<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 JUNE 30, 1999

                                       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 of          (I.R.S. employer identification
   incorporation or organization)                       number)

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


            41300 CHRISTY STREET             THE MERCURY CENTRE, WYCOMBE LANE
                  FREMONT                              WOOBURN GREEN
              CALIFORNIA 94538                 HIGH WYCOMBE, BUCKS HP10 0HH
          UNITED STATES OF AMERICA                    UNITED KINGDOM
               (510) 360-3700                        (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 August 3, 1999, there were 12,860,124 Ordinary shares of L0.20 each
nominal value, outstanding.

<PAGE>


                              INSIGNIA SOLUTIONS PLC

                          PART 1 - FINANCIAL INFORMATION

<TABLE>
<S>            <C>                                                                                <C>
ITEM 1.        FINANCIAL STATEMENTS:
               Condensed Consolidated Balance Sheet at June 30, 1999
               and December 31, 1998 (Unaudited).....................................................3

               Condensed Consolidated Statement of Operations for the three months
               and six months ended June 30, 1999 and 1998 (Unaudited)...............................4

               Condensed Consolidated Statement of Cash Flows for the six months
               ended June 30, 1999 and 1998 (Unaudited)..............................................5

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

ITEM 2.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
               AND RESULTS OF OPERATIONS............................................................10

ITEM 3.        QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK...........................21

                                            PART II - OTHER INFORMATION

ITEM 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................................22

ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K.....................................................23

SIGNATURES     .....................................................................................24
</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>
                                                                     June 30,             December 31,
                                                                       1999                   1998
                                                                --------------------   -------------------
<S>                                                            <C>                     <C>
                            ASSETS
Current assets:
       Cash and cash equivalents                                        $  1,176               $ 6,798
       Restricted cash                                                       120                   186
       Cash and cash equivalents held in escrow                            6,770                 9,100
       Accounts receivable, net of allowances
            of $211 and $1,449, respectively                                 762                 1,706
       Prepaid and other current assets                                    1,301                 1,515
                                                                --------------------   -------------------
             Total current assets                                         10,129                19,305

Property and equipment, net                                                  825                 1,074
Restricted cash                                                              250                   250
Other noncurrent assets                                                      325                   382
                                                                --------------------   -------------------

                                                                        $ 11,529              $ 21,011
                                                                --------------------   -------------------
                                                                --------------------   -------------------

             LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
       Accounts payable                                                  $   946              $  1,608
       Accrued liabilities                                                 2,135                 2,265
       Accrued royalties                                                   1,386                 4,309
       Income taxes payable                                                  960                   994
       Deferred revenue                                                      221                   262
       Customer deposits                                                      95                   104
       Capital lease obligations                                              11                    51
                                                                --------------------   -------------------
             Total current liabilities                                     5,754                 9,593
                                                                --------------------   -------------------

Contingency (Note 6)

Shareholders' equity:
       Preferred shares                                                        -                     -
       Ordinary shares                                                     4,241                 4,164
       Additional paid-in capital                                         34,832                34,725
       Accumulated deficit                                               (32,837)              (27,010)
       Cumulative currency translation adjustment                           (461)                 (461)
                                                                --------------------   -------------------
             Total shareholders' equity                                    5,775                11,418
                                                                --------------------   -------------------

                                                                        $ 11,529              $ 21,011
                                                                --------------------   -------------------
                                                                --------------------   -------------------
</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                 Six months ended
                                                                      June 30,                          June 30,
                                                           -------------------------------- ----------------------------------
                                                                1999             1998            1999              1998
                                                           ---------------- --------------- ----------------  ----------------
<S>                                                      <C>                <C>             <C>               <C>
Net revenues:
         License                                                 $ 1,418         $ 2,038          $ 3,598           $ 6,798
         Service                                                      89             296              217               518
                                                           ---------------- --------------- ----------------  ----------------
                 Total net revenues                                1,507           2,334            3,815             7,316
                                                           ---------------- --------------- ----------------  ----------------

Cost of net revenues:
         License                                                     822           1,676            1,915             4,154
         Service                                                     130             248              308               689
                                                           ---------------- --------------- ----------------  ----------------
                 Total cost of net revenues                          952           1,924            2,223             4,843
                                                           ---------------- --------------- ----------------  ----------------
                 Gross profit                                        555             410            1,592             2,473
                                                           ---------------- --------------- ----------------  ----------------

Operating expenses:
         Sales and marketing                                       1,432           2,038            3,060             4,601
         Research and development                                  1,403           1,690            3,018             3,186
         General and administrative                                  525           1,074            1,503             2,435
                                                           ---------------- --------------- ----------------  ----------------
                  Total operating expenses                         3,360           4,802            7,581            10,222
                                                           ---------------- --------------- ----------------  ----------------
                  Operating loss                                  (2,805)         (4,392)          (5,989)           (7,749)

Interest income, net                                                 101             358              256               509
Other income (expense), net                                           (3)             40              (50)           14,831
                                                           ---------------- --------------- ----------------  ----------------

                  Income (loss) before income taxes               (2,707)         (3,994)          (5,783)            7,591

Provision (benefit) for income taxes                                   4            (317)              44             3,636
                                                           ---------------- --------------- ----------------  ----------------

                  Net income (loss)                             $ (2,711)       $ (3,677)      $  (5,827)          $  3,955
                                                           ---------------- --------------- ----------------  ----------------
                                                           ---------------- --------------- ----------------  ----------------
Net income (loss) per share:
                  Basic                                         $  (0.21)       $  (0.30)      $   (0.46)          $   0.33
                                                           ---------------- --------------- ----------------  ----------------
                                                           ---------------- --------------- ----------------  ----------------
                  Diluted                                       $  (0.21)       $  (0.30)      $   (0.46)          $   0.32
                                                           ---------------- --------------- ----------------  ----------------
                                                           ---------------- --------------- ----------------  ----------------
Weighted average equivalent shares:
                  Basic                                           12,781          12,111          12,736             12,094
                                                           ---------------- --------------- ----------------  ----------------
                                                           ---------------- --------------- ----------------  ----------------
                  Diluted                                         12,781          12,111          12,736             12,358
                                                           ---------------- --------------- ----------------  ----------------
                                                           ---------------- --------------- ----------------  ----------------
</TABLE>

                               See accompanying notes.

                                       Page 4
<PAGE>


                               INSIGNIA SOLUTIONS PLC
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                          (AMOUNTS IN THOUSANDS, UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   Six months ended
                                                                                       June 30,
                                                                           ---------------------------------
                                                                                1999              1998
                                                                           ---------------    --------------
<S>                                                                        <C>                <C>
Cash flows from operating activities:
    Net income (loss)                                                          $ (5,827)         $  3,955
    Adjustments to reconcile net income (loss) to net cash used
    in operating activities:
    Depreciation                                                                    324               354
    Other                                                                           (42)          (14,731)
    Net changes in assets and liabilities:
         Restricted cash                                                             66                 -
         Accounts receivable, net                                                   944             5,223
         Prepaid and other current assets                                           214              (439)
         Prepaid income taxes                                                         -               864
         Other noncurrent assets                                                     57                84
         Accounts payable                                                          (662)             (668)
         Accrued liabilities                                                       (130)              444
         Customer deposits                                                           (9)             (450)
         Accrued royalties                                                       (2,923)           (1,656)
         Deferred revenue                                                           (41)             (402)
         Income taxes                                                               (34)            2,982
         Noncurrent liabilities                                                       -                98
                                                                           ---------------    --------------
           Net cash used in operating activities                                 (8,063)           (4,342)
                                                                           ---------------    --------------
Cash flows from investing activities:
         Proceeds from sale of property and equipment                               101                70
         Purchases of property and equipment                                       (134)             (394)
         Purchases of short-term investments, net                                     -            (6,141)
         Proceeds from sale of product line                                           -            15,862
         Product line sale proceeds held in escrow                                 (170)           (8,900)
         Product line sale proceeds released from escrow                          2,500                 -
                                                                           ---------------    --------------
           Net cash provided by investing activities                              2,297               497
                                                                           ---------------    --------------
Cash flows from financing activities:
         Payments made under capital leases                                         (40)              (70)
         Proceeds from issuance of shares, net                                      184               195
                                                                           ---------------    --------------
           Net cash provided by financing activities                                144               125
                                                                           ---------------    --------------
Net decrease in cash and cash equivalents                                        (5,622)           (3,720)
Cash and cash equivalents at beginning of the period                              6,798            10,641
                                                                           ---------------    --------------
Cash and cash equivalents at end of the period                                  $ 1,176           $ 6,921
                                                                           ---------------    --------------
                                                                           ---------------    --------------
</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 six months ended June 30, 1999 are not
necessarily indicative of the results to be expected for the entire fiscal year,
which ends on December 31, 1999.

These unaudited condensed consolidated financial statements should be read in
conjunction with the financial statements and notes thereto for the year ended
December 31, 1998 included in Insignia Solutions plc's ("Insignia") 1998 Annual
Report and Form 10-K.

NOTE 2.  INCOME TAX PROVISION (BENEFIT)

Insignia's provision for income taxes for the six months ended June 30, 1999,
primarily represents certain non-U.S. taxes arising from sales to customers in
Japan. Insignia accounts for income taxes under an asset and liability approach
that requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been recognized in
Insignia's financial statements or tax returns. In estimating future tax
consequences, Insignia generally considers all expected future events other than
enactments of changes in the tax law or rates.

NOTE 3.  NET INCOME (LOSS) PER SHARE

Net income (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 warrants and stock options (using the modified treasury stock
method). Under the Basic method of calculation of EPS, ordinary equivalent
shares are excluded from the computation. Under the Diluted method of
calculation of EPS, ordinary share equivalents are excluded from the computation
if their effect is anti-dilutive.

NOTE 4.  RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 133 "Accounting for Derivative Instruments and
Hedging Activities" ("FAS 133"). FAS 133 establishes accounting and reporting
standards for derivative instruments and for hedging activities. This statement
becomes effective for all fiscal quarters of fiscal years beginning after June
15, 1999. In June 1999, the FASB issued Statement of Financial Accounting
Standard No. 137 "Accounting for Derivative Instruments - Deferral of the Effect
Date of FAS Statement No. 133" ("FAS 137"). FAS 137 defers the effective date of
FAS 133 until June 15, 2000. Insignia will adopt FAS 133 in 2001. Insignia
expects the adoption of FAS 133 will not affect results of operations.

                                    Page 6
<PAGE>

In March 1998, the AICPA issued Statement of Position No. 98-1, "Accounting for
the Costs of Computer Software Developed or Obtained for Internal Use" ("SOP
98-1"). SOP 98-1 provides guidance on accounting for the costs of computer
software developed or obtained for internal use and is effective for financial
statements for fiscal years beginning after December 15, 1998. Insignia has
adopted SOP 98-1 in 1999. The adoption of SOP 98-1 did not have a material
impact on the results of operations.

NOTE 5.  COMPREHENSIVE INCOME (LOSS)

In 1998, Insignia adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income" ("FAS 130"). FAS 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. FAS 130 also requires that an entity classify
items of other comprehensive earnings by their nature in an annual financial
statement. The accumulated other comprehensive loss at June 30, 1999 and
December 31, 1998 related to cumulative currency translation adjustments.

Total comprehensive loss was not different from the net loss reported for the
six months ended June 30, 1999.

NOTE 6.  CONTINGENCIES

MICROSOFT

Insignia has a non-exclusive, worldwide license from Microsoft ("Microsoft
Distribution Agreement") to reproduce, adapt and distribute the currently
available versions of Windows and MS-DOS that are included as a component of
Insignia's SoftWindows products. Insignia pays Microsoft a per unit royalty for
copies of Insignia's products sold that include a version of Windows and MS-DOS.
The current royalty amounts are based upon certain estimates of the volume of
Insignia's sales of SoftWindows. The Microsoft Distribution Agreement expired on
March 31, 1997, but was extended until September 30, 1998 on substantially the
same terms. Insignia subsequently entered into a new distribution agreement
dated October 1, 1998 on substantially the same terms, effective for one year.

In January 1999, pursuant to this agreement, Microsoft began an audit of the
royalties paid in 1997 and 1998. Insignia has not been notified of the outcome
of the audit by Microsoft. If it is shown that the Company has made an
underpayment of royalties under this agreement, Insignia may be subject to
penalties in addition to the payment of the underpaid royalties.

CITRIX

In February 1998, Insignia disposed of its NTRIGUE technology for $17.687
million. A substantial portion of the total purchase price paid by the Buyer
("Citrix") was placed in escrow to secure Insignia's agreement to indemnify
Citrix with respect to certain matters.

On January 29, 1999, Insignia received an indemnity claim from Citrix for an
amount estimated by Citrix to not exceed $6.25 million. The claim was made
pursuant to the Asset Purchase Agreement between Insignia and Citrix under which
Citrix purchased Insignia's NTRIGUE product line in February 1998.

                                    Page 7
<PAGE>

Citrix' indemnity claim is based on a declaratory relief action that Citrix
filed against GraphOn Corporation ("GraphOn") in November 1998 in the United
States District Court, Southern District of Florida. Citrix' action against
GraphOn seeks a declaratory judgement that Citrix does not infringe any GraphOn
proprietary rights and that Citrix has not misappropriated any trade secrets or
breached an agreement to which GraphOn is a party. Citrix filed the action in
response to and to resolve assertions first made by GraphOn, and disclosed to
Citrix in January 1998, that Insignia used GraphOn's confidential information to
develop certain of Insignia's products, possibly including products Insignia
sold to Citrix in February 1998. The Court dismissed the complaint, but Citrix
has subsequently filed an appeal. GraphOn has not filed an action against either
Insignia or Citrix relating to its assertions and Insignia believes such
assertions by GraphOn are without merit or basis. Accordingly, Insignia
contests Citrix' indemnity claim.

NOTE 7.  SEGMENT INFORMATION

In 1998, Insignia adopted Statement of Financial Accounting Standards 131,
"Disclosures about Segments of an Enterprise and Related Information" ("FAS
131"). FAS 131 supersedes FAS 14, "Financial Reporting for Segments of a
Business Enterprise", replacing the "industry segment" approach with the
"management" approach. The management approach designates the internal
organization that is used by management for making operating decisions and
assessing performance as the source of Insignia's reportable segments. FAS 131
also requires disclosures about products and services, geographic areas, and
major customers. The adoption of FAS 131 did not affect results of operations
but did affect the disclosure of segment information.

Insignia operates in a single industry segment providing virtual machine
technology which enables software applications and operating systems to be
run on various computer platforms. In the second quarter of 1999, Ingram
Micro U.S. and Sun Microsystems, Inc. accounted for 14% and 21% of total
revenues, respectively. In the second quarter of 1998, Ingram Micro U.S. and
Sun Microsystems, Inc. accounted for 13% and 40% of total revenues,
respectively. No other customer accounted for 10% or more of Insignia's total
revenues during the second quarter of 1999 and 1998.

                                    Page 8
<PAGE>



GEOGRAPHIC INFORMATION

Financial information by geographical region is summarized below (in
thousands):

<TABLE>
<CAPTION>
                                                      Three months ended                   Six months ended
                                                           June 30,                            June 30,
                                                -------------------------------     -------------------------------
                                                    1999              1998             1999               1998
                                                -------------      ------------     ------------      -------------
<S>                                             <C>                <C>              <C>               <C>
Revenues from unaffiliated customers:
      United States                             $     1,273        $    1,307       $    3,354        $     5,973
      International                                     234             1,027              461              1,343
                                                -------------      ------------     ------------      -------------
Consolidated                                    $     1,507        $    2,334       $    3,815        $     7,316
                                                -------------      ------------     ------------      -------------
                                                -------------      ------------     ------------      -------------
Intercompany revenues:
      United States                             $       167        $       86       $      336        $       551
      International                                      51               450              162                990
                                                -------------      ------------     ------------      -------------
Consolidated                                    $       218        $      536       $      498        $     1,541
                                                -------------      ------------     ------------      -------------
                                                -------------      ------------     ------------      -------------
Operating loss:
      United States                             $      (710)       $   (2,665)      $   (1,794)       $    (3,201)
      International                                  (2,095)           (1,727)          (4,195)            (4,548)
                                                -------------      ------------     ------------      -------------
Consolidated                                    $    (2,805)       $   (4,392)      $   (5,989)       $    (7,749)
                                                -------------      ------------     ------------      -------------
                                                -------------      ------------     ------------      -------------
Identifiable assets:
      United States                                                                 $    2,243        $     7,774
      International                                                                     22,225             32,083
      Intercompany items and eliminations                                              (12,939)           (10,066)
                                                                                    ------------      -------------
Consolidated                                                                        $   11,529        $    29,791
                                                                                    ------------      -------------
                                                                                    ------------      -------------
</TABLE>


All of the international revenues and substantially all of the international
identifiable assets relate to Insignia's operations in the United Kingdom.
Intercompany sales are accounted for at prices intended to approximate those
that would be charged to unaffiliated customers.

                                     Page 9
<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
Insignia's Form 10-K for the year ended December 31, 1998 (the "Form 10-K").

FUTURE OPERATING RESULTS

This Form 10-Q contains forward looking statements. These forward looking
statements concern matters which include the revenue model and market for Jeode,
international sales, gross margins, operating expenses, the availability of
licenses to third-party proprietary rights, Year 2000 compliance, exchange rate
fluctuations and Insignia's liquidity and capital needs and other statements
regarding matters that are not historical. 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,
among the other factors that could cause actual results to differ materially are
the following: the demand for Jeode; the performance and functionality of Jeode;
Insignia's ability to deliver on time, and market acceptance of new products or
upgrades of existing products; the timing of, or delay in, large customer
orders; continued availability of technology and intellectual property license
rights; product life cycles; quality control of products sold; competitive
conditions in the industry; economic conditions generally or in various
geographic areas; and the risks listed from time to time in the reports that
Insignia files with the U.S. Securities and Exchange Commission.

Insignia's future performance depends upon sales of products within Insignia's
Jeode product line, which is a new product. Jeode became available for sale in
March 1999. Jeode may not achieve or sustain market acceptance or provide the
desired revenue levels. The failure of the Jeode product to provide an adequate
level of performance and functionality, or the lack of market acceptance of this
product for any reason, would harm Insignia's business, financial condition and
results of operations. If the Jeode product is successful and developed on a
timely basis, Insignia will be required to further develop direct sales channels
in the embedded systems market and to hire and train more direct sales
personnel. Competition for qualified sales personnel is intense and Insignia may
not be able to attract the personnel needed to market and sell products in the
embedded systems market. Insignia anticipates increased operating expenses as it
develops the organization to market, sell and support the product, before any
revenue is recognized from sales of the product. Insignia may not experience
growth in revenues in any particular period when compared to prior periods. Any
quarterly or annual shortfall in net revenues in relation to expectations would
harm Insignia's business, operating results and financial condition. Insignia
may not be able to achieve or sustain profitability. If Insignia's revenues grow
more slowly than anticipated, or if Insignia's operating expenses exceed
expectations and cannot be adjusted, Insignia's operating losses would continue
or increase. In future periods, Insignia's operating results may fall below the
levels expected by securities analysts and shareholders, which would result in a
substantial decline in the trading price of Insignia's shares and could have an
adverse effect on the liquidity of Insignia's shares.

Insignia's Annual Report on Form 10-K for 1998 includes an analysis of certain
risks of Insignia's business, including risks which are inherent to software
development, as well as

                                     Page 10
<PAGE>

specific risks relating to the competitive environment in which Insignia
operates. Although Insignia has sought to identify the most significant risks
to its business, Insignia cannot predict whether, or to what extent any such
risks may be realized. Also, Insignia may not have identified all possible
issues which Insignia might face. Potential risks and uncertainties include,
without limitation, those mentioned in Insignia's Form 10-K; and in
particular the continued acceptance by the marketplace of Insignia's products
and Insignia's ability to successfully develop new products in the future.
Investors should carefully read Insignia's filings with the Securities and
Exchange Commission, together with this Form 10-Q, and consider all trends
and uncertainties concerning Insignia's business before making an investment
decision with respect to Insignia's stock.

The following table sets forth the unaudited condensed consolidated results of
operations as a percentage of total revenues for the three and six month periods
ended June 30, 1999 and 1998.

<TABLE>
<CAPTION>
                                                          Three months ended                     Six months ended
                                                               June 30,                               June 30,
                                                 -------------------------------------  ------------------------------------
                                                       1999                1998              1999                1998
                                                 -----------------   -----------------  ----------------   -----------------
<S>                                             <C>                 <C>                <C>                <C>
Net revenues:
          License                                        94.1%               87.3%              94.3%               92.9%
          Service                                         5.9%               12.7%               5.7%                7.1%
                                                 -----------------   -----------------  ----------------   -----------------
            Total net revenues                          100.0%              100.0%             100.0%              100.0%
                                                 -----------------   -----------------  ----------------   -----------------
Cost of net revenues:
          License                                        54.6%               71.8%              50.2%               56.8%
          Service                                         8.6%               10.6%               8.1%                9.4%
                                                 -----------------   -----------------  ----------------   -----------------
            Total cost of net revenues                   63.2%               82.4%              58.3%               66.2%
                                                 -----------------   -----------------  ----------------   -----------------
            Gross profit                                 36.8%               17.6%              41.7%               33.8%
                                                 -----------------   -----------------  ----------------   -----------------
Operating expenses:
          Sales and marketing                            95.0%               87.3%              80.2%               62.9%
          Research and development                       93.1%               72.4%              79.1%               43.5%
          General and administrative                     34.8%               46.0%              39.4%               33.3%
                                                 -----------------   -----------------  ----------------   -----------------
           Total operating expenses                     222.9%              205.7%             198.7%              139.7%
                                                 -----------------   -----------------  ----------------   -----------------
           Operating loss                              (186.1%)            (188.1%)           (157.0%)            (105.9)%
Interest income, net                                      6.7%               15.3%               6.7%                7.0%
Other income (expense), net                              (0.2%)               1.7%              (1.3%)             202.7%
                                                 -----------------   -----------------  ----------------   -----------------
            Income (loss) before income taxes          (179.6%)            (171.1%)           (151.6%)             103.8%
Provision (benefit) for income taxes                      0.3%              (13.6%)              1.1%               49.7%
                                                 -----------------   -----------------  ----------------   -----------------
            Net income (loss)                          (179.9%)            (157.5%)           (152.7%)              54.1%
                                                 -----------------   -----------------  ----------------   -----------------
                                                 -----------------   -----------------  ----------------   -----------------
</TABLE>

                                     Page 11
<PAGE>

OVERVIEW

Insignia, which commenced operations in 1986, develops, markets and supports
virtual machine technology which enables software applications and operating
systems to be run on various computer platforms.

Insignia's principal product line in recent years has been SoftWindows-TM-.
This product enables Microsoft Windows ("Windows"-Registered Trademark-)
applications to be run on most Apple Computer Inc. ("Apple"-Registered
Trademark-) Macintosh computers and many UNIX workstations. Revenues from
this product line have been declining since 1995 as a result of two factors.
One factor is the declining Macintosh market. The other factor is increased
competition which has led to reduced prices and margins. In late 1997,
Insignia began a strategic review of its business and explored new markets
that would leverage Insignia's 10 years of emulation software development
experience.

In January 1998, Insignia announced its intention to launch a new product
line. This product line, called Jeode-TM-, is based on Insignia's Embedded
Virtual Machine ("EVM"-TM-) technology. Jeode is Insignia's implementation of
Sun Microsystems, Inc.'s ("Sun") Java-Registered Trademark- technology
developed specifically for embedded systems. The Jeode platform is enabled by
Insignia's EVM and is designed to enable software developers to create
reliable, efficient and predictable embedded products. The product became
available for sale in March 1999 and is expected to be the principal product
line in 1999 and the foreseeable future. Insignia expects its Jeode product
line to generate revenue in 1999. Revenue from the Jeode product line will
initially be derived from three main sources: the sale of a development
license, the sale of annual maintenance and support, and a commercial use
royalty based on shipments of products that include Jeode technology.

Between December 1995 and May 1998, Insignia shipped NTRIGUE-TM-, a Windows
compatibility client/server product that supported multiple X-terminals,
workstation clients, Macintosh computers, PCs, network computers and Net PCs
from a Windows NT-based server. Insignia disposed of its NTRIGUE technology in
February 1998 for $17.687 million.

In the second quarter of 1999, Insignia shipped two product lines: SoftWindows
and Jeode. Insignia derived its revenue from the shipment of products and from
offering support services. The majority of revenues were derived from the
shipment of SoftWindows products.

REVENUES

<TABLE>
<CAPTION>
                                                       Three months ended                     Six months ended
                                                            June 30,                              June 30,
                                                ----------------------------------     -------------------------------
                                                    1999                1998               1999              1998
                                                --------------     ---------------     -------------      ------------
                                                                            (in thousands)
<S>                                             <C>               <C>                 <C>                <C>
License revenue                                 $       1,418      $        2,038      $      3,598       $     6,798
Service revenue                                            89                 296               217               518
                                                --------------     ---------------     -------------      ------------
Total net revenue                               $       1,507      $        2,334      $      3,815       $     7,316
                                                --------------     ---------------     -------------      ------------
                                                --------------     ---------------     -------------      ------------
</TABLE>

Insignia derives its SoftWindows revenues from the sale of packaged software
products 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

                                     Page 12
<PAGE>

engineering activities, training, and annual maintenance contracts are
classified as service revenue.

In the second quarter of 1999, total revenues declined by 35% compared to total
revenues for the second quarter of 1998. In the six months ended June 30, 1999,
total revenues declined by 48% compared to revenues for the first six months of
1998. The decline is primarily due to reduced demand for cross-compatibility
solutions and the sale of Insignia's NTRIGUE business.

License revenues in the three months ended June 30, 1999 were 94% of total
revenues. License revenues in the three months ended June 30, 1998 were 87% of
total revenues. In the six months ended June 30, 1999 license revenues were 94%
of total revenues. In the six months ended June 30, 1998, license revenues were
93% of total revenues. In the second quarter of 1999, license revenues declined
30% compared to license revenues in the second quarter of 1998. For the six
months ended June 30, 1999, license revenue declined 47% compared to the same
period in 1998.

Service revenue in the second quarter of 1999 was 70% lower than service revenue
in the second quarter of 1998. Service revenue for the six months ended June 30,
1999 was 58% lower than service revenue for the same period in 1998, primarily
as a result of a decreased number of UNIX support contracts resulting from lower
sales of UNIX products.

Sales of Macintosh-based products in the second quarter of 1999 increased by 31%
compared to sales in the second quarter of 1998, but decreased by 38% compared
to the first quarter of 1999. In the second quarter of 1998, Macintosh-based
sales decreased due to the impending release of a new version of the product in
the third quarter of 1998. For the six months ended June 30, 1999, sales of
Macintosh-based products decreased 34% compared to the same period in 1998.
Revenue from the sale of Insignia's products for Macintosh computers accounted
for 59% of total revenues in the three months ended June 30, 1999 and 29% of
total revenues in the three months ended June 30, 1998. Revenue from the sale of
Insignia's products for Macintosh computers accounted for 61% of total revenues
in the six months ended June 30, 1999 and 48% of total revenues in the six
months ended June 30, 1998.

Revenues from the sale of Insignia's products for UNIX computers accounted for
41% of total revenues in the three months ended June 30, 1999 and 69% of total
revenues in the three months ended June 30, 1998. Revenues from the sale of
Insignia's products for UNIX computers accounted for 39% of total revenues in
the six months ended June 30, 1999 and 42% of total revenues in the six months
ended June 30, 1998. In the second quarter of 1999, sales of UNIX-based products
decreased by 62% compared to sales in the second quarter of 1998. For the six
months ended June 30, 1999, UNIX sales decreased by 52% compared to the same
period in 1998.

Jeode service revenue accounted for less than one percent of revenue for the
three months ended June 30, 1999. There was no Jeode revenue in any previous
quarters.

In the three months ended June 30, 1998, revenue from the sale of NTRIGUE
products accounted for 4% of total revenues. In the six months ended June 30,
1998, revenue from the sale of NTRIGUE products accounted for 10% of total
revenues. There was no NTRIGUE revenue in 1999 as Insignia's NTRIGUE product
line was sold in early 1998.

                                     Page 13
<PAGE>

Insignia distributes its packaged products within the United States and
internationally through multiple distributors and resellers. Insignia offers
certain return privileges to its customers including product exchange privileges
and price protection. Insignia recognizes revenues from packaged products upon
shipment with provisions for estimated future returns, exchanges and price
protection being recorded as a reduction of total revenues.

The Company is establishing a specialized direct sales force to sell the Jeode
product line. The Jeode product line revenue model is based on original
equipment manufacturers ("OEMs") customer transactions. Revenue from the Jeode
product is expected to be derived from three main sources: the sale of a
development license, the sales of annual maintenance and support, and a
commercial use royalty based on shipments of products that include Jeode
technology.

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

<TABLE>
<CAPTION>
                                                   Three months ended                  Six months ended
                                                        June 30,                           June 30,
                                              ------------------------------    -------------------------------
                                                  1999             1998             1999             1998
                                              -------------    -------------    -------------    --------------
<S>                                           <C>              <C>              <C>              <C>
Distributors:
   Software House International                          *                *              14%                *
   Sun Microsystems                                    21%              40%              10%              24%
   Mitsubishi                                            *                *              10%                *
   Ingram Micro                                        14%              13%                *              21%

 All Distributors:                                     73%              81%              54%              69%
* Less than 10%
</TABLE>

Sales to customers outside the United States, derived mainly from customers in
Europe and Asia, represented approximately 16% of total revenues in the three
months ended June 30, 1999 and 49% of total revenues in the three months ended
June 30, 1998, and 22% of total revenues in the six months ended June 30, 1999
and 21% of total revenues in the six months ended June 30, 1998. Movements in
currency exchange rates did not have a material impact on total revenues in the
three or six months ended June 30, 1999. However, movements in currency exchange
rates could affect Insignia's future revenues and results of operations.

COST OF REVENUES AND GROSS MARGIN

<TABLE>
<CAPTION>
                                                   Three months ended                  Six months ended
                                                        June 30,                           June 30,
                                              ------------------------------    -------------------------------
                                                  1999             1998             1999             1998
                                              -------------    -------------    -------------    --------------
                                                            (in thousands, except percentages)
<S>                                           <C>              <C>              <C>              <C>
 Cost of license revenue                      $        822     $      1,676     $      1,915     $       4,154
 Gross margin: license revenue                         42%              18%              47%               39%

 Cost of service revenue                               130              248              308               689
 Gross margin: service revenue                        (46%)             16%             (42%)             (33%)

 Total cost of revenues                       $        952     $      1,924     $      2,223     $       4,843
 Gross margins: total revenues                         37%              18%              42%               34%
</TABLE>

                                     Page 14
<PAGE>

Cost of license revenue comprises mostly royalties to third parties, along with
the 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.

Insignia's distribution agreement with Microsoft Corporation expired on March
31, 1997, but was extended until September 30, 1998 on substantially the same
terms. Insignia subsequently entered into a new distribution agreement dated
October 1, 1998 on substantially the same terms, effective for one year.
Termination or expiration without renewal of the Microsoft Distribution
Agreement would result in the inability of Insignia to sell its SoftWindows
products. However, since 1995, revenues and margins from SoftWindows have been
declining, primarily as a result of competitive pricing pressure. Revenues and
margins on the SoftWindows product line are at a level where Insignia's future
can no longer depend on them.

Insignia believes that the significant factors affecting the Jeode gross margin
will include pricing of the development license, pricing of the unit usage and
royalties to third parties such as Sun Microsystems. In early 1999, Insignia
signed a five-year agreement with Sun Microsystems under which Sun established
Insignia as an authorized Virtual Machine provider. Under this agreement
Insignia will pay Sun a per unit royalty on each Jeode-enabled embedded product
shipped by Insignia's customers, plus a royalty on all development licenses put
in place between Insignia and its customers.

Insignia's gross margin for license revenue is significantly affected by many
factors, including pricing of Insignia's products, royalties paid to third
parties, the mix of products licensed, the channels through which Insignia's
products are distributed and product maturity. Insignia's gross margin for
license revenue can also be affected in particular periods by pricing strategies
and return privileges employed in connection with new product introductions and
upgrades. License revenue gross margins in the quarter ended June 30, 1999 were
42%, compared to 18% for the same period in 1998. The prior year quarterly gross
margin was low due to increased returns on the NTRIGUE product line. For the six
months ended June 30, 1999, license revenue gross margins were 47%, compared to
39% for the same period in 1998.

Gross margin for service revenue decreased in the second quarter of 1999 to
(46%) from 16% in the same period of 1998, and decreased for the six months
ending June 30, 1999 to (42%) from (33%) in the same period of 1998. The decline
is a result of the decreased UNIX service revenue.

Service revenue gross margins for 1999 are expected to increase due to the
required maintenance and upgrade contracts for each Jeode product sale.

                                     Page 15
<PAGE>


OPERATING EXPENSES

<TABLE>
<CAPTION>
                                                   Three months ended                  Six months ended
                                                        June 30,                           June 30,
                                              ------------------------------    -------------------------------
                                                  1999             1998             1999             1998
                                              -------------    -------------    -------------    --------------
                                                            (in thousands, except percentages)
<S>                                           <C>              <C>              <C>              <C>
 Sales and marketing                          $      1,432     $      2,038     $      3,060     $       4,601
 Percentage of total revenues                          95%              87%              80%               63%

 Research and development                     $      1,403     $      1,690     $      3,018     $       3,186
 Percentage of total revenues                          93%              72%              79%               44%

 General and administrative                   $        525     $      1,074     $      1,503     $       2,435
 Percentage of total revenues                          35%              46%              39%               33%
</TABLE>

Sales and marketing expenses include advertising and promotional expenses, trade
shows, personnel and related overhead costs, and salesperson commissions. Sales
and marketing expenses decreased by 30% in the quarter ended June 30, 1999 from
the quarter ended June 30, 1998, and by 33% for the six months ended June 30,
1999 from the same period of 1998. The decrease is due to reduced spending on
advertising programs and staffing. Insignia anticipates sales and marketing
expenses to increase in the second half of 1999 as Insignia continues to ramp up
its marketing and direct sales organization for its Jeode product line.

Research and development expenses consist primarily of personnel costs, overhead
costs relating to occupancy and equipment depreciation. Research and development
expenses decreased by 17% in the three months ended June 30, 1999 over the same
period in 1998. The second quarter 1998 research and development expenses
included a one-time cost for technology purchased and expensed. Excluding this
one-time expense, the second quarter of 1999 increased 7% over the same period
in 1998. Research and development expenses decreased by 5% in the six months
ended June 30, 1999 over the six months ended June 30, 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 1999 and 1998, no development
expenditures 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 51% in the three
months ended June 30, 1999 over the same period of 1998 as a result of reducing
a large reserve for a debt that has now been collected. Excluding the impact of
the reserve adjustment, general and administrative expenses decreased by 11% in
the three months ended June 30, 1999 over the same period of 1998, and by 20%
for the six months ended June 30, 1999 over the same period of 1998. The decline
is due to reduced headcount and reduced legal fees.

                                     Page 16
<PAGE>

INTEREST INCOME, NET

<TABLE>
<CAPTION>
                                                   Three months ended                  Six months ended
                                                        June 30,                           June 30,
                                              ------------------------------    -------------------------------
                                                  1999             1998             1999             1998
                                              -------------    -------------    -------------    --------------
                                                            (in thousands, except percentages)
<S>                                           <C>              <C>              <C>              <C>
 Interest income, net                         $        101     $        358     $        256     $         509
 Percentage of total revenues                           7%              15%               7%                7%
</TABLE>

Interest income, net decreased from $358,000 in the three months ended June 30,
1998 to $101,000 in the three months ended June 30, 1999 due primarily to
decreased interest income earned on Insignia's cash and cash equivalents. For
the six months ended June 30, 1999, interest income, net decreased from $509,000
to $256,000.

OTHER INCOME (EXPENSE), NET

<TABLE>
<CAPTION>
                                                   Three months ended                  Six months ended
                                                        June 30,                           June 30,
                                              ------------------------------    -------------------------------
                                                  1999             1998             1999             1998
                                              -------------    -------------    -------------    --------------
                                                            (in thousands, except percentages)
<S>                                          <C>              <C>              <C>              <C>
 Other income (expense), net                  $        (3)     $         40     $       (50)     $      14,831
 Percentage of total revenues                           -%               2%             (1%)              203%
</TABLE>

Other income (expense), net decreased from income of $40,000 in the three months
ended June 30, 1998 to an expense of $3,000 in the three months ended June 30,
1999, and primarily comprised foreign exchange gains (losses) in both periods.
In the six months ended June 30, 1999, other income (expense), net decreased
from income of $14.831 million, for the same period last year, to an expense of
$50,000. The income in the first six months of 1998 was a result of the gain on
disposal of the NTRIGUE product line of $14.731 million in the first quarter of
1998. This gain comprised gross disposal proceeds of $17.687 million less $2.956
million of transaction expenses, employment terminations and costs and losses
related to the property and equipment sold or written down in value.

In the six months ended June 30, 1999, Insignia realized a foreign exchange loss
of $50,000 compared to a gain of $100,000 in the six months ended June 30, 1998.

Approximately 85% of Insignia's total revenues and over 40% of its operating
expenses are denominated in United States dollars. Most of the remaining
revenues and expenses of Insignia are pound sterling denominated and
consequently Insignia is exposed to fluctuations in pound sterling exchange
rates. To hedge against this currency exposure, Insignia 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 June 30,
1999 and December 31, 1998. However, currency fluctuations could harm Insignia's
results of operations in the future.

                                     Page 17
<PAGE>

Insignia has, at times, 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 interest rate risk and will fall in
value if market interest rates increase. Insignia attempts to limit this
exposure by investing primarily in short-term securities.

PROVISION FOR INCOME TAXES

<TABLE>
<CAPTION>
                                                   Three months ended                  Six months ended
                                                        June 30,                           June 30,
                                              ------------------------------    -------------------------------
                                                  1999             1998             1999             1998
                                              -------------    -------------    -------------    --------------
                                                                      (in thousands)
<S>                                          <C>              <C>              <C>              <C>
 Provision (benefit) for income               $          4      $      (317)    $         44     $       3,636
     taxes
 Effective income tax rate                               -                -                -                 -
</TABLE>

Insignia's provision for income taxes for the three and six months ended June
30, 1999 primarily represents certain non-U.S. taxes arising from sales to
Japan. Insignia's benefit for income taxes for the three months ended June 30,
1998 primarily represent a refund from the prior year tax return. The six months
ended June 30, 1998 primarily represent a tax provision in 1998 reflecting
certain non-U.S. taxes arising upon the disposal of the Company's NTRIGUE
product line, net of offsetting operating losses. Insignia has recorded a full
valuation allowance against all deferred tax assets, primarily comprising net
operating losses, on the basis that significant uncertainty exists with respect
to realization.

LIQUIDITY AND CAPITAL RESOURCES

<TABLE>
<CAPTION>
                                                   June 30,        December 31,
                                                     1999              1998
                                                ---------------  ------------------
                                                           (in thousands)
<S>                                            <C>               <C>
 Cash, cash equivalents and                     $      1,546       $       7,234
     investments
 Cash and cash equivalents                      $      6,770       $       9,100
     held in escrow
 Working capital                                $      4,375       $       9,712
Net cash used in operating                      $     (8,063)      $     (13,687)
     activities
</TABLE>

Insignia is in the process of transitioning its product focus from compatibility
products to its Jeode product line based on Insignia's EVM technology. This
change in product focus has resulted in a redirection of available resources
from Insignia's historical revenue base towards the development and marketing
efforts associated with the Jeode platform, which was not released for general
availability until March 1999. As a result of this change in product strategy
and associated redirection of resources to new product development, Insignia's
financial position weakened during the first half of 1999.

Insignia's cash, cash equivalents and short-term investments, including cash and
cash equivalents of $6.77 million held in escrow, were $8.3 million at June 30,
1999, a decrease of $8.0 million from $16.3 million at December 31, 1998, while
working capital decreased to $4.4 million at

                                     Page 18
<PAGE>

June 30, 1999, from $9.7 million at December 31, 1998. The principal source
of cash funding came from receivable collections and NTRIGUE product line
sales proceeds released from escrow.

Insignia continues to face significant risks associated with the successful
execution of its new product strategy. These risks include, but are not limited
to continued technology and product development, introduction and market
acceptance of new products, changes in the marketplace, liquidity, competition
from existing and new competitors which may enter the marketplace and retention
of key personnel. Due to the generally longer sales cycles expected to be
associated with the Jeode platform, Insignia does not currently have accurate
visibility of future order rates and demand for its products generally. Jeode
platform products may never achieve market acceptance.

Insignia believes that additional financing will be necessary before December
31, 1999, as its existing cash and cash equivalents are insufficient to meet
Insignia's operating and capital requirements for the next six months. Insignia
is currently considering various financing alternatives. Insignia may not be
able to obtain adequate funding when needed, on acceptable terms or at all. The
failure to raise additional funds on a timely basis and on sufficiently
favorable terms would jeopardize Insignia's business.

Insignia's liquidity may be reduced in the future by factors such as higher
interest rates, inability to borrow without collateral, availability of capital
financing and continued operating losses. Further, significant fluctuations in
quarterly operating results has had and, in the future, may continue to have a
negative affect on Insignia's liquidity. Factors such as price reductions, the
introduction and market acceptance of new products and product returns have
contributed to this quarterly variability. Moreover, Insignia's expense levels
are based in part on expectations of future sales levels, and a shortfall in
expected sales could therefore result in a disproportionate decrease in results
of operations. As such, the revenues or results of operations in some future
period may be below the expectations of investors, which would likely result in
a significant reduction in the market price of Insignia's shares. A decline in
the market price of Insignia's shares would have a negative effect on Insignia's
ability to raise needed capital on acceptable terms and conditions.

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, embedded 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.

Insignia's assessment of the impact of this issue has encompassed 1) software
held for resale; 2) internally utilized systems; 3) computerized information and
software provided by third parties which might be integral to customer usage of
Insignia's products; 4) compliance issues related entirely to the state of
readiness by customers and vendors and 5) Year 2000 cost. Set forth below is the
status of each review and the estimated impact, to the extent management can
determine at this time.

                                     Page 19
<PAGE>

SOFTWARE HELD FOR RESALE

Based on Insignia's assessment to date, Insignia believes that all versions of
Jeode, SoftWindows 98 products, SoftWindows95 products, RealPC and NTRIGUE, a
product Insignia no longer ships, are Year 2000 compliant. Earlier versions of
SoftWindows and all versions of Soft PC, a product Insignia 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 Insignia's
customers will install the Year 2000 compliant version of Insignia's products in
a timely manner, which could lead to failure of customer systems and product
liability claims against Insignia. Even if Insignia's products are Year 2000
compliant, Insignia may in the future be subject to claims based on Year 2000
issues in the products of other companies, or 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 Insignia for Year
2000 damages, including consequential damages, could harm Insignia's business,
financial condition and results of operations.

INTERNAL SYSTEMS

Insignia has carried out an assessment of its own internal systems and
believes that they are all Year 2000 compliant.

THIRD-PARTY SYSTEMS

Insignia has reviewed its material third-party relationships such as key
suppliers and distributors. Insignia believes all computerized information and
software provided by third parties that might be integral to customer usage of
Insignia's products is Year 2000 compliant.

Although Insignia believes that its internal critical processes are Year 2000
ready, Insignia also recognizes that it is vulnerable, as are most
organizations, to the inability of third-party external interface suppliers and
utility organizations to achieve Year 2000 readiness. The most reasonable worst
case scenario could include failure of power and water supplies, major
transportation disruptions, and failures of communications and financial systems
- any one of which could have a major and material effect on Insignia's ability
to produce its products and deliver services to its customers. While Insignia
has contingency plans in place to address most issues under its control, a
problem outside its control could result in a delay in product shipments
depending on the nature and severity of the problems.

CUSTOMERS AND VENDORS

Insignia'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 Insignia's customers
because of the failure of such noncompliant systems or software or for any other
reason, could also affect the perceived performance of Insignia's products,
which could have a negative effect on Insignia's competitive position. In
addition, Insignia 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 Insignia, which could
result in a material adverse effect on Insignia's business, financial condition
and results of operations.

                                     Page 20
<PAGE>

YEAR 2000 COST

The total cost associated with preparation for the Year 2000 has not been, and
is not expected to be, material to Insignia's business, financial condition or
results of operations. Nevertheless, Insignia 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 Insignia or its customers or suppliers will not have a
material adverse effect on Insignia's business, financial condition and results
of operations.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Insignia enters into derivative financial instruments such as currency option
contracts to hedge certain anticipated, but not yet committed, transactions
expected to be denominated in foreign currencies. Insignia does not use
derivative financial instruments for trading or speculative purposes. Insignia's
downside risk with respect to currency option contracts (British pounds) is
limited to the premium paid for the right to exercise the option. Premiums paid
for options outstanding as of June 30, 1999 were not material.

                                     Page 21
<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 May 27, 1999. 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. Albert E. Sisto was re-elected and Vincent
     S. Pino was elected as Directors at the meeting. The Directors whose term
     of office continues after the meeting are Nicholas, Viscount Bearsted and
     Richard M. Noling.

(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:

2. To re-appoint PricewaterhouseCoopers 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
3,359,950         1,950

3. To elect as a Director Vincent S. Pino.

FOR               AGAINST
3,213,847         144,261

4. To re-elect as a Director Albert E. Sisto.

FOR               AGAINST
3,208,408         147,100

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

FOR               AGAINST
2,838,659         519,469

6. To approve a resolution to amend the Company's UK Employee Share Option
Scheme 1996.

FOR               AGAINST
2,836,639         520,269

7. To approve a resolution to amend the Company's 1995 Incentive Stock Option
Plan for US Employees.

FOR               AGAINST
2,838,789         519,919

8. To approve a resolution to grant authority to the Directors to allot
relevant securities for a period of five years without further shareholder
approval.

FOR               AGAINST
2,788,021         564,997

                                     Page 22
<PAGE>

9. To approve a resolution to grant authority to the Directors to allot equity
securities for a period of five years without first offering such securities to
existing shareholders.

FOR               AGAINST
2,791,871         562,147

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

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

Exhibit 10.47     Registrant's 1995 Employee Share Purchase Plan, as amended

Exhibit 10.48     Registrant's U.K. Employee Share Option Scheme 1996, as
                  amended

Exhibit 10.49     Registrant's 1995 Incentive Stock Option Plan for U.S.
                  Employees, as amended

Exhibit 11.1      Statement Regarding Computation of Earnings (Loss) Per Share

Exhibit 27.1      Financial Data Schedule

(b) Reports on Form 8-K

None




                                     Page 23
<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: August ___, 1999

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


                                     Page 24
<PAGE>

                                 INDEX TO EXHIBITS

<TABLE>
<CAPTION>

EXHIBIT                                                                                 PAGE
NUMBER                EXHIBIT TITLE                                                   NUMBER
---------------------------------------------------------------------------------------------
<S>                   <C>                                                             <C>

Exhibit 10.47         Registrant's 1995 Employee Share Purchase Plan, as amended

Exhibit 10.48         Registrant's U.K. Employee Share Option Scheme 1996, as
                      amended

Exhibit 10.49         Registrant's 1995 Incentive Stock Option Plan for U.S.
                      Employees, as amended


Exhibit 11.1          Statement Regarding Computation of Earnings (Loss) Per Share

Exhibit 27.1          Financial Data Schedule

</TABLE>


                                     Page 25