of this uncertainty are
reflected in the consolidated financial statements.

                                       7
<PAGE>
                        ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (Information as of July 31, 2000 and for the three
                    months ended July 31, 2000 is unaudited)

3.       INVENTORIES

         At July 31, 2000 and April 30, 2000, inventories consisted of the
following:

<TABLE>
<CAPTION>
                                                                                   July 31, 2000              April 30, 2000
                                                                                ------------------           ------------------
<S>                                                                                     <C>                          <C>
Raw Materials                                                                           $  770,000                   $  742,000
Work-in-process                                                                            230,000                      225,000
Finished goods                                                                             329,000                      314,000
                                                                                ------------------           ------------------
                                                                                        $1,329,000                   $1,281,000
                                                                                ==================           ==================
The above amounts are net of obsolescence reserves of $479,000 at both July 31,
2000 and April 30, 2000.

4.       FINANCING ARRANGEMENTS

        At July 31, 2000 and April 30, 2000, long-term debt consisted of the
following:
                                                                                     July 31, 2000               April 30, 2000
                                                                                ------------------           ------------------
Note payable to bank                                                                    $  226,000                   $  231,000
Note payable - Private party                                                             2,010,000                    1,902,000
(Less  unamortized  discount  of  $140,000  and  $148,000  for July and  April
respectfully)
Other                                                                                        4,000                        5,000
                                                                                ------------------           ------------------
                                                                                         2,240,000                    2,138,000
Less amounts due within one year                                                           (19,000)                     (19,000)
                                                                                                             ------------------
Total Long-term debt                                                                    $2,221,000                   $2,119,000
                                                                                ------------------           ------------------
</TABLE>
         The note payable to bank, which is secured by the Company's
headquarters facility, has an adjustable interest rate (9.03% at July 31, 2000)
which may not increase or decrease by more than 3% once every three years.

         On August 1, 1999, the Company renegotiated most of the 10% APR, short
term notes to a 5 year, 10% APR Promissory Note that comes due on August 1,
2004. These notes are collatoralized with the intellectual property of the
Company. In return for converting the short term note to long term, the Company
issued 5 year Warrants to Purchase 2,500,000 Shares of Common Stock at the then
current market price of $.10 per share. The Warrants have been valued at
$175,000 using the Black-Scholes Option Pricing Model, using the following
weighted average assumptions: A Risk-Free interest rate of 6.355% and an
expected volatility of 88.55%. A discount on the notes payable has been recorded
for that amount which will be amortized on a straight line basis over the term
of the notes. During the quarter ended July 31, 2000, the Company raised an
additional $100,000 of capital using this long term Promissory Note.

5.       NET LOSS PER SHARE

         The following table sets forth the computation of net loss per share --
basic and diluted:

<TABLE>
<CAPTION>
                                                                                                  3 MONTHS ENDED
                                                                                     --------------------------------------
                                                                                          July 31,               July 31,
                                                                                            2000                  1999
<S>                                                                                 <C>                     <C>
Numerator:
  Net Loss                                                                          $    (392,000)          $     (411,000)
  Preferred Stock Dividends                                                                    (-)                (223,000)
                                                                                     ------------            -------------
  Numerator for net loss per share - loss attributable
    to common shareholders                                                          $    (392,000)          $     (643,000)
Denominator:
  Denominator for basic and diluted earnings
    per share - weighted-average shares                                                21,888,336               19,168,049
                                                                                     ------------            -------------
Net loss per share -- basic and diluted                                             $       (0.02)          $        (0.03)
                                                                                     ============            =============
</TABLE>
         The effect of potentially dilutive securities have not been included in
the above computations since such securities would have been anti-dilutive for
the periods presented. These potentially dilutive securities consisted of
options and warrants to purchase 7,771,985 and 5,287,500 shares of Common Stock
as of July 31, 2000 and July 31, 1999, respectively.

                                       8
<PAGE>

                        ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (Information as of July 31, 2000 and for the three
                    months ended July 31, 2000 is unaudited)

6.       PREFERRED STOCK

         In September 1996 the shareholders of the Company approved an amendment
to the Company's Certificate of Incorporation to authorize up to 5,000,000
shares of Preferred stock. To date, the Company has authorized 840 shares as
Series A Preferred Stock, 160 shares of Series B Preferred Stock and 200 shares
of Series C Preferred Stock.

         The Company offered shares of 9% convertible cumulative redeemable
Preferred Stock, Series A ("Series A Preferred Stock") in exchange for the
surrender of the Company's outstanding $25,000, 9% Convertible Subordinated
Redeemable Notes due August 1, 1999 ("Notes").

         As of July 31, 2000, through private placements, the Company issued 399
shares of Series A Preferred Stock in exchange for notes or $12,500 cash per
share, generating gross proceeds of $4,988,000 to the Company.

         The Series A Preferred Stock is convertible at the option of the
holder, in whole or in part, at any time after March 1, 1997 (the "Initial
Conversion Date") into Common Stock of the Company at a price per share of
Common Stock equal to (I) $1.00 per share, or (II) such adjusted price as may
form time to time be adjusted (the "Conversion Price"). If converted into Common
Stock, each Preferred Share will entitle the holder to receive warrants to
purchase a number of shares of Common Stock at a price of $1.25 per share, equal
to the number of shares of Common Stock into which the Preferred Shares were
converted. The warrants will be valid for a period of five years commencing from
the date of issuance.

         The Series B Preferred Stock is convertible at the option of the holder
into Common Stock of the Company at a price of $.75 per share and is identical
to Series A Preferred Stock in all other aspects. The Company has authorized 160
shares and sold 24 shares as of April 30, 2000, generating gross proceeds of
$300,000.

         The Series C Preferred Stock is a $10,000 denomination, 9% convertible
cumulative redeemable issue with a conversion price of $.25 per share. There are
no warrants attached to this issuance. The Company has authorized 200 shares and
sold 37 shares through April 30, 2000, generating gross proceeds of $370,000.

         Series A, B, and C Preferred Shares pay dividends semi-annually each
February 1, and August 1, commencing on February 1, 1997. The Company may elect
to pay dividends in the form of Common Stock of the Company issued at 90% of the
then current market price of the Common Stock. For the purposes of this
calculation the "current market price" shall mean the average of the daily
closing prices for each of the thirty consecutive business days prior to such
dividend date.

         On June 11, 1999, the Company paid its February 1, 1999 Preferred Stock
dividend requirement by issuing common stock. The total number of common shares
issued for the dividend was 1,231,565. The shares were valued at $0.191 per
share.

         On April 18, 2000 the Company paid its August 1, 1999 and February 1,
2000, Preferred Stock dividend requirements by issuing common stock. The total
number of shares issued for August 1, 1999 was 924,408 and were valued at
$0.2714 per share. The total number of shares issued for February 1, 2000, was
1,795,880 and were valued at $0.1404 per share.

                                       9
<PAGE>

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

RESULTS OF OPERATIONS

QUARTER ENDED JULY 31, 2000 COMPARED TO THE QUARTER ENDED JULY 31, 1999

         The net loss for the three months ended July 31, 2000 was $392,000, a
decrease of $19,000, or 4.6% over the net loss of 411,000 for the three months
ended July 31, 1999.

<TABLE>
<CAPTION>
REVENUES                                    Three Months Ended
                                   ------------------------------------
                                    July 31,                   July 31,
                                      2000                       1999

<S>                                <C>                       <C>
Equipment sales                    $   58,000                $   60,000
Service revenues                      329,000                   296,000
                                    ---------                 ---------
   Total                           $  387,000                $  356,000
                                    =========                 =========
</TABLE>

         Equipment sales for the first three months of fiscal 2001, ending July
31, 2000 decreased $2,000, or 3.3%, over the same period of the prior year.
Sales of paint colorant dispensers decreased $38,000. Sales of the Royal
Match(R) painT colorant dispensers have decreased because the equipment has not
yet gained widespread market acceptance. Sales of beverage equipment increased
$35,000, the Company is not actively marketing its beverage equipment but is
supporting dealer sales in Canada and accepting orders from domestic customers.

         Service revenues for the first three months of fiscal 2001 increased
$33,000, or 11.1% from the same period of the prior year. The increase is due to
higher juice sales of $106,000, a $17,000 increase or 19.6% above the first
three months of fiscal 2000 and higher service contract revenues of $5,000 on
Royal Match(R) paint colorant dispensers .

<TABLE>
<CAPTION>
GROSS MARGINS                                 Three Months Ended
                                          --------------------------
                                          July 31,          July 31,
                                            2000              1999

<S>                                         <C>               <C>
Equipment                                   20.8%             34.8%
                                            ====              ====
Service                                     41.4%              9.6%
                                            ====               ===
   Total                                    38.3%             13.6%
                                            ====              ====
</TABLE>

         For the first three months of fiscal 2001 gross margin as a percentage
of sales on equipment decreased 14 points over the same period of the prior
year. The decrease resulted from lower margins obtained from dealer sales of its
beverage equipment and lower Royal Match(R) paint colorant dispenser sales.

         For the first three months of fiscal 2001 gross margin as a percentage
of service revenues increased 31.8 points over the same period of the prior
year. The increase is attributable to lower service labor and benefit costs and
lower parts costs that were associated with refitting the Royal Match(R) paint
colorant dispensers with automatic nozzle cappers.

GENERAL AND ADMINISTRATIVE

         For the first three months of fiscal 2001 general and administrative
expenses decreased $60,000, or 15.1%, to $336,000, as compared to the same
period of fiscal 2000. This was due to headcount reductions and allocation of
administrative resources to marketing and direct product related activities.

SELLING AND MARKETING EXPENSES

         For the first three months of fiscal 2001 selling and marketing expense
decreased $5,000, or 6.7%, to $70,000, down from $75,000 for the same period of
FY 2000. The decrease is due primarily to reorganization of the management
structure of the sales force.

                                       10
<PAGE>

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

RESEARCH AND DEVELOPMENT

         For the first three months of fiscal 2001, research and development
expenses increased $18,000, or 94.7%, to $37,000. The increase is due to a
reallocation of existing resources into software enhancement efforts required to
modify the Royal Match(R) paint dispensing system to meet the needs of new
customers.

INTEREST EXPENSE

         For the first three months of fiscal 2001 interest expense increased
$36,000, or 112.5%, to $68,000. This is a result of higher notes payable
balances.

OTHER INCOME

         Other income increased $35,000, to $35,000 for the first three months
of fiscal 2001 and represents the reversal of prior year adjustments.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's cash balance decreased to $32,000 as of July 31, 2000
from $163,000 at April 30, 2000. Operations for the three months ended July 31,
2000 required cash of $231,000, a decrease of $246,000, or 51.6%, when compared
to the three months ended July 31, 1999. The $231,000 use of cash was caused by
a net loss of $392,000 offset by decreased receivables of $73,000, increased
accounts payable of $49,000 and depreciation and amortization of $34,000.

         Consistent with prior years, the Company's primary source of liquidity
has been private placements of equity and debt instruments. During the fiscal
year ended April 30, 2000, the Company generated $1,500,000 from the private
issuance of Notes payable.

         In August, 1997, to raise additional capital, the Company began issuing
short term promissory notes through a private placement. The notes are sold in
multiples of $12,500, or fractions thereof, and accrue interest at the rate of
10%, with principal and interest due at maturity. The initial maturity date was
June 30, 1998, however, the Company had the option, which it exercised, to
extend the maturity date to December 31, 1998. The Company extended the maturity
date through negotiations with Holders of the Notes and their representatives
until December 31, 1999. On August 1, 1999, the Company renegotiated most of the
10% APR, short term notes to a 5 year, 10% APR Promissory Note that comes due on
August 1, 2004. These notes are collatoralized with the intellectual property of
the Company. In return for converting the short term note to long term, the
Company issued 5 year Warrants to Purchase 2,500,000 Shares of Common Stock at
the then current market price of $.10 per share. The Warrants have been valued
at $175,000 using the Black-Scholes Option Pricing Model, using the following
weighted average assumptions: A Risk-Free interest rate of 6.355% and an
expected volatility of 88.55%. A discount on the notes payable has been recorded
for that amount which will be amortized on a straight line basis over the term
of the notes. During the quarter ended July 31, 2000, the Company raised an
additional $100,000 of capital using this long term Promissory Note. As of July
31, 2000, the Company has issued notes in the aggregate of $2,325,000. The
Company anticipates using proceeds of equity offerings, additional extensions or
other re-financing options to satisfy the notes..

         The Company intends to satisfy its short-term (i.e., the next 12-month
period) capital requirements using the proceeds of offerings of its equity
securities and the issuance of additional notes. The Company is currently
attempting to raise at least $2,000,000 through an offering of its convertible
preferred stock. The exact terms of this offering have not been finalized.
Longer term capital needs are anticipated to be satisfied by additional proceeds
of offerings of the Company's equity and/or debt securities, improvements in
operational cash flow, warrant exercise proceeds, and traditional credit
facilities. There can be no assurance that at any time a sufficient market for
the Company's equity offerings or debt financings will be available upon
commercially reasonable terms, if at all.

                                       11
<PAGE>

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

LIQUIDITY AND CAPITAL RESOURCES (CONT.)

         The Company's long-term capital plan is critically dependent upon the
commercial success of its Products and, to the extent success is not timely
achieved, its ability to implement significant cost reduction programs. Toward
this end, Management has taken steps to increase revenue through sales and
marketing efforts that include the redeployment of research and development
resources of the Company to work closely with the Company's existing and
prospective customers in the paint and beverage industry. If it becomes
necessary to implement significant cost reduction programs, it is likely that
such programs will involve a significant curtailment of marketing and research
and development activities as well as payroll reductions which would likely have
an adverse affect on future operating results. There can be no assurance that
the Company will be successful in generating operating profit and sufficient
operational cash flow through the commercial success of its products or any such
cost reduction programs. If the Company is not successful in this regard,
Management will have to consider alternative uses of its assets including the
possible licensing or outright sale of one or more of its proprietary
technologies.

         The current liquidity position of the Company and the inability of
operations to generate positive cash flow raises doubt about the Company's
ability to continue as a going concern (see Note 2 to the Financial Statements).

                                       12
<PAGE>

PART II - OTHER INFORMATION

ITEM 6  - EXHIBITS AND REPORTS ON FORM 8-K

(a)      The financial statements listed on the index set forth in Item 1 of
         this Quraterly report on Form 10-Q are filed as part of this Quarterly
         Report.

(b)      The following exhibits are incorporated by reference herein or annexed
         to this quarterly report:

3.1      Certificate of Incorporation of the Registrant.

3.2      Bylaws of the Registrant.*

10.1     Employment agreement dated March 1, 1997 by and between the Registrant
         and Charles M. Stimac, Jr.*

10.2     Form of Director Option Agreement dated October 30, 1998.

10.3     Amended 1995 Stock Option Plan.*

10.4     Amendment #1 to Employment agreement between the Registrant and
         Charles M. Stimac, Jr.

11.1     Statement regarding computation of per share earnings (see Financial
         Statements at Item 1 of this Quarterly Report on Form 10-Q).

27.      Financial Data Schedule (for S.E.C. electronic filing only)

         * Incorporated by reference to a similarly numbered exhibit to the
         retgistrants registration on form S-1 filed with the Commission on
         April 8, 1998.

(c)      Current reports on Form 8-K during the quarter ended July 31, 2000..

         During the first quarter of Fiscal 2001, the Company filed no
         reports on Form 8-K.

<PAGE>

                                    SIGNATURE

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.


                                        ABC DISPENSING TECHNOLOGIES, INC.



Date: September 12, 2000                /s/ Charles M. Stimac, Jr.
                                       -----------------------------------------
                                            Charles M. Stimac, Jr.
                                            President/CEO