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 OCTOBER 26, 1996
                                            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 November 21, 1996 was 17,109,160.








                                       -1-

<PAGE>



                                                   Index

                             ABC Dispensing Technologies, Inc. and Subsidiaries
<TABLE>
<CAPTION>

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

         Consolidated balance sheets -October 26, 1996 and April 27, 1996                                3

         Consolidated statements of operations - Six months ended October 26, 1996 and
         October 28, 1995                                                                                4

         Consolidated statements of cash flows - Six months ended October 26, 1996 and
         October 28, 1995                                                                                5

         Consolidated statement of stockholders' equity - Six months ended October 26, 1996              6

         Notes to consolidated financial statements - October 26, 1996                                7-11

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations       12-14


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                                                                      15



Signature                                                                                               16

</TABLE>








                                                     -2-

<PAGE>


                        ABC DISPENSING TECHNOLOGIES, INC.
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                           Unaudited         Audited
ASSETS                                                              October 26, 1996  April 27, 1996
----------------------------------------------------------------------------------------------------
<S>                                                                     <C>             <C>   
Current assets:
         Cash and cash equivalents                                      $    472,000    $    488,000
         Trade receivables:
           Accounts receivable, less allowance for doubtful accounts
             of $152,000 as of October 26 and $136,000 as of April 27        337,000         666,000
         Notes receivable (short-term)                                        33,000          28,000
         Inventories (Note 3)                                              1,156,000       1,703,000
                                                                        ------------    ------------
                  Total current assets                                     1,998,000       2,885,000

Property, Plant, and Equipment (Note 10)                                   1,507,000       1,491,000
Less accumulated depreciation                                               (821,000)       (788,000)
                                                                        ------------    ------------
                                                                             686,000         703,000

Other assets:
         Notes receivable (long-term)                                         86,000          70,000
         Intangible assets, less accumulated amortization of $516,000
            as of October 26 and $480,000 as of April 27                     138,000         169,000
         Patents pending and deferred charges                                145,000         193,000
                                                                        ------------    ------------
                 Total other assets                                          369,000         432,000

Total Assets                                                            $  3,053,000    $  4,020,000
                                                                        ============    ============


LIABILITIES AND STOCKHOLDERS' EQUITY
----------------------------------------------------------------------------------------------------

Current liabilities:

         Accounts payable                                               $    684,000    $    876,000
         Line of credit                                                      225,000         292,000
         Note payable to related party (Note 4)                             (110,000)        500,000
         Current portion of long-term debt (Note 4)                           18,000          25,000
         Accrued liabilities:
           Legal fees and settlement costs                                   151,000         148,000
           Employee compensation and benefits                                306,000         218,000
           Warranty reserve                                                  192,000         197,000
            Other                                                            271,000         353,000
           Deferred income                                                    19,000          33,000
                                                                        ------------    ------------
                  Total current liabilities                                1,756,000       2,642,000

Long-term debt (Note 4)                                                      298,000         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)                                          1,225,000               0
         Additional paid-in-capital                                       19,010,000      18,942,000
         Retained earnings (deficiency)                                  (19,266,000)    (17,882,000)
                                                                        ------------    ------------
                                                                           1,140,000       1,230,000
         Less notes receivable - stockholders                               (141,000)       (146,000)
                                                                        ------------    ------------
            Total Stockholders' Equity                                       999,000       1,084,000
                                                                        ------------    ------------
Total Liabilities and Stockholders' Equity                              $  3,053,000    $  4,020,000
                                                                        ============    ============
</TABLE>




                                         See accompanying notes.

                                                  -3-

<PAGE>

<TABLE>
<CAPTION>
                                 ABC DISPENSING TECHNOLOGIES, INC.
                               CONSOLIDATED STATEMENT OF OPERATIONS
               Six months and three months ended October 26, 1996 and October 28, 1995
                                          Unaudited

                                             Six Months Ended                Three Months Ended
                                       Oct. 26, 1996   Oct. 28, 1995    Oct. 26, 1996  Oct. 28, 1995
----------------------------------------------------------------------------------------------------
<S>                                      <C>             <C>            <C>             <C>    
Revenues:
         Products and services          $  2,138,000    $  3,555,000    $    960,000    $  2,429,000
         Royalties                                 0         256,000               0         184,000
                                        ------------    ------------    ------------    ------------

         Total revenues                    2,138,000       3,811,000         960,000       2,613,000

Cost and expenses:
         Products and services             1,763,000       3,156,000         727,000       2,077,000
         General and administrative        1,013,000         577,000         459,000         309,000
         Selling and marketing               305,000         255,000         149,000         141,000
         Research and development            391,000         363,000         213,000         200,000
                                        ------------    ------------    ------------    ------------

         Total cost and expenses           3,472,000       4,351,000       1,548,000       2,727,000

Loss from operations                      (1,334,000)       (540,000)       (588,000)       (114,000)


Other income:
         Investment income/(expense)           9,000          61,000          42,000           2,000
         Interest income/(expense)           (62,000)        (41,000)        (66,000)        (31,000)
         Other income/(expense)                3,000          12,000          (3,000)          4,000
                                        ------------    ------------    ------------    ------------

         Total other income/(expense)        (50,000)         32,000         (27,000)        (25,000)


Net loss (Note 5)                       ($ 1,384,000)   ($   508,000)   ($   615,000)   ($   139,000)
                                        ------------    ------------    ------------    ------------

Weighted average number of
  shares outstanding                      17,114,655      16,140,467      16,989,655      16,272,087
                                        ------------    ------------    ------------    ------------

Net loss per share                      ($      0.08)   ($      0.03)   ($      0.04)   ($      0.01)
                                        ============    ============    ============    ============ 
                                            
</TABLE>

























                                                  See accompanying notes.

                                                           -4-


<PAGE>


                        ABC DISPENSING TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                    UNAUDITED
<TABLE>
<CAPTION>

                                                               Six Months Ended    Six Months Ended
                                                               October 26, 1996    October 28, 1995
----------------------------------------------------------------------------------------------------
<S>                                                                 <C>             <C>   
Cash flows from operating activities:
-------------------------------------

Net loss                                                           ($1,384,000)     ($  508,000)

      Adjustments to reconcile net loss to net cash
         used in operating activities:
         Depreciation and amortization                                  69,000           39,000

      Changes in operating assets and liabilities:
         Receivables                                                   308,000         (885,000)
         Inventories                                                   547,000          111,000
         Patents pending and deferred charges                           48,000          (50,000)
         Accounts payable                                             (192,000)         298,000
         Accrued liabilities                                             4,000       (1,035,000)
         Deferred income                                               (14,000)         (17,000)
                                                                   -----------      -----------

      Total adjustments                                                770,000       (1,539,000)
                                                                   -----------      -----------

Net cash used in operating activities                                 (614,000)      (2,047,000)

Cash flows from investing activities:
-------------------------------------

      Additions to patents                                              (5,000)         (37,000)
      Additions to property, plant, and equipment                      (16,000)               0
                                                                   -----------      -----------

Net cash used in investing activities                                  (21,000)         (37,000)

Cash flows from financing activities:
-------------------------------------

      Proceeds from issuance of preferred stock                      1,225,000                0
      Proceeds (costs) of private placement                             68,000          584,000
      Proceeds from collection of stockholders' receivable               5,000            6,000
      Proceeds from miscellaneous note                                   4,000                0
      Repayment of line of credit                                      (67,000)               0
      Repayment of notes payable and loan costs                       (616,000)        (398,000)
      Proceeds from issuance of notes payable                                0          475,000
      Stock contribution to class action settlement fund                     0          450,000
      Proceeds from stock issued for exercise of warrants                    0          428,000
      Proceeds from stock issued for exercise of stock options               0           65,000
                                                                   -----------      -----------

Net cash provided by financing activities                              619,000        1,619,000
                                                                   -----------      -----------

Net increase (decrease) in cash and cash equivalents                   (16,000)        (465,000)
Cash and cash equivalents at beginning of year                         488,000        1,309,000
                                                                   -----------      -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                         $   472,000      $   844,000
                                                                   ===========      ===========
</TABLE>
                                    See accompanying notes.

                                             -5-

<PAGE>


                        ABC DISPENSING TECHNOLOGIES, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                        Six months ended October 26, 1996
                                    Unaudited
<TABLE>
<CAPTION>

                                  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

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

 Preferred Stock private
      placement (Note 6)                                     1,225,000

 Private placement costs                                                    (73,000)

 Net loss for the six months
   ended October 26, 1996                                                               (1,384,000)
                                ----------        --------  ----------  -----------   ------------     ---------
Balance at October 26, 1996     17,109,160        $171,000  $1,225,000  $19,010,000   $(19,266,000)    $(141,000)
                                ==========        ========  ==========  ===========   ============     ========= 
                              
</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 to a uniform and 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 six month period ended October 26, 1996 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 October 26, 1996.

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 72 and 84
percent of the Company's  total  revenues,  for the six months ended October 26,
1996 and October 28, 1995, 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 not material, and therefore,  are not 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 October 26, 1996 and April 27, 1996, inventories consisted of the following:

                                       October 26, 1996          April 27, 1996
                                       ----------------          --------------
Raw Materials                               $   605,000             $   729,000
Work-in-process                                 153,000                 488,000
Finished goods                                  398,000                 486,000
                                             ----------              ----------
                                             $1,156,000              $1,703,000
                                             ==========              ==========
                                         
The above amounts are net of obsolescence reserves of $926,000 as of October 26,
1996 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 (see
footnote 7). The note payable has an adjustable  interest rate (9.25% at October
26, 1996 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 October 26, 1996, the facility had a net book value of
$455,000.

At  October  26,  1996 and  April  27,  1996,  notes  payable  consisted  of the
following:
                                       October 26, 1996          April 27, 1996
                                       ----------------          --------------
Note payable to bank (Headquarters
  facility purchase)                           $273,000                $278,000
Other (equipment purchases)                      43,000                  41,000
                                               --------                --------
                                                316,000                 319,000
Less amounts due within one year                (18,000)                (25,000)
                                               --------                --------

Total long-term debt                           $298,000                $294,000
                                               ========                ========
                                                
Interest  paid by the Company  approximates  interest  expense for the  quarters
ended October 26, 1996 and July 29, 1995.

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  is due  monthly  at the rate of 18% per  annum.  The terms of the loan
agreement  require 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 is due
on the third  anniversary.  Mezzanine,  at its option, may convert the principal
amount of the loan into common  stock at a price of $3.00 per share,  or, if the
entire loan is converted,  166,666  shares of common stock  (including  standard
anti-dilution  provisions).  In consideration for providing the loan,  Mezzanine
received a five (5) year  warrant to acquire  shares of common  stock at a price
equal to the lower of seventy  percent (70%) of the 30-day average trading price
prior to closing of the loan, or $2.50 (the "Price"). The warrant exercise price
was therefore  determined to be $2.04 per share. The number of shares subject to
the warrant will be determined by dividing the Price into an amount equal to 10%
of the average annual loan balance multiplied by the number of years the loan is
outstanding (the "Warrant Fee").  The resulting  maximum number of warrants that
could be issued are  58,910.  At  Mezzanine's  election,  all or any part of the
Warrant Fee may be put to the Company upon  repayment of the loan for payment in
cash in the  amount  equal to 70% of such  Warrant  Fee,  paid in equal  monthly
payments  over the  same  number  of  months  that  the  loan  was  outstanding.
Additionally,  Mezzanine received a closing fee equal to 2% of the amount of the
loan and reimbursement for expenses associated with the making of the loan.

On July 24, 1996, the Company  distributed 125,000 shares of common stock to The
Mezzanine  Financial Fund,  L.P. in satisfaction of $38,000 of interest  charges
from May  through  September  1996 due  Mezzanine  under the credit  facility it
provides the Company,  plus  Mezzanine  will credit the  principal  owned to the
extent that  proceeds  from the sale of these  shares or the market value of the
shares at September 30, 1996 exceeds the amount of interest due.

On September  23, 1996,  the Company paid the  Mezzanine  Financial  Fund,  L.P.
(Mezzanine) in the amount of $500,000. Prior to this date, the Company delivered
125,000  common shares to Mezzanine of which 30,000 shares were sold to pay past
due  interest.  In  addition,  another  60,000  shares were sold by Mezzanine in
September and October 1996, the proceeds, net of commission, used to pay off the
remaining  interest of  approximately  $10,000 and agreed to enhancement  fee of
approximately  $23,000. The Company is currently in the process of obtaining the
return of the remaining shares and/or cash proceeds.

Herbert M.  Pearlman,  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  also  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.

BRIDGE NOTES
On June 13, 1995, the Company  initiated a private  offering to sell 20 units of
$25,000 10% Senior  Subordinate Notes due June 1, 1998 and three year redeemable
warrants to  purchase  12,500  shares of the  Company's  common  stock at $2 per
share. The transaction was exempt from registration  under the Securities Act of
1933. Nineteen units were issued under the offering,  providing the Company with
$475,000 in proceeds.  The notes  included a repayment  provision  requiring the
Company to apply 40% of the net proceeds  received by it from the sale of any of
its common  stock other than common  stock issued upon the exercise of employee,
director,  or consultant stock options,  to the pro-rata  repayment of the Notes
within  sixty  (60) days of the  receipt of such  proceeds.  As a result of this
repayment provision the notes were paid in full on February 16, 1996.

LINE OF CREDIT
On December 18, 1995, the Company  established a $750,000 line of credit secured
by accounts  receivable  and other assets of the  Company.  At October 26, 1996,
$225,000 was outstanding  and $525,000 of the line of credit was available.  The
line of credit  bears an  interest  rate of prime  plus four  points  (12.25% at
October  26,  1996,  which  equals the  weighted-average  interest  rate for the
period).
                                       -9-

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

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  $14,800,000  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.    PREFERRED STOCK

The  shareholders  of the  Company  have  approved  a  proposal  by the Board of
Directors to authorize 5,000,000 shares of Preferred Stock. The Preferred Shares
are 9%  Convertible  Cumulative  Redeemable  Preferred  Stock,  Series  A. As of
December 6, the Company has received commitments totaling $2,150,000.

7.    COMMON STOCK

STOCK OPTION PLANS

The  Company  has a  non-qualified  stock  option  plan which  provides  for the
issuance of up to 500,000  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' & Employees' Shares Under Option            Directors' Shares Under Option
                              For Six Months Ended    For Six Months Ended     For Six Months Ended    For Six Months Ended
                                  October 26, 1996        October 28, 1995         October 26, 1996        October 28, 1995
                                  ----------------        ----------------         ----------------        ----------------
<S>                                <C>                      <C>                      <C>                     <C>    
Outstanding, April 27, 1996               194,314                  191,941                  130,000                 195,000
Granted                                         -                   97,250                   20,000                       -
Exercised                                       -                 ( 10,049)                       -                ( 40,000)
Canceled                                        -                 (121,828)                       -                       -
                                          -------                 --------                  -------                --------
Outstanding October 26, 1996              194,314                  157,314                  150,000                 155,000
                                          -------                 --------                  -------                --------
Exercise price per share           $1.50 to $3.44        $1.63 to $3.44              $1.25 to $3.25        $1.25 to $3.25

Warrant shares under and prices for the years ended October 26, 1996 and October 28, 1995 are summarized as follows:
</TABLE>

<TABLE>
<CAPTION>
                                                        1996                        1995
                                                     ---------                    ---------
<S>                                                  <C>                          <C>      
Outstanding at beginning of period                   2,447,410                    1,275,000
Granted                                                 85,000                      255,000
Exercised                                                    -                     (100,000)
Canceled                                                     -                            -
                                                     =========                    =========
Outstanding at end of period                         2,532,410                    1,430,000
                                                     =========                    =========
Exercise price per share                         $1.25 to $3.50              $1.25 to $3.38
</TABLE>
                                                              -10-

<PAGE>


                        ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


8.    RELATED PARTY TRANSACTIONS

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

9.    OPERATING LEASES

For the six months ended October 26, 1996 and October 28, 1995, aggregate rental
expense was $18,000, and $20,000, respectively.


10.   PROPERTY, PLANT AND EQUIPMENT

Property,  plant and equipment  consisted of the following  October 26, 1996 and
April 27, 1996:

                                            October 26, 1996     April 27, 1996

Land                                             $    57,000        $    57,000
Building and building improvements                   573,000            572,000
Machinery and equipment                              877,000            865,000
                                                 -----------        -----------
                                                   1,507,000          1,494,000
Less accumulated depreciation                       (821,000)          (791,000)
                                                 -----------        -----------
                                                 $   686,000        $   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 three
months  ended  October 26,  1996 and  October  28,  1995  amounted to $8,000 and
$5,000,  respectively.  The Company has the discretion to make a  profit-sharing
contribution, but no such contribution has been made by the Company.



















                                      -11-

<PAGE>

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

      The Company reports on a fiscal year which ends on the Saturday closest to
April 30. The current year ends April 26,  1997,  the prior year ended April 27,
1996.

FAILURE TO MEET NASDAQ STOCK LISTING MINIMUM REQUIREMENTS

      The Company has failed to meet the NASDAQ capital and surplus requirement,
as  set  forth  in  NASD  Marketplace  Rule  4310(c)(03).   The  NASDAQ  Listing
Qualifications  Panel has  granted  the  Company  an  exception  regarding  this
requirement.  The exception  requires that the Company must make a public filing
with the SEC and NASDAQ on or before December 2, 1996. The filing must contain a
balance sheet no older than October 31, 1996 with pro forma  adjustments for any
significant transactions occurring on or before the filing date. The filing must
evidence  minimum  capital  and  surplus  in  excess of  $1,800,000,  as well as
compliance with all other criteria necessary for continued listing.  The Company
has met the  December  2  requirement  with a capital  and  surplus  balance  of
$2,437,000.

      The exception  further requires that the Company must make a second public
filing with the SEC and NASDAQ on or before  January 3, 1997.  The second filing
must  contain a balance  sheet no older than  November  30,  1996 with pro forma
adjustments for any significant  transactions  occurring on or before the filing
date.  The  filing  must  evidence  minimum  capital  and  surplus  in excess of
$2,400,000,  as well  as  compliance  with  all  other  criteria  necessary  for
continued  listing.  In the event the  Company  fails to comply  with any of the
terms of this  exception,  its securities  will be immediately  deleted from The
NASDAQ  Stock  Market.  However,  the Company  believes  that it will be able to
continue to meet the NASDAQ maintenance schedule

IMPLEMENTATION OF A STRATEGIC PLAN

      The Company recognizes  the need to increase  sales as quickly as possible
and also  the  need to  review  and  implement  long-term  marketing  and  sales
strategies.  With this in mind the Company has developed, with the assistance of
an  accredited  marketing  consultant,  a  Strategic  Plan for  November 1, 1996
through  April  30,  1998.   Corporate  growth  strategies  include:  1)  market
penetration, 2) market expansion, 3) product development and 4) diversification.

SIGNIFICANT ORDER

      On July 17, 1995, the Company  received a $7 million initial order for its
new Institutional Juice Dispenser. This is the largest, single order the Company
has ever  received.  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 now in field  test.  The  order may be
incorporated into a new joint venture yet to be detailed,  however,  the Company
has not yet received finalized  delivery dates or installation  sites. These are
still pending field test results and other considerations.

COMPANY ANNOUNCES JOINT-VENTURE AGREEMENT

      On October 22, 1996 the Company announced a preliminary  agreement to form
a joint  venture  with Wm. H.  Leahy  Associates,  a  privately  owned  national
foodservice  marketing company based in Chicago.  The partnership combines ABC's
proprietary  dispensing  technology  and equipment  with a specially  formulated
fresh-fruit  concentrate  developed by Leahy for sale to the institutional  food
marketplace. The proposed agreement 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 concluded in January 1997.

COMPANY APPOINTS NEW PRESIDENT

      On July 16,  1996,  the  Company  appointed  Charles  M.  Stimac,  Jr.  as
President and Chief Executive Officer to succeed Robert A. Cutting.  Mr. Stimac,
45 years old, has more than 20 years  experience in the  investment  banking and
brokerage  industry and has  extensive  experience in sales and  marketing.  Mr.
Stimac was formerly a Vice President with Roney & Company,  a member firm of the
New York Stock Exchange.






                                      -12-

<PAGE>


MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS (continued)

COMPANY ANNOUNCES CHANGE OF CFO

      On October 1, 1996,  the  Company  appointed  consultant  and  turn-around
specialist Walter W. Crate, on an interim basis, the  responsibilities  of Chief
Financial  Officer and Assistant to the  President.  Mr. Crate  succeeds Gary T.
Salhany,  who resigned as CFO to pursue other interests.  Mr. Crate's career has
included  serving as chief operating  officer of a $100 million,  multi-national
holding  company  and as managing  director  of the  Chicago  office of Citicorp
Investment Bank. Mr. Crate has been involved in the acquisition of 25 companies,
and he has acted in advisory  capacity to management and equity investors in the
turnaround of under-performing assets.

COMPANY APPOINTS DIRECTOR OF MARKETING/VICE PRESIDENT OF ENGINEERING

      On  October  17,  1996,  Brian  C.  Sanders  joined  the  Company  in  the
newly-established  dual positions of Director of Marketing and Vice President of
Engineering--Paint  and  Industrial  Division.  Mr.  Sanders was the founder and
president of ULTRABLEND  Systems,  Inc.,  which  specializes in the research and
development,  production and marketing of point-of-sale  equipment for the paint
and coatings industry. He holds an engineering degree from Syracuse University.

COMPANY APPOINTS EUROPEAN DIRECTOR OF SALES AND SUPPORT SERVICES

      On  November  5,  1996,   Nigel  Whittaker  was  appointed  to  the  newly
established  position of Director of Sales and Support Services for Europe.  Mr.
Whittaker,  who is based in Manchester,  England, will implement and supervise a
sales, marketing, and support organization exclusively for ABC's proprietary new
modular, 18 canister,  automatic tinting dispenser,  and related products, which
are being  introduced in the U.S. this fall.  His previous  experience  includes
serving  as  Managing  Director  of  ULTRABLEND  Systems  (Europe)  Ltd.  and as
President of Applied Color Systems, Inc., based in Princeton,  New Jersey, where
he  spearheaded  the sales  and  support  growth  for that  company's  Datacolor
International product line throughout the North and South American continents.

SIX MONTHS ENDED OCTOBER 26, 1996 COMPARED TO SIX MONTHS ENDED OCTOBER 28, 1995

      The net loss was  $1,384,000  for the six months  ended  October  26, 1996
compared to $615,000 for the same period last year.  Total  revenues for the six
months ended October 26, 1996 was $2,138,000 compared to $3,811,000 for the same
period last year.

Product sales:                       October 26, 1996      October 28, 1995

Industrial dispensers                      $1,458,000            $2,950,000
Beverage dispensers                           354,000               357,000
                                           ----------            ----------

                                            1,812,000             3,307,000
                                           ----------            ----------

Service and development sales:

Industrial                                    105,000               237,000
Beverage                                      191,000               230,000
Other                                          30,000                37,000
                                           ----------            ----------

                                              326,000               504,000

Total revenues                             $2,138,000            $3,811,000
                                           ==========            ==========




                                           -13-

<PAGE>

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS (continued)

COST AND EXPENSE REVIEW

      Gross profit on products sold is 26% year-to-date  compared to 28% for the
same  period last year.  The cost of products  sold  include the  amortizing  of
previously capitalized selling rights.  Year-to-date overhead expense is $74,000
compared to prior year overhead  expense of $86,000.  The  remaining  unabsorbed
overhead is  $226,000 as of October 26, 1996  compared to $144,000 as of October
28, 1995.

      General  and  administrative  expenses  increased  from  $577,000  through
October 28, 1995 to $1,013,000  through October 26, 1996.  Severance  expense of
$221,000 was recorded  for former  President  and CEO,  Robert A.  Cutting,  and
former CFO Gary T. Salhany.  No severance  expense was recorded  during the same
period last year.  Secondly,  overall payroll and expenses have increased in the
current year versus the prior year.  In  addition,  the  activity-based  costing
system  accounts for a portion of the  variation  in general and  administrative
expenses from last year to this year; this variation  reflects the higher volume
of general and administrative activity in the current year.

      Increased selling and marketing  activities  resulted in a 20% increase in
expenses for the six months  ended  October 26, 1996 versus the six months ended
October 28, 1995.

      Research and development expenses increased by 8% for the six months ended
October 26, 1996 versus the six months ended October 28, 1995.  This increase is
mainly due to the increase in research and development personnel.

LIQUIDITY AND CAPITAL RESOURCES

      The Company's cash balance  decreased  slightly from $488,000 on April 27,
1996 to $472,000 on October 26,  1996.  Operating  activities  required  cash of
$614,000,  however the Company was able to provide  $619,000  through  financing
activities.

      For  short-term  cash, the Company  utilizes an accounts  receivable-based
credit line.  As of October 26, 1996,  the Company had $225,000  outstanding  on
this credit line.  The interest rate is four points over the prime lending rate,
or 12.25% as of October 26.

      In  September  1996,  the  Company  effected  a  private  placement  of 9%
Convertible  Senior  Subordinated  Redeemable  Notes.  As of  December  6, 1996,
$2,150,000 has been received.  Substantially all the note holders have agreed to
surrender the notes in exchange for  Convertible  Preferred  Stock (see Note 6).
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. (see below)

      On July 24, the Company distributed 125,000 common shares to The Mezzanine
Financial Fund,  L.P. in  satisfaction  of $38,000 of interest  charges from May
through September 1996 due Mezzanine under the January 1996 loan provided to the
Company;  Mezzanine has credited the principle  owed to the extent that proceeds
from the sale of these shares or the market value of the shares at September 30,
1996 exceeds the amount of interest due. In addition, the Company wired funds of
$500,000 on September 23, 1996 to Mezzanine in full satisfaction of the original
$500,000 principle balance.

      The Company has negotiated extended payment terms from many of its vendors
to enable the Company to continue production runs and meet shipping deadlines.

      The current ratio as of October 26 was 1.14:1.00,  compared to the current
ratio of April 27, which was 1.09:1.00.

      The quick ratio as of October 26 (cash and current receivables, divided by
total current liabilities) was 0.48:1.00 as of October 26, compared to 0.45:1.00
as of April 27.


      Inventories  were reduced to $1.1 million at October 26, from $1.7 million
at  April  27,  due  to  the  shipment  of   Tint-A-Color   dispensers   to  The
Sherwin-Williams Company.

      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. 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.





                                      -14-


<PAGE>


PART II     OTHER INFORMATION

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

(a)   Exhibits

4.1   Form of 9% Convertible Senior Subordinated  Redeemable Notes due August 1,
      1999 issued in  connection  with a private  placement  of the  Registrants
      Securities (the "1996 Private Placement").

4.2   Form of Common Stock Purchase Warrant  issued in connection  with the 1996
      private placement.

24.   Power of Attorney (see signature page).

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: December 9, 1996                  /s/ Charles M. Stimac, Jr  
      ----------------                  ---------------------------------   
                                        Charles M. Stimac, Jr.
                                        President/CEO




































                                      -16-