<PAGE>
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                    US SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549


                                 FORM 10-QSB


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

               For the Quarterly Period Ended: SEPTEMBER 30, 1996

     ( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
          THE SECURITIES AND EXCHANGE ACT.


                        Commission File Number:  0-25602


                                TECH SQUARED INC.
        (Exact name of small business issuer as specified in its charter)


                MINNESOTA                               41-1591872
     (State or other jurisdiction                    (I.R.S. Employer
           or organization)                         Identification No.)


                              5198 WEST 76TH STREET
                             EDINA, MINNESOTA  55439
                    (Address of principal executive offices)


                                 (612) 832-5622
                           (Issuer's telephone number)


                                       N/A
              (Former name, former address and former fiscal year,
                         if changed since last report)


     Check whether the issuer: (1) 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 Registrant 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 November 1, 1996, 10,374,870 shares of Common Stock, no par value, 
of the Company were outstanding.

     Transitional Small Business Disclosure Format (Check One): 
Yes ____; No __X__

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<PAGE>

                               TECH SQUARED, INC.

                                      INDEX

PART I. FINANCIAL INFORMATION                                               Page
                                                                            ----
    Item 1.  Financial Statements

    Consolidated Statements of Financial Position  at September 30, 1996
     (unaudited) and December 31, 1995                                        3

    Consolidated Statements of Operations (unaudited) for the three
     months and nine months ended September  30, 1996 and 1995                4

     Consolidated Statements of Cash Flows (unaudited) for the nine
      months ended September 30, 1996 and 1995                                5

     Notes to Consolidated Financial Statements                               6



    Item 2.  Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                       8



PART II. OTHER INFORMATION

         Item 1.  Legal Proceedings                                          12

         Item 5.  Other Information                                          12

         Item 6.  Exhibits and Reports on Form 8-K                           12

SIGNATURES                                                                   13


<PAGE>

ITEM 1.                  FINANCIAL STATEMENTS

TECH SQUARED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

                                         September 30,   December 31,
                                              1996          1995
                                         -------------  -------------
ASSETS                                    (Unaudited)

CURRENT ASSETS
Cash                                        $352,918        $867,370
Available-for-sale securities              1,284,375       1,200,000
Accounts receivable, net of allowance
  for doubtful receivables of $398,000
  and $381,000 respectively                2,808,214       2,306,096
Inventories                                2,390,455       3,519,368
Prepaids and other current assets            570,543         461,227
                                           ---------       ---------
  TOTAL CURRENT ASSETS                     7,406,505       8,354,061


Available-for-sale securities                747,448               -
Property and equipment, net                  453,358         444,603
Receivable from officer/stockholder          199,267         205,800
Mining assets                                      -         600,000
Patents and organization costs, net          139,049         134,790
                                           ---------       ---------
                                          $8,945,627      $9,739,254
                                          -----------     ----------
                                          -----------     ----------
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Revolving line of credit                    $767,377        $595,000
Accounts payable                           4,433,074       4,927,618
Accrued compensation and benefits            187,086         142,846
Accrued expenses                             552,632         509,375
Dividend payable                             727,104         500,000
                                          ----------      ----------
  TOTAL CURRENT LIABILITIES                6,667,273       6,674,839

Dividend payable                                   -         392,707

Minority interest                            119,668         248,211

Redeemable preferred stock, 12%
   cumulative convertible,  $1 par
   value; 1,000,000 shares authorized;
   160,000 and 185,000 shares issued         162,500         185,000
   and outstanding, respectively

Commitments and contingencies

STOCKHOLDERS' EQUITY:
Common stock: no par value; 25,000,000
  shares authorized 10,374,870 issued
  and outstanding                                  -               -
Additional paid-in capital                 3,771,964       3,702,066
Retained earnings (deficit)               (1,860,153)     (1,463,569)
Unrealized gain on available-for-sale
  securities                                  84,375               -
                                          ----------      ----------
   TOTAL STOCKHOLDERS' EQUITY              1,996,186       2,238,497
                                          ----------      ----------
                                          $8,945,627      $9,739,254
                                          ----------      ----------
                                          ----------      ----------

Note:  The consolidated statement of financial position at December 31, 1995 
       has been derived from the audited financial statements at that date.

See accompanying notes to consolidated financial statements.

                                       3
<PAGE>

TECH SQUARED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                       Three Months Ended                    Nine Month Ended
                                   -----------------------------       -----------------------------
                                   September 30,   September 30,       September 30,   September 30,
                                       1996            1995                1996              1995
                                   -------------   -------------       -------------   -------------
<S>                               <C>            <C>                 <C>              <C>
Net Sales                             $9,254,257      $8,842,135        $26,513,926      $33,919,025
Cost of sales                          8,229,814       9,148,733         23,588,335       31,637,988
                                   -------------   -------------        -----------     ------------
  GROSS PROFIT                         1,024,443        (306,598)         2,925,591        2,281,037

Selling & marketing expenses             497,406         522,373          1,711,492        1,689,646
General & administrative expenses        579,607         699,171          1,582,945        1,981,720
Research & development expenses           54,821          39,254            142,369           94,564
                                   -------------   -------------        -----------     ------------
 Total Operating Expenses              1,131,834       1,260,798          3,436,806        3,765,930
                                   -------------   -------------        -----------     ------------
  OPERATING PROFIT (LOSS)               (107,391)     (1,567,396)          (511,215)      (1,484,893)

Interest expense, net                    (18,841)        (61,959)           (22,925)        (190,078)
Dividend Income                            3,600                              9,000
                                   -------------   -------------        -----------     -------------
 PROFIT (LOSS) BEFORE MINORITY
  INTEREST IN LOSSES                    (122,632)     (1,629,355)          (525,140)      (1,674,971)

 Minority interest in losses              81,003          16,158            128,544           43,054
                                   -------------  --------------        -----------     ------------
  NET INCOME (LOSS) BEFORE
   INCOME TAXES                         ($41,629)    ($1,613,197)         ($396,596)     ($1,631,917)

Tax benefit of change to
 taxable status                                -               -                  -         $192,500
Income tax benefit                             -               -                  -          $22,460
                                    -------------  --------------        -----------     ------------
  NET INCOME (LOSS)                     ($41,629)    ($1,613,197)         ($396,596)     ($1,416,957)

Pro forma income tax provision                 -               -                  -         ($31,911)
                                    -------------  --------------        -----------     ------------
  PRO FORMA NET INCOME (LOSS)           ($41,629)    ($1,613,197)         ($396,596)     ($1,448,868)
                                    -------------  --------------        -----------     ------------
                                    -------------  --------------        -----------     ------------

Pro forma net income (loss) per
 common share                             ($0.01)         ($0.17)            ($0.04)          ($0.17)
                                    -------------  --------------        -----------     ------------
                                    -------------  --------------        -----------     ------------

Weighted average shares
 outstanding                          10,374,870       9,620,925         10,374,870        8,290,833
                                   -------------  --------------        -----------     ------------
                                   -------------  --------------        -----------     ------------
</TABLE>

See accompanying notes to consolidated financial statements.


                                       4
<PAGE>

TECH SQUARED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


<TABLE>
<CAPTION>
                                                                  Nine Months Ended
                                                          ----------------------------------
                                                          September 30,        September 30,
                                                              1996                  1995
                                                          -------------        -------------
<S>                                                     <C>                   <C>
Cash Flows From Operating Activities:
   Net Income (loss)                                         ($396,596)         ($1,416,957)
   Non-cash items included in loss:
    Depreciation and amortization                              160,726              185,533
    Minority interest in Digital River                        (128,544)             (43,054)
   Changes In Operating Assets And Liabilities:
    Accounts receivable, net                                  (502,118)             409,195
    Inventories                                              1,128,913            1,277,058
    Income taxes                                                     -             (214,960)
    Prepaid and other current assets                          (109,316)            (329,022)
    Accounts payable                                          (538,219)          (1,392,094)
    Other current liabilities                                   87,497               82,085
                                                            -----------          -----------
     NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES      (297,657)          (1,442,216)
Cash Flows From Investing Activities:
   Purchases of property and equipment                        (166,008)             (50,336)
   Increase in patents and organization costs                   (7,731)             (30,166)
   Change in officer/stockholder receivable                      6,533                    -
                                                            -----------          -----------
     NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES      (167,206)              (80,502)

Cash Flows From Financing Activities:
   Dividends paid                                             (165,603)                 (560)
   Preferred stock redemption                                  (37,500)                    -
   Net borrowings (payments) on line of credit                 172,377              (355,000)
   Payment for stock repurchase                                      -              (173,485)
   Issuance of common stock                                    (18,863)            2,087,885
                                                            -----------          -----------
     NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES       (49,589)            1,558,840
                                                            -----------          -----------
     NET INCREASE(DECREASE) IN CASH                           (514,452)               36,122

Cash At Beginning Of Period                                    867,370               818,507
                                                            -----------          -----------
     CASH AT END OF PERIOD                                    $352,918              $854,629
                                                            -----------          ------------
                                                            -----------          ------------
</TABLE>

See accompanying notes to consolidated financial statements.


                                       5
<PAGE>

                               TECH SQUARED, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                               SEPTEMBER 30, 1996


NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been 
prepared in accordance with generally accepted accounting principles for 
interim financial information and with the instructions to Form 10-QSB and 
Article 10 of Regulation S-X.  Accordingly, they do not include all of the 
information and footnotes required by generally accepted accounting 
principles for complete financial statements.  In the opinion of management, 
all adjustments (consisting of normal recurring accruals) considered 
necessary for a fair presentation have been included.  Operating results for 
the three and nine  month periods ended September 30, 1996 are not 
necessarily indicative of the results that may be expected for the year ended 
December 31, 1996.  The accompanying consolidated financial statements and 
notes should be read in conjunction with the audited financial statements and 
notes thereto included in the Company's 1995 annual report on Form 10-KSB.

The Consolidated financial statements include the accounts of Tech Squared 
Inc., its wholly owned subsidiaries, and Digital River, Inc. ( "Digital 
River"), which the Company controls through its bargain purchase option to 
acquire 60% of the outstanding common stock.  Digital River  has developed 
and is operating a proprietary system which allows the secure sale and 
delivery of software, fonts and images on-line, via the internet.    Digital 
River's first  on-line software sale and delivery occurred in August, 1996.

Certain amounts in the financial statements of prior periods have been 
reclassified to conform to the presentation used for the three and nine month 
periods ended September  30, 1996. 

NOTE 2  -  INVENTORIES

The Company's inventories consist primarily of goods held for resale and are
stated at the lower of cost or market.  Cost is determined using the first-in,
first-out method.

NOTE 3  -  AVAILABLE-FOR-SALE SECURITIES

The trading markets for the Company's available-for-sale securities are highly
volatile and may be limited, and there can be no assurance that the ultimate
dollar value realized for these investments will be equal to or in excess of the
value at which they are currently recorded .

In October 1996 Hanover Gold Company, Inc.  ("Hanover") completed the
registration of the Company's 525,000 shares of Hanover  common stock. 
Additionally, Hanover filed suit against the Company for breach of contract and
injunctive relief to force the Company to break escrow and release title to its
Montana Gold mining properties in exchange for 400,000 shares of Hanover common
stock held in escrow.  Although the Company has not yet filed its answer to the
Complaint, the Company has notified Hanover of some of its counterclaims.  The
ultimate outcome of the lawsuits cannot be determined at this time, however, it
could significantly impact the carrying value and nature of the mining assets
currently recorded in the Company's Consolidated Statement of Financial
Position.

NOTE 4 -  LEASE

In May 1996 the Company executed a new lease on its existing facilities.  The
new  agreement has a 38 month term and includes certain contraction and
expansion provisions.  Future minimum lease payments, including estimated common
area maintenance are as follows:

Year ending December 31,

     1997                       $189,000
     1998                        207,000
     1999                        105,000


                                       6
<PAGE>

NOTE 5  -  REVOLVING LINE OF CREDIT

In November, 1996 the Company entered into an amendment to its existing line of
credit with Norwest.  The amendment includes an extension of the term from
December 31, 1996 to April 30, 1997, an increase in the interest rate by 1%, a
minimum quarterly interest expense of $10,000, a fee of $8,000, and certain
other modifications including waiving the defaults, and re-setting the covenants
for the remainder of the term.

Borrowings under the $4,000,000 line of credit with Norwest, as amended, are 
payable on demand,  limited by eligible percentages of accounts receivable, 
inventory and certain investments, and bear interest at the prime rate plus 
2%. The agreement requires the Company to maintain certain covenants 
including a minimum net worth, current ratio, debt to equity ratio, and 
certain operating results.  Borrowings under the agreement are secured by 
substantially all the Company's assets, and are personally guaranteed up to 
$500,000 by  the Company's CEO.

NOTE 6 -  DIGITAL RIVER

Digital River, Inc. ( "Digital River"), which the Company controls through its
bargain purchase option to acquire 60% of the outstanding common stock,  has
developed and is operating a proprietary system which allows the secure sale and
delivery of software, fonts and images on-line, via the internet.    Digital
River's first  on-line software sale and delivery occurred in August, 1996.

The working capital requirements of Digital River will exceed the available cash
resources currently in Digital River.  To address its need for additional
financing Digital River has signed a letter of intent for a private placement of
its common stock with a minimum of $2.0 million and a maximum of $4.0 million in
gross proceeds.  If the offering is successfully completed the proceeds will be
used to fund product development  and expand Digital River's sales and marketing
activities, including additions to its  management team.  There is no assurance
that this offering or any other additional financing will be successfully
completed, or if completed that it will be completed at terms favorable to
existing shareholders of Digital River, or to the Company.

Summarized condensed financial information of Digital River is as follows (in
000's):

      BALANCE SHEET INFORMATION

                                   Sept. 30,       Dec. 31,
                                     1996            1995
                                     ----            ----
       Cash                         $ 171           $ 487
       Total assets                   409             635
       Current liabilities            110               9
       Stockholders' equity           299             627

      OPERATING INFORMATION
                                       Three Months Ended
                                          September 30,
                                       ------------------
                                         1996       1995
                                         ----       ----
       Net sales                        $  30       $  -
       Operating expenses                 222         45
       Net loss                          (203)       (40)




                                       7
<PAGE>

                               TECH SQUARED, INC.

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
              CONDITION AND RESULTS OF OPERATIONS

Certain statements contained herein are forward-looking statements within the 
meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934 
that involve a number of risks and uncertainties.  Such forward-looking 
information may be indicated by words such as will, may be, expects or 
anticipates.  In addition to the factors discussed herein, among the other 
factors that could cause actual results to differ materially are the 
following: business conditions and growth in the personal computer industry 
and the general economy; competitive factors such as rival computer and 
peripheral product sellers and price pressures; availability of vendor 
products at reasonable prices; inventory risks due to shifts in market 
demand; and risks presented from time to time in reports filed by the Company 
with the Securities and Exchange Commission, including but not limited to the 
annual report on Form 10-KSB for the year ended December 31, 1995.

The Company sells computer and peripheral products, mainly in the Macintosh 
market,  through direct marketing channels, and to value added resellers.   
On May 9, 1995, MacUSA  merged with the Jaguar Group, Ltd. (Jaguar).  The 
merger was accounted for as a "reverse acquisition" under the purchase method 
in which MacUSA was deemed to have acquired Jaguar, though Jaguar continued 
as the surviving legal entity.  The consolidated financial statements do not 
reflect the historical operating results of Jaguar prior to the merger 
because its historical results are not considered meaningful.  Following the 
merger, Jaguar changed its name to Tech Squared Inc.

The Consolidated financial statements include the accounts of Tech Squared 
Inc., its wholly owned subsidiaries, and Digital River, Inc. ( "Digital 
River"), which the Company controls through its bargain purchase option to 
acquire 60% of the outstanding common stock.  Digital River  has developed 
and is  operating a proprietary system which allows the secure sale and 
delivery of software, fonts and images on-line, via the internet.    Digital 
River's first  on-line software sale and delivery occurred in August, 1996.

For the three months ended September 30, 1996 the Company recorded a net loss 
of ($54,000) or ($0.01) per share compared to a  net loss of ($1,613,000) or 
($0.17) per share in the third quarter of 1995.  For the nine  months ended 
September 30, 1996 the Company recorded a  net loss of ($409,000) or  ($0.04) 
per share, compared to a pro forma net  loss  of ($1,449,000) or  ($0.17)  
per share for the comparable period of 1995.    Excluding the Company's share 
of the Digital River loss which amounted to ($122,000)  the Company recorded 
a net income of $80,000 in the third quarter of 1996.  This is the first 
profitable quarter for the Company's core operations, excluding Digital 
River, since the Quarter ended June 30, 1995.  

Summarized condensed financial information for Tech Squared, Inc.  excluding 
Digital River is as follows (In 000's):

      BALANCE SHEET INFORMATION

                                      Sept. 30,       Dec. 31,
                                         1996            1995
                                      ---------       --------
      Current assets                  $  7,243        $  7,867
      Total assets                       8,567           9,109
      Current liabilities                6,587           6,666
      Stockholders' equity               1,832           1,866

      OPERATING INFORMATION
                                          Three Months Ended
                                             September 30,
                                          ------------------
                                            1996      1995
                                            ----      ----
      Net sales                           $ 9,224   $8,842
      Operating expenses                      910    1,215
      Net income (loss)                        80   (1,589)


                                       8
<PAGE>

At September 30, 1996  the Company had cash of $353,000 of which  $171,000 
was in  Digital River and available only to fund the operations of Digital 
River.  Availability under the Company's discretionary revolving line of 
credit totaled $1.7 million  as of September 30, 1996. 

RESULTS OF OPERATIONS

NET SALES

Net sales for the Company's third quarter ended September 30, 1996  totaled 
$9,254,000 compared to $8,842,000  for the corresponding period of 1995.  The 
increase in sales of 4.7 % is due to an increase in sales to the Company's 
DTP Direct catalog customers of approximately 21% and an increase in sales to 
the Company's distribution customers of approximately 18%, offset by  
significant reductions in sales  to the Company's mass merchant and PLI 
customers of approximately $1.2 million.

Net sales for the first nine  months of 1996 totaled $26,514,000 compared to 
$33,919,000 for the same period in 1995. The decline in year-to-date sales is 
primarily due to the Company's decision In the fourth quarter of 1995  to 
de-emphasize sales into the mass merchant channel and to stop shipping 
product under the PLI brand name acquired in the second quarter of 1995.   
Sales from these two areas in the nine months ended September 30, 1995 were 
approximately $6.5 million. Sales to the Company's distribution customers 
also declined $2.5 million in  the nine month period  due to significant 
declines in sales of storage devices including hard drives, optical drives, 
and removable storage drives. The decline in sales from the Company's 
distribution, mass merchant, and PLI customers was somewhat offset by an 
increase in sales to the Company's DTP Direct catalog customers of 
approximately 11% compared to the nine months ended September 30, 1995.

Digital River  recorded net sales in the third quarter of 1996 totaling 
approximately $30,000.  Prior to the third quarter, Digital River had not 
recorded any revenue.

GROSS PROFIT

Gross profit for the quarter ended September 30, 1996 was $1,024,000 or 11.1% 
of net sales compared to $(307,000) or (3.5)% of net sales for the comparable 
period of 1995. Gross profit for  the nine month period ended September 30, 
1996 was $2,926,000  or 11.0% of net sales compared to $2,281,000 or 6.7% of 
net sales for the same period in 1995. Gross profit as a percentage of net 
sales increased in 1996 due to the significant reduction in sales to the mass 
merchant channel and under the PLI brand name which have historically carried 
lower gross margins than the Company's direct sales. Gross margin in the 
third quarter of 1995 was negatively impacted by an adjustment of 
($1,008,000) relating to the reduction of certain inventories to their lower 
of cost or market values, and certain other adjustments.

The Company expects ongoing competitive pressure on gross margins in 1996 and 
beyond.

SELLING AND MARKETING EXPENSES

Selling and marketing expenses totaled  $497,000 or 5.4% of sales during the 
quarter ended September 30, 1996 compared to $522,000 or 5.9% of sales during 
the corresponding period of 1995. For the nine month period ending September 
30, 1996 selling and marketing expenses were $1,711,000 compared to 
$1,690,000 for the same period in 1995. As a percentage of sales, selling and 
marketing expenses for the first nine months of 1996 increased to 6.5% of net 
sales from 5.0% of net sales for the same nine month period in 1995.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the third quarter ended September 30, 
1996 were $580,000 compared to $699,000 for the comparable period of 1995. 
For the nine month period ended September 30, 1996 general and administrative 
expenses were $1,583,000 compared to $1,982,000  for the same period in 1995. 
The decrease is primarily due to the voluntary salary elimination by the CEO 
of the Company from October 1995 to June 1996, and an overall reduction in


                                       9
<PAGE>

variable expenses associated with sales. The reduction in general overhead 
was offset in part by an increase in costs associated with being a public 
company.

Digital River recorded general and administrative expenses of $143,000 in the 
third quarter of 1996 compared to $4,000 in the third quarter of 1995.  The 
increase is primarily due to an increase in  personnel costs, legal costs, 
travel costs, and due to an inter company charge of $30,000 for 
administrative services provided by Tech Squared to Digital River prior to 
September 30, 1996.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses are all incurred by  Digital River.  
Research and development expenses were $55,000 and $142,000 in the  third 
quarter  and nine months ended September 30, 1996 compared to $39,000 and 
$95,000 in the same periods of 1995.  The increase reflects the increase in 
personnel and in costs associated with ongoing development activities by 
Digital River.

NET INTEREST EXPENSE

Net interest expense for the third quarter ended September 30, 1996 was 
$19,000 compared to $62,000 for the same period in 1995.  Interest expense 
for the nine month period ended September 30, 1996 was $23,000 compared to 
$190,000 for the same period in 1995.  The decrease in interest expense is 
due to a significant decrease in the average outstanding balance on the 
Company's line of credit.

DIVIDEND INCOME

The Company recorded $3,600 and $9,000 of dividend income in the third 
quarter and nine months ended September 30 1996, respectively, from its 
investment in CAM Designs Inc.

INCOME TAXES

In the third quarter and nine months ended September 30, 1996 the Company 
recorded no income tax  provision due to the Company's inability to currently 
record net operating loss benefit carry forwards for financial reporting 
purposes.  In the nine months ended September 30, 1995 the company recorded 
an income tax benefit of $215,000 including $193,000 due to the change in 
taxable status from an S Corporation as a result of the merger with Jaguar.

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal sources of liquidity at September 30, 1996 , 
consisted of liquid funds, a revolving line of credit agreement with Norwest 
Bank Minnesota, NA ("Norwest"),  and vendor trade credit lines.

As of September 30, 1996 the Company had working capital of  $739,000. This 
working capital has been reduced by a dividend declared but not yet paid in 
the amount of $727,000 which is subordinated to the Company's indebtedness 
under a line of credit with Norwest pursuant to the terms of a Credit and 
Security Agreement dated January 3, 1996. Pursuant to a related debt 
subordination agreement with Norwest, the Company is only allowed to pay 
$200,000 in 1996 of which $166,000 has been paid through September 30, 1996, 
and certain other amounts in the event of additional cash influxes into the 
Company.

In November, 1996 the Company entered into an amendment to its existing line 
of credit with Norwest. The amendment includes an extension of the term from 
December 31, 1996 to April 30, 1997, an increase in the interest rate by 1%, 
a minimum quarterly interest expense of $10,000, a fee of $8,000, and certain 
other modifications including waiving the defaults, and re-setting the 
covenants for the remainder of the term.

Borrowings under the $4,000,000 line of credit with Norwest, as amended, are 
payable on demand,  limited by eligible percentages of accounts receivable, 
inventory and certain investments, and bear interest at the prime rate plus 
2%. The agreement requires the Company to maintain certain covenants 
including a minimum net worth, current ratio, debt to equity ratio, and 
certain operating

                                       10
<PAGE>

results.  Borrowings under the agreement are secured by substantially all the 
Company's assets, and are personally guaranteed up to $500,000 by the 
Company's CEO.

Inventories decreased from $3,519,000, as of December 31, 1995 to  $2,390,000 
as of September 30,1996. This decrease resulted primarily from reduction of 
inventories related to a significant  purchase in October 1995  and from 
improved inventory management. Capital expenditures totaled $166,000 in the 
nine months ended September 30, 1996 compared to $50,000 for the comparable 
period of 1995.  The increase is primarily due to capital expenditures by 
Digital River of $77,000.

The Company believes that funds generated from management of receivable and 
inventory levels, advances under its discretionary line of credit, further 
expansion of lines with trade creditors,  the cash on hand  and potential 
proceeds from the sale of its investments, will be sufficient to fund its 
operations through the end of 1996.  However, maintaining an adequate level 
of working capital through the end of 1996 and thereafter depends in part on 
the success of the Company's sales and marketing efforts,  the Company's 
ability to control operating expenses, and the Company's ability to maintain 
its relationships with its bank and its suppliers.  Furthermore, funding of 
the Company's operations in future periods may require additional investments 
in the Company in the form of equity or debt. There can be no assurance that 
the Company will achieve desired levels of sales or profitability, or that 
future capital infusions will be available.

The working capital requirements of  Digital River will exceed the available 
cash resources currently in Digital River.  The Company is  addressing the 
need for additional capital by raising additional funds in the form of either 
equity or debt.   Digital River has signed a letter of intent for a private 
placement of its common stock with a minimum of $2.0 million and a maximum of 
$4.0 million in gross proceeds.  If the offering is successfully completed 
the proceeds will be used to fund product development  and expand Digital 
River's sales and marketing activities, including additions to its management 
team.  There is no assurance that this offering or any other additional 
financing will be successfully completed, or if completed that it will be 
completed at terms favorable to existing shareholders of Digital River, or to 
the Company.


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<PAGE>

                           PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS.

         On October 4, 1996 Hanover Gold Company, Inc. ("Hanover") filed suit 
against Tabor Resources Corporation ("Tabor"), a wholly owned subsidiary of 
the Company in the United States District Court Eastern District of 
Washington.   The complaint seeks to force the Company to break escrow and 
release title to its Montana Gold mining properties in exchange for 400,000 
shares of Hanover common stock held in escrow, along with certain other 
damages.  Although the Company has not yet filed its answer to the Complaint, 
the Company has notified Hanover of some of its counterclaims.  The ultimate 
outcome of the lawsuits cannot be determined at this time, however, it could 
significantly impact the carrying value and nature of the mining assets 
currently recorded in the Company's Consolidated Statement of Financial 
Position.

         Reference is made to the Company's Annual Report on Form 10-KSB for 
the year ended December 31, 1995 and Forms 10-QSB for the quarters ended 
March 31, 1996 and June 30, 1996 on file with the Securities and Exchange 
Commission. Except as provided above, during the quarter ended September 30, 
1996, the Company was not party to any newly instituted legal proceedings and 
there have been no material developments during such period to existing legal 
proceedings.

ITEM 5.  OTHER INFORMATION

         On August 29, 1996 Chuck Reese joined the Company as President and 
Chief Operating Officer.  Joel Ronning, the founder of MacUSA remains the 
Chief Executive Officer and Chairman of the Board.  Mr. Ronning is also the 
President and CEO of Digital River, where he is currently devoting the 
majority of his time.

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

         (a)  Exhibits

              10.1  First Amendment to Credit and Security Agreement between
                    MacUSA, Inc. and Norwest Bank Minnesota, NA dated
                    November 5, 1996.

              10.2  Letter Agreement dated August 20, 1996 to Mr. Charles Reese
                    regarding employment as the Company's President and COO.

              27.1  Financial Data Schedule.

         (b)  Reports on Form 8-K

              None


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<PAGE>

SIGNATURE

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.

                                       TECH SQUARED, INC.







November 11, 1996                      /s/ Joel Ronning
                                       -----------------------------
                                       Joel Ronning
                                       Chief Executive Officer (as principal
                                       executive and operating officer and
                                       principal financial and accounting
                                       officer)




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<PAGE>


                                  EXHIBIT INDEX


Exhibit Index    Description                                         Page Number
-------------    -----------                                         -----------

10.1             First Amendment to Credit and Security Agreement
                 between MacUSA, Inc. and Norwest Bank
                 Minnesota, NA dated November 5, 1996.                    15

10.2             Letter Agreement dated August 20, 1996 to
                 Mr. Charles Reese regarding employment as the
                 Company's President and COO.                             25

27.1             Financial Data Schedule                                  28




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