SECURITIES AND EXCHANGE COMMISSION

                          WASHINGTON, D.C.   20549-1004

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000

                        COMMISSION FILE NUMBER  0-020992

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

          MASSACHUSETTS                                          04-2842217
(State  or  other  jurisdiction                           (I.R.S.  Employer
of  incorporation  or  organization)                     Identification  Number)


                                 101 MAIN STREET
                       CAMBRIDGE, MASSACHUSETTS 02142-1521
   (Address, including zip code, of registrant's principal executive offices)

                                 (617) 577-1017
               (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  AT  LEAST  THE  PAST  90  DAYS.

                     YES      X              NO
                            -----

AS  OF  AUGUST  10,  2000 THERE WERE 10,663,178 SHARES OF COMMON STOCK, $.01 PAR
VALUE  PER  SHARE,  OUTSTANDING.


<PAGE>
<TABLE>
<CAPTION>
                         MATHSOFT, INC. AND SUBSIDIARIES

                                    FORM 10-Q

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000

                                TABLE OF CONTENTS

                                                                              PAGE
                                                                              ----
<S>                                                                           <C>

PART I.    FINANCIAL INFORMATION:

 Item 1. Consolidated Condensed Financial Statements

           - Consolidated Condensed Balance Sheets as of
               June 30, 2000 (unaudited) and December 31, 1999                  3

           - Consolidated Condensed Statements of Income for the
               Three and Six Months Ended June 30, 2000 and 1999 (unaudited)    5

           - Consolidated Condensed Statements of Cash Flows for the
               Six Months Ended June 30, 2000 and 1999 (unaudited)              6

           - Notes to Consolidated Condensed Financial Statements               8

  Item 2. Management's Discussion and Analysis of Financial
               Condition and Results of Operations                             12

  Cautionary Statements                                                        16

  Item 3. Quantitative and Qualitative Disclosures about Market
          Risk                                                                 20

PART II.   OTHER INFORMATION:

  Item 4. Submission of Matters to a Vote of Security Holders                  21

  Item 5. Other Information                                                    22

  Item 6. Exhibits and Reports on Form 8-K                                     22

SIGNATURES                                                                     23
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
                         MATHSOFT, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                     ASSETS
                                   (UNAUDITED)


                                                        JUNE  30,   DECEMBER  31,
                                                          2000         1999
                                                       -----------  -----------
<S>                                                    <C>          <C>
CURRENT ASSETS:
       Cash and cash equivalents                       $ 5,462,520  $ 8,444,259
       Accounts receivables, less reserves of
            approximately $1,026,775 at June 30, 2000
            and $1,134,000 at December 31, 1999          6,209,525    4,743,130
       Other receivables                                 1,373,885    1,420,154
       Inventories                                         189,201      262,760
       Prepaid expenses                                    688,214      382,291
                                                       -----------  -----------
                    Total current assets                13,923,345   15,252,594
                                                       -----------  -----------
PROPERTY AND EQUIPMENT, AT COST:
       Computer equipment and software                   6,352,066    5,529,795
       Property and equipment under capital lease          993,043      918,042
       Furniture and fixtures                            1,288,020    1,105,128
       Leasehold improvements                              652,200      626,534
                                                       -----------  -----------
                                                         9,285,329    8,179,499
       Less - Accumulated depreciation                   7,261,608    6,865,495

                                                         2,023,721    1,314,004
                                                       -----------  -----------

OTHER ASSETS, INCLUDING INTANGIBLES, NET                   380,349      425,922
                                                       -----------  -----------
                                                       $16,327,415  $16,992,520
                                                       ===========  ===========
</TABLE>

The  accompanying  notes  are  an integral part of these consolidated condensed
financial  statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
                         MATHSOFT, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                   (UNAUDITED)


                                                           JUNE 30,      DECEMBER 31,
                                                             2000            1999
                                                         -------------  --------------
<S>                                                      <C>            <C>
CURRENT LIABILITIES:
       Current portion of capital lease obligations
            and equipment financing                      $    399,877   $     383,537
       Accounts payable                                     3,161,608       2,362,150
       Accrued expenses and other current liabilities       3,939,067       2,742,141
       Deferred revenue                                     3,016,784       2,722,052
                                                         -------------  --------------
                    Total current liabilities              10,517,336       8,209,880
                                                         -------------  --------------

Capital Lease Obligations and Equipment Financing,
           Less current portion                               138,889         148,442
                                                         -------------  --------------
STOCKHOLDERS' EQUITY:
       Preferred stock, $.01 par value -
            Authorized - 1,000,000 shares
            Issued and outstanding-none                             -               -
       Common stock, $.01 par value-
            Authorized - 20,000,000 shares
            Issued and outstanding - 10,663,178 shares
            at June 30, 2000 and 9,931,990 shares at
            December 31, 1999                                 106,632          99,320
       Additional paid-in capital                          32,465,237      30,834,687
       Accumulated deficit                                (26,323,821)    (22,213,919)
       Notes receivable for stock (Note 8)                   (550,000)              -
       Cumulative translation adjustment                      (26,858)        (85,890)
                                                         -------------  --------------
                   Total stockholders' equity               5,671,190       8,634,198
                                                         -------------  --------------
                                                         $ 16,327,415   $  16,992,520
                                                         -------------  --------------
<FN>
The accompanying notes are an integral part of these consolidated condensed financial
statements.
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                         MATHSOFT INC, AND SUBSIDIARIES
             CONSOLIDATED CONDENSED STATEMENTS OF INCOME OPERATIONS
                                  (UNAUDITED)


                                                        THREE MONTHS ENDED             SIX MONTHS ENDED
                                                              JUNE 30,                     JUNE 30,
                                                      -----------------------------------------------------
                                                         2000          1999          2000          1999
                                                      ------------  ------------  ------------  ------------
REVENUES:
<S>                                                   <C>           <C>           <C>           <C>
  Software licenses                                   $ 5,267,004   $ 5,110,605   $11,224,110   $10,387,402
  Services and other                                    2,586,548     1,417,960     4,450,857     2,680,387
                                                      ------------  ------------  ------------  ------------
    Total revenues                                      7,853,552     6,528,565    15,674,967    13,067,789
                                                      ------------  ------------  ------------  ------------

COST OF REVENUES:
  Software licenses                                       915,857       838,398     1,952,283     1,643,750
  Services and other                                    2,097,196       430,059     3,423,972       819,500
                                                      ------------  ------------  ------------  ------------
    Total cost of revenues                              3,013,053     1,268,457     5,376,255     2,463,250
                                                      ------------  ------------  ------------  ------------
    Gross profit                                        4,840,499     5,260,108    10,298,712    10,604,539
                                                      ------------  ------------  ------------  ------------

OPERATING EXPENSES:
  Sales and marketing                                   4,482,804     2,937,498     8,935,828     5,753,073
  Research and
      development - gross                               2,997,802     2,326,943     5,933,970     4,553,472
  Less funded research                                 (1,208,205)   (1,149,575)   (2,513,629)   (2,188,529)
                                                      ------------  ------------  ------------  ------------
  Research and development, net                         1,789,597     1,177,368     3,420,341     2,364,943
  General and administrative                            1,085,275       768,299     2,118,700     1,503,678
                                                      ------------  ------------  ------------  ------------
    Total operating expenses                            7,357,676     4,883,165    14,474,869     9,621,694
                                                      ------------  ------------  ------------  ------------

    INCOME (LOSS) FROM OPERATIONS                      (2,517,174)      376,943    (4,176,157)      982,845

Interest income, net                                       53,721        34,301       111,651        75,741

                                                      ------------  ------------  ------------  ------------

    INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES    (2,463,457)      411,244    (4,064,506)    1,058,586

Provision for income taxes                                 29,545        22,340        45,396        32,420
    NET INCOME (LOSS)                                 $(2,493,001)  $   388,904   $(4,109,902)   $1,026,166
                                                      ------------  ------------  ------------  ------------

Basic Net Income (loss) Per Share                     $     (0.24)  $      0.04   $     (0.40)  $      0.11
                                                      ============  ============  ============  ============
Diluted Net Income (loss) Per Share                   $     (0.24)  $      0.04   $     (0.40)  $      0.10
                                                      ============  ============  ============  ============
WEIGHTED AVERAGE NUMBER
     OF SHARES OUTSTANDING                             10,398,246     9,766,175    10,232,106     9,726,615
                                                      ============  ============  ============  ============
WEIGHTED AVERAGE SHARES
     OUTSTANDING ASSUMING DILUTION                     10,398,246    10,495,170    10,232,106    10,682,252
                                                      ============  ============  ============  ============


The  accompanying  notes  are  an  integral part of these consolidated condensed financial  statements.
</TABLE>


                                        5
<PAGE>
<TABLE>
<CAPTION>
                         MATHSOFT, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


                                                                                    SIX MONTHS ENDED
                                                                                         JUNE 30,
                                                                                   2000            1999
                                                                               --------------  --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                            <C>           <C>
  Net income (loss)                                                            $(4,109,902)  $     1,026,166
  Adjustments to reconcile net income (loss) to net
    cash (used in) provided by operating activities -
     Depreciation and amortization                                                 441,952           427,138
     Changes in assets & liabilities-
         Accounts receivables                                                   (1,466,395)         (437,294)
         Other receivables                                                          46,270            65,156
         Inventories                                                                73,558           118,952
         Prepaid expenses                                                         (126,819)         (251,024)
         Accounts payable                                                          799,458          (389,680)
         Accrued expenses                                                        1,196,926          (539,414)
         Deferred revenue                                                          294,732           321,642
                                                                               ------------  ----------------
             Net cash (used in) provided by operating activities                (2,850,220)          341,642

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                                           (1,105,829)         (263,597)
  Decrease (Increase) in other assets                                                 (268)           11,500
                                                                               ------------  ----------------
            Net cash used in investing activities                               (1,106,097)         (252,097)
                                                                               ------------  ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on note payables                                                              -           (65,036)
  Payments on capital lease obligations and equipment financing                   (367,111)         (258,737)
  Borrowings on capital lease obligations and equipment financing                  194,795           255,255
  Proceeds from exercise of stock options and
        Employee Stock Purchase Plan                                             1,087,862           730,624
                                                                               ------------  ----------------
            Net cash provided by financing activities                              915,546           662,106

Effect of exchange rate changes on cash and cash equivalents                        59,032           (12,437)
                                                                               ------------  ----------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                       (2,981,739)          739,214

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                   8,444,259         5,706,657
                                                                               ------------  ----------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                       $ 5,462,520   $     6,445,871
                                                                               ============  ================
</TABLE>

The  accompanying  notes  are  an  integral part of these consolidated condensed
financial  statements


                                        6
<PAGE>
<TABLE>
<CAPTION>
                         MATHSOFT, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (CONTINUED)
                                   (UNAUDITED)



                                                             SIX MONTHS ENDED
                                                                 JUNE 30,
                                                             ----------------
                                                               2000    1999
                                                             -------  -------
<S>                                                          <C>      <C>
SUPPLEMENTAL DISCLOSURE OF NON-CASH
    FINANCING
          Issuance of Note Receivable for the Exercise
                of 275,000 Common Stock Options              $550,000  $     -
                                                             --------  -------



                                                             SIX MONTHS ENDED
                                                                 JUNE 30,
                                                             ----------------
                                                               2000     1999
                                                             -------  -------
<S>                                                          <C>      <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
    INFORMATION:
          Cash paid during the period for-
                Interest                                     $44,751  $33,634
                                                             =======  =======
                Income taxes                                 $ 6,824  $20,000
                                                             =======  =======


The  accompanying  notes  are  an  integral part of these consolidated condensed
financial  statements.
</TABLE>


                                        7
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.  BASIS  OF  PRESENTATION

The accompanying unaudited consolidated condensed financial statements have been
prepared  by  MathSoft, Inc. ("MathSoft" or the "Company") pursuant to the rules
and  regulations  of  the  Securities  and Exchange Commission regarding interim
financial  reporting.  Accordingly,  they  do not include all of the information
and  footnotes required by generally accepted accounting principles for complete
financial  statements  and  should  be read in conjunction with the consolidated
financial statements and notes thereto for the three-month and six-month periods
ended  June  30,  2000.  The  accompanying  consolidated  condensed  financial
statements  reflect  all  adjustments  (consisting  solely  of normal, recurring
adjustments)  which  are,  in  the  opinion  of management, necessary for a fair
presentation  of  results  for  the  interim  periods presented.  The results of
operations for the three-month and six-month periods ended June 30, 2000 are not
necessarily  indicative  of the results to be expected for the full fiscal year.

2.  RECLASSIFICATION  OF  AMOUNTS

Certain amounts in the financial statements for the year ended December 31, 1999
have  been  reclassified  to  conform  to the presentation for the three and six
month  periods  ended  June  30,  2000.

3.  INVENTORIES

Inventories  are stated at the lower of cost (first-in, first-out) or market and
consist  of  the  following:

<TABLE>
<CAPTION>
                        JUNE 30,   DECEMBER 31,
                          2000         1999
                        ---------  -------------
<S>                     <C>        <C>
Materials and supplies  $  73,456  $      82,444
Finished goods            115,745        180,316
                        ---------  -------------
                        $ 189,201  $     262,760
                        ---------  -------------
</TABLE>


                                        8
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


4.  NET  INCOME  (LOSS)  PER  SHARE

The Company reports earnings per share in accordance with SFAS No. 128, Earnings
per  Share.  Under  SFAS  No.  128,  basic net income (loss) per common share is
computed  based  on  net  income (loss) available to common stockholders and the
weighted average number of common shares outstanding during the period.  Diluted
net  income  per  share is computed by including the number of additional common
shares  that would have been outstanding if the dilutive potential common shares
had been issued.  For the three and six months ended June 30, 2000, dilutive net
loss  per  share is calculated the same as basic as all common stock equivalents
are  considered  antidilutive  due  to  the  Company's  net  loss  position.

A  reconciliation  of  basic  and  diluted  shares  outstanding  is  as follows:

<TABLE>
<CAPTION>
                                  THREE MONTHS ENDED     SIX MONTHS ENDED
                                        JUNE 30,            JUNE 30,
                               ----------------------  ----------------------
                                  2000        1999       2000        1999
                               ----------  ----------  ----------  ----------
<S>                            <C>         <C>        <C>         <C>
Weighted average shares
    outstanding                10,398,246   9,766,175  10,232,106   9,726,615

Effect of dilutive securities         -       728,995         -       955,637
                               ----------  ----------  ----------  ----------
Weighted average shares
outstanding assuming dilution  10,398,246  10,495,170  10,232,106  10,682,252
                               ==========  ==========  ==========  ==========
</TABLE>

The  following  securities  were  not included in computing diluted earnings per
share  because  their  effect  would  be  antidilutive:

<TABLE>
<CAPTION>
                          THREE MONTHS ENDED    SIX MONTHS ENDED
                                JUNE 30,             JUNE 30,
                         -------------------  ------------------
                           2000       1999      2000      1999
                         ----------  -------  ---------  -------
<S>                      <C>        <C>       <C>       <C>
Antidilutive securities   2,878,421  387,736  2,878,421  271,886
                         ==========  =======  =========  =======
</TABLE>


                                        9
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

5.  COMPREHENSIVE  INCOME

The Company reports comprehensive income (loss) in accordance with SFAS No. 130,
Reporting Comprehensive Income.  Under SFAS No. 130, comprehensive income (loss)
is  computed as the total of net income (loss) and all other nonowner changes in
equity.

Total  comprehensive  income  is  as  follows:

<TABLE>
<CAPTION>
                               THREE MONTHS ENDED         SIX MONTHS ENDED
                                     JUNE 30,                  JUNE 30,
                             -----------------------  -------------------------
                                2000         1999         2000          1999
                             ------------  ---------  ------------  -----------
<S>                          <C>           <C>        <C>           <C>
Net income (loss)            $(2,493,001)  $388,904   $(4,109,902)  $1,026,166
Cumulative translation
       adjustment                 41,420    (11,338)       59,032      (12,437)
                             ------------  ---------  ------------  -----------
Comprehensive income (loss)  $(2,451,581)  $377,566   $(4,050,870)  $1,013,729
                             ------------  ---------  ------------  -----------
</TABLE>

6.     SEGMENT  REPORTING

The  Company's  continuing  operations  are classified in three primary business
segments:  (1)  Engineering  and  Education Software Products Division, (2) Data
Analysis  Products  Division and (3) FreeScholarships.com.  Summarized financial
information  by  business  segment  for  continuing  operations  is  as follows:


<TABLE>
<CAPTION>
                                        THREE  MONTHS  ENDED     SIX  MONTHS  ENDED
                                                  JUNE 30,           JUNE 30,
                                      ------------------------  ------------------
                                                2000     1999      2000      1999
                                      ---------------  -------  --------  --------
                                             (IN THOUSANDS)      (IN THOUSANDS)
<S>                                   <C>              <C>      <C>       <C>
Segment Revenues:
    Engineering and Education
       Software Products Division     $        3,933   $3,639   $ 8,182   $ 7,343
    Data Analysis Products Division            3,659    2,890     7,196     5,725
    FreeScholarships.com                         262        0       297         0
                                      ---------------  -------  --------  --------
           Total net revenues         $        7,854   $6,529   $15,675   $13,068
                                      ---------------  -------  --------  --------

Segment Income (Loss):
    Engineering and Education
       Software Products Division     $          106   $  229   $   411   $   398
    Data Analysis Products Division              562      360     1,196       828
    FreeScholarships.com                      (3,161)    (200)   (5,716)     (200)
                                      ---------------  -------  --------  --------
           Total net income (loss)    $       (2,493)  $  389   $(4,109)  $ 1,026
                                      ---------------  -------  --------  --------
</TABLE>


                                       10
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

              Notes to Consolidated Condensed Financial Statements
                                   (Unaudited)

7.  NEW  ACCOUNTING  STANDARDS

The  Securities and Exchange Commission released Staff Accounting Bulletin (SAB)
No. 101, Revenue Recognition in Financial Statements, on December 3, 1999.  This
bulletin provides additional guidance on the accounting for revenue recognition,
including both broad conceptual discussions as well as certain industry-specific
guidance.  The  guidance  is effective for the quarter ending December 31, 2000.
The  Company  does  not  expect  the  adoption of SAB No. 101 to have a material
impact  on  the  Company's  results  of  operations.

In  March  1999,  the  FASB issued Interpretation No. 44, Accounting for Certain
Transactions  Involving  Stock Compensation-An Interpretation of APB Opinion No.
25.  The  interpretation  clarifies  the  application  of  Opinion 25 in certain
situations, as defined.  The interpretation is effective July 1, 2000 but covers
certain  events  that  occurred after December 15, 1998 but before the effective
date of the interpretation. The effects of applying this interpretation would be
recognized  on  a  prospective basis from the effective date.  Accordingly, upon
initial  application  of the interpretation, (a) no adjustments would be made to
the  financial  statements  for the periods before the effective date and (b) no
expense  would  be recognized for any additional compensation cost measured that
is attributable to periods before the effective date.  MathSoft expects that the
adoption  of  this  interpretation would not have any effect on the accompanying
financial  statements.

8.  NOTE  RECEIVABLE

On  June  20,2000, the Company loaned a $550,000 on a full recourse basis to its
CEO  for  the  exercise  of  the Company's common stock options.  The note bears
interest  of  8% in the first two years, and the prime rate in years thereafter,
currently  9.5%.  The  Company  has  a  security interest in up to 50% of common
shares  issued upon the exercise of the underlying stock options.  The principal
and  any accrued but unpaid interest is payable on demand at any time after June
19,  2002,  or  earlier  upon  the  occurrence  of certain specific events.  The
Company has recorded the note receivable as a reduction in stockholder equity in
the  accompanying  consolidated  financial  statements.


                                       11
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Three  Months  Ended June 30, 2000 compared with the Three Months Ended June 30,
1999.

RESULTS  OF  OPERATIONS

Total  net  revenues  increased 20.3% from $6,529,000 for the three months ended
June  30,  1999  to  $7,854,000  for  the three months ended June 30, 2000.  The
increase in total net revenues was primarily attributable to an increase in both
license  and  service revenue generated from the Data Analysis Products Division
and  to  a  lesser  extent,  an  increase  in  revenue  from the Engineering and
Education  Software  Products Division.  FreeScholarships.com generated revenues
during  the  three  months  ended  June  30,  2000  of  $262,000, primarily from
advertising  on  its  website.  The  FreeScholarships.com  website  commenced
operations  in  February  2000.

Worldwide  Data  Analysis  Products  Division  net revenues increased 26.6% from
$2,890,000  in  the  three months ended June 30, 1999 to $3,659,000 in the three
months ended June 30, 2000, and increased as a percentage of total revenues from
44.3%  to  46.6%.  The  increase was primarily attributable to service revenues,
which  include  maintenance,  training  and  consulting. The increase in service
revenues  was primarily attributable to the release of S-PLUS 2000 in June 1999,
providing  the  division  with  an  expanded  customer  base.

Worldwide  Engineering  and  Education  Software  Products Division net revenues
increased  8.1%  from  $3,639,000  for  the three months ended June 30, 1999, to
$3,933,000  for  the three months ended June 30, 2000.  This Division's revenues
decreased  as  a  percentage  of  total  net  revenues from 55.7% to 50.1%.  The
increase  in  net  revenue  was  primarily  due  to  growth  of 103% in sales of
StudyWorks,  which  exceeded  Mathcad  revenue  for the first time this quarter.
Mathcad  product line revenues declined 19% versus second quarter of 1999 levels
due  to  flat  international  sales  and  a decrease in education channel sales.

Total  international  net  revenues attributable to sales of all Company product
lines decreased slightly from $1,649,000 in the three months ended June 30, 1999
to  $1,639,000  in  the  three  months  ended  June 30, 2000, and decreased as a
percentage  of  total  revenues  from  25.3%  to  20.9%,  respectively

Total  cost  of  revenues  increased 137.5%, from $1,268,000 in the three months
ended  June 30, 1999, to $3,013,000 in the three months ended June 30, 2000, and
increased  as  a percentage of total revenues from 19.4% to 38.4%, respectively.
The  increase  in  total  cost of revenues as a percentage of total revenues was
primarily  attributable  to  web  hosting and content costs, internet connection
charges,  equipment  depreciation,  and compensation and scholarship awards, all
associated  with  FreeScholarships.com.  In  addition,  direct  materials  as  a
percentage  of  revenues  increased  as  lower margin software products, such as
StudyWorks,  and  Data  Analysis  Products  Division  software  services such as
consulting,  accounted  for  a  greater  portion  of  overall  revenues.

Sales and marketing expenses increased 52.6% from $2,937,000 in the three months
ended  June  30, 1999 to $4,483,000 in the three months ended June 30, 2000, and
increased  as  a percentage of total revenues from 45.0% to 57.1%, respectively.
The  increase in overall sales and marketing expenses was primarily attributable
to FreeScholarships.com advertising.  The software divisions experienced a 9.8%


                                       12
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS  OF  OPERATIONS  (CONTINUED)

increase  due  to  advertising  and  compensation  supporting  the  sales growth
experienced  in  the  quarter.

Net  research and  development  expenses  increased 52.0% from $1,177,000 in the
three  months  ended June 30, 1999 to $1,790,000 for the three months ended June
30,  2000,  and increased as a percentage of total revenues from 18.0% to 22.8%,
respectively.  The overall increase in net research and development expenses was
primarily  attributable to FreeScholarships.com and increased investments in the
Mathcad  and  S-Plus  product lines, and was partially offset by the increase in
research  funding.  Funded research increased 5.1%, from $1,150,000 in the three
months  ended  June  30,  1999 to $1,208,000 for the three months ended June 30,
2000. The increase  in funded research is attributable to an increase in awarded
contracts  and the related increase in personnel to obtain those contracts.  The
Company's  Data  Analysis  Products  Division funded research department average
headcount  increased  from  35  to  41  as  of  June  30, 1999 and June 30, 2000
respectively.

General  and  administrative expenses increased 41.3% from $768,000 in the three
months ended June 30,1999 to $1,085,000 in the three months ended June 30, 2000,
and  increased  as  a  percentage  of  total  revenues  from  11.8%  to  13.8%,
respectively.  The  software  divisions  experienced a 23.3% increase in general
and  administrative  costs  due to unrealized foreign exchange losses, increased
compensation  costs,  insurance costs and facility related costs.  The remaining
increase  is  due  to  increased compensation costs, facility related costs, and
increases  in other miscellaneous expenses associated with FreeScholarships.com,
as  it  experienced  full-scale operations for all of the second quarter of 2000
versus  startup  operations  in  the  second  quarter  of  1999.

Six Months Ended June 30, 2000 Compared with the Six Months Ended June 30, 1999.

RESULTS  OF  OPERATIONS

Total  net  revenues  increased  20.0% from $13,068,000 for the six months ended
June  30,  1999  to  $15,675,000  for  the  six  months  ended  June  30,  2000.
Approximately  $1.5 million of the increase, or 56.4%, was attributable the Data
Analysis  Products  Division.  The  Engineering  and Education Software Products
Division  contributed  to 32.2% of the increase in revenue.  The remaining 11.4%
increase  in  revenue  was  provided  by  FreeScholarships.com,  which generated
revenues during the six months ended June 30, 2000, of $297,000 from advertising
on  its  website.  The  FreeScholarships.com  website  commenced  operations  in
February  2000.

Worldwide  Data Analysis Products Division license and service revenue increased
25.7% from $5,725,000 in the six months ended June 30,1999, to $7,196,000 in the
six  months  ended  June  30,  2000,  and increased as a percentage of total net
revenues  from  43.8%  to  45.9%.  Service  revenue  increased $1,364,000, while
S-PLUS  new  license  revenues increased $107,000.  The latest release of S-PLUS
2000  in June 1999, created a larger customer base for the division and resulted
in  increased  levels  of  training,  maintenance  and  consulting  revenue.

Worldwide  Engineering  and  Education  Software  Products  Division  revenues
increased  11.4%  from  $7,343,000  for  the  six  months  ended June 30,1999 to
$8,182,000  for  the  six  months  ended  June  30,


                                       13
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS  OF  OPERATIONS  (CONTINUED)

2000,  and  decreased  as a percentage of net revenues from 56.2% to 52.2%. This
increase  was  primarily  due  to  growth  in new license revenue of StudyWorks,
fueled  by the release in June 2000 of StudyWorks IV, the latest version of that
product.  This  offset a decline in new Mathcad 2000 licenses and Axum 6 upgrade
licenses.

Total  international revenues attributable to sales of all Company product lines
increased  12.5%  from
$3,524,000  in the six months ended June 30,1999 to $3,964,000 in the six months
ended  June 30, 2000, and decreased as a percentage of total revenues from 27.0%
to  25.3%,  respectively.

Total  cost of revenues increased 118.3% from $2,463,000 in the six months ended
June  30,1999 to $5,376,000 in the six months ended June 30, 2000, and increased
as  a percentage of total revenues from 18.8% to 34.3%, respectively. As was the
case  for the three month period ended June 30, 2000, the increase in total cost
of  revenues as a percentage of total revenues was primarily attributable to web
hosting  and content costs, internet connection charges, equipment depreciation,
and  compensation  and  scholarship  awards,  all  associated  with
FreeScholarships.com.  In  addition,  direct  materials,  as  a  percentage  of
revenue,  increased  as  lower margin software products, such as StudyWorks, and
software  services,  such  as consulting, accounted for a greater portion of all
sales.

Sales and marketing expenses increased  55.3%, from $5,753,000 in the six months
ended  June  30,1999  to  $8,936,000  the  six  months  ended June 30, 2000, and
increased  as  a percentage of total revenues from 44.0% to 57.0%, respectively.
The  increase in overall sales and marketing expenses was primarily attributable
to  an increase in variable marketing expenditures associated with the launch of
the  FreeScholarhips.com  website.  The  software  divisions experienced a 10.6%
increase  due  to  increased  advertising and compensation issues supporting the
sales  growth  experienced  this  year.

Net  research  and  development expenses increased 44.6%, from $2,365,000 in the
first  six months ended June 30,1999 to $3,420,000 for the six months ended June
30,  2000,  and increased as a percentage of total revenues from 18.1% to 21.8%,
respectively.  The overall increase in net research and development expenses was
primarily  attributable to FreeScholarships.com and increased investments in the
Mathcad  and  S-Plus  product lines, and was partially offset by the increase in
research funding.  Funded research increased 14.9%, from $2,189,000 in the first
six  months ended June 30, 1999 to $2,514,000 in the first six months ended June
30,  2000.  The  increase  in  funded research is attributable to an increase in
awarded  contracts  and  the  related  increase  in  personnel  to fulfill those
contracts.  The  Company's  Data  Analysis  Products  Division  funded  research
average  headcount increased from 33 to 40 as of June 30, 1999 and June 30, 2000
respectively.

General  and administrative expenses increased 40.9%, from $1,504,000 in the six
months  ended June 30, 1999 to $2,119,000 in the six months ended June 30, 2000,
and  increased  as  a  percentage  of  total  revenues  from  11.5%  to  13.5%,
respectively.  The  software  divisions experienced a 24.8% increase general and
administrative  expenses  costs  due  to  unrealized  foreign  exchange  losses,
increased  compensation  costs, insurance costs and facility related costs.  The
remaining  increase  is  due  to  increased compensation costs, facility related
costs,  and  increases  in  other  miscellaneous  expenses  associated  with
FreeScholarships.com,  as  it  experienced  full-scale  operations  starting  in
February  2000  versus startup operations in the six months ended June 30, 1999.


                                       14
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS  OF  OPERATIONS  (CONTINUED)

LIQUIDITY  AND  CAPITAL  RESOURCES

Cash  and  cash  equivalents,  totaling  $5,463,000  at June 30, 2000, decreased
$2,981,000  during  the  six  months  ended  June  30,  2000, from $8,444,000 at
December  31, 1999.  The negative cash flow resulted primarily from cash used in
operations  of $2,850,000, purchases of property and equipment of $1,106,000 and
payments  of  capital  lease  obligations  and  equipment financing of $367,000,
partially  offset  by  proceeds generated by exercise of stock options and stock
purchases  under  the  employee  stock  option  and  stock  purchase  plans  of
$1,088,000,  and borrowings of capital lease obligations and equipment financing
of  $195,000.

Cash  and  cash  equivalents  of  $5,463,000  as  of June 30, 2000 represent the
Company's  financial  reserves.  The  Company  does  not  have  a line of credit
agreement  with  a commercial bank.  As its' previous agreement expired on  June
30,  2000. There were no amounts outstanding on the line of credit  at  June 30,
2000.  There were no amounts outstanding on the line of credit at June 30, 2000.

Based on its present plans for the near term investment in FreeScholarships.com,
the  Company  believes  its  financial  reserves  and  cash  flows  from  future
operations may not be sufficient to meet its liquidity requirements for the next
twelve months.  Therefore, the Company anticipates attempting to conclude one or
more  financing transactions, which could include sales of selected assets, bank
borrowings  or sales of stock in either or both of the Company or one or more of
its operating units. However, if such sources of financing are not available for
any  reason,  the  Company  has  the ability to reduce its planned investment in
FreeScholarships.com  to  meet  its  liquidity  requirements for the next twelve
months.  The  foregoing  statement  is  forward-looking  and  involves risks and
uncertainties,  many  of  which are outside the Company's control. The Company's
actual  experience may differ materially from that discussed above. Factors that
might  cause  such a difference include, but are not limited to, those discussed
in  "Cautionary  Statements"  as  well  as future events that have the effect of
reducing  the Company's available cash balances, such as unanticipated operating
losses  or  capital  expenditures,  cash expenditures related to possible future
acquisitions,  or  investment  in  new products or services.  The Company may be
presented  from  time  to  time  with  acquisition  opportunities, which require
additional  external  financing,  and  the Company may from time to time seek to
obtain  additional  funds  from  public  or  private issuances of equity or debt
securities.  There can be no assurance that any financing will be available at
all  or  on  terms  acceptable  to  the  Company.


                                       15
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                              CAUTIONARY STATEMENTS

In  addition  to  the other information in this report, the following cautionary
statements  should  be  considered  carefully  in evaluating the Company and its
business.  Information  provided  by  the  Company from time to time may contain
certain  "forward-looking"  information,  as  that  term  is  defined by (i) the
Private  Securities  Litigation  Reform  Act  of  1995  (the  "Act") and (ii) in
releases  made  by  the  Securities  and Exchange Commission (the "SEC").  These
cautionary  statements  are being made pursuant to the provisions of the Act and
with  the intention of obtaining the benefits of the "safe harbor" provisions of
the  Act.

VARIABILITY  OF  QUARTERLY OPERATING RESULTS.  The Company's quarterly operating
results  may  vary significantly from quarter to quarter, depending upon factors
such  as the introduction and market acceptance of new products and new versions
of  existing  products,  the  ability  to  reduce  expenses,  the  activities of
competitors,  and  the  anticipated  losses  incurred  by  FreeScholarships.com.
Because  a high percentage of the Company's expenses are relatively fixed in the
near  term,  minor  variations  in  the timing of orders and shipments can cause
significant  variations  in  quarterly  operating results.  The Company operates
with  little or no backlog and has no long-term contracts.  Substantially all of
its  product  revenues  in  each quarter result from software licenses issued in
that  quarter,  making  the  Company's  ability  to  accurately  forecast future
revenues  and  income  for  any period necessarily limited.  Any forward-looking
information  provided  from  time  to  time  by  the  Company  represents  only
management's  then-best current estimate of future results or trends, and actual
results  may  differ materially from those contained in the Company's estimates.

POTENTIAL  VOLATILITY  OF STOCK PRICE.  There has been significant volatility in
the  market  price  of securities of technology companies.  The Company believes
factors such as announcements of new products by the Company or its competitors,
quarterly  fluctuations  in  the  Company's  financial results or other software
companies'  financial  results,  shortfalls  in  the  Company's actual financial
results  compared to results previously forecasted by stock market analysts, and
general conditions in the software and internet industries and conditions in the
financial  markets could cause the market price of the Common Stock to fluctuate
substantially.  These  market fluctuations may adversely affect the price of the
Company's  Common  Stock.

RISKS  ASSOCIATED  WITH  ACQUISITIONS.  The  Company  has  made  a  number  of
acquisitions  and  will continue to review future acquisition opportunities.  No
assurances  can  be  given  that  acquisition  candidates  will  continue  to be
available  on  terms  and  conditions  acceptable  to the Company.  Acquisitions
involve  numerous  risks,  including,  among  other things, possible dilution to
existing shareholders, difficulties and expenses incurred in connection with the
acquisitions  and  the subsequent assimilation of the operations and services or
products  of  the  acquired  companies,  the difficulty of operating new (albeit
related) businesses, the diversion of management's attention from other business
concerns  and  the  potential loss of key employees of the acquired company.  In
the  event  that  the  operations  of  an  acquired  business  do not live up to
expectations,  the  Company may be required to restructure the acquired business
or  write-off  the  value of some or all of the assets of the acquired business.
There  can  be no assurance that any acquisition will be successfully integrated
into  the  Company's  operations.

LIMITED  OPERATING  HISTORY  IN THE INTERNET MARKET. Since 1984, the Company has
focused  on  development  of  its core software products, the Mathcad and S-PLUS
product  families.  In  1999,  the  Company  broadened  its focus to include the
development  of  FreeScholarships.com,  an  internet  venture  that launched its
associated website in February, 2000, and courses related to the use of its core
software


                                       16
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                              CAUTIONARY STATEMENTS

product families that are offered through the World Wide Web, such as the S-PLUS
Knowledge Discovery Series.  Historically, the Company's revenues have come from
licenses  related  to the Company's core product families.  Although the Company
anticipates that the majority of its revenue will continue to come from licenses
related  to its core product families, these moves toward increased focus on the
Internet  have  required, and will continue to require, changes in personnel and
business  processes.

THE  COMPANY  MAY  HAVE  TO  FIND  OUTSIDE  PARTNERS  OR  SOURCES OF FUNDING FOR
FREESCHOLARSHIPS.COM.  The  Company  may  require  partners  or other sources of
outside  funding  to continue the funding of FreeScholarships.com.  Although the
Company  is  currently  reviewing various funding strategies, the Company has no
agreements  with  external  sources  in  place  to assist the Company in funding
FreeScholarships.com.  beyond December 31, 2000. There can  be no assurance that
any  partnering  or  funding  opportunities  will  be  available  on  terms  and
conditions  acceptable to the Company.

INTERNET-RELATED RISKS. The Company's online store, its online courses available
through  the  World Wide Web, such as its S-PLUS Knowledge Discovery Series, and
its  wholly-owned subsidiary, FreeScholarships.com, rely on the continued growth
of the Internet.  The Company expects that continued consumer concerns regarding
security,  reliability,  privacy,  ease  of  use,  and  the  changing regulatory
environment  will  affect the development of the Company's products and services
connected  with  the  Internet.

SECURITY.  If the Company's web site security fails, it may damage the Company's
ability to sell products through its online store or attract and retain users to
FreeScholarships.com.  In addition, the Company may be liable if security on its
web  sites  is  breached  and  the  Company  is the victim of credit card fraud.

 RELIABILITY.  The  Company  uses  an  outside  service  to  maintain  the
FreeScholarships.com web servers and an online web store.  If these servers fail
for  an  extended  period  of  time,  registered  users  of  and  visitors  to
FreeScholarships.com  may turn to other web sites and the FreeScholarships brand
may  be  damaged.

 PRIVACY.   Visitors  to the Company's online store and the FreeScholarships.com
web site are asked for certain personally identifying information, which is then
used to ship products, award scholarships and for marketing and data collection.
No personally identifiable information is sold or conveyed to third parties.  As
attitudes regarding online privacy continue to evolve, there can be no assurance
that the Company's needs for personally identifiable information will be in line
with  public  attitudes  or  government  regulations  regarding  privacy.

EASE  OF  USE.  If,  for  reasons such as failure of the Company's web servers,
slow  modem connections or poor web site design, users of the Company's products
and  services  including  the  online  store,  the  online  courses  or
FreeScholarships.com,  find  it  difficult  to  use  the  Company's products and
services, the Company's revenues could decrease and its brands could be damaged.

CHANGING REGULATORY ENVIRONMENT.  Laws and regulation regarding the Internet are
becoming  more common.  Changes in laws regarding privacy, internet access taxes
or  other  areas may require the Company to change the way it does business over
the  Internet.  For example, FreeScholarships.com aims its services and products
at  persons  age  13  and  above.  Currently,  the  Children's  Online  Privacy
Protection  Act, also known as COPPA, and the regulations enacted by the Federal
Trade  Commission, also known as the FTC, to enforce the COPPA, require that the
Company  not  collect  personally  identifiable  data  from children 12 years or
younger.  If  this  law  was  changed  and  the  minimum  age  level


                                       17
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                              CAUTIONARY STATEMENTS

increased, it could damage the Company's ability to attract teenage users to the
FreeScholarships.com  web  site.  The laws governing the use of the Internet are
generally  unsettled.  There is no way to predict the ways in which existing and
new  laws  will  apply  to  Internet  commerce,  services  or  products.

CHANGES IN LOCAL, STATE OR FEDERAL LAW RELATED TO THE OPERATION OF A SWEEPSTAKES
COULD  ADVERSELY  AFFECT  THE  COMPANY'S  ABILITY  TO  CONTINUE  THE  CURRENT
FREESCHOLARSHIPS.COM  BUSINESS  MODEL. FreeScholarships.com currently awards its
scholarships  based  on  a  widely-accepted  sweepstakes  model.  If one or more
localities  or states decide to change its laws related to sweepstakes or online
sweepstakes,  or  if federal laws, including tax laws, are enacted that regulate
sweepstakes or that change the tax laws under which FreeScholarships.com is able
to  award  scholarships,  FreeScholarships.com  may  have to change its business
model.  There  can  be no assurance that any such change in the FreeScholarships
business  model  required  by  changes in local, state or federal laws would not
damage  FreeScholarships.com

RISKS  ASSOCIATED  WITH DIVESTITURES.  The Company's product offerings presently
may  be  divided between two principal software product families - those related
to  its  Mathcad  line  addressing  the  calculation  needs  of  the  technical,
professional  and  education markets, and those related to its S-PLUS offerings,
marketed  primarily  to  professionals  needing  statistical  analysis tools. In
addition,  the  Company has a new investment in FreeScholarships.com. In setting
strategic  goals  to  maximize  shareholder value, the Company from time to time
considers  the options of divesting itself of one software product family or the
other,  or  product  lines within a given family, to concentrate its focus other
business  opportunities.  If  the  Company were to consummate such a sale, there
can  be no assurance that it would receive returns from such sale that investors
in  the  Company  would  consider  attractive.

RISKS  ASSOCIATED  WITH  DISTRIBUTION  CHANNELS.  The  Company  markets  and
distributes  its S-PLUS products in the U.S. through the Company's telesales and
outside  sales  force  and  internationally  through  third  party resellers and
distributors  and  its own sales-force.  Mathcad products are currently marketed
and  distributed  in  the  U.S.  through third party resellers and distributors,
telesales,  direct  mail and electronic methods.  Internationally, the Company's
Mathcad  products are marketed and distributed through third party resellers and
distributors.  There can be no assurance that the Company will be able to retain
its  current  resellers and distributors, or expand its distribution channels by
entering  into arrangements with new resellers and distributors in the Company's
current  markets  or  in  new  markets.

RISKS  ASSOCIATED  WITH  INTERNATIONAL  OPERATIONS.  Sales outside North America
accounted  for  approximately 25.3% and 27.0% of the Company's total revenues in
the  six  months ended June 30, 2000 and 1999, respectively, and may continue to
represent a significant portion of the Company's product revenues.  Any decrease
in  sales  outside  North  America  may  have a materially adverse effect on the
Company's operating results.  The Company's international business and financial
performance  may  be  affected  by  fluctuations  in exchange rates and by trade
regulations.

RELIANCE ON THIRD PARTY LICENSORS.  Maple V, a software product licensed with or
as  part  of  Mathcad,  certain  copyrighted  texts  licensed  from  third party
publishers incorporated in the Company's Electronic Books, and the S programming
language,  the  language  on  which all of the StatSci's products are based, are
each  currently  licensed  from a single source or limited source suppliers.  If
such  licenses are discontinued, there can be no assurance that the Company will
be  able  to  independently  develop


                                       18
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                              CAUTIONARY STATEMENTS

substitutes  or  to  obtain  alternative  sources or, if able to be developed or
obtained  as  needed in the future, that such efforts would not result in delays
or  reductions in product shipments or cost increases that could have a material
adverse  effect  on  the  Company's  consolidated  business  operations.

RAPID  TECHNOLOGICAL  CHANGE;  COMPETITION.  The  technical calculation software
market is subject to rapid and substantial technological change, similar to that
affecting  the  software industry generally.  The Company, to remain successful,
must  be  responsive  to  new  developments  in  hardware  and  chip technology,
operating  systems,  programming  technology, Internet technology and multimedia
capabilities.  In  addition,  the  Company  competes  against  numerous  other
companies,  some  of  which  have  significant  name  recognition,  as  well  as
substantially  greater  capital  resources,  marketing  experience, research and
development  staffs  and  production facilities than the Company.  The Company's
financial  results  may be negatively impacted by the failure of new or existing
products  to  be  favorably  received  by  retailers and consumers due to price,
availability,  features, other product choices or the necessity of promotions to
increase  sales  of  the  Company's  products.

UNCERTAINTIES  REGARDING  PROTECTION  OF  PROPRIETARY  TECHNOLOGY; UNCERTAINTIES
REGARDING  PATENTS.  The  Company  believes  that  while  the  mathematical
calculations  performed by the Company's software are not proprietary, the speed
and  quality  of  displaying  the  computation and the ease of use are unique to
MathSoft's products.  The Company's success will depend, in part, on its ability
to  protect  the  proprietary  aspects  of  its  products.  The Company seeks to
protect  these  proprietary  aspects  of  its  products  principally  through  a
combination  of  contract  provisions and copyright, patent, trademark and trade
secret  laws.  There  can be no assurance that the steps taken by the Company to
protect  its  proprietary rights will be adequate to prevent misappropriation of
its  technology.  Although the Company believes that its products and technology
do not infringe any existing proprietary rights of others, the use of patents to
protect  software  has  increased  and there may be pending or issued patents of
which the Company is not aware that the Company may need to license or challenge
at  significant  expense.  There can be no assurance that any such license would
be  available  on acceptable terms, if at all, or that the Company would prevail
in  any  such  challenge.

RELIANCE  ON  ATTRACTING  AND  RETAINING KEY EMPLOYEES.  The Company's continued
success  will  depend  in large part on its ability to attract and retain highly
qualified  technical,  managerial,  sales  and  marketing  and  other personnel.
Competition  for such personnel in the New England and northwestern areas of the
United  States  is intense.  The Company has non-competition agreements with its
key  management  and  technical  personnel.  There  can be no assurance that the
Company  will  be  able  to  continue  to  attract  or  retain  such  personnel.
RISKS  ASSOCIATED  WITH  NEW PRODUCTS OR SERVICES.  The Company's future revenue
growth  rate  and  earnings performance depend on a number of factors, including
the  continued  success  of  its existing products and service offerings and the
development  of one or more new products or services including the Company's new
internet  venture, FreeScholarships.com.  These investments may adversely affect
the  Company's  quarterly and annual financial results until such time that they
begin  to  return  a  profit.  Furthermore, there can be no assurance that these
investments  will  ever  achieve  the  desired  financial  results.


                                       19
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company develops products in the United States and sells them worldwide.  As
a  result,  the Company's financial results could be affected by factors such as
changes  in  foreign  currency  exchange  rates  or  weak economic conditions in
foreign  markets. Since the Company's sales are currently priced in U.S. dollars
and  translated into local currency amounts, a strengthening of the dollar could
make  the  Company's  products  less competitive in foreign markets. The Company
maintains an  operation in the United Kingdom, which incurs expenses denominated
in  its  local  currency.  However,  the  Company  believes that these operating
expenses  will  not have a material adverse effect on its results of operations.

Interest  income  and  expense  are sensitive to changes in the general level of
U.S.  interest  rates,  particularly  since  the  company's  investments  are in
short-term instruments.  Based on the nature and current levels of the Company's
investments  and  debt,  however, the Company believes that there is no material
market  risk  or  exposure.

The  Company's  general  investing policy is to limit the risk of principal loss
and  ensure the safety of invested funds by limiting credit and market risk. The
Company  currently places its investments in highly liquid money market accounts
and  short-term  investments.  All  highly  liquid  investments  with  original
maturities  of  three  months  or  less  are  considered to be cash equivalents.


                                       20
<PAGE>
                        MATHSOFT, INC.  AND SUBSIDIARIES

                           PART II - OTHER INFORMATION

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

     The  Company  held  its annual meeting of stockholders on May 26, 2000.  At
the  meeting,  the  Stockholders  of  the  Company  voted  to

     (i)  elect  Walter M. Pile as a Class I Director to serve for a  three-year
          term (until the Annual  Meeting of  Stockholders  in 2003)  (9,037,133
          shares in favor,  300,995 shares against; 0 shares  abstaining;  and 0
          shares  unvoted) and Christopher H. Covington as a Class I Director to
          serve  for  a  three-year  term  (until  the  Annual  Meeting  of  the
          Stockholders  in 2003)  (9,073,183  shares  in favor;  264,945  shares
          against; 0 shares abstaining; and 0 shares unvoted);

     (ii) amend the Amended and Restated  1992 Stock Plan to increase the number
          of shares of Common Stock  available for issuance  under the plan from
          3,900,000  shares  to  4,650,000  shares  (1,362,786  shares in favor;
          736,158  shares  against;  132,039  shares  abstaining;  and 7,107,145
          shares unvoted);

     (iii)ratify  the  selection  of Arthur  Andersen  LLP as  auditors  for the
          fiscal year ended December 31, 2000 (9,296,561 shares in favor; 18,894
          shares against; 22,673 shares abstaining; and 0 shares unvoted).


                                       21
<PAGE>

                         MATHSOFT, INC.  AND SUBSIDIARIES

                           PART II - OTHER INFORMATION


ITEM  5.  OTHER  INFORMATION

     (a)     Exhibits:

            10.1      Promissory  Note
            10.2      Pledge  Agreement

ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

     (a)  Exhibits:

            27.1  Financial  Data  Schedule.

     (b)  Reports  on  Form  8-K:

               The Company filed a Current Report on Form 8-K dated May 18, 2000
               announcing the appointment of Dermot P. O'Grady as new Chief
               Financial  Officer.

               The Company filed a Current Report on Form 8-K dated July 20,
               2000 reporting fiscal  second  quarter  and  year  to  date
               results.


                                       22
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                                    SIGNATURES

Pursuant  to  the  requirements  of  the  Securities  Exchange  Act of 1934, the
registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  thereunto  duly  authorized.

                                      MATHSOFT, INC.

Dated:  August 14, 2000         By  /s/ Charles J. Digate
                                -------------------------
                                Charles J. Digate
                                Chairman, President and Chief Executive Officer
                               (Principal Executive Officer)




Dated:  August 14, 2000         By  /s/ Dermot P. O'Grady
                                -------------------------
                                Dermot P. O'Grady
                                Vice President Finance and Administration,
                                Chief Financial Officer, Treasurer, and Clerk
                               (Principal Financial and Accounting Officer)


                                       23
<PAGE>