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, 1997                                       0 - 9574

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



                         UNITED SYSTEMS TECHNOLOGY, INC.

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

                          1850 Crown Drive - 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  September  30,  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>

                                                  September 30,
                                                      1997          December 31,
                                                   (Unaudited)          1996
                                                 ==============    =============
     Current Assets
Cash and cash equivalents                           $ 34,540          $ 67,252
Trade accounts receivable, less allowance
for doubtful accounts of $40,000 at
September 30, 1997 and December 31, 1996             256,839           253,692
Prepaid expenses and other                             5,735               279
                                                   ---------         ---------
          Total current assets                       297,114           321,223
                                                   ---------         ---------

Property and equipment, net                           93,115           115,738
Goodwill, net                                        690,790           741,744
Purchased software, net                               58,230            71,833
Deposits and other                                    16,028            27,942
                                                   ---------         ---------
                                                     858,163           957,257
                                                   ---------         ---------
     Total assets                                 $1,155,277        $1,278,480
                                                   =========         =========

             Liabilities and Stockholders' Equity
Current Liabilities
Current portion of capital lease obligations         $ 6,065           $ 8,271
Trade accounts payable                               182,047           230,039
Accrued payroll                                       16,551            20,432
Accrued interest - related party                      75,071            72,020
Other accrued expenses                               110,497           115,368
Deferred revenue                                     698,644           664,797
                                                   ---------         ---------
          Total current liabilities                1,088,875         1,110,927

Notes payable - related party                         50,000            50,000
Capital lease obligations, net of current portion      2,137             6,730
                                                   ---------         ---------
     Total liabilities                             1,141,012         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, 500,000 shares
of Series D, and 300,000  shares of Series E
(liquidating  preference  of $1.00 per share)
aggregating $1,300,000 at September 30, 1997
and 1,450,000 at December 31, 1996                    30,000           205,000
Common stock, par value $.10 per share; 
authorized 100,000,000 shares; issued and 
outstanding 43,278,045 at September 30, 1997
and 38,643,163 December 31, 1996.                  4,327,857         3,796,975
Additional paid-in capital                         3,758,508         4,214,390
Accumulated deficit                               (8,202,100)       (8,105,542)
                                                   ---------         ---------
Total stockholders' equity                            14,265           110,823
                                                   ---------         ---------
Total liabilities and stockholders' equity        $1,155,277        $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>       <C>        <C>   

                                      Three Months Ended     Nine Months Ended
                                         September 30,          September 30,
                                          1997      1996      1997       1996
                                          ====      ====      ====       ====
Revenue
 Software packages                     $ 53,016  $ 88,436  $ 176,070  $ 254,600
 Installation, training and
  customer support                       23,098    55,299     77,575    190,939
 Maintenance                            264,827   288,033    802,294    924,961
 Equipment and supplies sales            52,120    44,536    155,748    186,933
 Other                                      423     8,278      3,436     11,170
                                      --------- ---------  ---------  ---------
                                        393,484   484,582  1,215,123  1,568,603
                                      --------- ---------  ---------  ---------
Costs and expenses
Salaries                                235,902   275,921    731,164    884,832
Other general, administrative and
selling expense                          94,494   114,599    360,193    416,669
Depreciation and amortization            40,428    71,787    120,679    223,301
Commissions                               6,904    13,917     21,631     26,129
Cost of equipment and supplies sold      24,428    25,690     74,934     99,403
                                      --------- ---------  ---------  ---------
                                        402,156   501,914  1,308,601  1,650,334
                                      --------- ---------  ---------  ---------
Loss from operations                     (8,672)  (17,332)   (93,478)   (81,731)
                                      --------- ---------  ---------  ---------

Nonoperating income (expense)
Interest expense                         (1,381)   (2,296)    (4,303)    (6,919)
Interest income                             198       410      1,223      2,978
                                      --------- ---------  ---------  ---------
                                         (1,183)   (1,886)    (3,080)    (3,941)
                                      --------- ---------  ---------  ---------

Net loss                                $(9,855) $(19,218)  $(96,558)  $(85,672)
                                      ========= =========  =========  =========

Preferred stock dividend requirements   (22,932)  (26,345)   (68,060)   (78,449)
                                      --------- ---------  ---------  ---------

Loss available for common stockholders $(32,787) $(45,563) $(164,618) $(164,121)
                                      ========= =========  =========  =========

Loss per common share                    $ NIL    $ NIL      $ NIL      $ NIL
                                      ========= =========  =========  =========

Weighted average number of common
 shares outstanding                  43,278,045 37,969,763 43,278,045 37,969,763
                                     ========== ========== ========== ==========
</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 Nine Month Period Ended September 30, 1997 and 1996
                                   (Unaudited)
<TABLE>
<S>                                                  <C>            <C> 
 
                                                     1997           1996
                                                     ====           ====
Cash flows in operating activities:
  Net Loss                                       $ (96,558)      $ (85,672)
                                                   -------         -------

Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
 Depreciation and amortization                     120,679         223,301
 Change in operating assets and liabilities:
  Accounts receivable                               (3,147)         29,892
  Prepaid expenses                                  (5,456)         (9,561)
  Deposits and other                                11,914          (2,041)
  Accounts payable                                 (47,992)        (43,772)
  Accrued expenses                                  (5,701)         35,593
  Deferred revenue                                  33,847        (186,213)
                                                   -------         -------

                                                 $ 104,144       $  47,199
                                                   -------         -------

Net cash provided (used) in operating activities     7,586         (38,473)
                                                   -------         -------

Cash flows from investing activities:
 Property and equipment additions                $ (31,914)      $ (23,659)
 Additions to purchased software                    (2,046)         (2,065)
                                                   -------         -------

Net cash used in investing activities            $ (33,960)      $ (25,724)
                                                   -------         -------
Cash flows from financing activities:
 Payments on capital lease obligations              (6,338)        (31,002)
                                                   -------         -------
Net cash used in financing activities            $  (6,338)      $ (31,002)
                                                   -------         -------
Decrease in cash and cash equivalents            $ (32,712)      $ (95,199)
Cash and cash equivalents, beginning of year        67,252         139,234
                                                   -------         -------
Cash and cash equivalents, end of period         $  34,540       $  44,035
                                                   =======         =======

Supplemental disclosures of cash flow information:

Cash paid during the period for:
  Interest                                       $   1,255       $   2,576
                                                   =======         =======
</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 September 30, 1997 and December
31,  1996 and the  results  of  operations  and cash  flows of USTI for the nine
months ended September 30, 1997 and 1996. The consolidated results of operations
for the nine months ended September 30, 1997 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,  1997 and  December  31,  1996
consisted of the following:
<TABLE>
<S>                                              <C>                 <C>   
 
                                             September 30,       December 31,
                                                 1997                1996
                                                 ----                ----

Leasehold improvements                       $   58,702          $   58,702
Furniture and fixtures                           38,330              38,330
Equipment                                       901,206             869,292
                                               --------            --------
                                                998,238             966,324
Less Accumulated depreciation
  and amortization                             (905,123)           (850,586)
                                               --------            --------
                                             $   93,115          $  115,738
                                               --------            --------
</TABLE>

Note 3.  Other Assets:

     Other assets at September  30, 1997 and December 31, 1996  consisted of the
following:
<TABLE>
<S>                            <C>               <C>                <C> 

                                             Accumulated
September 30, 1997             Cost          Amortization           Net
------------------             ----          ------------           ---

Goodwill                    $1,692,128       $(1,001,338)        $690,790
Purchased Software             592,700          (534,470)          58,230

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
September  30, 1997,  are entitled to the payment of  approximately  $314,975 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, 1997,  are entitled to the payment of  approximately  $266,860 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, 1997,  are entitled to the payment of  approximately  $132,445 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 is effective  for financial  statements  issued after
December 15, 1997. Early adoption of the new standard is not permitted.  The new
standard  eliminates  primary and fully diluted  earnings per share and requires
presentation of basic and diluted 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
three month period ended  September 30, 1997 include  revenues of $393,484 and a
net loss of $9,855 as compared to revenues of $484,582 and a net loss of $19,218
for the same period in 1996.  Results for the nine month period ended  September
30, 1997 include  revenues of $1,215,123and a net loss of $96,558 as compared to
revenues of 1,568,603 and a net loss of $85,672 in 1996.

     The Company continues to adjust its expenses based on anticipated levels of
revenue  resulting  in  decreased  expenses.   The  Company  is  continuing  its
development  of  additional  modules for its  asystTM  product  line,  which was
initially introduced in 1996. The asystTM product line operates 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 windows based PC networks. This trend has resulted in
a decrease  in the  volume of  licensing  activity  of the  Company's  older DOS
(QuestTM)  and  mid-range  (LegacyTM  ) products  during  1997.  The  Company is
offering  its Legacy  customers a Year 2000  version of certain  modules and has
sent  agreements for the new version to the customers that have requested  them.
The  Company  expects  to begin  shipping  the Year 2000  version  of the Legacy
products in the 4th quarter of 1998.

Three Month Period Ended September 30, 1997 and 1996
----------------------------------------------------
     The Company's  total revenue  decreased 19% from $484,582  during the third
quarter in 1996 to $393,484 in 1997.  Software license fees decreased 40% during
the third quarter of 1997 as compared to 1996.  Licensing of the Company's older
product  lines  decreased  in 1997 as  compared  to 1996,  while  the  volume of
licensing of the Company's  newer  asystTM  products did not increase at a level
sufficient to offset this decrease. 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
58% from 1996 due to the  decrease in licensing  of the  Company's  minicomputer
products  which require a higher amount of these types of services.  Maintenance
revenue  decreased  8% in 1997,  due in part,  to a  decrease  in the  number of
customers of the Company's  LegacyTM products that elected to select maintenance
coverage.  Equipment and supplies  sales  increased 17% in the second quarter of
1997 due, in part,  to a increase in the volume forms sold in  conjunction  with
its products.

     Total costs and expenses decreased 20% from $501,914 in 1996 to $402,156 in
1997.  Salary  expense  decreased  15% 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 18%
in 1997 as a  result  of  continued  efforts  to  control  or  reduce  expenses.
Depreciation  and  amortization  expense  decreased 44% in 1997 from 1996 due in
part, to a reduction in software and goodwill amortization  expense.  Commission
expense  decreased  50% in  1997  resulting  from a  decrease  in the  level  of
licensing the Company's software products by agents in 1997.

Nine Month Period Ended September 30, 1997 and 1996
---------------------------------------------------
     The Company's total revenue  decreased 23% from $1,568,603 during the first
nine months in 1996 to $1,215,123 in 1997.  Software  license fees decreased 31%
during the first  nine  months of 1997 as  compared  to 1996.  Licensing  of the
Company's  older  product  lines  decreased  during  1997  while  the  volume of
licensing of the Company's  newer  asystTM  products did not increase at a level
sufficient to offset this decrease. 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
59% from 1996 due to the  decrease in licensing  of the  Company's  minicomputer
products  which require a higher amount of these types of services.  Maintenance
revenue  decreased  13% in 1997,  due in part,  to a  decrease  in the number of
customers of the Company's  LegacyTM products that elected to select maintenance
coverage. Equipment and supplies sales decreased 17% in the first nine months of
1997 due, in part, to a decrease in the level of computers  sold in  conjunction
with its products.

     Total  costs  and  expenses  decreased  21%  from  $1,650,334  in  1996  to
$1,308,601  in 1997.  Salary  expense  decreased  17% 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
14% in 1997 as a result of  continued  efforts to  control  or reduce  expenses.
Depreciation  and  amortization  expense  decreased 46% in 1997 from 1996 due in
part, to a reduction in software and goodwill amortization  expense.  Commission
expense  decreased 17% in 1997 resulting from the use of an agent to license the
Company's  software during 1996. Cost of equipment and supplies decreased 25% as
a result of decreased sales of computer equipment during the period.

Liquidity and Capital Resources
-------------------------------
     The Company  had net cash  provided  from  operating  activities  of $7,586
during the nine months ended September 30, 1997, as compared to net cash used by
operations  of $38,473  for the same  period in 1996.  Net cash of  $33,960  was
utilized  during 1997 for investing in capital  expenditures  versus $25,724 for
1996. Net cash of $6,338 was utilized in 1997 as compared to $31,002 in 1996 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  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.  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. In 1997, Ventana  distributed this note to its limited partners in its
fund  requiring  the  Company  to  reissue  notes,  under  the  same  terms  and
conditions,  to the limited partners. As of September 30, 1997 there was $75,071
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, 1997, dividends were in arrears on Series
B preferred stock in the amount of $314,975,  on Series D preferred stock in the
amount of $266,860 and on Series E preferred stock in the amount of $132,445.


                           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 acquisition 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 in such amount.  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 their 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.  The City of Sinton paid USTI $10,000 for a portion of its attorney's
fees awarded as part of the judgement.

     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.



<PAGE>

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
September  30, 1997,  are entitled to the payment of  approximately  $314,975 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, 1997,  are entitled to the payment of  approximately  $266,860 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, 1997,  are entitled to the payment of  approximately  $132,445 in
dividends which are currently in arrears.

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

         Not Applicable


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:  November 13 1997                     By: /s/  Thomas E. Gibbs
                                                --------------------
                                                Thomas E. Gibbs, President
                                                 and Chairman of the Board
                                                (Principal Executive Officer)


Date:  November 13, 1997                    By: /s/  Randall L. McGee
                                                ----------------------
                                                Randall L. McGee, Secretary
                                                 and Treasurer
                                                (Principal Financial and
                                                 Accounting Officer)


<PAGE>