<PAGE>
 
                    U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, DC  20549



                                 FORM 10-QSB/A
                                        


                Quarterly Report Under Section 13 or 15(d) of 
                      The Securities Exchange Act of 1934
               For the Quarterly period ended September 30, 1997


                        Commission File Number 0-13741


                           ITC LEARNING CORPORATION
       -----------------------------------------------------------------
              (FORMERLY KNOWN AS INDUSTRIAL TRAINING CORPORATION)
       (Exact name of small business issuer as specified in its charter)


           MARYLAND                                             52-1078263
---------------------------------                         ----------------------
(State or other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                         Identification Number)


            13515 Dulles Technology Drive, Herndon, Virginia 20171
            ------------------------------------------------------
                   (Address of principal executive offices)


                                (703) 713-3335
                           -------------------------
                           Issuer's telephone number



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


 As of September 30, 1997, 3,897,034 shares of Common Stock were outstanding.

          Transitional Small Business Disclosure Format: Yes     No X
                                                             ---   ---
<PAGE>

This amendment replaces Item 1 as filed November 4, 1997 which contained a 
typographical misprint.

                                    PART I
                                        

ITEM 1.  FINANCIAL STATEMENTS


                           ITC LEARNING CORPORATION

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                  (Unaudited)
<TABLE>
<CAPTION>
 
 
                                     For the Three Months,       For the Nine Months
                                      Ended September 30,        Ended September 30,
                                       1997         1996          1997          1996
                                    ----------   ----------   -----------   -----------
<S>                                 <C>          <C>          <C>           <C>
 
Net revenues                        $7,088,571   $5,537,255   $16,297,834   $16,858,136
Cost of sales                        5,173,711    4,216,647     9,844,537    11,634,049
                                    ----------   ----------   -----------   -----------
Gross margin                         1,914,860    1,320,608     6,453,297     5,224,087
 
 
Selling, general, and
    administrative expense           2,420,161    2,332,357     8,953,365     6,672,337
Equity in earnings of affiliates      (159,389)     (56,163)     (198,503)     (168,520)
Interest income, net                   (55,140)    (125,553)     (138,473)     (368,074)
                                    ----------   ----------   -----------   -----------
 
                                     2,205,632    2,150,641     8,616,389     6,135,743
                                    ----------   ----------   -----------   -----------
 
Loss before income taxes              (290,772)    (830,033)   (2,163,092)     (911,656)
 
Income tax benefit                     (48,000)    (332,000)     (716,000)     (365,000)
                                    ----------   ----------   -----------   -----------
 
Net loss                            $ (242,772)  $ (498,033)  $(1,447,092)  $  (546,656)
                                    ==========   ==========   ===========   ===========
 
Net loss per common
    share (note 2)                  $    (0.06)  $    (0.14)  $     (0.37)  $     (0.15)
                                    ==========   ==========   ===========   ===========
Weighted average number
 of shares outstanding               3,897,034    3,632,455     3,897,027     3,595,064
                                    ==========   ==========   ===========   ===========
</TABLE> 


    See accompanying notes to condensed consolidated financial statements.

                                       1
<PAGE>
 
                           ITC LEARNING CORPORATION

                     CONDENSED CONSOLIDATED BALANCE SHEETS


                                    ASSETS
<TABLE>
<CAPTION>
 
 
                                                    September 30,   December 31,
                                                         1997           1996
                                                    -------------   ------------
                                                     (Unaudited)
<S>                                                 <C>             <C>
 
Current assets:
  Cash and cash equivalents                           $ 2,406,570    $ 2,697,566
  Accounts receivable, net (note 3)                     5,326,039      7,641,066
  Due from affiliates                                     100,194         36,768
  Inventories (note 6)                                  4,123,849      1,018,383
  Prepaid expenses                                        364,502        190,402
  Income tax receivable                                   278,595        689,104
  Other current assets                                      7,239              0
                                                      -----------    -----------
     Total current assets                              12,606,988     12,273,289
 
Long-term receivable (note 4)                           1,015,978      1,589,916
 
Property and equipment:
  Video and computer equipment                          3,790,507      3,361,923
  Furniture and fixtures                                  725,500        747,146
  Leasehold improvements                                  102,215         95,422
                                                      -----------    -----------
                                                        4,618,222      4,204,491
 
  Less accumulated depreciation and amortization       (3,557,723)    (2,963,197)
                                                      -----------    -----------
     Net property and equipment                         1,060,499      1,241,294
 
Capitalized program development costs, net              4,576,124      4,226,525
Intangible assets                                       3,653,526      3,975,840
Other                                                     558,715         67,461
                                                      -----------    -----------
                                                      $23,471,830    $23,374,325
                                                      ===========    ===========
</TABLE>

    See accompanying notes to condensed consolidated financial statements.
                                        

                                       2
<PAGE>
 
                           ITC LEARNING CORPORATION

                     CONDENSED CONSOLIDATED BALANCE SHEETS


                     LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
 
 
                                                       September 30,   December 31,
                                                            1997           1996
                                                       -------------   ------------
                                                        (Unaudited)
<S>                                                    <C>             <C>
 
Current liabilities:
  Line of credit (note 5)                                $         0    $   515,000
  Current installments of long-term debt                      34,515        130,745
  Accounts payable                                         1,124,244      1,331,079
  Due to affiliates                                          321,580        335,797
  Accrued compensation and benefits                          745,269        826,764
  Deferred revenues (note 6)                               4,711,373      1,458,945
  Other accrued expenses                                   1,156,199      1,619,326
                                                         -----------    -----------
     Total current liabilities                             8,093,180      6,217,656
 
Deferred lease obligations                                   102,829        113,020
Deferred income taxes                                              0        353,522
                                                         -----------    -----------
     Total liabilities                                     8,196,009      6,684,198
 
Stockholders' equity:
  Common stock, $.10 par value, 12,000,000 shares
     authorized; 3,897,034 and 3,896,924 issued
     and outstanding in 1997 and 1996, respectively          389,703        389,693
  Additional paid-in capital                              16,068,686     16,067,366
  Note receivable from ESOP                                  (67,177)      (143,677)
  Retained earnings (deficit)                             (1,070,347)       376,745
  Foreign currency translation adjustment                    (45,044)             0
                                                         -----------    -----------
     Total stockholders' equity                           15,275,821     16,690,127
                                                         -----------    -----------
     Total liabilities and stockholders' equity          $23,471,830    $23,374,325
                                                         ===========    ===========
</TABLE>

    See accompanying notes to condensed consolidated financial statements.
                                        

                                       3
<PAGE>
 
                           ITC LEARNING CORPORATION

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                  (Unaudited)
<TABLE>
<CAPTION>
 
                                                                  For Nine Months Ended September 30,
                                                                       1997               1996
                                                                    -----------        -----------
<S>                                                                 <C>                <C>
Cash flows from operating activities:
 Net loss                                                           $(1,447,092)       $  (546,656)
 Reconciling items:
  Deferred tax benefit                                                 (716,000)                --
  Depreciation and amortization                                       2,642,781          3,114,957
  Increase (decrease) in reserve for doubtful accounts                  106,515           (145,409)
  Salespeople awards of common shares                                       938                 --
  Foreign currency translation adjustment                               (45,044)                --
 Changes in operating assets and liabilities:
  Decrease (increase) in accounts receivable                          2,208,512         (2,961,499)
  Decrease (increase) in inventories                                 (3,105,466)           151,968
  Increase in prepaid expenses                                         (174,100)           (65,474)
  Decrease (increase) in other assets                                    17,910             (7,651)
  Decrease (increase) in income taxes receivable                        256,976           (435,200)
  Decrease (increase) in long term receivable                           573,938         (1,561,129)
  Increase (decrease) in accounts payable                              (206,835)         1,522,842
  Increase (decrease) in due to affiliates, net                         (77,643)           183,952
  Increase (decrease) in accrued compensation and benefits              (81,495)           181,548
  Increase in deferred revenues                                       3,252,428            683,156
  Increase (decrease) in other accrued expenses                        (463,127)           147,661
  Decrease in income taxes payable                                           --           (105,000)
  Decrease in deferred lease obligation                                 (10,191)           (12,335)
                                                                    -----------        -----------
 Net cash from operating activities                                   2,733,005            145,731
 
Cash flows from investing activities:
 Deferred program development costs                                  (2,075,540)        (3,750,374)
 Capital expenditures                                                  (413,731)          (346,597)
                                                                    -----------        -----------
 Net cash used in investing activities                               (2,489,271)        (4,096,971)
 
Cash flows from financing activities:
 Repayments under line of credit                                       (515,000)                --
 Principal payments of long-term debt                                   (96,230)           (88,710)
 Issuance of common stock                                                    --            129,513
 Employee stock ownership plan note collections                          76,500             80,500
                                                                    -----------        -----------
 Net cash provided by (used in) financing activities                   (534,730)           121,303
                                                                    -----------        -----------
 
Net increase (decrease) in cash                                        (290,996)        (3,829,937)
 
Cash and cash equivalents at beginning of period                      2,697,566         10,348,762
                                                                    -----------        -----------
 
Cash and cash equivalents at end of period                          $ 2,406,570        $ 6,518,825
                                                                    ===========        ===========
</TABLE>

    See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>
 
                           ITC LEARNING CORPORATION

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                              September 30, 1997

                                  (Unaudited)

1)  SIGNIFICANT ACCOUNTING POLICIES

a)  Basis of Presentation
    ---------------------

The condensed consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries  Activ Training, Ltd ("Activ"), ITC
Australasia Pty. Ltd. ("ITCA"), Anderson Soft-Teach ("AST") and ComSkill
Learning Centers, Inc. ("ComSkill").  Significant intercompany accounts and
transactions have been eliminated in consolidation.  In the opinion of the
Company, the interim condensed consolidated financial statements include all
adjustments, consisting of only normal recurring adjustments, necessary for a
fair presentation of the results for the interim periods.  Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted.  The interim condensed consolidated financial statements should be read
in conjunction with the Company's December 31, 1996 and 1995 audited financial
statements included with the Company's filing on Form 10-KSB.  The interim
operating results are not necessarily indicative of the operating results for
the full fiscal year.

b)  Revenues and Cost
    -----------------

Revenues include both off-the-shelf and custom courseware sales, courseware
licenses, consulting service revenues and hardware revenues.  The Company
recognizes revenues on off-the-shelf product and hardware sales as units are
shipped.  The Company permits the customer the right to return the courseware
within 30 days of purchase.  In the event that sales returns are material, the
Company adjusts revenue accordingly.  Revenues from sales of custom training
programs that are developed and produced under specific contracts with
customers, including contracts with affiliated joint ventures and limited
partnerships, are recognized on the percentage of completion basis as related
costs are incurred during the production period.  Gross revenues from sales of
affiliated joint venture and limited partnership copyrighted courseware are
included in the Company's financial statements, as are related production,
selling and distribution costs.  Amounts due to co-owners of the affiliated
venture/partnerships related to such courseware sales are reflected as royalties
and included in cost of sales in the financial statements.  Revenues from
courseware licenses are recognized upon the delivery of the initial copy of each
product licensed, and related duplication costs are accrued based on estimates.
Revenues from consulting services are recognized as services are performed.

2)  EARNINGS PER SHARE

In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share, which is required to be adopted on December 31, 1997.
At that time, the Company will be required to change the method currently used
to compute earnings per share and to restate all prior periods.  Under the new
requirement for calculating primary earnings per share, the dilutive effect of
stock options will be excluded.  The impact of Statement No. 128 on the
calculation of primary and fully diluted earnings per share for the quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997 is not expected to be
material.

                                       5
<PAGE>
 
3)  ACCOUNTS RECEIVABLE
 
Accounts receivable include the following:
<TABLE> 
<CAPTION> 
                                                           September 30,   December 31,
                                                               1997           1996
                                                            ----------     ----------
<S>                                                         <C>            <C> 
Trade accounts receivable                                   $4,877,262     $6,738,762
Current portion of long-term receivable, net (Note 3)          845,934      1,012,287
Unbilled contract receivables                                    5,321        182,025
Less allowance for doubtful accounts                          (402,663)      (296,148)
                                                            ----------     ----------
 Trade accounts receivable, net                              5,325,854      7,636,926
Other receivables                                                  185          4,140
                                                            ----------     ----------
                                                            $5,326,039     $7,641,066
                                                            ==========     ==========
</TABLE>

4)  LONG-TERM RECEIVABLE

During the second quarter of 1996, the Company entered into a contract with the
DeKalb County (GA) Board of Education ("DeKalb") for the sale of a district-wide
multicopy courseware license, hardware and certain future services.  The total
contract amount of $5,060,000 is payable in four installments, $1,535,000 upon
contract execution, and the remaining $3,525,000 in three equal annual
installments beginning in June, 1997.  The June 1997 installment was received in
accordance with the provisions of the contract and the effect of the payment is
reflected in the financial statements.  The long-term portion of the net
receivable has been discounted assuming a 6% interest rate.

Components of long-term receivable include the following:

                                                                   September 30,
                                                                       1997
                                                                       ----

  Receivable from DeKalb County (GA) Board of Education             $2,350,000
  Related dealer fees payable                                         (401,768)
  Less amounts classified as current, net of related dealer fees      (845,934)
  Less amount representing interest                                    (86,320)
                                                                    ---------- 
                                                                    $1,015,978
                                                                    ==========

5)  NOTE PAYABLE TO BANK

At September 30, 1997, the Company had no amounts outstanding relating to its
$3,000,000 revolving bank line of credit, which bears interest at the bank's
prime lending rate.  Borrowings under the line are collateralized by the
Company's accounts receivable and inventory.

6)  DEFERRED REVENUES

During the third quarter of 1997, the Company was selected by the DeKalb County
(GA) Board of Education (DeKalb) to furnish 3,120 personal computers to the
schools within the DeKalb School district.  The total sale was valued at
$5,749,560.  The computers are being installed during the third and fourth
quarters of 1997.  As of September 30, 1997, 1,260 computers have been
installed.  Accordingly, the Company has remaining balances of $3,122,220 in
hardware computer inventory and $3,457,620 in deferred revenues associated with
this transaction.

                                       6
<PAGE>
 
                                  SIGNATURES
                                        

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

ITC LEARNING CORPORATION
      (Registrant)



BY /s/ Christopher E. Mack                          DATE        11/7/97  
   --------------------------------------------          -----------------------
   Christopher E. Mack
   Vice President of Finance and Administration
   and Treasurer