UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended March 31, 1997

                       Commission File Number: 33-15370-D
                                   -----------

                             CUSA Technologies, Inc.
          ------------------------------------------------------------
             (Exact name of the registrant as specified in charter)

                       Nevada                   87-0439511
          ---------------------------- -------------------------------
              State of Incorporation     IRS Identification Number

               986 West Atherton Drive, Salt Lake City, Utah 84123
           -----------------------------------------------------------
                    (Address of principal executive offices)

                                 (801) 263-1840
           -----------------------------------------------------------
                  (Telephone of registrant including area code)

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

                                           Yes ___X___              No ________

                APPLICABLE ONLY TO ISSUER INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the Issuer filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by court.

                             Yes _______ No ________


                      APPLICABLE ONLY TO CORPORATE ISSUERS

As of May 14,  1997 the Issuer had 15,404,204  shares  of  its common stock, par
value $0.001 per share, issued and outstanding.


<PAGE>




                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

CUSA Technologies,  Inc. (the "Company"),  has included the consolidated balance
sheets of the Company and its  subsidiaries as of March 31, 1997 (unaudited) and
June 30, 1996 (the end of the Company's most recent fiscal year),  the unaudited
consolidated  statements of operations for the three months ended March 31, 1997
and 1996 and the unaudited consolidated  statements of operations and cash flows
for the nine  months  ended  March 31, 1997 and 1996,  together  with  unaudited
condensed notes thereto .

In the opinion of management of the Company,  the financial  statements  reflect
all  adjustments,  all of which are normal recurring  adjustments,  necessary to
fairly  present the financial  condition of the Company for the interim  periods
presented.  The financial statements included in this report on Form 10-Q should
be read in conjunction with the audited financial  statements of the Company and
the notes thereto  included in the annual report of the Company on form 10-K for
the year ended June 30, 1996.



<PAGE>
                           "CUSA TECHNOLOGIES, INC."
                          Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                  

                                                                   (Unaudited)       
                                                                     March 31,   June 30,
                                                                       1997        1996
                         Assets                                    -----------  ---------
                         ------
Current Assets:
<S>                                                             <C>                <C>   
        Cash                                                    $      896,962    583,080
        "Trade accounts receivable, net of allowance for"
                doubtful accounts                                    3,118,693  2,666,345
        Inventories                                                    386,763    140,402
        Prepaid expenses and other assets                              176,763    422,029
        Net assets of discontinued operations                             --    5,627,221
                                                                   -----------  ---------
                Total current assets                                 4,579,181  9,439,077

Property and equipment :
        Leasehold Improvements                                         143,863    13,808
        "Furniture, fixtures and equipment"                          2,899,754  2,463,946
        Other                                                          673,480    668,405
                                                                   -----------  ---------
                Total property and equipment                         3,717,097  3,272,159

        Less accumulated depreciation and amortization               1,418,477    933,428
                                                                   -----------  ---------
                Net property and equipment                           2,298,620  2,338,731

"Equipment under capital lease obligations, net"                       299,726    233,816

Receivables from related parties                                       359,069    362,849

"Software development and acquisition costs, net"                    1,524,486  1,398,510

Other assets                                                           133,921    208,178
                                                                   -----------  ---------
                                                            $        9,195,003 13,981,161
                                                                   ===========  =========
</TABLE>

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

<PAGE>

                           "CUSA TECHNOLOGIES, INC."
                          Consolidated Balance Sheets
<TABLE>
<CAPTION>

                                                                                          (Unaudited)
                                                                                            March 31,             June 30,
                                                                                              1997                  1996
                                                                                       --------------         ------------   
                     Liabilities and Stockholders' Deficit
                     -------------------------------------
Current liabilities:
<S>                                                                                      <C>                        <C>   
        Line of credit with bank                                                         $       --                891,022
        Current installments of long-term debt                                                 36,183            1,446,930
        Current installments of obligations under capital leases                              210,598              205,888
        Accounts payable                                                                    1,472,828            3,600,904
        Accrued liabilities                                                                 1,407,281            3,309,086
        Customer deposits                                                                     984,951            1,690,973
        Income taxes payable                                                                   10,657               18,081
        Payables to related parties                                                              --              1,167,398
        Net liabilities of discontinued operations                                            437,206                 --
        Deferred revenue                                                                    5,785,121            4,816,596
                                                                                       --------------         ------------
                Total current liabilities                                                  10,344,825           17,146,878

Long-term debt with related parties                                                              --              2,445,000

"Long-term debt, excluding current installments"                                                 --                430,894

"Obligations under capital leases,  excluding current installments"                           147,023              193,977
                                                                                       --------------         ------------
                Total liabilities                                                          10,491,848           20,216,749

Commitments and contingent liabilities                                                           --                   --

Stockholders' deficit:
        "Series A convertible preferred stock, $.001  par value;"
                "authorized 1,500,000 shares; issued and outstanding 1,000,000 shares"          1,000                1,000
        "Common stock,  $.001 par value; authorized 25,000,000 shares;"
                "issued and outstanding 15,404,204 shares at March 31, 1997 and"
                "8,916,438 shares at June 30, 1996"                                            15,404                8,916
        Additional paid-in capital                                                         16,523,820           10,530,308
        Accumulated deficit                                                               (17,837,069)         (16,775,812)
                                                                                       --------------         ------------
                Total stockholders' deficit                                                (1,296,845)          (6,235,588)
                                                                                       --------------         ------------
                                                                                   $        9,195,003           13,981,161
                                                                                       ==============         ============
</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>



                           "CUSA TECHNOLOGIES, INC."
                     Consolidated Statements of Operations
                                  (Unaudited)

<TABLE>
<CAPTION>

                                                                                Three months ended            Nine months ended
                                                                                    March 31,                     March 31,
                                                                      ------------------------------   --------------------------
                                                                              1997            1996           1997           1996
                                                                      --------------    ------------   -----------   ------------
Net revenues:
<S>                                                               <C>                       <C>            <C>            <C>    
        Hardware and software sales                               $       2,451,019       2,495,118      6,719,816      9,485,987
        "Support, maintenance and other services"                         5,148,774       4,894,056     13,526,985     12,214,546
        Other revenue                                                       103,562         104,747        366,920        314,749
                                                                      --------------------------------------------   ------------
                Total revenues                                            7,703,355       7,493,921     20,613,721     22,015,282
                                                                      --------------------------------------------   ------------
Cost of goods sold and other direct costs:
        Hardware and software                                               932,440       1,210,440      2,685,106      4,299,813
        "Support, maintenance and other services"                         3,392,435       2,843,004      8,762,810      7,238,754
        Other                                                                63,035          47,554        216,670        121,316
                                                                      --------------------------------------------   ------------
                Total cost of goods sold and other direct costs           4,387,910       4,100,998     11,664,586     11,659,883
                                                                      --------------------------------------------   ------------
                Gross profit                                              3,315,445       3,392,923      8,949,135     10,355,399

Product development costs                                                   614,707         120,385      1,702,435        611,460
"Selling, general and administrative  expenses"                           1,740,648       3,437,466      6,713,527      9,351,110
                                                                      --------------------------------------------   ------------
                Operating income (loss)                                     960,090        (164,928)       533,173        392,829

Other income (expense):
        Interest expense                                                    (26,019)        (98,055)      (220,907)      (242,544)
        "Other, net"                                                        (28,719)        (67,186)       (29,305)       (43,034)
                                                                      --------------------------------------------   ------------
                Income (loss) from continuing operations              
                     before income taxes                                    905,352        (330,169)       282,961        107,251 

Income tax expense (benefit)                                                     --         (87,236)            --        167,763
                                                                      --------------------------------------------   ------------
Income (loss) from continuing operations                                    905,352        (242,933)       282,961        (60,512)

"Loss from discontinued operations, net of income taxes"                   (108,687)     (1,231,763)      (310,132)    (1,347,536)

"Loss from disposal of discontinued operations,"
        net of income taxes                                                (783,908)             --       (944,083)            --
                                                                      --------------------------------------------   ------------
                Net Income (loss)                                   $        12,757      (1,474,696)      (971,254)    (1,408,048)
                                                                      ============================================   ============
Income (loss) per common and common equivalent share:
        Primary
                From continuing operations                          $          0.08           (0.03)          0.02          (0.02)
                From discontinued operations                        $         (0.08)          (0.14)         (0.04)         (0.16)
        Fully Diluted
                From continuing operations                          $          0.06           (0.04)          0.01          (0.02)
                From discontinued operations                        $         (0.06)          (0.14)         (0.08)         (0.16)

Weighted average common and common equivalent shares:
        Primary                                                          11,224,024       8,775,494      9,675,264      8,653,093
        Fully Diluted                                                    15,404,204       8,775,494     15,404,204      8,653,093

</TABLE>

The accompanying notes are an integral part of these financial statements.
<PAGE>




                            CUSA TECHNOLOGIES, INC.
                     Consolidated Statements of Cash Flows
                                  (Unaudited)
                          Nine months ended March 31,
<TABLE>
<CAPTION>

                                                                                                     1997           1996
                                                                                               ------------    -----------
Cash flows from operating activities:
<S>                                                                                              <C>               <C>    
Income (loss) from continuing operations                                                         $ 282,961        (60,512)
Adjustments to reconcile income (loss) from continuing operations
        to net cash used in operating activities:
                Depreciation and amortization                                                      817,419      1,466,087
                Provision for doubtful accounts                                                     83,867         48,162
                Net change in current assets and liabilities:
                        Trade accounts receivable                                                 (536,215)    (1,570,935)
                        Inventories                                                               (246,361)        92,402
                        Prepaids expenses and other assets                                          24,266       (156,396)
                        Accounts payable and accrued liabilities                                (4,029,883)     1,318,050
                        Customer deposits                                                         (706,022)      (187,084)
                        Income taxes payable                                                       (74,240)        28,792
                        Deferred income taxes                                                           --       (456,067)
                        Deferred revenue                                                           968,525        987,179
                                                                                               ------------   ------------
                        Net cash provided by (used in) continuing operating activities          (3,127,868)     1,509,678
Net cash provided by (used in) discontinued operations                                             974,248       (289,567)
                                                                                               ------------   ------------
                        Net cash provided by (used in) operating activities                     (2,153,620)     1,220,111

Cash flows from investing activities:
                Software development costs                                                        (41,003)      (717,097)
                Capital expenditures                                                              (557,192)    (1,340,270)
                Advances to related parties                                                          3,780             --
                Decrease in other assets                                                            74,257        (96,163)
                Net cash provided by (used in) investing activities of discontinued operations   7,232,630       (973,444)
                                                                                               ------------   ------------
                        Net cash provided by (used in) investing activities                      6,341,472      (3,126,974)

Cash flows from financing activities:
                Net borrowings under lines of credit                                              (891,022)     1,012,877
                Repayments of obligations under capital leases                                    (160,809)      (166,805)
                Repayment of long-term debt with related parties                                (1,167,398)            --
                Reduction of payables to related parties                                                --       (893,265)
                Proceeds from long-term debt with related parties                                       --      1,300,000
                Proceeds from long-term debt                                                            --        600,000
                Net borrowings under capital lease obligations                                     118,565             --
                Issuance of common stock and exercise of stock options                           6,000,000          2,818
                Payments to acquire common stock                                                        --        (75,500)
                Repayments of long-term debt                                                    (4,286,640)      (339,029)
                Net cash used in financing activities of discontinued operations                (3,396,666)      (132,273)
                Preferred dividend distributions                                                   (90,000)       (90,000)
                                                                                               ------------   ------------
                        Net cash provided by (used in) financing activities                     (3,873,970)     1,218,823

                        Net increase (decrease) in cash                                            313,882       (688,040)

Cash at beginning of period                                                                        583,080        818,883
                                                                                               ------------   ------------
Cash at end of period                                                                            $ 896,962        130,843
                                                                                               ============   ============        
</TABLE>

The accompanying notes are an integral part of these financial statements 
<PAGE>
                            CUSA TECHNOLOGIES, INC.
                   Notes to Consolidated Financial Statements
                                   (Unaudited)



(1) Basis of Presentation

The   accompanying   unaudited   consolidated   financial   statements  of  CUSA
Technologies, Inc. (the Company) have been prepared in accordance with generally
accepted  accounting  principles for interim financial  information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly,  these
financial  statements  do  not  include  all  of the  information  and  footnote
disclosures  required by generally accepted  accounting  principles for complete
financial statements. These financial statements and footnote disclosures should
be read in conjunction with the audited  consolidated  financial  statements and
the notes thereto  included in the Company's  latest report on Form 10-K for the
year  ended  June 30,  1996.  In the  opinion of  management,  the  accompanying
unaudited consolidated financial statements contain all adjustments  (consisting
of only normal recurring  adjustments) necessary to fairly present the Company's
consolidated  financial  position  as of March  31,  1997  and its  consolidated
results of  operations  and cash flows for the nine months  ended March 31, 1997
and 1996.  The results of  operations  for the three and nine months ended March
31, 1997 may not be  indicative of the results that may be expected for the year
ending June 30, 1997.


(2) Liquidity

During the nine  months  ended  March 31,  1997,  the  Company  had income  from
continuing   operations  of  $282,961,   incurred  a  net  operating  loss  from
discontinued  operations  of  $310,132,  a  loss  on  disposal  of  discontinued
operations of $944,083,  used cash in operating  activities of $2,153,620 and at
March 31, 1997 had a stockholders' deficit of $1,296,845. These losses have also
resulted in violations  of certain debt  covenants  with the  Company's  primary
financial  institution,  which  had been  waived  by the  financial  institution
through  September  30,  1996.  The Company has been  negotiating  to amend such
covenants  to  conform  to  currently   anticipated  future  operating  results.
Management  has begun to  implement  plans to return the  Company to  profitable
operations  and a positive  cash flow.  During the three  months ended March 31,
1997,  the Company had income from  continuing  operations of $905,352 and a net
income  (including a combined loss on disposal of  discontinued  operations  and
loss from  discontinued  operations  of $892,595) of $12,757.  In the opinion of
management,  full  implementation of these plans will permit the Company to meet
its operating and debt cash  requirements,  at least through the next year.  The
Company is subject to many  uncertainties  over  which  management  has  limited
control,  any one of which could adversely  affect the Company's  operating cash
flows,  and thus create cash flow problems for the Company.  In January of 1997,
the Company  agreed to sell 8.6 million  shares of common stock for $8.0 million
in cash to its Chairman and Chief  Executive  Officer.  During February of 1997,
the Company received $6.0 million of the commitment. (See foot note 6).
<PAGE>

(3) Discontinued Operations

     (a)  Medical and Commercial Divisions

         In June  1996,  the Board of  Directors  of the  Company  committed  to
         dispose  of the  business  and  assets of the  medical  and  commercial
         divisions.  On July 2, 1996, the Company  consummated an asset purchase
         agreement  with  Physician  Computer  Network,  Inc.  (PCN) whereby PCN
         agreed to acquire  substantially  all of the assets and assume  certain
         liabilities of the medical and commercial divisions.

         In June 1996,  upon  adoption of the plan to dispose of the medical and
         commercial  divisions,   the  Company  recorded  a  provision  for  the
         estimated  loss on the  disposal  of the  divisions  in the  amount  of
         $2,494,451 (net of income tax benefit of $-0-).  This provision relates
         to the  expected  loss  on the  sale  to PCN,  net of  disposal  costs,
         severance benefits to division employees, certain occupancy costs under
         non-cancelable  leases, and anticipated future losses related to assets
         and  operations  not sold to PCN until their  ultimate  disposition  is
         completed.  The estimation of the loss on the disposal of the divisions
         requires  management to make estimates and assumptions  that affect the
         reported  amount of the loss on disposal.  Actual  results could differ
         from those  estimates.  As such  estimates  are  adjusted  or as actual
         results  occur,  the  adjustments  to the estimates are reported in the
         current period as additional gain or loss on disposal. During the three
         and nine month  periods  ended March 31,  1997,  the  Company  recorded
         additional  losses on the  disposal of the  divisions  in the amount of
         $783,908  and  $944,083  respectively,  (net of income  tax  benefit of
         $-0-).

     (b)  Rental Software and Real-estate Rental Divisions

         In March of 1997,  the Board of Directors  of the Company  committed to
         dispose  of  the  business  and  assets  of  the  Rental  software  and
         Real-estate rental divisions.  A gain on disposal of these divisions is
         anticipated,  but has not been recognized in the accompanying financial
         statements,   such  gain  will  be  recognized   when   realized.   The
         consummation  of the  disposals is expected  during the quarter  ending
         June 30, 1997. The Company recorded a net loss from these  discontinued
         operations  for the three month and nine month periods ending March 31,
         1997 of $108,687  and  $310,132,  respectively,  net of income taxes of
         $-0- in the  accompanying  consolidated  statements of operations under
         the caption Loss from discontinued operations, net of income taxes.

     The medical, commercial,  rental software, and real-estate rental divisions
     have been accounted for as discontinued  operations,  and accordingly,  the
     results of their  operations are segregated from  continuing  operations in
     the  accompanying  statements of operations.  Revenue,  operating costs and
     expenses, other income and expense, and income taxes of these divisions for
     the three and nine month periods  ended March 31, 1997 and 1996,  have been
     reclassified as discontinued operations. No allocation of general corporate
     overhead  has  been  made  to  discontinued  operations  related  to  these
     divisions.
<PAGE>

     Summary  operating  results of  discontinued  operations  for the  medical,
     commercial,  rental software, and real-estate rental divisions for the nine
     months ending March 31, 1997 and 1996 are as follows:

                                                         1997           1996
                                                    -----------      ----------
         Revenues                                $    1,437,382      13,016,663
                                                    ===========      ==========

         Gross Profit                            $       750,473      5,700,226
                                                    ============     ==========

         Loss before income taxes                $     (310,132)     (1,818,105)

            Income tax benefit                   $           -0-        470,569
                                                    -------------     ----------

         Loss from discontinued operations       $      (310,132)    (1,347,536)
                                                    =============     ==========


The remaining assets and liabilities related to the discontinued operations have
been  separately  classified  on the  balance  sheets  as  net  assets  (or  net
liabilities) of discontinued  operations. A summary of the net liabilities as of
March 31, 1997 is as follows:

         Assets:
           Trade accounts receivable, net                      $     327,760
            Other receivables                                        200,000
            Inventory                                                 27,064
            Prepaid expenses and other assets                         29,281
            Software development costs, net                           95,938
            Fixed assets, net                                      2,043,068
                                                                   ---------

                  Total assets                                     2,723,111
                                                                   ---------

         Liabilities:
           Accounts Payable and accrued liabilities                  205,575
           Customer deposits                                          28,682
            Liability for estimated loss on disposal                 972,090
            Deferred revenue                                         258,069
            Notes payable                                          1,683,542
            Obligation under capital lease                            12,359
                                                                  ----------

<PAGE>

                     Total liabilities                             3,160,317
                                                                  ----------
         Net liabilities of discontinued operations           $      437,206
                                                                  ==========

<PAGE>


(4) Income (loss) per Share

Income or loss per common and common  equivalent  share is  computed by dividing
net income (loss) by the weighted average common shares  outstanding  during the
period,  including common  equivalent  shares (if dilutive).  Common  equivalent
shares include stock options,  convertible preferred stock and convertible debt.
Income used in this  calculation is reduced (loss is increased) by the dividends
paid to preferred stockholders.


(5) Contingent Liabilities

The Company is  involved  in certain  legal  matters in the  ordinary  course of
business.  In the opinion of management and legal counsel, such matters will not
have a material effect on the financial position or results of operations of the
Company.


(6)   Stock Purchase Agreement

In January of 1997, the Company agreed to sell  approximately 8.6 million shares
of its common  stock,  representing  49% of the common  stock to be  outstanding
after the  completion of the sale, to its Chairman and Chief  Executive  Officer
for $8.0 million in cash.  During the quarter ending March 31, 1997, the Company
received  $6.0  million  of  the  $8.0  million  commitment.  The  Company  used
approximately  $4.3 million of the proceeds to retire  long-term debt during the
quarter ending March 31, 1997.


<PAGE>


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

General

In June of 1994,  the Company  entered into the credit union  software  business
through the  acquisition  of CUSA,  Inc.  ("CUSA") and the credit union software
division of CUSA's largest  distributor.  From June of 1994 to July of 1996, the
Company acquired all of the significant  distributors of the CUSA software, some
of which were  distributors  of software  products in the medical and commercial
open systems  markets.  In June of 1996, the Board of Directors voted to dispose
of the business and assets of the  Company's  medical and  commercial  divisions
through a sale of assets to Physician Computer Network,  Inc. ("PCN").  On March
27, 1997, the Board of Directors voted to dispose of the business and the assets
of the Company's rental software division and to approve a sale of the Company's
commercial  rental  property to an officer and  shareholder of the Company.  The
divestiture of the medical,  commercial,  and rental software  divisions and the
sale of the  commercial  real property  have been part of the Company's  plan to
devote its  resources  to the  development  and  expansion  of its credit  union
software business.

Third quarter and first nine months of fiscal 1997 compared to the third quarter
and first nine months of fiscal 1996

Net revenues

Net revenues are derived from hardware and software sales,  hardware maintenance
and software  support  services,  and sales of products  and services  which are
related  to the  Company's  computer  systems  such as  credit  union  statement
printing, disaster recovery, and microfiche services.

The  Company's net revenues  increased 2.8 percent from  $7,493,921 in the third
quarter of fiscal  1996 to  $7,703,355  in the third  quarter of fiscal 1996 and
decreased  6.4 percent from  $22,015,282  in first nine months of fiscal 1997 to
$20,613,721 in the first nine months of fiscal 1997.

Revenues from hardware and software sales  decreased 1.8 percent from $2,495,118
in the third quarter of fiscal 1996 to $2,451,019 in the third quarter of fiscal
1997 and 29.2 percent from $9,485,987 in the first nine months of fiscal 1996 to
$6,719,816 in the first nine months of fiscal 1997. The decrease in hardware and
software  sales in first  nine  months  of the  fiscal  year was the  result  of
increased  management  focus in the first and second quarters of the fiscal year
on the  profitability  over the volume of hardware and software sales shipped in
the fiscal year.

Revenues from support, maintenance and other services increased 5.2 percent from
$4,849,056  in the third  quarter  of  fiscal  1996 to  $5,148,774  in the third
quarter  of fiscal  1997 and 10.7  percent  from  $12,214,546  in the first nine
months of fiscal 1996 to  $13,526,985  in the first nine months of fiscal  1997.
The increase was due to increased  sales of the Company's  statement  processing
services and the addition of software and hardware  maintenance accounts through
new system sales.

Other revenues did not vary significantly in the periods reported.

Gross margin

Costs of goods sold consist of the cost of hardware and software  purchased  for
resale, the amortization of capitalized  software development costs, the expense
of installing  and training the customer to use the Company's  computer  systems
and the expense of providing  support and  maintenance  services to users of the
Company's products.
<PAGE>

The hardware and software gross margin  increased from 51.5 percent in the third
quarter of fiscal 1996 to 62.0  percent in the third  quarter of fiscal 1997 and
from 54.7 percent in the first nine months of fiscal 1996 to 60.0 percent in the
first nine months of fiscal  1997.  In the same  period,  the gross  margin from
support,  maintenance and other services revenue  decreased from 41.9 percent in
the third  quarter of fiscal 1996 to 34.1 percent in the third quarter of fiscal
1997 and from 40.7  percent  in the  first  nine  months of fiscal  1996 to 35.2
percent in the first nine months of fiscal 1997.  The  increases in the hardware
and software  gross margin are primarily  attributable  to increased  management
emphasis on the  profitability  of orders over the volume of orders  written and
shipped in fiscal 1997 and an increase in software as a percentage of hardware &
software  sales in the third  quarter  and first nine months of fiscal 1997 when
compared with the same periods in fiscal 1996. The  decreases,  in the first and
second  quarters  of fiscal  1997,  in the gross  profit  margin  from  support,
maintenance  and  other  services  revenue  are due to  decreased  software  and
hardware  sales,  resulting  in a decrease in the amount of revenue to cover the
fixed costs of the Company's  installation and training  departments,  increased
software support  expenditures to build up resources for software  support,  and
increased lower margin statement processing services as a percentage of support,
maintenance and other services

Product development costs

Product  development  costs  include  funds used for research  and  development,
system operational error fixes and maintenance  software upgrades.  As expected,
product development costs increased from $120,385 in the third quarter of fiscal
1996 to  $614,707 in the third  quarter of fiscal 1997 and from  $611,460 in the
first nine  months of fiscal  1996 to  $1,702,435  in the first  nine  months of
fiscal 1997.  The  increase  reflects the  Company's  commitment  to continue to
improve current products and to invest in the development of new products,  with
an  increased  emphasis on research  and  development,  which is expensed in the
period incurred, over capitalized expenditures.

Selling, general and administrative costs

The selling, general, and administrative expenses for the Company decreased 49.4
percent from  $3,437,466  in the third  quarter of fiscal 1996, to $1,740,648 in
the third  quarter of fiscal 1997 and 28.2 percent from  $9,351,110 in the first
nine  months of fiscal  1996 to  $6,713,527  in the first nine  months of fiscal
1997.  This  decrease  was due to the  reduction,  over the first nine months of
fiscal  1997,  of  selling  and  general  corporate  overhead  expenses  and the
elimination  of  the  amortization  of  goodwill,  which  was  written  off as a
nonrecurring  charge in fiscal 1996. These expense reductions have been achieved
through the gradual reduction of overhead and administrative personnel.

Interest and income tax expense

Interest expense decreased 73.5 percent in the third quarter of fiscal 1997 when
compared  to the third  quarter of fiscal 1996 and 8.9 percent in the first nine
months of fiscal 1997 when compared to the first nine months of fiscal 1996. The
decreases  were due to the  retirement,  in the first quarter of fiscal 1997, of
certain  interest-bearing related party obligations and, in the third quarter of
fiscal 1997, of approximately $4.3 million of long term obligations. The Company
anticipates  an  additional  reduction  of  interest  expense to result from the
retirement  of a term  loan  upon the  completion  of the  proposed  sale of the
Company's  commercial  rental  property  to an officer  and  shareholder  of the
Company (see ITEM. 5. OTHER INFORMATION).

Income tax  expense was zero in the third  quarter of fiscal 1997  compared to a
recorded  tax  benefit of $87,236 in the third  quarter of fiscal  1996.  In the
first nine months of fiscal  1997 income tax expense was zero  compared to a tax
expense of $167,763  (resulting in an effective tax rate of 156.4%) in the first
nine  months of fiscal  1996.  The  difference  in the tax expense is due to the
losses  incurred in the first and second  quarters of fiscal 1997,  for which no
income tax benefit has been recorded,  and the loss incurred in the third fiscal
quarter of 1996. .


<PAGE>
Discontinued Operations

In June of 1996,  the  Company  adopted a plan to  dispose  of the assets of its
medical and commercial software divisions (the "1996 Discontinued  Operations").
The liability for the  estimated  loss on the disposal of the 1996  Discontinued
Operations  was  established  in June of 1996. The disposal of the assets of the
1996 Discontinued Operations (except those assets related to the medical records
software) was completed on July 2, 1996. In the third quarter of fiscal 1997, it
was  determined  that the costs to dispose of the 1996  Discontinued  Operations
would exceed the original  estimates.  The excess costs are primarily the result
of the  Company's  failure  to find a buyer  for the  medical  records  software
division and consist primarily of employee  severance and customer  settlements.
As a  result,  the  Company  accrued  additional  expenses  associated  with the
disposal of the 1996 Discontinued  Operations of $783, 908 for the third quarter
of fiscal  1997 and  944,083  for the first  nine  months  of  fiscal  1997.  No
additional,  material  adjustments to the estimated loss on disposal of the 1996
Discontinued Operations are currently anticipated.

The losses  from  discontinued  operations  in the third  quarter and first nine
months of fiscal 1996 of $1,231,763 and  $1,347,536,  respectively,  reflect the
net  operating  results  of the 1996  Discontinued  Operations,  and the  rental
software  and  commercial  rental  property  divisions  (the "1997  Discontinued
Operations")  prior to their  disposal.  The losses in the third quarter and the
first nine months of fiscal 1997 of $108,687 and $310,132, respectively, reflect
the net operating results of the 1997 Discontinued Operations.

Capital Resources and Liquidity

At March 31,  1997,  the Company had current  assets of  $4,579,818  and current
liabilities  of  $10,344,825.  The current  liabilities  include  $5,785,121  of
deferred revenue which primarily represents billings for services to be provided
over  the  remaining  term  of  software  and  hardware  maintenance   contracts
(generally one year).

The  Company has a term loan in the  original  principal  amount of  $1,700,000,
which matures December 1, 2006, bears interest at a rate of 9.75% per annum, and
is  secured,  primarily,  by a trust  deed on the  Company's  commercial  rental
property  located in Sparks,  Nevada.  Management  anticipates the retirement of
this loan in the  fourth  quarter  of fiscal  1997  upon the  completion  of the
planned sale of the commercial  rental property to an officer and shareholder of
the Corporation.

On July 2, 1996 the Company sold its medical and commercial divisions to PCN for
$9,450,000  cash and the  assumption  of certain  related  liabilities.  Of  the
purchase  price,  $150,000 had not been  received as of May 14, 1997 and will be
paid to the Company  upon the  delivery of certain  assets  which are  currently
subject to a court order  restricting  such transfer  pending the  settlement of
certain judgments.

In February of 1997,  pursuant to a Purchase and Sale Agreement the Company sold
approximately  8.6 million  shares of its common  stock,  par value  .001,  to a
director, officer and shareholder of the Company (the "Purchaser) for $8,000,000
at a price of $0.975 per share. To date, the Company has issued 6,153,846 shares
of common stock in exchange for $6,000,000,  of which approximately $4.3 million
was used to retire certain long term obligations. The Company expects to receive
the remaining  $2,000,000  before the end of the 1997 fiscal year. When received
the  $2,000,000  will be used by the Company to redeem all of the Company's 1994
Series Preferred Stock as required by the Purchase and Sale Agreement.

The Company  anticipates that these financing  sources,  together with cash flow
from operations,  will be sufficient to permit it to meet its cash  requirements
through the coming year.

In fiscal 1996, the Company  recorded  nonrecurring  charges of approximately $7
million in connection with the  revaluation of certain balance sheet  intangible
assets and the accrual of restructuring  costs. Also in fiscal 1996, the Company
recorded a combined loss from disposal and from discontinued  operations of $7.6
million.  As a  result  of  these  nonrecurring  charges  and  the  losses  from
continuing  operations in fiscal 1996, the Company's retained earnings decreased
from $.8 million at June 30, 1996 to a $16.8 million accumulated deficit at June
30, 1996 and further  decreased  to a $17.8  million  accumulated  deficit as of
March 31, 1997.

<PAGE>



                                     PART II
                                OTHER INFORMATION


ITEM 3. LEGAL PROCEEDINGS

The Company is  involved  in certain  legal  matters in the  ordinary  course of
business.  In the opinion of management and in-house legal counsel, the ultimate
resolution  of these  matters will not have a material  effect on the  financial
position or results of operations of the Company.


ITEM 5.  OTHER INFORMATION

Purchase and Sale Agreement

On January 24, 1997 the Company  entered into a Purchase and Sale Agreement (the
"Agreement")  whereby it agreed to sell on  February  10, 1997 at the offices of
the  Company  or at such  other time and place as  mutually  agreed  upon by the
parties,  approximately 8.6 million shares of its common stock, representing 49%
of the common stock to be  outstanding  after the completion of the sale, to its
Chairman and Chief Executive  Officer (the "Investor") for $8.0 million in cash.
In February of 1997 the Company received $6,000,000,  approximately $4.3 million
of which was used to retire long term debt. It is anticipated that the remaining
$2,000,000 will be received in fiscal 1997.  When received,  the $2,000,000 will
be used by the  Company to redeem all of the  Company's  1994  Series  Preferred
Stock as required by the Agreement.


Rental Division

On March 27,  1997,  the Board of  Directors  of the  Company  voted to sell the
Company's Rental Software Division to an employee and shareholder of the Company
(the "Buyer")for $400,000. The purchase price will be paid over three years, and
will be  secured  by the  assets of the  Rental  Software  Division,  a personal
guarantee  and  200,000  of  the  Buyer's  common  stock  of  the  Company.  The
transaction is subject to, among other conditions, the negotiation and execution
of a final purchase agreement by the parties.

Commercial Rental Property

On March 27,  1997,  the Board of  Directors  of the  Company  voted to sell the
Company's commercial rental property located in Sparks, Nevada for the appraised
price of $3,125,000  less  commissions  and fees.  The completion of the sale is
subject to the  negotiation and execution of a final purchase and sale agreement
by the parties.


<PAGE>



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K


(a) Exhibits

The following exhibits are included as part of this report:

Exhibit           SEC Ref
Number             Number                  Title of Document
-------           -------                 -------------------

                  None.

(b)   Reports on Form 8K.

                  None.


<PAGE>



SIGNATURES

Pursuant  to the  requirements  of  section  13 or 15(d) of the  Securities  and
Exchange  Act of 1934 as amended,  the Company has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.


Dated:  May 15, 1997


CUSA Technologies, Inc.


/s/ D. Jeff Peck
------------------------------------------------------
D. Jeff Peck, Principal Accounting Officer