SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB



               QUARTERLY REPORT FILED UNDER SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended                           Commission File Number
    November 30, 1996                                           0-21649
------------------------------                           ----------------------


                                 WEBSECURE, INC.
                       -----------------------------------
                          (Exact Name of Small Business
                       Issuer As Specified In Its Charter)



           Delaware                                           04-3296069
--------------------------------                        ------------------------
(State or Other Jurisdiction of                          (I.R.S. Employer
 Incorporation or Organization)                           Identification Number)


                   1711 Broadway, Saugus, Massachusetts 01906
                ------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (617) 867-2300
                ------------------------------------------------
                (Issuer's 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               No  X
                              -----            -----

         As of January 17, 1997, the Company had outstanding 5,605,000 shares of
Common Stock, $.01 par value per share.


<PAGE>



                                 WEBSECURE, INC.

                                      INDEX
<TABLE>
<CAPTION>

PART I.       FINANCIAL INFORMATION                                                               PAGE
              ---------------------                                                               ----               

ITEM 1.       FINANCIAL STATEMENTS
<S>                                                                                              <C>    
Balance Sheets
    as of November 30, 1996 (Unaudited) and August 31, 1996 (Audited)............................  1

Statements of Operations
    for the Three Month Periods ended November 30, 1996 and 1995 (Unaudited)
    and Cumulative from Inception (July 19, 1995) to November 30, 1996 ..........................  2

Statement of Cash Flows
    for the Three Month Periods ended November 30, 1996 and 1995 (Unaudited)
    and Cumulative from Inception (July 19, 1995) to November 30, 1996 ..........................  3-4

Notes to Financial Statements (Unaudited)........................................................  5

ITEM 2.       PLAN OF OPERATIONS.................................................................  6-9

PART II.      OTHER INFORMATION..................................................................  10
              -----------------

ITEM 1.       LEGAL PROCEEDINGS..................................................................  10

ITEM 2.       CHANGES IN SECURITIES..............................................................  10

ITEM 3.       DEFAULTS UPON SENIOR SECURITIES....................................................  10

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS................................  10

ITEM 5.       OTHER INFORMATION .................................................................  10

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K...................................................  10

SIGNATURES.......................................................................................  11
----------
</TABLE>




                                 WEBSECURE, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                                 BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                         November 30,             August 31,
                                                                             1996                    1996
                                                                         ------------             ----------
ASSETS                                                                   (Unaudited)               (Audited)
<S>                                                                   <C>                     <C>    
CURRENT:
     Cash                                                               $       7,974           $     12,832
     Accounts receivable, net                                                 855,678                 21,797
     Inventories                                                                9,106                  5,971
     Due from related parties                                                  32,439                 59,776
     Prepaid expenses and other                                                28,394                  6,600
                                                                        -------------         --------------
         Total current                                                        933,591                106,976
PROPERTY AND EQUIPMENT, NET                                                 1,279,725              1,173,397
DEFERRED REGISTRATION COSTS                                                   641,260                424,060
OTHER ASSETS                                                                   81,142                 41,515
                                                                        -------------         --------------
                                                                        $   2,935,718           $  1,745,948
                                                                        =============         ==============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
     Accounts payable and accrued expenses                              $   1,135,342           $    679,435
     Due to related parties                                                    --                    125,635
     Note payable to related party                                            699,083                672,000
     Current portion of capital lease obligations                             254,094                 71,763
                                                                        -------------          -------------
         Total current liabilities                                          2,088,519              1,548,833
CAPITAL LEASE OBLIGATION, LESS CURRENT MATURITIES                             826,837                300,430
                                                                        -------------          -------------
         Total liabilities                                                  2,915,356              1,849,263
                                                                        =============          =============

STOCKHOLDERS' EQUITY (DEFICIT):
     Preferred stock, $.01 par value; 1,000,000 shares
       authorized; no shares issued and outstanding                            --                      --
     Common stock, $.01 par value; 20,000,000 shares
       authorized; 2,105,000 shares issued and outstanding                     21,050                 21,050
     Class B common stock, $.01 par value; 2,000,000
       shares authorized; 625,000 shares issued and
       outstanding                                                              6,250                  6,250
     Additional paid-in capital                                             7,827,025              7,827,025
     Deficit accumulated during the development stage                     (7,833,963)            (7,957,640)
                                                                        -------------          -------------
         Total stockholders' equity (deficit)                                 20,362             (  103,315)
                                                                        -------------          -------------
                                                                        $   2,935,718           $  1,745,948
                                                                        =============          =============

                                  See accompanying notes to financial statements
</TABLE>

                                       -1-





                                 WEBSECURE, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                            Cumulative
                                                                                          from Inception
                                                        Three Months Ended              (July 19, 1995) to
                                                            November 30,                   November 30,
                                                        1996              1995                 1996
                                                    -----------      -----------         --------------
<S>                                               <C>              <C>                  <C>    
Revenues                                            $   887,041      $     6,963          $     984,296
Cost of revenues                                        188,012           25,274                381,452
                                                    -----------      -----------         --------------
         Gross margin                                   699,029        ( 18,311)                602,844
                                                    -----------      -----------         --------------

Operating expenses:
   General and administrative                           301,096          112,656              1,477,467
   Selling and marketing                                195,774            6,297                496,400
   Research and development                              45,148           32,114                623,396
   Charge for acquired
     research and development                              --                --               5,760,000
                                                    -----------      -----------         --------------
   Total operating expenses                             542,018          151,067              8,357,263
                                                    -----------      -----------         --------------

Income (loss) from operations                           157,011       ( 169,378)          (  7,754,419)
   Interest expense, net of interest income           ( 33,334)           (   0)          (     79,544)
                                                    -----------      -----------         --------------
Income (loss) before income taxes                       123,677       ( 169,378)          (  7,833,963)
Income taxes                                               --               --                     --
                                                    -----------      -----------         --------------

Net income (loss)                                   $   123,677      $ (169,378)         $(  7,833,963)
                                                    ===========      ===========         ==============

Net income (loss) per common and
  common equivalent shares                          $       .03      $    ( .04)          $(      1.63)
                                                    ===========      ===========         ==============

Shares used in computing net income (loss)
  per common and common
  equivalent shares                                   4,805,050        4,805,050              4,805,050
                                                    ===========      ===========         ==============




                                  See accompanying notes to financial statements
</TABLE>

                                       -2-





                                 WEBSECURE, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                            Cumulative
                                                                                          from Inception
                                                              Three Months Ended        (July 19, 1995) to
                                                                  November 30,             November 30,
                                                             1996           1995               1996
                                                          ----------     ----------      --------------
<S>                                                     <C>            <C>             <C>   

Cash flows from operating activities:
     Net income (loss)                                    $  123,677     $(169,378)      $ ( 7,833,963)
     Adjustments to reconcile net income
     (loss) to net cash provided (used) by
     operating activities:
     Charge for acquired research and
       development                                            --              --              5,760,000
     Issuance of common stock for
        professional services                                 --              --                 79,800
     Depreciation and amortization                           100,300         18,077             297,766
     Changes in operating assets and
        liabilities
       Accounts receivable                                 (833,881)      (  1,719)        (   855,678)
       Inventories                                         (  3,135)      ( 16,714)        (     9,106)
       Prepaid expenses and other                          ( 21,794)          8,639        (    28,394)
       Accounts payable and accrued
           expenses                                          455,907        790,985           1,135,342
                                                          ----------     ----------      --------------
     Net cash provided (used) by
       operating activities                                (178,926)       629,890         ( 1,454,233)
                                                          ----------     ----------      --------------

Cash flows from investing activities:
     Acquisition of property and equipment                 (205,380)      (647,571)        ( 1,576,243)
     Deferred registration costs                           (217,200)      ( 79,924)        (   641,260)
     Increase in other assets                              ( 40,875)      (  4,836)        (    82,390)
                                                          ----------     ----------      --------------
     Net cash used in investing activities                 (463,455)      (732,331)        ( 2,299,893)
                                                          ----------     ----------      --------------

Cash flows from financing activities:
     Borrowings under capital leases                         735,431          --             1,124,487
     Principal payments on capital lease                   ( 26,693)          --           (    43,556)
     (Increase) decrease in due
       from related parties                                   27,337      (268,454)        (    32,439)
     Decrease in due to related parties                    (125,635)      ( 17,343)               --

</TABLE>

                                       -3-




                                 WEBSECURE, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                      STATEMENTS OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>
                                                                                           Cumulative
                                                                                         from Inception
                                                             Three Months Ended        (July 19, 1995) to
                                                                 November 30,              November 30,
                                                             1996           1995               1996
                                                          ----------     ----------      --------------
<S>                                                     <C>            <C>             <C>    
Cash flows from financing activities (continued):
     Proceeds from issuance of common stock                    --           254,310           2,0l4,525
     Proceeds from notes payable to related
       party                                                  27,083        133,928           1,522,083
     Payments of notes payable to related
       party                                                   --             --          (    823,000)
                                                          ----------     ----------      --------------
     Net cash provided by financing activities               637,523        102,441           3,762,100
                                                          ----------     ----------      --------------

     Net increase (decrease) in cash                      (   4,858)          --                  7,974

     Cash, beginning of period                                12,832          --                   --
                                                          ----------     ----------      --------------
     Cash, end of period                                 $     7,974    $     --         $        7,974
                                                          ==========     ==========      ==============

     Supplemental disclosure of financing information:
       Cash paid for interest                            $     5,997    $     --         $       46,733


                                  See accompanying notes to financial statements
</TABLE>

                                       -4-




                                 WEBSECURE, INC.
                          NOTES TO FINANCIAL STATEMENTS

GENERAL
-------

WebSecure,  Inc. (the  "Registrant")  is in the development  stage, and as such,
success of future operations is subject to a number of risks similar to those of
other  companies in the same stage of  development.  Principal among these risks
are the Company's limited operating history,  history of operating losses, early
stage of market development,  competition from substitute products, larger, more
established competitors and rapid technological change.

The accompanying  unaudited condensed financial statements have been prepared in
accordance  with the  instructions  for Form 10-QSB and therefore do not include
all  information  and footnotes  necessary for a fair  presentation of financial
position,  results of operations  and changes in cash flows in  conformity  with
generally accepted  accounting  principles.  The unaudited  condensed  financial
statements  should be read in  conjunction  with the  financial  statements  and
related notes included in the Registrant's Form SB-2  Registration  Statement as
filed with the  Securities  and Exchange  Commission  (the "SEC") on December 4,
1996. In the opinion of management, the unaudited condensed financial statements
contain all adjustments  necessary for a fair  presentation of the  Registrant's
financial  condition and results of operations for the interim periods presented
and all such  adjustments are of a normal and recurring  nature.  The results of
operations  for the three  months ended  November  30, 1996 are not  necessarily
indicative of the results which may be expected for the entire fiscal year.

COMPUTATION OF NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARES

The net income  (loss) per common and common  equivalent  shares are computed by
dividing  the net  income  (loss)  by the  weighted  average  number  of  shares
outstanding  during  each  period  presented,  as  adjusted  for the  effects of
application of SEC Staff Accounting  Bulletin No. 83 ("SAB No. 83"). Pursuant to
SAB No. 83, all common stock and common stock  equivalents  issued within twelve
months prior to the initial filing of the registration statement relating to the
Company's initial public offering (the "IPO") at a price less than the IPO price
have been treated as outstanding for all reported periods.  The number of shares
used in the  computation  also  assumes that each share of  outstanding  Class B
Common Stock has been converted into four shares of Common Stock, which occurred
on the date of filing of the Registrant's Form SB-2 Registration  Statement with
the SEC.

DEFERRED REGISTRATION COSTS

      As of November 30, 1996,  the Company has incurred  registration  costs of
$641,260 in  connection  with the IPO.  These costs have been  deferred and were
charged against equity on December 10, 1996 at the completion of its IPO.

                                       -5-



ITEM 2.                        PLAN OF OPERATIONS
                               ------------------
OVERVIEW

         The Registrant, a development stage company, offers Internet access and
support services for secure communications and commercial  transactions over the
Internet.  The Company provides general Internet services,  such as connectivity
and  communications  services.  The Company also resells software  licensed from
third parties.

         The financial  results for the period from inception (July 19, 1995) to
November 30, 1996 primarily  relate to the Company's  initial  organization  and
establishment  of  infrastructure.  The Company has had limited  revenues  since
inception and had a working capital deficiency at November 30, 1996. The results
for the quarter ended  November 30, 1996 are not  necessarily  indicative of the
results of the  Company's  operations  that may be expected  for the fiscal year
ending August 31, 1997.

         The Company  completed  its IPO on December 10, 1996.  The Company sold
1,000,000 shares of common stock and 1,150,000 redeemable warrants, and received
net proceeds of approximately $6,493,000.

         The  Company's  plan of  operations  for the next  twelve  months  will
principally  involve  the sale of  connectivity  and the  provision  of Internet
access  services.  The Company  intends to use a portion of the IPO  proceeds to
hire  additional  personnel,  including  marketing,  sales and customer  service
personnel, as well as to continue to upgrade its Internet access infrastructure.

RESULTS OF OPERATIONS

Revenues.  The Company has  generated  $984,296 in revenues  from its  inception
(July 19, 1995) through  November 30, 1996. The Company had revenues of $887,041
during the three month period ended November 30, 1996, compared to $6,963 during
the three months ended  November  30,  1995,  an increase of $880,078.  Revenues
since inception have been primarily comprised of software licenses, connectivity
and  communications  services.  Due to the  development  stage of the  Company's
operations, the Company cannot predict whether software sales, which constituted
substantially  all of the  Company's  revenues  during  the three  months  ended
November 30, 1996, will continue in future periods.  The Company  anticipates it
will derive revenues  primarily from  connectivity  charges,  hosting  services,
software licenses and intranet networking.

Cost of revenues.  The Company's cost of revenues,  which consists  primarily of
Internet access costs, was $381,452 during the period from inception to November
30,  1996,  $188,012  for the three month  period  ended  November  30, 1996 and
$25,274 for the three month period ended November 30, 1995. The Company's  costs
of revenues have increased each quarter since the Company's inception.


                                       -6-


General  and  Administrative.   General  and  administrative   expenses  consist
primarily of compensation expenses and fees for professional  services.  General
and  administrative  expenses were  $1,477,467  for the period from inception to
November 30, 1996.  General and  administrative  expenses  were $301,096 for the
three  months ended  November 30, 1996  compared to $112,656 for the three month
period ended  November  30,  1995.  From  inception  through  November 30, 1996,
approximately $1,113,000 of the general and administrative expenses were paid to
Employee  Resource,  Inc.  ("ERI"),  an employee  leasing  company  owned by the
Company's  President and Chief Executive Officer.  ERI leases to the Company all
of its employees, including the officers of the Company.

Selling and  Marketing.  Selling and  marketing  expenses  consist  primarily of
salaries, commissions, trade show expenses, and advertising and marketing costs.
The Company has incurred  $496,400 in expenses for selling and marketing  during
the period from inception to November 30, 1996.  Selling and marketing  expenses
were  $195,774 for the three month period  ended  November 30, 1996  compared to
$6,297 for the three month  period  ended  November  30,  1995.  The increase is
primarily attributable to the start-up of the Company's marketing activities and
the  expansion  of its  service  options.  The  Company  intends to use a direct
selling  force that will target  certain  industries  and sell  across  vertical
markets, as well as independent sales agents and distributors.

Research and  Development.  The Company's  research and development  efforts are
focused on development of the Company's co-hosting capabilities.  The Company is
also developing intranet models for intraorganization communications that can be
used by multi-site  organizations.  The Company's  engineers are also developing
the  Company's  communications  infrastructure  to allow for  daily  information
transfer to the  Company for  periodic  back-up of customer  files and  disaster
control  purposes.  Research and  development  expenses  totaled  $623,396  from
inception to November  30,  1996.  Research  and  development  expenses  totaled
$45,148 for the three month period ended  November 30, 1996, compared to $32,114
for the three month period ended November 30, 1995. The increase in research and
development expenses is due primarily to infrastructure development.

Operating  Income  (Loss).  Operating  loss for the  period  from  inception  to
November 30, 1996 was  $7,754,419.  Operating  income was $157,011 for the three
months ended November 30, 1996 compared to an operating loss of $169,378 for the
three months ended November 30, 1995. The operating loss from inception resulted
primarily from a non-cash charge in connection with the acquisition of software.

Net  Interest  Expense.  Net interest  expense for the period from  inception to
November 30, 1996 was $79,544 and $33,334 for the three months  ending  November
30,  1996.  There was no interest  income or expense for the three  months ended
November 30, 1995.  This increase in interest  expense was due to an increase in
borrowing and capital lease obligations.

Income Taxes. Since inception, the Company has generated tax benefits related to
its operating loss  carry-forwards  and amortization of research and development
costs.  The deferred  asset  related to such  benefits was fully  reserved as of
November  30, 1996 due to the  significant  doubt about the  realization  of the
deferred tax asset. Taxes on income for the three months ended November 30, 1996
was offset in full by the utilization of the deferred tax benefits. Accordingly,
there has been

                                       -7-




no income tax expense or benefit  reflected on the  accompanying  statements  of
operations since inception.

LIQUIDITY AND CAPITAL RESOURCES

         Since its inception,  the Company has financed its activities primarily
by notes payable from a stockholder  and the sale of its Common Stock to private
investors.  Working capital deficiency at November 30, 1996 was $1,154,928.  The
Company has three  capital lease  agreements  which are secured by fixed assets.
The outstanding  balance as of November 30, 1996 for one of these agreements was
approximately  $355,000,  and matures in December  2000. In September  1996, the
Company entered into two additional  capital lease agreements under which it may
borrow up to an aggregate of  $1,000,000,  of which  approximately  $726,000 was
outstanding at November 30, 1996. These  obligations  mature in October 2001. On
December  10,  1996,  the Company  deposited,  as  collateral,  a portion of the
proceeds from the IPO equal to the amount outstanding under these agreements.

         For the three months ended  November  30, 1996,  cash of  approximately
$178,900 was used by operating activities compared to cash provided by operating
activities  of  approximately  $630,000 for the three months ended  November 30,
1995.  During the period  from  inception  to  November  30,  1996,  the Company
recorded a non-cash charge of $5,760,000  against earnings for acquired research
and development,  which was a substantial component of the Company's overall net
loss for the period of approximately $7,834,000.

         Cash used in investing  activities was  approximately  $464,000 for the
three months ended  through  November  30,  1996,  as compared to  approximately
$732,000  for the three month period  ended  November 30, 1995.  The increase in
cash  used in  investing  activities  is due  primarily  to the  acquisition  of
property and equipment and deferred registration costs.

         In December 1995, the Company raised approximately  $2,014,500 from the
sale of  Common  Stock  to third  party  investors.  The  Company  has  borrowed
approximately  $1,522,000 from related parties since inception, all of which has
been repaid as of January 17, 1997.

         Management  believes  that  the  net  proceeds  from  the  IPO  will be
sufficient  to meet the Company's  anticipated  cash needs and finance its plans
for  expansion  for at least the next  twelve  months.  Thereafter,  the Company
anticipates that it may require  additional  financing to meet its current plans
for expansion. No assurance can be given of the Company's ability to obtain such
financing  on  favorable  terms,  if at all.  If the Company is unable to obtain
additional financing,  its ability to meet its current plans for expansion could
be materially adversely affected.


                                       -8-



IMPACT OF INFLATION

         Inflation  has not  had a  material  adverse  effect  on the  Company's
business.

NEW ACCOUNTING STANDARDS

         Statement  of  Financial   Accounting   Standards   ("SFAS")  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of," issued by the Financial Accounting Standards Board ("FASB"), is
effective for financial statements for fiscal years beginning after December 15,
1995.  The new standard  establishes  new guidelines  regarding when  impairment
losses on  long-lived  assets,  which  include  plant and  equipment and certain
identifiable  intangible  assets  and  goodwill,  should be  recognized  and how
impairment  losses should be measured.  The Company does not expect the adoption
of this standard to have a material effect on its financial  position or results
of operations.

         In  October  1995,  the FASB  issued  SFAS  No.  123,  "Accounting  for
Stock-Based  Compensation."  The Company has determined that it will continue to
account for stock-based  compensation for employees under Accounting  Principles
Board Opinion No. 25 and elect the  disclosure-only  alternative  under SFAS No.
123.  The Company  will be required to disclose the pro forma net income or loss
and per  share  amounts  in the  notes to the  financial  statements  using  the
fair-value-based  method  beginning  in the year ending  August 31,  1997,  with
comparable  disclosures  for the year ended August 31, 1996. The Company has not
determined the impact of these pro forma adjustments.



                                       -9-





                           PART II - OTHER INFORMATION


ITEM 1.           LEGAL PROCEEDINGS.  None.

ITEM 2.           CHANGES 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 INFORMATION.  None.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K.

                  (A)      EXHIBITS.  None.

                  (B)      REPORTS  ON FORM  8-K.  No  reports  on Form 8-K were
                           filed  during the  quarter  for which this  report is
                           filed.


                                      -10-




                                   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.

                                                  WEBSECURE, INC.


Date:  January 20, 1997                           By: /s/ Robert M. Kuzara
                                                     ---------------------
                                                     Robert M. Kuzara
                                                     President


Date:  January 20, 1997                              /s/ Carole Ouellette
                                                     --------------------
                                                     Carole Ouellette
                                                     Chief Financial Officer


                                      -11-