U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934

                  For the quarterly period ended: June 30, 1997

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                           Commission File No. 0-11808

                             MB SOFTWARE CORPORATION

           Colorado                                           59-2219994
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                          Identification Number)

                      2225 E. Randol Mill Road - Suite 305
                           Arlington, Texas 76011-6306
                                 (817) 633-9400


Check  whether the Issuer (1) 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 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 [ ]

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court.

                                Yes [ X ] No [ ]


As of June 30, 1997,  67,885,000  shares of the Issuer's  $.001 par value common
stock were outstanding.

Transitional Small Business Disclosure Format

                                Yes [ ] No [ X ]



<PAGE>

                             MB SOFTWARE CORPORATION

                                   Form 10-QSB

                           Quarter Ended June 30, 1997


                                      INDEX

PART I  -  FINANCIAL INFORMATION                                   PAGE NUMBER

  Item 1  -  Financial Statements

     Consolidated Balance Sheet
     June 30, 1997 (Unaudited)                                          3-4

     Consolidated Statements of Operations
     for the Six Months and Three Months 
     ended June 30, 1997 and 1996 (Unaudited)                            5

     Consolidated Statements of Cash Flows
     for the Six Months ended June 30, 1997
     (Unaudited)                                                         6

     Notes to Consolidated Financial Statements                          7

  Item 2 - Management's Discussion
  and Analysis of Financial Condition and
  Results of Operations                                                 7-9

PART II - OTHER  INFORMATION

  Item 5 - Other Information                                             9

  Item 6  -  Exhibits, Financial Statement 
  Schedules and Reports on Form 8-K                                     9-10

SIGNATURES                                                               10

<PAGE>

                    MB SOFTWARE CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                                  June 30, 1997


                                     ASSETS

                                                           JUNE      DECEMBER
                                                           1997        1996
CURRENT ASSETS
       Cash                                            $1,119,025    $196,653
       Trade accounts receivable                        3,136,549     345,452
       Less allowance for bad debt                       ( 80,381)   ( 33,487)
       Notes receivable                                   129,542      10,000
       Commissions receivable                              61,452           -
       Deposits                                            18,645      18,488
       Prepaid expenses                                    22,155      19,883
                                                      -----------   ---------
                    Total current assets                4,406,987     556,989
                                                      -----------   ---------

PROPERTY AND EQUIPMENT, NET                               303,336      63,349
                                                      -----------   ---------

OTHER ASSETS
       Goodwill                                           812,316     850,109
       Software development costs                         445,199     394,240
                                                      -----------   ---------
                    Total other assets                  1,257,515   1,244,349
                                                      -----------   ---------

                                                       $5,967,838  $1,864,687
                                                      ===========   =========

                        - Continued -

<PAGE>

                    MB SOFTWARE CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEET (continued)
                                  June 30, 1997


                      LIABILITIES AND SHAREHOLDERS' EQUITY

                                                          JUNE       DECEMBER
                                                          1997         1996
CURRENT LIABILITIES
       Notes payable                                   $3,863,815   $  242,029
       Accounts payable                                   286,507      149,741
       Accrued liabilities                                122,864      101,382
       Other liabilities                                  109,000      179,000
       Other                                                2,452
       Deferred revenue                                    93,472      159,026
                                                      -----------   ----------
                Total current liabilities               4,478,110      831,178

LONG TERM LIABILITIES
      Note payable                                      1,347,866    1,283,808
      Other liabilities                                    40,000       40,000
                                                      -----------   ----------
            Total long term liabilities                 1,387,866    1,323,808

SHAREHOLDERS' EQUITY
       Common stock .001 par value;100,000,000 shares
          authorized; 67,885,000 shares issued             67,885       67,885
       Additional paid-in capital                         810,322      810,322
       Retained earnings (deficit)                     (1,156,467)  (1,156,467)
       Treasury stock, at cost;409,577                    (12,039)  (   12,039)
       Net earnings                                       392,161
                                                      -----------   ----------
            Total shareholders' equity (deficit)          101,862     (290,299)
                                                      -----------   ----------
                                                       $5,967,838   $1,864,687


<PAGE>
                    MB SOFTWARE CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                  June 30, 1997
                                  (UNAUDITED)
<TABLE>
<CAPTION>
<S>                                          <C>            <C>             <C>             <C>   

REVENUES
    Service fee & broker income              $    4,983       $  34,027       $   12,501      $    35,843
    Consulting fees                              30,000                           53,610
    Software & maintenance sales                384,407         683,599          810,871        1,286,698
    Medical Income                              838,261                        1,543,952
    Other income                                     27         219,992            4,541          250,000
                                             ----------       ---------       ----------      -----------
         Total revenues                       1,257,678         937,618        2,425,476        1,572,541

COST OF REVENUES
    Cost of service & broker fees                                 2,548                             2,548
    Cost of software & maintenance              157,592          82,617          302,042          185,456
    Cost of medical services                     27,942                           37,349
                                             ----------       ---------       ----------      -----------
          Total cost of revenues                185,534          85,165          339,390          188,004 
                                             ----------       ---------       ----------      -----------
GROSS PROFIT                                  1,072,144         852,453        2,086,086        1,384,537

OPERATING EXPENSES
    Selling, general & administrative           831,334         565,515        1,557,369          995,354
    Depreciation and amortization                80,701           4,646          139,928           10,262
                                             ----------       ---------       ----------      -----------
          Total operating expenses              912,035         570,161        1,697,297        1,005,616

                                             ----------       ---------       ----------      -----------
INCOME FROM OPERATIONS                          160,109         282,292          388,789          378,921

OTHER INCOME (EXPENSES)
    Interest income, net                          ( 631)        ( 7,409)         ( 3,675)           8,445
    Other, net                                    ( 252)       ( 13,743)             302           15,954
                                              ----------       ---------       ---------      -----------
          Total other income, net                 ( 883)       ( 21,150)         ( 3,372)          24,399

                                              ----------       ---------       ---------      -----------
NET INCOME BEFORE TAXES                         159,225         261,142          392,161          354,522
                                              ----------       ---------       ---------      -----------
PROVISION FOR INCOME TAXES

NET INCOME                                    $ 159,225         261,142          392,161          354,522
                                              ==========       ========        =========      ===========
  Income per weighted-average common share    $   0.002           0.005            0.006            0.007
                                              ==========       ========       ==========      ===========
  Weighted-average common shares outstanding  67,885,000     49,485,000       67,885,000       49,485,000
                                              ==========       ========       ==========      ===========

</TABLE>

<PAGE>


                    MB SOFTWARE CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
<S>                                                            <C>                     <C>  
                                                                  SIX MONTHS                SIX MONTHS
                                                                ENDED 06/30/97            ENDED 06/30/96
                                                                     1997                      1996
                                                               ----------------        ------------------
CASH FLOWS FROM OPERATING ACTIVITIES
       Net Income(Loss) for the period                         $        392,161         $         354,522
       Adjustments to reconcile net income(loss) to net
        cash used by operating activities:
                    Depreciation                                        139,928                    13,163
                    Amortization                                         37,793
                    Gain on debt extinguis                             (115,102)
                    Bad debt expense                                     26,267
                    Change in allowance for doubtful accounts            46,894
                    Changes in assets and liabilities:
                          Trade accounts receivable                 ( 2,824,584)                ( 144,283)
                          Advances                                                                 (1,125)
                          Commissions Receivable                        (61,452)
                          Prepaid expenses and other                     (2,273)                   (4,500)
                          Deposits                                         (157)                     (700)
                          Accounts payable                              136,766                    73,086
                          Accrued liabilities                            21,482                   (55,371)
                          Other liabilities                             (70,000)                  364,266
                          Deferred revenues                             (65,554)                   79,283
                          Other                                          25,872                    (6,812)
                                                               ----------------        ------------------

Net cash used by operating activities                                (2,311,958)                  671,529

CASH FLOWS FROM INVESTING ACTIVITIES
      Disposal (Purchase) of property and equipment                    (239,987)                   (8,565)
      Software development costs capitalized                            (50,959)                  (71,032)
      Advances  on notes receivable                                    (119,542)                  (21,052)
                                                               ----------------        ------------------
Net cash uesd by investing activities                                  (410,489)                 (100,649)

CASH FLOWS FROM FINANCING ACTIVITIES
      Payments on notes payable                                         (76,134)                  764,600
      Increase in notes payable                                       3,720,953                  (350,411)
      Increase (decrease) in cash overdraft                                                        29,616
      Purchase of treasury stock                                                                   45,000
                                                               ----------------        ------------------

Net cash provided by financing activities                             3,644,819                   488,805

INCREASE / (DECREASE) IN CASH                                           922,372                    82,075
                                                               ----------------        ------------------

 Cash at beginning of period                                            196,653                    36,535

 Cash at end of period                                          $     1,119,025         $         118,610
                                                               ================        ==================

SUPPLEMENTAL INFORMATION
       Cash paid during the period for interest                 $         3,675         $           8,451

                                                                ================        ==================
</TABLE>
<PAGE>


                             MB SOFTWARE CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 1997
                                   (Unaudited)

BASIS OF PRESENTATION

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted,  although  management  believes the  disclosures
herein are adequate to make the  information  presented  not  misleading.  These
interim financial  statements should be read in conjunction with the most recent
financial statements of MB Software Corporation included in the Company's report
on Form 10-KSB for the year ended December 31, 1996.

The interim  financial  information  included  herein is  unaudited;  however it
reflects all adjustments  (consisting  solely of normal  recurring  adjustments)
which are, in the opinion of management,  necessary for a fair  presentation  of
financial position, results of operations and cash flows for the interim period.
The results of  operations  for the six months and three  months  ended June 30,
1997 are not  necessarily  indicative of the results to be expected for the full
year.


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


The Company
MB Software Corporation took a major step forward and unfolded the next phase of
its 1997  Strategic  Plan by  consolidating  areas  within  its three  operating
companies,  thereby  positioning  them for long term benefits to derive  greater
economies of scale and improved productivity.

The Company's  primary focus  continued to be the  acquisition of companies that
provide reciprocal  benefit and distribution  channels for its software products
while currently  increasing  corporate asset value and developing greater market
share and critical mass for specific products and services.

Each  operating   company   installed   common  practice   management   systems,
consolidated   workflow   processes  and  reporting   mechanisms  to  facilitate
operational  control and  pinpoint  areas where  performance  correction  may be
indicated.

The Company  continued  to perform in  accordance  with it targets for the year;
however, for the quarter ended June 30, 1997, a steeper than anticipated expense
curve occurred from  consolidation  of Company  functions  which softened profit
margins,  although the quarter still remained profitable. In each operating arm,
the Company realigned management,  streamlined or downsized staff, reduced fixed
cost and explored expansion plans.

Santiago SDS, Inc.  continued to sharpen its focus within the physician practice
management  market  through  restructuring  of  marketing  campaigns  to offer a
more-defined,  yet  cost-competitive,  state-of-the-art  product.  Santiago SDS,
Inc.,  in response to  evolving  market  trends,  continued  to enhance  product
capability and customer  appeal,  yet minimize  product cost  increases.  In the
quarter ended June 30, 1997,  Santiago SDS, Inc.  maintained market share within
this highly  competitive  market  segment  through  corporate  extension  of new
markets for its products and  services.  Strategies  for 1997 remained on target
with financial and scheduling projections.

<PAGE>


Color  Country  Health  Express,  Inc.  continued  to  exceed  expectations  and
continued to explore  expansion of its satellite  locations within its market by
maximization  of existing,  yet  untapped,  capacity  without  major demands for
capital or staff.  Anticipated  seasonal  downturns in revenue were measured and
staffing  levels  adjusted  to  reduce  controllable  costs and  protect  profit
margins.

Intercoastal  Rehabilitation,  Inc.  achieved  positive  results after
substantial  realignment  of  staff  and  systems  to  position  it  for  needed
efficiencies and improved  productivity.  The streamlined  entity,  with clearer
operational  focus,  continued to ramp up results,  albeit after a longer period
than planned.


Results of Operations

This  section  discusses  the  results  of  operations  of the  Company  and its
subsidiaries for the quarterly period ended June 30, 1997.

In the quarter ended June 30, 1997, revenues from the consolidated entities rose
to $1,257,678, an increase of 34% over the $937,618 reported for the same period
in 1996. The year to date revenue for 1997 of $2,425,476  represents an increase
of 54% over the  revenue in the same  period in 1996 of  $1,572,541.  This trend
continues to show strong revenue  growth and it represents  the sixth  continued
quarter of increased revenues for the Company.

Cost of revenues and operating expenses for the quarter ended June 30, 1997 were
$185,514 and $912,035 respectively. This is an increase of 118% over the cost of
revenues of $85,165 and an increase of 60% over  operating  expenses of $570,161
for the same period in 1996.  Year to date 1997 cost or revenues plus  operating
expenses approximate 84% of total revenue. This 14% increase over the prior year
is primarily  due to  increased  expenses  incurred  with the  restructuring  of
Santiago  SDS,  Inc.'s  marketing  plan,  reduced  sales while  refocusing  that
marketing campaign, and miscellaneous  unanticipated additional expenses related
to the Florida acquisition and operational improvements.

Total assets  increased to  $5,967,838.  This increase from December 31, 1996 is
largely  attributable  to the increase in receivables  via increased  revenue in
1997. The nature of revenues  generated from the  subsidiaries  acquired  during
1997 lends themselves to larger receivables balances. Additionally, an influx of
$1,000,000  of cash  occurred  near the end of the  quarter.  This  represents a
short-term note payable.

Total liabilities  increased to $5,865,976 from the December 31, 1996 balance of
$2,157,986.  The  escalation of  liabilities  was largely due to the  $1,000,000
short-term  note  mentioned  above,  debt  assumed with  acquisitions,  and debt
incurred through normal operations.

Liquidity and Capital Resources

As of June 30,  1997,  the Company had total assets of  $5,967,838  with current
assets of $4,406,987,  property and equipment $303,336 and other assets totaling
$1,257,515.  Total current  liabilities  at June 30, 1997 were  $4,478,110  with
total long-term liabilities equaling $1,387,866. Loans to the Company by certain
of its officers,  directors and shareholders totaled to $2,744,430.  Net working
capital at the end of the period was ($71,123),  an improvement from the quarter
ended March 31, 1997 which net working capital equaled ($104,849).

<PAGE>

The Company is actively  engaging in  acquisitions of  complementary  companies,
development  of software  products,  and  developing  greater  market  share for
specific products and services. It is impossible to predict what impact, if any,
the above will have on the  operating  results of the Company.  The Company will
attempt  to enhance  cash  flows  from  operations  through  sales  efforts  and
operating   efficiencies  and  in  addition,   may  attempt  to  seek  financing
opportunities  to obtain funds in 1997 as necessary to continue the  development
of the Company, its programs and strategic  acquisitions.  However, there can be
no assurance  that the Company will produce  additional  revenue or profits from
these efforts.  The Company intends to continue its growth by new  acquisitions,
adding  customers  and catering to existing  customers  as well as  aggressively
marketing new products and services.

PART II  -  OTHER INFORMATION

ITEM 5.  OTHER INFORMATION

The Company and Imagine, Inc. ("Imagine") announced on August 5, 1997, that they
had formed  Healthcare  Innovations,  a limited liability company ("HI") for the
purposes  of  acquiring  and  operating  healthcare  businesses.  Imagine  is  a
subsidiary of Stone Investments, which in turn is a subsidiary of Stone Capital,
a company  with over $3  billion in assets.  The  Company  will own a 51% common
equity  interest in HI and Imagine  will own a 49% common  equity  interest.  In
addition,  each of the Company and Imagine  will own  preferred  interests in HI
designed to return their respective investments, plus a 10% return, over a three
year period.

For  its  interest,  the  Company  contributed  to HI  its  existing  healthcare
businesses,  consisting of two rehabilitation  clinics in Jacksonville,  Florida
and a Utah-based  nurse  practitioner  business.  The Company will also serve as
operator of HI, for which it will  receive a management  fee. For its  interest,
Imagine  contributed to HI the sum of $2,000,000,  $900,000 of which was used to
repay  debt  assumed  in  connection  with  the  purchase  of  the  Jacksonville
facilities, and the remainder of which will be used to fund capital requirements
of the  businesses  and future  acquisitions.  The $900,000  loan  repayment was
accomplished by a $1,000,000 loan from Imagine, through the Company, to Oak Tree
Receivables,  Inc.,  which then repaid the loan with the cash and certain of its
receivables.  The  remaining  $100,000  was  used to  repay  obligations  of the
Jacksonville  facilities  incurred in the ordinary course of business.  Oak Tree
Receivables  was  contributed to HI by the Company,  and the $1,000,000 note was
contributed to HI by Imagine as part of its $2,000,000 contribution.

Also in connection with the formation of HI, Imagine loaned the Company $500,000
for use in its Santiago operations. The loan bears interest at a rate of 10% and
is due on August 1, 2000. As security for the loan,  the Company  pledged all of
its stock of  Santiago  to  Imagine  and Robert T. Shaw,  a  shareholder  of the
Company who had previously  acquired a security  interest in the Santiago stock,
consented to the pledge.  In addition,  a key part of the  relationship  between
Imagine  and the  Company  is a  funding  arrangement  whereby  Imagine  and its
affiliates  will provide  capital to HI through loan and equity  arrangements in
order for HI to purchase healthcare  businesses.  The terms of such arrangements
are to be negotiated.

ITEM 6.  EXHIBITS, FINANCIAL STATEMENT SHCEDULES AND REPORTS ON FORM 8-K

Exhibits

10.1  Operating Agreement dated as of August 1, 1997 for Healthcare 
      Innovations, LLC  

10.2  LLC Preorganizational Agreement dated as of August 1, 1997 among the 
      Company, HI and Imagine  

10.3  Services Agreement dated as of August 1, 1997 between HI and the 
      Company 

10.4  Promissory Note dated as of August 1, 1997 in the  principal  amount of 
      $500,000 executed by the Company as maker in favor of Imagine 

10.5  Amended and Restated Pledge Agreement dated as of August 1, 1997 among 
      the Company, Imagine and Robert T. Shaw  

<PAGE>
 

Financial Statements  -  See Item 1 for financial statements filed with this 
--------------------     report.

Reports on Form 8-K  - Original 8-K was filed on February 6, 1997 and an 
-------------------    Amendment No. 1 was filed April 4, 1997.



 

<PAGE>