As Filed with the Securities and Exchange Commission on April 8, 1998
                              Registration No. 333-

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-1

                          REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933


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

               FLORIDA                                       59-2001203
               -------                                       ----------
(state or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)
                                451 Kennedy Road
                                Akron, Ohio 44305
                                 (330) 733-2841
    (Address, including zip code, and telephone number, including area code,
                  of Registrant's principal executive offices)

                             CHARLES M. STIMAC, JR.
                                    PRESIDENT
                                451 Kennedy Road
                                Akron, Ohio 44305
                                 (330) 733-2841
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                                 WITH A COPY TO:

                              Lee A. Albanese, Esq.
                            St. John & Wayne, L.L.C.
                               70 East 55th Street
                            New York, New York 10022

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.

If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ X ]





<PAGE>



                         CALCULATION OF REGISTRATION FEE


<TABLE>
<CAPTION>

                                                                                                         Proposed
                                                                              Proposed Maximum           Maximum          Amount of
                                                              Amount to be     Offering Price           Aggregate      Registration
Title of each Class of Securities to be Registered             Registered        Per Share           Offering Price          Fee
                                                              ------------    ----------------       --------------    -------------
<S>                                                        <C>                    <C>                <C>                  <C>
Common Stock, par value $.01 per share,                        257,500(1)(5)       $2.00(2)          $   515,000.00       $  156.06
Underlying Common Stock Purchase Warrants and Options           10,000(1)(5)       $3.00(2)          $    30,000.00       $    9.09
                                                                20,000(1)(5)      $3.375(2)          $    67,500.00       $   20.45
                                                               700,000(1)(5)       $3.50(2)          $ 2,450,000.00       $  742.42
                                                                30,000(1)(5)       $2.25(2)          $    67,500.00       $   20.45
                                                               300,000(1)(5)      $1.375(2)          $   412,500.00       $  124.99
                                                                40,000(1)(5)       $1.25(2)          $    50,000.00       $   15.15
                                                                10,000(1)(5)       $3.50(2)          $    35,000.00       $   10.61
                                                                90,000(1)(5)       $1.25(2)          $   112,500.00       $   34.09
                                                               100,000(1)(5)       $1.25(2)          $   125,000.00       $   37.88
                                                               381,000(1)(5)      $1.125(2)          $   428,625.00       $  129.89
                                                                80,000(1)(5)      $  .844            $    67,500.00       $   20.45
                                                               134,000(1)(5)       $1.25(2)          $   167,500.00       $   50.76
                                                             3,837,500(1)(5)       $1.25(2)          $ 4,796,875.00       $1,453.60

Common Stock, par value $.01 per share, issuable in            690,750(3)(5)      $1.453(6)          $ 1,003,659.75(6)    $  304.12
payment of dividends on Preferred Stock

Common Stock, par value $.01 per share, issuable upon        3,837,500(4)(5)       $1.00(2)          $ 3,837,500.00       $1,162.88
conversion of Preferred Stock

TOTAL                                                       10,518,250             -----             $14,166,659.75       $4,292.89

</TABLE>

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

(1)      Issuable upon exercise of the Warrants (as defined in the Prospectus).
(2)      The offering price per share is calculated pursuant to Rule 457(g).
(3)      Issuable in lieu of cash dividends payable on the Preferred Stock (as
         defined in the Prospectus).
(4)      Issuable upon conversion of the Preferred Stock (as defined in the
         Prospectus).
(5)      Pursuant to Rule 416, there are also registered hereby such additional
         indeterminate number of shares of Common Stock as may be issuable by
         reason of the anti-dilution provisions of such Warrants and Preferred
         Stock.
(6)      Estimated pursuant to Rule 457(c) solely for purposes of calculating
         the amount of the registration fee, based upon the average of the high
         and low prices reported on March 25, 1998 as reported on the NASDAQ
         Small Cap Market.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, AND ANY INFORMATION OR
REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS IS NOT AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, BY ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR THAT PERSON TO MAKE AN
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
UNDER THIS PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCE, CREATE ANY IMPLICATION THAT
THE INFORMATION IN THIS PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE OF THIS PROSPECTUS.

<PAGE>



                        ABC DISPENSING TECHNOLOGIES, INC
                              CROSS REFERENCE SHEET
                     PURSUANT TO REGULATION S-K, ITEM 501(B)

<TABLE>
<CAPTION>

            Item of Form S-1                                                  Prospectus Location
            ----------------                                                  -------------------
<S>    <C>                                               <C>
1.     Forepart of the Registration Statement and        Facing Page; Cross Reference Sheet; Outside Front Cover Page
       Outside Front Cover Page of Prospectus            of Prospectus

2.     Inside Front and Outside Back Cover Pages         Inside Front Cover Page of Prospectus
       of Prospectus

3.     Summary Information, Risk Factors, Ratio of       Risk Factors; Inapplicable as to Summary and Ratio of Earnings
       Earnings to Fixed Charges                         to Fixed Charges

4.     Use of Proceeds                                   Use of Proceeds

5.     Determination of Offering Price                   Inapplicable

6.     Dilution                                          Inapplicable

7.     Selling Security Holders                          Inapplicable

8.     Plan of Distribution                              Plan of Distribution

9.     Description of Securities to be Registered        Description of Capital Stock; Stock Price and Dividend Policy

10.    Interests of Named Experts and Counsel            Legal Matters, Experts

11.    Information with Respect to the Registrant

       (a)               Description of Business         Business

       (b)               Description of Property         Business

       (c)               Legal Proceedings               Business

       (d)               Dividends and Related           Dividend Policy
                         Stockholder Matters

       (e)               Financial Statements            Financial Statements and Financial Statement Schedules

       (f)               Selected Financial Data         Selected Financial Data

       (g)               Supplementary Financial         Inapplicable
                         Information

       (h)               Management's Discussions        Management's Discussions and Analysis of Financial Condition
                         and Analysis of Financial       and Results of Operations
                         Condition and Results of
                         Operations

       (i)               Changes in Accountants          Changes in Accountants

       (j)               Directors and Executive         Management
                         Officers

       (k)               Executive Compensation          Management

       (l)               Security Ownership              Security Ownership of Certain Beneficial Owners and
                                                         Management


</TABLE>

<PAGE>

PROSPECTUS


                        ABC DISPENSING TECHNOLOGIES, INC.

                        10,518,250 Shares of Common Stock

The securities of ABC Dispensing Technologies, Inc. (the "Company"), to which
this Prospectus relates (the "Securities"), include the following: 5,990,000
shares of the Company's common stock, $.01 par value per share ("Common Stock")
issuable by the Company (the "Warrant Shares") upon exercise of certain common
stock purchase warrants and options (collectively, the "Warrants"), 3,837,500
shares of Common Stock (the "Conversion Shares") issuable upon conversion of
shares of the Company's issued and outstanding 9% Convertible Cumulative
Redeemable Preferred Stock, Series A ("Preferred Stock") and 690,750 shares of
Common Stock issuable in payment of dividends on the Preferred Stock (the
"Dividend Shares").

The Securities being offered hereby by the Company are being offered to permit
the issuance of registered stock upon the exercise of the Warrants, conversion
of the Preferred Stock into Common Stock, and in payment of dividends on the
Preferred Stock. See "Plan of Distribution."

Additionally, this Prospectus has been prepared for use, with the prior consent
of the Company, by certain holders of the Warrants, who will acquire Warrant
Shares upon exercise of Warrants and who may wish to sell such shares in
transactions in which they may (because of their relationship to the Company) be
deemed to be underwriters within the meaning of the Act.

The Company's Common Stock is presently listed on the National Association of
Securities Dealers Automated Quotation ("NASDAQ") Small Cap Market System under
the symbol "ABCC." The average of the closing bid and asked price for the Common
Stock as reported by NASDAQ on March 25, 1998 was $1.485.

Other than the proceeds equal to the exercise price of the Warrants exercised,
the Company will receive no cash proceeds from the distribution of the
Securities offered hereby.

This Prospectus also relates to such additional shares of Common Stock which may
be issuable pursuant to the anti-dilution provisions of the Warrants and
Preferred Stock, which shares are being registered pursuant to Rule 416
promulgated under the Act.


                  SEE "RISK FACTORS" FOR CERTAIN MATTERS TO BE
                      CONSIDERED BY PROSPECTIVE INVESTORS.


         THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
         SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
         NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE COMMISSION
         PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
         REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

                  THE DATE OF THE PROSPECTUS IS APRIL 7, 1998



                                        1

<PAGE>



                                TABLE OF CONTENTS

Available Information.......................................................2
Risk Factors................................................................3
The Company.................................................................4
Use of Proceeds.............................................................4
Plan of Distribution........................................................5
Stock Price and Dividend Policy.............................................6
Selected Financial Data.....................................................7
Management's Discussion and Analysis of
         Financial Condition and Results of Operations......................9
Business...................................................................16
Change In Accountants......................................................20
Management.................................................................21
Security Ownership of Certain Beneficial
         Owners and Management.............................................24
Certain Transactions.......................................................25
Description of Capital Stock...............................................26
Legal Matters..............................................................29
Experts....................................................................29
Index to Financial Statements.............................................F-1




                              AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, the Company files reports, proxy and information statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy and information statements and other information can be inspected
and copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, Room 1024, 450 Fifth Street N.W., Washington, D.C. 20549; and
at the regional offices of the Commission at Northwest Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade Center,
Suite 1300, New York, New York 10048. Copies of such materials can be obtained
from the Public Reference Section of the Commission, in 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, such reports and other
information may be electronically accessed at the Commission's site on the World
Wide Web located at http://www.sec.gov.

The Company has filed a Registration Statement on Form S-1 (together with all
amendments thereto referred to herein as the "Registration Statement") under the
Act with the Commission, covering the shares of Common Stock being offered by
this Prospectus. This Prospectus does not contain all the information set forth
or incorporated by reference in the Registration Statement and the exhibits and
schedules relating thereto, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the securities offered by this
Prospectus, reference is made to the Registration Statement and the exhibits and
schedules thereto which are on file at the offices of the Commission and may be
obtained upon payment of the fee prescribed by the Commission, or may be
examined without charge at the offices of the Commission. Statements contained
in this Prospectus as to the contents of any contract or other documents
referred to are not necessarily complete, and are qualified in all respects by
such reference.

                                        2


<PAGE>
                                  RISK FACTORS

The Securities offered hereby involve a high degree of risk. Prospective
investors should carefully consider, along with the other information contained
herein, the following risk factors before purchasing any Securities offered
hereby:

         1. HISTORY OF LOSSES; ADDITIONAL CAPITAL REQUIREMENTS. The Company has
reported a net loss for each year of operation since its inception except for
the fiscal year ended April 30, 1989, in which it reported net income of
$154,000. For the nine months ended January 24, 1998, the Company reported a net
loss of $1,033,000 on revenues of $4,511,000 as compared to a net loss of
$1,650,000 on revenues of $2,565,000 for the comparable period in the previous
fiscal year. The Company reported a net loss of $2,968,000 on revenues of
$3,073,000 for the fiscal year ended April 26, 1997, as compared to a net loss
of $1,324,000 on revenues of $5,312,000 for the fiscal year ended April 27, 1996
and a net loss of $2,681,000 on revenues of $3,359,000 for the fiscal year ended
April 29, 1995. As a result, the Company requires capital resources to fund
operating losses as well as research and development expenditures. It is
anticipated that the expenditures associated with continued research and
development will cause the Company to incur operating losses and cash flow
deficiencies until such time, if any, as the Company generates sufficient
additional revenues from operations. Accordingly, the Company will be required
to seek alternative sources of working capital with funds from additional equity
or debt financings or joint venture or other collaborative arrangements. No
assurance can be given that any such additional funds will be available to the
Company on acceptable terms, if at all. If adequate funds are not available from
operations or additional sources of financing, the Company's business will be
materially adversely affected.

         2. UNCERTAINTY AS TO CONTINUATION AS A GOING CONCERN. The Company's
history of operating losses and limited capital resources have caused the
Company's independent auditors to include in their reports for the fiscal years
ended April 26, 1997 and April 27, 1996 a paragraph expressing substantial doubt
regarding the Company's ability to continue as a going concern.

         3. UNCERTAINTY OF MARKET ACCEPTANCE. The success of the Company's
dispensing systems will depend heavily on the Company's ability to gain
acceptance, both domestically and internationally, of leading companies in
industrial, food service and other markets. Acceptance of the Company's
technology by industry leaders will be determined in large part by the Company's
ability to access such entities and to demonstrate the performance features and
cost benefits of its dispensing products. The Company has had limited success to
date in the paint industry and the beverage industry. No assurance can be given
that the Company's dispensing technology will meet with general market
acceptance.

         4. DEPENDENCE ON MAJOR CUSTOMER. During the first nine months of Fiscal
1998, one customer, The Home Depot, Inc., accounted for 90% of the Company's
total revenues. During the fiscal years ended April 26, 1997 and April 27, 1996,
one customer, Sherwin-Williams, accounted for 54% and 72%, respectively, of the
Company's revenues. The Company currently has no orders from Sherwin-Williams
and does not expect significant revenues from sales to Sherwin-Williams in the
near future. While the effect of the loss of revenues from Sherwin-Williams has
been somewhat mitigated by the revenues generated from Home Depot, a loss of
revenues from Home Depot would have a material adverse effect on the Company's
revenues and there can be no assurance that the Company would be able to replace
the revenues from such loss.

         5. COMPETITION. The controlled measurement and dispensing equipment
industry is highly competitive and dominated by several large companies with
substantially greater financial resources and name recognition than the Company.
Many of these companies have extensive experience, possess substantially greater
financial, technological and personnel resources than the Company and,
particularly in the food service industry, have received the approval and
support of industry leaders commanding large market shares. No assurance can be
given that the Company will be able to compete successfully in the controlled
measurement and dispensing equipment industry.

         6. DIVIDEND POLICY. The Company has not paid dividends on its Common
Stock since its inception and, by reason of its present financial condition and
its projected financial needs, it does not contemplate paying dividends in the
foreseeable future on the Company's Common Stock.

         7. SHARES ELIGIBLE FOR FUTURE SALE. Sales of the Company's Common Stock
in the public market by current shareholders of the Company could adversely
affect the market price of the Common Stock. Assuming the exercise of the
Warrants, conversion of the Preferred Stock and payment of Preferred Stock
dividends with Common Shares, 10,518,250 shares of Common Stock may be offered
for sale in the public market. The Company has registered with the Commission an
aggregate of approximately 600,000 shares of Common Stock in several
registration statements filed by the Company for continuous or delayed sales. In
addition, the Company has approximately an aggregate of 291,000 shares issued
and outstanding which are "restricted" in accordance with Rule 144 of the
Regulations promulgated under the Securities Act of 1933. The Company cannot
predict the extent to which the market sales of the Common Stock or the
availability of such Common Stock will have an adverse effect on the market
price for such stock.

       8. NASDAQ LISTING. The Company is currently out of compliance with the
NASDAQ'S capital and surplus requirement, as set forth in NASD Marketplace Rule
4310(c)(02) which became effective February 23, 1998. To meet the new minimum
listing requirement, the Company must maintain net tangible assets of at least
$2,000,000. As of February 28, 1998, the Company had $1,062,180 of net tangible
assets. The Company has provided the NASDAQ with a written appeal, requesting
additional time within which to comply with the minimum net tangible asset rule.
The appeal is based on, among other things, the pending success of the Company's
capital raising activites. The delisting has been stayed pending the appeal.
There can be no assurance that the Company's appeal will be successful, or that
if such appeal is granted, that the Company will in fact attain the requisite
amount of net tangible assets. If the NASDAQ delists the Company's Common Stock,
the market price thereof and the efficiency of the trading market therefor may
be materially adversely affected.

                                        3
<PAGE>
                                   THE COMPANY

         The Company designs proprietary dispensing systems which dispense and
blend liquids, powders and other ingredients to a uniform and high degree of
accuracy. The Company also custom designs and manufactures its own proprietary
dispensing equipment to meet the needs of its customers, using standard
micro-processors. The Company's technology is protected by 33 useful patents and
5 patents pending. The Company's long-term objective is to be a worldwide source
of dispensing technology possessing substantial marketing capabilities
consisting of industry-specific marketing divisions.

         The Company offers a complete range of dispensing technology
commercialization services. In addition to custom design and manufacturing, the
Company also provides training, installation and product service. Dispensing is
an integral part of a large number of manufacturing processes. In many
industries, dispensing is a mechanical function and one of the few operations
that remains largely untouched by advanced technology.

         To date, the Company has developed unique dispensing systems for the
beverage, paint, chemical coatings, concrete and animal-husbandry industries.
Virtually all of the Company's revenues to date have been derived from the sale
of its computerized paint-tint dispensing system and its beverage dispensing
systems.

         The Company has recently completed a thorough internal review of
operations, marketing and strategic planning. As a result, the Company has
refocused its resources and efforts on its paint dispensing and juice dispensing
product lines. On April 18, 1997 the Company terminated its exclusive agreement
(the "Sherwin-Williams Agreement") with The Sherwin-Williams Company
("Sherwin-Williams") pursuant to which agreement the Company sold its
paint-dispensing systems exclusively to Sherwin-Williams. The termination of the
Sherwin-Williams Agreement allowed the Company to pursue other customers in the
paint industry. On February 12, 1997, the Company received a multi-million
dollar order for 300 of its new, self-calibrating universal paint-tint
dispensing systems from The Home Depot, Inc. ("Home Depot"). Delivery of the
Company's systems to Home Depot commenced in May 1997 and is expected to be
completed during the current fiscal year. The Company anticipates, though there
can be no assurances, that Home Depot's order constitutes the initial phase of a
system-wide roll-out to Home Depot's entire 500-plus store network, with one to
three units of the Company's tinting system expected to be installed in each
store.

         On June 25, 1997 the Company announced the formation of "Virtual
Squeeze"(TM), a joint venture with Damon Industries Inc., a Nevada based juice
manufacturer and distributor. Virtual Squeeze has targeted the $3 billion
institutional juice market with a self-contained, refrigerated dispenser
designed to use shelf stable, bag in the box concentrates. Current plans provide
for the free installation and service of the dispensing equipment provided that
only Virtual Squeeze(TM) products are used. The joint venture will generate
revenues from on-going juice sales. The Company and Damon Industries will share
in the resulting profits or losses equally. The Company believes the Virtual
Squeeze(TM) equipment is the only known juice dispenser specifically designed to
use shelf stable products.

         During fiscal 1997, the Company discontinued marketing efforts with
respect to its Classic(TM) line of soft drink dispensers, due to narrow margins
and resistance from major soft drink suppliers to support the equipment. The
Company is exploring opportunities to capitalize on its Classic(TM) product
line, including potential strategic partnerships, technology licenses and/or
sale of the Classic(TM) product line.

         The Company is a corporation organized under the laws of Florida in
1980. In May 1996, the Company changed its name from American Business Computers
Corporation to ABC Dispensing Technologies, Inc. The Company's principal
executive offices are located at 451 Kennedy Road, Akron, Ohio 44305, and its
telephone number is (330) 733-2841.


                                 USE OF PROCEEDS

         The Company will only receive proceeds from the exercise of the
Warrants and the issuance of the Warrant Shares. The 5,990,000 Warrant Shares
are being registered to provide the holders of the Warrants with freely
tradeable Common Stock upon exercise. If all the Warrants are exercised, the
Company will receive aggregate gross proceeds of approximately $9,327,000. No
assurance can be given, however, that all or any portion of the Warrants will be
exercised. If any of the Warrants are exercised, the Company intends to use the
proceeds for general corporate purposes.

                                        4

<PAGE>



                              PLAN OF DISTRIBUTION

         This Prospectus relates to the offer and sale of 5,990,000 shares of
Common Stock by the Company upon the exercise of the Warrants, 690,750 shares of
Common Stock issuable in payment of dividends on the Company's Preferred Stock
and 3,837,500 shares of Common Stock by the Company upon conversion of shares of
the Preferred Stock.

         The shares of Common Stock issuable upon exercise of the Warrants, in
payment of dividends and upon conversion of the Preferred Stock will be issued
and distributed by the Company pursuant to the terms and conditions of the
Warrants and Preferred Stock. Such Common Stock is being registered pursuant to
the Act and offered by the Company hereby to permit the issuance by the Company
of registered stock upon the exercise of the Warrants in payment of dividends
and upon conversion of the Preferred Stock in accordance with their respective
terms. Additional shares of Common Stock may be issuable pursuant to the
anti-dilution provisions of the Warrants and Preferred Stock, which shares are
also being registered hereby pursuant to Rule 416 promulgated under the Act. If
all of the Warrants registered hereby are exercised, the Company will receive
aggregate cash proceeds of approximately $9,327,000. See "Use of Proceeds."

         From time to time, the Company may amend this Prospectus by Prospectus
Supplements or post-effective amendments to the Registration Statement of which
this Prospectus is a part, to offer Warrant Shares and Conversion Shares
obtained by persons pursuant to the exercise of the Warrants or Conversion of
Shares of Preferred Stock, which persons may, by virtue of their relationship to
the Company, be deemed underwriters under the Act.

         The Warrants consist of fourteen different classes of securities
described as follows:

         (1)      common stock purchase warrants issued in a private placement
                  during the summer of 1995 covering an aggregate of 257,500
                  shares of Common Stock with an exercise price of $2.00 per
                  share and an expiration date of June 1, 1998;

         (2)      common stock purchase options issued to officers of the
                  Company in August 1995 covering an aggregate of 10,000 shares
                  of Common Stock with an exercise price of $3.00 per share and
                  an expiration date of April, 2000;

         (3)      common stock purchase options issued as compensation to
                  certain officers of the Company in May 1995 covering an
                  aggregate of 20,000 shares of Common Stock with an exercise
                  price of $3.375 per share and an expiration date of May, 2000.

         (4)      common stock purchase warrants issued as part of the
                  settlement of a litigation in September and November 1995
                  covering an aggregate of 700,000 shares of Common Stock with
                  an exercise price of $3.50 per share and an expiration date of
                  November, 2000;

         (5)      common stock purchase options issued as compensation to a
                  commissioned agent in December 1995 covering 30,000 shares of
                  Common Stock with an exercise price of $2.25 per share and an
                  expiration date of December, 2000;

         (6)      common stock purchase warrants issued as compensation to an
                  officer of the Company in July 1996 covering 300,000 shares of
                  Common Stock with an exercise price of $1.375 per share and an
                  expiration date of July 2006;

         (7)      common stock purchase warrants issued as compensation to
                  an officer of the Company in October 1996 covering 15,000
                  shares of Common Stock with an exercise price of $1.25 per
                  share and an expiration date of October, 2001;

         (8)      common stock purchase warrants issued in September, 1996 as
                  compensation for consulting services provided covering 10,000
                  shares of Common Stock with an exercise price of $3.50 per
                  share and an expiration date of September, 2001 and 25,000
                  shares of Common Stock with an exercise price of $1.25 per
                  share and an expiration date of September, 2001;

         (9)      common stock purchase warrants issued as compensation to
                  directors of the Company in January and February 1997 covering
                  90,000 shares of Common Stock with an exercise price of $1.25
                  per share and an expiration date of February, 2002;

         (10)     common stock purchase warrants issued as compensation to an
                  officer of the Company in March, 1997 covering 100,000 shares
                  of Common Stock with an exercise price of $1.25 per share and
                  an expiration date of March, 2007;

         (11)     common stock purchase warrants issued as incentive to 42
                  employees in May, 1997 covering 381,000 shares of Common Stock
                  with an exercise price of $1.125 per share and an expiration
                  date of May, 2002.

         (12)     common stock purchase warrants issued as compensation to
                  directors of the Company in October, 1997 covering 80,000
                  shares of Common Stock with an exercise price of $.844 per
                  share and an expiration date of October, 2007.


                                       5

<PAGE>

         (13)     common stock purchase warrants associated with Notes Payable
                  issued by the Company covering 134,000 shares of Common Stock
                  with an exercise price of $1.25 per share and an expiration
                  date five years from their date of issuance.

         (14)     common stock purchase warrants which are eligible for issuance
                  upon conversion of the Company's Preferred Stock at a price of
                  $1.25 per share and an expiration date five years from their
                  date of issuance.

         The Preferred Stock issued in connection with a private placement in
December 1996 and January and February 1997 consists of 307 shares of 9%
Convertible Cumulative Redeemable Preferred Stock, Series A, each convertible
into shares of Common Stock at a price of $1.00 per share and Common Stock
Purchase Warrants to purchase an equal number of shares of Common Stock as
received upon conversion, exercisable at a price of $1.25 per share. Each share
of Preferred Stock is entitled to receive dividends semi-annually and may be
redeemed by the Company at any time upon thirty (30) days' written notice.

         In order to comply with certain states' securities laws, if applicable,
the Common Stock issuable upon exercise of the Warrants will be sold in such
jurisdictions only through registered or licensed brokers or dealers. In certain
states, the Common Stock issuable upon exercise of the Warrants may not be sold
unless such Common Stock has been registered or qualified for sale in such
state, or unless an exemption from registration or qualification is available
and is obtained.

TRANSFER AGENT

         The Transfer Agent for the Common Stock is American Stock Transfer &
Trust Company, 40 Wall Street, New York, New York 10005.

                         STOCK PRICE AND DIVIDEND POLICY

         The Company's Common Stock is traded on the Nasdaq Small Cap Market
under the symbol "ABCC". The following table sets forth the high and low closing
sale prices of the Company's Common Stock as reported on the Nasdaq Small Cap
Market for the periods indicated.


FISCAL 1996                                       HIGH               LOW
                                                  ----               ---
First Quarter..................................  3 7/16             2 1/4
Second Quarter.................................  3 7/16            2 5/16
Third Quarter..................................  3 3/16             1 7/8
Fourth Quarter.................................   2 1/8            1 9/16

FISCAL 1997

First Quarter..................................   2 1/8            1 3/16
Second Quarter.................................  1 7/16             13/16
Third Quarter..................................  2 1/16             11/16
Fourth Quarter.................................   2 1/4             1 1/6



                                       6
<PAGE>
                          
                                                 
FISCAL 1998                                       HIGH               LOW 
                                                  ----               --- 
First Quarter..................................  1 3/16             27/32
Second Quarter................................   1 5/16             25/32
Third Quarter..................................   1 1/4             17/32
Fourth Quarter (Through March 25, 1998)........   1 5/8               7/8

         On March 25, 1998, the last sale price of the Common Stock reported on
the Nasdaq Small Cap Market was $1.500 per share. At March 25, 1998, the
approximate number of holders of record of the Common Stock was 1,080.

         The Company has never paid cash dividends on its capital stock and does
not intend to pay cash dividends for the foreseeable future. The Company expects
that earnings will be retained for the continued growth and development of the
Company's business. Future dividends, if any, will depend upon the Company's
earnings, financial condition, working capital requirements, compliance with
covenants in agreements to which the Company is or may be subject, future
prospects and other factors deemed relevant by the Company's Board of Directors.

                             SELECTED FINANCIAL DATA

         The selected financial data for each of the years ended April 30, 1994
and 1993 are derived from financial statements of the Company not included
herein. The selected financial data for the two years in the period ended April
27, 1996 are derived from the financial statements of the Company, included
elsewhere herein, which have been audited by Ernst & Young LLP, independent
auditors, as stated in their report appearing elsewhere herein. The selected
financial data for the year ended April 26, 1997 are derived from the financial
statements of the Company, included elsewhere herein, which have been audited by
Grant Thornton LLP, independent auditors, as stated in their report appearing
elsewhere herein. The selected financial data for the nine months ended January
24, 1998 and January 25, 1997 are derived from the financial statements of the
Company, included elsewhere herein, and are unaudited. The financial data set
forth below should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Financial
Statements, including the notes thereto, appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>


                             NINE MONTHS ENDED                                           FOR THE FISCAL YEARS ENDED
------------------------------------------------------------------------------------------------------------------------------------
                          JAN. 24,       JAN. 25,       APRIL 26,        APRIL 27,       APRIL 29,      APRIL 30,       APRIL 30,
                          1998           1997           1997             1996            1995           1994            1993
                          -------        -------        --------         --------        --------       --------        ---------
<S>                       <C>            <C>            <C>              <C>             <C>            <C>             <C>
REVENUES(a)               $4,511,000     $2,565,000     $3,073,000       $5,312,000      $3,359,000     $5,010,000      $2,329,000

NET LOSS                  $(1,033,000)   $(1,650,000)   ($2,968,000)     ($1,324,000)    ($2,681,000)   ($1,378,000)    ($3,359,000)

WEIGHTED AVERAGE          17,178,863     17,067,493     17,074,000       16,414,000      15,669,000     14,155,000      13,820,000
NUMBER  OF SHARES
OUTSTANDING

NET LOSS PER SHARE -      ($0.07)        $(0.10)        ($0.17)          ($0.08)         ($0.17)        ($0.10)         ($0.24)
BASIC AND DILUTED

TOTAL                     $3,562,000     $3,683,000     $3,350,000       $4,020,000      $3,719,000     $4,190,000      $4,102,000
ASSETS

LONG-TERM                 $  265,000     $  279,000       $283,000         $294,000        $278,000       $-0-            $-0-
OBLIGATIONS                                

STOCKHOLDERS'             $1,167,000     $2,433,000     $1,635,000       $1,085,000      $515,000       $2,194,000      $2,011,000
EQUITY


</TABLE>
                                        7

<PAGE>


<TABLE>
<CAPTION>


                            NINE MONTHS ENDED                                          FOR THE FISCAL YEARS ENDED
-----------------------------------------------------------------------------------------------------------------------------------
                          JAN. 24,      JAN. 25,         APRIL 26,        APRIL 27,       APRIL 29,        APRIL 30,      APRIL 30,
                          1998          1997             1997             1996            1995             1994           1993
                          -------       -------          --------         --------        --------         --------       ---------
<S>                       <C>           <C>              <C>              <C>             <C>              <C>             <C>
DIVIDENDS                 $-0-          $-0-             $-0-             $-0-            $-0-             $-0-            $-0-
DECLARED
PER SHARE OF
COMMON
STOCK

RESEARCH &                $924,000      $344,000         $629,000         $714,000        $606,000         $386,000        $391,000
DEVELOPMENT (a)
</TABLE>


(a) Research & Development costs include costs subject to reimbursement under
various agreements. The amounts earned under these agreements are included in
revenues for the respective years.



                                        8

<PAGE>
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


SIGNIFICANT ORDER

         On February 12, 1997, the Company announced that it received an initial
multi-million dollar order for its new, self-calibrating, universal paint-tint
dispensing system. The order was received from The Home Depot, Inc., North
America's largest home improvement retailer. The order is for 300 units of ABC's
new automatic tinting system, tradenamed "Royal Match." Commercial delivery
commenced in May, 1997, and will be completed during fiscal year 1998. This is
the initial phase of an anticipated roll out to The Home Depot's entire 500-plus
store network in 34 states and three Canadian provinces, with one to three units
of the tinting system expected to be installed per store. The unit has been
designed to interface with The Home Depot's networked point-of-sale system.


RESULTS OF OPERATIONS

NINE MONTHS ENDED JANUARY 24, 1998 COMPARED TO NINE MONTHS ENDED
JANUARY 25, 1997

The Company's net loss the first three quarters of fiscal 1998 decreased
$617,000, or 37.4%, to $1,033,000, from the $1,650,000 net loss for the
corresponding period of the prior year. The net loss for the third quarter of
fiscal 1998 decreased $22,000, or 8.3%, to $244,000, from the $266,000 net loss
for the third quarter of the prior year.

While revenues have increased significantly (see below), losses have not
decreased proportionately. This is due to $321,000 of costs being deferred into
future periods in the third quarter of fiscal 1997. The deferred costs relate to
the adaption of the ROYAL MATCH(TM) tint system to meet the specific needs of
The Home Depot. Had the costs not been deferred, the net loss for the first
three quarters of fiscal 1998 and fiscal 1997 would have been $863,000 and
$1,971,000, respectively. The decrease in net loss for the first three quarters
of fiscal 1998 would have been $1,108,000, or 56.2%, from the same period in the
prior year. The net loss for the third quarter of fiscal 1997 would have been
$587,000. The decrease in net loss for the third quarter of fiscal 1998 would
have been $343,000, or 58.4%, from the net loss for the third quarter of fiscal
1997. The costs were amortized over a period of 11 months and were fully
amortized as of October 25, 1997.

REVENUES

<TABLE>
<CAPTION>

                                      Nine Months Ended                  Third Quarter Ended
                                    January 24,    January 25,         January 24,    January 25,
                                      1998           1997                1998           1997
                                   -----------    ------------         ----------     ----------
<S>                                 <C>            <C>                 <C>             <C>
(in thousands)
Equipment sales                     $ 4,088        $ 2,028             $ 1,857         $ 216
Service revenues                        423            537                 138           211
                                     ------         ------              ------          ----
          TOTAL                     $ 4,511        $ 2,565             $ 1,995         $ 427
                                     ======         ======              ======          ====
</TABLE>


Equipment sales for the first three quarters of fiscal 1998 increased
$2,060,000, or 101.6%, over the first three quarters of fiscal 1997. The
increase is due to $2,388,000 in increased sales of paint colorant dispensers
which were partially offset by decreases of $241,000 in beverage equipment sales
and $87,000 in industrial equipment sales and project development revenues.
Equipment sales for the third quarter of fiscal 1998 increased $1,641,000, or
759.7%, over the third quarter of fiscal 1997. This increase is due to
$1,792,000 in increased sales of paint colorant dispensers which were partially
offset by decreases of $124,000 in beverage equipment sales and $27,000 in
industrial equipment sales and project development revenues.


                                        9

<PAGE>
The increase in sales of paint colorant dispensers is due to the Company not
having any orders for paint colorant dispensers from the middle of the second
quarter to the end of the third quarter of fiscal 1997. The decrease in sales of
beverage equipment is due to the company discontinuing its' Omnitron(tm) soft
drink line of beverage dispensers in the second quarter of fiscal 1997. The
decrease in sales of industrial equipment and project development revenues is a
result of the company focusing on the paint and institutional juice markets. The
Company's current strategy is to develop only products for which there is a
known market need and customers who are committed to the product.

Service revenues for the first three quarters of fiscal 1998 were down $114,000,
or 21.2% from the first three quarters of fiscal 1997. The decrease was due to a
$191,000 decrease in sales of replacement parts which was partially offset by a
$72,000 increase in service labor revenues. Service revenues for the third
quarter of fiscal 1998 decreased $73,000, or 34.6% from the third quarter of
fiscal 1997. The decrease was due to a $114,000 decrease in sales of replacement
parts which was partially offset by a $41,000 increase in service labor
revenues. Sales of replacement parts are down due to discontinuation of the
TINT-A-COLOR(tm) paint colorant dispensers and the Omnitron(tm) soft drink
dispensers. Service labor revenues have increased due to installation charges on
sales of ROYAL MATCH(tm) paint colorant dispensers.

GROSS MARGINS
<TABLE>
<CAPTION>

                                       Nine Months Ended              Third Quarter Ended
                                   January 24,    January 25,      January 24,    January 25,
                                    1998             1997             1998            1997
                                  -----------     ----------       -----------    -----------
<S>                                 <C>            <C>                 <C>            <C>
Equipment                           34.3%          31.0%               31.4%          18.4%
                                   =======        =======              =====         =======
                         
Service                             (5.2)%        (25.9)%               0.7%         (37.8%)
                                   =======        =======              =====         =======
Total                               30.6%          19.1%               30.0%          (0.9%)
                                   =======        =======              =====         =======
</TABLE>
For the first three quarters of fiscal 1998, gross margin as a percentage of
sales on equipment increased 3.3 points over the first three quarters of fiscal
1997. For the third quarter of fiscal 1998, gross margin as a percentage of
sales on equipment increased 13 points over the third quarter of fiscal 1997.
The increases resulted from changes in product mix caused by the cessation of
shipments to Sherwin-Williams in the second quarter of FY 1997 and the Company's
withdrawal from the soft drink market.

For the first three quarters of fiscal 1998, gross margin as a percentage of
service revenues increased 20.7 points over the first three quarters of fiscal
1997. For the third quarter of fiscal 1998, gross margin as a percentage of
service revenues increased 38.5 points over the third quarter of fiscal 1997.
These increases are primarily due to increased equipment installation revenues
and a decline in low (or negative) margin service on soft drink equipment
resulting from the discontinuation of the Omnitron (tm) soft drink dispensers.
Additionally, in fiscal 1997, the Company had negotiated with Sherwin-Williams
to retrofit existing paint colorant dispensers at a price equal to the Company's
cost.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses decreased $217,000, or 16.9%, to $1,064,000
in the first three quarters of fiscal 1998, down from $1,281,000 for the same
period of the prior year. Severance expense of $221,000 which was incurred in
the first three quarters of fiscal 1997 and a decreases in payroll expense and
travel expense of $201,000 and $26,000, respectively, during the first three
quarters of fiscal 1998 are primarily responsible for the decrease. These
decreases were partially offset by an increase in amortization of deferred
charges of $152,000 and increased legal and professional fees of $79,000 in the
first three quarters of fiscal 1998. The increase in legal and professional fees
relates to raising capital, corporate governance and shareholder communications.

For the third quarter of fiscal 1998, general and administrative expenses
increased $63,000, or 23.5%, to $331,000, up from $268,000 for the third quarter
of fiscal 1997. The increase is attributable to $77,000 of increased
amortization expense related to deferred charges. This increase was partially
offset by individually immaterial decreases in various expenses aggregating
$14,000.
                                       10

<PAGE>

SELLING AND MARKETING EXPENSES

For the first three quarters of fiscal 1998, selling and marketing expenses
decreased $133,000, or 28.3%, to $337,000, down from $470,000 for the first
three quarters of fiscal 1997. The decrease was primarily due to sales and
marketing personnel performing more research and development, and administrative
activities in the first three quarters of fiscal 1998 than in same period of the
prior year. The allocation of sales and merchandising payroll expense to
research and development and general and administrative expense was responsible
for $103,000 of the decrease. The decreased selling and marketing activity also
resulted in a decrease of $30,000 in travel expense during the first three
quarters of fiscal 1998, as compared to the same period of the prior year.

Selling and marketing expense decreased $50,000, or 30.3%, to $115,000 in the
third quarter of fiscal 1998, down from $165,000 for the same period of the
prior year. A decrease in marketing activity led to decreased payroll expense of
$20,000 and decreased travel expense of $30,000 in the third quarter of fiscal
1998, as compared to the same period of the prior year.

RESEARCH AND DEVELOPMENT EXPENSES

For the first three quarters of fiscal 1998 research and development expenses
increased $580,000, or 168.8%, to $924,000, up from $344,000 for the first three
quarters of fiscal 1997. For the third quarter of fiscal 1998, research and
development expenses increased $365,000, or 776.6%, to $318,000, up from a
negative $47,000 in fiscal 1997. The increase in research and development
expenses is due to continued development of, and enhancements to, the ROYAL
MATCH(TM) paint colorant dispenser, the CHECK MATE(TM) software which controls
the ROYAL MATCH(TM), and the VIRTUAL SQUEEZE(TM) juice dispenser.

OTHER INCOME AND EXPENSE

For the first three quarters of fiscal 1998, interest expense increased $25,000,
or 33.8%, to $99,000, up from $74,000 for the first three quarters of fiscal
1997. For the third quarter of fiscal 1998, interest expense increased $31,000,
or 258.3%, up from $12,000 for the third quarter of fiscal 1997. The increases
are due to higher debt balances in fiscal 1998.

Other income increased $19,000, or 118.8%, to $35,000 in the first three
quarters of fiscal 1998, up from $16,000 for the first three quarters of fiscal
1997. The increase is attributable to reversing an estimated liability and
related expense of $58,000. The underlying matter was ultimately settled without
cost to the Company. This increase credited to other income was partially offset
by the write-off of patents-pending of $39,000. For the third quarter of fiscal
1998, other expense was $30,000, a decrease of $43,000, or (330.8)% from the
$13,000 other income for fiscal 1997. The decrease was primarily due to the
write-off of patents-pending of $39,000.


                                       11


<PAGE>

FISCAL 1997 COMPARED TO FISCAL 1996

The net loss for FY 1997 was $2,968,000, an increase of $1,644,000, or 124% over
the net loss of $1,324,000 for FY 1996. The Company's consolidated results of
operations for the two years are summarized below:

Revenues                                 FY 1997             FY 1996
--------                                 -------             -------

Equipment sales                       $ 2,427,000         $ 4,258,000
Service revenues                          646,000             799,000
Royalties                                       -             255,000
                                       ----------          ----------

     TOTAL                            $ 3,073,000         $ 5,312,000
                                       ==========          ==========


Equipment sales for FY 1997 were $2,427,000, a decrease of $1,831,000, or 43%,
from FY 1996 equipment sales of $4,258,000. The decrease was primarily due to a
$1,504,000 decline in sales of paint colorant dispensers to The Sherwin-
Williams Company. The production and shipment of equipment to fill the
Sherwin-Williams order was completed during the second quarter of FY 1997 and no
additional orders for equipment were received from Sherwin-Williams. Sales of
beverage equipment decreased $227,000 due to the Company's withdrawal from the
soft drink market in FY 1997. Additionally, project development revenues
decreased in FY 1997 are responsible for the remaining $100,000 decrease. The
Company's new strategy to develop only products for which there is a known
market need led to the decrease in project development revenues.

Service revenues for FY 1997 were $646,000, a decrease of $153,000, or 19.1%,
from FY 1996 service revenues of $799,000. The decrease was due to decreased
installation revenue from Sherwin-Williams as their order was completed in the
second quarter of FY 1997, and decreased service revenue on soft drink equipment
as the Company withdrew from the soft drink market in FY 1997.

Royalty revenues for FY 1997 decreased $255,000, or 100%, from FY 1996. The
absence of royalty revenues in FY 1997 was due to the termination of the
Company's relationship with Sherwin-Williams.


Gross Margins                            FY 1997            FY 1996
-------------                            -------            -------

Equipment                                  29.9%              30.8%
                                           ====               ====
Service                                   (41.1)%            (20.7)%
                                           ====               ====
Total                                      15.0%              23.0%
                                           ====               ====

In FY 1997, gross margin as a percentage of sales on equipment decreased 0.9
points to 29.9%, down from 30.8% in FY 1996. The decrease was due to a change in
product mix caused by the cessation of shipments to Sherwin-Williams in the
second quarter of FY 1997 and the Company's withdrawal from the soft drink
market.

Gross margin as a percentage of service revenue in FY 1997 decreased 20.4 points
to a negative 41.1%, down from a negative 20.7% in FY 1996. The decrease was
primarily due to the Company terminating its relationship with Sherwin-Williams
and the Company's withdrawal from the soft drink market. Service expenses did
not decrease with the decline in revenues. Additionally, the Company had
negotiated with Sherwin-Williams to retrofit existing paint colorant dispensers
at a price equal to the Company's cost.


                                       12


<PAGE>


GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses increased $891,000, or 80.6%, to $1,997,000
in FY 1997, up from $1,106,000 in FY 1996. The increase was attributable to
$509,000 in management reorganization and related payroll costs; a $191,000
increase in amortization of deferred charges during fiscal 1997; a $93,000
increase in bad debt expense; a $61,000 increase in payroll expense; and $37,000
of individually immaterial increases in various expenses. The management
reorganization was completed in fiscal 1997.

SELLING AND MARKETING EXPENSES

Selling and marketing expenses increased $160,000 or 29.6%, to $700,000 in FY
1997, up from $540,000 in FY 1996. Selling & marketing expenses increased due to
a larger sales force in the current year, and increased expenses related to
product presentations at trade shows and to industry councils.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses decreased $85,000 or 11.9%, to $629,000 in FY
1997, down from $714,000 in FY 1996. The decrease was due to fewer product
development projects in FY 1997 than in the prior year. Management's strategy is
to only pursue development projects when there is a known market need for the
product and there is a customer who has committed to purchase the product.
Management believes that this strategy will increase the commercial viability of
the project.

OTHER INCOME (EXPENSE)

Other income (net) decreased $210,000, or 62.9%, in FY 1997 to $124,000, from
$334,000 in Fiscal 1996. The decrease was primarily attributable to the reversal
of $95,000 of securities and contract litigation fees in FY 1997, versus a
$366,000 reversal in FY 1996 (see note 13 to the financial statements).
Additionally, investment income decreased $74,000 from the prior year as most of
the Company's investments were liquidated. These decreases were offset by
individually immaterial increases in other revenues. The funds received from
liquidating investments were used for continuing operations.

The Company's operating results may fluctuate in the future as a result of a
number of factors, including changes in pricing policies by the Company's
suppliers, the market acceptance of new and enhanced versions of the Company's
products, and general economic conditions.

FISCAL 1996 COMPARED TO FISCAL 1995

The net loss for FY 1996 was $1,324,000, down $1,357,000, or 50.6%, from the
$2,681,000 net loss for FY 1995. The Company's consolidated results of
operations for the two years are summarized below:

Revenues                                     FY 1996           FY 1995
--------                                     -------           -------

Equipment sales                            $4,258,000        $2,525,000
Service revenues                              799,000           683,000
Royalties                                     255,000           151,000
                                           ----------        ----------
                                           $5,312,000        $3,359,000
                                           ==========        ==========

Equipment sales increased $1,733,000, or 68.6%, to $4,258,000 in FY 1996, up
from $2,525,000 in FY 1995. The increase was due to $1,710,000 in increased
sales of paint-tint dispensers to The Sherwin-Williams Company and an increase
of $23,000 in project development revenues during FY 1996.

Service revenues for FY 1996 were $799,000, an increase of $116,000, or 17.0%,
from FY 1995 service revenues of $683,000. The increase was due to service and
installation for new equipment sales to Sherwin-Williams.

In FY 1996, royalty revenue increased $104,000, or 68.8%, to $255,000, up from
$151,000 in FY 1995. Increased sales of paint-tint dispensers to The
Sherwin-Williams Company caused the increase.

Gross Margins                            FY 1996            FY 1995
-------------                            -------            -------

Equipment                                 30.8%               27.2%
                                          ====                ====
Service                                  (20.7)%             (10.4)%
                                          ====                ====
Total                                     23.0%               19.6%
                                          ====                ====


                                       13

<PAGE>

In FY 1996, gross margin as a percentage of sales on equipment increased 3.6
points to 30.8%, up from 27.2% in FY 1995. The variance was caused by a $150,000
write-off of obsolete inventory in FY 1995 that exceeded the FY 1996 write-off
by $92,000. The additional write-off in FY 1995 lowered the gross margin from
30.8% to 27.2%.

Gross margin as a percentage of service revenue in FY 1996 decreased 10.3 points
to a negative 20.7%, down from a negative 10.4% in FY 1995. The decrease was due
to increased travel and administrative expenses associated with installation and
service of new equipment.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses increased $57,000, or 5.4%, to $1,106,000 in
FY 1996, up from $1,049,000 in FY 1995. The increase was due to increased
payroll expense and supplemental legal counsel for public company matters.

SELLING AND MARKETING EXPENSES

Selling and marketing expenses increased $134,000, or 33%, to $540,000 in FY
1996, up from $406,000 in FY 1995. The increase was caused by additional
international marketing efforts for both paint and beverage products.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses increased $108,000, or 17.8%, to 714,000 in FY
1996, up from $606,000 in FY 1995. The change resulted from increased new
product development activity. Numerous dispensing applications were under
development during FY 1996, including: the institutional juice dispenser, a
chemical coatings dispenser, and a cement additives dispenser.

SECURITIES AND CONTRACT LITIGATION

The distribution of the Class Action settlement fund (see Note 13 to the
Consolidated Financial Statements) and the final valuation of the Company's
contributed common stock to the fund allowed the Company to lower the accrual
for settlement costs and legal expenses by $366,000. The Company had originally
accrued $1,000,000 in FY 1995 to record estimated remaining settlement costs and
legal fees. The remaining accrual at April 27, 1996, was $95,000.

INTEREST EXPENSE

Interest expense was $134,000 in FY 1996, up $106,000, or 378.6%, from the FY
1995 interest expense of $28,000. The increase is due to a full year of interest
on the building mortgage, an increased average balance on the line-of credit,
and an increase of $500,000 in long-term debt during FY 1996.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash balance decreased to $287,000 as of January 24, 1998 from
$445,000 as of April 26, 1997.

Operations during the first three quarters ended January 24, 1998 required cash
of $1,183,000 which resulted from a net loss of $1,033,000, and net increases in
operating assets and operating liabilities of $435,000, and $6,000,
respectively, offset by depreciation and amortization of $291,000.

Consistent with prior years, the Company's primary source of liquidity has been
private placements of equity and equity derivative instruments. From August 1,
1996, to October 30, 1996, the Company issued 132 shares of Series A Preferred
Stock in exchange for the surrender of the Company's outstanding $25,000, 9%
Convertible Subordinated Redeemable Notes Payable in the aggregate principal
amount of $1,650,000. From August 1, 1996, through February 7, 1998, the Company


                                       14


<PAGE>


issued 176 shares of Series A Preferred Stock in exchange for $12,500 cash per
share, generating $2,063,000 cash (see footnote 8). Near term cash requirements
will be obtained using this same Preferred Stock vehicle.

In August, 1997, to raise additional working capital, the Company began issuing
short term promissory notes. The notes are sold in multiples of $12,500, or
fractions thereof, and pay interest at the rate of 10%, with principal and
interest paid at maturity. The initial maturity date is June 30, 1998, however,
the Company may, at its sole option, extend the maturity date to December 31,
1998. At January 24, 1998, the Company has generated $335,000 in cash by issuing
the notes.

In addition to private placements of equity and notes payable, management
uses an accounts receivable-based credit line to meet short-term cash
requirements (see note 5 to the financial statements). The credit line bears an
interest rate of prime plus four points. As of March 12, 1998, the credit limit
was set at $500,000 with an outstanding balance of $500,000.

If the above sources of cash do not become available or are not sufficient, the
Company may be forced to curtail marketing and research & development activities
which would adversely affect future operating results. Furthermore, if
management is successful in raising additional funds, there is no guarantee that
the Company will achieve profitable operations, or positive cash flow.

The current liquidity position of the Company and the inability of operations to
generate positive cash flow raises doubt about the Company's ability to continue
as a going concern (see Note 3 to the financial statements). Management
recognizes these weaknesses and is taking aggressive steps to increase revenues
through increased sales and marketing efforts.

1997 AUDIT

     Grant Thornton LLP has audited the consolidated balance sheet of the
Company as of April 26, 1997, and the related consolidated statement of
operations, cash flows and stockholders' equity for the year ended April 26,
1997. In its report of July 11, 1997, to the Board of Directors and to the
Company it is stated that the financial statements have been prepared assuming
that the Company will continue as a going concern. However, their report states
that the "history of operating losses and limited capital resources raise
substantial doubt" about the Company's ability to continue as a going concern
(see Note 3 to the Consolidated Financial Statements). Management recognizes the
need to increase sales and raise additional capital and has plans and programs
intended to accomplish these goals.

IMPACT OF YEAR 2000

The year 2000 issue pertains to computer programs that were written using two
digits rather than four to define the applicable year. As a result, those
computer programs have time-sensitive software that recognize the year "00" as
the year 1900 rather than the year 2000. This could cause a system failure or
miscalculations causing disruptions of operations.

During fiscal 1998, the Company has obtained software updates for its critical
operational software to make the software "2000 compliant." The Company believes
that with the updates to existing software, the Year 2000 Issue will not pose
significant operational problems for its computer systems.

                                       15

<PAGE>


                                    BUSINESS

ORGANIZATION

     The Company is a corporation organized under the laws of Florida in 1980.
In May, 1996, the Company changed its name from American Business Computers
Corporation to ABC Dispensing Technologies, Inc.

CORE COMPETENCE

     ABC Dispensing Technology's (the "Company" or "ABC") core competence is its
ability to creatively use existing technology to develop state-of-the-art
dispensing systems. The Company's dispensing systems are designed to increase
accuracy, efficiency, speed, flexibility and functionality. The Company's
technology is transferable into many industries. The Company concentrates on
developing solutions for specific, known applications. The Company has a unique
approach to creating new, innovative solutions by combining first the principles
of physics with state-of-the-art electronics. The Company designs its own
computer controlled systems--both hardware and software.

     The core of the Company is talented people and 33 useful patents and 5
patents pending. The Company is a technology and marketing firm. However, two
operational advantages the Company believes it has over other technically
oriented firms are: (1) the ability to produce the systems the Company designs,
and (2) the ability to offer field technical support (training, installation,
and service).

NEW DIRECTIONS

         ABC, as a technology firm, has depended on industry partners to make
the Company's equipment commercially successful. The risk in this approach is
centered around possible different goals and objectives between ABC and its
partners. As of July 15, 1996 the Company began thoroughly examining the markets
in which it competes. This examination included inviting leaders in those
markets to define their exact needs and problems. A complete understanding of
its customers' needs will allow the Company to design more universally accepted
machines from the Company's innovative concepts.

     Marketing, market demand, and the customer will drive ABC's research &
development, design, and commercialization. Exclusivity has restricted the
Company in the past. The Company's new mission focuses on driving an innovative
dispensing solution through the broad market in a universally and commercially
viable fashion.

     ABC will strive to take advantage of strategic alliances with other
companies with whom it may have had long standing relationships. The Company
believes joint ventures and co-production will grow the business and reduce
expenses through economies of scale.

     In addition to broadening the marketing of ABC's equipment, the Company
will concentrate on maximizing its patent portfolio. This portfolio is a library
of useful technology. The Company will strive to sell and re-sell the various
configurations of that technology as useful parts and components to the wide
range of industries we serve now--and in the future.

     The Company's new mission embraces the concept of "milestone development."
In other words, ABC will discontinue research & development on new products at
its own expense, based on speculation of the possibility of a future order.
Rather, it will work closely with those companies willing to pay ABC in stages
as the Company works from proof of concept through field prototype to the
ultimate, commercial version of the product. Generating revenues in stages as
the Company proves its ability helps ensure the commercial order or alerts the
Company early to the feasibility of the project. This method of research &
development should help control expenses.


                                       16


<PAGE>


     As the Company rolls out new products, it will assist its customers and
partners in making their organizations comfortable and confident in their use of
ABC's equipment and products. ABC will strive to assist them in making these
products commercially successful and will support their effort with regard to
applications, maintenance, training, marketing, and sales.

     The Company is dedicated to selling dispensing technology at a profit--to a
wide range of industries.

PRODUCTS

INDUSTRIAL

     During the past year, the Company has successfully developed a universal
line of tint dispensers designed in a modular fashion that provides the
flexibility to control from 9 to 18 different colorants. As a result, the
Company believes it can now address the current needs of most of the world's
major paint retailers. The Company recently obtained a purchase order from The
Home Depot, North America's largest home improvement retailer. The multi-million
dollar order is for 300 self-calibrating units, (Royal Match(TM)) that will be
installed in new stores and used to upgrade dispensing capabilities in existing
stores. Commercial shipments of this equipment began in May, 1997. System
advantages include:

     1. Elimination of daily purging;

     2. Self-calibration to adjust for changes in tint rheology including
        temperature, density and viscosity;

     3. Limited moving parts to minimize maintenance requirements; and

     4. Self-cleaning dispensing of clear flush after each dispense cycle.

     For the nine months ended January 24, 1998, 90% of the Company's revenues
were from sales of paint products to The Home Depot, Inc. During the fiscal year
ended April 26, 1997 ("FY 1997"), all paint product sales were sales to The
Sherwin-Williams Company, accounting for 54% of total Company revenues. Paint
product sales to The Sherwin-Williams Company were 72% and 59% of total Company
revenues in FY 1996 and FY 1995, respectively. The Company currently has no
orders from The Sherwin-Williams Company, and does not expect significant
revenues from sales to The Sherwin-Williams Company in the near future.

     Other Industrial dispensers that have been partially developed through
field test, including Concrete Additives, Chemical Coatings and an Antibacterial
dairy sprayer. These products are not being further developed until a customer
order can be obtained. The Company will continue to obtain customer feedback on
features, market size, and economics of these projects. However, the Company's
new focus on product commercialization prevents any major development efforts on
these products.

BEVERAGE

      The Company currently markets two types of beverage dispensers:
juice and liquor.

     On June 25, 1997 the Company announced the creation of "Virtual
Squeeze,"(TM) a 50-50 joint venture agreement with Damon Industries Inc., a
Nevada based juice manufacturer and distributor. Virtual Squeeze has targeted
the $3 billion institutional juice market with a self-contained, refrigerated
dispenser designed to use shelf stable, bag in the box concentrates. Current
plans provide for the free installation and service of the dispensing equipment
provided that only "Virtual Squeeze" products are used. Revenues will be
generated from on-going juice sales. The Company believes the equipment is the
only known juice dispenser specifically designed to use shelf stable products.
System advantages include:

     1.  High volume dispensing of chilled juices;

     2.  No refrigerated storage required;


                                       17


<PAGE>


     3. Preprogrammed, automated, mandatory sanitization routines;

     4.  Pre-set portion dispensing; and

     5. Automated flavor blending.

     The current marketing strategy has a three pronged approach: Direct sales
efforts targeted at nursing home chains and buying groups, distributor
recruitment of existing businesses currently servicing the health care industry,
and marketing directly to food service distributors.

     During Fiscal 1997, ABC discontinued the ongoing marketing efforts of the
Classic(TM) line of soft drink dispensers. This decision was made because of
narrow margins and resistance from the major soft drink suppliers to support the
equipment. The Company is continuing to look for opportunities to capitalize on
its soft drink technology. Options currently being considered include, strategic
partnerships, technology licenses, and outright sale.

     Sales of Classic(TM) products accounted for 0.3%, 12.2%, 10.8% and 11% of
total Company revenues for the 9 months ended January 24, 1998, and in FY 1997,
FY 1996 and FY 1995, respectively.

     The Company's UltraBar(TM) liquor dispensing system pours complex mixed
drinks quickly with a touch of the customized touch-sensitive drink menu.
Advantages are speed, accuracy, simplicity, full cash and inventory
accountability, and reduction of theft, spillage, overpours, errors, and
giveaways.

     Sales of UltraBar(TM) products accounted for 5.3%, 10.1%, 7.5% and 13% of
total Company revenues for the 9 months ended January 24, 1998, and in FY 1997,
FY 1996 and FY 1995, respectively.

NEW PRODUCT DEVELOPMENT

     ABC offers the ability to contract with new business partners to assist in
the development of new dispensing systems. As mentioned previously in the "New
Directions" section, ABC plans to develop new dispensers for emerging products
which require our technology; however, ABC will perform this development work in
phases with each phase intended to generate revenues.


SERVICES

SERVICE/TECHNICAL SUPPORT

     The Company is able to perform on-site service for the Company's installed
base of equipment in the U.S. using its own service technicians who are located
throughout the country. The Company has committed to increase the number of
field service technicians to improve its response time and reduce the variable
costs of providing service. Variable costs will be reduced by eliminating
excessive travel and overtime expenses. The Company also contracts with
third-party service organizations to assist in providing technical support to
customers.

     ABC also utilizes its technical service organization to perform third party
installation and service for other electronic equipment manufacturers. Service
sales accounted for 9.4%, 21%, 15.1% and 22% of total Company revenues for the 9
months ended January 24, 1998, and in FY 1997, FY 1996 and FY 1995,
respectively.

SALES BACKLOG

     As of March 1, 1998, the sales order backlog (unshipped product orders) was
$312,000. As of April 26, 1997, the sales order backlog was $4.4 million. As of
April 27, 1996, the sales order backlog was $1.6 million.


                                       18

<PAGE>



INTERNATIONAL SALES

     Revenues from international sales for the 9 months ended January 24, 1998,
and for fiscal years 1997, 1996, and 1995 amounted to 1%, 1%, 1% and 3% of total
revenues, respectively. Primary international sales efforts center on liquor
equipment to Canada and Industrial Sales to South America and Europe.

COMPETITION

The Company is one of four manufacturers that sell automatic paint tint
dispensers in the U.S. Of the other three manufacturers, one has an established
presence in the U.S. market, and the other two are new to the U.S. market. The
Company recently gained access to the entire U.S. market after being released
from an exclusivity agreement with The Sherwin-Williams Company. ABC believes
that the design and features of its' dispensing equipment, coupled with the
ability to provide nationwide on-site technical support give the Company a
competitive advantage in the market place.

The institutional juice market in which the Company competes through the
creation of the Virtual Squeeze joint venture is highly competitive. Currently,
80-90% of the juice sold in this market is sold as frozen concentrate. The
joint venture will compete by selling shelf-stable juice concentrates and
providing the customer with a dispenser that will mix, chill and provide portion
control dispensing of the juice. The dispenser also allows for mixing of juice
flavors and requires automated sanitizing routines.

HUMAN RESOURCES

     As of March 1, 1998, the Company had 41 full-time employees, seven fewer
than the same time last year. The Company has cash and stock option incentive
plan programs for substantially all full-time employees. In fiscal year 1997,
the Company has increased the employee option program to provide greater degrees
of employee ownership and to help ensure a stable workforce. The employees are
not represented by a union. Temporary workers are utilized in the production
process. A highly qualified labor pool exists in the immediate geographic area
should the Company need to expand its workforce.

PATENTS

     The Company has consistently sought patent protection for its proprietary
technology and products. To date, 33 patents are held and an additional 5 are
pending. Patent coverage of the Company's dispensing technology is broad.
Research and development expenditures for the nine months ended January 24,
1998, and fiscal years 1997, 1996, and 1995 were $924,000, $629,000, $714,000
and $606,000, respectively.

ENTITIES AND FISCAL YEAR

     "ABC" is comprised of three legal entities: the parent (public entity)--ABC
Dispensing Technologies, Inc., (a Florida corporation) (NASDAQ:ABCC), the
operating subsidiary--ABC Dispensing Technologies, Inc. (an Ohio corporation),
and a second subsidiary that holds the patents--ABC Tech Corp. (an Ohio
corporation).

     "Fiscal Year 1998" ends April 25, 1998. The Company has adopted a fiscal
year ending on the Saturday closest to April 30. Each quarter consists of 13
weeks.

     "Fiscal Year 1997" ended April 26, 1997.

PROPERTIES

     The Company owns a single floor building of approximately 18,400 square
feet of office, laboratory, and production space located in Akron, Ohio. The
property is encumbered by a mortgage in favor of an institutional lender. The
principal balance of the mortgage was $259,000 as of January 24, 1998.



                                       19


<PAGE>


     The Company leases additional warehouse space from independent third
parties on an as needed basis.

LEGAL PROCEEDINGS

The Company presently is not involved as a defendant in any material litigation.


                              CHANGE IN ACCOUNTANTS

     On March 20, 1997, the Company notified Ernst & Young LLP ("E&Y") that they
were dismissed as the Company's independent auditor.

     The Company and E&Y had not, in connection with the audit of the Company's
financial statements for each of the prior two years ended April 27, 1996 and
April 29, 1995, had any disagreement on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreement, if not resolved to E&Y's satisfaction, would have caused E&Y to
make reference to the subject matter of the disagreement in connection with its
reports.

     The reports of E&Y on the Company's financial statements for the years
ended April 27, 1996 and April 29, 1995 did not contain an adverse opinion or a
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principles, except that the report of E&Y on the
Company's financial statements for the year ended April 27, 1996 included an
explanatory paragraph relating to an uncertainty about the Company's ability to
continue as a going concern.

     The decision to change accountants was approved by the Company's Board of
Directors.

     On March 20, 1997, the Company appointed Grant Thornton LLP its independent
accountants and Grant Thornton LLP accepted such appointment.

     The Company had no prior relationship with Grant Thornton LLP.



                                       20

<PAGE>



                                   MANAGEMENT


     The executive officers and Directors of the Company are as follows:

<TABLE>
<CAPTION>

NAME                                    AGE               POSITION
----                                    ---               --------
<S>                                     <C>               <C>
Charles M. Stimac, Jr.                  46                President, Chief Executive Officer, Chief Financial
                                                          Officer and Director

Herbert L. Luxenburg                    62                Director

C. Rand Michaels                        60                Director

Frank E. Vaughn                         68                Director

Norbert J. Lewandowski                  60                Director

William L. Shanklin                     57                Director
</TABLE>

CHARLES M. STIMAC, JR. has been President, Chief Executive Officer and a
Director of the Company since July 15, 1996. Mr. Stimac has more than twenty
years experience in the investment banking industry. Prior to joining the
Company, Mr. Stimac served as Vice President of Roney and Company, a member firm
of the New York Stock Exchange through June 1996.

HERBERT L. LUXENBURG has been a Director of the Company since September 1988.
Mr. Luxenburg has been a proprietor in the hospitality industry since 1965 and
has served as President and Chief Executive Officer of the University Inn and
Days Inn of Kent, Ohio from 1989 through the present.

C. RAND MICHAELS has been a Director of the Company since September 1986. Mr.
Michaels is Vice Chairman of Lomak Petroleum, Inc., a public corporation engaged
in exploration for, and in the development and production of, crude oil and
natural gas. Mr. Michaels has held executive positions with Lomak since 1976.
Mr. Michaels also has served as a Director of Lynx Exploration, Inc., an oil and
gas exploration company from 1994 through the present and as a Director of North
Coast Energy, Inc. from 1996 through the present.

FRANK E. VAUGHN was appointed Director of the Company on October 13, 1997 to
fill a vacant seat on the board and serve until the next election by the
shareholders at the 1998 annual meeting. Mr. Vaughn was formerly President of
the Hoover Companies and Executive Vice President of the Maytag Corporation. Mr.
Vaughn is currently an Adjunct Professor and visiting lecturer at Kent State
University.

NORBERT J. LEWANDOWSKI was appointed Director of the Company on December 15,
1997 to fill a vacant seat on the board and serve until the next election by the
shareholders at the 1998 Annual Meeting. Mr. Lewandowski currently serves on the
Board of Trustees at Kent State University. Mr. Lewandowski is a CPA and until
1992 he headed a large regional accounting firm that he founded. Mr. Lewandowski
currently serves as a consultant to many local companies.


                                       21

<PAGE>
WILLIAM L. SHANKLIN was appointed Director of the Company on December 15, 1997
to fill a vacant seat on the board and serve until the next election by the
shareholders at the 1998 Annual Meeting. Mr. Shanklin has been a Professor
of Marketing and Entrepreneurship at Kent State University from 1977 to the
present. Mr. Shanklin has served as consultant and advisor to the President/CEO
of the Company for the past 16 months. Mr. Shanklin is an author and has been a
consultant to numerous companies, ranging from Fortune 500 firms to small
businesses.

BOARD MEETINGS

     For the nine months ended January 24, 1998, the Board of Directors held
three Meetings. The Company's Board of Directors held three meetings during the
fiscal year ended April 26, 1997. All Directors attended all the Board meetings.

DIRECTORS' COMPENSATION

     On September 22, 1996, Herbert L. Luxenburg and C. Rand Michaels were each
granted 20,000 options to purchase shares of the Company's common stock at $1.25
per share. On January 2, 1997, Mr. Luxenburg and Mr. Michaels were each granted
20,000 warrants to purchase shares of the Company's common stock at $1.25 per
share. On October 10, 1997, Mr. Luxenburg and Mr. Michaels were each granted
20,000 warrants to purchase shares of the Company's common stock at $0.844 per
share and Mr. Vaughn was granted 20,000 warrants to purchase shares of the
Company's common stock at $0.844 per share. These options and warrants were
granted to the Directors to compensate them for their services as Directors. On
October 10, 1997 Mr. Vaughn was granted 20,000 warrants to purchase shares of
the Company's common stock at $0.844 per share for accepting a position on the
Board of Directors. On January 29, 1998, Mr. Lewandowski and Mr. Shanklin were
each granted 20,000 warrants for accepting positions on the Board of Directors
and 20,000 warrants as compensation for their services as Directors for fiscal
1998. Each warrant allows the Director to purchase one share of the Company's
common stock at a price $1.125 per share. On October 10, 1997 Mr. Vaughn was
granted 20,000 warrants to purchase shares of the Company's common stock at
$0.844 per share for accepting a position on the Board of Directors. On January
29, 1998, Mr. Lewandowski and Mr. Shanklin were each granted 20,000 warrants for
accepting positions on the Board of Directors and 20,000 warrants as
compensation for their services as Directors for fiscal 1998. Each warrant
allows the Director to purchase one share of the Company's common stock at a
price $1.125 per share.

EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE

     The following table sets forth a summary of the fiscal years ended April
26, 1997, April 27, 1996 and April 29, 1995 of the compensation of the Company's
Chief Executive Officer.
<TABLE>
<CAPTION>
                                                                                                      Long Term
                                                                                                     Compensation
                                                  Annual Compensation                                    Awards
                                                  -------------------                               --------------
     Name and Principal       Fiscal                                   Other Annual        Options      All Other
          Position            Year         Salary        Bonus         Compensation        (# of      Compensation
                                                                           ($) (1)         shares)          ($)
     ------------------       ------       ------        -----         ------------        --------   ------------
<S>                           <C>          <C>              <C>            <C>              <C>            <C>
Charles M. Stimac, Jr.        1997         $108,333         -0-            -0-              -0-             $670(2)
President and Chief
Executive Officer

Robert A. Cutting,            1996         $122,000         -0-            -0-              -0-             $490
Former President and          1995         $115,000         -0-            -0-              -0-             $490(3)
Chief Executive Officer
</TABLE>
(1)  Perquisites of the fiscal year ended April 26, 1997  did not exceed 10%
     of Mr. Stimac's and Mr. Cutting's respective salaries combined.
(2)  These amounts represent the Company's matching contributions for Mr.
     Stimac's account in the Company's 401-(K) retirement plan.
(3)  Mr. Cutting's employment with the Company terminated effective July 14,
     1996.
                                           22
<PAGE>



               OPTION GRANTS DURING THE YEAR ENDED APRIL 26, 1997

     The Company did not grant any options to purchase shares of Common Stock to
the named executive officers during the fiscal year ended April 26, 1997.



                                       23

<PAGE>



         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


              As of March 1, 1998, there were no persons known by the Company to
beneficially own more than five percent (5%) of any class of the Company's
securities. The following table sets forth certain information as of March 1,
1998, except as noted, regarding the Common Stock held by Directors and the
Chief Executive Officer of the Company, including each nominee for election as a
Director and all directors and executive officers as a group:



<TABLE>
<CAPTION>

                                                          Number of Shares of Common             Percent of
Name and Beneficial Owner                                  Stock Beneficially Owned                 Class
-------------------------                                 --------------------------             ----------
<S>                                                             <C>                                 <C>
Charles M. Stimac, Jr., President,                              378,881(1)                          2.18%
   Chief Executive Officer and Director

Herbert L. Luxenburg, Director                                  275,826(2)                          1.58%

C. Rand Michaels, Director                                      263,300(3)                          1.51%

Frank E. Vaughn                                                 140,000(4)                              *

William L. Shanklin                                             301,170(5)                          1.73%

Norbert J. Lewandowski                                           40,000(6)                              *

Directors (including nominees) and                            1,399,177                             8.06%
  Officers as a Group (4 Persons)

</TABLE>
-------------
* The percentage of shares beneficially owned by this director does not
exceed one percent of the class so owned.


     (1)      Includes 153,881 shares of Common Stock and warrants to purchase
              225,000 shares of Common Stock, which warrants are exercisable
              within 60 days.

     (2)      Herbert L. Luxenburg owns stock options rights to purchase 75,000
              shares of Common Stock under the Company's 1990 Non-Qualified
              Stock Option Plan. Under the Company's 1995 Stock Option Plan, Mr.
              Luxenburg holds options to purchase 25,826 shares of Common Stock
              and warrants to purchase 100,000 shares of Common Stock. All of
              such options and warrants are exercisable within 60 days. Mr.
              Luxenburg also owns 75,000 shares of Common Stock.

     (3)      C. Rand Michaels owns stock options rights to purchase 75,000
              shares of Common Stock under the Company's 1990 Non-Qualified
              Stock Option Plan. Under the Company's 1995 Stock Option Plan,
              Mr. Luxenburg holds options to purchase 25,826 shares of Common
              Stock and warrants to purchase 60,000 shares of Common Stock. Mr.
              Michaels is the owner of 2 shares of the Company's 9% Cumulative
              Convertible Preferred Stock and the beneficial owner of an
              additional two shares. The Preferred shares are convertible into
              12,500 shares of the Company's Common Stock at any time after
              March 1, 1997. Upon conversion of the Preferred shares, Mr.
              Michaels will receive warrants to purchase Common Stock equal to
              the number of common shares obtained upon conversion.  All of such
              options and warrants are exercisable within 60 days. Mr. Luxenburg
              also owns 1,319 shares of Common Stock and is the beneficial owner
              of 859 shares.

                                       24

<PAGE>


     (4)      Frank E. Vaughn holds warrants to purchase 40,000 shares of Common
              Stock and owns 4 shares of the Company's 9% Cumulative Convertible
              Preferred Stock. The Preferred shares are convertible into 12,500
              shares of the Company's Common Stock at any time after March 1,
              1997. Upon conversion of the Preferred shares, Mr. Vaughn will
              receive warrants to purchase Common Stock equal to the number of
              common shares obtained upon conversion. All of such options and
              warrants are exercisable within 60 days.

     (5)      William L. Shanklin holds warrants to purchase 75,000 shares of
              Common Stock and owns 4 shares of the Company's 9% Cumulative
              Convertible Preferred Stock (Preferred Stock). Mr. Shanklin will
              also acquire 5 shares of the Company's Preferred Stock on 1/15/98
              pursuant to the terms of a consulting agreement dated 10/1/97.
              The Preferred shares are convertible into 12,500 shares of the
              Company's Common Stock at any time after March 1, 1997. Upon
              conversion of the Preferred Shares, Mr. Shanklin will receive
              warrants to purchase Common Stock equal to the number of common
              shares obtained upon conversion. All of such Preferred Shares and
              warrants are convertible or exercisable within 60 days. Mr.
              Shanklin also owns 1,170 shares of Common Stock.

     (6)      Norbert J. Lewandowski holds warrants to purchase 40,000 shares of
              Common Stock.  The warrants are exercisable within 60 days.


                              CERTAIN TRANSACTIONS

     On January 17, 1996, the Company obtained a $500,000 working capital
asset-secured loan from the Mezzanine Financial Fund, L.P. ("Mezzanine").
Interest on the loan was due monthly at the rate of 18% per annum. The terms of
the loan agreement provided for a $100,000 repayment of principal on each of the
first and second anniversaries of the closing of the loan. The balance of
$300,000 was due on the third anniversary. Mezzanine, at its option, could have
converted the loan into 166,666 shares of common stock (including standard
anti-dilution provisions). In consideration for providing the loan, Mezzanine
received a five (5) year warrant (the "Warrant Fee") to acquire shares of common
stock (at a price equal to the lower of seventy percent (70%) of the 30-day
average trading price prior to closing of the loan, or $2.50 (the "Price")). The
warrant exercise price was therefore determined to be $2.04 per share. The
maximum number of shares subject to the warrant was determined to be 58,910
under a formula in the loan agreement. At Mezzanine's election, all or any part
of the Warrant Fee could have been put to the Company upon repayment of the loan
for payment in cash in the amount equal to 70% of such Warrant Fee, paid in
equal monthly payments over the same number of months that the loan was
outstanding. Additionally, Mezzanine received a closing fee equal to 2% of the
amount of the loan and reimbursement for expenses associated with the making of
the loan.

     On July 24, 1996, the Company distributed 125,000 shares of common stock to
Mezzanine in satisfaction of $38,000 of interest charges from May through
September 1996 due Mezzanine under the credit facility.

     On September 23, 1996, the Company fully repaid Mezzanine the $500,000.
Prior to this date, the Company delivered 125,000 common shares to Mezzanine of
which 30,000 shares were sold to pay past due interest. In addition, another
60,000 shares were sold by Mezzanine in September and October 1996, the
proceeds, net of commission, used to pay off the remaining interest of
approximately $10,000 and agreed to an enhancement fee of approximately $23,000.
On December 31, 1996, Mezzanine returned 35,000 shares of Common Stock to the
Company.

     Herbert M. Pearlman, Chairman of the Board of Directors of the Company
through February 5, 1997, is a director, officer and principal stockholder of
the general partner of Mezzanine. Mr. Pearlman is also Chairman, chief executive
officer and a principal stockholder of Helm Resources, Inc., a publicly traded
company which holds an approximately 14% equity stake in Mezzanine.

     Pursuant to an arrangement with InterSystems, Inc., a company in which Mr.
Pearlman is Chairman and in which Mr. Pearlman has a significant equity
interest, the Company received certain shareholder relations services. The
Company reimbursed InterSystems, Inc. by paying one-third of the salary and
other expenses of the InterSystems, Inc. employee providing the services to the


                                       25

<PAGE>

Company. The Company did not make any payments to InterSystems, Inc. during
fiscal 1997. The arrangement was terminated in February, 1997.

     Pursuant to an arrangement with Helm Resources, Inc., that was terminated
in February 1997, the Company paid for 25% of the allocated overhead expenses
associated with the office space maintained for Mr. Pearlman by Helm Resources,
Inc. The Company did not make any payments to Helm Resources, Inc. during fiscal
1997.

                          DESCRIPTION OF CAPITAL STOCK

GENERAL

     The Company is authorized to issue up to 50,000,000 shares of Common Stock
and 5,000,000 shares of Preferred Stock. As of the date of this Prospectus,
17,362,862 shares of Common Stock and 316 shares of Preferred Stock are issued
and outstanding. An additional 3,109,719 shares of Common Stock are issuable
upon exercise of outstanding stock options and warrants to purchase Common
Stock.

     The following description provides a summary of the material rights and
limitations relating to ownership of the Company's capital stock. For a complete
legal description of the Company's capital stock, reference should be made to
the Company's Restated Certificate of Incorporation, as amended, and Bylaws,
copies of which are included as exhibits to the Registration Statement of which
this Prospectus is a part.

PREFERRED STOCK

     The Company's 9% Convertible Cumulative Redeemable Preferred Stock, Series
A (each a "Preferred Share") is convertible into the Company's Common Stock at a
price of $1.00 per share. Attached to each Preferred Share are redeemable Common
Stock purchase warrants to purchase a number of shares of Common Stock, at a
price of $1.25 per share, equal to the number of shares of Common Stock issued
upon conversion of the Preferred Shares. The warrants are exercisable for a
period of five years commencing on the date of the conversion of the Preferred
Shares. The Preferred Shares may be redeemed by the Company, at its option, upon
no more than sixty, nor fewer than thirty, written days notice to the holder.
Each Preferred Share pays dividends semi-annually each February 1 and August 1,
commencing on February 1, 1997. The Company may elect to make dividend payments
in shares of Common Stock of the Company issued at 90% of the then market price
of the Common Stock.

COMMON STOCK

     All outstanding shares of Common Stock are, and the shares to be issued in
this Offering will be, fully paid and non-assessable. There are no preemptive,
conversion, subscription, redemption or repurchase rights associated with the
shares of Common Stock. Each holder of Common Stock is entitled to one vote for
each share owned of record on matters submitted to a vote of the stockholders.
Holders of Common Stock are not entitled to cumulative voting rights in the
election of Directors. Upon liquidation of the Company, the holders of Common
Stock are entitled to participate ratably in the assets available for
distribution after satisfaction of all claims of the Company's creditors and
preferred shareholders. The holders of Common Stock are entitled to receive
ratably such dividends as the Board of Directors, in its discretion, may declare
out of funds legally available therefor.

CERTAIN BYLAW PROVISIONS

     The Company's Bylaws provide that stockholders may act by written consent,
without prior notice and without a vote, if a consent is signed by stockholders
having not less than the minimum number of votes that would be necessary to
authorize such action at a meeting of stockholders. The Bylaws may be amended by
a majority vote of the stockholders or Board of Directors. The foregoing summary


                                       26


<PAGE>

of material provisions is qualified in its entirety by reference to the
Company's Bylaws, which are filed as an exhibit to the Registration Statement of
which this Prospectus is a part.

ANTI-TAKEOVER MATTERS

     A Florida corporation may not engage in a business transaction with any
person acquiring 10% or more of the voting stock of such Florida corporation (an
"interested shareholder") for a period of three years following the date of such
acquisition, unless: (i) the corporation approved the business transaction; (ii)
the corporation has not had more than 300 shareholders of record at any time
during the proceeding three years; (iii) the interested stockholder has been a
beneficial owner of 80% or more of the corporation's voting stock for at least
five years prior to the transaction; (iv) the interested shareholder is the
beneficial owner of at least 90% of the outstanding voting shares of the
corporation, exclusive of shares acquired directly from the corporation in a
transaction not approved by a majority of the disinterested directors; (v) the
corporation is an investment company registered under the Investment Company Act
of 1940; (vi) in the business transaction, consideration shall be paid to the
holders of each class or series of voting shares and all of the following
conditions shall be met: (1) the aggregate amount of the cash and the fair
market value as of the valuation date of consideration other than cash to be
received per share by holders of each class or series of voting shares in such
transaction are at least equal to the highest of the following: (a) if
applicable, the highest per share price, including any brokerage commissions,
transfer taxes, and soliciting dealers' fees, paid by the interested shareholder
for any shares of such class or series acquired by it within the 2-year period
immediately preceding the transaction date or in the transaction in which it
became an interested shareholder, whichever is higher; (b) the fair market value
per share of such class or series on the transaction date; (c) if applicable,
the price per share equal to the fair market value per share of such class or
series determined pursuant to subparagraph b., multiplied by the ratio of the
highest per share price, including any brokerage commissions, transfer taxes,
and soliciting dealers' fees, paid by the interested shareholder for any shares
of such class or series acquired by it within the 2-year period immediately
preceding the transaction date, to the fair market value per share of such class
or series on the first day in such 2-year period on which the interested
shareholder acquired any shares of such class or series; and (d) if applicable,
the highest preferential amount, if any, per share to which the holders of such
class or series are entitled in the event of any voluntary or involuntary
dissolution of the corporation, (2) the consideration to be received by holders
of outstanding shares shall be in cash or in the same form as the interested
shareholder has previously paid for shares of the same class or series, and if
the interested shareholder has paid for shares with varying forms of
consideration, the form of the consideration shall be either cash or the form
used to acquire the largest number of shares of such class or series previously
acquired by the interested shareholder, (3) During such portion of the 3-year
period preceding the transaction date that such interested shareholder has been
an interested shareholder, except as approved by a majority of the disinterested
directors: (a) there shall have been no failure to declare and pay at the
regular date therefor any full periodic dividends, whether or not cumulative, on
any outstanding shares of the corporation; (b) there shall have been: (I) no
reduction in the annual rate of dividends paid on any class or series of voting
shares, except as necessary to reflect any subdivision of the class or series;
and (II) an increase in such annual rate of dividends as necessary to reflect
any reclassification, including any reverse stock split, recapitalization,
reorganization, or similar transaction which has the effect of reducing the
number of outstanding shares of the class or series; and (c) such interested
shareholder shall not have become the beneficial owner of any additional voting
shares except as part of the transaction which results in such interested
shareholder becoming an interested shareholder, (4) during such portion of the
3-year period preceding the transaction date that such interested shareholder
has been an interested shareholder, except as approved by a majority of the
disinterested directors, such interested shareholder shall not have received the
benefit, directly or indirectly (except proportionately as a shareholder), of
any loans, advances, guaranties, pledges, or other financial assistance or any
tax credits or other tax advantages provided by the corporation, whether in
anticipation of or in connection with such affiliated transaction or otherwise,
(5) except as otherwise approved by a majority of the disinterested directors, a
proxy or information statement describing the affiliated transaction and
complying with the requirements of the Exchange Act and the rules and
regulations thereunder has been mailed to holders of voting shares of the
corporation at least 25 days before the consummation of such affiliated
transaction, whether or not such proxy or information statement is required to
be mailed pursuant to the Exchange Act or such rules or regulations.

     The corporation may opt out of the effect of this statute by: (i) including
a provision to such effect in the corporation's original certificate of
incorporation, (ii) amendment to the corporation's bylaws made by the board of
directors prior to January 1, 1989, or (iii) amendment of the corporation's


                                       27


<PAGE>


certificate of incorporation or bylaws approved by holders of a majority of the
shares entitled to vote, excluding the voting shares of the interested
shareholder; provided that such amendment shall not take effect until 18 months
after its adoption and shall not effect any business combinations with
interested stockholders which are effected during such 18 months.

LIMITATION OF DIRECTOR AND OFFICER LIABILITY

     The Company's Directors are each party to an Indemnification Agreement
pursuant to which such Directors of the Company shall not be personally liable
to the Company or its stockholders for damages for breach of any duty owed to
the Company or its stockholders; provided, that such Director shall act in good
faith and in a manner he reasonably believes to be in, or not opposed to, the
best interests of the Company, and, with respect to any criminal action or
proceeding, such Director has no reasonable cause to believe his conduct is
unlawful.

TRANSFER AGENT

     American Stock Transfer & Trust Co. is the transfer agent and registrar for
the Common Stock.

                                       28


<PAGE>



                                  LEGAL MATTERS

     Certain legal matters relating to the legality of the Securities offered
hereby have been passed upon for the Company by St. John & Wayne, L.L.C., 70
East 55th Street, New York, New York 10022.

                                     EXPERTS

     The consolidated financial statements and financial statement schedule of
the Company included herein, have been audited by Grant Thornton LLP,
independent auditors, as set forth in their report thereon for the fiscal year
ended April 26, 1997 (which contains an explanatory paragraph with respect to a
going concern uncertainty mentioned in Note 3 of the consolidated financial
statements for the fiscal year ended April 26, 1997) included herein. Such
consolidated financial statements and financial statement schedule are included
herein in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.

     The consolidated financial statements and financial statement schedule of
the Company as of April 27, 1996 and for the two years then ended included
herein, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon (which contains an explanatory paragraph with
respect to a going concern uncertainty mentioned in Note 3 to the consolidated
financial statements) appearing elsewhere herein. Such consolidated financial
statements and financial statement schedule are included in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.



                                       29

<PAGE>

<TABLE>
<CAPTION>

                                      INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
                                      --------------------------------------------------------
<S>                                                                                                                              <C>
REPORTS OF INDEPENDENT AUDITORS..................................................................................................F-2

FINANCIAL STATEMENTS

Consolidated Balance Sheets as of January 24, 1998 (unaudited), April 26, 1997 and April 27, 1996................................F-4

Consolidated Statement of Operations for the Nine Months Ended January 24, 1998
  and January 25, 1997, (unaudited) and the Years ended April 26, 1997, April 27, 1996 and April 29, 1995........................F-5

Consolidated Statement of Cash Flows for the nine months ended January 24, 1998 and
  January 25, 1997 (unaudited) and for Years ended April 26, 1997, April 27, 1996, and April 29, 1995............................F-6

Consolidated Statement of Stockholders' Equity for the nine months ended January 24, 1998 
  (unaudited) and for Years ended April 26, 1997, and April 27, 1996, and April 29, 1995.........................................F-7

Notes to Consolidated Financial Statements.......................................................................................F-9

Supplementary Data:

Schedule II - Valuation & Qualifying Accounts...................................................................................F-18
</TABLE>







                                                                F-1

<PAGE>



                         REPORT OF INDEPENDENT AUDITORS


The Board of Directors and Stockholders
ABC DISPENSING TECHNOLOGIES, INC.

We have audited the accompanying consolidated balance sheet of ABC Dispensing
Technologies, Inc. (name changed from American Business Computers Corporation)
as of April 26, 1997, and the related consolidated statement of operations, cash
flows and stockholders' equity for the year then ended. Our audit also included
the financial statement schedule listed in the index at Item 11.2. These
financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of ABC
Dispensing Technologies, Inc. at April 26, 1997, and the consolidated results of
its operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As more fully described in
Note 3, the Company's history of operating losses and limited capital resources
raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 3. The
consolidated financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that might result from the outcome
of this uncertainty.



                                                      GRANT THORNTON LLP


Cleveland, Ohio
July 11, 1997





                                       F-2


<PAGE>



                         REPORT OF INDEPENDENT AUDITORS


The Board of Directors and Stockholders
ABC Dispensing Technologies, Inc.

We have audited the accompanying consolidated balance sheet of ABC Dispensing
Technologies, Inc. (name changed from American Business Computers Corporation)
as of April 27, 1996, and the related consolidated statements of operations,
cash flows and stockholders' equity for the two fiscal years in the period ended
April 27, 1996. Our audits also included the financial statement schedule listed
in the index at Item 11.2 for the two fiscal years in the period ended April
27, 1996. These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of ABC
Dispensing Technologies, Inc. at April 27, 1996, and the related consolidated
statements of operations, cash flows and stockholders' equity for the two fiscal
years in the period ended April 27, 1996, in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial statement
schedule for the two fiscal years in the period ended April 27, 1996, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

The accompanying consolidated financial statements as of April 27, 1996, and for
the two fiscal years in the period then ended, have been prepared assuming that
the Company will continue as a going concern. As more fully described in Note 3,
the Company's history of operating losses and limited capital resources raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 3. The consolidated
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that might result from the outcome of this
uncertainty.



                                                       ERNST & YOUNG LLP


Akron, Ohio
August 8, 1996



                                       F-3


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


                                                                       January 24, 1998
Assets                                                                   Unaudited               April 26,1997     April 27, 1996
------                                                                 ----------------          -------------     --------------
<S>                                                                    <C>                       <C>               <C>
Current Assets
         Cash and cash equivalents                                     $    287,000              $      445,000      $     488,000
         Accounts receivable, less allowance for doubtful
         accounts of $76,000, $191,000 and $136,000 at January 24,
         1998, April 26, 1997 and April 27, 1996, respectively            1,155,000                     327,000            764,000
         Inventories (Note 4)                                             1,084,000                   1,431,000          1,703,000
                                                                     --------------              --------------     --------------
                  Total current assets                                    2,526,000                   2,203,000          2,955,000

Property, plant, and equipment (Notes 5 and 12)                             663,000                     704,000            703,000
Other assets:
         Advances to Joint Venture (Note 15)                                123,000                          --                 --
         Discount on Notes Payable (Note 5)                                  59,000                          --                 --
         Intangible assets, less accumulated amortization of
           $614,000, $552,000 and $480,000 as of January 24, 1998,
           April 26, 1997 and April 27, 1996, respectively                   70,000                     102,000            169,000
         Patents pending and deferred charges                               121,000                     341,000            193,000
                                                                     --------------              --------------     --------------
                                                                            373,000                     443,000            362,000
                                                                     --------------              --------------     --------------
Total Assets                                                           $  3,562,000              $    3,350,000       $  4,020,000
                                                                     ==============              ==============       ============
Liabilities And Stockholders' Equity
------------------------------------

Current Liabilities
         Accounts payable                                              $    938,000                $    877,000       $    875,000
         Line of credit (Note 5)                                            373,000                       2,000            292,000
         Note payable to related party (Note 5)                                   -                           -            500,000
         Current portion of long-term debt                                  369,000                      36,000             25,000
         Accrued liabilities:
                  Legal fees and settlement costs (Note 14)                       -                           -            148,000
                  Employee compensation and benefits                         82,000                     224,000            218,000
                  Warranty reserve                                          170,000                      88,000            197,000
                  Other                                                     198,000                     205,000            386,000
                                                                     --------------              --------------     --------------
                           Total current liabilities                      2,130,000                   1,432,000          2,641,000
 
Long-term debt (Note 5)                                                     265,000                     283,000            294,000

Stockholders' equity:
         Preferred Stock, 9% cumulative; authorized 320 shares, 
         308 and 271 shares issued and outstanding at January 24,
         1998 and April 26, 1997, respectively (Note 8)                   3,850,000                   3,388,000                  -
         Common Stock, $.01 par value; authorized 50,000,000
         shares; 17,355,347; 17,114,279 and 16,984,160 shares as
         of January 24, 1998, April 26, 1997 and April 27, 1996,
         respectively                                                       174,000                     171,000            170,000
         Additional paid-in capital ($36,785 restricted for cost of
         treasury shares held at April 26, 1997)                         19,291,000                  19,014,000         18,942,000
         Retained earnings (deficit)                                    (22,102,000)                (20,850,000)       (17,882,000)
                                                                     --------------              --------------     --------------
                                                                          1,213,000                   1,723,000          1,230,000
         Less notes receivable - stockholders                               (46,000)                    (51,000)          (146,000)
         Less cost of treasury stock, 35,000 shares                               -                     (37,000)                 -
                                                                     --------------              --------------     --------------
            Total Stockholders' Equity                                    1,167,000                   1,635,000          1,085,000
                                                                     --------------              --------------     --------------
Total Liabilities and Stockholders' Equity                             $  3,562,000              $    3,350,000     $    4,020,000
                                                                     ==============              ==============       ============

                             See accompanying notes.

                                                                
</TABLE>

                                      F-4

<PAGE>


<TABLE>
<CAPTION>

                                                  ABC DISPENSING TECHNOLOGIES, INC.
                                                CONSOLIDATED STATEMENT OF OPERATIONS


                                                      Nine Months Ended                              Years Ended
                                                ----------------------------    ---------------------------------------
                                                Jan. 24, 1998  Jan. 25, 1997    April 26,      April 27,      April 29,
                                                        (Unaudited)              1997           1996            1995
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>            <C>            <C>            <C>            <C>        
Revenues:
         Products and services                  $ 4,511,000   $ 2,565,000    $ 3,073,000    $ 5,057,000    $ 3,208,000
         Royalties                                       --            --             --        255,000        151,000
                                                -----------   -----------    -----------    -----------    -----------
                                                  4,511,000     2,565,000      3,073,000      5,312,000      3,359,000

Cost and expenses:
         Products and services                    3,165,000     2,076,000      2,839,000      4,610,000      3,053,000
         General and administrative               1,064,000     1,281,000      1,997,000      1,106,000      1,049,000
         Selling and marketing                      337,000       470,000        700,000        540,000        406,000
         Research and development                   924,000       344,000        629,000        714,000        606,000
                                                -----------   -----------    -----------    -----------    -----------
                                                  5,490,000     4,171,000      6,165,000      6,970,000      5,114,000
                                                -----------   -----------    -----------    -----------    -----------

Loss from operations                              (979,000)    (1,606,000)    (3,092,000)    (1,658,000)    (1,755,000)

Other income (expense)
         Securities and contract litigation
           fees and settlement (Note 14)                --             --         95,000        366,000     (1,000,000)
         Investment income                          10,000         14,000          4,000         78,000         77,000
         Interest expense                          (99,000)       (74,000)      (138,000)      (134,000)       (28,000)
         Other, net                                 35,000         16,000        163,000         24,000         25,000
                                                -----------   -----------    -----------    -----------    -----------
                                                   (54,000)       (44,000)       124,000        334,000       (926,000)
                                                -----------   -----------    -----------    -----------    -----------

Net loss                                       $(1,033,000)   $(1,650,000)   $(2,968,000)   $(1,324,000)   $(2,681,000)
                                                ==========   ============   ============   ============   ============

Net loss per share - Basic and Diluted         $     (0.07)   $     (0.10)   $     (0.18)   $     (0.08)   $     (0.17)
                                                ==========   ============   ============   ============   ============
</TABLE>

                             See accompanying notes.



                                                                F-5

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

                                                              Nine Months Ended                            Years Ended
                                                     ----------------------------------    -----------------------------------------
                                                     Jan. 24, 1998     Jan. 25, 1997        April 26,         April 27,   April 29,
                                                                 (Unaudited)                  1997              1996           1995
-----------------------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES:
<S>                                               <C>              <C>              <C>              <C>              <C>           
Net loss                                          $  (1,033,000)   $  (1,650,000)   $  (2,968,000)   $  (1,324,000)   $  (2,681,000)
   Adjustments to reconcile net loss
   to net cash used in operating activities:
   Deprecation and amortization                         291,000          124,000          313,000          110,000           99,000
   Loss on disposal of assets                                --               --               --               --            6,000
   Value of common stock issued to settle
   litigation                                                --               --               --               --          450,000
Treasury stock issued as compensation for legal
 services                                                37,000               --               --               --               --

   Changes in operating assets and liabilities:
   Receivables                                         (828,000)         437,000          437,000         (398,000)         220,000
   Inventories                                          347,000          648,000          272,000         (484,000)         129,000
   Other assets                                          46,000         (291,000)        (307,000)        (283,000)         (13,000)
      Accounts payable                                   61,000         (475,000)           2,000          421,000          149,000
      Accrued liabilities                               (82,000)        (289,000)        (428,000)        (869,000)         163,000
      Deferred income                                    15,000          (29,000)          (5,000)          13,000          (32,000)
                                                  -------------    -------------    -------------    -------------    -------------
   Total adjustments                                   (113,000)         125,000          284,000       (1,490,000)       1,171,000
                                                  -------------    -------------    -------------    -------------    -------------

Net cash used in operating activities                (1,146,000)      (1,525,000)      (2,684,000)      (2,814,000)      (1,510,000)

INVESTING ACTIVITIES:

   Purchases of property, plant, and equipment          (46,000)         (34,000)         (69,000)         (16,000)        (671,000)
   Additions to patent                                  (30,000)          (5,000)          (4,000)              --          (11,000)
   Advances to Joint Venture                           (123,000)              --               --               --               -- 
   Investment in Joint Venture                               --               --          (14,000)              --               --
                                                  -------------    -------------    -------------    -------------    --------------

Net cash used in investing activities                  (107,000)         (29,000)         (87,000)         (16,000)        (682,000)

FINANCING ACTIVITIES:

   Proceeds from (Payments on)
        Line of Credit - Net                            371,000         (292,000)              --               --               --
   Increase in deferred charges                         (59,000)              --               --               --               --
   Proceeds from private placements from
      Preferred Stock                                   462,000        2,836,000        3,388,000          926,000          979,000
   Proceeds from private placement of
     notes payable                                      335,000               --           29,000        1,267,000          490,000
   Private placement costs                                   --               --          (73,000)              --               --
   Proceeds from issuance of common stock                    --           69,000          140,000               --               -- 
   Repayment of notes payable and loan costs            (29,000)        (592,000)        (820,000)        (684,000)         (12,000)
   Proceeds from collection of  stockholders
      receivable                                          5,000           94,000           95,000               --               --
   Proceeds from stock issued for exercise of
      stock options and warrants                             --               --            6,000          500,000           23,000
   Purchase of treasury shares                               --               --          (37,000)              --               --
   Other                                                 10,000           (9,000)              --               --               --
                                                  -------------    -------------    -------------    -------------    -------------
Net cash provided by financing activities             1,095,000       2, 106,000        2,728,000        2,009,000        1,480,000
                                                  -------------    -------------    -------------    -------------    -------------
Net increase (decrease) in cash and cash 
  equivalents                                          (158,000)         552,000          (43,000)        (821,000)        (712,000)
Cash and cash equivalents at beginning of year          445,000          488,000          488,000        1,309,000        2,021,000
                                                  -------------    -------------    -------------    -------------    -------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                287,000    $   1,040,000    $     445,000    $     488,000    $   1,309,000
                                                  =============    =============    =============    =============    =============
</TABLE>
                                               See accompanying notes.
                                       F-6

<PAGE>

<TABLE>
<CAPTION>


                                                  ABC DISPENSING TECHNOLOGIES, INC.
                                           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                                  Years Ended April 26, 1997, April 27,
                                                        1996, and April 29, 1995
                                         and Nine Months Ended January 24, 1998 (unaudited)
                                         
                                                        
                                                         Number
                            Number of                     of                                                        
                            Shares of                  Shares of                Additional     Retained         Notes       
                             Common          Common     Preferred   Preferred    Paid-in       Earnings       Receivable   Treasury
                              Stock          Stock       Stock       Stock       Capital     (Deficiency)    Stockholders    Stock
                            ---------        ------     ---------  ---------   -----------   -------------   ------------  --------
<S>                         <C>             <C>          <C>         <C>       <C>           <C>             <C>           <C>
Balance at May 1, 1994      14,981,039      $150,000        -           -      $15,921,000   $(13,877,000)                      -
   Private placements        1,000,000        10,000                             1,126,000                    $(164,000)
   Exercise of stock
   options                      15,077                                              23,000
   Collection on notes
   receivable-stockholders                                                                                        7,000
   Net Loss                                                                                    (2,681,000)
                            ----------      --------    ---------  ---------   -----------   -------------    -----------  --------
Balance at April 29, 1995   15,996,116      $160,000        -           -      $17,070,000   $(16,558,000)     $(157,000)       -
   Private placements          569,667         6,000                               909,000
   Stock issued to settle
   litigation                  150,000         1,000                               466,000
   Exercise of warrants        214,000         2,000                               426,000
   Exercise of stock
   options                      54,377         1,000                                71,000
   Collection on notes
   receivable-stockholders                                                                                         11,000
   Net Loss                                                                                    (1,324,000)
                            ----------      --------    ---------  ---------   -----------   -------------    -----------  --------
Balance at April 27, 1996   16,984,160      $170,000        -           -      $18,942,000   $(17,882,000)      ($146,000)      -
   Preferred Stock private
   placement (Note 9)                                      271      $3,388,000
   Private placement costs                                                         (73,000)
   Issuance of Stock to
   Mezzanine Financial
   Fund, L.P. (Note 5)         125,000         1,000                               139,000
   Exercise of Stock
   Options                       5,000                                               6,000
   Collection on notes
   receivable-stockholders                                                                                         95,000
   Net Loss                                                                                    (2,968,000)
 
  Purchase of Treasury Stock 
   35,000 shares                                                                                                           $(37,000)
                            ----------      --------    ---------  ---------   -----------   -------------    -----------  --------
                              

</TABLE>

                                                                F-7

<PAGE>
<TABLE>
<CAPTION>



                                                          ABC DISPENSING TECHNOLOGIES, INC.
                                                   CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                                        Years Ended April 26, 1997, April 27,
                                                            1996, and April 29, 1995 and
                                                            Nine Months Ended January 24,
                                                                  1998 (unaudited)
                                                                     (continued)
                                                                                                                                   
                                                                                                                                   
                                                        Number                                                                   
                            Number of                     of                                                                      
                            Shares of                  Shares of               Additional     Retained         Notes               
                             Common           Common   Preferred   Preferred     Paid-in       Earnings       Receivable   Treasury
                             Stock            Stock      Stock       Stock       Capital     (Deficiency)    Stockholders    Stock 
                            ---------         ------    ---------  ---------   -----------   -------------   ------------  --------
<S>                         <C>              <C>          <C>      <C>          <C>           <C>             <C>          <C>     

Balance at April 26, 1997   17,114,279       $171,000      271     $3,388,000   $19,014,000   $(20,850,000)   $(51,000)    $(37,000)

Preferred Stock Private                                          
Placement (Note 9)                                          37        462,000       

Preferred Stock Dividend
(Note 9)                       241,068          3,000                               216,000       (219,000)

Warrants Outstanding -
Original Issue Discount                                                              61,000

Collection on notes
receivable-stockholders                                                                                          5,000

Net Loss                                                                                        (1,033,000)

Issuance of Treasury Stock  
 (35,000 Shares) issued for 
 legal services received                                                    
                                                                                                                             37,000
                            ----------       --------      ---     ----------   -----------   -------------   ---------    ---------
Balance at January 24,      17,355,347       $174,000      308     $3,850,000   $19,291,000   $(22,102,000)   $(46,000)    $      0
1998                        ==========       ========      ===     ==========   ===========   =============   =========    =========


</TABLE>


                                                       See accompanying notes.



                                                                F-8

<PAGE>

                        ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 April 26, 1997
                   (information as of January 24, 1998 and for
                     the nine months ended January 24, 1998,
                       and January 25, 1997, is unaudited)

1.      BUSINESS DESCRIPTION

ABC Dispensing Technologies, Inc. (name changed from American Business Computers
Corporation) designs proprietary dispensing systems to dispense and blend
liquids, powders and other ingredients to a uniform and high degree of accuracy.
The Company provides training, installation and product service and also custom
designs and manufactures its own proprietary dispensing equipment to meet the
needs of its customers which are located primarily in the United States. To
date, the Company has focused its development and marketing efforts on the
Beverage and Paint Industries.

2.      SIGNIFICANT ACCOUNTING POLICIES

YEAR END -The Company's fiscal year-end is the Saturday closest to April 30,
which results in a fifty-two or fifty-three week year. Fiscal 1998, fiscal 1997,
fiscal 1996 and fiscal 1995 consist of fifty-two weeks ending on April 24, 1998,
April 26, April 27, and April 29, respectively. References to the years 1998,
1997, 1996 and 1995 refer to fiscal years ended April 24, 1998, April 26, 1997,
April 27, 1996, and April 29, 1995, respectively.

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

LOSS PER SHARE - In 1997, the Fnancial Accounting Standards Board issued
Statement (SFAS) No. 128, Earnings per Share. SFAS No. 128 replaced the
calculation of primary and fully diluted earnings per share with basic and
diluted earnings per share. All loss per share amounts for all periods have
been presented, and where appropriate, restated to conform to the SFAS No. 128
requirements.

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

CASH EQUIVALENTS - The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash equivalents. On
December 22, 1997 the Company issued 35,000 shares of treasury stock as
compensation for legal services received. The treasury stock was valued at
$37,000.

FINANCIAL INSTRUMENTS - The carrying value of the Company's cash, accounts
receivable, accounts payable and notes payable are a reasonable estimate of
their fair value due to the short-term nature of these instruments. The
Company's long-term debt has variable interest rates and carrying value
approximates fair market value at January 24, 1998.

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

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

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

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

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

MAJOR CUSTOMER - Revenues from The Home Depot, Inc. were 90 percent of total
revenues for the nine months ended January 24, 1998. Revenues from The
Sherwin-Williams Company were 1%, 65%, 54%, 72% and 59% of the Company's total
revenues for the nine months ended January 24, 1998 and January 25, 1997 and the
years ended April 26, 1997, April 27, 1996 and April 29, 1995. respectively. The
Company currently has no orders from Sherwin-Williams and does not expect
significant revenues from sales to Sherwin-Williams in the near future.

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

STOCK-BASED COMPENSATION - The Company grants stock options for a fixed number
of shares to employees generally with an exercise price equal to the fair value
of the shares at the date of grant. The Company accounts for stock-based
compensation in accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," and, accordingly, recognizes no
compensation expense for the stock option grants. Additional disclosures
relating to stock option activity which are required by Statement of Financial
Accounting Standards No. 123 - "Accounting for Stock Based Compensation" are
included in note 7.

BASIS OF PRESENTATION OF INTERIM FINANCIAL INFORMATION - The interim unaudited
consolidated financial statements included herein have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the nine months ended January 24, 1998 are not
necessarily indicative of the results that may be expected for the year ending
April 25, 1997.

                                       F-9

<PAGE>
                        ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 April 26, 1997
                   (information as of January 24, 1998 and for
                     the nine months ended January 24, 1998,
                       and January 25, 1997, is unaudited)

3.      GOING CONCERN UNCERTAINTY

The Company has reported a net loss for each year of operation since its
inception except for 1989, and as of January 24, 1998 has an accumulated
retained earnings deficiency of $22,102,000. The Company's cash flow from
operating activities was a negative $1,146,000, negative $2,684,000 and negative
$2,814,000 for the nine months ended January 24, 1998, and the years ended April
26, 1997, and April 27, 1996, respectively. Cash and cash equivalents declined
from $2,021,000 at the beginning of fiscal 1995 to $287,000 at January 24, 1998.
Management expects that the Company will continue to incur losses and use cash
in operations in the near future.

Management recognizes the Company must generate additional funds to assure
continuation of operations. The Company has been successful in raising capital
from private investors and raised $5,220,000 over the past three years through
private placements of both preferred and common stock. The Company is continuing
in it efforts to raise capital through private placements of 9% Convertible
Cumulative Preferred Stock. The Preferred Stock is convertible into common stock
at $1 per share. Proceeds from private placements will be used to reduce
accounts payable and provide additional working capital. No assurances can be
given that the Company will be successful in raising additional capital.
Further, there can be no assurance, assuming the Company successfully raises
additional funds, that the Company will achieve profitable operations or
positive cash flow. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. No adjustments to the amounts or
classification of assets and liabilities which could result from the outcome of
this uncertainty are reflected in the consolidated financial statements.

4.      INVENTORIES

At January 24, 1998, April 26, 1997 and April 27, 1996, inventories consisted of
the following:
                       January 24, 1998             1997            1996
                       ----------------        -----------      -----------
Raw Materials             $ 865,000             $   927,000      $  729,000
Work-in-process              85,000                 118,000         488,000
Finished goods              134,000                 386,000         486,000
                         ----------            ------------     -----------
                         $1,084,000              $1,431,000      $1,703,000
                         ==========            ============     ===========

The above amounts are net of obsolescence reserves of $838,000 at January 24,
1998 and April 26, 1997, and $985,000 at April 27, 1996.

5.   FINANCING ARRANGEMENTS

NOTES PAYABLE

In June 1994, the Company purchased its headquarters facility in Akron, Ohio for
$490,000. A note payable was entered into during fiscal 1995 to partially
finance this purchase which was previously leased from the former chairman. The
note payable has an adjustable interest rate (9.03% at January 24, 1998 and
9.25% at April 26, 1997, and April 27, 1996) which may not increase or decrease
by more than 2% once every three years. The maximum increase or decrease is 6%
over the life of the loan. Principal and interest payments of $2,995 are payable
monthly with the balance of $143,000 due October 1, 2005. The note payable is
secured by the headquarters facility. At January 24, 1998, the facility and
improvements thereto have a net book value of $535,000.

At January 24, 1998, April 26, 1997 and April 27, 1996, long-term debt consisted
of the following:
<TABLE>
<CAPTION>
                                                      January 24, 1998       1997              1996
                                                      ----------------    ---------         ---------
<S>                                                        <C>             <C>               <C>     
Note payable to bank                                       $259,000        $268,000          $278,000
Notes Payable                                               335,000               -                 -
Other                                                        40,000          51,000            41,000
                                                           --------        --------           -------
Less amounts due within one year                            634,000         319,000           319,000
                                                           (369,000)        (36,000)          (25,000)
                                                           --------        --------          --------
Total long-term debt                                       $265,000        $283,000          $294,000
                                                           ========        ========          ========
</TABLE>
                                                                F-10

<PAGE>
As of April 26, 1997 maturities of long term debt for the next five years were
as follows: 1998--$35,000; 1999--$32,000; 2000--$20,000; 2001--$16,000 and
2002--$17,000.
 
In August, 1997 the Company began issuing notes payable at a discount. The notes
are sold in multiples of $12,500, or fractions thereof, and pay interest at the
rate of 10%, with principal and interest paid at maturity. The initial maturity
date is June 30, 1998, however, the Company may, at its sole option, extend the
maturity date to December 31, 1998. Attached to notes are reedemable common
stock purchase warrants to purchase 5,000 shares of the Company's common stock
at a price of $1.25 per share. The warrants are exercisable for a period of five
years commencing on the date of issuance. The warrants have been valued at
$63,000 using the Black-Sholes option pricing model and a discount on notes
payable has been recorded for that amount. As of February 24, 1998, the Company
has issued notes in the aggregate of $335,000.

For the nine months ended January 24, 1998 and the years ended April 26, 1997
and April 27, 1996, interest expenses approximated interest paid by the Company.

MEZZANINE NOTE
On January 17, 1996, the Company obtained a $500,000 working capital
asset-secured loan from the Mezzanine Financial Fund, L.P. ("Mezzanine").
Interest is due monthly at the rate of 18% per annum. In consideration for
providing the loan, Mezzanine received a five (5) year warrant to acquire shares
of common stock at a price equal to the lower of seventy percent (70%) of the
30-day average trading price prior to closing of the loan, or $2.50 (the
"Price"). The warrant exercise price was therefore determined to be $2.04 per
share. The number of shares subject to the warrant will be determined by
dividing the Price into an amount equal to 10% of the average annual loan
balance multiplied by the number of years the loan is outstanding (the "Warrant
Fee"). The resulting maximum number of warrants that could be issued are 58,910.
At Mezzanine's election, all or any part of the Warrant Fee may be put to the
Company upon repayment of the loan for payment in cash in the amount equal to
70% of such Warrant Fee, paid in equal monthly payments over the same number of
months that the loan was outstanding. Additionally, Mezzanine received a closing
fee equal to 2% of the amount of the loan and reimbursement for expenses
associated with the making of the loan. On July 24, 1996, the Company
distributed 125,000 shares of common stock to Mezzanine. Mezzanine subsequently
sold 90,000 of the shares to satisfy interest charges from April through
September, 1996, prepayment penalties and other fees. On September 24, 1996, the
Company repaid the $500,000 principal balance of the loan in full. On December
31, 1996, the loan agreement was terminated and Mezzanine returned 35,000 shares
of Common Stock to the Company. 

Herbert M. Pearlman, who resigned as Chairman of the Board of Directors of the
Company on February 5, 1997, is a director, officer and principal stockholder of
the general partner of Mezzanine. Mr. Pearlman is also Chairman, chief executive
officer and a principal stockholder of Helm Resources, Inc., a publicly traded
company which holds an approximately 14% equity stake in Mezzanine.

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

LINE OF CREDIT On December 18, 1995, the Company established a $750,000 line of
credit secured by accounts receivable and other assets of the Company. In
February, 1996, the line of credit was reduced from $750,000 to $450,000. In
December, 1998, the credit line was increased to $500,000.  At January 24, 1998,
$390,000 was outstanding and $110,000 of the line of credit was available. At
April 26, 1997, $2,000 was outstanding and $108,000 of the line of credit was
available. The line of credit bears an interest rate of prime plus four points
(12.50% at January 24, 1998, April 26, 1997 and April 27, 1996), which equals
the weighted-average interest rate for the period.



                                      F-11

<PAGE>
                        ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 April 26, 1997
                 (information as of January 24, 1998 and for the
                     nine months ended January 24, 1998, and
                         January 25, 1997, is unaudited)

6.   INCOME TAXES

Deferred income taxes are provided for the temporary differences between the
financial reporting basis and the tax basis of Company assets and liabilities.

The components of the Company's deferred income taxes at April 26, 1997 and
April 27, 1996 are as follows:


                                                1997               1996
                                           ----------------   ------------
Net operating loss carry forwards            $ 6,650,000       $ 5,450,000
Inventories                                      413,000           495,000
Other                                            170,000           255,000
                                             -----------       -----------
   Total deferred tax asset                    7,233,000         6,200,000
Valuation allowance for deferred taxes        (7,233,000)       (6,200,000)
                                             -----------       -----------
   Net deferred taxes                               $-0-              $-0-
                                             ===========       ===========  

At April 26, 1997 and April 27, 1996, the Company had Federal net operating loss
carryforwards for tax reporting purposes of approximately $17,500,000 and
$14,800,000, respectively. The net operating loss carryforwards expire in the
years 1998 to 2012. It is uncertain if benefits relating to these deferred tax
assets are realizable and accordingly, a valuation allowance equal to the amount
of such deferred tax assets has been recorded.

7.   COMMON STOCK

STOCK OPTION PLANS

The Company has non-qualified stock option plans under which directors, officers
and key employees may be granted incentive stock options for the purchase of the
Company's common stock An aggregate of 500,000 shares of the Company's common
stock were reserved for issuance under the Company's 1990 Stock Option Plan and
1,750,000 shares were reserved for issuance under the Company's 1995 Stock
Option Plan and amendments thereto. All granted options are exercisable after
six months from the grant date provided the employee has at least one year of
service. Grant options expire five years after grant date or 90 days after the
Employee's or Director's relationship with the Company is terminated. The
Company also may grant incentive stock warrants to directors, officers and key
employees. The stock warrants can be redeemed to purchase the common stock of
the Company.

A summary of the Company's stock option plans and employee stock warrants, and
related information for the years ended April 26, 1997, April 27, 1996, and
April 29, 1995, is as follows:
<TABLE>
<CAPTION>
                                                    1997                         1996                            1995
                                          -------------------------      ------------------------       ------------------------
                                                          Weighted                    Weighted                      Weighted
                                                           Average                     Average                       Average
                                            Shares     Exercise price     Shares   Exercise price       Shares   Exercise price
                                            ------     --------------     ------   --------------       ------   --------------
<S>                                         <C>        <C>                <C>        <C>               <C>         <C>         
Outstanding - beginning of year             510,966    $       2.46       411,941    $       1.81      179,018     $       2.24

     Granted                              1,029,851    $       1.29       273,902    $       2.89      264,500     $       1.69
     Exercised                               (5,119)   $       1.10       (54,377)   $       1.32            -                -
     Canceled                               (17,375)   $       1.50      (120,500)   $       1.75      (31,577)    $       3.15
                                          ---------                      --------                      -------

Outstanding - end of year                 1,518,323    $       1.68       510,966    $       2.46      411,941     $       1.81
                                          =========                      ========                      =======

Exercisable at end of year                1,039,652    $       1.92       468,814    $       2.48      409,941     $       1.81
                                          =========                      ========                      =======

Available for grant                         341,677                       894,034                      113,059
                                          =========                      ========                      =======

Weighted average fair value of options
     granted during the year                $  0.96                       $  1.95                       $ 1.14
</TABLE>
                                                                F-12

<PAGE>



                        ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.   COMMON STOCK (CONTINUED)

The following table summarizes information about stock options and employee
stock warrants outstanding and exercisable by price range as of April 26, 1997:

<TABLE>
<CAPTION>

                                                            Outstanding                           Exercisable
                                          --------------------------------------------        ---------------------
                                                           Weighted
                                                            Average
                                                           Remaining         Weighted                         Weighted
                                                          Contractual         Average                          Average
Range of exercise prices                 Shares              Life         Exercise Price      Shares        Exercise Price
------------------------                 --------       ------------------- --------------   --------      --------------

<S>                                      <C>                 <C>            <C>                 <C>          <C>       
   $1.00 - $1.63                         1,155,421           4.06           $   1.27            676,750      $     1.34

   $2.00 - $2.50                            41,652           3.82           $   2.17             41,652      $     2.17

   $2.50 - $3.44                           321,250           2.93           $   3.09            321,250      $     3.09
                                         ---------                                            ---------

                                         1,518,323                                            1,039,652
                                         =========                                            =========
</TABLE>


ACCOUNTING FOR STOCK BASED COMPENSATION

The Company has elected to follow Accounting Principles Board Opinion No. 25,
ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES (APB 25) and related interpretations in
accounting for its employee stock based compensation. The exercise price of each
stock options and employee stock warrant equals the market price of the
Company's stock on the date of grant. Accordingly, no compensation cost has been
recognized for the plans.

During 1995, the Financial Accounting Standard Board issued Statement of
Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION
(SFAS 123). SFAS 123 defines a fair valued based method of accounting for an
employee stock option and similar equity instrument and encourages all entities
to adopt that method of accounting for all of their employee stock compensation
plans. However, SFAS 123 allows an entity to continue to measure compensation
cost for those plans using the method of accounting prescribed in APB 25.
Entities that elect to continue using APB 25 must make pro forma disclosures of
net income and earnings per share as if the fair value based method of
accounting defined in SFAS 123 had been adopted.

The Company has computed, for pro forma disclosure purposes, the value of all
options granted during the fiscal years ending April 26, 1997, and April 26,
1996, using the Black-Scholes option pricing model as prescribed by SFAS 123
using the following weighted average assumptions:

                                 1997                       1996
                               --------                   -------

Risk-free interest rate           6.54%                     6.18%

Dividend yield                      0 %                       0 %

Volatility                          79%                       92%

Average life                    5 years                   5 Years



                                      F-13

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

7.     COMMON STOCK (CONTINUED)

Using the Black-Scholes methodology, the total value of options granted during
fiscal 1997 and 1996 was $781,000 and $495,000, respectively. If the Company had
accounted for its stock-based compensation plans in accordance with SFAS 123,
the Company's net loss and net loss per share would approximate the pro forma
disclosures below:

<TABLE>
<CAPTION>
                                                              April 26, 1997       April 27, 1996
                                                              --------------       --------------
<S>                                     <C>                   <C>                   <C>          
     Net Loss                           As reported           $ (2,968,000)         $ (1,324,000)

                                        Pro forma             $ (3,749,000)         $ (1,819,000)

     Primary earnings per share         As reported                $ (0.17)              $ (0.08)

                                        Pro forma                  $ (0.22)              $ (0.11)
</TABLE>
WARRANTS

On May 2, 1995, the Company granted David B. Hudson, V.P. - Domestic Beverage
Sales, and Keith P. Jordan, National Account Manager, warrants to purchase
20,000 and 10,000 restricted shares of common stock, respectively, at $3.38 per
share; the warrants expire May 2, 2000.

On June 13, 1995, the Company initiated a private offering to sell 20 units of
$25,000 10% Senior Subordinate Notes due June 1, 1998 and three year redeemable
warrants to purchase 12,500 shares of the Company's common stock at $2 per share
(See Note 5).

On August 1, 1995, the Company granted warrants to Herbert M. Pearlman, Chairman
(200,000 at $3.00 per share), Robert A. Cutting, former President (100,000 at
$3.00 per share), and others (30,000 ranging from $2.00 to $3.00).

On September 14, 1995, the Company issued 200,000 warrants at $3.50 per share to
Hussmann Corporation pursuant to the securities litigation settlement (see
footnote 12 to the Consolidated Financial Statements).

On November 1, 1995, the Company issued 500,000 warrants at $3.50 per share to
Pepsi-Cola Company pursuant to the securities litigation settlement (see
footnote 12).

On December 11, 1995, the Company issued 30,000 warrants at $2.25 per share
pursuant to a sale of common stock.

On January 17, 1996, the Company issued 58,910 warrants at $2.04 per share to
Mezzanine Financial Fund L.P. pursuant to the debt financing received by
Mezzanine (see footnote 5)

On July 15, 1996, the Company granted 300,000 warrants at $1.375 per share to
Charles M. Stimac, Jr. pursuant to the terms of his employment agreement as
President of the Company. The warrants are subject to a 10 year vesting
schedule.

On September 7, 1996, the Company granted warrants to William Lerner, Secretary
(10,000) and William T. Shanklin, consultant to the Company (25,000) at $1.25
per share.

On October 27, 1996, the Company granted 15,000 warrants at $1.25 per share to
Charles M. Stimac, Jr., President.

On January 2, 1997, the Company granted warrants to Herbert L. Luxenburg,
Director (20,000), and C. Rand Michaels, Director (20,000), at $1.25 per share.

On February 5, 1997, the Company issued 50,000 warrants at $1.25 per share to
Herbert M. Pearlman, former Director.

                                      F-14
<PAGE>
                        ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


8.       NET LOSS PER SHARE

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

<TABLE>
<CAPTION>

                                                       Nine Months Ended                        Years Ended
------------------------------------------------------------------------------------------------------------------------------
                                            January 24,        January 25,     April 26,          April 27,        April 29,
                                               1998              1997            1997               1996              1995
                                         -------------      --------------   -------------    --------------     -------------
<S>                                     <C>                <C>               <C>               <C>                <C>        
Numerator:
     Net Loss                           $(  1,033,000)     $( 1,650,000)     $( 2,968,000)     $  1,324,000       $(2,681,000)
     Preferred Stock Dividends                243,000)          (67,000)         (143,000)               -                 -
                                        --------------     -------------     --------------    -------------      ------------
     Numerator for net loss per
     share - income available to
     common shareholders                $(  1,276,000)     $ (1,717,000)     $( 3,111,000)     $( 1,324,000)      $(2,681,000)
                                        --------------     -------------      -------------     -------------     ------------
Denominator:
     Denominator for basic and diluted earnings
     per share - weighted-average
     shares                                17,178,863        17,067,493        17,074,000        16,414,000        15,669,000
                                        --------------     -------------     -------------     -------------     -------------

Net loss per share -- basic and
diluted                                 $(       0.07)     $(      0.10)      $(      0.18)    $(      0.08)     $(      0.17)
                                        ==============     =============     ==============    =============     =============
</TABLE>


Diluted earnings per share calculations have been omitted as the effect of
potentially dilutive securities would have been anti-dilutive for the periods
reported.

Options and warrants to purchase 3,109,719, 3,325,411, 2,853,234, 2,775,679 and
1,669,277 shares of Common Stock were outstanding and exercisable as of January
24, 1998, January 25, 1997, April 26, 1997, April 27, 1996, and April 29, 1995,
respectively. Each option allows the holder to purchase one share of the
Company's Common Stock. The exercise price of the options varies from $0.844 to
$3.50 per share. The options and warrants were not used to compute diluted
earnings per share because the Company has net losses for the periods reported,
and therefore, the effect would be antidilutive.


9.       PREFERRED STOCK

The shareholders of the Company have approved an amendment to the Company's
Certificate of Incorporation to authorize 5,000,000 shares of Preferred stock.

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

As of January 24, 1998, through private placements, the Company issued 308
shares of Series A Preferred Stock in exchange for notes or $12,500 cash per
share, generating gross proceeds of $3,850,000 to the Company.

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

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

On October 7, 1997, the Company paid its February 1, and August 1, 1997,
Preferred Stock dividend requirements by issuing common stock. The total number
of common shares issued for the February 1, 1997 dividend was 61,240. The shares
were valued at $1.09359 per share. The total number of common shares issued for
the August 1, 1997 dividend was 179,828. The shares were valued at $0.84375 per
share.


                                      F-15

<PAGE>



As of February 1, 1998 there is a dividend payable on Preferred Stock in the
amount of $167,463. At the discretion of the Company, the dividend will be paid
in common stock of the Company. A total of 228,636 shares will be issued to
satisfy the dividend requirement.


10.      RELATED PARTY TRANSACTIONS

From February, 1995, to August, 1996, the Company leased office space for
Herbert M. Pearlman from Helm Resources, Inc. for approximately $21,000 per
year. Mr. Pearlman is Chairman, Chief Executive Officer and a principal
stockholder in Helm Resources, Inc. (see footnote 5). Mr. Pearlman resigned as
Chairman of the Board of Directors of the Company on February 5, 1997.


11.      OPERATING LEASES

Aggregate rental expense for the nine months ended January 24, 1998, and fiscal
years 1997, 1996 and 1995 was $33,000, $48,000, $60,000 and $13,000,
respectively.


12.      PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at January 24, 1998,
April 26, 1997 and April 27, 1996:



<TABLE>
<CAPTION>
                                          January 24, 1998       1997          1996
                                          ----------------    ---------     ---------
<S>                                            <C>              <C>           <C>    
Land                                           $59,000          $57,000       $57,000
Building and building improvements             572,000          572,000       572,000
Machinery and equipment                        890,000          934,000       865,000
                                             ---------        ---------     ---------
                                             1,519,000        1,563,000     1,494,000
Less accumulated depreciation                 (856,000)        (859,000)     (791,000)
                                             ---------        --------      ---------
                                              $663,000         $704,000      $703,000
                                             =========        =========     =========
</TABLE>




                                                                F-16

<PAGE>



                        ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13.           RETIREMENT BENEFITS

The Company sponsors a 401(k) plan which covers substantially all full-time
employees. Eligible employees may contribute up to 14% of their compensation to
this plan. The Company has agreed to match participants' contributions at the
rate of 25 cents on the dollar up to a maximum of 4% of the participants'
compensation. The cost of the Company's matching contribution was approximately
$11,000 for the nine months ended January 24, 1998, $13,000 in 1997, and $9,000
in each year during 1996 and 1995. The Company has the discretion to make a
profit-sharing contribution, but no such contribution has been made by the
Company.


14.           LITIGATION SETTLEMENT/CONTINGENCIES

On March 13, 1995, the Company and other defendants (officers and directors and
former directors of the Company) entered into a Stipulation of Settlement (the
"Settlement") with the Plaintiffs in a class action lawsuit (the "Securities
Litigation") that provided for the Settlement of the Securities Litigation. The
Settlement provided for a Gross Settlement Fund of $1,850,000, plus 1,550,000
shares of the Company's common stock. The Company's contribution to the
Settlement Fund was $443,000 and 150,000 shares. The Stipulation defined the
Plaintiff class as "all persons who purchased ABCC common stock on the open
market from January 24, 1990 through August 1, 1991, inclusive." On June 19,
1995, the U.S. Federal District Court for the Southern District of New York
entered a Final Judgment approving the Settlement as "fair, reasonable and
adequate to members of the class." Pursuant to the terms of the Final Judgment,
on July 6, 1995, Plaintiffs' counsel were paid attorneys' fees of $550,000 (plus
$1,078 of accrued interest after taxes) on the cash portion of the Settlement
Fund and were reimbursed $244,394 for expenses out of the Gross Settlement Fund.
Plaintiffs' counsel also received an aggregate of 465,000 shares of common stock
of the Company awarded to Plaintiffs' counsel from the Gross Settlement Fund as
a portion of attorneys' fees. These shares of common stock were distributed to
Plaintiffs' counsel in early February 1996.

On January 16, 1996, the U.S. Federal District Court ordered the distribution of
the Net Settlement Fund consisting of approximately $1,082,000 cash and
1,085,000 shares of common stock of the Company to 1,469 authorized claimants.
The distribution to authorized claimants was made pursuant to the Order of the
Court on about February 23, 1996. There is no further action to be taken in
connection with the Securities Litigation since the Settlement has been
effectuated in accordance with the Order of the Court.

The estimated legal fees and settlement costs were accrued for the above
action. At April 29, 1995, the accrual amounted to $1,498,000. During 1996,
$1,037,000 of this amount was settled in cash and securities, $366,000 was
reversed and credited to income and $95,000 remained in the accrual at April 26,
1996 to cover certain remaining legal fees. In 1997, the remaining $95,000
accrual was reversed and credited to income.

The Company from time to time is subject to routine litigation incidental to its
business. The Company believes that any liability that may finally be determined
would not have a material adverse effect on its financial statements.


15.           JOINT VENTURE AGREEMENT

On June 25, 1997, the Company entered into a joint venture agreement with Damon
Industries, a privately-owned national juice manufacturer with headquarters in
Sparks, Nevada, to form "Virtual Squeeze", a 50-50 business enterprise. The
purpose of the joint venture is to provide shelf-stable juice products and
state-of-the-art dispensing technology to health care facilities with high
volume juice consumption. Under the agreement, the Company will manufacture
dispensing equipment and provide technical support to the joint venture, and
Damon will manufacture fruit juice and provide marketing and administrative
support for the joint venture. The joint venture will finance the dispensing
equipment through sale/leaseback arrangements. The dispensing equipment will be
placed in a customer's facility at no charge providing the customer commits to
purchasing all of its juice from the Virtual Squeeze. The revenue from the juice
sales will cover the cost of equipment, juice, and operating expenses of the
joint venture. Resulting profits from the juice sales will be split equally by
the Company and Damon.

Through January 24, 1998, the Company has provided $123,000 of juice dispensing
equipment to Virtual Squeeze, a joint venture between the Company and Damon
Industries of Sparks, Nevada. The Company will be reimbursed for the cost of the
equipment through revenues from juice sales made by Virtual Squeeze.



                                      F-17

<PAGE>


<TABLE>
<CAPTION>

                                          ABC DISPENSING TECHNOLOGIES, INC. (CONSOLIDATED)

                                          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

Column A                                     Column B              Column C          Column D              Column E

                                                                  Additions
                                           Balance at            Charged to                                 Balance
                                            Beginning             Costs and                                  at End
Description                                 of Period              Expenses        Deductions             of Period
-----------                                ----------            ----------        ----------             ---------
<S>                                        <C>                  <C>               <C>                     <C>    
NINE MONTHS ENDED JANUARY 25, 1998 (UNAUDITED)

Allowance for doubtful accounts             $ 191,000            $        -        $ 115,000 (a)          $  76,000
                                             ========             =========         =========               =======

Allowance for inventory obsolescence        $ 838,000            $        -        $       -              $ 838,000
                                             ========             =========         =========               =======

YEAR ENDED APRIL 26, 1997

Allowance for doubtful accounts             $ 136,000            $  141,000        $  86,000 (a)          $ 191,000
                                             ========             =========         ========                =======

Allowance for inventory obsolescence        $ 985,000                     -        $ 147,000(b)           $ 838,000
                                             ========              ========         ========                =======


YEAR ENDED APRIL 27, 1996

Allowance for doubtful accounts             $  78,000            $   40,000         $ 18,000 (a)          $ 136,000
                                             ========             =========          ========               ========

Allowance for inventory obsolescence        $ 943,000            $   80,000         $ 38,000(b)           $ 985,000
                                             ========             =========          =======                =======


YEAR ENDED APRIL 29, 1995

Allowance for doubtful accounts             $ 128,000            $    1,000         $ 51,000(a)           $  78,000
                                             ========             =========          ========               =======


Allowance for inventory obsolescence        $ 816,000            $  150,000         $  23,000(b)          $ 943,000
                                             ========             =========          ========               =======


(a)  Uncollectible accounts written off, net of recoveries.

(b) Inventory written off and/or disposed of.


</TABLE>



                                      F-18

<PAGE>
                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 5.  FAILURE TO MEET NASDAQ MINIMUM LISTING REQUIREMENTS

     The Company is currently out of compliance with NASDAQ'S capital and
surplus requirement, as set forth in NASD Marketplace Rule 4310( c)(02). To meet
the minimum requirement, the Company must maintain capital and surplus in excess
of $2,000,000. The NASDAQ Listing Requirements Department has scheduled the
Company's Common Stock to be delisted from the NASDAQ Stock Market effective
with the close of business on March 16, 1998. The Company is requesting a
hearing with the NASDAQ Listing Qualifications Department to appeal the
delisting decision. The request for the hearing will stay the delisting of the
Company's Common Stock pending the outcome of the hearing.

ITEM 14.   OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

     The following table sets forth the estimated expenses of ABC Dispensing
Technologies, Inc. in connection with the distribution of the securities being
registered:

Registration Fee.................................................   $ 4,292.89
Legal Fees and Expenses..........................................   $25,000.00
Accounting Fees and Expenses.....................................   $15,000.00
Miscellaneous Expenses...........................................   $   500.00
TOTAL............................................................   $37,240.91

Item 15.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

         The Company is a Florida corporation. The following summary is
qualified in its entirety by reference to the complete text of the Florida
Business Corporation Act (the "FBCA"), the Company's Articles of Incorporation,
and the Company's Bylaws.

         Section 607.0850(1) of the FBCA, provides, in general, that a
corporation may indemnify any of its directors and officers against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding (including any appeal thereof) (i) if such person acted in
good faith and in a manner he or she reasonably believed to be in, or not
opposed to, the best interests of the corporation, and (ii) with respect to any
criminal action or proceeding, he or she had no reasonable cause to believe his
or her conduct was unlawful.

         Section 607.0850(2), however, provides that in actions brought by or in
the right of the corporation, no indemnification shall be made in respect of any
claim, issue or matter as to which the director or officer shall have been
adjudged to be liable unless, and only to the extent that, the court in which
such proceeding was brought, or any other court of competent jurisdiction, shall
determine upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.

ITEM 16.  EXHIBITS

         3.1      Certificate of Incorporation of the Registrant, as amended

         3.2      Bylaws of the Registrant

         5.1      Opinion of St. John & Wayne, L.L.C. as to the legality of the
                  securities to be registered

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

         10.2     1990 Stock Option Plan

         10.3     Amended 1995 Stock Option Plan

         11.1     Statement re: Computation of Per Share Earnings included as 
                  footnote 8 in Item 11 of this Registration Statement on 
                  Form S-1

         11.2     The financial statement schedule listed on the index set forth
                  in Item 11 of this registration statement on Form S-1 is
                  filed as part of this Registration Statement.

                                      II-1

<PAGE>



         21.1     List of Subsidiaries

         23.1     Consent of Ernst & Young LLP, Independent Auditors.

         23.2     Consent of Grant Thornton LLP, Independent Auditors

         23.3     Consent of St. John & Wayne, L.L.C. (included in Exhibit 5.1)

         24.1     Power of Attorney (included on the signature page hereof)

ITEM 17.   UNDERTAKINGS

         The Registrant hereby undertakes:

         (1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

                           (i)  To include any prospectus required by
                           Section 10(a)(3) of the Securities Act of 1933;

                           (ii) To reflect in the Prospectus any fact or events
                           arising after the effective date of the registration
                           statement (or arising after the effective date of the
                           registration statement or the most recent
                           post-effective amendment thereof) which, individually
                           or in the aggregate, represent a fundamental change
                           in the information set forth in the registration
                           statement; and

                           (iii) To include any material information with
                           respect to the plan of distribution not previously
                           disclosed in the registration statement or any
                           material change to such information in the
                           registration statement;

                  PROVIDED, HOWEVER, that paragraphs 1(i) and 1(ii) do not apply
if the registration statement is on Form S-3, or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the effective registration
statement.

         (2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial BONA
FIDE offering thereof.

         (3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.

         (4) That, for the purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's Annual Report pursuant
to Section 13(a) or 15(d) of the Securities Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.

         (5) To supplement the prospectus, after the expiration of the
subscription period, to set forth the results of the subscription offer, and the
terms of any subsequent re-offering thereof. If any public offering is to be
made on terms differing from those set forth on the cover page of the
Prospectus, a post-effective amendment will be filed to set forth the terms of
such offering.

         (6) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant, or otherwise, the Securities and Exchange Commission
has informed the registrant that such indemnification is against public policy
as expressed in the Act and is therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.


                                      II-2

<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-1 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Akron, State of Ohio, on April 8, 1998.

                  ABC DISPENSING TECHNOLOGIES, INC.


                  By:  /s/ Charles M. Stimac, Jr.
                       ---------------------------
                       Charles M. Stimac, Jr., President and Director
                       (principal executive officer and principal financial
                       and accounting officer)



                                POWER OF ATTORNEY

         Each person whose signature appears below constitutes and appoints
Charles M. Stimac, Jr. and John L. Hornbeck true and lawful attorneys-in-fact
and agents each acting alone, with full powers of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each acting alone,
full powers and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

         Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on April 8, 1998.

Signature                                                        Title
---------                                                        ------

/s/ Charles M. Stimac, Jr.                                  President, Director
-----------------------------                                                  
Charles M. Stimac, Jr.


/s/ Herbert L. Luxenburg                                    Director
-----------------------------                                                  
Herbert L. Luxenburg


/s/ C. Rand Michaels                                        Director
-----------------------------                                                  
C. Rand Michaels


/s/ Frank E. Vaughn                                         Director
-----------------------------                                                  
Frank E. Vaughn


/s/ Norbert J. Lewandowski                                  Director
-----------------------------                                                  
Norbert J. Lewandowski


/s/ William L. Shanklin                                     Director
-----------------------------                                                  
William L. Shanklin



                                      II-3

<PAGE>



                                INDEX TO EXHIBITS



NUMBER   DESCRIPTION                                         
------   -----------                                         

3.1      Certificate of Incorporation of the Registrant, as amended

3.2      Bylaws of the Registrant

5.1      Opinion of St. John & Wayne, L.L.C. as to the legality of the 
         securities to be registered.

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

10.2     1990 Stock Option Plan

10.3     Amended 1995 Stock Option Plan

11.1     Statement re: Computation of Per Share Earnings included as footnote 8
         in Item 11 of this Registration Statement on Form S-1.

11.2     The financial statement schedule listed on the index set forth in 
         Item 11 of this Registration Statement on Form S-1 is filed as part of 
         this Registration Statement.

21.1     List of Subsidiaries

23.1     Consent of Ernst & Young LLP, Independent Auditors

23.2     Consent of Grant Thornton LLP, Independent Auditors

23.3     Consent of St. John & Wayne, L.L.C. (included in Exhibit 5.1)

24.1     Power of Attorney (included on the signature page hereof)





                                      II-4
[{"type": "S-1", "sequence": "1", "secsgml_size_bytes": 206533}]
{"company-data": {"conformed-name": "ABC DISPENSING TECHNOLOGIES INC", "cik": "0000748103", "assigned-sic": "3559", "irs-number": "592001203", "state-of-incorporation": "FL", "fiscal-year-end": "0427"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-49673", "film-number": "98589942"}, "business-address": {"street1": "451 KENNEDY RD", "city": "AKRON", "state": "OH", "zip": "44305", "phone": "2167332841"}, "mail-address": {"street1": "451 KENNEDY ROAD", "city": "AKRON", "state": "OH", "zip": "44305"}, "former-company": [{"former-conformed-name": "AMERICAN BUSINESS COMPUTERS CORP", "date-changed": "19920703"}, {"former-conformed-name": "SEBRN CORP", "date-changed": "19861015"}]}
As Filed with the Securities and Exchange Commission on April 8, 1998
                              Registration No. 333-

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-1

                          REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933

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

               FLORIDA                                       59-2001203
               -------                                       ----------
(state or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)
                                451 Kennedy Road
                                Akron, Ohio 44305
                                 (330) 733-2841
    (Address, including zip code, and telephone number, including area code,
                  of Registrant's principal executive offices)

                             CHARLES M. STIMAC, JR.
                                    PRESIDENT
                                451 Kennedy Road
                                Akron, Ohio 44305
                                 (330) 733-2841
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                                 WITH A COPY TO:

                              Lee A. Albanese, Esq.
                            St. John & Wayne, L.L.C.
                               70 East 55th Street
                            New York, New York 10022

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.

If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ X ]
CALCULATION OF REGISTRATION FEE
Proposed
                                                                              Proposed Maximum           Maximum          Amount of
                                                              Amount to be     Offering Price           Aggregate      Registration
Title of each Class of Securities to be Registered             Registered        Per Share           Offering Price          Fee
                                                              ------------    ----------------       --------------    -------------
Common Stock, par value $.01 per share,                        257,500(1)(5)       $2.00(2)          $   515,000.00       $  156.06
Underlying Common Stock Purchase Warrants and Options           10,000(1)(5)       $3.00(2)          $    30,000.00       $    9.09
                                                                20,000(1)(5)      $3.375(2)          $    67,500.00       $   20.45
                                                               700,000(1)(5)       $3.50(2)          $ 2,450,000.00       $  742.42
                                                                30,000(1)(5)       $2.25(2)          $    67,500.00       $   20.45
                                                               300,000(1)(5)      $1.375(2)          $   412,500.00       $  124.99
                                                                40,000(1)(5)       $1.25(2)          $    50,000.00       $   15.15
                                                                10,000(1)(5)       $3.50(2)          $    35,000.00       $   10.61
                                                                90,000(1)(5)       $1.25(2)          $   112,500.00       $   34.09
                                                               100,000(1)(5)       $1.25(2)          $   125,000.00       $   37.88
                                                               381,000(1)(5)      $1.125(2)          $   428,625.00       $  129.89
                                                                80,000(1)(5)      $  .844            $    67,500.00       $   20.45
                                                               134,000(1)(5)       $1.25(2)          $   167,500.00       $   50.76
                                                             3,837,500(1)(5)       $1.25(2)          $ 4,796,875.00       $1,453.60

Common Stock, par value $.01 per share, issuable in            690,750(3)(5)      $1.453(6)          $ 1,003,659.75(6)    $  304.12
payment of dividends on Preferred Stock

Common Stock, par value $.01 per share, issuable upon        3,837,500(4)(5)       $1.00(2)          $ 3,837,500.00       $1,162.88
conversion of Preferred Stock

TOTAL                                                       10,518,250             -----             $14,166,659.75       $4,292.89
-----------------------

(1)      Issuable upon exercise of the Warrants (as defined in the Prospectus).
(2)      The offering price per share is calculated pursuant to Rule 457(g).
(3)      Issuable in lieu of cash dividends payable on the Preferred Stock (as
         defined in the Prospectus).
(4)      Issuable upon conversion of the Preferred Stock (as defined in the
         Prospectus).
(5)      Pursuant to Rule 416, there are also registered hereby such additional
         indeterminate number of shares of Common Stock as may be issuable by
         reason of the anti-dilution provisions of such Warrants and Preferred
         Stock.
(6)      Estimated pursuant to Rule 457(c) solely for purposes of calculating
         the amount of the registration fee, based upon the average of the high
         and low prices reported on March 25, 1998 as reported on the NASDAQ
         Small Cap Market.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, AND ANY INFORMATION OR
REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS IS NOT AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, BY ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR THAT PERSON TO MAKE AN
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
UNDER THIS PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCE, CREATE ANY IMPLICATION THAT
THE INFORMATION IN THIS PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE OF THIS PROSPECTUS.
ABC DISPENSING TECHNOLOGIES, INC
                              CROSS REFERENCE SHEET
                     PURSUANT TO REGULATION S-K, ITEM 501(B)
Item of Form S-1                                                  Prospectus Location
            ----------------                                                  -------------------
1.     Forepart of the Registration Statement and        Facing Page; Cross Reference Sheet; Outside Front Cover Page
       Outside Front Cover Page of Prospectus            of Prospectus

2.     Inside Front and Outside Back Cover Pages         Inside Front Cover Page of Prospectus
       of Prospectus

3.     Summary Information, Risk Factors, Ratio of       Risk Factors; Inapplicable as to Summary and Ratio of Earnings
       Earnings to Fixed Charges                         to Fixed Charges

4.     Use of Proceeds                                   Use of Proceeds

5.     Determination of Offering Price                   Inapplicable

6.     Dilution                                          Inapplicable

7.     Selling Security Holders                          Inapplicable

8.     Plan of Distribution                              Plan of Distribution

9.     Description of Securities to be Registered        Description of Capital Stock; Stock Price and Dividend Policy

10.    Interests of Named Experts and Counsel            Legal Matters, Experts

11.    Information with Respect to the Registrant

       (a)               Description of Business         Business

       (b)               Description of Property         Business

       (c)               Legal Proceedings               Business

       (d)               Dividends and Related           Dividend Policy
                         Stockholder Matters

       (e)               Financial Statements            Financial Statements and Financial Statement Schedules

       (f)               Selected Financial Data         Selected Financial Data

       (g)               Supplementary Financial         Inapplicable
                         Information

       (h)               Management's Discussions        Management's Discussions and Analysis of Financial Condition
                         and Analysis of Financial       and Results of Operations
                         Condition and Results of
                         Operations

       (i)               Changes in Accountants          Changes in Accountants

       (j)               Directors and Executive         Management
                         Officers

       (k)               Executive Compensation          Management

       (l)               Security Ownership              Security Ownership of Certain Beneficial Owners and
                                                         Management
PROSPECTUS

                        ABC DISPENSING TECHNOLOGIES, INC.

                        10,518,250 Shares of Common Stock

The securities of ABC Dispensing Technologies, Inc. (the "Company"), to which
this Prospectus relates (the "Securities"), include the following: 5,990,000
shares of the Company's common stock, $.01 par value per share ("Common Stock")
issuable by the Company (the "Warrant Shares") upon exercise of certain common
stock purchase warrants and options (collectively, the "Warrants"), 3,837,500
shares of Common Stock (the "Conversion Shares") issuable upon conversion of
shares of the Company's issued and outstanding 9% Convertible Cumulative
Redeemable Preferred Stock, Series A ("Preferred Stock") and 690,750 shares of
Common Stock issuable in payment of dividends on the Preferred Stock (the
"Dividend Shares").

The Securities being offered hereby by the Company are being offered to permit
the issuance of registered stock upon the exercise of the Warrants, conversion
of the Preferred Stock into Common Stock, and in payment of dividends on the
Preferred Stock. See "Plan of Distribution."

Additionally, this Prospectus has been prepared for use, with the prior consent
of the Company, by certain holders of the Warrants, who will acquire Warrant
Shares upon exercise of Warrants and who may wish to sell such shares in
transactions in which they may (because of their relationship to the Company) be
deemed to be underwriters within the meaning of the Act.

The Company's Common Stock is presently listed on the National Association of
Securities Dealers Automated Quotation ("NASDAQ") Small Cap Market System under
the symbol "ABCC." The average of the closing bid and asked price for the Common
Stock as reported by NASDAQ on March 25, 1998 was $1.485.

Other than the proceeds equal to the exercise price of the Warrants exercised,
the Company will receive no cash proceeds from the distribution of the
Securities offered hereby.

This Prospectus also relates to such additional shares of Common Stock which may
be issuable pursuant to the anti-dilution provisions of the Warrants and
Preferred Stock, which shares are being registered pursuant to Rule 416
promulgated under the Act.

                  SEE "RISK FACTORS" FOR CERTAIN MATTERS TO BE
                      CONSIDERED BY PROSPECTIVE INVESTORS.

         THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
         SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
         NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE COMMISSION
         PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
         REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

                  THE DATE OF THE PROSPECTUS IS APRIL 7, 1998

                                        1
TABLE OF CONTENTS

Available Information.......................................................2
Risk Factors................................................................3
The Company.................................................................4
Use of Proceeds.............................................................4
Plan of Distribution........................................................5
Stock Price and Dividend Policy.............................................6
Selected Financial Data.....................................................7
Management's Discussion and Analysis of
         Financial Condition and Results of Operations......................9
Business...................................................................16
Change In Accountants......................................................20
Management.................................................................21
Security Ownership of Certain Beneficial
         Owners and Management.............................................24
Certain Transactions.......................................................25
Description of Capital Stock...............................................26
Legal Matters..............................................................29
Experts....................................................................29
Index to Financial Statements.............................................F-1

                              AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, the Company files reports, proxy and information statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy and information statements and other information can be inspected
and copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, Room 1024, 450 Fifth Street N.W., Washington, D.C. 20549; and
at the regional offices of the Commission at Northwest Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade Center,
Suite 1300, New York, New York 10048. Copies of such materials can be obtained
from the Public Reference Section of the Commission, in 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, such reports and other
information may be electronically accessed at the Commission's site on the World
Wide Web located at http://www.sec.gov.

The Company has filed a Registration Statement on Form S-1 (together with all
amendments thereto referred to herein as the "Registration Statement") under the
Act with the Commission, covering the shares of Common Stock being offered by
this Prospectus. This Prospectus does not contain all the information set forth
or incorporated by reference in the Registration Statement and the exhibits and
schedules relating thereto, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the securities offered by this
Prospectus, reference is made to the Registration Statement and the exhibits and
schedules thereto which are on file at the offices of the Commission and may be
obtained upon payment of the fee prescribed by the Commission, or may be
examined without charge at the offices of the Commission. Statements contained
in this Prospectus as to the contents of any contract or other documents
referred to are not necessarily complete, and are qualified in all respects by
such reference.

                                        2
RISK FACTORS

The Securities offered hereby involve a high degree of risk. Prospective
investors should carefully consider, along with the other information contained
herein, the following risk factors before purchasing any Securities offered
hereby:

         1. HISTORY OF LOSSES; ADDITIONAL CAPITAL REQUIREMENTS. The Company has
reported a net loss for each year of operation since its inception except for
the fiscal year ended April 30, 1989, in which it reported net income of
$154,000. For the nine months ended January 24, 1998, the Company reported a net
loss of $1,033,000 on revenues of $4,511,000 as compared to a net loss of
$1,650,000 on revenues of $2,565,000 for the comparable period in the previous
fiscal year. The Company reported a net loss of $2,968,000 on revenues of
$3,073,000 for the fiscal year ended April 26, 1997, as compared to a net loss
of $1,324,000 on revenues of $5,312,000 for the fiscal year ended April 27, 1996
and a net loss of $2,681,000 on revenues of $3,359,000 for the fiscal year ended
April 29, 1995. As a result, the Company requires capital resources to fund
operating losses as well as research and development expenditures. It is
anticipated that the expenditures associated with continued research and
development will cause the Company to incur operating losses and cash flow
deficiencies until such time, if any, as the Company generates sufficient
additional revenues from operations. Accordingly, the Company will be required
to seek alternative sources of working capital with funds from additional equity
or debt financings or joint venture or other collaborative arrangements. No
assurance can be given that any such additional funds will be available to the
Company on acceptable terms, if at all. If adequate funds are not available from
operations or additional sources of financing, the Company's business will be
materially adversely affected.

         2. UNCERTAINTY AS TO CONTINUATION AS A GOING CONCERN. The Company's
history of operating losses and limited capital resources have caused the
Company's independent auditors to include in their reports for the fiscal years
ended April 26, 1997 and April 27, 1996 a paragraph expressing substantial doubt
regarding the Company's ability to continue as a going concern.

         3. UNCERTAINTY OF MARKET ACCEPTANCE. The success of the Company's
dispensing systems will depend heavily on the Company's ability to gain
acceptance, both domestically and internationally, of leading companies in
industrial, food service and other markets. Acceptance of the Company's
technology by industry leaders will be determined in large part by the Company's
ability to access such entities and to demonstrate the performance features and
cost benefits of its dispensing products. The Company has had limited success to
date in the paint industry and the beverage industry. No assurance can be given
that the Company's dispensing technology will meet with general market
acceptance.

         4. DEPENDENCE ON MAJOR CUSTOMER. During the first nine months of Fiscal
1998, one customer, The Home Depot, Inc., accounted for 90% of the Company's
total revenues. During the fiscal years ended April 26, 1997 and April 27, 1996,
one customer, Sherwin-Williams, accounted for 54% and 72%, respectively, of the
Company's revenues. The Company currently has no orders from Sherwin-Williams
and does not expect significant revenues from sales to Sherwin-Williams in the
near future. While the effect of the loss of revenues from Sherwin-Williams has
been somewhat mitigated by the revenues generated from Home Depot, a loss of
revenues from Home Depot would have a material adverse effect on the Company's
revenues and there can be no assurance that the Company would be able to replace
the revenues from such loss.

         5. COMPETITION. The controlled measurement and dispensing equipment
industry is highly competitive and dominated by several large companies with
substantially greater financial resources and name recognition than the Company.
Many of these companies have extensive experience, possess substantially greater
financial, technological and personnel resources than the Company and,
particularly in the food service industry, have received the approval and
support of industry leaders commanding large market shares. No assurance can be
given that the Company will be able to compete successfully in the controlled
measurement and dispensing equipment industry.

         6. DIVIDEND POLICY. The Company has not paid dividends on its Common
Stock since its inception and, by reason of its present financial condition and
its projected financial needs, it does not contemplate paying dividends in the
foreseeable future on the Company's Common Stock.

         7. SHARES ELIGIBLE FOR FUTURE SALE. Sales of the Company's Common Stock
in the public market by current shareholders of the Company could adversely
affect the market price of the Common Stock. Assuming the exercise of the
Warrants, conversion of the Preferred Stock and payment of Preferred Stock
dividends with Common Shares, 10,518,250 shares of Common Stock may be offered
for sale in the public market. The Company has registered with the Commission an
aggregate of approximately 600,000 shares of Common Stock in several
registration statements filed by the Company for continuous or delayed sales. In
addition, the Company has approximately an aggregate of 291,000 shares issued
and outstanding which are "restricted" in accordance with Rule 144 of the
Regulations promulgated under the Securities Act of 1933. The Company cannot
predict the extent to which the market sales of the Common Stock or the
availability of such Common Stock will have an adverse effect on the market
price for such stock.

       8. NASDAQ LISTING. The Company is currently out of compliance with the
NASDAQ'S capital and surplus requirement, as set forth in NASD Marketplace Rule
4310(c)(02) which became effective February 23, 1998. To meet the new minimum
listing requirement, the Company must maintain net tangible assets of at least
$2,000,000. As of February 28, 1998, the Company had $1,062,180 of net tangible
assets. The Company has provided the NASDAQ with a written appeal, requesting
additional time within which to comply with the minimum net tangible asset rule.
The appeal is based on, among other things, the pending success of the Company's
capital raising activites. The delisting has been stayed pending the appeal.
There can be no assurance that the Company's appeal will be successful, or that
if such appeal is granted, that the Company will in fact attain the requisite
amount of net tangible assets. If the NASDAQ delists the Company's Common Stock,
the market price thereof and the efficiency of the trading market therefor may
be materially adversely affected.

                                        3
THE COMPANY

         The Company designs proprietary dispensing systems which dispense and
blend liquids, powders and other ingredients to a uniform and high degree of
accuracy. The Company also custom designs and manufactures its own proprietary
dispensing equipment to meet the needs of its customers, using standard
micro-processors. The Company's technology is protected by 33 useful patents and
5 patents pending. The Company's long-term objective is to be a worldwide source
of dispensing technology possessing substantial marketing capabilities
consisting of industry-specific marketing divisions.

         The Company offers a complete range of dispensing technology
commercialization services. In addition to custom design and manufacturing, the
Company also provides training, installation and product service. Dispensing is
an integral part of a large number of manufacturing processes. In many
industries, dispensing is a mechanical function and one of the few operations
that remains largely untouched by advanced technology.

         To date, the Company has developed unique dispensing systems for the
beverage, paint, chemical coatings, concrete and animal-husbandry industries.
Virtually all of the Company's revenues to date have been derived from the sale
of its computerized paint-tint dispensing system and its beverage dispensing
systems.

         The Company has recently completed a thorough internal review of
operations, marketing and strategic planning. As a result, the Company has
refocused its resources and efforts on its paint dispensing and juice dispensing
product lines. On April 18, 1997 the Company terminated its exclusive agreement
(the "Sherwin-Williams Agreement") with The Sherwin-Williams Company
("Sherwin-Williams") pursuant to which agreement the Company sold its
paint-dispensing systems exclusively to Sherwin-Williams. The termination of the
Sherwin-Williams Agreement allowed the Company to pursue other customers in the
paint industry. On February 12, 1997, the Company received a multi-million
dollar order for 300 of its new, self-calibrating universal paint-tint
dispensing systems from The Home Depot, Inc. ("Home Depot"). Delivery of the
Company's systems to Home Depot commenced in May 1997 and is expected to be
completed during the current fiscal year. The Company anticipates, though there
can be no assurances, that Home Depot's order constitutes the initial phase of a
system-wide roll-out to Home Depot's entire 500-plus store network, with one to
three units of the Company's tinting system expected to be installed in each
store.

         On June 25, 1997 the Company announced the formation of "Virtual
Squeeze"(TM), a joint venture with Damon Industries Inc., a Nevada based juice
manufacturer and distributor. Virtual Squeeze has targeted the $3 billion
institutional juice market with a self-contained, refrigerated dispenser
designed to use shelf stable, bag in the box concentrates. Current plans provide
for the free installation and service of the dispensing equipment provided that
only Virtual Squeeze(TM) products are used. The joint venture will generate
revenues from on-going juice sales. The Company and Damon Industries will share
in the resulting profits or losses equally. The Company believes the Virtual
Squeeze(TM) equipment is the only known juice dispenser specifically designed to
use shelf stable products.

         During fiscal 1997, the Company discontinued marketing efforts with
respect to its Classic(TM) line of soft drink dispensers, due to narrow margins
and resistance from major soft drink suppliers to support the equipment. The
Company is exploring opportunities to capitalize on its Classic(TM) product
line, including potential strategic partnerships, technology licenses and/or
sale of the Classic(TM) product line.

         The Company is a corporation organized under the laws of Florida in
1980. In May 1996, the Company changed its name from American Business Computers
Corporation to ABC Dispensing Technologies, Inc. The Company's principal
executive offices are located at 451 Kennedy Road, Akron, Ohio 44305, and its
telephone number is (330) 733-2841.

                                 USE OF PROCEEDS

         The Company will only receive proceeds from the exercise of the
Warrants and the issuance of the Warrant Shares. The 5,990,000 Warrant Shares
are being registered to provide the holders of the Warrants with freely
tradeable Common Stock upon exercise. If all the Warrants are exercised, the
Company will receive aggregate gross proceeds of approximately $9,327,000. No
assurance can be given, however, that all or any portion of the Warrants will be
exercised. If any of the Warrants are exercised, the Company intends to use the
proceeds for general corporate purposes.

                                        4
PLAN OF DISTRIBUTION

         This Prospectus relates to the offer and sale of 5,990,000 shares of
Common Stock by the Company upon the exercise of the Warrants, 690,750 shares of
Common Stock issuable in payment of dividends on the Company's Preferred Stock
and 3,837,500 shares of Common Stock by the Company upon conversion of shares of
the Preferred Stock.

         The shares of Common Stock issuable upon exercise of the Warrants, in
payment of dividends and upon conversion of the Preferred Stock will be issued
and distributed by the Company pursuant to the terms and conditions of the
Warrants and Preferred Stock. Such Common Stock is being registered pursuant to
the Act and offered by the Company hereby to permit the issuance by the Company
of registered stock upon the exercise of the Warrants in payment of dividends
and upon conversion of the Preferred Stock in accordance with their respective
terms. Additional shares of Common Stock may be issuable pursuant to the
anti-dilution provisions of the Warrants and Preferred Stock, which shares are
also being registered hereby pursuant to Rule 416 promulgated under the Act. If
all of the Warrants registered hereby are exercised, the Company will receive
aggregate cash proceeds of approximately $9,327,000. See "Use of Proceeds."

         From time to time, the Company may amend this Prospectus by Prospectus
Supplements or post-effective amendments to the Registration Statement of which
this Prospectus is a part, to offer Warrant Shares and Conversion Shares
obtained by persons pursuant to the exercise of the Warrants or Conversion of
Shares of Preferred Stock, which persons may, by virtue of their relationship to
the Company, be deemed underwriters under the Act.

         The Warrants consist of fourteen different classes of securities
described as follows:

         (1)      common stock purchase warrants issued in a private placement
                  during the summer of 1995 covering an aggregate of 257,500
                  shares of Common Stock with an exercise price of $2.00 per
                  share and an expiration date of June 1, 1998;

         (2)      common stock purchase options issued to officers of the
                  Company in August 1995 covering an aggregate of 10,000 shares
                  of Common Stock with an exercise price of $3.00 per share and
                  an expiration date of April, 2000;

         (3)      common stock purchase options issued as compensation to
                  certain officers of the Company in May 1995 covering an
                  aggregate of 20,000 shares of Common Stock with an exercise
                  price of $3.375 per share and an expiration date of May, 2000.

         (4)      common stock purchase warrants issued as part of the
                  settlement of a litigation in September and November 1995
                  covering an aggregate of 700,000 shares of Common Stock with
                  an exercise price of $3.50 per share and an expiration date of
                  November, 2000;

         (5)      common stock purchase options issued as compensation to a
                  commissioned agent in December 1995 covering 30,000 shares of
                  Common Stock with an exercise price of $2.25 per share and an
                  expiration date of December, 2000;

         (6)      common stock purchase warrants issued as compensation to an
                  officer of the Company in July 1996 covering 300,000 shares of
                  Common Stock with an exercise price of $1.375 per share and an
                  expiration date of July 2006;

         (7)      common stock purchase warrants issued as compensation to
                  an officer of the Company in October 1996 covering 15,000
                  shares of Common Stock with an exercise price of $1.25 per
                  share and an expiration date of October, 2001;

         (8)      common stock purchase warrants issued in September, 1996 as
                  compensation for consulting services provided covering 10,000
                  shares of Common Stock with an exercise price of $3.50 per
                  share and an expiration date of September, 2001 and 25,000
                  shares of Common Stock with an exercise price of $1.25 per
                  share and an expiration date of September, 2001;

         (9)      common stock purchase warrants issued as compensation to
                  directors of the Company in January and February 1997 covering
                  90,000 shares of Common Stock with an exercise price of $1.25
                  per share and an expiration date of February, 2002;

         (10)     common stock purchase warrants issued as compensation to an
                  officer of the Company in March, 1997 covering 100,000 shares
                  of Common Stock with an exercise price of $1.25 per share and
                  an expiration date of March, 2007;

         (11)     common stock purchase warrants issued as incentive to 42
                  employees in May, 1997 covering 381,000 shares of Common Stock
                  with an exercise price of $1.125 per share and an expiration
                  date of May, 2002.

         (12)     common stock purchase warrants issued as compensation to
                  directors of the Company in October, 1997 covering 80,000
                  shares of Common Stock with an exercise price of $.844 per
                  share and an expiration date of October, 2007.

                                       5
(13)     common stock purchase warrants associated with Notes Payable
                  issued by the Company covering 134,000 shares of Common Stock
                  with an exercise price of $1.25 per share and an expiration
                  date five years from their date of issuance.

         (14)     common stock purchase warrants which are eligible for issuance
                  upon conversion of the Company's Preferred Stock at a price of
                  $1.25 per share and an expiration date five years from their
                  date of issuance.

         The Preferred Stock issued in connection with a private placement in
December 1996 and January and February 1997 consists of 307 shares of 9%
Convertible Cumulative Redeemable Preferred Stock, Series A, each convertible
into shares of Common Stock at a price of $1.00 per share and Common Stock
Purchase Warrants to purchase an equal number of shares of Common Stock as
received upon conversion, exercisable at a price of $1.25 per share. Each share
of Preferred Stock is entitled to receive dividends semi-annually and may be
redeemed by the Company at any time upon thirty (30) days' written notice.

         In order to comply with certain states' securities laws, if applicable,
the Common Stock issuable upon exercise of the Warrants will be sold in such
jurisdictions only through registered or licensed brokers or dealers. In certain
states, the Common Stock issuable upon exercise of the Warrants may not be sold
unless such Common Stock has been registered or qualified for sale in such
state, or unless an exemption from registration or qualification is available
and is obtained.

TRANSFER AGENT

         The Transfer Agent for the Common Stock is American Stock Transfer &
Trust Company, 40 Wall Street, New York, New York 10005.

                         STOCK PRICE AND DIVIDEND POLICY

         The Company's Common Stock is traded on the Nasdaq Small Cap Market
under the symbol "ABCC". The following table sets forth the high and low closing
sale prices of the Company's Common Stock as reported on the Nasdaq Small Cap
Market for the periods indicated.

FISCAL 1996                                       HIGH               LOW
                                                  ----               ---
First Quarter..................................  3 7/16             2 1/4
Second Quarter.................................  3 7/16            2 5/16
Third Quarter..................................  3 3/16             1 7/8
Fourth Quarter.................................   2 1/8            1 9/16

FISCAL 1997

First Quarter..................................   2 1/8            1 3/16
Second Quarter.................................  1 7/16             13/16
Third Quarter..................................  2 1/16             11/16
Fourth Quarter.................................   2 1/4             1 1/6

                                       6
FISCAL 1998                                       HIGH               LOW 
                                                  ----               --- 
First Quarter..................................  1 3/16             27/32
Second Quarter................................   1 5/16             25/32
Third Quarter..................................   1 1/4             17/32
Fourth Quarter (Through March 25, 1998)........   1 5/8               7/8

         On March 25, 1998, the last sale price of the Common Stock reported on
the Nasdaq Small Cap Market was $1.500 per share. At March 25, 1998, the
approximate number of holders of record of the Common Stock was 1,080.

         The Company has never paid cash dividends on its capital stock and does
not intend to pay cash dividends for the foreseeable future. The Company expects
that earnings will be retained for the continued growth and development of the
Company's business. Future dividends, if any, will depend upon the Company's
earnings, financial condition, working capital requirements, compliance with
covenants in agreements to which the Company is or may be subject, future
prospects and other factors deemed relevant by the Company's Board of Directors.

                             SELECTED FINANCIAL DATA

         The selected financial data for each of the years ended April 30, 1994
and 1993 are derived from financial statements of the Company not included
herein. The selected financial data for the two years in the period ended April
27, 1996 are derived from the financial statements of the Company, included
elsewhere herein, which have been audited by Ernst & Young LLP, independent
auditors, as stated in their report appearing elsewhere herein. The selected
financial data for the year ended April 26, 1997 are derived from the financial
statements of the Company, included elsewhere herein, which have been audited by
Grant Thornton LLP, independent auditors, as stated in their report appearing
elsewhere herein. The selected financial data for the nine months ended January
24, 1998 and January 25, 1997 are derived from the financial statements of the
Company, included elsewhere herein, and are unaudited. The financial data set
forth below should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Financial
Statements, including the notes thereto, appearing elsewhere in this Prospectus.
NINE MONTHS ENDED                                           FOR THE FISCAL YEARS ENDED
------------------------------------------------------------------------------------------------------------------------------------
                          JAN. 24,       JAN. 25,       APRIL 26,        APRIL 27,       APRIL 29,      APRIL 30,       APRIL 30,
                          1998           1997           1997             1996            1995           1994            1993
                          -------        -------        --------         --------        --------       --------        ---------
REVENUES(a)               $4,511,000     $2,565,000     $3,073,000       $5,312,000      $3,359,000     $5,010,000      $2,329,000

NET LOSS                  $(1,033,000)   $(1,650,000)   ($2,968,000)     ($1,324,000)    ($2,681,000)   ($1,378,000)    ($3,359,000)

WEIGHTED AVERAGE          17,178,863     17,067,493     17,074,000       16,414,000      15,669,000     14,155,000      13,820,000
NUMBER  OF SHARES
OUTSTANDING

NET LOSS PER SHARE -      ($0.07)        $(0.10)        ($0.17)          ($0.08)         ($0.17)        ($0.10)         ($0.24)
BASIC AND DILUTED

TOTAL                     $3,562,000     $3,683,000     $3,350,000       $4,020,000      $3,719,000     $4,190,000      $4,102,000
ASSETS

LONG-TERM                 $  265,000     $  279,000       $283,000         $294,000        $278,000       $-0-            $-0-
OBLIGATIONS                                

STOCKHOLDERS'             $1,167,000     $2,433,000     $1,635,000       $1,085,000      $515,000       $2,194,000      $2,011,000
EQUITY
7
NINE MONTHS ENDED                                          FOR THE FISCAL YEARS ENDED
-----------------------------------------------------------------------------------------------------------------------------------
                          JAN. 24,      JAN. 25,         APRIL 26,        APRIL 27,       APRIL 29,        APRIL 30,      APRIL 30,
                          1998          1997             1997             1996            1995             1994           1993
                          -------       -------          --------         --------        --------         --------       ---------
DIVIDENDS                 $-0-          $-0-             $-0-             $-0-            $-0-             $-0-            $-0-
DECLARED
PER SHARE OF
COMMON
STOCK

RESEARCH &                $924,000      $344,000         $629,000         $714,000        $606,000         $386,000        $391,000
DEVELOPMENT (a)
(a) Research & Development costs include costs subject to reimbursement under
various agreements. The amounts earned under these agreements are included in
revenues for the respective years.

                                        8
MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SIGNIFICANT ORDER

         On February 12, 1997, the Company announced that it received an initial
multi-million dollar order for its new, self-calibrating, universal paint-tint
dispensing system. The order was received from The Home Depot, Inc., North
America's largest home improvement retailer. The order is for 300 units of ABC's
new automatic tinting system, tradenamed "Royal Match." Commercial delivery
commenced in May, 1997, and will be completed during fiscal year 1998. This is
the initial phase of an anticipated roll out to The Home Depot's entire 500-plus
store network in 34 states and three Canadian provinces, with one to three units
of the tinting system expected to be installed per store. The unit has been
designed to interface with The Home Depot's networked point-of-sale system.

RESULTS OF OPERATIONS

NINE MONTHS ENDED JANUARY 24, 1998 COMPARED TO NINE MONTHS ENDED
JANUARY 25, 1997

The Company's net loss the first three quarters of fiscal 1998 decreased
$617,000, or 37.4%, to $1,033,000, from the $1,650,000 net loss for the
corresponding period of the prior year. The net loss for the third quarter of
fiscal 1998 decreased $22,000, or 8.3%, to $244,000, from the $266,000 net loss
for the third quarter of the prior year.

While revenues have increased significantly (see below), losses have not
decreased proportionately. This is due to $321,000 of costs being deferred into
future periods in the third quarter of fiscal 1997. The deferred costs relate to
the adaption of the ROYAL MATCH(TM) tint system to meet the specific needs of
The Home Depot. Had the costs not been deferred, the net loss for the first
three quarters of fiscal 1998 and fiscal 1997 would have been $863,000 and
$1,971,000, respectively. The decrease in net loss for the first three quarters
of fiscal 1998 would have been $1,108,000, or 56.2%, from the same period in the
prior year. The net loss for the third quarter of fiscal 1997 would have been
$587,000. The decrease in net loss for the third quarter of fiscal 1998 would
have been $343,000, or 58.4%, from the net loss for the third quarter of fiscal
1997. The costs were amortized over a period of 11 months and were fully
amortized as of October 25, 1997.

REVENUES
Nine Months Ended                  Third Quarter Ended
                                    January 24,    January 25,         January 24,    January 25,
                                      1998           1997                1998           1997
                                   -----------    ------------         ----------     ----------
(in thousands)
Equipment sales                     $ 4,088        $ 2,028             $ 1,857         $ 216
Service revenues                        423            537                 138           211
                                     ------         ------              ------          ----
          TOTAL                     $ 4,511        $ 2,565             $ 1,995         $ 427
                                     ======         ======              ======          ====
Equipment sales for the first three quarters of fiscal 1998 increased
$2,060,000, or 101.6%, over the first three quarters of fiscal 1997. The
increase is due to $2,388,000 in increased sales of paint colorant dispensers
which were partially offset by decreases of $241,000 in beverage equipment sales
and $87,000 in industrial equipment sales and project development revenues.
Equipment sales for the third quarter of fiscal 1998 increased $1,641,000, or
759.7%, over the third quarter of fiscal 1997. This increase is due to
$1,792,000 in increased sales of paint colorant dispensers which were partially
offset by decreases of $124,000 in beverage equipment sales and $27,000 in
industrial equipment sales and project development revenues.

                                        9
The increase in sales of paint colorant dispensers is due to the Company not
having any orders for paint colorant dispensers from the middle of the second
quarter to the end of the third quarter of fiscal 1997. The decrease in sales of
beverage equipment is due to the company discontinuing its' Omnitron(tm) soft
drink line of beverage dispensers in the second quarter of fiscal 1997. The
decrease in sales of industrial equipment and project development revenues is a
result of the company focusing on the paint and institutional juice markets. The
Company's current strategy is to develop only products for which there is a
known market need and customers who are committed to the product.

Service revenues for the first three quarters of fiscal 1998 were down $114,000,
or 21.2% from the first three quarters of fiscal 1997. The decrease was due to a
$191,000 decrease in sales of replacement parts which was partially offset by a
$72,000 increase in service labor revenues. Service revenues for the third
quarter of fiscal 1998 decreased $73,000, or 34.6% from the third quarter of
fiscal 1997. The decrease was due to a $114,000 decrease in sales of replacement
parts which was partially offset by a $41,000 increase in service labor
revenues. Sales of replacement parts are down due to discontinuation of the
TINT-A-COLOR(tm) paint colorant dispensers and the Omnitron(tm) soft drink
dispensers. Service labor revenues have increased due to installation charges on
sales of ROYAL MATCH(tm) paint colorant dispensers.

GROSS MARGINS
Nine Months Ended              Third Quarter Ended
                                   January 24,    January 25,      January 24,    January 25,
                                    1998             1997             1998            1997
                                  -----------     ----------       -----------    -----------
Equipment                           34.3%          31.0%               31.4%          18.4%
                                   =======        =======              =====         =======
                         
Service                             (5.2)%        (25.9)%               0.7%         (37.8%)
                                   =======        =======              =====         =======
Total                               30.6%          19.1%               30.0%          (0.9%)
                                   =======        =======              =====         =======
For the first three quarters of fiscal 1998, gross margin as a percentage of
sales on equipment increased 3.3 points over the first three quarters of fiscal
1997. For the third quarter of fiscal 1998, gross margin as a percentage of
sales on equipment increased 13 points over the third quarter of fiscal 1997.
The increases resulted from changes in product mix caused by the cessation of
shipments to Sherwin-Williams in the second quarter of FY 1997 and the Company's
withdrawal from the soft drink market.

For the first three quarters of fiscal 1998, gross margin as a percentage of
service revenues increased 20.7 points over the first three quarters of fiscal
1997. For the third quarter of fiscal 1998, gross margin as a percentage of
service revenues increased 38.5 points over the third quarter of fiscal 1997.
These increases are primarily due to increased equipment installation revenues
and a decline in low (or negative) margin service on soft drink equipment
resulting from the discontinuation of the Omnitron (tm) soft drink dispensers.
Additionally, in fiscal 1997, the Company had negotiated with Sherwin-Williams
to retrofit existing paint colorant dispensers at a price equal to the Company's
cost.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses decreased $217,000, or 16.9%, to $1,064,000
in the first three quarters of fiscal 1998, down from $1,281,000 for the same
period of the prior year. Severance expense of $221,000 which was incurred in
the first three quarters of fiscal 1997 and a decreases in payroll expense and
travel expense of $201,000 and $26,000, respectively, during the first three
quarters of fiscal 1998 are primarily responsible for the decrease. These
decreases were partially offset by an increase in amortization of deferred
charges of $152,000 and increased legal and professional fees of $79,000 in the
first three quarters of fiscal 1998. The increase in legal and professional fees
relates to raising capital, corporate governance and shareholder communications.

For the third quarter of fiscal 1998, general and administrative expenses
increased $63,000, or 23.5%, to $331,000, up from $268,000 for the third quarter
of fiscal 1997. The increase is attributable to $77,000 of increased
amortization expense related to deferred charges. This increase was partially
offset by individually immaterial decreases in various expenses aggregating
$14,000.
                                       10
SELLING AND MARKETING EXPENSES

For the first three quarters of fiscal 1998, selling and marketing expenses
decreased $133,000, or 28.3%, to $337,000, down from $470,000 for the first
three quarters of fiscal 1997. The decrease was primarily due to sales and
marketing personnel performing more research and development, and administrative
activities in the first three quarters of fiscal 1998 than in same period of the
prior year. The allocation of sales and merchandising payroll expense to
research and development and general and administrative expense was responsible
for $103,000 of the decrease. The decreased selling and marketing activity also
resulted in a decrease of $30,000 in travel expense during the first three
quarters of fiscal 1998, as compared to the same period of the prior year.

Selling and marketing expense decreased $50,000, or 30.3%, to $115,000 in the
third quarter of fiscal 1998, down from $165,000 for the same period of the
prior year. A decrease in marketing activity led to decreased payroll expense of
$20,000 and decreased travel expense of $30,000 in the third quarter of fiscal
1998, as compared to the same period of the prior year.

RESEARCH AND DEVELOPMENT EXPENSES

For the first three quarters of fiscal 1998 research and development expenses
increased $580,000, or 168.8%, to $924,000, up from $344,000 for the first three
quarters of fiscal 1997. For the third quarter of fiscal 1998, research and
development expenses increased $365,000, or 776.6%, to $318,000, up from a
negative $47,000 in fiscal 1997. The increase in research and development
expenses is due to continued development of, and enhancements to, the ROYAL
MATCH(TM) paint colorant dispenser, the CHECK MATE(TM) software which controls
the ROYAL MATCH(TM), and the VIRTUAL SQUEEZE(TM) juice dispenser.

OTHER INCOME AND EXPENSE

For the first three quarters of fiscal 1998, interest expense increased $25,000,
or 33.8%, to $99,000, up from $74,000 for the first three quarters of fiscal
1997. For the third quarter of fiscal 1998, interest expense increased $31,000,
or 258.3%, up from $12,000 for the third quarter of fiscal 1997. The increases
are due to higher debt balances in fiscal 1998.

Other income increased $19,000, or 118.8%, to $35,000 in the first three
quarters of fiscal 1998, up from $16,000 for the first three quarters of fiscal
1997. The increase is attributable to reversing an estimated liability and
related expense of $58,000. The underlying matter was ultimately settled without
cost to the Company. This increase credited to other income was partially offset
by the write-off of patents-pending of $39,000. For the third quarter of fiscal
1998, other expense was $30,000, a decrease of $43,000, or (330.8)% from the
$13,000 other income for fiscal 1997. The decrease was primarily due to the
write-off of patents-pending of $39,000.

                                       11
FISCAL 1997 COMPARED TO FISCAL 1996

The net loss for FY 1997 was $2,968,000, an increase of $1,644,000, or 124% over
the net loss of $1,324,000 for FY 1996. The Company's consolidated results of
operations for the two years are summarized below:

Revenues                                 FY 1997             FY 1996
--------                                 -------             -------

Equipment sales                       $ 2,427,000         $ 4,258,000
Service revenues                          646,000             799,000
Royalties                                       -             255,000
                                       ----------          ----------

     TOTAL                            $ 3,073,000         $ 5,312,000
                                       ==========          ==========

Equipment sales for FY 1997 were $2,427,000, a decrease of $1,831,000, or 43%,
from FY 1996 equipment sales of $4,258,000. The decrease was primarily due to a
$1,504,000 decline in sales of paint colorant dispensers to The Sherwin-
Williams Company. The production and shipment of equipment to fill the
Sherwin-Williams order was completed during the second quarter of FY 1997 and no
additional orders for equipment were received from Sherwin-Williams. Sales of
beverage equipment decreased $227,000 due to the Company's withdrawal from the
soft drink market in FY 1997. Additionally, project development revenues
decreased in FY 1997 are responsible for the remaining $100,000 decrease. The
Company's new strategy to develop only products for which there is a known
market need led to the decrease in project development revenues.

Service revenues for FY 1997 were $646,000, a decrease of $153,000, or 19.1%,
from FY 1996 service revenues of $799,000. The decrease was due to decreased
installation revenue from Sherwin-Williams as their order was completed in the
second quarter of FY 1997, and decreased service revenue on soft drink equipment
as the Company withdrew from the soft drink market in FY 1997.

Royalty revenues for FY 1997 decreased $255,000, or 100%, from FY 1996. The
absence of royalty revenues in FY 1997 was due to the termination of the
Company's relationship with Sherwin-Williams.

Gross Margins                            FY 1997            FY 1996
-------------                            -------            -------

Equipment                                  29.9%              30.8%
                                           ====               ====
Service                                   (41.1)%            (20.7)%
                                           ====               ====
Total                                      15.0%              23.0%
                                           ====               ====

In FY 1997, gross margin as a percentage of sales on equipment decreased 0.9
points to 29.9%, down from 30.8% in FY 1996. The decrease was due to a change in
product mix caused by the cessation of shipments to Sherwin-Williams in the
second quarter of FY 1997 and the Company's withdrawal from the soft drink
market.

Gross margin as a percentage of service revenue in FY 1997 decreased 20.4 points
to a negative 41.1%, down from a negative 20.7% in FY 1996. The decrease was
primarily due to the Company terminating its relationship with Sherwin-Williams
and the Company's withdrawal from the soft drink market. Service expenses did
not decrease with the decline in revenues. Additionally, the Company had
negotiated with Sherwin-Williams to retrofit existing paint colorant dispensers
at a price equal to the Company's cost.

                                       12
GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses increased $891,000, or 80.6%, to $1,997,000
in FY 1997, up from $1,106,000 in FY 1996. The increase was attributable to
$509,000 in management reorganization and related payroll costs; a $191,000
increase in amortization of deferred charges during fiscal 1997; a $93,000
increase in bad debt expense; a $61,000 increase in payroll expense; and $37,000
of individually immaterial increases in various expenses. The management
reorganization was completed in fiscal 1997.

SELLING AND MARKETING EXPENSES

Selling and marketing expenses increased $160,000 or 29.6%, to $700,000 in FY
1997, up from $540,000 in FY 1996. Selling & marketing expenses increased due to
a larger sales force in the current year, and increased expenses related to
product presentations at trade shows and to industry councils.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses decreased $85,000 or 11.9%, to $629,000 in FY
1997, down from $714,000 in FY 1996. The decrease was due to fewer product
development projects in FY 1997 than in the prior year. Management's strategy is
to only pursue development projects when there is a known market need for the
product and there is a customer who has committed to purchase the product.
Management believes that this strategy will increase the commercial viability of
the project.

OTHER INCOME (EXPENSE)

Other income (net) decreased $210,000, or 62.9%, in FY 1997 to $124,000, from
$334,000 in Fiscal 1996. The decrease was primarily attributable to the reversal
of $95,000 of securities and contract litigation fees in FY 1997, versus a
$366,000 reversal in FY 1996 (see note 13 to the financial statements).
Additionally, investment income decreased $74,000 from the prior year as most of
the Company's investments were liquidated. These decreases were offset by
individually immaterial increases in other revenues. The funds received from
liquidating investments were used for continuing operations.

The Company's operating results may fluctuate in the future as a result of a
number of factors, including changes in pricing policies by the Company's
suppliers, the market acceptance of new and enhanced versions of the Company's
products, and general economic conditions.

FISCAL 1996 COMPARED TO FISCAL 1995

The net loss for FY 1996 was $1,324,000, down $1,357,000, or 50.6%, from the
$2,681,000 net loss for FY 1995. The Company's consolidated results of
operations for the two years are summarized below:

Revenues                                     FY 1996           FY 1995
--------                                     -------           -------

Equipment sales                            $4,258,000        $2,525,000
Service revenues                              799,000           683,000
Royalties                                     255,000           151,000
                                           ----------        ----------
                                           $5,312,000        $3,359,000
                                           ==========        ==========

Equipment sales increased $1,733,000, or 68.6%, to $4,258,000 in FY 1996, up
from $2,525,000 in FY 1995. The increase was due to $1,710,000 in increased
sales of paint-tint dispensers to The Sherwin-Williams Company and an increase
of $23,000 in project development revenues during FY 1996.

Service revenues for FY 1996 were $799,000, an increase of $116,000, or 17.0%,
from FY 1995 service revenues of $683,000. The increase was due to service and
installation for new equipment sales to Sherwin-Williams.

In FY 1996, royalty revenue increased $104,000, or 68.8%, to $255,000, up from
$151,000 in FY 1995. Increased sales of paint-tint dispensers to The
Sherwin-Williams Company caused the increase.

Gross Margins                            FY 1996            FY 1995
-------------                            -------            -------

Equipment                                 30.8%               27.2%
                                          ====                ====
Service                                  (20.7)%             (10.4)%
                                          ====                ====
Total                                     23.0%               19.6%
                                          ====                ====

                                       13
In FY 1996, gross margin as a percentage of sales on equipment increased 3.6
points to 30.8%, up from 27.2% in FY 1995. The variance was caused by a $150,000
write-off of obsolete inventory in FY 1995 that exceeded the FY 1996 write-off
by $92,000. The additional write-off in FY 1995 lowered the gross margin from
30.8% to 27.2%.

Gross margin as a percentage of service revenue in FY 1996 decreased 10.3 points
to a negative 20.7%, down from a negative 10.4% in FY 1995. The decrease was due
to increased travel and administrative expenses associated with installation and
service of new equipment.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses increased $57,000, or 5.4%, to $1,106,000 in
FY 1996, up from $1,049,000 in FY 1995. The increase was due to increased
payroll expense and supplemental legal counsel for public company matters.

SELLING AND MARKETING EXPENSES

Selling and marketing expenses increased $134,000, or 33%, to $540,000 in FY
1996, up from $406,000 in FY 1995. The increase was caused by additional
international marketing efforts for both paint and beverage products.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses increased $108,000, or 17.8%, to 714,000 in FY
1996, up from $606,000 in FY 1995. The change resulted from increased new
product development activity. Numerous dispensing applications were under
development during FY 1996, including: the institutional juice dispenser, a
chemical coatings dispenser, and a cement additives dispenser.

SECURITIES AND CONTRACT LITIGATION

The distribution of the Class Action settlement fund (see Note 13 to the
Consolidated Financial Statements) and the final valuation of the Company's
contributed common stock to the fund allowed the Company to lower the accrual
for settlement costs and legal expenses by $366,000. The Company had originally
accrued $1,000,000 in FY 1995 to record estimated remaining settlement costs and
legal fees. The remaining accrual at April 27, 1996, was $95,000.

INTEREST EXPENSE

Interest expense was $134,000 in FY 1996, up $106,000, or 378.6%, from the FY
1995 interest expense of $28,000. The increase is due to a full year of interest
on the building mortgage, an increased average balance on the line-of credit,
and an increase of $500,000 in long-term debt during FY 1996.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash balance decreased to $287,000 as of January 24, 1998 from
$445,000 as of April 26, 1997.

Operations during the first three quarters ended January 24, 1998 required cash
of $1,183,000 which resulted from a net loss of $1,033,000, and net increases in
operating assets and operating liabilities of $435,000, and $6,000,
respectively, offset by depreciation and amortization of $291,000.

Consistent with prior years, the Company's primary source of liquidity has been
private placements of equity and equity derivative instruments. From August 1,
1996, to October 30, 1996, the Company issued 132 shares of Series A Preferred
Stock in exchange for the surrender of the Company's outstanding $25,000, 9%
Convertible Subordinated Redeemable Notes Payable in the aggregate principal
amount of $1,650,000. From August 1, 1996, through February 7, 1998, the Company

                                       14
issued 176 shares of Series A Preferred Stock in exchange for $12,500 cash per
share, generating $2,063,000 cash (see footnote 8). Near term cash requirements
will be obtained using this same Preferred Stock vehicle.

In August, 1997, to raise additional working capital, the Company began issuing
short term promissory notes. The notes are sold in multiples of $12,500, or
fractions thereof, and pay interest at the rate of 10%, with principal and
interest paid at maturity. The initial maturity date is June 30, 1998, however,
the Company may, at its sole option, extend the maturity date to December 31,
1998. At January 24, 1998, the Company has generated $335,000 in cash by issuing
the notes.

In addition to private placements of equity and notes payable, management
uses an accounts receivable-based credit line to meet short-term cash
requirements (see note 5 to the financial statements). The credit line bears an
interest rate of prime plus four points. As of March 12, 1998, the credit limit
was set at $500,000 with an outstanding balance of $500,000.

If the above sources of cash do not become available or are not sufficient, the
Company may be forced to curtail marketing and research & development activities
which would adversely affect future operating results. Furthermore, if
management is successful in raising additional funds, there is no guarantee that
the Company will achieve profitable operations, or positive cash flow.

The current liquidity position of the Company and the inability of operations to
generate positive cash flow raises doubt about the Company's ability to continue
as a going concern (see Note 3 to the financial statements). Management
recognizes these weaknesses and is taking aggressive steps to increase revenues
through increased sales and marketing efforts.

1997 AUDIT

     Grant Thornton LLP has audited the consolidated balance sheet of the
Company as of April 26, 1997, and the related consolidated statement of
operations, cash flows and stockholders' equity for the year ended April 26,
1997. In its report of July 11, 1997, to the Board of Directors and to the
Company it is stated that the financial statements have been prepared assuming
that the Company will continue as a going concern. However, their report states
that the "history of operating losses and limited capital resources raise
substantial doubt" about the Company's ability to continue as a going concern
(see Note 3 to the Consolidated Financial Statements). Management recognizes the
need to increase sales and raise additional capital and has plans and programs
intended to accomplish these goals.

IMPACT OF YEAR 2000

The year 2000 issue pertains to computer programs that were written using two
digits rather than four to define the applicable year. As a result, those
computer programs have time-sensitive software that recognize the year "00" as
the year 1900 rather than the year 2000. This could cause a system failure or
miscalculations causing disruptions of operations.

During fiscal 1998, the Company has obtained software updates for its critical
operational software to make the software "2000 compliant." The Company believes
that with the updates to existing software, the Year 2000 Issue will not pose
significant operational problems for its computer systems.

                                       15
BUSINESS

ORGANIZATION

     The Company is a corporation organized under the laws of Florida in 1980.
In May, 1996, the Company changed its name from American Business Computers
Corporation to ABC Dispensing Technologies, Inc.

CORE COMPETENCE

     ABC Dispensing Technology's (the "Company" or "ABC") core competence is its
ability to creatively use existing technology to develop state-of-the-art
dispensing systems. The Company's dispensing systems are designed to increase
accuracy, efficiency, speed, flexibility and functionality. The Company's
technology is transferable into many industries. The Company concentrates on
developing solutions for specific, known applications. The Company has a unique
approach to creating new, innovative solutions by combining first the principles
of physics with state-of-the-art electronics. The Company designs its own
computer controlled systems--both hardware and software.

     The core of the Company is talented people and 33 useful patents and 5
patents pending. The Company is a technology and marketing firm. However, two
operational advantages the Company believes it has over other technically
oriented firms are: (1) the ability to produce the systems the Company designs,
and (2) the ability to offer field technical support (training, installation,
and service).

NEW DIRECTIONS

         ABC, as a technology firm, has depended on industry partners to make
the Company's equipment commercially successful. The risk in this approach is
centered around possible different goals and objectives between ABC and its
partners. As of July 15, 1996 the Company began thoroughly examining the markets
in which it competes. This examination included inviting leaders in those
markets to define their exact needs and problems. A complete understanding of
its customers' needs will allow the Company to design more universally accepted
machines from the Company's innovative concepts.

     Marketing, market demand, and the customer will drive ABC's research &
development, design, and commercialization. Exclusivity has restricted the
Company in the past. The Company's new mission focuses on driving an innovative
dispensing solution through the broad market in a universally and commercially
viable fashion.

     ABC will strive to take advantage of strategic alliances with other
companies with whom it may have had long standing relationships. The Company
believes joint ventures and co-production will grow the business and reduce
expenses through economies of scale.

     In addition to broadening the marketing of ABC's equipment, the Company
will concentrate on maximizing its patent portfolio. This portfolio is a library
of useful technology. The Company will strive to sell and re-sell the various
configurations of that technology as useful parts and components to the wide
range of industries we serve now--and in the future.

     The Company's new mission embraces the concept of "milestone development."
In other words, ABC will discontinue research & development on new products at
its own expense, based on speculation of the possibility of a future order.
Rather, it will work closely with those companies willing to pay ABC in stages
as the Company works from proof of concept through field prototype to the
ultimate, commercial version of the product. Generating revenues in stages as
the Company proves its ability helps ensure the commercial order or alerts the
Company early to the feasibility of the project. This method of research &
development should help control expenses.

                                       16
As the Company rolls out new products, it will assist its customers and
partners in making their organizations comfortable and confident in their use of
ABC's equipment and products. ABC will strive to assist them in making these
products commercially successful and will support their effort with regard to
applications, maintenance, training, marketing, and sales.

     The Company is dedicated to selling dispensing technology at a profit--to a
wide range of industries.

PRODUCTS

INDUSTRIAL

     During the past year, the Company has successfully developed a universal
line of tint dispensers designed in a modular fashion that provides the
flexibility to control from 9 to 18 different colorants. As a result, the
Company believes it can now address the current needs of most of the world's
major paint retailers. The Company recently obtained a purchase order from The
Home Depot, North America's largest home improvement retailer. The multi-million
dollar order is for 300 self-calibrating units, (Royal Match(TM)) that will be
installed in new stores and used to upgrade dispensing capabilities in existing
stores. Commercial shipments of this equipment began in May, 1997. System
advantages include:

     1. Elimination of daily purging;

     2. Self-calibration to adjust for changes in tint rheology including
        temperature, density and viscosity;

     3. Limited moving parts to minimize maintenance requirements; and

     4. Self-cleaning dispensing of clear flush after each dispense cycle.

     For the nine months ended January 24, 1998, 90% of the Company's revenues
were from sales of paint products to The Home Depot, Inc. During the fiscal year
ended April 26, 1997 ("FY 1997"), all paint product sales were sales to The
Sherwin-Williams Company, accounting for 54% of total Company revenues. Paint
product sales to The Sherwin-Williams Company were 72% and 59% of total Company
revenues in FY 1996 and FY 1995, respectively. The Company currently has no
orders from The Sherwin-Williams Company, and does not expect significant
revenues from sales to The Sherwin-Williams Company in the near future.

     Other Industrial dispensers that have been partially developed through
field test, including Concrete Additives, Chemical Coatings and an Antibacterial
dairy sprayer. These products are not being further developed until a customer
order can be obtained. The Company will continue to obtain customer feedback on
features, market size, and economics of these projects. However, the Company's
new focus on product commercialization prevents any major development efforts on
these products.

BEVERAGE

      The Company currently markets two types of beverage dispensers:
juice and liquor.

     On June 25, 1997 the Company announced the creation of "Virtual
Squeeze,"(TM) a 50-50 joint venture agreement with Damon Industries Inc., a
Nevada based juice manufacturer and distributor. Virtual Squeeze has targeted
the $3 billion institutional juice market with a self-contained, refrigerated
dispenser designed to use shelf stable, bag in the box concentrates. Current
plans provide for the free installation and service of the dispensing equipment
provided that only "Virtual Squeeze" products are used. Revenues will be
generated from on-going juice sales. The Company believes the equipment is the
only known juice dispenser specifically designed to use shelf stable products.
System advantages include:

     1.  High volume dispensing of chilled juices;

     2.  No refrigerated storage required;

                                       17
3. Preprogrammed, automated, mandatory sanitization routines;

     4.  Pre-set portion dispensing; and

     5. Automated flavor blending.

     The current marketing strategy has a three pronged approach: Direct sales
efforts targeted at nursing home chains and buying groups, distributor
recruitment of existing businesses currently servicing the health care industry,
and marketing directly to food service distributors.

     During Fiscal 1997, ABC discontinued the ongoing marketing efforts of the
Classic(TM) line of soft drink dispensers. This decision was made because of
narrow margins and resistance from the major soft drink suppliers to support the
equipment. The Company is continuing to look for opportunities to capitalize on
its soft drink technology. Options currently being considered include, strategic
partnerships, technology licenses, and outright sale.

     Sales of Classic(TM) products accounted for 0.3%, 12.2%, 10.8% and 11% of
total Company revenues for the 9 months ended January 24, 1998, and in FY 1997,
FY 1996 and FY 1995, respectively.

     The Company's UltraBar(TM) liquor dispensing system pours complex mixed
drinks quickly with a touch of the customized touch-sensitive drink menu.
Advantages are speed, accuracy, simplicity, full cash and inventory
accountability, and reduction of theft, spillage, overpours, errors, and
giveaways.

     Sales of UltraBar(TM) products accounted for 5.3%, 10.1%, 7.5% and 13% of
total Company revenues for the 9 months ended January 24, 1998, and in FY 1997,
FY 1996 and FY 1995, respectively.

NEW PRODUCT DEVELOPMENT

     ABC offers the ability to contract with new business partners to assist in
the development of new dispensing systems. As mentioned previously in the "New
Directions" section, ABC plans to develop new dispensers for emerging products
which require our technology; however, ABC will perform this development work in
phases with each phase intended to generate revenues.

SERVICES

SERVICE/TECHNICAL SUPPORT

     The Company is able to perform on-site service for the Company's installed
base of equipment in the U.S. using its own service technicians who are located
throughout the country. The Company has committed to increase the number of
field service technicians to improve its response time and reduce the variable
costs of providing service. Variable costs will be reduced by eliminating
excessive travel and overtime expenses. The Company also contracts with
third-party service organizations to assist in providing technical support to
customers.

     ABC also utilizes its technical service organization to perform third party
installation and service for other electronic equipment manufacturers. Service
sales accounted for 9.4%, 21%, 15.1% and 22% of total Company revenues for the 9
months ended January 24, 1998, and in FY 1997, FY 1996 and FY 1995,
respectively.

SALES BACKLOG

     As of March 1, 1998, the sales order backlog (unshipped product orders) was
$312,000. As of April 26, 1997, the sales order backlog was $4.4 million. As of
April 27, 1996, the sales order backlog was $1.6 million.

                                       18
INTERNATIONAL SALES

     Revenues from international sales for the 9 months ended January 24, 1998,
and for fiscal years 1997, 1996, and 1995 amounted to 1%, 1%, 1% and 3% of total
revenues, respectively. Primary international sales efforts center on liquor
equipment to Canada and Industrial Sales to South America and Europe.

COMPETITION

The Company is one of four manufacturers that sell automatic paint tint
dispensers in the U.S. Of the other three manufacturers, one has an established
presence in the U.S. market, and the other two are new to the U.S. market. The
Company recently gained access to the entire U.S. market after being released
from an exclusivity agreement with The Sherwin-Williams Company. ABC believes
that the design and features of its' dispensing equipment, coupled with the
ability to provide nationwide on-site technical support give the Company a
competitive advantage in the market place.

The institutional juice market in which the Company competes through the
creation of the Virtual Squeeze joint venture is highly competitive. Currently,
80-90% of the juice sold in this market is sold as frozen concentrate. The
joint venture will compete by selling shelf-stable juice concentrates and
providing the customer with a dispenser that will mix, chill and provide portion
control dispensing of the juice. The dispenser also allows for mixing of juice
flavors and requires automated sanitizing routines.

HUMAN RESOURCES

     As of March 1, 1998, the Company had 41 full-time employees, seven fewer
than the same time last year. The Company has cash and stock option incentive
plan programs for substantially all full-time employees. In fiscal year 1997,
the Company has increased the employee option program to provide greater degrees
of employee ownership and to help ensure a stable workforce. The employees are
not represented by a union. Temporary workers are utilized in the production
process. A highly qualified labor pool exists in the immediate geographic area
should the Company need to expand its workforce.

PATENTS

     The Company has consistently sought patent protection for its proprietary
technology and products. To date, 33 patents are held and an additional 5 are
pending. Patent coverage of the Company's dispensing technology is broad.
Research and development expenditures for the nine months ended January 24,
1998, and fiscal years 1997, 1996, and 1995 were $924,000, $629,000, $714,000
and $606,000, respectively.

ENTITIES AND FISCAL YEAR

     "ABC" is comprised of three legal entities: the parent (public entity)--ABC
Dispensing Technologies, Inc., (a Florida corporation) (NASDAQ:ABCC), the
operating subsidiary--ABC Dispensing Technologies, Inc. (an Ohio corporation),
and a second subsidiary that holds the patents--ABC Tech Corp. (an Ohio
corporation).

     "Fiscal Year 1998" ends April 25, 1998. The Company has adopted a fiscal
year ending on the Saturday closest to April 30. Each quarter consists of 13
weeks.

     "Fiscal Year 1997" ended April 26, 1997.

PROPERTIES

     The Company owns a single floor building of approximately 18,400 square
feet of office, laboratory, and production space located in Akron, Ohio. The
property is encumbered by a mortgage in favor of an institutional lender. The
principal balance of the mortgage was $259,000 as of January 24, 1998.

                                       19
The Company leases additional warehouse space from independent third
parties on an as needed basis.

LEGAL PROCEEDINGS

The Company presently is not involved as a defendant in any material litigation.

                              CHANGE IN ACCOUNTANTS

     On March 20, 1997, the Company notified Ernst & Young LLP ("E&Y") that they
were dismissed as the Company's independent auditor.

     The Company and E&Y had not, in connection with the audit of the Company's
financial statements for each of the prior two years ended April 27, 1996 and
April 29, 1995, had any disagreement on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreement, if not resolved to E&Y's satisfaction, would have caused E&Y to
make reference to the subject matter of the disagreement in connection with its
reports.

     The reports of E&Y on the Company's financial statements for the years
ended April 27, 1996 and April 29, 1995 did not contain an adverse opinion or a
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principles, except that the report of E&Y on the
Company's financial statements for the year ended April 27, 1996 included an
explanatory paragraph relating to an uncertainty about the Company's ability to
continue as a going concern.

     The decision to change accountants was approved by the Company's Board of
Directors.

     On March 20, 1997, the Company appointed Grant Thornton LLP its independent
accountants and Grant Thornton LLP accepted such appointment.

     The Company had no prior relationship with Grant Thornton LLP.

                                       20
MANAGEMENT

     The executive officers and Directors of the Company are as follows:
NAME                                    AGE               POSITION
----                                    ---               --------
Charles M. Stimac, Jr.                  46                President, Chief Executive Officer, Chief Financial
                                                          Officer and Director

Herbert L. Luxenburg                    62                Director

C. Rand Michaels                        60                Director

Frank E. Vaughn                         68                Director

Norbert J. Lewandowski                  60                Director

William L. Shanklin                     57                Director
CHARLES M. STIMAC, JR. has been President, Chief Executive Officer and a
Director of the Company since July 15, 1996. Mr. Stimac has more than twenty
years experience in the investment banking industry. Prior to joining the
Company, Mr. Stimac served as Vice President of Roney and Company, a member firm
of the New York Stock Exchange through June 1996.

HERBERT L. LUXENBURG has been a Director of the Company since September 1988.
Mr. Luxenburg has been a proprietor in the hospitality industry since 1965 and
has served as President and Chief Executive Officer of the University Inn and
Days Inn of Kent, Ohio from 1989 through the present.

C. RAND MICHAELS has been a Director of the Company since September 1986. Mr.
Michaels is Vice Chairman of Lomak Petroleum, Inc., a public corporation engaged
in exploration for, and in the development and production of, crude oil and
natural gas. Mr. Michaels has held executive positions with Lomak since 1976.
Mr. Michaels also has served as a Director of Lynx Exploration, Inc., an oil and
gas exploration company from 1994 through the present and as a Director of North
Coast Energy, Inc. from 1996 through the present.

FRANK E. VAUGHN was appointed Director of the Company on October 13, 1997 to
fill a vacant seat on the board and serve until the next election by the
shareholders at the 1998 annual meeting. Mr. Vaughn was formerly President of
the Hoover Companies and Executive Vice President of the Maytag Corporation. Mr.
Vaughn is currently an Adjunct Professor and visiting lecturer at Kent State
University.

NORBERT J. LEWANDOWSKI was appointed Director of the Company on December 15,
1997 to fill a vacant seat on the board and serve until the next election by the
shareholders at the 1998 Annual Meeting. Mr. Lewandowski currently serves on the
Board of Trustees at Kent State University. Mr. Lewandowski is a CPA and until
1992 he headed a large regional accounting firm that he founded. Mr. Lewandowski
currently serves as a consultant to many local companies.

                                       21
WILLIAM L. SHANKLIN was appointed Director of the Company on December 15, 1997
to fill a vacant seat on the board and serve until the next election by the
shareholders at the 1998 Annual Meeting. Mr. Shanklin has been a Professor
of Marketing and Entrepreneurship at Kent State University from 1977 to the
present. Mr. Shanklin has served as consultant and advisor to the President/CEO
of the Company for the past 16 months. Mr. Shanklin is an author and has been a
consultant to numerous companies, ranging from Fortune 500 firms to small
businesses.

BOARD MEETINGS

     For the nine months ended January 24, 1998, the Board of Directors held
three Meetings. The Company's Board of Directors held three meetings during the
fiscal year ended April 26, 1997. All Directors attended all the Board meetings.

DIRECTORS' COMPENSATION

     On September 22, 1996, Herbert L. Luxenburg and C. Rand Michaels were each
granted 20,000 options to purchase shares of the Company's common stock at $1.25
per share. On January 2, 1997, Mr. Luxenburg and Mr. Michaels were each granted
20,000 warrants to purchase shares of the Company's common stock at $1.25 per
share. On October 10, 1997, Mr. Luxenburg and Mr. Michaels were each granted
20,000 warrants to purchase shares of the Company's common stock at $0.844 per
share and Mr. Vaughn was granted 20,000 warrants to purchase shares of the
Company's common stock at $0.844 per share. These options and warrants were
granted to the Directors to compensate them for their services as Directors. On
October 10, 1997 Mr. Vaughn was granted 20,000 warrants to purchase shares of
the Company's common stock at $0.844 per share for accepting a position on the
Board of Directors. On January 29, 1998, Mr. Lewandowski and Mr. Shanklin were
each granted 20,000 warrants for accepting positions on the Board of Directors
and 20,000 warrants as compensation for their services as Directors for fiscal
1998. Each warrant allows the Director to purchase one share of the Company's
common stock at a price $1.125 per share. On October 10, 1997 Mr. Vaughn was
granted 20,000 warrants to purchase shares of the Company's common stock at
$0.844 per share for accepting a position on the Board of Directors. On January
29, 1998, Mr. Lewandowski and Mr. Shanklin were each granted 20,000 warrants for
accepting positions on the Board of Directors and 20,000 warrants as
compensation for their services as Directors for fiscal 1998. Each warrant
allows the Director to purchase one share of the Company's common stock at a
price $1.125 per share.

EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE

     The following table sets forth a summary of the fiscal years ended April
26, 1997, April 27, 1996 and April 29, 1995 of the compensation of the Company's
Chief Executive Officer.
Long Term
                                                                                                     Compensation
                                                  Annual Compensation                                    Awards
                                                  -------------------                               --------------
     Name and Principal       Fiscal                                   Other Annual        Options      All Other
          Position            Year         Salary        Bonus         Compensation        (# of      Compensation
                                                                           ($) (1)         shares)          ($)
     ------------------       ------       ------        -----         ------------        --------   ------------
Charles M. Stimac, Jr.        1997         $108,333         -0-            -0-              -0-             $670(2)
President and Chief
Executive Officer

Robert A. Cutting,            1996         $122,000         -0-            -0-              -0-             $490
Former President and          1995         $115,000         -0-            -0-              -0-             $490(3)
Chief Executive Officer
(1)  Perquisites of the fiscal year ended April 26, 1997  did not exceed 10%
     of Mr. Stimac's and Mr. Cutting's respective salaries combined.
(2)  These amounts represent the Company's matching contributions for Mr.
     Stimac's account in the Company's 401-(K) retirement plan.
(3)  Mr. Cutting's employment with the Company terminated effective July 14,
     1996.
                                           22
OPTION GRANTS DURING THE YEAR ENDED APRIL 26, 1997

     The Company did not grant any options to purchase shares of Common Stock to
the named executive officers during the fiscal year ended April 26, 1997.

                                       23
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

              As of March 1, 1998, there were no persons known by the Company to
beneficially own more than five percent (5%) of any class of the Company's
securities. The following table sets forth certain information as of March 1,
1998, except as noted, regarding the Common Stock held by Directors and the
Chief Executive Officer of the Company, including each nominee for election as a
Director and all directors and executive officers as a group:
Number of Shares of Common             Percent of
Name and Beneficial Owner                                  Stock Beneficially Owned                 Class
-------------------------                                 --------------------------             ----------
Charles M. Stimac, Jr., President,                              378,881(1)                          2.18%
   Chief Executive Officer and Director

Herbert L. Luxenburg, Director                                  275,826(2)                          1.58%

C. Rand Michaels, Director                                      263,300(3)                          1.51%

Frank E. Vaughn                                                 140,000(4)                              *

William L. Shanklin                                             301,170(5)                          1.73%

Norbert J. Lewandowski                                           40,000(6)                              *

Directors (including nominees) and                            1,399,177                             8.06%
  Officers as a Group (4 Persons)
-------------
* The percentage of shares beneficially owned by this director does not
exceed one percent of the class so owned.

     (1)      Includes 153,881 shares of Common Stock and warrants to purchase
              225,000 shares of Common Stock, which warrants are exercisable
              within 60 days.

     (2)      Herbert L. Luxenburg owns stock options rights to purchase 75,000
              shares of Common Stock under the Company's 1990 Non-Qualified
              Stock Option Plan. Under the Company's 1995 Stock Option Plan, Mr.
              Luxenburg holds options to purchase 25,826 shares of Common Stock
              and warrants to purchase 100,000 shares of Common Stock. All of
              such options and warrants are exercisable within 60 days. Mr.
              Luxenburg also owns 75,000 shares of Common Stock.

     (3)      C. Rand Michaels owns stock options rights to purchase 75,000
              shares of Common Stock under the Company's 1990 Non-Qualified
              Stock Option Plan. Under the Company's 1995 Stock Option Plan,
              Mr. Luxenburg holds options to purchase 25,826 shares of Common
              Stock and warrants to purchase 60,000 shares of Common Stock. Mr.
              Michaels is the owner of 2 shares of the Company's 9% Cumulative
              Convertible Preferred Stock and the beneficial owner of an
              additional two shares. The Preferred shares are convertible into
              12,500 shares of the Company's Common Stock at any time after
              March 1, 1997. Upon conversion of the Preferred shares, Mr.
              Michaels will receive warrants to purchase Common Stock equal to
              the number of common shares obtained upon conversion.  All of such
              options and warrants are exercisable within 60 days. Mr. Luxenburg
              also owns 1,319 shares of Common Stock and is the beneficial owner
              of 859 shares.

                                       24
(4)      Frank E. Vaughn holds warrants to purchase 40,000 shares of Common
              Stock and owns 4 shares of the Company's 9% Cumulative Convertible
              Preferred Stock. The Preferred shares are convertible into 12,500
              shares of the Company's Common Stock at any time after March 1,
              1997. Upon conversion of the Preferred shares, Mr. Vaughn will
              receive warrants to purchase Common Stock equal to the number of
              common shares obtained upon conversion. All of such options and
              warrants are exercisable within 60 days.

     (5)      William L. Shanklin holds warrants to purchase 75,000 shares of
              Common Stock and owns 4 shares of the Company's 9% Cumulative
              Convertible Preferred Stock (Preferred Stock). Mr. Shanklin will
              also acquire 5 shares of the Company's Preferred Stock on 1/15/98
              pursuant to the terms of a consulting agreement dated 10/1/97.
              The Preferred shares are convertible into 12,500 shares of the
              Company's Common Stock at any time after March 1, 1997. Upon
              conversion of the Preferred Shares, Mr. Shanklin will receive
              warrants to purchase Common Stock equal to the number of common
              shares obtained upon conversion. All of such Preferred Shares and
              warrants are convertible or exercisable within 60 days. Mr.
              Shanklin also owns 1,170 shares of Common Stock.

     (6)      Norbert J. Lewandowski holds warrants to purchase 40,000 shares of
              Common Stock.  The warrants are exercisable within 60 days.

                              CERTAIN TRANSACTIONS

     On January 17, 1996, the Company obtained a $500,000 working capital
asset-secured loan from the Mezzanine Financial Fund, L.P. ("Mezzanine").
Interest on the loan was due monthly at the rate of 18% per annum. The terms of
the loan agreement provided for a $100,000 repayment of principal on each of the
first and second anniversaries of the closing of the loan. The balance of
$300,000 was due on the third anniversary. Mezzanine, at its option, could have
converted the loan into 166,666 shares of common stock (including standard
anti-dilution provisions). In consideration for providing the loan, Mezzanine
received a five (5) year warrant (the "Warrant Fee") to acquire shares of common
stock (at a price equal to the lower of seventy percent (70%) of the 30-day
average trading price prior to closing of the loan, or $2.50 (the "Price")). The
warrant exercise price was therefore determined to be $2.04 per share. The
maximum number of shares subject to the warrant was determined to be 58,910
under a formula in the loan agreement. At Mezzanine's election, all or any part
of the Warrant Fee could have been put to the Company upon repayment of the loan
for payment in cash in the amount equal to 70% of such Warrant Fee, paid in
equal monthly payments over the same number of months that the loan was
outstanding. Additionally, Mezzanine received a closing fee equal to 2% of the
amount of the loan and reimbursement for expenses associated with the making of
the loan.

     On July 24, 1996, the Company distributed 125,000 shares of common stock to
Mezzanine in satisfaction of $38,000 of interest charges from May through
September 1996 due Mezzanine under the credit facility.

     On September 23, 1996, the Company fully repaid Mezzanine the $500,000.
Prior to this date, the Company delivered 125,000 common shares to Mezzanine of
which 30,000 shares were sold to pay past due interest. In addition, another
60,000 shares were sold by Mezzanine in September and October 1996, the
proceeds, net of commission, used to pay off the remaining interest of
approximately $10,000 and agreed to an enhancement fee of approximately $23,000.
On December 31, 1996, Mezzanine returned 35,000 shares of Common Stock to the
Company.

     Herbert M. Pearlman, Chairman of the Board of Directors of the Company
through February 5, 1997, is a director, officer and principal stockholder of
the general partner of Mezzanine. Mr. Pearlman is also Chairman, chief executive
officer and a principal stockholder of Helm Resources, Inc., a publicly traded
company which holds an approximately 14% equity stake in Mezzanine.

     Pursuant to an arrangement with InterSystems, Inc., a company in which Mr.
Pearlman is Chairman and in which Mr. Pearlman has a significant equity
interest, the Company received certain shareholder relations services. The
Company reimbursed InterSystems, Inc. by paying one-third of the salary and
other expenses of the InterSystems, Inc. employee providing the services to the

                                       25
Company. The Company did not make any payments to InterSystems, Inc. during
fiscal 1997. The arrangement was terminated in February, 1997.

     Pursuant to an arrangement with Helm Resources, Inc., that was terminated
in February 1997, the Company paid for 25% of the allocated overhead expenses
associated with the office space maintained for Mr. Pearlman by Helm Resources,
Inc. The Company did not make any payments to Helm Resources, Inc. during fiscal
1997.

                          DESCRIPTION OF CAPITAL STOCK

GENERAL

     The Company is authorized to issue up to 50,000,000 shares of Common Stock
and 5,000,000 shares of Preferred Stock. As of the date of this Prospectus,
17,362,862 shares of Common Stock and 316 shares of Preferred Stock are issued
and outstanding. An additional 3,109,719 shares of Common Stock are issuable
upon exercise of outstanding stock options and warrants to purchase Common
Stock.

     The following description provides a summary of the material rights and
limitations relating to ownership of the Company's capital stock. For a complete
legal description of the Company's capital stock, reference should be made to
the Company's Restated Certificate of Incorporation, as amended, and Bylaws,
copies of which are included as exhibits to the Registration Statement of which
this Prospectus is a part.

PREFERRED STOCK

     The Company's 9% Convertible Cumulative Redeemable Preferred Stock, Series
A (each a "Preferred Share") is convertible into the Company's Common Stock at a
price of $1.00 per share. Attached to each Preferred Share are redeemable Common
Stock purchase warrants to purchase a number of shares of Common Stock, at a
price of $1.25 per share, equal to the number of shares of Common Stock issued
upon conversion of the Preferred Shares. The warrants are exercisable for a
period of five years commencing on the date of the conversion of the Preferred
Shares. The Preferred Shares may be redeemed by the Company, at its option, upon
no more than sixty, nor fewer than thirty, written days notice to the holder.
Each Preferred Share pays dividends semi-annually each February 1 and August 1,
commencing on February 1, 1997. The Company may elect to make dividend payments
in shares of Common Stock of the Company issued at 90% of the then market price
of the Common Stock.

COMMON STOCK

     All outstanding shares of Common Stock are, and the shares to be issued in
this Offering will be, fully paid and non-assessable. There are no preemptive,
conversion, subscription, redemption or repurchase rights associated with the
shares of Common Stock. Each holder of Common Stock is entitled to one vote for
each share owned of record on matters submitted to a vote of the stockholders.
Holders of Common Stock are not entitled to cumulative voting rights in the
election of Directors. Upon liquidation of the Company, the holders of Common
Stock are entitled to participate ratably in the assets available for
distribution after satisfaction of all claims of the Company's creditors and
preferred shareholders. The holders of Common Stock are entitled to receive
ratably such dividends as the Board of Directors, in its discretion, may declare
out of funds legally available therefor.

CERTAIN BYLAW PROVISIONS

     The Company's Bylaws provide that stockholders may act by written consent,
without prior notice and without a vote, if a consent is signed by stockholders
having not less than the minimum number of votes that would be necessary to
authorize such action at a meeting of stockholders. The Bylaws may be amended by
a majority vote of the stockholders or Board of Directors. The foregoing summary

                                       26
of material provisions is qualified in its entirety by reference to the
Company's Bylaws, which are filed as an exhibit to the Registration Statement of
which this Prospectus is a part.

ANTI-TAKEOVER MATTERS

     A Florida corporation may not engage in a business transaction with any
person acquiring 10% or more of the voting stock of such Florida corporation (an
"interested shareholder") for a period of three years following the date of such
acquisition, unless: (i) the corporation approved the business transaction; (ii)
the corporation has not had more than 300 shareholders of record at any time
during the proceeding three years; (iii) the interested stockholder has been a
beneficial owner of 80% or more of the corporation's voting stock for at least
five years prior to the transaction; (iv) the interested shareholder is the
beneficial owner of at least 90% of the outstanding voting shares of the
corporation, exclusive of shares acquired directly from the corporation in a
transaction not approved by a majority of the disinterested directors; (v) the
corporation is an investment company registered under the Investment Company Act
of 1940; (vi) in the business transaction, consideration shall be paid to the
holders of each class or series of voting shares and all of the following
conditions shall be met: (1) the aggregate amount of the cash and the fair
market value as of the valuation date of consideration other than cash to be
received per share by holders of each class or series of voting shares in such
transaction are at least equal to the highest of the following: (a) if
applicable, the highest per share price, including any brokerage commissions,
transfer taxes, and soliciting dealers' fees, paid by the interested shareholder
for any shares of such class or series acquired by it within the 2-year period
immediately preceding the transaction date or in the transaction in which it
became an interested shareholder, whichever is higher; (b) the fair market value
per share of such class or series on the transaction date; (c) if applicable,
the price per share equal to the fair market value per share of such class or
series determined pursuant to subparagraph b., multiplied by the ratio of the
highest per share price, including any brokerage commissions, transfer taxes,
and soliciting dealers' fees, paid by the interested shareholder for any shares
of such class or series acquired by it within the 2-year period immediately
preceding the transaction date, to the fair market value per share of such class
or series on the first day in such 2-year period on which the interested
shareholder acquired any shares of such class or series; and (d) if applicable,
the highest preferential amount, if any, per share to which the holders of such
class or series are entitled in the event of any voluntary or involuntary
dissolution of the corporation, (2) the consideration to be received by holders
of outstanding shares shall be in cash or in the same form as the interested
shareholder has previously paid for shares of the same class or series, and if
the interested shareholder has paid for shares with varying forms of
consideration, the form of the consideration shall be either cash or the form
used to acquire the largest number of shares of such class or series previously
acquired by the interested shareholder, (3) During such portion of the 3-year
period preceding the transaction date that such interested shareholder has been
an interested shareholder, except as approved by a majority of the disinterested
directors: (a) there shall have been no failure to declare and pay at the
regular date therefor any full periodic dividends, whether or not cumulative, on
any outstanding shares of the corporation; (b) there shall have been: (I) no
reduction in the annual rate of dividends paid on any class or series of voting
shares, except as necessary to reflect any subdivision of the class or series;
and (II) an increase in such annual rate of dividends as necessary to reflect
any reclassification, including any reverse stock split, recapitalization,
reorganization, or similar transaction which has the effect of reducing the
number of outstanding shares of the class or series; and (c) such interested
shareholder shall not have become the beneficial owner of any additional voting
shares except as part of the transaction which results in such interested
shareholder becoming an interested shareholder, (4) during such portion of the
3-year period preceding the transaction date that such interested shareholder
has been an interested shareholder, except as approved by a majority of the
disinterested directors, such interested shareholder shall not have received the
benefit, directly or indirectly (except proportionately as a shareholder), of
any loans, advances, guaranties, pledges, or other financial assistance or any
tax credits or other tax advantages provided by the corporation, whether in
anticipation of or in connection with such affiliated transaction or otherwise,
(5) except as otherwise approved by a majority of the disinterested directors, a
proxy or information statement describing the affiliated transaction and
complying with the requirements of the Exchange Act and the rules and
regulations thereunder has been mailed to holders of voting shares of the
corporation at least 25 days before the consummation of such affiliated
transaction, whether or not such proxy or information statement is required to
be mailed pursuant to the Exchange Act or such rules or regulations.

     The corporation may opt out of the effect of this statute by: (i) including
a provision to such effect in the corporation's original certificate of
incorporation, (ii) amendment to the corporation's bylaws made by the board of
directors prior to January 1, 1989, or (iii) amendment of the corporation's

                                       27
certificate of incorporation or bylaws approved by holders of a majority of the
shares entitled to vote, excluding the voting shares of the interested
shareholder; provided that such amendment shall not take effect until 18 months
after its adoption and shall not effect any business combinations with
interested stockholders which are effected during such 18 months.

LIMITATION OF DIRECTOR AND OFFICER LIABILITY

     The Company's Directors are each party to an Indemnification Agreement
pursuant to which such Directors of the Company shall not be personally liable
to the Company or its stockholders for damages for breach of any duty owed to
the Company or its stockholders; provided, that such Director shall act in good
faith and in a manner he reasonably believes to be in, or not opposed to, the
best interests of the Company, and, with respect to any criminal action or
proceeding, such Director has no reasonable cause to believe his conduct is
unlawful.

TRANSFER AGENT

     American Stock Transfer & Trust Co. is the transfer agent and registrar for
the Common Stock.

                                       28
LEGAL MATTERS

     Certain legal matters relating to the legality of the Securities offered
hereby have been passed upon for the Company by St. John & Wayne, L.L.C., 70
East 55th Street, New York, New York 10022.

                                     EXPERTS

     The consolidated financial statements and financial statement schedule of
the Company included herein, have been audited by Grant Thornton LLP,
independent auditors, as set forth in their report thereon for the fiscal year
ended April 26, 1997 (which contains an explanatory paragraph with respect to a
going concern uncertainty mentioned in Note 3 of the consolidated financial
statements for the fiscal year ended April 26, 1997) included herein. Such
consolidated financial statements and financial statement schedule are included
herein in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.

     The consolidated financial statements and financial statement schedule of
the Company as of April 27, 1996 and for the two years then ended included
herein, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon (which contains an explanatory paragraph with
respect to a going concern uncertainty mentioned in Note 3 to the consolidated
financial statements) appearing elsewhere herein. Such consolidated financial
statements and financial statement schedule are included in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.

                                       29
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
                                      --------------------------------------------------------
REPORTS OF INDEPENDENT AUDITORS..................................................................................................F-2

FINANCIAL STATEMENTS

Consolidated Balance Sheets as of January 24, 1998 (unaudited), April 26, 1997 and April 27, 1996................................F-4

Consolidated Statement of Operations for the Nine Months Ended January 24, 1998
  and January 25, 1997, (unaudited) and the Years ended April 26, 1997, April 27, 1996 and April 29, 1995........................F-5

Consolidated Statement of Cash Flows for the nine months ended January 24, 1998 and
  January 25, 1997 (unaudited) and for Years ended April 26, 1997, April 27, 1996, and April 29, 1995............................F-6

Consolidated Statement of Stockholders' Equity for the nine months ended January 24, 1998 
  (unaudited) and for Years ended April 26, 1997, and April 27, 1996, and April 29, 1995.........................................F-7

Notes to Consolidated Financial Statements.......................................................................................F-9

Supplementary Data:

Schedule II - Valuation & Qualifying Accounts...................................................................................F-18
F-1
REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
ABC DISPENSING TECHNOLOGIES, INC.

We have audited the accompanying consolidated balance sheet of ABC Dispensing
Technologies, Inc. (name changed from American Business Computers Corporation)
as of April 26, 1997, and the related consolidated statement of operations, cash
flows and stockholders' equity for the year then ended. Our audit also included
the financial statement schedule listed in the index at Item 11.2. These
financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of ABC
Dispensing Technologies, Inc. at April 26, 1997, and the consolidated results of
its operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As more fully described in
Note 3, the Company's history of operating losses and limited capital resources
raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 3. The
consolidated financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that might result from the outcome
of this uncertainty.

                                                      GRANT THORNTON LLP

Cleveland, Ohio
July 11, 1997

                                       F-2
REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
ABC Dispensing Technologies, Inc.

We have audited the accompanying consolidated balance sheet of ABC Dispensing
Technologies, Inc. (name changed from American Business Computers Corporation)
as of April 27, 1996, and the related consolidated statements of operations,
cash flows and stockholders' equity for the two fiscal years in the period ended
April 27, 1996. Our audits also included the financial statement schedule listed
in the index at Item 11.2 for the two fiscal years in the period ended April
27, 1996. These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of ABC
Dispensing Technologies, Inc. at April 27, 1996, and the related consolidated
statements of operations, cash flows and stockholders' equity for the two fiscal
years in the period ended April 27, 1996, in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial statement
schedule for the two fiscal years in the period ended April 27, 1996, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

The accompanying consolidated financial statements as of April 27, 1996, and for
the two fiscal years in the period then ended, have been prepared assuming that
the Company will continue as a going concern. As more fully described in Note 3,
the Company's history of operating losses and limited capital resources raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 3. The consolidated
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that might result from the outcome of this
uncertainty.

                                                       ERNST & YOUNG LLP

Akron, Ohio
August 8, 1996

                                       F-3
ABC DISPENSING TECHNOLOGIES, INC.
                                                  CONSOLIDATED BALANCE SHEETS
January 24, 1998
Assets                                                                   Unaudited               April 26,1997     April 27, 1996
------                                                                 ----------------          -------------     --------------
Current Assets
         Cash and cash equivalents                                     $    287,000              $      445,000      $     488,000
         Accounts receivable, less allowance for doubtful
         accounts of $76,000, $191,000 and $136,000 at January 24,
         1998, April 26, 1997 and April 27, 1996, respectively            1,155,000                     327,000            764,000
         Inventories (Note 4)                                             1,084,000                   1,431,000          1,703,000
                                                                     --------------              --------------     --------------
                  Total current assets                                    2,526,000                   2,203,000          2,955,000

Property, plant, and equipment (Notes 5 and 12)                             663,000                     704,000            703,000
Other assets:
         Advances to Joint Venture (Note 15)                                123,000                          --                 --
         Discount on Notes Payable (Note 5)                                  59,000                          --                 --
         Intangible assets, less accumulated amortization of
           $614,000, $552,000 and $480,000 as of January 24, 1998,
           April 26, 1997 and April 27, 1996, respectively                   70,000                     102,000            169,000
         Patents pending and deferred charges                               121,000                     341,000            193,000
                                                                     --------------              --------------     --------------
                                                                            373,000                     443,000            362,000
                                                                     --------------              --------------     --------------
Total Assets                                                           $  3,562,000              $    3,350,000       $  4,020,000
                                                                     ==============              ==============       ============
Liabilities And Stockholders' Equity
------------------------------------

Current Liabilities
         Accounts payable                                              $    938,000                $    877,000       $    875,000
         Line of credit (Note 5)                                            373,000                       2,000            292,000
         Note payable to related party (Note 5)                                   -                           -            500,000
         Current portion of long-term debt                                  369,000                      36,000             25,000
         Accrued liabilities:
                  Legal fees and settlement costs (Note 14)                       -                           -            148,000
                  Employee compensation and benefits                         82,000                     224,000            218,000
                  Warranty reserve                                          170,000                      88,000            197,000
                  Other                                                     198,000                     205,000            386,000
                                                                     --------------              --------------     --------------
                           Total current liabilities                      2,130,000                   1,432,000          2,641,000
 
Long-term debt (Note 5)                                                     265,000                     283,000            294,000

Stockholders' equity:
         Preferred Stock, 9% cumulative; authorized 320 shares, 
         308 and 271 shares issued and outstanding at January 24,
         1998 and April 26, 1997, respectively (Note 8)                   3,850,000                   3,388,000                  -
         Common Stock, $.01 par value; authorized 50,000,000
         shares; 17,355,347; 17,114,279 and 16,984,160 shares as
         of January 24, 1998, April 26, 1997 and April 27, 1996,
         respectively                                                       174,000                     171,000            170,000
         Additional paid-in capital ($36,785 restricted for cost of
         treasury shares held at April 26, 1997)                         19,291,000                  19,014,000         18,942,000
         Retained earnings (deficit)                                    (22,102,000)                (20,850,000)       (17,882,000)
                                                                     --------------              --------------     --------------
                                                                          1,213,000                   1,723,000          1,230,000
         Less notes receivable - stockholders                               (46,000)                    (51,000)          (146,000)
         Less cost of treasury stock, 35,000 shares                               -                     (37,000)                 -
                                                                     --------------              --------------     --------------
            Total Stockholders' Equity                                    1,167,000                   1,635,000          1,085,000
                                                                     --------------              --------------     --------------
Total Liabilities and Stockholders' Equity                             $  3,562,000              $    3,350,000     $    4,020,000
                                                                     ==============              ==============       ============

                             See accompanying notes.
F-4
ABC DISPENSING TECHNOLOGIES, INC.
                                                CONSOLIDATED STATEMENT OF OPERATIONS

                                                      Nine Months Ended                              Years Ended
                                                ----------------------------    ---------------------------------------
                                                Jan. 24, 1998  Jan. 25, 1997    April 26,      April 27,      April 29,
                                                        (Unaudited)              1997           1996            1995
-----------------------------------------------------------------------------------------------------------------------------------
Revenues:
         Products and services                  $ 4,511,000   $ 2,565,000    $ 3,073,000    $ 5,057,000    $ 3,208,000
         Royalties                                       --            --             --        255,000        151,000
                                                -----------   -----------    -----------    -----------    -----------
                                                  4,511,000     2,565,000      3,073,000      5,312,000      3,359,000

Cost and expenses:
         Products and services                    3,165,000     2,076,000      2,839,000      4,610,000      3,053,000
         General and administrative               1,064,000     1,281,000      1,997,000      1,106,000      1,049,000
         Selling and marketing                      337,000       470,000        700,000        540,000        406,000
         Research and development                   924,000       344,000        629,000        714,000        606,000
                                                -----------   -----------    -----------    -----------    -----------
                                                  5,490,000     4,171,000      6,165,000      6,970,000      5,114,000
                                                -----------   -----------    -----------    -----------    -----------

Loss from operations                              (979,000)    (1,606,000)    (3,092,000)    (1,658,000)    (1,755,000)

Other income (expense)
         Securities and contract litigation
           fees and settlement (Note 14)                --             --         95,000        366,000     (1,000,000)
         Investment income                          10,000         14,000          4,000         78,000         77,000
         Interest expense                          (99,000)       (74,000)      (138,000)      (134,000)       (28,000)
         Other, net                                 35,000         16,000        163,000         24,000         25,000
                                                -----------   -----------    -----------    -----------    -----------
                                                   (54,000)       (44,000)       124,000        334,000       (926,000)
                                                -----------   -----------    -----------    -----------    -----------

Net loss                                       $(1,033,000)   $(1,650,000)   $(2,968,000)   $(1,324,000)   $(2,681,000)
                                                ==========   ============   ============   ============   ============

Net loss per share - Basic and Diluted         $     (0.07)   $     (0.10)   $     (0.18)   $     (0.08)   $     (0.17)
                                                ==========   ============   ============   ============   ============
See accompanying notes.

                                                                F-5
ABC DISPENSING TECHNOLOGIES, INC.
                                                CONSOLIDATED STATEMENT OF CASH FLOWS

                                                              Nine Months Ended                            Years Ended
                                                     ----------------------------------    -----------------------------------------
                                                     Jan. 24, 1998     Jan. 25, 1997        April 26,         April 27,   April 29,
                                                                 (Unaudited)                  1997              1996           1995
-----------------------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES:
Net loss                                          $  (1,033,000)   $  (1,650,000)   $  (2,968,000)   $  (1,324,000)   $  (2,681,000)
   Adjustments to reconcile net loss
   to net cash used in operating activities:
   Deprecation and amortization                         291,000          124,000          313,000          110,000           99,000
   Loss on disposal of assets                                --               --               --               --            6,000
   Value of common stock issued to settle
   litigation                                                --               --               --               --          450,000
Treasury stock issued as compensation for legal
 services                                                37,000               --               --               --               --

   Changes in operating assets and liabilities:
   Receivables                                         (828,000)         437,000          437,000         (398,000)         220,000
   Inventories                                          347,000          648,000          272,000         (484,000)         129,000
   Other assets                                          46,000         (291,000)        (307,000)        (283,000)         (13,000)
      Accounts payable                                   61,000         (475,000)           2,000          421,000          149,000
      Accrued liabilities                               (82,000)        (289,000)        (428,000)        (869,000)         163,000
      Deferred income                                    15,000          (29,000)          (5,000)          13,000          (32,000)
                                                  -------------    -------------    -------------    -------------    -------------
   Total adjustments                                   (113,000)         125,000          284,000       (1,490,000)       1,171,000
                                                  -------------    -------------    -------------    -------------    -------------

Net cash used in operating activities                (1,146,000)      (1,525,000)      (2,684,000)      (2,814,000)      (1,510,000)

INVESTING ACTIVITIES:

   Purchases of property, plant, and equipment          (46,000)         (34,000)         (69,000)         (16,000)        (671,000)
   Additions to patent                                  (30,000)          (5,000)          (4,000)              --          (11,000)
   Advances to Joint Venture                           (123,000)              --               --               --               -- 
   Investment in Joint Venture                               --               --          (14,000)              --               --
                                                  -------------    -------------    -------------    -------------    --------------

Net cash used in investing activities                  (107,000)         (29,000)         (87,000)         (16,000)        (682,000)

FINANCING ACTIVITIES:

   Proceeds from (Payments on)
        Line of Credit - Net                            371,000         (292,000)              --               --               --
   Increase in deferred charges                         (59,000)              --               --               --               --
   Proceeds from private placements from
      Preferred Stock                                   462,000        2,836,000        3,388,000          926,000          979,000
   Proceeds from private placement of
     notes payable                                      335,000               --           29,000        1,267,000          490,000
   Private placement costs                                   --               --          (73,000)              --               --
   Proceeds from issuance of common stock                    --           69,000          140,000               --               -- 
   Repayment of notes payable and loan costs            (29,000)        (592,000)        (820,000)        (684,000)         (12,000)
   Proceeds from collection of  stockholders
      receivable                                          5,000           94,000           95,000               --               --
   Proceeds from stock issued for exercise of
      stock options and warrants                             --               --            6,000          500,000           23,000
   Purchase of treasury shares                               --               --          (37,000)              --               --
   Other                                                 10,000           (9,000)              --               --               --
                                                  -------------    -------------    -------------    -------------    -------------
Net cash provided by financing activities             1,095,000       2, 106,000        2,728,000        2,009,000        1,480,000
                                                  -------------    -------------    -------------    -------------    -------------
Net increase (decrease) in cash and cash 
  equivalents                                          (158,000)         552,000          (43,000)        (821,000)        (712,000)
Cash and cash equivalents at beginning of year          445,000          488,000          488,000        1,309,000        2,021,000
                                                  -------------    -------------    -------------    -------------    -------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                287,000    $   1,040,000    $     445,000    $     488,000    $   1,309,000
                                                  =============    =============    =============    =============    =============
See accompanying notes.
                                       F-6
ABC DISPENSING TECHNOLOGIES, INC.
                                           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                                  Years Ended April 26, 1997, April 27,
                                                        1996, and April 29, 1995
                                         and Nine Months Ended January 24, 1998 (unaudited)
                                         
                                                        
                                                         Number
                            Number of                     of                                                        
                            Shares of                  Shares of                Additional     Retained         Notes       
                             Common          Common     Preferred   Preferred    Paid-in       Earnings       Receivable   Treasury
                              Stock          Stock       Stock       Stock       Capital     (Deficiency)    Stockholders    Stock
                            ---------        ------     ---------  ---------   -----------   -------------   ------------  --------
Balance at May 1, 1994      14,981,039      $150,000        -           -      $15,921,000   $(13,877,000)                      -
   Private placements        1,000,000        10,000                             1,126,000                    $(164,000)
   Exercise of stock
   options                      15,077                                              23,000
   Collection on notes
   receivable-stockholders                                                                                        7,000
   Net Loss                                                                                    (2,681,000)
                            ----------      --------    ---------  ---------   -----------   -------------    -----------  --------
Balance at April 29, 1995   15,996,116      $160,000        -           -      $17,070,000   $(16,558,000)     $(157,000)       -
   Private placements          569,667         6,000                               909,000
   Stock issued to settle
   litigation                  150,000         1,000                               466,000
   Exercise of warrants        214,000         2,000                               426,000
   Exercise of stock
   options                      54,377         1,000                                71,000
   Collection on notes
   receivable-stockholders                                                                                         11,000
   Net Loss                                                                                    (1,324,000)
                            ----------      --------    ---------  ---------   -----------   -------------    -----------  --------
Balance at April 27, 1996   16,984,160      $170,000        -           -      $18,942,000   $(17,882,000)      ($146,000)      -
   Preferred Stock private
   placement (Note 9)                                      271      $3,388,000
   Private placement costs                                                         (73,000)
   Issuance of Stock to
   Mezzanine Financial
   Fund, L.P. (Note 5)         125,000         1,000                               139,000
   Exercise of Stock
   Options                       5,000                                               6,000
   Collection on notes
   receivable-stockholders                                                                                         95,000
   Net Loss                                                                                    (2,968,000)
 
  Purchase of Treasury Stock 
   35,000 shares                                                                                                           $(37,000)
                            ----------      --------    ---------  ---------   -----------   -------------    -----------  --------
F-7
ABC DISPENSING TECHNOLOGIES, INC.
                                                   CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                                        Years Ended April 26, 1997, April 27,
                                                            1996, and April 29, 1995 and
                                                            Nine Months Ended January 24,
                                                                  1998 (unaudited)
                                                                     (continued)
                                                                                                                                   
                                                                                                                                   
                                                        Number                                                                   
                            Number of                     of                                                                      
                            Shares of                  Shares of               Additional     Retained         Notes               
                             Common           Common   Preferred   Preferred     Paid-in       Earnings       Receivable   Treasury
                             Stock            Stock      Stock       Stock       Capital     (Deficiency)    Stockholders    Stock 
                            ---------         ------    ---------  ---------   -----------   -------------   ------------  --------
Balance at April 26, 1997   17,114,279       $171,000      271     $3,388,000   $19,014,000   $(20,850,000)   $(51,000)    $(37,000)

Preferred Stock Private                                          
Placement (Note 9)                                          37        462,000       

Preferred Stock Dividend
(Note 9)                       241,068          3,000                               216,000       (219,000)

Warrants Outstanding -
Original Issue Discount                                                              61,000

Collection on notes
receivable-stockholders                                                                                          5,000

Net Loss                                                                                        (1,033,000)

Issuance of Treasury Stock  
 (35,000 Shares) issued for 
 legal services received                                                    
                                                                                                                             37,000
                            ----------       --------      ---     ----------   -----------   -------------   ---------    ---------
Balance at January 24,      17,355,347       $174,000      308     $3,850,000   $19,291,000   $(22,102,000)   $(46,000)    $      0
1998                        ==========       ========      ===     ==========   ===========   =============   =========    =========
See accompanying notes.

                                                                F-8
ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 April 26, 1997
                   (information as of January 24, 1998 and for
                     the nine months ended January 24, 1998,
                       and January 25, 1997, is unaudited)

1.      BUSINESS DESCRIPTION

ABC Dispensing Technologies, Inc. (name changed from American Business Computers
Corporation) designs proprietary dispensing systems to dispense and blend
liquids, powders and other ingredients to a uniform and high degree of accuracy.
The Company provides training, installation and product service and also custom
designs and manufactures its own proprietary dispensing equipment to meet the
needs of its customers which are located primarily in the United States. To
date, the Company has focused its development and marketing efforts on the
Beverage and Paint Industries.

2.      SIGNIFICANT ACCOUNTING POLICIES

YEAR END -The Company's fiscal year-end is the Saturday closest to April 30,
which results in a fifty-two or fifty-three week year. Fiscal 1998, fiscal 1997,
fiscal 1996 and fiscal 1995 consist of fifty-two weeks ending on April 24, 1998,
April 26, April 27, and April 29, respectively. References to the years 1998,
1997, 1996 and 1995 refer to fiscal years ended April 24, 1998, April 26, 1997,
April 27, 1996, and April 29, 1995, respectively.

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

LOSS PER SHARE - In 1997, the Fnancial Accounting Standards Board issued
Statement (SFAS) No. 128, Earnings per Share. SFAS No. 128 replaced the
calculation of primary and fully diluted earnings per share with basic and
diluted earnings per share. All loss per share amounts for all periods have
been presented, and where appropriate, restated to conform to the SFAS No. 128
requirements.

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

CASH EQUIVALENTS - The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash equivalents. On
December 22, 1997 the Company issued 35,000 shares of treasury stock as
compensation for legal services received. The treasury stock was valued at
$37,000.

FINANCIAL INSTRUMENTS - The carrying value of the Company's cash, accounts
receivable, accounts payable and notes payable are a reasonable estimate of
their fair value due to the short-term nature of these instruments. The
Company's long-term debt has variable interest rates and carrying value
approximates fair market value at January 24, 1998.

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

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

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

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

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

MAJOR CUSTOMER - Revenues from The Home Depot, Inc. were 90 percent of total
revenues for the nine months ended January 24, 1998. Revenues from The
Sherwin-Williams Company were 1%, 65%, 54%, 72% and 59% of the Company's total
revenues for the nine months ended January 24, 1998 and January 25, 1997 and the
years ended April 26, 1997, April 27, 1996 and April 29, 1995. respectively. The
Company currently has no orders from Sherwin-Williams and does not expect
significant revenues from sales to Sherwin-Williams in the near future.

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

STOCK-BASED COMPENSATION - The Company grants stock options for a fixed number
of shares to employees generally with an exercise price equal to the fair value
of the shares at the date of grant. The Company accounts for stock-based
compensation in accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," and, accordingly, recognizes no
compensation expense for the stock option grants. Additional disclosures
relating to stock option activity which are required by Statement of Financial
Accounting Standards No. 123 - "Accounting for Stock Based Compensation" are
included in note 7.

BASIS OF PRESENTATION OF INTERIM FINANCIAL INFORMATION - The interim unaudited
consolidated financial statements included herein have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the nine months ended January 24, 1998 are not
necessarily indicative of the results that may be expected for the year ending
April 25, 1997.

                                       F-9
ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 April 26, 1997
                   (information as of January 24, 1998 and for
                     the nine months ended January 24, 1998,
                       and January 25, 1997, is unaudited)

3.      GOING CONCERN UNCERTAINTY

The Company has reported a net loss for each year of operation since its
inception except for 1989, and as of January 24, 1998 has an accumulated
retained earnings deficiency of $22,102,000. The Company's cash flow from
operating activities was a negative $1,146,000, negative $2,684,000 and negative
$2,814,000 for the nine months ended January 24, 1998, and the years ended April
26, 1997, and April 27, 1996, respectively. Cash and cash equivalents declined
from $2,021,000 at the beginning of fiscal 1995 to $287,000 at January 24, 1998.
Management expects that the Company will continue to incur losses and use cash
in operations in the near future.

Management recognizes the Company must generate additional funds to assure
continuation of operations. The Company has been successful in raising capital
from private investors and raised $5,220,000 over the past three years through
private placements of both preferred and common stock. The Company is continuing
in it efforts to raise capital through private placements of 9% Convertible
Cumulative Preferred Stock. The Preferred Stock is convertible into common stock
at $1 per share. Proceeds from private placements will be used to reduce
accounts payable and provide additional working capital. No assurances can be
given that the Company will be successful in raising additional capital.
Further, there can be no assurance, assuming the Company successfully raises
additional funds, that the Company will achieve profitable operations or
positive cash flow. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. No adjustments to the amounts or
classification of assets and liabilities which could result from the outcome of
this uncertainty are reflected in the consolidated financial statements.

4.      INVENTORIES

At January 24, 1998, April 26, 1997 and April 27, 1996, inventories consisted of
the following:
                       January 24, 1998             1997            1996
                       ----------------        -----------      -----------
Raw Materials             $ 865,000             $   927,000      $  729,000
Work-in-process              85,000                 118,000         488,000
Finished goods              134,000                 386,000         486,000
                         ----------            ------------     -----------
                         $1,084,000              $1,431,000      $1,703,000
                         ==========            ============     ===========

The above amounts are net of obsolescence reserves of $838,000 at January 24,
1998 and April 26, 1997, and $985,000 at April 27, 1996.

5.   FINANCING ARRANGEMENTS

NOTES PAYABLE

In June 1994, the Company purchased its headquarters facility in Akron, Ohio for
$490,000. A note payable was entered into during fiscal 1995 to partially
finance this purchase which was previously leased from the former chairman. The
note payable has an adjustable interest rate (9.03% at January 24, 1998 and
9.25% at April 26, 1997, and April 27, 1996) which may not increase or decrease
by more than 2% once every three years. The maximum increase or decrease is 6%
over the life of the loan. Principal and interest payments of $2,995 are payable
monthly with the balance of $143,000 due October 1, 2005. The note payable is
secured by the headquarters facility. At January 24, 1998, the facility and
improvements thereto have a net book value of $535,000.

At January 24, 1998, April 26, 1997 and April 27, 1996, long-term debt consisted
of the following:
January 24, 1998       1997              1996
                                                      ----------------    ---------         ---------
Note payable to bank                                       $259,000        $268,000          $278,000
Notes Payable                                               335,000               -                 -
Other                                                        40,000          51,000            41,000
                                                           --------        --------           -------
Less amounts due within one year                            634,000         319,000           319,000
                                                           (369,000)        (36,000)          (25,000)
                                                           --------        --------          --------
Total long-term debt                                       $265,000        $283,000          $294,000
                                                           ========        ========          ========
F-10
As of April 26, 1997 maturities of long term debt for the next five years were
as follows: 1998--$35,000; 1999--$32,000; 2000--$20,000; 2001--$16,000 and
2002--$17,000.
 
In August, 1997 the Company began issuing notes payable at a discount. The notes
are sold in multiples of $12,500, or fractions thereof, and pay interest at the
rate of 10%, with principal and interest paid at maturity. The initial maturity
date is June 30, 1998, however, the Company may, at its sole option, extend the
maturity date to December 31, 1998. Attached to notes are reedemable common
stock purchase warrants to purchase 5,000 shares of the Company's common stock
at a price of $1.25 per share. The warrants are exercisable for a period of five
years commencing on the date of issuance. The warrants have been valued at
$63,000 using the Black-Sholes option pricing model and a discount on notes
payable has been recorded for that amount. As of February 24, 1998, the Company
has issued notes in the aggregate of $335,000.

For the nine months ended January 24, 1998 and the years ended April 26, 1997
and April 27, 1996, interest expenses approximated interest paid by the Company.

MEZZANINE NOTE
On January 17, 1996, the Company obtained a $500,000 working capital
asset-secured loan from the Mezzanine Financial Fund, L.P. ("Mezzanine").
Interest is due monthly at the rate of 18% per annum. In consideration for
providing the loan, Mezzanine received a five (5) year warrant to acquire shares
of common stock at a price equal to the lower of seventy percent (70%) of the
30-day average trading price prior to closing of the loan, or $2.50 (the
"Price"). The warrant exercise price was therefore determined to be $2.04 per
share. The number of shares subject to the warrant will be determined by
dividing the Price into an amount equal to 10% of the average annual loan
balance multiplied by the number of years the loan is outstanding (the "Warrant
Fee"). The resulting maximum number of warrants that could be issued are 58,910.
At Mezzanine's election, all or any part of the Warrant Fee may be put to the
Company upon repayment of the loan for payment in cash in the amount equal to
70% of such Warrant Fee, paid in equal monthly payments over the same number of
months that the loan was outstanding. Additionally, Mezzanine received a closing
fee equal to 2% of the amount of the loan and reimbursement for expenses
associated with the making of the loan. On July 24, 1996, the Company
distributed 125,000 shares of common stock to Mezzanine. Mezzanine subsequently
sold 90,000 of the shares to satisfy interest charges from April through
September, 1996, prepayment penalties and other fees. On September 24, 1996, the
Company repaid the $500,000 principal balance of the loan in full. On December
31, 1996, the loan agreement was terminated and Mezzanine returned 35,000 shares
of Common Stock to the Company. 

Herbert M. Pearlman, who resigned as Chairman of the Board of Directors of the
Company on February 5, 1997, is a director, officer and principal stockholder of
the general partner of Mezzanine. Mr. Pearlman is also Chairman, chief executive
officer and a principal stockholder of Helm Resources, Inc., a publicly traded
company which holds an approximately 14% equity stake in Mezzanine.

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

LINE OF CREDIT On December 18, 1995, the Company established a $750,000 line of
credit secured by accounts receivable and other assets of the Company. In
February, 1996, the line of credit was reduced from $750,000 to $450,000. In
December, 1998, the credit line was increased to $500,000.  At January 24, 1998,
$390,000 was outstanding and $110,000 of the line of credit was available. At
April 26, 1997, $2,000 was outstanding and $108,000 of the line of credit was
available. The line of credit bears an interest rate of prime plus four points
(12.50% at January 24, 1998, April 26, 1997 and April 27, 1996), which equals
the weighted-average interest rate for the period.

                                      F-11
ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 April 26, 1997
                 (information as of January 24, 1998 and for the
                     nine months ended January 24, 1998, and
                         January 25, 1997, is unaudited)

6.   INCOME TAXES

Deferred income taxes are provided for the temporary differences between the
financial reporting basis and the tax basis of Company assets and liabilities.

The components of the Company's deferred income taxes at April 26, 1997 and
April 27, 1996 are as follows:

                                                1997               1996
                                           ----------------   ------------
Net operating loss carry forwards            $ 6,650,000       $ 5,450,000
Inventories                                      413,000           495,000
Other                                            170,000           255,000
                                             -----------       -----------
   Total deferred tax asset                    7,233,000         6,200,000
Valuation allowance for deferred taxes        (7,233,000)       (6,200,000)
                                             -----------       -----------
   Net deferred taxes                               $-0-              $-0-
                                             ===========       ===========  

At April 26, 1997 and April 27, 1996, the Company had Federal net operating loss
carryforwards for tax reporting purposes of approximately $17,500,000 and
$14,800,000, respectively. The net operating loss carryforwards expire in the
years 1998 to 2012. It is uncertain if benefits relating to these deferred tax
assets are realizable and accordingly, a valuation allowance equal to the amount
of such deferred tax assets has been recorded.

7.   COMMON STOCK

STOCK OPTION PLANS

The Company has non-qualified stock option plans under which directors, officers
and key employees may be granted incentive stock options for the purchase of the
Company's common stock An aggregate of 500,000 shares of the Company's common
stock were reserved for issuance under the Company's 1990 Stock Option Plan and
1,750,000 shares were reserved for issuance under the Company's 1995 Stock
Option Plan and amendments thereto. All granted options are exercisable after
six months from the grant date provided the employee has at least one year of
service. Grant options expire five years after grant date or 90 days after the
Employee's or Director's relationship with the Company is terminated. The
Company also may grant incentive stock warrants to directors, officers and key
employees. The stock warrants can be redeemed to purchase the common stock of
the Company.

A summary of the Company's stock option plans and employee stock warrants, and
related information for the years ended April 26, 1997, April 27, 1996, and
April 29, 1995, is as follows:
1997                         1996                            1995
                                          -------------------------      ------------------------       ------------------------
                                                          Weighted                    Weighted                      Weighted
                                                           Average                     Average                       Average
                                            Shares     Exercise price     Shares   Exercise price       Shares   Exercise price
                                            ------     --------------     ------   --------------       ------   --------------
Outstanding - beginning of year             510,966    $       2.46       411,941    $       1.81      179,018     $       2.24

     Granted                              1,029,851    $       1.29       273,902    $       2.89      264,500     $       1.69
     Exercised                               (5,119)   $       1.10       (54,377)   $       1.32            -                -
     Canceled                               (17,375)   $       1.50      (120,500)   $       1.75      (31,577)    $       3.15
                                          ---------                      --------                      -------

Outstanding - end of year                 1,518,323    $       1.68       510,966    $       2.46      411,941     $       1.81
                                          =========                      ========                      =======

Exercisable at end of year                1,039,652    $       1.92       468,814    $       2.48      409,941     $       1.81
                                          =========                      ========                      =======

Available for grant                         341,677                       894,034                      113,059
                                          =========                      ========                      =======

Weighted average fair value of options
     granted during the year                $  0.96                       $  1.95                       $ 1.14
F-12
ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.   COMMON STOCK (CONTINUED)

The following table summarizes information about stock options and employee
stock warrants outstanding and exercisable by price range as of April 26, 1997:
Outstanding                           Exercisable
                                          --------------------------------------------        ---------------------
                                                           Weighted
                                                            Average
                                                           Remaining         Weighted                         Weighted
                                                          Contractual         Average                          Average
Range of exercise prices                 Shares              Life         Exercise Price      Shares        Exercise Price
------------------------                 --------       ------------------- --------------   --------      --------------
$1.00 - $1.63                         1,155,421           4.06           $   1.27            676,750      $     1.34

   $2.00 - $2.50                            41,652           3.82           $   2.17             41,652      $     2.17

   $2.50 - $3.44                           321,250           2.93           $   3.09            321,250      $     3.09
                                         ---------                                            ---------

                                         1,518,323                                            1,039,652
                                         =========                                            =========
ACCOUNTING FOR STOCK BASED COMPENSATION

The Company has elected to follow Accounting Principles Board Opinion No. 25,
ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES (APB 25) and related interpretations in
accounting for its employee stock based compensation. The exercise price of each
stock options and employee stock warrant equals the market price of the
Company's stock on the date of grant. Accordingly, no compensation cost has been
recognized for the plans.

During 1995, the Financial Accounting Standard Board issued Statement of
Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION
(SFAS 123). SFAS 123 defines a fair valued based method of accounting for an
employee stock option and similar equity instrument and encourages all entities
to adopt that method of accounting for all of their employee stock compensation
plans. However, SFAS 123 allows an entity to continue to measure compensation
cost for those plans using the method of accounting prescribed in APB 25.
Entities that elect to continue using APB 25 must make pro forma disclosures of
net income and earnings per share as if the fair value based method of
accounting defined in SFAS 123 had been adopted.

The Company has computed, for pro forma disclosure purposes, the value of all
options granted during the fiscal years ending April 26, 1997, and April 26,
1996, using the Black-Scholes option pricing model as prescribed by SFAS 123
using the following weighted average assumptions:

                                 1997                       1996
                               --------                   -------

Risk-free interest rate           6.54%                     6.18%

Dividend yield                      0 %                       0 %

Volatility                          79%                       92%

Average life                    5 years                   5 Years

                                      F-13
ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.     COMMON STOCK (CONTINUED)

Using the Black-Scholes methodology, the total value of options granted during
fiscal 1997 and 1996 was $781,000 and $495,000, respectively. If the Company had
accounted for its stock-based compensation plans in accordance with SFAS 123,
the Company's net loss and net loss per share would approximate the pro forma
disclosures below:
April 26, 1997       April 27, 1996
                                                              --------------       --------------
Net Loss                           As reported           $ (2,968,000)         $ (1,324,000)

                                        Pro forma             $ (3,749,000)         $ (1,819,000)

     Primary earnings per share         As reported                $ (0.17)              $ (0.08)

                                        Pro forma                  $ (0.22)              $ (0.11)
WARRANTS

On May 2, 1995, the Company granted David B. Hudson, V.P. - Domestic Beverage
Sales, and Keith P. Jordan, National Account Manager, warrants to purchase
20,000 and 10,000 restricted shares of common stock, respectively, at $3.38 per
share; the warrants expire May 2, 2000.

On June 13, 1995, the Company initiated a private offering to sell 20 units of
$25,000 10% Senior Subordinate Notes due June 1, 1998 and three year redeemable
warrants to purchase 12,500 shares of the Company's common stock at $2 per share
(See Note 5).

On August 1, 1995, the Company granted warrants to Herbert M. Pearlman, Chairman
(200,000 at $3.00 per share), Robert A. Cutting, former President (100,000 at
$3.00 per share), and others (30,000 ranging from $2.00 to $3.00).

On September 14, 1995, the Company issued 200,000 warrants at $3.50 per share to
Hussmann Corporation pursuant to the securities litigation settlement (see
footnote 12 to the Consolidated Financial Statements).

On November 1, 1995, the Company issued 500,000 warrants at $3.50 per share to
Pepsi-Cola Company pursuant to the securities litigation settlement (see
footnote 12).

On December 11, 1995, the Company issued 30,000 warrants at $2.25 per share
pursuant to a sale of common stock.

On January 17, 1996, the Company issued 58,910 warrants at $2.04 per share to
Mezzanine Financial Fund L.P. pursuant to the debt financing received by
Mezzanine (see footnote 5)

On July 15, 1996, the Company granted 300,000 warrants at $1.375 per share to
Charles M. Stimac, Jr. pursuant to the terms of his employment agreement as
President of the Company. The warrants are subject to a 10 year vesting
schedule.

On September 7, 1996, the Company granted warrants to William Lerner, Secretary
(10,000) and William T. Shanklin, consultant to the Company (25,000) at $1.25
per share.

On October 27, 1996, the Company granted 15,000 warrants at $1.25 per share to
Charles M. Stimac, Jr., President.

On January 2, 1997, the Company granted warrants to Herbert L. Luxenburg,
Director (20,000), and C. Rand Michaels, Director (20,000), at $1.25 per share.

On February 5, 1997, the Company issued 50,000 warrants at $1.25 per share to
Herbert M. Pearlman, former Director.

                                      F-14
ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8.       NET LOSS PER SHARE

The following table sets forth the computation of net loss per share - basic and
diluted:
Nine Months Ended                        Years Ended
------------------------------------------------------------------------------------------------------------------------------
                                            January 24,        January 25,     April 26,          April 27,        April 29,
                                               1998              1997            1997               1996              1995
                                         -------------      --------------   -------------    --------------     -------------
Numerator:
     Net Loss                           $(  1,033,000)     $( 1,650,000)     $( 2,968,000)     $  1,324,000       $(2,681,000)
     Preferred Stock Dividends                243,000)          (67,000)         (143,000)               -                 -
                                        --------------     -------------     --------------    -------------      ------------
     Numerator for net loss per
     share - income available to
     common shareholders                $(  1,276,000)     $ (1,717,000)     $( 3,111,000)     $( 1,324,000)      $(2,681,000)
                                        --------------     -------------      -------------     -------------     ------------
Denominator:
     Denominator for basic and diluted earnings
     per share - weighted-average
     shares                                17,178,863        17,067,493        17,074,000        16,414,000        15,669,000
                                        --------------     -------------     -------------     -------------     -------------

Net loss per share -- basic and
diluted                                 $(       0.07)     $(      0.10)      $(      0.18)    $(      0.08)     $(      0.17)
                                        ==============     =============     ==============    =============     =============
Diluted earnings per share calculations have been omitted as the effect of
potentially dilutive securities would have been anti-dilutive for the periods
reported.

Options and warrants to purchase 3,109,719, 3,325,411, 2,853,234, 2,775,679 and
1,669,277 shares of Common Stock were outstanding and exercisable as of January
24, 1998, January 25, 1997, April 26, 1997, April 27, 1996, and April 29, 1995,
respectively. Each option allows the holder to purchase one share of the
Company's Common Stock. The exercise price of the options varies from $0.844 to
$3.50 per share. The options and warrants were not used to compute diluted
earnings per share because the Company has net losses for the periods reported,
and therefore, the effect would be antidilutive.

9.       PREFERRED STOCK

The shareholders of the Company have approved an amendment to the Company's
Certificate of Incorporation to authorize 5,000,000 shares of Preferred stock.

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

As of January 24, 1998, through private placements, the Company issued 308
shares of Series A Preferred Stock in exchange for notes or $12,500 cash per
share, generating gross proceeds of $3,850,000 to the Company.

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

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

On October 7, 1997, the Company paid its February 1, and August 1, 1997,
Preferred Stock dividend requirements by issuing common stock. The total number
of common shares issued for the February 1, 1997 dividend was 61,240. The shares
were valued at $1.09359 per share. The total number of common shares issued for
the August 1, 1997 dividend was 179,828. The shares were valued at $0.84375 per
share.

                                      F-15
As of February 1, 1998 there is a dividend payable on Preferred Stock in the
amount of $167,463. At the discretion of the Company, the dividend will be paid
in common stock of the Company. A total of 228,636 shares will be issued to
satisfy the dividend requirement.

10.      RELATED PARTY TRANSACTIONS

From February, 1995, to August, 1996, the Company leased office space for
Herbert M. Pearlman from Helm Resources, Inc. for approximately $21,000 per
year. Mr. Pearlman is Chairman, Chief Executive Officer and a principal
stockholder in Helm Resources, Inc. (see footnote 5). Mr. Pearlman resigned as
Chairman of the Board of Directors of the Company on February 5, 1997.

11.      OPERATING LEASES

Aggregate rental expense for the nine months ended January 24, 1998, and fiscal
years 1997, 1996 and 1995 was $33,000, $48,000, $60,000 and $13,000,
respectively.

12.      PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at January 24, 1998,
April 26, 1997 and April 27, 1996:
January 24, 1998       1997          1996
                                          ----------------    ---------     ---------
Land                                           $59,000          $57,000       $57,000
Building and building improvements             572,000          572,000       572,000
Machinery and equipment                        890,000          934,000       865,000
                                             ---------        ---------     ---------
                                             1,519,000        1,563,000     1,494,000
Less accumulated depreciation                 (856,000)        (859,000)     (791,000)
                                             ---------        --------      ---------
                                              $663,000         $704,000      $703,000
                                             =========        =========     =========
F-16
ABC DISPENSING TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13.           RETIREMENT BENEFITS

The Company sponsors a 401(k) plan which covers substantially all full-time
employees. Eligible employees may contribute up to 14% of their compensation to
this plan. The Company has agreed to match participants' contributions at the
rate of 25 cents on the dollar up to a maximum of 4% of the participants'
compensation. The cost of the Company's matching contribution was approximately
$11,000 for the nine months ended January 24, 1998, $13,000 in 1997, and $9,000
in each year during 1996 and 1995. The Company has the discretion to make a
profit-sharing contribution, but no such contribution has been made by the
Company.

14.           LITIGATION SETTLEMENT/CONTINGENCIES

On March 13, 1995, the Company and other defendants (officers and directors and
former directors of the Company) entered into a Stipulation of Settlement (the
"Settlement") with the Plaintiffs in a class action lawsuit (the "Securities
Litigation") that provided for the Settlement of the Securities Litigation. The
Settlement provided for a Gross Settlement Fund of $1,850,000, plus 1,550,000
shares of the Company's common stock. The Company's contribution to the
Settlement Fund was $443,000 and 150,000 shares. The Stipulation defined the
Plaintiff class as "all persons who purchased ABCC common stock on the open
market from January 24, 1990 through August 1, 1991, inclusive." On June 19,
1995, the U.S. Federal District Court for the Southern District of New York
entered a Final Judgment approving the Settlement as "fair, reasonable and
adequate to members of the class." Pursuant to the terms of the Final Judgment,
on July 6, 1995, Plaintiffs' counsel were paid attorneys' fees of $550,000 (plus
$1,078 of accrued interest after taxes) on the cash portion of the Settlement
Fund and were reimbursed $244,394 for expenses out of the Gross Settlement Fund.
Plaintiffs' counsel also received an aggregate of 465,000 shares of common stock
of the Company awarded to Plaintiffs' counsel from the Gross Settlement Fund as
a portion of attorneys' fees. These shares of common stock were distributed to
Plaintiffs' counsel in early February 1996.

On January 16, 1996, the U.S. Federal District Court ordered the distribution of
the Net Settlement Fund consisting of approximately $1,082,000 cash and
1,085,000 shares of common stock of the Company to 1,469 authorized claimants.
The distribution to authorized claimants was made pursuant to the Order of the
Court on about February 23, 1996. There is no further action to be taken in
connection with the Securities Litigation since the Settlement has been
effectuated in accordance with the Order of the Court.

The estimated legal fees and settlement costs were accrued for the above
action. At April 29, 1995, the accrual amounted to $1,498,000. During 1996,
$1,037,000 of this amount was settled in cash and securities, $366,000 was
reversed and credited to income and $95,000 remained in the accrual at April 26,
1996 to cover certain remaining legal fees. In 1997, the remaining $95,000
accrual was reversed and credited to income.

The Company from time to time is subject to routine litigation incidental to its
business. The Company believes that any liability that may finally be determined
would not have a material adverse effect on its financial statements.

15.           JOINT VENTURE AGREEMENT

On June 25, 1997, the Company entered into a joint venture agreement with Damon
Industries, a privately-owned national juice manufacturer with headquarters in
Sparks, Nevada, to form "Virtual Squeeze", a 50-50 business enterprise. The
purpose of the joint venture is to provide shelf-stable juice products and
state-of-the-art dispensing technology to health care facilities with high
volume juice consumption. Under the agreement, the Company will manufacture
dispensing equipment and provide technical support to the joint venture, and
Damon will manufacture fruit juice and provide marketing and administrative
support for the joint venture. The joint venture will finance the dispensing
equipment through sale/leaseback arrangements. The dispensing equipment will be
placed in a customer's facility at no charge providing the customer commits to
purchasing all of its juice from the Virtual Squeeze. The revenue from the juice
sales will cover the cost of equipment, juice, and operating expenses of the
joint venture. Resulting profits from the juice sales will be split equally by
the Company and Damon.

Through January 24, 1998, the Company has provided $123,000 of juice dispensing
equipment to Virtual Squeeze, a joint venture between the Company and Damon
Industries of Sparks, Nevada. The Company will be reimbursed for the cost of the
equipment through revenues from juice sales made by Virtual Squeeze.

                                      F-17
ABC DISPENSING TECHNOLOGIES, INC. (CONSOLIDATED)

                                          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

Column A                                     Column B              Column C          Column D              Column E

                                                                  Additions
                                           Balance at            Charged to                                 Balance
                                            Beginning             Costs and                                  at End
Description                                 of Period              Expenses        Deductions             of Period
-----------                                ----------            ----------        ----------             ---------
NINE MONTHS ENDED JANUARY 25, 1998 (UNAUDITED)

Allowance for doubtful accounts             $ 191,000            $        -        $ 115,000 (a)          $  76,000
                                             ========             =========         =========               =======

Allowance for inventory obsolescence        $ 838,000            $        -        $       -              $ 838,000
                                             ========             =========         =========               =======

YEAR ENDED APRIL 26, 1997

Allowance for doubtful accounts             $ 136,000            $  141,000        $  86,000 (a)          $ 191,000
                                             ========             =========         ========                =======

Allowance for inventory obsolescence        $ 985,000                     -        $ 147,000(b)           $ 838,000
                                             ========              ========         ========                =======

YEAR ENDED APRIL 27, 1996

Allowance for doubtful accounts             $  78,000            $   40,000         $ 18,000 (a)          $ 136,000
                                             ========             =========          ========               ========

Allowance for inventory obsolescence        $ 943,000            $   80,000         $ 38,000(b)           $ 985,000
                                             ========             =========          =======                =======

YEAR ENDED APRIL 29, 1995

Allowance for doubtful accounts             $ 128,000            $    1,000         $ 51,000(a)           $  78,000
                                             ========             =========          ========               =======

Allowance for inventory obsolescence        $ 816,000            $  150,000         $  23,000(b)          $ 943,000
                                             ========             =========          ========               =======

(a)  Uncollectible accounts written off, net of recoveries.

(b) Inventory written off and/or disposed of.
F-18
PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 5.  FAILURE TO MEET NASDAQ MINIMUM LISTING REQUIREMENTS

     The Company is currently out of compliance with NASDAQ'S capital and
surplus requirement, as set forth in NASD Marketplace Rule 4310( c)(02). To meet
the minimum requirement, the Company must maintain capital and surplus in excess
of $2,000,000. The NASDAQ Listing Requirements Department has scheduled the
Company's Common Stock to be delisted from the NASDAQ Stock Market effective
with the close of business on March 16, 1998. The Company is requesting a
hearing with the NASDAQ Listing Qualifications Department to appeal the
delisting decision. The request for the hearing will stay the delisting of the
Company's Common Stock pending the outcome of the hearing.

ITEM 14.   OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

     The following table sets forth the estimated expenses of ABC Dispensing
Technologies, Inc. in connection with the distribution of the securities being
registered:

Registration Fee.................................................   $ 4,292.89
Legal Fees and Expenses..........................................   $25,000.00
Accounting Fees and Expenses.....................................   $15,000.00
Miscellaneous Expenses...........................................   $   500.00
TOTAL............................................................   $37,240.91

Item 15.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

         The Company is a Florida corporation. The following summary is
qualified in its entirety by reference to the complete text of the Florida
Business Corporation Act (the "FBCA"), the Company's Articles of Incorporation,
and the Company's Bylaws.

         Section 607.0850(1) of the FBCA, provides, in general, that a
corporation may indemnify any of its directors and officers against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding (including any appeal thereof) (i) if such person acted in
good faith and in a manner he or she reasonably believed to be in, or not
opposed to, the best interests of the corporation, and (ii) with respect to any
criminal action or proceeding, he or she had no reasonable cause to believe his
or her conduct was unlawful.

         Section 607.0850(2), however, provides that in actions brought by or in
the right of the corporation, no indemnification shall be made in respect of any
claim, issue or matter as to which the director or officer shall have been
adjudged to be liable unless, and only to the extent that, the court in which
such proceeding was brought, or any other court of competent jurisdiction, shall
determine upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.

ITEM 16.  EXHIBITS

         3.1      Certificate of Incorporation of the Registrant, as amended

         3.2      Bylaws of the Registrant

         5.1      Opinion of St. John & Wayne, L.L.C. as to the legality of the
                  securities to be registered

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

         10.2     1990 Stock Option Plan

         10.3     Amended 1995 Stock Option Plan

         11.1     Statement re: Computation of Per Share Earnings included as 
                  footnote 8 in Item 11 of this Registration Statement on 
                  Form S-1

         11.2     The financial statement schedule listed on the index set forth
                  in Item 11 of this registration statement on Form S-1 is
                  filed as part of this Registration Statement.

                                      II-1
21.1     List of Subsidiaries

         23.1     Consent of Ernst & Young LLP, Independent Auditors.

         23.2     Consent of Grant Thornton LLP, Independent Auditors

         23.3     Consent of St. John & Wayne, L.L.C. (included in Exhibit 5.1)

         24.1     Power of Attorney (included on the signature page hereof)

ITEM 17.   UNDERTAKINGS

         The Registrant hereby undertakes:

         (1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

                           (i)  To include any prospectus required by
                           Section 10(a)(3) of the Securities Act of 1933;

                           (ii) To reflect in the Prospectus any fact or events
                           arising after the effective date of the registration
                           statement (or arising after the effective date of the
                           registration statement or the most recent
                           post-effective amendment thereof) which, individually
                           or in the aggregate, represent a fundamental change
                           in the information set forth in the registration
                           statement; and

                           (iii) To include any material information with
                           respect to the plan of distribution not previously
                           disclosed in the registration statement or any
                           material change to such information in the
                           registration statement;

                  PROVIDED, HOWEVER, that paragraphs 1(i) and 1(ii) do not apply
if the registration statement is on Form S-3, or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the effective registration
statement.

         (2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial BONA
FIDE offering thereof.

         (3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.

         (4) That, for the purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's Annual Report pursuant
to Section 13(a) or 15(d) of the Securities Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.

         (5) To supplement the prospectus, after the expiration of the
subscription period, to set forth the results of the subscription offer, and the
terms of any subsequent re-offering thereof. If any public offering is to be
made on terms differing from those set forth on the cover page of the
Prospectus, a post-effective amendment will be filed to set forth the terms of
such offering.

         (6) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant, or otherwise, the Securities and Exchange Commission
has informed the registrant that such indemnification is against public policy
as expressed in the Act and is therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

                                      II-2
SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-1 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Akron, State of Ohio, on April 8, 1998.

                  ABC DISPENSING TECHNOLOGIES, INC.

                  By:  /s/ Charles M. Stimac, Jr.
                       ---------------------------
                       Charles M. Stimac, Jr., President and Director
                       (principal executive officer and principal financial
                       and accounting officer)

                                POWER OF ATTORNEY

         Each person whose signature appears below constitutes and appoints
Charles M. Stimac, Jr. and John L. Hornbeck true and lawful attorneys-in-fact
and agents each acting alone, with full powers of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each acting alone,
full powers and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

         Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on April 8, 1998.

Signature                                                        Title
---------                                                        ------

/s/ Charles M. Stimac, Jr.                                  President, Director
-----------------------------                                                  
Charles M. Stimac, Jr.

/s/ Herbert L. Luxenburg                                    Director
-----------------------------                                                  
Herbert L. Luxenburg

/s/ C. Rand Michaels                                        Director
-----------------------------                                                  
C. Rand Michaels

/s/ Frank E. Vaughn                                         Director
-----------------------------                                                  
Frank E. Vaughn

/s/ Norbert J. Lewandowski                                  Director
-----------------------------                                                  
Norbert J. Lewandowski

/s/ William L. Shanklin                                     Director
-----------------------------                                                  
William L. Shanklin

                                      II-3
INDEX TO EXHIBITS

NUMBER   DESCRIPTION                                         
------   -----------                                         

3.1      Certificate of Incorporation of the Registrant, as amended

3.2      Bylaws of the Registrant

5.1      Opinion of St. John & Wayne, L.L.C. as to the legality of the 
         securities to be registered.

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

10.2     1990 Stock Option Plan

10.3     Amended 1995 Stock Option Plan

11.1     Statement re: Computation of Per Share Earnings included as footnote 8
         in Item 11 of this Registration Statement on Form S-1.

11.2     The financial statement schedule listed on the index set forth in 
         Item 11 of this Registration Statement on Form S-1 is filed as part of 
         this Registration Statement.

21.1     List of Subsidiaries

23.1     Consent of Ernst & Young LLP, Independent Auditors

23.2     Consent of Grant Thornton LLP, Independent Auditors

23.3     Consent of St. John & Wayne, L.L.C. (included in Exhibit 5.1)

24.1     Power of Attorney (included on the signature page hereof)

                                      II-4