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
   March 31, 1997                                 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
                                 (972) 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 March 31, 1997 there were 43,278,045  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                                       10
---------------------------



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



     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, 1996.




<PAGE>

                 United Systems Technology, Inc. and Subsidiary
                           Consolidated Balance Sheets
<TABLE>
<S>                                                 <C>               <C>
   
                                                  March 31,
                                                    1997           December 31,
                                                 (Unaudited)           1996
                                                =============     =============
           Current Assets
Cash and cash equivalents                       $    100,323        $   67,252
 Trade accounts receivable, less allowance
  for doubtful accounts of $40,000 at
 March 31, 1997 and December 31, 1996                266,683           253,692
 Prepaid expenses and other                              574               279
                                                  ----------        ----------
   Total current assets                              367,580           321,223
                                                  ----------        ----------

Property and equipment, net                          102,380           115,738
Goodwill, net                                        724,759           741,744
Purchased software, net                               67,667            71,833
Deposits and other                                    20,869            27,942
                                                  ----------        ----------
                                                     915,675           957,257
                                                  ----------        ----------
   Total assets                                  $ 1,283,255        $1,278,480
                                                  ==========        ==========

          Liabilities and Stockholders' Equity
Current Liabilities
 Current portion of capital lease obligations    $     8,515        $    8,271
 Trade accounts payable                              207,318           230,039
 Accrued payroll                                      15,949            20,432
 Accrued interest - related party                     73,003            72,020
 Other accrued expenses                              137,648           115,368
 Deferred revenue                                    681,909           664,797
                                                  ----------        ----------
   Total current liabilities                       1,124,342         1,110,927

Notes payable - related party                         50,000            50,000
Capital lease obligations, net of current portion      4,508             6,730
                                                  ----------        ----------
   Total liabilities                               1,178,850         1,167,657 
                                                  ----------        ----------

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 $1,300,000
 at March 31, 1997 and 1,450,000 at December
 31, 1996                                            130,000           205,000 
Common stock, par value $.10 per share;
 authorized 100,000,000 shares; issued and 
 outstanding 43,278,045 at March 31, 1997
 and 38,634,163 at December 31, 1996.              4,327,857         3,796,975
Additional paid-in capital                         3,758,508         4,214,390
Accumulated deficit                               (8,111,960)       (8,105,542)
                                                  ----------        ----------
     Total stockholders' equity                      104,405           110,823
                                                  ----------        ----------
     Total liabilities and stockholders' equity  $ 1,283,255       $ 1,278,480
                                                  ==========        ==========
</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>
                                                        Three Months Ended
                                                              March 31,
                                                     1997              1996
                                                  ==========        ==========
Revenue
 Software packages                               $    78,503       $    78,679
 Installation, training and customer support          35,031            73,450
 Maintenance                                         279,519           326,837
 Equipment and supplies sales                         64,122            47,192
 Other                                                 1,304              -
                                                  ----------        ----------
                                                     458,479           526,158
                                                  ----------        ----------
Costs and expenses
 Salaries                                            253,180           310,457
 Other general, administrative and selling expense   128,854           148,580
 Depreciation and amortization                        39,782            77,218
 Commissions                                           9,109             3,264
 Cost of equipment and supplies sold                  33,072            16,339
                                                  ----------        ----------
                                                     463,997           555,858
                                                  ----------        ----------
Loss from operations                                  (5,518)          (29,700)
                                                  ----------        ----------

Nonoperating income (expense)
 Interest expense                                     (1,393)           (2,542)
 Interest income                                         493             1,269
                                                  ----------        ----------
                                                        (900)           (1,273)
                                                  ----------        ----------
Net loss                                         $    (6,418)      $   (30,973)
                                                  ==========        ==========

Preferred stock dividend requirements                (22,440)          (25,865)
                                                  ----------        ----------

Loss available for common stockholders           $   (28,858)      $   (56,838)
                                                  ==========        ==========

Earning (loss) per common share                  $      NIL        $      NIL
                                                  ==========        ==========

Weighted average number of common
 shares outstanding                               43,278,045        38,634,163
                                                  ==========        ==========

</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 Three Month Period Ended March 31, 1997 and 1996
                                   (Unaudited)
<TABLE>
<S>                                                    <C>             <C>

                                                      1997             1996
                                                    ==========      ==========
Cash flows in operating activities:
 Net Loss                                        $    (6,418)      $   (30,972)
                                                  ----------        ----------

Adjustments  to  reconcile  net  loss
 to  net  cash provided by operating activities:
  Depreciation and amortization                       39,782            77,218
  Change in operating assets and liabilities:
   Accounts receivable                               (12,991)           53,751
   Prepaid expenses                                     (295)          (34,302)
   Deposits and other                                  7,073            14,283
   Accounts payable                                  (22,721)          (23,874)
   Accrued expenses                                   18,780            15,819
   Deferred revenue                                   17,112           (24,481)
                                                  ----------        ----------
                                                 $    46,740       $    78,414
                                                  ----------        ----------

Net cash provided (used) in operating activities      40,322            47,442
                                                  ----------        ----------

Cash flows from investing activities:
 Property and equipment additions                $    (4,186)      $    (8,077)
 Additions to purchased software                      (1,086)             (210)
                                                  ----------        ----------

Net cash used in investing activities            $    (5,272)      $    (8,287)
                                                  ----------        ----------

Cash flows from financing activities:
 Payments on capital lease obligations           $    (1,979)      $   (17,736)
                                                  ----------        ----------

Increase in cash and cash equivalents            $    33,071       $    21,419
Cash and cash equivalents, beginning of year          67,252           139,234
                                                  ----------        ----------

Cash and cash equivalents, end of period         $   100,323       $   160,653
                                                  ==========        ==========

Supplemental disclosures of cash flow information:

Cash paid during the period for:
 Interest                                        $       580       $     1,464
                                                   ==========        ==========

</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 March 31, 1997 and December 31,
1996 and the results of  operations  and cash flows of USTI for the three months
ended March 31, 1997 and 1996.  The  consolidated  results of operations for the
three months ended March 31, 1997 are not necessarily  indicative of the results
to be expected for the full year.


Note 2.  Property and Equipment:

     Property and equipment at March 31, 1997 and December 31, 1996 consisted of
the following:
<TABLE>
<S>                                            <C>                 <C>

                                             March 31,          December 31,
                                               1997                 1996
                                            ----------           ----------

Leasehold improvements                    $    58,702          $    58,702
Furniture and fixtures                         38,330               38,330
Equipment                                     873,941              869,292
                                            ---------            ---------
                                              970,973              966,324
Less Accumulated depreciation
  and amortization                           (868,593)            (850,586)
                                            ---------            ---------

                                          $   102,380          $   115,738
                                            ---------            ---------
</TABLE>


Note 3.  Other Assets:

     Other  assets at March 31,  1997 and  December  31, 1996  consisted  of the
following:
<TABLE>
<S>                         <C>                  <C>                  <C>

                                             Accumulated
March 31, 1997             Cost              Amortization              Net
--------------             ----              ------------              ---

Goodwill               $ 1,692,128          $   (967,369)       $    724,759
Purchased Software         591,740              (524,073)             67,667

December 31, 1996
-----------------
Goodwill               $ 1,692,128          $   (950,384)       $    741,744
Purchased Software         590,654              (518,821)             71,833
</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
March 31,  1997,  are  entitled  to the  payment of  approximately  $297,430  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
March 31,  1997,  are  entitled  to the  payment of  approximately  $249,315  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
March 31,  1997,  are  entitled  to the  payment of  approximately  $121,915  in
dividends which are currently in arrears.

Note 5.  New Accounting Pronouncement:

     The FASB has issued  Statement of Financial  Accounting  Standards No, 128,
Earnings Per Share,  which which is effective  for financial  statements  issued
after  December 15, 1997.  Early  adoption of the new standard is not permitted.
The new standard  eleminates  primary and fully  diluted  earnings per share and
requires  presentation  of basic and siluted  earnings per share  together  with
disclosure of how the per share  amounts are computed.  The adoption of this new
standard is not expected to have a material impact on the disclosure of earnings
per share in the financial statements.  The effect of adopting this new standard
has not been determined.

<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 March 31,  1997  include  revenues  of $458,479  and a net loss of
$6,418 as compared  to  revenues  of $526,158  and a net loss of $30,973 for the
same period in 1996.

     The Company continues to adjust its expenses based on anticipated levels of
revenue resulting in decreased expenses and improved results of operations.  The
Company is continuing  its  development  of  additional  modules for its asystTM
product line,  which was initially  introduced in 1996. The asystTM product line
will operate in a single user or network  Windows  environment and is seamlessly
interfaced with the other Microsoft Office  products.  The Company believes that
its asystTM  product line offers 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.

Three Month Period Ended March 31, 1997 and 1996

     The Company's  total revenue  decreased 13% from $526,158  during the first
quarter in 1996 to $458,479 in 1997.  Software  license fees  remained  constant
during the first quarter of 1997 as compared to 1996.  The Company  continues to
market its  QuestTM,  asystTM and  LegacyTM  product  lines  toward  prospective
customers which it believes are best suited for its products.  Installation  and
training  decreased  52%  from  1996 due to the  decrease  in  licensing  of the
Company's  minicomputer  products which require a higher amount of these type of
services.  Maintenance  revenue  decreased  14% in  1997 ,  due in  part,  to an
attrition  in the number of  customers  of the  Company's  LegacyTM  products to
select maintenance  coverage.  Equipment and supplies sales increased 36% in the
first quarter of 1997 due, in part, to increased sales of computer equipment and
compatible preprinted forms for its products.

     Total costs and expenses decreased 17% from $555,858 in 1996 to $463,997 in
1997.  Salary  expense  decreased  18% in  1997  as a  result  of the  Company's
continued  adjustments  in  staffing  to align  with its  anticipated  levels of
revenue.  Other general,  administrative and selling expense costs decreased 13%
in 1997 as a  result  of  continued  efforts  to  control  or  reduce  expenses.
Depreciation  and  amortization  expense  decreased 48% in 1997 from 1996 due in
part, to a reduction in software and goodwill amortization  expense.  Commission
expense  increased  179% in 1997  resulting  from the increased  number of sales
representaives  employed  by the  Company and the use of an agent to license the
Company's software during the quarter.  Cost of equipment sold increased 102% as
a result of increased sales of computer equipment during the period.


<PAGE>

Liquidity and Capital Resources

     The Company had net cash provided in operating activities of $40,324 during
the three  months  ended March 31,  1997,  as  compared to net cash  provided by
operations  of  $47,442  for the same  period in 1996.  Net cash of  $5,735  was
utilized  during 1997 for  investing in capital  expenditures  versus $8,287 for
1996. Net cash of $1,979 was utilized in 1997 as compared to $17,736 in 1996 for
financing activities during the three 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, 1996 to
September  30,  1998.  The original  maturity  date of this note was October 17,
1987.  As of March 31,  1997 there was $73,003 of  interest  outstanding  on the
note.
     The Company is  currently in arrears in the payment of dividends to holders
of its  preferred  stock.  As of March 31,  1997,  dividends  were in arrears on
Series B preferred stock in the amount of $297,430,  on Series D preferred stock
in the  amount of  $249,315  and on Series E  preferred  stock in the  amount of
$121,915.

<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,  that USTI and USTEI succeeded to the obligations of MDM by the
acquisition  of the assets of MDM,  and that there was a failure to comply  with
the New Jersey bulk sales act in USTEI's  acquisition of the assets of MDM. USTI
and USTEI did not assume any  obligations  or liabilities of MDM with respect to
the County of Essex in the acquistion transaction.  USTEI did agree to pay up to
$50,000  in defense  costs of MDM with  respect  to such  claim.  USTI and USTEI
answered each of such lawsuits,  denying all material  allegations  therein, and
intend to vigorously defend such  allegations.  On March 20, 1996, the County of
Essex's  claim  that  USTI and USTEI  succeeded  to the  obligations  of MDM was
dismissed with prejudice. Subsequently, the Court found that the New Jersey bulk
sales  act was not  complied  with  but has made no  finding  on the  amount  of
damages,  if any,  with  respect  thereto.  The  Company  has filed  third party
complaints against counsel representing the parties to the transaction for their
failure to have caused the bulk sales act to be complied with. Additionally,  on
April 10,  1997,  the  County of Essex  obtained  a  judgement  against  MDM for
approximately  $600,000  on its  claim for  failure  of  performance  by MDM and
recovered  $248,277  from the surety and the surety  succeeded  to the County of
Essex's  claim  against  MDM,  USTI and USTEI.  The  litigation  is still in the
discovery  phase.  As stated  above,  USTI and USTEI have  denied  all  material
allegations  of the  County  of Essex  and  intend  to  vigorously  defend  such
litigation and pursue its third party claims.

     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 was  seeking;
USTI answered the lawsuit by denying all material  allegations therein. In April
1997,  a jury  ruled in favor of USTI in this  suit,  finding  that there was no
breach of warranty by USTI with  respect to the  software or services  provided.
The jury  further  found  that the City of  Sinton  had  breached  the  software
contracts  by  asserting  rights and  duties  which  were not  specified  in the
contracts. USTI is currently seeking an award of at least some of its attorney's
fees as part of the motion for  judgement on the verdict  proceedings  currently
underway.

     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  damages  in  excess  of  $10,000.  USTI has been  granted  an
extension  of time to answer in the matter and  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


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
March 31,  1997,  are  entitled  to the  payment of  approximately  $297,430  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
March 31,  1997,  are  entitled  to the  payment of  approximately  $249,315  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
March 31,  1997,  are  entitled  to the  payment of  approximately  $121,915  in
dividends which are currently in arrears.

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

     Not Applicable



<PAGE>

Item 5.  Other Information

     During the first  quarter 1997,  Ventana  Growth Fund elected its option to
convert its 750,000 shares of the Company's Series C preferred stock into shares
of the Company's  common stock.  There were dividends in arrears on the Series C
preferred  stock in the amount of $115,415 which were also converted into common
stock. A total of 5,308,280  shares of the Company's common stock were issued as
a result of this conversion.


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:  May 14, 1997                         By: /s/  Thomas E. Gibbs
                                                --------------------
                                                Thomas E. Gibbs, President
                                                and Chairman of the Board
                                               (Principal Executive Officer)



Date:  May 14, 1997                         By: /s/  Randall L. McGee
                                                ----------------------
                                                Randall L. McGee, Secretary
                                                and Treasurer
                                               (Principal Financial and
                                                Accounting Officer)





<PAGE>