U.S. Securities and Exchange Commission
                             Washington, D.C. 20549
                                 ---------------

                                   Form 10-QSB

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

                  For the quarterly period ended March 31, 1997

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

                For the transition period from _______to________

                         Commission file number 1-14076

                             ALLEGRO NEW MEDIA, INC.
       (Exact name of small business issuer as specified in its charter)

          Delaware                                  22-3270045
 (State or other jurisdiction           (I.R.S. Employer Identification Number)
 of incorporation or organization)


                    111 N. Market Street, San Jose, CA 95113
                    (Address of principal executive offices)


                                 (408) 537-3000
                           (Issuer's telephone number)


     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing  requirements for the past 90 days. 
Yes [ X ] No [ ]

     State the number of shares  outstanding of each of the issuer's  classes of
common equity,  as of the latest  practicable  date:  8,050,424 shares of Common
Stock as of May 1, 1997.

     Transitional Small Business Disclosure Format (Check one): 
Yes [   ]  No [ X ]

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

<PAGE>



                              CROSS REFERENCE SHEET

                                                                   Page
                                                                   Number
  Cover Page                                                          1

  Cross Reference Sheet                                               2

                 Part I. Financial Information

  Item 1. Financial Statements (Unaudited):

     Condensed consolidated balance sheets as of March 31, 1997
       and December 31, 1996                                          3
     Condensed consolidated statements of operations for the three
       months ended March 31, 1997 and 1996                           4
     Condensed consolidated statements of cash flows for the three
       months ended March 31, 1997 and 1996                           5
     Notes to condensed financial statements - March 31, 1997         6

  Item 2.  Management's Discussion and Analysis or Plan of Operation  7

                           Part II. Other Information

  Item 1.  Legal Proceedings.                                         11

  Item 2.  Changes In Securities.                                     11

  Item 3.  Defaults Upon Senior Securities.                           11

  Item 4.  Submission of Matters to a Vote of Security Holders.       11

  Item 5.  Other Information.                                         11

  Item 6.  Exhibits and Reports on Form 8-K                           11

  Signatures                                                          12

  Index to Exhibits                                                   13


<PAGE>


                          Part I. Financial Information

                             ALLEGRO NEW MEDIA, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                              March 31,                  December 31,
                                                1997                         1996
Assets                                       (Unaudited)
  Current assets:
<S>                                            <C>                        <C>        
    Cash and cash equivalents                  $3,039,829                 $ 4,833,454
    Restricted cash                             1,650,000                   1,650,000
    Short-term investments                      4,359,337                   6,328,180
    Accounts receivable, net                    2,128,046                   1,991,790
    Inventories (Note 3)                          465,700                     713,586
    Other current assets                          395,400                     235,849
                                               ----------                  ----------
            Total current assets               12,038,312                  15,752,859
  Property and euipment, net                     444,623                     450,867
  Acquired software, net                        6,420,319                   6,787,614
  Goodwill and other intangibles, net           3,953,830                   4,262,033
                                              -----------                ------------  
                                              $22,857,084                 $27,253,373

Liabilities and Stockholders' Equity


  Current liabilities:
<S>                                           <C>                         <C>        
    Accounts payable                          $ 2,135,691                 $ 3,509,060
    Accrued liabilities                         8,832,608                  10,186,059
    Notes payable                               1,798,392                   1,882,548
                                              -----------                 -----------
     Total current liabilities                 12,766,691                  15,577,667


  Stockholders' equity:
<S>                                            <C>                         <C>
   Serial Preferred Stock, authorized 1,939,480 
      shares, none issued and outstanding:
    Class B Voting Preferred Stock, authorized
     60,520 shares; issued and 
     outstanding 60,520 shares                         61                          61
    Common stock, par value $.001 per share, 
     authorized 30,000,000 shares; issued and 
     outstanding 7,860,243 shares in 1996 and 
     8,050,424 shares in 1997                       8,050                       7,860
   Additional paid-in capital                  42,843,535                  41,731,437
   Accumulated deficit                        (32,761,253)                (30,063,652)
                                              ------------                ------------ 
     Total stockholders' equity                10,090,393                  11,675,706
                                              ------------                ------------
     Total liabilities and stockholders' 
       equity                                 $22,857,084                 $27,253,373

</TABLE>

     Note:  The balance  sheet at December  31, 1996 has been  derived  from the
audited  financial  statements  at that  date but does  not  include  all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements.

                  See notes to condensed financial statements.

<PAGE>


                             ALLEGRO NEW MEDIA, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                      Three Months Ended

                                                           March 31,

                                                    1997             1996

<S>                                             <C>               <C>      
     Net sales                                  $3,950,252        $ 445,924
     Cost of goods sold                            951,766          229,402
                                                ----------        ---------
     Gross profit                                2,998,486          216,522

     Selling, general and administrative
       expenses                                  3,669,915          502,683
     Depreciation and amortization of acquired
       technology and goodwill                     866,919            7,354
     Product development                         1,252,656           82,278
     Other (income) expense   net                 (93,403)         (30,149)
                                                ----------        ---------
     Net loss                                 $(2,697,601)       $(345,644)


     Net loss per share                             $(.34)           $(.11)

     Weighted average number of common
        shares outstanding                      7,932,743        3,150,669
                                                ---------        ---------
</TABLE>

                  See notes to condensed financial statements.

<PAGE>


                             ALLEGRO NEW MEDIA, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                           For the Three Months Ended March 31,
                                               1997                     1996
  Operating activities
<S>                                        <C>                       <C>        
     Cash (used in) operations             $(2,780,212)              $ (631,472)

  Investment activities
     Cash used to pay acquisition costs     (  959,935)
     Purchase of property and equipment     (   32,321)                (  1,953)
     Proceeds from sale of short term 
       investments                           1,968,843

  Financing activities
     Proceeds from sale of common stock         10,000                  464,907



Net (decrease) in cash                      (1,793,625)                (168,518)
Cash at beginning of period                  4,833,454                2,928,272
                                            -----------             ------------ 
Cash at end of period                      $ 3,039,829              $ 2,759,755

</TABLE>

                  See notes to condensed financial statements.


<PAGE>


                             ALLEGRO NEW MEDIA, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

  1. Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim financial  information and with the instructions to Form 10-QSB and Item
310 of Regulation S-B.  Accordingly,  they do not include all of the information
and footnotes required by generally accepted accounting  principles for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31, 1997
are not necessarily  indicative of the results that may be expected for the year
ending  December 31, 1997. For further  information,  refer to the  consolidated
financial  statements  and footnotes  thereto  included in the Company's  Annual
Report on Form 10-KSB for the year ended  December 31, 1996.  Certain prior year
information has been reclassified to conform to the current year's presentation.

  2. Loss Per Share.

     Net loss per share is computed  based upon the weighted  average  number of
shares of common  stock and  common  share  equivalents  outstanding  during the
periods  presented.  In accordance  with the Securities and Exchange  Commission
Staff  Accounting  Bulletin No. 83,  common  share  equivalents  resulting  from
outstanding  options to  purchase  common  stock are  excluded  as the impact is
anti-dilutive.

  3. Inventories
<TABLE>
<CAPTION>

     Inventories consist of the following:
                                             March 31, 1997   December 31, 1996
<S>                                           <C>               <C>      
                Raw materials                 $  80,801         $  81,570
                Finished goods                  384,899           632,016
                                              ---------         ----------
                                              $ 465,700         $ 713,586
</TABLE>

  4. Stockholder's Equity

     During the quarter  ending  March 31, 1997,  the Company  issued (a) 71,428
shares of common  stock to M. S.  Farrell & Co.,  Inc.  ("MSF")  and a  designee
thereof in connection with the Company's  exercise of its right to terminate its
exclusive  investment  banking and other obligations to MSF and (b) an aggregate
of 118,747 shares of common stock to investment  bankers,  consultants  and upon
the  exercise  of certain  stock  options  under the  Company's  1994  Long-Term
Incentive Plan.

  5. Business Combinations

     On July 31, 1996, the Company acquired all of the outstanding  common stock
of Serif Inc. and all of the outstanding preference and ordinary shares of Serif
(Europe)  Limited  (collectively  "Serif").  The aggregate  purchase  price was
approximately  $4,200,000 and was principally  financed  through the issuance of
1,000,000  shares  of the  Company's  common  stock.  The  acquisition  has been
accounted  for as a purchase and the results of operations of Serif are included
in the Company's consolidated financial statements beginning August 1, 1996.

    On December 27, 1996,  the Company  acquired all of the  outstanding  common
stock of Software Publishing  Corporation ("SPC"). The aggregate purchase price,
including all direct costs,  was  approximately  $30,000,000 and was principally
financed through the issuance of 3,376,162 shares of common stock.


<PAGE>

                             ALLEGRO NEW MEDIA, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


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

     Statements  contained in this Quarterly  Report on Form 10-QSB that are not
based upon historical fact are  "forward-looking  statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking statements included
in this Form 10-QSB  involve known and unknown  risks,  uncertainties  and other
factors which could cause actual results,  performance  (financial or operating)
or achievements  expressed or implied by such forward looking  statements not to
occur or be realized.  Such forward looking statements  generally are based upon
the best estimates by the Company of future results, performance or achievement,
based  upon  current  conditions  and the most  recent  results  of  operations.
Forward-looking  statements  may be  identified  by the  use of  forward-looking
terminology   such  as   "may,"   "will,"   "expect,"   "believe,"   "estimate,"
"anticipate,"  "continue,"  or similar  terms,  variations of those terms or the
negative of those terms.

     The Company has recently acquired three operating  software  companies with
the  expectation  that such  transactions  will  result in  long-term  strategic
benefits.  The realization of these anticipated  benefits will depend in part on
whether the operations of the Company and its recently acquired subsidiaries can
be fully integrated in an efficient and effective manner.  This requires,  among
other things,  integration  of the Company's and such  subsidiaries'  respective
product  offerings and  coordination  of the  Company's  and such  subsidiaries'
sales, marketing and research and development efforts and distribution channels.
While the Company has substantially implemented its integration plans, there can
be no assurance  that the expected  long-term  strategic  benefits of the recent
acquisitions will be realized.

     Additional potential risks and uncertainties  include,  among other things,
such factors as the overall level of business and consumer spending for computer
software,  the  amount  of  sales of the  Company's  products,  the  competitive
environment within the computer software industry,  the level and costs incurred
in connection with the Company's product  development efforts and the results of
such efforts,  the financial strength of the retail industry,  market acceptance
of the Company's products,  certain technological  considerations,  competition,
dependence on key personnel and the other factors and information  disclosed and
discussed  in this "Item 2.  Management's  Discussion  and  Analysis  or Plan of
Operation"  and in other  sections  of this Form  10-QSB.  Readers  of this Form
10-QSB  should   carefully   consider  such  risks,   uncertainties   and  other
information,  disclosures and discussions  which contain  cautionary  statements
identifying  important  factors  that  could  cause  actual  results  to  differ
materially from those provided in the forward-looking statements.

  General

     The Company is an international  supplier of computer software applications
and companion  utilities  primarily for the corporate and SOHO business  market.
These software  applications  and companion  utilities are targeted  towards the
visual  communications  product  category,  and improve the graphical appeal and
overall effectiveness of documents produced by desktop publishing,  presentation
graphics,  web page,  word  processing and similar  applications.  The Company's
product lines include several products based upon its patent-pending Intelligent
Formatting+ technology ActiveOffice,  ASAP WordPower,  ASAP WebShow and ASAP; as
well as its traditional products such as Serif PagePlus, Serif DrawPlus, Harvard
Graphics, Harvard ChartXL, Harvard Spotlight, Learn to Do Windows 95 with John C
Dvorak,  and a line of interactive  multimedia  products  based on  Entrepreneur
Magazine  publications.  In January 1997, the Company  introduced  ActiveOffice,
which is a companion  product to Microsoft Office that is designed to give users
of Microsoft Word, Excel,  PowerPoint and Exchange Mail, a quick and easy way to
convert plain text and numbers into visual graphics.  The Company also continues
to  offer  other  business  productivity  software  products.  The  Company  has
de-emphasized its word processing and other non-visual communications,  business
productivity and interactive  multimedia products. The Company currently derives
substantially  all of its net sales from  products sold directly to end-users by
its direct mail and telemarketing  centers,  and to retailers,  distributors and
corporate  purchasers  by its  internal  corporate  and retail  sales  force and
independent  sales  representatives.  As the  industry  evolves  mechanisms  for

<PAGE>

efficiently  and securely  charging  customers  directly  for software  over the
Internet,  the Company  expects  that it may be able to  supplement  traditional
forms  of  software  distribution  and  distribute  software  directly  over the
Internet medium.

     North America and  international net revenues for the Company's three month
periods ending March 31, 1997 and 1996 and the percentage of such revenues were
as follows:

<TABLE>
<CAPTION>
                                               Three Months Ended March 31,
                                        1997                              1996
                               Net Revenues    %          Net Revenues   %

<S>                             <C>            <C>        <C>             <C> 
     North America              $1,872,165     47%        $445,924        100%
     International               2,078,087     53%             -0-          0%
                                ----------     ---        --------        ----
     Total net revenues         $3,950,252     100%       $445,924        100%
</TABLE>

     The Company  believes  that end users are  continuing  to migrate  from the
Windows 3.1 to the Windows 95 platform and potentially  will migrate to Internet
computing.   The  Company  expects   increased   competition,   including  price
competition,  in the  Windows  3.1,  Windows  95 and  Windows  NT markets in the
future.  Several of the Company's competitors have introduced suites of products
which include products that directly compete with the Company's products.  These
suites of products  may be bundled with other  office  software  programs by the
same or other competitors, or are sold free or included as part of the operating
system.  The Company believes these offerings of product suites adversely affect
net  revenues,  and will  continue to adversely  affect  sales of the  Company's
products in the future as the individual  products within the suites continue to
gain  increased  levels of  inter-operability  and  functionality.  The  Company
currently does not offer a suite of general  purpose office  products;  however,
the Company  currently  offers two suites of products,  Serif  Publishing  Power
Suite  and  Harvard  Presenters  Pack,  as  well  as  products  that  complement
competitive  suite products.  The Company believes that in order to increase its
net revenues, it must introduce new marketing strategies and continue to develop
and  introduce  new  technologies  and  products  through  strategic  alliances,
acquisitions or internal development.  Any inability or delay in executing these
strategies,  difficulties  encountered in introducing  new products or marketing
programs,  or failures of the Company's  current and future  products to compete
successfully with products offered by other vendors,  could adversely affect the
Company's net revenues and profitability.

  Results of Operations

     Three Month Period Ended March 31, 1997  Compared to the Three Month Period
Ended March 31, 1996

     Net Sales.  Net sales  increased  approximately  786% from  $445,924 in the
three month period ended March 31, 1996 to  $3,950,252 in the three month period
ended March 31, 1997 as a result of the inclusion of sales from Serif and SPC in
the 1997  three-month  period.  There  were no Serif or SPC  results in the 1996
period.  The Company  provided for returns in the three month period ended March
31, 1997 at  approximately  25% of gross sales versus  approximately  21% in the
three month period ended March 31, 1996.

     Cost of Goods Sold.  Cost of goods sold increased  approximately  315% from
$229,402 in the three month period ended March 31, 1996 to $951,766 in the three
month  period ended March 31, 1997,  as a result of higher  sales  volume.  As a
percentage of net sales, cost of goods sold decreased from  approximately 51% of
net sales in the three month period ended March 31, 1996 to approximately 24% of
net  sales in the  three  month  period  ended  March  31,  1997 as a result  of
increased sales volumes providing lower per unit production costs.

     The  Company's  gross  margins  and  operating  income may be  affected  in
particular periods by the timing of product  introductions,  promotional pricing
and rebate offers, as well as by return  privileges and marketing  promotions in
connection with new product  introductions  and upgrades.  These  promotions may
have a negative  influence on average  selling prices and gross  margins.  Gross
margins  have  also  been,  and  may  continue  to  be,  adversely  affected  by
competitive pricing strategies in the industry as a whole, including competitive
upgrade pricing, the OEM business and alternative licensing arrangements.


<PAGE>

     Costs of goods sold consists  primarily of product costs,  freight charges,
royalties and an inventory allowance for damaged and obsolete products.  Product
costs consist of the costs to purchase the  underlying  materials and print both
boxes and manuals, media costs (CD-ROM's and other media) and assembly.

     Selling,  General  and  Administrative   Expenses.   Selling,  general  and
administrative  expenses ("SG&A")  increased by approximately 630% from $502,683
in the three month period ended March 31, 1996 to  $3,669,915 in the three month
period ended March 31, 1997. Substantially all expenses have increased since the
1996 period due to the inclusion of expenditures  associated with the operations
of Serif and SPC which  were not  included  in the 1996  period.  Total  selling
expenses  increased  approximately  702% from $166,470 in the three month period
ended March 31, 1996 to  $1,334,644  in the three month  period  ended March 31,
1997, primarily as a result of an increase in direct mail advertising associated
with the Company's  telemarketing  operations and the roll-out costs  associated
with the release of the Company's new ActiveOffice  product.  Total salaries and
wages  increased  $1,447,150 or  approximately  953%, from $151,914 in the three
month period ended March 31, 1996 to  $1,599,064 in the three month period ended
March 31, 1997,  primarily  due to the  inclusion of wages  attributable  to the
operations of Serif and SPC, which were not included in the  three-month  period
ended March 31, 1996.

     The Company is  utilizing a consumer  rebate offer in  connection  with its
marketing of its new ActiveOffice product. No assurance can be given that rebate
redemptions  will not be at a rate in excess of  amounts  that the  Company  may
reserve for such redemptions or that redemptions in excess of such reserve would
not have a material adverse effect on the Company's business,  operating results
or financial condition.

     The Company establishes  several of its marketing  expenditure levels based
on expected net revenues.  If orders and  shipments do not occur when  expected,
expenditure  levels  could be  disproportionately  high  compared to  recognized
revenues for the reported period,  and the Company's  operating results could be
adversely affected.  The Company  periodically  reviews and adjusts its variable
expenditure  levels based on actual sales volumes.  In the future, the Company's
net  revenues and  operating  results  could be adversely  affected by these and
other factors, such as delays in new product  introductions,  the mix of product
sales or distribution channels and customer choices regarding operating systems.

     Depreciation and Amortization of Acquired  Technology and Goodwill.  In the
three-month  period ended March 31,  1997,  the Company  recorded  approximately
$866,919 in depreciation  and  amortization of acquired  technology and goodwill
associated with its acquisitions of Serif and SPC, which was not included in the
three month period ended March 31, 1996.

     Product Development.  Product development expenses increased  approximately
1422% from $82,278 in the three month period ended March 31, 1996 to  $1,252,656
in the three month period ended March 31,  1997,  principally  as a result of an
increase in product development costs associated with producing new products. As
a  percentage  of net  sales,  the  Company's  product  development  costs  were
approximately  31.7% in the three month period ended March 31, 1997 versus 18.5%
in the three month  period  ended March 31,  1996,  due to the  inclusion of the
costs  associated  with the Serif and SPC  development  teams in the 1997 period
which were not  included in the 1996 period,  as well as  increased  development
spending  on future  products.  The Company  expects  that  product  development
expenses will increase in dollar amount in the future as the Company expands its
product  development  activities,  although the Company's  long-term  goal is to
reduce  product  development  costs  as  a  percentage  of  sales.  All  product
development costs have been expensed in the period incurred.

     Other Income. Other income increased from $30,149 in the three month period
ended March 31, 1996 to $93,403 in the three month  period ended March 31, 1997,
primarily as a result of higher cash balances.

  Liquidity and Capital Resources

     During the three month  period ended March 31, 1997,  the  Company's  cash,
cash  equivalents  and  short-term  investments  decreased  by  $3,762,468  from
$11,161,634 at December 31, 1996 to $7,399,166 at March 31, 1997, primarily as a
result of using $2,780,212 in operations and $959,935 to pay certain acquisition
costs.  Although the Company had a working  capital deficit of $728,379 at March
31, 1997, the Company  believes that its existing cash and cash  equivalents and
cash generated from operations, if any, should be sufficient to meet its

<PAGE>

currently  anticipated  liquidity and capital  expenditure  requirements  for at
least the next  twelve  months.  There can be no  assurance,  however,  that the
Company will be successful in attaining its sales goals, nor that attaining such
goals will have the  desired  effect on the  Company's  cash  resources.  If the
Company  does  not  attain  its  revenue  and  cash  collection  goals or if the
Company's  cash  resources  are not  sufficient,  it may be  necessary to obtain
additional  sources of financing.  The Company has a line of credit  facility of
$300,000;  however,  there can be no assurances that the Company will be able to
obtain additional financing,  if at all, or that such financing will be on terms
acceptable  to the Company.  The Company is pursuing a possible  offering of its
equity or debt securities.  However,  there can be no assurance that the Company
will be successful in completing such an offering.

     The Company's operating  activities for the first three months of 1997 used
cash of $2,780,212,  which reflected a reduction of $1,373,369 in trade accounts
payable.  The Company  generated cash of $976,587 in its investment  activities,
after  giving  effect to the use of $959,935 of cash  relating to the payment of
acquisition  costs.  The Company intends to continue to utilize its resources in
1997 for product development,  marketing and advertising,  to finance the higher
level of inventory and accounts receivable  necessary to support the anticipated
increase in sales, for capital expenditures,  including the purchase of computer
equipment,  and for internal and external  software  development.  However,  the
Company's  cash   requirements  may  change  depending  upon  numerous  factors,
including,  without limitation, the need to finance the licensing or acquisition
of third party software as well as increased  inventory and accounts  receivable
arising from the sale and shipment of new products.

     In the three month period ended March 31,  1997,  approximately  53% of the
Company's  total sales were generated  outside the U.S. The Company expects this
practice to continue. The Company's exposure for foreign currency exchange gains
and losses is partially  mitigated,  as the Company incurs operating expenses in
most of the currencies in which it invoices customers. As of March 31, 1997, the
Company had no foreign exchange  contracts  outstanding.  The Company's  foreign
exchange  gains and losses may be  expected to  fluctuate  from period to period
depending on the movement in exchange rates.

     In June 1994,  SPC sold its  Superbase  product  line to Computer  Concepts
Corporation  ("CCC")  (Nasdaq  National  Market:   CCEE)  for  shares  of  CCC's
restricted  common stock.  As of March 31, 1997, SPC owned  3,039,894  shares of
common  stock of CCC,  which it has or expects to sell during the  remainder  of
1997, or as soon thereafter as practicable. As of May 12, 1997 the closing price
of the CCC common stock on The Nasdaq National Market was $.53 per share.

  Seasonality

     The computer  software  market is  characterized  by  significant  seasonal
swings in demand,  which typically peak in the fourth quarter of each year. This
seasonal  pattern is due primarily to the increased  demand for software  during
the  year-end  holiday  buying  season.  The  Company  expects its net sales and
operating  results  to  continue  to reflect  this  seasonality.  The  Company's
revenues may also experience  substantial  variations as a result of a number of
factors, such as consumer and business preferences and introduction of competing
titles by competitors, as well as limited time promotional pricing offers. There
can  be no  assurance  that  the  Company  will  achieve  consistent  growth  or
profitability on a quarterly or annual basis.

  Inflation

     The Company believes that inflation has generally not had a material impact
on its operations.


<PAGE>



PART II. Other Information

Item 1.   Legal Proceedings.

     Reference is hereby made to the Company's  Annual Report on Form 10-KSB for
the fiscal year ended  December 31, 1996,  Item 3 thereof (page 14), filed April
15, 1997 (Commission file No.: 1-14076),  and to the references  therein,  for a
discussion of all material pending legal proceedings to which the Company or any
of its subsidiaries are parties.

Item 2.   Changes in Securities.

          None.

Item 3.   Defaults upon Senior Securities.

          None.

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

          None.

Item 5.   Other Information.

          None.

Item 6.   Exhibits and Reports on Form 8-K

          (a)  10.2 Director and Advisor Stock Option Plan.
               27   Financial Data Schedule.

          (b) Reports filed on Form 8-K during the quarter ended March 31, 1997:

     On January 2, 1997, the Company filed a Current Report on Form 8-K (Date of
Report:  December  27,  1996)  with  the  Commission  reporting,  as an  Item  2
disclosure,  the  Company's  acquisition  of SPC as a result of the  merger of a
wholly owned  subsidiary of the Company with and into SPC. The Form 8-K included
(by incorporation by reference to the Company's  Registration  Statement on Form
S-4  (Registration  No.:  333-16449),  filed with the Commission on November 20,
1996) the following financial statements and information:

     (i)  Financial Statements of Business Acquired.

          (A) Audited  financial  statements of SPC as of September 30, 1996 and
          1995 and for the years then ended.

     (ii) Pro Forma Financial Information (Unaudited).
          (A) Pro forma condensed  combined balance sheet of the Company and its
          subsidiaries as of September 30, 1996.

          (B) Pro forma  condensed  combined  statements  of  operations  of the
          Company and its subsidiaries for the year ended December 31, 1995.

          (C) Pro forma  condensed  combined  statements  of  operations  of the
          Company and its  subsidiaries  for the nine months ended September 30,
          1996.

          (D) Notes to unaudited pro forma consolidated financial statements.

<PAGE>

                                   SIGNATURES

     In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                        ALLEGRO NEW MEDIA, INC.

  Date:     May 14, 1997                By:    /s/ Barry A. Cinnamon
                                                   Barry A. Cinnamon
                                        Chairman of the Board, President and
                                               Chief Executive Officer
                                            (Principal Executive Officer)


  Date:     May 14, 1997                By:    /s/  Mark E. Leininger
                                                    Mark E. Leininger
                                        Chief Operating Officer, Vice President-
                                          Finance, Treasurer, Chief Financial
                                         Officer (Principal Accounting Officer)

<PAGE>


                                  EXHIBIT INDEX

10.2      Director and Advisor Stock Option Plan.
27        Financial Data Schedule.