<PAGE>
 
________________________________________________________________________________


                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                            _______________________

                                   FORM 10-Q
                            _______________________


(Mark One)
[X]     Quarterly report pursuant to section 13 of 15(d) of the Securities
        Exchange Act of 1934 for the quarterly period ended March 31, 1997

[ ]     Transition report pursuant to section 13 of 15(d) of the Securities
        Exchange Act of 1934 for the transition period
        from _________ to __________ 
          


                          Commission File No. 0-21038


                               NETWORK SIX, INC.
            (Exact name of registrant as specified in its charter)



         Rhode Island                                  05-036-6090
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
 incorporation or organization)


               475 Kilvert Street, Warwick, Rhode Island  02886
         (Address of principal executive offices, including zip code)

                                (401) 732-9000
             (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.   Yes    X          No 
                                         ---------        ---------

As of March 31, 1997, there were 721,192 shares of the registrant's Common
Stock, $.10 par value, outstanding.

________________________________________________________________________________


<PAGE>
 
                        PART 1 - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                               NETWORK SIX, INC.
                            Condensed Balance Sheets
<TABLE>
<CAPTION>
 
                                                                March 31, 1997         Dec. 31, 1996
                                                                ______________         _____________

                                                                 (unaudited)
ASSETS
------
<S>                                                             <C>                 <C>
CURRENT ASSETS:
   Cash...............................................              $  601,116            $  127,581
   Contract receivables, less allowance for
          doubtful accounts of $50,000 at
          March 31, 1997 and $97,856 December 31,                      680,767             1,528,757
          1996........................................
   Costs and estimated earnings in excess of
          billings on contracts.......................               1,404,980             1,864,939
   Income taxes receivable............................                 490,043               516,046
   Other assets.......................................                 144,586               158,976
                                                                    ----------            ----------
          Total current assets........................               3,321,492             4,196,299
 
Property and equipment
   Computers and equipment............................                 613,758               620,042
   Furniture and fixtures.............................                 180,611               194,878
   Leasehold improvements                                               20,191                20,191
                                                                    ----------            ---------- 
 
                                                                       814,560               835,111
Less:  accumulated depreciation and  amortization.....                 706,111               696,596
                                                        
 
          Net property and equipment                                   108,449               138,515
Deferred taxes........................................                 190,624               190,624
Contract receivables and costs in excess of billings
   on Hawaii contract..................................              3,571,824             3,571,824
 
Other assets...........................................                696,807               176,302
                                                                    ----------            ----------
 
                                                                    $7,889,196            $8,273,564
                                                                    ==========            ========== 
 
</TABLE>

                                       2
<PAGE>
 
<TABLE>
<CAPTION>
 
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S>                                                              <C>                                 <C>
CURRENT LIABILITIES:
    Current installment of obligations under
         capital leases...............................             $    70,458             $   70,190
    Notes payable to bank.............................               1,800,000              1,800,000
    Trade accounts payable............................               1,584,272              1,732,332 
    Accrued salaries and benefits.....................                 437,626                470,767
    Accrued subcontractor expense.....................                  41,903                 22,244
    Accrued restructuring.............................                       0                  5,383 
    Note payable - short term.........................                 146,993                143,646    
    Other accrued expenses............................                 440,615                508,194
    Billings in excess of costs and estimated 
         earnings on contracts........................                  64,708                 31,771
    Deferred taxes....................................                 270,021                270,021
    Preferred stock dividends payable.................                 280,993                234,760
                                                                   -----------            -----------
   
         Total current liabilities....................               5,137,588              5,289,308
                                                                   -----------            -----------
Obligations under capital leases, excluding current
    installments......................................                 155,408                171,608
    Note payable - long term..........................                  25,843                 63,871
                                                                   -----------            -----------
         Total Liabilities............................               5,318,840              5,524,787
                                                                   -----------            -----------
STOCKHOLDERS' EQUITY:
    Series A convertible preferred stock, $3.50 par
         value.  Authorized 857,142.85 shares; issued
         and outstanding 714,285.71 shares
         at March 31, 1997 and December 31,
         1996; liquidation of $3.50 per share plus
         unpaid and accumulated dividends.............               2,235,674              2,235,674
 
   Common stock, $.10 par value.  Authorized
         4,000,000 shares; issued 721,192 shares at
         March 31, 1997 and 
         December 31, 1996............................                  72,119                 72,119
 
    Additional paid-in capital........................               1,653,295              1,653,296

    Retained earnings (accumulated deficit)...........              (1,384,685)            (1,206,265)

    Treasury stock, 3,748 common shares at cost.......                  (6,047)                (6,047)
                                                                   -----------            -----------
         Total stockholders' equity...................               2,570,356              2,748,777
                                                                   -----------            -----------

         Total Liabilities & Stockholder's Equity.....             $ 7,889,196            $ 8,273,564
                                                                   ===========            ===========

</TABLE>

                                       3
<PAGE>
 
                               NETWORK SIX, INC.
                      Condensed Statements of Operations
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                  QUARTER ENDED   QUARTER ENDED
                                                      3/31/97         3/31/96
                                                  -------------   -------------
<S>                                               <C>             <C>
Contract revenue earned.........................     $1,414,186      $3,686,829
Cost of revenue earned..........................        973,140       2,233,555
                                                  -------------   -------------

   Gross profit.................................        441,045       1,453,274

Selling, general, & administrative expenses.....        526,331         996,338
                                                  -------------   -------------
   Income before interest and taxes.............        (85,286)        456,936
Other deductions (income)
   Interest Expense.............................         50,658         101,000
   Interest Earned..............................        (3,757)        (40,678)
                                                  -------------   -------------
Income (loss) before income taxes...............      (132,187)        396,614

Income taxes....................................             0         164,043
                                                  -------------   -------------

NET INCOME (loss)...............................    $ (132,187)      $  232,571
                                                  -------------   -------------
Per share information:
   Net income (loss) used in fully diluted 
    calculation.................................     ($132,187)     $  232,571

   Less preferred dividend......................    $   46,233      $   46,233
                                                  -------------   -------------
   Net income (loss) used in primary per share
     calculation................................     ($178,420)     $  186,338
                                                  -------------    ------------
Net income (loss) per share:
   Primary:
    Net income (loss)...........................    $    (0.24)     $     0.26
                                                  -------------   -------------
   Fully diluted:                                
    Net income (loss)...........................    $    (0.24)     $     0.26
                                                  -------------   -------------
 
Shares used in computing net income (loss) 
 per share:
 
   Primary......................................       729,050         712,205
   Fully Diluted................................       729,050         890,777
 
 
</TABLE>
 

                                       4
<PAGE>
 
                               NETWORK SIX, INC.
                       Condensed Statements of Cash Flow
                                  (Unaudited)
<TABLE>
<CAPTION>
 
<S>                                                             <C>            <C>
                                                                Three months   Three months
                                                                   ended          ended
                                                                  3/31/97        3/31/96
                                                                ------------   ------------
Cash Flows from operating activities:
Net income (loss)..........................................     $   (132,187)   $   232,571
Adjustments to reconcile net income to net cash provided by
   operating activities:
       Depreciation and amortization.......................           24,162         80,003
       Provision for doubtful accounts.....................          (47,856)             -
       Loss on sale/disposal of fixed assets...............            4,454              -
       (Increase) decrease in contract receivables.........          895,847       (480,445)
       Increase in costs and estimated earnings in excess
          of billings on contracts.........................          459,958        (70,852)
       Decrease in income taxes receivable.................           26,003        483,904
       Increase in other current assets....................           14,390         30,301
       Decrease in deferred tax assets.....................                -         43,634
       Decrease in due from officer........................                -         14,080
       Decrease in long term receivables...................                -         17,798
       (Increase) decrease in other assets.................         (520,505)       (12,595)
       Increase in Long Term Amounts Due from      
          Hawaii...........................................                -        940,465
       Increase (decrease) in trade accounts payable.......         (148,060)       175,482
       Increase (decrease) in accrued salaries and benefits          (33,141)             -
       Increase (decrease) in accrued subcontractor
          expenses.........................................           19,659              -
       Increase (decrease) in other notes payable..........          (34,681)             -
       Increase (decrease) in other accrued expenses.......          (67,579)      (304,952)
       Increase (decrease) in accrued restructuring........           (5,383)             -
       Increase (decrease) in billing in excess of costs
          and estimated earnings on contracts..............           32,937       (248,297)
       Increase (decrease) in deferred tax liability.......                -          8,828
                                                                 -----------   ------------
       Net cash provided by operating activities                     488,018        909,926
 
Cash flows from investment activities:
   Proceeds from sales of fixed assets.....................            1,449              -
   Capital expenditures....................................                -         (2,310)
                                                                ------------   ------------
       Net cash used in investing activities...............            1,449         (2,310)
                                                                ------------   ------------
Cash flows from financing activities:
   Principal payments on capital lease obligations.........          (15,932)       (37,281)
   Proceeds from (payments on) notes payable to bank.......                -     (1,150,000)
   Payment of dividends....................................                -              -
                                                                ------------   ------------
       Net cash used in financing activities                         (15,932)    (1,175,002)
                                                                ------------   ------------
Net increase (decrease) in cash............................          473,535       (267,386)
Cash at beginning of the period............................          127,581      1,205,652
                                                                ------------   ------------

Cash at end of period......................................     $    601,116    $   938,266
                                                                ============   ============
Supplemental cash flow information:
   Cash paid (received) during the year for:
       Income taxes........................................     $    (26,003)  $         -
       Interest............................................           50,772        125,406
                                                                ============   ============
                                                  
                                                                
</TABLE>

                                       5
<PAGE>
 
                               NETWORK SIX, INC.
                         Notes to Financial Statements
                                 March 31, 1997
                                  (unaudited)


(1) Basis of Presentation

    The interim financial statements have been prepared without audit, pursuant
    to the rules and regulations of the Securities and Exchange Commission
    (SEC). Certain information and footnote disclosures, normally included in
    financial statements prepared in accordance with generally accepted
    accounting principles, have been condensed or omitted pursuant to SEC rules
    and regulations; nevertheless, management believes that the disclosures
    herein are adequate to make the information presented not misleading. These
    financial statements should be read in conjunction with the financial
    statements and notes thereto included in the Form 10K and Proxy Statement.
    In the opinion of management, all adjustments, consisting only of normal
    recurring adjustments, necessary to present fairly the financial position of
    the Company as of March 31, 1997, and the statements of income and cash
    flows for the three month periods ended March 31, 1997 and 1996, have been
    included herein. The results of operations for the interim periods are not
    necessarily indicative of the results for the full years.
    
(2) Certain 1996 balances have been reclassified to conform to the 1997 
    presentation.


                                       6


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

General
         In January 1997 the Company announced that it had been selected as an
approved vendor with the State of Arizona, Department of Administration, to
provide data processing, management and consulting services. The Company was one
of several vendors selected in a competitive procurement process from a very
large field to provide Arizona services. The exact value of the contract and
scope of services are undetermined at this time.

         Also in January 1997 the Company announced the formation of a Network
Services Division. The new division, based in Warwick, RI, will provide system
administration, consulting, design, implementation and support services in the
LAN, WAN, Internet/intranet and remote communications technology areas. The
decision to create this division was based on the current and future market
demand. Although the division is new, the Company has considerable experience in
these areas, having worked most recently on remote cellular communications, Web
page development, LAN/WAN development and legacy system/LAN integration
projects. 

         In March 1997 the Company announced that it had signed the contract
with the State of Maine, Department of Human Services to construct and install a
child welfare system for $6.3 million. Unisys is a subcontractor to the Company 
on this contract and will play a significant role in transferring and modifying 
the child welfare system they built for Indiana to Maine.

         In March 1997 the Company received a $332,000 change order to its
contract with the State of Rhode Island Department of Health to provide a
centralizied data management, tracking and communications system which will link
the State's databases into the Rhode Island Children's Access Program or
"RICAP". This cchange order increases the contract value to $1.9 million.

         In March 1997 the Company announced the resignation of Mr. James J.
Trainor from the Board of Directors and the election of Mr. Clifton C. Dutton to
the Board of Directors.

Results of Operations - Three Months Ended March 31, 1997 Compared to 1996

         Contract revenue decreased $2,272,643 or 62% from $3,686,829 in the
three months ended March 31, 1996 to $1,414,186 in the three months ended March
31, 1997 primarily due to the substantial completion of the Idaho CSE and the
Virgin Island VIPERS projects. Also, the level of activity and revenue
recognition on the Hawaii contract is $ one million less than one year ago.

         Cost of revenue earned, consisting of direct employee labor, direct
contract expense and subcontracting expense, decreased $1,547,273 or 61% from
$2,520,413 in the three months ended March 31, 1996 to $973,140 in the three
months ended March 31, 1997 due to the decreased effort to support the lower
level of business and the lower reliance on subcontractor labor.

         Gross profit decreased $725,370 or 62% from $1,166,415 for the three
months ended March 31, 1996 to $441,045 for the three months ended March 31,
1996. Gross profit as a percentage of revenue earned decreased from 31.6% for
the three months ended March 31, 1996 to 31.2% for the three months ended March
31, 1997. The decrease in gross profit dollars is due to a lower level of
business activity.

         Selling, general and administrative (SG&A) expenses decreased $470,007
or 47.2% from $996,338 in the three months ended March 31, 1996 due to reduction
in personnel and reduction of expenses due to the lower level of revenue. On a
percentage basis, SG&A expenses increased to 37% from 27% primarily as a
consequence of higher legal fees associated with: (1) the Company's Hawaii-
related litigation; (2) finalizing the Maine contract; and (3) negotiating a new
Term Loan. See Part II - Other Information, Item 1 - Legal Proceedings.

         As a result of the foregoing, income before income taxes decreased
$528,801, or 133.3% from $396,614 for the three months ended March 31, 1996 to a
loss of $132,187 for the three months ended March 31, 1997.

                                       7
<PAGE>
 
         Net income decreased $364,758, or 156.8% from $232,571 for the three
months ended March 31, 1996 to a loss of $132,187 for the three months ended
March 31, 1997.


Liquidity and Capital Resources

         In order to finance bid preparation costs and to obtain sufficient
collateral to support performance bonds required by some state government
agencies, the Company has, in the past, entered into joint ventures with other
firms with greater financial resources when bidding for contracts. The Company
expects to continue and expand this practice prospectively as well as to pursue
more time and material contracts than it has historically pursued. Time and
materials contracts generally do not require performance bonds and almost always
involve less risk to deliver what the customer requires.

         The Company has historically not received its first contract progress
payments on fixed price contracts until approximately three to six months after
contract award, which itself was as much as 12 months after proposal preparation
commences. The Company was therefore required to fund substantial costs well
before the receipt of related income, including marketing and proposal costs and
the cost of a performance bond. Prospectively, the Company expects to tighten up
this timetable, thereby reducing the requirement for additional working capital.

         The Company has funded its operations through cash flows from
operations, bank borrowings, and private placements of equity securities. Net
cash provided by operating activities was $488,018 and $909,926 in the three
months ended March 31, 1997 and 1996 respectively. Fluctuations in net cash
provided by operating activities are primarily the result of changes in net
income, contract and income tax receivables, accounts payable and costs and
estimated earnings in excess of billings on contracts due to differences in
contract milestones and payment dates.
         
         On April 30, 1997 the Company signed a new Term Loan (the Loan) with
its bank. The Company is required to reduce outstanding borrowings under the
Loan from $1.8 million to the following limits: October 15, 1997 - $1,500,000,
November 15, 1997 - $1,200,000 and December 15, 1997 - $900,000. The interest
rate on the Loan is 16%, the difference between 16% and prime plus 2% is accrued
and payable at maturity, which is January 31, 1998. There are also a number of
provisions for accelerated payment to reduce the loan balance. In addition, the
Company agreed to provide the bank with a warrant to purchase 50,487
unregistered shares of the Company's Common Stock at $1.75 per share,
exercisable immediately with an expiration date of April 30, 2002, plus 15% of
any recovery received from its litigation in Hawaii. The warrants and the bank's
right to a percentage of any recovery terminate if the Company pays down the
Loan completely or raises $1 million of equity capital prior to maturity. The
Company's obligations under the Loan are secured by substantially all of the
assets of the Company. The agreement also provides that the Company may not pay
any dividends on its capital stock without the consent of the bank.

                                       8
<PAGE>
 
                          PART 11 - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         On November 12, 1996 the State of Hawaii filed a lawsuit in the Circuit
Court of the First Circuit of the State of Hawaii against the Company and Aetna
Casualty and Surety and Federal Insurance Company for damages due to breach of
contract (the "Hawaii litigation") . Aetna Casualty and Surety and Federal
Insurance Company provided the $10.3 million performance bond on the Company's
contract with the State of Hawaii to develop and install the State's child
enforcement system. The suit alleges the Company failed to meet contractual
deadlines, provided late, incomplete and/or unsuitable deliverables, and
materially breached the contract by never completing the design, the application
programming, and the system test and systems implementation. The State is
seeking general damages, consequential and special damages, liquidated damages,
attorneys' fees, reimbursement for the cost of the suit and interest costs that
the court deems just and proper all in an unspecified amount.

         The Company vigorously denies the State's allegations and, on January
23, 1997 filed a counter claim against the State alleging that the State
breached the Company's contract. The Company is seeking $70 million in damages
and is alleging that the State had fraudulently induced the Company into
designing and building a system having capabilities and extraordinary features
far beyond the scope of the Company's contract and industry standards. The
fraudulent inducement was in the form of withholding payments, improper
rejection of work that satisfies the requirements of the contract and verbal and
written abuse of the Company's employees and management.

         In addition, Unisys, a vendor providing equipment under the Company's
Hawaii contract, has submitted a $896,000 claim against the $10.3 million
performance bond. In February 1997 the State released all but $1.1 million of
the performance bond, the remainder is intended to cover amounts payable to
Unisys and other subcontractors. In April 1997, after a detailed review of their
records and discussions with the Company, Unisys agreed to lower their claim to 
$859,602.

         On December 13, 1996, Complete Business Solutions, Inc. (CBSI), a
subcontractor to the Company on the Hawaii contract, filed a lawsuit against the
Company in the Superior Court of the State of Rhode Island for $517,503 which
the Company had previously accrued, plus interest, costs and attorney's fees.
The Company disputes the $517,503 owed to CBSI and filed a counterclaim against
CBSI on January 13, 1997 alleging, among other things, that CBSI failed to
complete its duties required under the subcontract with the Company in a timely
manner, improperly engaged in negotiations with the State of Hawaii to complete
the project, hired and attempted to hire employees of the Company in violation
of its subcontract agreement with the Company and obtained and utilized
confidential information inappropriately. Also, the Company alleges that CBSI
owes the Company $482,750 as of December 31, 1996 for which the Company has not
established a reserve for uncollectibility.

                                       9
<PAGE>
 
         On February 3, 1997, the Company filed a third-party complaint ("TPC")
in the Hawaii litigation against MAXIMUS Corporation ("MAXIMUS") and CBSI.
MAXIMUS has been the State of Hawaii's contract supervisor and advisor since the
inception of the Hawaii project. The allegations the Company has made against
CBSI in this TPC are substantially similar to the allegations made against CBSI
in the Company's counterclaim to CBSI's December 13, 1996 lawsuit brought
against the Company in Rhode Island. The Company alleged, moreover, that MAXIMUS
is liable to the Company on grounds that: (i) the Company was an intended third
party beneficiary under the contract between the MAXIMUS and Hawaii; (ii)
MAXIMUS tortiously interfered in the contract between the Company and Hawaii;
(iii) MAXIMUS negligently breached duties to the Company and (iv) MAXIMUS aided
and abetted Hawaii in Hawaii's breach of contract. The Company 's complaint
seeks $60 million in damages.

         On March 27, 1997, MAXIMUS filed a motion to dismiss certain counts of 
the TPC germane to them.  A hearing was held on April 17, 1997 and the motion 
was denied.

         Management believes that the Company's claims against the State,
MAXIMUS and CBSI have substantial merit and will vigorously pursue these claims.
There is substantial uncertainty, however, inherent in all litigation. If the
Company were not to prevail in its suit with the State, such a result could have
a material adverse effect on the Company and jeopardize the Company's ability to
continue as a going concern. Management of the Company and its attorneys are
unable to predict with any certainty the ultimate outcome of this litigation,
including the probability that this litigation will have a negative impact on
the Company or the dollar amount of the potential impact. At March 31, 1997, the
Company had unbilled work-in-process and related receivables from the State and
CBSI of approximately $3.57 million, which exceeds stockholders' equity of
approximately $2.57 million, for which no allowance for uncollectibility has
been recorded. The Company has not accrued for any potential liability to the
State which may result from this litigation. In addition, the Company has not
accrued for any legal expense to be incurred in connection with this litigation,
which could be significant.

ITEM 2.  CHANGE IN SECURITIES

         None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None

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

         None.
 


ITEM 5.  OTHER MATERIALLY IMPORTANT EVENTS

         None

ITEM 6.  EXHIBITS AND REPORTS

         (a)   None

         (b)   No reports on Form 8-K have been filed during the quarter for
               which this report is filed.

                                       10
<PAGE>
 
                                  SIGNATURES


         Pursuant to the requirements 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.


                               Network Six, Inc.



Date: May 15, 1997             By: /s/ Kenneth C. Kirsch
                                 ---------------------------------------
                                   Kenneth C. Kirsch
                                   Chairman, President and
                                   Chief Executive Officer



                               By: /s/ Dorothy M. Cipolla
                                 ---------------------------------------
                                   Dorothy M. Cipolla
                                   Chief Financial Officer and Treasurer
                                   (principal financial officer)
 

                                       11