<PAGE>
 
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                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549
    
                               AMENDMENT NO. 1 TO     

                                  FORM 10-QSB

                       QUARTERLY REPORT UNDER SECTION 13

                OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

       FOR QUARTER ENDING JUNE 30, 1996 COMMISSION FILE NUMBER 33-23138-D

                                HEARTSOFT, INC.
                                ---------------
             (Exact name of registrant as specified in its charter)

              Delaware                                    87-0456766
       -----------------------                 ---------------------------------
       (State of Incorporation)                (IRS Employer Identification No.)
                                                   
3101 Hemlock Circle, Broken Arrow, Oklahoma                 74012
-------------------------------------------               ----------
 (Address of principal executive offices)                 (Zip Code)


      Registrant's telephone number, including area code:  918/251-1066

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
requirement for the past 90 days.    YES X     NO
                                        ---      ---

As of June 30, 1996, there were 5,089,608 shares of Heartsoft, Inc. Common
Stock, $0.0005 par value outstanding.

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Heartsoft, Inc. - Quarterly Report Ending June 30, 1996.
===============================================================================

                      HEARTSOFT, INC. - QUARTERLY  REPORT
                               TABLE OF CONTENTS

 PART 1. Financial Information                                Page

 Item 1: Balance Sheet as of June 30, 1996                     3

         Statement of Income Three Months ending
         June 30, 1996                                         4

         Statement of Cash Flow - Three Months Ending
         June 30, 1996                                         5

         Notes to Financial Statements                         6

         Management's Discussion, Analysis of
         Financial Condition, and Results of Operations        7

PART 11. Other Information

 Item 1: Legal Proceedings                                     9

                                     Page 2
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Heartsoft, Inc. - Quarterly Report Ending June 30, 1996.
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Part 1. FINANCIAL INFORMATION 
ITEM 1 FINANCIAL STATEMENTS

 
                                 BALANCE SHEET
<TABLE>
<CAPTION>
                                                 June 30, 1996    March 31,1996
                                                 -------------    -------------
<S>                                              <C>              <C>
ASSETS
  Cash                                             $  552,533      $   19,922
  Accounts Receivable-trade                           222,613         165,013
  Inventory                                            12,874          11,216
  Prepaid Expenses and Deposits                       118,205          50,495
  Receivables- related parties                         57,490          51,013
                                                   ----------      ---------- 
     Total Current Assets                          $  963,715         297,659

   Fixed Assets-Net                                   111,718         100,478
   Developed Software (See Note 2)                    569,052         536,140
   Deferred income tax benefit                        138,926         145,901
                                                   ----------      ----------
     Total Other Assets                            $  819,696         782,519
                                                   ----------      ----------
   Total Assets                                    $1,783,411      $1,080,178
                                                   ==========      ==========

 LIABILITIES
   Accounts Payable - Trade                        $   84,726         122,851
   Notes Payable-current portion                      106,270         261,801
   Capital lease obligations-current portion           34,768          22,662
   Taxes Payable                                       66,928          53,901
                                                   ----------      ----------   
    Total Current Liabilities                      $  292,692         461,215

  Long Term Liabilities                                37,068          38,404
                                                   ----------      ----------
  Total Liabilities                                $  329,760      $  499,619

STOCKHOLDERS EQUITY
  Retained Earnings                                  (941,633)       (884,467)
  Common Stock                                          2,512           2,513
  Preferred Stock                                       6,550           1,550
  Paid-In Capital                                   2,346,699       1,460,963
  Net Profit / (Loss)                                  39,523
                                                   ----------      ----------
    Total Stockholders Equity                      $1,453,651      $  580,559
                                                   ----------      ----------
  Total Liabilities And
  Stockholders Equity                              $1,783,411      $1,080,178
                                                   ==========      ==========
</TABLE>

                                     Page 3
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Heartsoft, Inc. - Quarterly Report Ending June 30, 1996
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Part 1. FINANCIAL INFORMATION

 
                              STATEMENT OF INCOME
<TABLE>    
<CAPTION>
                                                Three months ended
                                                      June 30,
 
                                                   1996     1995
                                                   ----     ----
<S>                                            <C>        <C>
REVENUE

Gross Sales                                    $459,196   $277,313
                                               --------   -------- 
Sales Returns                                    (1,380)   (12,284)
Sales Discounts                                    (270)      (737)
                                               --------   -------- 
Net Sales                                       457,546    264,292

Total Cost of Goods Sold                        185,372     25,186
                                               --------   --------
GROSS MARGIN                                    272,174    239,107

EXPENSES
Payroll Expense                                  83,069     54,497
Administrative Expense                          142,607     87,297
                                               --------   --------
Operating Expense                               225,676    141,794
                                               --------   --------
Net Operating Income                           $ 46,468     96,672
                                               --------   -------- 
Less: Income Taxes (See Note 3)                   6,975          0
 
Net Income After Taxes                         $ 39,523   $ 96,672
                                               --------   -------- 
Preferred Dividends                            $  2,836   $      0
                                               --------   -------- 

Net Income Available to Common Shareholders    $ 36,687   $ 96,672
                                               ========   ========

EARNINGS (LOSS) PER SHARE*                         0.01       0.02
                                                   ----       ----
</TABLE>     

*Primary weighted average common shares outstanding during the period. 
 1995=4,259,740 and 1996=5,089,608

                                     Page 4
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Heartsoft, Inc. - Quarterly Report Ending June 30, 1996.
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Part 1. FINANCIAL INFORMATION
 
                            STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                                 3 Months ended June 30,
 
                                                     1996        1995
                                                   ---------   --------
<S>                                                <C>         <C>
Cash Flow from operating activities
  Net Income (Loss)                                $  39,523   $ 96,672
  Change in Current Assets
    Net Receivables                                 (121,245)   (97,602)
    Inventory                                         (1,659)    (7,750)
    Prepaid Expenses                                 (67,710)    37,283
  Change in Current Liabilities
    Accounts Payable                                 (20,408)    18,096
    Loan Payable                                      (6,968)     6,000
    Other Current Liabilities                         13,026      3,515
                                                   ---------   --------
    Total Cash Flow from operating activities       (165,441)    56,215
 
Cash Flow from investing activities
  Developed Software                                 (59,187)   (15,543)
  Property, Plant & Equipment                        (14,238)   (18,726)
  Depreciation on Disposed Prop, Plant & Equip.       30,000        511
  Intangible Assets                                    6,250       (632)
                                                   ---------   --------
    Total Cash Flow from investing activities        (37,175)   (34,390)

Cash Flow from financing activities
  Long-Term Debt                                    (155,509)   (35,941)
  Paid-ln Capital                                    890,735      5,950
  Retained Earnings                                             (10,742)
                                                   ---------   --------
    Total Cash Flow from financing activities        735,226    (40,734)
                                                   ---------   --------
Net Increase (Decrease) in Cash                    $ 532,610   $(18,909)
                                                   =========   ======== 

Beginning Cash Balance                             $  19,923   $ 32,813
Net Increase (Decrease) in Cash                    $ 532,610   $(18,909)
                                                   ---------   --------
Ending Cash Balance                                $ 552,533   $ 13,904
                                                   =========   ========
</TABLE>

                                     Page 5
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Heartsoft, Inc. - Quarterly Report Ending June 30, 1996.
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                                HEARTSOFT, INC.
                         NOTES TO FINANCIAL STATEMENTS
                                 June 30, 1996
                                  (unaudited)

Note 1. Basis of Presentation.
        ----------------------

The accompanying financial statements have been prepared by the Company without
audit. In the opinion of management, all adjustments (consisting of only normal
recurring accruals) considered necessary for a fair presentation have been
included.

Note 2. Developed Software
        ------------------

Capitalization of software development costs begins when the project reaches
technological feasibility and includes the costs incurred until the project is
ready for release. Software development costs are amortized on the straight-line
method over a maximum of seven years or the expected life of the product,
whichever is less. As of March 31, 1996, this policy represents a change in the
Company's accounting treatment for amortization of its development costs.

Note 3. Deferred Income Tax
        -------------------

The Company reports the deferred tax benefit in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes". Income
tax expense reflects federal and state income taxes on current earnings. No
actual current income taxes were paid due to the application of the tax loss
carryforward. Therefore, tax expense for both years is deferred to a future
date.

                                     Page 6
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Heartsoft, Inc., - Quarterly Report Ending June 30, 1996.
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Item 2

                                HEARTSOFT. INC.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
                                 June 30, 1996

OVERVIEW

Heartsoft, Inc. is a publicly held Delaware Corporation, incorporated January
15, 1988, and traded OTC (Symbol: HTSF).  Presently, 30 million shares of stock
are authorized, with 5,089,608 shares issued and outstanding. Over the past
ninety days, the Company's stock has traded in the $1.69 to $3.37 range.

The mission of Heartsoft, Inc. is to create value for its shareholders through
the development, acquisition, and distribution of advanced multimedia
technologies for education in schools and homes.

To date, Heartsoft's Core Products Division has designed and published more than
30 educational software titles. These proprietary titles range in price from
$34.95 to $995 depending on the configuration. These titles are targeted to both
public and private U.S. Schools with children in Pre-Kindergarten through the
8th grades. The Company has licensed other products which are targeted at
children in grades 4 through 12.

During the last year, Heartsoft has opened an Advanced Technology Division
office in Dallas, Texas to distribute leading-edge technology products to
schools. Based on the performance of this office, the Company may use it as a
prototype for offices to be opened in other major markets across the country in
the next few years.

Since the company's initial formation in 1989, the shareholders and management
of Heartsoft, Inc. have contributed over $1.3 million in capital and assets to
the Company. The continued financial strategy of Heartsoft emphasizes
reinvestment of income for continued growth during the next few years of
operations.

RESULTS OF OPERATIONS

Net Revenues
    
Net Sales of the Company's educational computer software for the 3 months ending
June 30, 1996, were $457,546 compared to $264,292 for the same period one year
ago, an increase of 73%. The increase in revenues can be attributed to the
Company's expanded presence and the opening of the Dallas Heartsoft Advanced
Technologies Division. Sales returns declined as a percentage of sales, as the
Company moved away from a marketing policy that encouraged preview sales, which
traditionally have a higher return rate.     

Cost of Goods Sold

The Company includes in cost of goods sold all costs associated with the
acquisition of components, assembly of finished products and shipping. Included
in that total is the Advanced Technology Division's cost of licensed products,
which varies by vendor and product line. Total gross margin increased to
$272,174, a 12% improvement. The gross margin of 59.4% for the three months
ended 6/30/96 was a decline from 90.5% in the year earlier period. The decrease
was attributable to the inclusion of the different cost structure associated
with the Advanced Technology Division product line, as the Tulsa Core Product's
Division continued to operate at roughly the same efficiency level as prior
periods. 

                                     Page 7
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Heartsoft, Inc. - Quarterly Report Ending June 30, 1996.
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Operating Expenses

General operating expenses increased across the board from $141,794 for the
three months ended June 30, 1995 to $225,676 for period ending June 30, 1996. As
a percentage of net sales, operating expenses decreased from 53.4% one year ago
to 49.3% for the quarter ending June 30, 1996. The current quarter figures
include $30,000 in software amortization and depreciation expenses, which were
not included in year earlier periods. (See Note 2). Without the amortization
expense, the operating expenses as a percentage of sales would have declined to
42.8% as of 6/30/96.

Net Income

Net income decreased to $39,523 for the 3 months ending June 30, 1996 from
$96,672 for the same period one year ago. The net income fell due to the higher
operating expenses, as the Company continued to add additional sales and
development capacity.

Liquidity and Capital Resources

As of June 30, 1996, the Company's principle sources of liquidity included cash
and accounts receivable of $775,000 as well as a revolving line of credit with a
current limit of $250,000. Management believes that its existing sources of
liquidity and anticipated funds from operations will satisfy the working capital
and capital expenditures requirements for the foreseeable future.

                                     Page 8
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Heartsoft, Inc. - Quarterly Report Ending June 30, 1996.
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Part 11. OTHER INFORMATION

Item 1: LEGAL PROCEEDINGS

Both the Company and Benjamin Shell, the Company's Chairman of the Board, are
named as defendants in a lawsuit filed on May 17, 1996, in Superior Court of
Murray County, Georgia, by Raymond Long, a former stockholder of the Company.
The suit sets forth various claims against Mr. Shell and the Company,
essentially alleging fraud in connection with Mr. Long's investment in the
Company in 1991 and 1992. Although it is difficult to ascertain from the
complaint the specific facts giving rise to the allegations or the aggregate
amount of damages sought, the suit alleges actual damages in excess of
$2,000,000, punitive damages, as well as treble damages under various theories
of recovery. While the lawsuit has only recently been filed, both the Company
and Mr. Shell have retained Georgia counsel, and have filed both an answer to
the allegations in the complaint, asserting numerous defenses, as well as a
Motion to Dismiss the case, for lack of jurisdiction. The hearing on the Motion
to Dismiss was held on August 21, 1996, and at that time the Court took the
Motion under advisement, until November 1, 1996. Both Mr. Shell and the Company
believe they have meritorious defenses to the suit, and both plan to vigorously
defend the allegations contained herein.

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.

                              HEARTSOFT, INC.
                              (Registrant)
                              
    October 9, 1996             /s/ Benjamin P. Shell
-------------------------       -------------------------------------------
          Date                        Benjamin P. Shell, Chairman
                                
                                
     October 9 1996             /s/ Bryan J. Reusser
-------------------------       -------------------------------------------
          Date                        Bryan J. Reusser, Director of Finance     

                                     Page 9