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 JANUARY 25, 1997
                                            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.
           (Name changed from American Business Computers Corporation)
             (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 February 19, 1997 was 17,109,160.





                                       -1-

<PAGE>

<TABLE>
<CAPTION>
                                                        Index

                                 ABC Dispensing Technologies, Inc. and Subsidiaries


Part I     Financial Information                                                                       Page No.
---------------------------------------------------------------------------------------------------------------
<S>        <C>                                                                                         <C>  
Item 1.    Financial Statements (Unaudited)

           Consolidated balance sheets - January 25, 1997 and April 27, 1996                              3

           Consolidated  statements of operations - Nine months and three months ended
           January 25, 1997 and January 27, 1996                                                          4

           Consolidated statements of cash flows - Nine months ended January 25, 1997
           and January 27, 1996                                                                           5

           Consolidated statement of stockholders' equity - Nine months ended January 25, 1997            6

           Notes to consolidated financial statements - January 25, 1997                               7-11

Item II.   Management's Discussion and Analysis of Financial Condition and Results of Operations      12-13


Part II    Other Information
----------------------------------------------------------------------------------------------------------------
Item 1.    (Not Applicable)

Item 2.    (Not Applicable)

Item 3.    (Not Applicable)

Item 4.    (Not Applicable)

Item 5.    Other Information                                                                             14

Item 6.    (A)  Exhibits and Reports                                                                     15



Signature                                                                                                16


</TABLE>





























                                       -2-



<PAGE>

ITEM I.
                        ABC DISPENSING TECHNOLOGIES, INC.
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                               Unaudited         Audited
ASSETS                                                                    January 25, 1997  April 27, 1996
----------------------------------------------------------------------------------------------------------
<S>                                                                          <C>             <C> 
Current assets:
           Cash and cash equivalents                                         $  1,040,000    $    488,000
           Trade receivables:
             Accounts receivable, less allowance for doubtful accounts
               of $158,000 as of January 25 and $136,000 as of April 27           216,000         666,000
           Notes receivable (short-term)                                           33,000          28,000
           Inventories (Note 3)                                                 1,055,000       1,703,000
                                                                             ------------    ------------
                     Total current assets                                       2,344,000       2,885,000

Property, Plant, and Equipment (Note 10)                                        1,528,000       1,494,000
Less accumulated depreciation                                                    (838,000)       (791,000)
                                                                             ------------    ------------
                                                                                  690,000         703,000

Capitalized R&D Labor                                                             340,000               0
Less accumulated amortization                                                     (19,000)              0
                                                                             ------------    ------------
                                                                                  321,000               0

Other assets:
           Notes receivable (long-term)                                            78,000          70,000
           Intangible assets, less accumulated amortization of $534,000
              as of January 25 and $480,000 as of April 27                        120,000         169,000
           Patents pending and deferred charges                                   130,000         193,000
                                                                             ------------    ------------
                   Total other assets                                             328,000         432,000

Total Assets                                                                 $  3,683,000    $  4,020,000
                                                                             ============    ============
LIABILITIES AND STOCKHOLDERS' EQUITY
---------------------------------------------------------------------------------------------------------

Current liabilities:

           Accounts payable                                                  $    401,000    $    876,000
           Line of credit                                                               0         292,000
           Note payable to related party (Note 4)                                 (92,000)        500,000
              Current portion of long-term debt (Note 4)                           31,000          25,000
           Accrued liabilities:
             Legal fees and settlement costs                                       43,000         148,000
             Employee compensation and benefits                                   294,000         218,000
             Warranty reserve                                                     119,000         197,000
              Other                                                               171,000         353,000
             Deferred income                                                        4,000          33,000
                                                                             ------------    ------------
                     Total current liabilities                                    971,000       2,642,000

Long-term debt (Note 4)                                                           279,000         294,000

Stockholders' equity:
           Common Stock, $.01 par value; authorized
             50,000,000 shares; 17,109,160 shares issued
             and outstanding (16,984,160 at April 27, 1996)                       171,000         170,000
           Preferred stock (Note 6)                                             2,836,000               0
           Additional paid-in-capital                                          19,010,000      18,942,000
           Retained earnings (deficiency)                                     (19,532,000)    (17,882,000)
                                                                             ------------    ------------
                                                                                2,485,000       1,230,000
           Less notes receivable - stockholders                                   (52,000)       (146,000)
                                                                             ------------    ------------
              Total Stockholders' Equity                                        2,433,000       1,084,000
                                                                             ------------    ------------
Total Liabilities and Stockholders' Equity                                   $  3,683,000    $  4,020,000
                                                                             ============    ============
                                                                             
                             See accompanying notes

                                       -3-
</TABLE>


<PAGE>

                        ABC DISPENSING TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
    Nine months and three months ended January 25, 1997 and January 27, 1996
                                    Unaudited
<TABLE>
<CAPTION>

                                                     Nine  Months Ended             Three Months Ended
                                               Jan. 25, 1997   Jan. 27, 1996   Jan. 25, 1997   Jan. 27, 1996
------------------------------------------------------------------------------------------------------------
<S>                                             <C>             <C>             <C>             <C>    
Revenues:
           Products and services                $  2,565,000    $  3,980,000    $    427,000    $    425,000
           Royalties                                       0         256,000               0               0
                                                ------------    ------------    ------------    ------------

           Total revenues                          2,565,000       4,236,000         427,000         425,000

Cost and expenses:
           Products and services                   2,076,000       3,683,000         313,000         527,000
           General and administrative              1,281,000         921,000         268,000         344,000
           Selling and marketing                     470,000         367,000         165,000         112,000
           Research and development                  344,000         517,000         (47,000)        154,000
                                                ------------    ------------    ------------    ------------

           Total cost and expenses                 4,171,000       5,488,000         699,000       1,137,000

Loss from operations                              (1,606,000)     (1,252,000)       (272,000)       (712,000)


Other income:
           Securities and contract litigation
             fees and settlement cost                      0         328,000               0         328,000
           Investment income                          14,000          21,000           5,000           3,000
           Interest income/(expense)                 (74,000)        (88,000)        (12,000)              0
           Other income/(expense)                     16,000          72,000          13,000         (30,000)
                                                ------------    ------------    ------------    ------------

           Total other income/(expense)              (44,000)        333,000           6,000         301,000


Net loss (Note 5)                               ($ 1,650,000)   ($   919,000)   ($   266,000)   ($   411,000)
                                                ------------    ------------    ------------    ------------

Weighted average number of
  shares outstanding                              17,540,662      16,320,562      18,538,604      16,672,361
                                                ------------    ------------    ------------    ------------

Net loss per share                              ($      0.09)   ($      0.06)   ($      0.01)   ($      0.02)
                                                ============    ============    ============    ============ 


</TABLE>




















                                 See accompanying notes.

                                           -4-




<PAGE>
                        ABC DISPENSING TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                    UNAUDITED
<TABLE>
<CAPTION>
                                                             Nine Months Ended  Nine Months Ended
                                                              January 25, 1997   January 27, 1996
-------------------------------------------------------------------------------------------------
<S>                                                               <C>            <C>    
Cash flows from operating activities:

Net loss                                                          ($1,650,000)   ($  919,000)

       Adjustments to reconcile net loss to net cash
          used in operating activities:
          Depreciation and amortization                               124,000         73,000

       Changes in operating assets and liabilities:
          Inventories                                                 648,000       (107,000)
          Receivables                                                 437,000          2,000
          Patents pending and deferred charges                         22,000        (55,000)
          Deferred income                                             (29,000)             0
          Accrued liabilities                                         289,000     (1,278,000)
          Accounts payable                                           (475,000)       (57,000)
                                                                  -----------    -----------

       Total adjustments                                              438,000     (1,422,000)
                                                                  -----------    -----------

Net cash used in operating activities                              (1,212,000)    (2,341,000)

Cash flows from investing activities:

       Additions to property, plant and equipment                       2,000        (65,000)
       Additions to selling rights                                          0       (175,000)
       Additions to patents                                            (4,000)         1,000
       Additions to capitalized R & D labor                          (340,000)             0
                                                                  -----------    -----------

Net cash used in investing activities                                (342,000)      (239,000)

Cash flows from financing activities:

       Proceeds from issuance of preferred stock                    2,836,000              0
       Proceeds from severance settlement                              89,000              0
       Proceeds (costs) of private placements                          68,000        593,000
       Proceeds from collection of stockholders receivable              5,000          8,000
       Proceeds from issuance of notes payable                              0      1,007,000
       Stock contribution to class action settlement fund                   0        467,000
       Proceeds from stock issued for exercise of warrants                  0        428,000
       Proceeds from stock issued for exercise of stock options             0         72,000
       Repayment of line of credit                                   (292,000)             0
       Repayment of notes payable and loan costs                     (600,000)      (654,000)
                                                                  -----------    -----------

Net cash provided by financing activities                           2,270,000      1,921,000
                                                                  -----------    -----------

Net increase (decrease) in cash and cash equivalents                  716,000       (659,000)
Cash and cash equivalents at beginning of year                        488,000      1,309,000
                                                                  -----------    -----------

Cash and cash equivalents at end of period                        $ 1,040,000    $   650,000
                                                                  ===========    ===========
                                                            
</TABLE>
                                                           
                             See accompanying notes.

                                       -5-


<PAGE>

<TABLE>
<CAPTION>
                                                             ABC DISPENSING TECHNOLOGIES, INC.
                                                      CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                                            Nine months ended January 25, 1997
                                                                         Unaudited

                                      Number of   Common Stock                       Additional       Retained          Notes
                                      Shares of       $.01 Par        Preferred         Paid-in       Earnings    Receivable-
                                   Common Stock          Value            Stock         Capital   (Deficiency)   Stockholders
-----------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>              <C>            <C>            <C>          <C>               <C>


Balance at April 27, 1996            16,984,160       $170,000               $0     $18,942,000   $(17,882,000)     $(146,000)


    Collection of notes receivable-
      stockholders'                                                                                                     5,000

    Severance settlement                                                                                               89,000

    Issue of stock to Mezzanine
      Financial Fund, L.P. (Note 4)     125,000          1,000                          141,000

    Issue of stock to Davis, Scott

    Preferred Stock private
        placement (Note 6)                                            2,836,000

    Private placement costs                                                             (73,000)

    Net loss for the nine months
      ended January 25, 1997                                                                        (1,650,000)

                                             --             --               --              --             --             --
                                     ----------       --------     ------------     -----------   ------------      ---------

Balance at January 25, 1997          17,109,160       $171,000     $  2,836,000     $19,010,000   $(19,532,000)     $ (52,000)
                                     ==========       ========     ============     ===========   ============      ========= 
                       

</TABLE>



























                             See accompanying notes.

                                                           -6-
              


<PAGE>
                        ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    BUSINESS DESCRIPTION

ABC Dispensing Technologies, Inc. (name changed from American Business Computers
Corporation)  designs  proprietary  dispensing  systems which dispense and blend
liquids,  powders and other  ingredients in a uniform fashion with a high degree
of accuracy. The Company provides training, installation and product service and
also custom designs and manufactures its own proprietary dispensing equipment to
meet the  needs of its  customers  which are  located  primarily  in the  United
States. To date, the Company has developed and is marketing  dispensing  systems
for  the   beverage,   paint,   chemical   coatings,   cement   additives,   and
animal-husbandry industries.

2.    SIGNIFICANT ACCOUNTING POLICIES

BASIS  OF  PRESENTATION  - The  accompanying  unaudited  consolidated  financial
statements have been prepared in accordance with generally  accepted  accounting
principles. In the opinion of management,  all adjustments (consisting of normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included. Operating results for the nine month period ended January 25, 1997 are
not  necessarily  indicative  of the results  that may be expected  for the year
ended April 26, 1997.  For further  information,  refer to the Form 10-K for the
year ended April 27, 1996.

YEAR END - The Company `s fiscal  year-end is the Saturday  closest to April 30,
which  results in a fifty-two  or  fifty-three  week year.  Both fiscal 1997 and
fiscal  1996  consist  of  fifty-two  weeks  ending  on April 26 and  April  27,
respectively.  References to the years 1997 and 1996 refer to fiscal years ended
April 26, 1997 and April 27, 1996, respectively.

CONSOLIDATION - The consolidated  financial  statements  include the accounts of
the Company and its  subsidiaries,  ABC  Dispensing  Technologies,  Inc. and ABC
TechCorp.   Significant   intercompany   transactions  and  balances  have  been
eliminated in consolidation.

USE OF ESTIMATES - The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

CASH  EQUIVALENTS - The Company  considers all highly liquid  investments with a
maturity of three months or less when purchased to be cash equivalents.

FINANCIAL  INSTRUMENTS  - The carrying  value of the  Company's  cash,  accounts
receivable,  accounts  payable and notes  payable are a  reasonable  estimate of
their  fair  value  due to the  short-term  nature  of  these  instruments.  The
Company's  long-term  debt  has  variable  interest  rates  and  carrying  value
approximates fair value at January 25, 1997.

CONCENTRATION  OF CREDIT - In the normal course of business,  the Company enters
into transactions to meet the financing needs of customers. The Company performs
ongoing  credit  evaluations  of  customers'  financial  condition and generally
requires collateral from customers who finance purchases beyond thirty days. The
Company's  exposure  to credit  risk  associated  with  nonperformance  on these
transactions  is limited  to amounts  reflected  in the  Company's  consolidated
financial statements, less the value, if any, of the secured equipment.

INVENTORIES - Inventories  are valued at the lower of cost or market,  using the
first-in, first-out (FIFO) method.

PROPERTY,  PLANT AND  EQUIPMENT - Property,  plant and  equipment are carried at
cost. Depreciation is provided primarily by use of the straight-line method over
the estimated useful lives of the assets, which are five years for machinery and
equipment and thirty years for buildings.

INTANGIBLE  ASSETS - Intangible  assets consist of patents and purchased selling
rights  which  are  recorded  at  cost.   Amortization  is  provided  using  the
straight-line method over a period of five years or less.


REVENUE  RECOGNITION - Revenue on equipment sales is recognized when the product
is shipped and title  transfers,  including  equipment that requires  subsequent
installation.  Revenue for  development  services and for service and support is
recognized  when the service is performed  unless  there is a service  contract.
Revenue from service  contracts is  recognized  ratably over the contract  term,
generally one year. Royalty income is recognized in accordance with the terms of
the royalty  agreement,  which  generally  provides that  royalties are based on
units shipped.

MAJOR  CUSTOMER  - Revenues  from The  Sherwin-Williams  Company  were 65 and 78
percent of the Company's total  revenues,  for the nine months ended January 25,
1997 and January 27, 1996, respectively.

PROVISION  FOR WARRANTY  CLAIMS - Estimated  warranty  costs are provided at the
time of sale of the warranted products.





                                       -7-



<PAGE>
                            ABC DISPENSING TECHNOLOGIES, INC.
                        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

STOCK-BASED  COMPENSATION  - The Company grants stock options for a fixed number
of shares to employees  generally with an exercise price equal to the fair value
of the  shares  at the date of  grant.  The  Company  accounts  for  stock-based
compensation  in accordance  with  Accounting  Principles  Board Opinion No. 25,
"Accounting  for Stock Issued to Employees,  " and,  accordingly,  recognizes no
compensation expense for the stock option grants.

NET LOSS PER SHARE - Net loss per  share is  computed  on the basis of  weighted
average number of shares  outstanding for the period.  Common stock  equivalents
are material,  and therefore,  are included in the computation of primary shares
outstanding.

RECLASSIFICATIONS  - Certain  reclassifications  have  been  made to prior  year
amounts to conform with current year classifications.

3.    INVENTORIES

At January 25, 1997 and April 27, 1996, inventories consisted of the following:

                                     January 25, 1997         April 27, 1996

Raw Materials                         $   633,000             $   729,000
Work-in-process                           125,000                 488,000
Finished goods                            297,000                 486,000
                                       ----------              ----------
                                       $1,055,000              $1,703,000
                                       ==========              ==========

The above amounts are net of obsolescence  reserves of 840,000 as of January 25,
1997 and $985,000 as of April 27, 1996.

4.    FINANCING ARRANGEMENTS

NOTES PAYABLE
In June 1994, the Company purchased its headquarters facility in Akron, Ohio for
$490,000.  A note  payable was  entered  into  during  fiscal 1995 to  partially
finance  this  purchase  which  was  previously leased from the former chairman.
The   note   payable   has   an   adjustable   interest  rate  (9.25% at January
25, 1997 and April 27,  1996) which may not increase or decrease by more than 2%
once every three years.  The maximum increase or decrease is 6% over the life of
the loan. Principal and interest payments of $3,026 are payable monthly with the
balance of  $143,000  due  October 1, 2005.  The note  payable is secured by the
headquarters facility. At January 25, 1997, the facility had a net book value of
$451,000.

At  January  25,  1997 and  April  27,  1996,  notes  payable  consisted  of the
following:
                                       January 25, 1997         April 27, 1996

Note payable to bank (Headquarters
   facility purchase)                     $270,000                $278,000
Other (equipment purchases)                 40,000                  41,000
                                          --------               ---------
                                           310,000                 319,000
Less amounts due within one year           (31,000)                (25,000)
                                          --------               ---------

Total long-term debt                      $279,000                $294,000
                                          ========                ========
                                          
Interest  paid by the Company  approximates  interest  expense for the  quarters
ended January 25, 1997 and April 27, 1996.

Maturities of notes payable for the five years  subsequent to April 27, 1996 are
as  follows:  1997--$25,000;  1998--$30,000;  1999--$24,000;  2000--$15,000  and
2001--$16,000.
                                           -8-

<PAGE>
                            ABC DISPENSING TECHNOLOGIES, INC.
                        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4.    FINANCING ARRANGEMENTS (CONTINUED)

MEZZANINE NOTE
On  January  17,  1996,  the  Company   obtained  a  $500,000   working  capital
asset-secured  loan  from the  Mezzanine  Financial  Fund,  L.P.  ("Mezzanine").
Interest was accrued on outstanding  principal at the rate of 18% per annum. The
terms of the loan agreement  required a $100,000  repayment of principal on each
of the first and second anniversaries of the closing of the loan. The balance of
$300,000 was due on January 17, 1999.

On September  23, 1996,  the Company  paid-off the loan to the  Mezzanine in the
amount  of  $500,000.  Additionally,  Mezzanine  received  63,000  shares of the
Company's common stock for enhancement fees and prepayment fees.

Herbert M. Pearlman,  former  Chairman of the Board of Directors of the Company,
is a  director,  officer and  principal  stockholder  of the general  partner of
Mezzanine.  Mr. Pearlman is Chairman,  chief  executive  officer and a principal
stockholder of Helm  Resources,  Inc., a publicly  traded company which holds an
approximately 14% equity stake in Mezzanine.

LINE OF CREDIT
On December 18, 1995, the Company  established a $750,000  discretionary line of
credit  secured by  accounts  receivable  and other  assets of the  Company.  At
January 25, 1997, no amount was  outstanding  and $750,000 of the line of credit
is  available.  The line of credit  bears an  interest  rate of prime  plus four
points (12.25% at January 25, 1997, which equals the  weighted-average  interest
rate for the period).

On January 27,  1997,  the Company  renewed  its line of credit  agreement  with
generally the same terms as the original  agreement.  The maximum line of credit
available under the renewal is $450,000, and it expires on June 30, 1997.

5.    INCOME TAXES

The  components  of the  Company's  deferred  income taxes at April 27, 1996 and
April 29, 1995 are as follows:
                                                 1996               1995
                                             -----------        -----------
Net operating loss carryforwards             $ 5,450,000        $ 4,709,000
Inventories                                      495,000            447,000
Other                                            255,000            363,000
                                             -----------        -----------
   Total deferred tax asset                    6,200,000          5,519,000
Valuation allowance for deferred taxes        (6,200,000)        (5,519,000)
                                             -----------        -----------

   Net deferred taxes                        $       -0-        $       -0-
                                             ===========        ===========

At April 27, 1996 and April 29, 1995, the Company had Federal net operating loss
carryforwards  for tax reporting  purposes of  approximately  $14,200,000  which
expires in the years 1997 to 2011. It is uncertain if benefits relating to these
deferred tax assets are realizable and accordingly,  a valuation allowance equal
to the amount of such deferred tax assets has been recorded.

6.    PRIVATE PLACEMENT

The  shareholders  of the Company have  approved an  amendment to the  Company's
Certificate of Incorporation to authorize 5,000,000 shares of 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 February  28,  1997,  the Company  issued 261 shares of Series A Preferred
Stock,  in  exchange  for notes or  $12,500  cash per  share,  generating  gross
proceeds to the Company of $3,265,000.
                                           -9-

<PAGE>
                            ABC DISPENSING TECHNOLOGIES, INC.
                        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.    COMMON STOCK

STOCK OPTION PLANS

The Company has non-qualified stock option plans which provides for the issuance
of up to 1,250,000 shares of common stock for non-employee  directors,  officers
and other key employees.  All granted options are  exercisable  after six months
from the grant date  provided  the  employee  has at least one year of  service.
Grant  options  expire five years after grant date.  All options were granted at
fair market value at the date of the grant. Options that expire in May 1997 will
be granted a one year extension.

Stock option transactions and prices are summarized as follows:

<TABLE>
<CAPTION>
                                     Officers' &            Officers' &          Director's Shares       Directors' Shares
                                      Employees              Employees              Under Option            Under Option
                                For Nine Months Ended   For Nine Months Ended  For Nine Months Ended    For Nine Months Ended
                                    January 25, 1997      January 27, 1996        January 25, 1997          January 27, 1996
                                    ----------------     ----------------         ----------------          ----------------
<S>                                        <C>                  <C>                     <C>                       <C>    
Outstanding, April 27, 1996                  194,314              191,941                 130,000                   195,000
Granted                                      429,128              112,750                 160,000                         -
Exercised                                          -            (  14,367)                      -                 (  40,000)
Canceled                                           -            (  96,010)                      -                 (  25,000)
                                           ---------             --------                 -------                  --------    
Outstanding October 26, 1996                 623,442              194,314                 290,000                   130,000
                                           =========             ========                 =======                  ========  

Exercise price per share              $1.13 to $3.44       $1.50 to $3.44          $1.25 to $3.25            $1.25 to $3.25

Warrant shares under and prices for the years ended January 25, 1997 and January
27, 1996 are summarized as follows:

                                                               January 25, 1997                       January 27, 1996
                                                               ----------------                       ----------------
<S>                                                            <C>                                    <C>      
Outstanding at beginning of period                                    2,447,410                              1,275,000
Granted                                                                 329,000                                255,000
Exercised                                                                     -                              (100,000)
Canceled                                                                      -                                      -
                                                               ================                       ================
Outstanding at end of period                                          2,776,410                              1,430,000
                                                               ================                       ================
Exercise price per share                                         $1.25 to $3.50                         $1.25 to $3.38
</TABLE>


8.    RELATED PARTY TRANSACTIONS

The Company and Mr.  Herbert M.  Pearlman  mutually  terminated  an  arrangement
effective  October 1, 1996 that paid an  allocation  to Helm  Resources  for the
costs  of  Mr.   Pearlman  for  office  space  and  direct   expenses   totaling
approximately  $21,000 per year for  services  rendered  by Mr.  Pearlman to the
Company.  Mr. Pearlman,  former Chairman of the Company,  is the chief executive
officer and a principal stockholder of Helm Resources Inc. (see footnote 4).

9.    OPERATING LEASES

For the nine months  ended  January 25,  1997 and  January 27,  1996,  aggregate
rental expense was $33,000, and $29,000, respectively.










                                      -10-



<PAGE>


                        ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10.   PROPERTY, PLANT AND EQUIPMENT

Property,  plant and equipment consisted of the following as of January 25, 1997
and April 27, 1996:

                                         January 25, 1997        April 27, 1996

Land                                       $    57,000            $     57,000
Building and building improvements             573,000                 572,000
Machinery and equipment                        898,000                 865,000
                                             ---------              ----------
                                             1,528,000               1,494,000
Less accumulated depreciation                 (838,000)               (791,000)
                                             ---------              ---------
                                              $690,000                $703,000
                                              ========                ========
                                             

11.   RETIREMENT BENEFITS

The Company  sponsors a 401(k) plan which  covers  substantially  all  full-time
employees.  Eligible employees may contribute up to 12% of their compensation to
this plan. The Company has agreed to match  participants'  contributions  at the
rate of 25  cents  on the  dollar  up to a  maximum  of 4% of the  participants'
compensation.  The  cost of the  Company's  matching  contribution  for the nine
months  ended  January  25,  1997 and  January  27,1996  amounted to $11,000 and
$9,000,  respectively.  The Company has the discretion to make a  profit-sharing
contribution, but no such contribution has been made by the Company.


































                                      -11-



<PAGE>


ITEM II - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

GENERAL

      With new top  management  in the form of a President  and CFO, the Company
recognizes  the  need  to  change  its  overall  corporate  strategy  to  become
profitable  as soon as possible.  In the past,  the Company  focused most of its
efforts on research and  development  with less emphasis on marketing and sales.
The  Company has shifted  its  emphasis,  and as a result of its new focus,  the
Company  developed  an intense  marketing  and sales  strategy for its four main
product  lines:  paint  dispensing  equipment,  liquor  control  systems,  juice
dispensers, and soft-drink dispensers.

Product  sales for the nine months  ended  January 25, 1997 and January 27, 1996
are shown below:

Product sales:              January 25, 1997    January 27, 1996

Paint/Industrial dispensers      1,509,000         3,019,000
Beverage dispensers                509,000           489,000
                                 ---------         ---------
                                 2,018,000         3,508,000

Service and development sales:

Paint/Industrial                   205,000           296,000
Beverage                           293,000           345,000
Other                               49,000            87,000
                                 ---------         ---------
                                   547,000           728,000

Total revenues                   2,565,000         4,236,000
                                 =========         =========

RESULTS OF OPERATIONS

      Revenues  for  the  nine  months  ended  January  25,  1997  decreased  by
$1,671,000, or 39%, to $2,565,000, as compared to the same nine month period FYE
96. This  decrease in revenues is primarily the result of a decrease in the sale
of paint dispensers of approximately $1.5 million, or 50%, due to the completion
of Sherwin-Williams'  order for tint-a-color  dispensing units. Service revenues
also decreased $181,000, or 25%, due to fewer service calls to Sherwin-Williams.

      Gross margin percent  increased from 13% FYE 96 to 19% for the nine months
ended January 25, 1997.  This increase  reflects a decrease in production  costs
associated  with  the  completion  of  the  tint-a-color  dispenser  order  from
Sherwin-Williams,  and to a  price  increase  which  was  enacted  in the  third
quarter.

      General and  administrative  expenses  increased for the nine months ended
January 25, 1997 by $360,000, or 39% to $1,281,000, as compared to the same nine
month  period  FYE 96.  This  increase  is  primarily  due to the  recording  of
severance  expense of $221,000 for former  President and CEO, Robert A. Cutting,
and former  CFO,  Gary T.  Salhany.  In  addition,  overall  payroll and related
benefits  have  increased  over the same  period  last year due to an  increased
emphasis on supporting the Company's sales staff.

      Selling and marketing expenses increased for the nine months ended January
25, 1997 by  $103,000,  or 28%, to  $470,000,  as compared to the  corresponding
period FYE 96. As stated  above,  the Company  expanded its sales and  marketing
efforts.   This  increase  is  attributable  to  an  increase  in  trade  shows,
promotional  literature  and  a  mass  mailing  program.  The  Company  did  not
participate in any of these activities during FYE 96.


                                      -12-


<PAGE>


RESULTS OF OPERATIONS (continued)

      Research  and  development  expenses  decreased  for the nine months ended
January 25, 1997 by $173,000,  or 33%, to $344,000, as compared to the same nine
month  period FYE 96. The decrease is due to the  capitalization  of $340,000 of
research and development labor costs. These labor costs are being amortized over
36 months. In addition,  there was an increase in research and development costs
related to the universal tint dispenser and the  institutional  juice dispenser.
This increase is due to increased  labor hours resulting from intense efforts by
the Company to finalize the design and  operation of these two product  lines so
that they can be distributed to the marketplace.

      Securities  and contract  litigation  expenses were not recognized for the
nine months ended  January 25, 1997.  However,  for the same period last year, a
favorable  true-up  of  $328,000  was  recorded.  This  true-up  represented  an
over-accrual of legal fees associated with the class action settlement suit. The
suit was  settled on January 16,  1996 when all  related  fees and damages  were
paid.

NET INCOME

      For the nine months  ended  January 25, 1997,  the Company  reported a net
loss of  $1,650,000  and loss per  share  of  $0.09  as  compared  to a net loss
$919,000 and a loss per share of $0.06 for FYE 96. This  increase in net loss is
attributable to a decrease in sales.

LIQUIDITY AND CAPITAL RESOURCES

      The Company's  cash balance  increased  from $488,000 on April 27, 1996 to
$1,040,000  on  January  25,  1997.   Operating   activities  required  cash  of
$1,212,000, however the Company was able to provide $2,106,000 through financing
activities. This excess will be used to fund day-to-day operations.

      For  short-term  cash, the Company  utilizes an accounts  receivable-based
credit line. As of January 25, 1997, the Company had no  outstanding  balance on
this credit line. The interest rate is the prime lending rate plus four percent,
or 12.25% as of January 25, 1997 (See Note 4).

      In  September  1996,  the  Company  effected  a  private  placement  of 9%
Convertible  Senior  Subordinated  Redeemable  Notes.  All the note holders have
agreed  to  surrender  the  notes  in  exchange  for 9%  Convertible  Cumulative
Redeemable  Preferred  Stock,  Series A (see Note 6). As of February  28,  1997,
$3,265,000 has been  received.  The Company has used the proceeds to pay related
selling  commissions  and  expenses,  and in  addition,  to  fully  satisfy  and
terminate  the $500,000  credit  facility  provided by Mezzanine  and to provide
working capital for the Company.

      The current ratio as of January 25 was 2.41:1.00,  compared to the current
ratio of April 27, which was 1.09:1.00.

      The quick ratio as of January 25 (cash and current receivables, divided by
total current liabilities) was 1.33:1.00 as of January 25, compared to 0.45:1.00
as of April 27.

      Inventories were reduced to $1.05 million at January 25, from $1.7 million
at  April  27,  due  to  the  shipment  of   Tint-A-Color   dispensers   to  The
Sherwin-Williams Company.

      The Company  anticipates  that its  liquidity  and capital  resources  are
sufficient  to meet its  short-term  needs.  However,  the Company  will require
additional  capital  to  continue  its  long-term   operations  and  research  &
development  activities.  No  assurances  can be given that the Company  will be
successful in raising additional  capital.  Further,  there can be no assurance,
assuming the Company successfully raises additional funds, that the Company will
achieve profitable operations or positive cash flow.



                                      -13-

<PAGE>


PART II - OTHER INFORMATION

ITEM 5 - OTHER INFORMATION
--------------------------

MULTI-MILLION DOLLAR ORDER FROM HOME DEPOT

      On February 12, 1997,  the Company  announced  that it received an initial
multi-million dollar order for its new,  self-calibrating,  universal paint-tint
dispensing system, representing its first order from The Home Depot, Inc., North
America's largest home improvement  retailer.  The multi-million dollar order is
for 300 units of ABC's new automatic  tinting system,  tradenamed "Royal Match."
Delivery is scheduled to commence  early this Spring.  This is the initial phase
of an anticipated  rollout to The Home Depot's entire  500-plus store network in
34 states and three Canadian  provinces,  with one to three units of the tinting
system expected to be installed per store.

RESIGNATION OF DIRECTORS

      On February 6, 1997,  the Company  announced  that Mr. Herbert M. Pearlman
resigned as Chairman of the  Company's  Board of Directors and as a director due
to  other  business  commitments  and  personal  considerations.   Mr.  John  E.
Stieglitz,  director of the Company, also resigned as a director. As a result of
these resignations,  there are currently three directors of the Company,  two of
whom are non-affiliated directors.

SIGNIFICANT ORDER AND PROPOSED JOINT-VENTURE AGREEMENT

      On July 17, 1995, the Company received a $7 million initial order from Wm.
H. Leahy Associates,  a privately owned national  foodservice  marketing company
based   in   Chicago,   for  its  new   Institutional   Juice   Dispenser.   The
microprocessor-driven  system  mixes  and  dispenses  from  juice  concentrates,
ensuring a controlled  mixture and an accurate,  standard  portion.  The Company
filed for a patent on the controlling  electronics and software.  This new Juice
Dispenser is currently undergoing field tests.

      On October 22, 1996, the Company announced a preliminary agreement to form
a  joint  venture  with  Wm.  H.  Leahy  Associates  to  process  and  sell  the
institutional  juice  dispenser.   The  proposed  joint-venture  combines  ABC's
proprietary  dispensing  technologies and equipment with a specially  formulated
fresh-fruit  concentrate  developed by Wm. H. Leahy  Associates  for sale to the
institutional  food  marketplace.  The  proposed  agreement,  which  is still in
negotiations,  calls for the two companies to share ongoing revenues and profits
on a basis to be determined after completion of field testing, which is expected
to be in the Spring of 1997.

      To date,  no sales  have been  recorded  under the  initial  order or as a
result of the joint-venture.

















                                      -14-



<PAGE>


PART II - OTHER INFORMATION

ITEM 6 - EXHIBITS AND REPORTS
-----------------------------

(a)         EXHIBITS

3(i).1      Amendment to the Certificate of Incorporation dated January 31, 1997

3(i).2      Amendment to the Certificate of Incorporation dated January 31, 1997

11.         Statement of Earnings per Share (See Financial Statements)

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













































                                      -15-



<PAGE>


                                        SIGNATURE


Pursuant to 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.
                                              ----------------------------------
                                                        (Registrant)



Date: March 11, 1997                          /s/ Charles M. Stimac, Jr.   
      ------------------------------          ----------------------------------
                                                    Charles M. Stimac, Jr.
                                                    President/CEO




























                                      -16-