<PAGE> 1

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


                                  Form 10-QSB



(Mark One)

  X   Quarterly report pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934
For the period ended March 31, 2000.
OR
      Transition report pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

Commission File Number: 0-25678


                              MUSTANG.COM, INC.

            (Exact name of registrant as specified in its charter)

                                  California
                           (State of incorporation)

                                  77-0204718
                               (I.R.S.  employer
                            identification number)

                              6200 Lake Ming Road
                         Bakersfield, California 93306
                   (Address of principal executive offices)

                                (661) 873-2500
             (Registrant's 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

   As of May 8,2000 there were 6,768,136 shares of the Registrant's
common stock outstanding.











==============================================================================
<PAGE> 2



                          MUSTANG SOFTWARE, INC.

                                  FORM 10-QSB

                                     INDEX


                                                                           Page


PART I.   Financial Information:

Balance Sheets as of March 31, 2000 and December 31, 1999                     3

Statements of Operations for the three months ended March 31, 2000 and
1999                                                                          4

Statements of Cash Flows for the three months ended March 31, 2000 and
1999                                                                          5

Notes to Financial Statements                                                 6

Management's Discussion and Analysis of Financial Condition and Results of
Operations                                                                    7

PART II.   Other Information:

Item 5 Other Information                                                     16

Item 6. Exhibits and Reports on Form 8-K                                     17

Signatures                                                                   18



















==============================================================================
<PAGE> 3


                          MUSTANG SOFTWARE, INC.
                             BALANCE SHEETS

                                ASSETS
<TABLE>
<CAPTION>
                                                       March 31,    December 31
                                                         2000           1999
Unaudited)
<S>
CURRENT ASSETS:                                        <C>          <C>
   Cash and cash equivalents                           $13,710,863  $ 8,847,602
   Accounts receivable, net of allowance for doubtful
    accounts of $170,000 and $170,000 at December 31,
    1999 and March 31, 2000 respectively                   893,656      693,739
   Inventories                                               9,168       13,373
   Other                                                      --          3,750
- ------------------------------------------------------------------------------
      Total current assets                              14,613,687    9,558,464
- ------------------------------------------------------------------------------
PROPERTY AND EQUIPMENT:

  Property and equipment                                 1,446,653    1,278,371
  Accumulated depreciation                                (708,516)    (650,293)
- ------------------------------------------------------------------------------
      Net property and equipment                           738,137      628,078
- ------------------------------------------------------------------------------
OTHER ASSETS:

  Other                                                    244,965        2,485
- ------------------------------------------------------------------------------
      Total other assets                                   244,965        2,485
- ------------------------------------------------------------------------------
                                                      $ 15,596,789  $10,189,027
= ==============================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                   $    551,183 $    492,942
   Current portion of capital lease                          9,111        9,111
   Accrued payroll and liabilities                         274,261      325,005
   Income Tax Payable                                       99,776       99,776
   Deferred revenue                                        315,000      250,000
- ------------------------------------------------------------------------------
      Total current liabilities                          1,249,331    1,176,834
- ------------------------------------------------------------------------------
CAPITAL LEASE OBLIGATION, net of current portion           249,442      251,636
- ------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
   Common stock, no par value:
      Authorized--30,000,000 shares
         Issued and outstanding-5,969,384 and 6,768,136
           shares at December 31,1999 and March 31,
           2000 respectively                            21,560,941   15,966,363
      Retained earnings                                 (7,462,925)  (7,205,806)
- ------------------------------------------------------------------------------
         Total shareholders' equity                     14,098,016    8,760,557
- ------------------------------------------------------------------------------
                                                      $ 15,596,789  $10,189,027
= ==============================================================================

The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 4

                                 MUSTANG.COM, INC.
                             STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                   Three Months Ended March 31,
                                                       2000             1999
<S>                                                <C>            <C>
REVENUE                                            $   1,409,988  $     772,982
COSTS OF REVENUE                                         126,473         48,561
- ------------------------------------------------------------------------------
Gross profit                                           1,283,515        724,421
- ------------------------------------------------------------------------------
OPERATING EXPENSES:
   Research and development                              370,586        129,520
   Selling and marketing                                 629,324        251,629
   General and administrative                            672,076        347,321
- ------------------------------------------------------------------------------

      Total operating expenses                         1,671,986        728,470
- ------------------------------------------------------------------------------

   Income(loss)from operations                          (388,471)        (4,049)
- ------------------------------------------------------------------------------
OTHER INCOME (EXPENSE):
   Interest expense                                       (6,407)        (6,611)
   Interest income                                       150,353         20,959
- ------------------------------------------------------------------------------
      Total other income (exp).                          143,946         14,348
- ------------------------------------------------------------------------------

Income (loss) before
   provision for income taxes                           (244,525)        10,299

PROVISION (BENEFIT)
   FOR INCOME TAXES                                           --             --
- ------------------------------------------------------------------------------

NET INCOME (LOSS)                                  $    (244,525) $      10,299
= ==============================================================================

NET INCOME (LOSS)
   PER COMMON SHARE - Basic                        $       (0.04) $        0.00
= ==============================================================================

NET INCOME (LOSS)
   PER COMMON SHARE - Diluted                      $       (0.04) $        0.00
= ==============================================================================

WEIGHTED AVERAGE NUMBER
   OF SHARES OUTSTANDING - Basic                        6,314,858     4,145,314
= ==============================================================================

WEIGHTED AVERAGE NUMBER
   OF SHARES OUTSTANDING - Diluted                      6,314,858     4,984,299
= ==============================================================================

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

<PAGE> 5

</TABLE>
<TABLE>

                               MUSTANG.COM, INC.
                            STATEMENTS OF CASH FLOWS

<CAPTION>

                                                  Three Months Ended March 31,
                                                         2000         1999

<S>                                               <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

   Net income(loss)                               $  (244,525)   $    10,299
   Adjustments to reconcile net income to net cash
       provided by operating activities:
      Depreciation and amortization                    57,734         43,549
      Net changes in assets and liabilities          (389,218)        17,055
- ------------------------------------------------------------------------------
        Net cash provided (used) by operating
        Activities                                   (576,009)        70,903
- ------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITES:
   Purchase of property and equipment                (153,114)        (4,670)
- ------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net proceeds from issuance of stock              5,594,578        302,500
   Payments on capital lease obligation                (2,194)        (1,989)
- ------------------------------------------------------------------------------
        Net Cash provided (used) by financing
        Activities                                  5,592,384        300,511
- ------------------------------------------------------------------------------

NET INCREASE (DECREASE) IN CASH                     4,863,261        366,744

CASH BALANCE, beginning of period                   8,847,602      1,849,700
- ------------------------------------------------------------------------------
CASH BALANCE, end of period                       $13,710,863    $ 2,216,444
= ==============================================================================
SUPPLEMENTAL DISCLOSURES:
   Interest paid                                        6,407          6,611
   Taxes paid                                              --             --


   The accompanying notes are an integral part of these financial
statements.
</TABLE>
===============================================================================
<PAGE> 6


                                  MUSTANG.COM, INC.
                           NOTES TO FINANCIAL STATEMENTS

Note 1. Accounting Policies

   The accompanying unaudited Condensed Financial Statements have been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission.  Certain information and footnote disclosures
normally included in annual financial statements prepared in accordance
with generally accepted accounting principles have either been condensed
or omitted pursuant to those rules and regulations.  In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.  The
results of operations and cash flows for the periods presented are not
necessarily indicative of the results that may be expected for the full
fiscal year.  For further information, refer to the financial statements
and notes thereto for the year ended December 31, 1999, included in the
1999 Form 10KSB.

   The condensed Balance Sheet at December 31, 1999 has been taken from
the audited financial statements at that date and condensed.

<PAGE> 7

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

      In addition to the comments that follow, further information
can be obtained by referring to the management's discussion and analysis
of financial condition and results of operations section included in the
Form 10KSB of Mustang.com, Inc. Mustang" or the "Company"), filed for the
year ended December 31, 1999.

Results of Operations:

Three Months Ended March 31, 2000 and 1999

   Revenues for the three months ended March 31, 2000  were $1,409,988
, an increase of 637,006  or 82.4%  over revenues for the same period in
1999. As a percentage of revenues by product category for the first
quarter 2000  vs. 1999  showed the QmodemPro line at 1%  and 4% and the
Company's Internet directed product line consisting of Mustang  Message
Center ("MMC"), ListCaster and FileCenter, at 99%  and 96%, respectively.

   Gross profit for the quarter increased from $724,421  in 1999  to
$1,283,515  in  2000 , and decreased  as a percentage of revenues from
93.7%  in 1999  to 91.0%  in 2000 . Gross profit percentage has averaged
between 83-91 % over the last three calendar years. The Company does not
expect the gross profit percentage to remain at the current level. As more
turnkey solutions are sold through the Mustang Professional Services
division, the Company expects the gross profit percentage to decrease.

   Research and development expenses increased  $241,066  in the first
quarter of 2000  from 1999 , and increased  as a percentage of revenues
from 16.8%  in 1999  to 26.3%  in 2000 . Research and development is
concentrated in Windows NT and Windows 95/98 and directly targets the
expanded use of international networks, including the Internet. The
Company has devoted and is devoting a substantial portion of its research
and development resources to the Windows 95/98 and Windows NT environments
and now offers a suite of Web server and Internet/intranet utility
applications for Windows 95/98 and Windows NT environments. The headcount
in this department increased  from 6  at March 31, 1999  to 13  at March
31, 2000 . The headcount  accounted for the majority of the increase  in
absolute dollars.

   Selling and marketing expenses for the quarter were $629,324 , an
increase of $ $377,695  over the same quarter the previous year, and they
increased  as a percentage of revenues from 32.6%  in first quarter of
1999  to 44.6%  in the three months ended March 31, 2000 . The increase in
expenses  was due primarily to an increase in the sales and marketing
staff.

   General and administrative expenses increased  for the quarter
compared to the previous year, from $347,321  in 1999  to  $672,076  in
2000, and increased  as a percentage of revenues, from 44.9%  in 1999  to


<PAGE> 8

47.7%  in 2000 .  Expenses remained consistent as a percent of revenues
for the current quarter compared to the same quarter last year.  Increase
in headcount was the major contributor to the increase in actual dollars.

Liquidity and Capital Resources

   Cash and cash equivalents balance at March 31, 2000  were
approximately $13,711,000 , an increase of approximately $ 4,863,000  from
December 31, 1999 .

In October 1999, Mustang completed a private placement of its securities
to accredited investors receiving proceeds, before offering expenses, of
approximately $5,600,000. In the financing, Mustang issued 765,908 shares
of  its common stock at $7.3125 per share and warrants to purchase up to
574,431 shares of its Common Stock. The principal reasons for the increase
in cash was the receipt of net proceeds aggregating approximately
$8,850,000 from these 1999 equity financings and the exercise of
outstanding warrants.

   Accounts receivable increased approximately $200,000  and Accounts
payable increased  approximately $58,000  in the first quarter of 2000
from the period ended December 31, 1999 . Accounts receivable average days
to collect for the quarter ended March 31, 1999 and 2000 were 59  and 42
days, respectively. Average days to collect in 1999  was 45  days.
Management's goal is to maintain receivable collection days at or below 50
for 2000 . Inventory levels have decreased approximately  4,200  at March
31, 2000  from December 31, 1999 .


Certain Risk Factors That Could Affect Future Results

   Recent Losses; No Assurance of Profitability. During the years ended
December 31, 1997, 1998 and 1999, the Company reported revenue of
approximately $1,898,000, $2,011,000 and $3,711,000, respectively, and
incurred net losses of approximately $1,341,000, $1,157,000 and $906,000,
respectively. There can be no assurance that the Company will be able to
profitably market the Mustang Message Center, any of its other products or
any products it may develop in the future. Until the Company is able to
generate sufficient revenues to offset costs and expenses, of which there
can be no assurance, Mustang will continue to sustain losses. Moreover,
the Company's losses may increase in the future as it tries to implement
announced plans to grow revenues.

   Variability of Operating Results; Lengthy Sales Cycle. Mustang's
expense levels are based, in part, on its expectations as to future
revenues and are not expected to decrease, at least in the short term. In
fact Mustang expects expenses to increase from those incurred during the
first quarter of 1999 as implements a strategy to add sales and support
personnel in an effort to grow revenues. Further, Mustang may from time to
time be forced by the competitive environment in which it competes to make


<PAGE> 9

tactical or strategic decisions that disrupt or reduce anticipated
revenues. Moreover, during 1998, which was the first year that the Company
achieved material revenues from MMC and its other Internet-directed
products introduced during 1997, the Company observed a trend that a
disproportionate percentage of the Company's net sales were generated
during the last month of a quarter. As a result, a shortfall in sales in
any quarter as compared to expectations may not be identifiable until the
end of a quarter. Mustang may not be able to adjust its spending plan in a
timely manner to compensate for any future revenue shortfall. Any
significant shortfall in sales in relation to the Company's revenue
expectations would have a material adverse impact on the Company's
business, results of operations, financial condition and prospects.

   The purchase of the Enterprise Edition of MMC, the Company's core
product, involves a significant commitment of customers' personnel and
other resources. Furthermore, the cost of the software is typically only a
small portion of the related hardware, development, training and
integration costs associated with implementing a complete e-mail
management solution. For these and other reasons, the sales cycle
associated with the purchase of MMC is typically complex, lengthy and
subject to a number of significant risks. Such risks include changes in
customers' budgetary constraints and approval at senior levels of
customers' organizations, over which the Company has no control. The
Company's sales cycle can range from four to six months or more and varies
substantially from customer to customer. Because of the lengthy sales
cycle and the dependence of the Company's quarterly revenues upon a
relatively small number of orders that represent large dollar amounts, the
loss or delay of a single order could have a material adverse effect on
the Company's business, financial condition and results of operations.

Uncertainty of Market for E-mail Management Software and Dependence
upon MMC. Prior to 1998, most of the Company's revenues were derived from
its Wildcat! WinServer and BBS software. Beginning in the second quarter
of 1997 and continuing throughout the year, Mustang changed its focus and
launched new products designed to facilitate interaction on the Internet's
World Wide Web. Mustang released the Business Edition of MMC in September
1997 and its core product, the Enterprise Edition, in February 1998. The
future of the Company is dependent upon the acceptance by the market of
MMC and Mustang's ability to market this e-mail management solution and
related services successfully. MMC accounted for over 50 percent of the
Company's net sales during 1998, but Mustang has only limited operating
history with respect to this product.  As a result, as well as the recent
emergence of the commercial e-mail management market, the Company has
neither internal nor industry-based historical financial data for a
significant period upon which to project revenues or base planned
operating expenses. Future operating results will depend on a variety of
factors, including Mustang's ability to maintain or increase market demand
for MMC and its other products and services, usage and acceptance of the
Internet the introduction and acceptance of new, enhanced or alternative
products or services by Mustang or its competitors. Other factors that


<PAGE> 10

could affect its operating results include Mustang's ability to anticipate
and effectively adapt to a developing market and to rapidly changing
technologies, general economic conditions, competition by existing and
emerging competitors, software defects and other quality control problems
and the mix of products and services sold.

   Undeveloped and Rapidly Changing Markets.  The markets for Mustang's
products and services are at a very early stage of development, are
rapidly changing and are characterized by an increasing number of market
entrants that have introduced or are developing competing products and
services for use on the Internet and the World Wide Web. As is typical for
a new and rapidly evolving industry, demand for and market acceptance of
recently introduced products and services are subject to a high level of
uncertainty and risk. Acceptance and usage of the MMC is dependent on
continued growth in use of e-mail as a primary means of communications by
businesses and consumers. Businesses that already have invested
substantial resources in traditional or other methods of conducting
business may be reluctant to adopt new commercial methodologies or
strategies that may limit or compete with their existing businesses.
Individuals with established patterns of purchasing goods and services may
be reluctant to alter those patterns. Accordingly, it is not assured that
sufficient demand for Mustang's products and services will develop to
sustain Mustang's business.

   There can be no assurance that use of e-mail as a primary method of
communication or commerce over the Internet will become widespread, that a
substantial market for Mustang's products and services will emerge or that
the MMC will be generally adopted. Mustang's business, financial condition
and results of operations will be materially and adversely affected if the
market fails to develop as expected or develops more slowly than expected.
Similarly, Mustang's business, financial condition and results of
operations will be materially and adversely affected if the Internet
infrastructure is not adequately expanded or managed, or if Mustang's
products and services do not achieve market acceptance by a significant
number of businesses.

   Competition. The market for e-mail message management products and
services is intensely competitive, and Mustang expects competition to
increase significantly. There are no substantial barriers to entry into
Mustang's business, and it expects established and new entities to enter
the market for e-mail message management products and services in the near
future. It is possible that a single supplier will dominate one or more
market segments including e-mail management, customer service and call
center automation. Furthermore, since there are many potential entrants to
the field, it is extremely difficult to assess which companies are likely
to offer competitive products and services in the future, and in some
cases it is difficult to discern whether an existing product or service is
competitive with the MMC.

<PAGE> 11

   Mustang's principal competitors in the e-mail message management
market include Aptex, Brightware, eGain, Exactis.com, Inc., Kana
Communications, MessageMedia and Octane Software, each of which provides
software solutions for e-mail management. Mustang also competes with other
firms that provide e-mail message management services on an outsourcing
basis. The Company competes with a number of independent software
suppliers who offer Web Server or telecommunications software as or among
their product line(s). Several of Mustang's current and potential
competitors have greater name recognition, larger installed customer
bases, more diversified lines of products and services and significantly
greater financial, technical, marketing and other resources than Mustang.
Such competitors may be able to undertake more extensive marketing
campaigns, adopt more aggressive pricing policies and make more attractive
offers to businesses to induce them to use their products or services.

   Limited Intellectual Property and Proprietary Rights. Mustang relies
on a combination of trade secret, copyright and trademark laws,
nondisclosure agreements and other contractual provisions and technical
measures to protect its proprietary rights. Mustang believes that, due to
the rapid pace of technological innovation for Internet products,
Mustang's ability to establish and maintain a position of technology
leadership in the industry depends more on skills of its development
personnel than upon the legal protections afforded its existing
technology. There can be no assurance that trade secret, copyright and
trademark protections will be adequate to safeguard the proprietary
software underlying Mustang's products and services. Similarly, there can
be no assurance that agreements with employees, consultants and others who
participate in the development of its software will not be breached, that
Mustang will have adequate remedies for any breach or that Mustang's trade
secrets will not otherwise become known. Mustang also faces the risk that
notwithstanding Mustang's efforts to protect its intellectual property,
competitors will be able to develop functionally equivalent e-mail message
management technologies without infringing any of Mustang's intellectual
property rights. Despite Mustang's efforts to protect its proprietary
rights, unauthorized parties may attempt to copy or otherwise obtain and
use products or technology that Mustang considers proprietary, and third
parties may attempt to develop similar technology independently. In
addition, effective protection of intellectual property rights may be
unavailable or limited in certain countries. Accordingly, there can be no
assurance that Mustang's means of protecting its proprietary rights will
be adequate or that Mustang's competitors will not independently develop
similar technology.

   As the use of the Internet for commercial activity increases, and
the number of products and service providers that support Internet
commerce increases, Mustang believes that Internet commerce technology
providers may become increasingly subject to infringement claims. There
can be no assurance that plaintiffs will not file infringement claims in
the future. Any such claims, with or without merit, could be time
consuming, result in costly litigation, disrupt or delay the enhancement
or shipment of Mustang's products and services or require Mustang to enter


<PAGE> 12

into royalty or licensing agreements. Such royalty or licensing
agreements, if required, may not be available on terms acceptable or
favorable to Mustang, which could have a material adverse effect on
Mustang's business, financial condition and results of operations. In
addition, Mustang may initiate claims or litigation against third parties
for infringement of Mustang's proprietary rights or to establish the
validity of Mustang's proprietary rights.

   Dependence of Key Personnel. The Company is dependent upon James A.
Harrer, its President and Chief Executive Officer and C. Scott Hunter, its
Vice President and Chief Technical Officer. The loss of either of these
executives could have a material adverse effect on the Company. While the
Company has one-year employment agreements with these executives, such
agreements are terminable by each without any reason upon four months
notice. Moreover, unforeseen circumstances could cause either of them to
no longer render services to the Company.  Mustang has key-man life
insurance on the life of Mr. Harrer for $1,000,000. There can be no
assurance that the proceeds from this policy will be sufficient to
compensate the Company in the event of Mr. Harrer's death, and this policy
does not cover the Company in the event that he becomes disabled or is
otherwise unable to render services to the Company.  Mustang's success of
the Company is also dependent upon its ability to attract and retain
highly qualified personnel.  There can be no assurance that the Company
will be able to recruit and retain such personnel.

   Dependence on Increased Usage; Stability of the Internet. The demand
for products used on the Internet such as those offered by Mustang will
depend in significant part on continued rapid growth in the number of
households and commercial, educational and government institutions with
access to the Internet, in the level of usage by such entities. Usage of
the Internet as a source for information, products and services is a
relatively recent phenomenon. Accordingly, it is difficult to predict
whether the number of users drawn to the Internet will continue to
increase and whether any significant market for usage of the Internet for
such purposes will continue to develop and expand. There can be no
assurance that Internet usage patterns will not decline as the novelty of
the medium recedes or that the quality of products and services offered
online will improve significantly to continue to support user interest. In
addition, it is uncertain whether the cost of Internet access will
decline. Failure of the Internet to stimulate user interest and be
accessible to a broad audience at moderate costs would jeopardize the
markets for Mustang's products and services.

   Issues regarding the stability of the Internet's infrastructure
remain unresolved. The rapid rise in the number of Internet users and
increased transmission of audio, video, graphical and other multimedia
content over the Internet has placed increasing strains on the Internet's
communications and transmission infrastructures. Continuation of such
trends could lead to significant deterioration in transmission speeds and
reliability of the Internet and could reduce the usage of the Internet by


<PAGE> 13

businesses and individuals. The Internet continues to experience
significant growth in the number of users and level of use. Without
corresponding increases and improvements in the Internet infrastructure,
there can be no assurance that the Internet will be able to support the
demands placed upon it by such continued growth. Any failure of the
Internet to support such increasing number of users due to inadequate
infrastructure, or otherwise, would seriously limit the development of the
Internet as a viable source of communication or commerce. This could
materially and adversely affect the acceptance of Mustang's products and
services which would, in turn, materially and adversely affect Mustang's
business, results of operations, financial condition and prospects.

   Government Regulation and Legal Uncertainties. Mustang believes it
is not currently subject to direct regulation by any government agency in
the U.S., other than regulations generally applicable to businesses, and
there are currently few laws or regulations directly applicable to access
to, or commerce on, the Internet. However, there can be no assurance that
federal, state or foreign agencies will not attempt in the near future to
begin to regulate the market for Internet commerce. More generally, due to
the increasing popularity and use of the Internet, it is possible that a
number of laws and regulations will be adopted with respect to the
Internet, covering issues such as user privacy, pricing, taxation and
characteristics and quality of products and services. For example, the
Telecommunications Reform Act of 1996 may subject certain Internet content
providers to criminal penalties for the transmission of certain
information and could also result in liability to Internet service
providers, World Wide Web hosting sites and transaction facilitators such
as Mustang. Various foreign jurisdictions have also moved to regulate
access to the Internet and to strictly control World Wide Web content.
Even if Mustang's business is not directly subject to regulation, the
adoption of any such laws or regulations may inhibit the growth of the
Internet, or the businesses of the users of Mustang's products and
services, which could in turn adversely affect Mustang's business,
financial condition and results of operations. Moreover, the applicability
to the Internet of existing laws governing issues such as property
ownership, libel, taxation and personal privacy is uncertain. Such
uncertainty creates the risk that such laws could be interpreted in a
manner that could generally inhibit commerce on the Internet and adversely
impact Mustang's business.

   Due to the growth of Internet commerce, Congress has considered
regulating providers of services and transactions in this market, and
federal or state authorities could enact laws, rules or regulations
affecting Mustang's business or operations. Government agencies may
promulgate rules and regulations affecting Mustang's activities or those
of the users of its products and services. Any or all of these potential
actions could result in increased operating costs for Mustang or for the
principal users of its products or services and could also reduce the
convenience and functionality of Mustang's products or services. This
could result in reduced market acceptance, which would have a material


<PAGE> 14

adverse effect on Mustang's business, financial condition and results of
operations.



    Need to upgrade its systems and the Mustang Hosted Network to
accommodate growth in electronic communications and commerce. In February
2000, Mustang began offering Mustang Message Center as an application
service provider with its launch of the Mustang Network, a Web-based
hosted application service to provide an alternative for those customers
which do not want Mustang Message Center installed onsite at its location.
As a consequence of the new solution, the Company faces risks related to
the ability of the Mustang Network to operate with higher activity levels
while maintaining expected performance. As the volume and complexity of
customer communications and electronic commerce increases, Mustang will
need to expand its systems and hosted network infrastructure. The
expansion and adaptation of its network infrastructure will require
substantial financial, operational and management resources. Due to the
recent introduction of its hosted Web solution, Mustang's ability to
connect and manage a substantially larger number of customers is unknown.
Customer demand for Mustang's products and services could be greatly
reduced if its fails to maintain high capacity data transmission. In
addition, as it upgrades its network infrastructure, the Company is likely
to encounter equipment or software incompatibility. Mustang may not be
able to expand or adapt its hosted network infrastructure to meet
additional demand or its customers' changing requirements in a timely
manner or at all.

Growth in Demand for its Hosted Network Solution May Adversely
Affect Mustang's Near Term Results of Operations. During 1999, 99% of
Mustang's revenues were derived from sales and related services from the
onsite installation of the Mustang Message Center at customers' locations.
An additional consequence of the Mustang Network solution is the risk that
customers who might have otherwise purchased Mustang Message Center and
related services will prefer the Mustang Network solution. Mustang Message
Center over the Mustang Network offers the same functionality as the
onsite installation of the Mustang Message Center but at a substantially
lower up front cost. Mustang believes that to remain competitive it must
offer Mustang Message Center as an application service provider and that,
over time, providing this service will generate revenues that more than
make up for lost sales of onsite installations. However, in the near term,
its results of operations could suffer if onsite sales are lost due to the
popularity of its hosted solution.

   Risks of Unplanned System Interruptions and Capacity Constraints.
Mustang expects that its customers will experience interruptions with its
hosted network from time to time. These interruptions could be due to
hardware and operating system failures. The Company expects a substantial
portion of its revenue to be derived from customers who use its hosted
network. If it is correct (of which there can be no assurance), its


<PAGE> 15

business will suffer if Mustang experiences frequent or long system
interruptions that result in the unavailability or reduced performance of
its hosted network or reduce its ability to provide remote management
services. Mustang expects to experience occasional temporary capacity
constraints due to sharply increased traffic or, as has been the case for
other Web-based businesses, the possibility that it will be targeted by
hackers, either of which could cause unanticipated system disruptions,
slower response times, impaired quality and degradation in levels of
customer service. If this were to continue to happen, Mustang's business
and reputation could be seriously harmed. The Company's success largely
depends on the efficient and uninterrupted operation of its computer and
communications hardware and network systems. Substantially all of the
Company's computer and communications systems are located in Bakersfield,
Kern County, California. Mustang's systems and operations are vulnerable
to damage or interruption from fire, earthquake, power loss,
telecommunications failure and similar events. Any unplanned interruption
of services may harm Mustang's ability to attract and retain customers.

   Dependence on relationships with, and the system integrity of,
hosting partners for the Mustang Network. Mustang's hosted network
consists of virtual data centers co-located in the physical data centers
of its hosting partners. Accordingly, it relies on the speed and
reliability of the systems and networks of these hosting partners. If its
hosting partners experience system interruptions or delays, or if the
Company does not maintain or develop relationships with hosting partners,
its business could suffer. The lead-time to add system capacity for
Mustang's hosted network at its hosting partner has increased recently
from 90 days to six months and could extend longer in the future as the
use and offerings of application service providers continue to grow. If
Mustang does not anticipate demand for its hosted network accurately and
does not provide sufficient lead-time to its hosted partner for expansion
or timely arrange for alternative hosting partners, if available, to
handle growth, its results of operations and financial condition could be
materially adversely affected.

<PAGE> 16


PART II.   Other Information:


Item 5.  Other Information.

   On February 28, 2000 Mustang announced that it entered into an
agreement with Quintus Corporation for Quintus to acquire registrant in a
stock merger. Under the terms of the agreement, Quintus will exchange
0.793 shares of Quintus common stock for each outstanding share of the
Company's common stock. All outstanding options and warrants to purchase
registrant's common stock will also be assumed by Quintus, adjusted for
the exchange ratio. Completion of the acquisition is subject to customary
closing conditions, including approval of registrant's shareholders. The



special shareholders meeting of the Company scheduled for May 11, 2000 to
consider approving the acquisition has been adjourned until 10:00 a.m.,
local time, May 18, 2000, at the Rio Bravo Resort, 12000 Lake Ming Road,
Bakersfield, California 93306.

<PAGE> 17

Item 6.  Exhibits and Reports on Form 8-K

(b) Reports on Form 8-K

   Two reports on Form 8-K were filed during the quarter covered by
this Report. These reports, reporting events occurring on February 10 and
February 28, 2000, each reported matters under Item 5.




<PAGE> 18


   SIGNATURES

   In accordance with the requirements of the Securities Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.


         Signature                Title                           Date


_/s/ James A. Harrer___
James  A. Harrer         President  and Chief Executive           May 15, 2000
                         Officer (Principal Executive
                         Officer)

_/s/ Donald M. Leonard_
Donald M. Leonard        Vice  President and  Chief               May 15, 2000
                         Financial Officer (Principal Financial
                         and  Accounting  Officer)