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 June 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)

                             Allegro New Media, Inc.
        (Former name, former address and former fiscal year, if changed
                               since last report)

     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 August 8, 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 June 30, 1997 and 
     December 31, 1996                                                       3
     Condensed Consolidated Statements of Operations for the Three
     and Six Months Ended June 30, 1997 and 1996                             4
     Condensed Consolidated Statements of Cash Flows for the Six 
     Months Ended June 30, 1997 and 1996                                     5
     Notes to Condensed Financial Statements                                 6


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

<PAGE>


                 SOFTWARE PUBLISHING CORPORATION HOLDINGS, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                     June 30,                December 31,
                                                       1997                      1996
                                                    (Unaudited)                 (Note)

                              ASSETS
Current assets:
<S>                                                 <C>                       <C>        
 Cash and cash equivalents . . . . . . . . . . .    $ 2,822,162               $ 4,833,454
 Restricted cash . . . . . . . . . . . . . . . .              -                 1,650,000
 Short-term investments. . . . . . . . . . . . .      1,487,634                 6,328,180
 Accounts receivable, net. . . . . . . . . . . .      2,667,167                 1,991,790
 Inventories (Note 3). . . . . . . . . . . . . .        605,783                   713,586
 Other current assets. . . . . . . . . . . . . .        288,494                   235,849
                                                    -----------              ------------
      Total current assets . . . . . . . . . . .      7,871,240                15,752,859
Property and equipment, net. . . . . . . . . . .        619,843                   450,867
Acquired software, net . . . . . . . . . . . . .      5,597,917                 6,787,614
Goodwill and other assets, net . . . . . . . . .      3,968,454                 4,262,033
                                                    -----------              ------------
                                                    $18,057,454              $ 27,253,373
                                                    -----------              ------------

</TABLE>

<TABLE>
<CAPTION>

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
<S>                                                 <C>                      <C>         
 Accounts payable. . . . . . . . . . . . . . . .    $ 2,888,498              $  3,509,060
 Accrued liabilities . . . . . . . . . . . . . .      6,944,528                10,186,059
 Notes payable . . . . . . . . . . . . . . . . .         77,274                 1,882,548
                                                    -----------              ------------
Total current liabilities. . . . . . . . . . . .    9,910,300                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. . . . . . . . . . . . . . .    (34,704,492)              (30,063,652)
                                                    ------------              ------------
 Total stockholders' equity. . . . . . . . . . .      8,147,154                11,675,706
                                                    ------------              ------------
 Total liabilities and stockholders' equity. . .    $18,057,454              $ 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.
</FN>
</TABLE>

                  See notes to condensed financial statements.


<PAGE>


                 SOFTWARE PUBLISHING CORPORATION HOLDINGS, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                              Three Months Ended        Six Months Ended
                                                   June 30,                  June 30,
                                                1997       1996         1997         1996

<S>                                        <C>           <C>           <C>           <C>       
Net sales. . . . . . . . . . . . .         $ 4,144,311   $   421,125   $ 8,094,563   $  867,049
Cost of goods sold . . . . . . . .             827,603       112,767     1,779,369      342,169
                                           ------------   -----------  -----------   ----------- 
Gross profit . . . . . . . . . . .           3,316,708       308,358     6,315,194      524,879

Selling, general and administrative 
  expenses                                   3,565,436     1,127,391     7,728,016    1,629,947
Amortization of acquired software
  and goodwill and depreciation. .             822,618         7,180     1,689,537       14,534
Product development. . . . . . . .             890,526       357,288     1,646,738      439,566
Other (income) expense   net . . .             (18,633)      (22,828)     (108,257)     (52,977)
                                            ------------  -----------   -----------  -----------
Net loss . . . . . . . . . . . . .         $ (1,943,239) $(1,160,673)  $(4,640,840) $(1,506,190)
                                            ------------  -----------   -----------  -----------


Net loss per share . . . . . . . .         $       (.24) $      (.38)  $      (.58) $      (.49)
                                            ------------  -----------   -----------  -----------
Weighted average number of common
 shares outstanding. . . . . . . .            8,050,424    3,083,760     7,991,909    3,067,215
                                            ------------  -----------   -----------  -----------

</TABLE>



                  See notes to condensed financial statements.

<PAGE>


                 SOFTWARE PUBLISHING CORPORATION HOLDINGS, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                       For the Six Months Ended June 30,
                                                             1997            1996

Operating activities
<S>                                                    <C>               <C>         
Cash (used in) from operations . . . . . . . . .       $ (6,239,217)     $(1,533,617)

Investment activities
Purchase of property and equipment . . . . . . .           (457,348)         (16,862)
Proceeds from sale of short term investments . .          4,840,546                -
Cash used for business acquisition . . . . . . .                  -         (120,650)
                                                       -------------     ------------
                                                          4,383,198         (137,512)

Financing activities
Proceeds from sale of common stock . . . . . . .                  -          464,907
Repayment of notes . . . . . . . . . . . . . . .         (1,805,273)               -
                                                       -------------     ------------
                                                         (1,805,273)         464,907

Net (decrease) in cash . . . . . . . . . . . . .         (3,661,292)      (1,206,222)
Cash at beginning of period. . . . . . . . . . .          6,483,454        2,928,272
                                                       -------------     ------------
Cash at end of period. . . . . . . . . . . . . .       $  2,822,162      $ 1,722,050
                                                       -------------     ------------
</TABLE>


                  See notes to condensed financial statements.


<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 six month periods ended
June 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.   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
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.

3.   Inventories.

     Inventories consist of the following:

<TABLE>
<CAPTION>
                              June 30, 1997    December 31, 1996
          <S>                     <C>               <C>              
          Raw materials           $ 110,948          $   31,570
          Finished goods            494,835             682,016
                                  ---------          ----------
          Total                   $ 605,783          $  713,586
</TABLE>

4.   Stockholders' Equity.

     During the first six months of 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
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.

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>


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 visual communications and presentation  graphics,
desktop publishing and business productivity segments of 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 ActiveOffice,  ActivePresenter,  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  within the documents and  presentations  created by such programs.  In
June 1997, the Company  introduced  ActivePresenter,  an Internet and World Wide
Web  presentation  and  publishing  program  which  publishes  both  its  own or
Microsoft   PowerPoint   presentations   for  either  real  time  or  on  demand
presentations  on the World  Wide Web.  The  Company  intends  to release in the
second half of 1997 a new product currently titled ActiveMail, which is expected
to 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

<PAGE>

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
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 six month periods ending June 30, 1997 and 1996, were as follows:


<TABLE>
<CAPTION>
                           Three Months Ended June 30,                        Six Months Ended June 30,
                            1997                1996                         1997                  1996
                         $         %      $          %                  $          %         $           %

<S>                  <C>           <C>    <C>        <C>             <C>          <C>      <C>          <C>  
North America        $1,902,380    46.0   $ 421,125  100.0           $3,774,545   47.0     $867,049     100.0
International         2,241,931    54.0           0    0.0            4,320,018   53.0            0       0.0
                     ----------   -----   ---------  -----           ----------  -----     --------     -----
Total net revenues   $4,144,311   100.0   $ 421,125  100.0           $8,094,563  100.0     $867,049     100.0
</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 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 continue to develop and introduce new technologies and products internally,
obtain  additional  technologies  and products through  strategic  alliances and
acquisitions and introduce new marketing  strategies.  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  continued
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 June 30, 1997  Compared to the Three Month Period
Ended June 30, 1996

     Net Sales.  Net sales  increased  approximately  884% from  $421,125 in the
three month period ended June 30, 1996 to  $4,144,311  in the three month period
ended June 30, 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 included in the
1996  period.  The Company  provided for returns in the three month period ended
June 30, 1997 at approximately  12% of gross sales versus  approximately  22% in
the three month period ended June 30, 1996 due to a substantial shift in product
sales from primarily  retail sales to more direct channels,  which  historically
have exhibited fewer returns than the retail sales channels.

     Cost of Goods Sold.  Cost of goods sold increased  approximately  634% from
$112,767 in the three month  period ended June 30, 1996 to $827,603 in the three
month  period  ended June 30, 1997,  as a result of higher  sales  volume.  As a
percentage of net sales, cost of goods sold decreased from  approximately 27% of

<PAGE>

net sales in the three month period ended June 30, 1996 to approximately  20% of
net sales in the three month period  ended June 30, 1997,  primarily as a result
of increased sales volumes  providing lower per unit production  costs.  Cost of
goods sold consists primarily of product costs,  freight charges,  royalties and
inventory allowances 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.

     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.

     Selling,  General  and  Administrative   Expenses.   Selling,  general  and
administrative ("SG&A") expenses increased by approximately 216% from $1,127,391
in the three month period ended June 30, 1996 to  $3,565,436  in the three month
period ended June 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 which were  acquired  subsequent  to June 30, 1996.  Total selling
expenses (not including salaries) increased  approximately  1,418% from $149,973
in the three month period ended June 30, 1996 to  $2,276,700  in the three month
period ended June 30, 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  ActiveOffice  and
ActivePresenter products. SG&A expenses in the three month period ended June 30,
1996 included $637,980 relating to the release of 217,000 shares of common stock
from escrow to two management  stockholders.  No similar expense was incurred in
the 1997 three month period.

     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.

     Amortization  of Acquired  Software and Goodwill and  Depreciation.  In the
three  month  period  ended June 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 June
30, 1996. Depreciation increased to $38,565 in the three month period ended June
30, 1997 from $7,180 for the three month  period  ended June 30, 1996 due to the
increased level of  fixed  assets   resulting   primarily  from  the  Company's
acquisitions of Serif and SPC.

     Product Development.  Product development expenses increased  approximately
149% from  $357,288 in the three month period ended June 30, 1996 to $890,526 in
the  three  month  period  ended  June 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  which were not included in the 1996 period. As a percentage of net
sales, the Company's  product  development  costs were  approximately 21% in the
three month  period  ended June 30,  1997  versus 85% in the three month  period
ended June 30, 1996.  The 1996 period  included  approximately  $243,750 for the
acquisition  of  partially   developed   software.   The  Company  expects  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
product development costs have been expensed in the period incurred.

     Other Income. Other income decreased from $22,828 in the three month period
ended June 30,  1996 to $18,633 in the three  month  period  ended June 30, 1997
primarily as a result of lower average cash balances during the 1997 period.


<PAGE>

     Six Month Period Ended June 30, 1997 Compared to the Six Month Period Ended
June 30, 1996

     Net Sales. Net sales increased  approximately 834% from $867,049 in the six
month  period  ended June 30, 1996 to  $8,094,563  in the six month period ended
June 30,  1997 as a result of the  inclusion  of sales from Serif and SPC in the
1997 period. There were no Serif or SPC results included in the 1996 period. The
Company  provided  in the six month  period  ended June 30,  1997 for returns at
approximately  15% of gross  sales  versus  approximately  21% in the six  month
period ended June 30, 1996,  due to a  substantial  shift in product  sales from
primarily  retail  sales  to  more  direct  channels,  which  historically  have
exhibited fewer returns than the retail sales channels.

     Cost of Goods Sold.  Cost of goods sold increased from $342,169 for the six
month  period  ended June 30, 1996 to  $1,779,369  in the six month period ended
June 30, 1997, or approximately  420%, as a result of increased sales volume. As
a percentage of net sales,  cost of goods sold decreased from  approximately 39%
in the six month period ended June 30, 1996 to 22% in the six month period ended
June 30, 1997,  primarily as a result of higher sales volume providing lower per
unit production costs.

     Selling,  General  and  Administrative   Expenses.   Selling,  general  and
administrative  expenses  increased by  $6,098,069  or  approximately  374% from
$1,629,947  in the six month period ended June 30, 1996 to $7,728,016 in the six
month period ended June 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 which were  acquired  subsequent  to June 30,  1996.  General  and
administrative  expenses  increased  approximately 879% from $320,442 in the six
month  period  ended June 30, 1996 to  $3,136,230  in the six month period ended
June 30,  1997.  Total  selling  expenses  (not  including  salaries)  increased
approximately  1,041% from  $316,443 in the six month period ended June 30, 1996
to $3,611,345 in the six month period ended June 30, 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  ActiveOffice and ActivePresenter  products.  SG&A expenses in the
six month period ended June 30, 1996 included  $637,980  relating to the release
of 217,000 shares of common stock from escrow to two management stockholders. No
similar expense was incurred in the 1997 six month period.

     Amortization of Acquired Software and Goodwill and Depreciation. In the six
month period ended June 30, 1997, the Company recorded approximately  $1,568,106
in  amortization  of  acquired   software  and  goodwill   associated  with  its
acquisitions of Serif and SPC, which were acquired  subsequent to June 30, 1996.
Depreciation  increased  to $121,431 in the six month period ended June 30, 1997
from  $14,534 in the six month period ended June 30, 1996 due to the increase in
fixed assets  resulting  primarily  from the Company's  acquisition of Serif and
SPC.

     Product Development.  Product development expenses increased  approximately
275% from  $439,566 in the six month period ended June 30, 1996 to $1,646,738 in
the six month  period ended June 30, 1997  principally  as a result of the costs
associated  with the  development  of new Serif  and SPC  products,  which  were
acquired  subsequent to June 30, 1996. In the 1996 period,  the Company expensed
$243,750  relating to the  acquisition  of partially  developed  software.  As a
percentage of net sales, the Company's  product  development  costs decreased to
approximately  20% in the six month period ended June 30, 1997 versus 51% in the
six month  period  ended June 30, 1996 due to higher net sales volume which more
than  offset the  inclusion  of expenses  relating to Serif and SPC  development
projects in the 1997 period. The Company expects 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. Other income increased approximately 104% from $52,977 in the
six month  period  ended June 30, 1996 to $108,257 in the six month period ended
June 30, 1997, primarily as a result of higher average cash balances.

Liquidity and Capital Resources

     During the six month  period ended June 30, 1997,  the  Company's  cash and
cash  equivalents  and  short-term  investments  decreased  by  $6,851,838  from
$11,161,634 at December 31, 1996 to $4,309,796 at June 30, 1997,  primarily as a
result of using  $6,239,217  in  operations,  $1,805,273 to pay certain debt and
$457,348  to  purchase  property  and  equipment,  which more than  offset  cash
generated by investment  activities.  Although the Company had a working capital
deficit of $2,039,060 at June 30, 1997,  the Company  believes that its existing

<PAGE>

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 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.  In the event that the  Company  does not attain its
revenue  and  cash  collection  goals or if the  Company's  cash  resources  are
otherwise not  sufficient,  the Company has  developed  alternatives  which,  if
implemented, would be expected to sufficiently reduce expenses to meet currently
anticipated liquidity and capital expenduture requirements for at least the next
twelve  months.  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;  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 six months of 1997 used
cash of  $6,239,217,  primarily as a result of reducing  accrued  liabilities by
$3,241,531,  reducing trade accounts payable by $620,562 and increasing accounts
receivable  by  $675,377.  The Company  generated  cash of  $4,383,198  from its
investment  activities,  resulting primarily from the sale of certain short term
investments,  which more than  offset the use of  $457,348  of cash to  purchase
property and equipment. The Company intends to continue to utilize its resources
in 1997 for marketing and advertising,  to finance the higher level of inventory
and accounts receivable  associated with its anticipated  increase in sales, for
capital expenditures, for internal and external software development, as well as
in connection with possible  future  acquisitions.  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 six month  period  ended  June 30,  1997,  approximately  54% of the
Company's  total sales were generated  outside the U.S. The Company expects this
pattern to continue as it continues to expand its foreign sales operations.  The
Company's  exposure to foreign  currency  exchange gains and losses is partially
mitigated as the Company  incurs  operating  expenses in the  principal  foreign
currency in which it invoices  its  foreign  customers.  As of June 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 June 30, 1997,  SPC owned  736,148  shares of common stock of CCC which it
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  adverse effect on its financial
condition. As of August 7, 1997 the closing price of the CCC common stock on The
NASDAQ SmallCap Market was $.50 per share.

Seasonality

     The computer  software  market is  characterized  by  significant  seasonal
swings in demand,  which  typically  peak in the fourth quarter of each calendar
year.  This  seasonal  pattern  is due  primarily  to the  increased  demand for
software  during the year-end  holiday buying season.  In addition,  the typical
European summer 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  offers.
There can be no assurance  that the Company will  achieve  consistent  growth or
profitability on a quarterly or annual basis.


<PAGE>

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.

     On July 22, 1997,  the Santa Clara Superior  Court  dismissed  three of the
four causes of action  alleged by Pyramid Data,  Inc.  ("Pyramid")  in Pyramid's
action against the Company's Software Publishing Corporation ("SPC") subsidiary.
SPC  believes  that the  remaining  cause of  action is also  without  merit and
intends to continue to vigorously  defend against  Pyramid's  allegations and to
prosecute its cross complaint for indemnification against Pyramid.


Item 2.   Changes in Securities.

     None.


Item 3.   Defaults Upon Senior Securities.

     None.


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

     On June 16, 1997,  the Annual  Meeting of  Stockholders  of the Company was
held,  at which the  following  matters were voted upon and adopted by the votes
indicated:

     1.   Three  directors  were elected to Class I of the Board of Directors to
          serve until the Annual Meeting of Stockholders in 2000, in addition to
          the other six  directors  whose  term of  office  continued  after the
          Meeting.  The names of the newly  elected  directors and votes cast in
          favor of their election and shares withheld are as follows:

<TABLE>
<CAPTION>
          Nominee                    Votes For   Votes Withheld
          <S>                        <C>             <C>    
          Barry A. Cinnamon          6,687,719       288,903
          Neil R. Austrian, Jr.      6,692,663       283,959
          Marc E. Jaffe              6,692,663       283,959
</TABLE>

     2.   Amendment of the Company's  Certificate of Incorporation to change the
          Company's name to "Software Publishing Corporation Holdings, Inc." The
          votes cast in favor of the proposal, against the proposal, those votes
          which abstained and broker non-votes were as follows:

<TABLE>
<CAPTION>
          Votes For   Votes Against  Votes Abstaining/Withheld  Broker Non-Votes
<S>       <C>             <C>                <C>                     <C>
          6,921,747       31,146             23,729                  -0-
</TABLE>

     3.   Amendment of the Company's  1994 Long Term  Incentive Plan to increase
          the number of shares  available for award thereunder from 3,000,000 to

<PAGE>

          4,000,000 and to expand the class of eligible participants.  The votes
          cast in favor of the proposal, against the proposal, those votes which
          abstained and broker non-votes were as follows:

<TABLE>
<CAPTION>
          Votes For   Votes Against  Votes Abstaining/Withheld  Broker Non-Votes
<S>       <C>            <C>                 <C>                   <C>      
          3,261,832      874,793             48,748                2,791,249
</TABLE>

     4.   Adoption of the Company's 1997 Employee Stock Purchase Plan. The votes
          cast in favor of the proposal, against the proposal, those votes which
          abstained and broker non-votes were as follows:

<TABLE>
<CAPTION>
          Votes For   Votes Against  Votes Abstaining/Withheld  Broker Non-Votes
<S>       <C>            <C>                <C>                   <C>      
          3,775,318      420,120            43,820                2,737,371
</TABLE>


Item 5.   Other Information.

     Pursuant to a Settlement and General  Release  Agreement,  dated as of July
25, 1997 (the "Fraisl Settlement Agreement"), among Daniel J. Fraisl ("Fraisl"),
the Company and Software Publishing  Corporation,  a wholly-owned  subsidiary of
the Company  ("SPC"),  Fraisl resigned as an officer and employee of the Company
and SPC and, in  connection  therewith,  received a lump sum payment of $85,000,
payment with respect to accrued  vacation  time and the  Company's  agreement to
make all payments in respect of health  insurance for Fraisl's benefit for a six
month period.  The Company also agreed that all stock options previously granted
to Fraisl  would remain  exercisable  through  January 24,  1998,  to the extent
exercisable on July 25, 1997. On July 25, 1997,  Fraisl held options to purchase
an aggregate  288,220 shares of the common stock, par value $.001 per share (the
"Common  Stock"),  of the Company,  of which 107,220 shares of Common Stock were
then  exercisable,  all at the exercise price of $4.663 per share.  In addition,
pursuant  to a  Consulting  Agreement,  dated as of July 25,  1997 (the  "Fraisl
Consulting  Agreement"),  between SPC and Fraisl,  SPC retained Fraisl for a two
year period to provide  certain  consulting  services  relating to the Company's
Intelligent Formatting technology.


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
  3.1          Composite of Certificate of Incorporation of the Company,
               as amended to date.
10.46          Company 1994 Long Term Incentive Plan, as amended.
10.47          Company 1997 Employee Stock Purchase Plan, as amended.
10.48          Settlement and General Release Agreement, dated as of July 25, 
               1997, among Daniel J. Fraisl, the Company and Software Publishing
               Corporation .
10.49          Consulting Agreement, dated as of July 25, 1997, between the
               Company and Daniel J. Fraisl.
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 June 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:    August 18, 1997               By:  /s/ Barry A. Cinnamon
                                             Barry A. Cinnamon
                                             Chairman of the Board, President
                                             and Chief Executive Officer
                                             (Principal Executive Officer)


Dated:    August 18, 1997               By:  /s/ Mark E. Leininger
                                             Mark E. Leininger
                                             Chief Operating Officer, Vice
                                             President - Finance, Treasurer, 
                                             Chief Financial Officer
                                             (Principal Financial Officer)



<PAGE>


                                  EXHIBIT INDEX

  3.1     Composite of Certificate of Incorporation of the Company, as amended
          to date.
10.46     Company 1994 Long Term Incentive Plan, as amended.
10.47     Company 1997 Employee Stock Purchase Plan, as amended.
10.48     Settlement and General Release Agreement, dated as of July 25, 1997,
          among Daniel J. Fraisl, the
          Company and Software Publishing Corporation.
10.49     Consulting Agreement, dated as of July 25, 1997, between the Company
          and Daniel J. Fraisl.
27        Financial Data Schedule.