================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-QSB

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


            FOR THE QUARTER ENDED                COMMISSION FILE NUMBER
                JUNE 30, 2004                           0-12969

                         TOUCHSTONE SOFTWARE CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


                DELAWARE                                    95-3778226
   (STATE OR OTHER JURISDICTION                         (I.R.S. EMPLOYER
 OF INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NO.)


        1538 TURNPIKE ST., NORTH ANDOVER, MASSACHUSETTS        01845
           (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)         (ZIP CODE)


                                 (978) 686-6468
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

                                      NONE
                     (FORMER NAME, FORMER ADDRESS AND FORMER
                   FISCAL YEAR, IF CHANGED SINCE LAST REPORT)


     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 past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                 Yes [X] No [ ]

     The number of shares of Common Stock of the Registrant outstanding as of
August 11, 2004 was 11,440,060 shares.
================================================================================
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                                      INDEX
                                                                           PAGE
                                                                          NUMBER
PART I.    FINANCIAL INFORMATION

ITEM 1.    Financial Statements
           Consolidated Balance Sheet -- June 30, 2004                       3
           Consolidated Income Statements -- Three Months Ended
             June 30, 2004 and June 30, 2003 and Six Months Ended
             June 30, 2004 and June 30, 2003
           Consolidated Statements of Cash Flows -- Six Months
             Ended June 30, 2004 And June 30, 2003                           5
           Notes to Consolidated Financial Statements                       6-8

ITEM 2.    Management's Discussion and Analysis of Financial
             Condition and Results of Operations                           9-12

ITEM 3.    Controls and Procedures                                          12

PART II.   OTHER INFORMATION

ITEM 1.    Legal Proceedings                                                13
ITEM 2.    Changes in Securities                                            13
ITEM 3.    Defaults Upon Senior Securities                                  13
ITEM 4.    Submission of Matter To a Vote of Security Holders               13
ITEM 5.    Other Information                                                13

ITEM 6.    Exhibits and Reports on Form 8-K                                 13

Signatures                                                                  14
Exhibits                                                                  15-17







                                        2
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                         PART I - FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS
                           CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2004
                                   (UNAUDITED)


ASSETS
Current assets:
       Cash and cash equivalents                                  $     334,611
       Accounts receivable, net                                          15,683
       Inventories                                                       24,224
       Prepaid expenses and other current assets                         24,862
                                                                  -------------
              Total current assets                                      399,380

Note receivable, related party                                           96,676
Investments, other                                                      147,727
Property, and equipment, net                                              6,618
                                                                  -------------
                                                                  $     650,401
                                                                  =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
       Accounts payable                                           $      37,821
       Accrued payroll and related expenses                              69,932
       Other accrued expenses                                            77,315
                                                                  -------------
              Total current liabilities                                 185,068
                                                                  -------------

Shareholders' equity:
       Preferred stock, $.001 par value, 3,000,000 shares
          authorized, none issued or outstanding
       Common stock, $.001 par value, 20,000,000 shares
          authorized, issued and outstanding, 11,440,060 shares          11,440
       Additional paid-in capital                                    20,979,684
       Deferred compensation                                            (42,184)
       Accumulated deficit                                          (20,483,607)
                                                                  -------------
             Shareholders' equity, net                                  465,333
                                                                  -------------
                                                                  $     650,401
                                                                  =============


The accompanying notes are an integral part of these consolidated financial
statements.

                                        3
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                         CONSOLIDATED INCOME STATEMENTS
                                   (UNAUDITED)
<TABLE><CAPTION>

                                                                THREE MONTHS ENDED                      SIX MONTHS ENDED
                                                                     JUNE 30,                               JUNE 30,
                                                             2004               2003                 2004               2003
                                                         ------------       ------------         ------------       ------------
<S>                                                      <C>                <C>                  <C>                <C>
Revenues:
     Product sales                                       $    345,450       $    305,271         $    823,773       $    737,913
     Royalty income                                            11,949             31,207               25,958             78,659
                                                         ------------       ------------         ------------       ------------
        Total revenues                                        357,399            336,478              849,731            816,572
Cost of revenues                                               42,274             44,217              115,728            100,263
                                                         ------------       ------------         ------------       ------------
        Gross profit                                          315,125            292,261              734,003            716,309
                                                         ------------       ------------         ------------       ------------

Operating expenses:
     Sales, marketing, general and administrative             229,922            199,032              485,118            412,429
     Research and development                                 128,668            129,215              260,298            295,288
                                                         ------------       ------------         ------------       ------------
         Total operating expenses                             358,590            328,247              745,416            707,717
                                                         ------------       ------------         ------------       ------------
Income (loss) from operations                                 (43,465)           (35,986)             (11,413)             8,592
Gain on sale of investment                                       --               13,200                 --               13,200
Other income, net                                               2,770             53,031                5,574             54,070
                                                         ------------       ------------         ------------       ------------
Income (loss) before provision for income taxes               (40,695)            30,245               (5,839)            75,862
Provision for income taxes taxes                                 --                 --                   --                 --
Net income (loss)                                        $    (40,695)      $     30,245         $     (5,839)      $     75,862
                                                         ============       ============         ============       ============

Basic earnings  (loss) per share                         $      (0.00)      $       0.00         $      (0.00)      $       0.01
                                                         ============       ============         ============       ============

Basic weighted average shares outstanding                  11,440,060         11,440,060           11,040,060         11,440,060
                                                         ============       ============         ============       ============

Diluted  earnings (loss) per share                       $      (0.00)      $       0.00         $      (0.00)      $       0.01
                                                         ============       ============         ============       ============

Diluted weighted average shares outstanding                12,201,010         12,301,010           12,201,010         12,301,010
                                                         ============       ============         ============       ============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements

                                        4
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE><CAPTION>

                                                                            SIX MONTHS ENDED
                                                                                JUNE 30,

                                                                        2004               2003
                                                                     ----------         ----------
<S>                                                                  <C>                <C>
Cash flows from operating activities:
       Net Income (loss)                                             $   (5,839)        $   75,862
       Adjustments to reconcile net income (loss) to net cash
         provided by (used in) operating activities:
              Depreciation                                                3,411              7,322
              Amortization of deferred compensation                        --                  900
                 Gain on sale of investment                                --              (13,200)
                 Deferred income taxes                                     --               (7,370)
                Changes in assets and liabilities:
              Accounts receivable                                        (2,517)            (9,488)
              Inventories                                                (2,447)              (498)
              Prepaid expenses and other current assets                  (2,700)            (7,315)
              Accounts payable                                          (13,221)          (201,834)
                Accrued liabilities                                      12,219              29236
                                                                     ----------         ----------
                 Net cash used in operating activities                  (11,094)          (126,385)
                                                                     ----------         ----------

Cash flows from investing activities:
        Proceeds from the sale of investment                               --              420,000
       Collection of notes receivable - related party                        32                 30
                                                                     ----------         ----------
                 Net cash provided by investing activities                   32            420,030
                                                                     ----------         ----------

Cash flows from financing activities:
       Payment on long-term debt

                                                                        (10,660)           (15,137)
                                                                     ----------         ----------
                    Net cash used in financing activities               (10,660)           (15,137)
                                                                     ----------         ----------

Net increase (decrease) in cash and cash equivalents                    (21,722)           278,507
Cash and cash equivalents, beginning of period                          356,333             72,426
                                                                     ----------         ----------
Cash and cash equivalents, end of period                             $  334,611         $  350,933
                                                                     ----------         ----------

Supplemental disclosure of cash flow information:
       Cash paid during the period for:
                 Interest                                            $      209         $    1,932
                                                                     ----------         ----------
                 Income taxes                                        $     --           $     --
                                                                     ----------         ----------
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                        5
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS. TouchStone Software Corporation and subsidiaries
("TouchStone" or the "Company") markets, and supports a line of computer
problem-solving utility software and supporting products and engineering
services which simplify personal computer installation, support, and
maintenance. TouchStone operates from one location in the United States. The
Company markets its products, domestically and internationally, directly to
original equipment manufacturers and end users.

PRINCIPLES OF CONSOLIDATION. The 2004 consolidated financial statements of the
Company include the financial statements of the Company's wholly-owned
subsidiary; eSupport.com, Inc.. The 2003 consolidated financial statements of
the Company include the financial statements of the Company's two wholly owned
subsidiaries, eSupport.com and Touchstone Investments, Inc. All inter-company
transactions and balances have been eliminated.

BASIS OF PRESENTATION. The accompanying unaudited consolidated financial
statements have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission regarding interim
financial reporting. Accordingly, they do not include all of the information and
footnotes in accordance with generally accepted accounting principles for
complete financial statements and should be read in conjuction with the audited
financial statements included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 2003. In the opinion of management, the accompanying
unaudited financial statements contain all adjustments necessary for fair
presentation of the Company's financial position, results of operations and cash
flows at the dates and for the periods presented. Such adjustments consisted
only of normal recurring items.

The operating results for the three and six months ended June 30, 2004 are not
necessarily indicative of the results to be expected for the full year.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The Company previously has suffered recurring operating losses and
operating cash flow deficits, has an accumulated deficit of $20,476,807 at June
30, 2004, and is dependent on its current cash reserves to fund future operating
losses and operating cash flow deficits. In addition, the Company is subject to
a number of risks. Principally among these risks are marketing of its products
and services, which are susceptible to increased competition from other
companies and obsolescence of its products and services. Also amoung these risks
are the decreased sales leads the Company has faced with the changes to Phoenix
Technology's website. The Company is still working with Phoenix Technologies on
a solution to the website change that occurred in February 2003. Phoenix has
moved the Company's link to a more acceptable location on their website. These
factors, among others, raise substantial doubt about the Company's ability to
continue as a going concern at June 30, 2004. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

Management's reorganization plan of providing for significant staff reductions
in non-core operating and support functions, limitations on corporate travel and
a realignment of senior management responsibilities has been fully executed. In
order to meet its cash requirements over the next twelve months, management
expects to supplement cash flow benefits expected from these initiatives with
current cash reserves. Other additional sources of financing, including
additional private debt or equity capital, are being explored, along with
seeking merger candidates with whom the Company has synergies.

                                        6
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

2. EARNINGS PER SHARE

Pursuant to Statement of Financial Accounting Standards No. 128, "EARNINGS PER
SHARE" (SFAS 128), the Company provides dual presentation of "Basic" and
"Diluted" Earnings Per Share (EPS). Basic EPS excludes dilution from common
stock equivalents and is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding for the
period. Diluted EPS reflects the potential dilution from common stock
equivalents. Common stock equivalents consisted of outstanding stock options and
warrants for the periods ended June 30, 2004 and 2003. At June 30, 2004 and
2003, the number of outstanding stock options and warrants were 760,950 and
854,450, respectively.


3. NOTE RECEIVABLE - RELATED PARTY

During 2000, the Company entered into an agreement to advance up to $500,000 to
Metro Investments, LLC ("Metro"), to invest in internet-based companies. Metro
is owned 100% by Pierre Narath, the Company's Chairman of the Board and Jason
Raza, the Company's President and Chief Executive Officer. The advances are
supported by a 5-year promissory note. The terms of the note, as amended in
November 2001, require interest to accrue at the rate of 8% per annum payable
monthly, beginning January 2002. The note is secured by investments held by
Metro. Proceeds from the sale of any of the underlying investments must be used
to pay outstanding principal and interest prior to any distribution of income or
assets to the members of Metro. All outstanding principal and interest is due
December 31, 2004.

Total advances under this agreement amounted to $350,000 plus accrued interest
of $54,855, of which $308,179 has been repaid through June 30, 2004. The balance
at June 30, 2004 is $96,676.


4. INVESTMENTS

INVESTMENTS, OTHER. Investments, other at June 30, 2004, include equity
instruments of privately held internet and technology companies. These
investments are accounted for under the cost method as the Company's ownership
represents less than 20% of each investee. The Company's carrying value of these
investments approximates fair value at June 30, 2004.

         The Company regularly reviews the assumptions underlying the operating
performance and cash flow forecasts in assessing carrying value and or
impairment of its investments. At June 30, 2004, the Company has concluded there
has been no further decline in the value of these investments, therefore no
adjustment has been made to these investments during the quarter.



5. INCOME TAXES

No provision for income taxes is shown in the accompanying consolidated income
statements as the Company has sufficient net operating loss carryforwards
available to offset current taxable income levels at June 30, 2004 and 2003,
respectively.

                                        7
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

6. STOCK OPTIONS

The Company accounts for its stock-based employee compensation plan under the
recognition and measurement principles of APB Opinion No. 25, ACCOUNTING FOR
STOCK ISSUED TO EMPLOYEES, and related Interpretations. No stock-based employee
compensation cost is reflected in net income, as all options granted under those
plans had an exercise price equal to the market value of the underlying common
stock on the date of grant. The following table illustrates the effect on net
income and earnings per share as if the company had applied the fair value
recognition provisions of FASB Statement No. 123, ACCOUNTING FOR STOCK-BASED
COMPENSATION, to stock-based employee compensation.


       -------------------------------------------------------------------------
                                      THREE MONTHS ENDED      SIX MONTHS ENDED
                                            JUNE 30,              JUNE 30,
       ----------------------------- --------------------- ---------------------
                                        2004       2003       2004       2003
       ----------------------------- ---------- ---------- ---------- ----------
       Net income (loss)
         as reported                   (40,695)    30,245     (5,839)    75,862
       ----------------------------- ---------- ---------- ---------- ----------
       Pro forma impact of
          expensing options                 81        164        162        472
       ----------------------------- ---------- ---------- ---------- ----------
       Pro forma net
          Income (loss)                (40,776)    30,081     (6,001)    75,390
       ----------------------------- ---------- ---------- ---------- ----------

       ----------------------------- ---------- ---------- ---------- ----------
       Earnings (loss) per share:
       ----------------------------- ---------- ---------- ---------- ----------
           Basic-as reported             $0.00      $0.00      $0.00      $0.01
       ----------------------------- ---------- ---------- ---------- ----------
           Basic-pro forma               $0.00      $0.00      $0.00      $0.01
       ----------------------------- ---------- ---------- ---------- ----------

       ----------------------------- ---------- ---------- ---------- ----------
           Diluted-as reported           $0.00      $0.00      $0.00      $0.01
       ----------------------------- ---------- ---------- ---------- ----------
           Diluted-pro forma             $0.00      $0.00      $0.00      $0.01
       ----------------------------- ---------- ---------- ---------- ----------



                                        8
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

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

OVERVIEW

     TouchStone Software Corporation, Inc. and its consolidated subsidiary,
("TouchStone" or "the Company") is a provider of system management software,
which includes basic input/output ("BIOS") software upgrades, personal computer
("PC") diagnostics for personal computers and embedded systems. System
management software is one of the fundamental layers in any microprocessor-based
system (including PCs) architecture and provides an essential interface between
the systems's operating software and hardware. Organized in 1982 as a California
corporation, the Company reincorporated in Delaware in January 1997. The
Company's executive offices are located at 1538 Turnpike Street, North Andover,
Massachusetts 01845, and its telephone number is (978) 686-6468.

     In January 2000, the Company formed eSupport.com, Inc. (a New Hampshire
Corporation), a wholly-owned subsidiary, which currently conducts the day to day
operations. The Company's core product is BIOS, which is the software initially
executed after the system is turned on, tests and initializes hardware
components, initiates the operating system and then provides advanced interface
functions. BIOS software upgrades allow end-users of desktop PCs to extend the
life of their systems and reduce the overall ownership cost of a PC. During the
past several years, eSupport has grown into a full-service engineering company
supplying not only BIOS software upgrades, but also PC diagnostics software and
NRE (non-recurring engineering) services to both end-users and OEM customers. As
the evolution of software and hardware has become more complex, the need for
compatibility has increased in importance. The Company believes that its
experience and customer focus allow it to quickly identify solutions and market
products compatible with the array of operating systems, application programs,
utilities and hardware products available.

     eSupport's customers include primarily end-users, enterprises such as a
majority of Fortune 500 corporations, government agencies, major educational and
financial institutions, designers and manufacturers of motherboards, PC systems
and other microprocessor-based or embedded devices. eSupport markets and
licenses its products and services worldwide.

INDUSTRY OVERVIEW

     During the last decade, the personal computer industry has grown rapidly -
fueled most recently by the Internet. The Company believes that the market will
continue to expand in the future as technological advances and increased
functionality, combined with lower pricing, will increasingly make personal
computers common for use in both homes and businesses. Future changes in the
operating systems that run personal computers may contain some of the
functionality of certain utility software of the kind marketed by the Company.
The software industry, including the utility market, is increasingly being
dominated by a few very large competitors. However, the Company believes that
the complexities created by the Internet, multimedia and connectivity utilizing
enhanced video, storage, animation, and audio capabilities will continue to
drive the demand for new, sophisticated, separately installed utility software
and BIOS upgrades.

                                       9
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

RESULTS OF OPERATIONS

     The following is a discussion of the financial condition and results of
operations of the Company as of June 30, 2004 and June 30, 2003 and should be
read in conjunction with the accompanying consolidated financial statements and
notes thereto and the Company's audited consolidated financial statements and
notes thereto for the year ended December 31, 2003, included in the Company's
Annual Report on Form 10-KSB and is qualified in its entirety by reference
thereto.

     The following table sets forth, for the periods indicated, certain
consolidated statement of operations information as a percentage of the
Company's total revenues represented by each item. The Company's historical
results are not necessarily indicative of results in any future period.

<TABLE><CAPTION>

                                                 THREE MONTHS     THREE MONTHS     SIX MONTHS       SIX MONTHS
                                                     ENDED            ENDED           ENDED            ENDED
                                                    JUNE 30,         JUNE 30,        JUNE 30,         JUNE 30,
                                                      2004             2003            2004             2003
<S>                                                   <C>              <C>             <C>              <C>
     Revenues:
         Product sales                                 97%              91%             97%              90%
         Royalty income                                 3                9               3               10
                                                 ---------------------------------------------------------------
              Total revenues                          100              100             100              100
     Cost of revenues                                  12               13              14               12
                                                 ---------------------------------------------------------------
     Gross profit                                      88               87              86               88
                                                 ---------------------------------------------------------------
              Operating expenses:
              Sales, marketing, general and
            administrative                             62               59              56               51
              Research and development                 37               38              31               36
                                                 ---------------------------------------------------------------
              Total operating expenses                 99               97              87               87
                                                 ---------------------------------------------------------------
     Income (loss) from operations                    (11)             (10)             (1)               1
     Gain on sale of investment                        --                4              --                2
     Other income, net                                  1               15               1                6
                                                 ---------------------------------------------------------------
     Income (loss) before provision for
     income taxes                                     (10)               9               0                9
     Provision for income taxes                        --               --              --               --
                                                 ---------------------------------------------------------------
     Net income (loss)                                (10)%              9%              0%               9%
                                                 ===============================================================
</TABLE>

                                       10
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

COMPARISON OF THREE MONTH PERIODS ENDED JUNE 30, 2004  AND 2003

     REVENUES. The Company's revenues consist of product sales, royalties and
engineering services revenues. Product revenues are recorded at the time
products are shipped. Royalty income is recognized upon receipt of a royalty
report and payment from the licensor. Engineering services revenue generally
consists of amounts charged for customization of the software prior to delivery
and are generally recognized as the services are performed. For the six months
ended June 30, 2004 the Company experienced an overall increase in revenues of
4% as compared to the same period a year ago. The increase in revenues is due to
an increase in our web advertising campaign. The Company is also still working
with Phoenix Technologies on a solution to the website change that occurred in
February 2003. Phoenix has moved the Company's link to a more acceptable
location on their website. Product sales increased approximately 12% as compared
to the same period one year ago. Royalty revenue decreased by approximately 67%
as compared to the same period one year ago due to one royalty agreement being
cancelled. The second royalty situation is lower due to a product change.

     COST OF REVENUES. Cost of revenues consists of the cost of materials,
freight expenses, royalties paid to other software development companies and
direct costs associated with engineering services revenues. Cost of revenues as
a percentage of revenue increased to 14% of revenues for the six month period
ended June 30, 2004 from 12% for the same period a year ago. This is due mainly
to an increase in costs associated with third party products.

     SALES, MARKETING, GENERAL AND ADMINISTRATIVE. Sales, marketing, general and
administrative expenses consist primarily of salaries & commissions,
professional services and facilities costs. Sales, marketing, general and
administrative expenses increased by approximately $73,000, or 17%, for the six
month period ended June 30, 2004, from the same period one year ago. This
increase is related to higher commissions paid, the larger web advertising
campaign and some outside service cost.

     RESEARCH AND DEVELOPMENT. Research and development expenses consist
primarily of engineering personnel and related expenses. Research and
development expenses decreased approximately $35,000 or 11% for the six month
period ended June 30, 2004 from the same period one year ago.

     OTHER INCOME, NET. Other income, net consists of interest income associated
with the related party note, interest income from the Company's money market
accounts, and interest expense associated with the long term debt. Other income
decreased by approximately $48,000 for the six month period ended June 30, 2004
as compared to the same period one year ago. The decrease is due to a settlement
the Company received from former legal counsel.


LIQUIDITY AND CAPITAL RESOURCES

     During the six months ended June 30, 2004, cash resources of approximately
$11,000 were used by the Company's operating activities as compared to cash of
approximately $126,000 used during the same period a year ago.

     The Company's cash balance at March 31, 2004 was approximately $335,000 as
compared to approximately $351,000 a year ago.

     Management expects that the cash balance and the benefits from the
reduction in overall operating expenses to be sufficient to meet its cash
requirements. Other additional sources of financing, including additional
private debt or equity capital, are being explored, along with seeking merger
candidates with whom the Company has substantial synergies.

     The Company continues to operate with no material commitments for capital
expenditures and we anticipate that expenditures will continue to decrease in
the immediate future as we continue to cut costs during our efforts to
restructure current operating expenditures in line with our current revenue
stream.

     The impact of inflation during 2004 has had no material impact on
our business and financial results.

                                       11
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     The report, other than historical financial information, includes
forward-looking statements that involve known and unknown risks and
uncertainties, including quarterly flucutations in results. Such statements are
made pusuant to the "safe harbor" provisions established by recent securities
legislations, and are based on the assumptions and expectations of the Company's
management at the time such statements are made. Important factors that could
cause actual results to differ include the timely availability and acceptance of
new products, general market conditions governing supply and demand, the impact
of competitive products and pricing and other risks detailed in the Company's
filings with the Securities and Exchange Commission. Actual results may vary
materially. Accordingly you should not place undue reliance on any
forward-looking statements. Unless otherwise required by law, the Company
disclaims any obligations to revise or update such forward-looking statements in
order to reflect future events or developments.

ITEM 3.  CONTROLS AND PROCEDURES

     As of June 30, 2004, an evaluation was performed under the supervision and
with the participation of the Company's management, including the Chief
Executive Officer and the Accounting Manager, of the effectiveness of the design
and operation of the Company's disclosure controls and procedures. Based on that
evaluation, the Company's management, including the Chief Executive Officer and
the Accounting Manager, concluded that the Company's disclosure controls and
procedures were effective as of June 30, 2004. There have been no significant
changes in the Company's internal controls or in other factors that could
significantly affect internal controls subsequent to June 30, 2004.


















                                       12
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                           PART II--OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     The Company is subject to legal proceedings and claims, which arise in the
ordinary course of its business. Although occasional adverse decisions (or
settlements) may occur, the Company believes that the final disposition of such
matters will not have a material adverse effect on the financial position or
results of operations of the Company.

ITEM 2. CHANGES IN SECURITIES

        None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        None

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

        None

ITEM 5. OTHER INFORMATION

        None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a) Exhibits

            Exhibit 31.1 Certification Pursuant to Rule 13a-14 of the Securities
                         Exchange Act of 1934

            Exhibit 31.2 Certification Pursuant to Rule 13a-14 of the Securities
                         Exchange Act of 1934

            Exhibit 32   Certifications Pursuant to Rule 13a-14(b) of the
                         Securities Exchange Act of 1934

        (b) Reports on Form 8-K

            On May 14, 2004, the Company filed a current report on Form 8-K to
            announce the posting of a press release announcing the financial
            results of the first quarter of 2004.






                                       13
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                                   SIGNATURES

     IN ACCORDANCE WITH THE REQUIREMENTS OF THE EXCHANGE ACT, THE REGISTRANT
CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED.

                                         TOUCHSTONE SOFTWARE CORPORATION
                                                  (Registrant)





         NAME                            TITLE                        DATE



/s/ Jason K. Raza               Chief Executive Officer and      August 11, 2004
---------------------------     President
JASON K. RAZA



/s/ Michelle L. Carrozzella     Accounting Manager               August 11, 2004
---------------------------
MICHELLE L. CARROZZELLA
















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