U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                  FORM 10-QSB/A
                                (Amendment No. 1)

[X]        Quarterly report under Section 13 or 15(d) of the Securities Exchange
           Act of 1934

           For the quarterly period ended September 30, 1996


                                       or

[_]        Transition report under Section 13 or 15(d) of the Exchange Act

           For the transition period from ______ to _______


                         Commission file number 0-13117

                                MICROFRAME, INC.
        -----------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)


           New Jersey                                             22-2413505
-------------------------------                                 -------------
(State or Other Jurisdiction of                                 (IRS Employer
 Incorporation or Organization)                              Identification No.)


                   21 Meridian Road, Edison, New Jersey 08820
                   ------------------------------------------
                    (Address of Principal Executive Offices)

                                 (908) 494-4440
                   ------------------------------------------
                (Issuer's Telephone Number, Including Area Code)


           Check whether the issuer:  (1) filed all reports required to be filed
by  Section  13 or 15(d) of the  Exchange  Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing requirements for the past 90 days.

Yes  [X}         No  [_]

There were 4,819,142 shares of Common Stock outstanding at November 6, 1996

Transitional Small Business Disclosure Format:

Yes  [_}         No  [X]



<PAGE>



INTRODUCTION

           This  Amendment  is being filed (i) to correct  the dollar  amount of
Inventory for the period ended September 30, 1996 and (ii) to reflect all of the
exhibits being filed with this report.






<PAGE>



                         PART I. FINANCIAL INFORMATION



Item 1.    Condensed Consolidated Financial Information.

           The condensed  consolidated financial statements included herein have
been  prepared  by the  registrant  without  audit  pursuant  to the  rules  and
regulations of the Securities and Exchange  Commission.  Although the registrant
believes that the disclosures are adequate to make the information presented not
misleading,  certain information and footnote  disclosures  normally included in
financial  statements  prepared in accordance with generally accepted accounting
principles   have  been  condensed  or  omitted   pursuant  to  such  rules  and
regulations.  It is suggested that these condensed financial  statements be read
in conjunction  with the financial  statements and the notes thereto included in
the registrant's latest Annual Report on Form 10-KSB.


                                       -2-

<PAGE>



MicroFrame, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
--------------------------------------------------------------------------------

(unaudited)

<TABLE>
<CAPTION>
                                                           September 30,     March 31,
                               ASSETS                          1996            1996
                                                           ------------    ------------
<S>                                                        <C>             <C>         
Current assets
    Cash and cash equivalents                              $    729,096    $     48,302
    Accounts receivable, less allowance for doubtful
      accounts of $100,000                                    1,236,606       1,540,561
    Inventory                                                 1,224,619       1,084,870
    Prepaid expenses and other current assets                   122,641          77,426
                                                           ------------    ------------
      Total current assets                                    3,312,962       2,751,159

    Property and equipment at cost, net                         382,004         409,866
    Capitalized software, less accumulated amortization
      of $725,084 and $649,332, respectively                    316,398         266,319
    Goodwill, less accumulated amortization of
      $11,085 and $5,766, respectively                           90,525          95,844
    Security deposits                                            34,893          34,983
                                                           ------------    ------------
      Total assets                                         $  4,136,782    $  3,558,171
                                                           ============    ============

               LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
    Bank borrowings                                        $     40,433    $    538,754
    Accounts payable                                            255,186         395,619
    Accrued payroll and related liabilities                     235,624         285,651
    Deferred income                                             247,330         258,856
    Other current liabilities                                   330,135         435,215
                                                           ------------    ------------
      Total current liabilities                               1,108,708       1,914,095
                                                           ------------    ------------
Commitments and contingencies                                      --              --
Long-term debt                                                   52,073          72,833
Stockholders' equity
    Common stock - par value  $.001 per  share;
      authorized 50,000,000 shares, issued 4,819,542
      shares and outstanding  4,819,142 shares at
      September 30, 1996; issued 3,718,075 shares
      and outstanding 3,717,675 shares at March 31, 1996          4,819           3,718
    Preferred stock - par value $10 per share;
      authorized 200,000 shares, none issued                       --              --
    Additional paid-in capital                                6,187,756       4,856,924
    Accumulated deficit                                      (3,212,574)     (3,285,399)
                                                           ------------    ------------
                                                              2,980,001       1,575,243
    Less-Treasury stock, 400 shares, at cost                     (4,000)         (4,000)
                                                           ------------    ------------
      Total stockholders' equity                              2,976,001       1,571,243
                                                           ------------    ------------
      Total liabilities and stockholders' equity           $  4,136,782    $  3,558,171
                                                           ============    ============
</TABLE>

The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements

                                       -3-

<PAGE>



MicroFrame, Inc. and Subsidiary
Condensed Consolidated Statements of Operations
--------------------------------------------------------------------------------

(unaudited)

<TABLE>
<CAPTION>
                                                Six Months Ended             Three Months Ended
                                                 September 30,                 September 30,
                                          --------------------------    --------------------------
                                              1996           1995           1996          1995
                                          -----------    -----------    -----------    -----------
<S>                                       <C>            <C>            <C>            <C>        
Net sales                                 $ 3,437,511    $ 2,606,940    $ 1,661,176    $   742,598
Cost of sales                               1,253,890      1,165,874        648,831        425,027
                                          -----------    -----------    -----------    -----------
Gross Margin                                2,183,621      1,441,066      1,012,345        317,571
    Research and development expenses         428,010        294,050        204,060        165,383
    Selling, general and administrative
      expenses                              1,683,019      1,906,137        779,724        947,624
                                          -----------    -----------    -----------    -----------
Income (loss) from operations                  72,592       (759,121)        28,561       (795,438)
Interest income                                21,101          3,062         10,833            244
Interest expense                              (20,868)        (1,694)        (6,669)        (1,694)
                                          -----------    -----------    -----------    -----------
Income (loss) before income tax benefit        72,825       (757,753)        32,725       (796,888)
Income tax benefit                                  0              0              0        (14,700)
                                          -----------    -----------    -----------    -----------
Net income (loss)                         $    72,825    $  (757,753)   $    32,725    $  (782,188)
                                          ===========    ===========    ===========    ===========
Per share data
    Net income (loss) per share           $      0.02    $     (0.21)   $      0.01    $     (0.21)
                                          -----------    -----------    -----------    -----------
Weighted average number of common
    shares outstanding                      4,680,003      3,689,773      4,823,524      3,692,321
                                          -----------    -----------    -----------    -----------
</TABLE>

The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements


                                       -4-

<PAGE>



MicroFrame, Inc. and Subsidiary
Condensed Consolidated Statements of Cash Flows
--------------------------------------------------------------------------------
(unaudited)

<TABLE>
<CAPTION>
                                                                  Six Months Ended
                                                                  September 30,
                                                                  -------------
                                                               1996           1995
                                                           -----------    -----------
<S>                                                        <C>            <C>         
Cash flows from operating activities
Net income                                                 $    72,825    $  (757,753)
Adjustments to reconcile net income to net cash
    provided by operating activities
      Depreciation and amortization                            177,845        150,006
      Provision for bad debts                                   31,646         25,145
      Provision for inventory obsolescence                      17,500         22,877
      (Increase) decrease in
        Accounts receivable                                    272,310        593,228
        Inventory                                             (157,249)      (527,608)
        Prepaid expenses and other current assets              (45,215)       (35,017)
        Security deposits                                           90         (5,521)
      Increase (decrease) in
        Accounts payable                                      (140,433)        65,014
        Accrued payroll and related liabilities                (50,027)      (116,867)
        Deferred income                                        (11,526)        12,456
        Other current liabilities                             (105,080)        75,628
                                                           -----------    -----------
        Net cash provided (used) by operating activities        62,686       (498,412)
                                                           -----------    -----------
Cash flows from investing activities
    Capital expenditures                                       (68,913)      (187,238)
    Capitalized software                                      (125,831)      (149,818)
    Acquisition of European Business Associates                      0        (39,736)
                                                           -----------    -----------
      Net cash used in investing activities                   (194,744)      (376,792)
                                                           -----------    -----------

Cash flows from financing activities
    Proceeds of short-term borrowings                                0        400,000
    Repayments of debt                                        (519,081)             0
    Issuance of common stock                                 1,331,933          4,168
                                                           -----------    -----------
      Net cash provided by financing activities                812,852        404,168
                                                           -----------    -----------

Net increase (decrease) in cash and cash equivalents           680,794       (471,036)

Cash and cash equivalents - beginning of period                 48,302        490,261
                                                           -----------    -----------

Cash and cash equivalents - end of period                  $   729,096    $    19,225
                                                           ===========    ===========
</TABLE>

The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements

                                       -5-

<PAGE>



                         MICROFRAME, INC. AND SUBSIDIARY
                         NOTES TO CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1996
                                   (Unaudited)





Note 1 - Condensed Consolidated Financial Statements:
-----------------------------------------------------

           The condensed  consolidated  balance  sheets as of September 30, 1996
and March 31, 1996, the condensed consolidated  statements of operations for the
six  month  periods  ended  September  30,  1996  and  1995  and  the  condensed
consolidated  statements of cash flows for the six month periods then ended have
been prepared by the Company  without audit.  In the opinion of management,  all
adjustments  (which  include  only normal  recurring  adjustments)  necessary to
present fairly the financial  position,  results of operations and cash flows at
September 30, 1996 and 1995 have been made.

           Certain  information and footnote  disclosures  normally  included in
financial  statements  prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  It is suggested that these condensed
financial  statements be read in conjunction  with the financial  statements and
notes thereto as of March 31, 1996 and for the year then ended.


Note 2 - Inventory:
-------------------

           Inventory consists of the following:

                                     September 30, 1996       March 31, 1996
                                     ------------------       --------------

                 Raw materials           $  843,821              $  676,120
                 Work in process            333,267                 367,820
                 Finished goods              47,531                  40,930
                                         ----------              ----------
                                                        
                           Total         $1,224,619              $1,084,870
                                         ==========              ==========
                                                     

                                       -6-

<PAGE>



                         MICROFRAME, INC. AND SUBSIDIARY
                         NOTES TO CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1996
                                   (Unaudited)


Note 3 - Stockholders' Equity:
------------------------------

           During the six months ended September 30, 1996,  stockholders' equity
changed for the following items:

               Net income                                 $   72,825

               Issuance of common stock of                $1,331,933


           In April,  1996,  the Company sold 860,000  shares of common stock to
unrelated   investors,   at  $1.25  per  share  and  received  net  proceeds  of
approximately  $1,030,000.  In conjunction with this sale,  warrants to purchase
860,000  shares of common stock with an exercise  price of $1.50 and warrants to
purchase an additional  860,000 shares of common stock with an exercise price of
$2.00 were issued. These warrants expire in April, 2000.

           In addition, the Company sold 241,467 shares of common stock at $1.25
per share to four current  shareholders of record who held the contractual right
to maintain  their share of  ownership.  The Company  received  net  proceeds of
approximately  $300,000.  In  conjunction  with this sale,  warrants to purchase
241,467  shares of common stock with an exercise  price of $1.50 and warrants to
purchase an additional  241,467 shares of common stock with an exercise price of
$2.00 were issued. These warrants expire in April, 2000.


Note 4 - Net Income Per Share:
------------------------------

           The computation of earnings per common and common equivalent share is
based upon the weighted average number of common shares  outstanding  during the
period  plus (in  periods in which they have a  dilutive  effect)  the effect of
common stock  equivalents,  comprised of outstanding stock options and warrants.
Fully diluted  earnings per share also reflect  additional  dilution  related to
outstanding  stock  options due to the use of the market price at the end of the
period, when higher than the average price for the period.


                                       -7-

<PAGE>



                         MICROFRAME, INC. AND SUBSIDIARY
                         NOTES TO CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1996
                                   (Unaudited)


Note 5 - Contingent Liabilities
-------------------------------

           The Company is involved in proceedings  with respect to certain sales
tax matters.  Total  amounts  included in other current  liabilities  related to
these  proceedings  is  $100,000  at  September  30,  1996.  In the  opinion  of
management of the Company,  amounts  accrued for  assessments in connection with
sales tax are adequate and ultimate  resolution of these matters will not have a
material effect on the Company's  consolidated  financial  position,  results of
operations or cash flows.


Note 6 - Stock-Based Compensation
---------------------------------

           In fiscal 1997,  the Company will be required to adopt the provisions
of  Statement  of  Financial  Standards  No. 123,  "Accounting  for  Stock-Based
Compensation".  This Statement  requires companies to estimate the fair value of
common stock, stock options, or other equity instruments ("Equity  Instruments")
issued to employees using pricing models which take into account various factors
such as current price of the common stock,  volatility  and expected life of the
Equity  Instrument.  The Standard permits  companies to either provide pro forma
footnote disclosure, or to adjust operating results, for the amortization of the
estimated  value of the Equity  Instrument over the vesting period of the Equity
Instrument.  The  Company  has  elected  to  account  for  stock  options  under
Accounting  Principles  Board Opinion No. 15 and will disclose certain pro forma
information beginning in fiscal 1997.


                                       -8-

<PAGE>



                           PART II. OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K
           --------------------------------

           (a)        Exhibits:

*                     3.2        By-Laws of the Company.

*                     10.21      1994 Stock  Option  Plan (as  amended on August
                                 16, 1996).

*                     10.36      First  Amendment to Consulting  Agreement dated
                                 as of August 1, 1996 between David I. Gould and
                                 the Company.

*                     27.1       Financial Data Schedule.

           (b)        Reports on Form 8-K: None.

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

*  Previously  filed  with the  Company's  Form  10-QSB  for the  quarter  ended
   September 30, 1996.


                                       -9-

<PAGE>


                                   SIGNATURES
                                   ----------


           In  accordance  with  the  requirements  of  the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

Date: November 14, 1996


                                          MICROFRAME, INC.



                                          /s/ Stephen B. Gray
                                          ------------------------------
                                          Stephen B. Gray, President and
                                          Chief Operating Officer


                                          /s/ Mark A. Simmons
                                          ------------------------------
                                          Mark A. Simmons, Chief Financial
                                          Officer (Principal Financial Officer)

                                      -10-