SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


[X] Quarterly report pursuant to section 13 or 15(d) of the Securities  Exchange
    Act of 1934 for the quarter period ended November 30, 1997 or

[ ] Transition report pursuant to section 13 of 15(d) of the Securities Exchange
    Act of 1934 for the Transition period from ________ to ________

                        Commission file number: 0-25104


                   CONTINENTAL INFORMATION SYSTEMS CORPORATION
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                                     
           New York                                           16-0956508
--------------------------------------------------------------------------------
  (State or other jurisdiction                            (I.R.S. Employer 
   of incorporation)                                      Identification No.)


 One Northern Concourse, P.O. Box 4785, Syracuse, NY          13221-4785
--------------------------------------------------------------------------------
     (Address of principal executive offices)                 (Zip Code)


                                 (315) 455-1900
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code) 

         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 [ ]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:


         Indicate by check mark whether the  registrant  has filed all documents
and reports  required to be filed by Sections 12, 13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. Yes [ X ] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS: 

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest  practicable  date: As of December 31,
1997, the registrant  has 7,009,260  shares of common stock,  par value $.01 per
share, outstanding.
<PAGE>
                   CONTINENTAL INFORMATION SYSTEMS CORPORATION
                              AND ITS SUBSIDIARIES


                                TABLE OF CONTENTS


                                                                                
                                                                                

PART I.             FINANCIAL INFORMATION:                                      

Item 1.             Financial Statements                                        

                    Consolidated Balance Sheets -
                             November 30, 1997 and May 31, 1997                 

                    Consolidated Statements of Operations and Retained
                           Earnings (Accumulated Deficit) - for the three months
                           and six months ended November 30, 1997 and 1996      

                    Consolidated Statements of Cash Flows -
                           for the six months ended November 30, 1997 and 1996  

                    Notes to Consolidated Financial Statements                  

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


PART II.            OTHER INFORMATION:                                          

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

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


SIGNATURES                                                                      
<PAGE>
                         PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
Continental Information Systems Corporation
and its Subsidiaries
In Thousands (Except per Share Data)
                                                             
                               CONSOLIDATED BALANCE SHEETS
                                       (Unaudited)
                                                                 November 30,    May 31,
                                                                    1997          1997
                                                                  --------      --------
<S>                                                               <C>           <C>
Assets:
Cash and cash equivalents ...................................     $  4,771      $  9,005
Accounts receivable, net ....................................        1,541         2,485
Notes receivable ............................................        3,501         5,094
Investment in mortgage participation notes (Note 3) .........        1,199          --
Inventory ...................................................        6,774         6,980
Net investment in direct financing leases (Note 2) ..........        6,668         3,446
Rental equipment, net (Note 2) ..............................        5,720         7,505
Furniture, fixtures and equipment, net ......................          126           218
Other assets ................................................          645           446
Goodwill, net ...............................................        3,468         3,632
Deferred tax assets .........................................        5,500         5,414
                                                                  --------      --------

            Total assets ....................................     $ 39,913      $ 44,225
                                                                  ========      ========
Liabilities and Shareholders' Equity:
Liabilities:
     Accounts payable and other liabilities .................     $  1,299      $  1,450
     Discounted lease rental borrowings (Note 2) ............        1,962         5,633
     Note payable to institution - secured ..................          753         1,005
     Notes payable to former owners of acquired company .....        1,536         1,536
                                                                  --------      --------

          Total liabilities .................................        5,550         9,624
                                                                  --------      --------
Shareholders' Equity:
Common stock, $.01 par value; authorized 20,000,000 shares at
     November 30, 1997, 10,000,000  shares at May 31, 1997;
     issued  7,101,668 shares at November  30, 1997,
     7,031,667 shares at May 31, 1997 (Note 4) ..............           71            70
Additional paid-in capital ..................................       35,129        34,992
Accumulated deficit .........................................         (601)         (461)
                                                                  --------      --------
                                                                    34,599        34,601
Treasury stock, at cost; 92,408 shares at November 30, 1997,
     960 shares at May 31, 1997 (Note 4) ....................         (236)         --
                                                                  --------      --------

          Total shareholders' equity ........................       34,363        34,601
                                                                  --------      --------

          Total liabilities and shareholders' equity ........     $ 39,913      $ 44,225
                                                                  ========      ========
</TABLE>
      The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
Continental Information Systems Corporation
and its Subsidiaries
In Thousands (Except per Share Data)

                                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                 AND RETAINED EARNINGS (ACCUMULATED DEFICIT)
                                                 (Unaudited)


                                                                For the Three               For the Six
                                                                 Months Ended               Months Ended
                                                                 November 30,               November 30,
                                                          ----------------------      ---------------------- 
                                                            1997          1996          1997          1996  
                                                          --------      --------      --------      --------
<S>                                                       <C>           <C>           <C>           <C>
Revenues:
Equipment sales .....................................     $  2,817      $  8,412      $  7,461      $ 13,057
Equipment rentals ...................................          794         1,219         1,763         2,620
Income from direct financing leases .................          182           432           369           889
Gain from sale of equipment subject to lease (Note 2)         --           2,475            78         2,475
Interest, fees and other income .....................          598           441         1,142         1,031
                                                          --------      --------      --------      --------
                                                             4,391        12,979        10,813        20,072
                                                          --------      --------      --------      --------
Costs and Expenses:
Cost of sales .......................................        2,731         6,691         6,424        10,129
Depreciation of rental equipment ....................          382           756           862         1,606
Interest expense ....................................          112           370           321           695
Other operating expenses ............................          346           637           837         1,136
Selling, general and administrative expense .........        1,206         1,835         2,595         3,590
                                                          --------      --------      --------      --------
                                                             4,777        10,289        11,039        17,156
                                                          --------      --------      --------      --------

Income (loss) from operations before taxes ..........         (386)        2,690          (226)        2,916

Provision for income tax (tax benefit) ..............         (147)        1,022           (86)        1,108
                                                          --------      --------      --------      --------

Net income (loss) ...................................         (239)        1,668          (140)        1,808

Retained earnings (accumulated deficit),
beginning of period .................................         (362)       (1,407)         (461)       (1,547)
                                                          --------      --------      --------      --------

Retained earnings (accumulated deficit),
end of period .......................................     $   (601)     $    261      $   (601)     $    261
                                                          ========      ========      ========      ========

Net income per share of common stock (Note 5) .......     $   (.03)     $    .24      $   (.02)     $    .26
                                                          ========      ========      ========      ========
Weighted average number of shares of common
stock outstanding ...................................        6,990         7,002         7,003         7,001
                                                          ========      ========      ========      ========
</TABLE>
      The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
Continental Information Systems Corporation
and its Subsidiaries
In Thousands
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (Unaudited)                                   
                                                             For the Six Months Ended
                                                                     November 30,
                                                                 1997          1996
                                                              --------      --------
<S>                                                           <C>           <C>
Cash flows from operating activities:
Net income (loss) .......................................     $   (140)     $  1,808
                                                              --------      --------
Adjustments to reconcile net income to net cash
provided by operating activities:
     Proceeds from sale of equipment subject to lease ...          850         7,367
     Gain from sale of equipment subject to lease .......          (78)       (2,475)
     Proceeds from sale of other leased equipment .......           58         3,677
     Proceeds from sale of Telecommunications Business
         Unit's assets ..................................          895          --
     Amortization of unearned income ....................         (369)         (889)
     Collections of rentals on direct financing leases ..        1,210         2,736
     Depreciation and amortization expense ..............        1,252         2,054
     Other ..............................................         (129)           59
     Effect on cash flows of changes in:
         Accounts receivable ............................          741           377
         Notes receivable ...............................        1,593        (1,862)
         Inventory ......................................         (625)       (4,227)
         Other assets ...................................         (199)        1,008
         Accounts payable and other liabilities .........         (151)         (301)
         Deferred tax assets ............................          (86)        1,108
                                                              --------      --------
                                                                 4,962         8,632
                                                              --------      --------
Net cash provided by operations .........................        4,822        10,440
                                                              --------      --------
Cash flows from investing activities:
Purchase of rental equipment ............................       (7,295)       (2,432)
Investment in mortgage participation notes ..............       (1,123)         --
Purchase of property and equipment ......................          (86)          (23)
                                                              --------      --------
     Net cash used in investing activities ..............       (8,504)       (2,455)
                                                              --------      --------
Cash flows from financing activities:
Proceeds from lease, bank and institution financings ....        3,024         4,631
Payments on lease, bank and institution financings ......       (3,478)       (6,050)
Proceeds from exercise of stock options .................          138          --
Purchase of treasury stock ..............................         (236)         --
                                                              --------      --------
     Net cash provided by (used in) financing activities          (552)       (1,419)
                                                              --------      --------

     Net increase (decrease) in cash and cash equivalents       (4,234)        6,566
Cash and cash equivalents at beginning of period ........        9,005         5,382
                                                              --------      --------
Cash and cash equivalents at end of period ..............     $  4,771      $ 11,948
                                                              ========      ========
</TABLE>
      The accompanying notes are an integral part of these financial statements.
<PAGE>
Continental Information Systems Corporation
and its Subsidiaries
Notes to the Consolidated Financial Statements

1.    Basis of Presentation

      The accompanying unaudited financial statements of Continental Information
      Systems  Corporation  and its  subsidiaries  (the  "Company")  contain all
      adjustments which are, in the opinion of management,  necessary for a fair
      statement  of results for the interim  periods  presented.  While  certain
      information  and  footnote  disclosures  normally  included  in  financial
      statements  prepared in  accordance  with  generally  accepted  accounting
      principles have been condensed or omitted,  the Company  believes that the
      disclosures  herein are adequate to make the  information  not misleading.
      The results of operations  for the six months ended November 30, 1997, are
      not  necessarily  indicative  of the  results  for the  full  year.  These
      statements  should be read in conjunction with the consolidated  financial
      statements  and notes  thereto  included for the fiscal year ended May 31,
      1997 appearing in the Company's Form 10-K.

2.    Sale of Equipment Subject to Lease and Telecommunications Business Unit

      On August 31, 1997, the Company, through a wholly-owned subsidiary, sold a
      portion of its leased equipment to an  institutional  investor for a sales
      price of  approximately  $4.4  million,  payable in cash of  approximately
      $850,000  and the  assumption  by the  investor of the  Company's  related
      outstanding  non-recourse  lease rental  borrowings of approximately  $3.5
      million.

      Additionally,  on August 31,  1997,  the Company,  through a  wholly-owned
      subsidiary,  sold its Telecommunications Business Unit to Meridian Leasing
      Corporation  of  Deerfield,  Illinois.  The sales price  approximated  the
      Business Unit's book value and therefore did not significantly  affect the
      results of  operations  for the quarter  ended  August 31, 1997 or the six
      months ended November 30, 1997.

3.    Investment in Mortgage Participation Notes

      On June 30, 1997,  the Company  announced that it had entered into a Joint
      Investment   Agreement  (the  "Emmes  Agreement")  with  Emmes  Investment
      Management Co. LLC ("Emmes") to provide high-yield,  short-term  financing
      for commercial real estate  transactions.  Under the agreement the Company
      may  provide  up to $8  million  in  financing,  subject  to  management's
      approval of each loan.  

      The  Emmes  Agreement   involves   transactions  which  do  not  meet  the
      underwriting  standards of a traditional lender, and instances where there
      are unusual time  constraints.  Emmes,  founded in 1992 by individuals who
      have been  involved in  commercial  real  estate  dating back to the early
      1970s, provides high-yield,  short-term real estate financing as well as a
      broad range of other special  opportunity real estate  investments.  Under
      the Emmes Agreement,  Emmes will identify,  negotiate and service proposed
      transactions,   and  will  present  to  the  Company  the  opportunity  to
      participate  in  such   transactions.   The  Company  will  make  its  own
      independent determination whether to participate in a transaction.  In the
      current  fiscal  quarter  ended  November  30,  1997,  the Company made an
      initial   investment  of  approximately   $1.1  million  in  two  approved
      transactions.  Additionally,  on  December 1, 1997,  the  Company  made an
      investment in a third approved transaction of approximately $.5 million.
<PAGE>
4.    Common Stock

      On May 27, 1997,  the Company  announced  that its Board of Directors  had
      authorized  the  expenditure  of up to $500,000 for the  repurchase of its
      common stock.  The Company  commenced a voluntary odd lot program  through
      June 30,  1997,  which was extended  through  July 31, 1997.  Shareholders
      owning less than 100 shares of the Company's common stock were offered the
      opportunity  to sell all their  shares at the closing  price of the common
      stock on the NASDAQ  Small-Cap Market on May 23, 1997, which was $2.25 per
      share.  Approximately  20,000 shares were repurchased by the Company at an
      aggregate  cost  of  approximately  $45,000.  Subsequent  to the  odd  lot
      repurchase  program,  the Company  intends to repurchase from time to time
      additional  shares  of its  common  stock up to the  balance  of  $500,000
      remaining  after the odd lot  program.  The  Company  may  repurchase  the
      additional shares at prevailing prices in the open market or in negotiated
      or other  permissible  transactions  at the discretion of management.  The
      Company will hold all repurchased  shares of common stock in its treasury.
      As of November 30, 1997,  approximately 72,000 shares had been repurchased
      by the  Company  in this  manner  at an  aggregate  cost of  approximately
      $191,000.

      On October 28, 1997, at the Company's  Annual  Meeting,  the  stockholders
      approved  the  amendment  of  the  Company's   Restated   Certificate   of
      Incorporation to increase the number of authorized  shares from 10 million
      to 20 million. The Board of Directors considers the increase of authorized
      shares  of  Common  Stock  to be  desirable  (i)  to  permit  the  Company
      flexibility in using its Common Stock in any potential future acquisitions
      of property or  securities  of other  companies,  (ii) to permit  possible
      future  dividends in shares of the Company's  Common Stock,  and (iii) for
      other corporate purposes, including adoption of new employee benefit plans
      or amendment of existing ones. The Company currently has no plans to issue
      any  additional  shares (other than  pursuant to the Company's  1995 Stock
      Compensation Plan).

5.    Net Income Per Share

      Net income per share was computed based on the weighted  average number of
      shares of common stock outstanding during the periods.  As of November 30,
      1997, the Company had  outstanding  options to purchase  369,674 shares of
      common  stock (see Note 7). The  potential  dilution  of these  options is
      immaterial in the computation of net income per share.

6.    Reclassifications

      Certain  prior  period  balances  in the  financial  statements  have been
      reclassified  to  conform  to  the  current  period  financial   statement
      presentation.

7.    Stock Compensation Plan

      On  July  6,  1995,  the  Board  of  Directors   adopted  the  Continental
      Information  Systems  Corporation 1995 Stock  Compensation Plan (the "1995
      Plan").  The 1995 Plan provides for the issuance of options covering up to
      1,000,000  shares of common stock and stock grants of up to 500,000 shares
      of common  stock to  non-employee  directors  of the  Company  and, in the
      discretion of the  Compensation  Committee,  employees of and  independent
      contractors and consultants to the Company.
<PAGE>
Continental Information Systems Corporation
and its Subsidiaries
Notes to the Consolidated Financial Statements


      A  summary  of the  status of the 1995 Plan as of  November  30,  1997 and
changes since inception is presented below:
<TABLE>
<CAPTION>

                                                                   Weighted Average
                                                       Number of    Exercise Price
                                                        Options       Per Option
                                                      --------        --------
 <S>                                                    <C>             <C>
   Outstanding at
         May 31, 1995 (none exercisable) .......         15,000        $   3.50
   Granted .....................................          9,000        $   2.50
   Exercised ...................................           --          $  --
   Forfeited/expired ...........................         (9,000)       $   3.50
                                                       --------         
   Outstanding at
         May 31, 1996 (6,000 exercisable) ......         15,000        $   2.90
   Granted .....................................        319,000        $   1.97
   Exercised ...................................        (16,667)       $   1.97
   Forfeited/expired ...........................        (33,333)       $   1.97
                                                       --------         
    Outstanding at
         May 31, 1997  (188,337 exercisable) ...        284,000        $   2.02
   Granted .....................................        175,000        $   2.32
                                                       --------         
    Outstanding at
         August 31, 1997 (246,671 exercisable) .        459,000        $   2.13
   Granted .....................................         15,674        $   3.00
   Exercised ...................................        (70,001)       $   1.97
   Forfeited/expired ...........................        (34,999)       $   1.97
                                                       --------         
    Outstanding at
         November 30, 1997 (185,670 exercisable)        369,674        $   2.05
                                                       ========         


</TABLE>
<PAGE>
Continental Information Systems Corporation
and its Subsidiaries


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

                                  Introduction

The following  discussion and analysis of the financial condition and results of
operations of the Company  should be read in conjunction  with the  consolidated
financial  statements  and the notes  thereto  for the fiscal year ended May 31,
1997, appearing in the Company's Form 10-K.

All statements contained herein that are not historical facts, including but not
limited to, statements regarding anticipated future capital requirements and the
Company's  future  business  plans,  are based on  current  expectations.  These
statements  are  forward  looking  in nature  and  involve a number of risks and
uncertainties.  Actual  results may differ  materially.  Among the factors  that
could cause actual  results to differ  materially  are those set forth below and
the other risk  factors  described  from time to time in the  Company's  reports
filed with the SEC.  The  Company  wishes to caution  readers not to place undue
reliance on any such  forward  looking  statements,  which  statements  are made
pursuant to the Private  Securities  Litigation Reform Act of 1995 and, as such,
speak only as of the date made.

                              Results of Operations

                  Comparison of the Three Months and Six Months
                        Ended November 30, 1997 and 1996

Total  revenues  decreased  66.2% to $4.4  million  for the three  months  ended
November 30, 1997 from $13.0 million for the comparable  fiscal quarter in 1996.
For the six months ended November 30, 1997,  total revenues  decreased  46.1% to
$10.8  million  from $20.1  million for the  comparable  fiscal  period in 1996.
Within  this  category,  equipment  sales  for the three  and six  months  ended
November 30, 1997,  decreased by $5.6 million (66.5%) and $5.6 million  (42.9%),
respectively.  These decreases  reflect a decline in sales at the laser printing
equipment  business unit, in addition to lower results for the aircraft business
unit, which had generated  significant sales and pretax margins during the prior
year fiscal  quarter.  Sales and margins  from the  aircraft  business  unit are
likely  to  continue  to  vary  quarter  to  quarter,  based  on the  volume  of
transactions.  Equipment rentals and income from direct financing leases for the
three and six months ended November 30, 1997,  decreased by $.7 million  (40.9%)
and $1.4 million (39.2%),  respectively,  from comparable periods in 1996. These
decreases  are  directly  related  to the sale of a  substantial  portion of the
Company's leased equipment to an institutional investor in the second quarter of
the prior fiscal year for a gain of approximately  $2.5 million.  The Company is
acquiring additional equipment, subject to lease, which it intends to sell on an
ongoing basis, as market conditions permit.  Interest, fees and other income for
the three and six months ended November 30, 1997,  increased by $157,000 (35.6%)
and $111,000  (10.8%),  respectively,  over  comparable  periods in 1996.  These
increases  primarily  reflect an increase in interest  income and an increase in
fees generated by brokered transactions.
 
Costs and  expenses  for the three  and six  months  ended  November  30,  1997,
decreased by $5.5 million (53.6%) and $6.1 million (35.7%),  respectively,  from
comparable periods in 1996. Within this category, cost of sales, as a percentage
<PAGE>
of sales,  for the three and six months ended November 30, 1997,  were 96.9% and
86.1%,  respectively,  as compared to 79.5% and 77.6% for the comparable periods
in 1996. The significant  percentage  increases in the current periods reflect a
charge of approximately $195,000 for the write-down of obsolete inventory at the
laser printing equipment business unit. Sales and margins for this business unit
have been adversely  impacted,  and may continue to be impacted,  as a result of
increased  activity in the used high speed printer market by Xerox  Corporation,
the  manufacturer  of the Company's  laser  printers,  and another large leasing
company  that has  entered  the  market.  Additionally,  these  cost  percentage
variances are the result of product mix, with the aircraft business unit usually
generating  significant  margins on a relatively few large  transactions and the
telecommunications  and printing  business units  generating  comparably  lesser
margins on a greater  number of  transactions.  On August 31, 1997 the  Company,
through a wholly-owned subsidiary,  sold its Telecommunications Business Unit to
Meridian   Leasing   Corporation  of  Deerfield,   Illinois.   The  sales  price
approximated the Business Unit's book value and therefore did not  significantly
affect the results of  operations  for the quarter  ended August 31, 1997 or the
six months ended  November 30, 1997.  Depreciation  of rental  equipment for the
three and six months ended November 30, 1997,  decreased by $374,000 (49.5%) and
$744,000 (46.3%), respectively, from comparable periods in 1996. These decreases
are directly related to the aforementioned  sale of a substantial portion of the
Company's  portfolio  of leased  equipment  in the  second  quarter of the prior
fiscal year.  Interest  expense for the three and six months ended  November 30,
1997,  decreased by $258,000 (69.7%) and $374,000  (53.8%),  respectively,  from
comparable  periods in 1996.  These  decreases  were  primarily  the result of a
decrease in the average debt outstanding during the current three months and six
months ended November 30, 1997.  Other operating  expenses for the three and six
months  ended  November 30,  1997,  decreased  by $291,000  (45.7%) and $299,000
(26.3%),  respectively,  from  comparable  periods in 1996.  These decreases are
chiefly  the  result of a  decrease  in  expenses  associated  with the  reduced
portfolio of leased equipment and a decrease in machine  refurbishment  expenses
for  the  laser  printing   equipment  business  unit.   Selling,   general  and
administrative  expenses for the three and six months  ended  November 30, 1997,
decreased  by  $629,000  (34.3%)  and  $995,000  (27.7%),   respectively,   from
comparable  periods  in  1996.  These  decreases  were  principally  due to cost
containment efforts and staff reductions between the periods.  For the three and
six months ended November 30, 1997, a provision for deferred  income tax benefit
on loss from operations was recorded, at an effective rate of 38%, in the amount
of  $147,000  and  $86,000,  respectively.  For the three and six  months  ended
November 30, 1996,  a provision  for deferred  income tax expense on income from
operations  was  recorded,  at an  effective  rate of  38%,  in the  amounts  of
$1,022,000 and $1,108,000, respectively.

                         Liquidity and Capital Resources

Cash provided by operations for the six months ended November 30, 1997, was $4.8
million as compared  to $10.4  million for the  comparable  period in 1996.  The
decrease was  primarily  due to the proceeds  generated by the sale of equipment
subject to lease of approximately  $.9 million in the current period as compared
to approximately  $7.4 million in the prior year period.  Proceeds from the sale
of the  Telecommunication's  Business  Unit's  assets  were $.9  million  in the
current period.  Additionally,  significant  funds were generated in the current
period by net  collections  of the  following:  (i) rentals on direct  financing
leases of $1.2 million,  (ii) accounts  receivable  of $.7 million,  and,  (iii)
notes  receivable  of $1.6 million.  The Company  purchased  approximately  $7.3
million of additional rental equipment for lease transactions during the current
period,  which  it has the  option  to  sell  on an  ongoing  basis,  as  market
conditions permit. Additionally, during the current period, the Company invested
approximately  $1.1  million in  mortgage  participation  notes  under its Joint
<PAGE>
Investment Agreement (the "Emmes Agreement") with Emmes Investment Mangement Co.
LLC ("Emmes").  Proceeds from lease, bank and institution financings for the six
months  ended  November  30, 1997 and 1996,  were $3.0  million and $4.6 million
respectively.  Payments on lease, bank and institution  financings  decreased by
approximately $2.5 million to $3.5 million for the six months ended November 30,
1997 from $6.0 million for the comparable period in 1996. This decrease reflects
a decrease in the average discounted lease rental borrowings  outstanding during
the current  period.  Proceeds  from the exercise of stock options by employees,
under the 1995 Stock Compensation Plan,  amounted to $138,000 in the current six
month period.

On May 27,  1997,  the  Company  announced  that  its  Board  of  Directors  had
authorized  the  expenditure  of up to $500,000 for the repurchase of its common
stock. The Company  commenced a voluntary odd lot program through June 30, 1997,
which was  extended  through July 31,  1997.  Shareholders  owning less than 100
shares of the Company's  common stock were offered the  opportunity  to sell all
their shares at the closing  price of the common  stock on the NASDAQ  Small-Cap
Market on May 23, 1997, which was $2.25 per share.  Approximately  20,000 shares
were repurchased by the Company at an aggregate cost of  approximately  $45,000.
Subsequent to the odd lot repurchase program,  the Company intends to repurchase
from time to time  additional  shares of its common  stock up to the  balance of
$500,000  remaining  after the odd lot program.  The Company may  repurchase the
additional  shares at  prevailing  prices in the open market or in negotiated or
other permissible transactions at the discretion of management. The Company will
hold all repurchased shares of common stock in its treasury.  As of November 30,
1997,  approximately  72,000 shares had been  repurchased by the Company in this
manner at an aggregate cost of approximately $191,000.

On October 28, 1997, at the Company's Annual Meeting, the stockholders  approved
the amendment of the Company's Restated Certificate of Incorporation to increase
the number of  authorized  shares  from 10 million to 20  million.  The Board of
Directors  considers  the  increase of  authorized  shares of Common Stock to be
desirable (i) to permit the Company flexibility in using its Common Stock in any
potential future acquisitions of property or securities of other companies, (ii)
to permit possible future dividends in shares of the Company's Common Stock, and
(iii) for other corporate  purposes,  including adoption of new employee benefit
plans or amendment of existing ones. The Company currently has no plans to issue
any  additional  shares  (other  than  pursuant  to  the  Company's  1995  Stock
Compensation Plan).

The Company expects that  operations  will generate  sufficient cash to meet its
operating expenses and current  obligations for the foreseeable  future. In July
1996, the Company  finalized two revolving loan agreements with  institutions to
provide  (1)  warehouse  lease  financing  in the amount of $5  million  and (2)
inventory financing for the laser printing equipment business unit in the amount
of $2.5  million.  At  November  30,  1997,  approximately  $.8 million in loans
payable  were  outstanding  under  these  lines of  credit.  The laser  printing
equipment  business unit's loan agreement  contains various covenants  including
limitations on additional  indebtedness and the maintenance of minimum levels of
net  worth/net  earnings.  At November 30, 1997,  the laser  printing  equipment
business unit did not meet the minimum net  worth/net  earnings  requirement;  a
waiver relative to this covenant was obtained from the lending  institution.  In
December 1997, the Company finalized an additional revolving loan agreement with
an institution to provide lease and inventory  financing,  for aircraft  engines
for CIS Air, in the amount of $10  million.  The  facility has a 3 year term and
permits  borrowing  equal to a percentage of the appraised value of the aircraft
engines  financed.  Availability  under the facility is limited to the appraised
value of the financed aircraft engines.  Substantially all the assets of CIS Air
are pledged as collateral for the loan.
<PAGE>

                           PART II - OTHER INFORMATION


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

At the Company's Annual Meeting of  Stockholders,  held on October 28, 1997, the
following directors were elected to the Board of Directors:

                                     Affirmative Votes          Votes Withheld
                                     -----------------          --------------
     Julius S. Anreder                    5,832,278                 104,995
     Dr. Leon H. Bloom                    5,885,956                  51,317
     James P. Hassett                     5,578,500                 358,773
     George H. Heilborn                   5,703,023                 234,250
     Michael L. Rosen                     5,803,636                 133,637
     Paul M. Solomon                      5,720,445                 216,828

The proposal to amend the Company's  Restated  Certificate of  Incorporation  to
increase  the number of  authorized  shares  from 10  million to 20 million  and
certain other amendments was approved and received the requisite number of votes
as follows:

           Affirmative Votes        Negative Votes             Abstentions
           -----------------        --------------             -----------
               5,737,011                166,249                   34,013

The  ratification  of the  selection of Price  Waterhouse  LLP as the  Company's
independent  auditors  for the fiscal year ending May 31, 1998 was  approved and
received the requisite number of votes as follows:

           Affirmative Votes        Negative Votes             Abstentions
           -----------------        --------------             -----------
               5,890,973                32,222                    14,078

The stockholder proposal to request that the Board of Directors proceed to adopt
a plan of complete  liquidation  of the  Company  did not receive the  requisite
number of votes and therefore was not approved. The votes were as follows:

 Affirmative Votes       Negative Votes       Abstentions       Broker Non-Votes
 -----------------       --------------       -----------       ----------------
     209,922               2,030,232             27,894             3,669,225

Item 6.  Exhibits and Reports on Form 8-K

           (a)    Exhibits

                  3.1  Restated Certificate of Incorporation, as amended

                  27.1  Financial Data Schedule

           (b)    Reports on Form 8-K - No reports on Form 8-K were filed by the
                  Company during the quarter ended November 30, 1997.
<PAGE>



                                   SIGNATURES


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

                                      CONTINENTAL INFORMATION SYSTEMS
                                      CORPORATION

Date:    January 9, 1998              By:  /s/ Michael L. Rosen
                                           --------------------
                                           Michael L. Rosen
                                           President, Chief Executive Officer 
                                           and Director



Date:    January 9, 1998              By:  /s/ Jonah M. Meer
                                           -----------------
                                           Jonah M. Meer
                                           Senior Vice President,
                                           Chief Operating Officer
                                           and Chief Financial Officer