U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB
                                  -------------

[X]  QUARTERLY  REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

For the quarter ended October 31, 1999

[  ] TRANSITION  REPORT UNDER  SECTION 13 or 15(d) OF THE EXCHANGE ACT FOR THE
     TRANSITION PERIOD FROM ____ to _____

                          Commission File No. 000-24996

                          INTERNET COMMERCE CORPORATION
        (Exact name of small business issuer as specified in its charter)

         Delaware                                        13-3645702
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                       Identification No.)

805 Third Avenue 9TH Floor, New York, New York             10022
(Address of principal executive offices)                 (Zip Code)

(212) 271-7640
(Issuer's telephone number)

---------------------------
(Former name, former address
and former fiscal year, if changed
since last report)

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

                             Yes |X|                        No |_|

                 State the number of shares  outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.

           Class                                Outstanding at October 31,1999:
           -----                                -------------------------------

 Class A Common Stock, $.01 par value                     2,249,108 shares

 Class B Common Stock, $.01 par value                     115,590 shares



                  Traditional Small Business Disclosure Format

                             Yes |X|                        No |_|

<PAGE>

                          INTERNET COMMERCE CORPORATION

                              INDEX TO FORM 10-QSB
                                                                            PAGE
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

Balance sheets as of October 31, 1999 (unaudited) and July 31, 1999.....       3

Statements of operations and comprehensive loss for the three months
   ended October 31, 1999 and October 31, 1998 (unaudited)..............       4

Statements of cash flows for the three months ended October 31, 1999
   and October 31, 1998 (unaudited).....................................       5

Notes to financial statements...........................................     6-7

Item 2.  Management's Discussion and Analysis of Financial Condition
          and  Results of Operations....................................    8-10

PART II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K...............................      11

SIGNATURES     .........................................................      12


                                       2
<PAGE>

INTERNET COMMERCE CORPORATION

Balance Sheet

<TABLE>
<CAPTION>
                                                                                           October 31,         July 31,
                                                                                               1999              1999
                                                                                           -------------   -----------------
                                         ASSETS                                            (unaudited)
<S>                                                                                     <C>              <C>
Current assets:
     Cash and cash equivalents                                                          $       452,732  $        114,258
     Marketable securities                                                                    1,993,400         3,970,655
     Accounts receivable                                                                        114,818            49,424
     Prepaid expenses and other assets                                                           31,338           111,434
                                                                                          --------------   ---------------
          Total current assets                                                                2,592,288         4,245,771


Restricted cash                                                                                 441,024           435,664
Property and equipment, net                                                                     807,253           793,131
Software development costs, net                                                                 708,839           711,889
Goodwill, net                                                                                   300,523           339,721
Other assets                                                                                     14,237            14,237
                                                                                          --------------   ---------------
          Total assets                                                                  $     4,864,164  $      6,540,413
                                                                                          ==============   ===============


                                    LIABILITIES

Current liabilities:
     Accounts payable                                                                   $       430,328  $        367,379
     Accrued expenses                                                                           379,002           554,537
     Capital lease obligation                                                                   218,760           188,271
     Other liabilities                                                                              370            16,819
                                                                                          --------------   ---------------
          Total current liabilities                                                           1,028,460         1,127,006

Capital lease obligation - less current portion                                                 333,562           358,498

                                                                                          --------------    ---------------
          Total liabilities                                                                   1,362,022         1,485,504


Commitments and contingencies


                               STOCKHOLDERS' EQUITY

Preferred stock:
     Preferred stock - 5,000,000  shares  authorized,  including 10,000 series A
        preferred stock and 175 series S preferred.
     Series A  preferred  stock - par value $.01 per share,  $1,000  liquidation
       value per share, 7,690 and 9,590 shares issued and outstanding at October
       31, 1999
       and July 31, 1999                                                                             77                96
Common stock:
     Class A - par value $ .01 per share, 40,000,000 shares authorized, one vote
       per share; 2,249,108 and 1,810,941 shares issued and outstanding
       October 31, 1999 and July 31, 1999                                                        22,491            18,109
     Class B - par value $ .01 per share, 2,000,000 shares authorized,
       six votes per share; 115,590 shares issued and outstanding October 31,
1999
       and July 31, 1999                                                                          1,156             1,156
Additional paid-in capital                                                                   29,181,585        28,989,889
Accumulated deficit                                                                        (25,695,007)      (23,920,341)
Accumulated other comprehensive loss                                                            (8,160)          (34,000)
                                                                                          --------------   ---------------
          Total stockholders' equity                                                          3,502,142         5,054,909
                                                                                          --------------   ---------------

          Total liabilities and stockholders' equity                                    $     4,864,164  $      6,540,413
                                                                                          ==============   ===============
</TABLE>

See notes to financial statements


                                       3
<PAGE>

INTERNET COMMERCE CORPORATION

Statements of Operations and Comprehensive Loss

<TABLE>
<CAPTION>
                                                                                          Three Months Ended
                                                                                             October 31,
                                                                                   --------------------------------
                                                                                       1999             1998
                                                                                   --------------   --------------
                                                                                            (unaudited)
<S>                                                                             <C>              <C>
Revenue:
     Services                                                                   $        140,363 $           9,296
                                                                                  --------------   ---------------

Expenses:
     Cost of services                                                                    222,931             5,010
     Product development and enhancement                                                 223,214           106,168
     Selling and marketing                                                               565,832           126,087
     General and administrative                                                          906,547           756,528
     Non-cash charges in connection with compensation
           and services                                                                                    487,950
                                                                                   --------------   ---------------
                                                                                     (1,918,524)       (1,481,743)
                                                                                   --------------   ---------------

Operating loss                                                                       (1,778,161)       (1,472,477)
                                                                                   --------------   ---------------

Interest and investment income                                                            27,759             4,767
Interest expense                                                                        (24,264)          (80,878)
                                                                                   --------------   ---------------

         NET LOSS                                                                $   (1,774,666)  $    (1,548,558)

Other comprehensive income:

     Un
     Unrealized holding gains                                                             25,840
                                                                                   --------------   ---------------

Comprehensive loss                                                              $    (1,748,826)  $    (1,548,558)
                                                                                   ==============   ===============

Basic and diluted loss
     per common share                                                           $          (.96)  $         (1.21)
                                                                                   ==============   ===============

Weighted average number of common
     shares outstanding - basic
     and diluted loss per share                                                        1,841,794         1,276,849
                                                                                   ==============   ===============
</TABLE>

See notes to financial statements


                                       4
<PAGE>

Internet Commerce Corporation


Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                                             Three Months Ended
                                                                                                October 31,
                                                                                  -----------------------------------------
                                                                                      1999                       1998
                                                                                  -----------------------------------------
                                                                                                (unaudited)
<S>                                                                             <C>                       <C>
Cash flows from operating activities:
 Net loss                                                                       $   (1,774,666)           $    (1,548,558)
 Adjustments to reconcile net loss to net cash
   used in operating activities:
      Depreciation and amortization                                                     109,177                     60,415
      Loss on sale of marketable securities                                              14,932
      Issuance of common stock and warrants for services,
           compensation and consulting agreement termination                                                       487,950
      Amortization of debt discount                                                                                 52,083
      Changes in:
          Accounts receivable, prepaid expenses and other assets                          9,342                     60,509
          Accounts payable, notes payable and accrued expenses                           46,965                    387,011
                                                                                  --------------            ---------------

          Net cash used in operating activities                                     (1,594,250)                  (500,590)
                                                                                  --------------            ---------------


Cash flows from investing activities:
   Purchases of property and equipment                                                 (34,029)
   Proceeds from sales of marketable securities                                       1,988,163
                                                                                  --------------            ---------------

          Net cash provided by investing activities                                   1,954,134
                                                                                  --------------            ---------------


Cash flows from financing activities:
   Proceeds from bridge loan                                                                                       300,000
   Proceeds from note payable                                                                                      155,000
   Proceeds from exercise of employee stock options                                     20,059
   Payments on capital lease obligations                                               (41,469)                    (19,820)
                                                                                  --------------            ---------------

          Net cash (used in) provided by financing activities                          (21,410)                    435,180
                                                                                  --------------            ---------------

Net increase (decrease) in cash and cash equivalents                                    338,474                   (65,410)

Cash and cash equivalents, beginning of  period                                         114,258                   178,287
                                                                                  --------------            ---------------

Cash and cash equivalents, end of period                                        $       452,732           $        112,877
                                                                                  ==============            ===============

Supplemental disclosure of cash flow information: Cash paid during the year for:
          Interest                                                              $        24,264           $         23,911
     Noncash investing and financing activities:
          Issuance of common stock for settlement                                       176,000
          Property acquired under capital lease                                          47,022
          Debt discount in connection with bridge loan                                                              78,775
          Issuance of common stock for purchase of minority
               interest of subsidiary                                                                              470,384
</TABLE>

See notes to financial statements


                                       5
<PAGE>

INTERNET COMMERCE CORPORATION

Notes to financial statements
October 31, 1999

NOTE A - BASIS OF PRESENTATION AND THE COMPANY

[1]      Basis of presentation:

         The accompanying  unaudited  condensed  financial  statements have been
         prepared in accordance with generally  accepted  accounting  principles
         for interim  financial  information  and with the  instructions to Form
         10-QSB  and  Article  3 of  Regulation  S-B.  Accordingly,  they do not
         include all of the  information  and  footnotes  required by  generally
         accepted accounting  principles for complete financial  statements.  In
         the  opinion  of  management,  all  adjustments  (consisting  of normal
         recurring  accruals)  considered  necessary for fair  presentation have
         been  included.  Operating  results for the  three-month  period  ended
         October 31, 1999 are not necessarily indicative of the results that may
         be expected for the year ending July 31, 2000.

         The balance  sheet at July 31, 1999 has been  derived  from the audited
         consolidated  financial  statements at that date,  but does not include
         all the footnotes required by generally accepted accounting  principles
         for complete financial  statements.  For further information,  refer to
         the audited financial  statements and footnotes thereto included in the
         Company's Form 10-KSB for the fiscal year ended July 31, 1999.

[2]      The Company:

         Internet Commerce Corporation (the "Company" or "ICC") was incorporated
         on November 18, 1991 in the State of Delaware.

         ICC is engaged in the design, development, and marketing of systems for
         securing, controlling, delivering and auditing electronic documents and
         files primarily over the Internet. ICC is seeking to position itself as
         an  independent  third  party  to  authenticate,   certify,   validate,
         authorize and deliver secure transactions for electronic information.

         ICC  began  the  development  of the  CommerceSense  service  in  1997,
         introduced CommerceSense for beta testing in November 1997 and launched
         the current  version of  CommerceSense  commercially in April 1999. The
         CommerceSense  system uses the Internet and  proprietary  technology to
         deliver the Company's customers' documents and data files to members of
         their trading communities,  many of which have incompatible systems, by
         translating  the documents  and data files into any format  required by
         the receiver.  The system can be accessed  using a standard Web browser
         or virtually any other communications protocol.

[3]      Reclassification:

         The Company has revised the October 31, 1998 balance  sheet,  statement
         of  operations  and  statement  of cash  flows  from  those  previously
         reported to conform to current year presentation.  In addition, $78,775
         was reclassified from net cash used in operating activities to net cash
         provided by financing  activities  in the  statement of cash flows from
         amounts previously reported.


                                       6
<PAGE>

NOTE B - SUBSEQUENT EVENTS

[1]      Private Placements

         On November 24, 1999,  Cable & Wireless PLC ("C&W")  agreed to purchase
         for $10 million,  10,000 shares of a new class of convertible preferred
         stock of ICC.  Initially,  the investment is convertible into shares of
         class A common stock at $22.34 per share. The average closing bid price
         of the  class A common  stock  for the five  trading  days  before  the
         definitive  agreement  was  executed  and  delivered  was  $22.21.  The
         preferred  stock  is  entitled  to a four  percent  cumulative,  annual
         dividend,  payable  in  cash  or in kind at  ICC's  option,  and  votes
         together with the class A common stock.  Each share of preferred  stock
         entitles  C&W to a number  of votes  equal to the  number  of shares of
         class A common stock into which the preferred stock is convertible. C&W
         will also receive 400,000  warrants to purchase class A common stock of
         ICC.  The  warrants  are  exercisable  for five  years at  $22.21.  The
         transaction  with C&W is  subject  to  approval  of the  boards of both
         companies.

         On November 19, 1999, Firmco Firstar Investment Research and Management
         Company,  LLC agreed to purchase for $2.5  million,  138,300  shares of
         class A common stock.  On November 23, 1999,  Bantry Bay Ventures,  LLC
         agreed to  purchase  for $2  million,  98,159  shares of class A common
         stock. On November 26, 1999,  Acorn Investment Trust agreed to purchase
         for $5 million,  197,725  shares of class A common stock.  The purchase
         price for the class A common  stock in each of these  transactions  was
         based upon the average  closing  bid price of the class A common  stock
         for the five trading days before the applicable definitive  agreement
         was executed and delivered.

[2]      Warrant Conversions

         The Company received proceeds of $930,000 upon the exercise of warrants
subsequent to October 31, 1999.


                                       7
<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations

This  Quarterly  Report on Form  10-QSB  contains  a number of  "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities  Act"), and Section 21E of the Securities  Exchange Act
of 1934, as amended (the "Exchange  Act").  Specifically,  all statements  other
than  statements  of  historical  facts  included in this Report  regarding  our
financial position, business strategy and plans and objectives of management for
future  operations  are  forward-looking   statements.   These   forward-looking
statements are based on the beliefs of management,  as well as assumptions  made
by and information currently available to management.  When used in this Report,
the  words  "anticipate,"   "believe,"   "estimate,"  "expect,"  "may,"  "will,"
"continue" and "intend," and words or phrases of similar import,  as they relate
to our  financial  position,  business  strategy  and plans,  or  objectives  of
management,   are  intended  to  identify  forward-looking   statements.   These
"cautionary  statements"  reflect our current view with respect to future events
and are  subject  to risks,  uncertainties  and  assumptions  related to various
factors including, without limitation, those listed below the heading "Overview"
and  in  our  registration  statements  and  periodic  reports  filed  with  the
Securities  and Exchange  Commission  under the  Securities Act and the Exchange
Act.

Although we believe that our expectations  are reasonable,  we cannot assure you
that our expectations will prove to be correct.  Based upon changing conditions,
should any one or more of these risks or  uncertainties  materialize,  or should
any underlying  assumptions prove incorrect,  actual results may vary materially
from  those  described  in this  Report  as  anticipated,  believed,  estimated,
expected or intended.

Overview

We were founded as Infosafe Systems, Inc. in November 1991 and from 1991 to 1997
we conducted  limited  operations and developed  products that we were unable to
exploit  commercially  and  consequently  discontinued.  In 1998, we shifted our
business  emphasis to focus  exclusively on the development and marketing of our
CommerceSense  service and  launched  the current  version of our  CommerceSense
service  commercially  in  April  1999.  As a  result,  we have  only a  limited
operating  history  and  there  is  little  historical  information  on which to
evaluate our business and prospects.

We developed our CommerceSense  service as an alternative to the electronic data
interchange,  or EDI, services that are currently  provided by traditional value
added networks,  also known as VANs,  that offer their services  primarily using
dedicated  telecommunications  links. Our CommerceSense  service  translates and
transmits electronic documents,  such as purchase orders, requests for proposals
and receipts, as well as images and other data over the Internet.

We are currently focusing on our CommerceSense service. As a result, our revenue
for the foreseeable  future is almost entirely  dependent on the success of this
service, including, but not limited to, the number of customers who subscribe to
the service and the volume (in  kilocharacters) of the data,  documents or other
information they send or retrieve  utilizing our service.  We expect our cost of
revenue and  operating  expenses to increase  significantly,  especially  in the
areas of marketing,  customer installation and customer service. We will need to
generate significant revenue to achieve and maintain profitability. If we do not
increase our revenue significantly, we will continue to be unprofitable.

We expect to base our expenditures on our plans and estimates of future revenue.
We may be unable to  adjust  spending  in a timely  manner if we  experience  an
unexpected   shortfall  in  our  revenue.  As  a  result,  we  may  not  achieve
profitability.


                                       8
<PAGE>

Results of Operations

Three Months Ended October 31, 1999 Compared with Three Months Ended October 31,
1998.

Our revenue was  $140,000  and $9,000,  respectively,  in the three months ended
October 31, 1999 (the "2000 Quarter") and October 31, 1998 (the "1999 Quarter").
CommerceSense generated this revenue.

Cost of services  increased  to $223,000 in the 2000  Quarter from $5,000 in the
1999  Quarter.  The  increase  of  $218,000  is  primarily  due to  direct  cost
components,  including  charges for data lines and  personnel  employed  for the
roll-out of our  CommerceSense  service to new customers and the depreciation of
equipment used to render this service.

Product  development  and  enhancement  costs  increased to $223,000 in the 2000
Quarter from $106,000 in the 1999 Quarter, an increase of $117,000. We were able
to spend more of our resources on enhancing our service since we had  sufficient
funds to do so. In addition,  we developed and added new features to our service
in the 2000 Quarter.

Selling and  marketing  expenses  increased to $566,000 in the 2000 Quarter from
$126,000 in the 1999  Quarter,  an increase of  $440,000.  We were able to spend
more  of our  resources  on our  selling  and  marketing  efforts  since  we had
sufficient  funds  to  do so in  the  2000  Quarter.  These  expenses  primarily
consisted of salaries and related costs,  advertising and participation in trade
shows.

General and administrative  costs increased to $907,000 in the 2000 Quarter from
$757,000  in the 1999  Quarter.  The  increase  of $150,000 is largely due to an
increase in salaries and related employee benefits of $116,000.

Non-cash charges in connection with compensation and services  decreased to zero
in the 2000 Quarter from $488,000 in the 1999 Quarter.  The decrease of $488,000
was due to the fact that in the 1999 Quarter we issued  warrants to  consultants
for  services   ($460,000)  and  common  stock  ($28,000)  to  an  employee  for
compensation and did not have similar expenses in the 2000 Quarter.

We had income from  investments of $28,000 in the 2000 Quarter and $5,000 in the
1999  Quarter.  The  increase  is due to  higher  average  cash  and  marketable
securities balances in the 2000 Quarter compared to the 1999 Quarter.

Interest  expense  decreased  to $24,000 in the 2000 Quarter from $81,000 in the
1999  Quarter.   The  decrease  of  $57,000  was  largely  attributable  to  the
amortization  of debt  discount.  Debt discount  amounted to $52,000 in the 1999
Quarter. There was no debt discount in the 2000 Quarter.

The net loss in the 2000 Quarter was  $1,775,000  compared to  $1,549,000 in the
1999 Quarter. The net loss in the 1999 Quarter, after excluding non-cash charges
for compensation and services expense and debt discount, was $1,008,917.

Liquidity and Capital Resources

At October 31, 1999 we had working capital of $1,564,000.

We have financed our operations  through private  placements during fiscal 1994,
our initial public offering during fiscal 1995 (the "IPO"), a private  placement
in March 1997, a private  placement of bridge note units during  fiscal 1998 and
1999 and a private  placement  of series A  preferred  stock in April  1999.  We
anticipate  losses  through  fiscal  2000,  as we attempt  to expand  commercial
markets for CommerceSense.


                                       9
<PAGE>

As a result of operating losses,  cash used in operating  activities amounted to
$1,594,000 in the 2000 Quarter and $501,000 in the 1999  Quarter.  Cash used for
purchase of equipment amounted to $34,000 in the 2000 Quarter and $0 in the 1999
Quarter.

Our  principal  sources of liquidity at October 31, 1999  included cash and cash
equivalents of $453,000 and marketable securities of $1,993,000.  In November of
1999, we obtained  binding  commitments for the purchase of Class A Common Stock
in the total amount of $9.5 million  from outside  investors.  Also in November,
Cable & Wireless  agreed to purchase for $10 million  10,000 shares of preferred
stock and  400,000  warrants.  See Note B (1) of Notes to  Financial  Statements
herein.

We have a net operating loss carryforward of approximately $24 million to offset
future  taxable  income for federal tax purposes.  The  utilization  of the loss
carryforward  to reduce any such future  income taxes will depend on our ability
to  generate  sufficient  taxable  income  prior  to the  expiration  of the net
operating loss  carryforwards.  The carryforward  expires from 2007 to 2019. The
Internal Revenue Code of 1986, as amended,  contains  provisions which generally
limit the use of available net operating  loss  carryforwards  in any given year
should significant  changes (greater than 50%) in ownership interests occur. Due
to the IPO, the net operating loss  carryover of $1.9 million  incurred prior to
the IPO will be subject to an annual  limitation  of $400,000  until the pre-IPO
portion of the net  operating  loss is  utilized or  expires.  Also,  due to the
private  placement of series A preferred  stock in April 1999, the net operating
loss carryover of $20 million  incurred  prior to the private  placement will be
subject  to an annual  limitation  of $1 million  until that  portion of the net
operating loss is utilized or expires.

Year 2000 Compliance

We may have  substantial  exposure to the year 2000  problem,  both with our own
systems and with systems we do not control. The year 2000 problem could harm our
business and financial  results.  Many currently  installed computer systems and
software  products have been coded to accept or recognize only two digit entries
to define the applicable year. These systems may erroneously  recognize the year
2000 as the year 1900. Thus could result in major failures or malfunctions.

This risk is  particularly  significant  for our  business.  We rely on computer
programs and systems in connection with our internal and external  communication
networks and systems,  including transmissions of information over the Internet,
order processing and  fulfillment,  accounting and financial  systems,  customer
access to our web site and other business functions. Based on our design process
and  assessment to date, we believe the current  versions of our service and our
various systems are year 2000 compliant.  However, we cannot assure you that our
programs  designed to minimize the impact of the  transition to the year 2000 on
the terminal  operations  software at our  facilities  and other date  sensitive
equipment will be completely successful.  In addition, the costs of implementing
these  programs  may exceed our current  estimates.  If these  programs  are not
successful or if their costs exceed our estimates,  the date change from 1999 to
2000 could  harm our  business.  The full  extent of any  adverse  impact on our
business is impossible to determine.

In  addition,  our  customers  may not become  year 2000  compliant  in a timely
fashion or at all. The failure of a customer to become year 2000  compliant will
adversely  affect the ability of that customer's  trading partners to receive or
utilize the document or data we transmit.  As a result,  customers  that are not
year 2000 compliant may cease using our  CommerceSense  service,  decreasing our
revenues and harming our results of operations.


                                       10
<PAGE>

PART II.  OTHER INFORMATION


Item 6: Exhibits and Reports on Form 8-K

(a)      Exhibit(s).

Number                Description               Method of Filing
------                -----------               ----------------

27                    Financial Data Schedule   Filed with this Form 10-QSB

 (b)   Reports on Form 8-K

On December 1, 1999 and December 13, 1999, we filed Current Reports on Form 8-K.


                                       11
<PAGE>

                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

INTERNET COMMERCE CORPORATION
(Registrant)

Date:  December 14, 1999      By:  /s/ Geoffrey S. Carroll
                                   ---------------------------------------------
                                   Geoffrey S. Carroll
                                   President and Chief Executive Officer
                                   (Principal Executive Officer)


Date:  December  14, 1999     By:  /s/ Walter M. Psztur
                                   ---------------------------------------------
                                   Walter M. Psztur
                                   Chief Financial Officer
                                   (Principal Financial and Accounting Officer)