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                          SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549
                                      FORM 10-K/A
                                   (AMENDMENT N0. 1)
(Mark One)
    X    ANNUAL REPORT PURSUANT TO Section 13 OR 15(d) OF THE SECURITIES
  -----  EXCHANGE ACT OF 1934 (Fee Required)
         For the fiscal year ended June 30, 1996
         OR
         TRANSITION REPORT PURSUANT TO Section 13 OR 15(d) OF THE SECURITIES
  -----  EXCHANGE ACT OF 1934 (No Fee Required)  For the transition period from
         _____ to _____

                           Commission file number: 0-26222
                                 ONTRAK SYSTEMS, INC.
                (Exact name of registrant as specified in its charter)
    CALIFORNIA                                             77-0074302
(State of incorporation)               (IRS employer identification number)

                       1010 RINCON CIRCLE, SAN JOSE, CA  95131
                (Address of principal executive offices and zip code)

                                    (408) 577-1010
                 (Registrant's telephone number, including area code)

             Securities registered pursuant to Section 12(b) of the Act:

Title of each class                       Name of Exchange on which registered
-------------------                       ------------------------------------
      NONE                                                NONE

             Securities registered pursuant to Section 12(g) of the Act:
                              COMMON STOCK, NO PAR VALUE
                                   (Title of Class)

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
                             ----                          ----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K.  [  ]

The aggregate market value of the voting stock held by non-affiliates of the
registrant, based upon the closing sale price of the Common Stock on August 31,
1996, as reported on the Nasdaq National Market, was approximately $56,900,302.
Shares of Common Stock held by each officer, director and holder of 5% or more
of the outstanding Common Stock have been excluded in that such persons may be
deemed to be affiliates.  This determination of affiliate status is not
necessarily a conclusive determination for other purposes.

Outstanding shares of COMMON STOCK, NO PAR VALUE, as of August 31, 1996:
7,557,964

                         DOCUMENTS INCORPORATED BY REFERENCE

Parts of the registrant's Proxy Statement for its Annual Meeting of 
Shareholders held on November 21, 1996 are incorporated by reference into 
Part III of this Form 10-K Report.

<PAGE>

This Amendment to Form 10-K Report is filed to provide additional disclosure 
concerning the biographies of the Company's directors and executive officers 
in Item 10 and to file an additional agreement as an exhibit.


                                      1
<PAGE>

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

    The names and certain information about the executive officers and 
directors of the Company are as follows:

    NAME                          AGE       POSITION

    James W. Bagley               57        Chairman of the Board of Directors
                                            and Chief Executive Officer

    Jerauld J. Cutini             37        Executive Vice President, Strategic,
                                            Marketing, Business Management and 
                                            Customer Service, Secretary 
                                            and Director

    Patrick C. O'Connor           48        Vice President, Chief Financial
                                            Officer and Assistant Secretary

    Wilbur Krusell, Ph.D.         48        Executive Vice President, Process
                                            Technology, and Chief Technical
                                            Officer

    Michael C. Child              41        Director

    Richard J. Elkus, Jr.         61        Director

    Gary Hultquist                53        Director

    Mr. Bagley has served as Chairman of the Board and Chief Executive 
Officer of the Company since June 1996.  Prior to joining OnTrak, Mr. Bagley 
was employed by Applied Materials, Inc., a semiconductor equipment company, 
for 15 years in various management positions, most recently as Vice Chairman 
of the Board of Directors.  He joined Applied Materials in 1981 as Senior 
Vice President, was Chief Operating Officer from 1987 through October 1995, 
served as President from December 1987 to December 1993, and was appointed 
Vice Chairman of the Board of Directors in December 1993.  Mr. Bagley was 
employed by Texas Instruments, a semiconductor manufacturer, before he joined 
Applied Materials.  Mr. Bagley is also a director of Tencor Instruments, a 
semiconductor equipment company, Teradyne, Inc., a semiconductor equipment 
company, and Kulicke and Soffa Industries, Inc., a semiconductor equipment 
company.

    Mr. Cutini joined the Company in August 1990 as Vice President of Sales. 
He has served as a director of the Company since November 1990. He served as 
the Company's Chief Financial Officer from November 1990 until September 
1992.  He became Secretary in September 1992, and became Executive Vice 
President, Sales and Marketing in November 1994.  From February 1989 to 
August 1990, Mr. Cutini was Senior Sales Engineer for Applied Materials. From 
September 1988 to February 1989, Mr. Cutini was Western Regional Sales 
Manager for Solitec, Inc., a semiconductor equipment company. From May 1981 
to September 1988, Mr. Cutini was employed by Silicon Valley Group, a 
semiconductor equipment company, in various positions in sales, marketing, 
and customer service.

    Mr. O'Connor joined the Company in June 1992 and has served as
Vice-President, Chief Financial Officer and Assistant Secretary since
September 1992. He served as a director of the Company from September 1992 to
November 1994. Mr. O'Connor was an independent management consultant from
May 1991 through December 1994, when he became a full-time employee of the
Company.  From 1979 to May 1991, Mr. O'Connor was employed by Silicon Valley
Group, in various positions, including Senior Vice President of Corporate
Development; Vice President, Operations; and Vice President of Customer
Services.  From 1973 to 1979, Mr. O'Connor was the Chief Financial Officer or
Corporate Controller for the Semiconductor Equipment Division of Eaton
Corporation and its predecessors.

    Dr. Krusell joined the Company in November 1992 as Vice President, 
Process Technology, and Chief Technical Officer. From February 1992 to 
October 1992, Dr. Krusell was employed by Watkins-Johnson Company, a 
semiconductor equipment company, first as Manager, Single Wafer Process 
Research and Development, and subsequently as Manager of CVD Research and 
Development. From September 1990 to January 1992, Dr. Krusell was Director of 
Process Development for Advantage Production Technology, Inc., a 
semiconductor equipment company. From 1976 to September 1990, Dr. Krusell was 
employed by MEMC, a manufacturer of silicon wafers, in various positions, 
most recently as Wafer Process Manager.

    Mr. Child has served as a director of the Company since November 1994. 
Mr. Child has been employed by TA Associates, Inc., a venture capital firm, 
or it predecessor, since July 1982, and has been a partner of affiliated 
venture funds since January 1986. Mr. Child has been a Managing Director of 
TA Associates, Inc. for more than the past 5 years. Mr. Child is also a 
director of Ultratech Stepper, Inc., a semiconductor equipment company, and 
Sonic Solutions, a professional audio company.

    Mr. Elkus has served as a director of the Company since August 1996. He 
has been Vice Chairman of the Board and Executive Vice President of Tencor 
Instruments since February 1994. Mr. Elkus was one of the founders of 
Prometrix Corporation, a semiconductor equipment company, which was acquired 
by Tencor in February 1994. Mr. Elkus was the Chairman of the Board and Chief 
Executive Officer of Prometrix from 1983 until February 1994.

    Mr. Hultquist has served as a director of the Company since April 1995.
Since July 1996, Mr. Hultquist has served as Chairman of the Board and Chief
Executive Officer of Titanium Memory Systems, Inc., a development stage company
that has developed and is preparing to manufacture high performance titanium
substrates for the computer disk drive industry. Since September 1995, Mr.
Hultquist has served as Managing Director of Hultquist Capital, Inc., a
financial services and consulting firm which specializes in advising
technology-based companies. From April 1988 until September 1995, he served as
President and Chief Executive Officer of Bridgemere Capital, Inc., a 
financial services and consulting company which specialized in advising 
technology-based companies. Mr. Hultquist served as Chief Operating Officer 
of Bridgemere from November 1986 until April 1988. Prior to joining 
Bridgemere, Mr. Hultquist practiced law for 18 years, including service in 
the US Army.

    There are no family relationships among directors or executive officers 
of the Company. The executive officers serve at the discretion of the Board 
of Directors, until their successors are appointed.

    The information required by this Item relating to compliance with Section 
16(a) of the Exchange Act is incorporated by reference from the Company's 
Proxy Statement for the 1996 Annual Meeting of Shareholders on page 23 under 
the caption "SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE."


                                      2

<PAGE>

                                      SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the Registrant has duly caused this Amendment to Report 
on Form 10-K to be signed on its behalf by the undersigned, thereunto duly 
authorized.

                                       ONTRAK SYSTEMS, INC.

    Dated:  December 13, 1996         By:  /s/ Patrick C. O'Connor
                                            ----------------------
                                            Patrick C. O'Connor
                                            Vice President-Finance
                                            and Chief Financial
                                            Officer


                                  POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints James W. Bagley and Patrick C. O'Connor, or
either of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities to sign any and all amendments to this Report
on Form 10-K, and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or either of them, or their or his
substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Exchange Act of 1934, as 
amended, this Amendment to Report on Form 10-K has been signed by the 
following persons on behalf of the Registrant and in the capacities and on 
the dates indicated.

       SIGNATURE                  TITLE                         DATE
       ---------                  -----                         ----


/s/ James W. Bagley*         Chairman of the Board and     December 13, 1996
---------------------------  Chief Executive Officer
    James W. Bagley

/s/ Patrick C. O'Connor      Vice President - Finance and  December 13, 1996
---------------------------  Chief Financial Officer
    Patrick C. O'Connor      (Principal Financial and
                             Accounting Officer)

/s/ Michael C. Child*        Director                      December 13, 1996
---------------------------
    Michael C. Child


/s/ Jerauld J. Cutini*       Director                      December 13, 1996
---------------------------
    Jerauld J. Cutini


/s/ Gary Hultquist*          Director                      December 13, 1996
---------------------------
    Gary Hultquist

                             Director                      December __, 1996
---------------------------
    Richard J. Elkus, Jr.

 * By: /s/ Patrick C. O'Connor
      ------------------------
       Patrick C. O'Connor
        Attorney-in-fact


                                       3

<PAGE>

                                    EXHIBIT INDEX



Exhibit
Number   Exhibit Description                                     Reference
------   -------------------                                     ---------

   3.1   Amended and Restated Articles of Incorporation
         of the Registrant                                           (2)

   3.2   Bylaws of the Registrant, as amended                        (1)

   4.1   Reference is made to Exhibits 3.1 and 3.2

   4.2   Form of Common Stock Certificate                            (1)

  10.1   Series A and Series B Preferred Stock Purchase
         Agreement dated November 2, 1994, by and among the
         Registrant and the persons named as Purchasers therein      (1)

  10.2   Business Loan Agreement dated November 17, 1993 between
         the Registrant and Silicon Valley Bank, as modified         (1)

  10.3   Financing commitment letters to Registrant dated
         January 5, 1995 and July 25, 1994 from Belvedere
         Equipment Financing Corporation, and financing
         commitment letter to Registrant dated September 1,
         1993 from Oak Capital                                       (1)

  10.4   Equipment Financing Agreement (No. 93121003) dated
         January 19, 1994 between the Registrant and University
         National Bank & Trust Company                               (1)

  10.5   Equipment Financing Agreement (No. 94071102) dated
         October 25, 1994 between the Registrant and Orix
         USA Corporation                                             (1)

  10.6   Equipment Financing Agreement (No. 94071104) dated
         November 18, 1994 between the Registrant and
         Bank of the West                                            (1)

  10.7   Equipment Financing Agreement (No. 94121402) dated
         February 28, 1995 between the Registrant and Bay
         Area Bank                                                   (1)

* 10.8   Purchase Agreement dated May 17, 1993, between the
         Registrant and Intel Corporation                            (1)


                                       4

<PAGE>

* 10.9   Equipment Purchase Agreement dated April 15, 1994,
         between the Registrant and Motorola, Inc.                   (1)

*10.10   Contract between the Registrant and Transpacific
         Technology GmbH for Siemens Microelectronics Center         (1)

 10.11   Form of International Representation Agreement
         of the Registrant                                           (1)

 10.12   Form of Domestic Representation Agreement of
         the Registrant                                              (1)

 10.13   Standard Lease Agreement dated January 28, 1994
         between the Registrant and South Bay Tech Center            (1)

 10.14   Standard Industrial Sublease dated March 14, 1994
         between the Registrant and Peripheral Computer Support,
         Inc.; and Standard Lease Agreement dated October 7,
         1994 between the Registrant and South Bay Tech Center       (1)

 10.15   Standard Lease Agreement dated April 20, 1992,
         as amended on October 10, 1994, between the
         Registrant and South Bay Tech Center                        (1)

 10.16   Agreement for Financial Advisory Services dated
         March 3, 1995 between the Registrant and Bridgemere
         Capital, Inc.                                               (1)

 10.17   Form of Stock Purchase Warrant dated November 2,
         1994 issued to certain affiliates of Bridgemere
         Capital, Inc.                                               (1)

 10.18   Shareholders' Agreement dated November 2, 1994
         by and among the Registrant and the undersigned
         holders of capital stock of the Registrant                  (1)

 10.19   Employment Agreement dated January 1, 1995
         between the Registrant and Homayoun Talieh                  (1)

 10.20   Form of Indemnification Agreement between the
         Registrant and its directors and certain of its
         officers and significant shareholders                       (1)

 10.21   Amended and Restated 1992 Stock Option Plan and
         forms of agreement thereunder (incorporated by
         reference to Exhibits 4.3, 4.4 and 4.5 of Registrant's
         Form S-8 Registration Statement (No. 33-95560)
         filed with the Commission on August 9, 1995)


                                        5

<PAGE>

 10.22   1995 Employee Stock Purchase Plan and form of
         subscription agreement thereunder (incorporated by
         reference to Exhibit 4.6 of Registrant's Form S-8
         Registration Statement (No. 33-95560) filed with
         the Commission on August 9, 1995)

 10.23   1995 Director Stock Option Plan and forms of
         agreements thereunder (incorporated by reference
         to Exhibit 4.7 of Registrant's Form S-8 Registration
         Statement (No. 33-95560) filed with the
         Commission on August 9, 1995)

 10.24   401(k) Plan of the Registrant                               (1)

 10.25   Cafeteria Plan of the Registrant                            (1)

 10.26   Employee Profit Sharing Plan of the Registrant              (1)

 10.27   Common Stock Purchase Agreement dated April 30,
         1992 between the Registrant and Patrick C. O'Connor         (1)

 10.28   Common Stock Purchase Agreement dated June 30, 1993
         between the Registrant and Patrick C. O'Connor              (1)

 10.29   General Settlement Agreement, License and Mutual
         General Release dated June 6, 1995                          (1)

 10.30   Employment Agreement dated June 9, 1995 between the
         Registrant and Robert L. Piccioni                           (2)

 10.31   Lease Agreement dated July 18, 1995 between the
         Registrant and Orchard Investment Company Number 751        (2)

 10.32   Loan Modification Agreement dated August 18, 1995 to the
         Business Loan Agreement dated November 17, 1993 between
         the Registrant and Silicon Valley Bank                      (2)

 10.33   First Amendment to Lease dated November 30, 1995 to the
         Lease Agreement dated July 18, 1995 between the
         Registrant and Orchard Investment Company Number 751        (3)

 10.34   Loan Modification Agreement dated November 15, 1995 to the
         Business Loan Agreement dated November 17, 1993 between
         the Registrant and Silicon Valley Bank                      (3)

 10.35   Loan Modification Agreement dated January 19, 1996 to the
         Business Loan Agreement dated November 17, 1993 between
         the Registrant and Silicon Valley Bank, and related
         Promissory Note and Collateral Assignment, Patent Mortgage
         and Security Agreement                                      (3)


                                         6

<PAGE>

  10.36  First Amendment to Lease dated March 29, 1996 to the
         Lease Agreement dated October 7, 1994 between the
         Registrant and South Bay Tech Center Associates             (4)

  10.37  Sublease Agreement and Consent of Master Lessor dated
         March 31, 1996, relating to the Lease Agreement dated
         April 20, 1992 between the Registrant and South Bay Tech
         Center Associates                                           (4)

  10.38  International Distribution Agreement dated October 27,
         1995 between the Registrant and Metron Technology BV        (4)

  10.39  Employment Agreement between the Company and
         James W. Bagley (incorporated by reference to
         Exhibit 10.39 to the Registrant's Form 8-K Report 
         dated May 20, 1996)

**10.40  Agreement for Financial Advisory Services dated 
         October 1, 1995 between the Registrant and 
         Hultquist Capital, LLC.

  13.1   Annual Report to Shareholders (in lieu of an Annual Report
         to Shareholders, the Registrant will provide a copy of its
         Report on Form 10-K to each of its shareholders)

  21.1   Subsidiaries of the Registrant                              (1)

  23.1   Consent of Price Waterhouse LLP

  24.1   Power of Attorney.  Reference is made to page 41
         of this Report

  27     Financial Data Schedule

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

(1) Incorporated by reference to the Exhibits of corresponding number to
    Registrant's Form SB-2 Registration Statement (No. 33-93260-LA) filed with
    the Commission on June 7, 1995, as amended.

(2) Incorporated by reference to the Exhibits of corresponding number to
    Registrant's Annual Report on Form 10-K for the fiscal year ended June 30,
    1995.

(3) Incorporated by reference to the Exhibits of corresponding number to
    Registrant's Quarterly Report on Form 10-Q for the quarter ended December
    31, 1995.

(4) Incorporated by reference to the Exhibits of corresponding number to
    Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31,
    1996.

 *  Confidential treatment has been requested for portions of each of these
    agreements.

 ** Filed as an exhibit to the Amendment to Form 10-K Report dated 
    December 13, 1996.
                                       7