SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                           --------------------------

                                   FORM 10-QSB

                   Quarterly Report under Section 13 or 15 (d)
                     of the Securities Exchange Act of 1934

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

For the Quarter Ended:                                  Commission File Number
   September 30, 1996                                           0 - 9574

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


                         UNITED SYSTEMS TECHNOLOGY, INC.

        Iowa                                                  42-1102759
(State of Incorporation)                                   (I.R.S. Employer
                                                         Identification Number)

                          3021 Gateway Drive, Suite 240
                               Irving, Texas 75603
                                 (214) 518-0728

          (Address of principal executive offices and telephone number)

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

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                               Yes __X__ No ______



         As  of  September  30,  1996  there  were  37,969,763   shares  of  the
registrant's Common Stock, par value $0.10 per share, outstanding.





<PAGE>



                 UNITED SYSTEMS TECHNOLOGY, INC. AND SUBSIDIARY

                              INDEX TO FORM 10-QSB



PART I - FINANCIAL INFORMATION (UNAUDITED)                              PAGE
------------------------------------------

Item 1.  Consolidated Financial Statements

                  Balance Sheets                                          3

                  Statements of Operations                                4

                  Statements of Cash Flows                                5

                  Notes to Consolidated Financial Statements              6


Item 2.  Management's Discussion and Analysis or
                  Plan of Operation                                       8




PART II - OTHER INFORMATION                                              11
---------------------------



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



         The consolidated  financial  information reflects all adjustments which
are, in the opinion of management,  necessary to reflect a fair  presentation of
financial  position  and of the  results  of  operations  and cash flows for the
periods presented.


         These consolidated  financial  statements should be read in conjunction
with the notes to the  consolidated  financial  statements which are included in
the annual report on Form 10- KSB for the fiscal year ended December 31, 1995.





<PAGE>


<TABLE>

                 United Systems Technology, Inc. and Subsidiary
                           Consolidated Balance Sheets

                                           September 30,
                                               1996              December 31,
                                            (Unaudited)               1995
                                       ==================    ===================
  Current Assets  
<S>                                          <C>                  <C>       
Cash and cash equivalents                    $   44,033           $  139,234
Trade accounts receivable, less 
allowance for doubtful accounts of $75,000      320,310              368,803
Prepaid expenses and other                       17,875                8,314
                                             ----------           ----------
Total current assets                            382,218              516,351
                                             ----------           ----------

Property and equipment, net                     129,889              164,962
Goodwill, net                                 1,100,155            1,168,515
Software development costs, net                  89,190              136,713
Purchased software, net                         149,098              195,720
Deposits and other                               30,582               28,541
                                             ----------           ----------
                                              1,498,914            1,694,451
                                             ----------           ----------

Total assets                                 $1,881,133           $2,210,802
                                             ==========           ==========


  Liabilities and Stockholders' Equity
Current Liabilities
Current portion of capital lease obligations $   13,324           $   51,283
Notes payable - related party                    50,000               50,000
Trade accounts payable                          254,766              301,645
Accrued payroll                                  27,707               22,248
Accrued interest - related party                 70,980               67,873
Other accrued expenses                          137,603              115,970
Deferred revenue                                653,554              839,767
                                             ----------           ----------
Total current liabilities                     1,207,933            1,448,786

Capital lease obligations, 
net of current portion                           13,424                6,467
                                             ----------           ----------

Total liabilities                             1,221,358            1,455,253
                                             ----------           ----------

Commitments and contingencies                      -                    -

  Stockholders' Equity
Preferred stock, convertible, cumulative,
par value $.10 per share; authorized 
5,000,000 shares; issued and outstanding,
500,000 shares of Series B, 750,000 
shares of Series C, 500,000 shares of 
Series D and 300,000 shares of Series E
(liquidating preference of $1.00, $.20, 
$1.00 and $1.00 per share, respectively,) 
aggregating $1,450,000 at September 30,
1996 and December 31, 1995                      205,000              205,000
Common stock, par value $.10 per share; 
authorized 100,000,000 shares; issued 
and outstanding 37,969,763 at September 30, 
1996 and 38,643,163 December 31, 1995.        3,796,975            3,864,315
Additional paid-in capital                    4,214,390            4,157,151
Accumulated deficit                          (7,556,590)          (7,470,917)
                                             ----------           ----------
Total stockholders' equity                      659,775              755,549
                                             ----------           ----------
Total liabilities and stockholders' equity   $1,881,133           $2,210,802
                                             ==========           ==========

    The accompanying notes are an integral part of the financial statements.
</TABLE>


<PAGE>
                 United Systems Technology, Inc. and Subsidiary
                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>


                                 Three Months Ended         Nine Months Ended
                                    September 30,              September 30,

                                  1996         1995         1996         1995
                              ==========   ==========   ==========   ==========
Revenue
<S>                           <C>          <C>          <C>          <C>       
Software packages             $   88,436   $   65,236   $  254,600   $  182,636
Installation, training and
customer support                  55,299      103,712      190,939      387,057
Maintenance                      288,033      245,569      924,961      736,518
Equipment and supplies sales      44,536         (877)     186,856       51,092
Other                              8,278          932       11,247        4,159
                              ----------   ----------   ----------   ----------
                                 484,582      414,573    1,568,603    1,361,463
                              ----------   ----------   ----------   ----------
Costs and expenses
Salaries                         275,921      285,787      884,832      893,533
Other general, administrative
and selling expense              114,599      113,520      416,669      451,744
Depreciation and amortization     71,787      123,696      223,301      379,339
Commissions                       13,917       10,279       26,129       25,472
Cost of equipment and 
supplies sold                     25,690        4,769       99,403       39,548
                              ----------   ----------   ----------   ----------
                                 501,913      538,050    1,650,333    1,789,635
                              ----------   ----------   ----------   ----------
Loss from operations             (17,331)    (123,477)     (81,732)    (428,173)
                              ----------   ----------   ----------   ----------

Nonoperating income (expense)
Interest expense                  (2,296)      (4,170)      (6,919)     (15,040)
Interest income                      410        2,043        2,978        9,526
                              ----------   ----------   ----------   ----------
                                  (1,886)      (2,127)      (3,941)      (5,514)
                              ----------   ----------   ----------   ----------

Net loss                      $  (19,217)  $ (125,604)  $  (85,673)  $ (433,687)
                              ==========   ==========   ==========   ==========

Preferred stock dividend 
requirements                     (26,345)     (26,334)     (78,449)     (78,159)
                              ----------   ----------   ----------   ----------

Loss available for common 
stockholders                  $  (45,562)  $ (151,938)  $ (164,122)  $ (511,846)
                              ==========   ==========   ==========   ==========

Loss per common share         $   NIL      $    NIL     $    NIL     $  (0.01)
                              ==========   ==========   ==========   ==========

Weighted average number of 
common shares outstanding     37,969,763   33,634,163   37,969,763   33,634,163
                              ==========   ==========   ==========   ==========

    The accompanying notes are an integral part of the financial statements.
</TABLE>

<PAGE>

                 United Systems Technology, Inc. and Subsidiary
                      Consolidated Statements of Cash Flows
           For the Nine Month Period Ended September 30, 1996 and 1995
                                   (Unaudited)
<TABLE>

                                                1996                 1995
                                             ==========           ==========
Cash flows in operating activities:
<S>                                          <C>                  <C>        
Net Loss                                     $  (85,673)          $ (433,687)
                                             ----------           ----------

Adjustments to reconcile net loss to 
 net cash provided by (used in) 
 operating activities:
Depreciation and amortization                   223,301              379,339
 Change in operating assets and liabilities:
Accounts receivable                              29,892              376,991
Prepaid expenses                                 (9,561)                 754
Deposits and other                               (2,041)               2,917
Accounts payable                                (43,772)             (62,930)
Accrued expenses                                 35,593             (231,965)
Deferred revenue                               (186,213)            (224,069)
                                             ----------           ----------

                                             $   47,199           $  241,038
                                             ----------           ----------

Net cash used in operating activities           (38,475)            (192,649)
                                             ----------           ----------

Cash flows from investing activities:
Property and equipment additions             $  (23,659)          $  (18,543)
Additions to purchased software                  (2,065)              (6,650)
                                             ----------           ----------

Net cash used in investing activities        $  (25,724)          $  (25,193)
                                             ----------           ----------

Cash flows from financing activities:
Proceeds from issuance of common stock             -                    -
Payments on capital lease obligations           (31,002)             (82,940)
                                             ----------           ----------

Net cash used in financing activities        $  (31,002)          $  (82,940)
                                             ----------           ----------

Decrease in cash and cash equivalents        $  (95,200)          $ (300,782)
Cash and cash equivalents, beginning of year    139,234              419,705
                                             ----------           ----------

Cash and cash equivalents, end of period     $   44,033           $  118,923
                                             ==========           ==========

Supplemental disclosures of cash flow information:

Cash paid during the period for:
Interest                                     $    2,576           $    1,171
                                             ==========           ==========

    The accompanying notes are an integral part of the financial statements.
</TABLE>


<PAGE>

                 UNITED SYSTEMS TECHNOLOGY, INC. AND SUBSIDIARY
                   Notes To Consolidated Financial Statements
                                   (Unaudited)

Note 1.  Basis of Presentation:

         In the opinion of management,  the accompanying  unaudited consolidated
statements  contain  all  adjustments   (consisting  of  only  normal  recurring
accruals)  necessary to present fairly the  consolidated  financial  position of
United Systems  Technology,  Inc. ("USTI") as of September 30, 1996 and December
31,  1995 and the  results  of  operations  and cash  flows of USTI for the nine
months ended September 30, 1996 and 1995. The consolidated results of operations
for the nine months ended September 30, 1996 are not  necessarily  indicative of
the results to be expected for the full year.


Note 2.  Property and Equipment:

         Property  and  equipment  at  September  30, 1996 and December 31, 1995
consisted of the following:
<TABLE>

                                            September 30,        December 31,
                                                1996                 1995
                                             ----------           ----------

<S>                                          <C>                  <C>       
Leasehold improvements                       $   58,702           $   58,702
Furniture and fixtures                           37,518               37,518
Equipment                                       871,615              847,956
                                             ----------           ----------
                                                967,835              944,176
Less Accumulated depreciation
and amortization                               (837,946)            (779,214)
                                             ----------           ----------

                                             $  129,889           $  164,962
                                             ----------           ----------
</TABLE>
Note 3.  Other Assets:

         Other assets at September  30, 1996 and December 31, 1995  consisted of
the following:
<TABLE>

                                              Accumulated
September 30, 1996                    Cost    Amortization      Net
--------------------              ----------   -----------   ----------

<S>                               <C>          <C>          <C>       
Goodwill                          $1,692,128   $  591,973   $1,100,155
Software development
costs                              2,337,299    2,248,109       89,190
Purchased Software                   622,917      473,819      149,098

December 31, 1995

Goodwill                          $1,692,128   $  523,614   $1,168,515
Software development costs         2,337,299    2,200,586      136,713
Purchased Software                   620,853      425,133      195,720

</TABLE>
<PAGE>
                 UNITED SYSTEMS TECHNOLOGY, INC. AND SUBSIDIARY
                   Notes To Consolidated Financial Statements
                                   (Unaudited)

Note 4.  Preferred Stock:

         The company is in arrears in the payment of dividends to holders of its
Series B, C, D and E Preferred  Stock.  Holders of Series B Preferred  Stock are
entitled to annual  dividends of $.07 per share,  payable  quarterly  and, as of
September  30, 1996,  are entitled to the payment of  approximately  $280,075 in
dividends  which are currently in arrears.  Holders of Series C Preferred  Stock
are entitled to annual dividends of $.018 per share, payable annually and, as of
September  30, 1996,  are entitled to the payment of  approximately  $112,050 in
dividends  which are currently in arrears.  Holders of Series D Preferred  Stock
are entitled to annual dividends of $.07 per share, payable quarterly and, as of
September  30, 1996,  are entitled to the payment of  approximately  $231,960 in
dividends  which are currently in arrears.  Holders of Series E Preferred  Stock
are entitled to annual dividends of $.07 per share, payable quarterly and, as of
September  30, 1996,  are entitled to the payment of  approximately  $111,500 in
dividends which are currently in arrears.


<PAGE>
                 UNITED SYSTEMS TECHNOLOGY, INC. AND SUBSIDIARY


Item 2.   Management's Discussion and Analysis of Financial Condition
          or Plan of Operation

Results of Operations

         The Company  derives its revenue  from the  licensing  of its  software
packages,  installation,   training  and  customer  modifications,   maintenance
agreements and equipment  sales and  commissions.  Results of operations for the
period ended  September 30, 1996 include  revenues of $484,582 and a net loss of
$19,039 as compared to revenues of $414,573  and a net loss of $125,604  for the
same period in 1995.  Results for the nine month period ended September 30, 1996
include revenues of $1,568,603 and a net loss of $85,495 as compared to revenues
of $1,361,463 and a net loss of $433,687 in 1995.

         The  Company  continues  to adjust its  expenses  based on  anticipated
levels of revenue  resulting  in  decreased  expenses  and  improved  results of
operations.  Likewise,  management  is persistent in its efforts to increase the
customers'  satisfaction and to direct its marketing efforts toward  prospective
clients  which  management  believes  are better  candidates  for the  Company's
products.  With the added  diversity of the QuestTM  product line,  the Boss for
Windows  application,  and the  release of its new  asystTM  product  line,  the
Company believes it presents to prospective clients a broader choice of hardware
platforms on which to operate the Company's software.  Recently, the response to
the Company's  direct  marketing  efforts for the asystTM product line have been
encouraging  to the  Company.  Like BOSS for Windows,  the asystTM  product line
operates  in a single  user or network  Windows  environment  and is  seamlessly
interfaced with other Microsoft Office  products.  The Company believes that its
asystTM product line offers its current and prospective  customers an attractive
option, both from a financial and functionality standpoint.

Three Month Period Ended September 30, 1996 and 1995

         The  Company's  total revenue  increased  17% from $414,573  during the
third quarter in 1995 to $484,582 in 1996.  Software  license fees increased 36%
from $65,236 during the third quarter in 1995 to $88,436 in 1996,  due, in part,
to the Company's increased marketing efforts. Management continues to market the
InterFundTM,  QuestTM,  asystTM and LegacyTM  product  lines toward  prospective
customers which it believes are best suited for its products.  Installation  and
training  decreased 47% from 1995 due to the decrease in licensing  minicomputer
products in previous periods.  Maintenance revenue increased 17% in 1996 , which
is  attributable  to the  addition of the Quest Data  clients.  Equipment  sales
increased  significantly  over the third  quarter of 1996 due,  in part,  to the
sales of computer equipment and compatible preprinted forms for its products.

         Total costs and expenses decreased 7% from $538,050 in 1995 to $501,735
in 1996. Other general,  administrative and selling expense costs increased only
marginally  by 2% in 1996 as a result of continued  efforts to control or reduce
expenses.  Depreciation and amortization expense decreased 42% in 1996 from 1995
due in part to the complete  depreciation of the leasehold  improvements for the
corporate office move in 1993 and a reduction in software  amortization expense.
Commission expense increased 35% in 1996 resulting from the increased  licensing
of the Company's  software  products by Company sales  representatives  over the
same  quarter in 1995.  Cost of  equipment  sold  increased  439% as a result of
increased hardware sales during the period as well as the addition of preprinted
forms sales for its applicable products.


Nine Month Period Ended September 30, 1996 and 1995

         The Company's  total revenue  increased 15% from  $1,361,463 in 1995 to
$1,568,603 in 1996.  Software  license fees increased 36% in 1996 as compared to
1995, due, in part, to the licensing of QuestTM products, the Company's BOSS for
Windows product and its new asystTM product line. Management continues to market
the InterFundTM,  QuestTM, asystTM and LegacyTM product lines toward prospective
customers  which it  believes  are best suited for its  products.  Installation.
training and customer support revenue  decreased  51% in 1996 as compared to 
1995  primarily  as a result of a decrease in the volume of  professional  
services  generated  from the licensing activity of the Company's  minicomputer
products in prior periods.  Maintenance revenue  increased  26% in 1996  mainly
due to the  addition  of the Quest Data clients.  Equipment sales increased over
266% in 1996 due, in part, to the sales of computer equipment and compatible 
preprinted forms for its products.

         Total  costs  and  expenses  decreased  8% from  $1,789,635  in 1995 to
$1,650,155 during the period in 1996. Salary and contract labor expense remained
relatively constant in 1996 when compared to 1995. Other general, administrative
and  selling  expense  costs  decreased  8% in 1996 as a result  of the  expense
reduction plan that has reduced almost every category of expense,  with the most
significant reductions in the areas of travel, legal expense,  health insurance,
conference  fees and  equipment  repair/maintenance  expense.  Depreciation  and
amortization  expense  decreased  41%  in  1996  as a  result  of  the  complete
depreciation of the leasehold improvements for the corporate office move in 1993
and a reduction in software amortization  expense.  Commission expense increased
3% in 1996  resulting  from the increased  licensing of the  Company's  software
products by Company sales representatives. Cost of equipment sold increased 151%
as a result  of  increased  hardware  sales  during  the  period  as well as the
addition of preprinted forms sales for its applicable products.

Liquidity and Capital Resources

         The Company had net cash used by operating activities of $38,475 during
the nine  months  ended  September  30,  1996,  as  compared to net cash used by
operations  of $192,649 for the same period in 1995.  This decrease in cash used
was primarily the result of the improvement in the results of operations and the
improved collection efforts in 1996 as compared to 1995. Net cash of $25,724 was
utilized  during 1996 for investing in capital  expenditures  versus  $25,193 in
1995.  Net cash of $31,002  was  utilized in 1996 as compared to $82,940 in 1995
for financing activities during the nine month period.

         Management believes that the effect of its continued focus on adjusting
the Company's  expenses to the level of revenue,  which  management  anticipates
achieving,  and the Company's  current cash balance will be adequate to meet its
working capital requirements in the near future.  However, if the Company is not
able to continue to generate  positive  cash flows in the future by  achieving a
level of sales  adequate to support the  Company's  cost  structure,  additional
financing may be required, of which there can be no assurance.

         The  Company  has a $50,000  note  payable to Ventana  Growth  Fund,  a
related  party.  The maturity date of the note was extended  from  September 30,
1994 to September 30, 1996. The Company is currently negotiating an extension to
this  maturity  date.  The original  maturity  date of this note was October 17,
1987. As of September 30, 1996 there was $70,980 of interest  outstanding on the
note.  It may be  necessary  for the Company to seek further  extensions  of the
maturity of this obligation in the future.

         The  Company is  currently  in arrears in the payment of  dividends  to
holders of its  preferred  stock.  As of September 30, 1996,  dividends  were in
arrears  on Series B  preferred  stock in the  amount of  $280,075,  on Series C
preferred  stock in the amount of $112,050,  on Series D preferred  stock in the
amount of $231,960 and on Series E preferred stock in the amount of $111,500.

<PAGE>

                           Part II - Other Information

Item 1.  Legal Proceedings

         The Company is involved in the following legal proceedings:

         On December  10,  1993,  Plaintiff  County of Essex filed suit  against
USTI,  USTEI, New Jersey  Municipal Data Management  ("MDM") and MDM's surety in
Superior Court of New Jersey.  The suit is based on allegations  that MDM failed
to perform its obligations  related to software and related services sold by MDM
to the County of Essex and that USTI and USTEI  succeeded to the  obligations of
MDM by the  acquisition  of MDM.  USTI  and  USTEI  have  answered  each of such
lawsuits,  denying all material  allegations  therein,  and intend to vigorously
defend such allegations.

         On August 11, 1993,  Plaintiff City of Sinton, Texas filed suit against
USTI  alleging  defects in software and services  sold to the city in 1990.  The
suit failed to specify a measure of damages  which the City of Sinton  seeks and
USTI has answered the lawsuit by denying all material  allegations  therein, and
intends to vigorously defend such allegations.

         On August 12, 1996,  Plaintiff City of Siloam  Springs,  Arkansas filed
suit against USTI alleging  defects in software and services sold to the city in
1994.  The suit alleges  three  different  theories of  recovery,  as to each of
which, plaintiff claims in excess of $10,000. USTI intends to answer the lawsuit
by denying all material  allegations  therein,  and intends to vigorously defend
such allegations.




Item 2.  Change In Securities

         Not Applicable

<PAGE>

Item 3.  Defaults Upon Senior Securities

         The company is in arrears in the payment of dividends to holders of its
Series B, C, D and E Preferred  Stock.  Holders of Series B Preferred  Stock are
entitled to annual  dividends of $.07 per share,  payable  quarterly  and, as of
September  30, 1996,  are entitled to the payment of  approximately  $280,075 in
dividends  which are currently in arrears.  Holders of Series C Preferred  Stock
are entitled to annual dividends of $.018 per share, payable annually and, as of
September  30, 1996,  are entitled to the payment of  approximately  $112,050 in
dividends  which are currently in arrears.  Holders of Series D Preferred  Stock
are entitled to annual dividends of $.07 per share, payable quarterly and, as of
September  30, 1996,  are entitled to the payment of  approximately  $231,960 in
dividends  which are currently in arrears.  Holders of Series E Preferred  Stock
are entitled to annual dividends of $.07 per share, payable quarterly and, as of
September  30, 1996,  are entitled to the payment of  approximately  $111,500 in
dividends which are currently in arrears.

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

         Not Applicable


Item 5.  Other Information

         Not Applicable

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits - No exhibits are required to be filed with this report.

         (b) No reports on Form 8-K were filed during the quarter for which this
         report is filed.

<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.


                                            United Systems Technology, Inc.


Date: November 14, 1996                By: /s/  Thomas E. Gibbs
                                           --------------------
                                           Thomas E. Gibbs, President
                                           and Chairman of the Board
                                          (Principal Executive Officer)



Date: November 14, 1996                By: /s/  Randall L. McGee
                                           ----------------------
                                           Randall L. McGee, Secretary
                                           and Treasurer
                                          (Principal Financial and
                                           Accounting Officer)

<PAGE>