SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

                              FORM 10-KSB

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

         For the fiscal year ended:  September 30, 1997

                               	OR

        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
            OF THE SECURITIES EXCHANGE ACT OF 1934

            For the transition period from       to 


            Commission file number:  33-4882-D 


                 CLANCY SYSTEMS INTERNATIONAL, INC.  
                
         (Exact name of Registrant as specified in its charter)

             Colorado                           84-1027964   
       (State or other jurisdiction of         (IRS Employer
       incorporation or organization)	        Identification Number)


                     2250 South Oneida Street, #308
                 Denver, Colorado                  80224  
            ------------------------------         ----- 
    (Address of principal executive offices)     (Zip Code)

      Registrant's telephone number, including area code: 
                        (303) 753-0197

    Securities registered pursuant to Section 12(b) of the Act: 
                               None

    Securities registered pursuant to Section 12(g) of the Act:
                               None

Indicate by check mark whether the Registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act 
of 1934 during the preceding 12 months, and (2) has been subject to such 
filing requirements for the past 90 days.

                     (1) Yes    X   No 
                     (2) Yes    X   No 

     
<PAGE>
Check if there is no disclosure of delinquent filers in response to Item 
405 of Regulation S-B, and no disclosure will be contained, to the best of 
Registrant's knowledge, in definitive proxy or information statements 
incorporated by reference in Part III of this Form 10-KSB or any amendments 
to this Form 10-KSB. [X]

     The Company's revenues for its most recent fiscal year were $1,772,900.  
The aggregate market value of the voting stock held by nonaffiliates (based 
upon the average of the bid and asked price of these shares on the over-the-
counter market) as of December 23, 1997 was approximately $4,042,670.

  Class                        Outstanding at December 23, 1997

 Common stock, $.0001 par value           336,889,149 shares


 Documents incorporated by reference:  None

 Transitional Small Business Disclosure Format:
       
                                 Yes     No  X    

































<PAGE>
                   CLANCY SYSTEMS INTERNATIONAL, INC.

                           FORM 10-KSB

                              PART I

Item 1.  Description of Business

     (a)  Business Development.  In April 1987 Oxford Financial, Inc. 
("Oxford") merged with Clancy Systems International, Inc. (Old Clancy).  
Oxford, as the surviving company in the merger, changed its name to Clancy 
Systems International, Inc. (the "Company or Registrant").  Oxford was 
organized under the laws of the State of Colorado on March 3, 1986.  Old 
Clancy was organized under the laws of the State of Colorado on June 28, 
1984.

     The Company designs, develops and manufactures automated parking 
enforcement systems primarily for lease to municipalities, universities and 
institutions, including a ticket writing system and other enforcement systems.

     The Company has installed numerous parking enforcement systems for 
various clients, towns and universities.  The Company also has installed 
numerous systems through joint venture relationships.  See "Phoenix Group 
Systems" and "City of Inglewood" below.  To augment the enforcement element 
of the system, the Company markets the original Denver Boot and other 
enforcement tools.  By utilizing an integrated approach, the Company offers 
a complete parking citation processing system including tracking, 
enforcement, collection and automatic identification of delinquent violators 
in an effective and efficient manner.

     The Company also provides hardware and software for special projects for 
Hertz Corporation including a project called Fleet Control.  Fleet Control 
was developed in 1987 as an internal security system used by Hertz to track 
the transfer of cars between locations.

     The Company's principal executive offices are located at 2250 S. Oneida 
Street, #308, Denver, Colorado 80224 and its telephone number is (303) 
753-0197.

      (b) Business of the Issuer.

      (b),(1),(2)  Principal Products or Services and Markets and Distribution 
Methods.  The Company's parking enforcement system is an automated system 
which generates parking citations.  The system consists of a hand-held, 
light-weight, portable data entry terminal, a light-weight printer to 
generate the parking citation and a data collection computer system to store 
parking citation data at the end of each day.  The data entry terminal 
includes features such as large keys for use with gloved hands,  easily 
readable liquid crystal 
                                 -1-
<PAGE>
display, phosphorescent keypad for illuminated night use and a large 
expandable memory.  The printer contains a "no-wait" buffer which acts to 
eliminate delay in entering citation data. The printer has been streamlined 
and along with the hand-held terminal weighs only three and one-half pounds 
and is battery charged to last for at least eight hours with overnight 
recharging capability.  The citations are printed on a continuous fan fold 
flat form.  The data collection computer is used for uploading and 
downloading data and contains the capacity for interfacing directly, or via 
tape transfer, with a user's mainframe computer.  There are currently 
approximately 1200 ticket-writing units in operation.

     The Company's system also includes a complete back office processing and 
filing system.  The Company provides computers, printers and software to 
enable the user to do department of motor vehicle lookups, maintain citation 
information storage and recall, generate delinquent notices and have 
immediate access to files of all tickets previously written.  In addition, 
the Company's system also maintains a current, readily accessible list of 
vehicles with multiple outstanding citations, stolen vehicles, or vehicles 
otherwise wanted by local law enforcement officials.  The system also 
generates reports of citations by number and officer, revenues collected, 
names of scofflaws, officer productivity and other reports as deemed 
necessary or valuable to the agency.

     The Company's contracts for its parking enforcement systems generally 
provide that the Company will provide the ticketwriters, a back office 
processing system, custom software and training and support in consideration 
of a fee per citation issued, a monthly fee for computer equipment rental 
and/or a set  monthly fee. Occasionally, the Company will provide its system 
through an outright sale rather than through its typical lease arrangement. 
The Company generally warrants its equipment, provides updating and 
improvements to its system hardware and software and provides customary 
indemnification.

   The Company currently has systems installed for the following 
municipalities and universities representing approximately 6,000,000 tickets 
issued per year: Albany, CA: Allright Parking Systems, New York; Apcoa 
Systems in Kansas City, MO,  and Minneapolis, MN; Berkeley, CA; Breckenridge,
CO; Buffalo, NY; Burnaby, BC; Blackhawk, CO; Brigham Young University, Provo,
UT;  Buena Park, CA: Butler University, Indianapolis, IN; CSU Fresno; Central
Florida University, Orlando, FL; Charleston, SC;  Dallas, TX; Durango, CO;  
Eastchester, NY; Evansville, IN; Fort Collins, CO; Georgetown University, 
Washington, DC; Galveston, TX; Greeley, CO; Harrisburg, PA; Henderson, KY; 
Huntington, WV; Inglewood,CA; Lafayette, LA;  Lubbock, TX; Los Altos, CA; 
Montrose, CO; Naperville, IL;  New Hope, PA; New Orleans, LA;  North Carolina
State University, Raleigh, NC; North Carolina A & T, Greensboro, NC; MTRA, 
University of Oklahoma, Oklahoma City, OK; Overtime Parking, Walnut Creek, 
CA; Parking Control Service, S. San Francisco, CA;  ParkWise, Albany, OR; 
Reading, PA; Regional Parking, Walnut Creek, CA; Richmond, VA; Santa 
                                     -2-
<PAGE>
Barbara, CA; South Carolina State University, Orangeburg, SC;
Southwest Texas State University, San Marcos, TX; Southwestern Community 
College, Chula Vista, CA; Steamboat Springs, CO; Takoma Park, MD; Tampa, FL; 
Telluride, CO; University of Alberta, Edmonton, Alberta; University of 
California, San Francisco; Vail, CO; Weber State University; and Yonkers, NY.
By January 31, 1998, the Company plans to install a comprehensive ticket 
issuance and processing system for the city of Orlando, FL and a ticket 
issuance system for the city of Oakland, CA.  The Company was awarded a 
contract by Maywood, IL for complete facilities management which includes 
all ticket issuance and collections which will be fully operational by 
December 31, 1997.  

     On September 10, 1988 the Company entered into a three-year marketing 
agreement (the "Marketing Agreement") with Clancy Systems International 
Limited ("Clancy UK"), an unaffiliated company incorporated in England.  
Under the Marketing Agreement, Clancy UK has the exclusive rights to market 
the computer and other electronic hardware and software systems produced by 
the Company in the United Kingdom, and the nonexclusive rights to market the 
computer and other electronic hardware and software systems produced by the 
Company in Europe and Australia.  Clancy UK has agreed to use its best 
efforts to promote and market the Company's products and services and will 
reimburse the Company for its equipment and systems at rates to be agreed 
upon for each installation.  All hardware returned to the Company is 
replaced by the Company free of charge. By mutual agreement of the parties, 
the Marketing Agreement has been extended indefinitely. Currently Clancy UK 
services one client: Newcastle upon Tyne, England.

The Denver Boot

     The Denver Boot is a metal clamp which is fastened around a wheel which 
effectively prevents a vehicle from being moved.  The Denver Boot is removed 
by unlocking a padlock.  The Company acquired all rights to the product in a 
transaction with Grace Berg in June of 1994.  The Company will pay Mrs. Berg 
a royalty on all sales for a period extending to June 1999.   The Denver Boot
is used by a number of law enforcement agencies on vehicles with multiple 
offenses. The Denver Boot can be integrated into the Company's parking 
control and enforcement system or may be sold separately.  Sales of the 
Denver Boot have increased significantly during the past fiscal year. 

Fleet Control 

     During the quarter ended September 30, 1987 the Company developed a 
vehicle inventory control system for The Hertz Corporation referred to as 
Fleet Control. Fleet Control system tracks the transfer of rental cars 
between locations and is designed to enhance the security and control of 
inventory during such movements.
  
     The system provides Hertz with information pertaining to each vehicle 
from the moment it leaves a location and includes the name
                                 -3-
<PAGE>
and employee number of the hiker (driver), the Hertz vehicle number, 
the vehicle license number and a bar code identification symbol.  The 
information is readily transferable between locations and is reproduced in a 
report format. This system now deals with "non revenue" movement of vehicles.
 
     The Company sells charger/communication cradles to the Hertz 
Corporation for this project and maintains the equipment for Hertz under a 
maintenance service contract agreement.

    Hertz revenues to the Company represented approximately  2.5% of the 
Company's total revenues during fiscal 1997.

  The Fleet Control system is being provided to Hertz under a maintenance 
contract agreement.

Phoenix Group Systems  

     In joint venture with Phoenix Group, of Torrance, California, the 
Company has installed computerized parking citation issuance systems at 
Pasadena City College, Pasadena, California;  West Covina, California; Bell 
Gardens, California; Riverside, California; Cerritos College, Norwalk, CA; 
East L.A. College; L.A. Harbor College; L.A. Mission College; College; Santa 
Rosa Jr. College; Anaheim, California; Cuesta College, San Luis Obispo, CA; 
California State University, Dominguez Hills; Golden West College, Huntington
Beach, CA; Grossmont-Cuyamaca Colleges in El Cajon, CA; California State 
University, Los Angeles; County of Sonoma; Humboldt State College, Arcata, 
CA;  and Los Angeles Valley College, Van Nuys, CA.  Phoenix Group has 
contracts with these entities to provide noticing and Department of Motor 
Vehicle lookup.  The Company provides field units, charger/communication 
modules and system computers.  All of these entities write in the aggregate 
approximately 500,000 tickets per year.

MIS Department- City of Inglewood, CA

     In a joint venture agreement with the City of Inglewood, CA, Department 
of MIS, Clancy has agreed to provide hand-held ticket issuance equipment, 
ticket forms and envelopes for the City of Inglewood and clients that the 
City services for ticket processing. These cities include:  Inglewood, CA; 
Sacramento, CA; Lawndale, CA; Alhambra, CA; Compton, CA; Covina, CA; San 
Marino, CA; San Gabriel, CA; Hawthorne, CA; Oakland, CA; and South Pasadena, 
CA.

     (b)(3)  Status of Publicly-Announced New Product or Services.  Not 
applicable.

     (b)(4)  Competition.  The Registrant is aware of several other companies 
that currently offer an automated ticket writing system: Enforcement 
Technologies, Inc.; Cardinal; Com-Plus; DMS;  Radix-T-2 

                                  -4-
<PAGE>
and others. The Company believes that it is able to compete effectively in 
the field because of its fee per citation and leased system marketing 
approach which eliminates any significant capital expenditures by the user 
and because of the various enforcement products which it offers to complement
its system.

    The Registrant believes that its rental car return and inventory control 
systems are competitive with other types of similar systems in that they are 
"stand-alone" systems which do not require a compatible main frame computer 
to operate.  The  Registrant is aware of no other companies which currently 
offer a "stand-alone" rental car return system or a "stand-alone" inventory 
control system.

     Initially, the Company provides potential parking control  clients with 
consulting services to analyze the client's ticketing and enforcement needs.  
The Company then develops a proposal based upon those needs, which indicates
how the Company's system and related products would aid the client in 
achieving the two primary goals of ticket writing and enforcement:  creation 
of an equitable enforcement policy and an increase in revenues.  The Company 
believes that a system which is perceived by the public to provide a greater 
certainty of enforcement will result in a greater willingness upon the part 
of the public to promptly and consistently pay fines, thus increasing the 
flow of revenues to the client.  Depending upon the size of the client, the 
Company's services may range from the simple sale of hardware (i.e., the 
Denver Boot) to providing a ticketing and enforcement system and related 
equipment through a lease or sale arrangement, training users and handling 
data processing of tickets and the collection of fines.

     Although a few of the Company's systems provide for the purchase of 
systems or fees based on set monthly amounts, the Company has been marketing 
its system and other products to municipalities, universities, colleges, 
institutions and parking companies primarily under a professional services 
contract  geared to a transactional or per citation basis.  The Company 
supplies all hardware, software, training, supplies and maintenance for the 
system, thus eliminating all significant capital expenditures by the user.

     The Company markets its ticket writing and enforcement system directly 
to municipalities, universities, colleges, institutions and parking companies 
through commissioned sales representatives and members of management.  The 
Company currently has marketing alliances with six organizations throughout
the United States.  The Company's management attends trade shows and makes 
direct sales calls.

     The Company has an informal marketing arrangement with Clancy UK under 
which Clancy UK is marketing the Company's systems in the United Kingdom and 
Europe.  See "Clancy Systems International Limited Marketing Agreement."

     (b)(5)  Raw Materials and Principal Suppliers.  The Company purchases 
its hand-held computers from outside vendors and the Company builds the 
printer units that incorporate the hand-held 
                                -5-
<PAGE>
terminal.  Robert M. Brodbeck, the Company's Chairman of the Board and a 
director, supervises the manufacturing of the Company's printer units and is 
responsible for product engineering.  The hand-held terminals for the parking 
enforcement system and rental car return system are identical and the hand-
held terminals for the rental car inventory control system are different 
only in that they have an expanded memory and a bar code wand for 
identifying vehicles for inventory control purposes.  The printer units for 
the various systems are the same.  The Company's latest generation printers 
feature injection molded cases and an automatic top-of-form feature for the 
paper feed.  Other new technology for the electronics enable interfacing 
with auxiliary hardware such as radio communications devices, magnetic 
credit card readers and other peripheral devices.  The Company obtained a 
patent on its printer in April 1991. The Company purchases its hand-held 
terminals from several different vendors who sell computers that are all 
comparable in quality.  

     Component parts for the Company's products are purchased from various 
sources.  The Company has established certain vendors for such parts; 
however, should any of them become unavailable to the Company, the Company 
believes that there are many alternative sources of supply available to it. 

     The Company's paper products are purchased from outside vendors.  
Should any of these vendors be unable to supply these specialized products, 
the Company believes that there are many other available sources of supply.

    (b)(6) Significant Customers.  Presently, the Registrant has 81
 customers. The Registrant in general is greatly dependent on these 
customers, but the Registrant is particularly dependent on its contracts 
with Oklahoma City, Oklahoma; the City of Berkeley, California;  the Phoenix 
Group; the City of Inglewood, CA; and Hertz Corporation which together 
represented approximately 25% of the Company's total sales for the year 
ended September 30, 1997. From March 20, 1996 through September 30, 1997, 
the Company operated the parking ticket issuance operations for the Town of 
Cicero, IL.  Revenues from this operation represented 33% of its total 
revenues for fiscal 1996; however, this contract was discontinued effective 
as of December 5, 1996. See below. The Company continually updates the 
hardware and software products provided to these and all of its customers in 
an effort to ensure quality service and customer satisfaction.

     Oklahoma City, Oklahoma.  The Company has provided a fully implemented 
automated parking ticket writing, processing and enforcement system to 
Oklahoma City, Oklahoma, its first parking enforcement system, since June 
1986.  Under the current contract the Company receives a monthly fee for 
leasing equipment and providing supplies and support.  The contract may be 
terminated by either party upon 15 days written notice and may be extended 
for two additional 12-month terms upon mutual agreement of the parties on
terms to be negotiated.The current contract with the City of Oklahoma
                                       -6-
<PAGE>
expires June 30, 1998.  Under the contract, the Company has agreed to 
indemnify the City of Oklahoma, its officers, agents and employees against 
any claims resulting from acts or omissions of the Company or its officers, 
employees, representatives or agents.  During the 1997 fiscal year, the 
revenues from the Oklahoma City system represented approximately 4.5% of the 
Company's total revenues.

     Berkeley, California.  On September 8, 1989 the Company entered into a 
contract with the City of Berkeley, California to provide a parking 
enforcement system to issue citations, assemble data and interface to the 
City's database. Under the contract the Company provides hardware, custom 
software, maintenance, training and support.  The Company  receives a fee 
per valid citation issued. The contract term has been extended through 
September 1998. The Company has agreed to warrant all hardware and to 
replace or repair any broken hardware free of charge.  The Company has 
agreed to indemnify the City, its officers, agents and employees against 
any claims arising out of the Company's performance under the contract. The 
City has the right to terminate the contract with 30 days written notice.  
The system currently provides hardware for 30 parking control officers. 
During the 1997 fiscal year, the revenues from the City of Berkeley system 
represented approximately 7% of the Company's total revenues.

     Cicero, Illinois.  The Company entered into a three-year agreement with 
the Town of Cicero, IL in February, 1996,  to provide  complete facilities 
management service for its parking ticket issuance division. Under the 
agreement, the Company agreed to pay the Town of Cicero  an annual fee of 
$575,000.  The Company provided the complete system, personnel, hardware, and
supplies.  The Company retained all ticket revenues collected as well as any 
revenues collected on backlog tickets. The agreement may be terminated by 
either party upon 30 days written notice.   The Company began operations with
respect to the agreement the last week of March 1996. In connection with the
Agreement, the Company entered into an agreement with J & J Consulting under 
which the Company agreed to pay J & J an annual fee of $175,000 and monthly 
commissions equal to a percentage of all revenues generated by the Company 
from its operations in Cicero, and a bonus percentage once revenues to the 
Company exceed $1,000,000.  In November 1996, the Town terminated the 
agreement effective December 5, 1996 due to certain political issues 
unrelated to the Company.  In settlement of the breach of contract, the 
Company was reimbursed $185,484 from the Town of Cicero.  The Company 
continues to collect tickets issued by the Company and the earlier backlog 
which amounted to $508,234 for fiscal 1997, which included the amount of 
$185,484 reimbursed by the Town of Cicero, and represented 29% of the 
Company's total revenues.

     Inglewood, CA. In a joint venture agreement with the City of Inglewood, 
CA, Department of MIS, Clancy has agreed to sell hand-held ticket issuance 
equipment, ticket forms and envelopes to the City of Inglewood and clients
that the City services for ticket processing. In the year ended September 30,
1997, sales to the City of Inglewood represented 11% of the Company's total 
revenues.
                                  -7-
<PAGE>
     (b)(7)  Patents and Licenses.  The Company obtained a patent (#5,006,002)
for its printer used in its parking enforcement, rental car return and 
inventory control systems in April 1991.  This patent expires April 2008. 

     (b)(8)    Need for Governmental Approval.  None.
     (b)(9)    Effect of Governmental Regulations.  None. 

     (b)(10)  Research and Development.  In order to keep its products and 
systems from becoming obsolete, the Company regularly modifies and updates 
its hardware and software.  In order to streamline its ticket writing and 
car rental equipment, the Company has redesigned the printer so that it 
weighs only three and one-half pounds instead of five pounds.

     The Company has continually been modifying its patented printer and is 
beginning to market its printer as a stand-alone product to parking 
enforcement entities, delivery services and vendors who have a need for 
computer-generated receipts.  During the 1996 fiscal year the Company made 
significant modifications to the printer, which include a memory module and 
upgrade of components and board design.  

    During fiscal 1997, Clancy began production of a new printer that 
utilizes a thermal line printer.  This printer has been designed to print 
special fonts including the new PDF 417 bar code symbology.  The printer is  
utilized as a stand alone device, but has been designed to accept a module 
which incorporates a handheld terminal, mag stripe reader, PCMCIA card and 
can accept wands, bar codes and other peripheral devices.  Estimated 
completion time for the module has been extended to March 1998.  Other 
features include graphic display, back-lit keypad, phosphorescent keypad and 
expandable memory. The Company believes that a tremendous market exists for 
this product which may increase future revenues.  The ability to print PDF 
417 bar codes will be a significant marketing advantage; however, there can 
be no assurance that the Company's marketing efforts will be successful.
 
    The Company developed a printer with an infrared interface which it 
sells to a Canadian company.  It is anticipated that this product will be 
sold to others who can benefit from the infrared technology and require a 
portable field printing device.

     Robert M. Brodbeck, the Company's Chairman of the Board and a director, 
oversees developement and manufacturing of hardware produced by the Company.

     Management keeps informed of new developments in components so that the 
printer is up-to-date, fast and suits user requirements. The Company 
communicates with vendors on a regular and ongoing basis so that management 
is aware of upgraded components, new components and new processes to upgrade
its hardware.  By adapting its equipment to user needs and keeping current 
of the latest technology, the Company anticipates that its enforcement 
ticket writing and rental car systems will not become obsolete.  
                                -8-
<PAGE>
    The Company's software is developed in-house by four full-time 
programmers and by Stanley J. Wolfson, the Company's President and a 
director.

     The Company's software is maintained and updated on a regular basis.  
The software for the enforcement system ticketwriter and rental car return 
systems were developed by Stanley Wolfson over a period of two years.  The 
software for the Fleet Control inventory control system initially was 
developed by Mr. Wolfson in his capacity as an officer and employee of Stan 
Wolfson and Associates, Inc., and subsequently was transferred to the 
Company.  The software allows the ticketing, rental and inventory 
information to be entered and stored and the tickets, rental agreements and 
inventory information to be printed.  The user of the enforcement system also
may use the computer to look up information relating to possible stolen or 
multiple violation vehicles.

     The office computer software allows the daily ticket and rental and 
inventory information to be transferred from the portable units to a central 
computer.  The information is compiled and then processed further according 
to user requirements.

     Through sophisticated communications software, the Company is able to 
update, modify, repair, enhance and change most software at the client's 
location via a modem and the internet.

     The Company's Lot and Street Survey programs have been provided to 
clients for use with their parking systems.

     The Company spent $54,303 and $32,721 on research and development 
activities for the fiscal years ended September 30, 1996 and 1997, 
respectively. None of the cost of such activities was borne directly by the 
customers.

     (b)(11)  Compliance with Environmental Laws.  Compliance with federal, 
state and local provisions regulating the discharge of materials into the 
environment or otherwise relating to the protection of the environment will 
have no material effect on the capital expenditures, earnings and competitive 
position of the Company.

     (b)(12)  Employees.  The Company currently has twelve employees all of 
who are employed on a full time basis.  

Item 2.    Description of Properties.

     The Company is leasing approximately 1,700 square feet of office space 
located at 2250 South Oneida Street, #308, Denver, Colorado for its corporate 
offices for $1,310 per month pursuant to a lease agreement with an 
unaffiliated party which expires May 31, 1998.

     The Company also leases approximately 3,000 square feet of manufacturing 
space located at 5789 S. Curtice, Littleton, Colorado, from an unaffiliated 
party. Rental payments are $575 per month pursuant to a lease agreement that 
expires August 1, 1998.
                              -9-
<PAGE>
     The Company believes that these facilities are suitable and adequate for 
its needs.

Item 3.     Legal Proceedings.

     On November 4, 1995, the Registrant filed an action in the United States 
District Court for the District of Colorado naming Symbol Technologies, Inc.
as defendant, alleging patent infringement.  

     In 1993, Symbol Technologies, Inc. released a new product, a handheld 
terminal model PDT3100, which incorporates the  interactive button technology 
documented in patents #4,007,443 and #4,005,388, which the Company acquired 
from Termiflex Corporation on April 25, 1991.  The Company sought relief for 
patent infringement and licensing of the patented technology. 

      On February 18, 1997, the United States District Court for the District
of Colorado granted Symbol Technologies, Inc. its Motion for Summary 
Judgement in the case of Clancy Systems International, Inc. vs Symbol 
Technologies, Inc. for alleged patent infringement.  The motion was granted 
on the evidence that Nippondenso, a company which licensed Clancy's patent 
in 1992, did not properly mark their product with the patent number 
therefore jeopardizing Clancy's claim. The Company was assessed costs of 
$2,699.86.

     The Registrant knows of no litigation pending, threatened or 
contemplated, or unsatisfied judgments against the Registrant, nor any other 
proceedings to which the Registrant is a party.

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

           None.






















                               -10-
<PAGE>
                              PART II 


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

     (a)(1)  The principal market on which the Registrant's Common Stock is 
traded is the over-the-counter market and the Registrant's Common Stock is 
quoted in the OTC Bulletin Board.

     (a)(1)(i)  Not applicable.

     (a)(1)(ii) The range of high and low bid quotations for the Registrant's 
Common Stock for the last two fiscal years are provided below.  These over-
the-counter market quotations reflect inter-dealer prices without retail 
markup, markdown or commissions and may not necessarily represent actual 
transactions.


                             High bid   Low bid

10/1/95 - 12/31/96           .01         .005
1/1/96 - 3/31/96             .02         .01   
4/1/96 - 6/30/96             .02         .015
7/1/96 - 9/30/96             .015        .075 
10/1/96 - 12/31/96           .005        .005
1/1/97 - 3/31/97             .005        .005
4/1/97 - 6/30/97             .005        .004
7/1/97 - 9/30/97             .005        .005


     On December 23, 1997 the reported bid and asked prices for the 
Registrant's Common Stock were $.005 and $.0175, respectively.

     (a)(2)  Not applicable.

     (b)  The approximate number of record holders of the Registrant's Common 
Stock on December 26, 1997 was 629.

     (c)(1)  The Registrant has paid no dividends with respect to its Common 
Stock. 

     (c)(2)  There are no contractual restrictions on the Registrant's 
present or future ability to pay dividends.







                                 -11-
<PAGE>

Item 6.   Management's Discussion and Analysis or Plan of 
          Operation

     From fiscal 1996 to fiscal 1997 revenues declined approximately 2%.  
This is primarily due to a slight decline in ticket issuance by existing 
customers for various reasons including staff cutbacks and weather related 
problems. The Company's parking enforcement systems research and development 
costs  increased from  $54,303 to $60,591, or 8%, from fiscal 1996 to fiscal 
1997. General and administrative costs decreased by 1%  from fiscal 1996 to 
fiscal 1997.  The Company reported a profit of $16,792 for fiscal 1996 as 
compared to profit of $35,068 for fiscal 1997.

    Since  November 1986, the Company has had a professional services 
contract with  Oklahoma City to provide a ticket writing system for a set 
monthly fee.  For the fiscal years ended September 30, 1996 and 1997, the 
contract with Oklahoma City accounted for 4% and 4.5%, respectively, of the 
Company's total professional services contract revenue.  See Part I, Item 1 
(b)(6).

   During the fiscal year ended September 30, 1989 the Company entered into 
a contract with the City of Berkeley, California to provide its parking 
enforcement system.  For the fiscal years ended September 30, 1996 and 1997,
the contract with the City of Berkeley accounted for 8% and 7%, respectively,
of the Company's total professional services contract revenue.

    By a contract entered into on February 15, 1996, the Company began a 
facilities management project for the Town of Cicero Illinois in the last 
week of March 1996.  The Company paid the town of Cicero $575,000 as a 
guarantee of ticket income for a one year period.  The Company realized 
revenues from this operation through its fiscal year end at September 30, 
1997 that represented 29% of its total revenues and included an amount of 
$185,484 in contract reimbursement. This contract was terminated effective 
December 5, 1996, however the Company continues to collect revenue on issued
tickets.  See "Part I, Item 1(b)(6); Cicero, IL."

    During the fiscal years ended September 30, 1996 and 1997, the Company 
had in place a total of approximately 89 and 97 systems, respectively, 
representing both systems installed directly by the Company and systems 
installed through joint venture relationships.

   The Company "Fleet Control" program for Hertz continues to generate 
revenues for the Company. For the fiscal years ended September 30, 1996 and
1997, all revenues derived from Hertz were from contract agreements to 
provide leased hand-held terminals, chargers, and other peripherals and 
supplies related to various Fleet Control projects.  This revenue represented
3% and 2% of the Company's total revenue during fiscal 1996 and 1997, 
respectively.   See Part I, Item 1 (b)(1). 


                             -12-
<PAGE>
    The Company's professional services contract income generated for the 
year ended September 30, 1996 was approximately 2% from the Hertz Corporation 
projects and approximately 98% from the Company's parking enforcement systems
and product sales.  The Company's future operations will be greatly dependent 
upon its ability to obtain additional contracts for its parking control 
systems and other rental systems.

     At September 30, 1997, the Company had working capital of $554,707 as 
compared to $465,991 at September 30, 1996.  The Company's current ratio 
increased from 1.95 to 1 to 11.14 to 1 from September 30, 1996 to September
30, 1997. 

    The Company anticipates using its working capital to fund ongoing 
operations, including general and administrative expenses, equipment 
purchases, equipment manufacturing, travel, marketing and research and 
development.  The Company anticipates having sufficient working capital to 
fund operations for the fiscal year ending September 30, 1998.

     The Company has continually been modifying its patented printer and has 
marketed its printer as a stand-alone  product to delivery services and 
vendors who have a need for computer-generated receipts.  During the 1996 
fiscal year, the Company developed a new printer utilizing thermal line 
print technology. The Company also made significant upgrades to its standard
printer. The Company believes there exists a tremendous market for the new 
printer as it is able to print a new bar code symbology (PDF 417) which is 
expected to become an industry standard in the next few years. This product
may increase future revenues; however, there can be no assurance that the 
Company's marketing efforts will be successful.

Year 2000 Compliance

     During the fiscal year ended September 30, 1997, the Company completed a 
total revision of its ticket system (and other systems) software which 
includes total operations in a Windows environment and complete capability 
for the handling of the year 2000 date issue.  All new clients installed 
beginning January 1, 1997 are operating on the new system and existing 
clients are presently being converted. Some cities already have the need for 
year 2000 dating as license plates for mulitiple years are dated in year 2000
and later. In addition to the software, computer equipment is being upgraded 
for existing clients as well.  The equipment requirement for the Windows 
system requires faster computing capability with more memory along with the 
need for new bios that will handle year 2000 dating on the computer itself.  

     As the Clancy program to customers already includes upgrades to hardware 
and software on a regular basis as newer technology becomes available, 
conversion for year 2000 compliance does not pose any consequences to the 
Company either in financial or human resource areas. 

                                   -13-
<PAGE>

    The Company has already had an increase in the number of inquiries about
the system based on year 2000 software capabilities and the Company 
anticipates that during the next two years the client base could increase  
substantially as potential clients find the need to outsource their ticket 
issuance and processing programs in order to be operational in the year 2000. 
                                 
Item 7.    Financial Statements.

     The following financial statements are filed as a part of this Form 
10-KSB and are included immediately following the signature page. 

     Report of Independent Certified Public Accountants	

     Balance Sheet - September 30, 1996 and September 30, 1997	

     Income Statement - Years ended September 30, 1996 
                        and 1997 

     Statements of Stockholders' Equity - Years ended September 
                        30, 1996 and 1997

     Statements of Cash Flows - Years ended September 30, 1996 
                        and 1997

     Notes to Financial Statements


Item 8.   Changes in and Disagreements With Accountants on 
          Accounting and Financial Disclosure.  

     Not applicable.




















                                      -14-
<PAGE>
                                     PART III


Item 9. Directors, Executive Officers, Promoters and Control 
        Persons; Compliance with Section 16(a) of the Exchange 
        Act.

     (a)(1),(2),(3)  Identification of Directors and Executive Officers.

                              Position                      Dates of
Name                    held with Registrant       Age      service
----                    --------------------       ---      --------
Stanley J. Wolfson    President, Chief Executive    54        1987
                      Officer and Director

Robert M. Brodbeck    Chairman of the Board of      64        1987
                      Directors 

Mark G. Lawrence      Director                      48        1986

Lizabeth M. Wolfson   Secretary-Treasurer and       52        1987
                      Chief Financial and Chief
                      Accounting Officer

     (a)(4)  The business experience of the Registrant's officers 
and directors is as follows:

     Stanley J. Wolfson, President, Chief Executive Officer and a director of 
the Company since February 1987.  Mr. Wolfson attended the University of 
Colorado at Boulder and the University of Colorado at Denver. Mr. Wolfson had 
been president and a director of Clancy from inception until its merger into
the Company in April 1987.  Since 1967 Mr. Wolfson has been president and
director of Portion Controlled Foods, Inc. d/b/a Stan Wolfson and Associates,
Inc., a data processing  systems consulting firm located in Denver, Colorado
which employs two persons on a part-time basis.  His firm's clients include 
The Hertz Corporation that utilizes Stan Wolfson and Associates, Inc.'s hand-
held data entry equipment as part of its on-site national inventory control 
system.  The Hertz Corporation has been a major customer of the Company.
See Part I, Item 1. Mr. Wolfson has served as remote data acquisition 
consultant for AT&T as well as a consultant for a number of small local 
companies.  Mr. Wolfson is the husband of Lizabeth Wolfson, an officer of 
the Company.

     Robert M. Brodbeck, Chairman of the Board of Directors and a director of 
the Company since February 1987.  Mr. Brodbeck had been chairman of the board
of directors and a director of Clancy from June 29, 1985 until April 1987.
Mr. Brodbeck was a founder of Clancy, served as an initial director of
Clancy until Clancy's first organizational meeting and had been active as a 
principal shareholder of Clancy since its inception.  From December 1983 
until November 1986 Mr. Brodbeck had been president and director of I/O 
Services,
                                -15-
<PAGE>
Inc., (now known as Sabre Industries, Inc.), a public company located in 
Denver, Colorado which is involved in the development of systems 
for small block data transmission.  From July 1978 to May 1984, Mr. Brodbeck
was co-owner of Computer Tel, Inc. (d/b/a Loadmaster), located in Denver, 
Colorado, which developed a computerized load posting system in use 
nationally by the trucking industry.  From November 1973 to May 1984, Mr. 
Brodbeck was the owner of Kwik Kall, Inc., a direct dial courtesy phone 
system located in Denver, Colorado, serving the trucking industry in the 
southwestern United States as well as the eastern seaboard, Oklahoma and 
Texas.  Mr. Brodbeck sold his interests in both Computer Tel, Inc. and Kwik 
Kall, Inc. in 1984.  Prior to 1972 Mr. Brodbeck was an electronics and 
computer maintenance technician with Martin Marietta Corporation for 17 
years.

     Lizabeth M. Wolfson, Secretary-Treasurer and Chief Financial and Chief 
Accounting Officer of the Company since February 1987. Mrs. Wolfson attended 
the University of Colorado at Boulder and the University of Colorado at 
Denver. Mrs. Wolfson had been secretary and treasurer of Clancy from 1974 
and a director from December 1986 until April 1987.  Since 1978, Mrs. 
Wolfson has served as secretary of Stan Wolfson and Associates, Inc.   She 
is the wife of Stanley J. Wolfson, President, Chief Executive Officer and a 
director of the Company.

    Mark G. Lawrence, a director of the Company since April 1986. Mr. Lawrence 
served as Chairman of the Board of Directors and Secretary of the Company from 
April 1986 until February 1987 when the Exchange took place with Clancy. 
Since March 1988 Mr. Lawrence has served as executive vice president and a 
partner of Vintage Marketing Group, Inc., a company engaged in the sales and 
marketing of residential real estate. Since 1985 he has been secretary and a
director of Windscreens West, Inc., a Colorado corporation engaged in the 
distribution and sales of fencing and other products. He graduated from the 
University of Denver in 1971 with a B.A. degree in social sciences and 
attended the University of the Americas in Mexico City in 1969.  Mr. Lawrence
is a member of the Home Builders Association, the Sales and Marketing Council
of Metropolitan Denver and the National Sales and Marketing Council.
 
     (a)(5)  Directorships Held in Reporting Companies.  None.

     (b)  Identification of Certain Significant Employees.  None.

     (c) Family Relationships. LizabethM. Wolfson,
         Secretary-Treasurer and Chief Financial and Chief Accounting
         Officer of the Registrant, is the wife of Stanley J. 
         Wolfson, President, Chief Executive Officer and a director 
         of the Registrant.

      (d)  Involvement in Certain Legal Proceedings.  None

Compliance with Section 16(a) of the Exchange Act

     Not Applicable.
                                -16-
<PAGE>
Item 10.	Executive Compensation.

     (a)  General.  For the fiscal year ended September 30, 1997 the Company 
paid a ten percent sales commission totaling $5,665 to Stanley J. Wolfson, 
the President, Chief Executive Officer and a director of the Company, based 
upon gross sales (excluding supplies) to the Hertz Corporation.  In addition,
Mr. Wolfson received a salary of $49,400 for the most recent fiscal year 
ended.

     (b)  Summary Compensation Table.

        (a)                   (b)	     (c)           (e)
     Name and                                       Other annual
principal position            Year        Salary    compensation


Stanley J. Wolfson            1997       $49,400       $5,665	
President and Chief           1996        48,500        6,320
Executive Officer             1995        44,500        8,351

     (c)  Option/SAR Grants.  None.

     (d)  Option/SAR Exercises and Fiscal Year End Option/SAR
          Values.  Not applicable.

     (e)  Long-Term Incentive Plan.  None.

     (f)  Compensation of Directors.  None.

     (g)  Employment Contracts and Arrangements.  None.

     (h)  Report on Repricing of Options/SARs.  Not applicable.


Item 11.  Security Ownership of Certain Beneficial Owners and 
          Management.

     (a), (b)  Security Ownership of Beneficial Owners and Management.  The 
following table sets forth information as of December 23, 1997 with respect
to the ownership of the Company's Common Stock for all directors, 
individually, all officers and directors as a group, and all beneficial 
owners of more than five percent of the Common Stock.











                                     -17-
<PAGE>
Name and address                   Number of
of beneficial owner                 shares               Percentage
-------------------                ---------             ----------

Stanley J. Wolfson                 113,998, 464 (1)         33.8% 
2250 S. Oneida Ste. 308
Denver, Colorado  80224

Robert M. Brodbeck                   92,509,608             27.5%
2250 S. Oneida Ste. 308
Denver, CO 80224

Mark G. Lawrence                      3,100,000               .9%
2250 S. Oneida Ste. 308
Denver, Colorado  80224
 
All officers and directors          209,608,072 (1)         62.2%
as a group (four persons)
-------------- 

(1)  Includes 4,075,642 shares of Common Stock owned of record by Lizabeth M. 
Wolfson, the wife of Stanley Wolfson and an  officer of the Company and 
400,000 shares of Common Stock owned of record by the Wolfson children.

     (c)  Changes in Control.

     The Registrant knows of no arrangement, the operation of which may, at a 
subsequent date, result in change in control of the Registrant.

Item 12.     Certain Relationships and Related Transactions.

     None/Not applicable.

Item 13.     Exhibits and Reports on Form 8-K. 

     (a)   Exhibits.  The following is a complete list of exhibits filed as a 
part of this Report on Form 10-KSB and are those incorporated herein by 
reference.

Exhibit Number         Title of Exhibit

     3.1        Articles of Incorporation filed with the Colorado 
                Secretary of State on March 3, 1986 (2)

     3.1(a)     Articles of Amendment to Articles of Incorporation 
               (2)

     3.3        Bylaws (2)

     10.1(b)   Professional Services Contract between Clancy 
               Systems International, Inc. and the City of 
               Oklahoma dated June 14, 1989 (4)
-18-
<PAGE>
     10.2      Extension Agreement between Clancy Systems 
               International, Inc. and the City of Oklahoma dated  
               June 20, 1990 (5)

     10.6      Indemnification Agreements between the Registrant 
               and Robert M. Brodbeck, Stanley J. Wolfson and 
               Lizabeth M. Wolfson dated February 26, 1987 (1)

     10.12     Indemnity Agreements between Registrant and 
               Stanley J. Wolfson, Robert M. Brodbeck, Mark G. 
               Lawrence and Lizabeth M. Wolfson (3)

     10.24    Service Agreement between Clancy Systems 
              International, Inc. and the City of Berkeley, 
              California dated September 1, 1989 (4)

     10.25    Agreement between Clancy Systems International,
              Inc. and the Town of Cicero dated February 13, 1996 (6)
-------------

(1)  Incorporated by reference from exhibit 2.1 filed with the 
     Registrant's current report on Form 8-K dated February 26, 
     1987.

(2)  Incorporated by reference from the like numbered exhibits 
     filed with the Registrant's Registration Statement on Form 
     S-18, SEC File No. 33-4882-D.

(3)  Incorporated by reference from the like numbered exhibits
     filed with the Registrant's Annual Report on Form 10-K for
     the year ended September 30, 1987.

(4)  Incorporated by reference from the like numbered exhibits
     filed with the Registrant's Annual Report on Form 10-K for
     the year ended September 30, 1989. 

(5)  Incorporated by reference from the like numbered exhibits
     filed with the Registrant's Annual Report on Form 10-K for 
     the year ended September 30, 1990.

(6)  Incorporated by reference from the like numbered exhibits
     filed with the Registrant's Annual Report on Form 10-KSB for
     the year ended September 30, 1996.

     (b)  Reports on Form 8-K.  During the last quarter of the
          period covered by this report the Registrant filed no
          reports on form 8-K.

     SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO 
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES 
PURSUANT TO SECTION 12 OF THE ACT.

      None.

                                     -19-
<PAGE>
                                 SIGNATURES


     In accordance with the requirements of Section 13 or 15(d) of the 
Securities Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.


                              CLANCY SYSTEMS INTERNATIONAL, INC.




                               By  /s/ Stanley J. Wolfson
                               Stanley J. Wolfson, President


Date:  December 23, 1997

     In accordance with the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.


Date:  December 23, 1997             /s/ Stanley J. Wolfson
                                   Stanley J. Wolfson, President, 
                                   Chief Executive Officer and a
                                   Director


Date:  December 23, 1997            /s/ Robert M. Brodbeck 
                                   Robert M. Brodbeck, Chairman of 
                                   the Board of Directors and 
                                   Director


Date:  December 23, 1997             /s/ Lizabeth M. Wolfson
                                   Lizabeth M. Wolfson, Secretary- 
                                   Treasurer and Chief Financial
                                   and Chief Accounting Officer

Date:  December 23, 1997             /s/ Mark G. Lawrence
                                    Mark G. Lawrence, Director









                                    -20-
<PAGE>


                REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Shareholders 
Clancy Systems International, Inc.

We  have audited the balance sheet of Clancy Systems International, Inc.
as of September 30, 1996 and 1997, and the related statements of  income, 
stockholders' equity and cash flows for the years  then ended.  These
financial statements are the responsibility  of  the Company's  management.
Our responsibility is to express an  opinion on these financial statements
based on our audits.

We  conducted  our  audits  in accordance with generally  accepted auditing  
standards.  Those standards  require  that  we  plan  and perform the audits
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 financial statements referred to above present fairly, 
in all material respects, the financial position of  Clancy Systems 
International, Inc. at September 30, 1996 and 1997, and the results of  its
operations and its cash flow for the  years then ended, in conformity with 
generally accepted accounting principles.

Denver, Colorado
November 6, 1997		                      CAUSEY DEMGEN & MOORE INC.
   

















                                  F-1
<PAGE>
                     CLANCY SYSTEMS INTERNATIONAL, INC.

                               BALANCE SHEET

                         September 30, 1996 and 1997
				
                                                       1996       1997
Current assets:                                        ----       ----     
 Cash, including interest bearing accounts
  of $52,391 (1996) and $57,017 (1997)             $   90,510   $ 199,195
 Accounts receivable                                  286,931     196,646
 Inventories (Note 2)                                 190,255     210,608
 Investment in contract, net (Note 8)                 376,028           -
 Income taxes refundable                                  720       1,970
 Deferred tax asset (Note 5)                           12,000       1,000
                                                   ----------    --------
    Total Current assets                              956,444     609,419

Furniture and equipment, at cost:
  Office furniture and equipment                      185,245     228,680
  Equipment under service contracts (Note 8)        1,276,677   1,182,632
                                                   ----------   ---------

                                                    1,461,922   1,411,312
  Less accumulated depreciation                       955,371     994,732
                                                   ----------  ----------
       
   Net furniture and equipment                        506,551     416,580

Other assets:
  Deposits and other                                   44,810      26,835
  Software licenses                                    16,882      16,882
  Software development costs                          201,919     286,763
                                                    ---------  ----------

                                                      263,611     330,480
                                                        
Less accumulated amortization                         114,869     167,415
                                                   ----------   ---------

        Net other assets                              148,742     163,065
                                                  -----------   ---------

                                                  $ 1,611,737  $1,189,064
                                                  ===========  ==========

                                                   
    
                           See accompanying notes.
                                    F-2
<PAGE>
                       CLANCY SYSTEMS INTERNATIONAL, INC.
                               BALANCE SHEET

                          September 30, 1996 AND 1997

                    LIABILITIES AND STOCKHOLDERS' EQUITY
 
	                                                      1996       1997
Current liabilities:                                   ----       -----
 Note payable - bank (Note 4)                       $ 393,000   $       -
 Accounts payable                                      15,046           -
 Other accrued expenses                                 2,286       2,286
 Warranty reserve                                       4,000         400
 Deferred revenue                                      76,121      52,026
                                                    ---------   ---------

  Total current liabilities                           490,453      54,712

Deferred tax liability (Note 5)                        24,000       2,000

Commitments (Notes 7 and 8)

Stockholders'equity:
  Preferred stock,$.0001 par value;
   100,000,000 shares authorized, none issued
                                                            -           -
  Common stock,$.0001 par value;
   800,000,000 shares authorized, 
   336,889,149 shares issued and outstanding           33,689      33,689
  Additional paid-in capital                        1,030,674   1,030,674
 Retained earnings                                     32,921      67,989
                                                     --------   ---------
        Total stockholders' equity                  1,097,284   1,132,352
                                                    ---------   ---------
                                                  $ 1,611,737  $1,189,064
                                                  ===========  ==========



                      See accompanying notes.
                                F-3
<PAGE>

                    CLANCY SYSTEMS INTERNATIONAL, INC.
                          INCOME STATEMENT

           For the Years Ended September 30, 1996 and 1997
                                                    1996       1997
Revenues:                                           ----       ----
  Sales                                        $  172,532   $  200,374
  Service contract income (Notes 8 and 9)       1,046,692    1,064,292
  Parking ticket collections (Note 8)             604,002      508,234
                                                ---------    ---------
        Total revenues                          1,823,226    1,772,900

Costs and expenses:
  Cost of sales                                    82,566      154,944
  Cost of services (Note 3)                       531,857      576,501
  Cost of parking ticket collections (Note 8)     644,982      500,030
  General and administrative                      465,474      431,228
  Research and development                         54,303       60,591
                                            
                                                ---------    ---------
   Total costs and expenses                     1,779,182    1,723,294
                                                 --------    ---------

Income from operations				   44,044       49,606

Other income (expense):
  Interest income		                    4,775        2,275
  Interest expense                                (29,027)     (14,063)
                                                ---------      -------

  Total other income (expense)                    (24,252)     (11,788)
                                                ---------     --------

Income before provision for income taxes           19,792       37,818

Provision for income taxes (Note 5):
 Current expense (benefit)                        (5,000)       13,750
 Deferred expense (benefit)                        8,000       (11,000)
                                               ---------      --------

   Total income tax expense                        3,000          2,750
                                               ---------        -------

Net income                                    $   16,792      $  35,068
                                               =========      =========
Net income per common share (Note 6)          $        *      $       *
* Less than $.01 per share                     =========      =========
                           See accompanying notes.
                                   F-4
<PAGE>


                    CLANCY SYSTEMS INTERNATIONAL, INC.

                    STATEMENT OF STOCKHOLDER'S EQUITY

                For the Years Ended September 30, 1996 and 1997

<TABLE>
<CAPTION>   									
                                                               	Additional
							                            Common stock		               	  paid-in            		Retained
						                          Shares        Amount		             capital	             	earnings
                                --------------------             ----------              --------- 
<S>                           <C>           <C>                <C>                      <C>  
                  
Balance, September 30, 1995   336,889,149	  $ 33,689           $ 1,030,674              $  16,129

  Net income for the year 
   ended September 30, 1996             -           -                     -                16,792
                              -----------    --------           -----------              ---------                           

Balance, September 30, 1996   336,889,149       33,689            1,030,674                32,921

  Net income for the year
   ended September 30, 1997             -            -                    -                35,068
                              -----------    ---------          -----------              ---------  

Balance, September 30, 1997   336,889,149    $ 33,689           $ 1,030,674              $ 67,989
                              ===========    ========           ===========              ========
</TABLE>






                             See accompanying notes.
                                      F-5
<PAGE>

                       CLANCY SYSTEMS INTERNATIONAL, INC.

                           STATEMENT OF CASH FLOWS

                 For the Years Ended September 30, 1996 and 1997

                                                    1996       1997
Cash flows from operating activities:               ----       ----
 Net income                                     $  16,792   $  35,068
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation and amortization                  634,547     675,636
   Deferred income tax expense (benefit)            8,000     (11,000)
   Decrease (increase) in accounts receivable    (111,650)     90,285
   Increase in inventories                        (12,101)    (20,353)
   Decrease(increase)in income taxes refundable    11,280      (1,250)
   Increase(decrease)in accounts payable           15,046     (15,046)
   Decrease in accrued expenses                    (1,014)     (3,600)
   Increase(decrease)in deferred revenue           13,600     (24,095)
   Loss on disposal of assets                       7,284           -
                                                 --------     -------
     Total Adjustments                            564,992     690,577
                                               
Net cash provided by operating activities         581,784     725,645

Cash flows from investing activities:
 Acquisition of furniture and equipment - net    (282,914)   (157,091)
 Increase in software licenses and software 
  development costs                               (69,101)    (84,844)
 Investment in contract                          (750,000)          -
 Decrease (increase)in deposits and other 
  assets                                          (24,863)     17,975
 Proceeds from sales of fixed assets                6,200           -
                                                 --------    --------

   Net cash used in investing activities       (1,120,678)   (223,960)

Cash flows from financing activities:
 Proceeds from note payable - bank                650,000           -
 Payments on note payable - bank                 (257,000)   (393,000)
                                                ---------    --------
   Net cash provided by (used in) 
     financing activities                         393,000    (393,000)
                                                ---------    ---------
Increase(decrease)in cash      
  and cash equivalents                           (145,894)    108,685

Cash and cash equivalents at beginning of year    236,404      90,510
                                                ---------    --------
Cash and cash equivalents at end of year        $  90,510   $ 199,195
                                                 ========   =========
                         (Continued on following page)
                             See accompanying notes.
                                      F-6
<PAGE>
                       CLANCY SYSTEMS INTERNATIONAL, INC.

                          STATEMENT OF CASH FLOWS

                  For the Years Ended September 30, 1996 and 1997
                         (Continued from preceding page)


                  Supplemental disclosure of cash flow information:

                                                    1996     1997
                                                    ----     ----
Cash paid during the year for interest          $  29,027  $ 14,063
                                                =========  ========
Cash paid (refunded) during the year for 
  income taxes                                  $ (16,599) $ 15,000
Depreciation and amortization expense is        ========== ========
  allocated as follows:
   Cost of services                             $ 256,684 $ 299,608
   General and administrative                       3,891         -
   Cost of parking ticket collections             373,972   376,028
                                                ---------  --------

                                                $ 634,547 $ 675,636
                                                ========= =========























 
                         See accompanying notes.
                                  F-7
<PAGE>

                   CLANCY SYSTEMS INTERNATIONAL, INC.

                     NOTES TO FINANCIAL STATEMENTS

                      September 30, 1996 and 1997

1. Organization and summary of significant accounting policies

Organization:
The  Company  was  organized in Colorado on June  28, 1984.  The Company  is 
in the business of developing and marketing  ticket writing  systems
and  rental car return systems.  The  Company's revenues are derived primarily 
from cities, universities and  car rental  companies  throughout 
the  United  States, Canada and England.

Use of estimates:
The  preparation  of  financial  statements  in conformity  with generally  
accepted accounting principles requires management  to make  estimates and 
assumptions that affect the reported  amounts of assets  and  liabilities and 
disclosure of contingent assets and  liabilities at the date of the financial 
statements and  the reported  amounts of revenues and expenses during  the  
reporting period. Actual results could differ from those estimates.

Accounts receivable:
No  provision  for  doubtful accounts  was  deemed	necessary  at September 30, 
1996 or 1997.

Inventories:
Inventories  are  carried at the lower of cost (first-in,  first-out)  or  
market.  Inventory costs include materials,  labor  and manufacturing   
overhead. Inventories   consist   primarily  of computer  and  printer  parts 
and supplies  and  are	subject  to technical obsolescence.

Computer software:
Costs  incurred  to  establish the technological feasibility  of computer  
software are research and development costs, which  are charged  to  expense
as incurred.  Software  development  costs incurred subsequent   to
establishment of technological feasibility are capitalized and subsequently 
amortized based  on the  greater  of  the  straight line method  over  the 
remaining estimated economic life of the product (generally five years)  or
the estimate of  current and future revenues  for  the related software 
product. Amortization  expense for  the  years  ended September  30,  1996 
and 1997 amounted to $35,759  and  $52,456, respectively. Unamortized  
computer software development  costs amounted  to  $117,761  and $147,037
at September 30, 1996  and 1997, respectively.


                                       F-8
<PAGE>
                        CLANCY SYSTEMS INTERNAITONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 1996 and 1997

1. Organization  and  summary  of significant accounting  policies
   (continued)

Furniture and equipment:
Furniture and equipment are stated at cost. Depreciation is provided by the 
Company on an accelerated  method over  the  assets' estimated useful lives
of five years. Property and  equipment consists primarily of computers and 
printers which are subject to technical obsolescence. Sales  and  retirements
of depreciable property are recorded  by removing  the related cost and 
accumulated depreciation from  the accounts.  Gains and losses on sales and
retirements of  property are reflected in results of operations.

Other assets:
Software  license agreements are being amortized over a five-year period, the 
period estimated by management to be benefited.

Research and development costs:
Company  funded  research and development costs  are charged  to expense as 
incurred.

Revenue recognition:
Revenue  derived from professional service contracts on equipment and  support  
services is included in income as earned  over  the contract term; related 
costs consist mainly of depreciation, supplies and sales commissions.

The  Company  defers  revenue for equipment  and services  under service  
contracts that are billed to customers on  a  quarterly, semi-annual, annual or 
other basis.

Revenue from the issuance of parking tickets is recognized  on  a cash basis 
when received.

Income taxes:
The  Company  accounts  for  income  taxes  under Statement   of Financial   
Accounting  Standards  No. 109  ("FASB  No.   109"). Temporary  differences are 
differences between the tax  basis  of assets  and liabilities  and  their  
reported  amounts  in   the financial  statements that will result in taxable  
or deductible amounts  in  future  years. The Company's temporary  differences 
consist   primarily   of   tax operating   loss   carryforwards, depreciation 
differences and capitalized 263A costs.


                                     F-9
<PAGE>
                       CLANCY SYSTEMS INTERNATIONAL, INC.
                         NOTES TO FINANCIAL STATEMENTS

                         September 30, 1996 and 1997

1. Organization  and  summary  of significant accounting  policies
   (continued)

Cash equivalents:
For  purposes  of  the  statement  of  cash  flows, the  Company considers  
all highly liquid debt instruments purchased  with  a maturity of three 
months or less to be cash equivalents.

Fair value of financial instruments:
All  financial  instruments  are held  for  purposes other  than trading.  The  
following  methods and assumptions  were  used  to estimate the fair value of 
each financial instrument for which it is practicable to estimate that value: 
for  cash, cash equivalents and note payable, the carrying amount is  assumed  
to  approximate fair value  due  to  the  short-term maturities of these 
instruments.

Concentrations of credit risk:
Financial  instruments which potentially subject the Company  to 
concentrations of credit risk consist principally  of  cash  and trade 
receivables. The Company places its cash with high quality financial
institutions. At times during the year, the balance at any one financial 
institution may exceed FDIC limits.

The Company provides credit, in the normal course of business, to customers  
throughout the United States, Canada and England.  The Company  performs
ongoing credit evaluations of its customers.  A significant portion of the
Company's revenues are derived  from contracts   with   universities,   car 
rental companies and municipalities.

2. Inventories

Inventories consist of the following at September 30:

                                                 1996       1997
                                                 ----       ----
       Work in process                       $  9,380   $  13,570
       Purchased parts and supplies           180,875     197,038
                                             --------    --------
                                            $ 190,255   $ 210,608
                                            =========   =========


                                F-10
<PAGE>

                    CLANCY SYSTEMS INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS

                       September 30, 1996 and 1997

3. Related party transactions

The  Company  pays  a  10% sales commission  to  an officer  and director  of 
the Company for gross sales (excluding supplies)  to The Hertz Corporation. For 
the years ended September 30, 1996 and 1997, commissions of $6,320 and $5,665 
have been paid under this agreement, respectively.

4. Note payable - bank

On  March 22, 1996, the Company executed a three month promissory note  for  
$650,000  secured  by personal  guarantees  of  three officers of the Company. 
The note bore interest at 9.75% and  was originally  due on June 25, 1996. The 
maturity date was  extended to  December 25, 1996. During the year ended 
September 30,  1997, the note was repaid in full.

5. Income taxes

The  book to tax temporary differences resulting in deferred  tax assets   and 
liabilities are primarily net operating loss carryforwards, depreciation  
differences  and  capitalized  263A costs for tax purposes.

As  of September 30, 1996 and 1997, total deferred
tax assets and liabilities are as follows:
                                                 1996       1997
       Deferred tax assets                     $ 31,000   $ 1,000
       Deferred tax assets resulting from 
         loss carry-forward                      10,000         -
       Deferred tax liabilities                 (53,000)   (2,000)
                                                -------    -------
                                              $ (12,000)  $(1,000)
                                              ==========  ========
6. Net income per common share

Net  income  per  common share is based on the weighted  average number  of  
shares  outstanding during  the  years,   336,889,149 shares.









                                      F-11
<PAGE>
                       CLANCY SYSTEMS INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS

                          September 30, 1996 and 1997

7. Lease agreements - as lessee

The  Company  leases  office space under a  24  month lease  and manufacturing  
space under a 12 month lease, which  commenced  on June  1,  1996 and August 1, 
1996, respectively. The  office  and manufacturing rental  rates  are  $1,310  
and  $575  per  month, respectively.  Total rent expense for the years ended  
September 30, 1996 and 1997 amounted to $21,414 and $21,959, respectively.

The future minimum lease payments under these obligations are  as follows:

           Year ending September 30, 1998         $16,230
                                                  =======
8. Professional service contracts

The  Company  provides equipment and support services  under  12 month 
professional service contracts. At September 30, 1997,  all of  the contracts  
contained cancellation  provisions requiring notice of 30 days or less.

The  cost of the equipment provided in the contracts and  related accumulated 
depreciation are as follows at September 30:

                                                 1996       1997
                                                 ----       ---- 
    Equipment under service contracts       $ 1,276,677  $ 1,182,632
    Less accumulated depreciation              (839,213)    (852,345)
                                            -----------   ----------
                                            $   437,464  $   330,287
                                            ===========  ===========

Agreement with the Town of Cicero, Illinois:

On  February  15,  1996, the Company entered into  a three  year agreement with 
the Town of Cicero, Illinois, whereby the  Company issued  all  parking tickets 
for the City and provided collection services for  those parking tickets issued 
and  all outstanding parking  tickets previously issued by the City. As 
consideration, the  Company received all cash receipts from tickets  issued 
and previously issued.  The Company paid a  total  of  $750,000  for
commissions and amounts due to the Town. Amounts paid  pursuant to  the 
contract were amortized monthly on a straightline  basis over  the  period of
the agreement commencing April 1, 1996.  The Company has  maintained  a list
of receivables of  current and prior  ticket  issuances  totaling  
approximately $3,800,000  at September  30,  1997. The receivables are not
reflected  on  the Company's financial statements until the amounts are 
collected.

                                   F-12
<PAGE>

                    CLANCY SYSTEMS INTERNATIONAL, INC.

                      NOTES TO FINANCIAL STATEMENTS

                      September 30, 1996 and 1997

Effective December 5, 1996, the contract with the Town of  Cicero has been 
terminated.

9. Major customer and export sales

The  following  table  summarizes customers which accounted  for over 10% of 
revenues for the years ended September 30:

       Customer                                  1996       1997
       --------                                  ----       ----   
       A        - a city                            *        11%
       B   - a city                                33%       29%

   * less than 10% of total revenues

The  Company's export sales for the years ended September 30, by geographic 
area, are as follows:
                                                 1996       1997
                                                 ----       ----
       Canada                                $  86,000   $ 35,000
       England	                                61,000     35,000
                                              --------    -------

                                             $ 147,000  $  70,000
                                             =========   ========
10. Subsequent event

In October 1997, the Company  submitted a  bid for the privatization of the 
parking collections systems for a  city  in Virginia.  As a requirement of 
the bid, the Company  obtained  an irrevocable letter of credit in the 
amount of $190,000 with the Virginia bank, using proceeds from a $190,000 
bank loan.
















                                    F-13
<PAGE>