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

                          FORM 10-QSB/A


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


For the quarterly period ended March 31, 2000


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

For the transition period from ____________ to _____________

Commission File Number: 001-15769

                 CALIFORNIA SOFTWARE CORPORATION
(Exact name of small business issuer as specified in its charter)

              Nevada                         88-0408446
 (State or other jurisdiction of          (I.R.S. Employer
  incorporation or organization)        Identification No.)

   2485 McCabe Way, 2nd Floor,                 92614
        Irvine, California                   (Zip Code)
 (Address of principal executive
             offices)

                         (949) 553-8900
        (Issuer's telephone number, including area code)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
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 [  ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:

Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange
Act after the distribution of securities under a plan confirmed
by a court.

Yes [  ] No [  ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

State  the  number of shares outstanding of each of the  issuer's
classes  of  common  equity, as of the latest  practicable  date:
12,577,771

TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT:

Yes [  ] No [X]

<PAGE>



                 California Software Corporation
                        Quarterly Report
                  Period Ending March 31, 2000

                        Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Balance Sheet                                              1

Statements of Operations                                   2

Statements of Cash Flows                                   3

Notes to Financial Statements                              4

Item 2. Management's Discussion and Analysis               5

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                11

Item 2.  Changes in Securities                            12

Item 3.  Defaults Upon Senior Securities                  12

Item  4.  Submission of Matters to a Vote of Security     12
Holders

Item 5.  Other Information                                12

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

SIGNATURES                                                13

                               -i-


PART I - FINANCIAL INFORMATION


Item 1. Unaudited Financial Statements


                 California Software Corporation
                          BALANCE SHEET
                           (unaudited)

                                      March 31, 2000
ASSETS

Current assets:
Cash and cash equivalents                 $2,162,365

Accounts receivable, net of allowance        415,747
for doubtful accounts of $427,864

Prepaids and other current assets            283,241

Total current assets                       2,861,353

Property and equipment, net                   63,993
Other assets                                  64,552

TOTAL ASSETS                              $2,989,898

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued expenses       $415,775

Accrued payroll and related expenses         137,312

Deferred revenue                              73,125

Total current liabilities                    626,212

Contingencies (Note 4)

Stockholders' Equity
Preferred stock, $0.001 par value;                 -
5,000,000 shares authorized; no
shares issued and outstanding

Common stock, $0.001 par value;                9,766
20,000,000 shares authorized;
9,765,800 shares issued and
outstanding at March 31, 2000

Common stock subscribed                    2,000,000

Additional paid-in capital                 1,377,062

Accumulated deficit                      (1,023,142)

Total stockholders' equity                 2,363,686

TOTAL LIABILITIES AND STOCKHOLDERS'       $2,989,898
EQUITY


  The accompanying notes are an integral part of the financial
                           statements.

-1-


                 California Software Corporation
                    STATEMENTS OF OPERATIONS
                           (Unaudited)

                              Three months ended March 31,
                                         2000       1999
Revenues:
Software sales                       $404,411   $763,240

Maintenance and other revenue          40,429     34,132

Total revenues                        444,840    797,372

Costs and expenses:
Research and development              117,035    103,748

Selling, general, and                 905,872    464,797
administrative

Depreciation and amortization           6,707      2,511

Total costs and expenses            1,029,614    571,056

Income (loss) from operations       (584,774)    226,316

Other income (expense), net           (1,306)     (3,515)

Income (loss) from operations       (586,080)    222,801
before provision for income tax
es

Provision for income taxes                 -     (77,980)

Net income (loss)                  $(586,080)   $144,821

Basic and diluted income (loss)       $(0.07)      $0.02
per share

Weighted-average shares            8,736,284   6,541,800
outstanding


  The accompanying notes are an integral part of the financial
                           statements.

-2-


                 California Software Corporation
                    STATEMENTS OF CASH FLOWS
                           (unaudited)

                               Three months ended March 31,
                                           2000        1999

Net income (loss)                    $(586,080)    $144,821

Adjustments to reconcile net
income (loss) with net cash
flows provided by (used in)
operations:

Depreciation and amortization             6,707       2,511

Allowance for bad debt                        -      71,073

Loss on disposal of assets                5,542           -

Issuance of stock for services          185,083           -

Changes in operating assets /
liabilities:
Accounts receivable                      25,472   (254,430)

Prepaids and other current             (20,944)         100
assets

Accounts payable and accrued           (72,949)    (88,847)
expenses

Accrued payroll and related              20,065    (45,068)
expenses

Income taxes payable                          -      77,980

Deferred revenue                         21,292     (2,000)

Net cash used in operations           (415,812)    (93,860)

Cash flows from investing
activities

Acquisition of CSPI, net of cash              -     349,950
acquired

Increase in other assets                  (534)           -

PP&E additions                         (24,071)     (3,531)

Net cash provided by (used in)         (24,605)     346,419
investing activities

Cash flows from financing
activities

Issuance of common stock                200,000           -

Issuance of common stock              2,000,000           -
subscription

Net cash provided by financing        2,200,000           -
activities

Net change in cash and cash           1,759,583     252,559
equivalents

Cash at beginning of period             402,782      15,395

Cash at end of period                $2,162,365    $267,954

SUPPLEMENTAL DISCLOSURE OF
NONCASH INVESTING AND FINANCING
ACTIVITIES

Purchase of CSPI in exchange for              $-    $700,840
common stock subscription

Conversion of common stock              $700,840         $-
subscription into common stock

Issuance of stock in exchange for        $64,018         $-
note receivable

  The accompanying notes are an integral part of the financial
                           statements.

-3-

                 California Software Corporation
                  NOTES TO FINANCIAL STATEMENTS
                         March 31, 2000

1. BASIS OF PRESENTATION

The  financial statements included herein have been  prepared  by
California  Software Corporation (the "Company"), without  audit,
pursuant  to  the  rules and regulations of  the  Securities  and
Exchange  Commission ("SEC").  These financial statements  should
be  read  in  conjunction with the financial statements  and  the
notes thereto included in the Company's Annual Report on Form 10-
KSB, as amended, for the fiscal year ended December 31, 1999.

In  the opinion of management, the unaudited financial statements
contain  all  adjustments (consisting only  of  normal  recurring
adjustments)  necessary for a fair presentation of the  Company's
financial  position and results of operations.  The  results  for
the  three  month period ended March 31, 2000 are not necessarily
indicative of the results expected for the full fiscal year.

2. CHANGE IN ACCOUNTANTS / CHANGE IN ACCOUNTING PRINCIPLES

In  October  1997,  the American Institute  of  Certified  Public
Accountants ("AICPA") issued Statement of Position ("SOP") No. 97-
2,  "Software Revenue Recognition" which superseded SOP No. 91-1.
SOP  No.  97-2 was effective for fiscal years after December  15,
1997,  as  amended by SOP No. 98-4 and SOP No. 98-9, and provides
guidance  on  applying  generally accepted accounting  principles
("GAAP")  for  software  revenue recognition  transactions.   The
Company  had been improperly recognizing revenue on shipments  of
new  products that failed to meet the criteria specified  in  SOP
No.  97-2.   The  Company's  independent  accountant  issued   an
unqualified opinion on the Company's financial statements for the
year ended December 31, 1999, a copy of which was included in the
Company's  Annual Report on Form 10-KSB filed for the  year  then
ended.   In  addition, the Company filed a Form  10-QSB  for  the
three month period ended March 31, 2000 which contained financial
statements  that  were also not prepared in accordance  with  the
provisions  of SOP No. 97-2.  During the first quarter  of  2000,
the  Company was seeking to list its Common Stock on the American
Stock  Exchange  ("AMEX") and, during the  listing  process,  was
notified   that  the  Company  would  need  to  submit  reaudited
financial  statements for the year ended December 31,  1999  from
another independent accountant because the Company was unable  to
provide  evidence that its independent accountant  met  the  peer
review  standards mandated by the American Institute of Certified
Public  Accountants  ("AICPA").  On May 2,  2000,  the  Company's
Board   of  Directors  approved  a  resolution  engaging  a   new
certifying  independent  accountant,  Squar,  Milner,   Reehl   &
Williamson, LLP ("Squar"), who was initially engaged to perform a
SAS 71 review of the Company's financial statements for the three
months  ended  March  31,  2000.  After  appointing  Squar,  AMEX
notified  the  Company  that it would  accept  audited  financial
statements  for the three month period ended March  31,  2000  in
lieu  of  having  the year ended December 31, 1999  reaudited  by
Squar.  Squar subsequently notified the Company that it would not
be  able to perform this audit within the timeframe requested  by
the  Company.   On  July  24, 2000, the  Company  engaged  a  new
certifying  independent accountant, Stark, Tinter and Associates,
LLP ("Stark") in order to complete the audit within the Company's
timeframe.    Upon   examination  of  the   Company's   financial
statements, Stark notified the Company that the method  in  which
the Company used to record revenue was not in compliance with the
provisions of SOP No. 97-2.  The restated results for  the  three
months  ended March 31, 2000 and 1999 included in this report  on
Form 10-QSB/A are prepared in accordance with GAAP, including the
provisions of SOP No. 97-2.

3. STOCK TRANSACTIONS

On  January  12,  1999, the Company acquired the  net  assets  of
California  Software Products, Inc. ("CSPI")  with  a  historical
cost  of  $700,840  in exchange for a Common Stock  subscription.
Since  CSPI's line of business was substantially the same as  the
Company's, and the shareholders, officers, and directors of  CSPI
and  CSC were substantially the same, the Company valued the  net
assets  acquired from CSPI at their historical cost.  On  January
27, 2000, the subscription was converted into 2,000,000 shares of
the Company's Common Stock.

-4-

Effective  March  15,  2000, the Company effected  a  two-for-one
stock  split.  Since the Company is incorporated in the State  of
Nevada,  where state securities laws mandate a minimum par  value
of  $0.001 (the par value of the Company's Common Stock prior  to
the  split), the Company increased its Common Stock and decreased
its additional paid-in capital accounts to account for effects of
the  stock split.  All share amounts and dollar amounts  in  this
Form 10-QSB have been adjusted to account for the effects of this
split.

During  the  three  months  ended March  31,  2000,  the  Company
commenced  a  private  offering of its  Common  Stock  under  the
provisions  of Rule 506 of Regulation D under the Securities  Act
of  1933,  as  amended.  On March 31, 2000, the Company  received
partial  proceeds  of $2,000,000 from the offering  but  did  not
issue  the  shares until May 23, 2000.  As a result, the  Company
recorded a stock subscription in the amount of $2,000,000  as  of
March 31, 2000.

During  the three months ended March 31, 2000, the Company issued
to  unrelated non-employees 624,000 shares of its Common Stock at
prices  from  $0.525  to  $7.20 per share for  various  services.
Certain  of these services are to be performed in future periods.
As  such, the Company has recorded deferred expense at March  31,
2000 in the amount of $204,168 related to these services.

4. CONTINGENCIES

Litigation

Refer to Part II, Item 1 for a description of legal proceedings.

Leases

In  February 2000, the Company entered into a new lease agreement
for  its  corporate headquarters with McCabe Way Irvine, LLC  for
approximately  10,668 square feet located  at  2485  McCabe  Way,
Irvine,  CA  92614.  The lease is for a five year term, with  one
five-year  option,  with  monthly  lease  payments  ranging  from
$22,403 to $24,003.

Item 2. Management's Discussion and Analysis

FORWARD-LOOKING STATEMENTS

  In addition to historical information, this Quarterly Report on
Form  10-QSB  contains forward-looking statements.  The  forward-
looking statements are subject to certain risks and uncertainties
that  could cause actual results to differ materially from  those
reflected  in  such  forward-looking  statements.   Readers   are
cautioned  not  to place undue reliance on these  forward-looking
statements, which reflect management's opinions only  as  of  the
date  hereof. The Company undertakes no obligation to  revise  or
publicly  release the results of any revision to  these  forward-
looking  statements.  Readers should carefully  review  the  risk
factors described herein and in other documents the Company files
from  time  to time with the SEC, including its Annual Report  on
Form  10-KSB, as amended, for the fiscal year ended December  31,
1999  and the Quarterly Reports on Form 10-QSB, as amended, filed
by the Company in fiscal 2000.

GENERAL

The Company markets a family of software products under the brand
name  BABY  that support the migration of International  Business
Machines  ("IBM")  Midrange applications to the  PC-LAN  business
environment.   The products provide (a) software  solutions  that
allow   business   customers  to  migrate  IBM  Midrange   Report
Generation Language ("RPG") applications to the personal computer
("PC")  environment and execute such applications in native  mode
on a PC network without a complete rewrite; (b) software designed
to  create a distributed processing environment including a  true
AS/400   client-server  environment,  remote   site   operations,
deployment  of specific applications to PC workstations  separate
from  an  AS/400,  various  high  availability  applications,  or
delegation  of  AS/400 batch processing to NT; and (c)  graphical
user  interface  ("GUI") software that allows a developer  of  an
AS/400  text-based  application to present screens  with  Windows
point-and-click functionality.  The Company's goal is to  sustain
market  leadership in the management of midrange migration within
the  IBM  AS/400 and PC-LAN business environment,  and  to  build
market share in the graphical products market.

-5-

RESULTS OF OPERATIONS

Software Sales.  Software sales consist of sales of the Company's
BABY  software  products.  Software sales for  the  three  months
ended  March  31,  2000  and  1999 were  $404,411  and  $763,240,
respectively,  a 47.0% decrease.  The decrease in software  sales
during  2000  represents  a planned change  in  emphasis  in  the
Company's  business  plan.  In the first and second  quarters  of
1999,  emphasis was placed on upgrading current customers on  the
Company's  rehosting products to prepare them for the  launch  of
the  Company's  new  BABY/GUI and BABY.COM products,  which  also
allowed  the Company to expand its potential customer base  to  a
much  broader target of installed IBM AS/400 users.  The  Company
introduced BABY/GUI in the third quarter of 1999, and anticipates
launching  BABY.COM in the fourth quarter of 2000.   The  Company
anticipates  that these products will account for a  majority  of
the Company's sales in the future.

Maintenance  and  Other Revenue.  Maintenance and  other  revenue
consists  of  annual maintenance contracts sold to the  Company's
customers for technical support on its products, business partner
agreements  which  entitle the Company's customers  to  unlimited
annual  technical  support  as well  as  increased  discounts  on
software  purchases,  and shipping revenue billed  to  customers.
Revenue  from  annual maintenance contracts and business  partner
agreements  are  deferred and recognized over  the  term  of  the
related contract or agreement.  Maintenance and other revenue for
the  three  months ended March 31, 2000 and 1999 was $40,429  and
$34,132,  respectively, a 18.4% increase.   The  Company  expects
that revenue from this source will increase in future periods  as
the Company expands its customer base.

Research  and Development Costs.  Research and development  costs
consist  primarily  of  salaries paid  to  employees  engaged  in
research and development activities.  The Company has adopted the
provisions of Statement of Financial Accounting Standards No. 86,
"Accounting  for  the  Costs of Computer  Software  to  be  Sold,
Leased,  or Otherwise Marketed".  Since the Company did not  meet
the  standards  for  capitalization  under  this  Statement,  all
research  and development costs for the three months ended  March
31,  2000 and March 31, 1999 were charged to expense as incurred.
For  the three months ended March 31, 2000 and 1999, research and
development  costs  were $117,035 and $103,748,  respectively,  a
12.8% increase as the Company continues its planned increases  in
research  and  development activities relating to  potential  new
product releases.  As a percentage of total revenue, research and
development costs for the three months ended March 31, 2000  were
26.3%  as compared to 13.0% for the three months ended March  31,
1999.    The  Company  believes  that  research  and  development
expenditures are essential to maintaining a competitive  position
and  expects  that these costs will continue to increase  in  the
future.

Selling,  General  and Administrative Expense.  Selling,  general
and administrative expenses include sales and marketing expenses,
employee  compensation, corporate overhead, legal and  accounting
expenses,  and  bad  debt expenses.  For the three  months  ended
March  31,  2000  and  1999, selling, general and  administrative
expenses  were  $905,872  and  $464,797,  respectively,  a  94.9%
increase  due  to  investor   relations  expenses  and  financial
services expenses of approximately $185,000,  paid  in  shares of
the  Company's  Common Stock,  that  related  to  the   Company's
private  offering of its Common Stock completed during the second
quarter  of  2000.   In  addition,  increases  in  headcount from
approximately 23 employees during the quarter ended March 31,1999
to approximately 39 employees during the quarter ended  March 31,
2000 resulted in an increase in wages  and  related  benefits  of
approximately $210,000.  The remainder of the increase was due to
increases in corporate overhead necessary to support the Company's
expanding customer base.    As a percentage  of revenue,  selling
general and  administrative  expenses for  the three month period
ended  March 31, 2000  were  203.6% as compared to  58.3% for the
three  month period  ended March 31, 1999.    The Company expects
that  selling,  general and  administrative  costs, exclusive  of
the investor relations expenses, will continue to increase in the
future  as  the  Company  continues  to  ramp  up its  sales  and
marketing efforts.

Depreciation  and  Amortization.  Depreciation  and  amortization
consists  of recurring depreciation charges recorded against  the
Company's  property and equipment.  Depreciation and amortization
for the three months ended March 31, 2000 and 1999 was $6,707 and
$2,511,  respectively,  a 167.1% increase  primarily  due  to  an
increase in property and equipment acquired by the Company.  As a
percentage  of  revenue, depreciation and  amortization  for  the
three month period ended March 31, 2000 was 1.5% compared to 0.3%
for  the  three month period ended March 31, 1999.   The  Company
expects  that  depreciation  and amortization  will  continue  to
increase in the future as the Company increases its property  and
equipment base in connection with its continued expansion efforts
or  as  a result of any possible future acquisitions made by  the
Company.

-6-

Other Income/Expense,Net. Other income/expense primarily consists
of imputed interest expense calculated on the liabilities assumed
by   the Company  in  connection with its acquisition of CSPI  in
January 1999, offset by interest income received from investments
of the Company's  excess cash balances. Net other expense for the
three  months ended March 31, 2000 was $1,306 as compared to  net
other  expense of  $3,515  for  the three months ended March  31,
1999,  a  62.8%  decrease as the result of higher  cash  balances
maintained by the Company during the first quarter of 2000.

Income  Taxes.   For the three months ended March 31,  2000,  the
Company did not record any income tax benefit as compared  to  an
income tax provision of $77,980 for the three months ended  March
31, 1999.

Net  Income / Loss.  For the three months ended March  31,  2000,
the  Company recorded a net loss of $586,080 or $0.07 per  common
share  as compared to net income of $144,821 or $0.02 per  common
share  for  the  three  months ended March  31,  1999,  a  504.7%
decrease as a result of the factors described above.

LIQUIDITY AND CAPITAL RESOURCES

The  Company's operations have resulted in a net loss of $586,080
for  the  three months ended March 31, 2000 versus net income  of
$144,821  for the three months ended March 31, 1999.   Since  the
Company's inception in October 1998, the Company has financed its
operations primarily through the sale of its Common Stock.

Net  cash used in operations for the three months ended March 31,
2000  and  1999  was  $415,812  and $93,860,  respectively.   The
negative  cash  flows  generated from operations  for  the  three
months  ended  March 31, 2000 were primarily due  to  the  losses
incurred from operations, while the negative cash flows generated
from  operations for the three months ended March 31,  1999  were
primarily due to a decrease in cash collections resulting from  a
lack  of  internal resources.  The Company believes that  it  may
experience  negative cash flows from operations in the short-term
future  as  it  restructures its sales  efforts  to  prepare  for
supporting its new graphical and Internet-related products.

Net  cash used in investing activities for the three months ended
March  31, 2000 was $24,605, due almost entirely to purchases  of
property   and   equipment.   Net  cash  provided  by   investing
activities  for  the  three  months  ended  March  31,  1999  was
$346,419,  due  primarily  to cash received  from  the  Company's
acquisition  of  CSPI in January 1999.  The  Company  expects  to
continue to invest in capital and other assets as well as utilize
mergers and acquisitions to expand and support its growth.

Net  cash  provided by financing activities for the three  months
ended  March  31, 2000 was $2,200,000, due primarily to  proceeds
received  from the Company's private placement during  the  first
quarter  of  2000.   There was no cash provided  by  or  used  in
financing  activities for the year ended December 31, 1999.   The
Company  anticipates that it may seek additional capital  in  the
future to support its business plan.

At  March 31, 2000, cash and cash equivalents totaled $2,162,365.
In  addition, at March 31, 2000, the Company had working  capital
of $2,235,141 and an accumulated deficit of $1,023,142.

During  the  three  months  ended March  31,  2000,  the  Company
commenced  a  private  offering of its  common  stock  under  the
provisions  of Rule 506 of Regulation D under the Securities  Act
of  1933, as amended (the "Act").  On March 31, 2000, the Company
received partial proceeds of $2,000,000 from the offering but did
not  issue  the  shares until May 23, 2000.   As  a  result,  the
Company recorded a stock subscription in the amount of $2,000,000
as of March 31, 2000.

During  the three months ended March 31, 2000, the Company issued
to  unrelated  non-employees 624,000 shares of  common  stock  at
prices  from  $0.525  to  $7.20 per share for  various  services.
Certain  of these services are to be performed in future periods.
As  such, the Company has recorded deferred expense at March  31,
2000 in the amount of $204,168 related to these services.

Depending  on the outcome of the securities litigation  currently
filed  against  the  Company (see Part II, Item  1  hereof),  the
Company  may  be required to raise additional funds to  meet  the
Company's working capital and capital expenditure needs at  least
through the next twelve months.

-7-

RISK FACTORS

The  Company  does not provide forecasts of its future  financial
performance.  However, from time to time, information provided by
the  Company  or  statements made by its  employees  may  contain
"forward-looking"   information   that   involves    risks    and
uncertainties.   In  particular,  statements  contained  in  this
Report on Form 10-QSB/A that are not historical facts (including,
but not limited to statements contained in "Item 2 - Management's
Discussion and Analysis" of Part I of this Report on Form  10-QSB
relating  to  liquidity  and  capital resources)  may  constitute
forward-looking  statements and are made under  the  safe  harbor
provisions  of  The Private Securities Litigation Reform  Act  of
1995.   The  Company's actual results of operations and financial
condition  have  varied and may in the future vary  significantly
from  those  stated  in any forward looking statements.   Factors
that may cause such differences include, without limitation,  the
risks,  uncertainties and other information discussed  below  and
within  this  Quarterly Report on Form 10-QSB/A, as well  as  the
accuracy  of  the  Company's internal estimates  of  revenue  and
operating  expense  levels.   The  following  discussion  of  the
Company's  risk  factors should be read in conjunction  with  the
financial statements contained herein and related notes  thereto.
Such  factors,  among others, may have a material adverse  effect
upon  the Company's business, results of operations and financial
condition.

Exposure  to  Damages as a Result of Litigation.  On  August  17,
2000,  a  shareholder class action was commenced  in  the  United
States  District  Court  for the Central District  of  California
against the Company as well as two of its officers and directors,
Bruce  Acacio and Carol Conway.  The class action was brought  on
behalf  of  purchasers  of the stock of the  Company  during  the
period  February 9, 2000 through August 6, 2000.  The  plaintiffs
allege  that the defendants made false and misleading  statements
about the Company's actual and expected financial performance  to
inflate the value of the Company's stock to defraud investors, in
violation  of  federal  securities  laws.   The  plaintiffs  seek
damages,  interest, costs and such other equitable or  injunctive
relief as the Court may deem just and proper.

Additionally, on August 24, 2000, a shareholder filed a complaint
against  the same defendants in the United States District  Court
for  the  Central  District  of California,  based  on  the  same
allegations  and seeking the same damages as in the class  action
suit described above.

On  or about September 11, 2000, a third shareholder class action
was commenced in the United States District Court for the Central
District  of  California,  against  the  same  defendants.   This
complaint is based upon the same allegations and seeks  the  same
relief as in the class action suits described above.

On or about September 21, 2000, a fourth shareholder class action
was  commenced  in  the same court against the  same  defendants.
This  class  action suit is based upon the same  allegations  and
seeks the same relief as described above.

The  Company  expects that the above suits will  be  consolidated
into a single class action.

The  Company believes that it has meritorious defenses  to  these
actions  and  intends  to vigorously defend  them.   The  pending
securities   actions  are  in  the  early  states  of  procedure.
Consequently,  at  this  time it is not  reasonably  possible  to
estimate  the damage, or the range of damages, if any,  that  the
Company  might  incur in connection with such actions.   However,
the uncertainty associated with substantial unresolved litigation
may  be  expected  to  have an adverse impact  on  the  Company's
business.   In  particular,  such  litigation  could  impair  the
Company's  relationships with existing customers and its  ability
to  obtain new customers.  Defending such litigation will  likely
result  in  a  diversion of management's time and attention  away
from  business  operations, which could have a  material  adverse
effect  on  the  Company's business, results  of  operations  and
financial condition.  Such litigation may also have the effect of
discouraging potential acquirors from bidding for the Company  or
reducing  the  consideration such acquirors  would  otherwise  be
willing to pay in connection with an acquisition.

Dependence  on  Principal Products.  For the three  months  ended
March 31, 2000, the Company's core of BABY products accounted for
substantially  all of the Company's net sales.   The  Company  is
wholly  dependent  on these products.  As a  result,  any  factor
adversely affecting sales of any of these products could  have  a
material  adverse  effect on the Company.  The  Company's  future
financial  performance  will depend in  part  on  the  successful
introduction   of  enhanced  versions  of  these   products   and
development  of  new  versions of these and  other  products  and
subsequent  acceptance of such new and enhanced products.   There
can  be no assurance that the Company's new and enhanced products
will  achieve  significant  market acceptance  or  will  generate
significant revenue.  In addition, competitive pressures or other
factors may result in significant price erosion that could have a
material  adverse  effect  on the Company's  business,  financial
condition or results of operations.

-8-

Product  Concentration.  As previously noted, the Company derives
most  of  its  revenues from products that replicate  the  AS/400
environment  on  a  personal computer  platform  and  provides  a
graphical   user   interface  ("GUI")   for   those   text-screen
applications.   As  a  result,  the  Company's  future  operating
results  are dependent upon the continued widespread use  of  the
AS/400.   Because  there  can  be no assurance  that  the  AS/400
platform  will continue to be used in the foreseeable  future,  a
decline  in  demand for AS/400 products and hence  the  Company's
software  products could have a material adverse  effect  on  the
Company's business, operating results, and financial condition.

Potential for Software Defects.  Software products as complex  as
the  BABY  products offered by the Company may contain undetected
errors  or failures when first introduced or as new versions  are
released.   Despite  testing by the Company and  by  current  and
potential  customers, any of the Company's products  may  contain
errors  after their commercial shipment.  Such errors  may  cause
loss  of or delay in market acceptance of the Company's products,
damage  to  the Company's reputation, and increased  service  and
warranty  costs.  The possibility of the Company being unable  to
correct  such  errors in a timely manner could  have  a  material
adverse  effect  on the Company's results of operations  and  its
cash  flows.   In addition, technical problems with  the  current
release  of the platforms on which the Company's products operate
could impact sales of these products, which could have a material
adverse effect on the Company's results of operations.

Uneven  Patterns of Quarterly Operating Results.   The  Company's
revenues in general are relatively difficult to forecast and vary
from quarter to quarter due to various factors, including the (i)
relatively  long  sales cycles for the Company's  products,  (ii)
size  and timing of individual transactions, the closing of which
tend to be delayed by customers until the end of a fiscal quarter
as  a  negotiating tactic, (iii) introduction of new products  or
product  enhancements  by the Company or  its  competitors,  (iv)
potential  for  delay or deferral of customer implementations  of
the  Company's  software, (v) changes in customer  budgets,  (vi)
seasonality  of  technology purchases and other general  economic
conditions,  and  (vii) changes in the pricing  policies  of  the
Company  or its competitors. Accordingly, the Company's quarterly
results  are  difficult to predict until the end of the  quarter,
and  delays in product delivery or closing of sales near the  end
of  a  quarter have historically caused and could cause quarterly
revenues   and  net  income  to  fall  significantly   short   of
anticipated levels.

The Company's revenues in any quarter are substantially dependent
on  orders  booked  and  shipped in  that  quarter.  Because  the
Company's  operating  expenses are based on  anticipated  revenue
levels  and  because a high percentage of the Company's  expenses
are  relatively fixed, a delay in the recognition of revenue from
even   a  limited  number  of  sales  transactions  could   cause
significant  variations  in operating  results  from  quarter  to
quarter and could cause net income to fall significantly short of
anticipated levels.

Effects  of Electronic Commerce.  There can be no assurance  that
the  Company will be able to provide a product offering that will
satisfy new customer demands in the Internet, online services, e-
business   applications,  and  electronic  commerce  areas.    In
addition,  standards for web-enabled and e-business applications,
as  well as other industry adopted and de facto standards for the
Internet  are  evolving rapidly.  There can be no assurance  that
standards  chosen by the Company will position  its  products  to
compete  effectively for business opportunities as they arise  on
the  Internet  and  other emerging areas.   The  success  of  the
Company's  product offerings depends, in part, on  the  Company's
ability to continue developing products which are compatible with
the  Internet.  The increased commercial use of the Internet  may
require  substantial  modification  and  customization   of   the
Company's  products and the introduction of  new  products.   The
Company  may not be able to effectively compete in the  Internet-
related products and services market.

Competition.  The Company encounters intense competition in  some
aspects  of its platform migration business and competes directly
with  other software firms, many of which have greater  financial
resources than the Company.  There can be no assurance  that  the
Company  will  be able to compete successfully in the  future  or
that  competition will not have a material adverse affect on  the
Company's results of operations.

-9-

Acquisition  Strategy.   Although  the  Company  has  no  current
acquisition plans, it has addressed and may continue  to  address
the   need  to  develop  new  products,  in  part,  through   the
acquisition  of  other companies.  Acquisitions involve  numerous
risks   including  difficulties  in  the  assimilation   of   the
operations, technologies and products of the acquired  companies,
the  diversion  of  management's attention  from  other  business
concerns, risks of entering markets in which the Company  has  no
or  limited direct prior experience and where competitors in such
markets have stronger market positions, and the potential loss of
key employees of the acquired company.  Achieving and maintaining
the  anticipated benefits of an acquisition will depend  in  part
upon  whether the integration of a target company's  business  is
accomplished in an efficient and effective manner, and there  can
be no assurance that this will occur.  The successful combination
of  companies  in  the  high  technology  industry  may  be  more
difficult to accomplish than in other industries.

Hiring  and  Retention  of  Employees.  The  Company's  continued
growth  and  success  depend  to  a  significant  extent  on  the
continued  service  of  its  senior  management  and  other   key
employees and the hiring of new qualified employees.  Competition
for  highly-skilled business, product development, technical  and
other  personnel  is becoming more intense due to  lower  overall
unemployment rates as well as the boom in information  technology
spending.    Accordingly,  the  Company  expects  to   experience
increased  compensation  costs that may  not  be  offset  through
either improved productivity or higher prices.  There can  be  no
assurances  that  the Company will be successful in  continuously
recruiting new personnel and in retaining existing personnel.  In
general, the Company does not have long-term employment  or  non-
competition  agreements with its employees. The loss  of  one  or
more   key  employees  or  the  Company's  inability  to  attract
additional  qualified employees or retain other  employees  could
have  a  material adverse effect on the continued growth  of  the
Company.

Sales  Force Restructuring.  The Company historically has  relied
heavily on its direct sales force.  In the past, the Company  has
restructured  or  made other periodic adjustments  to  its  sales
force.  These changes have generally resulted in a temporary lack
of  focus  and reduced productivity by the Company's sales  force
that  may  have affected revenues in a quarter. There can  be  no
assurances that the Company will not continue to restructure  its
sales force or that the related transition issues associated with
restructuring the sales force will not recur.

Possible  Necessity  for Additional Capital.   Depending  on  the
outcome of the currently filed class action lawsuits, the Company
may  require additional capital to fund its capital expenditures,
product  development  and  working capital  requirements  through
2000.   In  addition,  any significant change  in  the  Company's
product  development plans or marketing and distribution  methods
might require additional capital.  If the Company is required  in
the  future  to  seek additional capital through a  new  line  of
credit,  asset-based lending or the sale of equity, no  assurance
can  be  given  that  such capital will  be  available  on  terms
favorable  to  the  Company,  or at  all.   The  sale  of  equity
interests would dilute the ownership of current shareholders.

Enforcement  of the Company's Intellectual Property Rights.   The
Company  relies on a combination of copyright, patent, trademark,
trade   secrets,   confidentiality  procedures  and   contractual
procedures to protect its intellectual property rights.   Despite
the  Company's  efforts  to  protect  its  intellectual  property
rights, it may be possible for unauthorized third parties to copy
certain portions of the Company's products or to reverse engineer
or  obtain  and  use  technology or other  information  that  the
Company  regards as proprietary.  There can also be no assurances
that  the Company's intellectual property rights would survive  a
legal   challenge  to  their  validity  or  provide   significant
protection  for  the Company.  In addition, the laws  of  certain
countries do not protect the Company's proprietary rights to  the
same  extent  as do the laws of the United States.   Accordingly,
there  can  be  no  assurance that the Company will  be  able  to
protect  its  proprietary technology against  unauthorized  third
party  copying or use, which could adversely affect the Company's
competitive position.

Possibility  of  Infringement Claims.  The Company  may,  in  the
future,  receive notices from third parties claiming infringement
by  the  Company's  products  of third  party  patent  and  other
intellectual property rights.  The Company expects that  software
products  will  increasingly be subject to  such  claims  as  the
number  of  products  and competitors in the  Company's  industry
segment   grow  and  the  functionality  of  products   overlaps.
Regardless  of its merit, responding to any such claim  could  be
time-consuming,  result  in  costly litigation  and  require  the
Company to enter into royalty and licensing agreements which  may
not  be  offered or available on terms acceptable to the Company.
If a successful claim is made against the Company and the Company
fails  to  develop  or  license  a  substitute  technology,   the
Company's  business, results of operations or financial  position
could be materially adversely affected.

-10-

Possible  Volatility  of Stock Price.  The market  price  of  the
Company's  Common Stock has experienced significant  fluctuations
and may continue to fluctuate significantly.  The market price of
the Common Stock may be significantly affected by factors such as
the  announcement of new products or product enhancements by  the
Company  or  its  competitors, technological  innovation  by  the
Company or its competitors, quarterly variations in the Company's
or  its competitors' results of operations, changes in prices  of
the  Company's or its competitors' products and services, changes
in revenue and revenue growth rates for the Company as a whole or
for  specific  geographic  areas,  business  units,  products  or
product  categories,  changes  in earnings  estimates  by  market
analysts,  speculation  in  the press or  analyst  community  and
general  market  conditions  or  market  conditions  specific  to
particular  industries.  The stock prices for many  companies  in
the  technology  sector have experienced wide fluctuations  which
often  have been unrelated to their operating performance.   Such
fluctuations  may  adversely  affect  the  market  price  of  the
Company's Common Stock.

Limited  Market  for  Common Stock; Absence  of  Dividends.   The
Company's  Common  Stock  is currently quoted  on  the  Over-the-
Counter   Bulletin  Board  ("OTCBB")  under  the  symbol  "CAWC".
However,  as is the case for many other stocks on the OTCBB,  the
trading  volume  in  the Company's stock  is  insignificant.   In
addition,  most of the Company's stock is privately held.   As  a
result,   the   market  for  the  Company's  stock  is   limited.
Management of the Company anticipates that the expansion  of  the
shareholder base and continuing improvements in operating results
would  enhance  the  liquidity of the  Company's  shares  in  the
future.   However,  there can be no assurance that  a  meaningful
trading market will develop.

Since the Company's inception, the Company has not paid dividends
on its Common Stock, and does not anticipate paying any dividends
in the foreseeable future.

Year  2000.  As of the date of this filing, the Company currently
knows  of  no  significant Year 2000-related failures  that  have
occurred  in  either its products or its internal  systems  as  a
result  of  the date change from December 31, 1999 to January  1,
2000.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

On  August 17, 2000, a shareholder class action was commenced  in
the  United  States  District Court for the Central  District  of
California against the Company as well as two of its officers and
directors,  Bruce Acacio and Carol Conway.  The class action  was
brought  on  behalf  of purchasers of the stock  of  the  Company
during  the period February 9, 2000 through August 6, 2000.   The
plaintiffs  allege that the defendants made false and  misleading
statements  about  the  Company's actual and  expected  financial
performance  to  inflate  the value of  the  Company's  stock  to
defraud investors, in violation of federal securities laws.   The
plaintiffs seek damages, interest, costs and such other equitable
or injunctive relief as the Court may deem just and proper.

On or about August 21, 2000, another shareholder class action was
commenced  against the Company, Mr. Acacio and Ms.  Conway.   The
complaint  is  based on the same allegations and is  seeking  the
same relief as in the class action suit described above.

On  or about September 11, 2000, a third shareholder class action
was commenced in the United States District Court for the Central
District of California against the Company and Mr. Acacio and Ms.
Conway.   This  complaint is based on the  same  allegations  and
seeks  the  same  relief as in the class action  suits  described
above.

On  or about September 21, 2000, another shareholder class action
was commenced in the United States District Court for the Central
District  of California against the Company, Mr. Acacio  and  Ms.
Conway.   This  complaint is based on the  same  allegations  and
seeks  the  same  relief as in the class action  suits  described
above.

-11-

The  Company  expects that the above suits will  be  consolidated
into a single class action.

The  Company believes that it has meritorious defenses  to  these
actions and intends to vigorously defend them.

Item 2. Changes in Securities

On  January 12, 1999, the Company acquired the net assets of CSPI
with a historical cost of $700,840 in exchange for a Common Stock
subscription.   Since CSPI's line of business  was  substantially
the  same  as the Company's, and the shareholders, officers,  and
directors  of  CSPI  and  CSC were substantially  the  same,  the
Company  valued  the  net  assets acquired  from  CSPI  at  their
historical  cost.   On  January 27, 2000,  the  subscription  was
converted into 2,000,000 shares of the Company's Common Stock.

Effective  March  15,  2000, the Company effected  a  two-for-one
stock  split.  Since the Company is incorporated in the State  of
Nevada,  where state securities laws mandate a minimum par  value
of  $0.001  (the par value of the Company's stock  prior  to  the
split), the Company increased its Common Stock and decreased  its
additional paid-in capital accounts to account for effects of the
stock  split.  All share amounts and dollar amounts in this  Form
10-QSB  have  been adjusted to account for the  effects  of  this
split.

During  the  three  months  ended March  31,  2000,  the  Company
commenced  a  private  offering of its  Common  Stock  under  the
provisions  of Rule 506 of Regulation D under the Securities  Act
of  1933,  as  amended.  On March 31, 2000, the Company  received
partial  proceeds  of $2,000,000 from the offering  but  did  not
issue  the  shares until May 23, 2000.  As a result, the  Company
recorded a stock subscription in the amount of $2,000,000  as  of
March 31, 2000.

During  the three months ended March 31, 2000, the Company issued
to  unrelated  non-employees 624,000 shares of  Common  Stock  at
prices  from  $0.525  to  $7.20 per share for  various  services.
Certain  of these services are to be performed in future periods.
As  such, the Company has recorded deferred expense at March  31,
2000 in the amount of $204,168 related to these services.

During  the three months ended March 31, 2000, the Company issued
to  its  employees  options  to purchase  64,000  shares  of  the
Company's Common Stock at exercise prices ranging from  $0.75  to
$13.625  per share.  The options vest over a period of 24  months
and  expire  five  years after the grant date.   No  compensation
expense was recognized upon the issuance of these options as  the
market  value  per share was equal to the exercise price  at  the
grant date.

Item 3. Defaults Upon Senior Securities

None.

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

None.

Item 5. Other Information

None.

Item 6. Exhibits and Reports on Form 8-K

  (a)  Exhibits -

     10 Standard  Multi-Tenant Office Lease between  the  Company
        and McCabe Way Irvine, LLC dated February 14, 2000

     27 Financial Data Schedule

  (b)  Reports on Form 8-K -

       There  were  no reports filed on Form 8-K during the quarter
       ended March 31, 2000.

-13-

                           Signatures

In  accordance  with the requirements of the  Exchange  Act,  the
Registrant caused this report to be signed on its behalf  by  the
undersigned, thereunto duly authorized.

Date: October 17, 2000

CALIFORNIA SOFTWARE CORPORATION

By:/s/Lawrence J. Jagiello

Lawrence J. Jagiello
Chief Financial Officer and Principal Accounting Officer





-14-