<PAGE>




                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549


                                    FORM 10-Q
(Mark One)
[ X ]     Quarterly Report under Section 13 or 15(d) of the Securities Exchange
          Act of 1934
          FOR THE QUARTER ENDED DECEMBER 31, 1996
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          0-16449    

                               BLYTH HOLDINGS INC.               
             (Exact name of registrant as specified in its charter)

        Delaware                                     94-3046892  
(State of incorporation)                 (IRS Employer Identification No.)


                         989 E. Hillsdale Boulevard #400
                         Foster City, California  94404
                    (Address of principal executive offices)


                                 (415) 571-0222
                         (Registrant's telephone number)


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 _____X_____   No _________   

As of January 29, 1997 there were 16,830,442 shares of registrant's Common
Stock, $.01 par value, outstanding.

                                        1

<PAGE>


                                 BLYTH HOLDINGS INC.

                                       INDEX

                       PART I.    FINANCIAL INFORMATION

                                                                     Page No.
Item 1.     Financial Statements: 

            Condensed Consolidated Balance Sheets - 
                 December 31, 1996 and March 31, 1996                    3

            Condensed Consolidated Statements of Operations  -
                 Three and nine months ended December 31, 1996 and 1995  4

            Condensed Consolidated Statements of Cash Flows - 
                 Nine months ended December 31, 1996 and 1995            5

            Notes to Condensed 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                                           11

Item 2.     Changes in Securities                                       11

Item 3.     Defaults upon Senior Securities                             11

Item 4.     Submission of Matters to a Vote of Security Holders         11

Item 5.     Other Information                                           11

Item 6.     Exhibits and Reports on Form 8-K                            12

            Signatures                                                  13



                                        2
<PAGE>



                         BLYTH HOLDINGS INC. AND SUBSIDIARIES
                         CONDENSED CONSOLIDATED BALANCE SHEETS
                                     ASSETS

<TABLE>
<CAPTION>

                                                   December 31, 1996             March 31, 1996
                                                   -----------------             --------------
                                                      (Unaudited)            (Derived from audited
                                                                              financial statements)
<S>                                                <C>                       <C>


Current Assets:
        Cash and equivalents                       $8,418,000                      $5,129,000
        Trade accounts receivable, less 
           allowance for doubtful accounts
           and returns of $422,000 and 
           $400,000, respectively                   2,406,000                       2,303,000
        Inventory                                      20,000                          71,000
        Other current assets                          904,000                       1,155,000
                                                 ------------                    ------------
           Total current assets                    11,748,000                       8,658,000
                                                 ------------                    ------------

Property, furniture and equipment, net             1,543,000                        1,831,000
Capitalized software development costs, net              -                            300,000
Other assets                                             -                             52,000
                                                 ------------                    ------------
                                                                           
           Total Assets                           $13,291,000                     $10,841,000
                                                 ------------                    ------------
                                                 ------------                    ------------
                                                                           
                                                                           
                      LIABILITIES AND STOCKHOLDERS' EQUITY                 

Current liabilities:
        Accounts payable and accrued liabilities   $1,564,000                      $1,822,000
        Deferred revenue                              892,000                       1,093,000
        Current portion of long term debt             150,000                         108,000
                                                 ------------                    ------------
            Total current liabilities               2,606,000                       3,023,000
                                                 ------------                    ------------
        Long term debt, net of unamortized 
           issuance costs of $403,000 and
           $0, respectively                        3,858,000                           26,000
                                                 ------------                    ------------
            Total liabilities                      6,464,000                        3,049,000
                                                 ------------                    ------------
Stockholders' Equity:                                                      
        Common stock                                  138,000                          98,000
        Paid in capital                            38,402,000                      35,722,000
        Accumulated deficit                       (31,931,000)                    (28,152,000)
        Foreign currency translation adjustment       218,000                         124,000
                                                 ------------                    ------------
            Total stockholders' equity              6,827,000                       7,792,000
                                                 ------------                    ------------
            Total Liabilities and 
              Stockholders' Equity               $ 13,291,000                    $ 10,841,000
                                                 ------------                    ------------
                                                 ------------                    ------------
</TABLE>

                                       3
<PAGE>

                            BLYTH HOLDINGS INC. AND SUBSIDIARIES

                       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>

                                               Three Months Ended                 Nine Months Ended
                                                  December 31                         December 31
                                             1996             1995                1996            1995
                                         -----------      ------------        ------------     ------------
<S>                                      <C>              <C>                  <C>             <C>
Net revenues:
      Products                           $ 1,128,000      $  1,834,000         $ 3,578,000     $  4,576,000
      Services                             1,272,000         1,918,000           4,654,000        5,722,000
                                         -----------      ------------        ------------     ------------
      Total net revenues                   2,400,000         3,752,000           8,232,000       10,298,000
                                         -----------      ------------        ------------     ------------

Cost and expenses:
      Cost of sales                          995,000         1,700,000           3,936,000        5,418,000
      Research & development                 790,000           580,000           2,052,000        2,287,000
      Sales, general and administrative    2,053,000         2,164,000           5,913,000        7,345,000
                                         -----------      ------------        ------------     ------------
      Total costs and expenses             3,838,000         4,444,000          11,901,000       15,050,000
                                         -----------      ------------        ------------     ------------
Operating loss                            (1,438,000)         (692,000)         (3,669,000)      (4,752,000)
                                         -----------      ------------        ------------     ------------
Other income (expense):
      Interest income                        165,000            87,000             332,000          201,000
      Interest expense                      (120,000)          (11,000)           (408,000)        (116,000)
      Loss of foreign exchange
        transactions                          (4,000)           (1,000)             (5,000)          (3,000) 
                                         -----------      ------------        ------------     ------------
                                              41,000            75,000             (81,000)          82,000
                                         -----------      ------------        ------------     ------------

Loss before income taxes                  (1,397,000)         (617,000)         (3,750,000)      (4,670,000)

Income tax expense                             1,000             3,000              29,000           31,000
                                         -----------      ------------        ------------     ------------
     Net loss                            $(1,398,000)      $  (620,000)        $(3,779,000)     $(4,701,000)
                                         -----------      ------------        ------------     ------------
                                         -----------      ------------        ------------     ------------

Net loss per common share:                $    (0.12)       $    (0.06)         $    (0.36)       $   (0.55)


Weighted average number of common 
  shares outstanding                      11,336,484         9,652,858          10,458,950        8,490,893


                                       4
</TABLE>


<PAGE>

                      BLYTH HOLDINGS INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (UNAUDITED)


                                                        Nine Months Ended
                                                           December 31
                                                        1996         1995
                                                    ------------  ------------
Cash flows from operating activities:
     Net loss                                       $(3,779,000)  $(4,701,000)
     Adjustments to reconcile net loss to net 
       cash used for operating activities:
          Depreciation and amortization expense         650,000       964,000
          Capitalization software development cost
            amortization expense                        300,000       842,000
          Accrued interest converted into stock           --           47,000
          Change in assets and liabilities:
            Net (increase) decreases in assets:
               Trade accounts receivable               (103,000)    1,304,000
               Inventory                                 51,000        51,000
               Other current assets                     251,000      (276,000)
               Other assets                              52,000         3,000
            Net increases (decreases) in liabilities:
               Accounts payable and accrued liabilites (258,000)     (334,000)
               Deferred revenue                        (201,000)      153,000
                                                      ---------     ---------

          Net cash used for operating activities     (3,037,000)   (1,947,000)
                                                      ---------     ---------
Cash flows from investing activities:
     Purchases of property, furniture and equipment    (257,000)     (194,000)
                                                      ---------     ---------
          Net cash used for investing activities       (257,000)     (194,000)
                                                      ---------     ---------

Cash flows from financing activities:
     Exercise of stock options                          122,000       116,000
     New proceeds from issuance of long-term debt     6,835,000     2,585,000
     Repayment of debt                                 (371,000)       16,000
                                                      ---------     ---------
          Net cash provided by financing activities   6,586,000     2,717,000
                                                      ---------     ---------

Effect of exchange rate changes on cash                  (3,000)      (57,000)

Net increase in cash and equivalents                  3,289,000       519,000
Cash and equivalents at beginning of period           5,129,000     4,593,000
                                                      ---------     ---------
Cash and equivalents at end of period                $8,418,000    $5,112,000
                                                      ---------     ---------
                                                      ---------     ---------

NON CASH INVESTING AND FINANCING ACTIVITIES
Conversion of convertible subordinated debentures
  into common stock                                  $2,794,000    $4,829,000
                                                      ---------     ---------
                                                      ---------     ---------

                                        5


<PAGE>

                       BLYTH HOLDINGS INC. AND SUBSIDIARIES

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.        The unaudited financial information furnished herein reflects all
     adjustments, consisting only of normal recurring items, which in the
     opinion of management are necessary to fairly state the Company's financial
     position, the results of its operations and the changes in its financial
     position for the periods presented.  These financial statements should be
     read in conjunction with the Company's audited financial statements for the
     year ended March 31, 1996.  The results of operations for the period ended
     December 31, 1996 are not necessarily indicative of results to be expected
     for any other interim period or the year ending March 31, 1997.
     
2.        Net loss per share for the three and nine months ended December 31,
     1996 is based on the weighted average number of common shares outstanding
     during the period including, where applicable, common stock equivalent
     shares.

3.        In June 1996 the Company closed an offering of $7,350,000 of 8%
     Convertible Debentures due June 3, 1999, (net proceeds of $6,836,000).  The
     principal and interest are convertible into shares of the Company's common
     stock and the Company may force conversion at its option after June 3,
     1999.  The Company's other long term debt consists primarily of long term
     leases.  In November 18, 1996 a special meeting of the Company's
     shareholders was held which ratified the 8% Convertible Debentures due June
     3, 1999 in accordance with the rules of the National Association of
     Security Dealers (Nasdaq). See "Management's Discussion and Analysis of 
     Financial Condition and Results of Operations--Other Income 
     (Expense)" and "Liquidity and Capital Resources".


                                        6


<PAGE>


                    BLYTH HOLDINGS INC. AND SUBSIDIARIES 
     
     ITEM 2.   Management's Discussion and Analysis of Financial Condition
               and Results of Operations
     
     
     RESULTS OF OPERATIONS
     
     THREE AND NINE MONTHS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1995
          
          REVENUES.   Total net revenues declined 36% to $2,400,000 for the
     three months ended December 31, 1996 from $3,752,000 for the three
     months ended December 31, 1995.  The decline in total net revenues for
     the three months ended December 31, 1996 as compared to the three
     months ended December 31, 1995 was due to a decline of both product
     and service revenues.  In addition, total net revenues declined 20% to
     $8,232,000 for the nine months ended December 31, 1996 from
     $10,298,000 for the nine months ended December 31, 1995.  The decline
     in total net revenues for the nine months ended December 31, 1996 as
     compared to the nine months ended December 31, 1995 was due to a
     decline of both service revenues and product revenues.
          
               Product revenues decreased 39% to $1,128,000 for the three
     months ended December 31, 1996 from $1,834,000 for the three months
     ended December 31, 1995.  The lower product revenues for the
     three months ended December 31, 1996 as compared to the three months
     ended December 31, 1995 is attributable, in part, to the fact that the 
     revenues for the three months ended December 31, 1995 included a $750,000
     site license sale to a large Latin American customer.  Product revenues 
     decreased 22% to $3,578,000 for the nine months ended December 31, 1996 
     from $4,576,000 for the nine months ended December 31, 1995.  The decrease
     in product revenues for the nine months ended December 31, 1996 as
     compared to the nine months ended December 31, 1995 was primarily due
     to the $750,000 site license sale to a large Latin American customer
     and decreased selling prices of the Company's software as a result of
     a price decrease in September of 1995 in response to competitive
     pressures.
          
          Service revenues for the three months ended December 31, 1996
     decreased 34% to $1,272,000 from $1,918,000 from the three months
     ended December 31, 1995.  Service revenues for the nine months ended
     December 31, 1996 decreased 19% to $4,654,000 from $5,722,000 from the
     nine months ended December 31, 1995. The decrease in service revenues for
     the three months and nine months ended December 31, 1996 as compared
     to the three months and nine months ended December 31, 1995 was a
     result of decreased consulting revenues from services provided in
     connection with implementation of the Company's products, partially as a 
     result of declines in sales of the Company's products, together with a
     decrease in maintenance and support revenues.

          COST OF SALES   Cost of sales is comprised of the following:  1)
     product cost which includes the cost of both internal and
     subcontracted production, technical support and maintenance services
     during the warranty period (primarily personnel related), and
     amortization of capitalized software development costs, and 2) service
     cost, primarily personnel related, which consists of consulting,
     technical support, maintenance services outside the warranty period
     and training.  Cost of sales as a percentage of total net revenues
     decreased to 42% from 45% for the three months ended December 31, 1996
     compared to the three months ended December 31, 1995.   This is
     primarily due to the absence of amortization of software development 
     cost in the three months ended December 31, 1996 as compared to the three 
     months ended December 31, 1995 offset, in part, by an increase in the 
     costs of sales associated with a higher mix of service revenues as 
     compared to product revenues.  Cost of products and services as a 
     percentage of total net revenues decreased to 48% from 53% for the nine
     months ended December 31, 1996 compared to the nine 


                                        7

<PAGE>

     months ended December 31, 1995.  This  decrease was attributable to a 
     lower cost of product sales, particularly with respect to product
     sales in the early part of the nine months ended December 31, 1996,
     and to only two quarters of amortization of capitalized software 
     development costs, in the nine months ended December 31, 1996. 
     Such costs were fully-amortized to cost of sales during the three 
     months ended September 30, 1996 compared to three quarters of 
     amortization in the nine months ended December 31, 1995.
          
          RESEARCH AND DEVELOPMENT  EXPENSE   Research and development
     costs increased to $790,000 for the three months ended December 31,
     1996 from $580,000 for the three months ended December 31, 1995.  The
     increase in research and development costs for the three months ended
     December 31, 1996 as compared to for the three months ended December
     31, 1995 is primarily due to increased investment in the Company's new
     electronic commerce products.  Research and development costs decreased
     to $2,052,000 for the nine months ended December 31, 1996 from
     $2,287,000 for the nine months ended December 31, 1995.  The decrease
     in research and development costs for the nine months ended December
     31, 1996 as compared to the nine months ended December 31, 1995 is
     primarily due to decreased staffing and associated support costs
     offset in part by increased investment in the Company's new electonic
     commerce products in the three months ended December 31, 1996.  The
     Company continues to invest in the development of new products aimed
     at sales opportunities that the Company expects will expand its
     markets.  
          
          SALES, GENERAL AND ADMINISTRATIVE EXPENSES  Sales, general and 
     administrative expenses decreased to $2,053,000 for the three 
     months ended December 31, 1996 from $2,164,000 for the three months 
     ended December 31, 1995, representing 86%  and 58% of total net 
     revenues during these periods, respectively.  The increase in 
     sales, general and administrative expenses as a percentage of total 
     net revenues is due primarily to a decrease in total net revenues 
     without a proportional decrease in such expenses.  Sales, general 
     and administrative expenses decreased to $5,913,000 for the nine 
     months ended December 31, 1996 from $7,345,000 for the nine months 
     ended December 31, 1995, representing 72%  and 71% of total net 
     revenues during these periods, respectively. The decrease in 
     absolute dollars for the three and nine months ended December 31, 
     1996 compared to the same prior period primarily represents the 
     effect of the Company's continuing cost control measures instituted 
     during the fiscal year ended March 31, 1996. The Company 
     currently plans to significantly increase its spending on marketing 
     during the next two quarters, and if the Company's sales do not increase 
     significantly as a result of these marketing efforts, the Company's 
     business, results of operations and financial conditions could be 
     materially adversely affected.
     
          OTHER INCOME (EXPENSE)   Other income (expense) is comprised 
     primarily of interest income earned on cash and equivalents, 
     interest expense related to the Company's 8% Convertible Debentures 
     due June 3, 1999 (issued June 4, 1996 with net proceeds to the 
     Company of $6,836,000), and loss on foreign currency transactions.  
     Interest income increased to $165,000 for the three months ended 
     December 31, 1996 from $87,000 for the three months ended December 
     31, 1995 and increased to $332,000 for the nine months ended 
     December 31, 1996 from $201,000 for the nine months ended December 
     31, 1995, primarily due to higher average balances of cash and 
     equivalents.  Interest expense increased to $120,000 for the three 
     months ended December 31, 1996 from $11,000 for the three months 
     ended December 31, 1995 and increased to $408,000 for the nine 
     months ended December 31, 1996 from $116,000 for the nine months 
     ended December 31, 1995 due primarily to the accrual of interest on 
     the outstanding 8% Convertible Debentures due June 3, 1999 and 
     premiums paid in order to redeem certain of the 8% Convertible 
     Debentures when they were submitted for conversion.  As of December 
     31, 1996 of the $7,350,000 of 8% Convertible Debentures due June 3, 
     1999, $2,794,333 had converted into 3,922,819 shares of common 
     stock and $407,333 had been redeemed for $497,264 of cash. As of January
     29, 1997 $4,178,333 had been converted into 6,994,061 shares of 
     common stock and $672,333 of the aggregate principal amount of the 
     87% Convertible Debentures had been redeemed for $901,095 of cash.

          The Company recognized a net loss of $1,398,000 for the three
     months ended December 31, 1996 versus a net loss of $620,000 for the
     three months ended December 31, 1995.  The increase in net loss for
     the three months ended December 31, 1996 as compared to the three
     months ended December 31, 1995 is primarily due to the decrease in
     product and service revenues.  A net loss of $3,779,000 was recorded
     for the nine months ended December 31 1996 versus a net loss of
     $4,701,000 for the nine months ended December 31, 1995.  The decrease
     in net loss for the nine months ended December 31, 
     1996 as compared to the nine months ended December 31, 1995 is 
     primarily due to decreases in costs and expenses offset by the 
     decrease in product and service revenues.
     

                                        8

<PAGE>

VARIABILITY OF RESULTS
          
          The Company has experienced significant quarterly fluctuations in
     operating results and anticipates such fluctuations in the future. 
     The Company generally ships orders as received and, as a result,
     typically has little or no backlog.  Quarterly revenues and operating
     results, therefore, depend on the volume and timing of orders received
     during the quarter, which are difficult to forecast.  Furthermore, the
     Company has typically sold to large corporate enterprises which often
     purchase in significant quantities, and therefore, the timing of the
     receipt of such orders could cause significant fluctuations in the
     operating results.  Historically, the Company has often recognized a
     substantial portion of its license revenues in the last month of the
     quarter.  Service revenues tend to fluctuate as consulting projects,
     which may continue over several quarters, are undertaken or completed. 
     Operating results may also fluctuate due to factors such as the demand
     for the Company's products, the size and timing of customer orders,
     the introduction of new products and product enhancements by the
     Company or its competitors, changes in the proportion of revenues
     attributable to licenses and service fees, commencement or conclusion
     of significant consulting projects, changes in the level of operating
     expenses, and competitive conditions in the industry.  

          The Company's staffing and other operating expenses are based on
     anticipated revenue, a substantial portion of which is not typically
     generated until the end of each quarter.  As a result, despite careful
     planning, delays in the receipt of orders can cause significant
     variations in operating results from quarter to quarter.  In addition,
     revenues in quarters after a new product release may be significantly
     affected by the amount of upgrade revenue, which tends to increase
     soon after the release of a new product and then decline rapidly.
          
          A number of additional factors have, from time to time, caused
     and may in the future cause the Company's  revenues and operating
     results to vary substantially from period-to-period.  These factors
     include:  pricing competition, delays in introduction of new products
     or product enhancements, size and timing of demand for existing
     products and shortening of product life cycle, inventory obsolescence
     and general economic conditions.

          The Company's future operating results will depend, to a
     considerable extent, on its ability to rapidly and continuously
     develop new products that offer its customers enhanced performance at
     competitive prices.  Inherent in this process are a number of risks. 
     The development of new, enhanced software products is a complex and
     uncertain process requiring high levels of innovation from the
     Company's designers as well as accurate anticipation of customers and
     technical trends by the marketing staff.  Once a product is developed,
     the Company must rapidly bring it into production, a process that
     requires long lead times on some product components and accurate
     forecasting of production volumes, among other things, in order to
     achieve acceptable product costs.

          The Company's operating results will also be affected by the
     volume, mix and timing of orders received during a period and by
     conditions in the industries that it serves as well as the general
     economy.  With the addition of the alternate channels and expanded
     geographical efforts which started in fiscal 1995, the Company has
     entered the worldwide market.  Accordingly, changes in the economies,
     trade policies and fluctuations in interest or exchange rates of other
     countries in which the Company sells its products may have an impact
     on its future financial results.
          
          The Company's operating expenses may increase as it expands its
     operations. During fiscal 1997, the Company continues making
     significant investments in product development, marketing and
     expansion of its sales channel in an effort to increase its 

                                        9

<PAGE>

     presence in the increasingly competitive client/server market 
     place.  Future operating results will be adversely affected if 
     net revenues do not increase accordingly.
     
          The development and introduction of new or enhanced products also
     requires the Company to manage the transition from older, displaced
     products in order to minimize disruptions in customer ordering
     patterns and excessive levels of older product inventory and to ensure
     that adequate supplies of new products can be delivered to meet
     customer demand.  Because the Company is continuously engaged in this
     product development and transition process, its operating results may
     be subject to considerable fluctuations, particularly when measured on
     a quarterly basis.
          
      
      LIQUIDITY AND CAPITAL RESOURCES
          
          At December 31, 1996, the Company's principal sources of
     liquidity consisted of cash and equivalents of $8.4 million.
          
          The Company's working capital position increased to $9.1 million
     at December 31, 1996 from $5.6 million at March 31, 1996.    This
     increase in working capital during the first quarter of fiscal 1997
     was primarily due to the fact that on June 3, 1996 the Company
     completed a private offering under Regulation S of the Securities Act
     of 1933, as amended, of 8% Convertible Debentures due June 3, 1999
     which resulted in net  proceeds to the Company of $6,836,000.

          The Company believes that its cash and equivalents, together with 
     expected net revenues, will be adequate to meet the Company's anticipated
     cash needs for operations through fiscal 1998.  However, the Company 
     believes the level of financial resources is a significant competitive 
     factor in its industry and may choose, prior to the end of fiscal 1998, 
     to raise additional capital through debt or equity financings to strengthen
     its financial position, to accelerate growth or to provide the Company with
     additional flexibility to take advantage of business opportunities that 
     might arise.  There can be no guarantee that additional capital will be
     available to the Company or, if available, on terms favorable to the 
     Company.  If the Company is unable to raise additional capital through
     operations or financings, the Company's business and operation results
     may be materially and adversely impacted as management would be required to
     significantly curtail operations, which could have a significant adverse 
     effect on the Company's business.

                                        10

<PAGE>


                               BLYTH HOLDINGS INC.

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None.

ITEM 2.  CHANGES IN SECURITIES

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

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

           On November 18, 1996, a special meeting of the stockholders of the 
Company was held to ratify the issuance of 8% Convertible Debentures in the 
principal amount of $7.35 million, effective June 4, 1996 (the "Original 
Debentures") and the subsequent amendment of the Original Debentures, 
effective September 6, 1996 amending Original Debentures in the aggregate 
amount of $4.2 million (the "Amended Debentures"). Under the terms of the 
amendment, the Amended Debentures and any accrued interest thereon are 
convertible into common stock at a conversion price equal to the lower of (i) 
95% of the highest ten day average closing bid price of the Company's common 
stock as reported on The Nasdaq National Market between October 15, 1996 and 
November 15, 1996, not to exceed $3.00 per share or be less than $2.25 per 
share or (ii) 85% of the average closing bid price of the Company's Common 
Stock for the five trading days immediately preceeding the date of 
conversion. Fifty percent of the aggregate principal amount of each Amended 
Debenture will be convertible on December 1, 1996 and the balance of the 
principal amount of the Amended Debentures will become convertible on March 
1, 1997. Out of 10,931,350 shares of common stock entitled to vote. 5,772,640 
shares were present or represented. The proposal received 4,996,909 votes 
"FOR" the proposal, 740,416 votes "AGAINST" with 35,315 abstentions. There 
were no broker non-votes.

ITEM 5.  OTHER INFORMATION

         None.

                                        11

<PAGE>

Item 6.   Exhibits and Reports on Form 8-K        

     (a)  Exhibits

          27.1  Financial Data Schedule

     (b)  Reports on Form 8-K

          (i) The Company filed a current report on Form 8-K on February 12, 
          1997 with respect to certain changes in management.


                                       12


<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.


     Date:  February 14, 1997                  BLYTH HOLDINGS INC.
                                                  (Registrant)


                                              /s/ Timothy P. Negris
                                             -----------------------
                                                  Timothy P. Negris
                                                President and Chief 
                                                Executive Officer



                                              /s/ William M. Glynn
                                             -----------------------
                                                  William M. Glynn
                                             Vice President, Finance 

                                        13