SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

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

                           For the Fiscal Year Ended:
                                December 31, 1999

                             Commission File Number
                                     0-9574

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

                         UNITED SYSTEMS TECHNOLOGY, INC.

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

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

          (Address of principal executive offices and telephone number)

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

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.10 per share

     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 20, 2000 THE  AGGREGATE  MARKET  VALUE OF VOTING  STOCK HELD BY
NON-AFFILIATES OF THE REGISTRANT WAS $13,409,947.


     As of March 20,  2000,  there were  52,569,078  shares of the  Registrant's
Common Stock outstanding.

     DOCUMENTS   INCORPORATED  BY  REFERENCE:   Portions  of  the   Registrant's
definitive  proxy statement  relating to its 1999 annual meeting of shareholders
is incorporated by reference into Part III of this Form 10-KSB.

     INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT  FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF THE  REGISTRANT'S  KNOWLEDGE,  IN THE PROXY  STATEMENT  INCORPORATED  BY
REFERENCE INTO PART III OF THE FORM 10-KSB OR ANY AMENDMENT HERETO. X

                                       2
<PAGE>

                                     PART I

ITEM 1.  BUSINESS

GENERAL DEVELOPMENT OF BUSINESS

     United Systems Technology,  Inc. ("USTI"),  was incorporated under the laws
of the State of Iowa on June 5, 1978, and its  wholly-owned  subsidiary,  United
Systems Technology East, Inc. ("USTEI"),  was incorporated under the laws of the
State of Delaware on June 10, 1991 (USTI and USTEI,  collectively,  are referred
to  herein  as the  "Company").  The  Company  is  engaged  in the  business  of
developing,  supporting and marketing  computer  software products to county and
local  governments.  The  software  applications  of the Company  operate on IBM
mid-range  computers,  and on various network  computer  systems both in DOS and
Windows  environments.  The  products  are offered to  customers in five product
application  groups.  These product  application  groups,  consisting of over 30
separate software titles, are Financial,  Public Works,  General  Administration
and Public Safety.

NARRATIVE DESCRIPTION OF BUSINESS

PRODUCTS

     The software applications offered by the Company consist of a comprehensive
line fo management  infromation  systems,  which were developed to  specifically
meet the  unique  requirements  of local  governmental  entities.  The  software
applications  of the  Company  are offered  through  its  LegacyTM,  QuestTM and
asystTM  product  lines.  The Legacy TM product line  operates on the IBM AS/400
mid-range  computer system.  The quest TM product line operates in a single user
or small network PC dos enviorment.The asystTM product line operates in a single
user or network Windows environment. An initial software sale typically averages
between $1,500 and $40,000. The cost of the related hardware varies depending on
the  type of  machine  purchased  as  well as the  amount  of  memory  capacity,
peripheral equipment and optional features obtained on the machine.

     The Company  markets its software  packages in the  following  four product
application groups.


    FINANCIAL SYSTEMS

     This group  includes  software  modules in the areas of general  ledger and
budgetary accounting,  budget preparation,  accounts payable,  payroll, accounts
receivable,   centralized  cash  receipts,  purchase  orders  and  comprehensive
financial report writer.

    PUBLIC WORKS

     This group includes  software  modules in the areas of utility  billing and
collections, hand held meter reading and bank drafting.

    GENERAL ADMINISTRATION

     This group  includes  software  modules in the areas of  building  permits,
animal licenses, business licenses and code enforcement.

    PUBLIC SAFETY

     This  group  includes  software  modules  in the  areas of  computer  aided
dispatch,  law  enforcement  records  management,   jail  management  and  court
administration.

<PAGE>

     The Company has completed the development of several new software products,
which  significantly  enhance the  competiveness of its  comprehensive  software
offering.  These  products  are  marketed  under the asystTM  brand  name,  were
developed as Windows  applications to "look and work like Microsoft Office", and
include a Fund  Accounting  product  line,  a Utility  Billing  product  line, a
General  Government  product line and a Public  Safety  product  line.  The Fund
Accounting product line includes General Ledger,  Budget XLence,  Report XLence,
Accounts  Payable,  Accounts  Receivable,  Purchase  Orders,  Cash  Receipts and
Payroll  modules.  The Utility  Billing product line includes  Utility  Billing,
Meter Reader  Interface,  Bank Drafts and Budget  Billing  modules.  The General
Government  product  line  includes  Master and Land  Directories,  Business and
Animal  Licenses and Building  Permits  modules.  The Public Safety product line
includes Mater Name Index, Calls for Service, Offense Reports,  Citations, State
Interface,  computer  aided  dispatch  and UCR reports  modules.  The Company is
currently developing additional modules for its asystTM product lines, including
Code enforcement,  service orders, alarm billing and Jail management modules, to
add to its existing  asystTM  offerings and anticipates that these packages will
be  released  in the 1st  quarter  of 2000.  The  Company  derives  its  revenue
principally  from (i)  licensing of its software  packages,  (ii)  installation,
training and customer support, (iii) maintenance agreements,  and (iv) equipment
and supplies sales.


    SOFTWARE PACKAGES

     The Company licenses its software  packages under a perpetual  nonexclusive
and nontransferable license agreement.

    INSTALLATION, TRAINING AND CUSTOMER SUPPORT

     The Company provides services related to the training and implementation of
the software  packages to its  customers.  These  services are  delivered at the
customer site, conducted in a classroom setting at the company's headquarters or
as "remote"  training through  interactive  computer-to-computer  hookup. In the
event that the customer requests  additional  functions from the product,  which
are  not  standard  in  the  software  packages,  the  Company  provides  custom
programming services for these modifications.

    MAINTENANCE AGREEMENTS

     The Company offers maintenance agreements in conjunction with the licensing
of its software packages.  These agreements provide telephone support,  software
product  enhancements,  error  corrections,   upgrades  and  remote  diagnostics
support.

    EQUIPMENT AND SUPPLIES SALES

     The Company sells PC's and hand-held  computers as well as certain computer
forms that are used in conjunction with the Company's products.

     For the year ended December 31, 1999, the Company  generated  approximately
29% of its revenue from the sale of software,  14% from  installation,  training
and customer support, 41% from software maintenance,  and 16% from equipment and
supplies sales.

MARKETING

     The  Company  markets its  products on a  nationwide  basis.  Marketing  is
conducted through its full-time sales staff in Dallas,  Texas as well as through
the Company's full-time sales representative located in Minneapolis, Minnesota.


                                        3
<PAGE>

     The  Company's   customers  are  primarily   municipal   governments   with
populations between 1,000 AND 100,000,  county governments,  police departments,
emergency  medical services  providers and municipal court systems.  The Company
currently has over 1,600 customer installations nationwide. The Company proposes
to sell  computer  equipment  when  selling its  software,  but the customer may
obtain their computer equipment from a hardware  manufacturer or dealer and then
purchase one or more software modules from the Company.

     The typical  purchaser's  representative is a City Manager,  Administrative
Manager,  Controller or Director of Finance. Customer leads are established from
customer  referrals,  direct mail  campaigns  and  attendance  at  national  and
regional  trade  shows.  In  addition,  the names and  addresses  of target city
governments are readily available from directory sources. The Company also holds
an annual  users'  meeting in Dallas,  Texas.  The two-day  meeting is typically
attended by  approximately  100 current and prospective  users. In the past, new
business has been generated from current  customers who have upgraded systems by
purchasing new modules.

     Approximately  30% of the  Company's  customers  are  located  in Texas and
Minnesota, and the remaining customers are located in various states nationwide.

COMPETITION

     The Company is aware of sizable,  nationally prominent  competitors,  which
market  products  that are  similar  to those of the  Company.  Numeraous  other
competitors  are  small,   local  vendors  who  often  do  not  market  standard
application  packages.  Management believes that the comprehensive nature of its
product offering,  including the uniqueness of the new asystTM product line, has
a positive impact on its competitive status.

EMPLOYEES

     The Company presently has 16 full-time  employees,  including its executive
officers.  In addition,  from time to time, the Company  engages the services of
consultants and part-time employees.

RESEARCH AND DEVELOPMENT


     During 1999, the Company  incurred  approximately  $100,000 in research and
developemnt costs related to the development of its asystTM product line.


PATENTS, COPYRIGHTS, TRADEMARKS AND ROYALTIES

     The Company  does not believe that its  products  are  patentable,  and, to
date, has not registered any copyright with respect to its products. The Company
believes that all of its products are of a proprietary  nature and the Company's
licensing  arrangements  prohibit  disclosure  of the  program by the  customer.
However,  there can be no assurance that the Company's  software is incapable of
being  duplicated  or that the Company  will be  successful  in  discovering  or
preventing any such duplication.

     The Company  entered into royalty  agreements as part of the sale of assets
to NCS on February  21,  1997.  In  addition,  the Company is a party to certain
royalty agreements, which, individually, and in the aggregate, have not required
the payment of material  amounts.  Under  these  agreements,  the Company is the
licensee of certain  software  systems,  which it markets as part of its product
line.

                                        4
<PAGE>


ITEM 2.  PROPERTIES

     The Company leases its 5,033 sqaure foot facility at 1850 Crown Road, Suite
1109,  Dalls,  Texas,  75234.  The lease for this  facility  was entered into on
September  30, 1997 for a sixty-two  month lease term  commencing on November 1,
1997 and expiring on December 31, 2002.

ITEM 3.  LEGAL PROCEEDINGS

The Company is involved in the following legal proceedings:

     On December 10, 1993,  Plaintiff  County of Essex filed suit against  USTI,
USTEI, New Jersey Municipal Data Management ("MDM") and MDM's surety in Superior
Court of New Jersey.  The Company filed third party  complaints  against counsel
representing   the  parties  to  the   transaction   for   negligence  in  their
representation  on this matter.  On April 26, 1999, a settlement  was reached in
this matter,  with all parties,  whereby this case was dismissed  with prejudice
without material adverse effect to the Company.

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


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters  were  submitted  to a vote of the  Company's  security  holders
during the fourth quarter of 1999.

                                        5
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
         SHAREHOLDER MATTERS

     The  Company's  common  stock is traded  over-the-counter  on the  National
Association of Securities Dealers, Inc.  Over-The-Counter Bulletin Board System.
The quotations shown below represent prices among the dealers and do not include
retail mark-ups,  mark-downs,  or commissions,  and do not necessarily represent
actual transactions.


                                        HIGH                 LOW
         QUARTER ENDED                BID PRICE           BID PRICE

         March 31, 1998                 $0.01               $0.01
         June 30, 1998                  $0.11               $0.01
         September 30, 1998             $0.06               $0.02
         December 31, 1998              $0.03               $0.02
         March 31, 1999                 $0.11               $0.02
         June 30, 1999                  $0.09               $0.04
         September 30, 1999             $0.15               $0.05
         December 31, 1999              $0.29               $0.10


     As of March 20, 2000,  the Company had 474  shareholders  of record and its
common  stock  had a closing  bid  price of $0.30 per share and a closing  asked
price of 0.31 per share


     Holders  of the  Company's  common  stock  are  entitled  to  receive  such
dividends as may be declared by the Company's  Board of Directors.  However,  no
dividends  on common  stock  have ever  been paid by the  Company,  nor does the
Company  anticipate  that dividends will be paid in the foreseeable  future.  In
addition,  payment of  dividends  to holders of the  Company's  common stock are
restricted pursuant to the terms of outstanding shares of preferred stock.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

     The  Company  derives  its  revenue  from  the  licensing  of its  software
packages,  installation,   training  and  customer  modifications,   maintenance
agreements  and sale of equipment and supplies.  Results of operations  for 1999
include  revenues of $2,113,197  resulting in net income of $422,253 as compared
to revenues of $1,856,973 and net income of $309,288 in 1998.


     The Company is continuing  the  development  of additional  modules for its
asystTM  products,  a windows  product  line that  operates  in a single user or
network  enviorment  and is  seamlessly  integrated  with  the  Micrsoft  Office
products.  The asystTM product line currently includes a Fund Accounting product
line, a Utility  Billing product line, a General  Government  product line and a
Public Safety product line. The Fund  Accounting  product line includes  General
Ledger,  Budget XLence,  Report XLence,  Accounts Payable,  Accounts Receivable,
Purchase Orders, Cash Receipts and Payroll modules.  The Utility Billing product
line includes Utility Billing,  Meter Reader  Interface,  Bank Drafts and Budget
Billing modules.  The General  Government  product line includes Master and Land
Directories,  Business and Animal  Licenses and Building  Permits  modules.  The
Public Safety product line includes Mater Name Index, Calls for Service, Offense
Reports,  Citations,  State  Interface,  Computer Aided Dispatch and UCR Reports
modules. the Company is currently developing  additional modules for its asystTM
product lines,  uncluding Code  Enforcement,  Service Orders,  Alarm Billing and
Jail  Management   modules,  to  add  to  its  existing  asystTM  offerings  and
anticipates that these packages will be released in the 1st quarter of 2000.

                                        6
<PAGE>

     The Company  believes that its asystTM  product line will continue to offer
its current and prospective custoemrs an attractive software solution, both from
a financial and functionality standpoint and follows the trend of clients moving
to a Windows based PC networks. This trend resulted in an increase in the volume
of licensing  activity to new customers or the Company's asystTM products during
1999.  The Company  offered a Year 2000  compliant  upgraded  version of certain
modules of the LegacyTM products which it shipped to those customers in 1999.

     The  following  table sets forth,  for the period  indicated,  the relative
percentage which certain items in the  Consolidated  Statements of Operations of
the Company  bear as a percent of total  revenues and the  percentage  change in
those items from period to period.

                                Percentage of Revenues
                               Yeear Ended December 31,
                                 1999            1998
                                 ----            ----

Revenue
 Software packages                29%             26%
 Installation, training and
  customer support                14%              6%
 Maintenance                      41%             53%
 Equipment and other              16%             15%
                                  ---             ---
                                 100%            100%

Costs and expenses
 Salaries                         44%             46%
 Other general administrative
  and selling expense             21%             22%
 Depreciation and amortization     6%              7%
 Commissions                       3%              3%
 Cost of equipment sold            8%              8%
                                  ---             ---
Total costs and expenses          82%             86%

Operating income                  18%             14%

Non-operating income               2%              -

Income before extraordinay item   20%             14%

Extraordinay item                  -               3%

Net income                        20%             17%


                                        7
<PAGE>

1999 VS 1998
------------
     The Comany's  total revenue  increased 14% for the year ended  December 31,
1999 from  $1,856,973  in 1998 to  $2,113,197  in 1999.  Software  license  fees
increased  27% in 1999 due, in part,  to a 44% increase in the  licensing of the
Company's  asystTM  products  and the  license  fees  related  to the Year  2000
compliant version of its LegacyTM products.  The Company continues to market its
products toward prspective customers,  which it believes are best suited for its
products. Installation,  training and customer support revenue increased 171% in
1999 due, in part to, an increased demand for custom programming  related to the
implemantation  of the Year 2000  version of the  Company's  LegacyTM  products.
Maintenance  revenue  decreased 12% in 1999,  due, in part, to a decrease in the
number of the Company's  QuestTM and LegacyTM  customers  that elected to select
maintenance  coverage.  This  decrease was  partially  offsett by an increase in
maintenance from new asystTM  customers.  Equipment sales and supplies increased
21% as a result of an  increase in the volume of  computer  equipment  and forms
sold in conjunction with its software products.


     Total cost and expenses  increased 7% for the year ended  December 31, 1999
from  $1,608,003 in 1998 to $1,727,176 in 1999.  Salary expense  increased 8% in
1999 due to an increase in  incentives  resulting  from the improved  results of
operations.  Depreciation  and amortization  expense  decreased 10% in 1999 from
1998 as a result of many previously  purchased assets becoming fully depreciated
in 1999.  Commission expenses increased 24% in 1999 as a result of the increased
licensing of the Company's  software  procusts in 1999.  Cost of equipment  sold
increased 27% in 1999 as a result of increased  sales of computer  equipment and
supplies in 1999.


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

     The Company  had net cash  provided by  operating  activities  of $ 470,274
during  1999 as compared to  $294,909  provided in 1998.  This  increase in cash
provided  was  primarilly  the  result  of the  improvement  in the  results  of
operations in 1999 as compared to 1998.  Net cash of$56,996 was utilized in 1999
for the purchase of equipment  necessary for the sales,  development and support
of its products.

     Management  believes that its ability to generate  positive cash flows from
operations,  in addition to its existing  cash balances 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 is  currently in arrears in the payment of dividends to holders
of its preferred  stock.  As of December 31, 1999,  dividends were in arrears on
the Series B preferred stock in the amount of $393,800 and on Series E preferred
stock in the amount of $179,735.

     On  October 5, 1999,  the  preferred  stock  holder  elected  its option to
convert its 500,000 shares of the Company's Series D preferred stock into shares
of the Company's  common stock.  There were dividends in arrears on the Series D
preferred stock in the amount of $336,860, which were also converted into common
stock. A total of 2,391,035  shares of the Company's common stock were issued as
a result of this conversion.

                                        8
<PAGE>

YEAR 2000
---------
     Until just a few years ago, most  computer  programs were written to define
an applicable  year byusing two digits for the year instead of four.  The effect
on a computer program that was written in such a way is to define a year that is
entered  with the two digits "00" as 1900  rather than 2000.  When the Year 2000
arrived, any computer programs that were written in the manner EITHER have to be
modified  to  accept  a date  in the  21st  century  or the  programs  had to be
replaced.  This  issue  not  only  effected  the  Company's  internal  automated
information systems but also effected the software products the Comapny develps,
support  and  markets to its  customers.  The  Company  evaluated  the  computer
programs it utilizes  internally for its information systems and determined that
all os its systems were Year 2000 compliant.  The Company's asystTM product line
is Year 2000 compliant.  The Company's customers that are utilizing the LegacyTM
and QuestTM  product  lines are being offered a Year 2000  compliant  version of
certain  packages within these product lines or are being  encouraged to migrate
to the  Company's  products  that are Year 2000  compliant.  Based on  currently
available information, the Company does not anticipate that the costs to address
the issues  related to the Year 2000 will have a material  adverse impact on the
Company's financial condition, results of operations or liquidity.

FORWARD-LOOKING STATEMENTS

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

                                        9
<PAGE>


ITEM 7.   CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                 United Systems Technology, Inc. and Subsidiary
                   Index to Consolidated Financial Statements
                           And Supplementary Schedules
                                                                   PAGES
                                                                   -----

Report of Independent Certified Public  Accountants                 F-1

Consolidated Financial Statements

     Balance sheets as of December 31, 1999 and 1998                F-2
     Statements of income for the years
      ended December 31, 1999 and 1998                              F-3
     Statements of stockholders' equity for the years
      ended December 31, 1999 and 1998                              F-4
     Statements of cash flows for the years
      ended December 31, 1999 and 1998                              F-5
     Notes to Consolidated Financial Statements                     F-6 to F-13


                                       10

<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of  Directors and Stockholders
United Systems Technology, Inc.

     We have  audited the  accompanying  consolidated  balance  sheets of United
Systems  Technology,  Inc. and  subsidiary as of December 31, 1999 and 1998, and
the related  consolidated  statements of income,  stockholders'  equity and cash
flows  for  the  years  then  ended.   These   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement presentation. We believe our audits provide a reasonable basis for our
opinion.


     In our opinion,  the financial statements referred to above present fairly,
in all material respects,  the consolidated financial position of United Systems
Technology,  Inc.  and  subsidiary  as of December  31,  1999 and 1998,  and the
consolidated  results of their operations and their  consolidated cash flows for
the years  then  ended,  in  conformity  with  accounting  principles  generally
accepted in the United States.

/s/ GRANT THORNTON LLP


Dallas, Texas
February 18, 2000


                                       F-1


<PAGE>

                 United Systems Technology, Inc. and Subsidiary
                          Consolidated Balance Sheets
                           December 31, 1999 and 1998


                                                     1999           1998
                                                     ====           ====
     Assets
Current Assets
 Cash and cash equivalents                        $  922,838     $  478,008
 Trade accounts receivable, less allowance for
  doubtful accounts of $25,000 in 1999 and 1998      216,577        329,708
                                                   ---------      ---------
  Total current assets                             1,139,415        807,716
                                                   ---------      ---------

Property and equipment at cost, net                   86,572         65,329
Goodwill, net                                        345,715        413,653
Purchased software, net                               19,878         33,301
Deposits and other                                    18,824          5,139
                                                   ---------      ---------
                                                     470,989        517,422
                                                   ---------      ---------

Total Assets                                      $1,610,404     $1,325,138
                                                   ---------      ---------

     Liabilities and Stockholders' Equity
Current Liabilities
 Notes payable - related party                    $   22,915     $    -
 Current portion of capital lease obligations                         2,448
 Trade accounts payable, including $113,200
  payable to a related party in 1999 and 1998        171,208        182,366
  Accrued payroll                                    157,611        110,806
  Accrued interest - related party                    38,673         43,457
  Other accrued expenses                              58,078         83,241
  Deferred revenue                                   512,109        701,180
                                                   ---------      ---------
 Total current liabilities                           960,594      1,123,498

Notes payable - related party                            -           27,083
                                                   ---------      ---------

Total Liabilities                                 $  960,594     $1,150,581
                                                   ---------      ---------

Commitments and contingencies                            -              -

     Stockholders' Equity
Preferred stock, convertible, voting, cumulative,
 par value $.10 per share; authorized 5,000,000
 shares; issued and outstanding, 500,000 shares
 of Series B, 300,000 shares of Series E,
 aggregate liqudating preference of $800,000 in
 1999 and $1,300,000 in 1998                          80,000        130,000
Common stock, par value $.10 per share; authorized
 100,000,000 shares; issued and outstanding
 51,569,078 and 48,178,043 shares in 1999 and
 1998, respectively                                5,156,908      4,817,804
Additional paid-in capital                         3,097,457      3,333,561
Accumulated deficit                               (7,644,555)    (8,066,808)
                                                   ---------      ---------
                                                     689,810        214,557
Less stock purchase notes receivable                  40,000         40,000
                                                   ---------      ---------
Total Shareholders' Equity                           649,810        174,557
                                                   ---------      ---------

Total Liabilities and Shareholders' Equity        $1,610,404     $1,325,138
                                                   ---------      ---------

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

                                      F-2
<PAGE>

                 United Systems Technology, Inc. and Subsidiary
                       Consolidated Statements of Income
                        For The Years Ended December 31,

                                                     1999           1998
                                                     ====           ====

Revenue
 Software packages                                $  612,679     $  482,922
 Installation, training and customer support         296,647        109,527
 Maintenance                                         872,920        992,005
 Equipment sales and supplies                        313,554        260,139
 Other                                                17,397         12,380
                                                   ---------      ---------
                                                   2,113,197      1,856,973
                                                   ---------      ---------
Costs and Expenses
 Salaries                                            936,833        870,539
 Other general, administrative and
  selling expense                                    380,782        363,777
 Depreciation and amortization                       117,116        130,243
 Rent                                                 54,928         54,878
 Commissions                                          60,578         48,971
 Cost of equipment sold                              176,939        139,595
                                                   ---------      ---------
                                                   1,727,176      1,608,003
                                                   ---------      ---------
Operating Income                                     386,021        248,970
                                                   ---------      ---------
Nonoperating (expense) income
 Interest expense                                     (2,044)        (4,057)
 Interest income                                      28,406         10,662
                                                   ---------      ---------
                                                      26,362          6,605
                                                   ---------      ---------
Net income before extraordinary income               412,383        255,575

Extraordinary gain on settlement of debt               9,870         53,713
                                                   ---------      ---------

Net income                                           422,253        309,288

Preferred stock dividend requirement                 (82,177)       (91,000)
                                                   ---------      ---------

Income allocable to common shareholders           $  340,076     $  218,288
                                                   ---------      ---------
Net income per common share before
 extraordinary item - basic and diluted           $     0.01     $      NIL
Extraordinay gain on settlemetn of debt                  NIL            NIL
                                                   ---------      ---------
Net income per common share after
 extraordinary item - basic and diluted           $     0.01     $      NIL
                                                   ---------      ---------

Weighted average number of common shares
 outstanding - basic                              48,930,152     44,630,098
                                                  ----------     ----------
               diluted                            61,729,244     44,630,098
                                                  ---------      ----------

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

                                      F-3
<PAGE>

                 United Systems Technology, Inc. and Subsidiary
                Consolidated Statements of Stockholders' Equity
                        For the Years Ended December 31,

                                                             Stock
                                     Additional             Purchase
              Capital Stock Issued    Paid-In   Accumulated   Note
              Preferred    Common     Capital     Deficit  Receivable   Total
              =========    ======     =======     =======  ==========   =====
Balance Jan 1,
1998          $ 130,000  $4,317,804 $3,768,561 $(8,376,096) $   -     $(159,731)

Sale of
 5,000,000
 shares of
 common stock               500,000   (450,000)              (40,000)    10,000
Recognition of
 deferred
 compensation on
 sale of stock                          15,000                           15,000
Net income                                         309,288              309,288
              ---------  ---------- ---------- ------------ --------- ---------
Balance December
 31, 1998     $ 130,000  $4,817,804 $3,333,561 $(8,066,808) $(40,000) $ 174,557

Conversion of
 Series D
 preferred
 stock to
 common stock   (50,000)    239,104   (189,104)                            -
Exercise stock
 options                    100,000    (65,000)                          35,000
Recognition of
 deferred
 compensation
 on sale of
 stock                                  18,000                           18,000
Net income                                         422,253              422,253
              ---------  ---------- ---------- ------------ --------- ---------
Balance December
 31, 1999     $  80,000  $5,156,908 $3,097,457 $(7,644,555) $(40,000) $ 649,810
              =========  ========== ========== ============ ========= =========


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

                                       F-4
<PAGE>

                 United Systems Technology, Inc. and Subsidiary
                     Consolidated Statements of Cash Flows
                        For the Years Ended December 31,

                                                     1999           1998
                                                     ====           ====
Cash flows in operating activities:

 Net Income                                       $ 422,253      $ 309,288

 Adjustments to reconcile net loss to
  net cash provided by operating activities:
   Depreciation and amortization                    117,116        130,243
   Recognition of deferred compensation costs
    on employee stock purchase                       18,000         15,000
   Extraordinary gain on settlement of debt          (9,870)       (53,713)

  Change in operating assets and liabilities:
   Trade accounts receivable                        113,131       (113,015)
   Prepaid expenses                                    -             6,165
   Deposits and other                               (13,685)          (140)
   Trade accounts payable                           (11,158)         5,050
   Accrued expenses                                  23,558         74,336
   Deferred revenue                                (189,071)       (78,305)
                                                   ---------      ---------
Net cash provided by operating activities         $ 470,274      $ 294,909
                                                   ---------      ---------
Cash Flows from investing activities:
 Property and equipment additions                   (56,996)       (21,925)
                                                   ---------      ---------
Cash flows from financing activities:
 Exercise of common stock options                    35,000           -
 Sale of common stock                                  -            10,000
 Payment of notes payable                            (1,000)        (5,500)
 Payments on capital lease obligations               (2,448)        (4,283)
                                                   ---------      ---------
Net cash provided from financing activities          31,552            217

Increase in cash and cash equivalents               444,830        273,201
Cash and cash equivalents, beginning of year        478,008        204,807
                                                   ---------      ---------
Cash and cash equivalents, end of year            $ 922,838      $ 478,008
                                                   =========      =========

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

                                      F-5
<PAGE>

                 UNITED SYSTEMS TECHNOLOGY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

1. Summary fo Significant Accounting Policies:

   Nature of Operations

     The  Company is engaged  in the  business  of  developing,  supporting  and
marketing  computer software  products to county and local  governments  located
throughout the United States.

   Basis of Presentation

     The  financial  include the  accounts of United  Systems  Technology,  Inc.
("USTI") and its wholly-owned  subsidiary,  United Systems Technology East, Inc.
("USTEI"). All intercompany transactions and balances have been eliminated.

   Cash Equivalents

     The Company  considers  short-term  investments  purchased  with an initial
maturity of three months or less to be cash equivalents.

   Property and Equipment

     Property and equipment are recorded at cost.  Depreciation  of property and
equipment is computed using the  straight-line  method over the estimated useful
lives of such  property  and  equipment,  which  range from three to five years.
Gains and losses on the disposal of such assets are recognized as incurred.

   Other Assets

     Goodwill  represnets the excess of the total acquisition cost over the fair
value  of the net  assets  acquired  of  Municipal  Software  Consultants,  Inc.
("MSC"), acquired in 1986 and QDS Acuisitions, Inc.("QDS") acquired in 1995. The
gooswill  resulting  from the MCS  acquisition  is  being  amortized  using  the
straight-line  method  over 20 years  from  date of  acquisition.  The  goodwill
resulting from the QDS acquisition is being  amortized  using the  straight-line
method  over 10 years from date of  acquisition.  Purchased  software  represent
assets acquired in the MDM and QDS  acquisitions,  and are being amortized using
the straight-line method over a five-year period.

   Revenue Recognition

     The  Company  recognizes  revenue  from the initial  license  for  computer
software  product  sales upon  delivery  of a  software  package.  Revenue  from
installation, training and customer support is recognized in the period in which
the  services  are  provided.  Revenue  from  contracts to maintain its computer
software products is recognized over the term of the contracts.

                                       F-6
<PAGE>
                 UNITED SYSTEMS TECHNOLOGY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

1. Summary fo Significant Accounting Policies (CONT'D.):

   Impairment of long-lived assets

     The  Company  reviews  its  long-lived  assets  and  certain   identifiable
intangibles for impairment when events or changes in circumstances indicate that
the  carrying  amount  of the  assets  may  not  be  recoverable.  In  reviewing
recoverability,  the Company  estimates the future cash flows expected to result
from  using the  assets  and  eventually  disposing  of them.  If the sum of the
expected future cash flows  (undiscounted  and without interest charges) is less
than the carrying amount of the asset, an impairment loss is recognized.

   Earning per Common Share

     The  Company  computes  basic  earnings  per  common  share  based  on  the
weighted-average number of common shares outstanding. Diluted earnings per share
are computed based on the  weighted-average  number of common shares outstanding
plus the number of additional  common shares that would have been outstanding if
dilutive potential common shares had been issued

   Financial Instruments

     The fair value of the Company's financial  instruments,  consisting of cash
and cash equivalents and debt, approximate their carrying values.

   Stock-Based Compensation

     Statement  of  Financial  Accounting  Standards  No.  123  "Accounting  for
Stock-Based Compensation" (SFAS 123) encourages, but does not require, companies
to record costs for stock-based  employee  compensation plans at fair value. The
Company has chosen to account for stock-based  compensation  using the intrinsic
value  method  prescribed  in  Accounting   Principles  Board  Opinions  No.  25
"Accounting for Stock Issued to Employees" and related  interpretations,  and to
provide the pro forma  disclosures as if the  requirements  of SFAS 123 had been
adopted.

   Use of Estimates

     In preparing financial statements in conformity with accounting  principles
generally  accepted  in the  United  States,  management  is  required  to  make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and the disclosure of contingent  asset and liabilities at the date
of the  financial  statements  and revenues and  expenses  during the  reporting
period. Actual results could differ from those estimates.

                                       F-7
<PAGE>
                 UNITED SYSTEMS TECHNOLOGY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

2. Property and Equipment:
                                             1999              1998
                                             ----              ----
     Leasehold improvements             $   66,416        $   64,772
     Furniture and fixtures                 40,655            40,655
     Equipment                             974,789           923,841
                                         ---------         ---------
                                         1,081,860         1,029,268

     Less accumulated depreciation
      and amortization                    (995,288)         (963,939)
                                         ---------         ---------
                                        $   86,572        $   65,329
                                         =========         =========

3. Other Assets:
                                               Accumulated
                                  Cost         Amortization         Net
                                  ----         ------------         ---
     1999
     ----
     Goodwill                  $ 1,692,128     $(1,346,413)     $  345,715
     Purchased Software            597,104        (577,226)         19,878

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


4. Capital Stock:

   Common Stock

     In September  1998,  the Company sold  5,000,000  shares of common stock to
four members of management  at a price of $.01 per share.  The fair market value
of the common stock on the date of the transaction was $.022 per share.

   Preferred Stock

     The Company's articles of incorporation authorize the issuance of 5,000,000
shares of  preferred  stock  with a par value of $.10 per share.  The  preferred
stock may be issued in series from time to time with such  designation,  rights,
preferences  and  limitations  as  the  Board  of  Directors  may  determine  by
resolution.

     Series B Preferred  Stock provide for, among other  things:(i) a cumulative
dividend  of $.07 per share per  annum,  payable  quarterly,  which must be paid
prior to the payment of a dividend  to holders of the  Company's  common  stock;
(ii) a  liquidation  preference  of $1.00  per share  plus  accrued  but  unpaid
dividends paid prior to any distribution to holders of common stock and Series C
preferred  stock;  (iii) the right to convert each share plus accrued but unpaid
dividends into common stock;  (iv) the right to vote on all matters submitted to
a vote of  stockholders  of the Company;  and (v)  redemption  at the  Company's
option at a  redemption  price of $1.00 per share  plus all  accrued  and unpaid
dividends.  As of December  31, 1999 the 500,000  oustanding shares of Series B
preferred  stock were entiltled to be converted into 4,468,995  shares of common
stock and were entitled to 4,468,995 votes on all matters submitted to a vote of
stockholders  of the  Company.  at December  31, 1999  cumulative  dividends  of
approximately $393,800 were in arrears.

                                       F-8
<PAGE>
                 UNITED SYSTEMS TECHNOLOGY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

4. Capital Stock:(CONT'D.):

     Series E Preferred  Stock provide for, among other  things:(i) a cumulative
dividend  of $.07 per share per  annum,  payable  quarterly,  which must be paid
prior to the payment of a dividend  to holders of the  Company's  common  stock;
(ii) a  liquidation  preference  of $1.00  per share  plus  accrued  but  unpaid
dividends paid prior to any distribution to holders of common stock and Series C
preferred  stock;  (iii) the right to convert each share plus accrued but unpaid
dividends into common stock;  (iv) the right to vote on all matters submitted to
a vote of  stockholders  of the Company;  and (v)  redemption  at the  Company's
option at a  redemption  price of $1.00 per share  plus all  accrued  and unpaid
dividends.  As of December 31, 1999 the 300,000  outstanding  shares of Series E
preferred  stock were entiltled to be converted into 2,398,685  shares of common
stock and were entitled to 2,398,685 votes on all matters submitted to a vote of
stockholders  of the  Company.  At December 31,  1999,  cumulative  dividends of
approximately $179,735 were in arrears.

5. Commitments and Contingencies:

   Operating Leases

     The Company leases certain office  facilities under a non-cancelable  lease
agreement  which  expires  December 31, 2002.  The future  minimum  annual lease
payments  under this lease are $49,070 from 1999 through 2002.  Rent expense was
$54,930 and $54,878 in 1999 and 1998, respectively.

6. Common Stock Options and Warrants:

   Stock Options

     In September 1986, the Board of Directors  approved the adoption of a stock
option plan (the "Plan"),  whereby  12,000,000  shares of the  Company's  common
stock are reserved for options to be granted to employees  and  directors at the
discretion of the Board of Directors.  The exercise  price shall be at a minimum
of 100% of the fair market value of the stock at the time the option is granted.
Unless otherwise specified,  the Plan allows for the options to expire ten years
from the date of grant and may not be  exercised  during  the  initial  one-year
period from date of grant.

     Compensation  costs for stock  options  granted to employees is measured as
the excess,  if any, of the quoted  market price of the  Company's  stock at the
date of grant over the amount an employee must pay to acquire the stock.  If the
Company recognized  compensation  expense based upon the fair value at the grant
date for options under the Plan,  the Company's 1999 and 1998 net income and net
income per common share would have increased to the pro forma amounts  indicated
as follows:

                                                     1999          1998
                                                     ----          ----
   Net income allocable to common shareholders
       As reported                                $ 340,076     $ 218,288
       Pro forma                                  $ 185,364     $ 159,476

   Net income per common share
       As reported                                  $  0.01       $   NIL
       Pro forma                                    $   NIL       $   NIL

                                       F-9
<PAGE>
                 UNITED SYSTEMS TECHNOLOGY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

6. Common Stock Options and Warrants:(CONT'D.):

     The fair value of these  options was  estimated  at the date of grant using
the  Black-Scholes  option  pricing  model with the  following  weighted-average
assumptions,  expected  volatility of 415%; risk free interest rate of 6.32%; no
dividend yield; and expected lives of 4 years in 1999 and five years in 1998.

     The pro forma amounts presented are not  representative of the amounts that
will be disclosed  in the future  because they do not take into effect pro forma
expenses related to grants before 1996.

     Additional  information with respect to options outstanding at December 31,
1999,  and the changes for each of the two years in the period then ended was as
follows:
                                                            1999
                                                  ------------------------
                                                                  Weighted
                                                                  Average
                                                                  Exercise
                                                    Shares         Price
                                                    ------         -----
       Outstanding at beginning of year            7,852,500        $.04
       Granted                                     3,950,500         .05
       Exercised                                  (1,000,000)        .04
       Foreited                                     (215,000)        .05
                                                  ----------         ---

       Outstanding at end of year                  10,587,500        $.04
                                                  ----------         ---

       Options exercisable at December 31, 1999    5,587,500        $.04
                                                  ----------         ---
       Weighted average fair value per share of
        options granted during 1999                                 $.05
                                                                     ---

                                                            1998
                                                  ------------------------
                                                                  Weighted
                                                                  Average
                                                                  Exercise
                                                    Shares         Price
                                                    ------         -----
       Outstanding at beginning of year            7,890,000        $.04
       Granted                                          -             -
       Foreited                                      (37,500)        .05
                                                   ---------         ---

       Outstanding at end of year                  7,852,500        $.04
                                                   ---------         ---

      Options exercisable at December 31, 1998     5,330,625        $.04
                                                   ---------         ---

                                      F-10
<PAGE>
                 UNITED SYSTEMS TECHNOLOGY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

6. Common Stock Options and Warrants:(CONT'D.):

     Information  about  stock  options  outstanding  at  December  31,  1999 is
summarized as follows:

                                         Options Outstanding
                            --------------------------------------------------
                                          Weighted Average
                              Number         Remaining        Weighted Average
Range of Exercise Prices    Outstanding   Contractual Life      Exercise Price
------------------------    -----------   ----------------    ----------------
    $.01 to $.05             8,337,500       2.4 years             $.04
    $.06 TO $.10             2,250,000       1.5 years             $.06
                            ----------
                            10,587,500
                            ----------

                                    Options Exercisable
                            --------------------------------
                               Number       Weighted Average
Range of Exercise Prices    Exercisable      Exercise Price
------------------------    -----------     ----------------
    $.01 to $.05             4,712,500           $.03
    $.06 TO $.10               875,000           $.06
                             ---------
                             5,587,500
                             ---------

   Stock Purchase Warrants

     As of December  31, 1999 common  stock  purchase  warrants  had been issued
primarily to officers,  directors adn employees  including  warrants to purchase
1,000,000  shares at $.035 per share issued to a Director of the Company for the
issuance  of a letter of  credit to  collateralize  debt of the  Company.  As of
December 31, 1999,  these warrants are fully vested:  No warrants were issued in
1999 or 1998.

                 Expiration           Exercise
                    Date               Price         Shares
                 ------------       -----------      ------
                 Aug  9, 2000          $.035       1,000,000
                 Sep 30, 2000          $.050         514,585
                                                   ---------
                                                   1,514,585
                                                   ---------

7. Income Taxes:

     At December 31, 1999, the Company has net operating loss  carry-forwards of
approximately  $2,489,000.  These carry-forwards  expire from 2000 through 2011.
Additionally,  the Company has approximately  $71,000 in unused general business
tax credits  available to directly  offset  future  income tax  liabilities  and
$624,000 in capital  loss  carry-forwards  available  to offset  future  capital
gains.

                                      F-11
<PAGE>
                 UNITED SYSTEMS TECHNOLOGY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

7. Income Taxes:(CONT'D.):

     For the years ended December 31, 1999 and 1998 the  difference  between the
effective  federal  income tax rate and the amounts  determined  by applying the
statutory  federal income tax rate to income before provision for federal income
tax was as follows:

                                                     1999          1998
                                                    Amount        Amount
                                                    ------        ------

         Federal income tax at statutory rate     $ 143,570     $ 105,160
         Amortization of goodwill                    23,100        23,100
         Other                                       (7,270)        6,440
         Change in valuation allowance             (159,400)     (134,700)
                                                   ---------     ---------
                                                  $    -        $    -
                                                   =========     =========


     Because of losses from operations in recent years, the Company has recorded
a valuation allowance equal to the net deferred tax asset.

     The  components  of the  deferred  tax accounts as of December 31, 1999 and
1998 are as follows:
                                                    1999          1998
                                                   ------        ------
      Deferred tax assets:
       Net operating losses carried forward     $  846,400     $  992,600
       Capital losses carried forward              212,300        212,300
       Deferred revenue                            174,100        238,400
       Accounts payable and accrued expenses       132,100        117,500
       General business tax credits                 71,000         71,000
                                                ----------     ----------
      Total deferred tax asset                  $1,435,900     $1,631,800
                                                ----------     ----------

      Deferred tax liabilities:
       Accounts receivable                          88,500        126,000
       Purchased software,property and equipment    27,900         26,900
                                                ----------     ----------
       Total deferred tax liability                116,400        152,900
                                                ----------     ----------

      Net deferred tax asset before valuation
        allowance                                1,319,500      1,478,900

      Less valuation allowance                   1,319,500      1,478,900
                                                 ---------      ---------

      Net deferred tax asset                    $     -        $     -
                                                 =========      =========

                                      F-12
<PAGE>
                 UNITED SYSTEMS TECHNOLOGY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

9. Employee Benefit Plans:

     Effective  January 16, 1992, the Company  established  the USTI  Employee's
401(K)  Profit  Sharing  Plan  and  Trust  (the  "Plan"),  which  is  a  defined
contribution  plan that covers  substantially  all  full-time  employees  of the
Company  eligible to  participate.  The Plan is subject to the provisions of the
Employee  Retirement  Income  Security  Act of 1974,  as amended  ("ERISA")  and
Section 401(K) of the Internal Revenue Code. The Company made  contributions for
the benefit of the  participants  in the plan in the amount of $5,305 and $4,095
for the years ended December 31, 1999 and 1998, respectively.






































                                      F-13
<PAGE>

ITEM  8.  Changes In and Disagreements With Accountants On Accounting
           and Financial Disclosure

     The Company has had no  disagreements  with its Independent  Accountants on
accounting and financial disclosure matters.

                                    PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The  information  required  by this  item  is set  forth  in the  Company's
definitive  proxy  statement  relating to the Company's  2000 Annual  Meeting of
Shareholders   under  the  captions   "Election  of  Directors"  and  "Executive
Officers." Such information is incorporated herein by reference therefrom.


ITEM 10. EXECUTIVE COMPENSATION

     The  information  required  by this  item  is set  forth  in the  Company's
definitive  proxy  statement  relating to the Company's  2000 Annual  Meeting of
Shareholders under the caption  "Management  Compensation."  Such information is
incorporated herein by reference therefrom.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  information  required  by this  item  is set  forth  in the  Company's
definitive  proxy  statement  relating to the Company's  2000 Annual  Meeting of
Shareholders under the caption "Security  Ownership of Certain Beneficial Owners
and Management." Such information is incorporated herein by reference therefrom.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  information  required  by this  item  is set  forth  in the  Company's
definitive  proxy  statement  relating to the Company's  2000 Annual  Meeting of
Shareholders under the caption "Certain Relationships and Related Transactions."
Such information is incorporated herein by reference therefrom.




                                       11

                                     PART IV

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)      Documents filed as part of this Report:

         1.       CONSOLIDATED FINANCIAL STATEMENTS

     See  "Index  to  Consolidated   Financial   Statements  and   Supplementary
Schedules" under Item 8 of this Report.

         2.       CONSOLIDATED FINANCIAL STATEMENTS SCHEDULES

     See  "Index  to  Consolidated   Financial   Statements  and   Supplementary
Schedules"  under Item 8 of this Report.  All other schedules have been omitted,
as the required  information is  inapplicable or the information is presented in
the financial statements or the notes thereto.

         3.       EXHIBITS

     The following  documents are filed as exhibits  herewith,  unless otherwise
specified, and are incorporated herein by this reference:

Exhibit
Number
-------
3.1   Amended and Restated Articles of Incorporation of the Company as filed on
      November 21, 1986 with the Secretary of State of the State of Iowa.
      (Incorporated by reference, Registration Statement on Form S-1, File No.
      33-9574, Exhibit 3.11)

3.2   Articles of Merger of Municipal Software Consultants, Inc. into United
      Systems Technology, Inc., as filed on December 31, 1986 with the
      Secretaries of State of the States of Iowa and Texas.  (Incorporated by
      reference, Annual Report on Form 10-K for the fiscal year ended December
      31, 1986, Exhibit 3.2)

3.3   Statement Establishing and Designating Series B Preferred Stock of the
      Company, as filed on June 13, 1988 with the Secretary of State of the
      State of Iowa. (Incorporated by reference, Quarterly Report on Form 10-Q
      for the quarter ended June 30, 1988, Exhibit 4.1)

3.4   Statement Establishing and Designating Series C Preferred Stock of the
      Company, as filed on June 13, 1988 with the Secretary of State of the
      State of Iowa. (Incorporated by reference, Quarterly Report on Form 10-Q
      for the quarter ended June 30, 1988, Exhibit 4.2)


                                       12
<PAGE>

Exhibit
Number
-------

3.5   Articles of Amendment to the Articles of Incorporation of the Company, as
      filed on July 15, 1988 with the Secretary of State of the State of Iowa.
      (Incorporated by reference, Quarterly Report on Form 10-Q for the quarter
      ended June 30, 1988, Exhibit 3.1)

3.6   By-Laws of the Company, as amended and currently in effect.  (Incorporated
      by reference, Registration Statement on Form S-1, File No. 33-9574,
      Exhibit 3.6)

3.7   Articles of Amendment to the Articles of Incorporation designating the
      Series D Preferred Stock of the Company, as filed on February 23, 1990
      with the Iowa Secretary of State. (Incorporated by reference, Form 8-K
      Current Report dated February 15, 1990, Exhibit 3.1)

3.8   Statement establishing and designating Series E Preferred Stock of the
      Company, as filed on June 26, 1991, with the Secretary of the State of
      Iowa. (Incorporated by referenced, Annual Report on Form 10-K for the year
      ended December 31, 1991, Exhibit 3.8)

10.1  1986 Stock Option Plan. (Incorporated by reference, Registration Statement
      on Form S-1, File No. 33-9574, Exhibit 10.9)

10.2  Agreement Regarding Preferred Stock Purchase, Warrant Purchase and Loan,
      dated October 16, 1986, by and between the Company and Ventana Growth
      Fund.(Incorporated by reference, Registration Statement on Form S-1, File
      No.33-9574, Exhibit 10.10)

10.3  Preferred Stock Purchase Agreement, dated October 28, 1986, by and
      between the Company and Ventana Growth Fund. (Incorporated by reference,
      Registration Statement on Form S-1, File No. 33-9574, Exhibit 10.17)

10.4  Promissory Note, dated October 16, 1986, in the amount of $150,000.00,
      from the Company to Ventana Growth Fund.  (Incorporated by reference,
      Registration Statement on Form S-1, File No. 33-9574, Exhibit 10.19)

10.5  Stock Purchase Agreement, dated June 8, 1988, by and between the Company
      and Farm Bureau Mutual Insurance Company.  (Incorporated by reference,
      Quarterly Report on Form 10-Q for the quarter ended June 30, 1988,
      Exhibit 19.1)

10.6  Preferred Stock Exchange Agreement, dated June 8, 1988, by and between
      the Company and Ventana Growth Fund.  (Incorporated by reference,
      Quarterly Report on Form 10-Q for the quarter ended June 30, 1988,
      Exhibit 19.2)

10.7  Purchase Agreement, dated February 15, 1990, by and between the Company
      and International Technology Group, Inc. (Incorporated by reference,
      Form 8-K Current Report dated February 15, 1990, Exhibit 10.1)

                                       13
<PAGE>

Exhibit
Number
-------
10.8  Assignment and Assumption Agreement, dated February 15, 1990, by and
      between the Company and International Technology Group, Inc. assigning
      all relevant rights and interest in a maintenance agreement with Grumman
      Systems Support Corp. to the Company.  (Incorporated by reference,
      Form 8-K Current Report dated February 15, 1990, Exhibit 10.2)

10.9  Assignment and Assumption Agreement, dated February 15, 1990, by and
      between the Company and International Technology Group, Inc. assigning
      all rights and interest in a Technology Transfer Agreement with AM
      Computer Corporation  and Microvote Partners, Ltd. to the Company.
      (Incorporated by reference, Form 8-K Current Report dated February 15,
      1990, Exhibit 10.3)

10.10 Assignment and Assumption Agreement, dated February 15, 1990, by and
      between the Company and International Technology Group, Inc. assigning
      all rights and interest in trademark INTEGRITY to the Company.
      (Incorporated by reference, Form 8-K Current Report dated February 15,
      1990, Exhibit 10.4)

10.11 Stock Purchase Agreement, dated February 14, 1990, by and between Farm
      Bureau Mutual Insurance Company and the Company.  (Incorporated by
      reference, Form 8-K Current Report dated February 15, 1990, Exhibit 10.5)

10.12 Asset Purchase Agreement, dated June 10, 1991, by and between the Company
      and New Jersey Municipal Data Management, Inc. (Incorporated by reference
      Form 8-K Current Report, dated June 10, 1991)

10.13 Asset Purchase Agreement, dated December 22, 1994, by and between the
      Company and Sequoia Pacific Systems, a division of Smurfit Packaging
      Corporation.  (Incorporated by reference Form 8-K Current Report, dated
      December 22, 1994, Exhibit 10.1)

10.14 Assignment and Assumption Agreement, dated December 22, 1994, by and
      between the Company and Sequoia Pacific Systems, a division of Smurfit
      Packaging Corporation.  (Incorporated by reference Form 8-K Current
      Report, dated December 22, 1994, Exhibit 10.2)

10.15 Asset Purchase Agreement, dated October 17, 1994, by and between the
      Company and Noll Computer Systems, Inc.("NCS").  (Incorporated by
      reference, Annual Report on Form 10-KSB for the year ended December 31,
      1994, Exhibit 10.15)

10.16 Asset Purchase Agreement, dated November 15, 1995, by and between the
      Company, Dralvar Capital Corp. ("Dralvar") and Ken Neff.  (Incorporated
      by reference, Form 8-K Current Report, dated November 15, 1995, Exhibit
      10.1)

10.17 Asset purchase Agreement dated February 21, 1997, by and between the
      Company and Noll Computer Services, Inc. ("NCS").  (Incorporated by
      reference, Annual Report on Form 10-KSB for the year ended December 31,
      1996, Exhibit 10.17)

                                       14
<PAGE>


       (b)    Reports on Form 8-K

              No reports on Form 8-K were filed  during the year for which
              this report is filed.

        (c)   Exhibits

              The  response to this  portion of Item 14 is submitted as a
              separate section of this report.

        (d)   Financial Statement Schedules

              The  response to this  portion of Item 14 is submitted as a
              separate section of this report.

                                       15
<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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: MARCH 29, 2000                   BY:  /S/  THOMAS E. GIBBS
                                            --------------------
                                            Thomas E. Gibbs,
                                            Chief Executive Officer and
                                             Chairman of the Board

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.

DATE: MARCH 29, 2000                   BY: /S/  THOMAS E. GIBBS
                                           --------------------
                                           Thomas E. Gibbs,
                                           Chief Executive Officer and
                                            Chairman of the Board
                                            (Principal Executive Officer)

DATE: MARCH 29, 2000                   BY: /S/  RANDALL L. MCGEE
                                           ---------------------
                                           Randall L. McGee,
                                           Secretary and Treasurer
                                            (Principal Financial &
                                             Accounting Officer)


DATE: MARCH 29, 2000                   BY:  /S/  SCOTT BURRI
                                            ----------------
                                            Scott Burri, Director


DATE: MARCH 29, 2000                   BY:  /S/  JORDAN ISSACKEDES
                                            ----------------------
                                            Jordan Issackedes, Director


DATE: MARCH 29, 2000                   BY:  /S/  EARL COHEN
                                            ---------------
                                            Earl Cohen, Director


                                       16
<PAGE>