<PAGE>




                         SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549 

                                     FORM 10-Q


    [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
         EXCHANGE ACT OF 1934
                 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998
                                        OR,
    [  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

                                          
               FROM THE TRANSITION PERIOD FROM                     TO
                                          
                           COMMISSION FILE NUMBER 0-27012
                                          
                               INSIGNIA SOLUTIONS plc
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                                          
                 ENGLAND AND WALES                   NOT APPLICABLE
           (State or other jurisdiction             (I.R.S. employer
         of incorporation or organization)       identification number)
                                          
                               ______________________
                                          
              41300 CHRISTY STREET                         INSIGNIA HOUSE
                    FREMONT                          THE MERCURY CENTRE, WYCOMBE
                CALIFORNIA 94538                         LANE, WOOBURN GREEN
            UNITED STATES OF AMERICA                HIGH WYCOMBE, BUCKS HP10 0HH
                (510)360-3700                              UNITED KINGDOM
                                                          (44)1628-539500
                                          
                                          
     (ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES AND PRINCIPAL
                                PLACES OF BUSINESS)
                                          
                                          
                                          
                                          
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes  [X]   No  [  ]



As of November 6, 1998, there were 12,194,316 Ordinary shares of L0.20 each
nominal value, outstanding.



<PAGE>

                             INSIGNIA SOLUTIONS PLC

                         PART 1 - FINANCIAL INFORMATION
<TABLE>

<S>                                                                                 <C>
ITEM 1.   FINANCIAL STATEMENTS:

          Condensed Consolidated Balance Sheet at September 30, 1998
          and December 31, 1997 (Unaudited). . . . . . . . . . . . . . . . . . . . .3

          Condensed Consolidated Statement of Operations for the three months 
          and nine months ended September 30, 1998 and 1997 (Unaudited). . . . . . .4

          Condensed Consolidated Statement of Cash Flows for the nine months
          ended September 30, 1998 and 1997 (Unaudited). . . . . . . . . . . . . . .5

          Notes to Unaudited Condensed Consolidated Financial Statements . . . . . .6

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS. . . . . . . . . . . . . . . . . . . . . . . . .8

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . . . . . . 16

                            PART II - OTHER INFORMATION

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . . . . . . . . . 17

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . . 17

SIGNATURES     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

</TABLE>



                                     Page 2

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
                                INSIGNIA SOLUTIONS PLC
                         CONDENSED CONSOLIDATED BALANCE SHEET
                          (AMOUNTS IN THOUSANDS, UNAUDITED)


<TABLE>
<CAPTION>
                                                        September 30,    December 31,
                                                            1998             1997
                                                       ---------------  --------------
<S>                                                    <C>              <C>
                ASSETS
Current assets:
     Cash and cash equivalents                           $     7,320      $    10,641 
     Short-term investments                                    2,500            3,820 
     Cash and cash equivalents held in escrow                  9,000                - 
     Accounts receivable, net of allowances 
       of $1,644 and $2,818, respectively                      2,586            6,754 
     Inventories                                                  26              185 
     Prepaid expenses                                            848              608 
     Prepaid income taxes                                          -              864 
                                                       ---------------  --------------
          Total current assets                                22,280           22,872 

Property and equipment, net                                      976            2,175 
Other noncurrent assets                                          826              410 
                                                       ---------------  --------------
          Total assets                                   $    24,082      $    25,457 
                                                       ---------------  --------------
                                                       ---------------  --------------
LIABILITIES AND SHAREHOLDERS' 
          EQUITY
Current liabilities:
     Accounts payable                                    $     1,164      $     1,683 
     Accrued liabilities                                       2,541            2,685 
     Customer deposits                                           119              617 
     Accrued royalties                                         4,555            8,874 
     Deferred revenue                                            284              843 
     Current obligations under capital leases                     58              104 
     Income taxes payable                                      1,253                - 
                                                       ---------------  --------------
          Total current liabilities                            9,974           14,806 
Noncurrent liabilities                                            78              128 
                                                       ---------------  --------------
          Total liabilities                                   10,052           14,934 
                                                       ---------------  --------------

Contingency (Note 6)

Shareholders' equity:
     Preferred shares                                              -                - 
     Ordinary shares                                           4,028            3,954 
     Additional paid-in capital                               34,607           34,462 
     Accumulated deficit                                     (24,144)         (27,432)
     Cumulative currency translation adjustment                 (461)            (461)
                                                       ---------------  --------------
          Total shareholders' equity                          14,030           10,523 
                                                       ---------------  --------------

          Total liabilities and shareholders equity       $   24,082      $    25,457 
                                                       ---------------  --------------
                                                       ---------------  --------------
</TABLE>

                              See accompanying notes

                                    Page 3

<PAGE>


                              INSIGNIA SOLUTIONS PLC
                  CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
            (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, UNAUDITED)

<TABLE>
<CAPTION>

                                                            Three months ended                 Nine months ended 
                                                               September 30,                     September 30,
                                                      -------------------------------    -------------------------------
                                                          1998              1997              1998             1997
                                                      -------------     -------------    -------------     -------------
<S>                                                   <C>               <C>              <C>               <C>
Revenues:
    License revenue                                     $   3,325         $   12,816        $ 10,123         $   30,648
    Service revenue                                           295                561             813              1,609
                                                      -------------     -------------    -------------     -------------
         Total revenues                                     3,620             13,377          10,936             32,257
                                                      -------------     -------------    -------------     -------------
Cost of revenues:
     Cost of license revenue                                2,154              4,524           6,308             12,094
     Cost of service revenue                                  170                530             859              1,616
                                                      -------------     -------------    -------------     -------------
         Total cost of revenues                             2,324              5,054           7,167             13,710
                                                      -------------     -------------    -------------     -------------
         Gross profit                                       1,296              8,323           3,769             18,547
                                                      -------------     -------------    -------------     -------------
Operating expenses:
     Sales and marketing                                    1,743              4,120           6,344             13,027
     Research and development                               1,407              2,317           4,593              7,202
     General and administrative                               794              2,620           3,229              5,535
     Restructuring                                              -                  -               -                857
                                                      -------------     -------------    -------------     -------------
         Total operating expenses                           3,944              9,057          14,166             26,621
                                                      -------------     -------------    -------------     -------------
         Operating loss                                    (2,648)              (734)        (10,397)            (8,074)

Interest income, net                                          263                155             772                536
Other income (expense), net                                     6                (45)         14,837               (145)
                                                      -------------     -------------    -------------     -------------
         Income (loss) before income taxes                 (2,379)              (624)          5,212             (7,683)

Income tax provision (benefit)                             (1,712)                17           1,924                183
                                                      -------------     -------------    -------------     -------------
         Net income (loss)                               $   (667)         $    (641)        $ 3,288         $   (7,866)
                                                      -------------     -------------    -------------     -------------
                                                      -------------     -------------    -------------     -------------
Earnings (loss) per share:
         Basic                                           $  (0.05)         $   (0.05)        $  0.27         $    (0.68)
                                                      -------------     -------------    -------------     -------------
                                                      -------------     -------------    -------------     -------------
         Diluted                                         $  (0.05)         $   (0.05)        $  0.27         $    (0.68)
                                                      -------------     -------------    -------------     -------------
                                                      -------------     -------------    -------------     -------------
Shares and share equivalents used in per share
calculations:
         Basic                                             12,164             11,695          12,118             11,614 
                                                      -------------     -------------    -------------     -------------
                                                      -------------     -------------    -------------     -------------
         Diluted                                           12,164             11,695          12,352             11,614 
                                                      -------------     -------------    -------------     -------------
                                                      -------------     -------------    -------------     -------------
</TABLE>


                             See accompanying notes
                             
                                    Page 4
<PAGE>                                          
                                          
                               INSIGNIA SOLUTIONS PLC
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                          (AMOUNTS IN THOUSANDS, UNAUDITED)

<TABLE>
<CAPTION>
                                                            Nine months ended
                                                              September 30,
                                                        --------------------------        
                                                            1998          1997
                                                        ------------  ------------
<S>                                                     <C>           <C>
Cash flows from operating activities:
     Net income (loss)                                   $   3,288     $  (7,866)
     Adjustments to reconcile net income (loss) to net
     cash used in operating activities:
      Depreciation                                             533         1,707 
      Other                                                (14,731)          206 
      Net changes in assets and liabilities:
         Accounts receivable, net                            4,168        (4,500)
         Inventories                                           159           214 
         Prepaid expenses                                     (240)         (209)
         Prepaid income taxes                                  864             -
         Other noncurrent assets                              (416)          508 
         Accounts payable                                     (519)          507 
         Accrued liabilities                                  (144)         (435)
         Customer deposits                                    (498)          107 
         Accrued royalties                                  (4,319)        3,169 
         Deferred revenue                                     (559)       (1,964)
         Income taxes payable                                1,253           100 
         Noncurrent liabilities                                 78             -
                                                        ------------  ------------
            Net cash used in operating activities          (11,083)       (8,456)
                                                        ------------  ------------
Cash flows from investing activities:
         Proceeds from the sale of property and                 86            45 
         equipment
         Purchases of property and equipment                  (645)         (641)
         Purchases (sales) of short-term investments,        1,320        (3,674)
         net
         Net proceeds from sale of product line             15,862             -
         Product line sale proceeds held in escrow          (9,000)            -
                                                        ------------  ------------
           Net cash provided by (used in) investing
           activities                                        7,623        (4,270)
                                                        ------------  ------------
Cash flows from financing activities:
         Payments made under capital leases                    (80)         (253)
         Proceeds from issuance of shares, net                 219           532 
                                                        ------------  ------------
           Net cash provided by financing activities           139           279 
                                                        ------------  ------------
Net decrease in cash and cash equivalents                   (3,321)      (12,447)
Cash and cash equivalents at beginning of the period        10,641        15,541 
                                                        ------------  ------------
Cash and cash equivalents at end of the period           $   7,320     $   3,094 
                                                        ------------  ------------
                                                        ------------  ------------
</TABLE>

                                          
                             See accompanying notes
                                          
                                    Page 5            
        

<PAGE>
                            INSIGNIA SOLUTIONS PLC
                                          
                 NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                             FINANCIAL STATEMENTS
                                          
                                          
NOTE 1.  BASIS OF PRESENTATION

The condensed consolidated financial statements are unaudited. However, in 
the opinion of management, all adjustments (consisting only of normal 
recurring adjustments) which are necessary for a fair presentation of the 
financial position and results for the interim period have been included.

The results of operations for the nine months ended September 30, 1998 are 
not necessarily indicative of the results to be expected for the entire 
fiscal year, which ends on December 31, 1998.

These unaudited condensed consolidated financial statements should be read in 
conjunction with the financial statements and notes thereto for the year 
ended December 31, 1997 included in the Company's 1997 Annual Report and Form 
10-K.

NOTE 2.  INCOME TAX PROVISION (BENEFIT)

The Company's income tax provision (benefit) for the three months and nine 
months ended September 30, 1998 primarily represents certain non-U.S. taxes 
arising upon the disposal of the Company's NTRIGUE product line, net of 
offsetting operating losses.  The Company has recorded a full valuation 
allowance against all deferred tax assets on the basis that significant 
uncertainty exists with respect to realization.

NOTE 3.  EARNINGS (LOSS) PER SHARE

The Company adopted Statement of Financial Accounting Standards No. 128 
("SFAS 128") "Earnings Per Share", during the year ended December 31, 1997.  
Earnings (loss) per share ("EPS") is presented on a basic and diluted basis, 
and is based upon the weighted average number of ordinary and ordinary 
equivalent shares outstanding during the period. Ordinary equivalent shares 
consist of preferred shares (using the as-if-converted method) and stock 
options (using the modified treasury stock method).  Under the basic 
calculation, ordinary equivalent shares are excluded from the computation.  
Under the diluted calculation, ordinary share equivalents are excluded from 
the computation if their effect is anti-dilutive.  All prior period amounts 
have been restated to conform with SFAS 128.

NOTE 4.  RECENT ACCOUNTING PRONOUNCEMENTS

In October 1997, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position No. 97-2 ("SOP 97-2"), "Software Revenue
Recognition", which the Company has adopted for transactions entered into during
the fiscal year beginning January 1, 1998.  SOP 97-2 provides guidance for
recognizing revenue on software transactions and supersedes Statement of
Position 91-1, "Software Revenue Recognition".  In March 1998, the AICPA issued
Statement of Position No. 98-4 ("SOP 98-4"), "Deferral of the Effective Date of
a Provision of SOP 97-2, Software Revenue Recognition".  SOP 98-4 defers, for
one year, the application of certain passages in SOP 97-2 which limit what is
considered vendor-specific

                                    Page 6

<PAGE>

objective evidence ("VSOE") necessary to recognize revenue for software 
licenses in multiple-element arrangements when undelivered elements exist.  
Additional guidance is expected to be provided prior to adoption of the 
deferred provision of SOP 97-2.  The Company will determine the impact, if 
any, the additional guidance will have on current revenue recognition 
practices when issued.  Adoption of the remaining provisions of SOP 97-2 did 
not have a material impact on revenue recognition during the three months and 
nine months ended September 30, 1998.

In June 1997, the Financial Accounting Standards Board issued Statement of 
Financial Accounting Standards No. 131, "Disclosures About Segments of An 
Enterprise and Related Information" ("SFAS 131").  SFAS 131 revises 
information regarding the reporting of operating segments and is required to 
be adopted in periods beginning after December 15, 1997.  It also establishes 
standards for related disclosures about products and services, geographic 
areas and major customers.  The Company will adopt SFAS 131 in 1998 and does 
not expect such adoption to have a material effect on disclosures made in its 
consolidated financial statements.

NOTE 5.  COMPREHENSIVE INCOME (LOSS)

In June 1997, the Financial Accounting Standards Board issued Statement of 
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" 
("SFAS 130").  The Company adopted SFAS 130 effective January 1, 1998 and 
such adoption did not have a material effect on its consolidated financial 
statements.  SFAS 130 requires that all items recognized under accounting 
standards as components of comprehensive earnings be reported in an annual 
statement that is displayed with the same prominence as other annual 
financial statements.  SFAS 130 also requires that an entity classify items 
of other comprehensive earnings by their nature in an annual financial 
statement.  For example, unrealized gains and losses on foreign exchange 
contracts, and unrealized gains and losses on marketable securities 
classified as available-for-sale.  Annual financial statements for prior 
periods will be reclassified, as required.

Total comprehensive income (loss) was not materially different from the net 
income (loss) reported for the three months and nine months ended September 
30, 1998.

NOTE 6.  CONTINGENCY

In February 1998, the Company disposed of its NTRIGUE technology for $17.687 
million.  A substantial portion of the total purchase price paid by the Buyer 
was placed in escrow to secure the Company's agreement to indemnify the Buyer 
with respect to certain matters.  All moneys placed in escrow and against 
which no claims have been made will be released after a specified period and 
the remainder shall be released at such time as pending claims, if any, are 
concluded. 

                                    Page 7


<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the 
unaudited condensed consolidated financial statements and notes thereto 
included in Part I - Item 1 of this Form 10-Q and the "Management's 
Discussion and Analysis of Financial Condition and Results of Operations" set 
forth in the Company's Form 10-K for the year ended December 31, 1997 (the 
"Form 10-K").

FUTURE OPERATING RESULTS

This Form 10-Q contains forward looking statements.  These forward looking 
statements concern matters which include, but are not limited to, the 
development of new products, enhancements or technologies, particularly 
JENE-TM-, the Company's implementation of Java-TM- specifically designed for 
embedded systems, which is currently under development, changes in the 
Macintosh and UNIX markets for the Company's products, competitive conditions 
in the industry, matters relating to exchange rate fluctuations and the 
Company's liquidity and capital needs.  These matters involve risks and 
uncertainties that could cause actual results to differ materially from those 
in the forward looking statements. In addition to the factors discussed 
above, other factors that could cause actual results to differ materially 
include, without limitation, the following:  Completion of development of 
JENE, market acceptance of JENE; the Company's ability to deliver on time, 
and market acceptance of new products or upgrades of existing products; the 
demand for Macintosh computers and UNIX workstations; the timing of, or delay 
in, large customer orders; continued availability of technology and 
intellectual property license rights; product life cycles; the introduction, 
acceptance and delivery of embedded systems by embedded system vendors; the 
introduction, acceptance and delivery of hardware and/or operating systems by 
Macintosh and UNIX vendors, Microsoft Corporation or their competitors; 
customer order deferrals in anticipation of new products; changes in the mix 
of distribution channels through which the Company's products are offered; 
purchasing patterns of distributors and retailers; quality control of 
products sold; economic conditions generally or in various geographic areas; 
and the risks listed from time to time in the reports that the Company files 
with the U.S. Securities and Exchange Commission. There can be no assurance 
that revenue levels, growth rates or profitability levels achieved during 
1995 and prior years will be achieved in the future or that the Company will 
experience growth in revenues and net income in any particular period when 
compared to prior periods. Any quarterly or annual shortfall in net revenues 
and/or earnings from the levels expected by securities analysts and 
shareholders would result in a substantial decline in the trading price of 
the Company's shares and could have an adverse effect on the liquidity of the 
Company's shares.

During the last twelve months, the Company has been developing JENE, its 
implementation of Java specifically designed for embedded systems.  The 
Company is entering the embedded systems market for the first time with its 
JENE product.  There can be no assurance that the Company will successfully 
and timely complete development of JENE, or that JENE, if developed, will 
achieve market acceptance.  The inability of the Company, due to resource 
constraints or technological or other reasons, to develop and introduce JENE 
in a timely manner would have a material adverse effect on the Company's 
business, financial condition and results of operations.  If JENE is 
successfully and timely developed, the Company will be required to develop 
distribution channels in the embedded systems market and to hire and train 
direct sales personnel. Competition for qualified sales personnel is intense 
and there can be no assurance that the Company will be able to attract the 
personnel needed to market and sell products in the embedded systems market.  
The Company anticipates increased operating expenses as it completes 
development of the product and develops the organization to market, sell and 
support
                                    Page 8

<PAGE>

the product, before any revenue is recognized from sales of the product.  The 
market for embedded applications is fragmented and is characterized by 
ongoing technological developments, evolving industry standards and rapid 
changes in customer requirements.  Most of the Company's competitors in the 
embedded systems market have greater financial, technical, marketing and 
sales resources than the Company, and more experience in developing, 
marketing and supporting embedded systems products.  Further, the Company 
could face price competition or other competitive pressures that could cause 
the Company to reduce the price of its product, which would result in reduced 
profit margins.  Prolonged price competition would have a material adverse 
effect on the Company's business, financial condition and results of 
operations.

The Form 10-K includes an analysis of certain risks of the Company's 
business, including risks which are inherent to software development, as well 
as specific risks relating to the competitive environment in which the 
Company operates. Although the Company has sought to identify the most 
significant risks to its business, the Company cannot predict whether, or to 
what extent any such risks may be realized, nor can there be any assurance 
that the Company has identified all possible issues which the Company might 
face. Potential risks and uncertainties include, without limitation, those 
mentioned in the Company's Form 10-K; and in particular the continued 
acceptance by the marketplace of the Company's products and the Company's 
ability to successfully develop new products in the future. Investors should 
carefully read the Company's filings with the Securities and Exchange 
Commission, together with this Form 10-Q, and consider all trends and 
uncertainties concerning the Company's business before making an investment 
decision with respect to the Company's stock.


                                    Page 9


<PAGE>

The following table sets forth the unaudited condensed consolidated results 
of operations as a percentage of total revenues for the three and nine month 
periods ended September 30, 1998 and 1997.

<TABLE>
<CAPTION>
                                   Three months ended       Nine months ended
                                      September 30,           September 30,
                                  --------------------    ----------------------
                                    1998        1997        1998           1997
                                  --------    --------    --------       -------
<S>                               <C>          <C>         <C>          <C>
Revenues:
     License revenue                91.9%       95.8%       92.6%         95.0% 
     Service revenue                 8.1%        4.2%        7.4%          5.0% 
                                  --------    --------    --------       -------
          Total revenues           100.0%      100.0%      100.0%        100.0% 
                                  --------    --------    --------       -------
Cost of revenues:
     Cost of license revenue        59.5%       33.8%       57.7%         37.5% 
     Cost of service revenue         4.7%        4.0%        7.9%          5.0% 
                                  --------    --------    --------       -------
          Total cost of revenues    64.2%       37.8%       65.6%         42.5% 
                                  --------    --------    --------       -------
          Gross profit              35.8%       62.2%       34.4%         57.5% 
                                  --------    --------    --------       -------
Operating expenses:
     Sales and marketing            48.1%       30.8%       58.0%         40.4% 
     Research and development       38.9%       17.3%       42.0%         22.3% 
     General and administrative     21.9%       19.6%       29.5%         17.2% 
     Restructuring                   0.0%        0.0%        0.0%          2.6% 
                                  --------    --------    --------       -------
          Total operating expenses 108.9%       67.7%      129.5%         82.5% 
                                  --------    --------    --------       -------
          Operating loss           (73.1%)      (5.5%)     (95.1%)       (25.0%)
Interest income, net                 7.3%        1.1%        7.1%          1.7% 
Other income (expense), net          0.2%       (0.3%)     135.7%         (0.5%)
                                  --------    --------    --------       -------
          Income (loss) before     (65.6%)      (4.7%)      47.7%        (23.8%)
          income taxes 

Income tax provision (benefit)     (47.3%)       0.1%       17.6%          0.6% 
                                  --------    --------    --------       -------
          Net income (loss)        (18.3%)      (4.8%)      30.1%        (24.4%)
                                  --------    --------    --------       -------
                                  --------    --------    --------       -------
</TABLE>

REVENUES

The Company currently derives its revenues from the sale of packaged software 
products, royalties received from bundling agreements with OEMs, 
customer-funded engineering activities under OEM contracts, and annual 
maintenance contracts. Revenues from the sale of packaged products and 
royalties received from OEMs are classified as license revenue, while 
revenues from customer-funded engineering activities and annual maintenance 
contracts are classified as service revenue. 

In the third quarter of 1998, total revenues declined by 73% compared to such 
revenues for the third quarter of 1997, but increased 55% compared to the 
second quarter ended June 30, 1998.  Revenues in the quarter ended September 
30, 1997 were materially impacted by a large source 

                                   Page 10

<PAGE>

code licensing arrangement with Silicon Graphics.  In the nine months ended 
September 30, 1998, total revenues declined by 66% compared to revenues for 
the first nine months of 1997.  The decline is primarily due to increased 
competition in the Macintosh and UNIX markets, a declining market share for 
Apple Macintosh compatible computers, and the sale of the Company's NTRIGUE 
business.

License revenue in the three months ended September 30, 1998 and 1997 was 92% 
and 96% of total revenues, respectively.  In the nine months ended September 
30, 1998 and 1997, license revenues were 93% and 95% of total revenues, 
respectively.  In the third quarter of 1998, license revenues declined 74% 
compared to license revenues in the third quarter of 1997.  For the nine 
months ended September 30, 1998, license revenues declined 67% compared to 
the same period in 1997.

Service revenue in the third quarter of 1998 was 47% lower than service 
revenue in the third quarter of 1997.  Service revenue for the nine months 
ended September 30, 1998 was 49% lower than service revenue for the same 
period in 1997, primarily as a result of the Company no longer selling 
NTRIGUE maintenance or support contracts.  Revenues from customer-funded 
engineering activities under OEM contracts also declined.  The Company 
discontinued supporting the NTRIGUE product in September 1998.

Sales of Macintosh-based products, in the third quarter of 1998, decreased by 
10% compared to sales in the third quarter of 1997, but increased 186% 
compared to the second quarter of 1998.  For the nine months ended September 
30, 1998, sales of Macintosh-based products decreased 42% compared to the 
same period in 1997.  In the three months ended September 30, 1998 and 
September 30, 1997, revenue from the sale of the Company's products for 
Macintosh computers accounted for 54% and 16% of total revenues, 
respectively.  In the nine months ended September 30, 1998 and September 30, 
1997, revenue from the sale of the Company's products for Macintosh computers 
accounted for 50% and 29% of total revenues, respectively.  During the third 
quarter the Company commenced shipping SoftWindows98 for the Macintosh.  
License revenue from sales of Macintosh-based products increased in the third 
quarter of 1998 compared to the second quarter of 1998, primarily due to 
increased sell-through of SoftWindows95 for the Macintosh as a result of 
reduced pricing, and initial volume shipments of SoftWindows98 for the 
Macintosh to end-user customers.  The decrease in license revenue from sales 
of Macintosh-based products in the first nine months of 1998 compared to the 
first nine months of 1997 is primarily the result of severe competitive 
pressures faced by the Company's North American Macintosh business. Continued 
severe competitive pressure may result in further reduced demand for the 
Company's Macintosh-based products which would have a material adverse effect 
on the Company's total revenues.  Similarly, any future declines in sales of 
Macintosh computers would also decrease the demand for the Company's 
products, and would also have a material adverse effect on the Company's 
total revenues.

In the three months ended September 30, 1998 and 1997, revenues from the sale 
of the Company's products for UNIX computers accounted for 43% and 53% of 
total revenues, respectively. In the nine months ended September 30, 1998 and 
1997, revenues from the sale of the Company's products for UNIX computers 
accounted for 42% and 36% of total revenues, respectively.  In the third 
quarter of 1998, sales of UNIX based products decreased by 78% compared to 
sales in the third quarter of 1997 which included the large source code 
licensing arrangement with Silicon Graphics.  For the nine months ended 
September 30, 1998, UNIX sales decreased by 60% compared to the same period 
in 1997.

In the three months ended September 30, 1998 and September 30, 1997, revenue 
from the sale of NTRIGUE products accounted for 3% and 29% of total revenues, 
respectively. In the nine

                                   Page 11

<PAGE>

months ended September 30, 1998 and 1997 revenue from the sale of NTRIGUE 
products accounted for 8% and 33% of total revenues, respectively.  Revenues 
declined as a result of the sale of the Company's NTRIGUE product line.  
There will be no significant NTRIGUE revenues in the future.

The Company distributes its packaged products within the United States and 
internationally through multiple distribution channels, including 
distributors, resellers, direct sales, telesales, and OEMs.  The Company 
offers certain return privileges to its customers including product exchange 
privileges and price protection.  The Company recognizes revenues from 
packaged products upon shipment; reserves for estimated future returns, 
exchanges and price protection are recorded as a reduction of total revenues. 

Sales to distributors and OEM's representing more than 10% of total revenue 
in each period accounted for the following percentages of total revenues. 

<TABLE>
<CAPTION>
                         Three months ended  Nine months ended
                           September 30,       September 30,
                        -------------------  -----------------
                         1998        1997      1998      1997
                        ------      ------    ------    ------
<S>                     <C>    <C>            <C>       <C>
Distributors:

 Sun Microsystems        31%              -         26%       -
 Mitsubishi              26%              -         10%       -
 Ingram Micro             7%              7%        17%       10%

 All Distributors:       83%   less than 10%        73%       32%

OEM's:

 Silicon Graphics          -             45%        -         27%
</TABLE>

No other customers accounted for more than 10% of the Company's total 
revenues in the three or nine months ended September 30, 1998 and September 
30, 1997.

Sales to customers outside the United States, derived mainly from customers 
in Europe and Asia, represented approximately 35% and 17% of total revenues 
in the three months ended September 30, 1998 and 1997, respectively, and 26% 
and 24% of total revenues in the nine months ended September 30, 1998 and 
1997, respectively.  

Movements in currency exchange rates did not have a material impact on total 
revenues in the three months or nine months ended September 30, 1998 or 
September 30, 1997.  However, there can be no assurance that movements in 
currency exchange rates will not have a material adverse effect on the 
Company's future revenues and results of operations.

Introductions of major new products and enhancements of existing products can 
have a significant impact on the Company's quarterly and annual revenues. 
Generally, sales volumes of new products increase in the first few months 
following the introduction of a new product, due to the purchase of upgrades 
by existing users and the purchase of initial inventory by distribution 
channels. Thereafter, revenues may decline and/or stabilize to a relatively 
constant level. Toward the end of a product's life cycle, revenues tend to 
decline significantly. Due to the inherent difficulties of software 
development, the Company cannot predict the exact quarter in which a new 
product or version will be ready to ship. Any delays in the scheduled release 
of major new products and enhancements would have a material adverse impact 
on the Company's revenues and results of operations.

                                  Page 12

<PAGE>

COST OF REVENUES AND GROSS MARGIN

Cost of license revenue primarily includes Windows, DOS and WinFrame 
royalties paid to Microsoft, IBM and Citrix, respectively, and costs of 
documentation, duplication and packaging. Cost of service revenue includes 
costs associated with customer-funded engineering activities and end-user 
support under maintenance contracts.

The Company's gross margin for license revenue is significantly affected by 
many factors, including pricing of the Company's products, royalties paid to 
third parties, the mix of products licensed, the channels through which the 
Company's products are distributed, and product maturity.  License revenue 
gross margins in the quarter ended September 30, 1998 were 35%, compared to 
65% for the same period in 1997.  For the nine months ended September 30, 
1998 license revenue gross margins were 38%, compared to 61% for the same 
period in 1997.  The Company's gross margin in the period was significantly 
affected by pricing strategies, unrecoverable third party royalties on 
product returns, rebate programs, and obsolescence of inventory.

The Company's distribution agreement with Microsoft Corporation expired on 
March 31, 1997, but was extended until September 30, 1998 on substantially 
the same terms.  The Company subsequently entered into a new distribution 
agreement dated October 1, 1998 on substantially the same terms, effective 
for one year.  

The Microsoft Source Code Agreement, effective May 4, 1993, expired on May 
30, 1996, except that the Source Code Agreement provided that the Company 
maintained the right to use the licensed source code until May 30, 1998 for 
product support purposes.  The Company has not entered and does not 
anticipate that it will enter into a renewal or replacement of the Source 
Code Agreement for future Windows products.  The Company has developed an 
alternative approach to the code in the Company's products for future 
versions of Windows.  SoftWindows98 was developed using this alternative 
approach.

Gross margin for service revenue increased in the third quarter of 1998 to 
42% from 6% in the same period of 1997. The increase was primarily due to a 
customer-funded engineering contract with one customer.  Service revenue 
gross margins decreased in the first nine months of 1998 to (6)% from 0% in 
the same period of 1997 as a result of the Company incurring costs supporting 
NTRIGUE with minimal matching revenue.  The Company was obliged to support 
NTRIGUE through September 1998.

OPERATING EXPENSES

Sales and marketing expenses include advertising and promotional expenses, 
trade shows, personnel and related overhead costs, and salesperson 
commissions. Sales and marketing expenses declined by 58% in the quarter 
ended September 30, 1998 from the quarter ended September 30, 1997, and by 
51% for the nine months ended September 30, 1998 from the same period of 
1997. The decline is due to reduced spending in advertising programs and 
staffing reductions.

Research and development expenses consist primarily of personnel costs, 
overhead costs relating to occupancy and equipment depreciation. Research and 
development expenses declined by 39% in the three months ended September 30, 
1998 over the same period in 1997, and by 36% in the nine months ended 
September 30, 1998 over the nine months ended September 30, 1997. The decline 
in 1998 resulted from staffing reductions associated with the sale of the 
NTRIGUE 

                                  Page 13

<PAGE>

product line. During the quarter ended September 30, 1998, the Company 
invested further in JENE, its forthcoming implementation of Java for embedded 
systems.  Research and development expenses are expected to increase in the 
three months ended December 31, 1998.  In accordance with Statement of 
Financial Accounting Standards No. 86, software development costs are 
expensed as incurred until technological feasibility is established, after 
which any additional costs are capitalized. In 1998 and 1997, no development 
costs were capitalized. 

General and administrative expenses consist primarily of personnel and 
related overhead costs for finance, information systems, human resources and 
general management. General and administrative expenses decreased by 70% in 
the three months ended September 30, 1998 over the same period of 1997, and 
by 42% for the nine months ended September 30, 1998 over the same period in 
1997.  The decline is due to reduced headcount and reduced legal fees.

RESTRUCTURING

In the first quarter of 1997, the Company completed a worldwide 
reorganization that integrated the Company's product development, product 
marketing and sales organizations into two business units to focus on the 
NTRIGUE and SoftWindows product lines, and reduced headcount.  Restructuring 
expenses consisted principally of costs related to terminated employees, 
including severance payments and stock option expenses.

INTEREST INCOME, NET

Interest income, net increased from $155,000 in the three months ended 
September 30, 1997 to $263,000 in the three months ended September 30, 1998 
due primarily to increased interest income earned on the Company's cash and 
cash equivalents held in escrow.  Interest income, net increased to $772,000 
for the nine months ended September 30, 1998 from $536,000 for the nine 
months ended September 30, 1997.

OTHER INCOME (EXPENSE), NET

Other income (expense), net increased from an expense of $45,000 in the three 
months ended September 30, 1997 to income of $6,000 in the three months ended 
September 30, 1998, and was primarily comprised of foreign exchange 
gains/losses in both periods.  In the nine months ended September 30, 1998, 
other income (expense), net increased to $14,837,000 of which 99% was the net 
gain on the sale of the Company's NTRIGUE product line and the majority of 
the remainder was foreign exchange gains.  In the nine months ended September 
30, 1997, other income (expense), net comprised primarily foreign exchange 
losses.

Over 80% of the Company's total revenues and over 50% of its operating 
expenses are denominated in United States dollars.  Most of the remaining 
revenues and expenses of the Company are pound sterling denominated and 
consequently the Company is exposed to fluctuations in pound sterling 
exchange rates.  To hedge against this currency exposure, the Company enters 
into foreign currency options and forward exchange contracts for periods and 
amounts consistent with the amounts and timing of its anticipated pound 
sterling denominated operating cash flow requirements. Unrealized gains and 
losses on foreign currency option contracts are deferred and were not 
material at September 30, 1998 and December 31, 1997. There can be no 
assurance that such fluctuations will not have a material effect on the 
Company's results of operations in the future.  

The Company has an investment portfolio of fixed income securities that are 
classified as "available-for-sale securities."  These securities, like all 
fixed income instruments, are subject to 

                                  Page 14

<PAGE>

interest rate risk and will fall in value if market interest rates increase.  
The Company attempts to limit this exposure by investing primarily in 
short-term securities.

INCOME TAX PROVISION (BENEFIT)

The Company's income tax provision (benefit) for the three months and nine 
months ended September 30, 1998 primarily represents certain non-U.S. taxes 
arising upon the disposal of the Company's NTRIGUE product line, net of 
offsetting operating losses.  The Company no longer anticipates the income 
tax liability from the gain on the disposal of the NTRIGUE product line in 
the quarter ended March 31, 1998 will be as significant as first accounted 
for, and has accordingly reduced its liability to reflect its current 
expected liability. As a result, the Company reported an income tax benefit 
of $1.7 million in the quarter ended September 30, 1998.  The Company has 
recorded a full valuation allowance, primarily comprising net operating 
losses, against all deferred tax assets on the basis that significant 
uncertainty exists with respect to their realization.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash, cash equivalents and short-term investments, including 
cash and cash equivalents of $9.0 million held in escrow, were $18.8 million 
at September 30, 1998, an increase of $4.3 million from $14.5 million at 
December 31, 1997.  Working capital increased to $12.3 million at September 
30, 1998, from $8.1 million at December 31, 1997.  The cash and cash 
equivalents held in escrow at September 30, 1998 are for the sole purpose of 
satisfying any obligations to Citrix arising from or in connection with an 
event against which the Company would be required to indemnify Citrix under 
the terms of the Company's sale of its NTRIGUE product line to Citrix.  
Subject to the foregoing, $2.5 million of such funds will be released from 
escrow in February 1999, and the remaining $6.5 million of such funds will be 
released in August 1999.  Net cash used by the Company for operating 
activities in the nine months ended September 30, 1998 was $11.1 million.  
Accounts receivable DSO has decreased to 65 days at September 30, 1998 
compared to 93 days at December 31, 1997.

The Company uses its working capital to finance ongoing operations and to 
fund development of its product lines.  Management believes that the 
Company's existing cash, cash equivalents and short-term investment balances 
and cash generated from operations, if any, will be sufficient to meet the 
Company's expected liquidity requirements through at least December 31, 1998.

YEAR 2000 COMPLIANCE

It is generally anticipated that many organizations will experience 
operational difficulties at the beginning of the Year 2000 as a result of the 
fact that many currently installed computer systems and software products are 
coded to accept only two digit entries in the date code field.  Significant 
uncertainty exists in the software and other industries concerning the scope 
and magnitude of problems associated with the century change.  Based on the 
Company's assessment to date, the Company believes that all versions of 
SoftWindows98 products, SoftWindows95 products, Real PC and NTRIGUE, a 
product the Company no longer ships, are Year 2000 compliant.  Earlier 
versions of SoftWindows and all versions of Soft PC, a product the Company no 
longer ships, are not Year 2000 compliant, but all such versions are 
upgradable to Year 2000 compliant products. However, there can be no 
assurance that all of the Company's customers will install the Year 2000 
compliant version of the Company's products in a timely manner, which could 
lead to failure of customer systems and product liability claims against the 
Company.  Even if the Company's products are Year 2000 compliant, the Company 
may in the future be subject to claims based on Year 2000 issues in the 
products of other companies, or 

                                  Page 15

<PAGE>

issues arising from the integration of multiple products within a system.  
The costs of defending and resolving Year 2000 related disputes, and any 
liability of the Company for Year 2000 damages, including consequential 
damages, could have a material adverse effect on the Company's business, 
financial condition and results of operations. Further, the Company's 
products are generally used with systems and software involving complicated 
software products developed by other vendors, which may not be Year 2000 
compliant.  Failure of the information systems of the Company's customers 
because of the failure of such noncompliant systems or software or for any 
other reason, could also affect the perceived performance of the Company's 
products, which could have a negative effect on the Company's competitive 
position.  In addition, the Company believes that the purchasing patterns of 
customers and potential customers may be affected by Year 2000 issues as 
companies expend significant resources to correct or patch their current 
software systems for Year 2000 compliance.  These expenditures may result in 
reduced funds available to purchase software products such as those offered 
by the Company, which could result in a material adverse effect on the 
Company's business, financial condition and results of operations.

The Company has carried out an assessment of its own internal systems and 
believes that they are all Year 2000 compliant.  The total cost associated 
with preparation for the Year 2000 has not been, and is not expected to be, 
material to the Company's business, financial condition or results of 
operations. Nevertheless, the Company may not timely identify and remediate 
all significant Year 2000 problems and remedial efforts may involve 
significant time and expense.  There can be no assurance that any Year 2000 
compliance problems of the Company or its customers or suppliers will not 
have a material adverse effect on the Company's business, financial condition 
and results of operations.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

                                    Page 16



<PAGE>

                             PART II - OTHER INFORMATION

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

(a) The Company held its Annual General Meeting on July 21, 1998.  Proxies for
    the meeting were solicited pursuant to Regulation 14A.

(b) At each Annual General Meeting, the third of the Company's Board of 
    Directors who have been in office longest since their last election, as 
    well as any directors appointed by the Board during the preceding year, 
    are required to resign and are then considered for re-election, assuming 
    they wish to stand for re-election.  Richard M. Noling was re-elected and 
    Paul L. Borrill was elected as Directors at the meeting.  The Directors 
    whose term of office continues after the meeting are Nicholas, Viscount 
    Bearsted and Albert E. Sisto.

(c) The matters described below were voted on at the Annual General 
    Meeting, and the number of votes cast with respect to each matter and, 
    with respect to the election of directors, for each nominee, were as 
    indicated:

1.  To re-appoint Price Waterhouse as UK statutory auditors of the Company until
    the conclusion of the next Annual General Meeting and to authorize the 
    Directors to fix their remuneration

       FOR                 AGAINST
       2,971,361           82,268

2.  To elect as a Director Paul L. Borrill

       FOR                 AGAINST
       2,884,425           139,456

3.  To re-elect as a Director Richard M. Noling

       FOR                 AGAINST
       2,849,558           185,311

4.   To approve a resolution to amend the Company's 1995 Employee Share Purchase
     Plan

       FOR                 AGAINST
       2,748,835           284,454

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits
The following exhibits are filed as part of this Report:

Exhibit 10.41  Microsoft License Agreement for Desktop Operating System Products
               dated October 1, 1998 between Microsoft Licensing, Inc. and 
               Insignia Solutions, Inc.*

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

*Confidential treatment has been requested with respect to certain portions of
this Exhibit.  Such portions have been omitted from this filing and have been
filed separately with the Commission.

                                  Page 17

<PAGE>



Exhibit 10.42  Registrant's 1995 Employee Share Purchase Plan, as amended

Exhibit 10.43  Promissory Note dated July 1, 1998 between Insignia Solutions,
               Inc. and David Winterburn

Exhibit 11.01  Statement Regarding Computation of Earnings (Loss) per Share

Exhibit 27.01  Financial Data Schedule

(b) Reports on Form 8-K
None


                                  Page 18

<PAGE>

                                 SIGNATURES

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


                                       INSIGNIA SOLUTIONS PLC
                                            (Registrant)

Date: November 12, 1998

                                       S/STEPHEN M. AMBLER
                                       -----------------------
                                       STEPHEN M. AMBLER
                                       Chief Financial Officer


                                  Page 19

<PAGE>


                              INDEX TO EXHIBITS


EXHIBIT
NUMBER    EXHIBIT TITLE
--------------------------------------------------------------------------------

Exhibit 10.41  Microsoft License Agreement for Desktop Operating System Products
               dated October 1, 1998 between Microsoft Licensing, Inc. and
               Insignia Solutions, Inc.*

Exhibit 10.42  Registrant's 1995 Employee Share Purchase Plan, as amended

Exhibit 10.43  Promissory Note dated July 1, 1998 between Insignia Solutions,
               Inc. and David Winterburn

Exhibit 11.01  Statement Regarding Computation of Earnings (Loss) per Share

Exhibit 27.01  Financial Data Schedule


------------------
*Confidential treatment has been requested with respect to certain portions of
this Exhibit.  Such portions have been omitted from this filing and have been
filed separately with the Commission.

                                  Page 20