<PAGE>


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


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


For the Quarterly Period Ended March 31, 1999


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

Commission File Number 0-15935


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


          CALIFORNIA                                           95-3634089
-------------------------------                           ---------------------
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                            Identification No.)


                  9339 CARROLL PARK DRIVE, SAN DIEGO, CA 92121
              ---------------------------------------------------
              (Address of principal executive offices and zip code)


                                 (619) 625-3000
               ---------------------------------------------------
               (Registrants telephone number, including area code)


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
                                   ---        ---

Number of shares of Common Stock outstanding at May 3, 1999:  9,615,163
                                                            -------------

Number of Sequentially Numbered Pages: 17

<PAGE>


                              ALTRIS SOFTWARE, INC.

                                      INDEX


<TABLE>
<CAPTION>
                                                                     Page Number
                                                                     -----------
<S>                                                                  <C>
PART I.  FINANCIAL INFORMATION


     Item 1. Financial Statements


                    Consolidated Balance Sheets                             3


                    Consolidated Statements of Operations                   4


                    Consolidated Statements of Cash Flows                   5


                    Notes to the Condensed Consolidated 
                       Financial Statements                                 6


     Item 2. Management's Discussion and Analysis of Financial 
             Condition and Results of Operations                           10



PART II. OTHER INFORMATION                                                 15
</TABLE>


                                       2
<PAGE>


                              ALTRIS SOFTWARE, INC.

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                             March 31, 1999      December 31, 1998
                                                             --------------      -----------------
                                                              (unaudited)
                                     ASSETS
<S>                                                          <C>                 <C>
Current assets:
    Cash and cash equivalents                                $      391,000       $      530,000
    Receivables, net                                                495,000            1,128,000
    Inventory, net                                                  275,000              277,000
    Other current assets                                            193,000              244,000
                                                             --------------       --------------
        Total current assets                                      1,354,000            2,179,000

Property and equipment, net                                       1,368,000            1,565,000
Computer software, net                                            4,510,000            4,685,000
Goodwill, net                                                     1,983,000            2,645,000
Other assets                                                        270,000              292,000
                                                             --------------       --------------
    Total assets                                             $    9,485,000       $   11,366,000
                                                             --------------       --------------
                                                             --------------       --------------

<CAPTION>
                      LIABILITIES AND SHAREHOLDERS' DEFICIT
<S>                                                          <C>                  <C>
Current liabilities:
    Accounts payable                                         $    2,921,000       $    2,779,000
    Accrued liabilities                                           2,095,000            1,934,000
    Notes payable                                                   700,000              745,000
    Deferred revenue                                              3,667,000            3,230,000
                                                             --------------       --------------
        Total current liabilities                                 9,383,000            8,688,000
Long term notes payable                                             421,000              468,000
Deferred revenue, long term portion                               1,963,000            2,131,000
Other long term liabilities                                       1,162,000            1,263,000
Subordinated debt, net of discount                                2,620,000            2,591,000
                                                             --------------       --------------
        Total liabilities                                        15,549,000           15,141,000

Commitments                                                               -                    -
Mandatorily redeemable convertible preferred stock,
    $1,000 par value, 3,000 shares authorized;
    3,000 shares issued and outstanding ($3,455,000 and
    $3,350,000 total liquidation preference, respectively)        3,108,000            3,003,000

Shareholders' deficit:
    Common stock, no par value, 20,000,000 shares authorized;
        9,615,163 and 9,614,663 issued and outstanding,
        respectively                                             61,096,000           61,201,000
    Common stock warrants                                           585,000              585,000
    Accumulated other comprehensive income                           65,000              (10,000)
    Accumulated deficit                                         (70,918,000)         (68,554,000)
                                                             --------------       --------------
        Total shareholders' deficit                              (9,172,000)          (6,778,000)
                                                             --------------       --------------
        Total liabilities and shareholders' deficit          $    9,485,000       $   11,366,000
                                                             --------------       --------------
                                                             --------------       --------------
</TABLE>



         The accompanying condensed notes are an integral part of these
                       consolidated financial statements.


                                       3
<PAGE>

                              ALTRIS SOFTWARE, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                        For the three months
                                                                           ended March 31,
                                                                        --------------------
                                                                     1999                 1998
                                                                     ----                 ----
<S>                                                          <C>                  <C>
Revenues:
    Licenses                                                 $      772,000           $  891,000
    Services and other                                            1,613,000            2,110,000
                                                             --------------       --------------
         Total revenue                                            2,385,000            3,001,000

Cost of revenues:
    Licenses                                                        305,000              294,000
    Services and other                                            1,067,000            1,507,000
                                                             --------------       --------------
         Total cost of revenues                                   1,372,000            1,801,000
                                                             --------------       --------------

Gross profit                                                      1,013,000            1,200,000
                                                             --------------       --------------

Operating expenses:
    Research and development                                      1,011,000              743,000
    Marketing and sales                                             765,000            1,669,000
    General and administrative                                    1,447,000            1,410,000
                                                             --------------       --------------
         Total operating expenses                                 3,223,000            3,822,000
                                                             --------------       --------------

Loss from operations                                             (2,210,000)          (2,622,000)

Interest and other income                                             9,000               15,000
Interest and other expense                                         (163,000)            (163,000)
                                                             --------------       --------------

Net loss                                                     $   (2,364,000)      $   (2,770,000)
                                                             --------------       --------------
                                                             --------------       --------------

Basic net loss per common share                              $         (.26)      $         (.30)
                                                             --------------       --------------
                                                             --------------       --------------

Diluted net loss per common share                            $         (.26)      $         (.30)
                                                             --------------       --------------
                                                             --------------       --------------

Shares used in computing basic and diluted
    net loss per common share                                     9,615,000            9,615,000
</TABLE>


          The accompanying condensed notes are an integral part of these
                       consolidated financial statements.


                                       4
<PAGE>


                              ALTRIS SOFTWARE, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                        For the three months
                                                                           ended March 31,
                                                                        --------------------
                                                                     1999                 1998
                                                                     ----                 ----
<S>                                                          <C>                  <C>
Cash flow from operating activities:
    Net loss                                                 $   (2,364,000)      $   (2,770,000)
    Adjustments to reconcile net loss to net
      cash used in operating activities:
         Depreciation and amortization                            1,085,000              594,000
         Changes in assets and liabilities:
           Receivables, net                                         633,000            1,201,000
           Inventory                                                  2,000              (15,000)
           Other assets                                              51,000              135,000
           Accounts payable                                         142,000             (527,000)
           Accrued liabilities                                      161,000             (422,000)
           Deferred revenue                                         269,000            1,081,000
           Other long term liabilities                             (101,000)              52,000
                                                             ---------------      --------------
Net cash used in operating activities                              (122,000)            (671,000)
                                                             --------------       --------------

Cash flows from investing activities:
    Maturity of short term investment                                     -               95,000
    Purchases of property and equipment                                   -              (78,000)
    Purchases of software                                                 -             (118,000)
    Computer software capitalized                                         -             (561,000)
                                                             --------------       --------------
Net cash used in investing activities                                     -             (662,000)
                                                             --------------       --------------

Cash flows from financing activities:
    Repayments of revolving loan and bank agreements               (100,000)             (50,000)
    Net borrowings under revolving loan and bank agreements           8,000              826,000
    Payment of preferred stock dividends                                  -              (87,000)
                                                             --------------       --------------
Net cash (used in) provided by financing activities                 (92,000)             689,000
                                                             --------------       --------------

Effect of exchange rate changes on cash                              75,000              (30,000)
                                                             --------------       --------------

Net decrease in cash and cash equivalents                          (139,000)            (674,000)

Cash and cash equivalents at beginning of period                    530,000            1,938,000
                                                             --------------       --------------

Cash and cash equivalents at end of period                   $      391,000       $    1,264,000
                                                             --------------       --------------
                                                             --------------       --------------

Supplemental cash flow information:
    Interest paid                                            $      108,000       $      101,000
                                                             --------------       --------------
                                                             --------------       --------------

Accretion of dividends on mandatorily
    redeemable convertible preferred stock                   $      105,000       $       87,000
                                                             --------------       --------------
                                                             --------------       --------------
</TABLE>


          The accompanying condensed notes are an integral part of these
                       consolidated financial statements.


                                       5
<PAGE>

                              ALTRIS SOFTWARE, INC.
           NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1 - Liquidity and Capital Resources
----------------------------------------

         Altris Software, Inc. (the "Company") has suffered recurring losses, 
and has an accumulated deficit of $70,918,000, a working capital deficit of 
$8,029,000 and a deficit in shareholders' equity of $9,172,000 as of March 
31, 1999, which raise substantial doubt about the Company's ability to 
continue as a going concern. Due to significant losses and decreasing sales, 
the Company, in 1998, reduced its payroll cost, the largest cost element. In 
addition, the Company has made further reductions of other expenditures. In 
the first quarter of 1999, the Company has experienced a reduction in 
incoming orders. The Company's ability to continue operations is dependent 
upon the generation of new systems sales of Altris EB in the near term, which 
cannot be assured. Given the substantial uncertainties confronting the 
Company, there can be no assurance that sufficient cash flows will be 
generated by the Company in the near term to meet its current obligations. 
Accordingly, the Company is investigating raising additional cash through 
debt or equity offerings or other means. Management believes that such 
additional cash through the issuance of debt or equity will be necessary to 
enable the Company to meet its short-term needs for working capital. There 
can be no assurance that additional debt or equity financing will be 
available, or that, if available, such financing could be completed on 
commercially favorable terms. Failure to obtain additional financing in the 
near future, can be expected to have a material adverse affect on the 
Company's business, results of operations, and financial condition. In May 
1999, the Company entered into a multi-part agreement with Spescom Ltd. to 
make certain investments in the Company and its wholly-owned U.K. subsidiary. 
See Part II Other Information, Item 5--Subsequent Event.

Note 2 - Basis of Presentation
------------------------------

         The information contained in the following Condensed Notes to the 
Consolidated Financial Statements is condensed from that which would appear 
in the annual consolidated financial statements; accordingly, the 
consolidated financial statements included herein should be reviewed in 
conjunction with the consolidated financial statements and related notes 
thereto contained in the 1998 Annual Report to Shareholders of the Company. 
It should be understood that accounting measurements at interim dates 
inherently involve greater reliance on estimates than at year end. The 
results of operations for the interim periods presented are not necessarily 
indicative of the results expected for the entire year.

         The accompanying consolidated balance sheet of the Company as of 
March 31, 1999 and the consolidated statement of operations and of cash flows 
for the three month periods ended March 31, 1999 and 1998 are unaudited. The 
consolidated financial statements and related notes have been prepared in 
accordance with generally accepted accounting principles applicable to 
interim periods. In the opinion of management, the consolidated financial 
statements reflect all adjustments, consisting only of normal recurring 
adjustments, necessary for a fair presentation of the consolidated financial 
position, operating results and cash flows for the periods presented.

         The consolidated financial statements include the accounts of the 
Company and its wholly owned subsidiaries. All significant intercompany 
balances and transactions have been eliminated.

Note 3 - Receivables
--------------------

<TABLE>
<CAPTION>
                                                             March 31, 1999      December 31, 1998
                                                             --------------      -----------------
<S>                                                          <C>                 <C>            
Billed receivables                                           $       529,000      $     1,193,000
Unbilled receivables                                                  99,000              129,000
Less allowance for doubtful accounts                                (133,000)            (194,000)
                                                             ---------------      ---------------
                                                             $       495,000      $     1,128,000
                                                             ---------------      ---------------
                                                             ---------------      ---------------
</TABLE>

Note 4 - Inventory
------------------

         Inventory consists of parts, supplies, and subassemblies primarily used
in maintenance contracts which service the Company's hardware products sold in
prior years. Inventory is stated at the lower of cost or market value. Cost is
determined using the first-in, first-out (FIFO) method. As of March 31, 1999 and
December 31, 1998, the Company has provided a reserve of $721,000 and $651,000,
respectively, to reduce the carrying amount to estimated net realizable value.

Note 5 - Notes Payable and Subordinated Debt
--------------------------------------------

Notes payable and subordinated debt consist of the following:

<TABLE>
<CAPTION>
                                                                March 31,         December 31,
                                                                  1999                1998     
<S>                                                          <C>                  <C>        
United Kingdom overdraft facility                            $    383,000         $   375,000
Revolving loans                                                   738,000             838,000
Subordinated debt, less discount of $380,000 and
  $409,000, respectively                                       2,620,000            2,591,000
                                                             -----------          -----------

                                                             $ 3,741,000          $ 3,804,000
                                                             -----------          -----------
                                                             -----------          -----------
</TABLE>

         In October 1998, the Company's United Kingdom subsidiary renewed an
overdraft facility with a bank. Interest is calculated at 3.0% per annum over
the bank's base rate (8.5% and 9.5% at March 31, 1999 and December 31, 1998,
respectively). Currently the facility is for $403,000 ((pound)250,000) and is
payable on demand. At March 31, 1999, $383,000 was outstanding under the
facility. At December 31, 1998, $375,000 was outstanding. Repayment of the
borrowings under the facility are collateralized by the property and assets of
the


                                       6
<PAGE>

Company's United Kingdom subsidiary, including a (pound)100,000 certificate
on deposit. The Company has also executed a guarantee in connection with the
facility.

         The Company has two revolving loan and security agreements, each
providing for borrowings of up to $1,000,000. The maximum credit available under
each facility declines by $200,000 each year beginning in March 1997 and
September 1996, respectively. Each loan is payable in monthly installments of
$16,667 plus interest equal to the 30-day Commercial Paper Rate plus 2.95%
(7.77% and 8.05% at March 31, 1999 and December 31, 1998, respectively). At
March 31, 1999, $738,000 was outstanding under these two agreements with no
additional funds available. At December 31, 1998, $838,000 was outstanding.
Total borrowings under the revolving loan and security agreements are
collateralized by the Company's assets. The revolving loan and security
agreements contain certain restrictive covenants including the maintenance of a
minimum ratio of debt to tangible net worth. As of March 31, 1999, the Company
was in violation of such covenants. The Company obtained a waiver of such
violations through March 15, 2000.

         In June 1997, the Company issued a five-year, 11.5% subordinated 
debenture with quarterly interest payments for gross proceeds of $3,000,000. 
In conjunction with the debt, the Company granted warrants (the "Lender 
Warrants") to purchase 300,000 shares of the Company's common stock at an 
exercise price of $6.00 per share. The warrants are exercisable over a 
five-year period from the date of issuance. A portion of the proceeds from 
the debt has been allocated to common stock warrants, which were valued at 
$585,000. In the event the debt is outstanding at June 2000, and each year 
thereafter, the Company will grant in each year additional five-year warrants 
to purchase 50,000 shares of common stock at an exercise price of $7.00 per 
share. A value has not been ascribed to these contingent warrants. At such 
time that the warrants are no longer contingent, a value, if any, will be 
ascribed. In November 1998, the company entered into a Security Agreement 
with the Investor providing the Investor with a second priority security 
interest in the inventory, accounts receivable, general intangibles and 
certain other assets of the Company. The Investor's security interest is 
subordinated to the first priority security interest of the lender under the 
Company's revolving credit agreements. In May 1999, the Company agreed to 
increase the interest rate on the subordinated debenture from 11.5% to 12% 
and reduce the exercise price on the Lender Warrants to $1.90 per share. See 
Part II. Other Information, Item 5 - Subsequent Event.

Note 6 - Convertible Preferred Stock
------------------------------------

         In June 1997, the Company issued 3,000 shares of its Series D 
Convertible Preferred Stock ("the Series D Preferred Stock") for gross 
proceeds of $3,000,000. The Series D Preferred Stock bears a dividend of 
11.5% per annum and is convertible into the Company's common stock at a price 
of $6.00 per share subject to reset, as defined in the preferred stock 
agreement. Since March 1998 the Company has been in default of certain 
covenants under the Preferred Stock Agreement, resulting in a dividend rate 
increase to 14% per annum. In addition, if the Company fails to pay dividends 
on six consecutive dividend payment dates, or the aggregate amount of unpaid 
dividends equals or exceeds $172.50 per share, then the Investor shall be 
entitled to nominate an additional director to the Company's board. In May 
1999, the Company agreed to reduce the conversion price on the Series D 
Preferred Stock to $1.90 per share. See Part II. Other Information, Item 5 - 
Subsequent Event.

         The Company may redeem the Series D Convertible Preferred Stock at its
option after June 1999 if an average trading price for the common stock equals
or exceeds $9.50 per share or after June 2002, irrespective of the trading
price. The Series D Preferred Stock redemption price per share is equal to the
sum of $1,000, plus all accrued and unpaid dividends and interest on such unpaid
dividends at an annual rate of 11.5% (increased to 14% as a result of the event
of default). If the number of shares issuable upon conversion of the Series D
Preferred Stock, when added to all other shares of common stock issued upon
conversion of the Series D Preferred Stock and any shares of common stock issued
or issuable upon the exercise of the warrants would exceed 1,906,692 shares of
common stock (the "Issuable Maximum"), then the Company shall be obligated to
effect the conversion of only such portion of the Series D Preferred Stock
resulting in the issuance of shares of common stock up to the Issuable Maximum,
and the remaining portion of the Series D Preferred Stock shall be redeemed by
the Company for cash in accordance with the procedures set forth in the
Certificate of Determination. In the event of mandatory redemption, when the
number of shares exceeds the Issuable Maximum, the redemption price per share is
equal to the redemption price under the optional redemption feature, plus the
appreciation in the value of the Company's common stock and conversion price on
the date of redemption.

         In connection with the issuance of the Series D Preferred Stock, the
Company has agreed to grant warrants to purchase the following number of shares
of its common stock if the Series D Preferred Stock remains outstanding on each
of the following dates: (i) on June 27, 2000 for 50,000 shares, at an exercise
price


                                       7
<PAGE>

of $7.00 per share, if the Series D Preferred Stock has not been redeemed or 
converted in full on or prior to June 27, 2000 (the "2000 Contingent 
Warrant"); (ii) on June 27, 2001 for 50,000 shares, at an exercise price of 
$7.00 per share, if the Series D Preferred Stock has not been redeemed or 
converted in full on or prior to June 27, 2001 (the "2001 Contingent 
Warrant"); (iii) on July 17, 2002 for 250,000 shares, at an exercise price 
equal to the trading price per share on the issuance date of the warrant, if 
the Series D Preferred Stock has not been redeemed or converted in full on or 
prior to July 17, 2002; and (iv) on June 27, 2003 for 250,000 shares, at an 
exercise price equal to the trading price per share on the issuance date of 
the warrant, if the Series D Preferred Stock has not been redeemed or 
converted in full on or prior to June 27, 2003. Such warrants are exercisable 
over a five-year period from the date of grant. A value has not been ascribed 
to these contingent warrants. At such time that the warrants are no longer 
contingent, a value will be ascribed, if any. In connection with the debt 
(see Note 4) and Series D Convertible Preferred Stock issuance, the Company 
paid $120,000 to a director of the Company for his service related to the 
offering. In May 1999, the Company agreed to reduce the exercise price of the 
2000 Contingent Warrant and 2001 Contingent Warrant to $1.90 per share. See 
Part II. Other Information, Item 5 - Subsequent Event.

         Each share of Series D Preferred Stock is entitled to one vote on all
matters submitted to the holders of the common stock. In the event of
liquidation of the Company, the Series D Preferred Stockholders will receive in
preference to the common stockholders an amount equal to $1,000 per share plus
accrued but unpaid dividends and interest on all such dividends at an annual
rate of 11.5% (increased to 14% as a result of the event of default). In 1998,
dividends of $87,000 were paid on the Series D Preferred Stock and as of March
31, 1998 accumulated unpaid dividends amounted to $455,000.

Note 7 - Reconciliation of Net Loss and Shares Used in Per Share Computations:
------------------------------------------------------------------------------

         Basic net loss per common share is computed as net loss plus accretion
of dividends on mandatorily redeemable convertible preferred stock divided by
the weighted average number of common shares outstanding during the period.
Diluted net loss per common share is computed as net loss divided by the
weighted average number of common shares and potential common shares, using the
treasury stock method, outstanding during the period and assumes conversion into
common stock at the beginning of each period of all outstanding shares of
convertible preferred stock. Computations of basic and diluted earnings per
share do not give effect to individual potential common stock instruments for
any period in which their inclusion would be anti-dilutive.

<TABLE>
<CAPTION>
                                                                     For the three months
                                                                         ended March 31,         
                                                             ------------------------------------
                                                                   1999                 1998
<S>                                                          <C>                  <C>            
Net Loss Used:
     Net loss                                                $   (2,364,000)      $   (2,770,000)
     Accretion of dividends on mandatorily
         redeemable convertible preferred stock                    (105,000)             (87,000)
                                                             ---------------      --------------
     Net loss used in computing basic and diluted net
     loss per share                                          $   (2,469,000)      $   (2,857,000)
                                                             ---------------      --------------
                                                             ---------------      --------------
Shares Used:
     Weighted average common shares outstanding
     used in computing basic and diluted net loss
     per common share                                              9,615,000            9,615,000
                                                             ---------------      --------------
                                                             ---------------      --------------
</TABLE>

Note 8 - Segment and Geographic Information
-------------------------------------------

         The Company has one business segment which consists of the 
development and sale of a suite of client/server document management software 
products. One customer accounted for 17% of the Company's total revenues in 
the quarter ended March 31, 1999.
 
         Revenues for March 31, 1999 and 1998 by customer and location are as 
follows:

<TABLE>
<CAPTION>
                                                     March 31,         March 31,
                                                       1999              1998
                                                    -----------       -----------
        <S>                                         <C>               <C>
        United States                               $ 1,615,000       $ 1,783,000
        Europe, primarily United Kingdom                690,000         1,097,000
        Other International                              80,000           121,000
                                                    -----------       -----------
                                                    $ 2,385,000       $ 3,001,000
                                                    -----------       -----------
                                                    -----------       -----------
</TABLE>

         Information by geographic location for the quarter ended March 31, 
1999 and 1998 follows:

<TABLE>
<CAPTION>
                                                          March 31, 1999
                                -------------------------------------------------------------------
                                United                             Corporate
                                States          Europe       Research & Development     Consolidated
                                ------          ------       ----------------------     ------------
<S>                           <C>            <C>             <C>                        <C>
Net sales                     $ 1,279,000    $ 1,106,000                                $ 2,385,000
Operating loss                   (567,000)      (632,000)         $(1,011,000)           (2,210,000)
Identifiable assets             4,443,000      5,042,000                                  9,485,000
</TABLE>

<TABLE>
<CAPTION>
                                                          March 31, 1998
                                -------------------------------------------------------------------
                                United                             Corporate
                                States          Europe       Research & Development     Consolidated
                                ------          ------       ----------------------     ------------
<S>                           <C>            <C>             <C>                        <C>
Net sales                     $ 1,916,000    $ 1,085,000                                $ 3,001,000
Operating loss                   (965,000)      (915,000)          $(742,000)            (2,622,000)
Identifiable assets             7,980,000      5,959,000                                 13,939,000
</TABLE>

         A majority of the Europe revenue, net sales and operating loss and 
all of the Europe identifiable assets are attributable to the United Kingdom.

         Research and development is performed both in the United States and 
Europe for the benefit of the entire Company and has not been separately 
allocated to geographic regions.

Note 9 - Litigation
-------------------

         On March 3, 1999, ("the settlement date"), the Company entered into 
a Memorandum of Understanding providing for the settlement of certain 
securities class action lawsuits pending against the Company. The Memorandum 
of Understanding provides that in exchange for the dismissal and release of 
all claims in these cases, (a) the Company's insurance carrier will pay 
$2,500,000 to the class of plaintiffs, (b) the Company will issue to the 
plaintiffs 2,304,271 shares of its common stock, which is equal to twenty 
percent of the sum of (i) the number of shares of common stock currently 
outstanding and (ii) the maximum number of shares issuable upon conversion of 
the Series D Preferred Stock, and (c) the Company will cooperate with 
plaintiffs' counsel by providing certain documents and information regarding 
the claims asserted in the class actions. The settlement is subject to 
certain conditions, including the execution of a stipulation of settlement, 
notice to

                                       8
<PAGE>

the class and approval by the court. The Stipulation of Settlement was 
executed on May 13, 1999. The stipulation provides that within ten days the 
parties will submit the stipulation and its exhibits to the court and jointly 
apply for entry of an order preliminarily approving the settlement, 
prescribing procedures for notice to class members and setting a hearing for 
the final approval of the settlement. The Company recorded expense of 
$1,128,000 in connection with this settlement in 1998 based on the average 
closing market price the week preceding the settlement date times the number 
of shares of the Company's common stock to be issued in the settlement.

         In addition as a part of the settlement in these class actions, the
Company's former Chairman of the Board, President, and Chief Executive Officer,
Jay V. Tanna, has agreed to forego any claim for the unpaid compensation of
$131,000 under the Separation Agreement and Release of Claims that Mr. Tanna and
the Company entered into on April 1, 1998, and to surrender his 35,000 shares of
common stock in the Company. Mr. Tanna and the company also have agreed to
execute a Settlement Agreement and Mutual Release resolving all claims and
disputes with one another, with the exception of certain existing
indemnification obligations under Altris' bylaws, California law, and the
indemnity agreement between the Company and Mr. Tanna related to his services as
a director and officer of the Company.

         In addition to the securities actions described above, the Company is
involved from time to time in litigation arising in the normal course of
business. The Company believes that any liability with respect to such routine
litigation, individually or in the aggregate, is not likely to be material to
the Company's consolidated financial position or results of operations.

Note 10 - Subsequent Event
--------------------------

         In May 1999, the Company entered into a multi-part agreement with 
Spescom Ltd. to make certain investments in the Company and its wholly-owned 
U.K. subsidiary. See Part II. Other Information, Item 5 - Subsequent Event.


                                       9
<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


THREE MONTHS ENDED MARCH 31, 1999 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1998.

         This report contains 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. These forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical results or anticipated results, including those set forth under
"Certain Factors That May Affect Future Results" below and elsewhere in, or
incorporated by reference into, this report.

Revenues

         Revenues for the three months ended March 31, 1999 were $2,385,000
as compared to $3,001,000 for the three months ended March 31, 1998 .


         First quarter 1999 revenues consisted of $772,000 (32%) in software
licenses and $1,613,000 (68%) related to services and other revenue. This
compares to first quarter 1998 software license revenues of $891,000 (30%) and
services and other revenue of $2,110,000 (70%).

         For the quarter ended March 31, 1999, software licenses revenues 
decreased $119,000, while revenues generated from services and other 
decreased $497,000. Management believes that the Company's inability to 
provide the Altris EB product as originally planned in 1997, which was to 
address the needs of new customers' for additional features and 
functionality, coupled with customers uncertainty regarding the financial 
condition of the Company, was the principal cause for the decline in software 
licenses, services and other revenues. In addition, management believes that 
future purchasing patterns of customers and potential customers have been 
affected by Year 2000 issues, with many companies expending significant 
resources to correct their software systems for Year 2000 compliance. 
Management believes that these expenditures have reduced funds available to 
purchase software products such as those offered by the Company.

         A small number of customers have typically accounted for a large
percentage of the Company's annual revenue. In the first three months of 1999,
one customer accounted for 17% of total revenues. No customer accounted for more
than 10% of total revenues in the first quarter of 1998. One consequence of this
dependence has been that revenue can fluctuate significantly on a quarterly
basis. The Company's reliance on relatively few customers could have a material
adverse effect on the results of its operations on a quarterly basis.
Additionally, a significant portion of the Company's revenues has historically
been derived from the sale of systems to new customers.

Cost of Revenues

         Cost of license revenues consists of costs associated with reselling 
third-party software products and amortization of internal software 
development costs. Gross profit as a percentage of license revenues was 60% 
for the first quarter 1999 compared to 67% for the same period a year ago. 
The decrease in the gross profit margin from licenses was due principally to 
increased amortization of software development costs in the first quarter 
1999 compared to 1998, due to the Company's release of its EB product.

         Cost of services and other revenues consists primarily of 
personnel-related costs in providing consulting services, training to 
customers and support. It also includes costs associated with reselling 
third-party hardware and maintenance. Gross profit as a percentage of 
services and other revenue was 34% for the first quarter 1999 compared to 29% 
in the prior year. The increase in the gross profit margin from services and 
other revenue was due principally to decreased personnel costs associated 
with consulting services and support.

         The Company's software and services are sold at a significantly higher
margin than third party products which are resold at a lower gross profit
percentage in order for the Company to remain competitive in the marketplace for
such third party products. Gross profit percentages can fluctuate quarterly
based on the revenue mix of Company software, services and third party software
or hardware.


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<PAGE>

Operating Expenses

         Research and development expense for the three months ended March 
31, 1999 was $1,011,000 versus $743,000 for the same period in the prior 
year. Research and development expense can vary year to year based on the 
amount of engineering service contract work required for customers versus 
purely internal development projects. It may also vary based on internal 
development projects in which technological feasibility and marketability of 
a product are established. These costs are capitalized as incurred and then 
amortized when the product is available for general release to customers. The 
increase in research and development in the first quarter 1999 was due 
primarily to the release of the Company's EB product, which resulted in the 
associated development costs being expensed rather than capitalized resulting 
in relatively lower research and development expenses. This increase in EB 
development costs was offset partially by a reduction in personnel costs.

         Marketing and sales expense for the three months ended March 31, 1999
was $765,000 versus $1,669,000 for the three months ended March 31, 1998. The
decrease was primarily due to lower personnel and associated costs. In addition,
as a result of the delay in releasing Altris EB, the Company's next generation
document management software, the Company reduced marketing and promotional
costs in the first quarter 1999 compared to the same period a year ago.

         General and administrative expense was $1,447,000 for the three 
months ended March 31, 1999 as compared to $1,410,000 for the three months 
ended March 31, 1998. The increase in general and administration expense was 
primarily due to increased goodwill amortization. In the fourth quarter 1998, 
the Company reduced the life of the goodwill associated with its London 
subsidiary from seven to four years as a result of uncertainties regarding 
future benefits to the Company provided by goodwill due to recurring 
significant losses and negative cash flow of the subsidiary. Goodwill 
amortization for the first quarter 1999 was $661,000 compared to $203,000 for 
the same period in 1998. The increase in goodwill amortization was offset 
partially by a decrease in personnel costs. In addition, general and 
administrative expenses included $175,000 in related severance costs in the 
first quarter 1999. In the quarter ended March 31, 1998, the Company incurred 
$376,000 in charges resulting primarily from severance costs including 
amounts owed under a Separation Agreement between the Company and its former 
CEO.

LIQUIDITY AND CAPITAL RESOURCES

         At March 31, 1999, the Company's cash and cash equivalents totaled 
$391,000 as compared to $530,000 at December 31, 1998, and its current ratio 
was .1 to 1. The Company has two revolving credit facilities that provide for 
borrowings of up to $738,000. At March 31, 1999, $738,000 was outstanding on 
the revolving loan agreements. In addition, the Company's U.K. subsidiary has 
an overdraft credit facility of $403,000 ((pound)250.000). The outstanding 
balance on this facility is payable on demand of the lender. At March 31, 
1999, borrowings on this facility were $383,000. The Company has guaranteed 
the borrowings on this facility. The Company and the bank agreed to extend 
the facility from January 15, 1999 to April 30, 1999 for total borrowings not 
to exceed $403,000 ((pound)250,000). Interest shall be payable at 3% per 
annum over the bank's base rate. See Note 5 of the Condensed Notes to the 
Consolidated Financial Statements. In May 1999, in connection with Spescom 
Ltd's acquisition of a 60% interest in the U.K. subsidiary, Spescom has 
agreed to indemnify the Company for any claim with respect to the Company's 
guarantee to the bank. See Part II. Other Information, Item - 5 Subsequent 
Event.

         As a result of misapplications in its revenue recognition policies, 
the Company, in 1998, restated its previously presented interim financial 
information and annual financial statements for 1996 and the interim 
information for the first three quarters of 1997. The restatement triggered 
events of default under each of the Company's revolving loan agreements and 
under the Subordinated Debenture. The lenders under such agreements and the 
Subordinated Debenture agreed to waive such events of default. The Lender has 
also waived compliance with certain financial covenants through March 15, 
2000. There can be no assurances that the Company will be able to secure from 
its lenders a further waiver of any events of default, including any events 
of default occurring after March 15, 2000 under the financial covenants of 
the revolving loan agreements. If such events of default are not then waived, 
the Company may then be required to repay the full amount of its outstanding 
indebtedness under the revolving credit agreements and the Subordinated 
Debenture. Defaults in the payment of such indebtedness or in the performance 
of other covenants under the agreements related to such indebtedness, whether 
occurring prior to or after March 15, 2000, could also result in the Company 
being required to repay the full amount of such indebtedness. In addition 
because the overdraft credit facility of the Company's U.K. subsidiary is 
payable upon demand, the Company could be required at any time to repay all 
outstanding borrowings under such facility. The repayment of such


                                       11
<PAGE>

indebtedness would require additional debt or equity financing. There can be no
assurances that any such financing would be available.

         During the first quarter of 1999, cash used in operating and 
financing activities totaled $122,000 and $92,000, respectively, while the 
Company did not use any cash in investing activities. During the first 
quarter of 1998, cash provided by financing activities totaled $689,000 while 
cash used in operating and investing activities totaled $671,000 and 
$662,000, respectively. Cash provided by financing activities was from net 
borrowings under revolving loan and bank agreements.

         In the first quarter of 1999, the Company has experienced a reduction
in incoming orders. The Company's ability to continue operations is dependent
upon the generation of new system sales of Altris EB in the near term, which
cannot be assured. Given the substantial uncertainties confronting the Company,
there can be no assurance that sufficient cash flows will be generated by the
Company in the near term to meet its current obligations. Accordingly, the
Company is investigating raising additional cash through a debt or equity
offering or other means. Management believes that such additional cash through
the issuance of debt or other means will be necessary to enable the Company to
meet its short term needs for working capital. There can be no assurance that
additional debt or equity financing will be available, or that, if available,
such financing could be completed on commercially favorable terms. Failure to
obtain additional financing in the near future, can be expected to have a
material adverse effect on the Company's business, results of operations, and
financial condition. See Part II. Other Information, Item - 5 Subsequent 
Event.

Net Operating Loss Tax Carryforwards

         As of December 31, 1998, the Company had a net operating loss
carryforward ("NOL") for federal and state income tax purposes of $42,000,000
and $9,429,000, respectively which expires over the years 1999 through 2018. In
addition, the Company generated but has not used research and investment tax
credits for federal income tax purposes of approximately $500,000, which will
substantially expire in the years 2000 through 2005. Under the Internal Revenue
Code of 1986, as amended (the "Code"), the Company generally would be entitled
to reduce its future Federal income tax liabilities by carrying unused NOL
forward for a period of 15 years to offset future taxable income earned, and by
carrying unused tax credits forward for a period of 15 years to offset future
income taxes. However, the Company's ability to utilize any NOL and credit
carryforwards in future years may be restricted in the event the Company
undergoes an "ownership change," generally defined as a more than 50 percentage
point change of ownership by one or more statutorily defined "5-percent
stockholders" of a corporation, as a result of future issuances or transfers of
equity securities of the Company within a three-year testing period. In the
event of an ownership change, the amount of NOL attributable to the period prior
to the ownership change that may be used to offset taxable income in any year
thereafter generally may not exceed the fair market value of the Company
immediately before the ownership change (subject to certain adjustments)
multiplied by the applicable long-term, tax-exempt rate announced by the
Internal Revenue Service in effect for the date of the ownership change. A
further limitation would apply to restrict the amount of credit carryforwards
that might be used in any year after the ownership change. As a result of these
limitations, in the event of an ownership change, the Company's ability to use
its NOL and credit carryforwards in future years may be delayed and, to the
extent the carryforward amounts cannot be fully utilized under these limitations
within the carryforward periods, these carryforwards will be lost. Accordingly,
the Company may be required to pay more Federal income taxes or to pay such
taxes sooner than if the use of its NOL and credit carryforwards were not
restricted.

         Over the past five years, the Company has issued equity securities in
connection with the private placement in June 1997, the Trimco acquisition in
December 1995, the Optigraphics acquisition in September 1993 and through
traditional stock option grants to employees. Although there was no "ownership
change" in 1998, this activity increases the potential for an "ownership change"
for income tax purposes.

         In connection with the acquisition of Trimco, the Company acquired
$926,000 in deferred tax assets of which approximately $626,000 was provided as
a valuation allowance. In June 1997, the $300,000 tax asset was realized. In the
event that remaining tax benefits acquired in the Trimco acquisition are
realized, such benefits will be used first to reduce any remaining goodwill and
other intangible assets related to the acquisition. Once those assets are
reduced to zero, the benefit will be included as a reduction of the Company's
income tax provision.


                                       12
<PAGE>

         In connection with the acquisition of Optigraphics, the Company
acquired Optigraphics' net operating losses which are limited to offset against
that entity's future taxable income, subject to annual limitations.


CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

Uncertain Impact of Restatement of Financial Statements

         As a result of the misapplications in its revenue recognition policies,
the Company in 1998 restated its previously presented interim financial
information and annual financial statements for 1996 and the interim information
for the first three quarters of 1997. In connection with the misapplications,
conditions which collectively represented material weaknesses in the Company's
internal accounting controls were identified. These conditions included a lack
of (i) sufficient oversight by the Company in regard to revenue recognition
practices of the Company's U.K. subsidiary, (ii) adherence to existing internal
controls and (iii) an adequate internal control structure in the Company's U.K.
subsidiary.

         To address the material weaknesses represented by these conditions, the
Company adopted a plan to strengthen the Company's internal accounting controls.
This plan included updating the Company's revenue recognition policies regarding
accounting and reporting for its customer contracts and contracts with Value
Added Resellers (VARs). The Company has implemented these policies.

The report of the Company's independent accountants, Grant Thornton LLP, on the
Company's Consolidated Financial Statements as of and for the year ended
December 31, 1998 includes an explanatory paragraph regarding the Company's
ability to continue as a going concern. See "Report of Independent Certified
Public Accountants" accompanying the Consolidated Financial Statements. The
Company's restatement of its financial statements, de-listing of the Company's
Common Stock from the Nasdaq National Market as a result of the Company's
failure to meet certain listing requirements, corporate actions to restructure
operations and reduce operating expenses, and customer uncertainty regarding the
Company's financial condition have had, and are likely to have in the future, a
material adverse effect on the Company and its ability to sell its products in
future.

Foreign Currency

         The Company's geographic markets are primarily in the United States and
Europe, with sales in other parts of the world. In the first quarter 1999,
revenue from the United States, Europe and other locations in the world were
68%, 29% and 3%, respectively. This compares to 59%, 37% and 4%, respectively
for the same period in 1998. The European currencies have been relatively stable
against the U.S. dollar for the past several years. As a result, foreign
currency fluctuations have not had a significant impact on the Company's
revenues or results of operations. The Company has recently increased its sales
efforts in international markets outside Europe, including Asia and Latin
America, whose currencies have tended to fluctuate more relative to the U.S.
dollar. In addition, the current continued weakness in Asian currencies may
result in reduced revenues from the countries affected by this condition.
Changes in foreign currency rates, the condition of local economies, and the
general volatility of software markets may result in higher or lower proportion
of foreign revenues in the future. Although the Company's operating and pricing
strategies take into account changes in exchange rates over time, there can be
no assurance that future fluctuations in the value of foreign currencies will
not have a material adverse effect on the Company's business, operating results
and financial condition.

Inflation

         The Company believes that inflation has not had a material effect on
its operations to date. Although the Company enters into fixed-price contracts,
management does not believe that inflation will have a material impact on its
operations for the foreseeable future, as the Company takes into account
expected inflation in its contract proposals and is generally able to project
its costs based on forecasted contract requirements.


                                       13
<PAGE>

Year 2000 Compliance

         Many currently installed computer systems and software products are
coded to accept only two digit entries in the date code field. These date code
fields will need to accept four digit entries to distinguish 21st century dates
from 20th century dates. As a result, many companies' computer systems and/or
software may need to be upgraded or replaced to comply with such "Year 2000"
requirements. Significant uncertainty exists in the software industry concerning
the potential effects associated with such compliance.

         The Company has commenced a program, to be substantially completed by
the Fall of 1999, to review the Year 2000 compliance status of the software and
systems used in its internal business processes, to obtain appropriate
assurances of compliance from the manufacturers of these products and agreement
to modify or replace all non-compliant products. Implementation of software
products from third parties, however, will require the dedication of
administrative and management information resources, the assistance of
consulting personnel from third party software vendors and the training of the
Company's personnel using such systems. Based on the information available to
date, the Company believes it will be able to complete its Year 2000 compliance
review and make necessary modifications prior to the end of 1999 as a part of
the Company Year 2000 compliance program. The Company is in the process of
completing Year 2000 compliance reviews and upgrades to software or systems
which are deemed critical to the Company's business. The Company expects to
complete this by mid 1999. Nevertheless, particularly to the extent the Company
is relying on the products of other vendors to resolve Year 2000 issues, there
can be no assurances that the Company will not experience delays in implementing
such products. If key systems, or a significant number of systems were to fail
as a result of Year 2000 problems or the Company were to experience delays
implementing Year 2000 compliant software products, the Company could incur
substantial costs and disruption of its business, which would potentially have a
material adverse effect on the Company's business and results of operations.

         The Company, in its ordinary course of business, tests and evaluates
its own software products. The Company has tested all of its legacy products and
believes that its software products are generally Year 2000 compliant, meaning
that the use or occurrence of dates on or after January 1, 2000 will not
materially affect the performance of the Company's software products with
respect to four digit date dependent data or the ability of such products to
correctly create, store, process and output information related to such date
data. However, some of the Company's customers are running product versions that
are not Year 2000 compliant. The Company has been encouraging these customers to
migrate to current product versions. In addition, there can be no assurances
that the Company's current products do not contain undetected errors or defects
associated with Year 2000 date functions. To the extent the Company's software
products are not fully Year 2000 compliant, there can be no assurance that the
Company's software products contain all necessary software routines and codes
necessary for the accurate calculation, display, storage and manipulation of
data involving dates. In addition, in certain circumstances, the Company has
warranted that the use or occurrence of dates on or after January 1, 2000 will
not adversely affect the performance of the Company's products with respect to
four digit date dependent data or the ability to create, store, process and
output information related to such data. If any of the Company's licensees
experience Year 2000 problems, such licensees could assert claims for damages
against the Company. In addition, some commentators have stated that a
significant amount of litigation will arise out of Year 2000 compliance issues,
and the Company is aware of a growing number of lawsuits against other software
vendors. Because of the unprecedented nature of such litigation, it is uncertain
to what extent the Company may be affected by it.

         In addition, management believes that future purchasing patterns of
customers and potential customers have been affected by Year 2000 issues, with
many companies expending significant resources to correct their software systems
for Year 2000 compliance. These expenditures have reduced funds available to
purchase software products such as those offered by the Company.


                                       14
<PAGE>

PART II.   OTHER INFORMATION


Item 1 - Legal Proceedings
--------------------------

         On March 3, 1999, ("the settlement date"), the Company entered into 
a Memorandum of Understanding providing for the settlement of certain 
securities class action lawsuits pending against the Company. The Memorandum 
of Understanding provides that in exchange for the dismissal and release of 
all claims in these cases, (a) the Company's insurance carrier will pay 
$2,500,000 to the class of plaintiffs, (b) the Company will issue to the 
plaintiffs 2,304,271 shares of its common stock, which is equal to twenty 
percent of the sum of (i) the number of shares of common stock currently 
outstanding and (ii) the maximum number of shares issuable upon conversion of 
the Series D Preferred Stock, and (c) the Company will cooperate with 
plaintiffs' counsel by providing certain documents and information regarding 
the claims asserted in the class actions. The settlement is subject to 
certain conditions, including the execution of a stipulation of settlement, 
notice to the class and approval by the court. The Stipulation of Settlement 
was executed on May 13, 1999. The stipulation provides that within ten days 
the parties will submit the stipulation and its exhibits to the court and 
jointly apply for entry of an order preliminarily approving the settlement, 
prescribing procedures for notice to class members and setting a hearing for 
the final approval of the settlement. The Company recorded expense of 
$1,128,000 in connection with this settlement in 1998 based on the average 
closing market price the week preceding the settlement date times the number 
of shares of the Company's common stock to be issued in the settlement.

         In addition as a part of the settlement in these class actions, the
Company's former Chairman of the Board, President, and Chief Executive Officer,
Jay V. Tanna, has agreed to forego any claim for the unpaid compensation of
$131,000 under the Separation Agreement and Release of Claims that Mr. Tanna and
the Company entered into on April 1, 1998, and to surrender his 35,000 shares of
common stock in the Company. Mr. Tanna and the company also have agreed to
execute a Settlement Agreement and Mutual Release resolving all claims and
disputes with one another, with the exception of certain existing
indemnification obligations under Altris' bylaws, California law, and the
indemnity agreement between the Company and Mr. Tanna related to his services as
a director and officer of the Company.

         In addition to the securities actions described above, the Company is
involved from time to time in litigation arising in the normal course of
business. The Company believes that any liability with respect to such routine
litigation, individually or in the aggregate, is not likely to be material to
the Company's consolidated financial position or results of operations.

Item 5 - Subsequent Event
--------------------------

         In May 1999 the Company entered into a multi-part agreement with 
Spescom Ltd., a South African company publicly traded on the Johannesburg 
Exchange, whereby Spescom has invested $1.8 million for 2 million shares of 
the Company's common stock. In addition, as part of the agreement, Spescom 
will pay the Company an additional $1.0 million and invest $1.2 million 
directly into Altris Software Ltd.("ASL"), the U.K. subsidiary of the 
Company, for a 60% ownership of ASL. In conjunction with the agreement the 
Company will contribute $400,000 into ASL and will retain a 40% interest in 
ASL.

         In addition, the Company has entered into a distribution agreement 
with ASL which grants ASL exclusive distribution rights for the Company's 
products around the world excluding North and South America and the 
Caribbean. Under the distribution agreement, the exclusivity is contingent on 
ASL meeting certain minimum royalty commitments beginning in 2002. The 
agreement provides for a royalty to the Company on sales of the Company's 
products by ASL equal to 50% of the Company's list price for such products. 
ASL has also entered into a distribution agreement with Spescom providing 
that ASL will be Spescom's exclusive distributor for the same territory of 
EMS 2000, Spescom's configuration management (CM) product. In addition, the 
agreement provides that the Company will become Spescom's exclusive 
distributor of EMS 2000 in North and South America and the Caribbean.

         In order for the Company to obtain consent to the agreement by 
Finova Capital (formerly Sirrom Capital), a debt holder and preferred 
stockholder of the Company, the interest rate on the Company's outstanding 
debenture held by Finova was increased from 11.5% to 12%. In addition, the 
conversion rate on the convertible preferred stock held by Finova has been 
adjusted from $6.00 per share of common stock to $1.90 and the exercise price 
on warrants entitling Finova to purchase 400,000 shares of the Company's 
common stock was also adjusted from $6.00 to $1.90 per share.

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<PAGE>

In addition, other terms of the transaction include:

        -       Spescom will have the right to appoint one representative on 
                the Company's board of directors;

        -       An additional 1,000,000 shares will be issued to Spescom if
                court approval of the settlement of the Company's outstanding
                securities litigation is not received by, as anticipated, 
                September 30, 1999;

        -       The Company will apply $200,000 of the proceeds from the
                transaction to fund an escrow account which will remain in
                effect until the second anniversary of the closing date for the
                purpose of securing any obligations owed by the Company to 
                Spescom under the agreement, including any liability the 
                Company may have under its representations and warranties to 
                Spescom in the agreement.

        -       The shares of stock representing the Company's 40% interest 
                in ASL will be pledged to Spescom to secure the obligations
                of the Company to Spescom, such pledge not to extend beyond
                the second anniversary of the closing date.

Item 6 - Exhibits and Reports on Form 8-K:
------------------------------------------

       (a)      Form 8-K, dated February 23, 1999


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<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.


                                        ALTRIS SOFTWARE, INC.




                                        By:  /s/John W. Low
                                           ------------------------------------
                                                John W. Low
                                                Chief Financial Officer




                                        Dated:     May 14, 1999
                                              -------------------------


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