**UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549**

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**FORM 10-Q**

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(Mark One)

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

**For the Quarterly Period Ended March 31, 2000**

**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 0-21010**

**Centura Software Corporation**
(Exact name of Registrant as specified in its Charter)



|**Delaware**                                                   | **94-2874178**                         
|-------------------------------------------------------------- | ---------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number)

**975 Island DriveRedwood Shores, California     94065**(Address of Principal Executive Offices including Zip Code)

**(650) 596-3400**(Registrant's Telephone Number, Including Area Code)

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

Securities registered pursuant to section 12(g) of the Act:**COMMON STOCK, $0.01 PAR VALUE PER SHARE**



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 reports), and (2) has been subject to such filing
requirements for the past 90 days.    YES [X]    NO [  ]


As of April 27, 2000, there were 39,084,813 shares of the Registrant's
Common Stock outstanding.



**CENTURA SOFTWARE CORPORATION
             FORM 10-Q for the Quarter Ended March 31, 2000
                                TABLE OF CONTENTS**


**PART I.   FINANCIAL INFORMATION**

**Page No.**Item 1.      Financial statements and supplementary dataCondensed consolidated balance sheets at March 31, 2000 and
     December 31, 1999

**Condensed consolidated statements of operations for the
          
    three months ended March 31, 2000 and 1999

**Condensed consolidated statements of cash flows for the
          
    three months ended March 31, 2000 and 1999

**Notes to condensed consolidated financial statements

**Item 2.   Management's discussion and analysis of financial
                      condition and results of operations

**Item 3.   Quantitative and qualitative disclosures about market risk

****PART II.  OTHER INFORMATION**Item 1.   Legal proceedings

**Item 2.   Changes in securities and use of proceeds

**Item 3.   Defaults upon senior securities

**Item 4.   Submission of matters to a vote of security holders

**Item 5.   Other information

**Item 6.   Exhibits and reports on Form 8-K

****Signature**

****PART I -- FINANCIAL INFORMATION**

Item 1. Financial statements and supplementary data**CENTURA SOFTWARE CORPORATION

                   CONDENSED CONSOLIDATED BALANCE SHEETS

                                (Unaudited)

                               (IN THOUSANDS)**March 31,    December 31,
                                                         2000          1999
                                                     ------------  ------------
                            ASSETS
Current assets:
   Cash and cash equivalents........................     $21,770       $20,614
   Accounts receivable, less allowances
     of $1,163 and $1,209...........................      12,640        14,394
   Other current assets.............................       4,625         4,970
                                                     ------------  ------------
     Total current assets...........................      39,035        39,978
Property and equipment, net.........................       3,647         3,541
Capitalized software, net...........................       1,580         1,035
Goodwill, net.......................................       2,674         2,694
Other intangible assets, net........................       3,457         3,686
Other assets........................................         545           546
                                                     ------------  ------------
                                                         $50,938       $51,480
                                                     ============  ============

   LIABILITIES, MANDATORILY REDEEMABLE CONVERTIBLE
     PREFERRED STOCK AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term obligations.........        $438          $430
   Accounts payable.................................       1,965         2,782
   Accrued compensation and related expenses........       1,697         1,759
   Short-term borrowings............................       2,522         3,302
   Other accrued liabilities........................       3,576         3,738
   Deferred revenue.................................      13,671        13,923
                                                     ------------  ------------
     Total current liabilities......................      23,869        25,934
Other long-term liabilities.........................         409           501
                                                     ------------  ------------
                                                          24,278        26,435
                                                     ------------  ------------
Mandatorily redeemable convertible preferred
   stock............................................      14,626        10,360
                                                     ------------  ------------

Stockholders' Equity:
   Common stock.....................................         391           375
   Additional paid-in capital.......................      94,391        95,978
   Accumulated other comprehensive income...........        (517)         (452)
   Accumulated deficit..............................     (82,231)      (81,216)
                                                     ------------  ------------
     Total stockholders' equity ....................      12,034        14,685
                                                     ------------  ------------
                                                         $50,938       $51,480
                                                     ============  ============

The accompanying notes are an integral part of these condensed
consolidated financial statements.
**CENTURA SOFTWARE CORPORATION

              CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

                                (Unaudited)

                   (IN THOUSANDS, EXCEPT PER SHARE DATA)**Three Months Ended
                                             March 31,
                                        -------------------
                                           2000      1999
                                        --------- ---------
Net revenues:
   Product.............................   $5,973    $7,097
   Service.............................    6,431     5,272
                                        --------- ---------
     Total net revenues................   12,404    12,369
                                        --------- ---------
Cost of revenues:
   Product.............................      428       837
   Service.............................      753       956
   Amortization of acquired technology.      133       --
                                        --------- ---------
     Total cost of revenues............    1,314     1,793
                                        --------- ---------
     Gross profit......................   11,090    10,576
                                        --------- ---------
Operating expenses:
   Sales and marketing.................    7,768     6,820
   Engineering and product development.    2,043     1,731
   General and administrative..........    2,194     1,617
   Amortization of goodwill and
     workforce intangible..............      208       --
                                        --------- ---------
     Total operating expenses..........   12,213    10,168
                                        --------- ---------
      Operating income (loss)..........   (1,123)      408
Other income (expense):
   Interest income.....................      246        56
   Interest expense....................     (147)      (68)
   Foreign currency gain (loss)........       24      (287)
                                        --------- ---------
Income (loss) before income taxes......   (1,000)      109
Provision for income taxes.............       15         5
                                        --------- ---------
Net income (loss)......................  ($1,015)     $104
                                        ========= =========
Accretion of mandatorily redeemable
  convertible preferred stock to
  redemption value.....................   (4,125)      --
Mandatorily redeemable convertible
  preferred stock dividend.............     (141)      --
                                        --------- ---------
Net income (loss) available to common
  stockholders.........................  ($5,281)     $104
                                        ========= =========

Basic net income (loss) per share......   ($0.14)    $0.00
                                        ========= =========

Basic weighted average common shares...   38,440    29,598
                                        ========= =========

Diluted net income (loss) per share....   ($0.14)    $0.00
                                        ========= =========

Diluted weighted average common shares.   38,440    29,651
                                        ========= =========

The accompanying notes are an integral part of these condensed
consolidated financial statements.
**CENTURA SOFTWARE CORPORATION

           CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

                             (Unaudited)

                            (IN THOUSANDS)**Three Months Ended
                                                                 March 31,
                                                           ---------------------
                                                              2000       1999
                                                           ---------- ----------
Cash flows from operating activities:
  Net income (loss).......................................   ($1,015)      $104
  Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
    Depreciation and amortization.........................       980        783
    Reduction in doubtful accounts, sales returns
     and allowances.......................................      (127)      (210)
    Issuance of stock options for services................        55         --
  Changes in assets and liabilities:
    Accounts receivable...................................     1,749      1,422
    Other current assets..................................      (175)       198
    Other assets..........................................         7        (30)
    Accounts payable and accrued liabilities..............    (1,004)      (260)
    Deferred revenue......................................      (252)      (205)
                                                           ---------- ----------
      Net cash provided by operating activities...........       218      1,802
                                                           ---------- ----------
Cash flows from investing activities:
  Acquisition of property and equipment...................      (549)      (258)
  Capitalization of software costs........................      (701)      (175)
  Capitalization of other intangibles.....................        --        (16)
  Proceeds from payment on note receivable................       513         --
                                                           ---------- ----------
      Net cash used in investing activities...............      (737)      (449)
                                                           ---------- ----------
Cash flows from financing activities:
  Repayment of short-term borrowings, net.................      (780)      (412)
  Repayment of capital lease obligation...................      (121)      (105)
  Proceeds from issuance of common stock, net.............     2,641         --
                                                           ---------- ----------
      Net cash provided by (used in) financing activities.     1,740       (517)
                                                           ---------- ----------
Effect of exchange rate changes on cash and cash
 equivalents..............................................       (65)        80
                                                           ---------- ----------
Net increase in cash and cash equivalents.................     1,156        916
Cash and cash equivalents at beginning of period..........    20,614      6,414
                                                           ---------- ----------
Cash and cash equivalents at end of period................   $21,770     $7,330
                                                           ========== ==========


Supplemental disclosure of non cash financing activities:

    Accretion of mandatorily redeemable convertible
      preferred stock to redemption value.................    $4,215         $--
                                                           ========== ==========
    Mandatorily redeemable convertible preferred
      stock dividend......................................      $141         $--
                                                           ========== ==========
    Conversion of operating lease to capital lease........        $--    $1,300
                                                           ========== ==========

The accompanying notes are an integral part of these
condensed consolidated financial statements.
**CENTURA SOFTWARE CORPORATION

                 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                      (Unaudited)****1. Summary of significant accounting policies**

Method of preparation

The accompanying condensed consolidated balance sheet as of March
31, 2000, the condensed consolidated statement of operations for the three
month periods ended March 31, 2000 and March 31, 1999, and cash flows for
the three month periods ended March 31, 2000 and March 31, 1999 are
unaudited.  In management's opinion, all adjustments which are normal and
recurring, necessary for a fair statement of the financial position,
results of operations, and of cash flows have been made for all periods
presented.The balance sheet as of December 31, 1999 has been derived from our
audited consolidated financial statements but does not include all
disclosures required by generally accepted accounting principles.  Such
disclosures are contained in our Annual Report on Form 10-K.The results of operations for the three month period ended March 31,
2000 are not necessarily indicative of the operating results to be
expected for the full year.  This financial data should be reviewed in
conjunction with management's discussion and analysis of financial
condition and results of operation and the audited consolidated financial
statements and accompanying notes included in our Annual Report on Form
10-K for the year ended December 31, 1999.Net income (loss) per share

Basic net income (loss) per share is calculated by dividing income
(loss) available to common stockholders by the weighted average number of
shares of common stock outstanding during each respective period. Diluted
net income (loss) per share is calculated giving effect to all dilutive
potential shares of common stock that were outstanding during each
respective period.  Dilutive potential shares of common stock could
consist of mandatorily redeemable convertible preferred stock, common
stock options and warrants.The following is a reconciliation of the computation for basic and
diluted net income (loss) per share:March 31,
                                       -------------------
                                         2000      1999
                                       --------- ---------
                                       (in thousands, except
                                           per share data)
Net income (loss) available to
  common stockholders.................  ($5,281)     $104
                                       ========= =========
Shares calculation:
 Average basic shares outstanding.....   38,440    29,598
 Effect of dilutive securities........     --          53
                                       --------- ---------
 Total shares used to compute
 diluted net income (loss) per share..   38,440    29,651
                                       ========= =========

Basic net income (loss) per share.....   ($0.14)    $0.00
                                       ========= =========

Diluted net income (loss) per share...   ($0.14)    $0.00
                                       ========= =========
Antidilutive potential shares of
 common stock at period end:
  Warrants............................      952     2,686
  Options.............................    7,703     6,221
  Mandatorily redeemable
    convertible preferred stock.......    2,148      --
                                       --------- ---------
                                         10,803     8,907
                                       ========= =========

In periods where we have a reported loss or in cases where stock
options, warrants and mandatorily redeemable convertible preferred stock
have an exercise price greater than the market price of the common shares
for the period, they are excluded from the per share calculation as they
are antidilutive.Comprehensive income (loss)

We report components of comprehensive income (loss) in our annual
consolidated statement of stockholders' equity. Other comprehensive
income (loss) consists of net income and foreign currency translation
adjustments. Our total comprehensive earnings were as follows:Three Months Ended
                                             March 31,
                                       -------------------
                                         2000      1999
                                       --------- ---------
                                           (in thousands)
Net income (loss).....................  ($1,015)     $104
Other comprehensive gain (loss).......      (65)       80
                                       --------- ---------
Total comprehensive income (loss).....  ($1,080)     $184
                                       ========= =========


Recent Accounting Pronouncements

In December 1999, the Securities and Exchange Commission issued
Staff Accounting Bulletin, or SAB No. 101, "Revenue Recognition in
Financial Statements".  SAB 101 provides guidance for revenue recognition
under certain circumstances.  The staff accounting bulletin is effective
no later than the second quarter of our fiscal year 2000. We are
currently reviewing the effect of SAB 101 on our consolidated results of
operations, financial position and cash flows.In June 1998, the Financial Accounting Standards Board, or FASB,
issued FAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities".  FAS 133 establishes accounting and reporting standards for
derivative instruments and for hedging activities. It requires us to
measure all derivatives at fair value and to recognize them on the
balance sheet as an asset or liability, depending on our rights or
obligations under the applicable derivative contract.  In July 1999, the
FASB issued FAS No. 137 that deferred the effective date of adoption of
FAS 133 for one more year.  We will adopt FAS 133 no later than the third
quarter of fiscal year 2000.  We are currently reviewing the effect of
FAS 133 on our consolidated results of operations, financial position and
cash flows.In March 2000, the Financial Standards Board issued Interpretation
No. 44, or FIN 44, "Accounting for Certain Transactions involving Stock
Compensation an interpretation of APB Opinion No. 25".  FIN 44 clarifies
the application of Opinion 25 for (a) the definition of employee for
purposes of applying Opinion 25, (b) the criteria for determining whether
a plan qualifies as a noncompensatory plan, (c) the accounting
consequences of various modifications to the terms of a previously fixed
stock option or award, and (d) the accounting for an exchange of stock
compensation awards in a business combination.  FIN 44 is effective July
1, 2000, but certain conclusions cover specific events that occur after
either December 15, 1998, or January 12, 2000.  We believe that the
impact of FIN 44 will not have a material effect on our financial
position or results of operations.**2. Segment information**

We are a leading provider of information appliance and e-business
software solutions that allow our customers to extend their business
information systems to the Internet and to wireless information devices,
for business-to-business applications.  The following table presents
information based on our method of internal reporting and on how we
organize our revenue into groups of similar products:Three Months Ended
                                             March 31,
                                       -------------------
                                         2000      1999
                                       --------- ---------
                                           (in thousands)
Embedded databases....................$   4,300 $   5,278
Application development environment...    1,177     1,249
Other tools and connectivity software.      496       570
                                       --------- ---------
  Total net product revenue...........$   5,973 $   7,097
                                       ========= =========



**3. Mandatorily redeemable convertible preferred stock**

In December 1999, we completed a private placement of 12,500 shares
of our Series A Cumulative Convertible Preferred Stock resulting in net
proceeds of $11,200,000, after deducting expenses associated with the
offering.Three Months Ended
                                             March 31,
                                       -------------------
                                         2000      1999
                                       --------- ---------
                                           (in thousands)
Balance at beginning of period........$  10,360 $    --
Dividend..............................      141      --
Accretion to redemption value.........    4,125      --
                                       --------- ---------
                                      $  14,626 $    --
                                       ========= =========


In accordance with the rights of the preferred stockholders we have
accrued a cumulative dividend for the three months ended March 31, 2000
at the rate of 4.5% per annum.   This dividend is due and payable in-kind
on March 31, 2000.Had we not been able to register the shares of common stock
underlying the preferred stock within 150 days of issuance of the
preferred stock, the preferred stockholders would have been able to
redeem the preferred stock at 125% of face value.  To reflect this
potential liability we have accreted the preferred stock balance to 125%
of the face value of the preferred stock outstanding, over a period of
150 days, prorated for the three months ended March 31, 2000. However, as
we received notice of effective registration on April 3, 2000, no such
liability exists and we will not be accreting further for this event.**4. Subsequent event**

On April 3, 2000 our registration statement on Form S-3, in
compliance with the Securities Act of 1933, as amended, registering
shares of common stock underlying the mandatorily redeemable convertible
preferred stock issued December 30, 1999 and associated warrants, was
declared effective.  In accordance with the terms of the Certificate of
Designation of the preferred stock (the "Certificate") we then issued a
conversion notice to the holders of the preferred stock requiring them to
convert all of their outstanding preferred stock holdings to common stock
over the period beginning April 17, 2000 and ending May 30, 2000.  As of
May 2, 2000 all of the preferred stock was converted to 3,099,000 shares
of common stock.  In accordance with the Certificate, during the Company-
directed conversion period, the number of shares issued was determined by
dividing the face value of the preferred stock by the lesser of $5.82 or
the lowest of the daily weighted average trading prices on the NASDAQ
SmallCap or National Market 10 days prior to the selected conversion date
within the conversion period, $4.093.**Item 2. Management's discussion and analysis of financial condition and
results of operations**

We are a leading provider of information appliance and e-business
software solutions.  We extend information systems to the Internet and to
wireless information devices for business-to-business applications.  Our
family of products, which provide end-to-end functionality in these
environments, includes a scalable Internet development environment (CTD),
a dynamic wireless connectivity solution (eSNAPP), and a range of
powerful, secure embeddable databases (SQLBase SafeGarde, Velocis, RDM
and db.linux).  In essence, we make the software our customers use to
create sophisticated Web and wireless applications.This quarterly report on Form 10-Q contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. Actual
results could differ materially from those projected in the
forward-looking statements as a result of certain of the risk factors set
forth below and elsewhere in this Quarterly Report on Form 10-Q. In
evaluating the Company's business, prospective investors should carefully
consider the following factors in addition to the other information
presented in this report.You should read the following discussion in conjunction with the
unaudited condensed consolidated financial statements and accompanying
notes included in Part I-Item 1 of this quarterly report, and the audited
consolidated financial statements and accompanying notes, and
management's discussion and analysis of financial condition and results
of operations included in our Annual Report on Form 10-K for the year
ended December 31, 1999.**Results of Operations:**

Net product revenues

The following table presents our net product revenues by product
line and approximate percentage of total revenues for the three months
ended March 31, 2000 and March 31, 1999:Three Months Ended March 31,
                                      ---------------------------------------
                                            2000                1999
                                      ------------------- -------------------
                                         (in        % of     (in        % of
                                      thousands)    total thousands)    total
Embedded databases...................   $4,300        72 %  $5,278        74 %
Application development environment..    1,177        20     1,249        18
Other tools and connectivity software      496         8       570         8
                                      --------- --------- --------- ---------
  Total net product revenue..........   $5,973       100 %  $7,097       100 %
                                      ========= ========= ========= =========



Net product revenues decreased $1,124,000, or 16%, for the three
months ended March 31, 2000 compared with the three months ended March 31,
1999.  The decrease is primarily due to a 50% decline in net sales of
SQLBase, an embedded database product primarily used in desktop
client/server applications. This decrease was partially offset by sales of
Velocis Database Server, our scalable database server used largely in Web-
centric applications, and RDM, a small-footprint embedded database, which
is used primarily in embedded device applications.  This is indicative of
what we believe is a market trend wherein customers are shifting
incremental information technology spending away from desktop client
server applications to Web-centric applications, coupled with competitive
pressure from large competitors that offer scalable database environments.
 Net revenues from sales of our development environment, CTD, in the first
quarter of 2000 were relatively flat compared with the first quarter of
1999.  Our new connectivity product offering, eSNAPP, was available only
in limited release format during the three months ended March 31, 2000 and
there are no revenues reported to date for this product.  We anticipate
our latest release of CTD, CTD 2000, and eSNAPP version 2.0, a general
release product, to be available in the second quarter of 2000.Net service revenues

Net service revenues primarily comprises fees that entitle our
customers to the right to receive product revision upgrades and updates as
and when they become available, telephone support and consulting services.Net service revenues increased 22% to $6,431,000 for the three
months ended March 31, 2000, from $5,272,000 for the three months ended
March 31, 1999, primarily due to a growth in the consulting business
following the acquisition of Raima Corporation, increased European
training revenue and timing differences in the amortization of license
maintenance support.Total net revenues by geographic region

The following table presents a summary of operations by geographic
region.  Revenues have been allocated to geographic regions based
primarily upon destination of product shipment.Three Months Ended March 31,
                                      ---------------------------------------
                                            2000                1999
                                      ------------------- -------------------
                                         (in        % of     (in        % of
                                      thousands)    total thousands)    total
North America........................   $5,075        41 %  $5,640        46 %
Europe...............................    6,023        49     5,711        46
Rest of the world....................    1,306        10     1,018         8
                                      --------- --------- --------- ---------
  Total net revenues.................  $12,404       100 % $12,369       100 %
                                      ========= ========= ========= =========

North American net revenues fell 10% for the three months ended
March 31, 2000, compared with the three months ended March 31, 1999, while
European net revenues increased 5% for the same periods.  The drop in
North American net revenues primarily reflects the decline in SQLBase
revenue, reflecting the shift in demand to scalable Web-centric database
environments and associated competitive pressures.  Historically, the
North American market has been an early indicator of paradigmatic market
shifts and we anticipate that markets outside North America are also
likely to be affected by this transition.  While the European segment is
experiencing similar pressure on a relative basis, the declines in SQLBase
revenues in that region were more than offset by increases in consulting
and other services.Revenues for the rest of the world increased 28% for the three
months ended March 31, 2000, compared with the three months ended March
31, 1999, largely due to a strong performance in the Asia Pacific region.Cost of net product revenues

Cost of product revenues includes the cost of production and the
amortization of capitalized software. Cost of production includes the cost
of subcontracted production and royalties for third party software.  The
table below presents these costs for the three months ended March 31, 2000
and March 31, 1999:Three Months Ended
                                             March 31,
                                       -------------------
                                         2000      1999
                                       --------- ---------
                                           (in thousands)
Cost of production....................     $272      $516
Amortization of capitalized software..      156       321
                                       --------- ---------
  Total cost of product revenues......     $428      $837
                                       ========= =========
As a percentage of net product
  revenues............................        7%       12%
                                       ========= =========
As a percentage of net product
  revenues, excluding amortization
  of capitalized software.............        5%        7%
                                       ========= =========


The decrease in cost of production was due principally to lower
royalty costs for the three months ended March 31, 2000, compared with the
three months ended March 31, 1999.  Cost of product revenues as a
percentage of net product revenues decreased to 7% for the three months
ended March 31, 2000, from 12% for the three months ended March 31, 1999,
due to both lower amortization of capitalized software and lower royalty
costs for the three months ended March 31, 2000, compared with the three
months ended March 31, 1999.We capitalize internal software development costs eligible for
capitalization from the time that a project reaches technological
feasibility until the time that the products derived from the project are
released for sale.  Software purchased from third parties and included in
our products is also capitalized if technological feasibility for the
project has been reached at the time of purchase.  These capitalized costs
are then amortized ratably over the useful life of the products, which is
generally estimated to be two to three years.The decrease in the amortization of the capitalized software costs
for the three months ended March 31, 2000, as compared with the three
months ended March 31, 1999, is primarily due to software purchased from
third parties and previously higher levels of internally capitalized costs
becoming fully amortized during 1999.Cost of net service revenues

Cost of service consists primarily of personnel costs related to
product license maintenance, training and technical support.  The table
below presents these costs for the three months ended March 31, 2000 and
March 31, 1999:Three Months Ended
                                             March 31,
                                       -------------------
                                         2000      1999
                                       --------- ---------
                                           (in thousands)
Total cost of service revenues........     $753      $956
                                       ========= =========
As a percentage of net service
  revenues............................       12%       18%
                                       ========= =========



The decrease in the actual cost of service and the relative
percentage of the cost of service revenues is primarily due to a reduction
in headcount in the respective periods.  By the end of 1999 we had
reorganized our support department by transferring previously out-sourced
support functions back in-house at a lower cost base while still
maintaining or improving service levels.Amortization of acquired products

In June 1999, we capitalized $2,670,000 of acquired technology, as
part of the acquisition of Raima Corporation.  In the three months ended
March 31, 2000 the associated amortization expense was $133,000.Sales and marketing expenses

Sales and marketing expenses consist principally of salaries, sales
commissions and costs of advertising and marketing campaigns.  The table
below presents these costs for the three months ended March 31, 2000 and
March 31, 1999:Three Months Ended
                                             March 31,
                                       -------------------
                                         2000      1999
                                       --------- ---------
                                           (in thousands)
Total sales and marketing expenses....   $7,768    $6,820
                                       ========= =========
As a percentage of total net
  revenues............................       63%       55%
                                       ========= =========



Sales and marketing expense increased for the three months ended
March 31, 2000, compared to the three months ended March 31, 1999,
primarily due to a planned increase in staffing in our sales and marketing
organization, in anticipation of several major new product releases in the
second quarter of 2000, along with the acquisition of Raima in June 1999.Engineering and product development expenses

The table below presents gross engineering and product development
expenses, capitalized software development costs, and net engineering and
product development expenses in dollar amounts and as a percentage of net
revenues for the three months ended March 31, 2000 and March 31, 1999:Three Months Ended
                                             March 31,
                                       -------------------
                                         2000      1999
                                       --------- ---------
                                           (in thousands)
Gross engineering and product
  development costs...................   $2,744    $1,906
Capitalized software
  development costs...................     (701)     (175)
                                       --------- ---------
Net engineering and product
  development costs...................   $2,043    $1,731
                                       ========= =========
As a percentage of net revenues:

Gross engineering and product
  development costs...................       22%       15%
                                       ========= =========
Net engineering and product
  development costs...................       16%       14%
                                       ========= =========
Net engineering and product development expenses for the three
months ended March 31, 2000 increased $312,000, or 18%, compared with the
three months ended March 31, 1999.The increase in the gross engineering and product development
expenses of $838,000, or 44%, for the three months ended March 31, 2000
compared with the three months ended March 31, 1999 is due primarily to
increases in personnel as we expand our efforts to leverage core
technologies into next generation products, combined with increased
personnel related costs as a result of the additional workforce of Raima,
which we acquired in June 1999.Capitalized software development costs increased 301% for the three
months ended March 31, 2000, compared with the three months ended March
31, 1999, due to two major product releases reaching technological
feasibility just prior to the three months ended March 31, 2000.We believe that the development of new products and the enhancement
of existing products are essential to our continued success, and we intend
to continue to devote substantial resources to new product development.General and administrative expenses

General and administrative expenses consist primarily of staffing
and related expenses, rent and facilities expense, depreciation, and
outside services.  The table below presents these costs for the three
months ended March 31, 2000 and March 31, 1999:Three Months Ended
                                             March 31,
                                       -------------------
                                         2000      1999
                                       --------- ---------
                                           (in thousands)
Total general and administrative
  expenses............................   $2,194    $1,617
                                       ========= =========
As a percentage of total net
  revenues............................       18%       13%
                                       ========= =========



General and administrative expenses increased $577,000, or 36%, for
the three months ended March 31, 2000, compared with the three months
ended March 31, 1999, primarily due to increased personnel related costs
as a result of the additional office associated with the Raima
acquisition.Amortization of goodwill and workforce intangible

As part of the June 1999 acquisition of Raima, we capitalized
$3,165,000 of goodwill, which is being amortized over its estimated period
of benefit of 5 years, and $670,000 of workforce intangible, which is
being amortized over its estimated period of benefit of 3 years.  For the
three months ended March 31, 2000, goodwill amortization expense was
$152,000 and the workforce intangible amortization expense was $56,000.Other income (expense), net

Other income (expense), net is comprised of interest income,
interest expense and gains or losses on foreign currency transactions.
For the three months ended March 31, 2000 other income (expense) increased
to net other income of $123,000 from a net other expense of $299,000 in
the same three months of the prior year.  This increase is due to higher
interest income, as a result of larger cash balances on deposit, following
the receipt of funds from the December 1999 private placement of preferred
stock and exercises of common stock options and warrants in addition to
favorable foreign exchange in the first quarter of 2000 as compared with
the first quarter of 1999.Provision for income taxes

The provision for income taxes primarily relates to foreign
withholding taxes. Due to our net losses and the availability of net
operating loss carryforwards arising in prior years, no provision for U.S.
income taxes was made for the three-month periods ended March 31, 2000 and
March 31, 1999.Accretion of mandatorily redeemable convertible preferred stock to
redemption value

The prorated accretion adjustment of $4,125,000, booked in the three
months ended March 31, 2000, reflects the theoretical charge that would
have resulted had we been unable to register the shares of common stock
underlying the preferred stock within the required period for registration
of 150 days.   In the event that the shares had not been registered within
the required timeframe, the preferred stockholders would then have been
entitled to redeem the preferred stock at 125% of face value.  Our
liability would therefore have increased to 125% of the face value of the
preferred stock.  Even though the registration of the shares of common
stock became effective on April 3, 2000, and we have no obligation to pay
125% of the face value, application of generally accepted accounting
principles required us to accrete to this potential redemption value.Mandatorily redeemable convertible preferred stock dividend

The preferred stock cumulative dividend of $141,000 for the three
months ended March 31, 2000 is accrued at the rate of 4.5% per annum, and
was paid in the form of incremental preferred stock on March 31, 2000.**Liquidity and Capital Resources:**

Cash flows

Three Months Ended
                                             March 31,
                                       -------------------
                                         2000      1999
                                       --------- ---------
                                           (in thousands)
Cash and cash equivalents at
  beginning of period.................$  20,614 $   6,414
Net cash (used in) provided by:
  Operating activites.................      218     1,802
  Investing activities................     (737)     (449)
  Financing activities................    1,740      (517)
Effect of exchange rate changes
 on cash and cash equivalents.........      (65)       80
                                       --------- ---------
Cash and cash equivalents at
  end of period.......................$  21,770 $   7,330
                                       ========= =========





Net cash from operating activities decreased $1,584,000 in the
three months ended March 31, 2000 compared with the same period in 1999.
 This decrease is primarily due to the operating loss incurred in the
first quarter of 2000 and larger reduction in accounts payable in the
three months ended March 31, 2000 compared with the same period in 1999.Net cash used in investing activities increased $288,000 in the
three months ended March 31, 2000 compared with the three months ended
March 31, 1999.  This increase is primarily attributed to increased
levels of capitalization of software development costs, due to two major
product releases reaching technological feasibility just prior to the
three months ended March 31, 2000, offset in part by proceeds from a note
receivable.Net cash from financing activities increased $2,257,000 in the
three months ended March 31, 2000 compared with the three months ended
March 31, 1999.  This is largely due to cash received from the exercises
of common stock options and warrants.We believe that expected cash flows from operations and existing
cash balances will be sufficient to meet our currently anticipated
working capital and capital expenditure requirements for the next 12
months.  We may, however, choose to raise cash for operational or other
needs sometime in the future.  If we need further financing, there can be
no assurance that it will be available on reasonable terms or at all.
Any additional equity financing will result in dilution to our
stockholders.Working capital

At March 31, 2000, our working capital, defined as current assets
less current liabilities, increased $1,122,000 to $15,166,000 from
$14,044,000 at December 31, 1999.  This is largely a result of an
increase in cash proceeds from the issuance of common stock arising from
exercises of common stock options and warrants.Excluding the impact of deferred product and support revenue of
$13,671,000 at March 31, 2000, our working capital increased by $870,000
to $28,837,000 during the three months ended March 31, 2000.  Deferred
product and service revenue reflects a delay in recognition of revenue in
accordance with contractual agreements and requires minimal future
monetary resources of Centura.Our capital requirements also may be affected by acquisitions of
businesses, products and technologies that are complementary to our
business, which we may consider from time to time. We regularly evaluate
such opportunities. Any such transaction, if consummated, may further
reduce our working capital or require the issuance of our common stock.Foreign currency forward contracts

At March 31, 2000 we had $3,774,000 in unsecured foreign currency
forward contracts denominated in four European currencies, including
German Deutschemarks, British Pounds Sterling, Dutch Guilders and Italian
Lire, as well as Australian Dollars, as part of a program to reduce the
financial exposure arising from foreign denominated monetary assets and
liabilities.Debt financing

In February 2000, we amended our $5,000,000 asset based loan
facility.  Under this amended agreement, we may borrow up to $5,000,000,
collateralized by our accounts receivable, combined with a $500,000
capital equipment facility.  The loan balance is limited to the lower of
$5,000,000, or 85% of our eligible receivables derived from customers
located in the United States and the United Kingdom, plus 25% of our
eligible receivables derived from approved customers located outside the
United States and the United Kingdom.  The interest rate is 2.0% above
the Bank of America Reference Rate, with provisions for a reduced
interest rate if we achieve certain financial covenants.  This agreement
matures at the end of January 2002, at which time we have the option to
renew the agreement for an additional one-year term.  If we terminate
this agreement prior to January 2002, we will incur an early termination
fee of $50,000.At March 31, 2000, we had drawn $2,522,000 on the loan facility and
were paying an interest rate of 2.0% above the Bank of America Reference
Rate of 9.0%.**Factors That May Affect Future Results:**

We have experienced in the past, and expect in the future to
continue to experience, significant fluctuations in quarterly operating
results.  We have at times recognized a substantial portion of our net
revenues in the last month or last few weeks of a quarter. We generally
ship products as orders are received and, therefore, have little or no
backlog. As a result, quarterly sales and operating results generally
depend on a number of factors that are difficult to forecast, including,
among others, the volume and timing of and ability to fulfill orders
received within the quarter.Operating results also may fluctuate due to the following factors:demand for our products;introduction, localization or enhancement of our products and our
competitors' products;market acceptance of new products;reviews in the industry press concerning the our products or our
competitors;changes or anticipated changes in our pricing our competitors' pricing;mix of distribution channels through which products are sold;mix of products sold;general economic conditions.

As a result, we believe that period-to-period comparisons of our
results of operations are not necessarily meaningful and should not be
relied upon as any indication of future performance.In addition, because our staffing and other operating expenses are
based in part on anticipated net revenues, a substantial portion of which
may not be generated until the end of each quarter, delays in the receipt
or shipment of orders and ability to achieve anticipated revenue levels
can cause significant variations in operating results from quarter to
quarter.  We may be unable to adjust spending in a timely manner to
compensate for any unexpected revenue shortfall. Accordingly, any
significant shortfall in sales of our products in relation to our
expectations could have an immediate adverse impact on our business,
operating results and financial condition. In addition, we currently
intend to increase our operating expenses to fund greater levels of sales
and marketing operations and expand distribution channels. To the extent
that such expenses proceed or are not subsequently followed by increased
net revenues, our business, operating results and financial condition
could be materially and adversely affected.In the future, we may make acquisitions of complementary companies,
products or technologies. Managing acquired businesses entails numerous
operational and financial risks, including difficulties in assimilating
acquired operations, diversion of management's attention to other
business concerns, amortization of acquired intangible assets and
potential loss of key employees or customers of acquired operations.
There can be no assurance that we will be able to effectively complete or
integrate acquisitions, and failure to do so could have a material
adverse effect on our operating results. At this time, we have no
understanding or agreement with any other entity regarding any potential
acquisition or combination, the consummation of which is probable.In addition, our quarterly operating results will depend on a
number of other factors that are difficult to forecast, including, but
not limited to the following risk factors.The volatility of our common stock price may harm our growth and ability
to raise capital.

Our common stock has a history of high volatility and our stock
price may vary in response to quarterly variations in operating and
financial results, as highlighted below, announcements of new products or
customer contracts by us or our competitors, litigation and other factors,
including sales of substantial blocks of our common stock. In addition,
the stock market in general, and the market for technology stocks in
particular, including our common stock, has experienced extreme price
fluctuations. These market fluctuations may affect the price of our stock,
often without necessarily any regard to whether we have experienced
changes in our business, operating results, or financial condition.
Fluctuations in the trading price or liquidity of our common stock may
adversely affect our ability to raise capital through future equity
financings, or to negotiate successful stock-for-stock acquisitions of
other companies.Fluctuations in our quarterly and annual results may adversely affect our
stock price.

Our quarterly and annual operating results have fluctuated
significantly in the past and may continue to do so in the future. On an
annual basis, we reported a loss of $3.2 million in 1999, a profit of $2.1
million in 1998 and a loss of $0.6 million for 1997. Our future operating
results may be below the expectations of public market analysts or
investors. We also may not learn of, or be able to confirm, revenue or
earnings shortfalls until late in the fiscal quarter or following the end
of the quarter and consequently may not be able to adjust spending in a
timely manner to compensate for the shortfalls. Accordingly, any
significant shortfall in sales of our products or services in relation to
our expectations or those of analysts or investors, could have an
immediate adverse impact on the price of our common stock.A number of factors are likely to cause variations in our quarterly
and annual results. From time to time, we or our competitors may announce
new products, product versions, capabilities or technologies that have the
potential to replace or shorten the life cycles of our existing products.
 The announcement of currently planned or other new products may also
cause customers to delay their purchasing decisions in anticipation of
such products. We may therefore occasionally experience a reduction in
demand for our existing products and decreased sales.In addition, our revenue recognition in some cases is dependent upon
the business activities of our customers and the timely and accurate
reporting of their activities to us, which makes predictability of the
related revenue extremely uncertain. For example, many of our product
licensing arrangements are subject to revenue recognition on a per-unit
deployed basis including cases where our deferred obligation to such
customers is gradually extinguished. Delays in the introduction or
availability of new hardware and software products from third parties may
also negatively affect sales of our products.Seasonal factors, including year and quarter end purchasing and the
timing of marketing activities, such as industry conventions and
tradeshows, may cause our operating results to fluctuate. Although we have
operated historically with little or no backlog of traditional boxed
product shipments, we have experienced a seasonal pattern of product
revenue, contributing to variation in quarterly worldwide product revenues
and operating results. We have generally realized lower revenues in the
first quarter as compared with the immediately preceding fourth quarter of
any given year and lower European revenues in the third quarter as
compared to the rest of the year. We have also experienced a pattern of
recording a substantial portion of our revenues in the third month of a
quarter. As a result, product revenues in any quarter are dependent on
orders booked in the last month. Our staffing and other operating expenses
are based in part on anticipated net revenues, a substantial portion of
which may not be generated until the end of each quarter. Delays in the
receipt or shipment of orders, including delays that may be occasioned by
failures of third party product fulfillment firms to produce and ship
products, or the actual loss of product orders can cause significant
variations in operating results from quarter to quarter.Our inability to retain or attract key personnel may prevent our business
from growing.

We are highly dependent on our executive officers and other key
personnel, and the loss of these employees may harm our competitive
position. Our future success will also depend largely on our ability to
continue to attract highly skilled personnel. Competition is intense for
employees with highly technical, management and other skills in the
software industry, particularly in the San Francisco bay area, and it may
be difficult to attract or retain qualified key employees. Without strong
management and talented employees, we may not continue to develop
successful new products or to obtain important strategic alliances.The lack of timely market delivery of our products and services or the
inability to achieve market acceptance may result in negative publicity
and losses.

The markets for our software products and services are characterized
by rapid technological developments, evolving industry standards, swift
changes in customer requirements and computer operating environments, and
frequent new product introductions and enhancements. If one or more
competitors introduce products that better address customer needs, we may
lose our market position and our revenues will decrease.Our success depends on the ability of our primary products,
including Centura's eSNAPP, SQLBase SafeGarde, RDM, Velocis Database
Server, Centura Team Developer, to perform well in various business
hardware and software application environments, and on the ability of our
consulting organization to successfully assist customers in their
solutions development. Any failure to deliver these products and services
as scheduled or their failure to achieve market acceptance as a result of
competition, rapid technological change, failure to timely release new
versions or upgrades, failure of such upgrades to achieve market
acceptance or otherwise, could result in negative publicity and decreased
sales.Like many software companies, we have in the past experienced delays
in the development of new products and product versions, which resulted in
loss or delays of product revenues. There can be no assurance that we will
not experience further delays in connection with our current product
development or future development activities.We are also increasingly dependent on the efforts of third-party
partners, including value-added resellers, and software developers, to
develop, implement, service and support our products. These third parties
increasingly have opportunities to select from a very broad range of
products from our competitors, many of whom have greater resources and
market acceptance than ours.  In order for our products and services to
succeed in the market, we must actively recruit and sustain relationships
with these third parties.Software errors in some of our products may cause our future sales to
decrease.

Software products as complex as those offered by us may contain
undetected errors when first introduced or as new versions are released.
We have in the past discovered software errors in some of our new products
and enhancements after their introduction. Although we have not
experienced material adverse effects resulting from any such errors to
date, errors could be found in new products or releases after commencement
of commercial shipments, resulting in adverse product reviews and a loss
of or delay in market acceptance.If the computer industry shifts away from information appliance and e-business
software, demand for our products may decrease significantly.

To date, substantially all of our revenues have been derived from
the licensing of software products for PC client/server systems and other
embedded software environments. Licensing of such products, in addition to
the licensing of products for use in always-connected, occasionally-
connected, connected-on-demand and Web-based host information system
environments and related consulting and support services, is expected to
continue to account for substantially all of our revenues for the
foreseeable future. With the increasing focus on enterprise-wide systems
that embrace the Web, some customers may opt for solutions that favor
mainframe or mini-computer solutions with associated Web connectivity.The market for information appliance and e-business software in
general, and the segments of such market addressed by our products in
particular, are relatively new. Our future financial performance will
depend in part on the continued expansion of this market and these market
segments and the growth in the demand for other products developed by us,
as well as increased acceptance of our products by information technology
professionals. We cannot assure you that the market for information
appliance and e-business software in general, and the relevant segments of
the market addressed by our products in particular, will continue to grow,
or that we will be able to respond effectively to the evolving
requirements of the market and market segments, or that information
technology professionals will accept our products. If we are not
successful in developing, marketing, localizing and selling applications
that gain commercial acceptance in these markets and market segments on a
timely basis, our competitive position may suffer and our revenues may
decrease.Residual problems related to the year 2000 issue may interrupt our
business and increase our operating expenses.

To date, our customers have not reported any problems with our
software products as a result of the commencement of the year 2000 and we
have not experienced any impairment in our internal operations resulting
from the year 2000 issue. Nevertheless, computer experts have warned that
there may still be residual consequences stemming from the change in
centuries and, if these consequences become widespread, they could result
in claims against us, a decrease in sales of our products and services,
increased operating expenses and other business interruptions.The information appliance and e-business software market is highly
competitive, and we risk losing our market share to other companies.

The information appliance and e-business software market is
intensely competitive and rapidly changing. Some of our products are
specifically targeted at the emerging portion of this market relating to
complete and secure integration solutions for always, occasionally, and
connected-on-demand mobile enterprise, Information Appliance, intelligent
device and Web-based host information system environments. Our current and
prospective competitors offer a variety of solutions to address this
market segment. Competitors include Aether Systems, Allaire, Borland.com
(Inprise), Citrix, IBM, Microsoft, Oracle, Puma, SilverStream, Sybase's
SQL Anywhere and Powersoft Divisions, Synchrologic and Tibco.  With the
emergence of the Web as an important platform for application development
and deployment and a variety of newly created Java based development
tools, additional competitors or potential competitors have emerged with
longer operating histories, significantly greater financial, technical,
sales, marketing and other resources, greater name recognition, larger
installed customer bases and established relationships with some of our
customers.Our competitors could in the future introduce products with more
features and lower prices than our offerings. These companies could also
bundle existing or new products with more established products to compete
with us. Furthermore, as the Information Appliance and e-business markets
expand, a number of companies, with significantly greater resources than
ours, could attempt to increase their presence in these markets by
acquiring or forming strategic alliances with our competitors, or by
introducing products specifically designed for these markets.Any termination or significant disruption of our relationships with any of
our resellers or distributors, or the failure by such parties to renew
agreements with us, could harm our sales.

We rely on relationships with value-added resellers and independent
third-party distributors for a substantial portion of our sales and
revenues, particularly in international markets. We also maintain
strategic relationships with a number of vertical software vendors and
other technology companies for marketing or resale of our products. Some
of our resellers and distributors also offer competing products. Most of
our resellers and distributors are not subject to any minimum purchase
requirements, they can cease marketing our products at any time, and they
may from time to time be granted stock exchange or rotation rights.
Moreover, the introduction of new and enhanced products may result in
higher product returns and exchanges from distributors and resellers. In
addition, the distribution channels through which client/server software
products are sold have been characterized by rapid change, including
consolidations and financial difficulties of distributors, resellers and
other marketing partners including some of our current distributors. The
bankruptcy, deterioration in financial condition or other business
difficulties of a distributor or retailer could render our accounts
receivable from such entity uncollectable. We cannot assure you that our
distributors or resellers will continue to purchase our products in the
same amounts, if at all, or to provide our products with adequate
promotional support. Termination of any of our relationships with
distributors or resellers could negatively affect our sales.Our inability to compete successfully in international markets may reduce
our revenues.

For the year ended December 31, 1999 our international sales were
55% of our net revenues, for the year ended December 31, 1998 our
international sales were 54% of our net revenues and for the year ended
December 31, 1997 our international sales were 58% of our net revenues.  A
key component of our strategy is continued expansion into international
markets, and we currently anticipate that international sales,
particularly in new and emerging markets, will continue to account for a
significant percentage of total revenues. We will need to retain effective
distributors, and hire, retain and motivate qualified personnel
internationally to maintain and/or expand our international presence.
However, we cannot assure that we will be able to successfully market,
sell, localize and deliver our products in international markets.There are also risks inherent in doing business on an international
level, such as unexpected changes in regulatory requirements and
government controls, problems and delays in collecting accounts
receivable, tariffs, export license requirements and other trade barriers,
difficulties in staffing and managing foreign operations, longer payment
cycles, political and economic instability, fluctuations in currency
exchange rates, seasonal reductions in business activity during summer
months in Europe and other parts of the world, restrictions on the export
of critical technology, and potentially adverse tax consequences, which
could adversely impact the success of international operations. In
addition, effective copyright and trade secret protection may be limited
or unavailable under the laws of some foreign jurisdictions.Also, sales of our products are denominated either in the local
currency of the respective geographic region or in US dollars, depending
upon the economic stability of that region and locally accepted business
practices. Accordingly, any increase in the value of the US dollar
relative to local currencies in those markets may negatively impact our
competitive position and our revenues.In some international markets we have entered into agreements with
independent companies that have also licensed the use of our name. These
agreements are in place to increase our opportunities and penetration in
such markets. While we believe that to date these agreements have
increased our penetration in such markets, there can be no certainty that
this performance will continue nor that these relationships will remain in
place. Failure to renew these agreements could adversely affect our
business in these markets.Our inability to adequately protect our proprietary technology may result
in us losing our competitive position.

We have one patent with respect to our SQLWindows and Centura Team
Developer products and one patent pending with respect to our SQLBase
SafeGarde product. The source code for our proprietary software is
protected both as a trade secret and as a copyrighted work. Despite these
precautions, it may be possible for a third party to copy or otherwise
obtain and use our products or technology without authorization, or to
develop similar technology independently. In addition, effective copyright
and trade secret protection may be unavailable or limited in some foreign
countries.We generally enter into confidentiality or license agreements with
our employees, consultants and vendors, and generally control access to
and distribution of our software, documentation and other proprietary
information. Despite efforts to protect proprietary rights, unauthorized
parties may attempt to copy aspects of our products or to obtain and use
information that is regarded as proprietary. Policing such unauthorized
use is difficult. There can be no assurance that the steps taken by us
will prevent misappropriation of our technology or that such agreements
will be enforceable. In addition, litigation may be necessary in the
future to enforce intellectual property rights, to protect trade secrets
or to determine the validity and scope of the proprietary rights of
others. Such litigation could result in substantial costs and diversion of
our resources.Third parties may also claim infringement by us with respect to
current or future products. We expect that we will increasingly be subject
to such claims as the number of products and competitors in the
Information Appliance and e-business markets grow and the functionality of
such products overlaps with other industry segments. In the past, we have
received notices alleging that our products infringe trademarks of third
parties. We have historically dealt with and will in the future continue
to deal with such claims in the ordinary course of business, evaluating
the merits of each claim on an individual basis. There are currently no
material pending legal proceedings against us regarding trademark
infringement.Any third party infringement claims, whether or not they are
meritorious, could result in costly litigation or require us to enter into
royalty or licensing agreements. Such royalty or license agreements, if
required, may not be available on terms acceptable to us, or at all. If we
were found to have infringed upon the proprietary rights of third parties,
we could be required to pay damages, cease sales of the infringing
products and redesign or discontinue such products.Our inability to obtain additional financing on favorable terms may
substantially harm the future growth of our business.

We may be required to seek additional equity financing to finance
the acquisition of new products and technologies, capital equipment and
continuing operations. If we need further financing, there can be no
assurance that it will be available on reasonable terms or at all. Any
additional equity financing will also result in dilution to our existing
stockholders.Our inability to monitor and respond to the need for additional personnel
and upgraded systems may impair our ability to expand sales and generate
increased revenue.

In recent years, we have experienced both expansion and contraction
of our operations, each of which has placed significant demands on our
administrative, operational and financial resources. To manage future
growth, if any, we must continue to improve our financial and management
controls, reporting systems and procedures on a timely basis and expand,
train and manage our work force. There can be no assurance that we will
be able to perform such actions successfully. We intend to continue to
invest in improving our financial systems and controls in connection with
higher levels of operations. Although we believe that our systems and
controls are adequate for the current level of operations, we anticipate
that we may need to add additional personnel and expand and upgrade our
financial systems to manage any future growth. Our failure to do so
effectively could negatively impact the growth of our sales and revenue.Future issuance of our common stock according to option plans or exercise
of warrants will dilute the beneficial ownership of our existing
stockholders, and the sale of such shares could negatively affect our
stock price.

As of March 31, 2000, we had outstanding warrants to purchase
952,000 shares of our common stock and options to purchase 7,703,000
shares of our common stock. Future issuance of such shares of our common
stock according to any of these outstanding securities will dilute the
beneficial ownership of our stockholders. In addition, sales, including
block sales, of a significant number of shares of common stock, or the
potential for such sales, could adversely affect the prevailing stock
market price for our common stock. This effect may be particularly
significant because these shares represent a large percentage of our
total outstanding stock.Conversion of our Series A Cumulative Convertible Preferred Stock and
exercise of the related warrants may dilute the interests of existing
stockholders.

On December 30, 1999 we issued 12,500 shares of our Series A
Cumulative Convertible Preferred Stock, all of which has since been
converted to common stock, and an option to purchase 6,000 shares of
Series A Cumulative Convertible Preferred Stock and warrants to purchase
shares of common stock.  So long as these securities remain outstanding
and unconverted or unexercised, the terms under which we could obtain
additional equity financing may be adversely affected. To the extent of
any conversion or exercise of these securities, the interests of our
existing stockholders will be diluted proportionately. Dilution will
increase significantly if the option to purchase additional shares of
preferred stock is exercised and the price of our common stock remains
consistently below the maximum conversion price of $5.82, since these
conditions would result in the conversion of larger amounts of our common
stock than would occur if our common stock price remains above the maximum
conversion price of $5.82. In addition, as more shares of preferred stock
are converted, our common stock price may decline further.If we are deemed to have issued 20% or more of our outstanding common
stock in connection with the private placement of our series A cumulative
convertible preferred stock, we may be required to delist our shares from
the NASDAQ National Market.

In accordance with NASD Rules 4310 and 4460, which require
stockholder approval of any transaction that would result in the issuance
of securities representing 20% or more of an issuer's outstanding listed
securities, we are not obligated to issue shares of our common stock upon
conversion of the Series A Cumulative Convertible Preferred Stock in
excess of 19.99% of our outstanding common stock on December 30, 1999, the
date of issuance of the preferred stock, or approximately 7,465,771 shares
of common stock. However, if the NASD determines that we have issued 20%
or more of our outstanding common stock in connection with our private
placement of the preferred stock, or that we have violated any other NASD
rule, we risk being delisted from the NASDAQ National Market.**Item 3. Quantitative and qualitative disclosure about market risk**

We are exposed to market risk from changes in foreign currency
exchange rates and interest rates that could impact our results of
operations and financial condition.We manage our exposure to foreign currency exchange risk using
derivative financial instruments (forward contracts) as a risk management
tool and not for speculative or trading purposes. We use these foreign
exchange contracts to reduce significant exposure to the risk that the
eventual net cash flows resulting largely from the sale of products and
services to non-U.S. customers will be adversely affected by changes in
exchange rates.  These instruments allow us to reduce our overall exposure
to exchange rates as the gains and losses on the contracts offset the
losses and gains on the assets, liabilities and assets being hedged.Annual gains and losses in the future may differ materially from
this analysis, however, based on the changes in the timing and amount of
foreign currency exchange rate movements and our actual exposures and
hedges.At March 31, 2000, we have a total of $3,774,000 in 30-day forward
contracts.  The US dollar equivalent balance at March 31, 2000 for each of
the currencies held comprises: German Deutschemarks ($863,000), British
Pounds Sterling ($1,863,000), Dutch Guilders ($309,000), Italian Lire
($395,000) and Australian Dollars ($344,000). The carrying value of these
financial instruments approximates their respective fair values.While we hedge certain foreign currency transactions, the decline in
value of non-U.S. dollar currencies may adversely impact our ability to
contract for sales in U.S. dollars and our products and services may
become more expensive to purchase in U.S. dollars for local customers
doing business in the countries of the affected currencies.Our international business is also subject to risks customarily
encountered in foreign operations, including changes in specific country's
or region's political or economic conditions, trade protection measures,
import or export licensing requirements, unexpected changes in regulatory
requirements and natural disasters.We are subject to interest rate risk on our investment portfolio.
However, our portfolio consists of only cash and cash equivalents at March
31, 2000, and thus our interest rate risk is immaterial.We are further subject to interest rate risk on our asset based loan
facility, however we believe that the adverse movements of interest rates
would not have a material effect on our consolidated financial position,
results of operations or cash flows.**PART II. OTHER INFORMATION**


**Item 1.         Legal proceedings**


As of March 31, 2000, to the best of our knowledge there were
no pending actions, potential actions, claims or proceedings
against us that could reasonably be expected to result in
damages to us which would have a material adverse effect on
our business, results of operations or financial condition.
We exist in a volatile legal and regulatory environment and it
is not possible to anticipate or estimate the potential
adverse impact of unknown claims or liabilities against us,
our officers and directors, and as such no estimate is made in
our financial statements for such unknown claims or
liabilities.**Item 2. Changes in securities and use of proceeds**

Not applicable**Item 3.         Defaults upon senior securities**


Not applicable**Item 4.         Submission of matters to a vote of security holders**

Not applicable**Item 5.         Other information**

Not applicable**Item 6.         Exhibits and reports on Form 8-K**

(a) Exhibits:27.1 Financial data schedule(b) Reports on Form 8-KCurrent report on Form 8-K, dated December 30, 1999 and filed
on January 5, 2000 reported that we had closed a private
placement of equity securities.
**CENTURA SOFTWARE CORPORATION****SIGNATURE**



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.CENTURA SOFTWARE CORPORATION(Registrant)

Dated: May 11, 2000

By:
    /s/ Richard LucienRichard LucienSenior Vice President, Finance and
                                           Chief Financial Officer(Principal Financial and Accounting Officer)