UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 10-K

      [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
      OF THE SECURITIES EXCHANGE ACT OF 1934

For The Fiscal Year Ended December 31, 1996

      [ ] 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 0-29048

ACCENT COLOR SCIENCES, INC.
(Exact name of registrant as specified in its charter)
         Connecticut                         06-1380314
(State or other jurisdiction of           (I.R.S. Employer
incorporation or organization)          Identification No.)

800 Connecticut Boulevard, East Hartford, Connecticut       06108
(Address of principal executive office)           (Zip Code)
Registrant's telephone number, including area code:(860) 610-4000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock

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

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.[X]

The aggregate market value of common stock held by non-affiliates
of the registrant as of March 14, 1997 was $73,479,263.
The number of shares outstanding of the registrant's common stock
as of March 14, 1997 was 10,139,775.

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive Proxy Statement dated April 1, 1997 to
be delivered to shareholders in connection
with the Annual Meeting of Shareholders to be held May 9, 1997
are incorporated by reference into Part III.


PART I

Item 1.   Business

General

Accent Color Sciences, Inc. ("Accent Color" or the "Company")
designs, manufactures and sells innovative, high-speed, spot
color printing systems ("Truecolor Systems") for integration with
digital, high-speed, black-on-white printers and sells related
consumables. Spot color printing involves the use of color to
enhance traditional black-on-white documents by accenting
critical information, such as a balance due on a billing
statement, or by printing graphics, such as a company logo. The
Company believes its Truecolor Systems are the first, and only,
printers capable of cost-effectively printing or highlighting
variable data (text or graphics which may vary from page to page)
in multiple standard and custom colors with the speed and
functionality of existing high-speed (more than 80 pages per
minute), black-on-white printers. Truecolor Systems are designed
to address what the Company believes is a substantial,
unfulfilled demand for spot color printing in the production
printing and production publishing segments of the digital
printing market. Accent Color's strategy is to rapidly penetrate
these global markets through strategic relationships with major
original equipment manufacturers ("OEMs"), including Xerox
Corporation ("Xerox"), International Business Machines
Corporation ("IBM") and Oce Printing Systems USA, Inc. ("Oce").

Truecolor Systems are designed to print spot color in high-speed,
high-volume applications at a low incremental cost per page
without diminishing the speed or performance of the high-speed,
black-on-white host printer or affecting the end user's existing
operational methods. Truecolor Systems are capable of printing up
to 310 pages per minute, utilizing up to eight different colors,
including custom colors, to print or highlight fixed or variable
data. Truecolor Systems combine the Company's proprietary paper
handling technology with patented ink jet technology from
Spectra, Inc. ("Spectra"). The Company holds an exclusive right
to supply products which include Spectra ink jet printheads to
print color on the black-on-white output from specified high-
speed printers from Xerox, IBM, Oce and certain other parties
through the year 2002. In connection with their arrangements with
the Company, Xerox and IBM are adapting their existing high-
speed, black-on-white printers for integration with the Company's
Truecolor Systems.

The Company intends to market its Truecolor Systems to OEMs of
high-speed, black-on-white printers. According to CAP Ventures,
Inc. ("CAP Ventures"), a printing industry market research firm,
the 1995 year-end installed base of digital, high-speed, black-on-
white printers in the U.S. was approximately 22,400 and the
installed base of these printers is projected to grow at a five-
year compounded annual growth rate ("CAGR") of approximately 11%
to 37,100 systems by the year 2000. In addition, approximately
4,800 digital, high-speed, black-on-white printers were sold in
the U.S. in 1995. Revenue from new system sales, supplies and
service exceeded $3.6 billion in 1995 and is expected to grow at
a five-year CAGR of approximately 12% to $6.4 billion by the year
2000. This growth is further driven by the number of pages
printed per year, which is projected to grow at a five-year CAGR
of approximately 13% by the year 2000.

To facilitate access to its target markets, the Company has
entered into agreements with Xerox and IBM, and has entered into
a memorandum of understanding with Oce, which the Company expects
to result in an agreement during early 1997. Xerox, IBM and Oce
intend to market, sell and service Truecolor Systems under their
respective corporate logos and product identifications. Accent
Color expects to substantially reduce or eliminate the cost and
time required to develop and maintain a direct sales and service
organization or distribution channel of its own by using the
existing sales and distribution channels of Xerox, IBM and Oce.
According to Dataquest, a market research firm, Xerox (excluding
its DocuTech systems), IBM and Oce accounted for approximately
80% of the high-speed, black-on-white printing systems sold in
the U.S. during 1994 and 1995. In addition, according to Xerox,
there are over 10,000 DocuTech printers installed with which
Truecolor Systems are designed to be integrated.

The Company also sells consumables comprised of standard and
custom color wax-based inks, as well as spare parts used with
Truecolor Systems. The Company expects that consumables will
generate recurring revenue which the Company believes will
increase as the installed base and usage of Truecolor Systems
increase. According to CAP Ventures, typical high-speed, black-on-
white printers servicing the production printing and production
publishing market segments produce approximately 1.7 million and
975,000 pages per month, respectively.

The Company was incorporated in Connecticut in May 1993. The
Company's principal executive offices are located at 800
Connecticut Boulevard, East Hartford, Connecticut 06108, and its
telephone number is (860) 610-4000. The Company's World Wide Web
site is located at www.accentcolor.com. The information contained
in the Company's World Wide Web site should not be considered a
part of this Form 10-K.

Current Developments

In March 1997, Xerox has notified the Company that it has decided
not to distribute Accent's cut-sheet version of the Truecolor System
designed for integration with Xerox's high-speed, black-on-white
printers as a Xerox product under the terms of the Xerox Agreement.
Consequently, the Company now intends to market and distribute the
Truecolor 135 directly to Xerox end users through an alternate
distribution program.  The Company is considering a number of
opportunities and, among these, has begun discussions with Xerox
concerning the possibility of acting as a Xerox "finishing partner."
Finishing partners provide products which operate with Xerox products
and receive assistance and support from Xerox sales and service
organizations.  There can be no assurance that the Company will be
able to successfully complete arrangements with Xerox to be a Xerox
"finishing partner" or that the Company will be able to establish
or maintain an effective direct marketing and sales program for the
Truecolor 135.  This Report on Form 10-K generally, and this Item 1
"Business" and Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations", specifically,
should be read in a manner consistent with these current developments.

Products

ACS Truecolor System

The Company offers both cut sheet and continuous form versions of
Truecolor Systems which are currently expected to be marketed
under the corporate logos and product identifications of the
Company's OEM customers. The current versions of Truecolor
Systems include the Truecolor 135 and the Truecolor 390. The
Company expects that Truecolor Systems will be priced to the
Company's OEM customers in the range of $75,000 to $105,000,
depending on model and options.

The Truecolor 135 attaches directly to either the Xerox 4635 cut
sheet production printing system or the Xerox DocuTech 135
production publishing system. Although the Truecolor 135 is
designed to print at higher speeds, it is currently configured to
print at the speed of the Xerox 4635 and DocuTech 135 (up to 135
pages per minute) in as many as eight colors at 300 dots per inch
resolution. The Truecolor 135 is designed to print up to
3,240,000 pages per month and can handle paper sizes from 7.0 to
14.0 inches wide, 6.0 to 17.0 inches long and paper weights from
16 to 42 pound bond.

The Truecolor 390 attaches directly to the IBM 3900 continuous
form production printing system. Although the Truecolor 390 is
designed to print at higher speeds, it is currently configured to
print at the speed of the IBM 3900 (up to 310 pages per minute)
in as many as eight colors at 240 dots per inch resolution. The
Truecolor 390 is designed to print up to 5,600,000 pages per
month and can handle paper sizes from 6.5 to 18.0 inches wide,
6.0 to 17.0 inches long and paper weights from 16 to 42 pound
bond.

<TABLE>
<CAPTION>
                TRUECOLOR SYSTEM FEATURES
FEATURES       TRUECOLOR 135            TRUECOLOR 390
<S>            <C>                      <C>
Host Printer   Xerox 4635 or Xerox      IBM 3900
               Docutech 135
Paper Handling Cut sheet                Continuous form
Speed          135 pages per minute     310 pages per minute
Resolution     300 dots per inch        240 dots per inch
Ink Reservoirs 4 standard, 8 optional   4 standard, 8 optional
Paper Width    7.0 to 14.0 inches       6.5 to 18.0 inches
Paper Length   6.0 to 17.0 inches       6.0 to 17.0 inches
Paper Weights  16 to 42 pound bond      16 to 42 pound bond
Paper Type     Pre-printed or blank     Pre-printed or blank,
               sheets, some labels      fanfold or roll-fed forms,
                                        some labels
Maximum Usage  3.2 million pages per    5.6 million pages per month
               month
</TABLE>

Consumables and Spare Parts

The Company's product offering includes consumables, such as
standard and custom color wax-based ink, and spare parts. Spot
color printing with Truecolor Systems requires the consumption of
significant quantities of wax-based ink and the replacement of
certain parts that are subject to normal wear and tear. The
Company expects that sales of consumables will generate recurring
revenue which the Company believes will increase as the installed
base and usage of Truecolor Systems increase.

Consumables:  The wax-based ink used in the Truecolor Systems is
sold in six kilogram packages containing 60 individual wax-based
ink blocks to the Company's OEM customers. The Company purchases
its wax-based ink from Spectra. As long as the Company purchases
its wax-based inks exclusively from Spectra, Spectra is
prohibited, through its agreement with the Company, from
knowingly supplying the wax-based ink directly to the Company's
OEM customers. Similarly, Xerox and IBM are currently prohibited
from purchasing wax-based ink from sources other than the
Company, subject to certain conditions.

Spare Parts:  The Company expects that periodic preventive
maintenance and repair will need to be performed on Truecolor
Systems and will include the replacement of damaged or worn parts
which are expected to be supplied exclusively by Accent Color to
the OEM customer. These replacement parts are produced by
subcontractors and suppliers according to the Company's design
specifications.

Product Development

The Company considers the enhancement of its present products to
be its research and development priority. Consequently, the
Company currently devotes a significant portion of its resources
to product development. The Company plans to commit substantial
resources to enhance its technology in the areas of (i) wider ink
jet printheads for greater color coverage per page, (ii) advanced
paper handling functionality, particularly duplex printing (the
ability to print on both sides of a page) and (iii) higher
resolution ink jet printheads. Certain enhancements are required
under the Company's contracts with Xerox and IBM. The Company
also plans to devote resources to assure the quality and
performance of its Truecolor Systems. The Company anticipates it
will need to increase its research and development spending and
hire additional personnel as the Company's business expands in
the future.

Accent Color considers its on-going efforts in engineering,
research and development to be a key component of its strategy.
The Company believes that its future success will depend in part
on its ability to continue to enhance its existing products and
to develop new products. The Company's research and development
activities consist of both long-term efforts to develop and
enhance products and services and short-term projects to make
modifications to respond to the immediate needs of its OEM
customers.

The Company's products are developed internally. The Company also
purchases technology, licenses intellectual property rights, and
oversees third party development for certain components of its
products. Internal development enables Accent Color to maintain
closer technical control over the products and gives the Company
the freedom to designate which modifications and enhancements are
most important and when they should be implemented. The Company
has created development processes for creating and enhancing its
products. Product documentation is generally created internally
in coordination with its OEM customers.

The Company expended approximately $805,000, $3.1 million and
$6.9 million on engineering and research and development in the
years ended December 31, 1994, 1995 and 1996, respectively. As of
March 14, 1997, Accent Color had 57 employees engaged in
engineering and research and development.

Manufacturing and Assembly

The Company's manufacturing strategy has been to design a product
based upon a relatively small number of discrete modules that can
be subassembled and tested by other parties. Other than the
patented ink jet printheads supplied by Spectra, the Company
believes these modules can be readily procured on competitive
terms. Approximately 75% of these modules are common across the
continuous form and cut sheet versions of Truecolor Systems in
order to achieve economies of scale while reducing design time,
expediting time-to-market and minimizing support requirements.
Initially, final assembly and testing, including extensive print
quality testing on a variety of papers and applications, will be
done by the Company prior to shipment until the product reaches
full production. The Company's strategy is to begin to
subcontract the full assembly and final testing to turnkey
manufacturers once full production is reached.

The Company is currently in discussions with two large
manufacturing companies to be the primary turnkey manufacturers
of the Truecolor Systems. The Company believes that these
companies have both the manufacturing and quality assurance
capabilities to satisfy the Company's supplier qualification
process which initially qualifies and monitors ongoing
performance to the Company's cost, quality and schedule
requirements. The Company expects to implement a formal quality
control program to inspect parts received from subcontractors to
determine whether they comply with Company specifications. The
Company intends to monitor adherence to these procedures through
site visits and direct supervision.

The Company has made product assurance and quality a priority in
its business strategy. In pursuit of this goal, the Company
intends to apply for ISO 9001 registration in early 1998. In
preparation for this, the Company has adopted a formal approach
to documentation control, design, manufacturing and business
process definition and is implementing an integrated business
system software package to manage key processes. Accent Color
also subjects the component modules and each complete Truecolor
System to extensive testing during assembly. An important part of
the testing involves printing tests in which the Company uses a
variety of paper grades and test patterns designed to verify
accuracy, color and other quality characteristics.

Marketing, Product Support, Sales and Training

Accent Color has adopted a third-party distribution strategy that
employs OEM customers to address the global market. OEM customers
purchase Truecolor Systems for integration with their high-speed,
black-on-white printing systems and currently expect to market
them for both installed printers and new printers under their
corporate logos and product identifications. The goals of these
relationships are to (i) rapidly penetrate the market represented
by both the existing installed base and new sales of high-speed,
black-on-white printers, (ii) substantially reduce or eliminate
the cost and time required for the Company to develop a direct
sales and service organization of its own, (iii) quickly gain
credibility and market acceptance by meeting the technical
requirements set by Xerox, IBM, Oce and other OEM customers and
(iv) integrate the Company's Truecolor Systems with certain
hardware and supporting software marketed by these OEM customers.
The Company may enter into relationships with other OEM customers
covering additional segments of the digital, high-speed printing
market.

The Company generally expects to receive monthly or quarterly,
non-binding, rolling forecasts of future orders for its products
from its OEM customers. The forecasts will usually cover the
subsequent 12 months. The Company will plan its future
activities, in part, on the basis of these forecasts. OEM
customers are expected to place actual orders by submitting
purchase orders, generally on a monthly basis, which cover
product requirements from four months from the date of the
purchase order.

Accent Color intends to provide support for the sales and
marketing activities of its OEM customers including Xerox, IBM
and Oce. This will include technical advice, as required,
regarding the optimal use of Truecolor Systems in demanding
applications, and participation in the formulation of marketing
initiatives to position and promote Accent Color's products
against any perceived or emerging competitors. The Company
expects to benefit from this interaction by receiving timely
feedback on end-user needs and desires which will drive product
enhancement and new product development. Xerox and IBM will also
distribute wax-based inks provided by Accent Color through their
existing supply channels. Accent Color currently expects to
provide sales support to meet the end user requests to create
custom colors using the Company's wax-based inks.

Xerox and IBM will also distribute spare parts provided by Accent
Color for Truecolor Systems and will provide field service
through their established service organizations. This will
provide end users with the first three levels of customer support
coverage, consisting of on site field service for installation
and maintenance, central technical support at a national and
international level and extensive stocking of spare parts to
ensure adequate responsiveness. In exceptional circumstances,
Accent Color's technical support group will assist Xerox and IBM
to resolve unusual maintenance situations, should the need arise,
via 7-day/24-hour telephone coverage. In addition, Xerox and IBM
will also provide training for their internal organizations and
end users. To support this activity, Accent Color has undertaken
training course development and will provide a limited number of
initial training classes to the education and training
organizations of Xerox and IBM.

Customers

The Company has entered into agreements with Xerox, covering both
Xerox's High End Systems Printing Group and its Production
Publishing Systems Group (which markets the DocuTech family of
products), and with IBM. The Company has also entered into a
memorandum of understanding with Oce. Under these arrangements,
Xerox, IBM and Oce intend to market, distribute and support
Truecolor Systems under their respective brand names. These
agreements are significant in several respects. First, according
to Dataquest, Xerox (excluding its DocuTech systems), IBM and Oce
accounted for approximately 80% of the high-speed, black-on-white
printers sold in the U.S. during 1994 and 1995. Second, the
Company's products are designed to be fully integrated with
certain hardware and supporting software products marketed by
Xerox, IBM and Oce. Third, Accent Color expects that market
acceptance of its Truecolor Systems will be accelerated since
sales and service will be provided by the large, well-established
sales and service organizations of Xerox, IBM and Oce.

Xerox Corporation.  In February 1996, the Company and Xerox, on
behalf of itself and its international affiliates, Rank Xerox
Limited, Fuji Xerox Co., Ltd. and Xerox Canada, Inc., entered
into a Product Development and Distribution Agreement (the "Xerox
Agreement"). The Xerox Agreement has a three-year term with
successive 12-month renewals unless one party gives six months
notice not to renew. The Xerox Agreement will allow the Company
to leverage what it believes is the largest sales and service
operation in the digital printing industry. Xerox's High End
System Printing Group has a major market position for cut sheet,
high-speed printers. The Company has been informed that Xerox's
Production Publishing Systems Printing Group intends to utilize
Truecolor Systems to provide spot color printing to the
Production Publishing market segment. During the initial term of
the agreement, Xerox is obligated to purchase all of its
requirements for consumables (standard and custom color wax-based
inks) and spare parts from the Company. If the Company is unable
to perform its obligations under the agreement, after a cure
period, the Xerox Agreement affords Xerox certain backup
manufacturing rights, provided that, once the loan from Xerox
(see below) has been paid in full, Xerox would be required to pay
a royalty to the Company for the right to manufacture the
systems. The Xerox Agreement also requires the Company to warrant
its products against manufacturing defects for 90 days after
initial installation.

In addition to the Xerox Agreement, the Company has entered into
a loan agreement with Xerox which provides for advancements of up
to $3.0 million based on the achievement of certain milestones
and subject to certain conditions, of which approximately $2.35
million was outstanding as of December 31, 1996 (the "Xerox
Loan"). The Xerox Agreement contains clauses imposing limitations
on the Company's right to develop cut sheet systems for a third
party as long as the Xerox Loan is outstanding or for the initial
term of the Xerox Agreement whichever term is longer. In
addition, as long as the Xerox Loan is outstanding or for the
initial term of the Xerox Agreement whichever term is longer,
Xerox will enjoy certain exclusive distribution rights with
respect to the sale of the Truecolor 135 and any other cut sheet
Truecolor Systems for use with printers with speeds of 30 pages
per minute or more, or copiers with speeds of 50 copies per
minute or more.

International Business Machines Corporation.  IBM's products are
used in corporate data centers and other high-speed printing
applications. In April 1996, the Company and IBM entered into a
Product Purchase Agreement (the "IBM Agreement"). This agreement
is for a term of three years with IBM having the right to renew
it for two additional one-year terms. The Company has been
informed that Truecolor Systems will be IBM's first product
targeted at spot color applications in high-speed printing. The
integration of color into IBM's AFP (Advanced Function Printing)
protocol and the use of the Truecolor System as an integrated
post-processing device attached to the IBM 3900 high-speed, black-
on-white printer are expected to be marketed worldwide by IBM's
international operations.

Under the IBM Agreement, IBM has committed to purchase
consumables from the Company for one year from the date of
general availability of Truecolor Systems to IBM customers and,
if certain conditions concerning competitive pricing are met,
thereafter as well. The IBM Agreement also requires the Company
to warrant its products against manufacturing defects for 90 days
after initial installation. Furthermore, under the IBM Agreement,
the Company has agreed to provide spare parts for its products to
IBM at prices which will yield a monthly parts cost per Truecolor
System not to exceed a specified amount. If the Company is unable
to perform its obligations under the agreement, after a cure
period, the IBM Agreement affords IBM certain backup
manufacturing rights, including the right to manufacture, or have
a third party manufacture, the Company's Truecolor Systems. This
right to manufacture is limited to the specific types of units
not properly delivered and may be terminated if the Company is
thereafter able to deliver the units in question in compliance
with the terms of the IBM Agreement. In consideration of
favorable payment terms, including the payment of a 20% deposit
upon orders, the Company has granted to IBM a second priority
lien against the Company's inventory in an amount not to exceed
the total deposits received.

Oce Printing Systems USA, Inc.  In 1996, Oce van der Grinten
N.V., purchased the high-speed printing systems business from
Siemens Nixdorf Informationssysteme AG. At that time, the Company
had already established an initial relationship with Siemens
Nixdorf Printing Systems L.P. to provide Truecolor Systems for
Siemens' high-speed printing products. In October 1996, the
Company entered into a memorandum of understanding with Oce. The
Company is currently negotiating a definitive contract for the
development and production of Truecolor Systems to be integrated
with Oce's Printing Systems.

Backlog

The Company measures backlog based on purchase orders for
Truecolor Systems, consumables and spare parts that have not yet
been shipped. A substantial amount of the Company's backlog can
be modified or canceled prior to 30 days before shipment without
penalty, except for the recovery of the Company's actual costs.
Accordingly, the Company believes that backlog cannot be
considered a meaningful indicator of future financial
performance. As of December 31, 1996, the Company's backlog was
approximately $3.1 million.

Competition

The Company believes there is no other product currently marketed
that is capable of cost-effectively printing variable data in
multiple standard or custom colors with the functionality of
existing high-speed, black-on-white printers. At the present
time, there exist digital, low-speed color printers, offset color
presses and high-speed printers that can print in only one color
at a time.

Suppliers to the market compete on the basis of speed, print
quality, functionality, reliability, cost per page and color
variety. The Company competes, in significant part, on the basis
of advanced proprietary technology in the areas of paper
handling, ink jet color printing and interface software which
allows the Company's products to print variable data, in multiple
standard or custom colors at high speeds. Products or product
improvements based on new technologies could be introduced by
other companies with little or no advance notice.

Competition in the markets for the Company's products is highly
fragmented. The Xerox 4890 (a similar product is also marketed by
Xerox as the DocuTech 390HC) is a spot color printer which prints
in black and one color per job (out of a limited palette). It is
capable of printing 92 pages per minute but does not offer custom
colors. BESTE Bunch Systems markets a color offset press used as
a downstream add-on to Oce or IBM high-speed, black-on-white
printers. While it is capable of providing color logos, it does
not print variable data, requires a longer time to set up and
requires specialized skills. The use of this offset press also
requires additional processes of negative production and plate
making. Fully installed, the footprint can exceed 30 square feet,
making it impractical for many existing data center
installations. In addition, there are production full process
color systems available which operate at print speeds of up to 70
pages per minute, including the Xeikon DCP-1 and the Xerox
DocuColor 40. These systems have relatively high print costs per
page and operate at much lower speeds than typical production
printing requires, making them impractical for high-speed print
jobs.

In addition to direct competition from other firms utilizing high-
speed color technologies, there exists potential direct
competition from firms improving technologies used in low-speed
to medium-speed color printers and indirect competition from
firms producing pre-printed forms. Manufacturers of high-speed,
black-on-white printers may also, in time, develop comparable or
more effective color capability within their own products which
may render the Company's products obsolete.

Intellectual Property

The Company's ability to compete effectively will depend, in
part, on the ability of the Company to maintain the proprietary
nature of its technology. The Company relies, in part, on
proprietary technology, know-how and trade secrets related to
certain aspects of its principal products and operations. To
protect its rights in these areas, the Company generally requires
its OEM customers, its suppliers and its employees to enter into
nondisclosure agreements. On February 11, 1997, the U.S. Patent
and Trademark Office granted a patent with respect to an initial
patent application relative to the mechanical design of the
Company's paper handling and color printing system, which form
the core of the Truecolor Systems. In addition, the Company has
filed applications for two additional patents relative to certain
enhancements of Truecolor Systems. The Company has also filed
foreign patent applications seeking patent protection in several
foreign countries.

The Company has an exclusive right to supply products which
include Spectra's ink jet printheads to print color on the black-
on-white output from specified high-speed printers marketed by
Xerox, IBM, Oce and certain other parties. To the extent that wax-
based inks and ink jet printheads purchased from Spectra are
covered under patents or licenses, the Company relies on
Spectra's rights under such patents and licenses and Spectra's
willingness and ability to enforce its patents and maintain its
licenses.

Employees

As of March 14, 1997, the Company employed 131 individuals, of
whom 57 employees were engaged in engineering and research and
development, 37 employees in manufacturing and operations, 11
employees in marketing and service efforts, four employees in
quality assurance, and 22 employees were working in an
administrative capacity. In addition, the Company had also
engaged ten independent contractors, of which five were engaged
in engineering and research and development, four in
manufacturing and operations and one in administration. The
Company's employees are not represented by a collective
bargaining organization, and the Company has never experienced a
work stoppage. The Company believes that its relationship with
its employees is good.

Item 2.  Properties

The Company's facilities are located at 800 Connecticut Boulevard
in East Hartford, Connecticut and presently consist of
approximately 69,000 square feet. The Company believes that these
facilities will meet the Company's needs for the next 12 months.
The Company leases this facility under a lease that expires on
December 31, 2000.

Item 3.  Legal Proceedings

The Company is not a party to any material legal proceedings.

Item 4.  Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders during
the fourth quarter of fiscal 1996.

PART II

Item 5.  Market for Registrant's Common Stock and Related
Stockholder Matters

Since the Company's initial public offering on December 18, 1996,
the Company's Common Stock has traded on the Nasdaq National
Market under the symbol "ACLR." The table below sets forth the
per share quarterly high and low bid prices of ACLR common stock
for the year ended December 31, 1996.

COMMON STOCK INFORMATION
                   1996
             High         Low
Fourth       $9           $8 1/4
Quarter

As of the close of business on March 14, 1997, the closing price
of Accent Color common stock was $8 3/4.

The Company has never declared or paid cash dividends on its
Common Stock. The Company currently intends to retain any
earnings for use in its business and does not anticipate paying
any cash dividends on its Common Stock in the foreseeable future.
As of March 14, 1997, there were approximately 186 stockholders
of record.


Item 6.  Selected Financial Data

<TABLE>
<CAPTION>
                          For the period                                     For the period
                          from inception                                     from inception
                          (May 21, 1993)                                     (May 21, 1993)
                          through December                                   through December
                          31,               For the year ended December 31,  31,

                                   1993           1994      1995      1996         1996
<S>                              <C>            <C>       <C>       <C>          <C>
Statement of
Operations Data:
Sales                            $-             $-        $-        $-           $-
Costs and expenses:
Costs of production              -              -         -             1,272         1,272
Research and development               19            805      3,051     6,932        10,808
Marketing, general and
administrative                         26            336      1,003     4,394         5,759
Related party
administrative expense           -              -                80        25           105
                                       45          1,142      4,134    12,623        17,944
Other (income)expense:
Interest expense                 -                    12         83       656           751
Interest income                  -              -         -              (113)         (113)
Subtotal Other(income) expense   -                    12         83       543           638
Net loss before extraordinary
item                                  (45)        (1,154)    (4,217)  (13,166)      (18,582)

Extraordinary item:
Loss on early extinguishment
of debt, net of income taxes
of nil                           -              -         -              (573)         (573)

Net Loss                             $(45)       $(1,154)   $(4,217) $(13,739)      (19,155)

Pro forma net loss per common
share:
Loss before extraordinary
item                                                           (.66)    (1.85)
Extraordinary item                                                -     (0.08)
Net loss                                                       (.66)    (1.93)

Pro forma weighted average
common shares outstanding                                  6,163,341 6,956,066

Other Data:
Number of prototype and pre-
production units shipped         -              -                  3        12            15
Units in backlog
(as of period end)               -              -         -                 29            29

</TABLE>

<TABLE>
<CAPTION>
                                                  December 31,
                                    1993        1994        1995        1996
Balance Sheet Data:
<S>                                <C>        <C>           <C>       <C>
Cash and cash equivalents          $-             $165          $1    $20,289
Working capital (deficit)             (24)         (86)     (1,862)    18,189
Total assets                            1          246         728     26,951
Short-term debt                    -          -                 50      1,000
Long-term debt, less current
portion                            -          -              2,020      1,272
Total shareholders'
equity (deficit)                      (24)         (57)     (3,164)    19,345

</TABLE>

Item 7.  Management's Discussion and Analysis of Financial
Condition and Results of Operations

The following discussions should be read in conjunction with the
section titled "Business-Current Developments" and in light of the
circumstances detailed therein.

Overview

Accent Color was formed in 1993 initially to develop a high-
speed, color printer to attach to a Xerox 4135 or Xerox 4635 cut
sheet, high-speed, black-on-white production printer. Development
and testing of a prototype began in January 1994 and was first
announced at the On-Demand Trade Show (a major printing industry
trade show) in May 1994. In November 1994, a "proof-of-concept"
Truecolor System was shown at the Xplor International Global
Electronic Document Systems Conference ("Xplor") (the primary
production printing industry trade show). After Xplor in November
1994, IBM approached the Company and requested that the Company
develop a version of its Truecolor System to work in conjunction
with the IBM 3900 continuous form production printing system.

During 1995, the Company began negotiations with Xerox, IBM and
Siemens Nixdorf Printing Systems USA, Inc. (which was acquired by
an affiliate of Oce in 1996) to enter into formal development
relationships. During the same period, the Company accelerated
its engineering and development activities as its efforts were
focused on designing and building the next generation prototypes
which were demonstrated at Xplor in November 1995 in the Xerox,
IBM and Accent Color exhibits and in the Xerox DocuTech Print
Center.

During 1996, the Company was focused on refining the Truecolor
System design and preparing for the commencement of commercial
production in the first half of 1997. In February 1996, a Product
Development and Distribution Agreement was signed with Xerox, and
in April 1996, the Company entered into a Product Purchase
Agreement with IBM. At Xplor in October 1996, the Company
demonstrated its Truecolor Systems, as well as certain
enhancements planned for production in 1997.

Pursuant to the Xerox Agreement and IBM Agreement, Xerox and IBM
are expected to submit purchase orders for shipments of
production systems approximately four to six months prior to the
expected shipment date. The Company expects most orders will be
shipped within four months of the receipt of purchase orders. As
a result, the Company believes that backlog cannot be considered
a meaningful indicator of future financial performance. Revenue
is expected to be recognized upon customer acceptance.

Accent Color also sells related consumables and spare parts.
Currently, the only consumables sold by the Company are wax-based
inks, which it acquires from Spectra. The sale of consumables is
expected to generate recurring revenue which the Company believes
will continue to increase as the installed base and usage of
Truecolor Systems increase. Accent Color does not expect to
derive significant revenue from maintenance of installed
Truecolor Systems because maintenance typically will be provided
by its OEM customers.

Accent Color expenses all research and development costs as they
are incurred, including costs associated with the manufacture of
prototypes. Accent Color produced the proof-of-concept and
prototype Truecolor Systems principally during 1994, 1995 and the
first six months of 1996, which resulted in significant research
and development expenses for those periods. In July 1996, the
Company began manufacturing pre-production Truecolor Systems for
delivery to customers. As a result, it began to allocate to costs
of production the manufacturing and other expenses associated
with the manufacture of pre-production Truecolor Systems.

Accent Color's marketing, general and administrative expenses
have increased to support the Company's anticipated revenue
growth and manufacturing activities. In 1996, in anticipation of
the production and sale of Truecolor Systems, the Company
expanded its accounting and other administrative functions to
support its manufacturing activities. The Company's strategy is
to distribute its products solely through its OEM customers.
Accordingly, marketing expense is attributable primarily to the
development and support of the OEM customer relationships and is
anticipated to be lower, in both dollar amounts and as a
percentage of revenue, than it would be if the Company
established and maintained a direct sales force. The Company also
incurs marketing expenses in connection with product promotional
activities and certain indirect marketing activities in
conjunction with its OEM customers. As a result, the Company
believes that marketing, general and administrative expenses will
continue to increase.

As of December 31, 1996, the Company had approximately $15.9
million in federal net operating loss carryforwards which may be
utilized by the Company to offset any taxable profits in future
periods. These carryforwards expire in years 2008 through 2011.
In December 1994 and December 1996, changes in ownership of the
Company occurred which limit the annual amount of certain federal
net operating loss carryforwards which may be used by the
Company.

Results of Operations

Year Ended December 31, 1996 Compared to Year Ended December 31,
1995.  The Company recognized no revenue for the years ended
December 31, 1996 and 1995. During 1996, the Company's efforts
were directed at designing, developing, testing and manufacturing
prototype and pre-production systems. During 1995, the Company's
efforts were directed at designing, developing, testing and
manufacturing prototype systems only.

Costs of production of $1,272,000 incurred during 1996 consist of
the start-up manufacturing expenses related to the Company's
preparation for commercial production of its Truecolor Systems.

Research and development expenses primarily consist of the cost
of personnel and equipment needed to conduct the Company's
research and development efforts, including manufacturing
prototype systems. Research and development expenses for 1996
increased by $3.9 million, or approximately 127%, to $6.9 million
from $3.0 million for 1995. This increase in research and
development expenses reflects additional expenses associated with
the development, manufacturing and testing of prototype systems,
the increase in engineering and production personnel, and
upgrades and enhancements for pre-production systems. Research
and development expenses were offset by $300,000 and $614,000 for
1996 and 1995, respectively, resulting from customer payments for
prototype units.

Marketing, general and administrative expenses primarily consist
of (i) the marketing cost in connection with product promotional
activities and certain indirect marketing activities in
conjunction with the Company's OEM customers and (ii) general and
administrative costs related to the salaries of the Company's
executive, administrative and financial personnel, and associated
costs. Marketing, general and administrative expenses for 1996
increased by $3.4 million to $4.4 million from $1.0 million for
1995. This increase in marketing, general and administrative
expenses was primarily attributable to the hiring of additional
service, marketing and administrative personnel to support the
Company's anticipated revenue growth and manufacturing
activities.

Related party administrative expense reflects financial advisory
fees paid to an investment banker who was a director of the
Company. The Company had related party administrative expense
of $25,000 and $80,000 for 1996 and 1995, respectively.

Interest expense for 1996 increased by $573,000 to $656,000 from
$83,000 for 1995. This increase in interest expense for 1996 was
primarily attributable to increased indebtedness outstanding in
1996 resulting from the issuance of debentures in October 1995,
the issuance of debentures in February 1996, the issuance of
short term notes in October 1996, and borrowings under the Xerox
Loan beginning in 1996. Interest income for 1996 was $113,000,
and the Company had no interest income for 1995.

Year Ended December 31, 1995 Compared to Year Ended December 31,
1994.  The Company generated no revenue for 1995 and 1994.

Research and development expenses for 1995 increased by $2.2
million to $3.0 million from $805,000 for 1994. This increase in
research and development expenses for 1995 primarily reflects
additional expense associated with the development, manufacturing
and testing of prototype systems and the related increase in
research and development personnel. Research and development
expenses were offset by $614,000 and $0 for 1995 and 1994,
respectively, resulting from customer payments for prototype
units.

Marketing, general and administrative expenses for 1995 increased
by $664,000 or approximately 198% to $1.0 million from $336,000
for 1994. This increase in marketing, general and administrative
expenses was primarily the result of adding personnel as the
Company expanded overall operations and support functions.

Related party administrative expense was $80,000 for 1995 and $0
for 1994, reflecting payment of financial advisory fees to an
investment banker who was a director of the Company.

Interest expense for 1995 increased by $71,000 to $83,000 from
$12,000 for 1994. Interest expense in 1995 related to the
issuance of certain debentures in October 1995. Interest expense
in 1994 related to the issuance of certain debentures in April
and August 1994. The Company had no interest income for 1995 and
1994.

Liquidity and Capital Resources

The Company's need for funding has increased from period to
period as it has continued its research and development
surrounding Truecolor System, continued its research and
development activities for enhancement of Truecolor Systems,
increased its capital expenditures on equipment and commenced
production of Truecolor System.  To date, the Company has
financed its operations through customer payments, borrowings and
sale of equity securities.

Through December 31, 1996, the Company has received $2.5 million
from the delivery of seven prototype and eight pre-production
systems to customers; net proceeds of $7.9 million from
borrowings and the sale of debt securities and net proceeds of
$35.9 million from the sale of equity securities.  Of the net
equity proceeds, $24.4 million was raised in the Company's
initial public offering in December 1996 and the balance of $11.5
million was raised through the private placement of equity
securities.

At December 31, 1996, the Company's primary source of liquidity
was cash and cash equivalents totaling $20.3 million.

Operating activities consumed $12.5 million in cash in 1996
compared to $2.6 million in 1995. The increase is attributable to
an increase in the net loss of the Company and an increase in
inventories as the Company purchased parts for commercial units.
This was partially offset by an increase in accounts payable,
customer deposits and deferred revenue.

Capital expenditures increased $2.1 million from $500,000 for the
year ended December 31, 1995 to $2.6 million for the year ended
December 31, 1996. The major components of this increase include
assets acquired as a result of the Company's expansion to support
the Company's anticipated revenue growth and manufacturing
activities, engineering development equipment and test equipment,
and the costs associated with the relocation of the Company
operations. The Company has currently budgeted approximately $2.1
million for capital expenditures for the year ending December 31,
1997. The Company's currently planned capital expenditures are
primarily for expansion of the Company's development and
manufacturing capabilities.

Under the Spectra Agreement, the Company is obligated to pay
$250,000 per calendar quarter through 1997 in order to maintain
certain exclusive rights. After 1997, the Company must continue
to make quarterly payments to continue to benefit from the
development efforts funded by Spectra's customers. The Company
currently anticipates making such payments over the term of the
Spectra Agreement.

The Company believes that its existing cash resources,
availability under the Xerox Loan and cash from operations, will
be sufficient for the financing of its operations, repayment of
indebtedness and capital expenditures through the third quarter
of 1997. Based on the Company's current operating plan, the
Company's primary requirements for cash through 1997 will be for
the repayment of indebtedness, the expansion of its
manufacturing, development, engineering and customer support
capabilities, the commercial production of additional Truecolor
Systems and the further development and enhancement of the
Company's products. As part of its expansion during 1997, the
Company currently expects (i) to hire approximately 50 additional
manufacturing, development, engineering and customer support
employees, (ii) to acquire inventories of modules, components and
wax-based inks for Truecolor Systems and (iii) to invest in
additional printhead manufacturing capacity. The Company's
currently planned research and development activities are focused
on developing (i) wider ink jet printheads for greater color
coverage per page, (ii) advanced paper handling functionality
particularly duplex printing (the ability to print on both sides
of the page) and (iii) higher resolution ink jet printheads.

Factors Affecting Future Results

The foregoing Management's Discussion and Analysis and discussion
of the Company's business contains various statements which are
forward looking in nature.  Such forward-looking statements are
made pursuant to the "safe harbor" provisions of Section 21E of
the Securities Exchange Act of 1934, as amended, which were
enacted as part of the Private Securities Litigation Reform Act
of 1995.

The Company cautions readers that the following important
factors, among others, in some cases have affected and, in the
future, could materially adversely affect the Company's actual
results and cause the Company's actual results to differ
materially from the results expressed in any forward-looking
statements made by, or on behalf of, the Company.

Limited Operating History; History Of Losses; Uncertainty Of
Future Financial Results.  The Company was formed in May 1993 and
is a development stage company with a limited operating history.
The Company incurred losses in each year of existence and
incurred a net loss of $13,739,000 for the year ended December
31, 1996. As a result of these losses, as of December 31, 1996,
the Company had an accumulated deficit of $19,155,000. It is
expected that quarterly net losses will continue through at least
the fourth quarter of 1997 and that the Company will incur a net
loss for 1997. In order to support the anticipated growth of its
business, the Company expects to expand its manufacturing and
administrative capabilities, technical and other customer support
functions, and research and product development activities. The
anticipated increase in the Company's operating expenses caused
by this expansion could have a material adverse effect on the
Company's operating results if revenue does not increase at an
equal or greater rate.

Uncertainty Of Market Development And Acceptance Of Accent
Color's Products.  The digital, high-speed printing market has
traditionally relied mainly on black-on-white print. There can be
no assurance that a market for high-speed, variable data color
printing will develop or achieve significant growth. The failure
of such market to develop or achieve significant growth would
have a material adverse effect on the Company's future results.

Dependence On A Limited Number Of Customers; Revenue
Concentration.  The Company anticipates that sales of its
Truecolor Systems and consumables to a limited number of OEM
customers will account for substantially all of the Company's
revenue. As of December 31, 1996, the Company had contracts with
only two customers, Xerox and IBM, and was negotiating a contract
with a third customer, Oce. There can be no assurance that these
customers will purchase a significant volume of the Company's
products.

Dependence On Third Party Marketing, Distribution And Support.  A
significant element of the Company's marketing strategy is to
form alliances with third parties for the marketing and
distribution of its products. To this end, the Company has
entered into the Xerox Agreement and the IBM Agreement, and is
currently negotiating an agreement with Oce, for the marketing,
distribution and support of the Company's products. There can be
no assurance that (i) the Company will be successful in
maintaining such alliances or forming and maintaining other
alliances, (ii) the Company will be able to satisfy its
contractual obligations with its OEM customers or (iii) the
Company's OEM customers will devote adequate resources to market
and distribute the Company's products successfully.

Dependence On Spectra.  The Company is dependent on Spectra, a
wholly owned subsidiary of Markem Corporation ("Markem"), as its
sole source supplier of ink jet printheads and the hot melt, wax-
based inks included in and used by Truecolor Systems. Spectra has
agreed to supply the Company with ink jet printheads and wax-
based inks under a supply agreement, subject to a number of
conditions. The Company's reliance on Spectra involves several
risks, including a potential inability to obtain an adequate
supply of required printheads or inks, and reduced control over
the quality, pricing and timing of delivery of these items. To
date, Spectra has only produced a limited number of ink jet
printheads. Accordingly, there can be no assurance that Spectra
will be able to provide a stable source of supply of these
components.

Spectra has granted the Company the exclusive right to supply
products including Spectra printheads in the worldwide market for
printing color on the output from specified high-speed, black-on-
white printers from Xerox, IBM, Oce and certain other parties
through December 31, 2002. To maintain such exclusive rights, the
Company is required to purchase a minimum number of ink jet
printheads each year, to continue to purchase its wax-based ink
requirements from Spectra and to make certain payments. There can
be no assurance that the Company will be able to meet the minimum
purchase requirements or make these payments.

Dependence On Major Subcontractors And Suppliers.  The Company
relies on subcontractors and suppliers to manufacture,
subassemble and perform certain testing of some modules and parts
of Truecolor Systems. The Company currently performs the final
assembly and testing of various Truecolor System components and
of each complete Truecolor System, and the Company plans to
eventually outsource the full assembly and testing of Truecolor
Systems. There can be no assurance that subcontractors or
suppliers will meet the Company's price, quality, quantity and
delivery requirements or otherwise perform to the Company's
expectations.

Development Risks.  The Company's products are in various stages
of development, and no revenue has been recognized from the sale
of its products. The Company has developed and plans to market
new products and new applications of technology and, accordingly,
is subject to risks associated with such ventures. The Company
has delivered prototype and pre-production Truecolor Systems and
is entering the production phase for these systems. Truecolor
Systems are currently undergoing extensive testing by Xerox and
IBM. The future results of the Company must be considered in
light of the expenses and delays frequently encountered in
connection with the operation of a new business, the development
and production of new products and the development of practical
production techniques for the products.

Limited History Of Product Manufacturing.  To date, the Company
has manufactured only limited quantities of Truecolor Systems for
evaluation in commercial applications. To be profitable, the
Company's products must be manufactured in sufficient quantities
and at acceptable costs. Future production in sufficient
quantities may pose technical and financial challenges for the
Company, and no assurance can be given that the Company will be
able to reduce its current product costs to an acceptable level
and to make a successful transition to high-volume production.

Significant Fluctuations In Quarterly Results.  The Company's
quarterly operating results are likely to vary significantly in
the future based upon a number of factors. Historically, there
has existed seasonality in the purchase of major equipment such
as the Company's Truecolor Systems, with many companies
experiencing higher sales in the fourth calendar quarter.
Furthermore, a significant portion of the Company's operating
expenses are relatively fixed in the short term, and planned
expenditures are based on sales forecasts. Sales forecasts by the
Company's OEM customers are generally not binding. If revenue
levels are below expectations, operating results may be
disproportionately affected because only a small portion of the
Company's expenses vary with revenue in the short term, which
could have a material adverse effect on the Company's future
results.

Need For Additional Funding For Operating And Capital
Requirements.  Based on its current operating plan, the Company
anticipates that additional financing will be required for the
financing of its operations, debt repayments and capital
expenditures during the fourth quarter of 1997. There can be no
assurance that, if and when needed, additional financing will be
available, or available on acceptable terms.

Product Warranty; Limit On Prices For Spare Parts.  The Company
warrants its Truecolor Systems to be free of defects in
workmanship and materials for 90 days from installation at the
location of the end user. Furthermore, under the Xerox and IBM
Agreement, the Company has agreed to provide spare parts for its
products at prices which will yield a monthly parts cost per
Truecolor System not to exceed a specified amount. There can be
no assurance that the Company will not experience warranty claims
or parts failure rates in excess of those which it has assumed in
pricing its products and spare parts. The Company has not
produced or shipped any production versions of its Truecolor
Systems. Consequently, the Company currently has no experience
with the volume or nature of warranty claims relating to its
products.

Dependence On A Single Product Line.  The Company anticipates
that it will derive substantially all of its revenue in the
foreseeable future from sales of Truecolor Systems, related
consumables and spare parts. If the Company is unable to generate
sufficient sales of Truecolor Systems due to market conditions,
manufacturing difficulties or other reasons or if purchasers of
Truecolor Systems were to purchase wax-based ink or spare parts
from suppliers other than the Company, there could be a material
adverse effect of the Company's future results.

Rapid Technological Change Requires Ongoing Product Development
Efforts.  The high-speed printer industry is characterized by
evolving technology and changing market requirements. The
Company's future success will depend on a number of factors,
including its ability to continue to develop and manufacture new
products and to enhance existing products. Consequently, the
Company considers the enhancement of its products to be a
development priority. Certain enhancements of its existing
products are required by the Company's contracts with Xerox and
IBM. Additionally, in a new and evolving market, customer
preferences can change rapidly and new technology could render
existing technology obsolete. Failure by the Company to respond
adequately to changes in its target market, to develop or acquire
new technology or to successfully conform to market preferences
could have a material adverse effect on future results of the
Company.

Limited Protection Of Proprietary Technology And Risks Of Third-
Party Claims.  The Company's ability to compete effectively will
depend, in part, on the ability of the Company to maintain the
proprietary nature of its technology. The Company relies, in
part, on proprietary technology, know-how and trade secrets
related to certain aspects of its principal products and
operations. To protect its rights in these areas, the Company
generally requires its OEM customers, suppliers, employees and
independent contractors to enter into nondisclosure agreements.
In addition, the Company has received a patent, and has filed
additional U.S. and foreign patent applications to protect
technology which the Company believes is proprietary. There can
be no assurance, however, that these agreements, arrangements
or patents will provide meaningful protection for the Company's
trade secrets, know-how or other proprietary information. A
failure of such protection could have a material adverse effect
on future results of the Company.

Difficulties In Managing Rapid Growth.  Since inception, the
Company has experienced rapid growth, which has placed a
significant strain on the Company's (i) administrative,
operational and financial personnel, (ii) management information
systems, (iii) manufacturing operations and (iv) other resources.
Certain of the Company's senior managers have recently joined the
Company, and the Company may increase the number of its senior
managers. In addition, the Company's future development plans
anticipate additional management, operating and financial
resources. The failure to manage growth effectively may have a
material adverse effect on the Company's future results.

Competition.  The Company expects to encounter varying degrees of
competition in the markets in which it intends to compete.
Products or product improvements based on new technologies could
be introduced by other companies with little or no advance
notice. Manufacturers of high-speed, black-on-white printers may
also, in time, develop comparable or more effective color
capability within their own products which may render the
Company's products obsolete. There can be no assurance that the
Company will be able to compete against future competitors
successfully or that competitive pressures faced by the Company
will not have a material adverse effect upon its future results.

Risks Associated With International Operations.
The Company intends to have its products marketed worldwide and
therefore may enter into contracts with foreign companies.
International sales are subject to certain inherent risks,
including unexpected changes in regulatory requirements, tariffs
and other trade barriers, fluctuations in exchange rates,
government controls, political instability and potential adverse
tax consequences. There can be no assurance that these factors
will not have a material adverse effect on the Company's future
results.

Need to Develop and Maintain an Alternate Distribution Program for
the Truecolor 135.
  Because of the decision by Xerox not to distribute the cut-sheet
version of the Truecolor System as a Xerox product, the Company will
need to establish and maintain an alternate distribution program for
the Truecolor 135.  The Company currently has limited direct marketing
and sales capabilities and has begun discussions with Xerox concerning
alternate distribution programs including the possibility of becoming
a Xerox "finishing partner."  There can be no assurance that the
Company will be able to establish or maintain an effective direct
marketing and sales program for the Truecolor 135 or successfully
conclude a "finishing partner" arrangement with Xerox.

Inflation
Although certain of the Company's expenses increase with general
inflation in the economy, inflation has not had a material impact
on the Company's financial results to date.

Item 8.  Financial Statements and Supplementary Data


REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders
  of Accent Color Sciences, Inc.

     In our opinion, the accompanying balance sheets and the
related statements of operations, of cash flows and of changes in
shareholders' equity (deficit) present fairly, in all material
respects, the financial position of Accent Color Sciences, Inc.
(a development stage company) at December 31, 1996 and 1995, and
the results of its operations and its cash flows for the years
ended December 31, 1996, 1995 and 1994, and for the period from
inception (May 21, 1993) through December 31, 1996, in conformity
with generally accepted accounting principles.  These financial
statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial
statements based on our audits.  We conducted our audits of these
statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for the
opinion expressed above.
     The Company's plans for funding future operations are
described in Note 1.


Price Waterhouse LLP

Hartford, Connecticut
February 26, 1997, except as to Note 13,
 which is as of March 27, 1997

<TABLE>
<CAPTION>

                      ACCENT COLOR SCIENCES, INC.
                     (a development stage company)
                            BALANCE SHEETS

                                             December 31,
                                        1996              1995
<S>                                 <C>          <C>
Assets
Current assets:
     Cash and cash equivalents      $20,288,535        $967
     Accounts receivable                 13,669           -
     Due from officer (Note 11)          15,802           -
     Inventories (Notes 2 and 4)      3,362,252           -
     Prepaid expenses and other
     assets (Note 2)                    511,633       8,857

          Total current assets       24,191,891       9,824

Fixed assets, net (Notes 2 and 3)     2,727,220     488,060
Other assets, net (Note 2)               32,354     230,231

          Total assets              $26,951,465    $728,115

Liabilities and Shareholders'
Equity (Deficit)

Current liabilities:
     Notes payable (Note 5)         $         -    $ 50,000
     Current maturities of long-
     term debt (Note 5)               1,000,000           -
     Obligations under capital
     leases (Note 8)                     47,555           -
     Accounts payable                 1,935,108     916,517
     Accrued expenses                   683,198     334,820
     Due to officers (Note 11)                -      20,711
     Customer advances and deposits
     (Note 2)                         1,387,400     550,000
     Deferred revenue (Note 2)          950,000           -

          Total current liabilities   6,003,261   1,872,048

Obligation under capital leases
(Note 8)                                123,621           -
Long-term debt, net of discount
(Note 5)                              1,271,638   1,945,117
Other long-term liabilities (Notes
7 and 8)                                208,002      74,911

          Total non-current
          liabilities                 1,603,261   2,020,028

Commitments and contingencies
(Notes 8, 11 and 12)

Shareholders' equity (deficit)
(Note 6):
     Preferred stock, no par value,
     500,000 shares authorized,
     0 and 324,360 shares issued
     and outstanding                          -   1,430,634
     Common stock, no par value,
     25,000,000 shares authorized,
     10,139,775 and 2,094,840
     shares issued and outstanding   38,499,490     821,291
     Deficit accumulated during the
     development stage              (19,154,547) (5,415,886)

          Total shareholders'
          equity (deficit)           19,344,943  (3,163,961)

          Total liabilities and
          shareholders' equity
          (deficit)                 $26,951,465  $  728,115

</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

<TABLE>
<CAPTION>

                   ACCENT COLOR SCIENCES, INC.
                  (a development stage company)
                    STATEMENTS OF OPERATIONS
                                                              For the
                                                              period from
                                                              inception
                                                              (May 21, 1993)
                            For the year ended December 31,   through December
                              1996       1995        1994     31, 1996
<S>                        <C>         <C>         <C>        <C>
Sales                               $-         $-          $-           $-
Costs and expenses:
    Costs of production      1,272,357          -           -    1,272,357
    Research and
    development              6,932,017  3,050,534     805,357   10,806,908
    Marketing, general
    and administrative       4,393,380  1,002,869     336,368    5,759,015
    Related party
    administrative
    expense (Note 11)           25,000     80,260           -      105,260


                            12,622,754  4,133,663   1,141,725   17,943,540

Other (income) expense:
     Interest expense          655,730     83,292      11,808      750,830
     Interest income          (113,126)         -           -     (113,126)


                               542,604     83,292      11,808      637,704

Net loss before
extraordinary item         (13,165,358)(4,216,955) (1,153,533) (18,581,244)

Extraordinary item:
     Loss on early
     extinguishment
     of debt, net of
     income taxes
     of nil                  (573,303)          -           -     (573,303)

Net loss                   (13,738,661)(4,216,955) (1,153,533) (19,154,547)


Unaudited pro forma net
loss per common share
(Note 2):
     Net loss before
     extraordinary item         (1.85)       (.66)
     Extraordinary item          (.08)           -
     Net loss                   (1.93)       (.66)


Unaudited pro forma
weighted average common
shares outstanding
(Note 2)                     6,956,066  6,163,341

</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

<TABLE>
<CAPTION>
                   ACCENT COLOR SCIENCES, INC.
                  (a development stage company)
                    STATEMENTS OF CASH FLOWS
                                                                    For the period
                                                                    from inception
                                                                    (May 21, 1993)
                                For the year ended December 31,     through December
                                  1996        1995        1994      31, 1996
<S>                           <C>          <C>         <C>          <C>
Cash flows from operating
activities:
Net loss                      (13,738,661) (4,216,955) (1,153,533)  (19,154,547)
Adjustments to reconcile
net loss to net cash used in
operating activities:
      Depreciation and
      amortization                974,184     111,127       3,116     1,088,499
      Write-off of deferred
      offering costs                    -      47,264           -        47,264
      Options granted for
      services                          -      18,400           -        18,400
      Debenture issued for
      services                          -      50,000           -        50,000
      Loss on disposal of
      fixed assets                 82,691       9,378           -        92,069
      Conversion of accrued
      interest to common
      stock                       231,147           -           -       231,147
      Extraordinary loss on
      extinguishment of debt      573,303           -           -       573,303
Changes in assets and
liabilities:
      Accounts receivable and
      amount due from officer     (29,471)          -           -       (29,471)
      Inventories              (3,362,252)          -           -    (3,362,252)
      Prepaid expenses and
      other assets               (502,776)     (3,731)     (5,126)     (511,633)
      Accounts payable and
      accrued expenses          1,366,969     793,990     261,557     2,440,785
      Due to officers             (20,711)     (2,357)     16,986             -
      Customer advances and
      deposits                    837,400     550,000           -     1,387,400
      Deferred revenue            950,000           -           -       950,000
      Other long-term
      liabilities                 133,091      74,911           -       208,002

      Net cash used in
      operating activities    (12,505,086) (2,567,973)   (877,000)  (15,971,034)

Cash flows from investing
activities:
Proceeds from sale of fixed
assets                              5,524           -           -         5,524
Purchases of fixed assets      (2,611,891)   (525,718)    (27,857)   (3,166,004)
Cost of patent                    (28,534)     (1,207)     (3,359)      (33,100)

       Net cash used in
       investing activities    (2,634,901)   (526,925)    (31,216)   (3,193,580)

Cash flows from financing
activities:
  Payment of capital lease
  obligations                     (71,953)          -           -       (71,953)
  Net proceeds from issuance
  of debentures                 3,049,768   1,789,333           -     4,839,101
  Proceeds from issuance of
  warrants                        261,482      56,631           -       318,113
  Net proceeds from issuance
  of common stock              33,869,508           -      29,500    33,920,808
  Proceeds from exercise of
  warrants                              -     694,960           -       694,960
  Net proceeds from issuance
  of preferred stock through
  offerings and conversion
  of debt                               -     340,060   1,090,574     1,430,634
  Increase (decrease) in
  notes payable                   (50,000)     50,000           -             -
  Increase in long-term debt    2,223,750           -           -     2,223,750
  Deferred offering costs               -           -     (47,264)      (47,264)
  Repayment of debentures      (3,855,000)          -           -    (3,855,000)

       Net cash provided by
       financing activities    35,427,555   2,930,984   1,072,810    39,453,149

       Net increase
       (decrease) in cash
       and cash equivalents    20,287,568    (163,914)    164,594    20,288,535

       Cash and cash
       equivalents at
       beginning of
       period                         967     164,881         287             -

       Cash and cash
       equivalents at
       end of period          $20,288,535        $967    $164,881   $20,288,535

Supplemental disclosure
  Cash paid for:
  Interest                        246,509           -           -       246,509

   Non-cash investing
   activities (Note 8):
   Capital lease
   obligations of
   $243,129 were
   incurred during
   the year ended
   December 31, 1996,
   reflecting new
   equipment leases

</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

<TABLE>
<CAPTION>

                       ACCENT COLOR SCIENCES, INC.
                      (a development stage company)
          STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

                                                                     Deficit
                                                                     Accumulated
                                                                     During the
                           Common Stock         Preferred Stock      Development
                         Shares     Amount    Shares       Amount    Stage           Total
<S>                  <C>        <C>           <C>       <C>        <C>            <C>
Proceeds from sale        3,900     $21,800          -          $-           $-     $21,800
Net loss                      -           -          -           -      (45,398)    (45,398)
December 31, 1993         3,900      21,800          -           -      (45,398)    (23,598)
Stock split           1,751,100           -          -           -            -           -
Conversion of
debentures                    -           -     74,360     371,804            -     371,804
Proceeds from
sale                          -           -    160,000     643,770            -     643,770
Conversion of
promissory
notes                    42,000      50,000          -           -            -      50,000
Reclassification              -     (20,500)         -           -            -     (20,500)
Shares issued for
services                      -           -     15,000      75,000            -      75,000
Net loss                      -           -          -           -   (1,153,533) (1,153,533)

December 31, 1994     1,797,000      51,300    249,360   1,090,574   (1,198,931)    (57,057)

Proceeds from
sale                          -           -     75,000     340,060            -     340,060
Exercise of
warrants                297,840     694,960          -           -            -     694,960
Options granted
to service provider           -      18,400          -           -            -      18,400
Warrants issued
with debt                     -      56,631          -           -            -      56,631
Net loss                      -           -          -           -   (4,216,955) (4,216,955)

December 31, 1995     2,094,840     821,291    324,360   1,430,634   (5,415,886) (3,163,961)

Warrants issued
with debt                     -     138,032          -           -            -     138,032
Proceeds from
sale                  2,625,000   9,460,044          -           -            -   9,460,044
Warrants issued
with debt                     -     123,450          -           -            -     123,450
Proceeds from
initial public
offering              3,450,000  24,409,464          -           -            -  24,409,464
Conversion of
Series III
debentures              607,626   2,116,575          -           -            -   2,116,575
Conversion of
Preferred stock       1,362,309   1,430,634   (324,360) (1,430,634)           -           -
Net loss                      -           -          -           -  (13,738,661)(13,738,661)

December 31, 1996    10,139,775 $38,499,490          -          $- $(19,154,547)$19,344,943

</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                   ACCENT COLOR SCIENCES, INC.
                  (a development stage company)
                  NOTES TO FINANCIAL STATEMENTS

1. Formation And Operations Of The Company

Accent Color Sciences, Inc. (the "Company") was incorporated in
Connecticut in May 1993.  The Company was initially formed to
design, develop, test and manufacture high-speed, color printers
to attach to high-speed, black-on-white printers.  The Company is
considered a development stage company as defined in Statement of
Financial Accounting Standards No. 7.

Development and testing of a prototype began in January 1994,
with a "proof-of-concept" system developed in November 1994.
During 1995, the Company began negotiations with major original
equipment manufacturers ("OEMs") to enter into formal development
relationships. At the same time, the Company accelerated its
engineering and development activities as its efforts were
focused on designing and building the next generation prototypes
which were completed in 1995.  Also in 1995, the Company and IBM
entered into a letter of intent for the development of three
prototype systems, and in August 1995, the Company and Xerox
entered into a memorandum of understanding for the development of
two prototype systems.  In November 1995, the Company and Oce
(then Siemens Nixdorf Printing Systems) executed a memorandum of
understanding for the development of two prototype systems.
Through December 31, 1996, the Company had received $1.5 million
for the delivery of prototype machines.  Through December 31,
1996, $914,000 had been offset against research and development
expense.

Management believes that the existing cash on hand at December
31, 1996, and the availability under the Xerox loan, combined
with anticipated financing will be adequate to fund the Company's
planned cash requirements through the end of 1997.  In the event
the Company is unsuccessful in achieving the anticipated
increased sales volume outlined in the 1997 forecast or the
Company fails to obtain additional financing, the Company would
expect to reduce costs and expenses through reduction in its
planned expansion, including a reduction in 1997 planned
inventory increases, capital expenditures and research and
development increases.

2. Summary Of Significant Accounting Policies

Significant accounting policies followed in the preparation of
these financial statements are as follows:

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 reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those estimates.

Revenue Recognition

Revenue is recognized upon customer acceptance.  Until such time
that the Company has adequate information to estimate future
returns and customer acceptance, revenue will be deferred from
the date of product shipment until final customer acceptance,
which will be at the end of the warranty period.  As of December
31, 1996, the Company has deferred revenue of $950,000 related to
products shipped.

Cash and Cash Equivalents

Cash and cash equivalents include cash on deposit with banks, as
well as investments with original maturities of less than 90
days.

Inventories

Inventories are carried at the lower of cost or market,
determined by the first-in, first-out method.  Cost of material
purchased for specific research and development projects has been
charged to research and development expense as incurred.
Inventories purchased for the production of printer systems which
will be sold to customers have been capitalized.

Fixed Assets

Fixed assets are stated at cost and are depreciated on a straight-
line basis over the estimated useful lives of the assets, which
are between three and five years.  Leasehold improvements are
amortized over the shorter of the term of the lease or the useful
life of the asset.

Patent

Patent costs of $33,100 and $4,566 at December 31, 1996 and 1995,
respectively, are capitalized as incurred and are amortized on a
straight-line basis over the shorter of the legal term or
estimated useful life.  Accumulated amortization was $746, $338
and $99 at December 31, 1996, 1995 and 1994,  respectively.

Deferred Debt Issuance Costs

Included in other assets are deferred debt issuance costs of $0
and $278,157 at December 31, 1996 and 1995, respectively.  Debt
issuance costs were amortized using the effective interest method
over the term of the related debt until its conversion to common
stock on December 23, 1996 (Note 6).  Amortization expense was
$136,088, $52,154 and $0 for the years ended December 31, 1996,
1995 and 1994, respectively.  The unamortized cost remaining at
conversion was included as a reduction in the carrying value of
the related common stock.

Income Taxes

The Company uses the liability method of accounting for income
taxes, as set forth in Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes."  Under this
method, deferred tax assets and liabilities are recognized for
the expected future tax consequences of temporary differences
between the carrying amounts and the tax basis of assets and
liabilities.

Research and Development Expenditures

Research and development expenditures are charged to expense as
incurred

Customer Advances and Deposits

     Customer Advances Under Research and Development Agreements

Amounts advanced pursuant to customer sponsored research and
development agreements are recognized as a liability until
certain obligations (as defined in the agreements, including
delivery and acceptance of certain test units) under the
agreements have been met.  Advances of $600,000 and $550,000 have
been deferred as of December 31, 1996 and 1995, respectively.
When the obligations are met, the amounts are offset against
research and development expense.  Amounts offset against
research and development expense were $300,000, $614,000 and $0
for the years ended December 31, 1996, 1995 and 1994,
respectively.

     Customer Deposits

Based on the Company's sales contracts with certain customers,
the Company is entitled to a percentage of the sales price upon
receipt of certain firm purchase orders. Customer deposits of
$787,400 and $0 have been deferred at December 31, 1996 and 1995,
respectively.

Stock-Based Compensation

The Company applies APB Opinion 25 and related interpretations in
accounting for its Stock Incentive Plan.  Additional disclosures
required under Financial Accounting Standard No. 123 "Accounting
for Stock-Based Compensation," are included in Note 7, Stock
Incentive Plan.

Unaudited Pro Forma Financial Data

The 8.00% convertible subordinated debentures (the "Series III
Debentures"), including accrued interest (see Note 5), converted
to Common Stock upon the closing of the initial public offering
of Common Stock and the Series A Convertible Voting Preferred
Stock (the "Series A Preferred Stock," see Note 6) converted to
Common Stock upon the effectiveness of the initial public
offering of Common Stock.  The unaudited pro forma net loss per
common share data included in the statements of operations for
the years ended December 31, 1995 and 1996 gives effect to this
conversion as if the shares were outstanding at the beginning  of
the respective periods, and as if the interest, amortization of
discount and amortization of deferred financing expenses
associated with the Series III Debentures were not incurred.

In determining pro forma weighted average common shares
outstanding, common share equivalents are excluded from the
computation as their effect is anti-dilutive, except that,
pursuant to Securities and Exchange Commission Staff Accounting
Bulletin No. 83, Common Stock options and warrants issued and
Common Stock, convertible debt and convertible preferred stock
sold in the twelve months preceding the initial filing date of
the public offering and through the effective date have been
included in the calculation as if outstanding for 1995 and for
the period January 1, 1996 through September 30, 1996 using the
treasury stock method and at the initial public offering price of
$8.00 per share.

3.   Fixed Assets

<TABLE>
<CAPTION>
                                        December 31,
                                      1996       1995
     <S>                          <C>          <C>
     Equipment                      $717,819   $172,160
     Computers                       790,791    164,435
     Furniture and fixtures          417,251     95,850
     Leasehold improvements          795,230     54,563
     Purchased software              319,381     57,725
     Capital leases - equipment      243,129          -

                                   3,283,601    544,733
     Less: accumulated
     depreciation and
     amortization                    556,381     56,673

                                  $2,727,220   $488,060

</TABLE>

Amortization expense for capital leases amounted to $42,454, $0
and $0 for the years ended December 31, 1996, 1995 and 1994,
respectively.  Depreciation expense was $485,191, $53,586 and
$3,017 for the years ended December 31, 1996, 1995 and 1994,
respectively.

4. Inventories

Inventories consist of the following:

<TABLE>
<CAPTION>
                                        December 31,
                                      1996       1995
       <S>                        <C>                <C>
       Raw materials and
       components                 $2,242,756         $-
       Work-in-process               607,245          -
       Finished goods                512,251          -

                                  $3,362,252         $-

</TABLE>

5. Debt

The following is a summary of the Company's debt:

<TABLE>
<CAPTION>

                          Stated
                         Interest                  December 31,
                          Rate      Maturity      1996     1995
       <S>                <C>      <C>        <C>        <C>
       Notes payable      10.00%           -          $-    $50,000
       Series III
       debentures, net
       of unamortized
       discount of
       $0 and $51,483      8.00%           -           -  1,945,117
       Long-term debt,
       net of unamortized
       discount of
       $78,362 and $0      8.00%   1997-1998   2,271,638          -

                                               2,271,638  1,995,117

       Less: current
       portion                                 1,000,000     50,000

                                              $1,271,638 $1,945,117

</TABLE>

Convertible Subordinated Debentures

On January 25, 1994, the Company issued $200,030 of 8.00%
convertible subordinated debentures (the "Series I Debentures").
On August 15, 1994, the Company issued an additional $160,000 of
the 8.00% convertible subordinated debentures (the "Series II
Debentures").  On September 20, 1994, all of the debentures,
including accrued interest of $11,774, were converted into 74,360
shares of the Company's Series A Preferred Stock at a rate of
$5.00 per share.

Notes Payable

The Company issued a $50,000 note payable in May 1995. The note
was paid in January 1996.  Interest on the note accrued at
10.00%.

Series III Debentures

On October 31, 1995, the Company completed an offering of 8.00%
convertible subordinated debentures (the "Series III Debentures")
for net proceeds of $1,668,443.  During 1995, the Company
converted $50,000 of accounts payable to Series III Debentures.
The Series III Debentures were convertible into Common Stock at a
rate of $3.67 per share.  The carrying value of the debentures,
plus accrued interest of $231,147, converted into 607,626 common
stock shares upon the closing of the initial public offering on
December 23, 1996.

At the time of issuance, each holder of a Series III Debenture
received a detachable warrant (the "Series III Warrants") to
purchase Common Stock for an amount of shares equal to the Series
III Debentures' principal amount divided by the conversion rate.
Total Series III Warrants issued were exercisable into 544,554
common shares at an exercise price of $3.67 per share and expire
on August 15, 1997. The Series III Warrants were valued at
$56,631, and accordingly this amount was allocated to Common
Stock with an equivalent discount recorded on the Series III
Debentures. The discount was amortized over the term of the
debentures until its conversion to common stock on December 23,
1996.  Amortization expense was $30,226, $5,148 and $0 for the
years ended December 31, 1996, 1995 and 1994, respectively.  The
unamortized discount remaining at conversion was included as a
reduction in the carrying value of the related common stock.

Series IV Debentures

During February 1996, the Company completed a private placement
of subordinated debentures (the "Series IV Debentures") for net
proceeds of $405,000, of which $240,000 was issued to a director
of the Company.  The Series IV Debentures are non-convertible and
bear interest at 8.00%. The Series IV Debentures were due on
August 31, 1996, and were repaid by the Company on August 29,
1996.  In addition, each holder received detachable warrants (the
"Series IV Warrants") to purchase Common Stock equal to the
Series IV Debentures' principal amount divided by $3.67.  The
Series IV Warrants were valued at $0.11 per warrant.
Accordingly, $11,782 was allocated to Common Stock, with an
equivalent discount recorded on the Series IV Debentures.  The
entire discount was amortized in the year ended December 31,
1996.  The Series IV Warrants issued are exercisable into 110,454
shares of Common Stock at an exercise price of $3.67 per share
and expire on February 28, 2001.

Xerox Loan

In December 1995, the Company received a commitment from a
customer to lend the Company up to $3,000,000 subject to the
successful completion of an OEM production agreement and
satisfactory negotiations of loan terms.  On January 2, 1996, the
Company received $500,000 under this commitment.  On February 16,
1996, the Company and the customer executed an OEM production
agreement and on February 28, 1996, the Company and the customer
finalized the terms of the loan.  The loan provides for a maximum
commitment of $3,000,000 through April 1, 1998, at an annual
interest rate of 8.00%.  As part of the inducement to extend such
commitment, the Company agreed to issued detachable warrants up
to a maximum of 375,000 shares of Common Stock at an exercise
price of $3.67 per share, of which the warrant to purchase
125,000 shares expires on February 28, 1999 and the warrant to
purchase 250,000 shares expires on April 19, 1999.

As of December 31, 1996, the Company has received $2,350,000 in
loan proceeds and issued detachable warrants for 375,000 shares
of Common Stock.  Accordingly, $126,250 was allocated to Common
Stock with an equivalent discount recorded on the note.
Amortization expense was $47,888, $0 and $0 for the years ended
December 31, 1996, 1995 and 1994, respectively.

Principal installments are due as follows: $500,000 on July 1,
1997; $500,000 on October 1, 1997; $1,000,000 on January 1, 1998;
and $350,000 on April 1, 1998.

Private Financing

On October 11, 1996, the Company completed a private financing
(the "Interim Financing") resulting in net proceeds to the
Company of $2,780,000 upon the issuance of the Company's
discounted notes in an aggregate principal amount of $3,450,000
bearing interest at a rate of 8.70% per annum (excluding debt
discount).  The Interim Financing was repaid upon the closing of
the initial public offering on December 23, 1996.

At the time of issuance, holders of notes of the Interim
Financing received warrants to purchase an aggregate of 45,000
shares of Common Stock at an exercise price of $8.00 per share.
The Interim Financing Warrants were valued at $123,450, and
accordingly this amount was allocated to Common Stock with an
equivalent discount recorded on the notes. The discount was
amortized over the term of the debentures until its
extinguishment on December 23, 1996.  Amortization was $159,107,
$0 and $0 for the years ended December 31, 1996, 1995 and 1994,
respectively.  The unamortized discount remaining at
extinguishment is included in the extraordinary loss due to early
extinguishment of the debt.

Related deferred debt issuance costs of  $220,000 were
capitalized and were amortized using the effective interest
method over the term of the debt until its extinguishment on
December 23, 1996.  Amortization expense was $61,040, $0 and $0
for the years ended December 31, 1996, 1995 and 1994,
respectively.  The unamortized cost remaining at extinguishment
is included in the extraordinary loss due to early extinguishment
of the debt.

6. Shareholders' Equity

Capital Stock Transactions

On September 15, 1994, the following changes in the Company's
capital structure occurred: (i) the Company's Board of Directors
declared a 450-for-1 split of the Common Stock, effective upon
the amendment of the Company's Certificate of Incorporation, (ii)
the authorized number of common shares was increased to 1,000,000
and (iii) the par value of the Common Stock was changed from $.01
to no par value.

In January 1995, the Company's Board of Directors amended the
articles of incorporation to increase the authorized shares of
Common Stock from 1,000,000 to 2,000,000. In April 1996, under
the consent of the Board of Directors, the number of authorized
shares of Common Stock was increased from 2,000,000 shares to
25,000,000 shares.

On October 8, 1996, as authorized by the Board of Directors, the
Company split its Common Stock 3-for-1. All shares and per share
conversion amounts (unless otherwise indicated) in the
accompanying financial statements have been restated to reflect
the 3-for-1 split.

Series A Preferred Stock

From a class of preferred stock with 500,000 authorized shares,
the Company's Board of Directors designated a series consisting
of 300,000 of such shares as Series A Preferred Stock. The Series
A Preferred Stock is nonredeemable, convertible and voting, with
no par value. The holders shall be entitled to receive
noncumulative cash dividends when and as declared by the Board of
Directors. In the event of any voluntary or involuntary
liquidation of the Company, the preferred shareholders shall be
entitled to all unpaid dividends at the time of liquidation and
$5.00 per share as a liquidating distribution prior to any
liquidating distribution to the common shareholders.

In 1994, pursuant to a private placement offering (the "Preferred
Stock Offering"), the Company issued 160,000 shares of Series A
Preferred Stock, with net proceeds of $643,770.  In February
1995, the Board of Directors increased the authorized shares of
Series A Preferred Stock from 300,000 shares to 350,000 shares.
In 1995 the Company issued an additional 75,000 shares of Series
A Preferred Stock, with net proceeds of $340,060.

In September 1994, the Company issued to a third party vendor
15,000 shares of Series A Preferred Stock as partial payment for
services rendered pursuant to a development agreement between the
third party vendor and the Company.  The fair market value of the
stock was recorded as $75,000.

Upon effectiveness of the registration statement filed pursuant
to the initial public offering of the Company on December 18,
1996,  the 324,360 outstanding shares of Series A Preferred Stock
converted at a rate of 4.2 common shares for one share of Series
A Preferred Stock for a total of 1,362,309 common stock shares.

Warrants

As of December 31, 1996, the Company had outstanding Common Stock
purchase warrants for an aggregate of 1,192,490 shares. Stock
purchase warrants for 246,714 common shares expiring August 15,
1997 are held by the Series III Debenture holders. Stock purchase
warrants for 110,454 common shares expiring February 28, 2001 are
held by the Series IV Debenture holders. A stock purchase warrant
for 375,000 common shares expiring on February 28, 1999, is held
by a noteholder. Stock purchase warrants for 300,000 common
shares expiring on June 28, 2001 are held by a placement agent
and were issued in connection with the June 1996 private
placement offering. Additionally, at the time of the initial
public offering, outstanding Series A Preferred Stock purchase
warrants for 23,500 shares converted at a rate of 4.2 common
stock warrants for one Series A Preferred Stock warrant for a
total conversion to 98,700 Common Stock purchase warrants.  These
warrants are held by a placement agent, of which warrants to
purchase 33,600 shares expire in September 2000 and warrants to
purchase 65,100 expire on February 22,  2001.  An additional
32,433 and 554 common stock purchase warrants were granted in
1996 to a former advisor of the Company as settlement for a
compensation claim.  These warrants expire on June 27, 2001 and
October 10, 2001, respectively.

The following summarizes the activity of outstanding warrants:

<TABLE>
<CAPTION>

                               Shares        Exercise
                               under         price       Warrants
                               warrant       (per share) Exercisable
       <S>                   <C>          <C>             <C>
       Outstanding at
       December 31, 1994             -               $-           -

       Granted to
        employees              112,500             3.67
       Granted to
        Series III debenture
        holders                544,554             3.67
       Exercised              (297,840)            2.33

       Outstanding at
       December 31, 1995       359,214            $3.67     359,214

       Granted to
       Series IV debenture
       holders                 110,454             3.67
       Granted to noteholder   375,000             3.67
       Granted to service
       providers                28,635             3.67
       Granted to
       placement agent         300,000             4.00
       Conversion of
       preferred stock
       warrants                 98,700             1.31
       Granted to
       former advisor in
       settlement               32,433             4.40
       Granted to
       former advisor in
       settlement                  554             8.80
       Warrants
       surrendered            (112,500)            3.67

       Outstanding at
       December 31, 1996     1,192,490    $1.31 - $ 8.80  1,192,490

</TABLE>

In early December 1995, in order to raise cash for operations,
the Company reduced the exercise price of the Series III
detachable warrants from $3.67 per share to $2.33 per share (a
revised fair market value as of such date) for a limited period
of time (through December 15, 1995).  Warrant holders exercised
297,840 shares of Common Stock for $694,960.

Common Stock

In June 1996, pursuant to a private placement offering, the
Company issued 2,625,000 shares of Common Stock for $4.00 per
share. This offering resulted in net proceeds of $9,460,044 to
the Company.

On December 23, 1996, the Company completed an initial public
offering pursuant to which 3,450,000 Common Stock shares were
issued at $8.00 each resulting in net proceeds of $24,409,464 to
the Company.

The Company has reserved shares of Common Stock as follows:

<TABLE>
<CAPTION>

                                              December 31,
                                           1996         1995
<S>                                      <C>         <C>
Conversion of Series III debentures,
including accrued interest                       -     564,958
Conversion of Series A Preferred stock           -   1,362,312
Exercise of Common Stock warrants        1,192,490     359,214
Exercise of Series A Preferred Stock
warrants                                         -      98,700
Exercise of options                      1,500,000     750,000


                                         2,692,490   3,135,184
</TABLE>

7. Stock Incentive Plan

In January 1995, the Company's Board of Directors adopted and
approved the 1995 Stock Incentive Plan (the "Plan") for
directors, officers, key employees and other persons.  The Plan
permits the granting of incentive stock options, non-statutory
stock options, stock appreciation rights and restricted stock
awards to purchase up to 300,000 shares of Common Stock.  In
April 1996, the number of shares increased to 1,500,000. Such
shares have been authorized and reserved.

Initially, options vested 20% each year, so that the options, or
any unexercised portion thereof, would be fully exercisable after
a period of five years following the date of their grant.
Pursuant to the April 9, 1996 Board of Directors meeting, the
original vesting period of five years was modified to three years
with options vesting 33% each year following the date of their
grant. All options previously granted are subject to this
modification. Certain options granted in 1996 (347,250 included
in the table below) are exercisable immediately upon their
issuance. Stock options under the Plan have terms ranging from
five to ten years.

The 1995 Stock Incentive Plan activity is summarized as follows:

<TABLE>
<CAPTION>
                        For the year ended      For the year ended
                        December 31, 1996       December 31, 1995
                                   Weighted                Weighted
                                   Average                 Average
                                   Exercise                Exercise
                       Shares      Price        Shares     Price
<S>                    <C>           <C>        <C>        <C>
Outstanding at
beginning of period      301,500     $2.58            -      $-
     Granted           1,016,850      3.80      328,500    2.47
     Exercised                 -         -            -       -
     Canceled            (37,500)     3.20      (27,000)   1.19
Outstanding at period
end                    1,280,850      3.53      301,500    2.58

Options exercisable
at period end            439,000      3.41            -       -

Weighted average fair
value of options
granted during the
period                     $2.87                  $1.62

</TABLE>

The following summarizes additional information about stock
options outstanding at December 31, 1996:

<TABLE>
<CAPTION>
           Options Outstanding                Options Exercisable

                       Weighted
           Number      Average                Number
           Outstanding Remaining    Weighted  Exercisable  Weighted
Exercise   at December Contractual  Exercise  at December  Exercise
Prices     31, 1996    Life         Price     31, 1996     Price
<C>       <C>            <C>         <C>       <C>         <C>
$1.19       154,500      7.17        $1.19      71,500     $1.19
 3.67       496,500      7.68         3.67     177,750      3.67
 4.00       629,850      7.94         4.00     189,750      4.00

          1,280,850                            439,000

</TABLE>

Had compensation expense been recognized based on the fair value
of the options at their grant dates, as prescribed in Financial
Accounting Standard No. 123, the Company's net loss and net loss
per share would have been as follows:

<TABLE>
<CAPTION>

                                 Year ended      Year ended
                                 December 31,    December 31,
                                 1996            1995
<S>                              <C>             <C>
Net loss:
     As reported                 $(13,738,661)   $(4,216,955)
     Pro forma under FAS 123     $(14,716,233)   $(4,420,205)

Pro forma net loss per share
(unaudited):
     As reported                       $(1.93)         $(.66)
     Pro forma under FAS 123           $(2.07)         $(.70)

</TABLE>

The fair value of each option grant is estimated on the date of
grant using the Black-Scholes option pricing model with the
following assumptions used for grants during the applicable
period: dividend yield of 0% for both periods; risk-free interest
rates ranging from 5.26% to 6.96% for options granted during the
year ended December 31, 1996 and 5.47% to 7.80% for options
granted during the year ended December 31, 1995; expected
volatility factors ranging from 45% to 50% for the year ended
December 31, 1996 and 40% to 45% for the year ended December 31,
1995; and an expected option term ranging from 5 to 10 years for
both periods.

Compensation of approximately $550,725 has been attributed to
Common Stock options granted in August 1996. Compensation expense
will be recognized over the three year vesting period, of which
$60,993 was recognized as of December 31, 1996.

8. Leases

Operating Leases

At December 31, 1996, the Company was committed under operating
leases for equipment, vehicles and office space with initial
terms of more than one year.  The vehicle leases contain a fair
value purchase option at the end of the lease term.  During 1996,
the Company entered into a new facilities lease extending through
July 2000.  Effective January 1, 1997, the space under the
facilities lease was expanded and the time extended through
December 2000.  The additional cost related to this amendment is
included in the table below.  The facilities lease agreement
provides for escalation of the lease payments over the term of
the lease, however, rent expense is recognized using the straight-
line method.

Minimum lease payments under the noncancelable leases are as
follows:

          1997                      $635,661
          1998                       749,950
          1999                       811,819
          2000                       811,819
          2001                             -

      Total minimum obligations    3,009,249

Rent expense related to operating leases was $468,862 in 1996,
$108,800 in 1995 and $11,315 in 1994.

Capital Lease Obligations

The Company is obligated under capital leases for certain office
equipment which expire on various dates through 2000. Future
minimum lease payments under these leases are as follows:

           1997                       $67,326
           1998                        65,712
           1999                        59,699
           2000                        18,206
           2001                             -

          Total minimum obligations   210,943
          Less: amount representing
          interest                     39,767

          Present value of minimum
          lease payments              171,176
          Less: current portion        47,555

                                  $   123,621

9. Income Taxes

Deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>

                                            December 31,
                                          1996        1995

      <S>                               <C>        <C>
      Gross deferred tax assets:
           Carryforwards:
                Research tax credits      $314,000   $157,000
                Net operating losses     6,517,000  2,133,000
           Other assets                  1,164,000     55,000

      Gross deferred tax assets          7,995,000  2,345,000

      Gross deferred tax liabilities       (44,000)    (9,000)

      Valuation allowance               (7,951,000)(2,336,000)

                                         $       -  $       -

</TABLE>

The Company has provided a valuation allowance for the full
amount of deferred tax assets in excess of deferred tax
liabilities since the realization of these future benefits cannot
be reasonably assured as of the end of each related period. If
the Company achieves profitability, the deferred tax assets may
be available to offset future income taxes.

At December 31, 1996, the Company had approximately $15.9 million
of federal net operating loss carryforwards that expire in years
2008 through 2011, approximately $15.9 million of state net
operating loss carryforwards that expire in years 1998 through
2001 and research and development tax credit carryforwards of
approximately $314,000 that expire in years 2009 through 2011.

As defined in the Internal Revenue Code, certain ownership
changes limit the annual utilization of federal net operating
loss and tax credit carryforwards.  During 1996, the Company
experienced such an ownership change which limits the amount of
federal net operating loss carryforwards and research tax credits
that can be utilized in any one taxable year.  At December 31,
1996 the approximate Section 382 annual limitation is $4.6
million.

10. Disclosure About Fair Value Of Financial Instruments

The carrying amount of cash, accounts receivable, amounts due
from officer, prepaid expenses, notes payable, current maturities
of long-term debt, accounts payable, accrued expenses, amounts
due to officers, customer advances and deposits and deferred
revenue approximates fair value because of the short-term nature
of those instruments.

The fair value of long-term debt is estimated based upon
management estimates and current interest rates offered to the
Company on similar debt. The estimated fair value of the
Company's debt (see Note 5) approximates its carrying value as of
December 31, 1996 and 1995.

11. Related Party Transactions

In connection with certain debt and equity offerings described in
Notes 5 and 6, the Company engaged Knickerbocker Securities, Inc.
("Knickerbocker"), whose president is a shareholder and was a
director of the Company during 1994 and a portion of 1995, as
their investment banker. Amounts attributed to debt and equity
offerings in 1996 and 1995  for Knickerbocker's services were
$150,000 and $214,126, respectively.

The Company entered into an agreement with Knickerbocker on
September 20, 1994, in which Knickerbocker would advise the
Company with regard to financial matters and methods of financing
for a three year period commencing on January 1, 1996 for a fee
of $1,000 per month. In March 1996, the Company terminated this
agreement as well as all previous agreements with Knickerbocker.
Amounts expensed relating to the advisory agreement and the
termination of all existing agreements were $25,000 and $80,260
for the year ended December 31, 1996 and 1995, respectively.
On July 31, 1994, two officers of the Company loaned $50,000 to
the Company in exchange for promissory notes. The notes were
converted into 42,000 shares of the Company's Common Stock on
December 16, 1994.

Amounts recorded as "Due to officers" represent compensation owed
to officers for services rendered to the Company. Amounts
recorded as "Due from officer" represent an advance for
relocation costs.

A member of the Company's Board of Directors is a partner with
the Company's primary legal firm.

In connection with the Interim Financing (see Note 5), a director
and a director's spouse purchased $250,000 and $100,000 of the
notes, and received 3,750 and 1,500 of the related warrants,
respectively.

12. Commitments And Contingencies

On January 8, 1996, the Company signed a seven year agreement
with a vendor for the supply of inks and printheads.  The
agreement provides the Company with worldwide rights, as defined.
The Company must pay the vendor royalties and license fees upon
achieving certain volume purchase levels.  The agreement also
includes certain exclusivity features which benefit the Company.
To maintain the exclusivity rights, quarterly payments of
$250,000 are required beginning January 1, 1996 and ending on
October 1, 1997, and the Company must purchase all ink and
printhead requirements from the vendor and purchase specified
minimum amounts each year.  The Company has the option to
terminate the exclusive rights leaving all other aspects of the
agreement unchanged.  Currently, it is the Company's intent to
maintain the rights.

Effective January 1994, the Company entered into employment
agreements with two of its executive officers reflecting a five
year term and a three year term with an automatic three year
renewal period, respectively. These agreements are subject to
termination by either party, and provide for salary continuation
and benefits for a specified period under certain circumstances
including a change in control (as defined) of the Company.  As of
December 31, 1996 and 1995, if all of the employees under
contract were to be terminated by the Company without cause (as
defined), the Company's liability would be approximately $400,000
and $440,000, respectively.

During 1996, the Company negotiated a product purchase agreement
with a major customer. In consideration of favorable payment
terms, including the payment of a 20% deposit upon orders, the
Company has granted a second priority lien against its inventory
up to an amount equal to deposits received.

13. Subsequent Events

On March 26, 1997, the Company was informed by Xerox that it decided
not to distribute the Truecolor 135 high-speed spot color printing system
as a Xerox product under the Company's distribution agreement with
Xerox.  The Company is currently reviewing alternate marketing and
distribution strategies to market the product directly to Xerox
end users.  As of December 31, 1996, the Company has a loan from
Xerox, deposits from Xerox and inventories specific to the Truecolor
135.  At this point, the Company is not able to determine the overall
impact of Xerox's decision not to distribute the product directly.


Item 9.  Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures

None.

PART III

Item 10.  Directors and Executive Officers of the Registrant

Information with respect to Directors may be found under the
caption "Election of Directors" on pages 2 and 3 of the Company's
Proxy Statement dated April 1, 1997, for the Annual Meeting of
Shareholders to be held May 9, 1997 (the "Proxy Statement"). Such
information is incorporated herein by reference.

The executive officers of Accent Color as of March 21, 1997 were
as follows:

      Name              Age   Position with the Company
Richard J. Coburn        65   Chairman of the Board
Norman L. Milliard       54   President and Chief Executive Officer
Patrick J. Pedonti       45   Vice President, Treasurer and Chief
                              Financial Officer
Martyn R. Jones          41   Vice President

Richard J. Coburn has been Chairman of the Board since May 1996
and cofounded the Company in May 1993. Mr. Coburn served as
President of the Company from May 1993 until May 1996 and served
as Chief Executive Officer of the Company from May 1993 until
August 1996.

Norman L. Milliard has been President of the Company since May
1996, has been Chief Executive Officer of the Company since
August 1996 and was elected a director of the Company in 1995.
Mr. Milliard served as Vice President of the Company from January
1994 until May 1996. Mr. Milliard joined the Company in January
1994.

Patrick J. Pedonti has been Vice President and Chief Financial
Officer of the Company since March 1997. Mr. Pedonti joined the
Company in March 1997.

Martyn R. Jones has been Vice President of the Company since May
1996. He served as Director of Marketing from November 1995 to
May 1996. Mr. Jones joined the Company in November 1995.


Item 11.  Executive Compensation

The information in the Proxy Statement set forth under the
captions "Executive Compensation" on pages 6 through 9 and
"Compensation of Directors" on page 3 is incorporated herein by
reference.


Item 12.  Security Ownership of Certain Beneficial Owners and
Management

The information set forth under the caption "Principal
Shareholders and Key Personnel" on page 5 of the Proxy Statement
is incorporated herein by reference.


Item 13.  Certain Relationships and Related Transactions

The information set forth under the caption "Certain
Transactions" on page 10 of the Proxy Statement is incorporated
herein by reference.

PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on
Form 8-K

(a)  Financial Statements and Schedules
   The financial statements as set forth under Item 8 of this
   report on Form 10-K are incorporated herein by reference.
   Financial statement schedules have been omitted since they
   are either not required, not applicable, or the information
   is otherwise included.

(b)  Reports on Form 8-K
   No reports on Form 8-K were filed during the last quarter of
   fiscal 1996.

(c)  Exhibit Listing

   Exhibit
    Number  Description
  3.1, 4.1  Restated Certificate of Incorporation of
            the Company.(1)
  3.2, 4.2  Bylaws of the Company, as amended.(1)
      10.1  Product Development and Distribution Agreement
            dated February 16, 1996 between the Company and
            Xerox Corporation.(1)
      10.2  Letter of Understanding dated July 2, 1996
            between the Company and Xerox Corporation
            supplementing the Product Development and
            Distribution Agreement.(1)
      10.3  Amendment to Product Development and
            Distribution Agreement between the Company and Xerox
            Corporation dated February 29, 1996.(1)
      10.4  Loan Agreement Promissory Note dated February
            29, 1996 between the Company and Xerox
            Corporation.(1)
      10.5  Product Purchase Agreement dated April 16, 1996
            between the Company and International Business
            Machines Corporation.(1)
      10.6  Letter Agreement supplementing Product Purchase
            Agreement between the Company and International
            Business Machines Corporation dated February 23,
            1996.(1)
      10.7  OEM Supply Agreement dated January 8, 1996
            between the Company and Spectra, Inc.(1)
      10.8  Amendment No. 1 to the OEM Supply Agreement
            dated July 12, 1996 between the Company and Spectra,
            Inc.(1)
      10.9  Lease Agreement dated February 16, 1996 between
            the Company John Hancock Mutual Life Insurance
            Company.(1)
     10.10  Memorandum of Understanding dated October
            10, 1996 between the Company and Oce van der
            Grinten, N.V.(1)
     10.11  Accent Color Sciences, Inc. 1995 Stock
            Incentive Plan.(1)
     10.12  Employment Agreement dated December 14,
            1993 between the Company and Norman L. Milliard.(1)
     10.13  Amendment No. 1 to Employment Agreement
            between the Company and Norman L. Milliard dated as
            of January 1, 1995.(1)
     10.14  Employment Agreement dated December 14,
            1993 between the Company and Richard J. Coburn.(1)
     10.15  Consulting Agreement dated August 2, 1994
            between the Company and Peter Teufel.(1)
     10.16  Consulting Agreement dated May 3, 1996
            between the Company and Raymond N. Smith.(1)
     10.17  Consulting Agreement Dated August 2, 1994
            between the Company and Klaus Werding.(1)
     10.18  Letter Agreement dated February 28, 1996
            between the Company and Pennsylvania Merchant Group
            Ltd.(1)
     10.19  Letter Agreement dated May 6, 1996 between
            the Company and Pennsylvania Merchant Group Ltd.(1)
     10.20  Termination Agreement dated August 20,
            1996 between the Company and Pennsylvania Merchant
            Group Ltd.(1)
     10.21  Termination Agreement dated March 29, 1996
            between the Company and Knickerbocker Securities,
            Inc.(1)
     10.22  Form of nondisclosure agreement between
            the Company and its employees.(1)
     10.23  Form of Registration Rights Agreement
            Relating to sale of Preferred Stock of the
            Company.(1)
     10.24  Form of Registration Rights Agreement
            Relating to sale of Series III Debentures of the
            Company.(1)
     10.25  Form of registration Rights Agreement
            Relating to warrants issued in connection with
            Series III Debentures of the Company.(1)
     10.26  Form of Registration Rights Agreement
            Relating to Warrants issued in connection with
            Series IV Debentures of the Company.(1)
     10.27  Form of Registration Rights Agreement
            Relating to sale of Common Stock of the Company.(1)
     10.28  Registration Rights Agreement Relating to
            Warrants issued by the Company to Xerox
            Corporation.(1)
     10.29  Form of Registration Rights Agreement
            Relating to Warrants issued pursuant to sale of
            Interim Notes.(1)
     11     Statement re: computation of per share
            earnings.
     24     Power of Attorney pursuant to which this
            Form 10-K has been signed on behalf of
            certain Directors.
     27     Financial Data Schedule
________________
     (1)  Incorporated by reference to Registration Statement 333-
       14043 on Form S-1.

Signatures

Pursuant to the requirements of Section 13 or 15(d) 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, in the City of East Hartford, State of
Connecticut, on March 25, 1997.

                                ACCENT COLOR SCIENCES, INC.


                                By               /s/ Norman L. Milliard
                                                     Norman L. Milliard
                                                     President and Chief
                                                     Executive Officer

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of Registrant and in the capacities indicated on March
25, 1997.


  /s/ Norman L. Milliard
      Norman L. Milliard
      President and Chief
      Executive Officer
      March 25, 1997
      (Principal Executive Officer)


  /s/ Patrick J. Pedonti
      Patrick J. Pedonti
      Vice President,
      Treasurer and
      Chief Financial
      Officer March 25, 1997
      (Principal Financial and Accounting Officer)


  /s/ Norman L. Milliard
      Norman L. Milliard
      Attorney-in-fact for:
      March 25, 1997


      Richard J. Coburn             Director
      Raymond N. Smith              Director
      Robert H. Steele              Director
      Peter Teufel                  Director
      Richard Hodgson               Director
      Willard F. Pinney, Jr.        Director