U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

(Mark One)

    |X|  Quarterly report under Section 13 or 15(d) of the Securities 
         Exchange Act of 1934

    For the quarterly period ended November 30, 1996

    | |  Transition report under Section 13 or 15(d) of the Exchange Act

    For the transition period from           to

Commission File Number 0-11791

                            GREENTREE SOFTWARE, INC.
           (Name of Small Business Issuer as Specified in Its Charter)

         New York                                      13-2897997
  (State or Other Jurisdiction             (I.R.S. Employer Identification No.)
of Incorporation or Organization)

                             7901 Flying Cloud Drive
                                    Suite 150
                             Eden Prairie, MN 55344
                    (Address of Principal Executive Offices)

                                 (617) 941-1500
                (Issuer's Telephone Number, Including Area Code)

                               2801 Fruitville Rd.
                                    Suite 180
                               Sarasota, FL 34237
                 (Address of Former Principal Executive Offices)

                                 (941) 954-2210
             (Issuer's Former Telephone Number, Including Area Code)


         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 January 17, 1997
         Common Shares, par value                      9,663,662 shares
             $.04 per share



<PAGE>



                            GREENTREE SOFTWARE, INC.

                                      INDEX

<TABLE>
<CAPTION>

 Item                                                                                         Page
Number                                                                                        Number
------                                                                                        ------
PART I.      FINANCIAL INFORMATION

<S>  <C>         <C>                                                                           <C>
     Item 1. Financial Statements

                 Balance Sheets as of November 30, 1996 and May 31, 1996....................    3

                 Statements of Operations for the three months ended
                 November 30, 1996 and 1995 and for the six months ended
                 November 30, 1996 and 1995 ................................................    4


                 Statements of Cash Flows for the six months ended
                 November 30, 1996 and 1995.................................................    5

                 Notes to the Financial Statements..........................................    6

     Item 2. Management's Discussion and Analysis or Plan of Operations.....................    9


PART II.     OTHER INFORMATION

     Item 1. Legal Proceedings..............................................................   12

     Item 6. Exhibits and Reports on Form 8-K...............................................   12

     Signature   ...........................................................................   13
</TABLE>


                                       2

<PAGE>



PART I.FINANCIAL INFORMATION
      Item 1. Financial Statements

   Company for which report is filed:  Greentree Software, Inc. (the "Company")

                            GREENTREE SOFTWARE, INC.
                                 BALANCE SHEETS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                       November 30,       May 31,
                                                                           1996            1996
<S>                                                                        <C>       <C>          
        ASSETS
CURRENT ASSETS:
  Cash                                                                     $58,904   $     249,525
  Accounts receivable, net                                                  58,079         112,749
  Inventory                                                                  5,758           4,854
  Prepaid expenses and other current assets                                 34,939          17,153
                                                                          --------   -------------
Total Current Assets                                                       157,680         384,281
                                                                           
PROPERTY AND EQUIPMENT, NET                                                100,824         120,000
                                                                           
OTHER ASSETS                                                              
  Customer list (net of allowance)                                          37,343          45,361
  Deferred software development costs, net                                 676,063         768,516
  Security deposits                                                          5,152           5,111
 Other                                                                       4,753          10,382
                                                                          --------   -------------
                                                                           723,311         829,350
                                                                          ========   =============
TOTAL ASSETS                                                              $981,815      $1,333,631
                                                                          ========   =============
                                                                     
         LIABILITIES AND STOCKHOLDERS' EQUITY  
                                                                    
CURRENT LIABILITIES:                                                
  Accounts payable                                                     $  379,249       $  447,791
  Accrued expenses                                                        350,451          430,296
  Deferred income                                                         113,016          151,452
                                                                     ------------     ------------
Total Current Liabilities                                                 842,716        1,029,539
                                                                                      
CONVERTIBLE NOTES:                                                        710,335               --
                                                                                      
TOTAL LIABILITIES                                                       1,553,051        1,029,539
                                                                                      
STOCKHOLDERS' EQUITY:                                                                 
Common  Stock,  $0.04 par  value,  authorized  15,000,000  shares,                    
outstanding 9,503,662 at November 30, 1996 and at May 31, 1996            380,146          380,146
Additional paid-in capital                                             12,830,428       12,833,851
Accumulated deficit                                                  (13,692,778)     (12,820,873)
                                                                     ------------     ------------
                                                                        (482,204)          393,124
  Less:  28,580 treasury stock, at cost                                  (89,032)         (89,032)
                                                                     ------------     ------------
Total Stockholders Equity                                               (571,236)          104,092
                                                                     ============     ============
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               $981,815     $  1,333,631
                                                                     ============     ============
</TABLE>

The accompanying notes are an integral part of the Unaudited Financial
Statements.


                                       3
<PAGE>




                            GREENTREE SOFTWARE, INC.
                             STATEMENT OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                              For The Three Months Ended                For the Six Months Ended
                                                      November 30,                            November 30,
                                                1996                1995                1996               1995
                                                ----                ----                ----               ----
<S>                                           <C>                <C>                  <C>                 <C> 
NET SALES
  Product                                     $  (1,300)          $  87,025            $  75,825          $  151,548
  Services                                        55,970             46,915               94,915              91,163
                                              ----------         ----------           ----------          ----------
                                                  54,670            133,940              116,070             242,711
                                              ----------         ----------           ----------          ----------

COSTS AND EXPENSES
  Cost of sales                                  160,266             39,951              269,057             126,789
  Selling expenses                               164,083             96,798              233,470             261,500
  General and administrative                     375,475            211,937              545,305             355,075
  Interest expense                                 -                    -                  -                     744
                                              ----------         ----------           ----------          ----------
                                                 699,824            348,686            1,047,832             744,108
                                              ----------         ----------         ------------          ----------

Operating loss                                 (645,154)          (214,746)            (877,092)           (501,397)
                                              ----------         ----------           ----------          ----------

OTHER INCOME                                         590                 12                5,187                  58
                                              ----------          ---------         ------------           ---------

LOSS BEFORE INCOME TAXES                       (644,564)          (214,734)            (871,905)           (501,339)
                                              ----------         ----------           ----------          ----------

INCOME TAXES                                    -                    -                  -                      2,400
                                              ----------         ----------           ----------          ----------

NET LOSS                                    $ (644,564)         $ (214,734)          $ (871,905)          $ (503,739)
                                            ===========         ===========          ===========          ===========


LOSS PER SHARE
Net loss per common share                   $    (0.07)         $    (0.04)          $    (0.09)          $    (0.10)
                                            ===========         ===========          ===========          ===========

Weighted average shares outstanding           9,503,662           4,721,790            9,503,662            4,721,790
                                            ===========         ===========          ===========          ===========
</TABLE>


The accompanying notes are an integral part of the Unaudited Financial
Statements.


                                       4
<PAGE>



                            GREENTREE SOFTWARE, INC.
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                      For the Six Months Ended
                                                               November 30,                November 30,
                                                                   1996                        1995
                                                          ------------------------     ---------------------
<S>                                                            <C>                      <C>         
CASH FLOW FROM OPERATING ACTIVITIES
  Net loss                                                     $   (871,905)            $  (503,739)
  Adjustments to reconcile net loss to net cash
  provided by (used in) operating activities:
    Depreciation and amortization                                    29,096                  59,375
    Amortization of deferred software costs                              --                  48,413
    (Increase) decrease in accounts receivable                       54,670                (143,041)
    (Increase) decrease in inventories                                 (904)                  4,615
   (Increase) decrease in prepaid expenses                          (17,786)                (32,582)
   Decrease in customer list                                          7,998                      --
    (Increase) decrease in deferred software development             92,453                (235,116)
      costs, net
    Decrease in security deposits                                       (41)                 23,714
     (Increase) in other assets                                       5,629                      --
    Increase (decrease) in accounts payable                         (68,542)               (120,899)
    Increase (decrease) in accrued expenses                         (79,845)                235,151
    Increase (decrease) in deferred income                          (38,436)                (17,753)
                                                               -------------            ------------
Cash used in operating activities                                  (887,392)               (646,356)

CASH FLOW FROM INVESTING ACTIVITIES
  Retirement of certificate of deposit                                   --                 775,000
  Additions to property and equipment                                (9,920)                 (8,993)
                                                               -------------            ------------
Cash provided (used) in investing activities                         (9,920)               (766,007)

CASH FLOW FROM FINANCING ACTIVITIES
  Net proceeds from private placement                               706,912                 505,426
  Note payable reduction                                                 --                (775,000)
                                                               -------------            ------------
Cash (used) provided by financing activities                        706,912                (269,574)

Increase (decrease) in cash                                        (190,621)               (149,923)
Cash balance - beginning                                            249,525                 157,621
                                                               -------------            ------------
Cash balance - ending                                               $58,904                 $ 7,698
                                                               -------------            ------------
</TABLE>

The accompanying notes are an integral part of the Unaudited Financial
Statements.


                                       5
<PAGE>



                            GREENTREE SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                November 30, 1996
                                   (Unaudited)


1. Basis of presentation In the opinion of the Company's management, the
unaudited financial statements include all adjustments (consisting only of
normal adjustments) necessary for a fair presentation of the financial position
of the Company at November 30, 1996 and May 31, 1996, the results of its
operations for the three and six months ended November 30, 1996 and November 30,
1995, and cash flow statements for the six months ended November 30, 1996 and
November 30, 1995.

         It is suggested that the unaudited financial statements and notes
thereto in this Report be read in conjunction with the financial statements and
notes thereto in the Company's Annual Report on Form 10-KSB for the fiscal year
ended May 31, 1996 (the "1996 Annual Report") which was previously filed.

         The accompanying financial statements of the Company have been
presented on the basis that the Company is a going concern, which contemplates
the realization of assets and the satisfaction of liabilities in the normal
course of business. The Company reported a net loss of $871,905 for the six
month period ended November 30, 1996 and $1,576,480 for the year ended May 31,
1996. Additionally, at November 30, 1996, the Company has a working capital
deficit of $685,036 and an accumulated deficit of $13,692,778. Information
available at January 21, 1997 indicates that losses are continuing.

         The Company's continued existence is dependent upon its ability to
raise capital and subsequently market its Windows(R)-based purchasing
applications--GT Purchase PRO. Management believes that is will be successful in
raising additional capital through the placement of the Company's equity and
debt securities as discussed in Note 10 of the financial statements contained in
the 1996 Annual Report. Historically, the Company has been successful raising
funds from outside sources through private placement or other means. While the
Company believes that its most recent version of GT Purchase PRO has demand in
the marketplace, a successful equity placement will be dependent upon each
potential investor's evaluation of the prospects for generating revenues from
this product. The Company, however, provides no assurances that significant
revenues will be generated.

         The Company is considered a Small Business (SB) filer pursuant to
Securities and Exchange Commission (SEC) regulations. As such, the accompanying
financial statements, are not intended to, nor do they, include all disclosures
required by the SEC's Regulation S-X.


                                       6
<PAGE>

         2.       Summary of Significant Accounting Practices

         (a)      Accounting Estimates

         Management is required to make estimates and assumptions during the
preparation of financial statements in conformity with generally accepted
accounting principles. These estimates and assumptions affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements. They also affect the
reported amounts of net income (loss) during the period. Actual results could
differ materially from these estimates and assumptions.

         (b)      Revenue Recognition

         The Company generally recognizes product revenue at the time products
are shipped provided that no significant Company obligations remain outstanding
and collection of the resulting receivable is deemed probable by management.
Insignificant support obligations remaining at the time of shipment are accrued.
In fiscal 1996 and the first two quarters of fiscal 1997, the Company did not
obtain signed license agreements on certain product shipments, including all
shipments of its most recent version of GT Purchase PRO. For these shipments
where a license agreement does not exist and the probability of collection and
the existence of remaining obligations could not be determined the sale has not
been recorded and revenue has not been recognized in the accompanying financial
statements.

         Service revenues are comprised primarily of revenues derived from
maintenance agreements. Maintenance fees are recorded as deferred revenue and
recognized over the maintenance period which is usually 12 months. Also included
in deferred revenue are deferred product revenues which, based on their terms,
will be recognized as revenue when the various terms are met.

         (c)      Accounts receivable

         Accounts receivable is presented net of allowance for uncollectible
accounts of $74,429 at November 30, 1996 and $26,700 at May 31, 1996.

         (d)      Software Development Costs

         The Company is engaged in research and development activities in the
area of computer software. In accordance with generally accepted accounting
principles, costs incurred prior to determination of technological feasibility
are considered research and development and treated as a period cost and,
accordingly, charged to operations. Once technological feasibility has been
established, development costs are capitalized and amortized over the estimated
economic lives of the respective products. The Company has determined that an
estimated product useful life of three years is reasonable for amortization
purposes for certain new products, and that an estimated product useful life of
one year is reasonable for amortization purposes for certain improvements to
existing products.

                                       7
<PAGE>

         (e)      Property and Equipment

         Property and equipment are stated at cost, less accumulated
depreciation. Depreciation is charged to operations over the estimated lives of
the related assets, generally five to seven years, using the straight-line
method. Maintenance and repairs are charged to expense as incurred. Improvements
and betterments that extend the useful life of the assets are capitalized.

         (f)      Cash and Cash Equivalents

         The Company considers all highly liquid investments with original
maturities of 90 days or less to be cash equivalents for financial statement
purposes. Included in cash equivalents at May 31, 1996 was a certificate of
deposit totaling approximately $100,000.

         (g)      Loss Per Common Share

         Net loss per common share is computed by dividing net loss by the
weighted average number of shares outstanding during the period. For the six
month period ended November 30, 1996 and the year ended May 31, 1996, common
shares options and warrants were anti-dilutive and were not included in the
weighted average of common shares used in determining per share amounts.


                                       8
<PAGE>



Item 2.  Management's Discussion and Analysis of Plan of Operation

         Except for the historical information contained herein, this Quarterly
Report on Form 10-QSB may contain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including but not limited to (i) the potential for future
orders and the existence of expressions of interest in the GT Purchase PRO
product and (ii) the approval by the shareholders of the Company of an amendment
to the Company's Certificate of Incorporation increasing the authorized shares
of Common Shares of the Company and permitting the mandatory conversion of
certain convertible promissory notes. Investors are cautioned that
forward-looking statements are inherently uncertain. Actual performance and
results of operations may differ materially from those projected or suggested in
the forward-looking statements due to certain risks and uncertainties, including
but not limited to, the following risks and uncertainties: (i) the Company's
history of losses and accumulated deficit, declining revenues and the
uncertainty of future profitability; (ii) the Company's capital requirements and
the uncertainty of additional funding; (iii) the need for shareholder approval
to convert certain convertible promissory notes; (iv) the uncertainty of market
acceptance of GT Purchase PRO software; (v) new management and the need to
recruit sales, service and implementation personnel to decrease dependence on
third party developers and implementation; (vi) the intense competition in the
software field; and (vii) the dependence on one product and rapid technological
change in the industry. Additional information concerning certain risks and
uncertainties that would cause actual results to differ materially from those
projected or suggested in the forward-looking statements is contained in the
Company's filings with the Commission, including those risks and uncertainties
discussed under the caption "Risk Factors" in the Company's Annual Report on
Form 10-KSB for the year ended May 31, 1996. The forward-looking statements
contained herein represent the Company's judgment as of the date of this
Quarterly Report on Form 10-QSB, and the Company cautions readers not to place
undue reliance on such statements.

Results of Operations

For the Three Months Ended November 30, 1996 Versus 1995

         Total sales for the three months ended November 30, 1996 were $54,670
compared to $133,940 for the three months ended November 30, 1995, reflecting a
decrease of $79,270 of 59.2%. Product revenues for the three months ended
November 30, 1996 were ($1,300) compared to $87,025 for the three months ended
November 30, 1995. Certain product sales from prior periods were reversed during
the three months ended November 30, 1996, resulting in a reported negative
product sales figure. Service revenues were $55,970 for the three months ended
November 30, 1996 compared to $46,915 for the three months ended November 30,
1995, reflecting an increase of $9,055 or 19.3%. The increase in service
revenues was attributable to the maintenance revenues resulting from the initial
sales of the GT Purchase PRO product.

                                       9
<PAGE>

         The Company remains in the initial stages of selling and marketing the
new version of GT Purchase PRO. While there have been expressions of interest in
the product by a number of potential customers, there can be no assurance that
any of these prospective customers will buy the product. With respect to those
customers who have now placed orders for the product, there can be no assurance
that the Company will be able to successfully install the product and receive
full payment. GT Purchase PRO, by the nature of the product, the integral role
it plays in the purchasing process of large corporate organizations, and the
sales price of the product, has a long selling cycle; there can be no assurance
that the Company will be able to sustain its operations for a sufficient period
of time to close the sales, install the product, and receive full payment from
those prospective customers who do express a willingness to place an order for
the product. Finally, a number of large corporations that have expressed an
interest in the product have also expressed concern about the Company's
financial viability, and may therefore decide to not place an order for the
product.

         The cost of sales for the three months ended November 30, 1996 was
$160,266 compared to $39,951 for the three months ended November 30, 1995, an
increase of $120,315 or 301.2%. For the six months ended November 30, 1996, cost
of sales was $269,057 compared to $126,789 for the six months ended November 30,
1995, an increase of $142,268 or 112.2%. This increase was primarily due to
additional development and installation expense associated with the release of
the new version of GT Purchase PRO.

         Selling expense for the three months ended November 30, 1996 was
$164,083 compared to $96,798 for the three months ended November 30, 1995, a
increase of $67,285 or 69.5%. Selling expense in the three months ended November
30, 1996 increased by $94,696, or 136.5%, from the $69,387 in selling expense
incurred in the three months ended August 31, 1996. This increase was primarily
due to increased personnel and marketing expenses as sales and marketing
activity increased in the three months ended November 30, 1996. For the six
months ended November 30, 1996, selling expense was $233,470 compared to
$261,500 for the six month ended November 30, 1995, a decrease of $28,030 or
10.7%. The levels of selling expense for the six months ended November 30, 1996
declined, as compared to the six months ended November 30, 1995, due to higher
levels of personnel, advertising and marketing expenses in the three months
ended August 31, 1995.

         General and administrative expense for the three months ended November
30, 1996 were $375,475 compared to $211,937 for the three months ended November
30, 1995, an increase of $163,538 or 77.2%. For the six months ended November
30, 1996 general and administrative expense was $545,305 compared to $355,075,
an increase of $190,230 or 53.6%. This increase was primarily due to increased
professional fees, including costs of litigation which have since been settled
(see Part II below) and compensation expense due primarily to increased
headcount.

         For the three months ended November 30, 1996, the Company reported a
net loss of $644,564 (or $.07 per share) as compared to a net loss of $214,734
(or $.04 per share) for the prior year. For the six months ended November 30,
1996, the Company reported a net loss of $871,905 (or $.09 per share) as
compared to a net loss of $503,739 

                                       10
<PAGE>

(or $.10 per share) for the prior year. This loss was caused by the continuation
of low sales volumes and the increase of personnel, development, advertising and
marketing expense to support future potential sales growth. The per share loss
for the three month period ended November 30, 1996 grew by a proportionally
smaller amount than the total net loss, and the per share loss for the six month
period ended November 30, 1996 actually decreased while the total net loss
increased, due to the increase in the number of issued and outstanding shares.


Liquidity and Capital Resources

         The Company had a working capital deficit of $685,036 at November 30,
1996 as compared to a deficit of $645,258 at May 31, 1996, a decrease in working
capital of $39,778. The primary reason for the decrease in working capital was
the loss for the six month period and continued product development
expenditures. These were partly offset by the placement of convertible notes
during the three months ended November 30, 1996. As a result, cash decreased
from $249,525 at May 31, 1996 to $58,904 at November 30, 1996. Accounts
receivable decreased from $112,749 at May 31, 1996 to $58,079 at November 30,
1996, primarily due to the increase in the allowance for doubtful accounts from
$24,700 at May 31, 1996 to $74,429 at November 30, 1996.

         During the three months ending on November 30, 1996, the Company began
a private offering of its common shares and convertible debt which closed on
December 11, 1996 after having raised a total of $790,000 in gross proceeds for
the Company. On October 25, 1996, the Company issued a convertible note in the
original amount of $750,000 to an accredited investor on the terms set forth in
the private placement, and on December 11, 1996, the Company issued 160,000
shares of Common Shares to two accredited investors, at a price per share of
$0.25, resulting in gross proceeds to the Company of $40,000. The convertible
debt was issued at face value, has a two year term, accrues interest beginning
six months after issuance, and will convert to common shares at a conversion
price of one share for each $0.25 of outstanding principal and accrued interest
upon the filing of an amendment to the Company's Certificate of Incorporation
increasing the number of authorized common shares. The Convertible Note is
reflected on the Company's balance sheet net of $69,665 in issuance costs,
$39,665 of which were paid in cash and the balance in a note which, among other
things, is convertible into common shares at $0.25 per share. As additional
consideration for the private offering, the Company issued common shares
purchase warrants exercisable for one common share for every two common shares
or conversion shares purchased, at an exercise price to be determined based on a
formula. There can be no assurance that the shareholders of the Company will
approve the amendment to the Company's Certificate of Incorporation that is
required for the mandatory conversion of the convertible notes issued in the
private placement.



                                       11
<PAGE>



PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

         On November 4, 1996, the Company settled outstanding litigation matters
with a former employee and Parera Information Services, a software developing
company, contracted to provide software development for the Company. Under the
terms of the settlement, the former employee and Parera agreed to return the
Company's property and release the copyright, wages and breach of contract
claims asserted in the litigation matters. In exchange the Company agreed to
release claims it had against the former employee and Parera and make a
settlement payment of $105,000 in three installments. The first installment
payment has been made. The remaining installments are due on March 10 and June
10. Although the Company was confident that it would prevail in these litigation
matters, the decision to settle was based on the expense of continued litigation
and the Company's desire to focus on product development and sales without
further distraction from the litigation.


Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits

                  None

         (b)      Reports on Form 8-K

                  Current Report on Form 8-K, dated October 15, 1996.


                                       12
<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.

                                   GREENTREE SOFTWARE, INC.



Date:  January 21, 1997            By:    /s/ Jeffrey B. Pinkerton
                                      ----------------------------
                                   Name: Jeffrey B. Pinkerton
                                   Title:  President and Chief Financial Officer