SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


[X]        Quarterly  report  pursuant to Section 13 or 15(d) of the  Securities
           Exchange Act of 1934

           for the quarterly period ended March 31, 1997.

[_]        Transition  report  pursuant to Section 13 or 15(d) of the Securities
           Exchange Act of 1934

           for the transition period from _______________ to _____________

                         Commission file number 0-15873

                             LASERGATE SYSTEMS, INC.
              (Exact name of small business issuer in its charter)

          Florida                                                 59-2543206
(State or other jurisdiction of                                (I.R.S. Employer
 incorporation or organization)                              Identification No.)

               28050 US 19 N, Suite 502, Clearwater, Florida 34621
               (Address of principal executive office) (Zip Code)

                    Issuer's telephone number: (813) 725-0882



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  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 practical date.

Class                                             Outstanding at May 14, 1997
-----                                             ---------------------------
Common stock $0.03 par value                      7,362,061

Transitional Small Business Disclosure Format (check one) Yes  [_]    No  [X]




<PAGE>



                    LASERGATE SYSTEMS, INC. AND SUBSIDIARIES

                FORM 10-QSB FOR THE QUARTER ENDED MARCH 31, 1997

                                      INDEX

Part I.    FINANCIAL INFORMATION PAGE

           Item 1.    Consolidated Financial Statements                       3

                      Consolidated Balance Sheets as of March 31, 1997        3
                      (unaudited) and December 31, 1996

                      Consolidated Statements of Operations                   4
                      (unaudited) for the three months ended
                      March 31, 1997 and March 31, 1996

                      Consolidated Statements of Cash Flows                   5
                      (unaudited) for the three months ended
                      March 31, 1997 and March 31, 1996

                      Notes to Financial Statements (unaudited)               6


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

Part II.   OTHER INFORMATION

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

           Signature                                                         13



<PAGE>



                    Lasergate Systems, Inc. and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                     ASSETS
                                                                      March 31,     December 31,
                                                                        1997            1996
                                                                    ------------    ------------
                                                                    (Unaudited)
<S>                                                                 <C>             <C>         
Current assets
      Cash and cash equivalents                                     $    634,507    $  1,924,825
      Accounts receivable, net of allowance for
        doubtful accounts of  $159,624 and $147,124                      786,102         868,931
      Inventories                                                        122,028         254,901
      Prepaid expenses                                                    85,378          40,966
                                                                    ------------    ------------
            Total current assets                                       1,628,015       3,089,623

Property and equipment, net                                              326,894         304,024
Note receivable-trade                                                    144,856            --
Systems and software costs, net of amortization of $1,539,131
 and $1,525,856                                                          321,554         242,739
Goodwill, net of amortization of $298,815 and $265,568                 2,349,458       2,382,705
Customer lists and support contracts, net of amortization of
 $159,375 and $141,667                                                   265,625         283,333
Other assets, net                                                         45,685         134,521
                                                                    ------------    ------------

Total assets                                                        $  5,082,087    $  6,436,945
                                                                    ============    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
      Notes payable, bank                                                 27,403          28,628
      Accounts payable, trade                                            633,201         542,671
      Deferred revenues                                                  423,152         909,516
      Accrued product costs                                              578,362         570,919
      Accrued expenses                                                   726,213       1,128,658
                                                                    ------------    ------------
Total current liabilities                                              2,388,331       3,180,392
Obligations to issue common stock                                        140,000         140,000
                                                                    ------------    ------------

      Total liabilities                                                2,528,331       3,320,392
Stockholders' equity:
      Preferred stock, $.03 par value, 2,000,000 shares
           authorized, 8,000 shares issued and outstanding at
           March 31, 1997 and December 31, 1996,  respectively               240             240
      Common stock, $.03 par value, 20,000,000 shares authorized,
           7,362,061 issued and outstanding at
           March 31, 1997 and December 31, 1996 , respectively           220,862         220,862
      Additional paid-in capital                                      19,818,769      19,818,769
      Less:  Common stock, $.03 par value, 20,000 shares
           at March 31, 1997 and December 31, 1996, respectively,
           subject to put options                                       (140,000)       (140,000)
      Accumulated deficit                                            (17,346,115)    (16,783,318)
                                                                    ------------    ------------
           Total stockholder's equity                                  2,553,756       3,116,553
                                                                    ------------    ------------
      Total liabilities and stockholders' equity                    $  5,082,087    $  6,436,945
                                                                    ============    ============
</TABLE>

        The accompanying notes are an integral part of these statements.




                                       -3-

<PAGE>


                    Lasergate Systems, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)



                                            Three Months Ended March 31,
                                            ----------------------------
                                                1997           1996
                                            -----------    -----------

Revenues                                    $ 1,278,576    $ 1,465,989

Operating Expenses:
      Cost of revenues                          853,299        751,890
      Development                               132,637         26,677
      Selling, general and administrative       867,083        863,810
                                            -----------    -----------
              Operating loss                   (574,443)      (176,388)

Other income (expense)
      Interest                                   10,241         (7,125)
      Other, net                                  1,405         19,558
                                            -----------    -----------


      Loss before income taxes                 (562,797)      (163,955)

Income taxes                                       --             --
                                            -----------    -----------

      Net loss                              $  (562,797)   $  (163,955)
                                            ===========    ===========
Net loss per common share                   $      (.08)   $      (.04)
                                            ===========    ===========


Weighted Average Common Stock Outstanding     7,362,061      4,632,809
                                            ===========    ===========





        The accompanying notes are an integral part of these statements..



                                       -4-

<PAGE>

                    Lasergate Systems, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                Three Months Ended March 31,
                                                                                ----------------------------
                                                                                    1997           1996
                                                                                -----------    -----------
<S>                                                                             <C>            <C>         
Cash flows from operating activities:
      Net loss                                                                  $  (562,797)   $  (163,955)
      Adjustments to reconcile net loss to cash used in operating activities:
      Depreciation of  property and equipment                                        33,822          4,379
      Amortization of intangibles                                                    71,313        132,496
      Increase in provision for doubtful accounts                                    12,500          7,777
      Compensation recognized from grant of stock options                              --           46,875

Decrease (increase) in:
          Accounts receivable, trade                                                 70,329       (479,782)
           Inventories                                                              132,873         30,723
           Prepaid expense                                                          (44,412)        57,407
           Other                                                                     81,753         10,007
      Increase (decrease) in:
          Accounts payable and accrued expenses                                    (311,915)        17,686
          Accrued product costs                                                       7,443       (203,193)
          Deferred revenue                                                         (486,364)       192,949
                                                                                -----------    -----------

          Net cash used in operating activities                                    (995,455)      (346,631)

Cash flows from investing activities:
      (Additions) to, disposal of, property and equipment                           (56,692)         1,632
      Capitalized software development costs                                        (92,090)          --
                                                                                -----------    -----------
          Net cash provided (used) in investing activities                         (148,782)         1,632

Cash flows from financing activities:
      Issuance of note receivable                                                  (144,856)          --
      Repayment of loans, other                                                      (1,225)          --
                                                                                -----------    -----------

 Net cash provided by financing activities                                         (146,081)          --
                                                                                -----------    -----------


      Net increase (decrease) in cash and cash equivalents                       (1,290,318)      (344,999)

Cash and cash equivalents, beginning of period                                    1,924,825        656,506
                                                                                -----------    -----------

Cash and cash equivalents, end of period                                            634,507    $   311,507
                                                                                ===========    ===========
</TABLE>


        The accompanying notes are an integral part of these statements.


                                       -5-
<PAGE>





                    LASERGATE SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1997


NOTE 1- FINANCIAL STATEMENT PRESENTATION AND OTHER INTERNAL PRESENTATION

INTERIM PRESENTATION

The interim consolidated  financial  statements of Lasergate Systems,  Inc. (the
"Company") are unaudited and should be read in conjunction with the consolidated
financial  statements  and notes  thereto in its Form  10-KSB for the year ended
December 31, 1996. In the opinion of management,  the accompanying  consolidated
financial  statements (with all explanations  contained in these Notes ) contain
all adjustments  necessary for a fair  presentation of the results of operations
for this interim period.  Interim results are not necessarily  indicative of the
results for a full fiscal year.

OPERATIONAL AND FUNDING MATTERS AND REPORTING BASIS

The information  contained in Note 3 to the Financial Statements included in the
Company's  Annual  Report on Form 10-KSB for the fiscal year ended  December 31,
1996  remains  current  related  to the  status  of  certain  of  the  Company's
operational  and  funding  matters  and,  accordingly,  should be referred to in
conjunction with this Form 10-QSB.

The  Company's  financial  statements  have been  prepared  in  conformity  with
generally accepted accounting principles,  which contemplate continuation of the
Company as a going  concern.  For the three  months  ended March 31,  1997,  the
Company  incurred  a  loss  of  $562,797  and  has  an  accumulated  deficit  of
$17,346,115  and used cash in operating  activities of $995,455 during the first
quarter of 1997.

In recent  years the Company has relied upon  proceeds  from  private and public
placements  and  loans  (some of which  were  converted  to stock)  from  former
principal stockholders to fund its operations.

In view of the matters described in the preceding paragraphs,  recoverability of
a major portion of the recorded  asset  amounts  shown in the Company's  balance
sheet is dependent  upon  continued  operation of the Company,  which in turn is
dependent upon the Company's  ability to succeed in its future  operations.  The
financial   statements   do  not  include  any   adjustments   relating  to  the
recoverability  and  classification  of  recorded  asset  amounts or amounts and
classification  of  liabilities  that might be  necessary  should the Company be
unable to continue in existence.

REVENUE RECOGNITION

Revenues  from the sale of  equipment  and  software  licenses,  which have been
predominately  under short-term  contracts during the periods  presented herein,
are recognized  upon the acceptance of the system by the customer  provided that
no significant  vendor or post-contract  support  obligations remain outstanding
and  collection of the resulting  receivable is probable.  Revenues from special
sales sold under  evaluation  periods are  recognized at the end of this period.
Revenues  from  the sale of  equipment  and  software  licenses  with a  planned
installation  period exceeding 90 days are accounted for using the percentage of
completion method.

Revenues from post contract  customer  support and  maintenance  are  recognized
ratably over the maintenance period if collectibility is probable.


                                       -6-

<PAGE>



CLASSIFICATION OF EXPENSES

Cost of revenues  includes the costs  associated  with the hardware and software
acquired for the Company's  customers and the estimated  direct costs associated
with the engineering  (mostly  software  customization)  and installation of the
system.  Cost of revenues also includes the estimated direct cost related to the
support and maintenance of the Company's service contracts.  Net Loss Per Common
Share

NET LOSS PER COMMON SHARE

The net loss per common share amount is based on the weighted  average number of
common shares outstanding during the period.  Common stock equivalents  (options
and warrants) and the effect of the convertible  securities were not included in
the calculation of net loss per share because they are antidilutive.

NOTE 2-SYSTEMS AND SOFTWARE COSTS

Historically,   the  Company  has  marketed   products  that  typically  require
substantial   customization   in  order  to  meet  the   customers'   particular
requirements.  During  1996,  the company  changed its  strategy  and decided to
design  products in a modular  fashion.  The modules  will  consist of a primary
product with optional  pre-developed  modules and a configuration  layer to meet
specific  customer needs that would require limited or no  customization  by the
Company.  The  implementation  of this  project  will  afford  the  Company  the
opportunity to use the same development tool (high level  programming  language)
for each module,  thus providing a certain degree of consistency  and efficiency
in the product  development  process.  Accordingly,  the Company  commenced  the
development  of this new product.  As of March 1997,  the Company had  installed
limited  functionality  versions at four different sites. As of May 13, 1997 the
Company had completed the general release  version of the new general  admission
product  including  all modules  originally  planned,  and has installed it at 8
sites including all sites which had earlier versions.  The development effort is
now focused on a group of functions for the ski industry. A beta test of the ski
product is  currently  scheduled  for July 1, 1997 and general  availability  is
currently scheduled for August 1, 1997.

As a result of this development effort and new product introduction, the Company
expects to achieve  cost  reductions  beginning in late 1997 in areas of product
development  and  customer  support.  In  addition,  the product will have a new
appearance  which is more  user  friendly  and will  allow  the user to modify a
configuration  layer  (without  access to the source  code)  which can remain in
place when  updating  the  product to a new  revision  level.  As a result,  the
Company expects its new products to be more competitive in the market.

The Company estimates the cost of developing the new general admission  products
incorporating the modular concept will total approximately  $400,000 to $450,000
by the second  quarter of 1997. In the first  quarter of 1997,  $92,000 of these
costs were  capitalized.  Since  inception,  development  costs  incurred  total
$223,000, and a total of $117,000 has been capitalized.

NOTE 3 - NOTE RECEIVABLE-TRADE

In  connection  with an early sale of the  Company's  new  product,  the Company
accepted a note receivable from a customer in the amount of $144,856 with a term
of 3 years  and  bearing  interest  at the rate of 10% per  annum.  Payments  of
principal  and interest are to be made on December 31, 1997,  1998,  and 1999 in
the  amounts  of  $50,000,  $61,185  and  $65,000  respectively.  This  note  is
classified as a long-term asset.

NOTE 4 - PRODUCT COST LIABILITY (WARRANTY ALLOWANCE)

An accrued warranty allowance of $578,362 has been provided to cover the cost of
enhancements to be made (free of charge) to systems  installed in prior periods.
During the first quarter of 1997,  $40,000 was spent for these  enhancements and
subsequently  charged against this allowance.  Management has reviewed  warranty
costs incurred  within the past year, and as a result has decided to provide for
known and unknown  warranty  costs by recording a warranty  allowance of 3.7% of
revenues.  Management  believes 3.7% of revenues is a  conservative  estimate of
these costs but will continue to monitor them to ensure they are provided for on
a current basis in order to match the cost with associated revenue.


                                       -7-

<PAGE>



NOTE 5  - LEGAL PROCEEDINGS

The Company's  founder and former  President and Chief  Executive  Officer,  has
commenced  an action  against the  Company in Florida  state  court.  The former
president alleges,  among other things,  that he was wrongfully  terminated from
his employment and seeks damages which in the aggregate could exceed $1,000,000.
The  Company  believes  that the former  president's  suit is without  merit and
intends to vigorously defend the action.  There have been no significant changes
regarding this action since the last quarter.

Derek Betty and James Potter have instituted actions against the Company arising
pursuant to agreements entered into at the time of the sale of Delta Information
Services, Inc. ("Delta").  The first action is entitled Derek Betty v. Lasergate
Systems,  Inc.  ("the Betty  Action")  and the second  action is entitled  James
Potter v.  Lasergate  Systems,  Inc.  and 1103065  Ontario,  Inc.  ("the  Potter
Action").  Both actions are pending in the Circuit  Court of the Sixth  Judicial
Circuit in and for Pinellas County,  Florida.  The Betty Action alleges that the
Company has failed to return shares of the Company's  stock which are being held
in escrow pursuant to a Collateral Stock Pledge Agreement executed in connection
with the sale of Delta to the Company. The Betty Action also alleges a breach of
the terms and  conditions  of a  Registration  Rights and Put  Option  Agreement
executed in connection  with the sale of Delta to the Company.  The Betty Action
seeks  damages  in an amount in excess  of  $15,000,  which is the  jurisdiction
amount,  but it is anticipated  that damages could be in excess of $25,000.  The
Potter  Action also alleges a breach of the  Registration  Rights and Put Option
Agreement.  Moreover,  the Potter Action includes  allegations  concerning James
Potter's Consulting Agreement with the Company and a Non-Compete Agreement.  The
Potter  Action seeks a  declaratory  judgment  determining  that the Company and
1103065  Ontario,  Inc. are in material breach of the Non-Compete  Agreement and
that Potter is  relieved of all  obligations  to perform  under the  Non-Compete
Agreement.  The  Company  has  moved  to  dismiss  both  actions  and to  compel
arbitration pursuant to an arbitration provision in the Stock Purchase Agreement
relating to the acquisition of Delta. The Company's motion to compel arbitration
in the  Betty  Action  was  granted  on May 2,  1997,  and the  motion to compel
arbitration  in the Potter  Action  was  granted on May 14,  1997.  The  Company
intends to vigorously defend both actions.

The Company is also involved in other legal actions. Management does not believe
that the ultimate resolution of these and the above matters will have a material
effect on the Company's financial position.

NOTE 6-SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Interest And Income Taxes Paid:

                                          Three Months Ended
                                          ------------------
                                        1997              1996
                                        ----              ----

Interest                                $460               --
Income taxes                             --                --



                                       -8-

<PAGE>



ITEM 2-MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The  following  discussions  should be read in  conjunction  with the  financial
statements  and notes  thereto,  and is  qualified  in its entirety by reference
thereto.

The  statements  contained in or  incorporated  by reference into this Quarterly
Report which are not historical  facts contain forward looking  information with
respect  to  plans,  projections  or  future  performance  of the  Company,  the
occurrence of which involve certain risks and uncertainties that could cause the
Company's  actual  results  to differ  materially  from  those  expected  by the
Company,  including  the  history of  operating  losses;  uncertainty  of future
financial  results;  possible  negative  cash  flow from  operating  activities;
additional  financing  requirements;  no  assurance  of  successful  and  timely
development of new products;  risks inherent in software  development;  customer
acceptance;  employee turnover; litigation;  dependance on regulatory approvals;
uncertainty of software and hardware pricing or profitability;  unpredictability
of  patent  protection;  rapid  technological  change;  competition;  and  other
uncertainties detailed in the Company's Annual Report on Form 10-KSB.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1997  VERSUS THREE MONTHS ENDED MARCH 31, 1996

Revenues:

Revenues  were  $1,278,576  and  $1,465,989 in the first quarter of 1997 and the
first quarter of 1996 respectively,  representing a decrease of $187,413 or 13%.
Product sales represented $1,184,595 and $1,305,559 in the first quarter of 1997
and 1996  respectively  and  revenue  from  maintenance  and support of existing
customers represented $93,981 and $160,430 in the first quarter of 1997 and 1996
respectively.  Revenue from product  sales in the first quarter of 1997 includes
five sales of the new general admission product totaling $881,000.  Revenue from
product sales in the first quarter of 1996 included  $324,000 of product sold to
Bayindir   Insaat  Turizm   Ticaret,   a  customer  whose  total   purchases  of
approximately  $505,000  represented 12% of the Company's  revenues in the first
quarter of 1996.  Revenue from maintenance and support has decreased due to less
customers accepting maintenance contracts on the legacy products.

Cost of Revenues:

Cost of revenues were $853,299 and $751,890 in the first quarter of 1997 and the
first quarter of 1996 respectively representing a $101,409, or 13%, increase. As
a percentage of revenues,  cost of revenues in the first quarter of 1997 was 67%
of revenues  compared to 51% of revenues in the first quarter of 1996.  This was
primarily due to increased costs associated with early  installations of the new
general admission product and a reduction of maintenance and support revenues on
the legacy products of $66,449.

Development Costs:

Development costs were $132,637 and $26,677 in the first quarter of 1997 and the
first quarter of 1996 respectively representing an increase of $105,960, or 397%
 . This was primarily due to the development staff dedicating most of its time in
the first quarter of 1996 to resolving  warranty  issues  instead of new product
development.  In addition, the development staff is now approximately 29% larger
(9  employees  in the first  quarter  of 1997  versus 7  employees  in the first
quarter of 1996). Development costs for the first quarter of 1997 do not include
$92,000 of  capitalized  costs.  The  Company  expects to  continue  development
efforts at approximately  the same level (9 employees) for the remainder of 1997
with the majority of the development  effort focused on its new modular products
(see Note 2 to the Financial Statements).

Selling, General and Administrative:

Selling,  general and administrative  expenses were $867,083 and $863,810 in the
first quarter of 1997 and the first quarter of 1996 respectively, representing a
$3,273 or 0.4% decrease. This was primarily due to an increase in legal expenses
of $39,000


                                       -9-

<PAGE>

offset by a decrease in  amortization of software costs in the amount of $61,183
due to the  write-down of capitalized  software  costs in June,  1996. All other
selling,  general and administrative  expenses combined increased $25,000.  As a
percentage of revenues, selling, general and administrative expenses were 68% in
the first  quarter of 1997 and 59% in the first  quarter of 1996. An increase in
this  percentage  of nine  percentage  points can be  attributed to the $187,413
decrease in revenues,  a decrease of five percentage points can be attributed to
the $61,183 decrease in amortization  expense and an increase of five percentage
points can be attributed to the increase in legal and other selling, general and
administrative expenses, as explained above.

Net loss increased to $562,797 ($.08 a share) for the first quarter of 1997 from
$163,955  ($.04 a share) for the first  quarter of 1996.  The  components of the
increase in the Company's net loss are explained above.

The FASB has  issued  Statement  of  Financial  Accounting  Standards  No.  128,
Earnings Per Share,  which is effective  for financial  statements  issued after
December 15, 1997. Early adoption of the new standard is not permitted.  The new
standard  eliminates  primary and fully diluted  earnings per share and requires
presentation of basic and diluted earnings per share together with disclosure of
how the per share  amounts were  computed.  The adoption of this new standard is
not expected to have a material  impact on the  disclosure of earnings per share
in the  financial  statements.  The effect of adopting this new standard has not
been determined.

LIQUIDITY AND CAPITAL RESOURCES

The  Company's  financial  statements  have been  prepared  in  conformity  with
generally accepted accounting principles,  which contemplate continuation of the
Company as a going  concern.  In the Company's  Annual Report on Form 10-KSB for
the fiscal year ended December 31, 1996, the Company's  auditors qualified their
opinion  as to a  going  concern.  The  information  contained  in Note 3 to the
Financial  Statements included in the Company's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 1996 remains current related to the status of
certain of the  Company's  operational  and funding  matters  and,  accordingly,
should be referred to in conjunction with this Form 10-QSB.

For the three months ended March 31, 1997,  the Company used $995,455 of cash in
operating  activities  and  incurred a loss of $562,797.  From its  inception in
March 1985 through March 31, 1997, the Company has incurred a cumulative loss of
$17,346,115.  In recent years the Company has relied upon  proceeds from private
and public placements and loans in order to fund its operations.

Warranty  costs  accrued  during the first  quarter of 1997 were $47,000 and the
value of warranty work  performed was $40,000.  Management  continues to monitor
these costs to ensure that sufficient  provisions have been recorded in order to
reasonably  match these costs with the associated  revenues as well as to ensure
that this work is performed as efficiently as possible.

During  the  first  quarter  of  1997,  accounts  receivable  decreased  $82,829
primarily due to increased collection efforts,  inventory decreased $132,873 due
to fewer  installations  being in process at March 31, 1997 than at December 31,
1996, and accounts payable  decreased $ 311,915  primarily due to the payment of
accrued  payroll,  payroll taxes and other  expenses  which were accrued at year
end. The decrease in accrued  payroll and payroll taxes arose because payroll is
payable on the last day of each month, but near year-end the Company changed its
payroll service provider and the new provider did not charge the Company for the
December 31, 1996 payroll  until  January 2, 1997.  At December 31, 1996 accrued
payroll and payroll  taxes were  $210,000 and at March 31, 1997 accrued  payroll
and payroll taxes were $2,000.  All other accounts  payable and accrued expenses
decreased $104,000 during the first quarter of 1997.

Also,  during the first  quarter of 1997,  an  installation  was completed for a
customer who agreed to participate in the development  process by being an early
installation  site for the new product in exchange for extended payment terms on
approximately  half of their purchase.  As a result, the Company accepted a note
receivable  from the  customer  in the amount of  $144,856  with a term of three
years and bearing interest at the rate of 10% per annum.

The Company estimates the cost of developing the new general admission  products
incorporating the modular concept will total approximately  $400,000 to $450,000
by the second  quarter of 1997. In the first  quarter of 1997,  $92,000 of these
costs were  capitalized.  Since  inception,  development  costs  incurred  total
$223,000 and a total of $117,000 has been capitalized.


                                      -10-
<PAGE>



Since the Company does not purchase  components  for its products until an order
is received,  there is  typically a backlog of orders for  systems.  The Company
defines  backlog as a signed  contract,  typically  with some type of  financial
assurance  such as a deposit.  As of March 31, 1997 and December  31, 1996,  the
Company's backlog was approximately $368,000 and $963,000, respectively.

Although no assurance  can be given,  management  believes  that an  on-schedule
product  launch of the new Admits  general  admission  product  combined  with a
recently  expanded sales force will enable the Company to achieve an increase in
revenues  and a reduction of the  operating  loss by the end of 1997 and lay the
foundation  for  future  profitability.  While  continuing  to work on  improved
financial  performance,  the  Company  intends  to seek  and  actively  pursue a
possible  relationship with a strategic  partner,  which might include an equity
investment in the Company and may review other financing opportunities.






                                      -11-

<PAGE>



Part II-Other Information

Item 6-Exhibits and Reports on Form 8-K

(a)  Exhibits: 27.1 Financial  Data Schedule.

(b)  Reports  on Form 8-K:  The  Company  has not filed any  reports on Form 8-K
during the quarter ended March 31, 1997.

All  other  items  required  in Part II have  been  previously  filed or are not
applicable for the quarter ended March 31, 1997.




                                      -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.

                                            Lasergate Systems, Inc.
                                            Registrant



Date:   May 15, 1997                        /s/   Philip P. Signore
                                            ----------------------------
                                            Philip P. Signore
                                            Vice President
                                            Chief Financial Officer





                                      -13-