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

                                   Form 10-QSB

(Mark One)
[ X ]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 OF THE
                 SECURITIES EXCHANGE ACT OF 1934
          For the quarterly period ended September 30, 1997

[   ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 OF THE
                 SECURITIES EXCHANGE ACT OF 1934
          For the transition period from _______to________

                         Commission file number: 1-14076

                 SOFTWARE PUBLISHING CORPORATION HOLDINGS, INC.
       (Exact name of small business issuer as specified in its charter)

                Delaware                           22-3270045
      (State or other jurisdiction                (IRS Employer
     of incorporation or organization)        Identification Number)

               111 North Market Street, San Jose, California 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:  9,011,400 shares of Common
Stock, as of November 13, 1997.

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


<PAGE>


                          PART I. FINANCIAL INFORMATION



Item                                                                     Page

Item 1.   Financial Statements (Unaudited):

Condensed Consolidated Balance Sheets as of September 
   30, 1997 and December 31, 1996. . . . . . . . . . . . . . . . . . . .   3
Condensed Consolidated Statements of Operations for the
   Three and Nine Months Ended September 30, 1997 and 1996 . . . . . . .   4
Condensed Consolidated Statements of Cash Flows for the 
   Nine Months Ended September 30, 1997 and 1996 . . . . . . . . . . . .   5
Notes to Condensed Financial Statements. . . . . . . . . . . . . . . . .   6


Item 2.   Management's Discussion and Analysis or Plan of Operation. . .   8

<PAGE>


                 SOFTWARE PUBLISHING CORPORATION HOLDINGS, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                          September 30,              December 31,
                                                               1997                      1996
                                                           (Unaudited)                  (Note)

                              ASSETS
Current assets:
<S>                                                         <C>                       <C>        
 Cash and cash equivalents . . . . . . . . . . .            $1,186,648                $ 4,833,454
 Restricted cash . . . . . . . . . . . . . . . .                    --                  1,650,000
 Short-term investments. . . . . . . . . . . . .             1,302,760                  6,328,180
 Accounts receivable, net. . . . . . . . . . . .             2,060,582                  1,991,790
 Inventories (Note 4). . . . . . . . . . . . . .               588,748                    713,586
 Other current assets. . . . . . . . . . . . . .               308,355                    235,849
                                                            ----------                -----------
      Total current assets . . . . . . . . . . .             5,447,093                 15,752,859

Property and equipment, net. . . . . . . . . . .               703,656                    450,867
Acquired software, net . . . . . . . . . . . . .             5,022,333                  6,787,614
Goodwill and other assets, net . . . . . . . . .             3,746,934                  4,262,033
                                                            ----------                -----------
                                                            14,920,016                $27,253,373
                                                            ----------                -----------
</TABLE>

<TABLE>
<CAPTION>
                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
<S>                                                         <C>                       <C>        
 Accounts payable. . . . . . . . . . . . . . . .            $2,402,080                $ 3,509,060
 Accrued liabilities . . . . . . . . . . . . . .             7,038,035                 10,186,059
 Notes payable . . . . . . . . . . . . . . . . .               139,346                  1,882,548
                                                            ----------                -----------
   Total current liabilities . . . . . . . . . .             9,579,461                 15,577,667

Long-term debt . . . . . . . . . . . . . . . . .               104,238                         --
                                                            ----------                -----------
   Total liabilities . . . . . . . . . . . . . .             9,683,699                 15,577,667

Stockholders' equity:
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 8,050,424
 shares in 1997 and 7,860,243 shares in 1996 . .                 8,050                     7,860
Additional paid-in capital . . . . . . . . . . .            42,843,535                 41,731,437
Accumulated deficit. . . . . . . . . . . . . . .           (37,615,329)               (30,063,652)
                                                            ----------                -----------
   Total stockholders' equity. . . . . . . . . .             5,236,317                 11,675,706
                                                            ----------                -----------
   Total liabilities and stockholders' equity. .           $14,920,016                $27,253,373
                                                            ----------                -----------

<FN>
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.
</FN>
</TABLE>

<PAGE>


                 SOFTWARE PUBLISHING CORPORATION HOLDINGS, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                              Three Months Ended                Nine Months Ended
                                                  September 30,                   September 30,
                                               1997          1996               1997           1996

<S>                                        <C>           <C>                <C>            <C>        
Net sales. . . . . . . . . . . . .         $ 4,032,609   $ 1,687,889        $ 12,127,172   $ 2,554,937
Cost of goods sold . . . . . . . .             951,371       387,344           2,730,740       729,513
                                            -----------   -----------        ------------   -----------
Gross profit . . . . . . . . . . .           3,081,238     1,300,545           9,396,432     1,825,424

Selling, general and administrative 
 expenses                                    4,375,128     3,905,919          12,103,144     5,546,835
Amortization of acquired software and
 goodwill and depreciation . . . .             847,847        62,461           2,537,384        76,996
Product development. . . . . . . .             794,071       158,172           2,440,809       597,738
In process research and development                 --     3,886,000                  --     3,886,000
Other (income) expense - net . . .             (24,971)      (82,685)           (133,228)     (135,663)
                                            -----------   -----------        ------------   -----------
Net loss . . . . . . . . . . . . .         $(2,910,837)  $(6,629,322)       $ (7,551,677)  $(8,146,482)
                                            -----------   -----------        ------------   -----------

Net loss per share . . . . . . . .         $      (.36)  $     (1.80)       $       (.94)  $     (2.44)
                                            -----------   -----------        ------------   -----------

Weighted average number of common
 shares outstanding. . . . . . . .           8,050,424     3,680,435           8,011,628     3,331,920


<FN>

                  See notes to condensed financial statements.
</FN>
</TABLE>


<PAGE>


                 SOFTWARE PUBLISHING CORPORATION HOLDINGS, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                    For the Nine Months Ended September 30,
                                                            1997                1996


Operating activities
<S>                                                   <C>                    <C>         
Cash (used in) from operations . . . . . . . . .      $(8,240,053)           $(1,038,470)

Investment activities
Purchase of property and equipment . . . . . . .         (581,139)               (28,602)
Proceeds from sale of short term investments . .        5,025,420                     --
Loans/note receivable. . . . . . . . . . . . . .          200,000               (200,000)
Cash used for business acquisition . . . . . . .               --               (390,906)
                                                      ------------           -------------
                                                        4,644,281               (619,508)

Financing activities
Proceeds from sale of common stock . . . . . . .               --                464,907
Proceeds from issuance of notes payable. . . . .          104,239                     --
Deferred costs . . . . . . . . . . . . . . . . .               --               (185,685)
Repayment of notes . . . . . . . . . . . . . . .       (1,805,273)              (559,000)
                                                      ------------           -------------
                                                       (1,701,034)              (279,778)

Net (decrease) in cash . . . . . . . . . . . . .       (5,296,806)            (1,937,756)
Cash at beginning of period. . . . . . . . . . .        6,483,454              2,928,272
                                                      ------------           -------------
Cash at end of period. . . . . . . . . . . . . .      $ 1,186,648            $   990,516
                                                      ------------           -------------
<FN>

                  See notes to condensed financial statements.
</FN>
</TABLE>


<PAGE>


                 SOFTWARE PUBLISHING CORPORATION HOLDINGS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   Basis of Presentation.

     The  accompanying   unaudited  condensed  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 and nine month  periods
ended September 30, 1997 are not necessarily  indicative of the results that may
be expected for the year ended 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.   Accounting Principles.

     Evaluation of Long-Lived Assets

     The Company assesses long-lived assets for impairment as prescribed by FASB
Statement No. 121,  Accounting for the  Impairment of Long-Lived  Assets and for
Long-Lived Assets to Be Disposed Of. Under those rules, goodwill associated with
assets  acquired in a purchase  business  combination  is included in impairment
evaluations when events or circumstances exist that indicate the carrying amount
of those assets may not be  recoverable.  The Company's  evaluation at September
30, 1997 has been based on projected  operating results of the businesses giving
rise to the goodwill. Management believes that these projections are reasonable;
however, actual future operating results may differ.

3.   Loss Per Share.

     Net loss per share is computed  based upon the weighted  average  number of
shares of common stock outstanding during the periods presented.

     In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings per Share," which is required to be adopted for the Company's
fiscal year ending December 31, 1997. At that time, the Company will be required
to change the method currently used to compute earnings per share and to restate
all prior  periods.  The  impact of  Statement  No.  128 is not  expected  to be
material for any previously reported period.

4.   Inventories.

     Inventories consist of the following:

<TABLE>
<CAPTION>
                               September 30, 1997    December 31, 1996
          <S>                   <C>                    <C>       
          Raw materials         $    88,239            $   31,570
          Finished goods            500,509               682,016
                                -----------            ----------
          Total                 $   588,748            $  713,586
                                -----------            ----------
</TABLE>

5.   Stockholders' Equity.

     During the first nine months of 1997 the Company  issued (a) 71,428  shares
of the common  stock,  par value $.001 per share (the  "Common  Stock"),  of the
Company 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

<PAGE>

banking and other  obligations  to MSF and (b) an aggregate of 118,747 shares of
Common Stock to investment  bankers,  consultants and other individuals and upon
the exercise of certain  outstanding  stock options  granted under the Company's
1994 Long-Term Incentive Plan.

     Subsequent to September 30, 1997,  the Company  consummated  the sale of an
aggregate  961,000  shares  of Common  Stock to five  accredited  investors  for
aggregate gross proceeds of $1,021,543 and estimated net proceeds of $960,466 in
private  transactions  exempt  from  registration  under  Section  4(2)  of  the
Securities  Act of 1933,  as amended  (the  "Securities  Act"),  and Rule 506 of
Regulation D promulgated thereunder.  In connection with such sale, the Company
paid $51,277 and issued a five year option to purchase  96,100  shares of Common
Stock, at an exercise price of $1.2756 per share, to a financial consultant.

6.   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 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.

7.   Subsequent Events.

     See Note 5 above.


<PAGE>

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  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 plan, 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  developer,  publisher  and  supplier  of
proprietary  computer software  applications and companion  utilities  programs,
primarily  targeted towards the corporate and small office/home  office ("SOHO")
markets. The Company's products are designed to improve the graphical appeal and
overall effectiveness of documents produced by desktop publishing,  presentation
graphics, web page, e-mail, word processing and similar applications, as well as
to produce documents through the Company's  easy-to-use  desktop  publishing and
presentation graphics applications.  The Company's product lines include several
products based upon its patent-pending  Intelligent Formatting technology,  such
as ActiveMail,  MailPlus, ActiveOffice,  ActivePresenter,  ActivePresenter Plus,
ASAP WordPower, ASAP WebShow and ASAP; as well as its traditional products, such
as Serif PagePlus, Serif DrawPlus,  Harvard Graphics,  Harvard ChartXL, 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. In June 1997, the Company introduced ActivePresenter,  an Internet and
World Wide Web presentation and publishing program, which publishes both its own
or  Microsoft  Power  Point  presentations  for  either  real  time or on demand
presentations.  In September  1997,  the Company  released  its latest  PagePlus
edition/upgrade,  PagePlus  5.0.  In October  1997,  the Company  announced  the
release of its  ActiveMail and MailPlus  products,  which enable e-mail users to
produce electronic messages utilizing a rich graphical  presentation rather than
ordinary  text.  The Company also  continues to offer word  processing and other
business  productivity  software  products,   but  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

<PAGE>

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

     North America and  international net revenues for the Company's three month
and nine month periods ending September 30, 1997 and 1996, were as follows:

<TABLE>
<CAPTION>

                        Three Months Ended September 30,              Nine Months Ended September 30,
                          1997                1996                      1997               1996
                    $            %       $           %              $            %       $           %

<S>                 <C>          <C>     <C>         <C>            <C>          <C>     <C>         <C>
North America       $3,160,929   79      $  821,839  49             $ 6,935,474  57      $1,678,887  66
International          871,680   21         866,050  51               5,191,698  43         866,050  34
                    ----------   ---     ----------  ---            -----------  ---     ----------  ---
Total net revenues  $4,032,609   100     $1,687,889  100            $12,127,172  100     $2,554,937  100
</TABLE>

     The Company  believes  that end users are  continuing  to migrate  from the
Windows 3.1 to the Windows 95 platform and  potentially  may 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.  The
Company  believes that 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  three  suites  of  products,   ActivePresenter   Plus,  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  continue  to develop  and  introduce  new
technologies  and products  through  strategic  alliances,  acquisitions  and/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.  The  Company's  growth  is  expected  to  require
continued increases in the number of the Company's  employees,  expenditures for
new product development,  the acquisition of product rights, sales and marketing
expenses, and general and administrative expenses.


Results of Operations

Three  Month  Period  Ended  September  30, 1997  Compared  to  the Three Month
Period Ended September 30, 1996

     Net Sales.  Net sales increased  approximately  139% from $1,687,889 in the
three month period ended  September  30, 1996 to  $4,032,609  in the three month
period ended September 30, 1997 as a result of the inclusion of sales from Serif
and SPC in the 1997 three month period.  The 1996 period  included two months of
sales from Serif.  There were no SPC results  included in the 1996  period.  The
Company  provided in the three month period ended September 30, 1997 for returns
at approximately 11% of gross sales versus  approximately 13% in the three month
period ended  September 30, 1996 due to a shift from  primarily  retail sales to
more direct channels,  which have historically  exhibited fewer returns than the
retail sales channels.

     Cost of Goods Sold.  Cost of goods sold increased  approximately  146% from
$387,344 in the three month period ended  September  30, 1996 to $951,371 in the
three month period ended September 30, 1997, as a result of higher sales volume.
As a percentage of net sales,  cost of goods sold increased  from  approximately
23% of net  sales  in the  three  month  period  ended  September  30,  1996  to
approximately  24% of net sales in the three month  period ended  September  30,
1997 as a result of  slightly  higher  unit costs and  changes to the  Company's
product mix. Cost of goods sold consists  primarily of product costs,  royalties
and  inventory  allowances  for damaged and  obsolete  products.  Product  costs

<PAGE>

consist of the costs to purchase the  underlying  materials and print both boxes
and manuals, media costs (CD-ROMs and other media) and assembly.

     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  upgrade
pricing, the OEM business and alternative licensing arrangements.

     Selling,  General  and  Administrative   Expenses.   Selling,  general  and
administrative   expenses  increased  by  $469,209  or  approximately  12%  from
$3,905,919  in the three month period ended  September 30, 1996 to $4,375,128 in
the three month period  September  30,  1997.  Substantially  all expenses  have
increased from the 1996 period due to the inclusion of costs associated with the
operations  of Serif  and SPC.  The 1996  period  includes  only two  months  of
operations of Serif, which was acquired as of July 31, 1996, and no SPC results.
Total selling expenses  excluding  salaries  increased  approximately  221% from
$670,994 in the three month period ended September 30, 1996 to $2,155,104 in the
three  month  period  ended  September  30,  1997,  primarily  as a result of an
increase  in  direct  mail  advertising  and  other  costs  associated  with the
Company's Serif and SPC products and operations.

     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  and the mix of
product sales or distribution channels.

     Amortization  of Acquired  Software and Goodwill and  Depreciation.  In the
three month period ended  September 30, 1997, the Company  recorded  $784,053 in
amortization of acquired software and goodwill  associated with its acquisitions
of Serif  and SPC,  which  was not  included  in the three  month  period  ended
September  30,  1997,  as compared to $47,451 in the  three-month  period  ended
September 30, 1996,  which related to the Serif  acquisition.  Depreciation  and
amortization  increased to $63,794 in the three month period ended September 30,
1997 from $15,010 for the three month period ended September 30, 1996 due to the
increased  level  of  fixed  assets  resulting   primarily  from  the  Company's
acquisitions of Serif and SPC.

     In-Process  Research and Development.  The Company  expensed  $3,886,000 of
in-process research and development costs associated with the acquisition of the
Serif companies in the three month period ended September 30, 1996. There was no
such expense in the 1997 period.

     Product Development.  Product development expenses increased  approximately
402% from  $158,172  in the three  month  period  ended  September  30,  1996 to
$794,071 in the three month period ended  September  30, 1997  principally  as a
result of an increase in product development costs associated with producing new
products and the inclusion of the product  development costs associated with the
Serif and SPC subsidiaries.  Two months of Serif product  development costs were
included in the 1996 period and no SPC product  development  costs were included
in the  1996  period.  As a  percentage  of net  sales,  the  Company's  product
development  costs  were  approximately  20% in the  three  month  period  ended
September  30, 1997 versus  approximately  9% in the three  month  period  ended
September  30,  1996.  The increase is due  primarily to the longer  development
cycle of products being produced by the Company's Serif and SPC subsidiaries, as
compared to the  relatively  short  development  cycle for  products  which were
produced prior to the  acquisitions of Serif and SPC. The Company  believes that
development expenses will increase in dollar amount in the future as the Company
expands its development activities,  although the Company's long-term goal is to
reduce product development costs as a percentage of sales. All development costs
have been expensed in the period incurred.

     Other  Income.  Other income  decreased  from a net of $82,685 in the three
month  period ended  September  30, 1996 to income of $24,971 in the three month
period ended September 30, 1996 primarily as a result of lower cash balances.


<PAGE>

Nine  Month  Period  Ended  September  30,  1997  Compared  to the  Nine Month
Period Ended September 30, 1996

     Net Sales.  Net sales increased  approximately  375% from $2,554,937 in the
nine month  period ended  September  30, 1996 to  $12,127,172  in the nine month
period  ended  September  30, 1997 largely as a result of inclusion of the sales
from the  Company's  Serif and SPC  subsidiaries.  The 1996 Period  includes two
months of sales from Serif and no SPC sales.  The  Company  provided in the nine
month period ended September 30, 1997 for returns at approximately  14% of gross
sales versus approximately 16% in the nine month period ended September 30, 1996
due to a shift from primarily retail sales to more direct  channels,  which have
historically exhibited fewer returns than the retail sales channels.

     Cost of Goods  Sold.  Cost of goods sold  increased  approximately  274% or
$2,001,227  from  $729,513 in the nine month period ended  September 30, 1996 to
$2,730,740  in the nine month period ended  September  30, 1997,  largely due to
increased  sales  volumes.  Cost of goods sold  decreased as a percentage of net
sales from  approximately  29% in the nine month period ended September 30, 1996
to  approximately  23% in the  nine  month  period  ended  September  30,  1997,
primarily as a result of increased  sales revenue per unit produced,  which more
than  offset  slightly  higher  unit  costs  and the  effect of  changes  to the
Company's product mix.

     Selling,  General  and  Administrative   Expenses.   Selling,  general  and
administrative  expenses  increased by  $6,556,309  or  approximately  118% from
$5,546,835 in the nine month period ended  September 30, 1996 to  $12,103,144 in
the nine month  period  ended  September  30,  1997.  Expenses in the nine month
period ended  September  30, 1996  include  charges to  compensation  expense of
$2,773,180  due to the release of an aggregate of 531,000 shares of common stock
from escrow.  No similar expense was incurred in the 1997 nine month period.  In
addition to the escrow  release,  the 1996  expenses  include  expenses  for two
months of operations of the Company's Serif subsidiaries and no expenses of SPC.
Total selling expenses increased  $4,779,011 or approximately 484% from $987,437
in nine month period ended  September  30, 1996 to  $5,766,449 in the nine month
period ended September 30, 1997,  primarily as a result of the Company's  direct
mail operations and increased advertising.

     Amortization  of Acquired  Software and Goodwill and  Depreciation.  In the
nine month period ended September 30, 1997, the Company  recorded  $2,352,159 in
amortization of acquired software and goodwill  associated with its acquisitions
of  Serif  and SPC,  which  was not  included  in the nine  month  period  ended
September  30,  1996,  as compared  to $47,451 in the  nine-month  period  ended
September 30, 1997,  which related to the Serif  acquisition.  Depreciation  and
amortization  increased to $185,225 in the nine month period ended September 30,
1997 from $29,545 for the nine month period ended  September 30, 1996 due to the
increased  level  of  fixed  assets  resulting   primarily  from  the  Company's
acquisitions of Serif and SPC.

     In-Process  Research  and  Development.  In the  nine  month  period  ended
September 30, 1996 the Company  expensed  $3,886,000 of in-process  research and
development costs associated with the acquisition of the Serif companies.  There
was no such expense in the 1997 period.

     Product Development.  Product development expenses increased  approximately
308%  from  $597,738  in the nine  month  period  ended  September  30,  1996 to
$2,440,809 in the nine month period ended  September 30, 1997  principally  as a
result of an increase in product development costs associated with producing new
products and the inclusion of the product  development costs associated with the
Serif and SPC subsidiaries.  Two months of Serif product  development costs were
included in the 1996 period and no SPC product  development  costs were included
in the  1996  period.  As a  percentage  of net  sales,  the  Company's  product
development  costs  were  approximately  21%  in the  nine  month  period  ended
September  30,  1997 versus  approximately  23% in the nine month  period  ended
September 30, 1996. The Company believes that development expenses will increase
in  dollar  amount  in  the  future  as  the  Company  expands  its  development
activities,  although  the  Company's  long-term  goal is to  continue to reduce
product  development  costs as a percentage of sales. All development costs have
been expensed in the period incurred.

     Other Income. In the nine month period ended September 30, 1997 the Company
received  other  income of $133,228  versus other income of $135,663 in the nine
month period  ended  September  30, 1996,  primarily as a result of similar cash
balances during the periods.


<PAGE>

Liquidity and Capital Resources

     During the nine month period ended  September 30, 1997,  the Company's cash
and cash  equivalents  and short-term  investments  decreased by $8,636,623 from
$11,161,634 at December 31, 1996 to $2,525,011 at September 30, 1997,  primarily
as a result of using  $8,240,053 in  operations,  $1,805,273 to pay certain debt
and  $581,139 to purchase  property and  equipment,  which more than offset cash
generated by investment  activities.  Although the Company had a working capital
deficit of  $4,132,368  at September  30, 1997,  the Company  believes  that its
existing cash and cash equivalents and cash generated from  operations,  if any,
should be  sufficient to meet its  currently  anticipated  liquidity and capital
expenditure  requirements for at least the next several 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.

     The Company has substantially implemented a cost reduction program relating
to personnel and operating  expenses  which is expected to  sufficiently  reduce
expenses  to  meet  currently  anticipated  liquidity  and  capital  expenditure
requirements for at least the next several months. In addition,  the Company has
received  approximately  $1,021,543 of gross proceeds from the sales, on October
23, 1997, of an aggregate 961,000 shares of Common Stock in private transactions
to five  accredited  investors.  In  addition,  the Company may seek  additional
sources of  financing.  The Company has a letter of credit  facility of $300,000
relating to certain  lease  obligations  and a debt  facility  of  approximately
$104,238  received from its primary bank in the United Kingdom;  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 nine months of 1997 used
cash of $8,240,053 primarily related to costs associated with development, sales
and marketing the Company's  products,  an increase in accounts  receivable  and
inventories  associated  with  higher  net  revenues  and a  reduction  of trade
accounts  payable  and  accrued  expenses.  The  Company  intends to continue to
utilize  its  working  capital in 1997 for product  development,  marketing  and
advertising,  to finance the higher level of inventory  and accounts  receivable
necessary to support an 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 nine month period ended September 30, 1997, approximately 43% of the
Company's  total sales were  generated  outside the United  States.  The Company
expects this  pattern to continue as it  continues  to expand its foreign  sales
operations.  The  Company's  exposure  to foreign  currency  gains and losses is
partially  mitigated as the Company incurs  operating  expenses in the principal
foreign  currency in which it invoices  foreign  customers.  As of September 30,
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 upon the movement in exchange rates.

     In June 1994,  SPC sold its  Superbase  product  line to Computer  concepts
Corporation ("CCC") (NASDAQ:  CCEE) for shares of CCC's restricted common stock.
As of September 30, 1997,  SPC owned 736,148 shares of common stock of CCC which
has or expects to sell during the  remainder of 1997,  or as soon  thereafter as
practicable.  CCC has informed SPC that CCC believes that approximately  427,148
of these shares were issued in error by CCC in excess of agreed  terms.  SPC and
CCC have not as yet resolved this dispute;  however,  the Company  believes that
any such resolution would not have a material effect on its financial condition.
As of October 31, 1997 the closing  price of the CCC common  stock on The NASDAQ
SmallCap Market was $.6875 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. The
seasonal  pattern is due primarily to the increased  demand for software  during
the year-end  holiday buying season.  In addition,  the typical  European summer

<PAGE>

holiday schedule  negatively  affects the third quarter of each calendar year on
sales generated for the European markets.  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 Item 3 of the  Company's  Annual Report on Form
10-KSB,  for the fiscal year ended December 31, 1996,  filed April 15, 1997, and
Item 1 of Part II of the  Company's  Quarterly  Report on Form  10-QSB,  for the
period  ended  June 30,  1997,  filed  August  19,  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 and Use of Proceeds.

     On  October 23,  1997,  the Company  consummated  the sale of an  aggregate
961,000 shares of Common Stock to five accredited  investors for aggregate gross
proceeds  of  $1,021,543  and  estimated  net  proceeds  of  $960,466 in private
transactions  exempt from registration  under Section 4(2) of the Securities Act
and Rule 506 of Regulation D  promulgated  thereunder.  In connection  with such
sale, the  Company paid $51,277 and issued a five year option to purchase 96,100
shares  of Common  Stock,  at an  exercise  price of  $1.2756  per  share,  to a
financial consultant.

     All net  proceeds  received by the Company in  connection  with its initial
public offering,  which commenced and the registration  statement  (Registration
No.  33-97184) for which was declared  effective on December 6, 1995,  have been
utilized in full.


Item 3.   Defaults Upon Senior Securities.

     None.


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

     None.


Item 5.   Other Information.

     On August  29,1997,  the  Board of  Directors  of the  Company  approved  a
repricing program with respect to the outstanding  options to purchase shares of
Common Stock held by the then current  officers,  directors and employees of the
Company.  Pursuant to this program,  each officer,  director and employee of the
Company,  as of such date,  may elect to have the exercise  price of any options
granted to such person reduced to $1.25 per share,  the per share closing market
price of the Common Stock on August 29, 1997,  upon  surrender of the 25% of the
options issued pursuant to any particular grant which vest at the latest time.

     Pursuant  to a  Settlement  and  General  Release  Agreement,  dated  as of
September 26, 1997 (the  "Szczepaniak  Settlement  Agreement"),  among Joseph V.
Szczepaniak  ("Szczepaniak"),  the Company and SPC,  Szczepaniak  resigned as an
officer  and  employee of the  Company  and SPC and,  in  connection  therewith,
received,  among  other  things,  a lump sum payment of  $50,000,  payment  with
respect  to  accrued  vacation  time  and the  Company's  agreement  to make all
payments in respect of health  insurance for  Szczepaniak's  benefit for a three
month period.  The Company also agreed that all stock options previously granted
to Szczepaniak  would remain  exercisable  through March 26, 1998, to the extent
exercisable on September 26, 1997.


<PAGE>

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

     (a)  Exhibits.

     Set forth below are all exhibits to this Quarterly Report on Form 10-QSB.

Exhibit
Number    Description

10.50     Form of Subscription Agreements, each dated October 23, 1997, between
          the Company and each of Ronald L. Altman (with respect to 24,000 
          shares of Common Stock), Gerold M. Fleischner (with respect to 24,000 
          shares of Common Stock), Howard Milstein (with respect to 865,000 
          shares of Common Stock), Patriot Group, LP (with respect to 24,000 
          shares of Common Stock) and Stephen P. Rosenblatt (with respect to 
          24,000 shares of Common Stock).
10.51     Registration Rights Agreement, dated October 23, 1997, among the 
          Company, Ronald L. Altman, Gerold M. Fleischner, Howard Milstein, 
          Patriot Group, LP and Stephen P. Rosenblatt. 
10.52     Settlement and General Release Agreement, dated as of September 26, 
          1997, among Joseph Szczepaniak, the Company and Software Publishing 
          Corporation.
10.53     Option, dated October 23, 1997, issued to Ronald L. Altman.
27        Financial Data Schedule.

     (b)  Reports on Form 8-K.

     The Company did not file any Current Reports on Form 8-K during the quarter
ended September 30, 1997.


<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.


                                        SOFTWARE PUBLISHING CORPORATION
                                                  HOLDINGS, INC.


Dated:    November 13, 1997             By:/s/ Barry A. Cinnamon
                                        Barry A. Cinnamon
                                        Chairman of the Board, President
                                        and Chief Executive Officer
                                        (Principal Executive Officer)


Dated:    November 13, 1997             By:/s/ Mark E. Leininger
                                        Mark E. Leininger
                                        Chief Operating Officer, Vice President-
                                        Finance, Treasurer and Chief Financial
                                        Officer 
                                        (Principal Financial Officer)



<PAGE>


                                  EXHIBIT INDEX


Exhibit
Number    Description

10.50     Form of Subscription Agreements, each dated October 23, 1997, between
          the Company and each of Ronald L. Altman (with respect to 24,000 
          shares of Common Stock), Gerold M. Fleischner (with respect to 24,000
          shares of Common Stock), Howard Milstein (with respect to 865,000 
          shares of Common Stock), Patriot Group, LP (with respect to 24,000 
          shares of Common Stock) and Stephen P. Rosenblatt (with respect to 
          24,000 shares of Common Stock).
10.51     Registration Rights Agreement, dated October 23, 1997, among the 
          Company, Ronald L. Altman, Gerold M. Fleischner, Howard Milstein, 
          Patriot Group, LP and Stephen P. Rosenblatt.
10.52     Settlement and General Release Agreement, dated as of September 26, 
          1997, among Joseph Szczepaniak, the Company and Software Publishing 
          Corporation.
10.53     Option, dated October 23, 1997, issued to Ronald L. Altman.
27        Financial Data Schedule.