SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549
                            FORM 10-Q
                        __________________

XX  Quarterly report pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934, For the quarterly period
    ended June 30, 1997, or

    Transition report pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934, For the transition period
    from ___________ to 

                  Commission File Number 1-10139
 

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


         DELAWARE                             04-2911320
(State or other jurisdiction of           (I.R.S. Employer
incorporation or organization)           Identification No.)

245 Winter Street
Waltham, MA                                         02154
(Address of principal executive offices)          (Zip Code)


                          (617)890-1700
                 (Registrant's Telephone Number)


Securities registered pursuant to Section 12(g) of the Act: NONE


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 other 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  XX Yes      No

As of July 31, 1997 there were 9,269,446 shares of Common Stock
outstanding.
<PAGE>
                          FORM 10-Q

                        QUARTERLY REPORT

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

                       TABLE OF CONTENTS


Facing Sheet. . . . . . . . . . . . . . . . . . . . . . . 1

Table of Contents . . . . . . . . . . . . . . . . . . . . 2


PART I.  FINANCIAL INFORMATION

 Item 1. Consolidated Financial Statements

         Consolidated Balance Sheets  . . . . . . . . . . 3
         Consolidated Statements of Operations. . . . . . 5
         Consolidated Statements of Cash Flows. . . . . . 7
         Notes to Consolidated Financial Statements . . . 9

 Item 2.  Management's Discussion and Analysis of Financial

         Condition and Results of Operations . . . . . . .11


PART II.  OTHER INFORMATION

 Item 1.  Legal Proceedings  . . . . . . . . . . . . . . .16

 Item 2.  Changes in Securitities. . . . . . . . . . . . .16

 Item 3.  Defaults Upon Senior Securities. . . . . . . . .16

 Item 4.  Submission of Matters to a Vote of
          Security Holders . . . . . . . . . . . . . . . .16

 Item 5.  Other Information. . . . . . . . . . . . . . . .18

 Item 6.  Exhibits and Reports on Form 8-K . . . . . . . .18


 SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . .19

Exhibit 11 - Computation of earnings per share . . . . . .20
<PAGE>
                 PART I. - FINANCIAL INFORMATION

                        NETEGRITY, INC.
                  CONSOLIDATED BALANCE SHEETS

                             ASSETS


                                          June 30,
                                            1997    December 31,
                                        (unaudited)     1996


CURRENT ASSETS:  

  Cash and cash equivalents               $4,620,286 $ 6,791,057
  Escrow receivable                          600,000     600,000
  Accounts receivable-trade, net of 
    allowance for doubtful accounts 
    of $74,797 and $67,797 at June 30
    1997 and December 31, 1996, 
    respectively                             501,619     787,780
  Other current assets                       553,627     559,230
  
  TOTAL CURRENT ASSETS                     6,275,532   8,738,067
  
EQUIPMENT AND LEASEHOLD 
  IMPROVEMENTS, NET                          501,497     287,323

CAPITALIZED SOFTWARE COSTS                   344,189       ---  
  
OTHER ASSETS:
                                             
  Investment in Encotone, Inc.               106,252     210,000
  Investment in Encotone, LTD.                 ---     1,000,000
    Other                                     33,922      23,360
  
  TOTAL OTHER ASSETS                         140,174   1,233,360
  
TOTAL ASSETS                              $7,261,392 $10,258,750




The accompanying notes are an integral part of the financial
statements.
<PAGE>
                        NETEGRITY, INC.
                  CONSOLIDATED BALANCE SHEET
 
             LIABILITIES AND STOCKHOLDERS' EQUITY


                                        June 30,
                                         1997        December 31,
                                     (unaudited)         1996

CURRENT LIABILITIES:

  Accounts payable-trade               $ 1,562,431 $ 2,099,436
  Other accrued expenses                 2,016,977   2,009,890
  Capital lease obligation                  30,058       ---
  
TOTAL LIABILITIES                        3,609,466   4,109,326
  
COMMITMENTS AND CONTINGENCIES                ---         ---
  
STOCKHOLDERS' EQUITY:
  Common stock, voting, $.01 par 
    value, authorized 25,000,000 
    shares: 9,269,446 shares 
    issued and 9,244,345 shares 
    outstanding at June 30, 1997; 
    9,204,946 shares issued and 
    9,179,845 shares outstanding 
    at December 31, 1996                    92,699      92,049
  Additional paid-in capital            10,569,354  10,460,554
  Cumulative translation adjustment         28,028      28,028
  Cumulative deficit                    (6,754,498) (4,147,550)
  Loan to officer                         (200,000)   (200,000)

                                         3,735,583   6,233,081
  Less - Treasury Stock, at cost: 
  25,101 shares                            (83,657)    (83,657)
  
TOTAL STOCKHOLDERS' EQUITY               3,651,926   6,149,424

TOTAL LIABILITIES AND 
  STOCKHOLDERS' EQUITY                 $ 7,261,392 $10,258,750


The accompanying notes are an integral part of the financial
statements.<PAGE>
                         NETEGRITY, INC.
              CONSOLIDATED STATEMENTS OF OPERATIONS
                           (Unaudited)

                                      For the three months ended
                                                 June 30,
                                            1997           1996

Net revenues                              $1,183,656  $1,129,972
Cost of revenues                             699,702     751,836
  Gross profit                               483,954     378,136
  
  Selling, general & administrative 
    expenses                               1,457,545     445,845
  
Loss from operations of continuing 
  operations                                (973,591)    (67,709)
  
Interest income                               62,656      11,095
Share of loss from investment
  in Encotone, Inc.                          (47,704)      ---
Write off of investment in 
  Encotone, LTD.                          (1,000,000)      ---
  
Loss from operations of continuing 
  operations                              (1,958,639)    (56,614)
Loss from operations of discontinued 
  operations                                   ---      (520,245)
Gain on sale of assets of 
  discontinued operations                      ---     6,000,000
  
(Loss) income before provision for 
  income taxes                            (1,958,639)  5,423,141
  
Provision for income taxes                     ---        19,000
  
  NET (LOSS) INCOME                       $(1,958,639) $5,404,141
  
Earnings (loss) per share:
  Loss from continuing operations             $(0.21)     $(0.01)
  Loss from operations of discontinued 
  operations                                     ---       (0.05)
  Gain on sale of assets of 
    discontinued operations                      ---        0.62
       NET(LOSS)INCOME PER SHARE              $(0.21)      $0.56
  
Weighted average shares outstanding        9,269,446   9,747,000
  
The accompanying notes are an integral part of the financial
statements.
<PAGE>
                         NETEGRITY, INC.
              CONSOLIDATED STATEMENTS OF OPERATIONS
                           (Unaudited)


                                       For the six months ended
                                                 June 30,
                                           1997           1996

Net revenues                              $2,170,250  $2,458,883
Cost of revenues                           1,234,953   1,506,884
  Gross profit                               935,297     951,999
   
  Selling, general & administrative 
    expenses                               2,479,067     844,631
  Research and development costs             101,148       ---
   
Income (loss) from operations of 
  continuing operations                   (1,644,918)    107,368
   
Interest income                              141,718      17,429
Share of loss from investment in 
  Encotone, Inc.                            (103,748)      ---
Write off of investment in 
  Encotone, LTD.                          (1,000,000)      ---

(Loss) income from continuing 
  operations                              (2,606,948)    124,797
Loss from operations of 
  discontinued operations                      ---      (734,698)
Gain on sale of assets of 
  discontinued operations                      ---     6,000,000
   
(Loss) income before provision for 
  income taxes                            (2,606,948)  5,390,099
   
Provision for income taxes                     ---        19,000
   
  NET (LOSS) INCOME                      $(2,606,948) $5,371,099
  
Earnings (loss) per share:
 (Loss) income from continuing 
    operations                                $(0.28)      $0.01
  Loss from operations of 
    discontinued operations                      ---       (0.08)
  Gain on sale of assets of 
    discontinued operations                      ---        0.66
     NET (LOSS) INCOME PER SHARE              $(0.28)      $0.59
  
Weighted average shares outstanding        9,265,279   9,052,000
   
  
The accompanying notes are an integral part of the financial
statements.<PAGE>
                         NETEGRITY, INC.
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (Unaudited)


                                       For the six months ended
                                                 June 30,
                                          1997           1996

OPERATING ACTIVITIES:

Net(loss) income from continuing 
  operations                             $(2,606,948)  $ 105,797

Adjustments to reconcile (loss) 
  income to net cash (used for) 
  provided by operating activities:
  Share of loss from investment in 
    Encotone, Inc.                           103,748       ---
  Write off of investment in 
    Encotone, LTD.                         1,000,000       ---
  Depreciation and amortization               44,494      10,981
  Provision for doubtful accounts 
    receivable                                 7,000       8,000

Change in operating assets and
  liabilities:
    Accounts receivable                      279,161     184,688
    Other current assets                       5,603    (203,549)
    Other assets                             (10,562)      ---
    Accounts payable                        (537,005)    383,570
    Other accrued expenses                    48,542     199,054
    Accrued income taxes                       ---      (180,000)
    Intangible assets                          ---       (42,417)

  Total adjustments                          940,981     360,327
  
  Net cash (used for) provided by 
    continuing operating activities       (1,665,967)    466,124

  Net cash (used for) provided by 
    discontinued operating activities        (41,455)  2,721,713
  
  Net cash (used for) provided by
    operating activities                 $(1,707,422) $3,187,837


The accompanying notes are an integral part of the financial
statements.
<PAGE>
                         NETEGRITY, INC.
          CONSOLIDATED STATEMENTS OF CASH FLOWS (Cont.)
                           (Unaudited)


                                        For the six months ended
                                                 June 30,
                                           1997           1996

INVESTING  ACTIVITIES:
Capitalized software costs              $  (344,189)       ---
Capital expenditures for equipment
  and leasehold improvements               (226,294)  $ (231,858)
Proceeds from sale of certain assets          ---      6,159,455
  Net cash (used for) provided by
   investing activities                    (570,483)   5,927,597

FINANCING  ACTIVITIES:
Net proceeds from issuance of stock         109,450       44,234
Principal payments under capital leases      (2,316)     (17,700)
Net payments on line of credit                 ---        41,248
Principal debt payments                        ---       (22,092)

  Net cash provided by financing 
    activities                              107,134       45,690
  
Effect of exchange rate changes 
  on cash                                     ---        (13,807)
     
  NET (DECREASE) INCREASE IN CASH 
    AND CASH EQUIVALENTS                 (2,170,771)   9,147,317
  
Cash and cash equivalents at 
  beginning of period                     6,791,057    1,258,061
  
  CASH AND CASH EQUIVALENTS AT 
    END OF PERIOD                        $4,620,286  $10,405,378

Supplemental Disclosures of Cash 
  Flow Information:
  Interest paid                          $      424  $    64,293
  Income taxes paid                      $   63,557        ---
  
Supplemental disclosure of non cash 
  investing and financing activities:
  Write off of investment in 
    Encotone, LTD.                       $1,000,000        ---
  Purchase of equipment under
    capital lease obligation             $   32,374        ---


The accompanying notes are an integral part of the financial
statements.
<PAGE>
                         NETEGRITY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


    Note 1 - The unaudited financial information furnished herein
reflects all adjustments which are of a normal recurring nature,
which in the opinion of management are necessary to fairly state
the Company's financial position, cash flows and the results of
its operations for the periods presented.  Certain information
and footnote disclosure normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  This information
should be read in conjunction with the Company's audited
financial statements for the fiscal year ended December 31, 1996,
included in Form 10-K filed on March 17, 1997. 

    Note 2 - The results of operations for the three-month and
six-month periods ended June 30, 1997 are not necessarily
indicative of the results to be expected for the entire year
ending December 31, 1997.

    Note 3 - Minority interest represents the minority
shareholders' proportionate share of their equity of Personal
Computing Tools, Inc. (PCT).  At June 30, 1997, the Company owned
94% of the capital stock of PCT.
  
    Note 4 - Net income per share is based upon the weighted
average number of common shares outstanding including the
dilutive effects of options and warrants.

    Note 5 - The Company provides for income taxes during interim
reporting periods based on reported earnings before income taxes
using an estimate of the annual effective tax rate.  Deferred
income taxes reflect the impact of temporary differences between
the amount of assets and liabilities recognized for tax purposes. 
These deferred taxes are measured by applying currently enacted
tax laws.

    Note 6 - As of June 28, 1996, the Company completed the
ivestiture of its catalog related business, consisting of The
rogrammer's SuperShop ("TPS")catalog, the TPS web site, the
corporate sales group, the German subsidiary ("SDC Germany") and
SDC Communications. The Company completed the transaction for an
aggregate price of $10,035,000.  The aggregate price consisted of
payment of $9,300,000 in immediately available funds and the
deposit of $735,000 under an escrow arrangement.  As of August
12, 1996, $135,000 of the escrow has been returned to the
Company.  The final purchase price of $10,035,000 was a
negotiated settlement.  Prior to the closing, the parties had a
dispute as to how catalog revenue should be measured under the
Agreement.

    The aggregate price of $10,035,000 assumed that the Company
transferred to the Purchaser as of the Closing date, tangible net
assets of the catalog related business that equaled to
$1,500,000.  These net assets are currently being audited and the
Company expects no material adjustments.

      The Company incurred $2,587,000 in expenses and write-offs
related to the divestiture.  These expenses were primarily
comprised of write-off of goodwill, severance costs, professional
fees and facility shut-down costs for its corporate offices and
distribution facility.  The Company reported a gain of $6,000,000
from the sale of the assets of its catalog related business.

      Note 7 - Effective February 1, 1997, the company began to
capitalize eligible software costs as required by FASB Statement
No. 86 "Accounting for the Costs of Computer Software to be Sold,
Leased, or Otherwise Marketed."  The Company capitalizes eligible
software costs upon establishing product technological easibility
and will amortize these costs on a product-by-product basis,
commencing upon release of the products to customers, on a
straight-line basis over the economic life of the product.  Costs
related to research, design and development of computer software
are charged to research and development expense as incurred.

      Note 8 - In October 1996 the Company made an early stage
investment in Encotone, LTD. with the anticipation that its first
product, TeleID , a credit card-sized acoustical smart card,
would be able to penetrate into the large long distance carrier
market.  To date, Encotone, LTD. has not shown any material
penetration in this market.  The Company evaluates the value of
its investments on an ongoing basis and relies on a number of
factors including, operating results, business plans, budgets and
economic projections.  As such, the Company has determined that a
write off of its investment in Encotone, LTD. in the amount of
$1,000,000, or $(0.11) per share, at June 30, 1997, is
appropriate.

The Company continues to maintain its original 10% equity
interest in Encotone, LTD., as well as its 50% equity interest in
Encotone, Inc. the joint venture formed with Encotone, LTD. in
1996 to market TeleID in North, Central, and South America.  At
June 30, 1997, the Company's investment in Encotone, Inc., under
the equity method, is $106,252.

Although there is a possibility for Encotone, LTD. to become
successful in the TeleID market, the Company believes that the
potential is less today than it was when its original investment
in Encotone, LTD. was made in 1996.  The Company will continue to
work with Encotone, LTD. for an indefinite period of time in
order to recover its investment.  The Company has held
preliminary discussions with Encotone, LTD. with respect to
potential reorganizations of both investments, and on July 16,
1997, the Company, as part of a majority shareholders' action,
advanced Encotone, LTD. $49,015.  Terms of the loan agreement
include an option for the Company to either convert the loan to
ordinary shares in Encotone, LTD., or receive quarterly payments
of principle and interest at 1.5% above the LIBOR rate, beginning
June 30, 1998 through March 31, 1999.

<PAGE>
                        NETEGRITY, INC.


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


OVERVIEW

     The Private Securities Litigation Reform Act of 1995
contains certain safe harbors regarding forward-looking
statements.  In that context, the discussion in this Item
contains forward-looking statements which involve certain degrees
of risk and uncertainties, including statements relating to
liquidity and capital resources.  Except for the historical
information contained herein, the matters discussed in this
section are such forward-looking statements that involve risks
and uncertainties, including the impact of competitive pricing
within the software industry, the effect any reaction to such
competitive pressures has on current inventory valuations, the
need for and effect of any business restructuring, the presence
of competitors with greater financial resources, capacity and
supply constraints or difficulties, and the Company's continuing
need for improved profitability and liquidity. 

    The following overview reflects the divestiture of the
Company's catalog related business.  Any comments relating to
operating results or issues are reflective of the continuing
network security business. The Company's revenues were generated
by the sale of network security products, integration and support
services to companies doing business on the Internet and internal
networks.  The divestiture of the Company's catalog related
business is recorded as discontinued operations in the
accompanying unaudited financial statements.

    The Company plans to develop and introduce new products to
address the changing needs of the evolving network security
market.  There can be no assurance that the Company will be able
to develop new products or that such products will achieve market
acceptance, or, if market acceptance is achieved, that the
Company will be able to maintain such acceptance for a
significant period of time.

<PAGE>
RESULTS OF CONTINUING OPERATIONS

    The following information should be read in conjunction with
the consolidated financial statements and notes thereto:

For the three months          % to Net Revenue         % Change
ended June 30,                  1997     1996          97 v. 96

  Net Revenues:
    Product sales               100%     100%             ---

  Gross Margins: 
    Product sales                41%      33%             8%

  Selling, general and 
    administrative expenses     123%      39%            84%

  Income (loss) from 
    continuing operations      (165%)     (5%)         (161%)

Revenues: Total net revenues for the second quarter ended June
30, 1997 increased by $53,684, or 4.8%, to $1,183,656 from
$1,129,972 in the second quarter ended June 30, 1996. This growth
in revenue was due to the increase in sales of Check Point
Software's FireWall-1  product and related maintenance. This
increase was offset by the Company's decision to eliminate
hardware sales to its customers and reduce the distribution of
Firewall-1 to other resellers in the industry. Such portions of
the business were eliminated or reduced because they yield low
margins and do not fit with the Company's longer-term strategic
plan.

Gross Profit: Total gross profit dollars for the second quarter
ended June 30, 1997 increased by $105,818, or 28%, to $483,954
compared with $378,136 in the second quarter ended June 30, 1996.
This increase can be attributed to the corresponding increase in
net revenues and elimination and reduction of low margin
business, discussed above.

Selling, General and Administrative Expenses:  Selling, General
and Administrative (SG&A) expenses increased 227% to $1,457,545
for the second quarter ended June 30, 1997 from $445,845 in the
quarter ended June 30, 1996.  This increase was a result of the
Company continuing the building of its management and employee
infrastructure to bring to market its proprietary product line
and address the growing network security marketplace.

Research and Development Costs: Research and Development
expenditures for the second quarter ended June 30, 1997 were
$185,350 as compared to $0 for the quarter ended June 30, 1996.
Beginning February 1, 1997, research and development expenditures
are being capitalized as a result of the Company realizing
technological feasibility.  The Company is continuing the
development of new products to address the changing needs of the
evolving network security market. Research and Development Costs
are expensed as incurred, and are capitalized upon establishing
technological feasibility on a product-by-product basis.

Interest Income:  Net interest income increased in the quarter
ended June 30, 1997 to $62,656 from $11,095 in the same period
last year.  This increase is mainly attributable to available
cash being invested at prevailing rates of interest.

Write Off of Investment in Encotone, LTD.:  In October 1996 the
Company made an early stage investment in Encotone, LTD. with the
anticipation that its first product, TeleID , a credit card-sized
acoustical smart card, would be able to penetrate into the large
long distance carrier market.  To date, Encotone, LTD. has not
shown any material penetration in this market.  The Company
evaluates the value of its investments on an ongoing basis and
relies on a number of factors including, operating results,
business plans, budgets and economic projections.  As such, the
Company has determined that a write off of its investment in
Encotone, LTD. in the amount of $1,000,000, or $(0.11) per share,
at June 30, 1997, is appropriate.

The Company continues to maintain its original 10% equity
interest in Encotone, LTD., as well as its 50% equity interest in
Encotone, Inc. the joint venture formed with Encotone, LTD. in
1996 to market TeleID in North, Central, and South America.  At
June 30, 1997, the Company's investment in Encotone, Inc., under
the equity method, is $106,252.

Although there is a possibility for Encotone, LTD. to become
successful in the TeleID market, the Company believes that the
potential is less today than it was when its original investment
in Encotone, LTD. was made in 1996.  The Company will continue to
work with Encotone, LTD. for an indefinite period of time in
order to recover its investment.  The Company has held
preliminary discussions with Encotone, LTD. with respect to
potential reorganizations of both investments, and on July 16,
1997, the Company, as part of a majority shareholders' action,
advanced Encotone, LTD. $49,015.  Terms of the loan agreement
include an option for the Company to either convert the loan to
ordinary shares in Encotone, LTD., or receive quarterly payments
of principle and interest at 1.5% above the LIBOR rate, beginning
June 30, 1998 through March 31, 1999.


For the six months          % to Net Revenue           % Change
ended June 30,               1997      1996             97 v. 96

  Net Revenues:
    Product sales            100%      100%               ---

  Gross Margins:
    Product sales             43%       39%               4%

  Selling, general and 
   administrative expenses   114%       34%              80%

  Research and development 
   costs                       5%       ---               5%

  Income (loss) from 
   continuing operations    (120%)       5%            (125%)

Revenues: Total net revenues for the six months ended June 30,
1997 decreased by $288,633, or 11.7%, to $2,170,250 from
$2,458,833 in the six months ended June 30, 1996. This decrease
was the net result of an increase in sales of Check Point
Software's FireWall-1  product and related maintenance, offset by
the Company's decision to eliminate hardware sales and reduce its
distribution of Firewall-1 to other resellers in the industry. 
These portions of the business were eliminated or reduced because
they yield low margins and do not fit with the Company's
longer-term strategic plan.

Gross Profit: Total gross profit dollars for the six months ended
June 30, 1997 decreased by $16,702, or 2%, to $935,297 from
$951,999 in the six months ended June 30, 1996. This decrease can
be attributed to the corresponding decrease in net revenues and
the Company's elimination and reduction of low margin business,
as described above. 

Selling, General and Administrative Expenses:  Selling, General
and Administrative (SG&A) expenses increased 194% to $2,479,067
for the six months ended June 30, 1997 from $884,631 in the six
months ended June 30, 1996. This increase was a result of the
Company continuing the building of its management and employee
infrastructure to bring to market its proprietary product line
and address the growing network security marketplace.

Research and Development Costs: Research and Development
expenditures for the first six months ended June 30, 1997 were
$445,337 as compared to $0 for the six months ended June 30,
1996. Beginning February 1, 1997, $344,189 of these expenditures
were capitalized as a result of the Company realizing
technological feasibility.  The Company is continuing the
development of new products to address the changing needs of the
evolving network security market. Research and Development Costs
are expensed as incurred, and are capitalized upon establishing
technological feasibility on a product-by-product basis.

Interest Income:  Net interest income increased in the six month
period ended June 30, 1997 to $141,718 from $17,429 in the same
period last year.  This increase is mainly attributable to
available cash being invested at prevailing rates of interest.

The Company's quarterly operating results have varied and may
continue to vary significantly depending on external factors. 
Substantially all of the Company's revenue in a quarter is
derived from orders received in that quarter.  Accordingly,
delays in orders are likely to result in the associated revenue
not being realized by the Company in the period.  Moreover, the
Company's expense levels are based in part on expectations of
future revenue levels, and a shortfall in expected revenue could
therefore result in a disproportionate decrease in the Company's
net income.




LIQUIDITY AND CAPITAL RESOURCES
(in thousands, except ratios)

                                          June 30,   December 31,
Financial Condition as of                   1997         1996

   Cash and cash equivalents               $4,620       $6,791
   Working capital                          2,667        4,629
   Current ratio                             1.74         2.13

Cash Flow Activity Summary for             June 30,     June 30,
the Six Months Ended                         1997         1996

   Net cash (used for) provided by
     continuing operating activities       (1,606)         466
   Net (cash used for) provided by 
     investing activities                    (570)       5,928
   Net cash provided by financing 
     activities                               107           46


      The Company's net cash balance decreased by $2,171,000 to
$4,620,000 at June 30, 1997 from $6,791,000 at December 31, 1996.
This decrease was primarily attributable to increased
expenditures related to building the Company's infrastructure and
the research and development costs associated with bringing its
flagship product to market.

      Accounts receivable-trade decreased 36% to $502,000 at June
30, 1997 from $788,000 at December 31, 1996.  This decrease
resulted partially from the corresponding decrease in net
revenues discussed above, coupled with a stringent corporate
collection policy, which resulted in a 25% decrease in
accounts receivable collection days outstanding from 64 days at
December 31, 1996 to 48 days at June 30, 1997.

      Working capital decreased by $1,962,000 to $2,667,000 at
June 30, 1997 from $4,629,000 at December 31, 1996.  This
decrease was primarily attributable to increased expenditures
related to building the Company's infrastructure and the research
and development costs associated with bringing its flagship
product to market.

      The Company anticipates that its existing cash resources
and cash flow from operations will be sufficient to fund its
operations through the Company's current fiscal year ending
December 31, 1997.  Additionally, the Company currently
anticipates that its available cash, expected cash flows from
operations, and its borrowing capacity will be sufficient to fund
operations through 1998. 



                   PART II. - OTHER INFORMATION


   ITEM 1.  LEGAL PROCEEDINGS

      The Company is not involved in any material legal
proceedings.



   ITEM 2.  CHANGES IN SECURITIES
      
      There have been no changes in securities during the quarter
ended June 30, 1997.



   ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
      
      Not applicable.




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

      On April 16, 1997, the Board of Directors caused to be
distributed to stockholders of record as of April 8, 1997 a
Notice of Special Meeting in Lieu of Annual Meeting of
Stockholders, Proxy and a Proxy Statement for the Special Meeting
on May 22, 1997.  On that record date, the Company had
outstanding 9,264,446 shares of Common Stock (excluding treasury
shares) that were entitled to vote.

      At the meeting, the stockholders acted upon the following
proposals:

(1)   to elect a Board of Directors;

(2)   to amend the company's By-Laws to eliminate the ability of
the Company's stockholders to act by consent without a meeting;

(3)   to amend the Company's By-Laws to provide that stockholders
of the Company may call a special meeting of stockholders only by
written application by one or more stockholders who hold 30% in
interest of the capital stock of the Company entitled to vote
thereat; 

(4)   to amend the Company's By-Laws to revise provisions
regarding director and officer indemnification;

(5)   to adopt and approve a 1997 Stock Option Plan pursuant to
which 500,000 shares of the Company's Common Stock shall be
reserved for issuance subject to the 1997 Plan;

(6)   to amend the Company's 1994 Stock Plan to increase the
number of shares of Common Stock reserved for issuance subject to
said Plan to 1,813,300.

      Votes "for" represent affirmative votes and do not include
"abstentions" or broker "non-votes".  Votes "withheld" from any
nominee, abstentions and broker non-votes are counted as present
or represented for purposes of determining a quorum.  Abstentions
are included in the number of shares present or represented and
voting on each matter, however, broker non-votes are not so
included.  In cases where a signed proxy was submitted without
direction, the shares represented by the proxy were voted "for"
each proposal in the manner disclosed in the proxy statement and
proxy.

      Voting results were as follows:

(1)  Election of Directors:
                                                 FOR     WITHHELD
     Stephen L. Watson                     7,530,066      17,277
     Barry N. Bycoff                       7,530,066      17,277
     Milton J. Pappas                      7,530,066      17,277
     Ralph B. Wagner                       7,530,066      17,277
     Michael L. Mark                       7,530,066      17,277
     Eric R. Giler                         7,530,066      17,277
     Richard J. Kosinski                   7,525,066      22,277


(2)  To amend the company's By-Laws to eliminate the ability of
the Company's stockholders to act by consent without a meeting:

                                     FOR     AGAINST      ABSTAIN
                               3,443,515   1,205,606       27,768


(3)  To amend the Company's By-Laws to provide that stockholders
may call a special meeting of stockholders only by written
application by one or more stockholders who hold 30% in interest
of capital stock:

                                     FOR     AGAINST      ABSTAIN
                               3,318,259   1,310,951       47,679


(4)  To amend the Company's By-Laws to revise provisions
regarding director and officer indemnification:

                                     FOR     AGAINST      ABSTAIN
                               6,986,873     174,106       34,204


(5)  To adopt and approve a 1997 Stock Option Plan:

                                     FOR     AGAINST      ABSTAIN
                               4,353,352     200,008       35,168


(6)  To amend the Company's 1994 Stock Plan:

                                     FOR     AGAINST      ABSTAIN
                               4,328,863     211,297       35,368

      


ITEM 5.   OTHER INFORMATION

     Not applicable.




ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     No reports on Form 8-K were filed during the quarter ended
June 30, 1997.
<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.



                                   NETEGRITY, INC.


 Date: August 8, 1997              By:/s/ Barry N. Bycoff
                                          Barry N. Bycoff
                                          President and Chief
                                          Executive Officer
                                          (Principal Executive
                                          Officer)




 Date: August 8, 1997              By:/s/ James O'Connor, Jr.
                                          James O'Connor, Jr.
                                          Vice President, Finance
                                          and Chief Financial
                                          Officer (Principal
                                          Financial and Chief
                                          Accounting Officer)
  

<PAGE>
                                                  EXHIBIT 11.00


                       NETEGRITY, INC.

               COMPUTATION OF EARNINGS PER SHARE

                          (UNAUDITED)

             (In thousands, except per share data)



                                             Three months ended
                                                   June 30,
                                               1997        1996

Weighted average shares outstanding            9,269       8,955

Net effect of dilutive stock options and
  warrants - based on the treasury stock 
  method using the average market price         ---          792

  Total                                        9,269       9,747

  Net loss from continuing operations       $ (1,959)     $  (57)
  Net loss from discontinued operations         ---         (520)
  Gain on sale of assets of discontinued
    operations                                  ---        6,000

Net (loss) income for EPS computation        $(1,959)     $5,423

Per share amounts:
  Loss from continuing operations             $(0.21)     $(0.01)
  Loss from discontinued operations              ---       (0.05)
  Gain on sale of assets of discontinued
    operations                                   ---        0.62
  
  NET LOSS (INCOME) PER SHARE                 $(0.21)      $0.56

<PAGE>
                                                  EXHIBIT 11.00



                        NETEGRITY, INC.

           COMPUTATION OF EARNINGS PER SHARE (cont.)

                          (UNAUDITED)

             (In thousands, except per share data)



                                                Six months ended
                                                     June 30,
                                                1997        1996

Weighted average shares outstanding            9,265       8,490

Net effect of dilutive stock options and
  warrants - based on the treasury stock 
  method using the average market price         ---          562

  Total                                        9,265       9,052

  Net (loss) income from continuing 
    operations                               $(2,607)     $  106
  Net loss from discontinued operations          ---        (735)
  Gain on sale of assets of discontinued
    operations                                   ---       6,000

Net (loss) income for EPS computation        $(2,607)     $5,371

Per share amounts:
  (Loss) income from continuing operations    $(0.28)      $0.01
  Loss from discontinued operations              ---       (0.08)
  Gain on sale of assets of discontinued
   operations                                    ---        0.66
  
  NET (LOSS) INCOME PER SHARE                 $(0.28)      $0.59