<PAGE>

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

                                  FORM 10-Q

(Mark One)
   [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
         THE SECURITIES AND EXCHANGE ACT OF 1934

For Quarterly Period Ended December 31, 1996

                                      OR

   [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
         THE SECURITIES AND EXCHANGE ACT OF 1934

                        Commission File Number: 001-12267

                            ROGUE WAVE SOFTWARE, INC.
             (Exact name of registrant as specified in its charter)

          Delaware                                            93-1064214
(State or other jurisdiction of                              (IRS Employer
incorporation or organization)                             Identification No.)

 850 SW 35th Street, Corvallis, Oregon                           97333
(Address of principal executive offices)                       (Zip Code)

                                (541) 754-3010
            (Registrant's telephone number, including area code)

_______________________________________________________________________________
                 (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 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 ___    NO _X_

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

            Class                             Outstanding at December 31, 1996
            -----                             --------------------------------
Common Stock, $0.001 par value                           7,624,103

                                     1 
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                           ROGUE WAVE SOFTWARE, INC.
                                  FORM 10-Q

                                   INDEX

                                                                       Page No.
                                                                       --------
PART I - FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements:

             Condensed Consolidated Balance Sheets at September 30, 1996
             and December 31, 1996 . . . . . . . . . . . . . . . . . . . . .3

             Consolidated Statements of Operations for the three
             months ended December 31, 1995 and 1996 . . . . . . . . . . . .4

             Consolidated Statements of Cash Flows for the
             three months ended December 31, 1995 and 1996 . . . . . . . . .5

             Notes to Consolidated Financial Statements. . . . . . . . . . .6

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

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 14

Item 4.  Submission of Matters to a Vote of Security Holders . . . . . . . 14

Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . 15

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

                                     2

<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1. - Consolidated Financial Statements:

                         ROGUE WAVE SOFTWARE, INC.
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                              (in thousands)

                                                    September 30,  December 31,
                                                         1996          1996
                                                    -------------  ------------
                                                                   (Unaudited)
                 A S S E T S:
Current assets:
  Cash and cash equivalents                            $ 1,714       $29,713
  Accounts receivable,net                                4,527         3,602
  Prepaid and other current assets                         981           658
                                                       -------       -------
    Total current assets                                 7,222        33,973

  Furniture, fixtures and equipment, net                 2,718         2,819
  Other assets, net                                        254           229
                                                       -------       -------
    Total assets                                       $10,194       $37,021
                                                       -------       -------
                                                       -------       -------

    LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
  Accounts payable                                     $   637        $  416
  Accrued expenses                                         805         1,226
  Deferred revenue                                       2,881         3,568
  Current portion of long-term obligations                 217           217
                                                       -------       -------
    Total current liabilities                            4,540         5,427

Long-term obligations, less current portion                322           268
                                                       -------       -------
    Total liabilities                                    4,862         5,695
                                                       -------       -------

Mandatorily redeemable preferred stock                   4,664           -
                                                       -------       -------

Stockholders' equity:
  Common stock                                               4             8
  Additional paid-in capital                               676        31,010
  Shareholder note receivable                              (13)          (13)
  Retained earnings                                         24           345
  Cumulative translation adjustment                        (23)          (24)
                                                       -------       -------
    Total stockholders' equity                             668        31,326
                                                       -------       -------
    Total liabilities and stockholders' equity         $10,194       $37,021
                                                       -------       -------
                                                       -------       -------

                             See accompanying notes.

                                      3

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                          ROGUE WAVE SOFTWARE, INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands, except share data, unaudited)

                                                   Three months ended 
                                                      December 31,    
                                                   ------------------ 
                                                    1995        1996  
                                                   ------      ------ 
  Revenue:
    License revenue                                $2,733      $4,485 
    Service and maintenance revenue                   804       1,394 
                                                   ------      ------ 
      Total revenue                                 3,537       5,879 
                                                   ------      ------ 

  Cost of revenue:
    Cost of license revenue                           219         342 
    Cost of service and maintenance revenue           294         502 
                                                   ------      ------ 
      Total cost of revenue                           513         844 
                                                   ------      ------ 
      Gross profit                                  3,024       5,035 
                                                   ------      ------ 

  Operating expenses:
    Product development                               924       1,484 
    Sales and marketing                             1,606       2,477 
    General and administrative                        472         705 
                                                   ------      ------ 
      Total operating expenses                      3,002       4,666 
                                                   ------      ------ 
      Income from operations                           22         369 
  Other income, net                                    14         110 
                                                   ------      ------ 
      Income before income taxes                       36         479 
  Income tax expense                                    7         158 
                                                   ------      ------ 
      Net income                                   $   29      $  321 
                                                   ------      ------ 
                                                   ------      ------ 
  Net income per common share                      $ 0.01      $ 0.04 
                                                   ------      ------ 
                                                   ------      ------ 

  Shares used in per share calculation              6,024       7,395 

                             See accompanying notes.

                                      4 
<PAGE>
                                      
                          ROGUE WAVE SOFTWARE, INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (in thousands, unaudited)

                                                            Three months ended
                                                               December 31,   
                                                            ----------------- 
                                                              1995      1996  
                                                            -------   ------- 
  Cash flows from operating activities:
   Net income                                                $   29   $   321 

  Adjustments to reconcile net income to net 
   cash from operating activities:
    Depreciation and amortization                                89       334 
    Changes in assets and liabilities:
      Accounts receivable                                      (239)      929 
      Prepaid and other current assets                          (46)      323 
      Other noncurrent assets                                    39       (23)
      Accounts payable and accrued expenses                    (352)      199
      Deferred revenue                                          247       686 
                                                             ------   ------- 
         Net cash from operating activities                    (233)    2,769 
                                                             ------   ------- 

  Cash flows from investing activities:
    Purchase of furniture, fixtures, and equipment             (184)     (388)
                                                             ------   ------- 
         Net cash from investing activities                    (184)     (388)
                                                             ------   ------- 

  Cash flows from financing activities:
    Payments on long-term obligations                           (25)      (54)
    Net proceeds from issuance of mandatorily 
     redeemable preferred stock                               3,523         - 
    Proceeds from issuance of common stock, net                   -    25,628 
    Proceeds from exercise of stock options                       9        46 
                                                             ------   ------- 
         Net cash from financing activities                   3,507    25,620 
                                                             ------   ------- 
  Effect of exchange rate on cash                                 -        (2)
                                                             ------   ------- 
         Net change in cash and cash equivalents              3,090    27,999 

  Cash and cash equivalents at beginning of period            1,010     1,714 
                                                             ------   ------- 
  Cash and cash equivalents at end of period                 $4,100   $29,713 
                                                             ------   ------- 
                                                             ------   ------- 

  Supplemental disclosure of cash flow information:
    Cash paid for interest                                   $    8   $    18 
    Cash paid for taxes                                           -        10 

  Supplemental disclosure of non-cash financing activities:
    Common stock issued for conversion of preferred stock         -     4,664 

                             See accompanying notes.

                                      5 
<PAGE>

                              ROGUE WAVE SOFTWARE, INC.
                                       NOTES TO
                           CONSOLIDATED FINANCIAL STATEMENTS
                                     (UNAUDITED)
                                           
1.  Basis of Presentation

    The accompanying financial statements have been prepared in conformity with
    generally accepted accounting principles.  However, certain information or
    footnote disclosures normally included in financial statements prepared in
    accordance with generally accepted accounting principles have been
    condensed, or omitted, pursuant to the rules and regulations of the
    Securities and Exchange Commission.  In the opinion of management, the
    statements include all adjustments necessary (which are of a normal and
    recurring nature) for the fair presentation of the results of the interim
    periods presented.  These financial statements should be read in
    conjunction with the Company's audited consolidated financial statements
    for the year ended September 30, 1996, as included in the Company's
    Registration Statement on Form SB-2 (Registration No. 333-13517) filed with
    the Securities and Exchange Commission.

2.  Net Income Per Common and Common Equivalent Share

    Net income per common and common equivalent share is computed using the
    weighted average number of common and dilutive common equivalent shares
    assumed to be outstanding during the period.  Common equivalent shares
    consist of options to purchase common stock.

3.  Use of Estimates in the Preparation of Financial Statements

    The preparation of financial statements in conformity with generally
    accepted accounting principles requires management to make estimates and
    assumptions that affect the reported amounts of assets and liabilities and
    disclosure of contingent assets and liabilities at the date of the
    financial statements and the reported amounts of revenue and expenses
    during the reporting period.  Actual results could differ from those
    estimates.

4.  Stockholders' Equity

    On November 21, 1996, the Company completed a public offering of 2,363,890
    shares of common stock which generated net proceeds of approximately $25.6
    million after deducting applicable issuance costs and expenses.  On
    December 3, 1996 the Company's underwriters exercised their over-allotment
    option resulting in the issuance of an additional 3,750 shares of common
    stock which generated net proceeds of approximately $41,850 after deducting
    applicable issuance costs and expenses.  The net proceeds are expected to
    be used for working capital and general corporate purposes, including the
    expansion of general sales and customer support and possible future
    acquisitions of technologies, products or businesses.





                                      6 
<PAGE>

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

     EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE FOLLOWING 
DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND 
UNCERTAINTIES.  THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM 
THOSE DISCUSSED HERE.  FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH 
DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN THIS SECTION, 
AS WELL AS IN THE SECTION ENTITLED "FACTORS THAT MAY AFFECT FUTURE RESULTS," 
AND THOSE DISCUSSED UNDER THE CAPTION "RISK FACTORS" IN THE COMPANY'S 
REGISTRATION STATEMENT ON FORM SB-2 (NO. 333-13517).  READERS ARE CAUTIONED 
NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS WHICH REFLECT 
MANAGEMENT'S ANALYSIS ONLY AS OF THE DATE HEREOF.  THE COMPANY UNDERTAKES NO 
OBLIGATION TO PUBLICLY RELEASE THE RESULTS OF ANY REVISION TO THESE 
FORWARD-LOOKING STATEMENTS WHICH MAY BE MADE TO REFLECT EVENTS OR 
CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF 
UNANTICIPATED EVENTS.  

OVERVIEW

     Rogue Wave was founded in 1989 to provide reusable software parts for 
the development of object-oriented software applications.  The Company 
operated as a Subchapter S corporation until June 1994.  In October 1995, 
Rogue Wave merged with Inmark Development Corporation ("Inmark"), a privately 
held corporation specializing in the development, distribution and support of 
an object-oriented graphical user interface library written in the C++ 
programming language. 

     To date, the Company's revenue has been derived from licenses of its
software products and related maintenance, training and consulting services. 
License revenue is recognized upon execution of a license agreement and shipment
of the product if no significant contractual obligations remain and collection
of the resulting receivable is probable.  Allowances for credit risks and for
estimated future returns are provided for upon shipment.  Returns to date have
not been material.  Service and maintenance revenue consists of fees that are
charged separately from the product licenses.  Maintenance revenue consists of
fees for ongoing support and product updates and is recognized ratably over the
term of the contract, which is typically 12 months.  Service revenue consists of
training and consulting services and is recognized upon completion of the
related activity.  For all periods presented, the Company has recognized revenue
in accordance with Statement of Position 91-1, SOFTWARE REVENUE RECOGNITION.  

     The Company markets its products primarily through its direct sales force,
and to a lesser extent through the Internet and an indirect channel consisting
of OEMs, VARs, dealers and distributors.  The Company's direct sales force
consists of an inside telesales group that focuses on smaller orders ($50,000 or
less), and an outside sales force that focuses on larger site licenses. The
Company makes all of its products available for sale and distribution over the
Internet to customers in the United States.  Revenue through this channel has
not been significant to date, and there can be no assurance that the Company
will be successful in marketing its products through this channel.

     International revenue accounted for approximately 19% of total revenue in
the first quarter of fiscal 1997.  In January 1996, the Company established a
wholly-owned subsidiary in Germany to market and support the Company's products
in Germany and neighboring countries.  The Company anticipates establishing or
acquiring similar organizations in other locations in Europe, and possibly in
Asia.  The Company expects that international license and service and
maintenance revenue will account for an increasing portion of its total revenue
in the future.  The Company has committed and continues to commit significant
management time and financial resources to developing direct and indirect
international sales and support channels.  There can be no assurance, however,
that the Company will be able to maintain or 

                                      7 
<PAGE>

increase international market demand for its products.  To date, other than 
revenue generated by the Company's German subsidiary, the Company's 
international revenue has been denominated in United States dollars.  As a 
result of recent fluctuations in international exchage rates, the Company's 
Board of Directors has authorized the Company to enter into forward foreign 
exchange contracts to minimize the transaction risk associated with such 
fluctuations.  To date, the Company has not engaged in any hedging 
activities.  Although exposure to currency fluctuations to date has been 
insignificant, to the extent international revenue is denominated in local 
currencies, foreign currency translations may contribute to significant 
fluctuations in, and could have a material adverse effect upon, the Company's 
business, financial condition and results of operations.

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated the percentage of net
revenues represented by certain line items in the Company's Consolidated
Statements of Operations.

                                          PERCENTAGE OF TOTAL NET REVENUES 

                                                  Three months ended 
                                                     December 31,    
                                                  ------------------ 
                                                  1995          1996 
                                                  ----          ---- 
Revenue:
  License revenue                                  77%           76% 
  Service and maintenance revenue                  23%           24% 
                                                  ---           ---  
    Total revenue                                 100%          100% 
                                                  ---           ---  

Cost of revenue:
  Cost of license revenue                           6%            6% 
  Cost of service and maintenance revenue           9%            8% 
                                                  ---           ---  
    Total cost of revenue                          15%           14% 
                                                  ---           ---  
    Gross profit                                   85%           86% 
                                                  ---           ---  

Operating expenses:
  Product development                              26%           25% 
  Sales and marketing                              45%           42% 
  General and administrative                       13%           13% 
                                                  ---           ---  
    Total operating expenses                       84%           80% 
                                                  ---           ---  
    Income from operations                          1%            6% 
Other income, net                                   0%            2% 
                                                  ---           ---  
    Income before income taxes                      1%            8% 
Income tax expense                                  0%            3% 
                                                  ---           ---  
    Net income                                      1%            5% 
                                                  ---           ---  
                                                  ---           ---  

                                      8 
<PAGE>

REVENUE

     The Company's total revenue increased 66% to $5.9 million in the first
quarter of fiscal 1997 from $3.5 million in the first quarter of fiscal 1996. 
License revenue increased 64% to $4.5 million in the first quarter of fiscal
1997 from $2.7 million in the first quarter of fiscal 1996. License revenue
increased primarily as a result of an increase in the number of licenses sold to
existing and new customers, reflecting additional product offerings, an
expanding market, increased market awareness and expansion of the Company's
direct sales organization.  In particular, the Company introduced its
Threads.h++ and Inter.Net.h++ products in the first quarter of fiscal 1997. 

     Service and maintenance revenue increased 73% to $1.4 million in the first
quarter of fiscal 1997 from $804,000 in the first quarter of fiscal 1996. The
increase in service and maintenance revenue was generally attributable to the
growing installed base of the Company's products and the associated increase in
demand for support and maintenance services. 

COST OF REVENUE

     Cost of license revenue increased 56% to $342,000 in the first quarter of
fiscal 1997 from $219,000 in the first quarter of fiscal 1996. The increase was
primarily the result of an increase in the number of licenses sold. 

     Cost of service and maintenance revenue increased 71% to $502,000 in the
first quarter of fiscal 1997 from $294,000 in the first quarter of fiscal 1996.
The increase was primarily the result of expenses associated with the
development of training programs, utilization of training and mentoring
consultants and the hiring of additional product support personnel.

OPERATING EXPENSES

     Product development expense increased 61% to $1.5 million in the first
quarter of fiscal 1997 from $924,000 in the first quarter of fiscal 1996. The
increase in product development expense was primarily attributable to the hiring
of additional product development personnel.  The Company anticipates that it
will continue to devote substantial resources to product development and that
product development expenses will increase in dollar amount through fiscal 1997
as the Company continues to increase its product development capacity, although
the Company does not believe such expenses will increase as a percentage of
total revenue.

     Sales and marketing expense increased 54% to $2.5 million in the first
quarter of fiscal 1997 from $1.6 million in the first quarter of fiscal 1996. As
a percentage of total revenue, sales and marketing expenses were 42% and 45% in
each respective period.  The decrease in sales and marketing expenses as a
percent of revenue was primarily due to the rapid growth in revenues.  While the
Company expects that sales and marketing expenses will continue to grow, the
Company does not believe such expenses will increase as a percentage of total
revenue.

     General and administrative expense increased 49% to $705,000 in the first
quarter of fiscal 1997 from $472,000 in the first quarter of fiscal 1996.  The
increase in general and administrative expenses were primarily due to increased
staffing, investment in infrastructure and associated expenses necessary to

                                      9 
<PAGE>

manage and support the Company's growing operations.  The Company believes that
during the near term its general and administrative expenses will continue to
grow in absolute dollars as a result of anticipated expansion.

OTHER INCOME, NET

     Other income increased as a result of higher interest income due to higher
investment balances resulting from the infusion of cash from the Company's
initial public offering. 

INCOME TAX EXPENSE

     The Company's effective tax rate increased to 33.0% of pretax income in the
first quarter of fiscal 1997 from 24.8% percent in the fourth quarter of fiscal
1996. The higher effective tax rate for the first quarter of fiscal 1997 was
primarily due to the decrease in research and experimentation tax credits. The
Company anticipates its fiscal 1997 effective tax rate will be approximately 33%
percent; however, this rate could change based on a change in the percentage of
total revenue derived from international sources. 

LIQUIDITY AND CAPITAL RESOURCES

     The Company completed an initial public offering of common stock on
November 22, 1996 with net proceeds of approximately $25.6 million.  The common
stock is trading on the Nasdaq National Market under the symbol RWAV.  The
Company generated cash of $2.8 million from operating activities for the first
quarter of fiscal 1997 compared to cash used in operating activities of $233,000
for the first quarter of fiscal 1996.  

FACTORS THAT MAY AFFECT FUTURE RESULTS

     IN EVALUATING THE COMPANY'S BUSINESS, PROSPECTIVE INVESTORS SHOULD
CAREFULLY CONSIDER THE FOLLOWING FACTORS IN ADDITION TO THE OTHER INFORMATION
PRESENTED IN THIS REPORT.

     UNCERTAINTY OF FUTURE OPERATING RESULTS; FLUCTUATIONS IN QUARTERLY
OPERATING RESULTS.  Prior growth rates in the Company's revenue and net income
should not be considered indicative of future operating results.  Future
operating results will depend upon many factors, including the demand for the
Company's products, the level of product and price competition, the length of
the Company's sales cycle, the size and timing of individual license
transactions, the delay or deferral of customer implementations, the budget
cycles of the Company's customers, the Company's success in expanding its direct
sales force and indirect distribution channels, the timing of new product
introductions and product enhancements, the mix of products and services sold,
levels of international sales, activities of and acquisitions by competitors,
the timing of new hires, changes in foreign currency exchange rates, and the
ability of the Company to develop and market new products and control costs.  A
significant portion of the Company's revenue has been, and the Company believes
will continue to be, derived from relatively large orders, and the timing of
such orders has caused and may continue to cause material fluctuations in the
Company's operating results, particularly on a quarterly basis.  The Company
generally ships orders as received and as a result typically has little or no
backlog.  Quarterly revenue and operating results therefore depend on the volume
and timing of orders received during the quarter, which are difficult to
forecast.  In addition, the Company has historically earned a substantial
portion of its revenue in the last days of each quarter.  To the extent this
trend continues, the failure to achieve such revenue during the last days of any
given quarter will have a 

                                      10 
<PAGE>

material adverse effect on the Company's business, financial condition and 
results of operations.

     Service and maintenance revenue tend to fluctuate as consulting contracts,
which may extend over several months, are undertaken, renewed, completed or
terminated.  License fee revenue is difficult to forecast due to the fact that
the Company's sales cycle, from initial evaluation to purchase, varies
substantially from customer to customer.  As a result of these and other
factors, revenue for any quarter is subject to significant variation, and the
Company believes that period-to-period comparisons of its results of operations
are not necessarily meaningful and should not be relied upon as indications of
future performance.  Because the Company's operating expenses are based on
anticipated revenue trends and because a high percentage of the Company's
expenses are relatively fixed, a delay in the recognition of revenue from a
limited number of transactions could cause significant variations in operating
results from quarter to quarter and could result in significant losses.  To the
extent such expenses precede, or are not subsequently followed by, increased
revenue, the Company's operating results would be materially and adversely
affected.  Due to all of the foregoing factors, it is likely that in some future
quarter the Company's operating results will be below the expectations of public
market analysts and investors.  In such event, the price of the Company's Common
Stock would likely be materially and adversely affected.  Fluctuations in
operating results may also result in volatility in the price of the Company's
Common Stock. 

     DEPENDENCE ON EMERGING MARKET FOR C++ AND JAVA.  The Company's product 
lines are designed for use in object-oriented software application 
development, specifically the C++ programming language, and substantially all 
of the Company's revenue has been attributable to sales of products and 
related maintenance and consulting services related to C++ programming and 
development.  The Company believes that while the market for object-oriented 
technology in general, and C++ tools and programming applications in 
particular, is growing, the Company's growth depends upon broader market 
acceptance of object-oriented technology and the C++ programming language.  
Even if broader market acceptance is achieved, the object-oriented market may 
continue to be characterized by multiple software environments, many of which 
are not supported by the Company's products, and numerous competitors in the 
areas of tools, methodology and services.  Furthermore, the C++ programming 
language is very complex.  Should the C++ programming language lose market 
acceptance or be replaced by another programming language, the Company's 
business, financial condition and results of operations would be materially 
and adversely affected. The Company's financial performance will depend in 
part upon continued growth in the object-oriented technology and C++ markets 
and the development of standards that the Company's products address.  There 
can be no assurance that the market will continue to grow or that the Company 
will be able to respond effectively to the evolving requirements of the 
market. 

     The number of software developers using the C++ programming language is 
relatively small compared to the number of developers using more traditional 
software development technology. The adoption of the C++ programming language 
by software programmers who have traditionally used other technology requires 
reorientation to significantly different programming methods, and there can 
be no assurance that the acceptance of the C++ programming language will 
expand beyond the early adopters of the technology.  Furthermore, there can 
be no assurance that potential corporate customers will be willing to make 
the investment required to retrain programmers to build software using C++ 
rather than structured or other object-oriented programming techniques.  Many 
of the Company's customers have purchased only small quantities of the 
Company's products and there can be no assurance that these or new customers 
will broadly implement C++ programming or purchase additional products. 

                                      11 
<PAGE>

     In addition, the Company has recently introduced several products for use
in the Java market.  The Company has spent and will continue to devote resources
to the development of new and enhanced products that address the Java market.
There can be no assurance that the Company will be successful in marketing its
existing or future Java products or that the market for Java products will grow.
If the Java market fails to grow, or grows more slowly than the Company
currently anticipates, the Company's business, financial condition and results
of operations could be materially and adversely affected.

     COMPETITION.  The market for the Company's products is intensely
competitive, subject to rapid change and significantly affected by new product
introductions and other market activities of industry participants.  The
Company's products are targeted at the emerging market for C++ software parts
and programming tools, and the Company's competitors offer a variety of products
and services to address this market.  The Company believes that the principal
competitive factors in this market are product quality, flexibility,
performance, functionality and features, use of standards based technology,
quality of support and service, company reputation and price.  While price is
less significant than other factors for corporate customers, price can be a
significant factor for individual programmers. Certain of the Company's
competitors have well-established relationships with current and potential
customers and have the resources to enable them to more easily offer a single
vendor solution.  Many of these companies have longer operating histories,
significantly greater resources and name recognition and larger installed bases
of customers than the Company.  As a result, competitors may be able to respond
more quickly to new or emerging technologies and changes in customer
requirements, or to devote greater resources to the development, promotion and
sale of their products than the Company. 

     The Company also faces competition from systems integrators and internal
development efforts.  Many systems integrators possess industry specific
expertise that may enable them to offer a single vendor solution more easily,
and already have a reputation among potential customers for offering
enterprise-wide solutions to software programming needs. There can be no
assurance that these third parties, many of which have significantly greater
resources than the Company, will not market competitive software products in the
future.  It is also possible that new competitors or alliances among competitors
will emerge and rapidly acquire significant market share.  The Company also
expects that competition will increase as a result of software industry
consolidation.  Increased competition may result in price reductions, reduced
gross margins and loss of market share, any of which could materially and
adversely affect the Company's business, operating results and financial
condition.  There can be no assurance that the Company will be able to compete
successfully against current and future competitors or that competitive
pressures faced by the Company will not materially and adversely affect its
business, financial condition and results of operations. 

     MANAGEMENT OF GROWTH.  The Company is experiencing a period of transition
and aggressive product introductions that has placed, and may continue to place,
a significant strain on its resources, including its personnel. Expansion of the
Company's product lines, additional product development and product
introductions, or acquisitions of other technologies or companies, when added to
the day-to-day activities of the Company, will place a further strain on the
Company's resources and personnel.  The Company's acquisition of Inmark
Development Corporation in October 1995 has also resulted in the Company's
product development team being distributed in three separate sites across the
country.  Managing this distribution requires a significant amount of attention
from management, particularly the Vice President, Development and the Chief
Technology Officer, to ensure that the Company's development efforts are timely,
consistent and well integrated. 

     Furthermore, the Company believes that its ability to achieve significant
revenue growth in the future will depend in large part on its success in
recruiting and training sufficient direct sales personnel and 

                                     12

<PAGE>

establishing and maintaining relationships with its outside sales 
representatives.  Although the Company is currently investing, and plans to 
continue to invest, significant resources to expand its direct sales force and 
to develop distribution relationships with outside sales representatives, the 
Company has at times experienced and continues to experience difficulty in 
recruiting qualified sales personnel and in establishing necessary sales 
representative relationships. The Company believes that the hiring and 
retaining of qualified individuals at all levels in the Company is essential 
to the Company's ability to manage growth successfully, and there can be no 
assurance that the Company will be successful in attracting and retaining the 
necessary personnel.  If Company management is unable to effectively manage 
growth, the Company's business, financial condition and results of operations 
will be materially and adversely affected. 

     RAPID TECHNOLOGICAL CHANGE; DEPENDENCE ON NEW PRODUCTS.  The market for
software development tools is characterized by rapid technological advances,
changes in customer requirements and frequent new product introductions and
enhancements.  The Company must respond rapidly to developments related to
hardware platforms, operating systems and applicable programming languages. 
Such developments will require the Company to continue to make substantial
product development investments.  Any failure by the Company to anticipate or
respond adequately to technological developments and customer requirements, or
any significant delays in product development or introduction, could result in a
loss of competitiveness or revenue. 

     The Company's future success will depend on its ability to continue to
enhance its current product line and to continue to develop and introduce new
products that keep pace with competitive product introductions and technological
developments, satisfy diverse and evolving customer requirements and otherwise
achieve market acceptance.  There can be no assurance that the Company will be
successful in continuing to develop and market on a timely and cost-effective
basis fully functional product enhancements or new products that respond to
technological advances by others, or that its enhanced and new products will
achieve market acceptance.  In addition, the Company has in the past experienced
delays in the development, introduction and marketing of new or enhanced
products. Such delays were primarily associated with increasing product
functionality and implementing new customer requirements. To date, such delays
have not resulted in a material adverse effect on the Company's business,
financial condition and results of operations. There can be no assurance that
the Company will not experience similar delays in the future.  Any failure by
the Company to anticipate or respond adequately to changes in technology and
customer preferences, or any significant delays in product development or
introduction, would have a material adverse effect on the Company's business,
financial condition and results of operations. 

     FUTURE ACQUISITIONS.  The Company frequently evaluates strategic
opportunities available to it and may in the future pursue acquisitions of
complementary technologies, products or businesses.  Future acquisitions of
complementary technologies, products or businesses by the Company will result in
the diversion of management's attention from the day-to-day operations of the
Company's business and may include numerous other risks, including difficulties
in the integration of the operations, products and personnel of the acquired
companies.  Future acquisitions by the Company may also result in dilutive
issuances of equity securities, the incurrence of debt and amortization expenses
related to goodwill and other intangible assets.  Failure of the Company to
successfully manage future acquisitions may have a material adverse effect on
the Company's business, financial condition and results of operations. 

                                     13

<PAGE>

PART II  -  OTHER INFORMATION

ITEM 1.  -  LEGAL PROCEEDINGS

     On October 30, 1996, Mark Anthony Pinone, a former employee of the Company,
filed a Complaint in Santa Clara Superior Court, alleging cause for claims
against the Company and Thomas Nora, the Company's former Vice President of
Sales, of breach of contract, breach of the implied covenant of good faith and
fair dealing, unlawful disability discrimination, wrongful termination in
violation of public policy, and intentional and negligent infliction of
emotional distress.  The Company settled the dispute with Mr. Pinone on December
17, 1996 and the lawsuit has been dismissed.

Item 4.  -  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The company held its Annual Meeting of Stockholders on October 30, 1996. 
The stockholders voted as follows:

     The stockholders elected each of the six nominees for director.  The
elected directors and the votes cast in favor and against each are as follows:

                                            VOTES IN FAVOR   VOTES AGAINST
                                            --------------   -------------
     Thomas M. Atwood                         6,907,976          72,396
     Thomas Keffer, Ph.D.                     6,782,976         197,396
     Howard M. Love, Jr.                      6,890,822          89,550
     Richard P. Magnuson                      6,907,976          72,396
     Thomas H. Peterson                       6,907,976          72,396
     Dan Whitaker                             6,782,976         197,396

     The stockholders approved the reincorporation of the Company in Delaware
and related changes to the rights of stockholders with 6,793,495 votes in favor,
200,318 against and 0 abstentions.

     The stockholders approved a two-for-three reverse stock split with
6,793,981 votes in favor, 199,832 against and 0 abstentions.

     The stockholders approved the Company's 1996 Equity Incentive Plan
with 6,787,745 votes in favor, 205,582 against and 486 abstentions.

     The stockholders approved the Company's Employee Stock Purchase Plan
with 6,788,037 votes in favor, 205,290 against and 486 abstentions.

     The stockholders' approved a form of Indemnity Agreement to be entered
into by the Company with each of its directors and executive officers with
6,787,204 votes in favor, 205,290 against and 1,319 abstentions.

                                     14

<PAGE>

Item 6.  -  EXHIBITS AND REPORTS ON FORM 8-K

     (a)    Exhibits:

     2.1(1)    Agreement and Plan of Reorganization between Registrant, Inmark
               Development Corporation and RW Acquisitions, Inc., dated as of
               September 19, 1995.

     2.2(1)    Agreement and Plan of Merger between the Registrant and Rogue
               Wave Software, Inc., an Oregon corporation.

     3.1       Amended and Restated Certificate of Incorporation of Rogue Wave
               Software, Inc., a Delaware corporation.

     3.2(1)    Bylaws of Rogue Wave Software, Inc., a Delaware corporation.

     4.1(1)    Reference is made to Exhibits 3.1 and 3.2.

     4.2(1)    Specimen Stock Certificate.

     4.3(1)    Amended and Restated Investors' Rights Agreement between the
               Registrant and certain investors, dated November 10, 1995, as
               amended June 27, 1996.

     10.1(1)   Registrant's 1996 Equity Incentive Plan.

     10.2(1)   Registrant's Employee Stock Purchase Plan.

     10.3(1)   Form of Indemnity Agreement to be entered into between the
               Registrant and its officers and directors.

     10.4(1)   Lease Agreement between Registrant and the State of Oregon, dated
               May 1, 1996.

     10.5(1)   Lease Agreement between the Registrant and the Landmark, dated
               April 22, 1996.

     10.6(1)   Loan and Security Agreement between the Registrant and Silicon
               Valley Bank, dated October 16, 1996.

     10.7(1)   Collateral Assignment, Patent Mortgage and Security Agreement
               between the Registrant and Silicon Valley Bank, dated October 16,
               1996.

     27.1      Financial Data Schedule.


     (1)  Filed as an Exhibit to the Registrant's Registration
     Statement on Form SB-2, as amended (No. 333-13517)

     (b)    Reports on Form 8-K:

                                     15

<PAGE>

     No reports on Form 8-K were filed during the quarter ended December 31,
1996

ITEMS 2, 3, AND 5 ARE NOT APPLICABLE AND HAVE BEEN OMITTED.





                                     16

<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.


                                       ROGUE WAVE SOFTWARE, INC.
                                       (Registrant)




Date:  February 13, 1997               /s/   ROBERT M. HOLBURN, JR.
                                       ----------------------------------
                                       ROBERT M. HOLBURN, JR.
                                       CHIEF FINANCIAL OFFICER