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
   June 30, 1999                                       0 - 9574

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


                         UNITED SYSTEMS TECHNOLOGY, INC.

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

                           1850 Crown Road, Suite 1109
                               Dallas, Texas 75234
                                 (972) 402-8600

          (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 June 30, 1999 there were 48,178,043 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 a fair  presentation  of financial
position  and of the  statements  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, 1998.


<PAGE>
                 United Systems Technology, Inc. and Subsidiary
                          Consolidated Balance Sheets
<TABLE>
<S>                                               <C>            <C>
                                                  June 30,
                                                    1999         December 31,
                                                 (Unaudited)        1998
                                                 -----------     -----------
Current Assets
 Cash and cash equivalents                      $   673,853      $   478,008
 Trade accounts receivable, less allowance
  for doubtful accounts of $25,000 at
  June 30, 1999 and December 31, 1998               186,514          329,708
                                                 ----------       ----------
    Total current assets                            860,367          807,716
                                                 ----------       ----------

 Property and equipment, net                         67,161           65,329
 Goodwill, net                                      379,684          413,653
 Purchased software, net                             24,515           33,301
 Deposits and other                                  21,422            5,139
                                                 ----------       ----------
                                                    492,782          517,422
                                                 ----------       ----------
    Total assets                                $ 1,353,149      $ 1,325,138
                                                 ==========       ==========

Liabilities and Stockholders' Equity
Current Liabilities
 Current portion of capital lease obligations   $     1,252      $     2,448
 Trade accounts payable, including $113,200
  payable to a related party at June 30, 1999
  and December 31, 1998                             194,831          182,366
 Accrued payroll                                     87,627          110,806
 Accrued interest - related party                    37,720           43,457
 Other accrued expenses                              59,098           83,241
 Deferred revenue                                   546,000          701,180
                                                 ----------       ----------
    Total current liabilities                       926,528        1,123,498

 Notes payable - related party                       22,915           27,083
                                                 ----------       ----------
    Total liabilities                               949,443        1,150,581
                                                 ----------       ----------

 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, 500,000 shares of Series D, and
  300,000 shares of Series E, aggregating
  liquidating preference of $1,300,000
  ($1.00 per share)                                 130,000          130,000
 Common stock, par value $.10 per share;
  authorized 100,000,000 shares; issued and
  outstanding 48,178,043 at June 30, 1999 and
  December 31, 1998                               4,817,804        4,817,804
 Additional paid-in capital                       3,342,562        3,333,561
 Accumulated deficit                             (7,846,660)      (8,066,808)
                                                 ----------       ----------
                                                    443,706          214,557
 Less stock purchase note receivable                 40,000           40,000
                                                 ----------       ----------
    Total stockholders' equity                      403,706          174,557
                                                 ----------       ----------
    Total liabilities and stockholders' equity  $ 1,353,149      $ 1,325,138
                                                 ==========       ==========
</TABLE>

    The accompanying notes are an integral part of the financial statements.

<PAGE>

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

                                     Three Months Ended     Six Months Ended
                                          June 30,              June 30,
                                       1999       1998       1999      1998
                                       ----       ----       ----      ----
Revenue
 Software packages                   $ 146,101  $  76,983   $ 271,676 $ 124,567
 Installation, training and
  customer support                      78,341     25,693     167,504    45,035
 Maintenance                           221,334    249,603     451,662   505,838
 Equipment and supplies sales           64,498     64,141     132,631   106,716
 Other                                   3,200      1,832       7,474     3,675
                                     ---------  ---------   --------- ---------
                                       513,474    418,252   1,030,947   785,831
                                     ---------  ---------   --------- ---------
Costs and expenses
 Salaries                              236,572    192,324     463,507   399,921
 Other general, administrative and
  selling expense                      104,121    133,229     221,883   248,584
 Depreciation and amortization          29,124     31,565      57,690    68,336
 Commissions                            10,775      6,010      15,185    10,011
 Cost of equipment and supplies sold    34,714     39,127      73,006    57,937
                                     ---------  ---------   --------- ---------
                                       415,306    402,255     831,271   784,789
                                     ---------  ---------   --------- ---------
Income from operations                  98,168     15,997     199,676     1,042
                                     ---------  ---------   --------- ---------
Nonoperating income (expense)
 Interest expense                         (514)    (1,133)     (1,065)   (2,303)
 Interest income                         6,146      2,148      11,667     3,926
                                     ---------  ---------   --------- ---------
                                         5,632      1,015      10,602     1,623
                                     ---------  ---------   --------- ---------
Net income before extraordinary item   103,800     17,012     210,278     2,665
                                     ---------  ---------   --------- ---------
Extraordinary gain on settlement
 of debt                                  -          -          9,870      -
                                     ---------  ---------   --------- ---------
Net income                             103,800     17,012     220,148     2,665

Preferred stock dividend requirements  (22,690)   (22,690)    (45,130)  (45,130)
                                     ---------  ---------   --------- ---------
Income (loss) available for common
 stockholders                        $  81,110  $  (5,678)  $ 165,148 $ (42,465)
                                     =========  =========   ========= =========

Net income (loss) per common share
 before extraordinary item           $     NIL  $     NIL   $     NIL $     NIL
Extraordinary gain on settlement
 of debt                                   NIL        NIL         NIL       NIL
                                     ---------  ---------   --------- ---------
Net income (loss) per common share
 after extraordinary item            $     NIL  $     NIL   $     NIL $     NIL
                                     =========  =========   ========= =========

Weighted average number of common
 shares outstanding                 48,178,043 43,178,043 48,178,043 43,178,043
                                    ========== ========== ========== ==========
</TABLE>

    The accompanying notes are an integral part of the financial statements.


<PAGE>

                 United Systems Technology, Inc. and Subsidiary
                     Consolidated Statements of Cash Flows
             For the Six Month Period Ended June 30, 1999 and 1998
                                  (Unaudited)
<TABLE>
<S>                                                 <C>              <C>

                                                    1999             1998
                                                    ----             ----
Cash flows in operating activities:
  Net income                                    $  220,148        $   2,665

Adjustments to reconcile net income (loss)
 to net cash provided by (used in)
 operating activities:
  Depreciation and amortization                     57,690           68,336
  Extraordinary gain on settlement of debt          (9,870)            -
  Change in operating assets and liabilities:
   Accounts receivable                             143,194           57,668
   Prepaid expenses                                   -             (13,378)
   Deposits and other                              (16,283)            (150)
   Accounts payable                                   (750)           8,887
   Accrued expenses                                (24,143)           9,776
   Deferred revenue                               (155,180)         (92,630)
                                                 ----------       ----------
                                                    (5,342)          38,509
                                                 ----------       ----------

Net cash provided from operating activities     $  214,806        $  41,174
                                                 ----------       ----------

Cash flows from investing activities:
 Property and equipment additions                  (16,765)         (13,154)
 Additions to purchased software                      -                (690)
                                                 ----------       ----------

Net cash used in investing activities              (16,765)         (13,844)
                                                 ----------       ----------

Cash flows from financing activities:
 Payments on notes payable                          (1,000)            -
 Payments on capital lease obligations              (1,196)          (3,145)
                                                 ----------       ----------

Net cash used in financing activities               (2,196)          (3,145)
                                                 ----------       ----------

Increase in cash and cash equivalents              195,845           24,185
Cash and cash equivalents, beginning of period     478,008          204,807
                                                 ----------       ----------

Cash and cash equivalents, end of period        $  673,853        $ 228,992
                                                 ==========       ==========
</TABLE>


    The accompanying notes are an integral part of the financial statements.

<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 June 30, 1999 and December 31,
1998 and the results of operations  and cash flows of USTI for the three and six
months ended June 30, 1999 and 1998. The consolidated  results of operations for
the six months ended June 30, 1999 are not necessarily indicative of the results
to be expected for the full year.


Note 2.  Property and Equipment:

     Property and equipment at June 30, 1999 and December 31, 1998  consisted of
the following:
<TABLE>
<S>                                          <C>               <C>

                                             June 30,          December 31,
                                               1999               1998
                                               ----               ----

Leasehold improvements                      $  64,772          $   64,772
Furniture and fixtures                         60,655              40,655
Equipment                                     916,476             923,841
                                            ---------          ----------
                                            1,046,034           1,029,268
Less Accumulated depreciation
  and amortization                           (978,873)           (963,939)
                                            ---------          ----------

                                            $  67,161          $   65,329
                                            ---------          ----------
</TABLE>

Note 3.  Other Assets:

     Other  assets at June 30,  1999 and  December  31,  1998  consisted  of the
following:
<TABLE>
<S>                          <C>            <C>                     <C>

                                            Accumulated
June 30, 1999                Cost           Amortization            Net
-------------                ----           ------------            ---

Goodwill                 $ 1,692,128       $ (1,312,444)      $   379,684
Purchased Software           592,700           (568,185)           24,215

December 31, 1998
-----------------
Goodwill                 $ 1,692,128       $ (1,278,475)      $   413,653
Purchased Software           592,700           (559,399)           33,301

</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, 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
June 30,  1999,  are  entitled  to the  payment  of  approximately  $376,155  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
June 30,  1999,  are  entitled  to the  payment  of  approximately  $328,045  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
June 30,  1999,  are  entitled  to the  payment  of  approximately  $169,150  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
three month  period  ended June 30, 1999  include  revenues of $513,474  and net
income of $103,800 as compared to revenues of $418,252 and net income of $17,012
for the same  period in 1998.  Results for the six month  period  ended June 30,
1999 include  revenues of  $1,030,947  and net income of $220,148 as compared to
revenues of $785,831 and net income of $2,665 in 1998.

     The  Company is  continuing  the  development  of its asystTM  products,  a
Windows  product line that operates in a single user or network  environment and
is seamlessly  interfaced with the other Microsoft Office products.  The asystTM
product line currently  includes a Fund  Accounting  system,  a Utility  Billing
system and a Public Safety system and has been  installed at over 300 locations.
The Fund  Accounting  system  includes  General  Ledger,  Budget XLence,  Report
XLence, Accounts Payable,  Accounts Receivable,  Purchase Orders, Cash Receipts,
and Payroll modules. The Utility Billing system includes Utility Billing,  Meter
Reader  Interface,  Bank Drafts and Budget Billing  modules.  The initial Public
Safety system includes Master Name Index, Calls for Service, Offense Reports and
UCR Reporting modules.  The Company is currently  developing its asystTM General
Government   products,   which  include  Business  and  Animal  Licenses,   Code
Enforcement  and Building  Permits  modules,  and  anticipates  that the initial
modules will be released in the 3rd quarter of 1999.  The Company  believes that
its asystTM  product  line will  continue  to offer its current and  prospective
customers  with an  attractive  software  solution,  both from a  financial  and
functionality standpoint and follows the trend of clients moving to PC networks.
This trend  resulted in a continued  decrease in the  licensing of the Company's
DOS (QuestTM ) and mid-range  (LegacyTM ) products to new accounts in 1999.  The
Company is offering a Year 2000 version of certain QuestTM and LegacyTM  modules
and has  received  commitments  to license  this  version of these  products and
continued to ship its Year 2000 version of the LegacyTM modules in the first six
months of 1999.

Three Month Period Ended June 30, 1999 and 1998
-----------------------------------------------

     The Company's  total revenue  increased 23% from $418,252 during the second
quarter in 1998 to $513,474 in 1999.  Software  license  fees  increased  90% in
1999,  due, in part, to an increase in the licensing of the Company's  Year 2000
version of its LegacyTM  products as well as an increase in the licensing of the
Company's  asystTM  products.  The Company  continues  to market its products to
prospective  customers  which it  believes  are best  suited  for its  products.
Installation  and  training  increased  to $78,341 in 1999 from $25,693 in 1998,
due, in part, to an increase in the demand for custom programming related to the
implementation  of the Year 2000  version of the  Company's  LegacyTM  products.
Maintenance  revenue  decreased 11% during 1999,  due, in part, to a decrease in
the number of the  Company's  QuestTM and  LegacyTM  customers  that  elected to
select maintenance coverage.

<PAGE>

     Total costs and expenses  increased 3% from $402,255 in 1998 to $415,306 in
1999.  Salary  expense  increased  23% in 1999,  due, in part, to an increase in
incentives  resulting  from  improved  results  of  operations.  Other  general,
administrative  and  selling  expense  decreased  22% in 1999 as a result of the
Company's   continued   efforts  to  manage  its  expenses.   Depreciation   and
amortization  expense  decreased  8% in 1999 as a  result  of a  portion  of the
Company's  assets  becoming  fully  depreciated  in  1999.   Commission  expense
increased  79% in 1999 due to an increase in the volume of  licensing  Company's
software in 1999. Cost of equipment and supplies sold decreased 11% in 1999.

Six Month Period Ended June 30, 1999 and 1998
---------------------------------------------

     Total costs and expenses  increased 6% from $784,789 in 1998 to $831,271 in
1999.  Salary  expense  increased  16% in 1999,  due, in part, to an increase in
incentives  resulting  from  improved  results  of  operations.  Other  general,
administrative  and selling  expense costs  decreased 11% in 1999 as a result of
continued  efforts to control or reduce expenses.  Depreciation and amortization
expense  decreased 16% as a result of a portion of the Company's assets becoming
fully depreciated  during the period.  Commission  expense increased 52% in 1999
due to an increase in the volume of licensing  the  Company's  products in 1999.
Cost of equipment and supplies sold increased 26% as a result of increased sales
of computer equipment and supplies during the period.


Liquidity and Capital Resources
-------------------------------

     The Company had net cash  provided  from  operating  activities of $214,806
during the six months ended June 30, 1999,  as compared to net cash  provided by
operations  of $41,174  for the same  period in 1998.  Net cash of  $16,765  was
utilized  during  1999 for  investing  in capital  expenditures  as  compared to
$13,844 in 1998.

     Management  believes that its ability to generate  positive cash flows from
operations added to 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  had  a  $50,000  note  payable  to  Ventana  Growth  Fund
("Ventana"),  a related  party.  Ventana  distributed  this note to its  limited
partners in its fund in 1997.  During 1998, the Company offered the note holders
the option of extending each note for an additional two year period or receiving
a  partial  payment  of the  balance  due in full  in  final  settlement  of the
principal and interest due to each note holder.  As of December 31, 1998,  there
was  $27,083  due  to  the  remaining  note  holders  and  $43,457  of  interest
outstanding  on these notes.  In 1999 certain  additional  note holders opted to
receive a partial  payment  totaling $1,000 in lieu of the balance due of $4,168
on the note  and  $6,702  of  accrued  interest  resulting  in a $9,870  gain on
settlement  of debt.  As of June 30, 1999 there was $22,915 due to the remaining
note holders and $37,720 of interest outstanding on these notes.

<PAGE>

     The Company is  currently in arrears in the payment of dividends to holders
of its preferred stock. As of June 30, 1999, dividends were in arrears on Series
B preferred stock in the amount of $376,155,  on Series D preferred stock in the
amount of $328,045 and on Series E preferred stock in the amount of $169,150.

Year 2000
---------

     Until just a few years ago, most  computer  programs were written to define
an applicable  year by using two digits for the year instead of four. The effect
on a computer program that was written in such a way is to define a year that is
entered  with the two digits "00" as 1900  rather than 2000.  When the Year 2000
arrives,  any computer programs that are written in this manner will either have
to be modified to accept a date in the 21st century or the programs will have to
be  replaced.  This issue not only  effects  the  Company's  internal  automated
information  systems but also has an effect on the software products the Company
develops,  supports and markets to its customers.  The Company has evaluated the
computer  programs that it utilizes  internally for its information  systems and
has  determined  that  substantially  all of its systems are currently Year 2000
compliant.  The  Company's  asystTM  product  line is Year 2000  compliant.  The
Company's  customers that are utilizing its LegacyTM,  and QuestTM product lines
are being offered a Year 2000 compliant version of certain packages within these
product lines or are being encouraged to migrate to the Company's  products that
are Year 2000 compliant.  Based on currently available information,  the Company
does not  anticipate  that the costs to address  the issues  related to the Year
2000 will have a material adverse impact on the Company's  financial  condition,
results of operations or liquidity.  The Company  currently  estimates  that the
total cost to achieve Year 2000 compliance to be approximately $25,000.

Forward-Looking Statements
--------------------------

     This report  contains  forward-looking  statements,  other than  historical
facts,  which  reflect the view of Company's  management  with respect to future
events.  Such  forward-looking  statements are based on assumptions  made by and
information currently available to the Company's management. Although management
believes that the expectations reflected in such forward-looking  statements are
reasonable,  it can give no assurance that such  expectations will prove to have
been  correct.  Important  factors  that could  cause  actual  results to differ
materially from such expectations  include,  without limitation,  the ability of
the Company i) to generate  levels of revenue and  adequate  cash flows from its
operations to support and maintain its current cost structure and ii) to develop
and deliver products that are  competitive,  accepted by its markets and are not
rendered  obsolete  by  changing  technology.   The  forward-looking  statements
contained  herein  reflect the current  views of the Company's  management  with
respect to future  events  and are  subject to these  factors  and other  risks,
uncertainties and assumptions relating to the operations,  results of operations
and  financial  position of the Company.  The Company  assumes no  obligation to
update the  forward-looking  statements or to update the reasons  actual results
could differ from those contemplated by such forward-looking statements.

<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 Company filed third party  complaints  against counsel
representing   the  parties  to  the   transaction   for   negligence  in  their
representation  on this matter.  On April 26, 1999, a settlement  was reached in
this  matter,  with all  parties,  whereby  this  case  will be  dismissed  with
prejudice upon the execution of the  documentation  necessary for the settlement
and was reached without material adverse effect to the Company

     The Company is also a defendant in various legal  actions,  which arose out
of the normal course of business.  In the opinion of  management,  none of these
actions are expected to have a material  effect on the  consolidated  results of
operations or financial position of the Company.


Item 2.  Change In Securities

         Not Applicable


Item 3.  Defaults Upon Senior Securities

     The  company is in arrears in the  payment of  dividends  to holders of its
Series B, 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
June 30,  1999,  are  entitled  to the  payment  of  approximately  $376,155  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
June 30,  1999,  are  entitled  to the  payment  of  approximately  $328,045  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
June 30,  1999,  are  entitled  to the  payment  of  approximately  $169,150  in
dividends which are currently in arrears.

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

     On June 23, 1999, the Company held its Annual Meeting of  Shareholders.  At
the meeting,  the  shareholders  of the Company  voted to approve the  following
items:

    The following persons were elected as Directors of the Company:

         Thomas E. Gibbs
         Jordan Issackedes
         Scott. A. Burri
         Earl H. Cohen

     The  accounting  firm of Grant  Thornton  LLP was  selected as  independent
accountants for the Company.


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:  August 13, 1999                      By: /s/  Thomas E. Gibbs
                                                --------------------
                                                Thomas E. Gibbs, President
                                                 and Chairman of the Board
                                                (Principal Executive Officer)



Date:  August 13, 1999                      By: /s/  Randall L. McGee
                                                ---------------------
                                                Randall L. McGee, Secretary
                                                 and Treasurer
                                                (Principal Financial and
                                                  Accounting Officer)



<PAGE>