SECURITIES AND EXCHANGE COMMISSION
                                 WASHINGTON, D.C.  20549

                                         FORM 10-KSB

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

                              For the Fiscal Year Ended June 30, 1996
                    [  ] Transition Report Pursuant to Section 13 or 15(d)
                                      of the Securities Exchange Act of 1934

                                         Commission File Number 0-15353
                                      _____________________________
                                      SAZTEC INTERNATIONAL, INC.

              California                                          33-0178457
  (State or Other Jurisdiction of                           (I.R.S. Employer
    Incorporation or Organization)                     Identification Number)

                    43 Manning Road, Billerica, Massachusetts   01821
                        (Address of Principal Executive Office)

                                             (508) 262-9600
                                 (Registrant's 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, Without Par Value

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 and (2) has been subject to such filing 
requirements for the past 90 days.  Yes   X      No ___

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 registrant's knowledge, in definitive proxy or information statements 
incorporated by reference in Part III of this Form 10-K or any amendment to 
this Form 10-K. [X ]

Revenues for the fiscal year ended June 30, 1996, are $10,851,555.

The aggregate market value of the Common Stock held by non-affiliates (based 
upon the last reported price on the bid-ask average on the OTC bulletin board) 
on November 22, 1996 was approximately $1,965,927.  As of November 22, 1996, 
there were 14,297,651 shares of Common Stock outstanding.

                         DOCUMENTS INCORPORATED BY REFERENCE

                                                     None.
                                               Page 1 of 40
                                                  PART I

ITEM 1.  Description of Business

General
Saztec International, Inc. (the "Company" or "Saztec") is a provider of 
information management services.  The Company specializes in a broad range of 
services that help customers manage the conversion of information (data, text, 
graphics) from traditional media (paper, microform) to computer usable formats 
and media.

Saztec has extensive experience in creating and maintaining text and image 
databases, and has been actively involved in providing these services to 
customers since the Company"s inception.

The Company also offers services that provide customers with an alternative to 
in-house data entry for a wide range of computer processing applications.  The 
Company provides such services in the U.S. and the U.K. and also relies on 
technology and contractual arrangements that permit the Company to have 
portions of certain data processing projects completed offshore at 
substantially lower labor costs than in the U.S. or Europe.

The Company was incorporated in California in 1976.  The Company's executive 
offices are located at 43 Manning Road, Billerica, Massachusetts 01821, and its 
telephone number is (508) 262-9600.  The principal wholly-owned subsidiaries 
are Advanced Automation Associates, Inc. ("AAA"), incorporated in the state of 
Missouri and Saztec Europe, Ltd., registered in Scotland.  Saztec Europe, Ltd. 
has three wholly owned subsidiaries; Saztec Services, Ltd., registered in 
England, Knightswade, Ltd., registered in England and Saztec Datenverabeitung 
GmbH, registered in Germany.

Description of Business
Saztec provides a complete range of services for the information conversion 
market.  The Company offers the following services which are integrated and 
customized as required by the customer's application:

Data Entry:  Information can be captured from any format or source material, 
including paper, microfilm, or microfiche.  Original data capture can be 
performed by traditional keyed data entry or by using one of the following 
techniques, depending upon the application: Optical Character Recognition 
(OCR), Intelligent Character Recognition (ICR), or Optical Mark Recognition 
(OMR).

A variety of quality control procedures are used to assure character accuracy.  
These procedures include key verification, sight verification, complex table 
and range checking, and post-capture editing software.

Text Conversions:  Several services are available to assist customers 
converting text information from one media to another.  Input is accepted in a 
variety of formats including paper, microform, and magnetic tape or cartridge, 
floppy disks, CD-ROM, electronic media or cards.  Clerical coding resources are 
available to assign tags, photocomposition codes, or complex document 
definition notations such as Standard Generalized Markup Language (SGML), a 
standard growing in popularity for commercial text databases; Hyperlink Text 
Markup Language (HTML), the document standard in use on the Internet; or 
Machine Readable Cataloguing (MARC), the standard for library catalog records.  
Original text capture can be accomplished via traditional key entry or by OCR 
techniques. Image Conversions:  A broad family of services are available to 
capture and convert document images for use in image based storage and 
retrieval systems.  Equipment is used to create images at resolutions between 
100 dots per inch (dpi) and 1200 dpi ranges, with variable light/dark 
thresholding available to match the quality of the documents.  Up to 64 levels 
of gray or color may be captured for projects requiring these capabilities.

Simple and compound documents can be accommodated in a variety of formats.  
Internally developed editing software provides the capability to carve images, 
add or delete data from an image, rotate and scale images and change text 
within an image.

The output can be provided in an uncompressed or defined compressed image 
format.  File headers and tape formats can be matched to the image storage and 
retrieval system used in the specific application.

Documents may be indexed in a variety of ways, depending on the application.  
Indexes ranging from simple identification numbers to complex key word 
abstracts can be accommodated.

Services can be provided either off-site, partially on-site or completely 
on-site depending upon the specialized needs of each individual customer.

Post Capture Computer Processing:  Captured data generally is processed before 
being output to provide for edit checks, special formatting, code explosions, 
reblocking, labeling and quality control.  The output can be provided on 
magnetic tape, diskette, optical disk, CD-ROM, over the Internet, or via 
telecommunications.

Custom software packages are developed as required for the manipulation of 
captured information to a specialized output format.  Computer processing is 
used to simplify the capture of complex information, restructure existing 
databases for migration to a new system, link indexes for image storage and 
retrieval applications, update information or combine files from a variety of 
sources into a unified format.

Project Management:  The key to managing complex conversion processes is 
project management.  At Saztec the following elements are made integral parts 
of all projects.

Project Plan -- A formal project plan is developed to provide information for 
the client and for the appropriate Saztec support and production personnel.  
The plan includes items such as: a project specification to detail the 
requirements of the project; a document analysis; an identification of 
resources and timescales; and a definition of the responsibilities of all 
involved with the project.  This plan includes detailed conversion 
instructions which are agreed to in advance by both Saztec and the customer.

Document Management -- All documents are tracked and logged throughout the 
conversion process.  From batching and sorting to combining converted data and 
images for final output, the progress of each document is tracked at each step 
of the production process.  Adherence to pre-defined quality control 
standards is strictly maintained.

Quality Control -- Saztec uses proven quality control procedures developed over 
a wide range of information conversion projects over the last ten years.  
Quality control processes are specifically developed for each project and are 
custom tailored to meet the unique requirements of each client.  Whatever the 
specific measure of quality may be, care is taken to track and improve quality 
at each step of the conversion process.  Prior to delivery, all work is 
certified by final inspection that quality control objectives have been 
achieved.

Offshore Resources:  The Company has entered into a priority Production 
Agreement, renewed in April 1991 for five years, with Saztec Philippines, Inc. 
("Saztec Philippines") providing for a first priority to the Company on all of 
its production resources.  In addition, Saztec Philippines has the "Right of 
First Refusal" on all data entry and clerical coding for the Company's United 
States clients that can be performed internationally, provided that Saztec 
Philippines can meet the requirements of quality, expertise, turnaround and 
pricing acceptable to the Company and its clients.

The Company anticipates Saztec Philippines will continue to be a primary sub-
contractor of data entry and clerical coding services and is currently 
negotiationg a new agreement.  However, where it has been necessary, the 
Company has utilized additional offshore vendors.  Since September, 1991, 
Saztec Philippines has not been affiliated in an ownership capacity with the 
Company.

Sale of Divisions: The Company"s plan to improve financial performance includes 
the sale or closedown of unprofitable operations and the sale of profitable 
operations that are not in line with the Company"s long-term mission to service 
customer needs for electronic data conversion.    As a result, the Company has 
sold the three operating divisions described below:

1. On June 8, 1995, the Company reached an agreement to sell the Financial 
Transaction Processing (FTP) Division to Lloyd"s Bank.    The division was 
based in Swindon, U.K., and provided remittance processing services to U.K. 
customers utilizing OCR and key entry processes.

2. On September 1, 1995, the Company sold its Marketing Fulfillment Division to 
a management group.   The division was based in Billerica, Massachusetts, and 
provided direct mail, rebate, and subscription services to customers in the New 
England area.

3. On September 1, 1995, the Company sold its Knightswade, Ltd. Microfilm 
Division to a management group.    The division was based in Winchester, U.K., 
and provided a range of microfilming services to U.K. customers.

Financial information about the sale of these divisions is presented in Note 7 
of the Notes to Consolidated Financial Statements.




Markets and Marketing
A major challenge for the Company is the project-oriented nature of its 
business.  Although the Company may perform services for a client over many 
years, such services may relate to one major project or to many smaller 
projects.  The Company is dependent on its ability to attract new projects from 
new and existing clients to replace completed projects.  The project-oriented 
nature of the Company's business creates difficulties in planning for staffing 
and equipment (principally computer) requirements, scheduling, facilities 
requirements and availability of offshore resources.

During the past several years, the Company has experienced a decline in the 
demand for traditional data entry and text conversion services.  Management 
believes the demand for image conversions will increase, based on its 
discussions with hardware and software suppliers, potential clients, other 
companies providing services similar to the Company, and market analysts.  
However, the overall image conversion marketplace is still in the developmental 
stage and, therefore, it is difficult to predict the timing and volume of the 
anticipated increase in image conversion services.

The Company provides services to the electronic publishing industry consisting 
of publishers, libraries, on-line information vendors, and trademark and market 
research companies.  The Company has performed the following specific services: 
(a) for European libraries, retrospective conversion of card catalog data to a 
local system, and conversion of hand printed worksheets for loading to a 
national computer network for research libraries; (b) the conversion for on 
line vendors, of archival files of abstracts and indexes with monthly additions 
to the database from newly published material; (c) for market researchers, 
ongoing capture and processing of client billings and data for analysis and 
publication; (d) CD-ROM reformatting and pre-mastering services for 
publishers; and (e) image capture of graphic material imbedded in text.

Other specific services the Company has provided are:  (a) database maintenance 
consisting of updates, changes, additions and deletions of (1) name and address 
information for market researchers, and (2) data capture of claim forms for 
medical insurance companies; and (b) data entry of individual, corporate and 
partnership state income tax returns upon filing.

Competition
The Company competes against many companies with respect to one or more of 
the various services provided by the Company.  Some of these competitors have 
substantially greater financial and other resources than the Company and 
compete aggressively with respect to all or some of the services provided by 
the Company. Such firms compete on a price and geographic basis, charging, in 
some instances, lower rates for particular services provided by the Company, 
and in other instances, providing quicker turnaround to clients in a particular 
area.  The Company may also be considered in competition with "in-house" 
personnel who may duplicate the Company's services.    

The Company primarily competes on the basis of service.  The Company believes 
that it has developed an effective methodology for document control for 
projects involving the conversion of a large number of documents.  The Company 
emphasizes this aspect of its service, among other components of service 
(such as timeliness and accuracy) in competing for new business.

Employees
At June 30, 1996, the Company employed 172 full-time and 88 part-time 
employees.

Dependence Upon Major Customers
Financial information about major customers is presented in Note 11 of the 
Notes to Consolidated Financial Statements.  At June 30, 1996, the Company was 
conducting business with approximately 130 customers in the United States and 
Europe.

Financial Information About Foreign Operations

Financial information about foreign operations is presented in Note 11 of the 
Notes to Consolidated Financial Statements.


ITEM 2.     PROPERTIES

The Company occupies its principal executive offices, approximately 21,500 
square feet, located in Billerica, Massachusetts, pursuant to a lease expiring 
in August, 1999.

In addition, the company leases an aggregate of 29,853 square feet of office 
space in South Weymouth, Massachusetts; Vernon, Connecticut; Kansas City, 
Missouri;  Ardrossan, Scotland; and Regensburg, Germany, pursuant to individual 
leases expiring between 1998 and 2001.

Management believes the current facilities are adequate to conduct the 
Company's operations.

ITEM 3.     LEGAL PROCEEDINGS

Information about legal proceedings is presented in Note 9 of the Notes to 
Consolidated Financial Statements, under "Litigation".

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS

None.


                                                    PART II

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

The Company's common stock is traded in the over-the-counter market and was 
quoted on the NASDAQ system (small cap market) under the trading symbol 
SAZZ through November 14, 1995.  On September 26, 1996, the Company had 
256 stockholders of record.  For the period of July 1 to September 21, 1996, 
the high and low closing price as reported by the NASD was 3/8 and $.15, 
respectively.  The table below sets forth high and low bid information by 
fiscal quarter as reported by the NASD and NASDAQ Research Department.

<TABLE>
<S>                                       <C>                       <C>
Bid Prices
Fiscal Quarter Ended;                         High                    Low

September 30, 1994                           1- 1/8                    1/2
December 31, 1994                               3/4                    1/2
March 31, 1995                               1- 1/16                   1/2
June 30, 1995                                   11/16                  3/16

September 30, 1995                              3/8                   1/8
December 31, 1995                               1/4                  1/50
March 31, 1996                                11/32                  1/40
June 30, 1996                                  9/16                     1/8

</TABLE>

The above mentioned over-the-counter quotations reflect inter-dealer prices, 
without retail markup, mark-down or commission and may not necessarily 
represent actual transactions.  The Company has not paid dividends on its 
Common Stock and has no present intention to pay any cash dividends.

The Company was not in compliance with NASDAQ's Small-Cap Market capital 
and surplus requirements and was deleted from the NASDAQ Stock Market at the 
close of business on November 14, 1995.  It continues to be listed in the OTC 
Bulletin Board.

ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS

Results of Operations
Revenues for the year ended June 30, 1996 were $10,851,555 compared to 
$13,596,848 for the year ended June 30, 1995, a decrease of $2,745,293, or 
(20.2%).  Net of divisions sold, revenues increased  8.76%, or $856,507 over 
the prior year.

Revenues from U.S. operations declined from $6,543,384 in 1995 to $4,923,900 
in the current year, a decline of $1,619,484, or (24.7%).   Revenues for the 
Company's European operations declined from $7,053,464 in fiscal year 1995 to 
$5,927,655, a decline of $1,125,809, or (16%).  Net of divisions sold, however, 
revenue increased $349,944 and $506,563 over the prior year for U.S. and U.K. 
operations, respectively.  The increase in U.S. based revenue was due to 
improvement in Data Capture Operations, as Imaging revenues decreased 
$124,000 from the prior year.  The decrease in Imaging revenue is attributable 
to a reduction in brokered projects sold during the year, which can in turn be 
traced to a reduction in the selling expense attributable to the Imaging 
Division of $57,000 during the current year. The revenue increase for the 
U.K. based operations was the result of an anticipated recovery in  the 
volume of library projects.

Gross profit increased from $2,403,452 in fiscal year 1995 to $2,893,478 in 
1996, an increase of $490,026, or 20.4%, due partly to the sale of 
unprofitable divisions.  Net of divisions sold, gross profit increased 
$832,908 in fiscal year 1996 over the prior year.  Included in this 
improvement is an increase in the gross profit of the Imaging Division in the 
current year due to reduced brokered sales and reductions in depreciation and 
facilities expense associated with the consolidation of operations in 
Billerica, Massachusetts.  Gross margin increased from 17.7% in fiscal 1995 
to 26.6% in 1996; net of divisions sold, gross margin increased 6.1% over the 
prior year to 27.3% in fiscal year 1996.

Selling and administrative (S&A) expense of $2,979,839 in fiscal year 1996 
includes a charge of $139,839 related to litigation.  S&A expense of $5,160,706 
in fiscal 1995 included a restructuring charge for Europe, as reported in the 
Company's Form 10-QSB for the period ending March 31, 1995, of  $411,134 for 
accelerated amortization of goodwill for the Knightswade microfilm acquisition, 
and for lease abandonment and severance costs in the U.K.  In April 1995, the 
Company incurred a $187,500 charge related to issuance of stock pursuant to the 
1992 purchase of Scanning America, Inc.  The Scanning America division was 
divested by the Company in October 1993.  Also, in December 1994, the 
Company incurred a $72,671 charge for relocation of its Dayton, Ohio, 
production activity and its Kansas City, Missouri headquarters to Billerica, 
Massachusetts.  Excluding these one-time charges, S&A expense was $2,840,000 
in fiscal year 1996 compared to $4,489,401 in fiscal 1995, a decrease of 
36.7%.  This reduction is comprised of a decrease in selling expense of 
$542,401 and  decreased administrative expense of $1,107,000 over the 
adjusted figure from the prior year.  Management believes it has largely 
achieved its goal of refocusing efforts on the Company's core business.

Capital Resources and Liquidity
During the quarter ended March 31, 1994, management completed three separate 
private placements generating $1,051,729, net of issuance costs of $49,271, in 
exchange for 1,100,000 shares of common stock and warrants to issue an 
additional 1,287,500 shares of common stock, exerciseable for a five year 
period at $1.375 per share.  One of the private placements of 750,000 shares 
was with a group of individuals unrelated to the Company ("the Meyerson 
Group").  Another transaction, representing 250,000 shares, was with Tallard 
B.V., a Netherlands Corporation ("Tallard"), and the remaining transaction 
for 100,000 shares was transacted with a then-member of the Company's Board 
of Directors.  Subsequent to the completion of these transactions, certain 
members of the Meyerson Group alleged certain disclosure violations by the 
Company in the offering documents.   The Company denied the allegations and 
believes they were without merit.   However, to avoid the potential cost of 
litigation, the Company agreed to issue 366,666 additional shares of 
unregistered common stock to the private placement participants and agreed to 
decrease the warrant price for all of the underlying warrants from $1.375 to 
$1.125.   At June 30, 1996 and 1995, 250,000 of the additional shares had 
been issued. In exchange for these modifications, the participants have 
agreed to release the Company from all claims arising out of the three 
private placements.

In October 1994, the Company agreed to sell 1,226,052 shares of common stock 
to Tallard pursuant to a stock purchase agreement for $729,687, net of expenses 
of $20,213.   The proceeds of the sale were received in installments through 
December 1994.

In May 1996, the Company completed a private placement of 584,000 shares for 
$136,000 to employees, members of management, directors, and a nonemployee 
shareholder.  In June 1996 an agreement was reached with two unrelated parties 
to purchase 1,200,000 shares of common stock for $300,000.  Proceeds from the 
June agreement were received in August and September, 1996.  Warrants were 
also issued in the above two placements for 484,000 and 1,200,000 shares, 
respectively.

At June 30, 1996, the Company had borrowed $389,703 under its revolving credit 
agreement and qualified for additional borrowings of $10,297.  At June 30, 
1995, the Company had borrowed $650,091 and had qualified for additional 
borrowings of $25,176.  The revolving credit agreement provides for interest 
at the lender's prime rate plus 4.0% (12.25% and 13.0% at June 30, 1996 and 
1995, respectively).  The credit agreement is secured by substantially all 
domestic assets of the Company, including the stock of subsidiaries, and is 
scheduled to expire on July 1, 1997.  The Company is in compliance with 
covenants contained in the current agreement; at June 30, 1995 the agreement 
contained various restrictive covenants which required, among other things, 
the maintenance of a minimum level of stockholders' equity.  Due to the 
losses incurred in fiscal 1994 and 1995, the Company was not in compliance 
with that minimum level.  However, the lender  waived compliance with that 
covenant.  Under the agreement that expired December 31, 1995, the maximum 
borrowing limit declined in steps from $650,000 on August 15, 1995, to 
$450,000 on November 30, 1995.  Maximum borrowing under the renewed agreement 
which expires July 1, 1997 declines $10,000 per month from $450,000 beginning 
February 1, 1996.  

In January 1995, the Company established a revolving credit agreement with a 
U.K. lender, secured by U.K.-generated export trade receivables, bearing 
interest at the lender's base rate plus 2.0% (7.938% in aggregate at June 30, 
1995).  The agreement expired in December 1995.  The maximum aggregate 
borrowings under the agreement were approximately $795,000.  Available 
borrowings were determined by a specified percentage of qualified export 
trade receivables.  At June 30, 1995, the Company had available borrowings of 
approximately $248,235 and had no borrowings outstanding.  The expired 
agreement was not replaced.

At June 30, 1996 the Company's unrestricted cash balance was $222,023 
compared to $644,101 at June 30, 1995.  However, the Company's working 
capital increased to $452,928 from a working capital deficit of $769,394 at 
June 30, 1995.  Working capital has been improved by the Company's private 
placements, cash flow from operations which was used to reduce current 
liabilities, the conversion of accounts payable into notes payable with terms 
in excess of one year, and more favorable repayment terms on the Common Stock 
Repurchase (see Note 2 of Notes to Consolidated Financial Statements ). 
Management believes these actions will result in sufficient resources to meet 
the Company's cash needs.

ITEM 7.     FINANCIAL STATEMENTS

Financial statements of the Company meeting the requirements of Regulation S-B 
are filed on the succeeding pages as listed below:

<TABLE>
  <S>                                                            <C>
                                                                      Page

     Reports of Independent Auditors                                 11 - 12

     Consolidated Statements of Operations for the Years Ended 
     June 30, 1996 and 1995                                              13

     Consolidated Balance Sheets as of June 30, 1996 and 1995          14

     Consolidated Statements of Changes in Stockholders'
     Equity for the Years Ended June 30, 1996 and 1995                   15

     Consolidated Statements of Cash Flows for the Years Ended
     June 30, 1996 and 1995                                          16 - 17

     Notes to Consolidated Financial Statements                      18 - 31

</TABLE>



                               REPORT OF INDEPENDENT AUDITORS


The Board of Directors and Stockholders
SAZTEC International, Inc. and Subsidiaries
Billerica, Massachusetts

We have audited the accompanying consolidated balance sheet of SAZTEC 
International, Inc. and Subsidiaries as of June 30, 1996, and the related 
consolidated statements of operations, changes in stockholders' equity and cash 
flows for the year 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 audit. 

We conducted our audit in accordance with generally accepted auditing 
standards.  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 that our audit provides 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 SAZTEC 
International, Inc. and Subsidiaries at June 30, 1996, and the  consolidated 
results of their operations and their cash flows for the year then ended, in 
conformity with generally accepted accounting principles.




GRANT THORNTON LLP


Kansas City, Missouri
August 15, 1996




                            REPORT OF INDEPENDENT AUDITORS


The Board of Directors and Stockholders
SAZTEC International, Inc. and Subsidiaries
Billerica, Massachusetts

We have audited the accompanying consolidated balance sheet of SAZTEC 
International, Inc. and Subsidiaries as of June 30, 1995, and the related 
consolidated statements of operations, changes in stockholders' equity and cash 
flows for the year 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 audit. 

We conducted our audit in accordance with generally accepted auditing 
standards.  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 that our audit provides 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 SAZTEC 
International, Inc., and Subsidiaries at June 30, 1995, and the  consolidated 
results of their operations and their cash flows for the year then ended, in 
conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that 
SAZTEC International, Inc. will continue as a going concern.  As more fully 
described in Note 1, the Company has incurred significant recurring operating 
losses and has a working capital deficiency at June 30, 1995.  In addition, 
at June 30, 1995, the Company has not complied with certain covenants of loan 
agreements with banks.  These conditions raise substantial doubt about the 
Company's ability to continue as a going concern.  Management's plans in 
regard to this matter are also described in Note 1.  The financial statements 
do not include any adjustments to reflect the possible future effects on the 
recoverability and classification of assets or the amounts and classification 
of liabilities that may result from the possible inability of the Company to 
continue as a going concern.



ERNST & YOUNG LLP


Boston, Massachusetts     
September 1, 1995



                    SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                    YEARS ENDED JUNE 30,

<TABLE>
<S>                                      <C>                  <C>
                                              1996                     1995     

Revenues                                    $10,851,555          $ 13,596,848

Cost of services                             7,958,077             11,193,396

Gross profit                                 2,893,478              2,403,452

Selling, general & administrative expense    2,979,839              5,160,706

Loss from operations                           (86,361)           (2,757,254)

Interest expense                              (125,086)              (201,394)
Gain (loss) on sale of divisions               231,154               (302,500)

Income (loss) before provision 
   for income taxes                             19,707             (3,261,148)

Provision for income taxes                      63,139

Net loss                                      $(43,432)          $ (3,261,148)

Loss per share of common stock:
Net loss                                       $(.003)                 $(.28)

Weighted average number of shares           12,700,609             11,637,481

</TABLE>

                                        See accompanying notes.





                SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                                    JUNE 30,

                                                            ASSETS
<TABLE>
<S>                                             <C>               <C>
                                                   1996                 1995
Current assets
Cash and cash equivalents                         $222,023          $ 644,101
Restricted cash                                    60,869              38,010
Accounts receivable, less allowance for 
  doubtful accounts of $47,755 in 1996 and 
  $83,326 in 1995                                 1,973,192          2,215,771
Costs and estimated earnings in excess of 
  billings  (Note 8)                                21,490
Work in process                                   570,651             580,842
Prepaid expenses and other current assets         176,664              160,076
Note receivable for stock subscribed (Note 2)     300,000                 -   
Total current assets                              3,324,889          3,638,800

Property and equipment, net (Notes 3 and 4)        598,415           1,164,048
Other assets
Goodwill and other intangible assets, less 
  accumulated amortization of $51,482 in 1996 
  and $819,610 in 1995                             173,931             208,182
Deposits and other assets                          122,070            144,632
Total assets                                     $4,219,305        $5,155,662


                        LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Notes payable (Note 4)                             $389,703          $650,091
Current portion long-term debt and capital 
  lease obligations (Notes 4 and 9)                 199,650           193,320
Common stock subject to repurchase (Note 2)          54,000           100,000
Income taxes payable                                 54,320
Accounts payable                                    885,692         1,028,708
Accrued liabilities                                  544,318        1,350,596
Customer deposits                                    744,278        1,085,479
Total current liabilities                          2,871,961        4,408,194

Long-term debt and capital lease obligations, 
  less current portion (Notes 2, 4 and 9)           241,257           105,686
Common stock subject to repurchase (Note 2)          46,000
Accrued expense                                      34,385

Stockholders' equity (Notes 2 and 5)
Preferred stock-no par value;  1,000,000 shares 
  authorized;   no shares issued
Common stock-no par value;  20,000,000 shares 
  authorized; 13,097,651 shares issued at June 
  30, 1996, and 12,543,851 shares issued at 
  June 30, 1995                                   11,270,811      11,134,811
Common stock subscribed (Note 2)                     300,000
Contributed capital                                  14,498            14,498
Accumulated deficit                              (10,416,633)    (10,373,201)
Cumulative translation adjustment                  (142,974)        (134,326)
Total stockholders' equity                         1,025,702          641,782
Total liabilities and stockholders' equity        $4,219,305      $5,155,662

</TABLE>
                                       See accompanying notes.



                         SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                              YEARS ENDED JUNE 30, 1996 AND 1995

<TABLE>
<S>                   <C>           <C>             <C>            <C> 
                             Common Stock            Common Stock Subscribed   
                         Number of     Amount        Number of       Amount 
                          Share                       Shares 
                                                      
Balance at 
  July 1, 1994          10,687,799   $10,163,998 
Shares canceled 
  pursuant to 
  repurchase 
  obligation
  (Note 2)               (40,000)
Shares issued 
  pursuant to a 
  market value 
  guarantee              300,000         187,500
Shares issued 
  pursuant to 
  private 
  placements 
  (Note 2)              1,226,052        729,687
Shares issued 
  pursuant to 
  renegotiation  
  of private 
  placements 
  (Note 2)                250,000
Shares issued 
  pursuant to 
  the achievement 
  of earn-out 
  targets 
  (Note 2)                120,000         53,626
Translation 
  adjustment                                                   
Net loss                                                      
Balance at 
  June 30, 1995         12,543,851     $11,134,81 
Shares canceled 
  pursuant to 
  repurchase
  obligation 
  (Note 2)                (30,200)
Shares issued 
  pursuant to 
  private 
  placements 
  (Note 2)                584,000        136,000
Stock subscribed                                      1,200,000      $300,000
Translation 
  adjustment                                                        
Net loss                                                          
Balance at 
  June 30, 1996        13,097,651     $11,270,811     1,200,000      $300,000 

</TABLE>
                         SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES
        CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY, CONTINUED
                              YEARS ENDED JUNE 30, 1996 AND 1995

<TABLE>
<S>                         <C>              <C>               <C>    
                             Contributed       Accumulated       Cumulative
                               Capital           Deficit         Translation

Balance at 
  July 1, 1994                 $14,498        $(7,112,053)        $(201,750)
Shares canceled 
  pursuant to 
  repurchase 
  obligation 
  (Note 2) 
Shares issued 
  pursuant to a 
  market value 
  guarantee                                  
Shares issued 
  pursuant to 
  private 
  placements 
  (Note 2) 
Shares issued 
  pursuant to 
  renegotiation  
  of private 
  placements 
  (Note 2) 
Shares issued 
  pursuant to 
  the achievement 
  of earn-out 
  targets 
  (Note 2) 
Translation 
  adjustment                                                        67,424
Net loss                                        (3,261,148)
Balance at 
  June 30, 1995                  $ 14,498    $ (10,373,201)      $ (134,326)
Shares canceled 
  pursuant to 
  repurchase
  obligation 
  (Note 2) 
Shares issued 
  pursuant to 
  private 
  placements 
  (Note 2) 
Stock subscribed                              
Translation 
  adjustment                                                         (8,648)
Net loss                                           (43,432)
Balance at 
  June 30, 1996                   $14,498      $(10,416,633)      $ (142,974)  

</TABLE>

                      See accompanying notes.

                             SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES
                               CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                 YEARS ENDED JUNE 30,

<TABLE>
<S>                                            <C>             <C>
                                                      1996            1995
Cash flows from operating activities
Net loss                                          $ (43,432)     $ (3,261,148)
Adjustments to reconcile net loss to net cash 
  (used in) provided by operating activities:
     Depreciation and amortization                   537,052        1,288,299
     Provision for bad debts                         (35,053)          97,213
     (Gain) loss on sale of assets                   (30,320)          54,122
     (Gain) loss on sale of assets of divisions
     sold                                           (231,154)          33,545
     Write-off of work in process related to 
       litigation                                    139,839
     Issuance of common stock pursuant to a 
        market value guarantee                                        187,500
     Other                                           (18,135)
Changes in assets and liabilities:
    Accounts receivable                              159,363        1,178,842
    Work in process                                 (219,915)           2,928
    Prepaid expenses and other current assets        (44,485)         207,486
    Deposits and other assets                          6,845          (35,589)
    Accounts payable                                 143,568         (287,068)
    Accrued liabilities                             (513,438)         305,036
    Customer deposits and non-current accrued 
      expenses                                        64,546          567,956
    Income taxes payable                              27,075
Net cash (used in) provided by operating 
    activities                                       (57,644)         339,122

Cash flows from investing activities:
    Payment received on notes receivable              17,077
    Additions to property and equipment              (59,017)        (378,783)
    Proceeds from the sale of property and 
      equipment                                       38,254           90,561
    (Increase) decrease in restricted cash           (22,846)          98,443
    Proceeds from sale of divisions                                   292,818
Net cash (used in) provided by investing 
    activities                                       (26,532)         103,039

Cash flows from financing activities:
    Principal payments on debt and capital 
       lease obligations                            (188,320)        (873,035)
     Borrowings on notes payable                   3,770,406
     Payments on notes payable                    (4,030,793)
     Payments on stock repurchase obligation                          (60,000)
     Proceeds from issuance of common stock, 
       net of issuance costs                         121,000          729,687
Net cash used in financing activities               (327,707)        (203,348)
Effect of exchange rate changes on cash              (10,195)          19,025

Net (decrease) increase in cash                     (422,078)         257,838

Cash and cash equivalents at beginning of year       644,101          386,263
Cash and cash equivalents at end of year         $   222,023     $    644,101

</TABLE>
                                           See accompanying notes.




                    SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                                    YEARS ENDED JUNE 30,

<TABLE>
<S>                                              <C>              <C>
                                                      1996              1995
Supplemental schedule of non-cash investing 
    and financing activities:
Purchase of property and equipment through 
    issuance of notes payable and capital 
    lease obligations                               $98,767          $160,147


Conversion of accounts payable into notes 
    payable                                        $258,730

Issuance of common stock pursuant to the 
    achievement of earn-out targets (Note 2):
       Increase in goodwill                                           $53,626
Issuance of common stock pursuant to a 
    market value guarantee (Note 2)                                  $187,500
Common stock issued for notes receivable            $15,000
Notes receivable in exchange for common stock
    subscribed                                     $300,000
Supplemental disclosures of cash flow 
  information:
     Cash paid during the year for:
          Interest                                 $132,820          $201,394
          Income taxes                              $38,758

</TABLE>
                                     See accompanying notes.

                SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    JUNE 30, 1996 AND 1995

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies consistently applied in the 
preparation of the accompanying consolidated financial statements follows:

Basis of Presentation
For the year ended June 30, 1995, the Company's consolidated financial 
statements are presented on the basis that it is a going concern, which 
contemplates the realization of assets and the satisfaction of liabilities in 
the normal course of business.  The Company incurred a net loss of $3,261,148 
in 1995 and, at June 30, 1995, had a working capital deficiency of $769,394.  
In addition, the Company was not in compliance with certain covenants of a 
loan agreement with its bank.  These conditions raised substantial doubt about 
the Company's ability to continue as a going concern.  The consolidated 
financial statements for the year ended June 30, 1995 do not include any 
adjustments to reflect the possible future effects on the recoverability and 
classification of assets or the amounts and classification of liabilities that 
may result from the outcome of this uncertainty.

During the year ended June 30, 1996, the Company completed sales of its 
Marketing Fulfillment Services and Knightswade Microfilm Divisions, renewed 
its line of credit, negotiated conversion of several short-term liabilities to 
term notes payable, and completed a private placement of its common stock.  
Production costs were reduced, resulting in improved gross profit over the 
prior year, and selling and administrative expenses were decreased.

Nature of Business
The Company provides services for database construction and information 
conversion utilizing computer processing, electronic imaging, optical character 
recognition, data entry and related technologies.

Principles of Consolidation
The consolidated financial statements include the accounts of Saztec 
International, Inc., and its wholly owned subsidiaries.   All significant 
intercompany balances and transactions have been eliminated.

Cash and Cash Equivalents
The Company considers all highly liquid financial instruments purchased with an 
original maturity of three months or less to be cash equivalents.

Restricted Cash
The restricted cash balance at June 30, 1996 includes a certificate of deposit 
of $28,052 held as collateral pursuant to a performance bond and $32,817 held 
in a collateral account for repayment of a revolving credit agreement.  At 
June 30, 1995 these balances were $26,210 and $11,800, respectively.

Work in Process
Work in process consists of labor and certain other costs incurred for 
uncompleted and unbilled projects.  

Concentration of Credit Risk
The Company grants credit to customers who meet the Company's preestablished 
credit requirements.   Security is not required when trade credit is granted to 
customers.  Credit losses are provided for in the consolidated financial 
statements and consistently have been within management's expectations.  The 
Company does not believe it is subject to market or geographic risk based on 
the industries or location of its customers (see Note 11).

Property and Equipment
Property and equipment are recorded at cost and depreciation is provided using 
straight-line or accelerated methods over estimated useful lives ranging from 
three to five years.   Leasehold improvements are amortized over the shorter 
of the useful life of the asset or the lease term.  Amortization of assets 
recorded under capitalized leases is included in depreciation expense.  
Expenditures for maintenance and repairs which do not increase the productive 
capacity or extend the useful lives of property and equipment are charged to 
expense as incurred; otherwise, such expenditures are capitalized and 
depreciated over the remaining estimated useful life of the property. Upon 
disposition of properties, the cost and accumulated depreciation thereon are 
eliminated from the accounts, and the gain or loss on disposition is credited 
or charged to income.  Internally developed software is materially related to 
specific contracts, is identified and deferred as work in process of those 
projects and charged to expense as revenue is recognized.  Management monitors 
the carrying value of assets and recognizes an impairment loss in the period 
the recoverability declines.

Goodwill and Other Intangible Assets
Goodwill and other intangible assets relate to businesses acquired and consist 
principally of acquisition costs, non-compete agreements and customer lists.  
All intangible assets are stated at cost net of accumulated amortization. 
Goodwill is being amortized using the straight-line method over 5 to 20 years.

On a continuing basis, management reviews the carrying value and period of 
amortization of goodwill.   During this review process, the Company reevaluates 
the assumptions used in determining the original cost of acquired businesses 
and related goodwill.   Although the assumptions may vary from transaction to 
transaction, they generally include revenue growth, operating results, cash 
flows, and other indicators of value.  

Foreign Currency Translation
Assets and liabilities of foreign operations are translated into United 
States dollars at exchange rates in effect on reporting dates, and income and 
expenses are translated at rates which approximate those in effect on 
transaction dates.  The resulting differences due to changing exchange rates 
are charged or credited directly to the "Cumulative translation adjustment" 
account included as part of Stockholders' equity.

Income Taxes
The Company accounts for income taxes in accordance with the provisions of 
Statement of Financial Accounting Standards No. 109, "Accounting for Income 
Taxes".  Under Statement No. 109, the liability method is used to account for 
income taxes.  Under the liability method, deferred tax assets and liabilities 
are determined based on differences between financial reporting and tax bases 
of assets and liabilities and are measured using the enacted tax rates and 
laws that are expected to be in effect when the differences are expected to 
reverse.  Valuation allowances are established, if necessary, to reduce the 
deferred tax asset to the amount that will, more likely than not, be realized.

Revenue Recognition
The Company has entered into certain long-term contracts.  The terms of most of 
these contracts allow for billing as work on records is completed.  
Infrequently, the Company enters into a contract with terms that specify 
billing at intervals not coincident with the completion of work and revenue 
recognition  Revenue on these long-term contracts is recognized using the 
percentage of completion (units of delivery method), measured by the units of 
output.  Contract costs include all direct material and labor costs and those 
indirect costs related to contract performance, such as indirect labor, 
supplies, and depreciation costs.  Selling, and administrative costs are 
expensed as incurred.  Provision for estimated losses on uncompleted contracts 
are made in the earliest period in which such losses can be estimated.  
Revenue on most contracts (which are short term) is recognized upon completion 
of identifiable batches of records and shipment of the product.

Loss Per Share
Loss per common share is computed by dividing the net loss applicable to common 
stockholders by the weighted average number of shares of common stock 
outstanding during each year which totaled 12,700,609 and 11,637,481, for the 
years ended June 30, 1996, and 1995, respectively.  For each of the named 
years, common stock equivalents would have been antidilutive and, therefore, 
were not included.  

Financial Instruments
The carrying value of long-term debt approximates fair value.

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

NOTE 2.  STOCKHOLDERS' EQUITY

Common Stock

During the quarter ended March 31, 1994, management completed three separate 
private placements generating $1,051,729, net of issuance costs of $49,271, in 
exchange for 1,100,000 shares of common stock and warrants to issue an 
additional 1,287,500 shares of common stock, exerciseable for a five year 
period at $1.375 per share.  One of the private placements of 750,000 shares 
was with a group of individuals unrelated to the Company ("the Meyerson 
Group").  Another transaction representing 250,000 shares was with Tallard B.
V. ("Tallard"), a greater than 5% shareholder of the Company.   The remaining 
transaction for 100,000 shares shares was transacted with a then-member of 
the Company's Board of Directors.

Subsequent to the completion of these transactions, certain members of the 
Meyerson Group alleged certain disclosure violations by the Company in the 
offering documents.   The Company denied the allegations and believes they were 
without merit.   However, to avoid the potential cost of litigation, the 
Company agreed to issue 366,666 additional shares of unregistered common 
stock to the private placement participants and agreed to decrease the 
warrant price for all of the underlying warrants from $1.375 to $1.125.   At 
June 30, 1996 and 1995, 250,000 of the additional shares had been issued.   
In exchange for these modifications, the participants have agreed to release 
the Company from all claims arising out of the three private placements.

Additionally, the Company granted certain demand registration rights to the 
Meyerson Group on the 1,000,000 shares that they now own.  On February 1, 
1995, the Meyerson Group exercised this right and the Company filed a Form S-3 
registration statement with the Securities and Exchange Commission.  The 
registration was under review and comment by the Commission through July 21, 
1995, when the Company requested suspension of the registration process.  The 
Company has asked that the registration statement not be withdrawn so that the 
option to proceed in the future is preserved.   The Meyerson Group has not 
waived the obligation of the Company to cause the registration statement to 
be filed.

On October 5, 1994, the Company agreed to sell 1,226,052 shares of common 
stock to Tallard pursuant to a stock purchase agreement.  The proceeds from the 
sale were received in installments through December 1994, and totalled 
$729,687, net of expenses of $20,213.

Effective December 31, 1993, Tallard exercised its right to convert a 
$1,750,000 note payable into preferred stock.  Tallard immediately exercised 
its right to convert the preferred stock into 2,334,500 shares of common 
stock.  The Company also issued 18,812 shares of common stock as payment of 
$18,812 of interest accrued through December 31, 1993.

Pursuant to the conversion of the Tallard debt described above, Tallard has 
certain Board representation rights for so long as Tallard maintains certain 
ownership levels in the Company.  Also pursuant to the conversion, the 
Company is prohibited from entering into any merger or consolidation, sale of 
substantially all of its assets, or sale of any series of stock senior to 
common stock without the approval of 66.6%, or more of the outstanding voting 
shares.

Additionally, as part of the conversion, Tallard and the Preferred Stockholders 
received certain demand and piggyback registration rights which would enable 
them to publicly trade the common shares received.  The demand registration 
rights may be exercised after September 30, 1994.  The Company is not required 
to effect more than one demand registration statement in any 12 month period, 
or two demand registrations in the aggregate.  The registration rights expire 
on December 21, 2003.

In connection with the Company's acquisition of the outstanding minority 
interest of Saztec Europe, Ltd. in 1991, the selling shareholders may receive 
up to 560,000 additional shares if the combined operations of Saztec Europe, 
Ltd. earn net income of 2,480,000 pounds, in aggregate, for the period ending 
June 30, 1996.  The agreement provides for annual earnings measurements 
during these years.  A total of 120,000 additional shares were earned during 
the year ended June 30, 1995.  The fair value of these shares, $53,626, has 
been applied to goodwill.  Amounts earned relating to 1996 operations are 
considered immaterial to the consolidated financial statements.

The Company has also granted a put option to the selling shareholders to 
repurchase 120,000 shares at $2.00 per share.  The put option is exerciseable 
at 10,000 shares ($20,000) per quarter through April, 1996.  The related 
liability was recorded at the time of the grant of the put option and the 
shares are cancelled when repurchased.  During the fiscal year ended June 30, 
1996, 30,200 shares of common stock totalling $60,400 were repurchased by the 
Company and for the fiscal year ended  June 30, 1995, 40,000 shares of common 
stock totaling $80,000 were repurchased by the Company, pursuant to the terms 
of the put option. Of the stock repurchased, $80,400 remained payable to the 
selling shareholders at June 30, 1996 and $20,000 remained payable at June 30, 
1995.  In December 1995, the payable was restructured at no interest to a 
series of 31 monthly payments: 24 payments of $3,000 principal plus 8% accrued 
interest followed by seven payments of $4,000 principal plus 8% accrued 
interest, with the final payment due July 1, 1998.  Of the 
remaining repurchase obligation payable or scheduled to 
come due, $54,000 at June 30, 1996 and $100,000 at June 30, 1995 has been 
classified as current in the accompanying consolidated financial statements.   

In April 1995, the Company issued 300,000 shares of common stock to a 
stockholder pursuant to the acquisition of the Scanning America, Inc. 
operations in April 1992.   The acquisition agreement provided for additional 
shares to be issued to the seller contingent upon the market value of Saztec's 
stock three years from the original acquisition date.   Based on the April 
1995 market value of the stock, the seller was entitled to claim 300,000 
shares of unregistered common stock at a value of $187,500, which has been 
included as a charge to earnings because the Scanning America division was 
divested by the Company in October 1993.

In May and June of 1996 the Company conducted private placements of its 
common stock.  Officers and directors purchased 464,000 shares and a current 
shareholder purchased 120,000 shares.  A common stock subscription was 
received for 1,200,000 shares of common stock and warrants to purchase an 
additional 1,200,000 shares.  The warrants are exercisable at $0.50 per share.  
Consideration was received in August and September 1996.

NOTE 3.  PROPERTY AND EQUIPMENT

Property and equipment consists of:
            
<TABLE>
<S>                                          <C>                 <C>
                                                  1996                1995
     Computer and other equipment              $3,212,454          $4,483,294
     Computer and other equipment under
        capitalized leases                       104,487              151,105
     Software                                     264,211             728,307
                                                3,581,152           5,362,706
     Accumulated depreciation and 
         amortization                           2,982,737           4,198,658
                                                 $598,415          $1,164,048
</TABLE>

Accumulated amortization of assets under capitalized leases amounted to 
$99,055 and $40,000, at June 30, 1996, and 1995, respectively.


NOTE 4.  NOTES PAYABLE, LONG-TERM DEBT, AND CAPITAL 
                    LEASE OBLIGATIONS

The Company has a revolving credit agreement secured by accounts receivable, 
work in process, property and equipment and other assets.  The agreement bears 
interest at the lender's prime rate plus 4.0% (12.25% and 13.0% in aggregate at 
June 30, 1996 and 1995, respectively). Available borrowings are determined by a 
specified percentage of qualified domestic trade receivables.  Repayments of 
the line of credit are taken directly from a collateral account established 
by the lender which contained $32,817 and $11,800 as of June 30, 1996 and 
1995, respectively.  At June 30, 1996 the company had  total available 
borrowings of $400,000 and had borrowed $389,703.  At June 30, 1995, the 
Company had total available borrowings of $675,267 and had borrowed $650,091.  
The credit agreement at June 30, 1995 contained various restrictive covenants 
which required, among other things, the maintenance of a minimum level of 
stockholders' equity.  Due to the loss incurred in fiscal 1995, the Company 
was not in compliance with that level.  However, the lender waived compliance 
with that covenant.

The agreement was renewed in January 1996, establishing a maximum borrowing 
of $450,000 which declines $10,000 per month beginning February 1, 1996.  
Unpaid principal amounts are due July 1, 1997.  Security and maximum 
borrowing (subject to the declining ceiling) are unchanged from the matured 
note.  The new agreement contains covenants requiring a minimum consolidated 
net stockholders' equity of $500,000 and a ratio of consolidated total 
indebtedness to consolidated net worth not to exceed 8:1.  The Company was in 
compliance with all covenants contained in this new agreement at June 30, 1996. 

In January 1995, the Company established a revolving credit agreement with a 
U.K. lender secured by U.K. accounts receivable bearing interest at the 
lender's base rate plus 2.0% (7.938% in aggregate at June 30, 1995) expiring in 
December 1995.  The maximum aggregate borrowings under the agreement were 
approximately $795,000.  Available borrowings are determined by a specified 
percentage of qualified export trade receivables.  At June 30, 1995, the 
Company had available borrowings of approximately $248,235 and had no 
borrowings outstanding.  The agreement was not renewed after expiration.
           
Long-term debt and capital lease obligations consist of:
<TABLE>
<S>                                                  <C>           <C> 
                                                        1996           1995
Notes payable, secured by equipment, bearing
  interest at rates ranging from 8.52% to 13.69%,
  payable in monthly installments through 1997 .       $122,383     $  165,439
Unsecured notes                                         265,627
Capital lease obligations, bearing interest at rates
  ranging from 12.75% to 16.0% payable monthly
  through 1998. (Note 9)                                 52,897        133,567
                                                        440,907        299,006
Current portion                                         199,650        193,320
Noncurrent portion                                     $241,257      $ 105,686

</TABLE>
Maturities of long-term debt and capital lease obligations for years ending 
June 30 are:

<TABLE>
            <S>            <C>
              1997           $199,650
              1998            120,901
              1999            116,569
              2000              3,787
                             $440,907
</TABLE>



NOTE 5.  EMPLOYEE BENEFIT PLANS

Stock Option Plan
The Company has in effect a stock option plan (the Plan) under which stock 
options have been discretionarily granted to officers and key employees at 
prices equal to or less than the market price at the date of grant.   Options 
expire four to five years after the date of grant.  Total options which were 
exercisable under the Plan at June 30, 1996, amounted to 141,200 shares.  The 
number of shares reserved for the Plan is 1,000,000. On June 30, 1996, options 
for 321,200 shares remained available for grants under the Plan.  Information 
with respect to options granted under the Plan follows:

<TABLE>
<S>                                        <C>                <C>
                                             Number of             Range of
                                              Shares            Option Prices
Outstanding at June 30, 1994                   805,800            $1.03-2.00
     Granted
     Exercised
     Canceled                                  97,850               1.03-1.88
     Expired                                   60,000                  1.75
Outstanding at June 30, 1995                  647,950               1.03-2.00
     Granted                                  430,000                    .25
     Exercised
     Canceled                                 519,950               1.03-1.88
     Expired                                   36,000                   1.88
Outstanding at June 30, 1996                   522,000              $.25-1.03

</TABLE>
Other Options
The following are not included in the Plan:
     stock options granted to the Company's President for 150,000 shares in 
     aggregate expiring in fiscal years 1999 and 2000.  These options were 
     issued at the fair market value on the date of grant.  Options which 
     were exercisable at June 30, 1996 amounted to 70,000 shares and were 
     exercisable at prices ranging from $.63 to $1.03 per share;

     stock options granted to the Company's Chairman for 225,000 shares in 
     aggregate expiring in fiscal year 1999.  These options were issued at the 
     fair market value on the date of grant.  Options which were exercisable 
     at June 30, 1996 amounted to 215,000 shares and were exercisable at 
     prices ranging from $.75 to $1.03 per share;

     stock options granted to outside members of the Board of Directors for 
     90,000 shares in the aggregate expiring in fiscal years 1999, 2000, and 
     2001.  These options were issued at fair market value on the date of 
     grant at prices ranging from $.25 to $1.03 per share.  Options for 
     21,000 shares were exercisable at June 30, 1996.

Employee Savings Plan
The Company has in effect an employee savings plan under which substantially 
all U.S. employees may contribute a percentage of their annual compensation, 
subject to annual Internal Revenue Code maximum limitations.  The Company has 
contributed 1% of the annual compensation for all participating employees who
are contributing a minimum of 2% of their compensation.  In the United Kingdom, 
the Company's subsidiary, Saztec Europe, Ltd. maintains a defined contribution 
pension plan for employees in Scotland and England.  The Company contributes a 
matching amount for all participating U.K. employees  who are contributing 2.5% 
to 4.5% of their compensation.  For the years ended June 30, 1996, and 1995, 
expense related to the savings and pension plans was not significant.  In July 
1995, the Company suspended the discretionary 1% employer match contribution 
to the U.S. savings plan.  The match was reinstated October 1, 1995.

NOTE 6.  INCOME TAXES

At June 30, 1996 and 1995, respectively, the Company had net operating loss 
carryforwards of approximately $6,200,000 and $6,000,000, respectively, for 
income tax purposes that expire in varying amounts through 2010.  These 
operating losses may be used to offset future taxable income in the United 
States.  For financial reporting purposes, a valuation allowance has been 
recognized to offset the deferred tax assets related to those carryforwards 
due to the uncertainty of their realization.     At June 30, 1996 and 1995, net 
operating loss carryforwards relating to the operations of Saztec Europe, Ltd. 
were immaterial due to the non-deductibility of certain operating expenses 
incurred during fiscal 1996 and 1995.

Deferred income taxes reflect the net tax effects of temporary differences 
between the carrying amounts of assets and liabilities for financial reporting 
purposes and the amounts used for income tax purposes.  Significant components 
of the Company's deferred tax assets and liabilities are as follows:

<TABLE>
<S>                                           <C>              <C>
                                                   1996              1995
Deferred tax assets:
     Accrued vacation                             $49,908        $   88,900
     Net operating loss carryforwards            2,488,330         2,430,300
     Other - net                                  30,596              33,400
          Total deferred tax assets              2,568,834          2,552,600
     Valuation allowance                        (2,485,834)        (2,500,200)
          Net deferred tax assets                 83,000              52,400

Deferred tax liability:
     Book basis in excess of tax basis of 
        intangible assets                         69,552               9,200
     Other - net                                  13,448              43,200
          Total deferred tax liabilities          83,000              52,400
          Net deferred tax asset                   $0             $       0

</TABLE>

The sources of the Company's consolidated income (loss) before income taxes for 
the years ended June 30 consist of:

<TABLE>
<S>                                        <C>                <C>
                                                1996                   1995
United States                                $(115,249)        $  (1,998,362)
Foreign                                       134,956             (1,262,786)
Income (Loss) before income tax expense        $19,707         $   (3,261,148)

</TABLE>

A reconciliation of the Company's income tax provision for fiscal 1996 and 1995 
and the amount computed by applying the statutory United States income tax rate 
of 34% consists of:

<TABLE>
<S>                                            <C>              <C>
                                                   1996                1995
Federal income taxes at statutory rate           $4,000           $ (679,400)
Foreign income taxes                             63,139                 -
Change in valuation allowance                   (14,400)             667,400
Officers  life insurance                          6,800                6,800
Goodwill and other non-deductible amortization    1,800                2,200
Other items                                       1,800                3,000

    Total income taxes                          $ 63,139               $ 0

</TABLE>

The provision for income taxes for fiscal 1996 consists of the following:

<TABLE>
<S>                  <C>                     <C>                   <C>
                        Current               Deferred               Total
Federal                ----                       ----                 ----
State                  ----                        ----                ----
Foreign               $63,139                       ----             $63,139

                      $63,139                       ----              $63,139

</TABLE>


NOTE 7.  SALES OF DIVISIONS

In June of 1995, management completed the sale of the assets of the Financial 
Transaction Processing Division ("FTP").  On September 1, 1995, the Company 
completed the sale of the Knightswade Microfilm Division ("KM") based in 
Winchester, U.K., and the Marketing Fulfillment Division ("FS") based in 
Billerica, Massachusetts.    The operating results for the years ended June 30, 
1996, and 1995 were as follows:

<TABLE>
<S>                     <C>               <C>          <C>          <C> 
                                  FTP              KM                  FS
                                 1995        1995       1996 (1)        1995
Revenue                     $ 1,113,360     $519,012    $217,535    $2,186,963
Gross profit (loss)             (92,635)      51,580     (12,505)      371,432
Operating profit (loss)      $ (296,110)    (284,357)    (22,152)     $208,932
Gain (loss) on sale of 
  division              (2)(3) $(157,500) (3)$(145,000) $231,154
Net assets at June 30                      $297,273                   $236,100

</TABLE>
       (1)  To date of sale of September 1, 1995
       (2)  Includes lease abandonment and severance costs and the gain (loss) 
               on sale of assets
       (3) Recognized in the results of operations for the year ended 
               June 30, 1995


NOTE 8.  COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED 
                   CONTRACTS

The following relates to two contracts being accounted for using the 
percentage of completion, units of output method, which use resulted in an 
excess of costs and estimated earnings over billings:

<TABLE>
<S>                                                       <C>
                                                          June 30, 1996

Costs incurred on uncompleted contracts                      $308,895
Estimated earnings                                            112,595
                                                              421,490
Less: Billings to date                                        400,000
Amount shown as Costs and estimated earnings in 
excess of billings on the accompanying consolidated 
balance sheet                                                 $21,490

</TABLE>

There were no such contracts at June 30, 1995.


NOTE 9.  COMMITMENTS AND CONTINGENCIES

Litigation
In July 1995, an action against the Company in connection with the employment 
of an individual was decided in favor of the Company by the State Court.  At 
present, management and counsel believe that the future effect of this action 
on the Company will be immaterial.

In August 1994, the Company filed suit against Digital Equipment Company 
(DEC) based upon termination by DEC of a contractual agreement between the 
companies.  On December 14, 1995, an order was entered granting the Summary 
Judgement motion of DEC.  The decision effectively terminated the Company's 
claim.  While the Company believes that its case was meritorious, it determined 
during the period for appeal, that it would be an imprudent use of the 
Company's resources to pursue an appeal.  The loss of the claim resulted in 
the Company's writing off $139,839 of work in process in connection with the 
contract.

Lease Commitments
Rent expense charged to operations under operating leases for office space, 
computer equipment and software for the years ended June 30, 1996 and 1995 
was $622,322 and $716,959, respectively.

At June 30, 1996, the Company had capital and operating lease obligations for 
office space and equipment used in operations that mature during the fiscal 
years ending June 30 as follows:

<TABLE>
<S>                    <C>        <C>               <C>         <C> 
                        Capital           Operating Leases          Total
                        Leases        Property       Equipment   Commitments
1997                    $46,585      $535,929         $19,397      $601,911
1998                      9,709       468,645           6,553       484,907
1999                                  419,494           3,291       422,785
2000                                  354,801                       354,801
2001                                  291,209                       291,209
                        $56,294    $2,070,078         $29,241    $2,155,613
Less amount 
  representing 
  interest                3,397
Net obligations
  under capital 
  leases (Note 4)       $52,897

</TABLE>


NOTE 10.  QUARTERLY FINANCIAL DATA (UNAUDITED)

The results of operations by quarter for the years ended June 30, 1996 and 1995 
were as follows:

<TABLE>
<S>                            <C>             <C>                <C>           
                                                                   Earnings
                                                Net income          (loss)
                                   Revenues       (loss)           Per Share
Year ended June 30, 1996
  Quarter ended-
     September 30, 1995           $2,359,115       $(233,994)         $(.02)
     December 31, 1995             2,997,179          13,885            .001
     March 31, 1996                2,685,100         115,742            .01
     June 30, 1996                 2,810,161          60,935            .006
                                 $10,851,555        $(43,432)         $(.003)
Year ended June 30, 1995
   Quarter ended -- 
     September 30, 1994          $ 3,446,796       $(520,909)         $(.05)
     December 31, 1994             3,720,648        (378,787)          (.03)
     March 31, 1995                3,501,719      (1,304,863)          (.11)
     June 30, 1995                 2,927,685      (1,056,589)          (.08)
Total                            $13,596,848     $(3,261,148)         $(.28)

</TABLE>

The above quarterly financial data is unaudited, but in the opinion of 
management, all adjustments necessary for a fair presentation of the selected 
data for these interim periods presented have been included.  

Included in the first quarter of fiscal 1996 is a gain of $231,154 on sale of 
the Fulfillment Marketing Division.  Included in the second quarter is a 
write-off of $139,839 of work in process related to litigation.

Included  in the fourth quarter of fiscal 1995 are charges of $187,500 for the 
issuance of stock pursuant to a market value guarantee related to a 1992 
acquisition agreement and $145,000 to provide for a loss on the sale of assets 
of the Knightsbridge Microfilm Division on September 1, 1995.



NOTE 11.  FOREIGN OPERATIONS AND MAJOR CUSTOMERS

Revenues, income (loss) before taxes, and identifiable assets by geographic 
area are shown below.  United Kingdom amounts relate solely to Saztec Europe, 
Ltd. and its subsidiaries, whose customers are located in the United Kingdom 
and Western Europe.  Countries included are England, Scotland, Germany, Italy, 
Spain, and Belgium.  Identifiable assets of Saztec Europe Ltd located outside 
of Ardrossan, Scotland are immaterial.

<TABLE>
<S>                                         <C>                <C>
                                                  1996                  1995
Total Revenues
     United States                             $4,923,900          $6,543,384
     United Kingdom/Western Europe              5,927,655           7,053,464
                                              $10,851,555         $13,596,848

Income (loss) before income taxes
     United States                             $(115,248)         $(1,998,362)
     United Kingdom/Western Europe              134,955            (1,262,786)
                                                $19,707          $ (3,261,148)

Identifiable Assets
     United States                             $1,937,421          $ 2,681,426
     United Kingdom                            2,281,884             2,474,236
                                               $4,219,305          $ 5,155,662
</TABLE>

Major Customers
For the year ended June 30, 1996 the Company had one customer in the United 
Kingdom that accounted for 13% of consolidated revenue.  The next three largest 
customers together accounted for 12.8% of consolidated revenue.  For the year 
ended June 30, 1995, the Company had two customers in the United Kingdom that 
accounted for 15% and 9% respectively, of consolidated revenue.


NOTE 12.  NEW ACCOUNTING STANDARD

In October 1995, the Financial Accounting Standards Board (FASB) issued 
Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for 
Stock-Based Compensation.  The Statement encourages companies to account for 
stock compensation awards using a fair value method.  Fair value is determined 
based on the stock price at the date the awards are granted.  The resulting 
compensation cost would be recognized as an expense in the statement of 
operations over the service period.

Companies can choose not to apply the new accounting method and continue to 
apply the current accounting requirements, which generally will result in no 
compensation cost for most fixed stock option plans.  Those that do so; 
however, will be required to disclose in notes to the financial statements 
what net income and earnings per share would have been if they had followed 
the accounting in SFAS No. 123.

Statement 123 also applies to equity instruments issued for goods or services 
provided by persons other than employees.  Those transactions would be 
accounted for based on the fair value of the goods or services received or 
the fair value of the equity instrument issued, whichever is more reliably 
measurable.

SFAS No. 123 is effective for the financial statements of the Company for the 
fiscal year beginning July 1, 1996.  The Company has not completed the process 
of evaluating the impact that will result from adopting SFAS No. 123, and is 
therefore unable to determine the impact that adopting this statement will 
have on the financial statements.  The Company plans to adopt this statement 
in its fiscal year ending June 30, 1997.




ITEM 8.  CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS 
ON ACCOUNTING AND FINANCIAL DISCLOSURES

None.



                             PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND 
         CONTROL PERSONS, COMPLIANCE WITH SECTION 16(a) 
         OF THE EXCHANGE ACT

Officers and Directors

The officers and directors of the Company are as follows:

<TABLE>
<S>                       <C>   <C>
Name                      Age             Position with Company

Robert P. Dunne            67   Chairman of the Board of Directors, Director

Gary N. Abernathy          56   President, Director, Chief Executive Officer

Tom W. Olofson             55   Director

Lee R. Petillon            67   Director

Pradeep Barthakur          48   Director

Kent L. Meyer              52   Vice President, Sales and Secretary

Thomas K. O'Loughlin       44   Vice President and Treasurer

Sean J. O'Regan            34   Vice President, Data Capture Operations

</TABLE>

Mr. Dunne has been a director of the Company since March 1985.  On November 
8, 1990, Mr. Dunne was appointed Chairman of the Board.  Since 1974 Mr. 
Dunne has also been President and Chief Executive Officer, a director and the 
principal shareholder of Robertson Corporation.  Mr. Dunne is a Certified 
Public Accountant.

Mr. Abernathy was Group Vice President of the Company from May 1, 1987 to 
February 1, 1988; President and Chief Operating Officer from February 1, 1988, 
until May 1990, when he became Vice Chairman and Chief International Officer.  
On December 9, 1994, Mr. Abernathy was appointed Chief Executive Officer.  
Mr. Abernathy was elected as a Director of the Company in March, 1985.  From 
1985 to April 1994, Mr. Abernathy was an officer, director and a principal 
shareholder of Robertson Corporation, which is also a shareholder of the 
Company.

Mr. Olofson was elected to the Company's Board of Directors in November 1991.  
Mr. Olofson has been Chairman and Chief Executive Officer of Electronic 
Processing, Inc. since July 1988.   Mr. Olofson also serves as a member of the 
Board of Directors of various private companies in which he is an investor.

Mr. Petillon was elected to the Company's Board of Directors in August 1988.  
Since 1978 Mr. Petillon has been in private law practice, dealing primarily in 
the areas of business, corporation, securities, mergers and acquisitions and 
corporate finance.  Mr. Petillon served as the Company's legal counsel from 
June 1983 to June 1988.

Mr. Barthakur was elected director at the regular meeting of the Board of 
Directors on September 12, 1996.  Mr. Barthakur is Executive Vice President & 
Secretary of Datamatics (America) Inc., where he has been employed since 1992.  
Datamatics (America) Inc. is a part of the Datamatics Group of Companies.

Mr. Meyer has been a Vice President of the Company since 1987 and served as a 
director from November 1983 through January 1995.

Mr. O'Loughlin, a Certified Public Accountant, joined the Company in July 
1995.  He practiced as an independent certified public accountant in 
California and Massachusetts.

Mr. O'Regan was promoted to  Vice President, Data Capture Operations in 
September 1995.  He has been employed in the Sales Department since 1986 with 
Advanced Automation Associates, Inc., a wholly owned subsidiary.

All directors hold office until the next annual meeting of shareholders and 
until their successors are duly elected and qualified.   Officers are elected 
on an annual basis by the Board of Directors and serve at the discretion of 
the Board.

Compliance with Section 16(a) of the Exchange Act

The Company believes that during the fiscal year ended June 30, 1996, all 
Section 16(a) filing requirements applicable to its officers, directors, and 
greater than 10% beneficial owners were satisfied.


ITEM 10.  EXECUTIVE COMPENSATION

Executive Compensation

The following tables set forth, for the fiscal year ended June 30, 1996 the 
compensation received by the Company's Chief Executive Officer and each of the 
most highly compensated executive officers whose compensation exceeded 
$100,000 for services rendered to the Company, or would have exceeded 
$100,000 if they had been employed by the Company for the entire year.


<TABLE>
<S>                  <C>   <C>         <C>      <C>          <C>
                                  Annual          Long Term   
                               Compensation      Compensation 
                                                    Award      
Name and                                          Securities 
                                                  Underlying     All other
Principal Position    Year  Salary($)   Bonus($)  Options(#) Compensation($)(1)

Gary N. Abernathy     1996   110,881                50,000
President and Chief   1995   115,375               100,000        55,000 (2)
 Executive Officer    1994   109,000                50,000         4,990 (1)

Elvin E. Smith        1996    81,080
Senior Vice President 1995   106,093
 Sales                1994    97,156     18,937     25,000

</TABLE>

(1)  Comprised of the taxable portion of split dollar life insurance premiums 
           for the named executives.
(2) Market value of 80,000 shares of common stock given to Mr. Abernathy in 
           an employment agreement with the Company dated January 1, 1995, 
           and authorized to be issued as of September 21, 1995.



Stock Options Issued

As shown in the above table, Mr. Abernathy was granted options for 50,000 
shares of common stock during the year ended June 30, 1996:
Option/SAR Grants in Last Fiscal Year
Individual Grants

<TABLE>
<S>               <C>            <C>             <C>             <C> 
                      Number of 
                     Securities    % of Total     
                     Underlying    Options/SARs   
                      Options/     Granted to      Exercise or
                                   Employees          Base         Expiration
       Name         SARs Granted  in Fiscal Year   Price ($/sh)       Date
Gary N. Abernathy      50,000          11.6             .25       May 14, 2001

</TABLE>

Stock Options Exercised

During the year ended June 30, 1996 no stock options were exercised by the 
named executives.  For the fiscal year ended June 30, 1996 no stock options 
previously awarded to any of the named executives were repriced.  The following 
table sets forth, as of June 30, 1996 the exercisable and unexercisable 
portions of stock options held by the named executives.

<TABLE>
<S>                <C>               <C>       <C>             <C>
                                               Number of Securities Underlying
                                                   Unexercised Options at 
                    Shares Acquired    Value          Fiscal Year End (#)
Name                 on Exercise($)   Realized    Exerciseable  Unexerciseable
Gary N. Abernathy         -0-            -0-         80,000         120,000

</TABLE>

As of June 30, 1996 there was no unrealized value with respect to the 
exercisable or unexercisable portions of the options held by the above-named 
executives.

Long-Term Incentive Plan Awards

The Company has no Long-term Incentive Plan Awards currently in effect.

Compensation of Directors

Outside directors receive compensation of $2,000 per quarter plus actual 
expenses to attend regular quarterly meetings.  For the quarters ended 
September 30 and December 31, 1995 the Compensation Committee voted to reduce 
the quarterly compensation to $1,000 per quarter.  The Chairman of the Board 
of Directors receives $6,000 per quarter plus actual expenses to attend 
regular meetings.  

Employment Contracts

Mr. Abernathy has an employment contract entered into with the Company on 
January 1, 1995 under which he will perform the duties of the office to which 
he is elected by the Board of Directors.  The contract is for a three year 
term ending December 31, 1997.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL 
                   OWNERS AND MANAGEMENT

The following table sets forth, as of September 25, 1996 information concerning 
the beneficial ownership of the Common Stock of the Company by (i) each person 
who is known by the Company to own beneficially more than 5% of the 
Company's Common Stock, (ii) each director of the Company, and (iii) all 
directors and executive officers of the Company as a group.


<TABLE>
<S>                                     <C>                 <C>
NAME AND ADDRESS                          NO. OF SHARES     PERCENT OWNED (1)

Gary N. Abernathy (2)
43 Manning Road
Billerica, MA  01821                       195,159                      1.1

Robert P. Dunne (3)
928 Southwest Tenth Street
Miami, FL 33130                            752,067                      4.2

Lee R. Petillon
21515 Hawthorne Blvd., #1260
Torrance, CA  90503                        109,000                         *

Tom W. Olofson (4)
501 Kansas Ave
Kansas City, KS  66105                     384,000                    2.1

Richard P. Kiphart (5)
222 West Adams
Chicago, IL 60603                         1,565,786                    8.7

Tallard B.V. (6)
c/o Peder G. Wallenberg
Amsteldijk 166 Rivierstaete
1079 LH Amsterdam                         4,562,697                  25.4

Datamatics Technologies PVT. LTD. (7)
c/o Dr. Lalit S. Kanodia, Chairman
Unit #118-120, SDF 4,
SEEPZ Andheri (East)
Bombay 400 096, India                      1,600,000                  8.9

Pradeep Barthakur (8)
26 Derby Lane
Tyngsboro, MA 01879                          800,000                 4.4

All Directors and Officers
as a Group (8 persons)                      2,459,226               13.7

* Less than one percent (1%)          
</TABLE>

(1) Based on 14,297,651 shares outstanding on September 28, 1996, 116,666 
shares authorized to be issued, 456,200 exercisable options and warrants to 
issue an additional 3,071,500 shares, in aggregate, at such date, for a total 
of 17,942,017.

(2) The shares beneficially owned by Mr. Abernathy are issued in the following 
manner: 10,759 shares in the name of Information Control, Inc. which is 
wholly-owned by Mr. Abernathy, a vested right to acquire 80,000 shares 
pursuant to stock options, 64,400 shares owned directly, and warrants for 
40,000 shares.

(3) The shares beneficially owned by Mr. Dunne consist of: 94,565 shares in 
the name of Robertson Corporation (of which Mr. Dunne is the sole owner), a 
vested right to acquire 228,000 shares pursuant to stock options, warrants to 
purchase 120,000 shares,  300 shares held by the Amy Schneeberger Trust, of 
which Mr. Dunne is a trustee, 400 shares held by Mrs. Dunne's Individual 
Retirement Account, and 308,802 shares owned directly.

(4) The shares beneficially owned by Mr. Olofson consist of  226,000 shares 
owned directly, vested options to purchase 18,000 shares, and warrants to 
purchase 140,000 shares.

(5) The shares beneficially owned by Mr. Kiphart are issued in the following 
manner: 1,302,746 shares owned directly, warrants to purchase 120,000 shares, 
and 143,040 shares in the aggregate, held by three trusts for Mr. Kiphart's 
children, of which Mrs. Kiphart is the trustee.

(6) The shares beneficially owned by Tallard B.V. are held in the following 
manner:  4,129,364 shares owned directly by Tallard B.V., 83,333 shares 
authorized to be issued, and a right to acquire 350,000 shares pursuant to 
stock warrants held by Tallard B.V.  Tallard B.V. is wholly owned by Mr. 
Wallenberg, and he may be deemed to be the beneficial owner of all shares 
held by Tallard B.V.

(7) The shares beneficially owned by Datamatics Technologies PVT. LTD. consist 
of 800,000 shares owned directly and warrants to purchase 800,000 shares.  
Datamatics Technologies PVT. LTD. is wholly owned by Dr. Lalit S. Kanodia, and 
he may be deemed to be the beneficial owner of these shares.

(8) The shares held by Mr. Barthakur consist of 400,000 shares owned directly 
and warrants to purchase 400,000 shares. 

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On October 5, 1994, the Company agreed to sell 1,226,052 shares of unregistered 
Common Stock of the Company for $750,000 to Tallard B.V. ("Tallard") 
pursuant to a Stock Purchase Agreement.    The transaction was consummated at 
a price approximating then current quoted market prices.

ITEM 13.     EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits
        The following Exhibits are filed by attachment to this Annual Report on 
        Form 10-KSB:

     Exhibit
     Number

     10.12   Renewal of Revolving Credit Agreement dated January 29, 1996 (page 
                 41 of this 10-KSB)
     22       Subsidiaries of the registrant (disclosed on page 2 in Item 1 of 
                 this 10-KSB)
     27       Financial Data Schedule (page 40 of this 10-KSB)



In addition to those Exhibits shown above, the Company incorporates the 
following Exhibits by reference to the filings set forth below:


Exhibit No.  Description                             Filed as Exhibit:
     2            Plan of Recapitalization          2 to Form 8-K dated  
                                                     February 19, 1993

     3            Articles of Incorporation and 
                        By-Laws                    3 to Form 10-K for the year
                                                    ended June 30, 1990

     4            Instruments defining the 
                        rights of security
                   holders including indentures.   4 to Form 10-K for the year 
                                                      ended June 30, 1990

     4.1         Ten Year Convertible Debenture 
                     Note Agreement                4 to Form 10-K for the year 
                                                      ended June 30, 1992

     4.2          Certificate of Determination 
                     for the establishment of 
                     the Series A Cumulative 
                     Preferred Stock                 4 to Form 8-K dated 
                                                      February 19, 1993

     4.3          Registration Rights Agreement 
                     dated December 31, 1993 
                     among Saztec International, 
                     Inc., Tallard B.V., Barry 
                     Craig, and the Preferred 
                     Shareholders                    4 to Form 8-K dated 
                                                      December 31, 1993

     10.1        Stock Purchase Agreement between 
                   Saztec International, Inc., 
                    and Tallard B.V.                 10 to Form 8-K dated 
                                                        October 5, 1994

     10.2        Agreement dated January 9, 1995 
                  between Saztec International, 
                  Inc., the Meyerson Group and 
                  the Placement Warrant Holders      10 to Form 10-Q for the 
                                                    Quarter ended December 31, 
                                                         1994

     10.3        The rescission of the purchase 
                   of CFL, Ltd. common stock           2 to Form 8-K dated
                                                        February 17, 1993

     10.4         Loan Agreement between Tallard 
                    B.V. and Saztec Europe, Ltd.      10 to Form 8-K dated 
                                                       February 19, 1993

     10.5         Conversion Agreement dated 
                   December 31, 1993 among 
                  Saztec International, Inc., 
                   Tallard B.V., and the 
                   Preferred Shareholders              10 to Form 8-K dated 
                                                        December 31, 1993

     10.6          Renewal of Revolving 
                    Credit Agreement                  10 to Form 8-K dated 
                                                        June 2, 1995

     10.7          Renewal of Revolving Credit 
                     Agreement                        10 to Form 8-K dated 
                                                        June 19, 1995


     10.8          1995 Employee Stock Option 
                      Plan                            10.8 to Form 10K-SB, 
                                                      dated September 22, 1995

     10.9          1995 Non-Employee Directors 
                     Stock Option Plan                10.9 to Form 10K-SB, 
                                                      dated September 22, 1995

     10.10         Employment Agreement for Gary 
                     N. Abernathy of  January 1, 
                      1995                            10.10 to Form 10K-SB, 
                                                      dated September 22, 1995

     10.11         Renewal of Revolving Credit 
                     Agreement dated August 12, 
                      1995                            10.11 to Form 10K-SB, 
                                                      dated September 22, 1995

     16          Change in certifying public 
                     accountants                      1 to Form 8-K dated 
                                                      January 26,1996

     99          Delisting of common stock by 
                     NASDAQ Stock Market, Inc.        1 to Form 8-K dated 
                                                      November 21, 1995


(b) Reports on Form 8-K:
None.


Exhibit 10.12

United Missouri Bank

January 29, 1996


Mr. Gary Abernathy, President
Saztec International, Inc.
6700 Corporate Drive
Kansas City, Missouri 64120

Dear Mr. Abernathy:

As you know, the Authority to Loan previously extended to Saztec International, 
Inc. and all of its subsidiaries ("Saztec") by this bank expired on December 
31, 1995.  In that connection, you had requested that this bank's Discount 
Committee consider continuing to extend a decreasing revolving credit facility 
to Saztec.

In consideration of your expressed desire to solidify a merger; specifically 
with Scangraphics, Inc., the Discount Committee of UMB Bank, n.a. has favorably 
considered your request and approved an Authority to Loan (the "Authority to 
Loan") on the terms and conditions set forth in this letter.

1 .     UMB Bank, n.a. hereby extends to Saztec an Authority to Loan in the 
initial amount of $450,000.  Furthermore, the Authority to Loan will decrease 
$10,000 on the first of each month beginning February 1, 1996.

Any remaining outstanding balance is payable in full on July 1, 1997.  The 
above listed amounts will be available provided that the outstanding principal 
amount of all advances under such Authority to Loan at no time exceeds an 
amount equal to 80% of Saztec's qualified accounts receivable.  Qualified 
accounts receivable shall have the meaning as set forth in a Security 
Agreement previously executed by Saztec.

2.      All advances under the Authority to Loan will be evidenced by a Master 
Revolving Note on this bank's standard form.  Such Note shall be payable not 
later than July 1, 1997.  Accrued interest will be due and payable monthly.

3.      All advances under the authority to Loan are subject to Saztec being in 
full and complete compliance with all terms and conditions stated in this 
letter at the time of each such advance and the continuation of extensions of 
credit are subject to Saztec being in full compliance with all terms hereof at 
all times.

4.      All advances under the Authority to Loan will be secured by all 
accounts receivables of Saztec, now owned or hereafter existing, 
notwithstanding the 80% of qualified accounts receivable basis for making 
advances, and by all inventory, machinery, equipment, furniture, fixtures and 
all common stock of all subsidiaries of Saztec now owned or hereafter acquired 
or created.

5.      Saztec will continue to maintain a lockbox for the receipt of all 
accounts receivable payments over which this bank has sole access and also a 
cash collateral account with this bank into which all accounts receivable 
payments will be deposited.

6.      All advances under the Authority to Loan shall bear interest per annum 
at 4% over this bank's prime rate of interest adjusted daily.  For purposes 
hereof, this bank's prime rate of interest shall be that rate of interest 
which it states from time to time, to be its prime rate of interest.

7.      Each extension of credit under the Authority to Loan shall be subject 
in the sole discretion of this bank, to the occurrence of no adverse material 
change in (1) the financial condition of Saztec or (ii) the aging or 
collectability of its accounts receivables.

8.      This bank must at all times have a first priority perfected security 
interest in all personal property of Saztec and all proceeds of all the 
foregoing and all common stock of all subsidiaries of Saztec.

9.      At all times, the consolidated net worth of Saztec must be at least 
equal to $500,000, the calculation of such to be performed in accordance with 
generally accepted accounting principals, consistently applied.

10.     At all times, the ratio of consolidated total indebtedness to 
consolidated net worth shall not exceed 8.00:1, the calculation of such to be 
performed in accordance with generally accepted accounting principals 
consistently applied.

11.     Saztec must provide this bank with monthly financial statements and 
accounts receivable listing and agings and a borrowing base certificate in form 
and substance acceptable to this bank not later than twenty (20) days 
following the end of each month certified by borrower.  Such financial 
statements to include, at a minimum, a balance sheet and an income statement.  
Year end statements are to be prepared by a certified public accounting firm 
acceptable to the Bank and be of an audit quality.

12.     Should the terms of this letter and any terms of any Promissory Note or 
Security Agreement executed or continued in conjunction herewith be in 
conflict, then the terms of any such Note or Security Agreement shall prevail.

13.     All documentation evidencing the Authority to Loan and any collateral 
therefore shall be on this bank's standard forms and must be satisfactory in 
all respects to this bank and its attorneys.

14.     All costs incurred by this bank in extending credit under the Authority 
to Loan must be paid by Saztec.

15.     This letter supersedes any and all prior agreements, whether written or 
verbal, between Saztec and this bank relating to the subject matter hereof 
except existing Promissory Notes, Security Agreements and financing 
statements.  By signing below, you and this bank agree that there are no 
unwritten agreements between us relating to the transactions proposed hereunder.

16.     STATUTORY STATEMENT MADE PURSUANT TO MO.  REV.  STAT. 
432.045. Oral agreements or commitments to loan money, extend credit or to 
forebear from enforcing payment of a debt, including promises to extend or 
renew such debt, are not enforceable.  To protect Saztec International, Inc. 
and to protect UMB Bank, n.a. from misunderstanding or disappointment, any 
agreements we reach concerning such matters are contained in this letter and 
the documents referred to herein, which are the complete and exclusive 
statements of the agreement between us, except as we may later agree in 
writing to modify it.

If you agree to the above terms and conditions, kindly acknowledge the same by 
signing in the space provided for that purpose below and return the original 
of this letter to the undersigned not later than January 31, 1996.

Sincerely,

UMB Bank, n.a.

UMB
By:
Ned C. Voth, Community Bank President

The undersigned hereby acknowledges and agrees to all the terms and conditions 
stated in the foregoing letter.

SAZTEC, INTERNATIONAL, INC.

By:
Gary Abernathy, President

Dated:                                   

ADVANCED AUTOMATION ASSOCIATES, INC.

By:
Gary Abernathy, President

Dated:                                   

UMB B02000 (R 9/89)

MASTER REVOLVING NOTE

$ 450,000.00**               and Interest                                 
DECEMBER 31, 1995

PAYMENTS, DISBURSEMENTS AND INTEREST
FOR VALUE RECEIVED, the undersigned (the "undersigned means each maker 
and each endorser and, if more than one, each jointly and severally agrees to 
all the provisions hereunder) promise(s) to pay to the order of the UMB Bank,
n.a.    hereinafter called Bank"), at its main office,
on  JULY 1,1997 .the principal sum of                   FOUR HUNDRED FIFTY 
THOUSAND DOLLARS AND NO/100 DOLLARS

or such other lesser amount as shall be noted on the Schedule of Disbursements 
and Payments of Principal included herein or attached hereto pursuant to the 
authority set forth herein, together with interest on the unpaid principal 
balance hereof from time to time outstanding from date(s) of disbursement(s) 
until paid, at the rate of      4.00                        percent
per annum above the prime interest rate of Bank, adjusted      Daily      , 
with all accrued interest payable
Monthly                     . Interest hereunder shall be computed on the 
basis of days elapsed and assuming a 360-day
year consisting of twelve 30-day months.  Unless Bank, in its sole discretion, 
may from time to time otherwise direct, all payments shall be applied first 
to payment of accrued interest, and then to reduction of the principal sum due 
hereunder.  This note shall bear interest after maturity, whether by reason of 
acceleration or otherwise, at a rate of interest equal to two percent (2%) in 
excess of the rate stated above until paid in full, and such interest shall be 
compounded annually if not paid annually.  Any part of the outstanding 
principal balance hereof may be paid prior to maturity and if less than the 
full amount due hereunder is paid, the undersigned, or any of them, may from 
time to time until maturity receive, but the Bank has no commitment to make, 
further disbursements hereunder; provided, however, the aggregate amount of 
all principal amounts outstanding hereunder shall at no time exceed the face 
amount of this note; and provided further, that each and every 
disbursement made under this MASTER REVOLVING NOTE shall be at the 
Bank's sole discretion.  In the event the undersigned pays any part of the 
principal balance hereof prior to maturity or, in accordance with the terms 
hereof, receives any additional disbursements of principal hereunder, the 
principal amount due hereunder shall be the last amount stated to be the 
Unpaid Principal Balance of Note on the Schedule of Disbursements and Payments 
of Principal and the undersigned hereby authorize(s) any officer of the Bank 
to make notations on the Schedule of Disbursements and Payments of Principal 
from time to time to evidence payments and disbursements hereunder.  The Bank 
is hereby directed by the undersigned to credit all future advances under this 
note to account number carried on the books of Bank in the name of Saztec 
International,  Inc., Advanced Automation
Associates, Inc.                     and the undersigned agrees that the Bank 
or holder hereof may make advances, at its
discretion, upon oral or written instructions of any of the undersigned, or 
any other person(s) duly authorized by the undersigned.

COLLATERAL            ** See Attached Addendum
The term "Collateral" as used herein includes (but without limitation) all of 
the property listed below now owned and hereafter acquired, all proceeds and 
products thereof, and all accessions thereto together with (1) all accruals 
thereto and dividends, rights, payments, shares and property received in 
respect thereof, including those by way of corporate reorganization, 
liquidation, split or change in capital structure-all of which will be 
promptly delivered to the holder hereof duly endorsed, if endorsement is 
required, and in proper form for transfer, (2) all indebtedness, including 
(without limitation) any credit balance, due from or standing on deposit with, 
the holder which belongs to, is in the name of, or is subject to withdrawal 
by, any party liable hereon, whether now existing or hereafter arising or 
deposited, and (3) all personal property of or in the name of any person 
liable hereon, now or hereafter in the possession or control of the holder 
hereof for any purpose and in any capacity.  The undersigned makers each 
represent that the proceeds of this note are to be used exclusively for 
business or agricultural purposes and are not for the personal, family or 
household purposes of any of them.  If this note is secured by a mortgage or 
deed of trust, such mortgage or deed of trust dated  N/A is governed by 
Section 443.055 R.S. Mo., if such mortgage or deed of trust is 
recorded in the State of Missouri.

Description of Collateral:

All Accounts Receivable, Inventory, Machinery, Equipment, Furniture and 
Fixtures as described in Security Agreements dated April 7, 1992, September 
25, 1992 and February 15, 1993.  All stock certificates, bonds, receipts, 
confirmation and similar documents as described in Security Agreements dated 
September 25, 1992 and December 15, 1994.  All commission receivables as 
described in Security Agreement dated October 8, 1993.


GRANT OF SECURITY INTEREST
The undersigned hereby grants to Bank a security interest in the Collateral for 
the payment of all amounts due under this note, and all renewals and extensions 
thereof, and for the payment of all other present and future obligations to the 
holder, direct or contingent, secured or unsecured, whether or not due, of 
any party liable hereon (all of which amounts and obligations are hereinafter 
referred to as "Secured Obligations"), and Bank may accordingly retain the 
Collateral or any part thereof as security after the payment of all amounts 
due under this note.  The undersigned agree(s) to give to Bank upon Bank's 
request, from time to time, such other and further security as Bank, in its 
sole discretion, may deem necessary or appropriate, such additional security 
to become "Collateral" under the provisions hereof.

RIGHTS RESPECTING COLLATERAL
Before or after maturity, the holder may (1) transfer all or any part of the 
Collateral into the name of the holder hereof or its nominee, with or without 
disclosing that such Collateral is subject to the lien and security interest 
hereunder; (2) notify the parties obligated on any of the Collateral to make 
payment to the holder hereof of any amounts due or to become due thereunder; 
(3) enforce collection of any of the Collateral by suit or otherwise and 
surrender, release or exchange all or any part thereof, or compromise, extend 
or renew for any period (whether or not longer than the original period) any 
indebtedness secured thereby; (4) take control of any proceeds of the 
Collateral; (5) endorse any Collateral in the name of any person 
liable hereon, whenever, in the opinion of the holder, such endorsement may 
facilitate the handling of, or realization upon, the Collateral, and an 
irrevocable power of attorney therefor is hereby granted to the holder hereof; 
(6) in addition to its security interest therein, apply balances, credits, 
deposits, accounts, or monies of any person liable hereon held by the holder 
in any capacity, whether or not the same are due, applying them toward the 
payment of such of the Secured Obligations, and in such order of application, 
as the holder elects; (7) vote, use, transfer or repledge 
any or all of the Collateral; (8) exercise such additional rights, powers or 
remedies, if any, with respect to any security for or guaranty of any of the 
Secured Obligations as may be provided in any written instrument other than 
this note.  No liability shall arise against the holder from any act, or the 
omission of any act, pertaining to the collection or failure to collect any 
Collateral securing this or any other obligation of 
any party liable hereon.  The undersigned hereby agree(s) to take any and all 
steps necessary to preserve any rights in the Collateral against prior parties 
and the holder hereof shall not be bound to take any such steps.  
Notwithstanding any other provision herein, the undersigned shall not give, 
transfer, sell, encumber or otherwise dispose of any of the Collateral, or 
any interest therein, without Bank's advance written consent.

ACCELERATION AND EVENTS OF DEFAULT
Without limitation on the demand maturity of this note, the holder may, without 
demand or notice of any kind, declare this note and any other of the Secured 
Obligations immediately due and payable in full at any time that the holder 
deems itself insecure for any reason whatsoever in respect of any Secured 
Obligation.  Upon the occurrence of any of the following events of default: 
(1) failure of the undersigned to pay or perform any other obligation of any of 
the undersigned to the holder hereof; (2) the death or dissolution of, or 
termination of existence of, any of the undersigned; (3) the failure of any of 
the undersigned to pay debts as they mature; (4) appointment of a receiver of 
or for any part of the property of any of the undersigned, an assignment for 
the benefit of creditors by any of the undersigned; or the commencement of any 
proceedings under bankruptcy or insolvency laws by or against any of the 
undersigned, then this note and all other obligations of each of 
the undersigned to the holder hereof shall immediately become due and payable 
in full without notice or demand.

MISSOURI LAW
The interpretation of this instrument and the rights and remedies of the 
parties hereto shall be governed by the laws of the State of Missouri.

COLLECTION EXPENSES
To the extent permitted by applicable law, the undersigned agrees to pay all 
expenses of the holder in collecting this note and enforcing rights respecting 
and realizing upon any of the Collateral, including reasonable attorneys' fees.



DEMAND, NOTICE, ENDORSERS, GUARANTORS AND SURETIES
Demand for payment, notice of nonpayment, protest, dishonor, diligence and such 
are hereby waived by all parties liable hereon.  All endorsers, guarantors and 
sureties, by endorsing or guaranteeing this note (1) agree to all of the terms 
and conditions herein contained, and (2) without limitation of the foregoing, 
and without affecting their liabilities hereunder, agree and consent to all 
renewals, extensions, and modifications hereof including (a) the impairment, 
substitution, exchange or release at any time or times of all or any part of 
any property securing payment of this note and all other obligations of each 
of the undersigned to the holder hereof, without notice; (b) the release of, 
or impairment of right of recourse against, any other endorser, guarantor or 
surety, without notice; and (c) the substitution of renewal or extension 
notes for this note, without notice or demand.

NO WAIVERS
Any failure by the holder hereof to exercise any right hereunder shall not be 
construed as a waiver of the right to exercise the same or any other right at 
any other time and from time to time thereafter.

HEADINGS
All headings or titles appearing in this note are used as a matter of 
convenience only and shall not affect the interpretation of the provisions 
hereof.

Mailing Address:
6700 Corporate Drive
Kansas City, MO 64120

Customer ID: 3904321
New Loan:

Saztec International, Inc.
By:

ADVANCED AUTOMATION ASSOCIATES, INC.
By:
Title:



ADDENDUM

It is hereby agreed by UMB Bank, n.a. and Saztec International, Inc. and 
Advanced Automation Associates, Inc. that the dollar availability of this 
Master Note shall decrease Ten Thousand Dollars on the first business day of 
each month beginning February 1, 1996, until maturity at July 1, 1997.

UMB BANK, n.a.
By:

SAZTEC INTERNATIONAL, INC.
By:

ADVANCED AUTOMATION ASSOCIATES, INC.
By:
 



                                              SIGNATURES

Pursuant to the requirement 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.


Dated:   December 9, 1996


     SAZTEC INTERNATIONAL, INC.



     By:          /s/ Robert P. Dunne     
                   Robert P. Dunne
                   Chairman of the Board and Director


Pursuant to the requirements of the Securities and Exchange Act of 1934, this 
Report has been signed below by the following persons on behalf of the 
registrant and in the capacities indicated on December 9, 1996.

     Signature                          Capacity


     /s/ Robert P. Dunne            Chairman of the Board and Director
     Robert P. Dunne


     /s/ Gary N. Abernathy          President, Chief Executive
     Gary N. Abernathy              Officer and Director


     /s/ Thomas K. O'Loughlin       Vice President and Treasurer
     Thomas K. O'Loughlin


     /s/ Kent L. Meyer               Secretary
     Kent L. Meyer


     /s/ Tom W. Olofson          Director
     Tom W. Olofson


     /s/ Lee R. Petillon             Director
     Lee R. Petillon


     /s/ Pradeep Barthakur          Director
     Pradeep Barthakur