<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
                           ---------------------------


[X]        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
           THE SECURITIES EXCHANGE ACT OF 1934

           For the quarterly period ended Dec. 31, 1995

                                       OR

[ ]        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 1-9189
                          -----------------------------


                             CHEYENNE SOFTWARE, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         Delaware                                          13-3175893
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                         Identification No.)


                               3 Expressway Plaza
                         Roslyn Heights, New York, 11577
                    (Address of principal executive offices)

                                 (516) 484-5110
              (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 or 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
                              --------           ---------

          The number of Shares of  Registrant's  Common Stock  outstanding as of
January 31, 1996 was 37,538,688 (excluding 2,035,000 shares of treasury stock).




<PAGE>


                                      INDEX

                    CHEYENNE SOFTWARE, INC. AND SUBSIDIARIES



PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements

         Consolidated Balance Sheets-
              December 31, 1995 and June 30, 1995.........................    3


         Consolidated Statements of Earnings-
              Three and Six Months Ended December 31, 1995 and 1994.......    4

         Consolidated Statements of Cash Flows-
              Six Months Ended December 31, 1995 and 1994.................    5


         Notes to Consolidated Financial Statements.......................    6

Item 2.  Management's Discussion and Analysis of Financial
                 Condition and Results of Operations......................    7



PART II.  OTHER INFORMATION

Item 1. Legal Proceedings.................................................   17

Item 4. Submission of Matters to a Vote of Security Holders...............   19

Signature.................................................................   20




                                       2


<PAGE>


PART I--FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

                    CHEYENNE SOFTWARE, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets
                         December 31, and June 30, 1995
<TABLE>
<CAPTION>
                                                                                              Dec. 31,          June 30,
                                 Assets                                                         1995              1995
                                 ------                                                       --------          --------
                                                                                             (Unaudited)
                                                                                                   (In thousands)
<S>                                                                                         <C>               <C>
Current assets:  
     Cash and cash equivalents                                                               $  7,528          $ 15,592
     Short term investments                                                                    24,648            15,088
     Accounts receivable, less allowance for doubtful accounts of
        $1,418,000 and $1,302,000, respectively                                                41,680            31,201
     Deferred income taxes                                                                      1,767             1,400
     Prepaid income taxes                                                                       3,081             1,055
     Prepaid expenses and other current assets                                                  6,609             5,163
                                                                                             --------          --------
                           Total current assets                                                85,313            69,499

Long term investments                                                                          37,841            40,522
Fixed assets, net                                                                              21,898            16,511
Equipment under capital leases, net                                                             5,326               ---
Other assets                                                                                    7,025             2,862
                                                                                             --------          --------
                           Total assets                                                      $157,403          $129,394
                                                                                             ========          ========

                           Liabilities and Shareholders' Equity
                           ------------------------------------
Current liabilities:
     Accounts payable                                                                       $   9,977         $   5,962
     Accrued expenses                                                                           4,069             5,751
     Current portion of obligations under capital leases                                        2,523               ---
     Other current liabilities                                                                  1,273               ---
                                                                                             --------          --------
                           Total current liabilities                                           17,842            11,713
Obligations under capital leases                                                                2,890               ---
Deferred income taxes                                                                           1,782             1,352
Other liabilities                                                                               1,665               ---
                                                                                             --------          --------
                           Total liabilities                                                   24,179            13,065
                                                                                             --------          --------
Minority interest in subsidiary                                                                   ---                19

Shareholders' equity:

     Preferred stock, $.01 par value, 5,000,000 shares authorized; none issued                    ---               ---
     Common stock, par value $.01 per share; 75,000,000 shares authorized;
       39,573,688 and 39,313,861 shares issued and outstanding                                    396               393
     Additional paid-in capital                                                                56,125            53,008
     Retained earnings                                                                        107,555            93,046
     Foreign currency translation adjustment                                                    (547)               464
     Net unrealized gain (loss) on investments                                                    153             (143)
     Treasury Stock, at cost; 2,035,000 shares                                               (30,458)          (30,458)
                                                                                             --------          --------
                           Total shareholders' equity                                         133,224           116,310
                                                                                             --------          --------
                           Total liabilities and shareholders' equity                        $157,403          $129,394
                                                                                             ========          ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       3
<PAGE>


                    CHEYENNE SOFTWARE, INC. AND SUBSIDIARIES
                       Consolidated Statements of Earnings
              Three and Six Months Ended December 31, 1995 and 1994
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                        Three Months Ended                Six Months Ended
                                                                           December 31,                      December 31,
                                                                        1995          1994                1995         1994
                                                                        ----          ----                ----         ----
                                                                                (In thousands, except per share data)
<S>                                                                  <C>         <C>                    <C>         <C>  
Revenues                                                             $42,449      $29,611               $80,913     $51,263

Cost of sales                                                          7,585        4,780                14,278       8,540
                                                                     -------     --------                ------     -------

Gross profit                                                          34,864       24,831                66,635      42,723
                                                                     -------     --------                ------     -------
Operating expenses:
       Research and development                                        6,147        3,174                11,313       5,989
       Selling and marketing                                          12,424        9,253                23,550      17,488
       General and administrative                                      4,075        2,272                 7,352       4,052
       Charge for purchased research and development                   2,563          547                 4,199         547
                                                                     -------     --------                ------     -------
                         Total operating expenses                     25,209       15,246                46,414      28,076
                                                                     -------     --------                ------     -------
Operating income                                                       9,655        9,585                20,221      14,647

Non-operating income:
      Interest income and other                                          922          813                 1,648       1,565
      Other (losses) gains, net                                          ---         (379)                  ---      20,853
                                                                     -------     --------                ------     -------
Income before income taxes                                            10,577       10,019                21,869      37,065

Provision for income taxes                                             3,464        3,406                 7,360      15,514
                                                                     -------     --------                ------     -------

Net income                                                           $ 7,113      $ 6,613               $14,509     $21,551
                                                                     =======     ========               =======     =======

       Net income per share                                          $  0.18      $  0.17               $  0.37    $   0.54
                                                                     =======     ========               =======     =======
Weighted average number of common shares and
       equivalents outstanding                                        38,888       39,879                38,930      39,783
                                                                     =======     ========               =======     =======


</TABLE>


See accompanying notes to consolidated financial statements.

                                       4

<PAGE>

                    CHEYENNE SOFTWARE, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                   Six Months Ended December 31, 1995 and 1994
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                             Six Months Ended
                                                                                                December 31,
                                                                                            1995            1994
                                                                                          --------       -------
                                                                                            (In thousands)
<S>                                                                                       <C>           <C>  
Cash flows from operating activities:
     Net income                                                                           $ 14,509    $ 21,551
     Adjustments to reconcile net income to net cash
       provided by operating activities:
           Tax benefit from exercise of stock options                                        1,674         300
           Equity in earnings of Gates/FA                                                     --           (85)
           Depreciation and amortization                                                     3,212       1,512
           Deferred rent                                                                       438        --
           Deferred income taxes                                                               (12)      9,181
           Gain on exchange of Gates/FA common stock for Arrow Electronics common stock       --       (21,232)
           Loss on sale of Arrow Electronics common stock                                     --           379
           Charge for purchased research and development                                     4,199         547


           Changes in  operating  assets and  liabilities,  net of effects  from
            acquisitions:
              Increase in accounts receivable                                              (10,374)     (3,164)
              Increase in prepaid income taxes                                              (2,026)       --
              Increase in prepaid expenses and other current assets                         (1,446)     (1,365)
              Increase in other assets                                                      (2,634)       (410)
              Increase in accounts payable and accrued expenses                                965       2,668
                                                                                          --------    --------
                  Net cash provided by operating activities                                  8,505       9,882
                                                                                          --------    --------
Cash flows from investing activities:
     Purchases of fixed assets                                                              (7,435)     (3,403)
     Purchases of short term investments                                                   (14,630)     (5,643)
     Purchases of long term investments                                                     (3,423)     (6,255)
     Proceeds from redemptions and maturities of short term investments                     11,464       2,853
     Proceeds from redemptions and maturities of long term investments                          88       1,984
     Net proceeds from sale of Arrow Electronics common stock                                 --         5,059
     Payments for acquisitions                                                              (2,437)     (1,150)
     Payment for purchase of minority interest                                                (236)       --
                                                                                          --------    --------
                  Net cash used in investing activities                                    (16,609)     (6,555)
                                                                                          --------    --------

Cash flows from financing activities:
     Proceeds from exercise of stock options                                                 1,521         687
     Principal payments under capital lease obligations                                       (471)       --
                                                                                          --------    --------
                  Net cash provided by financing activities                                  1,050         687

Effect of exchange rate changes on cash                                                     (1,010)         82
                                                                                          --------    --------
               (Decrease) increase in cash and cash equivalents                             (8,064)      4,096

Cash and cash equivalents, beginning of year                                                15,592      11,629
                                                                                          --------    --------
Cash and cash equivalents, end of period                                                  $  7,528    $ 15,725
                                                                                          ========    ========

</TABLE>

See accompanying notes to consolidated financial statements.

                                       5
<PAGE>


                             CHEYENNE SOFTWARE, INC.
                   Notes to Consolidated Financial Statements
                                December 31, 1995

(1)    Business and Basis of Presentation


       Business

       Cheyenne Software, Inc. and its subsidiaries ("Cheyenne" or the
       "Company") are engaged in the development, sale and support of software
       products for use in microcomputers and computer systems mainly for Local
       Area Network (LAN) and Wide Area Network (WAN) applications.


       Basis of Presentation

       The accompanying unaudited financial statements have been prepared in
       accordance with generally accepted accounting principles for interim
       financial information and in accordance with the instructions to Form
       10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
       all of the information and footnotes required by generally accepted
       accounting principles for complete financial statements. In the opinion
       of management, all adjustments (consisting of normal recurring
       adjustments or accruals) considered necessary for a fair presentation
       have been included. Operating results for the three or six month period
       ended December 31, 1995 are not necessarily indicative of the results
       that may be expected for the year ending June 30, 1996. For further
       information, refer to the financial statements and footnotes thereto and
       other information included in Cheyenne's annual report on Form 10-K for
       the year ended June 30, 1995.


(2)    Reclassification

       Certain prior year information has been reclassified to conform with the
       fiscal 1996 presentation format.

(3)    Capitalized Leases

       During the 1996 fiscal year, Cheyenne entered into various capital leases
       for equipment expiring May 31, 1998. The equipment recorded under the
       capital leases are amortized over the terms of the related leases by the
       straight-line method. Future minimum lease payments required under
       capitalized leases as of December 31, 1995 are approximately as follows:

       Year Ending June 30,                                       In Thousands
       --------------------                                       ------------
       1996 - remaining                                              $1,286
       1997                                                           2,572
       1998                                                           2,358
                                                                    -------
       Total minimum lease payments                                   6,216
       Less, amount representing interest                               803
                                                                    -------
       Present value of net minimum lease payments                   $5,413
                                                                    =======


(4)    Operating Leases

       Effective September 1, 1995, Cheyenne entered into a lease for a new
       office facility. The lease expires August 31, 2002 and includes scheduled
       base rent increases over the term of the lease commencing with the first
       payment on September 1, 1996. The total amount of the base rent payments
       is being charged to expense on the straight-line method over the term of
       the lease. Cheyenne has recorded a deferred credit to reflect the excess
       of rent expense over cash payments since inception of the lease. Future
       minimum rentals required under this lease as of December 31, 1995 are
       approximately as follows:



       Year Ending June 30,                                       In Thousands
       --------------------                                       ------------
       1997                                                         $1,154
       1998                                                          1,477
       1999                                                          1,524
       2000                                                          1,559
       Thereafter                                                    3,496
                                                                    ------
                                                                    $9,210
                                                                    ======
                                       6


<PAGE>

(5)    Acquisition of Chili Pepper Software

       On September 28, 1995, Cheyenne acquired certain assets and assumed
       certain liabilities of Chili Pepper Software, Inc. ("Chili Pepper"), a
       manufacturer of Hierarchical Storage Management (HSM) solutions for the
       desktop PC for approximately $718,000 of cash and the assumption of
       approximately $1,568,000 of liabilities. The acquisition has been
       accounted for as a purchase and the operating results of Chili Pepper are
       included in the consolidated statement of earnings from the date of
       acquisition. In connection with the acquisition, Cheyenne in FQ196
       recorded an expense for purchased research and development of
       approximately $1,636,000. The revenues and earnings of Chili Pepper for
       the periods prior to the acquisition were insignificant compared to those
       of Cheyenne.

 (6)   Acquisition of Media Blitz

       On October 31, 1995, Cheyenne acquired certain assets of Media Blitz,
       Inc. ("Media Blitz"), a manufacturer of optical and tape jukebox and
       CD-ROM management software solutions for the Microsoft Windows NT
       environment, for approximately $1,719,000 in cash and $2,500,000 in
       additional future contingent payments. The acquisition has been accounted
       for using the purchase method of accounting, and accordingly, the
       purchase price has been allocated to the assets purchased, including
       approximately $1,254,000 for capitalized software which is included in
       other assets. The excess of the purchase price over the fair value of the
       net assets acquired was approximately $162,000 and has been recorded as
       goodwill, which is included in other assets and is being amortized on a
       straight-line basis over three years. In addition, Cheyenne in FQ296
       recorded an expense for purchased research and development of
       approximately $2,763,000. The operating results of Media Blitz are
       included in the consolidated statement of earnings from the date of
       acquisition. The revenues and earnings of Media Blitz for the periods
       prior to the acquisition were insignificant compared to those of
       Cheyenne.


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

Quarter ended December 31, 1995 compared to Quarter ended December 31, 1994.

Overview of FQ296

       Except for the historical information and statements contained in
Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A"), the matters and items set forth in the MD & A are forward
looking statements that involve uncertainties and risks some of which are
discussed below, including under the caption "Cautionary Statements - Additional
Important Factors to be Considered."

       During the last week of FQ296 Cheyenne released the latest generation of
its leading product, ARCserve for NetWare Version 6. This product offers
advanced features and improved performance. The Company intends to initiate
marketing programs and expects to announce strategic alliances in FQ396 to
enhance Cheyenne's position in the market for NetWare back-up products and to
increase market penetration. Cheyenne also currently intends to release foreign
language versions of ARCserve 6 by the end of FY96.

       During FQ296 Cheyenne experienced continued sales growth of its
relatively new Windows NT product line. Both ARCserve and InocuLAN (antivirus)
for Windows NT were the first products in their respective categories to receive
certification for the Microsoft BackOffice logo. During FQ296 Cheyenne also
released new versions of InocuLAN and FAXserve for NetWare to take advantage of
Novell's NDS capabilities. Additionally, Windows 95 versions of ARCsolo and
InocuLAN were released in FQ296, along with numerous foreign language versions
of many of Cheyenne's existing products.

       The Company believes that its performance in FQ296 and, in particular,
sales of ARCserve for NetWare to distributors and other customers in FQ296 was
negatively affected by the delay in the release of ARCserve 6 until the last
week of FQ296. The delay was due to, among other factors, the complexity of the
product and the time and effort required to conduct comprehensive testing for
compatibility, reliability and performance.

       FQ296 is historically a strong quarter compared to FQ1 since FQ2
coincides with the end of the calendar year when a number of end users make
purchasing decisions relating to purchases during FQ2. Based on preliminary
data, it appears that the overall rate of growth in demand for Cheyenne products
to end users has slowed in FQ296 when compared to FQ196. The delay in the
release of ARCserve 6, the deferral of certain marketing programs from FQ296 to
FQ396 due to the delay and other strategic considerations, and possibly more
effective competition may have contributed to the reduced rate of growth. In
addition, sales of ARCserve for NetWare are closely linked with sales of
Novell's NetWare operating system, which is facing increased competition from
the Microsoft Windows NT network operating system. The growth in demand to end
users of Cheyenne's ARCserve for Windows NT increased in FQ296 from FQ196.

                                       7
<PAGE>

       In FQ296, Cheyenne recorded reserves in excess of those normally provided
of approximately $600,000 specifically for returns and exchanges in connection
with the release of ARCserve 6. At the end of FQ296, the Company estimates that
over $20,000,000 (slightly less than at the end of FQ196) of prior versions of
ARCserve (at distributor cost) are in the inventory of its distributors and
other customers. Based on communications with its distributors and other
customers, the usual slower acceptance of major enhancements to computer
software products (particularly in international markets), and the likelihood
that certain users will not require the advanced features of ARCserve 6,
Cheyenne believes that this inventory will sell through to end users. The
Company is also considering the implementation of additional marketing and other
promotional programs to promote the sale of prior versions of ARCserve currently
in the inventory of its distributors and other customers. Such programs and
incentives may affect profit margins.

       While the Company does not currently intend for ARCserve 6 to replace
prior versions of ARCserve, certain distributors and other customers could
exercise contractual rights to exchange prior versions of ARCserve for ARCserve
6. In the event of faster than expected market acceptance of ARCserve 6 and, in
certain other situations, Cheyenne may permit exchanges in excess of contractual
rights. Cheyenne believes that the additional reserve is adequate based upon
available information and actual exchanges through January 31, 1996. If actual
exchanges exceed this amount, revenues in subsequent quarters may be adversely
affected.

       The Company anticipates market acceptance of ARCserve 6 by the end of
calendar 1996, due to the quality of the product and Cheyenne's leading position
in the market for Novell NetWare back-up products. To foster the acceptance of
ARCserve 6, the Company has adopted a new pricing strategy for ARCserve 6 which
is intended to meet the needs of customers. The pricing strategy for ARCserve 6
includes a base package program for 25 users or less and a base package program
for unlimited users, each with additional, separately priced options.

       The Company believes that the new pricing model will make ARCserve 6 more
attractive to a significant portion of the Novell NetWare back-up market.
However, at the lowest end of the market, ARCserve 6 will be more expensive when
compared to ARCserve 5.x. Since ARCserve 5.x will still be available, it is
anticipated that these users may not rapidly move to ARCserve 6. The Company has
a large installed base (in excess of 500,000 users) of previous versions of
ARCserve who might be interested in upgrading to the new version 6. Therefore,
an upgrade version is being offered, which may create incremental revenues
during the next few quarters.

       While the pricing model of the full new product is expected by the
Company to further market acceptance of ARCserve 6, the average selling price of
ARCserve 6 (base package) is expected to be somewhat lower than the average
selling price of ARCserve 5.x. Cheyenne anticipates offsetting this decline in
average selling price with the sale of important options to the base package
which offer higher levels of functionality and performance. If the options do
not generate the level of sales expected by the Company, Cheyenne's revenues and
earnings may be adversely affected even if the unit sales of the ARCserve 6 base
package are at expected levels. In addition, distributors and other customers
may stock a lesser number of ARCserve 6 packages due to the reduced number of
product configurations compared to prior versions of ARCserve. While this will
lead to reduced costs to distributors and other customers, Cheyenne may
experience a decline in revenue as the market accepts ARCserve 6 and inventories
are lowered.

       The Company believes that it is well positioned to benefit in the long
term from the growth of the overall market for network storage management
software products. The Company expects to maintain its leadership position in
the NetWare back-up market by its introduction of ARCserve 6. Cheyenne also
expects continued strong growth from ARCserve for NT, as this product further
penetrates this rapidly growing market. Cheyenne also continues to invest and
make progress in the market for UNIX storage management back-up products.

Cautionary Statements - Additional Important Factors To Be Considered

       Set forth below are important factors which could cause actual results to
be adversely affected and to differ materially from the forward looking
statements in this MD&A, and other oral or written forward looking statements
made by the Company from time to time.

       Product Concentration. The Company historically has derived approximately
80+% of its revenues from the ARCserve product line, substantially all of which
supports the Novell NetWare operating system. The Company expects this
percentage to gradually decrease in the near future. The Company has recently
increased sales of ARCserve supporting Windows NT, Unix and other operating
systems and intends to devote significant resources to further increase such
sales. Since the NetWare market is still the largest market for Cheyenne,
increased sales in the other portions of the market like Windows NT may not be
sufficient in the foreseeable future to offset any decline or slowing in

                                       8

<PAGE>

revenues from NetWare products. Therefore, the success of ARCserve for NetWare
and in particular new Version 6 is critical to the future success of Cheyenne.
The failure of ARCserve 6 to obtain broad market acceptance, whether due to
competition, product quality or other factors, would have a material adverse
effect on the Company's business. In addition, even if ARCserve 6 is broadly
accepted, sales of this and the Company's other NetWare products are linked
closely with the growth in the market for the NetWare operating system. The
apparent slowing in the growth of the NetWare market, the Company's significant
dependence on this market, and general uncertainty in the networking operating
system market created by the competition between Microsoft and Novell, subjects
the Company's performance to increased volatility.

       Uncertain Acceptance of New Products; Technical Problems. As is the case
with new products generally, market acceptance of ARCserve 6 can never be
assured. If ARCserve 6 and/or its options experience a high number of
significant "bugs," or fail to include features required by users, or fail to
receive favorable product and other reviews in trade publications, market
acceptance may be delayed or may never be realized.

       Competitive factors may also impact the market acceptance of ARCserve 6.
The Company believes that ARCserve 6 offers advanced technology and improved
performance. Some users that have previously purchased competitive products may,
however, not consider the purchase of ARCserve 6 if satisfied with competitive
products. Cheyenne also must provide the level of technical support required by
its user base. The Company's ability to train its staff and to forecast demand
for ARCserve 6 technical support, and the successful implementation and use of
communications and other systems, will impact the quality of service provided.
Cheyenne must also continue to provide adequate support for its other products.
High quality customer support will further market acceptance of the product.
Conversely, if Cheyenne provides less than the required level of service, market
acceptance may be adversely impacted.

       Separately, in early February 1996 Cheyenne became aware of a potential
network security issue with InocuLAN for NT Versions 1.0 and 1.01. InocuLAN for
NT has been shipping since July 1995 and has an installed base as of December
31, 1995 of approximately 6,000 users. Cheyenne is not currently aware of any
customers that have experienced a security problem because of this issue.
However, given the importance of network security, Cheyenne almost immediately
provided all registered users and distributors and resellers of InocuLAN for NT
with information on how to eliminate the potential network security issue. The
fix may also be downloaded electronically via Cheyenne's electronic bulletin
board. An updated version of InocuLAN for NT is expected to be shipping in
mid-February 1996. Cheyenne believes that the technical issue has been resolved.
While any product quality issue and any related negative publicity may affect
sales, the Company believes that its prompt response should minimize the
potential negative effect on the Company, although there can be no assurance
that this will be the case.

       End of Quarter Sales. Historically, a high portion of Cheyenne's sales
have been completed in the last few weeks of each fiscal quarter, in part
because customers are able, or believe that they are able, to negotiate lower
prices and more favorable terms. Cheyenne's competitors also frequently offer
end of the quarter purchase incentives, which Cheyenne cannot control and which
could affect purchases of Cheyenne products. If Cheyenne determines not to
negotiate more favorable terms at the end of any fiscal quarter, as it has
previously done, or expected sales do not occur, revenues could be adversely
affected. Consistent with its history, Cheyenne received and fulfilled a
significant portion of its FQ296 sales in the last weeks of FQ296 and offered
certain of its distributors and other customers incentives to make purchases at
the end of FQ296. The delay in the shipment of ARCserve 6 contributed, in part,
to increased shipments at the end of FQ296. If these customers do not sell
through such products at sufficient levels, reorders and sales in subsequent
quarters could be adversely affected.

       Furthermore, this buying pattern results in a significant level of orders
to be processed and fulfilled at the end of each fiscal quarter. The Company's
worldwide order entry system is centralized in New York, while most orders are
fulfilled from a third party production facility in another state. The inability
of the Company to process and fulfill end of the quarter orders due to time
constraints, communication problems, operational difficulties or factors beyond
its control like electrical problems and weather related shutdowns could have an
adverse effect on revenues in any fiscal quarter. The Company recently began to
upgrade its information management systems in an effort to realize operational
efficiencies and to facilitate future growth. The Company's operations have
been, and may continue to be, disrupted in connection with the transition to the
new system. The transition is expected to be substantially completed by the end
of FY96.

                                       9
 
<PAGE>

      Volatility of Cheyenne's Common Stock. Cheyenne's earnings and stock
price have been and may continue to be subject to significant volatility,
particularly on a quarterly basis. Cheyenne has previously experienced
shortfalls in revenue and earnings from levels expected by securities analysts,
which had an immediate and significant adverse effect on the trading price of
Cheyenne's common stock. This may occur again in the future. Since a significant
percentage of Cheyenne's revenues are generated late in the fiscal quarter,
Cheyenne may not learn of revenue shortfalls until near the end of the fiscal
quarter, which could result in greater volatility in the trading price of
Cheyenne's common stock. Cheyenne's common stock is also subject to the
volatility of the high technology sector which is a highly dynamic industry, as
well as the strategic direction of, and announcements from, other companies such
as Novell and Microsoft which affect Cheyenne's business. In particular, the
assessment by investors of the relative performance of Novell's NetWare
operating system (Cheyenne's historically largest market) and Microsoft's
Windows NT operating system (a new market for Cheyenne not yet generating
significant revenue for the Company) may further increase the volatility of
Cheyenne's common stock.

       Volatility of Future Results. There are a number of factors and risks,
some beyond Cheyenne's control, which will also affect future operating results,
and increase the volatility of Cheyenne's common stock, including the size and
timing of significant orders; more effective competition which has increased
over recent periods; the ability of Cheyenne to timely develop, introduce and
market new products and upgrades which contain the functionality expected by
customers; market acceptance of new products and upgrades; the success of the
Company's sales and marketing programs; technological shifts and changes in the
storage management market and the other markets of the Company; the mix of sales
among Cheyenne's various channels, which compete against each other and result
in different gross margins to the Company; deferral or cancellation of orders in
anticipation of new products or upgrades; personnel changes; and general
economic factors in the worldwide markets where Cheyenne products are sold.

Results of Operations

The  following  Tables  1  and 2  include  a  summary  of  each  item  from  the
consolidated statements of earnings as a percentage of revenues. Please refer to
these tables while reading the following discussion.



















                            (continued on next page)


                                       10

<PAGE>


                                     TABLE 1
<TABLE>
<CAPTION>

                                                                                     Comparison FQ296 vs. FQ295
                                                                                     --------------------------
                                                                                              (Unaudited)
                                                                            FQ296                                      FQ295
                                                                      -----------------                          -----------------
                                                                      Amount      Ratio                          Amount      Ratio
                                                                      -------     -----                          -------     -----
                                                                                   (in thousands except per share data)
<S>                                                                   <C>         <C>                            <C>         <C> 
Revenues                                                              $42,449     100.0%                         $29,611     100.0%

Cost of sales                                                           7,585      17.9                            4,780      16.1
                                                                      -------     -----                          -------     -----
Gross profit                                                           34,864      82.1                           24,831      83.9
                                                                      -------     -----                          -------     -----

Operating expenses:
       Research and development                                         6,147      14.5                            3,174      10.7
       Selling and marketing                                           12,424      29.3                            9,253      31.3
       General and administrative                                       4,075       9.6                            2,272       7.7
       Charge for purchased research and development                    2,563       6.0                              547       1.8
                                                                      -------     -----                          -------     -----
                         Total operating expenses                      25,209      59.4                           15,246      51.5
                                                                      -------     -----                          -------     -----
Operating income                                                        9,655      22.7%                           9,585      32.4%
                                                                                  =====                                      =====

Non-operating income:
     Interest income and other                                            922                                        813
     Other losses                                                         ---                                       (379)
                                                                      -------                                    -------          

Income before income taxes                                             10,577                                     10,019

Provision for income taxes                                              3,464                                      3,406
                                                                      -------                                    -------     
Net income                                                             $7,113                                     $6,613
                                                                      =======                                    =======


Net income per share                                                  $  0.18                                    $  0.17
                                                                      =======                                    =======
Weighted average number of common shares and
       equivalents outstanding                                         38,888                                     39,879
                                                                      =======                                    =======
</TABLE>



                                       11


<PAGE>


                                     TABLE 2
<TABLE>
<CAPTION>

                                                                                  Six Months 1996 vs. Six Months 1995
                                                                                  -----------------------------------
                                                                                                (Unaudited)
                                                                      Six Months Ended                           Six Months Ended
                                                                        Dec. 31, 1995                              Dec. 31, 1994
                                                                      -----------------                          -----------------
                                                                      Amount      Ratio                          Amount      Ratio
                                                                      -------     -----                          -------     -----
                                                                                (in thousands except per share data)
<S>                                                                   <C>         <C>                            <C>         <C>    
Revenues                                                              $80,913     100.0%                         $51,263     100.0%

Cost of sales                                                          14,278      17.6                            8,540      16.7
                                                                      -------     -----                          -------     -----
Gross profit                                                           66,635      82.4                           42,723      83.3
                                                                      -------     -----                          -------     -----

Operating expenses:
       Research and development                                        11,313      14.0                            5,989      11.7
       Selling and marketing                                           23,550      29.1                           17,488      34.1
       General and administrative                                       7,352       9.1                            4,052       7.9
       Charge for purchased research and development                    4,199       5.2                              547       1.1
                                                                      -------     -----                          -------     -----
                         Total operating expenses                      46,414      57.4                           28,076      54.8
                                                                      -------     -----                          -------     -----
Operating income                                                       20,221      25.0%                          14,647      28.5%
                                                                                  =====                                      =====

Non-operating income:
     Interest income and other                                          1,648                                      1,565
     Other gains, net                                                     ---                                     20,853
                                                                      -------                                    -------          
Income before income taxes                                             21,869                                     37,065

Provision for income taxes                                              7,360                                     15,514
                                                                      -------                                    -------         
Net income                                                            $14,509                                    $21,551
                                                                      =======                                    =======


Net income per share                                                  $  0.37                                    $  0.54
                                                                      =======                                    =======

Weighted average number of common shares and
       equivalents outstanding                                         38,930                                     39,783
                                                                      =======                                    =======

</TABLE>
                                       12
<PAGE>


Revenues

       Cheyenne's revenues increased 43.4% in FQ296 versus FQ295 to $42,449,000
from $29,611,000. The increase is attributable to the expanding market for LAN
products, Cheyenne's broadening product line, increasing network data storage
requirements, more effective sales and marketing programs, plus increased sales
outside the United States and the addition of a few new distributors worldwide.

       As in previous fiscal quarters, substantially all of Cheyenne's revenues
from distribution in North America are from sales to three large distributors,
the largest of which accounted for 43.6% of North America distribution sales and
12.7% of total sales in FQ296. Except for each of the United States and Germany,
no one country accounted for more than 10% of the Company's total sales. A small
but increasing level of Company sales are from Japan, where Cheyenne conducts
its business in Yen. Cheyenne is therefore exposed to currency risk from
exchange rate movement of the US dollar versus the Yen. The currency risk
increases as the level of business conducted by Cheyenne in Japan grows.
Cheyenne also conducts an insignificant portion of its European business in
local currency and is subject to currency risk in these local currencies.
Cheyenne does not currently hedge against any foreign currency risk. 

A breakdown of sales is shown in Table 3.

                                     TABLE 3

                            SOFTWARE SALES BREAKDOWN

<TABLE>
<CAPTION>

                                                         FQ296               %             FQ295                 %
                                                       -------             -----          -------              -----
<S>                                                    <C>                 <C>            <C>                  <C>
Distribution:
      North America                                    $12,392              29.2%         $ 9,174               31.0%
      Europe                                            14,740              34.7           11,950               40.3
      Rest of World                                      3,050               7.2            1,513                5.1
                                                       -------             -----          -------              -----
   Total distribution:                                  30,182              71.1           22,637               76.4

Japan                                                    3,769               8.9            1,388                4.7

OEM                                                      4,947              11.7            3,070               10.4
Major Accounts                                           1,625               3.8              710                2.4
Direct and Other (U.S.)                                  1,926               4.5            1,806                6.1
                                                       -------             -----          -------              -----

   Total                                               $42,449             100.0%         $29,611              100.0%
                                                       =======             =====          =======              =====
</TABLE>

       Total distribution sales increased 33.3% in FQ296 versus FQ295, European
Distribution sales increased 23.3%, Japan sales increased 171.5%, and OEM sales
increased 61.1%. Sequentially (FQ296 versus FQ196), North America Distribution
sales increased 0.9%, European Distribution sales increased 20.4%, Japan sales
increased 12.9% and OEM sales increased 4.3%. The Company believes that some of
the increase in OEM sales may be from sales which previously might have been
made through the distribution channel.

       New product releases and upgrades like ARCserve 6 typically result in
revenue increases during the first three to six months due to initial inventory
purchases. The level of such purchases is generally based on the estimated rate
of sale to end users. If the actual rate differs from the expected rate, the
rate of purchases in subsequent periods may be affected.

       Cheyenne records an allowance for estimated returns each fiscal quarter
based on historical information and other factors known to the Company that
affect returns. Cheyenne estimates have generally been accurate, although
Cheyenne in the past has, and may in the future, underestimate actual returns.
Cheyenne increased the allowance for sales returns in FQ296 in connection with
the release of ARCserve 6 at the end of FQ296.
  
                                       13

<PAGE>

       In connection with the end of the quarter buying pattern discussed above,
certain distributors may purchase large amounts to obtain rebates and incentives
offered by the Company at the end of a fiscal quarter. The level of inventory
held by distributors is subject to the strategies and performance goals of each
distributor which change from time to time. As a result, quarterly fluctuations
in revenue could occur.

Please refer to Table 1

Gross Profit

       The gross profit margin was 82.1% for FQ296 and 83.9% FQ295. Prior
periods have been restated to reflect technical support costs which are now
included in Cost of Sales rather than Research & Development. The technical
support portion of Cost of Sales increased by more than 2% of sales while the
direct cost of production decreased by about 1% of sales. Cheyenne has seen a
decrease in gross margins over the last 2 fiscal years due to increases in the
percentages of sales from lower priced products, which have higher costs as a
percentage of the sales price, and increases in the cost of providing technical
support.

       The Company believes that providing a high level of technical support is
necessary to compete effectively and has accordingly invested and will continue
to invest in this area. Since the Company currently receives only insignificant
revenue from its technical support services, increases in the level of technical
support spending have and will continue to affect gross profit margins. The
failure of the Company to provide high quality technical support also could
materially affect revenues, further decreasing gross profit. It is anticipated
that incremental revenues from providing technical support will be increasing in
future quarters, partially offsetting the increased expenses.

       The release of competitive technology or market changes may cause
Cheyenne products to become obsolete more quickly than expected. From time to
time, the Company may incur significant inventory rework costs to modify
computer software and to correct software bugs, including the cost of replacing
inventory in the distribution channel. In either case, Cost of Sales would be
increased and gross margins could be adversely affected. Historically, this has
not been a significant issue for Cheyenne.

       Bad debt expense increased slightly due to credit problems experienced by
several of the Company's customers. Cheyenne in FQ296 generally experienced
delays in collections, which resulted in an increase in Days Sales Outstanding
from 79 in FQ196 to 90 in FQ296. The Company attributes this increase in DSO's
to general economic conditions, the granting of extended payment terms, the
significant portion of sales made at the end of the fiscal quarter and delayed
collections due in part to a new accounts receivable accounting software package
recently installed that experienced initial problems that have been resolved.

Research & Development Expenses (R&D)

R&D expenses increased 93.7% versus FQ295. R&D as a percentage of sales
increased to 14.5% versus 10.7% in last year's comparable quarter. The increase
was due to the Company's significantly broader product line that must further be
developed and supported by Cheyenne's engineering and technical personnel.

The Company continues to expand its product line by developing versions of its
products to support various operating systems, including Novell NetWare,
Microsoft Windows NT, Windows 3.1 and Windows 95, certain Unix operating
systems, and other operating systems. This effort has required significant
dollar level increases in research and development. However, it is anticipated
that R&D as a percentage of sales will not increase further, if internal sales
expectations are met.

All new products are subject to significant technical risk, based on the
complexity of the software and the required interaction with third party
hardware and software. In the past, the Company has experienced delays in the
development of new products or upgrades. Such delays may occur in the future.
There can be no assurance that material order deferrals in anticipation of new
products or upgrades will not occur. In addition, the Company has in the past
discovered software bugs (typical in complex software products) in released
products and may have lost revenues and customers as a result. Despite testing
by the Company, bugs may be found in the future in released products, including
ARCserve 6, which could result in loss or delay of market acceptance. In such
event, the Company's business and results could be adversely affected.

                                       14

<PAGE>


Selling and Marketing Expenses

Selling and Marketing expenses increased 34.3% in FQ296 versus FQ295. Selling
and Marketing expenses decreased to 29.3% of sales in FQ296 versus 31.3% last
year. The dollar increase was mainly due to the hiring of additional sales and
marketing personnel, particularly in Europe, where less sales support from the
Company's traditional distributors is anticipated as new distributors enter this
market, competing more on price and less on service. This trend is expected to
continue, and accordingly, further increases in Selling and Marketing expenses
in Europe will be necessary. Cheyenne's sales in Japan have increased, and the
Company continues to invest in that market. Cheyenne also continues to build a
sales, marketing and support infrastructure in non-Japan Asia, and South
America. The Company expects increased Selling and Marketing expenses as new
products are introduced in upcoming periods and that Selling and Marketing
expenses may increase as a percentage of sales from FQ296 levels. In FQ196, the
Company reclassified certain expenses from Selling and Marketing to offset
revenues. Prior periods have not been adjusted due to immateriality and net
income is not affected by the reclassification.

General and Administrative Expenses (G&A)

G&A expenses increased 79.4% in FQ296 versus FQ295. The portion of depreciation
expenses included in G&A has increased due to significant investments by the
Company in test equipment, new computers, new communications and MIS equipment
on a worldwide basis. Rent expense for the Company's new facility in Lake
Success also contributed to the increase. Legal expenses associated with the
shareholder lawsuit, the SEC Formal Order of Private Investigation and the PCPC
litigation also contributed to the increase.

The Company expects that G&A expenses will increase in dollar amount in
subsequent quarters as the Company expands its staffing and other support
operations, and, in FQ396, the Company expects a significant increase in legal
expenses related to the above matters.

Charge for Purchased Research and Development

On October 31, 1995, Cheyenne purchased certain assets of Media Blitz, Inc. In
connection with the acquisition, Cheyenne took a one time charge of
approximately $2,763,000 for the write-off of purchased R&D. The technological
feasibility of the in process technology was not yet established at the date of
the acquisition and the technology has no alternative use.

Total Operating Expenses

As a result of the above items, total operating expenses increased to
$25,209,000, or a 65.3% increase over last year's comparable quarter. Excluding
the charge for Purchased Research and Development in FQ296 and FQ295, total
operating expenses increased 54.1% versus last year's comparable quarter.
Operating expenses have also generally increased due to the Company's recent
acquisitions, and due to the cost of the assimilation of the sometimes
geographically diverse operations and personnel of the acquired companies.

Operating Income

Operating income (excluding the charge for Purchased Research and Development in
FQ296 and FQ295) increased to $12,218,000 in FQ296 from $10,132,000 in FQ295.
Operating income as a percentage of sales (excluding the charge for Purchased
Research and Development in FQ296 and FQ295) decreased in FQ296 to 28.7% of
sales versus 34.2% in FQ295. The Company continues to invest in its business and
build the infrastructure to support its global customer base and to improve its
long term competitive position. These increased costs have affected and may
continue to affect margins.

As noted above, a significant portion of the Company's revenue is from sales at
the end of each fiscal quarter. Since the Company commits to a substantial
portion of its operating expenses at the beginning of each fiscal quarter,
operating margins will be adversely affected by a shortfall in expected revenue.

Non-operating Income

Non-operating income increased from $434,000 (a figure reduced by certain losses
from the sale of securities) in FQ295 to $922,000 in FQ296. Interest income
increased from $813,000 in FQ295 to $882,000 in FQ296.

                                       15

<PAGE>


Provisions for Income Taxes

The effective income tax rate on pretax earnings was 32.8% in FQ296. In FQ296,
Cheyenne realigned its operations to obtain efficiencies and to improve cash
flow. The realignment resulted in an approximate 1.2% decrease in Cheyenne's
effective tax rate from FQ196 and the decrease is also expected in subsequent
quarters. The Company obtains tax benefits from its FSC and tax-exempt
investment income. Generally, higher foreign income taxes compared to prior
periods offset some of the benefits described above.

Per Share Data

The net income per share was 18 cents versus 17 cents for the comparable quarter
last year. Excluding the charge for Purchased Research and Development in FQ296
and FQ295, net income per share was 23 cents versus 18 cents for the comparable
quarter last year.

Liquidity and Capital Resources

The Company had no debt and $70,017,000 in cash, cash equivalents and
investments as of December 31, 1995. Cash, cash equivalents and investments
decreased $8,383,000 in FQ296 from FQ196 primarily due to the making of two (2)
quarterly estimated tax payments in FQ296, acquisition costs and significant
capital investments in the Company's Lake Success facility and international
offices. All accounts payable are current. Accounts receivable are collected on
average in 90 days. This level is higher than in prior periods, due to
collection problems discussed above, the granting of extended payment terms and
the even higher level of sales at the end of FQ296.

Capital expenditures for the six months ended December 31, 1995 were $7,435,000
versus $3,403,000 in last year's comparable period. The increase is due to
purchases of furniture, as well as computer, telephone and test equipment needed
to support the growing employee base and business. The Company is leasing
certain equipment on terms it believes favorable, which has increased cash
available for operations. It is anticipated that capital expenditures will be
about $15,000,000 in FY96 versus $10,974,000 in FY95. Further investments in
computers, test equipment and facilities are planned based upon continued growth
in the number of employees to support Cheyenne's growing business and the
partial move to a new 100,000 square foot facility located in Lake Success, New
York, near the current corporate headquarters in Roslyn Heights, New York.

Cheyenne may utilize significant portions of cash in connection with potential
acquisitions. Cheyenne may also continue the purchase of its common stock.

Management believes Cheyenne's current cash, cash equivalents and investment
positions coupled with anticipated cash flow from operations, will be adequate
to meet its anticipated cash requirements for planned capital expenditures and
operations for the next twelve months and any additional purchases of the
Company's common stock.

Six Months Comparison

The six months comparison of Results of Operations for FY96 versus FY95 is shown
in Table 2. In general, the same factors that were discussed in connection with
the three months ended FQ296 versus FQ295 discussion apply to the six month
comparison. As shown, net income for the first six months of FY96 was 37 cents
versus 54 cents during the same period last fiscal year. Excluding one time
charges for Purchased Research and Development in FQ296, FQ196 and FQ295, and
the one time gain of 28 cents per share in FQ195, net income for the first six
months of FY96 was 45 cents versus 27 cents during the same period last fiscal
year.


                                       16


<PAGE>


                           PART II - OTHER INFORMATION

Item 1.    Legal Proceedings

Neither Cheyenne nor any of its subsidiaries is a party to any material pending
legal proceedings, other than routine litigation incidental to the business, and
other than as set forth below:

1)   In re Cheyenne Software, Inc. Securities Litigation
     Master File No. 94 Civ. 2771 (TCP)

       On or about June 11, 1994, a securities fraud class action Complaint,
entitled Bell v. Cheyenne Software, Inc., et al., was filed in the United States
District Court for the Eastern District of New York. The lawsuit names as
defendants the Company and several of its officers and directors. In the
following weeks, several other similar lawsuits were filed in the Eastern
District of New York. The actions allege securities fraud claims under Sections
10(b) and 20 of the Securities Exchange Act of 1934, and seek compensatory
damages on behalf of all the shareholders who purchased shares between
approximately January 24, 1994 and approximately June 17, 1994, as well as
attorneys' fees and costs. The gravamen of the actions is that the Company and
the individual defendants made misrepresentations and omissions to the public,
which caused the Company's stock to be artificially inflated. The suits rely on
what is known as the "fraud on the market" theory of liability.

       On July 20, 1994, the Court ordered that all of the actions be
consolidated under the caption of In re Cheyenne Software, Inc. Securities
Litigation. On March 8, 1995, plaintiffs filed an Amended Complaint. On March
23, 1995, plaintiffs served a Motion for Class Certification. The Company has
contested certain aspects of that Motion, and the Court has yet to issue a
ruling. On April 11, 1995, the Company served a Motion to Dismiss certain of the
claims alleged in the Amended Complaint. The Motion to Dismiss is expected to be
heard by March-June, 1996.

       The defendants deny any and all liability and intend to vigorously defend
against the claims.

 2)  Rand v. Oxenhorn, et al.
     Delaware Chancery Court (New Castle County) No. 13583

       On or about June 27, 1994, a shareholder derivative Complaint, entitled
Rand v. Oxenhorn, et al., was filed in the Court of Chancery for the State of
Delaware in and for New Castle County. The lawsuit, purportedly filed
derivatively on behalf of the Company, names as defendants eleven of its present
or former officers and directors. The Complaint's factual allegations are
similar to those of In re Cheyenne Software, Inc. Securities Litigation
described above. However, instead of securities fraud claims, the action alleges
that the defendants breached their fiduciary obligations to the Company. The
suit seeks a variety of compensatory damages as well as attorneys fees.

       On August 19, 1994, the defendants filed a Motion to Dismiss on the
grounds that (1) the plaintiff failed to comply with the pleading and demand
requirements of a derivative action and (2) the pleadings fail to state a claim
upon which relief may be granted. On October 14, 1994, and before defendants'
Motion to Dismiss was ruled on, an Amended Complaint was filed only naming as
defendants six of Cheyenne's officers or directors. Cheyenne filed a Motion to
Dismiss the Amended Complaint on the same grounds listed above on February 16,
1995.

       The defendants deny any and all liability and intend to vigorously defend
against the claims.

3)   SEC Formal Private Investigation

       On June 28, 1994, the SEC commenced an Informal Inquiry into Cheyenne. On
or about April 14, 1995, the SEC advised the Company that it had issued a Formal
Order of Private Investigation of the Company. The Private Investigation is a
continuation of the Informal Inquiry. The Formal Order, among other things,
enables the SEC to utilize its subpoena powers to obtain relevant information
from third parties as well as the Company. The Private Investigation relates to
possible violations of federal securities laws. The Company has been cooperating
and intends to continue cooperating fully with the SEC.
  
                                       17
<PAGE>

4)   JWANCO, Inc., et al. v. Cheyenne Software, Inc. et al.
     California Superior Court (County of Alameda) No. H-183331-1

       On or about May 2, 1995, plaintiffs JWANCO, Inc. (formerly known as Bit
Software, Inc.), Jonathan Wan, Yau Ki Chuck, Norman Chan, David Law and David
Wong filed an action in the Superior Court of California in and for the County
of Alameda against the Company, Cheyenne Communications, Inc., a wholly owned
subsidiary of the Company, and several of its officers, directors and employees.
The Complaint alleges breach of contract, fraud, wrongful termination, negligent
infliction of emotional distress, and a number of other related torts. The
essence of the allegations is that the defendants breached agreements and
defrauded JWANCO, Inc., and the individual plaintiffs in connection with the
Company's acquisition of certain assets and assumption of certain liabilities of
Bit Software, Inc. on May 19, 1994. These allegations are substantially similar
to those In re Cheyenne Software, Inc. Securities Litigation described above. In
addition, the Complaint alleges, on behalf of plaintiff Jonathan Wan only,
wrongful termination and a variety of other causes of action relating to the
employment and termination of the employment of Jonathan Wan by Cheyenne
Communications. The defendants have removed the action to the United States
District Court, and have moved to transfer it to New York. Management of the
Company, based on advice of outside legal counsel, does not believe that the
ultimate resolution of this lawsuit will have a material adverse affect on the
financial position or results of operations of the Company.

       Although no answer has yet been filed, the defendants deny any and all
liability and intend to vigorously defend against the claims.

5)   Beier v. Cheyenne Software, Inc., et al.
     Master File No. 95 Civ. 2275 (DRH)

       On or about September 26, 1995, a Complaint was filed against the Company
and one of its officers alleging fraudulent and negligent misrepresentation. The
plaintiff alleges that misrepresentations were made to him by one of the
Company's officers in connection with the plaintiffs investment decision in
Cheyenne's common stock in June, 1994. The Company's motion to consolidate this
action with In Re Cheyenne Software, Inc. Securities Litigation described above
was recently denied. On January 26, 1996, the Company served a Motion to Dismiss
all of the claims alleged in the Complaint. The Motion to Dismiss is expected to
be heard by June, 1996.

       The defendants deny any and all liability and intend to vigorously defend
against the claims.

6)   PCPC v. Cheyenne Software, Inc.
     United States District Court (District of Delaware) Case No. 95-301 (SLR)

       On May 19, 1995, Personal Computer Peripherals Corporation ("PCPC") filed
a lawsuit in the United States District Court for the District of Delaware, Case
No. 95-301(SLR), naming Cheyenne, Legato Systems, Inc., Arcada Software,
Artisoft, Palindrome (a subsidiary of Seagate) and Symantec as defendants. PCPC
alleges infringement of patent No. 5,135,065, entitled "Backup Computer Program
for Networks" issued to PCPC on July 21, 1992. PCPC is seeking an injunction
against infringement of its patent, treble damages, attorneys' fees and other
damages. On July 10, 1995, Cheyenne answered the Complaint and denied any and
all liability.

       Cheyenne intends to vigorously defend against the claims. Management of
the Company, based on advice of outside legal counsel, does not believe that the
ultimate resolution of this lawsuit will have a material adverse affect on the
financial position or results of operations of the Company.

Item 2.    Changes in Securities

              Not applicable.

Item 3.    Defaults Upon Senior Securities

              Not applicable.

                                       18
<PAGE>

Item 4.    Submission of Matters to a Vote of Security Holders

              Cheyenne's Annual Meeting of Stockholders was held on December 14,
              1995. The stockholders approved the following:

              (i)    The election of each of the following nominees to the Board
                     of Directors:
<TABLE>
                     <S>                              <C>                        <C>   
                     Rino Bergonzi                    For:  33,124,624           Withheld:  121,685

                     ReiJane Huai                     For:  33,126,558           Withheld:  119,751

                     Richard F. Kramer                For:  33,126,911           Withheld:  119,598

                     Bernard D. Rubien                For:  33,098,849           Withheld:  147,460

                     Ginette Wachtel                  For:  33,103,574           Withheld:  142,735
</TABLE>

              (ii)   Ratification of the appointment of KPMG Peat Marwick LLP,
                     as independent auditors of the Company for the fiscal year
                     ending June 30, 1996:

                      For:  33,114,596                   Against:  52,765 
                                     Abstention:  78,948

              (iii)  Amendments to the Company's 1989 Incentive Stock Option
                     Plan (the "Incentive  Plan") to increase the aggregate
                     number of shares of common stock $0.01 par value per share
                     (the Common Stock) which may be issued upon the exercise
                     of all options granted pursuant to the Incentive Plan from
                     4,806,250 shares to  5,806,250  shares and to impose a
                     grant  limit under the Incentive Plan.

                     For:  12,633,720                    Against:  11,605,260 
                                     Abstention:  172,559

           The stockholders did not approve the following:

                     Amendments to the Company's 1987 Non-Qualified Stock
                     Option Plan (the "Non-Qualified Plan") to increase the
                     aggregate number of shares of Common Stock which may be
                     issued upon the exercise of all options granted pursuant
                     to the Non-Qualified Plan from 4,237,500 shares to
                     5,587,500 shares and to impose a grant limit under the
                     Non-Qualified Plan.
 
                      For:  11,319,164                   Against:  12,919,128
                                     Abstention:  173,247

Item 5.    Other Information

              Not applicable.

Item 6.    Exhibits and Reports on Form 8-K

              (a) 27. Financial Data Schedule
              (b) Reports on Form 8-K:      None


                                       19

<PAGE>


SIGNATURE

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.


                                       CHEYENNE SOFTWARE, INC.


Date:   February 13, 1996              By:     /s/  Elliot Levine
                                          -------------------------------------
                                       Elliot Levine, Executive Vice President,
                                       Senior Financial Officer and Treasurer
                                       (Principal Financial Officer)




                                       20