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                       SECURITIES AND EXCHANGE COMMISSION


                             WASHINGTON, D.C. 20549
                             ----------------------



                                    FORM 10-Q



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



For the Quarter ended: September 30, 1997       Commission File Number 000-21685



                       INTELIDATA TECHNOLOGIES CORPORATION
             (Exact name of registrant as specified in its charter)

DELAWARE                                                              54-1820617
(State of incorporation)                 (I.R.S. Employer Identification Number)

               13100 Worldgate Drive, Suite 600, Herndon, VA 20170
                    (Address of Principal Executive Offices)
                                 (703) 834-8500
                         (Registrant's telephone number)




Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.
Yes   X        No
   -------       -------

The number of shares of the registrant's Common Stock outstanding on October 31,
1997 was 31,163,027.



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<PAGE>
                       INTELIDATA TECHNOLOGIES CORPORATION

                          QUARTERLY REPORT ON FORM 10-Q

                                TABLE OF CONTENTS




                                                                            Page
                                                                            ----
PART I - FINANCIAL INFORMATION

         Item 1.  Unaudited Condensed Consolidated Financial Statements

                  Condensed Consolidated Balance Sheets
                  September 30, 1997 and December 31, 1996.....................3

                  Condensed Consolidated Statements of Operations
                  Three and Nine Months Ended September 30, 1997 and 1996......4

                  Condensed Consolidated Statement of Changes in
                  Stockholders' Equity
                  Nine Months Ended September 30, 1997.........................5

                  Condensed Consolidated Statements of Cash Flows
                  Nine Months Ended September 30, 1997 and 1996................6

                  Notes to Condensed Consolidated Financial Statements.........7

         Item 2.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations...................................10


PART II - OTHER INFORMATION

         Item 1.  Legal Proceedings...........................................20

         Item 6.  Exhibits and Reports on Form 8-K............................20


SIGNATURES....................................................................21

<PAGE>
PART I:  FINANCIAL INFORMATION
------------------------------

ITEM 1:  FINANCIAL STATEMENTS
-----------------------------
<TABLE>
                       INTELIDATA TECHNOLOGIES CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
                        (in thousands, except share data)
<CAPTION>
                                                                                   1997           1996
                                                                                -----------    -----------
                                                                                (unaudited)
<S>                                                                             <C>            <C>
ASSETS
 CURRENT ASSETS
     Cash and cash equivalents                                                  $       305    $    26,644
     Short-term investments                                                          10,770         12,418
     Accounts receivable, net of reserves of
         $5,738 in 1997 and $1,788 in 1996                                           17,158         12,925
     Inventories                                                                     19,673         28,420
     Prepaid expenses and other current assets                                          396          2,582
                                                                                -----------    -----------
         Total current assets                                                        48,302         82,989

 NONCURRENT ASSETS
     Costs in excess of net assets acquired                                              --         50,061
     Property, plant and equipment, net                                               6,830          9,143
     Investments                                                                      1,267            253
     Other assets                                                                       309          1,300
                                                                                -----------    -----------
TOTAL ASSETS                                                                    $    56,708    $   143,746
                                                                                ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
  CURRENT LIABILITIES
     Accounts payable                                                           $     1,883    $     4,684
     Accrued expenses and other liabilities                                          10,507         12,773
     Short-term borrowings                                                            1,300          2,000
                                                                                -----------    -----------
TOTAL LIABILITIES                                                                    13,690         19,457

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value; authorized 5,000,000 shares;
   no shares issued and outstanding                                                      --             --
Common stock, $0.001 par value; authorized 60,000,000 shares;
   issued 31,844,527 shares in 1997 and 31,816,693 shares in 1996;
   outstanding 31,163,027 shares in 1997 and 31,816,693 shares in 1996                   32             32
Additional paid-in capital                                                          243,857        243,757
Treasury stock, at cost, 681,500 shares                                              (2,064)            --
Receivable from sale of stock                                                            --         (2,456)
Deferred compensation                                                                   (46)          (133)
Accumulated deficit                                                                (198,761)      (116,911)
                                                                                -----------    -----------
TOTAL STOCKHOLDERS' EQUITY                                                           43,018        124,289
                                                                                -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      $    56,708    $   143,746
                                                                                ===========    ===========
</TABLE>
     See accompanying notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
                       INTELIDATA TECHNOLOGIES CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                (in thousands, except per share data; unaudited)

<CAPTION>
                                             Three months ended            Nine months ended
                                                September 30,                September 30,
                                         --------------------------    --------------------------
                                            1997           1996           1997           1996
                                         -----------    -----------    -----------    -----------
<S>                                      <C>            <C>            <C>            <C>
REVENUES
     Telecommunications                  $    10,841    $       512    $    47,033    $     1,358
     Electronic commerce                         824            551          3,035          1,579
     Interactive services                         43             --             67             --
                                         -----------    -----------    -----------    -----------

         Total revenues                       11,708          1,063         50,135          2,937
                                         -----------    -----------    -----------    -----------

COST OF REVENUES
     Telecommunications                        9,018            573         33,643          1,266
     Electronic commerce                         500            130          2,002            709
     Interactive services                         40             --             60             --
                                         -----------    -----------    -----------    -----------

         Total cost of revenues                9,558            703         35,705          1,975
                                         -----------    -----------    -----------    -----------

         Gross profit                          2,150            360         14,430            962

OPERATING EXPENSES
     General and administrative                4,736          2,926         11,437          7,448
     Selling and marketing                     4,397            185         10,207            268
     Research and development                  2,751          5,700          7,335          6,875
     Unusual charges                          69,125             --         69,691             --
                                          ----------    -----------    -----------    -----------

         Total operating expenses             81,009          8,811         98,670         14,591
                                         -----------    -----------    -----------    -----------

         Operating loss                      (78,859)        (8,451)       (84,240)       (13,629)
                                         -----------    -----------    -----------    -----------

OTHER INCOME (EXPENSE)
     Interest, net                               299            306          1,184            998
     Equity in affiliate                        (600)          (537)         1,267         (1,431)
     Other                                        --            158             --            344
                                         -----------    -----------    -----------    -----------

         Total other income (expense)           (301)           (73)         2,451            (89)
                                         -----------    -----------    -----------    -----------

Loss before income taxes                     (79,160)        (8,524)       (81,789)       (13,718)
     Income taxes                                 18             --             61             --
                                         -----------    -----------    -----------    -----------

Net loss                                 $   (79,178)   $    (8,524)   $   (81,850)   $   (13,718)
                                         ===========    ===========    ===========    ===========

Net loss per common share                $     (2.51)   $     (0.53)   $     (2.58)   $     (0.86)
                                         ===========    ===========    ===========    ===========

Weighted average outstanding shares           31,497         16,044         31,711         15,903
                                         ===========    ===========    ===========    ===========
</TABLE>
     See accompanying notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
                       INTELIDATA TECHNOLOGIES CORPORATION
            CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                      NINE MONTHS ENDED SEPTEMBER 30, 1997
                            (in thousands; unaudited)
<CAPTION>


                                    Common stock     Additional              Receivable
                                   ---------------    paid-in     Treasury   from sale      Deferred     Accumulated
                                   Shares   Amount    capital       Stock     of stock    Compensation     Deficit        Total
                                   ------   ------   ----------   --------   ----------   ------------   -----------    ---------
<S>                                <C>      <C>      <C>          <C>        <C>          <C>            <C>            <C>
Balance at December 31, 1996       31,817   $   32   $  243,757   $      -   $   (2,456)      $   (133)  $  (116,911)   $ 124,289
  Issuance of common stock:
    Exercise of stock options           5        -            5          -            -              -             -            5
    Employee stock purchase plan       23        -           95          -            -              -             -           95
  Acquisition of treasury stock      (682)       -            -     (2,064)           -              -             -       (2,064)
  Unusual charges                       -        -            -          -        2,456              -             -        2,456
  Compensation expense                  -        -            -          -            -             87             -           87
  Net loss                              -        -            -          -            -              -       (81,850)     (81,850)
                                   ------   ------   ----------   --------   ----------       --------   -----------    ---------
Balance at September 30, 1997      31,163   $   32   $  243,857   $ (2,064)  $        -       $    (46)  $  (198,761)   $  43,018
                                   ======   ======   ==========   ========   ==========       ========   ===========    =========
</TABLE>

















     See accompanying notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
                       INTELIDATA TECHNOLOGIES CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                  NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                            (in thousands; unaudited)

<CAPTION>
                                                                                   1997               1996
                                                                                -----------        -----------
<S>                                                                             <C>                <C>
Cash flows from operating activities
Net loss                                                                        $   (81,850)       $   (13,718)
Adjustments to reconcile net loss to net cash used in
operating activities:
   Depreciation and amortization                                                      4,280                352
   Provision for bad debts                                                              550                 --
   Equity in affiliate                                                               (1,267)             1,431
Noncash unusual charges                                                              69,691                 --
   In-process research and development from acquired company                             --              4,914
   Deferred compensation and other noncash activities                                    87                114
   Changes in certain assets and liabilities, net of effects of noncash
     transactions:
       Accounts receivable                                                           (8,183)               222
       Inventories                                                                   (1,456)               (81)
       Prepaid expenses and other current assets                                      1,116               (132)
       Other assets                                                                     223               (802)
       Accounts payable                                                              (2,801)               (65)
       Accrued expenses and other liabilities                                        (4,762)               352
                                                                                -----------        -----------
             Net cash used in operating activities                                  (24,372)            (7,413)
                                                                                -----------        -----------

Cash flows from investing activities
       Net activity of short-term investments and restricted cash                     1,648             (1,013)
       Purchases of property and equipment                                             (951)            (1,702)
       Proceeds from sale of property and equipment                                      --                407
       Other investing activities                                                        --                (78)
                                                                                -----------        -----------
             Net cash provided by (used in) investing activities                        697             (2,386)
                                                                                -----------        -----------

Cash flows from financing activities
       Payment of short-term borrowings                                                (700)                --
       Payments to acquire treasury stock                                            (2,064)                --
       Proceeds from issuance of common stock                                           100              2,173
                                                                                -----------        -----------
             Net cash provided by (used in) financing activities                     (2,664)             2,173
                                                                                -----------        -----------

             Decrease in cash and cash equivalents                                  (26,339)            (7,626)

Cash and cash equivalents, beginning of period                                       26,644             25,120
                                                                                -----------        -----------

Cash and cash equivalents, end of period                                        $       305        $    17,494
                                                                                ===========        ===========
</TABLE>





     See accompanying notes to condensed consolidated financial statements.
<PAGE>
               INTELIDATA TECHNOLOGIES CORPORATION AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


(1)      Basis of Presentation

                  The condensed  consolidated  balance sheet as of September 30,
         1997, and the related condensed  consolidated  statements of operations
         for the three and nine month periods ended September 30, 1997 and 1996,
         and the  consolidated  statements  of cash  flows  for the  nine  month
         periods ended  September 30, 1997 and 1996  presented in this Form 10-Q
         represent the results of InteliData  Technologies  Corporation for 1997
         and the historical  results of US Order, Inc. ("US Order") for 1996. On
         November  7,  1996,  US Order  and  Colonial  Data  Technologies  Corp.
         ("Colonial   Data")  merged  with  and  into  InteliData   Technologies
         Corporation ("InteliData" or the "Company").

                  The condensed  consolidated  balance sheet of InteliData as of
         September 30, 1997, and the related condensed  consolidated  statements
         of operations for the three and nine month periods ended  September 30,
         1997 and 1996,  and the  consolidated  statements of cash flows for the
         nine month periods ended September 30, 1997 and 1996, are unaudited. In
         the  opinion  of  management,  all  adjustments  necessary  for a  fair
         presentation of such financial  statements have been included.  Interim
         results  are not  necessarily  indicative  of results  for a full year.
         Certain  amounts have been  reclassified to conform to the current year
         presentation.

                  The condensed  consolidated financial statements and notes are
         presented  as  required  by  Form  10-Q,  and  do not  contain  certain
         information   included  in  the  Company's  annual  audited   financial
         statements  and notes.  These  financial  statements  should be read in
         conjunction with the annual audited financial statements of the Company
         and the  notes  thereto,  together  with  management's  discussion  and
         analysis of financial condition and results of operations, contained in
         the Form 10-K for the fiscal year ended December 31, 1996.

(2)      New Accounting Standards

                  Statement of Financial  Accounting Standards No. 128, Earnings
         Per Share ("SFAS 128") was issued in February 1997 and is effective for
         financial  statements  issued after  December 15, 1997.  The  statement
         establishes  new standards for  computing and  presenting  earnings per
         share ("EPS") and will require restatement of prior years' information.
         This  statement  simplifies  the standards for computing EPS previously
         found in APB Opinion 15. It replaces  the  presentation  of primary and
         fully  diluted EPS with a  presentation  of basic EPS and diluted  EPS,
         requires a dual  presentation on the face of the financial  statements,
         and  requires  a  reconciliation  of  basic  EPS to  diluted  EPS.  The
         presentation  of basic EPS and  diluted EPS would have been the same as
         EPS actually reported for the respective periods.
<PAGE>
                  Statement of Financial Accounting Standards No. 130, Reporting
         Comprehensive  Income  ("SFAS  130")  was  issued  in June  1997 and is
         effective for financial  statements issued after December 15, 1997. The
         statement  establishes  new  standards  for  reporting  and  display of
         comprehensive income and its components (revenues, expenses, gains, and
         losses)  in  a  full  set  of  general-purpose   financial  statements.
         Management  has not yet  determined  the  impact  of SFAS 130 on future
         financial statement presentations.

                  Statement  of   Financial   Accounting   Standards   No.  131,
         Disclosures  about  Segments of an Enterprise  and Related  Information
         ("SFAS  131") was issued in June 1997 and is  effective  for  financial
         statements  issued after December 15, 1997. This Statement  establishes
         standards  for  the  way  that  public  business   enterprises   report
         information about operating segments in annual financial statements and
         requires  that those  enterprises  report  selected  information  about
         operating segments in interim financial reports issued to shareholders.
         It also establishes  standards for related  disclosures  about products
         and services, geographic areas, and major customers. Management has not
         yet  determined  the impact of SFAS 131 on future  financial  statement
         presentations.

 (3)     Investment in Joint Venture

                  As  previously  disclosed,  on August  4,  1997,  the  Company
         provided   notice  to  its  joint  venture   partner,   Blau  Marketing
         Technologies,  Inc.  ("BMT") of its intention to terminate the parties'
         joint venture in Worldwide  Telecom  Partners,  Inc. ("WTP")  effective
         September  5,  1997.  The  joint  venture  provided  telecommunications
         products  combined with  marketing  services to the  telecommunications
         industry.   As  of  September  30,  1997,  the  Company  wrote-off  its
         investment in the joint  venture and provided for certain  reserves for
         accounts receivable due from the joint venture.

                  The Company's  subsidiary filed suit in September 1997 against
         WTP, BMT and Barry Blau in Connecticut  Superior Court seeking  payment
         by WTP of past due accounts  receivable in the amount of  approximately
         $11.0  million and making  certain  other  claims  including  breach of
         contract.  BMT  filed a  separate  suit  against  the  Company  and its
         subsidiary,  WTP and John C. Backus on October 31, 1997 alleging breach
         of contract  and making  certain  other  claims and seeking  damages in
         excess of $15,000. The Company believes that its claims and defenses in
         the  above-described  actions are meritorious and intends to vigorously
         pursue its remedies.

(4)      Unusual Charges

                  During  the third  quarter  of 1997 the  Company  announced  a
         strategic  repositioning of the Company's  telecommunications  division
         based on recent  events in its  marketplace.  In  connection  with this
         repositioning  and corporate  restructuring,  the Company's  management
         evaluated  its  financial  position  and  determined  that it  would be
         appropriate to charge to operations the remaining intangible assets due
         to impairment,  adjust inventory  carrying amounts to the lower of cost
         or market, and reflect certain restructuring charges, including charges
         for separation  agreements  with employees and
<PAGE>   
         charges  associated with the termination of a joint venture agreement.
         Additionally,  the Company adjusted the carrying value of a receivable
         from  the  sale  of  stock  for an  advertising  credit  based  on the
         Company's expected use of the credit.  Such third quarter 1997 charges
         aggregated  $49,246,000  for  the  impairment  of  intangible  assets;
         $11,333,000   for   inventories   and   commitments;   $2,437,000  for
         restructuring charges and separation agreements; $3,653,000 for assets
         relating to the joint  venture;  and  $2,456,000 for impairment of the
         advertising  credits.  The  impairment  was based on the excess of the
         carrying  value of the assets over the assets' fair  values.  The fair
         value of the assets were  generally  determined  as the  estimates  of
         future cash flows generated by the assets.

(5)      Stock Options

                  In order to motivate  and retain  employees,  on May 21, 1997,
         the Company offered employees, except for the Chairman of the Board and
         the Chief  Executive  Officer,  participating  in the  Company's  Stock
         Option Plans the  opportunity  to replace any remaining  unvested stock
         options  as of May 21,  1997  with an equal  number  of  options  at an
         exercise  price of $6.00,  which was above the closing  market price on
         such date.  Approximately,  642,000 stock options with exercise  prices
         ranging from $6.38 to $23.75 were  replaced.  The  replacement  options
         vest over three years from May 21, 1997 in equal annual increments.

(6)      Stock Repurchase Program

                  On August 12, 1997,  the Company  announced  that its board of
         directors  authorized a stock repurchase program whereby the Company is
         authorized to repurchase  from time to time up to two million shares of
         the  Company's  common stock from the open market.  As of September 30,
         1997, the Company had paid  $2,064,000 to repurchase  681,500 shares of
         its common stock.

<PAGE>
ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
----------------------------------------------------------
         CONDITION AND RESULTS OF OPERATIONS
         -----------------------------------

RESULTS OF OPERATIONS
---------------------

The following  represents the results of operations for InteliData for the three
and nine months  ended  September  30, 1997 and 1996.  Results for the three and
nine months ended  September 30, 1997  represent the  operations of  InteliData;
results for the three and nine months ended September 30, 1996 were based on the
stand  alone  operations  of US Order,  Inc.,  the  predecessor  corporation  to
InteliData.

During the third quarter of 1997 the Company announced a strategic repositioning
of the  Company's  telecommunications  division  based on  recent  events in its
marketplace.  In connection with this repositioning and corporate restructuring,
the Company's management evaluated its financial position and determined that it
would be appropriate to charge to operations the remaining intangible assets due
to impairment, adjust inventory carrying amounts to the lower of cost or market,
and reflect  certain  restructuring  charges,  including  charges for separation
agreements with employees and charges associated with the termination of a joint
venture  agreement.  Additionally,  the Company adjusted the carrying value of a
receivable  from  the  sale of  stock  for an  advertising  credit  based on its
expected  use of the  credit.  The  impairment  was  based on the  excess of the
carrying value of the assets over the assets' fair values. The fair value of the
assets were generally determined as the estimates of future cash flows generated
by the assets.

On August 1, 1994, the Company  entered into an Acquisition  Agreement with Visa
International Services Association ("Visa"),  pursuant to which the Company sold
its electronic banking and bill payment operations to Visa for approximately $15
million,  the assumption of certain liabilities and the right to receive certain
royalties during a 72-month period commencing  January 1, 1995 (the "Acquisition
Agreement").  Visa  subsequently  licensed  certain  of  its  rights  under  the
Acquisition  Agreement  to  Visa  InterActive.   In  connection  with  Integrion
Financial Network,  LLC's ("Integrion")  acquisition of substantially all of the
assets of Visa InterActive, including Visa InterActive's license to Integrion to
use the Bill-Pay System,  effective September 30, 1997, the Company entered into
a  Settlement  Agreement  with Visa and Visa  InterActive  whereby  the  Company
received $5 million as a  non-refundable  prepayment  for any  royalty  payments
otherwise  owed  to  the  Company  from  Visa's  domestic  licensees,  including
Integrion,  until August 22, 1999.  Thereafter,  and until the expiration of the
Acquisition  Agreement  on December  31,  2000,  the Company  shall  receive all
royalty  payments  otherwise due to the Company from Visa's domestic  licensees,
including  Integrion,  as otherwise  provided in the Acquisition  Agreement.  In
addition, the Company is entitled to receive royalty payments from international
licensees to whom Visa may license the  Bill-Pay  System,  through  December 31,
2000.  The Company  intends to recognize the revenue from the prepaid  royalties
ratably through the third quarter of 1999.
<PAGE>
THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

Revenues

         The Company's third quarter  revenues were $11,708,000 in 1997 compared
to  $1,063,000  in 1996 an increase of  $10,645,000.  Revenues  generated by the
telecommunications  division were $10,841,000  during the third quarter of 1997.
Telecommunications  division revenues are generated primarily from marketing and
promotional  campaigns  for Caller ID units and services  conducted by telephone
operating  companies  and the Company.  Contributing  to the  telecommunications
revenues  were  $8,417,000  from the sale of  approximately  257,000  Caller  ID
adjuncts;  1,987 integrated telephones and 2,227 multi-line systems;  $1,987,000
from customers within a Caller ID leasing program; and $437,000 in the telephone
repair business. Telecommunications revenues for the fourth quarter are expected
to be in line with the Company's performance in the third quarter.

         The electronic  commerce division  contributed  $824,000 in revenues in
the third  quarter of 1997,  a 50%  increase  over the same  period in the prior
year.  The increase is primarily  attributed to the expansion of the  division's
software  sales and related  services  which  aggregated  $588,000 for the third
quarter of 1997.  Software  revenues were $274,000 for the third quarter of 1997
compared to $0 for the third quarter of 1996. Service fee revenues for the third
quarter of 1997 were $236,000  compared to $551,000 for the same period in 1996,
a decrease of $315,000.  The decrease is predominantly  related to a decrease in
the  Company's   customer  support  revenues,   which  are  remarketed  by  Visa
InterActive  to Visa  member  banks,  which  aggregated  $155,000  for the third
quarter of 1997  compared  to $422,000  for the same  period one year ago.  This
decrease is a result of a wind-down relating to the Company's termination of the
customer service agreement with Visa InterActive  announced in the first quarter
of 1997.  The customer  service  agreement  terminated  effective July 31, 1997.
Monthly service fees revenues decreased to $81,000 in 1997 from $140,000 for the
same period in 1996.  Monthly  service fees revenues are from  customers who use
the Company's  previous  generation smart telephones and associated  interactive
applications,  and the decrease was primarily  due to the  Company's  continuing
efforts to convert these customers to Visa member banks.

         The interactive  services  division  recorded revenue of $43,000 during
the third quarter of 1997 related to SmartTime(R) services that are available to
customers on a variety of small screen devices,  primarily screen telephones, as
well as consulting service revenue.

Cost of Revenues

         The Company's  third  quarter cost of revenues  increased to $9,558,000
for 1997  from  $703,000  for the same  period in 1996.  The  telecommunications
division  contributed  $9,018,000  of the total cost of revenues,  consisting of
$7,437,000  from the sale of  Caller  ID  adjuncts,  integrated  telephones  and
multi-line  system  shipments;  $1,254,000 from leasing  activities and $327,000
from telephone repair services.
<PAGE>
         The electronic commerce division reported cost of revenues  aggregating
$500,000 for the third  quarter of 1997 or a 284%  increase over the same period
in the prior year. Cost of revenues from the electronic commerce division during
the third quarter of 1997  consisted of  consulting  and  professional  services
including service cost of revenue related to generating monthly fee revenues.

         The interactive  services division recorded cost of revenues of $40,000
during the third  quarter of 1997.  The Company  expects that because of certain
fixed fees and expenses associated with providing interactive services, the cost
of revenues for this division will remain high as a percentage of revenues.

         Overall gross profit margins  decreased to 18% for the third quarter of
1997  from 34% for the third  quarter  of 1996.  Gross  profit  margins  for the
telecommunications,  electronic commerce and interactive services divisions were
17%, 39% and 7%,  respectively  for the third quarter of 1997.  The gross profit
margin  derived from the sale of Caller ID adjuncts,  integrated  telephones and
multi-line systems was 12% for the third quarter of 1997.  Primarily,  Caller ID
adjunct   sales   contributed   to  the   low   margin   associated   with   the
telecommunications  product sales as the Company sold certain adjuncts at prices
below original  cost.  Accordingly,  the Company  incurred a charge in the third
quarter  to  write  down  its  inventories.  During  the  quarter,  the  Company
experienced severe pricing pressures from competition in Caller ID adjuncts. The
market for the Company's  telecommunications  products is highly competitive and
is also subject to increased pressures resulting from rapid technological change
and the emergence of new market entrants.  The Company's management expects such
pricing pressures for its telecommunications  products to continue in the future
and accordingly,  the Company is reviewing various outsourcing  arrangements for
products. See Unusual Charges.

General and Administrative

         General  and  administrative  expenses  were  $4,736,000  for the third
quarter of 1997 as  compared  to  $2,926,000  in the third  quarter of 1996,  an
increase of 62% over the same period last year.  The increase of $1,810,000  was
primarily  the result of  additional  staff  obtained  through  the merger  with
Colonial  Data  and the  acquisition  of  Braun,  Simmons  & Co.,  Inc.  ("Braun
Simmons") in September  1996, and upgrading  network  systems and operations and
specific  increases  in  legal  fees  primarily  for  the  defense  of a  patent
infringement  lawsuit in the amount of $532,000  (with  summary  judgment on the
infringement  claims  entered on October 23, 1997 in favor of the Company by the
United States District Judge) and an increase in the Company's provision for bad
debts in the amount of  $963,000.  Throughout  the  remainder  of the year,  the
Company  expects to control  general and  administrative  expenses  and plans to
continually  assess its operations in managing the continued  development of the
Company's infrastructure.

Selling and Marketing

         Selling and marketing  expenses  increased to $4,397,000  for the third
quarter of 1997 from  $185,000  for the same  period  last year.  The Company is
increasing its marketing efforts in promoting its residential and small business
telecommunications  product  lines to retail  markets and to the  regional  Bell
operating  companies  and  other  telephone  operating  companies  with
<PAGE>
whom the Company generates  product,  lease and service  revenues.  In the third
quarter of 1997,  selling and marketing  expenses were related  primarily to the
support  of  the  Company's   telecommunications   division   customer   service
department,  development of innovative  marketing programs,  advertising through
trade  publications and trade shows,  introduction of the multi-line  systems in
the retail market,  supporting payroll for the Company's sales force and working
with  third  party  vendors to sell  telecommunications  products.  The  Company
expects selling and marketing  expenses to fluctuate  widely in future reporting
periods  based on the timing of  marketing  campaigns  and the support of retail
sales.

         Selling and marketing expenses  associated with the electronic commerce
division and interactive  services divisions  aggregated  $564,000 and $230,000,
respectively  for the  three  months  ended  September  30,  1997.  The  Company
regularly markets and promotes the Company's home banking connectivity  products
to financial  institutions  and interactive  services  products to telephone and
paging companies and other distribution channels.

Research and Development

         Research and development  costs were $2,751,000 in the third quarter of
1997 as compared to  $5,700,000  for the same  period in 1996.  The  decrease of
$2,949,000 was largely  attributable to the  recognition of in-process  research
and development expenses of $4,914,000  associated with the acquisition of Braun
Simmons in 1996.  Exclusive of the in-process research and development charge in
1996,  the Company  increased  research and  development  expenses by $1,965,000
primarily   relating   to  the   developing,   designing   and  testing  of  new
telecommunications   products,  and  the  Company's  home  banking  connectivity
products  and,  the  Company's  two-line  smart  telephone  and  its  associated
interactive  services.  The Company has been  actively  engaged in research  and
development  since its  inception  and  expects  that these  activities  will be
essential to the  operations of the Company in the future.  The Company  expects
research and development costs to remain consistent with the third quarter level
during the remainder of 1997.

Unusual Charges

         Unusual charges  aggregated  $69,125,000 for the third quarter of 1997.
The unusual charges are associated  primarily with a strategic  repositioning of
the  Company's  telecommunications  division  based  on  recent  events  in  its
marketplace  announced in the third  quarter of 1997.  In  connection  with this
repositioning and corporate  restructuring,  the Company's  management evaluated
its financial  position and determined that it would be appropriate to charge to
operations the remaining  intangible assets due to impairment,  adjust inventory
carrying  amounts  to  the  lower  of  cost  or  market,   and  reflect  certain
restructuring   charges,   including  charges  for  separation  agreements  with
employees  and  charges  associated  with  the  termination  of a joint  venture
agreement. Additionally, the Company adjusted the carrying value of a receivable
from the sale of stock for an advertising credit based on the Company's expected
use of the credit.  Such third quarter 1997 charges  aggregated  $49,246,000 for
the  impairment  of  intangible   assets;   $11,333,000   for   inventories  and
commitments;  $2,437,000 for  restructuring  charges and separation  agreements;
$3,653,000  for  assets  relating  to the  joint  venture;  and  $2,456,000  for
impairment of the advertising credits. The impairment was
<PAGE>
based on the excess of the  carrying  value of the assets over the assets'  fair
values. The fair value of the assets were generally  determined as the estimates
of future cash flows generated by the assets.

Other Income (Expense)

         Other income  (expense)  was  $(301,000)  for the third quarter of 1997
compared to $(73,000)  for the same period in the prior year.  Interest  income,
net was  $299,000  for the third  quarter of 1997  compared to $306,000  for the
third quarter of 1996. The decrease of $7,000 was due to lower average  balances
for cash,  equivalents and short-term  investment balances for the third quarter
of 1997  compared to the third  quarter of 1996.  The Company  incurred  minimal
interest expense in the third quarter of 1997 and 1996. During the third quarter
of 1997, the Company adjusted its investment in Home Financial Network,  Inc. by
$(600,000)  based upon  expected  operations  of this  company and in 1996,  the
Company  incurred  a loss  of  $(537,000)  in its  proportionate  share  of Home
Financial  Network,  Inc. and recognized other income from the sale of assets of
$158,000.

Weighted Average Outstanding Shares and Net Loss Per Common Share

         The primary and fully  diluted  weighted  average  shares  increased to
31,497,000  for the third quarter of 1997  compared to 16,044,000  for the third
quarter  of  1996.  The  increase  resulted  primarily  from  shares  issued  in
connection with the  acquisition of Braun,  Simmons and the merger with Colonial
Data in September and November 1996, respectively.

         As a result of the foregoing, net loss per common share was $(2.51) for
the third quarter of 1997 compared to $(0.53) for the third quarter of 1996.


NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

Revenues

         The  Company's  first  nine month  revenues  were  $50,135,000  in 1997
compared to $2,937,000 in 1996 an increase of $47,198,000. Revenues generated by
the telecommunications division were $47,033,000 during the first nine months of
1997.   Telecommunications   division  revenues  are  generated  primarily  from
marketing and promotional  campaigns for Caller ID units and services  conducted
by  telephone  operating   companies  and  the  Company.   Contributing  to  the
telecommunications  revenues  were  $38,240,000  from the sale of  approximately
1,195,500 Caller ID adjuncts,  65,737 integrated telephones and 5,298 multi-line
systems;  $7,008,000  from  customers  within a US West  Communications  leasing
program; and $1,785,000 in the telephone repair business.

         The electronic commerce division contributed  $3,035,000 in revenues in
the first nine months of 1997, a 92% increase  over the same period in the prior
year.  The increase is primarily  attributed to the expansion of the  division's
software sales and related  services which  aggregated  $1,717,000 for the first
nine months of 1997.  Software  revenues were $965,000 for the nine
<PAGE>
months ended  September  30, 1997 compared to $133,000 for the nine months ended
September 30, 1996.  Service fee revenues for the first nine months of 1997 were
$1,313,000  compared to  $1,579,000  for the same period in 1996,  a decrease of
$266,000.  The service fees  revenues  were  generated  primarily  from customer
support  services and monthly  service  fees.  The  Company's  customer  support
revenues,  which  are  remarketed  by Visa  InterActive  to Visa  member  banks,
aggregated  $1,043,000 for the first nine months of 1997, compared to $1,138,000
for the same period in the prior year.  Monthly service fees revenues  decreased
to $270,000 in 1997 from $290,000 for the same period in 1996.  Monthly  service
fees revenues are from customers who use the Company's previous generation smart
telephones  and  associated  interactive  applications,  and  the  decrease  was
primarily due to the Company's  continuing efforts to convert these customers to
Visa member banks.

         The interactive  services division recorded revenues of $67,000 for the
first nine months related to bill-pay  subscriptions  and SmartTime(R)  services
that are available to customers on a variety of small screen devices,  primarily
screen telephones, as well as consulting service revenue.

Cost of Revenues

         The  Company's  first  nine  months  cost  of  revenues   increased  to
$35,705,000  for  1997  from  $1,975,000  for  the  same  period  in  1996.  The
telecommunications  division  contributed  $33,643,000  of  the  total  cost  of
revenues,  consisting of  $28,581,000  from the sale of Caller ID and multi-line
product  shipments;  $3,920,000  from leasing  activities  and  $1,142,000  from
telephone repair services.

         The electronic commerce division reported cost of revenues  aggregating
$2,002,000  for the first nine months of 1997 or a 182%  increase  over the same
period in the prior year. Cost of revenues from the electronic commerce division
during  the first nine  months of 1997  consisted  of  software  product  sales,
customer service expenses,  and consulting and professional  services  including
service cost of revenue related to generating monthly fee revenues.

         The interactive  services division recorded cost of revenues of $60,000
during  the first nine  months of 1997.  The  Company  expects  that  because of
certain fixed fees and expenses associated with providing  interactive services,
the cost of revenues  for this  division  will remain  high as a  percentage  of
revenues.

         Overall gross profit margins decreased to 27% for the first nine months
of 1997 compared to 33% for the first nine months of 1996.  Gross profit margins
for  the  telecommunications,   electronic  commerce  and  interactive  services
divisions were 28%, 34% and 10%, respectively for the first nine months of 1997.
The gross  profit  margin  derived  from the sale of  Caller  ID and  multi-line
products was 29% for the first nine months of 1997.  During the third quarter of
1997,  the Company  experienced  severe pricing  pressures  from  competition in
Caller  ID  adjuncts  which  contributed  to a  charge  to  write  down  certain
inventories.  The market for the Company's telecommunications products is highly
competitive  and is also subject to  increased  pressures  resulting  from rapid
technological  change and the  emergence of new market  entrants.  The Company's
management  expects  such  pricing  pressures  to  continue  in the  future  and
<PAGE>
accordingly,  the Company is  reviewing  various  outsourcing  arrangements  for
products. See Unusual Charges.

General and Administrative

         General and administrative expenses were $11,437,000 for the first nine
months of 1997 as compared to $7,448,000  in the first nine months of 1996.  The
increase of $3,989,000  was primarily  the result of additional  staff  obtained
through the merger with Colonial Data and the  acquisition  of Braun Simmons and
upgrading network systems and operations. Additionally, during the third quarter
of 1997, the Company incurred specific increases in legal fees primarily for the
defense of a patent infringement lawsuit in the amount of $532,000 (with summary
judgment on the infringement  claims entered on October 23, 1997 in favor of the
Company by the United  States  District  Judge) and an increase in the Company's
provision  for bad debts in the amount of  $963,000.  Throughout  the year,  the
Company  expects to control  general and  administrative  expenses  and plans to
continually  assess its operations in managing the continued  development of the
Company's infrastructure.

Selling and Marketing

         Selling and marketing  expenses  increased to $10,207,000 for the first
nine months of 1997 from $268,000 for the same period last year.  The Company is
increasing its marketing efforts in promoting its residential and small business
telecommunications  product  lines to retail  markets and to the  regional  Bell
operating  companies  and  other  telephone  operating  companies  with whom the
Company generates its telecommunications product, lease and service revenues. In
the first nine  months of 1997,  selling and  marketing  expenses  were  related
primarily  to the support of the  Company's  customer  service  department,  the
development  of  innovative   marketing  programs,   advertising  through  trade
publications and trade shows,  introducing the multi-line  systems in the retail
market,  initiating a direct sales force,  organizing  direct mail campaigns for
smart telephones,  paying payroll for the Company's sales force and working with
telemarketers and other third party vendors to sell telecommunications products.

         Selling and marketing expenses  associated with the electronic commerce
division and interactive  services divisions  aggregated  $922,000 and $559,000,
respectively for the nine months ended September 30, 1997. The Company regularly
markets  and  promotes  the  Company's  home  banking  connectivity  products to
financial institutions and interactive services products to telephone and paging
companies and other distribution channels.

Research and Development

         Research and development costs were $7,335,000 in the first nine months
of 1997 as compared to $6,875,000  for the same period in 1996.  The increase of
$460,000 was largely  attributable  to a recognition of in-process  research and
development  expenses of $4,914,000  associated  with the  acquisition  of Braun
Simmons  in the  third  quarter  of  1996.  Exclusive  of the  reclassification,
research and  development  charges  increased by $5,374,000 over the same period
last year. This increase is attributed to developing,  designing and testing new
telecommunications products and the Company's home banking connectivity products
and
<PAGE>
support  services and the  Company's  next  generation  smart  telephone and its
associated  interactive  services.  The  Company  has been  actively  engaged in
research and development  since its inception and expects that these  activities
will be essential to the  operations  of the Company in the future.  The Company
expects research and development costs to remain consistent during the remainder
of 1997.

Unusual Charges

         Unusual  charges  aggregated  $69,691,000  for the  nine  months  ended
September  30,  1997.  The unusual  charges  relate  primarily  with a strategic
repositioning  of the  Company's  telecommunications  division  based on  recent
events in its marketplace  announced in the third quarter of 1997. In connection
with this repositioning and corporate  restructuring,  the Company's  management
evaluated its financial  position and determined that it would be appropriate to
charge to operations the remaining  intangible assets due to impairment,  adjust
inventory  carrying amounts to the lower of cost or market,  and reflect certain
restructuring   charges,   including  charges  for  separation  agreements  with
employees  and  charges  associated  with  the  termination  of a joint  venture
agreement. Additionally, the Company adjusted the carrying value of a receivable
from the sale of stock for an advertising credit based on the Company's expected
use of the credit.  Such third quarter 1997 charges  aggregated  $49,246,000 for
the  impairment  of  intangible   assets;   $11,333,000   for   inventories  and
commitments;  $2,437,000 for  restructuring  charges and separation  agreements;
$3,653,000  for  assets  relating  to the  joint  venture;  and  $2,456,000  for
impairment of the advertising credits. The impairment was based on the excess of
the carrying value of the assets over the assets' fair values. The fair value of
the assets  were  generally  determined  as the  estimates  of future cash flows
generated by the assets.

Other Income (Expense)

         Other income (expense) was $2,451,000 for the first nine months of 1997
compared to $(89,000)  for the same period in the prior year.  Interest  income,
net was  $1,184,000  for the first nine months of 1997  compared to $998,000 for
the first nine months of 1996.  The  increase of $186,000  was due to  increased
cash,  equivalents and short-term  investment balances for the first nine months
of 1997  compared  to the first nine  months of 1996,  primarily  related to the
merger with  Colonial  Data which  provided  additional  cash,  equivalents  and
short-term investment balances. The Company incurred minimal interest expense in
the first nine months of 1997 and 1996.  The Company  recorded its equity in its
investment in Home Financial  Network,  Inc. of $1,267,000 and in the first nine
months of 1996, the Company  incurred a loss of $1,431,000 in its  proportionate
share of Home Financial  Network,  Inc. and recognized  other income,  primarily
from the sale of assets of $344,000.

Weighted Average Outstanding Shares and Net Loss Per Common Share

         The primary and fully  diluted  weighted  average  shares  increased to
31,711,000  for the first nine  months of 1997  compared to  15,903,000  for the
first nine months of 1996. The increase resulted primarily from shares issued in
connection with the  acquisition of Braun,  Simmons and the merger with Colonial
Data in September and November 1996, respectively.
<PAGE>
         As a result of the foregoing, net loss per common share was $(2.58) for
the first nine months of 1997 compared to $(0.86) for the third quarter of 1996.


LIQUIDITY AND CAPITAL RESOURCES

         During the first nine months of 1997, the Company's  cash,  equivalents
and short-term  investments  decreased by $26,339,000 resulting from the payment
of outstanding  liabilities at December 31, 1996 and the financing of operations
and certain accounts receivable balances. At September 30, 1997, the Company had
$11,075,000 in cash,  equivalents and short-term  investments that were invested
in  financial  instruments  that  are  diversified  among  high  credit  quality
securities.  The investments  are reported at cost,  which  approximates  market
value,  and are  classified  as  short-term  investments  and cash  equivalents.
Additionally,  at  September  30,  1997,  the  Company  had  working  capital of
$34,612,000  with no long-term  debt. The Company's  total assets exceeded total
liabilities by $43,018,000.

         During the first nine months of 1997, cash used in operating activities
was $24,372,000 compared to $7,413,000 in the same period in 1996. This increase
was primarily related to funding  operations,  financing an increase in accounts
receivable of $8,183,000, funding net payments from accounts payable and accrued
expenses of  $7,563,000,  offset in part by  decreases in  inventories,  prepaid
expenses and other assets aggregating $3,762,000.

         Investing  activities provided $697,000 during the first nine months of
1997 compared to using  $2,386,000 in the same period in 1996.  Cash provided by
investing  activities  was  primarily  contributed  by the  sale  of  short-term
investments  offset in part by the purchase of certain  property and  equipment,
primarily to support an upgrade for the Company's internal networks.

         Financing  activities  used $2,664,000 in the first nine months of 1997
compared  to  providing  $2,173,000  in the same  period in 1996.  Current  year
activities consisted of the repurchasing of shares of the Company's common stock
for $2,064,000,  net changes in short-term  borrowings from December 31, 1996 in
the amount of $700,000  offset by proceeds  received from the issuance of common
stock  during the first  nine  months of 1997.  During the first nine  months of
1996, the Company received $2,173,000 from the issuance of common stock.

         The Company's  primary needs for cash in the future are for investments
in product development,  working capital, the financing of operations, strategic
ventures,  capital  expenditures  and the upgrade of the  Company's  systems and
operations.  In order to meet the Company's  needs for cash throughout the year,
the Company will utilize cash and short-term investments and may utilize, to the
extent available,  funds generated from operations through the remainder of 1997
through the collections of accounts receivable and sale of inventories.
<PAGE>
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

         The  above  information  includes   forward-looking   statements,   the
realization  of which  may be  impacted  by the  factors  discussed  below.  The
forward-looking  statements  are made pursuant to the safe harbor  provisions of
the Private  Securities  Litigation Reform Act of 1995 (the "Act").  This report
contains forward looking statements that are subject to risks and uncertainties,
including,  but not limited to, the Company's ability to successfully  implement
its recently announced  telecommunications  business strategy,  the effects of a
down-sized  workforce on its  operations,  the impact of  competitive  products,
pricing pressure, product demand and market acceptance risks, timing of customer
programs,   reliance  on  key  strategic  alliances,   the  outcome  of  pending
litigation,  the  ability to attract  and  retain key  employees,  manufacturing
delays,   outsourcing  partners,   the  availability  of  key  component  parts,
availability  of cash for growth,  product  obsolescence,  inventory  levels and
valuations,  ability to reduce product costs, fluctuations in operating results,
ability to continue funding  operating  losses,  delays in development of highly
complex  products and other risks  detailed  from time to time in the  Company's
filings with the Securities and Exchange Commission,  including the risk factors
disclosed  in the  Company's  Form 10-K for the fiscal year ended  December  31,
1996.  These risks could cause the Company's  actual results for 1997 and beyond
to differ materially from those expressed in any forward looking statements made
by, or on behalf of, the Company.  The foregoing  list of factors  should not be
construed  as  exhaustive  or  as  any  admission   regarding  the  adequacy  of
disclosures made by the Company prior to the date hereof or the effectiveness of
said Act.
<PAGE>
PART II: OTHER INFORMATION
--------------------------

ITEM 1.  LEGAL PROCEEDINGS
--------------------------

         The Company's subsidiary filed suit in September 1997 against Worldwide
Telecom Partners,  Inc. ("WTP"), Blau Marketing  Technologies,  Inc. ("BMT") and
Barry Blau in  Connecticut  Superior  Court  seeking  payment by WTP of past due
accounts  receivable  in the amount of  approximately  $11.0  million and making
certain other claims  including  breach of contract.  WTP is a terminated  joint
venture which  provided  telecommunications  products  combined  with  marketing
services  to telcos.  BMT filed a separate  suit  against  the  Company  and its
subsidiary,  WTP and John C.  Backus on  October  31,  1997  alleging  breach of
contract  and  making  certain  other  claims and  seeking  damages in excess of
$15,000.   The   Company   believes   that  its  claims  and   defenses  in  the
above-described  actions are  meritorious  and intends to vigorously  pursue its
remedies.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------

(a)      Exhibits

         10.28    Employment Agreement dated August 11, 1997 between InteliData
                  Technologies Corporation and John C. Backus, Jr.

(b)      Reports on Form 8-K

         None

<PAGE>

                                   SIGNATURES



         Pursuant  to the  requirements  of the  Securities  Act  of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.



                                 INTELIDATA TECHNOLOGIES CORPORATION



                                 By: /s/ John C. Backus
                                     ----------------------------------------
                                     John C. Backus
                                     President and Chief Executive Officer




                                 By: /s/ John W. Hillyard
                                     ----------------------------------------
                                     John W. Hillyard
                                     Vice President and Chief Financial Officer