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                       SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549-1004

                                    FORM 10-Q

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

     For the quarterly period ended September 30, 2000

                                       or

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

                        Commission File Number 000-19462

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

          Delaware                                              86-0446453
(State or other jurisdiction                                  (IRS employer
      of incorporation)                                   identification number)
                               5 Cambridge Center
                               Cambridge, MA 02142
                                 (617) 354-0600
               ---------------------------------------------------
               (Address, including zip code, and telephone number,
                      including area code, of registrant's
                          principal executive offices)

     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 the
filing requirements for at least the past 90 days.

                                Yes [X]   No [ ]

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date (November 13, 2000).

                 Common stock, $.01 par value: 15,684,461 shares

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<PAGE>
                         ARTISOFT, INC. AND SUBSIDIARIES
                                      INDEX

                                                                            Page
                                                                            ----
PART I. FINANCIAL INFORMATION

   Item 1. Financial Statements

             Condensed Consolidated Balance Sheets-
               September 30, 2000 and June 30, 2000                            3

             Condensed Consolidated Statements of Operations-
               Three Months Ended September 30, 2000 and 1999                  4

             Condensed Consolidated Statements of Cash Flows-
               Three Months Ended September 30, 2000 and 1999                  5

             Notes to Condensed Consolidated Financial Statements            6-8

   Item 2. Management's Discussion and Analysis of
             Financial Condition and Results of Operations                  9-17

   Item 2(a). Quantitative and Qualitative Disclosures
                about Market Risk                                          17-18

PART II. OTHER INFORMATION

   Item 1. Legal Proceedings                                                  18

   Item 2. Changes in Securities                                              18

   Item 3. Defaults Upon Senior Securities                                    18

   Item 4. Submission of Matters to a Vote by Security Holders                18

   Item 5. Other Information                                                  18

   Item 6. Exhibits and Reports on Form 8-K                                   18

SIGNATURES                                                                    19

EXHIBITS
   11       Computation of Net Income Per Share                               20
   27       Financial Data Schedule                                           21

                                        2
<PAGE>
                         ARTISOFT, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


                                                  September 30,      June 30,
ASSETS                                                2000             2000
                                                   ------------    ------------
                                                   (unaudited)
Current assets:
  Cash and cash equivalents                        $      5,485    $      5,120
  Short term investments                                  1,479           2,490
  Receivables:
    Trade accounts, net                                   1,049           1,511
    Other receivables                                       125             146
  Inventories                                             1,179             808
  Prepaid expenses                                          625             366
                                                   ------------    ------------
      Total current assets                                9,942          10,441
                                                   ------------    ------------
Long term investments                                     7,797           7,797

Property and equipment                                    2,765           2,353
  Less accumulated depreciation and amortization         (1,310)         (1,140)
                                                   ------------    ------------
      Net property and equipment                          1,455           1,213
                                                   ------------    ------------
Other assets                                                217             179

Net assets from discontinued operations                      --           1,864
                                                   ------------    ------------
                                                   $     19,411    $     21,494
                                                   ============    ============
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                 $        958    $        928
  Accrued liabilities                                     2,057           1,937
  Deferred revenue                                           87              41
                                                   ------------    ------------
      Total current liabilities                           3,102           2,906
                                                   ------------    ------------
Commitments and contingencies                                --              --

Shareholders' equity:
  Preferred stock, $1.00 par value
    Authorized 11,433,600 shares; none issued                --              --
  Common stock, $.01 par value. Authorized
    50,000,000 shares; issued 28,992,030
    shares at September 30, 2000 and
    28,742,744 at June 30, 2000                             290             287
  Additional paid-in capital                            102,129         101,363
  Accumulated deficit                                   (16,326)        (13,278)
  Less treasury stock, at cost, 13,320,500 shares
    at September 30, 2000 and June 30, 2000             (69,784)        (69,784)
                                                   ------------    ------------
      Total shareholders' equity                         16,309          18,588
                                                   ------------    ------------
                                                   $     19,411    $     21,494
                                                   ============    ============

     See accompanying notes to condensed consolidated financial statements.

                                        4
<PAGE>
                         ARTISOFT, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


                                                           Three Months Ended
                                                              September 30,
                                                         ----------------------
                                                           2000          1999
                                                         --------      --------
                                                              (unaudited)

Net sales                                                $  2,221      $  2,721
Cost of sales                                                 604         1,268
                                                         --------      --------
  Gross profit                                              1,617         1,453
                                                         --------      --------
Operating expenses:
  Sales and marketing                                       2,433         1,455
  Product development                                       1,262           746
  General and administrative                                1,159           908
                                                         --------      --------
        Total operating expenses                            4,854         3,109
                                                         --------      --------
Loss from operations                                       (3,237)       (1,656)

Other income, net                                             189           187
                                                         --------      --------
  Net loss from continuing operations                      (3,048)       (1,469)

Income from discontinued operations, net of tax                --           987
                                                         --------      --------
  Net loss                                               $ (3,048)     $   (482)
                                                         ========      ========
Net loss per common share from continuing
  operations-Basic and Diluted                           $   (.20)     $   (.10)
                                                         --------      --------
Net loss per common share-Basic and Diluted              $   (.20)     $   (.03)
                                                         ========      ========
Weighted average common shares outstanding-
  Basic and Diluted                                        15,591        14,834
                                                         ========      ========

     See accompanying notes to condensed consolidated financial statements.

                                        4
<PAGE>
                         ARTISOFT, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                 Three Months Ended
                                                                    September 30,
                                                                 --------------------
                                                                   2000        1999
                                                                 --------    --------
                                                                     (unaudited)
<S>                                                              <C>         <C>
Cash flows from operating activities:
  Net loss                                                       $ (3,048)   $   (482)
  Adjustments to reconcile net loss to net
    cash used in operating activities:
      Depreciation and amortization                                   192         157
      Gain from disposition of property, net                           --           3
      Change in accounts receivable and inventory allowances           78         (29)
  Changes in assets and liabilities:
    Receivables:
      Trade accounts                                                  416         978
      Other receivables                                                21         (47)
    Inventories                                                      (403)        (20)
    Prepaid expenses                                                 (259)       (170)
    Accounts payable, accrued liabilities and deferred revenue        196         (92)
    Net assets from discontinued operations                         1,864        (948)
    Other assets                                                      (61)         (1)
                                                                 --------    --------
        Net cash used in operating activities                      (1,004)       (651)
                                                                 --------    --------
Cash flows from investing activities:
  Proceeds from sale of investment securities                       1,011          --
  Purchases of property and equipment                                (411)        (88)
                                                                 --------    --------
        Net cash provided by (used in) investing activities           600         (88)
                                                                 --------    --------
Cash flows from financing activities:
  Proceeds from the exercise of stock options                         769          42
                                                                 --------    --------
      Net cash provided by financing activities                       769          42
                                                                 --------    --------
Net increase (decrease) in cash and cash equivalents                  365        (697)

Cash and cash equivalents at beginning of period                    5,120      16,148
                                                                 --------    --------
Cash and cash equivalents at end of period                       $  5,485    $ 15,451
                                                                 ========    ========
</TABLE>

Note:  During the three  months ended June 30, 2000 the Company  invested  $10.3
million of its cash and cash  equivalents in short term and long term investment
securities.

     See accompanying notes to condensed consolidated financial statements.

                                        5
<PAGE>
                         ARTISOFT, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
        (in thousands, except percentages, shares and per share amounts)

(1) BASIS OF PRESENTATION

     The condensed  consolidated  financial  statements  include the accounts of
Artisoft,  Inc. and its three wholly-owned  subsidiaries:  Triton  Technologies,
Inc.,  Artisoft "FSC",  Ltd. (which has elected to be treated as a foreign sales
corporation),  and NodeRunner,  Inc. All significant  intercompany  balances and
transactions have been eliminated in consolidation.

     The accompanying unaudited condensed consolidated financial statements have
been prepared by the Company in accordance  with generally  accepted  accounting
principles, pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of management,  the accompanying financial statements
include all adjustments (of a normal recurring nature) which are necessary for a
fair  presentation of the financial  results for the interim periods  presented.
Certain  information  and footnote  disclosures  normally  included in financial
statements   have  been  condensed  or  omitted   pursuant  to  such  rules  and
regulations.  Although the Company believes that the disclosures are adequate to
make the  information  presented  not  misleading,  it is  suggested  that these
financial  statements be read in  conjunction  with the  consolidated  financial
statements and the notes thereto included in the Company's 2000 Annual Report on
Form 10-K.  The results of operations  for the three months ended  September 30,
2000 are not  necessarily  indicative of the results to be expected for the full
year.

(2) COMPUTATION OF NET LOSS PER SHARE

     Basic loss per share is computed by dividing  loss  attributable  to common
shareholders by the weighted average number of common shares outstanding for the
period.  Diluted loss per share reflects the potential dilution that could occur
if  securities  or other  contracts  to issue  common  stock were  exercised  or
converted  into  common  stock that then  shared in the  earnings  (loss) of the
Company.  In  calculating  net loss per common share for the three month periods
ended September 30, 2000 and 1999, 590,371 and 666,724 shares, respectively,  of
anti-dilutive  common stock equivalent  shares  consisting of stock options have
been excluded because their inclusion would have been anti-dilutive.

(3) DISCONTINUED OPERATIONS

     In September  1999, the Company  announced its intention to investigate the
potential  separation of its two business  units:  the  Communications  Software
Group (CSG) and the Computer Telephony Group (CTG). On June 2, 2000, the Company
signed a definitive  agreement to sell the CSG assets to Prologue Software Group
for approximately $3.0 million  (including  accounts  receivable).  The sale was
closed   effective  June  30,  2000.  Thus  the  Company  has  reclassified  the
accompanying   consolidated   balance  sheets,   statements  of  operations  and
statements of cash flows of CSG to Discontinued Operations.

                                        6
<PAGE>
     The  following is a summary of the  operating  results of the  Discontinued
Operations for the three month period ended September 30, 1999 (in thousands):

                                    Three Months Ended
                                      September 30,
                                          1999
                                         -------
     Net sales                           $ 3,680
     Cost of sales                           954
                                         -------
     Gross profit                          2,726
                                         -------
     Operating expenses                    1,739
                                         -------
     Net income                          $   987
                                         =======

(4) INVENTORIES

     Inventories  at  September  30,  2000  and  June 30,  2000  consist  of the
following:

                                      September 30,    June 30,
                                          2000           2000
                                         -------        -------
     Raw materials                       $   577        $   487
     Finished goods                          863            550
                                         -------        -------
                                           1,440          1,037
     Inventory allowances                  (261)           (229)
                                         -------        -------
                                         $ 1,179        $   808
                                         =======        ========

(5) PROPERTY AND EQUIPMENT

     Property and  equipment at September  30, 2000 and June 30, 2000 consist of
the following:

                                      September 30,    June 30,
                                          2000           2000
                                         -------        -------
     Furniture and fixtures              $    40        $    39
     Computers and other equipment         2,443          2,035
     Leasehold improvements                  282            279
                                         -------        -------
                                           2,765          2,353
     Accumulated depreciation and
     amortization                         (1,310)        (1,140)
                                         -------        -------
                                         $ 1,455        $ 1,213
                                         =======        =======

                                        7
<PAGE>
(6) OTHER ASSETS

     Other  assets  at  September  30,  2000 and June 30,  2000  consist  of the
following:

                                              September 30,   June 30,
                                                  2000           2000
                                                --------       --------
     Purchased technology, net of accumulated
       amortization of $396 and $374            $     41       $     63
     Recoverable deposits and other                  176            116
                                                --------       --------
                                                $    217       $    179
                                                ========       ========

(7) ACCRUED LIABILITIES

     Accrued  liabilities at September 30, 2000 and June 30, 2000 consist of the
following:

                                              September 30,    June 30,
                                                  2000           2000
                                                --------       --------
     Compensation and benefits                  $    819       $  1,032
     Payroll, sales and property taxes                39             33
     Marketing                                       741            374
     Royalties                                       112            334
     Other                                           346            164
                                                --------       --------
                                                $  2,057       $  1,937
                                                ========       ========

                                        8
<PAGE>
                         ARTISOFT, INC. AND SUBSIDIARIES

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

RESULTS OF OPERATIONS

     NET SALES.  Net sales  decreased  18% to $2.2 million for the quarter ended
September 30, 2000 from $2.7 million for the quarter  ended  September 30, 1999.
The decrease in net sales for the quarter  ended  September 30, 2000 as compared
to the quarter ended September 30, 1999 was due to the  discontinuation of sales
of the Company's  Visual Voice product line.  During the quarter ended  December
31, 1999, Intel Corporation purchased the Company's Visual Voice source code for
$2.7 million.  Intel  Corporation also agreed to pay the Company $1.5 million in
professional service fees associated with support and services provided to Intel
Corporation and the existing Visual Voice customers  between October 1, 1999 and
June 30, 2000.  These revenues were  recognized  ratably between October 1, 1999
and June 30, 2000. The Company  agreed to  discontinue  selling the Visual Voice
product line as of June 30, 2000. The decrease in overall revenues caused by the
discontinuation  of Visual Voice was partially  offset by increased sales of the
Company's  TeleVantage product line between the quarter ended September 30, 1999
and September 30, 2000.

     The Company  distributes its products  internationally  and tracks sales by
major geographic area. Non-U.S.  sales represented 17% and 9% of total net sales
for the quarters ended September 30, 2000 and 1999, respectively. The percentage
increase  in  international  sales  is due  primarily  to  sales  made to ALR (a
European  TeleVantage  distributor) during the quarter ended September 30, 2000.
International  sales  increased  100%  to $.4  million  for  the  quarter  ended
September 30, 2000 from $.2 million for the quarter ended September 30, 1999.

     GROSS PROFIT.  The Company's  gross profit was $1.6 million for the quarter
ended  September 30, 2000 and $1.5 million for the quarter  ended  September 30,
1999 or 73% and 53% of net sales,  respectively.  The  increase in gross  profit
percentage  for the quarter ended  September 30, 2000 as compared to the quarter
ended September 30, 1999 was due to the discontinuation of Visual Voice hardware
sales and lower sales of TeleVantage Not For Resale Kits (NFR's) associated with
the Company's development of its TeleVantage reseller channel.  Gross profit may
fluctuate  on a quarterly  basis  because of product  mix,  pricing  actions and
changes in sales and inventory allowances.

     SALES AND MARKETING. Sales and marketing expenses were $2.4 million for the
quarter  ended  September  30,  2000  and $1.5  million  for the  quarter  ended
September 30, 1999,  representing 110% and 53% of net sales,  respectively.  The
increase in sales and  marketing  expenses in aggregate  dollars for the quarter
ended  September  30,  2000  compared  to the same period in fiscal 2000 was due
principally to increased expenditures on the sales and marketing  infrastructure
for the Company's  TeleVantage product line. The increase in sales and marketing
expenses as a  percentage  of sales for the  quarter  ended  September  30, 2000
compared to the same period in fiscal 2000 is due to the overall decrease in net
sales for the quarter ended September 30, 2000 and the  aforementioned  increase
in sales and marketing infrastructure expense.

     PRODUCT DEVELOPMENT. Product development expenses were $1.3 million for the
quarter ended September 30, 2000 and $.7 million for the quarter ended September
30, 1999, representing 57% and 27% of net sales,  respectively.  The increase in
aggregate product development  expenses for the quarter ended September 30, 2000
compared to the same period in fiscal 2000 is  principally  attributable  to the
addition of product  development  resources.  The  addition  of new  development
personnel to the Computer Telephony Group during the quarter ended September 30,
2000 was  required  to meet  planned  future  product  introduction  timetables.
Specifically,  the Company  has added  development  personnel  in advance of the
expected  future  release of TeleVantage  4.0, its flagship  product and current
development efforts associated with the anticipated future release of Intel's CT
Media product line. The increase in product development expenses as a percentage
of net sales for the  quarter  ended  September  30,  2000  compared to the same
period in fiscal 2000 is  principally  due to the overall  decrease in net sales
between the two periods and the aforementioned  increase in expenses  associated
with the addition of new product development personnel. The Company believes the
introduction of new products to the market in a timely manner is critical to its
future success.

                                        9
<PAGE>
     GENERAL AND ADMINISTRATIVE.  General and administrative  expenses were $1.2
million  for the  quarter  ended  September  30,  2000 and $ .9 million  for the
quarter  ended  September  30,  1999,  representing  52% and  33% of net  sales,
respectively.  The increase in aggregate general and administrative expenses for
the quarter ended  September 30, 2000 compared to the same period in fiscal 2000
is principally the result of additional  occupancy costs incurred  subsequent to
the expansion of the Company's Cambridge,  Massachusetts-based  headquarters and
increased  depreciation  expense on the Company's fixed assets in its Cambridge,
Massachusetts headquarters.  The increase in general and administrative costs as
a percentage of net sales for the quarter  ended  September 30, 2000 compared to
the same period in fiscal 2000 is principally due to the overall decrease in net
sales between the two periods.

     OTHER INCOME,  NET. For the quarter ended September 30, 2000, other income,
net, increased to $189,000, from $187,000 in the corresponding quarter of fiscal
2000. The increase for the quarter ended September 30, 2000 resulted principally
from  the  receipt  of  increased  interest  income  on the  Company's  cash and
investment balances.

FUTURE RESULTS

     The  Company   intends  to  continue  to  increase  its   investments   and
expenditures  in sales,  marketing and development of its  software-based  phone
system,   TeleVantage.   The  Company  will  likely  see   increased   operating
expenditures over the next several quarters as it completes planned development,
marketing and sales  personnel  expansion  efforts for its  TeleVantage  product
line. With these planned headcount  increases and increases in rental rates, the
Company will see increased  occupancy  expenses  associated  with its Cambridge,
Massachusetts corporate headquarters.

     In December  1999,  the  Company  executed an  Intellectual  Property  (IP)
Purchase Agreement with Dialogic (an Intel Company).  The Company agreed to sell
its Visual Voice source code to Dialogic (an Intel Company) for consideration of
$2.7  million.  The $2.7  million was paid to  Artisoft  upon  execution  of the
agreement on December 30, 1999. Dialogic (an Intel Company) also agreed to allow
the Company to continue to sell its Visual  Voice  software  until June 30, 2000
royalty free up to a maximum of $1.4 million in sales per quarter. Subsequent to
June 30, 2000 the Company will be required to pay a royalty to Intel Corporation
on all sales of Visual Voice software. Intel also agreed to pay the Company $1.5
million in professional services revenue. The Company recognized $1.4 million of
Visual Voice source code sale and  professional  services revenue during each of
the quarters ended  December 31, March 31 and June 30.  Effective June 30, 2000,
Dialogic  (an Intel  Company)  has  formally  discontinued  Visual Voice and the
Company is no longer  authorized  to sell,  market or support the product  line.
Approximately 50% of the Company's  revenues in fiscal 2000 were attributable to
Visual  Voice sales or Visual Voice  source code  acquisition  revenue or Visual
Voice  professional  fees.  The loss of this revenue  stream along with expected
increases in operating  expenses will likely lead to increased  operating losses
and lower gross profits during fiscal 2001.

     In  December  1999,  the  Company  executed a  strategic  partnership  with
Dialogic (an Intel  Company).  Under the terms of the agreement,  the Company is
required to provide  Dialogic (an Intel  Company)  with a  software-based  phone
system that is compatible with Intel Corporation's CT Media Server.

     In January 2000,  the Company  executed a strategic  partnership  with TAIS
intended to allow the Company and TAIS to deliver an  integrated  communications
server and software-PBX  solution for small and midsized  businesses.  Under the
terms of the  agreement,  TAIS  will  invest  in  licenses  of  TeleVantage  for
customized  versions of the software  product to be integrated with its computer
telephony systems and communications server product offerings.  The Company will
be required to meet certain  development  milestones in providing the customized
software to TAIS.  TAIS acquired  100,000  shares of Artisoft  common stock at a
price of $6.994  per share and has the right to  acquire  an  additional  50,000
shares pursuant to a warrant  agreement.  Additionally,  the Company  authorized
TAIS to purchase an additional 1,350,000 shares of the Company's common stock on
the open market.  Toshiba is not  contractually  or in any other way required to
purchase  shares on the open market.  The Company  incurred a non-cash charge of
approximately  $2.3 million dollars on the issuance of these  securities,  which
was recognized as selling expense during the quarter ended March 31, 2000.

                                       10
<PAGE>
     The failure of the Company to successfully meet its development  milestones
on either one of these key strategic  agreements  may have an adverse  effect on
the  Company's  anticipated  future  revenues  from  TeleVantage.  The Company's
ability to  significantly  expand its selling and marketing of  TeleVantage to a
broad customer base may depend on its ability to successfully  execute these two
key strategic  agreements.  The failure of one or both of these  partnerships or
the Company's  inability to continue to develop  future  strategic  partnerships
could adversely effect the Company's operating results.

     The Company's  future  results of operations  involve a number of risks and
uncertainties.  Among the  factors  that could  cause  future  results to differ
materially from historical  results are the following:  business  conditions and
the general economy; business and technological developments in the emerging and
rapidly changing software-based PBX market; competitive pressures, acceptance of
new  products  and  price  pressures;  availability  of third  party  compatible
products at reasonable prices; risk of nonpayment of accounts  receivable;  risk
of product  line or  inventory  obsolescence  due to shifts in  technologies  or
market demand; timing of software introductions; and litigation.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

     The Company had cash and cash  equivalents of $5.5 million at September 30,
2000  compared  to $5.1  million at June 30,  2000 and  working  capital of $6.8
million at September  30, 2000  compared to $7.5  million at June 30, 2000.  The
increase  in cash and cash  equivalents  of $.4  million  was the  result of the
liquidation of certain short term investments and the conversion of a portion of
these  proceeds  into cash and cash  equivalents.  The decrease in the Company's
working  capital of $.7 million was  primarily the result of a decrease in trade
receivables  due to lower net sales achieved  during the quarter ended September
30,  2000 as  compared to the quarter  ended June 30,  2000.  Additionally,  the
aformentioned  reduction  in short  term  investments  also  contributed  to the
decrease in working capital.

     The Company funds its working capital  requirements  primarily through cash
flows from operations and existing cash balances.  While the Company anticipates
that existing cash balances and cash flows from  operations  will be adequate to
meet the Company's  current and expected cash requirements for at least the next
year,  additional  investments  by the Company to acquire new  technologies  and
products or loss of revenues from disposed  business  segments could necessitate
that the Company  seek  additional  debt or equity  capital.  In  addition,  the
Company  may also  from  time to time  seek debt  financing  or  solicit  equity
investments  for various  business  reasons.  There can be no assurance that any
such  additional  debt financing or equity capital will be available when needed
or, if  available,  will be on  satisfactory  terms.  The issuance of additional
equity securities may result in substantial dilution.

SHORT TERM AND LONG TERM INVESTMENTS

     The Company had short and long term investment  balances of $9.3 million at
September 30, 2000  compared to $10.3 million at June 30, 2000.  The decrease in
overall  investment  balances at September 30, 2000 compared to June 30, 2000 is
due to the  liquidation of some of these  securities  into cash in order to fund
operations. The Company purchased various AAA rated intermediate term securities
during  fiscal  2000.  All of these  securities  mature by  December  31,  2005.
Securities  with  maturities  between 91 days and 1 year are classified as short
term.  Those securities with maturities of 366 days or greater are classified as
long term investments at September 30, 2000 and June 30, 2000.

RECENT ACCOUNTING PRONOUNCEMENTS

     In March  2000,  the  Financial  Accounting  Standards  Board  issued  FASB
Interpretation  No. 44,  Accounting  for Certain  Transactions  involving  Stock
Compensation  (an  interpretation  of APB Opinion No. 25).  This  interpretation
provides  guidance  regarding  the  application  of  APB  Opinion  25  to  Stock
Compensation involving employees.  This interpretation is effective July 1, 2000
and does not have a material effect on the Company's financial statements.

                                       11
<PAGE>
     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards  ("SFAS") No. 133,  Accounting  for  Derivative
Instruments and Hedging Activities.  SFAS No. 133 as amended by SFAS No. 137, is
effective for fiscal years  beginning after June 15, 2000. SFAS No. 133 requires
that all  derivative  instruments be recorded on the balance sheet at their fair
value.  Changes in the fair value of  derivatives  are  recorded  each period in
current  earnings or other  comprehensive  income (loss)  depending on whether a
derivative  is designed as part of a hedge  transaction  and, if so, the type of
hedge  transaction  involved.  The Company does not expect that adoption of SFAS
No. 133 will have a material impact on its  consolidated  financial  position or
results of  operations  as the Company does not  currently  hold any  derivative
fianancial instruments.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995

     This Form 10-K may contain  forward-looking  statements  that involve risks
and  uncertainties,  including,  but not limited  to, the impact of  competitive
products and pricing,  product demand and market  acceptance risks, the presence
of  competitors  with  greater  financial  resources,  product  development  and
commercialization   risks,   costs   associated   with   the   integration   and
administration  of  acquired  operations,  capacity  and supply  constraints  or
difficulties,  the results of financing  efforts and other risks  detailed  from
time to time in the Company's  Securities and Exchange Commission  filings.  The
Company filed its fiscal 2000 Form 10-K on September 22, 2000.

RISK FACTORS

GENERAL

     COMPETITION.  The computer  telephony industry is highly competitive and is
characterized by rapidly evolving industry standards.  The Company competes with
other  phone  system  companies,   many  of  which  have  substantially  greater
financial,  technological,  production, sales and marketing and other resources,
as well as greater name recognition and larger customer bases, than the Company.
As a  result,  these  competitors  may be  able  to  respond  more  quickly  and
effectively to new or emerging technologies and changes in customer requirements
or to devote greater resources to the development,  promotion, sales and support
of their products than the Company. The Company's new product  introductions can
be subject to severe price and other  competitive  pressures.  While the Company
endeavors to introduce its products to the  marketplace in a timely manner there
can be no  assurances  that  due  to  the  greater  financial  resources  of the
Company's  competitors  that these products will be successful or even accepted.
There can be no assurance  that the  Company's  products will be able to compete
successfully  with other  products  offered  presently or in the future by other
vendors.

     NEW INDUSTRY  DEVELOPMENT.  The Company's  principal product,  TeleVantage,
competes   in  the  newly   emerging   software-based   phone   system   market.
Software-based  phone systems  operate in  conjunction  with and are affected by
developments  in other  related  industries.  These  industries  include  highly
developed  product  markets,  such as PCs, PC  operating  systems  and  servers,
proprietary  PBX and related  telephone  hardware  and  software  products,  and
telephone, data and cable transmission systems, as well as new emerging products
and industries,  such as Internet  communications  and Internet  Protocol ("IP")
telephony.  All of these industries and product markets are currently undergoing
rapid changes,  market  evolution and  consolidation.  The manner in which these
industries and products  evolve,  including the  engineering-  and  market-based
decisions  that are made  regarding  the  interconnection  of the  products  and
industries,  will  affect  the  opportunities  and  prospects  for  TeleVantage.
TeleVantage  competes directly with other  software-based phone system solutions
as well as  existing  traditional,  proprietary  hardware  solutions  offered by
companies such as Avaya  Communications,  Nortel and Siemens.  While the Company
anticipates a migration toward software-based phone system solutions,  there can
be no assurances that this will occur at the rate that the Company anticipates.

                                       12
<PAGE>
     PRODUCT  RETURNS  AND  ROTATIONS.  The  Company  is  exposed to the risk of
product returns and rotations from its  distributors  and value added resellers,
which are  estimated  and  recorded  by the  Company  as a  reduction  in sales.
Although  the  Company   attempts  to  monitor  its  reseller  and   distributor
inventories  to be consistent  with current  levels of sell  through,  localized
overstocking   may  occur  with  TeleVantage  due  to  rapidly  evolving  market
conditions.  In addition, the risk of product returns and rotations may increase
if the demand for its existing  products  should rapidly decline due to regional
economic troubles or increased  competition.  Although the Company believes that
it provides adequate allowances for product returns and rotations,  there can be
no  assurance  that actual  product  returns and  rotations  will not exceed the
Company's  allowances.  Any product  returns and rotations in excess of recorded
allowances  could result in a material adverse effect on net sales and operating
results.  As the Company  introduces more new products,  the  predictability and
timing of sales to end users and the  management  of returns  to the  Company of
unsold products by distributors and volume  purchasers  becomes more complex and
could result in material fluctuations in quarterly sales and operating results.

     FACTORS  AFFECTING  PRICING.  Substantially all of the Company's revenue in
each fiscal  quarter  results from orders booked in that quarter.  A significant
percentage of the Company's  bookings and sales to distributors  and value added
resellers  historically  have occurred  during the last month of the quarter and
are concentrated in the latter half of that month. Orders placed by distributors
are typically based upon  distributors'  recent  historical and forecasted sales
levels for Company  products and inventory levels of Company products desired to
be maintained by those distributors at the time of the orders. Moreover,  orders
may also be based upon financial practices by distributors  designed to increase
the return on  investment  or yield on the sales of the  Company's  products  to
value-added resellers or end-users.  Major distribution  customers  occasionally
receive  market  development  funds  from the  Company  for  purchasing  Company
products and from time to time  extended  terms,  in  accordance  with  industry
practice,  depending upon competitive conditions. The Company currently does not
offer any cash rebates to its U.S. distribution partners.  Changes in purchasing
patterns by one or more of the Company's  distributors,  changes in  distributor
policies   pertaining  to  desired   inventory   levels  of  Company   products,
negotiations of market development funds and changes in the Company's ability to
anticipate  in advance the product mix of  distributor  orders  could  result in
material fluctuations in quarterly operating results.

     PRODUCT CONCENTRATION. The Company has in the past derived, and anticipates
that it will in the future  derive,  a significant  portion of its revenues from
one product line.  Declines in the revenues from this software product,  whether
as a result of  competition,  technological  change,  price  pressures  or other
factors, could have a material adverse effect on the Company's business, results
of operations  and financial  condition.  Further,  life cycles of the Company's
products  are  difficult  to  estimate  due in part to the recent  emergence  of
certain  of the  Company's  products,  the  effect of new  products  or  product
enhancements,  technological  changes  in the  software  industry  in which  the
Company  operates and future  competition.  There can be no  assurance  that the
Company will be successful in maintaining  market  acceptance of its key current
products or any new products or product enhancements.

     TECHNOLOGICAL  CHANGE.  The markets for computer  telephony  solutions  are
characterized by rapid technological  change,  changing customer needs, frequent
product  introductions  and evolving  industry  standards.  The  introduction of
products  incorporating  new  technologies  and the  emergence  of new  industry
standards   could  render  the   Company's   existing   products   obsolete  and
unmarketable.  The  Company's  future  success  will  depend upon its ability to
develop and introduce new computer  telephony  products  (including new releases
and  enhancements)  on  a  timely  basis  that  keep  pace  with   technological
developments  and  emerging  industry  standards  and address  the  increasingly
sophisticated needs of its customers. There can be no assurance that the Company
will be successful in developing and marketing new computer  telephony  products
that respond to technological  changes or evolving industry standards,  that the
Company  will not  experience  difficulties  that  could  delay or  prevent  the
successful  development,  introduction  and marketing of these new products,  or
that its new products will adequately  meet the  requirements of the marketplace
and achieve market  acceptance.  If the Company is unable,  for technological or
other  reasons,  to develop and introduce new computer  telephony  products in a

                                       13
<PAGE>
timely   manner  in  response  to  changing   market   conditions   or  customer
requirements,  the  Company's  business,  results of  operations  and  financial
condition could be adversely affected.

     POTENTIAL  FOR  UNDETECTED  ERRORS.  Software  products as complex as those
offered by the Company may contain undetected errors.  There can be no assurance
that,  despite  testing by the Company and by current and  potential  customers,
errors  will not be found in new or  existing  products  after  commencement  of
commercial shipments,  resulting in loss of or delay in market acceptance or the
recall of such  products,  which could have a material  adverse  effect upon the
Company's business,  results of operations and financial condition.  The Company
provides  customer  support for most of its  products.  The Company  will in the
future offer new products.  If these products are flawed,  or are more difficult
to use than traditional Company products,  customer support costs could rise and
customer satisfaction levels could fall.

     HARDWARE   AVAILABILITY  AND  QUALITY.  The  Company's  computer  telephony
software  requires  the  availability  of certain  hardware.  Specifically,  the
TeleVantage  software-based  phone system  operates on certain voice  processing
boards  manufactured  by Dialogic (an Intel  Company).  To the extent that these
boards become unavailable or in short supply the Company could experience delays
in shipping  software-based  phone  systems to its  customers,  which may have a
material adverse affect on the Company's future operating results.  In addition,
the Company is dependent on the  reliability  of this hardware and to the extent
the   hardware  has  defects  it  will  impact  the   performance   of  its  own
software-based phone system. To the extent, that the hardware becomes unreliable
or does not perform in a manner that is acceptable  to the Company's  customers,
the Company could  experience a material  adverse impact on its future operating
results.  Such delays or quality problems if encountered could also cause damage
to the Company's  reputation  for  delivering  high quality,  reliable  computer
telephony solutions.

     INTELLECTUAL  PROPERTY RIGHTS.  The Company's success is dependent upon its
software  code  base,  its  programming  methodologies  and  other  intellectual
properties. To protect its proprietary technology,  the Company relies primarily
on a combination of trade secret laws and  nondisclosure,  confidentiality,  and
other agreements and procedures,  as well as copyright and trademark laws. These
laws and actions may afford only limited  protection.  There can be no assurance
that the steps taken by the Company  will be adequate to deter  misappropriation
of its  proprietary  information,  or to prevent the successful  assertion of an
adverse claim to software  utilized by the Company,  or that the Company will be
able to  detect  unauthorized  use and  take  effective  steps  to  enforce  its
intellectual  property  rights.  The  Company  owns  United  States and  foreign
trademark registrations for certain of its trademarks.  In addition, the Company
has applied for trademark  protection on a number of its recently introduced new
technologies.  In selling its products,  the Company relies primarily on "shrink
wrap"  licenses  that  are  not  signed  by  licensees  and,  therefore,  may be
unenforceable under the laws of certain jurisdictions.  In addition, the laws of
some foreign  countries provide  substantially  less protection to the Company's
proprietary  rights than do the laws of the United  States.  Trademark or patent
challenges in such foreign countries could, if successful, materially disrupt or
even terminate the Company's ability to sell its products in such markets. There
can be no assurance  that the  Company's  means of  protecting  its  proprietary
rights will be adequate or that the Company's competitors will not independently
develop similar technology.  Although the Company believes that its services and
products do not infringe on the  intellectual  property  rights of others,  such
claims have been and in the future may be  asserted  against  the  Company.  The
failure of the Company to protect its proprietary  property, or the infringement
of the  Company's  proprietary  property  on the rights of others,  could have a
negative impact on the Company's  business,  results of operations and financial
condition.

     DEPENDENCE UPON KEY PERSONNEL.  The Company's future performance depends in
significant part upon key technical and senior management personnel. The Company
is dependent on its ability to identify,  hire, train,  retain and motivate high
quality  personnel,  especially highly skilled engineers involved in the ongoing
research and development  required to develop and enhance the Company's software
products  and  introduce  enhanced  future  products.  A high level of  employee
mobility  and  aggressive  recruiting  of  skilled  personnel  characterize  the
industry.  There can be no assurance that the Company's  current  employees will
continue  to work  for the  Company  or that  the  Company  will be able to hire
additional  employees  on a timely  basis.  Loss of  services  of  existing  key
employees  or failure  to timely  hire new key  employees  could have a negative
impact on the Company's business, results of operations and financial condition.
The Company expects to grant additional stock options and provide other forms of

                                       14
<PAGE>
incentive  compensation  to  attract  and  retain key  technical  and  executive
personnel. These additional incentives will lead to higher compensation costs in
the future and may adversely  effect the Company's future results of operations.
The Company has experienced and expects to continue to experience  difficulty in
hiring key technical personnel in certain of its key development offices.  These
difficulties  could lead to higher  compensation  costs and may adversely effect
the Company's future results of operations.

     FLUCTUATIONS  IN  QUARTERLY  OPERATING  RESULTS.  The  Company's  operating
results  have in the past  fluctuated,  and may in the  future  fluctuate,  from
quarter  to  quarter,  as a result of a number  of  factors  including,  but not
limited to,  changes in pricing  policies or price  reductions by the Company or
its  competitors;  variations  in the  Company's  sales  channels  or the mix of
product sales; the timing of new product  announcements and introductions by the
Company or its competitors; the availability and cost of supplies; the financial
stability  of major  customers;  market  acceptance  of new products and product
enhancements;  the  Company's  ability  to  develop,  introduce  and  market new
products,  applications  and  product  enhancements;  the  Company's  ability to
control costs;  possible  delays in the shipment of new products;  the Company's
success in expanding  its sales and  marketing  programs;  deferrals of customer
orders in  anticipation  of new  products,  product  enhancements  or  operating
systems;  changes in Company strategy;  personnel changes;  and general economic
factors.  The Company's  software  products are generally  shipped as orders are
received and  accordingly,  the Company has  historically  operated  with little
backlog.  As a result,  sales in any quarter are  dependent  primarily on orders
booked and shipped in that  quarter and are not  predictable  with any degree of
certainty.  In addition, the Company's expense levels are based, in part, on its
expectations as to future  revenues.  If revenue levels are below  expectations,
operating results are likely to be adversely affected.  The Company's net income
may be  disproportionately  affected by a reduction in revenues because of fixed
costs related to generating  its revenues.  These or other factors may influence
quarterly  results  in the future  and,  accordingly,  there may be  significant
variations  in  the  Company's  quarterly   operating  results.   The  Company's
historical   operating   results  are  not  necessarily   indicative  of  future
performance for any particular period.  Due to all of the foregoing factors,  it
is possible that in some future quarter the Company's  operating  results may be
below the  expectations of public market analysts and investors.  In such event,
the price of the Company's Common Stock could be adversely affected.

     POSSIBLE  VOLATILITY  OF STOCK PRICE.  The trading  price of the  Company's
Common Stock is likely to be subject to significant  fluctuations in response to
variations in quarterly operating results, changes in management,  announcements
of  technological  innovations or new products by the Company,  its customers or
its  competitors,  legislative  or  regulatory  changes,  general  trends in the
industry and other events or factors.  The stock market has experienced  extreme
price and volume fluctuations which have particularly  affected the market price
for many high technology  companies  similar to the Company and which have often
been  unrelated to the operating  performance  of these  companies.  These broad
market  fluctuations  may  adversely  affect the market  price of the  Company's
Common  Stock.   Further,   factors  such  as  announcements  of  new  strategic
partnerships  or product  offerings by the Company or its competitors and market
conditions  for stocks  similar to that of the  Company  could have  significant
impact on the market price of the Common Stock.

     POSSIBLE  ACQUISITIONS OR DIVESTITURES.  From time to time, the Company may
consider acquisitions of or alliances with other companies that could complement
the Company's existing business, including acquisitions of complementary product
lines. Although the Company may periodically discuss such potential transactions
with a number of companies, there can be no assurance that suitable acquisition,
alliance or purchase  candidates  can be  identified,  or that,  if  identified,
acceptable terms can be agreed upon or adequate and acceptable financing sources
will be  available  to the  Company  or  purchasers  that would  enable  them to
consummate such transactions. Even if an acquisition or alliance is consummated,
there  can  be  no  assurance  that  the  Company  will  be  able  to  integrate
successfully  such  acquired  companies  or  product  lines  into  its  existing
operations,  which  could  increase  the  Company's  operating  expenses  in the
short-term  and  materially  and  adversely  affect  the  Company's  results  of
operations.  Moreover,  certain  acquisitions  by the  Company  could  result in
potentially   dilutive  issuances  of  equity  securities,   the  incurrence  of
additional debt and  amortization of expenses related to goodwill and intangible
assets,  all of  which  could  adversely  affect  the  Company's  profitability.
Acquisitions,  alliances and divestitures  involve  numerous risks,  such as the
diversion  of the  attention of the  Company's  management  from other  business

                                       15
<PAGE>
concerns,  the  entrance of the Company  into  markets in which it has had no or
only limited experience, unforeseen consequences of exiting from product markets
and the potential  loss of key employees of the acquired  company,  all of which
could  have a  material  adverse  effect on the  Company's  business,  financial
condition and results of operations.

COMPUTER TELEPHONY

     COMPUTER  TELEPHONY  PRODUCT MARKET.  The market for open,  standards-based
computer  telephony products is relatively new and is characterized by the rapid
evolution of hardware and software standards, emerging technologies and changing
customer  requirements.  These characteristics may render the Company's computer
telephony products unmarketable or may make the expansion,  timing and direction
of product development unpredictable. As a result of these factors, there can be
no assurance that computer  telephony  markets will continue to expand,  or that
the Company's products will achieve market acceptance.

     The Company believes that the principal  competitive  factors affecting the
computer  telephony  markets it serves  include  vendor and product  reputation,
product  architecture,  functionality  and features,  scalability,  ease of use,
quality of product and support,  performance,  price, brand name recognition and
effectiveness of sales and marketing efforts. There can be no assurance that the
Company can maintain and grow its market position  against current and potential
competitors,  especially those with significantly greater financial,  marketing,
service, support,  technical and other competitive resources. Any failure by the
Company to  maintain  and grow its  competitive  position  could have a material
adverse effect upon the Company's  revenues from its computer  telephony product
line.

     TeleVantage  is a telephone  system  designed  for small- and  medium-sized
businesses  and  branch  offices.   The  Company  believes   TeleVantage  offers
functionality  superior to that of a traditional standalone PBX. There can be no
assurances that competitors with substantially  greater financial resources than
that of the  Company  will not develop  their own  software-based  phone  system
solutions and subsequently  adversely affect the Company's  ability to market or
sell its software-based phone system solution, TeleVantage.

     TeleVantage  could  also  face  direct   competition  from  companies  with
significantly  greater  financial,  marketing,  service,  support and  technical
resources.  Although the Company has recently partnered with TAIS,  Dialogic (an
Intel  Company),  Compaq and IBM amongst  others to deliver  its  software-based
phone system to small and medium  sized  businesses  there can be no  assurances
these  partnerships  will  substantially  expand  the  market  presence  of  the
Company's  software-based  PBX,  TeleVantage.  The Company  anticipates  certain
competitors with greater  financial  resources will continue to make substantial
new investments in developing IP based and software based  telephony  solutions.
Thus there can be no  assurance  that the Company  will be able to  successfully
market or sell its own competing IP based or software-based telephony solutions.

     COMPUTER   TELEPHONY   HARDWARE   SUPPLIER   DEPENDENCIES.   The  Company's
software-based phone system,  TeleVantage, is designed to operate in conjunction
with  voice  processing  boards  manufactured  by  Dialogic,  an Intel  Company.
Additionally,  Dialogic,  an Intel  Company  is  currently  the  Company's  only
supplier of the voice processing  boards that are necessary for the operation of
TeleVantage.  If Intel Corporation becomes unable to continue to manufacture and
supply  these  boards in the  volume,  price and  technical  specifications  the
Company  requires,  then the  Company  would  have to adapt  its  products  to a
substitute supplier. Introducing a new supplier of voice processing boards could
result in unforeseen  additional product  development or customization costs and
could introduce hardware and software operating or compatibility problems. These
problems  could  affect  product  shipments,  be costly to correct or damage the
Company's  reputation  in the  markets  in which it  operates,  and could have a
material  adverse  affect on its  business,  financial  condition  or results of
operations.

                                       16
<PAGE>
     Additionally, Dialogic (an Intel Company) hardware failures could adversely
affect the Company's ability to ship and sell its own software products,  damage
its  reputation  in the markets in which it operates,  and could have a material
adverse affect on its business, financial condition or results of operations.

     COMPUTER  TELEPHONY  CUSTOMERS  AND  MARKET  ACCEPTANCE.   The  Company  is
currently and will continue to invest significant  resources in the development,
marketing and sales of TeleVantage,  a software-based phone system. There can be
no assurance that the Company will achieve  market  acceptance of these products
whose PBX and related  telephone  needs have  traditionally  been served through
proprietary PBX and key system  distributors  and  interconnects.  The Company's
potential  customer  base  for its  TeleVantage  product,  small,  medium  sized
businesses  and  branch  offices,  have  well  established  histories  of buying
existing  telecommunications  products,  including  proprietary PBXs and related
products, and have found such products to be generally reliable. Moreover, large
companies  such as Avaya  Communications  and Nortel have  invested  substantial
resources in the  development  and  marketing of existing  proprietary  PBXs and
related products and maintain well-developed distribution channels. Accordingly,
the Company will face substantial  market barriers and competitive  pressures in
achieving market acceptance of its new software based PBX products. There can be
no assurance that the Company will be successful in establishing a critical mass
of qualified computer telephony resellers or that such resellers will be able to
successfully market TeleVantage in the volumes that the Company anticipates. The
Company's  success in selling  these  products  will likely be influenced by its
ability to attract and inform the highest  qualified VARs and  distributors  and
interconnects on the features and functionality of these emerging technologies.

     The Company's computer telephony products compete in a relatively  immature
industry with as yet unproven technologies. The Company believes that there will
be an evolution toward open server-based telephony enabled applications from the
traditional  proprietary PBX  environment  and that, in such a new  environment,
software-based  PBX systems will be widely  accepted.  The Company also believes
that  there  may  be  an   eventual   gravitation   toward   Internet   Protocol
architectures. However, there can be no assurance that the current technological
innovations in the computer  telephony  industry will be widely adopted by small
to medium sized  businesses or that telephony  standards will evolve in a manner
that is advantageous to or anticipated by the Company.

     TeleVantage  currently  runs  only on  Microsoft  Windows  NT  servers.  In
addition,  the Company's products use other Microsoft Corporation  technologies,
including  Microsoft SQL Server.  A decline in market  acceptance  for Microsoft
technologies  or the  increased  acceptance of other server  technologies  could
cause the  Company  to incur  significant  development  costs  and could  have a
material adverse effect on our ability to market our current products. Although,
the Company believes  Microsoft  technologies will continue to be widely used by
businesses,  there  nonetheless  can be no assurance that  businesses will adopt
these  technologies  as  anticipated  or will not  migrate  to  other  competing
technologies that the Company's telephony products do not currently support.

     Additionally,  since the  operation of the Company's  software-based  phone
system solution is dependent upon certain Microsoft  technologies,  there can be
no  assurances  that in the  event of a price  increase  by  Microsoft  that the
Company  will  be  able  to  continue  to  successfully   sell  and  market  its
software-based phone system.

ITEM 7(A). QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     MARKET  RISK.  During the normal  course of business  Artisoft is routinely
subjected to a variety of market risks,  examples of which include,  but are not
limited to, interest rate movements and  collectibility of accounts  receivable.
Artisoft  currently  assesses  these  risks  and has  established  policies  and
practices to protect  against the adverse  effects of these and other  potential
exposures.  Although  Artisoft does not anticipate any material  losses in these
risk areas,  no assurances can be made that material losses will not be incurred
in these areas in the future.

     INTEREST  RATE  RISK.  Artisoft  may be exposed  to  interest  rate risk on
certain of its cash  equivalents.  The value of certain  of the  Company's  cash
equivalents  may be  adversely  impacted in a rising  interest  rate  investment
environment. Although Artisoft does not anticipate any material losses from such
a movement in interest  rates,  no assurances  can be made that material  losses
will not be incurred in the future.

                                       17
<PAGE>
                         ARTISOFT, INC. AND SUBSIDIARIES
                           PART II. OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

     The Company is subject to lawsuits and other claims arising in the ordinary
course of its  operations.  In the opinion of management,  based on consultation
with legal  counsel,  the  effects of such  matters  will not have a  materially
adverse effect on the Company's financial position.

ITEM 2. CHANGES IN SECURITIES

     None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None

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

     None

ITEM 5. OTHER INFORMATION

     None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          No. 11 - Computation of Net Loss Per Share

          No. 27 - Financial Data Schedule for Form 10-Q dated November 13, 2000

     (c)  Reports on Form 8-K

          None

                                       18
<PAGE>
                                   SIGNATURES

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

                                       ARTISOFT, INC.


Date: November 13, 2000                By /s/ Steven G. Manson
                                          --------------------------------------
                                          Steven G. Manson
                                          President and Chief Executive Officer


                                       By /s/ Kirk D. Mayes
                                          --------------------------------------
                                          Kirk D. Mayes
                                          Controller and Interim Chief Financial
                                          Officer