SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                  Form 10-C

               Report by Issuer of Securities Quoted on NASDAQ
                        Interdealer Quotation System
                Filed Pursuant to Section 13 or 15(d) of the
               Securities Exchange Act of 1934 and Rule 13a-17
                            or 15d-17 thereunder

                     KURZWEIL APPLIED INTELLIGENCE, INC.
               (Exact name of issuer as specified in charter)

                           411 Waverley Oaks Road
                        Waltham, Massachusetts 02154
                  (Address of principal executive offices)

                               (617) 893-5151
              (Issuer's telephone number, including area code)

                  I. CHANGE IN NUMBER OF SHARES OUTSTANDING
Indicate any change (increase or decrease) of 5% or more in the number of shares
outstanding:

        Title of Security:                        Common Stock, $0.01 Par Value
        Number of shares outstanding before the change: 6,790,367
        Number of shares outstanding after the change: 8,110,417
        Effective date of change:                 May 9, 1996
        Method of change:                         Private Placement

The Company sold 1,320,050 shares of its Common Stock in a private placement at
a sale price of $2.00 per share to a New York-based investment fund.


                        II.  CHANGE IN NAME OF ISSUER

                                    None




Date:         May 15, 1996             /s/ Thomas E. Brew, Jr.
      ----------------------------     -----------------------------------
                                           Thomas E. Brew, Jr.
                                           President & Chief Executive Officer