SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
                                    ---------
              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2000
                                                 ------------------
                                       OR
              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                 For the transition period from ______ to ______

                         Commission file number 0-27736

                         POINT WEST CAPITAL CORPORATION
                         -------------------------------
             (Exact name of registrant as specified in its charter)

                   Delaware                           94-3165263
                   --------                           ----------
              (State or other jurisdiction of       (I.R.S. Employer
              incorporation or organization)      Identification Number)

          1700 Montgomery Street, Suite 250
          ---------------------------------
            San Francisco, California                       94111
            -------------------------                     ---------
        (Address of principal executive offices)          (Zip Code)


                             (415) 394-9467
                             --------------
            (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 [ ]

At April 30, 2000,  there were  3,352,624  shares of the  registrant's  Common
Stock outstanding.


<PAGE>


                         POINT WEST CAPITAL CORPORATION
                         ------------------------------


                                      INDEX
                                      -----


Part I       Financial Information                                      Page #
------                                                                  ------

Item 1.      Consolidated Financial Statements (unaudited):

             Consolidated Balance Sheets
               March 31, 2000 and December 31, 1999                       1

             Consolidated Statements of Operations for the
               Three Months Ended March 31, 2000 and 1999                 2

             Consolidated Statements of Cash Flows for the
               Three Months Ended March 31, 2000 and 1999                 3

             Condensed Notes to Consolidated Financial Statements        4-11

Item 2.      Management's Discussion and Analysis of Financial
               Condition and Results of Operations                      12-20

Item 3.      Quantitative and Qualitative Disclosures
               About Market Risk                                         21


Part II      Other Information
-------

Item 1.      Legal Proceedings                                           22

Item 6.      Exhibits and Reports on Form 8-K                            22

Signatures                                                               23

                                      (i)
<PAGE>
                                            POINT WEST CAPITAL CORPORATION
                                              CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>



                                                                                 March 31,             December 31,
                                 ASSETS                                             2000                   1999
                                                                             -------------------    -------------------
                                                                                              (unaudited)

<S>                                                                                    <C>                  <C>

Cash and cash equivalents                                                  $          6,829,405   $         12,836,125
Restricted cash                                                                       1,402,306              3,074,057
Investment securities:
     Held-to-maturity                                                                        --              2,504,610
     Available-for-sale                                                               6,332,746              6,519,821
Matured policies receivable                                                              19,155                     --
Loans receivable, net of unearned income of $541,968 and
     $540,867, respectively, and net of an allowance for
     loan losses of $175,000 and $155,000, respectively                              33,910,283             35,467,079
Purchased life insurance policies                                                    31,525,162             31,727,966
Non-marketable securities                                                            16,183,213              5,933,133
Deferred financing costs, net of accumulated amortization
     of $1,440,851 and $1,378,623, respectively                                         659,078                656,376
Furniture and equipment, net of accumulated depreciation of
     $16,065 and $12,976, respectively                                                   47,655                 34,917
Other assets                                                                            609,974              2,771,767
                                                                             -------------------    -------------------

           Total assets                                                    $         97,518,977   $        101,525,851
                                                                             ===================    ===================

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Accrued interest expense                                                   $            118,037   $            346,483
Accounts payable                                                                        444,551                238,326
Accrued compensation payable                                                            350,581                543,400
Accrued litigation settlement                                                                --              2,205,000
Taxes payable                                                                             3,188                141,100
Revolving certificates                                                                4,164,978              4,200,000
Term certificates                                                                    24,364,690             24,498,815
Securitized notes payable                                                            36,363,824             38,528,914
Debenture payable                                                                     3,000,000              3,000,000
Deferred income taxes                                                                   442,691                281,020
                                                                             -------------------    -------------------

           Total liabilities                                                         69,252,540             73,983,058
                                                                             -------------------    -------------------

Stockholders' equity:
     Common stock, $0.01 par value; 15,000,000 authorized shares,
          4,391,124 and 4,390,124 shares, respectively, issued
          3,352,624 and 3,351,624 shares, respectively, outstanding                      43,911                 43,901
     Additional paid-in-capital                                                      30,091,689             30,088,949
     Accumulated comprehensive income, net of tax                                     1,661,526              2,098,960
     Retained deficit                                                                  (656,657)            (1,814,985)
     Treasury stock, 1,038,500 shares                                                (2,874,032)            (2,874,032)
                                                                             -------------------    -------------------

           Total stockholders' equity                                                28,266,437             27,542,793
                                                                             -------------------    -------------------

           Total liabilities and stockholders' equity                      $         97,518,977   $        101,525,851
                                                                             ===================    ===================
<FN>
     See accompanying condensed notes to consolidated financial statements.
</FN>
</TABLE>

                                      1
<PAGE>



                POINT WEST CAPITAL CORPORATION
             CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>



                                                                         For the Three Months Ended March 31,

                                                                         2000                 1999
                                                                  -------------------  --------------------
                                                                                (unaudited)
<S>                                                                        <C>                  <C>


Income:
      Interest income                                           $          2,215,184 $             490,992
      Net gain on securities                                                 418,271               968,348
      Other                                                                   32,965                82,021
      Earned discounts on matured policies                                        --                60,734
                                                                   -------------------  --------------------
           Total income                                                    2,666,420             1,602,095
                                                                  -------------------  --------------------

Expenses:
      Interest expense                                                     1,248,110             1,043,033
      Compensation and benefits                                              619,457               347,334
      Other general and administrative expenses                              869,860               581,471
      Amortization                                                            62,228               123,683
      Depreciation                                                             3,089                 1,798
                                                                  -------------------  --------------------
           Total expenses                                                  2,802,744             2,097,319
                                                                  -------------------  --------------------

           Loss before income taxes
             and extraordinary gain                                         (136,324)             (495,224)

Income tax benefit (expense)                                                  52,649                (4,800)

           Loss before extraorinary gain                                     (83,675)             (500,024)

Extraordinary gain, net of income taxes of $822,154                        1,242,003                    --
                                                                  -------------------  --------------------
          Net income (loss)                                     $          1,158,328 $            (500,024)
                                                                  ===================  ====================
Loss per share before extraordinary gain:
      Basic                                                     $              (0.02)$               (0.15)
                                                                  ===================  ====================
      Diluted                                                   $              (0.02)$               (0.15)

                                                                  ===================  ====================

Net income (loss) per share:
      Basic                                                     $               0.35                 (0.15)

                                                                  ===================  ====================
      Diluted                                                   $               0.31                 (0.15)
                                                                  ===================  ====================

Weighted-average number of shares of common stock
      outstanding                                                          3,352,261             3,273,628
Weighted-average number of shares of common stock
      and common stock equivalents outstanding                             3,751,463             3,273,628

<FN>
     See accompanying condensed notes to consolidated financial statements.
</FN>
</TABLE>

                                       2
<PAGE>


                       POINT WEST CAPITAL CORPORATION
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>



                                                                                  For the Three Months Ended March 31,
                                                                                       2000                  1999
                                                                                -------------------   -------------------
                                                                                                (unaudited)
<S>                                                                                       <C>                     <C>


Cash flows from operating activities:
    Net income (loss)                                                         $          1,158,328 $            (500,024)
    Adjustments to reconcile net income (loss) to net cash
         used in operating activities:
          Depreciation and amortization                                                     65,317               125,481
          Provision for loan losses                                                         20,000                25,000
          Net gain on securities                                                          (418,271)             (968,348)
          Interest income received as warrants                                          (1,101,532)             (148,840)
          Earned discounts on policies                                                          --               (60,734)
          Increase in deferred tax asset                                                  (368,386)                   --
          Extraordinary gain                                                            (1,242,003)                   --
          Changes in operating assets and liabilities:
            Collections on matured life insurance policies                                 183,648               540,458
            Increase in other assets                                                       (43,193)              (77,354)
            Decrease in accrued interest expense                                          (228,446)              (36,182)
            Increase in accounts payable                                                   206,225                89,565
            Decrease in accrued compensation payable                                      (192,819)              (81,044)
            Decrease in taxes payable                                                     (137,912)                   --
                                                                                -------------------   -------------------
                   Net cash used in operating activities                                (2,099,044)           (1,092,022)
                                                                                -------------------   -------------------

Cash flows from investing activities:
    Purchase of furniture and equipment                                                    (15,827)               (2,909)
    Decrease in restricted cash                                                          1,671,751             1,038,897
    Proceeds from maturity of held-to-maturity securities                                2,504,610                    --
    Purchase of investment and non-marketable securities                               (10,932,427)           (1,500,000)
    Proceeds from sale of investment and non-marketable securities                       1,659,681             1,307,148
    Additions to loans receivable                                                       (1,006,723)           (6,071,387)
    Principal payments on loans receivable                                               2,543,519               298,947
                                                                                -------------------   -------------------
                   Net cash used in investing activities                                 (3,575,416)           (4,929,304)
                                                                                -------------------   -------------------

Cash flows from financing activities:
    Principal payments on securitized notes payable                                       (100,933)                   --
    Proceeds from revolving certificates                                                       --              6,460,000
    Principal payments on revolving certificates                                           (35,022)              (62,773)
    Principal payments on term certificates                                               (134,125)                   --
    Increase in deferred financing costs                                                   (64,930)               (6,460)
    Proceeds from options exercised                                                          2,750               206,060

                                                                                -------------------   -------------------
                    Net cash (used in) provided by financing activities                   (332,260)            6,596,827
                                                                                -------------------   -------------------

                   Net (decrease) increase in cash and cash equivalents                 (6,006,720)              575,501

Cash and cash equivalents, beginning of period                                          12,836,125             6,668,126
                                                                                -------------------   -------------------

Cash and cash equivalents, end of period                                      $          6,829,405 $           7,243,627
                                                                                ===================   ===================

Supplemental disclosures:
Supplemental disclosure of non-cash activities:
    Unrealized (loss) gain on securities available for sale, net of tax       $           (437,434) $         21,587,971
    Receipt of warrants                                                       $          1,101,532 $             148,840
    Reduction in securitized notes payable in
         connection with extraordinary gain                                   $          2,064,157 $                  --
    Accrued litigation settlement offset against other assets                 $          2,205,000 $                  --
Supplemental disclosure of cash flow information:
    Taxes paid                                                                $            458,860  $              6,966
    Cash paid for interest                                                    $          1,580,471 $           1,039,857

<FN>
     See accompanying condensed notes to consolidated financial statements.
</FN>
</TABLE>

                                       3

<PAGE>


                         POINT WEST CAPITAL CORPORATION
                         ------------------------------

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------


1.       General Description
---      -------------------

         The unaudited  consolidated  financial statements of Point West Capital
Corporation ("Point West Capital") and its consolidated entities (the "Company")
as of March 31,  2000 and for the three month  periods  ended March 31, 2000 and
1999 have been  prepared in  accordance  with  accounting  principles  generally
accepted in the United States  ("GAAP") for interim  financial  information,  in
accordance  with Rule 10-01 of Regulation S-X.  Accordingly,  such statements do
not include all of the  information  and notes  thereto that are included in the
annual  consolidated  financial  statements.  In the opinion of management,  all
adjustments  considered  necessary for a fair  presentation  have been included.
Operating  results  for the three  month  period  ended  March 31,  2000 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2000.  The  consolidated  balance sheet as of December 31, 1999 has
been derived from the audited consolidated  financial statements of the Company.
These  statements  and  notes  thereto  should be read in  conjunction  with the
audited  consolidated  financial  statements  and notes thereto  included in the
Company's  Annual Report on Form 10-K for the year ended  December 31, 1999 (the
"Form 10-K").

         Point West  Capital is a  specialty  financial  services  company.  The
Company's  financial   statements   consolidate  the  assets,   liabilities  and
operations  of Point West Venture  Management,  LLC ("Point  West  Management"),
Point West Ventures,  L.P.  ("Point West  Ventures"),  Allegiance  Capital,  LLC
("Allegiance  Capital"),  Allegiance  Funding  I,  LLC  ("Allegiance  Funding"),
Allegiance Capital Trust I ("Allegiance Trust I"),  Allegiance  Management Corp.
("Allegiance  Management"),  Dignity Partners Funding Corp. I ("DPFC") and Point
West Securities,  LLC ("PWS").  References herein to Ventures include Point West
Management  and Point West  Ventures.  References  herein to Allegiance  include
Allegiance  Capital,  Allegiance  Funding,  Allegiance  Trust  I and  Allegiance
Management.

         During 1997,  the Company  expanded  its  financial  services  business
through the  operations  of Ventures,  which makes loans to and invests in small
businesses which are generally focused in the areas of e-commerce,  Internet and
telecommunications;  and  Allegiance,  which  lends  funds to  funeral  home and
cemetery owners.  During 1998, the Company formed PWS, a broker-dealer  licensed
by the National Association of Securities Dealers, Inc ("NASD"). In addition, in
connection with the principal  business activity of the Company through February
1997 (which was to provide viatical settlements for terminally ill persons), the
Company   continues  to  service  the  life  insurance   policies  held  by  its
wholly-owned special purpose subsidiary, DPFC. The Company continually evaluates
new  business  opportunities.  See  "Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations -- Overview."

2.       Investment Securities
--       ---------------------

         Investment securities consist of marketable debt and equity securities.
Statement of Financial  Accounting  Standards  No. 115,  Accounting  for Certain
Investments in Debt and Equity Securities,  requires  marketable debt and equity
securities  to  be  classified  into  held-to-maturity,  available-for-sale  and
trading categories.  Securities classified as available-for-sale are reported in
the  consolidated  balance sheets at fair value with any  cumulative  unrealized
gains and losses,  net of any tax effect,  included in comprehensive  income and
reported  as a  separate  component  of  stockholders'  equity.  Fair  value  is
estimated  by  management  based  on  the  average  closing  bid  prices  of the
securities for the last three trading days of the reporting period, adjusted for
liquidity constraints.  Securities classified as held-to-maturity  included U.S.
Treasury  bills  reported at cost with  original  maturities  greater than three
months,

                                       4
<PAGE>


but less than one year. Cash and cash equivalents  included U.S.  Treasury bills
with maturities less than three months of $5.6 million and $8.3 million at March
31, 2000 and  December 31, 1999,  respectively.  Any realized  gains and losses,
interest  and  dividends  and  unrealized  losses  on  securities  judged  to be
other-than-temporary are reported in the consolidated statements of operations.

         The cost and estimated fair value of investment securities reflected in
the  consolidated  balance sheets as of March 31, 2000 and December 31, 1999 are
as follows:

<TABLE>
<CAPTION>



                                 March 31, 2000
----------------------------------------------------------------------------------------------------------------------

                                                                     Gross               Gross
                                                                   Unrealized          Unrealized            Fair
                                                 Cost               Gains               Losses               Value
                                                 ----               -----               ------               -----
<S>                                          <C>                 <C>                    <C>               <C>

Available-for-sale:
     Corporate bonds.................    $         350,000   $             ---  $         (292,500)   $          57,500
      Common stock...................            3,221,103           3,301,531            (247,388)            6,275,246
                                         ------------------  ------------------  ------------------   ------------------
        Total available-for-sale         $       3,571,103   $       3,301,531  $         (539,888)   $       6,332,746
                                         =================   =================    =================   =================

</TABLE>
<TABLE>
<CAPTION>


                                December 31, 1999
----------------------------------------------------------------------------------------------------------------------

                                                                     Gross               Gross
                                                                   Unrealized          Unrealized             Fair
                                                  Cost               Gains               Losses               Value
                                                  ----               -----               ------               -----
<S>                                          <C>                 <C>                    <C>               <C>

Held-to-maturity:
     U.S. Treasury bills ..............  $       2,504,610   $             ---  $              ---   $       2,504,610
                                         -----------------   -----------------  ------------------   -----------------
          Total held-to-maturity         $       2,504,610   $                  $                    $       2,504,610
                                         =================   =================  ==================   =================



Available-for-sale:
     Corporate bonds.................    $         350,000   $             ---  $        (297,500)   $          52,500
      Common stock...................            2,678,633           4,201,560           (412,872)            6,467,321
                                         ------------------  ------------------  ------------------   ------------------
        Total available-for-sale         $       3,028,633   $       4,201,560  $        (710,372)   $        6,519,821
                                         =================   =================    =================   =================

</TABLE>


         Cumulative  net  unrealized  gains  on  available-for-sale   securities
(representing  differences  between  estimated  fair  value and cost)  were $2.8
million and $3.5 million at March 31, 2000 and  December 31, 1999,  respectively
These cumulative net unrealized  gains, net of applicable taxes, are included in
accumulated   comprehensive  income,  a  separate  balance  sheet  component  of
stockholders' equity. See Note 7.

3.       Loans Receivable
--       ----------------

         Loans  receivable  includes  loans made to  unaffiliated  third parties
through Allegiance and Ventures. Such loans are reported at the principal amount
outstanding,  net of unearned income, hedging gains and losses and the allowance
for loan losses.  Loan origination  fees and direct loan  origination  costs are
netted and  capitalized  and recognized  over the life of the related loan as an
adjustment of yield (interest  income) in accordance with Statement of Financial
Accounting  Standards  No.  91,  Accounting  for  Nonrefundable  Fees and  Costs
Associated  with  Originating  or  Acquiring  Loans and Initial  Direct Costs of
Leases.

         Allegiance had 22 loans  outstanding at March 31, 2000 in the aggregate
principal amount of $34.5 million,  which bore a weighted-average fixed interest
rate per annum of 9.8%. Allegiance had 21

                                       5

<PAGE>


loans  outstanding  at December 31, 1999 in the  aggregate  principal  amount of
$33.8 million,  which bore a  weighted-average  fixed interest rate per annum of
9.8%.  Principal and interest  payments are due monthly on such loans,  and such
loans mature, subject to permitted prepayments, approximately fifteen years from
the initial loan date. At March 31, 2000 and December 31, 1999,  one loan was in
default  and  on  non-accrual  status.  Management  continues  to  believe  that
Allegiance will not incur any loss in connection with the $2.1 million principal
amount of such loan and  therefore,  has not  recorded a reserve  in  connection
therewith.

         From time to time,  Allegiance uses futures  contracts to hedge certain
interest rate  exposure  between the time of loan  origination  and the expected
issuance of term certificates. See Note 5. The futures contracts are intended to
protect a portion of the net interest  margins earned on the loans. Any realized
gain or loss related to these hedges are deferred and  recognized  by Allegiance
over the life of the related loan as an adjustment of interest income.  Pursuant
to Statement of Financial  Accounting  Standards No. 80,  Accounting for Futures
Contracts,  all such deferred amounts are reflected in the consolidated  balance
sheets as an increase  (in the case of a hedging  loss) or decrease (in the case
of a hedging gain) in the carrying  value of loans  receivable.  As of March 31,
2000 and December 31, 1999,  Allegiance had cumulative net realized gains on its
hedging  activities of $215,000 which reduced loans receivable in a like amount.
As of March 31, 2000 and December 31, 1999, Allegiance had no open hedges.

         Ventures had one loan  outstanding  at March 31, 2000 in the  aggregate
principal  amount of $314,000,  which was originated in November 1999. The loan,
which matured and was repaid on April 30, 2000,  bore interest at the prime rate
plus 4% (at March 31,  2000 the prime  rate was  9.0%).  Ventures  had two loans
outstanding  at December  31,  1999 in the  aggregate  principal  amount of $2.6
million, one of which was originated in January 1998. This loan bore interest at
a fixed  interest  rate of 15% and was  repaid in January  2000.  The other loan
matured and was repaid on April 30, 2000.

4.       Purchased Life Insurance Policies
--       ---------------------------------

         Purchased life insurance  policies  consist only of those policies held
by DPFC.  The policies held by DPFC are pledged as security for the  Securitized
Notes (as defined in Note 6). As a result of collection  delays on the policies,
Point West Capital and the holders of the Securitized Notes (the  "Noteholders")
entered into an agreement  (the "DPFC  Agreement")  which amends  certain of the
terms  of the  Securitized  Notes.  Pursuant  to the  DPFC  Agreement,  which is
effective from March 2000 through June 2002, the Noteholders  will provide funds
to pay  servicing  fees,  premiums and certain  other costs of DPFC in the event
policy  collections  are  insufficient.  Under the DPFC  Agreement,  Point  West
Capital will  continue to act as servicer for a reduced fee of $18,000 per month
for the period March 2000 through June 2002.  The DPFC  Agreement  also provides
the  Noteholders  with an option to  purchase  from Point West  Capital the DPFC
outstanding  stock for a nominal amount on June 30, 2002. If the  Noteholders do
not exercise such option, Point West Capital may liquidate DPFC. See Note 6.

5.       Revolving and Term Certificates
--       -------------------------------

         Allegiance  finances its loans receivable under a structured  financing
arrangement established in August 1998 (the "Allegiance  Financing").  Under the
Allegiance  Financing  various  classes of revolving  and term  certificates  of
Allegiance Trust I have been issued. At March 31, 2000,  revolving  certificates
were  outstanding  in the  aggregate  principal  amount  of $4.2  million.  Such
certificates  bear interest at a fixed rate based on the one-year U.S.  Treasury
yield plus a weighted-average spread of 4.7%. The weighted-average interest rate
of the revolving certificates held by third parties at March 31, 2000 was 10.4%.
Allegiance funded and retained an unrated revolving certificate in the principal
amount of $2.2 million. The unrated certificate  represents the right to receive
all  excess  cash  flow  from  Allegiance  Trust

                                       6

<PAGE>


I  related  to the  revolving  certificates.  The other  revolving  certificates
received  ratings from Duff & Phelps Credit  Rating Co.  ranging from A to B. At
March  31,  2000,  the  term  certificates  were  outstanding  in the  aggregate
principal amount of $24.4 million. The  weighted-average  fixed interest rate of
the term  certificates  held by third  parties was 8.1%.  Allegiance  funded and
retained an unrated term  certificate  which  represents  the right to receive a
17.5% coupon subject to other priority payments on the senior  certificates.  At
March  31,  2000,  the  outstanding   principal  balance  of  the  unrated  term
certificate  was $2.6 million.  Allegiance  retained an additional  unrated term
certificate  which  represents  the right to receive 90% of the excess cash flow
from Allegiance Trust I related to the term certificates.  This term certificate
does not have a principal balance. The other term certificates  received ratings
from Duff & Phelps Credit Rating Co. ranging from AA to B.

         In April 2000, the Company and a consortium of insurance companies (the
"Investors")  executed amendments that extended the Allegiance Financing through
December 15, 2000. The Investors  agreed to continue to provide  revolving debt,
subject to certain  limitations,  through December 15, 2000, on terms similar to
those  under  the  original  Allegiance  Financing  revolving  certificates.  In
addition,  the Investors agreed to provide up to approximately  $20.0 million of
additional term financing, subject to certain limitations,  through December 15,
2000, on terms  similar to those under the original  Allegiance  Financing  term
certificates.  The fixed interest on the additional  term  certificates  will be
based on the ten-year U.S.  Treasury  yield plus a spread  ranging from 2.05% to
8.5%.

         The  Allegiance  Financing  does not qualify for sale  treatment  under
Statement of Financial  Accounting  Standards No. 125,  Accounting for Transfers
and Servicing of Financial  Assets and  Extinguishments  of  Liabilities  ("SFAS
125"), because its terms entitle Allegiance Funding to repurchase loans prior to
the point at which the cost of servicing them becomes  burdensome.  As such, the
loans and  borrowings  under  the  Allegiance  Financing  are  reflected  in the
consolidated balance sheets.

         In  connection  with  the  Allegiance   Financing  and  the  extensions
thereunder,  Allegiance Capital paid an aggregate of $375,000 in commitment fees
when funds were  initially  borrowed.  Of such  commitment  fees,  $100,000  was
amortized over the expected life of the initial revolving certificates,  $25,000
is  being  amortized  over  the  expected  life  of the  revolving  certificates
currently  outstanding  (8 months)  and  $250,000  is being  amortized  over the
expected life of the term certificates (15 years).  These allocations were based
on an  estimate  of  the  portion  of the  commitment  fee  attributable  to the
revolving certificates and the term certificates.

         In  connection   with  the  extension  of  the  Allegiance   Financing,
Allegiance  agreed  to pay a  non-usage  fee  ranging  from  zero  to  $100,000,
depending  upon the  amount  of term debt  issued  between  March  31,  2000 and
December 15, 2000.

6.       Securitized Notes Payable
--       -------------------------

         In 1995,  DPFC  issued its Senior  Viatical  Settlement  Notes,  Series
1995-A  with a stated  maturity  of March 10,  2005 (the  "Securitized  Notes").
Principal and interest  payments on and other costs of the Securitized Notes are
payable solely from collections on pledged  policies,  deposited funds and funds
provided by the Noteholders. The Securitized Notes bear a fixed interest rate of
9.17% per annum.  Point West  Capital is the  servicer of the  policies  pledged
under the  Indenture  pursuant  to which the  Securitized  Notes were issued and
incurs servicing  expenses and receives servicing income. See Note 4 for further
information regarding the servicing of DPFC.

         The Securitized  Notes  represent the  obligations  solely of DPFC. The
Company's consolidated financial statements include the assets,  liabilities and
operations  of  DPFC;  however,  the  assets  of DPFC

                                       7

<PAGE>


are not available to pay creditors of Point West Capital. The assets of DPFC are
the  beneficial  ownership  interests in the life  insurance  policies and funds
which secure the Securitized Notes.

         The DPFC Agreement was  negotiated due to the imminent  default of DPFC
under the terms of the Securitized  Notes and accordingly has been accounted for
as a troubled debt  restructuring  pursuant to GAAP.  As such, an  extraordinary
gain of $1.2  million,  net of taxes of  $822,000  was  recorded  and the stated
amount of the  Securitized  Notes of $38.5 million was reduced to $36.4 million,
reflecting the maximum future cash payments the Noteholders  could receive under
the DPFC  Agreement.  The $36.4  million  is equal to the face value of the life
insurance policies and restricted cash held by DPFC as of March 31, 2000.

7.       Stockholders' Equity
--       --------------------

<TABLE>
<CAPTION>


         Changes in  stockholders'  equity during the first three months of 2000
reflected the following:

               <S>                                                                   <C>


         Stockholders'  equity,  beginning  of  period   ..................     $27,542,793
          Comprehensive income:
           Net income......................................................       1,158,328
           Other comprehensive loss:.......................................
             Net unrealized investment losses, net of tax
              of $1.1 million .............................................       (437,434)
                                                                                -----------
               Comprehensive income........................................         720,894
          Common stock -- options exercised ...............................              10
          Additional paid-in-capital -- options exercised .................           2,740
                                                                                -----------
         Stockholders' equity, end of period...............................     $28,266,437
                                                                                ===========

         Changes in  stockholders'  equity during the first three months of 1999
reflected the following:

         Stockholders'  equity,  beginning  of  period   ..................     $14,829,561
          Comprehensive income:
           Net loss .......................................................       (500,024)
           Other comprehensive income: ....................................
             Net unrealized investment gains, net of tax
              of $6.9 million .............................................      21,587,971
               Comprehensive income .......................................      21,087,947
          Common stock -- options exercised ...............................             733
          Additional paid-in-capital -- options exercised .................         516,450
                                                                                -----------
         Stockholders' equity, end of period...............................     $36,434,691
                                                                                ===========

</TABLE>


                                       8

<PAGE>


8.       Earnings Per Share
--       ------------------

         The  weighted-average  number of common  stock  shares  and  additional
common stock equivalent shares used in computing income (loss) per share for the
three months ended March 31, 2000 and 1999 are set forth below. The following is
a  reconciliation  of the  numerator  and  denominator  of basic and diluted net
income (loss) per share:

<TABLE>
<CAPTION>

                                                                             Three Months Ended March 31,
                                                                                  2000          1999
                                                                                  ----          ----
         <S>                                                                  <C>                  <C>



         Numerator:
              Loss before extraordinary gain .......................           $ (83,675)     $ (500,024)
              Extraordinary gain ...................................            1,242,003            ---
                                                                               ----------     -----------
              Net income (loss).....................................           $1,158,328     $ (500,024)
                                                                               ==========     ===========

         Denominator:
              Weighted-average shares ..............................            3,352,261       3,273,628
                                                                               ----------     -----------
              Denominator  for basic net  income  (loss) and basic
               and   diluted   loss  before   extraordinary
               gain calculation.....................................            3,352,261       3,273,628
              Weighted-average effect of dilutive securities:
                   Employee stock options...........................              280,861             ---
                   Warrants.........................................              118,341             ---
                                                                               ----------     -----------

              Denominator    for    diluted    net    income   and
               extraordinary gain calculation.......................            3,751,463       3,273,628
                                                                               ==========     ===========

         Income (loss) per share:
              Basic ................................................
                   Loss before extraordinary gain...................           $  (0.02)      $    (0.15)
                   Extraordinary gain ...............................               0.37              ---
                                                                               ----------     -----------
                   Net income (loss)................................           $    0.35      $    (0.15)
                                                                               ==========     ===========
              Diluted...............................................
                   Loss before extraordinary gain...................           $  (0.02)      $    (0.15)
                   Extraordinary gain...............................                0.33              ---
                                                                               ----------     -----------
                   Net income (loss) ...............................           $    0.31      $    (0.15)
                                                                               ==========     ===========

</TABLE>


         Options  outstanding  during  the  first  quarter  of 2000 to  purchase
approximately 40,000 shares of common stock were not included in the computation
of diluted  income per share  because  the  exercise  price of the  options  was
greater  than the average  market  price of the common  stock during the quarter
and,  therefore,  would be  anti-dilutive.  As a result  of the net loss for the
three months ended March 31, 1999, options and warrants  outstanding during this
quarter were not included in the  computation  of diluted loss per share because
of the anti-dilutive effect.

9.       Segment Reporting
--       -----------------

         Statement of Financial  Accounting Standards No. 131, Disclosures about
Segments of an Enterprise  and Related  Information,  establishes  standards for
reporting  information about operating  segments in annual financial  statements
and requires selected  information about operating segments in interim financial
reports.  Operating  segments are defined as components  of an enterprise  about
which separate financial information is available that is evaluated regularly by
the chief operating decision maker, or decision making group, in deciding how to
allocate  resources and in assessing  performance.

                                       9


<PAGE>

Point West Capital's chief  operating  decision making group is comprised of the
Chairman of the Board, the President and the Chief Financial Officer.

         The  Company's   reportable   operating   segments  include   Ventures,
Allegiance  and Viatical  Settlements.  The Other  segment  includes  Point West
Capital and PWS. The accounting  policies of the operating segments are the same
as those described in the summary of significant accounting policies in the Form
10-K.

         The following tables represent the Company's  results from segments for
the three months ended March 31, 2000 and 1999.
<TABLE>
<CAPTION>


                                                    Three Months Ended March 31, 2000
                            ----------------------------------------------------------------------------------------

<S>                              <C>              <C>               <C>                  <C>                 <C>
                                                                     Viatical
                                                                     --------
                                  Ventures         Allegiance       Settlements(1)         Other             Total
                                  ---------       -----------       -------------          -----             -----
Interest income......           $ 1,303,135       $    822,762       $      6,818      $    82,469       $  2,215,184
Net gain on
securities   .........              418,271                 --                 --               --            418,271
Other income .........              (1,701)              3,188             18,836           12,642             32,965
                                -----------       ------------      -------------      -----------       ------------
Total income .........            1,719,705            825,950             25,654           95,111          2,666,420
Interest expense......               51,907            607,353            588,850               --          1,248,110
Depreciation &
   amortization.......               10,000             52,228                 --            3,089             65,317
Income   tax   benefit
   (expense) (2)......                   --              (570)                 --           53,219             52,649
Extraordinary gain....                   --                 --          1,242,003               --          1,242,003
Contributed net income
   (loss) (2).........            1,657,564          (312,807)            545,368        (731,797)          1,158,328
Identifiable assets...           26,583,112        35,716,699          31,794,138        3,425,028         97,518,977

</TABLE>


<TABLE>
<CAPTION>


                                                    Three Months Ended March 31, 1999
                            ----------------------------------------------------------------------------------------

<S>                              <C>              <C>               <C>                  <C>                 <C>
                                                                     Viatical
                                                                     --------
                                  Ventures         Allegiance       Settlements(1)         Other             Total
                                  ---------       -----------       -------------          -----             -----
Interest income......           $   187,400       $    221,422       $     27,603     $     54,567       $    490,992
Net gain on
securities   .........              650,898                 --                 --          317,450            968,348
Other income .........                   --                 --             69,589           73,166            142,755
                                -----------       ------------      -------------      -----------       ------------
Total income .........              838,298            221,422             97,192          445,183          1,602,095
Interest expense......               51,337            108,421            883,275               --          1,043,033
Depreciation &
   amortization.......                7,500             57,463             58,720            1,798            125,481
Income   tax  expense
  (2)......                              --             (4,800)                --               --             (4,800)
Contributed net income
   (loss) (2).........              779,389           (103,632)          (997,127)        (178,654)          (500,024)
Identifiable assets...           37,225,397         17,571,849         35,968,455        6,244,270         97,009,971


<FN>

--
(1)  The  Viatical   Settlements  segment  includes  results  of  operations  in
     connection with viatical settlements for DPFC and Point West.
(2)  Corporate  overhead  and income tax  expense  are not  generally  allocated
     between segments and are included in the Other segment.

</FN>
</TABLE>

                                       10

<PAGE>


10.      Subsequent Event
---      ----------------

         In May 2000,  the Company  agreed to provide up to $1.8 million to fund
exploratory  research and test marketing for a newly formed entity which will be
51% owned by the Company and plans to offer a new type of financial product. The
Company has the option to provide up to an  additional  $4.4 million of funding.
If the  Company  does not  provide the  additional  funding,  its equity will be
reduced to 16% to 25%, depending upon the amount, if any, of capital the Company
provides in addition to the $1.8 million.








                                       11

<PAGE>

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

         The  following  is  a  discussion  and  analysis  of  the  consolidated
financial  condition of the Company as of March 31, 2000,  and of the results of
operations  for the Company for the three  months ended March 31, 2000 and 1999,
and of  certain  factors  that may affect the  Company's  prospective  financial
condition and results of operations. The following should be read in conjunction
with the unaudited consolidated financial statements and related notes appearing
elsewhere herein.

Overview
--------

         Point West  Capital is a  specialty  financial  services  company.  The
Company's  financial   statements   consolidate  the  assets,   liabilities  and
operations  of  Ventures,  Allegiance,  DPFC  and  PWS.  See the  Form  10-K and
Condensed  Notes to Consolidated  Financial  Statements  (contained  herein) for
further information regarding these entities.

         During 1997,  the Company  expanded  its  financial  services  business
through the  operations  of Ventures,  which makes loans to and invests in small
businesses which are generally focused in the areas of e-commerce,  Internet and
telecommunications;  and  Allegiance,  which  lends  funds to  funeral  home and
cemetery owners.  During 1998, the Company formed PWS, a broker-dealer  licensed
by the NASD. In addition,  in connection with the principal business activity of
the Company through February 1997 (which was to provide viatical settlements for
terminally  ill persons),  the Company  continues to service the life  insurance
policies held by its wholly-owned  special purpose subsidiary,  DPFC. See Note 4
of the Condensed Notes to Consolidated  Financial Statements.  See the Form 10-K
for further  information  regarding  the  Company's  former  principal  business
activity.

         Information  regarding  the  revenues,  contributed  income  (loss) and
identifiable  assets for each of the Company's business segments is contained in
Note 9 of the Condensed Notes to Consolidated Financial Statements.

         The Company  continues to evaluate new business  opportunities.  In May
2000,  the  Company  agreed to  provide up to $1.8  million to fund  exploratory
research and test marketing for a newly formed entity which will be 51% owned by
the Company and plans to offer a new type of financial product.  The Company has
the option to provide  up to an  additional  $4.4  million  of  funding.  If the
Company does not provide the additional  funding,  its equity will be reduced to
16% to 25%,  depending upon the amount,  if any, of capital the Company provides
in addition to the $1.8 million.  Ventures,  Allegiance and PWS,  whose business
activities  are  described  below,  may or may not be indicative of the types of
business  opportunities the Company will continue to pursue. No assurance can be
given that the Company will be successful  in becoming a  broad-based  specialty
financial  services company or that any such enterprise will be successful.  The
Company is seeking advice from  financial  advisors to assist it in its strategy
of developing or acquiring new operating  businesses.  See "Considerations Under
the Investment Company Act of 1940."

Results of Operations for the Company
-------------------------------------

         Total Income.  Total income  increased 68.8% to $2.7 million during the
three  months  ended March 31, 2000 from $1.6  million  during the three  months
ended  March 31,  1999,  primarily  due to a $1.7  million  increase in interest
income  related to an increase in loans held by Allegiance  and debt  securities
held by Ventures.  Offsetting  the increase  during the three months ended March
31, 2000 were a $550,000 decline in net gain on securities and a $71,000 decline
in income related to the Viatical Settlement segment. See "Results of Operations
by Segment -- Viatical Settlements -- Certain Accounting

                                       12

<PAGE>


Implications  for DPFC." Also,  the three months ended March 31, 1999,  included
$66,000 of  investment  banking  fees related to PWS.  There were no  investment
banking fees in the 2000 period.

         Total Expenses.  Total expenses  increased 33.3% to $2.8 million during
the three months ended March 31, 2000 from $2.1 million  during the three months
ended March 31, 1999. This increase was primarily due to (i) a $288,000 increase
in other general and  administrative  expenses  primarily related to Allegiance,
(ii) a $272,000  increase in  compensation  and benefits due primarily to salary
increases and secondarily to additional  employees and (iii) a $205,000 increase
in interest expense related to borrowings by Allegiance.

         Extraordinary Gain. Under GAAP, a gain on a troubled debt restructuring
is an extraordinary  item. The Company  recognized an extraordinary  gain in the
amount of $1.2  million,  net of income taxes in the amount of $822,000,  during
the three  months  ended March 31, 2000 in  connection  with the DPFC  Agreement
described  in Notes 4 and 6 of the  Condensed  Notes to  Consolidated  Financial
Statements.  As a  result  of  the  DPFC  Agreement,  the  Company  reduced  the
outstanding  principal  amount  of the  Securitized  Notes  on the  consolidated
balance  sheet as of March 31, 2000 by $2.1 million to $36.4  million  (which is
equal to the face value of the life insurance  policies and restricted cash held
by DPFC as of that date) and recognized income in a like amount. See "Results of
Operations by Segment -- Viatical Settlements -- Certain Accounting Implications
for DPFC."

Results of Operations by Segment
--------------------------------

     Ventures
     --------

         Accounting Considerations

         Beginning in 1999,  because of the  volatility of Internet and Internet
related  stocks,  Point West Capital  shorted  stocks of certain  competitors of
FlashNet (one of the  investments  held by Ventures),  so as to partially  hedge
Ventures'  holdings in  FlashNet.  The effect of those  hedging  activities  are
reflected in the Company's consolidated statement of operations during the three
months ended March 31, 1999. At March 31, 2000 no such hedges were in place. The
Company  recognized a $317,000 gain in connection  with such hedging  activities
during the first quarter of 1999. See "Item 3 --  Quantitative  and  Qualitative
Disclosures About Market Risk."

         At  March  31,  2000 and  December  31,  1999,  the  Company  evaluated
Ventures' outstanding loans and determined that an allowance for loan losses was
not necessary.  As Ventures' loan portfolio grows or upon subsequent evaluation,
the Company will provide for allowances for loan losses to the extent considered
necessary.  See  Note  3  of  the  Condensed  Notes  to  Consolidated  Financial
Statements.

         Three Months Ended March 31, 2000 Compared to the Three Months Ended
March 31, 1999

         Interest  Income.  Interest income increased to $1.3 million during the
three  months ended March 31, 2000 from  $187,000  during the three months ended
March 31,  1999.  This  increase was  primarily  due to $1.1 million of interest
income  recognized in the first quarter of 2000 as a result of a warrant (valued
using the Black-Scholes option-pricing model) received in connection with one of
Ventures' debt securities.

         Net  Gain on  Securities.  Net  gain on  securities  declined  35.8% to
$418,000  during the three months ended March 31, 2000 from $651,000  during the
three  months  ended March 31,  1999,  due to the  write-off of one of Ventures'
investments.  Ventures  determined that a $750,000  investment in non-marketable
securities  of one  company  was  impaired  at March  31,  2000,  and  therefore
wrote-off the entire

                                       13

<PAGE>


$750,000  carrying value of such investment  during the three months ended March
31, 2000.  Offsetting this decline was an aggregate $517,000 increase in gain on
securities sold.

     Allegiance
     ----------

         Lending Activity

         In connection with the Allegiance Financing,  Point West Capital agreed
to provide additional cash to Allegiance Trust I in the event that monthly LIBOR
interest rates exceed 6.16%. To date Point West Capital has not been required to
make any such  payments.  The amount of cash,  if any, to be provided  will be a
function of several variables  including the monthly LIBOR interest rate and the
outstanding balance of one of the Allegiance Financing revolving certificates.

         For information  regarding  accounting for the loans held by Allegiance
and the Allegiance Financing and loan levels, see Notes 3 and 5 of the Condensed
Notes to Consolidated Financial Statements.

         Three Months Ended March 31, 2000 Compared to the Three Months Ended
March 31, 1999

         Interest Income. Interest income increased to $823,000 during the three
months  ended March 31, 2000 from  $221,000  during the three months ended March
31, 1999 due to increased lending activity by Allegiance.  The  weighted-average
interest  rate earned on the loans  outstanding  during the three  months  ended
March 31, 2000 was 9.2% compared to 9.3% during the three months ended March 31,
1999. The  weighted-average  interest rate for the 2000 period was lower because
one loan in the amount of $2.1 million was delinquent and on non-accrual status.
If this delinquent loan were excluded from the calculation, the weighted-average
interest rate for the 2000 period would have been 9.8%.  Management continues to
believe  that  Allegiance  will not incur any loss in  connection  with the $2.1
million principal amount of such loan and therefore,  has not recorded a reserve
in connection therewith.

         Interest  Expense.  Interest  expense  increased to $607,000 during the
three  months ended March 31, 2000 from  $108,000  during the three months ended
March  31,  1999 as a  result  of  increased  borrowings  under  the  Allegiance
Financing.  During the three months ended March 31, 2000,  the  weighted-average
interest rate under the Allegiance  Financing was 8.4% and the  weighted-average
borrowings were $28.6 million compared to the weighted-average  interest rate of
8.2% and  weighted-average  borrowings  of $5.4 million  during the three months
ended March 31, 1999.

         Compensation and Benefits.  Compensation and benefits increased $68,000
to $123,000 during the three months ended March 31, 2000 from $55,000 during the
three months ended March 31, 1999.  This  increase  resulted  from the hiring of
additional  employees in the second half of 1999 to support Allegiance's lending
activities.

         Other   General  and   Administrative   Expenses.   Other  general  and
administrative  expenses  increased $256,000 to $355,000 during the three months
ended March 31, 2000 from $99,000  during the three months ended March 31, 1999.
This  increase  was due  primarily to (i) a $124,000  increase in general  legal
expense,  (ii) $57,000 in  professional  fees related to the delinquent loan and
(iii) $40,000 in fees related to due diligence  for a potential  loan  portfolio
acquisition.

         Amortization.  Amortization  costs declined  slightly  during the three
months  ended March 31,  2000.  The three  months  ended March 31, 1999  reflect
financing costs associated with the original  revolving  certificates  under the
Allegiance Financing which were fully amortized by September 1999.

                                       14

<PAGE>


     Viatical Settlements
     --------------------

         The Viatical  Settlements  segment  includes  results of  operations in
connection with viatical settlements for DPFC and Point West Capital.

         As a  result  of  the  Company's  decision  in  1996  to  sell  all  or
substantially all of its assets,  the Company  established a reserve for loss on
sale of assets during 1996. This reserve is reevaluated  quarterly.  The reserve
for loss on sale of assets was  $132,000 as of March 31, 2000 and  December  31,
1999. From June 30, 1996 through the effective date of the DPFC  Agreement,  the
Company recognized income with respect to its viatical  settlement business upon
receipt of proceeds on  policies  (either  pursuant to sale of the policy or the
death of the  insured).  The  income  is equal to the  difference  between  such
proceeds  (less  any  back-end  sourcing  fees) and the  carrying  value of such
policies  after  giving  effect  to any  reserve  for  loss on the  sale of such
policies.

         Certain Accounting Implications for DPFC

         In March 2000,  the Company and the  Noteholders  entered into the DPFC
Agreement pursuant to which the Noteholders, through June 30, 2002, will provide
funds to pay  servicing  fees,  premiums and certain  other costs of DPFC in the
event policy collections are insufficient.  Under the DPFC Agreement, Point West
Capital will  continue to act as servicer for a reduced fee of $18,000 per month
for the period March 2000 through June 2002.  The DPFC  Agreement  also provides
the  Noteholders  with an option to  purchase  from Point West  Capital the DPFC
outstanding  stock for a nominal amount on June 30, 2002. If the  Noteholders do
not exercise such option, Point West Capital may liquidate DPFC. "See Results of
Operations for the Company -- Extraordinary Gain."

         As a result of the DPFC  Agreement,  pursuant to GAAP, the Company will
not  recognize  any future  gain or loss  related to DPFC until the  Noteholders
purchase the DPFC stock or DPFC is  liquidated  pursuant to the DPFC  Agreement.
The Company expects to recognize a pre-tax gain in an amount approximately equal
to the $4.6 million accumulated deficit of DPFC upon the occurrence of either of
these  events.  Additionally,  when  the  DPFC  stock  is  purchased  or DPFC is
liquidated,  the Company will have income tax liability associated with the gain
from debt  forgiveness.  The  Company  may be able to utilize  the  carryforward
losses from DPFC to offset such liability,  unless the carryforward  losses have
been  previously  utilized.  The Company  will  recognize  the  $18,000  monthly
servicing  fee paid to Point West  Capital as other  income in the  consolidated
statement of operations from March 2000 through June 2002.

         The Securitized  Notes represent the obligations  solely of DPFC. Point
West Capital did not  guarantee  repayment of the  Securitized  Notes and is not
required to fund any cash flow deficiencies thereunder.

         Three Months Ended March 31, 2000 Compared to the Three Months Ended
March 31, 1999

         Interest  Income.  Interest  income declined 75.0% to $7,000 during the
three  months  ended March 31, 2000 from  $28,000  during the three months ended
March 31, 1999, as a result of lower cash balances  attributable to DPFC and the
DPFC  Agreement.  DPFC did not  recognize  any interest  income for the month of
March 2000 and will not recognize any interest income in any future period.  See
"Certain Accounting Implications for DPFC."

         Earned Discounts on Matured Policies. DPFC did not recognize any earned
discounts on matured policies for the three months ended March 31, 2000 and will
not recognize any earned discounts in any future period. See "Certain Accounting
Implications  for DPFC." Earned  discounts on matured

                                       15
<PAGE>

polices was $61,000  during the three months  ended March 31,  1999.  During the
three months ended March 31, 2000,  nine  policies  matured with a face value of
$204,000, compared to 12 policies with a face value of $834,000 during the three
months ended March 31, 1999. As of March 31, 2000, the Company held 456 policies
with an  aggregate  carrying  value  of $31.6  million  (comprised  of  "matured
policies  receivable,"  "purchased  life  insurance  policies"  and a portion of
"other  assets")  and an  aggregate  face  value  of $36.8  million.  All of the
"matured  policies  receivable"  and  "purchased  life  insurance  policies" are
pledged as security for the Securitized Notes.

         Interest  Expense.  Interest  expense declined 33.3% to $589,000 during
the three  months  ended March 31, 2000 from  $883,000  during the three  months
ended March 31, 1999 because DPFC did not  recognize  any interest for the month
of March 2000. As a result of the DPFC  Agreement,  pursuant to GAAP,  DPFC will
not recognize any interest related to the Securitized Notes in any future period
(approximately  $900,000 per quarter). See "Certain Accounting  Implications for
DPFC."

         Other   General  and   Administrative   Expenses.   Other  general  and
administrative expenses declined 12.5% to $133,000 during the three months ended
March 31, 2000 from  $152,000  during the three months ended March 31, 1999 as a
result  of  the  DPFC  Agreement.   DPFC  did  not  recognize  any  general  and
administrative  expenses for the month of March 2000 and will not  recognize any
general  and  administrative   expenses  in  any  future  period.  See  "Certain
Accounting Implications for DPFC."

         Amortization.  There was no  amortization  expense for the three months
ended March 31, 2000  because the  financing  costs  related to the  Securitized
Notes were fully  amortized by December 31, 1999. The  amortization  expense for
the three months ended March 31, 1999 was $59,000.

     Other
     -----

         The Other segment includes operating results for Point West Capital and
PWS.  Except for  compensation  and benefit  expenses  clearly  attributable  to
Allegiance, corporate overhead is included in the Other segment and has not been
allocated.  Activities  for PWS were  immaterial  during the three  months ended
March 31, 2000 and 1999.

         Three Months Ended March 31, 2000 Compared to the Three Months Ended
March 31, 1999

         Interest Income.  Interest income increased to $82,000 during the three
months ended March 31, 2000 from $55,000 during the three months ended March 31,
1999, primarily due to an increase in interest earned on cash balances.

         Net Gain on Securities.  Point West Capital  recognized a $317,000 gain
during  the  three  months  ended  March 31,  1999 in  connection  with  hedging
activities  of  Internet-related   stocks.  See  "Item  3  --  Quantitative  and
Qualitative  Disclosures  About Market  Risk." There were no hedging  activities
during the three months ended March 31, 2000.

         Other Income.  Other income declined to $13,000 during the three months
ended March 31, 2000 from $73,000  during the three months ended March 31, 1999.
The three months ended March 31, 1999  included  $66,000 in  investment  banking
fees received by PWS. The amount and timing of these  services in future periods
cannot be predicted because of the limited operating history of PWS.

         Compensation and Benefits. Compensation and benefits increased 69.9% to
$496,000  during the three months ended March 31, 2000 from $292,000  during the
three  months  ended March 31,  1999.  This  increase  was due  primarily  to an
increase in salaries for existing employees in 2000. In addition,  this increase
resulted from the hiring of additional employees in the second half of 1999.

                                       16

<PAGE>


         Other   General  and   Administrative   Expenses.   Other  general  and
administrative  expenses  increased  15.5% to $381,000  during the three  months
ended March 31, 2000 from $330,000 during the three months ended March 31, 1999.
This increase was due to (i) a $82,000 increase in general legal expenses,  (ii)
$70,000  in  professional  fees  related  to  the  analysis  of a  new  business
opportunity  and  (iii) a  $22,000  increase  in rent  expense.  Offsetting  the
increase during the three months ended March 31, 2000 was a $135,000  decline in
litigation  expense.  The federal  class action and state  alleged  class action
lawsuits  were  settled in the first  quarter  of 2000,  and,  as a result,  the
Company  expects  legal  expenses to decline  substantially  in 2000 relative to
1999.  During the second quarter of 1999,  the Company  renewed the lease on its
current  space.  The Company's  monthly rent  increased from $5,240 per month to
approximately $15,000 per month.

Liquidity and Capital Resources
-------------------------------

     Point West Capital and PWS

         At present,  neither Point West Capital nor PWS has an external funding
source from which to fund its  working  capital  and  general  corporate  needs.
During  the three  months  ended  March 31,  2000,  the  Company  supported  the
operations of Point West Capital and PWS primarily  from existing cash balances.
In prior  periods,  the Company  generated cash primarily from sales proceeds of
investment securities and life insurance policies.  The Company used the cash to
grow its  businesses.  At March 31,  2000,  Point West Capital and PWS' cash and
cash equivalents were $2.0 million. The Company continues to analyze its current
and future  needs for  financing,  which  will be  dependent  on its  ability to
develop the  businesses of Ventures,  Allegiance and PWS, and any other business
opportunities  the Company  pursues.  See  "Considerations  Under the Investment
Company Act of 1940."  Assuming  the  Company  determines  additional  funds are
needed,  there  can be no  assurance  that  Point  West  Capital  or PWS will be
successful in obtaining external financing on satisfactory terms. The Company at
present anticipates having sufficient  liquidity to meet the working capital and
operational needs of Point West Capital and PWS through December 31, 2000, using
current cash and cash equivalents,  proceeds from sales of investment securities
and distributions from Ventures.

     Ventures

         Ventures'   activities   have   generally  been  supported  by  capital
contributions  from Point West Capital,  by the sale of  investments,  by a loan
from the SBA and the  repayment  by  obligors of loans.  Point West  Capital has
contributed  $5.8 million to Ventures  since  inception.  During 1999,  Ventures
generated $21.3 million of cash proceeds (net of  commissions)  from the sale of
securities and repayment of loans. During the three months ended March 31, 2000,
Ventures  generated $4.0 million of cash proceeds (net of commissions)  from the
sale of securities and repayment of loans. At March 31, 2000, Ventures' cash and
cash equivalents were $4.6 million.

         Point West Ventures has an SBA debenture license and, therefore, may be
permitted,  based on capital  contributions  by Point West  Capital and realized
gains on the sale of  securities,  to borrow up to $16.6  million  from the SBA,
subject to complying with SBA requirements.  Any borrowings bear interest at the
rate for ten year debentures issued by Small Business  Investment  Companies and
funded  through public  certificates  bearing the SBA's  guarantee.  Interest is
payable semi-annually.  In addition, there is a leverage and underwriting fee of
3.5% and a fee of 1% per annum on the outstanding  amount of debt. In July 1998,
Point West  Ventures  borrowed  $3.0  million from the SBA and during the second
quarter of 2000 expects to borrow at least an additional $3.5 million.

         Ventures may not have sufficient liquidity, at least in the short term,
to grow its  business.  In  addition,  because of  substantial  appreciation  in
investments, the Company may be required to restrict

                                       17

<PAGE>


Ventures' growth or dispose of investments in order to avoid  registration under
the  Investment   Company  Act  of  1940  at  some  time  in  the  future.   See
"Considerations Under the Investment Company Act of 1940."

     Allegiance

         As of March 31, 2000,  Point West Capital had invested  $7.5 million in
Allegiance  Capital.   In  August  1998,   Allegiance  arranged  the  Allegiance
Financing.  The Company  expects  that the  Allegiance  Financing  will  provide
sufficient  funds to support  Allegiance's  current level of lending  activities
through  December 15, 2000.  See Note 5 of the Condensed  Notes to  Consolidated
Financial  Statements.  Allegiance is attempting to acquire a portfolio of loans
with an outstanding  principal amount in excess of $125 million. The acquisition
is dependent on Allegiance obtaining an external financing source.

     DPFC

         DPFC operations are in run-off.  Point West Capital,  as servicer under
the Securitized Notes,  performs  monitoring and collection  activities for DPFC
and incurs  administrative  costs associated with these  activities.  Point West
Capital is reimbursed for these costs subject to priority  provisions  contained
in  the  Indenture.   Principal,  interest  payments  and  other  costs  on  the
Securitized  Notes are payable solely from  collections  on policies  pledged to
secure the payment  thereof and do not require Point West Capital to expend cash
or obtain financing to satisfy such obligations.

Considerations Under the Investment Company Act of 1940
-------------------------------------------------------

         The  Investment  Company  Act  of  1940  (the  "1940  Act")  creates  a
comprehensive  regulatory framework applicable generally to investment companies
(i.e., companies engaged primarily in the business of investing,  reinvesting or
trading in securities  within the meaning of the 1940 Act,  whether or not those
companies intend to be engaged  primarily in such business).  Companies that are
subject to the 1940 Act must register  with the SEC as investment  companies and
upon registration become subject to extensive regulation.  The Company believes,
based on its current activities and the nature of its assets, that it should not
be deemed to be an investment company because it is not engaged primarily in the
business of investing,  reinvesting or trading in securities  within the meaning
of the 1940 Act, and the rules of the SEC promulgated  thereunder,  and does not
hold itself out as an investment company.

         There are also various  percentage of assets and income tests and other
subjective  tests  under the 1940 Act and  related  rules that are  relevant  in
considering whether a company is deemed to be an investment company.


                                       18
<PAGE>


         Although  the  Company  believes  that it should not be deemed to be an
investment  company,  it is possible that it could become one in the near future
as a result of the following:

         *        Allegiance has not grown its commercial lending business as
                  quickly as the Company had expected;

         *        The  Company  has been  unable to  commence  or acquire  other
                  complementary  financial services  businesses as rapidly as it
                  had hoped;

         *        The  success  of  Ventures,  which  holds  a  number  of
                  investment  securities,   has  exceeded expectations; and

         *        The success of other investments by the Company has exceeded
                  expectations.

         The  majority of  investment  securities  held by the Company have been
acquired  since  January  1998.  The aggregate  value of these  investments  has
increased  substantially  since the purchase  dates and the Company has realized
substantial  gains in  connection  with the sales of some of these  investments.
During 1999,  Ventures  sold some of its  investments  in part to address  these
issues.  The  proceeds  of these  sales have been  invested  in U.S.  Government
securities  pending  final  use,  which  has  included  further  investments  by
Ventures.

         The Company intends to pursue an aggressive  strategy to ensure that it
is not deemed to be an  investment  company.  Some  elements  of this  strategy,
however,  may at  least  in the  short  term  materially  adversely  affect  the
Company's financial condition or results of operations, or both. The elements of
this strategy, which are subject to the risks described below involve:

         *    Pursuing the growth of new operating businesses, by acquisition or
              internal development;

         *    Continuing to develop Allegiance's commercial lending business;
              and

         *    Continuing to dispose of investment  securities and/or restricting
              the growth of Ventures' business.  Although the Company intends to
              continue  Ventures'  investment  activities,  the Company does not
              intend to contribute more capital to Ventures.

Growth of New Operating Businesses

         The Company continues to seek advice from financial  advisors to assist
it in its strategy of developing or acquiring new operating  businesses  that do
not  involve  investment  securities.  Although  the  Company  intends to pursue
businesses which are  complementary to the Company's current  businesses,  these
businesses may not necessarily involve financial services. These businesses will
be operating  entities which do not own, trade or hold any significant amount of
investment  securities.  The Company  may not find any  suitable  businesses  to
acquire or develop on terms acceptable to the Company. In addition,  the Company
may not be able to successfully  integrate the operations of any new businesses.
Finally,  any new  businesses  may not  contribute  positively  to the Company's
financial condition or results of operations.

Continuing the Growth of Allegiance

         The  Company  will use all  reasonable  efforts to continue to grow the
commercial lending business of Allegiance.  However, the growth of Allegiance is
dependent on the market's  acceptance  of the product

                                       19
<PAGE>


offerings and services of Allegiance,  Allegiance's  continued  ability to raise
financing for its activities, Allegiance's ability to find suitable creditworthy
borrowers and competitive pressures in the lending industry.

Disposing of Investment Securities/Limiting Growth of Ventures

         The Company may determine that it must dispose of additional investment
securities to avoid being deemed to be an investment  company.  The dispositions
may  occur at times and on terms  that  would  not  maximize  the value of these
investments.  Given the volatile nature of the market,  and, in some cases, lack
of a  market,  for some of these  investments,  sales  could  occur at  severely
depressed  prices. In addition,  the dispositions may result in  disadvantageous
tax consequences. The Company intends to use any proceeds of any additional sale
to support its working  capital  (including  further  investments  by Ventures).
Pending final use,  proceeds of any  additional  sale will likely be invested in
U.S. Government securities.

         The Company  also  currently  intends to limit the growth of  Ventures'
business.   Although  Ventures  intends  to  continue  investing  in  investment
securities,  the Company does not intend to contribute more capital to Ventures.
Limiting  Ventures' growth may materially  adversely affect the Company's future
financial condition and results of operations.

Forward Looking Statements
--------------------------

         This report includes forward looking  statements  within the meaning of
the Private Securities Litigation Reform Act of 1995. All statements made herein
which are not based on historical  facts are forward  looking and,  accordingly,
involve  risks and  uncertainties  that  could  cause  actual  results to differ
materially from those discussed.  Such forward looking  statements include those
under  "Management's  Discussion and Analysis of Financial Condition and Results
of Operations"  relating to (i) the ability of Allegiance to avail itself of the
benefits of the extension of the Allegiance Financing, (ii) no incurrence of any
loss and  potential  foreclosure  and  liquidation  of one of the loans  made by
Allegiance,  (iii) sufficiency of the Company's  liquidity and capital resources
(see "Liquidity and Capital Resources"),  (iv) the Company's ability to continue
not  being  subject  to  registration  and  regulation  under  the 1940 Act (see
"Considerations  Under the  Investment  Company  Act of 1940"),  (v)  amounts of
additional cash to be contributed to Allegiance  Trust I and (vi) the ability of
Point West Ventures to borrow funds from the SBA. Such  statements  are based on
management's  belief,  judgment and analysis as well as assumptions  made by and
information  available  to  management  at the date  hereof.  In addition to any
assumptions  and cautionary  factors  referred to specifically in this report in
connection with such forward looking statements, factors that could cause actual
results to differ  materially  from those  contemplated  by the forward  looking
statements include (i) Allegiance's ability to originate a sufficient number and
amount of loans that qualify for securitization under the Allegiance  Financing,
(ii)  Allegiance's  ability to foreclose on the  collateral  at a price at least
equal to the amount of debt  (including  foreclosure  fees and expenses) of such
loan and the outcome of the pending  counterclaim  filed in connection  with the
foreclosure  action,  (iii)  the  results  of  the  Company's  consideration  of
strategic  options  and  any  costs  associated  with  a  chosen  option,   (iv)
availability   and  cost  of   capital,   (v)  the   factors   described   under
"Considerations Under the Investment Company Act of 1940," (vi) increases in the
LIBOR  rate and  future  amounts  outstanding  under  the  Class  A-R  revolving
certificates  and (vii) Point West  Venture's  ability to originate a sufficient
amount of investments that qualify for financing under the SBA regulations.


                                       20
<PAGE>


ITEM 3--QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------

         Market  risk  refers  to the risk  that a change in the level of one or
more market prices,  interest rates, or other market factors, such as liquidity,
will  result in losses for a  specified  position or  portfolio.  The  Company's
exposure to market risk arises  primarily from the Company's  investments in the
stock of public and  private  companies,  fixed rate loans and debt  investments
made by  Allegiance  and  Ventures  and  Allegiance's  variable  rate debt.  The
Company's   management  believes  the  Company's  risk  management  and  hedging
practices result in carefully managed market exposure.

         The Company has investment  holdings in various  companies.  Due to the
varying nature of these investments, it is difficult to correlate the effects of
the market to a particular  market index. The effects of the market are reviewed
by management on an individual investment-by-investment basis.

         During  1999 the  Company  hedged  a  position  it held in an  Internet
service  provider and realized a $317,000 gain in  connection  with such hedging
activity.  At March 31, 2000 no hedges were in place.  However,  the Company may
hedge certain positions in the future.

         The table below  represents  principal cash flows and  weighted-average
interest rates for the Allegiance loans outstanding at March 31, 2000:

<TABLE>
<CAPTION>


                                 2000          2001           2002           2003           2004         Thereafter
                                 ----          ----           ----           ----           ----         ----------
<S>                               <C>           <C>             <C>           <C>             <C>            <C>



Fixed rate loans (1)(2)      $  572,925    $   878,004    $  967,541     $1,066,238     $1,175,035     $27,812,316
Average interest
     rates (1)                   9.8%          9.8%           9.8%           9.8%           9.8%            9.8%
<FN>

--
(1)  The principal  cash flows for fixed rate loans and average  interest  rates
     do not include one  delinquent
     loan.
(2)  The Company  intends to hedge its  interest  rate  exposure  related to the
     future  loans  made by  Allegiance  because  the  interest  rate  at  which
     Allegiance  anticipates  issuing term  certificates  in connection with the
     extension  of the  Allegiance  Financing  will be set in the future at some
     point.  Allegiance  intends to utilize  futures  contracts to hedge certain
     interest rate exposure between the time of origination of the loans and the
     expected issuance of such term certificates.
</FN>
</TABLE>


         In connection  with the extension of the  Allegiance  Financing,  Point
West Capital  agreed to provide  additional  cash to  Allegiance  Trust I in the
event that monthly LIBOR interest rates exceed 6.16%. To date Point West Capital
has not been required to make any such payments.  The amount of cash, if any, to
be provided will be a function of several variables  including the monthly LIBOR
interest rate and the  outstanding  balance of one of the  Allegiance  Financing
revolving certificates.


                                       21

<PAGE>

PART II.  OTHER INFORMATION
---------------------------

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

         There have been no new material  developments  in connection with legal
         proceedings.  See the Form 10-K for further information regarding legal
         proceedings.

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

         (a)      Exhibits:
                  Number          Description
                  ------          ------------


                     10.1        Amended  and  Restated  Indenture,  dated as of
                                 March  31,  2000,   among  Point  West  Capital
                                 Corporation,  Dignity  Partners Funding Corp. I
                                 and  Bankers  Trust  Company  (Incorporated  by
                                 reference to Exhibit 99.2 of the Company's Form
                                 8-K filed on April 19, 2000).

                     10.2        Amended  and  Restated  Contribution,  Sale and
                                 Servicing  Agreement,  dated  as of  March  31,
                                 2000,  among  Point West  Capital  Corporation,
                                 Dignity  Partners  Funding  Corp. I and Bankers
                                 Trust  Company  (Incorporated  by  reference to
                                 Exhibit 99.3 of the Company's Form 8-K filed on
                                 April 19, 2000).

                     10.3        Master  Agreement,  dated as of March 31, 2000,
                                 among Point West Capital  Corporation,  Dignity
                                 Partners   Funding   Corp.   I,  Bankers  Trust
                                 Company,     and    other    parties    thereto
                                 (Incorporated  by  reference to Exhibit 99.4 of
                                 the  Company's  Form 8-K  filed  on  April  19,
                                 2000).

                     27          Financial Data Schedule.

                     99.1        Press Release for Point West Ventures, L.P.

         (b)     Reports on Form 8-K filed during the quarter ended March 31,
                 2000:

                  Date             Item Reported          Matter Reported
                  ----             -------------          ---------------

                  March 7, 2000      5                    The  Company  issued a
                                                          press          release
                                                          regarding  its results
                                                          of   operations    for
                                                          1999.

                  April 12, 2000     5                    The  Company  issued a
                                                          press          release
                                                          regarding          the
                                                          resolution   with  the
                                                          Noteholders of Dignity
                                                          Partners Funding Corp.


                                       22

<PAGE>

                                   SIGNATURES
                                   ==========

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





                                              POINT WEST CAPITAL CORPORATION



Dated:  May 12, 2000                          /s/ ALAN B. PERPER
                                              --------------------------------
                                              ALAN B. PERPER
                                              President
                                              (Duly Authorized Officer)




Dated:  May 12, 2000                          /s/ JOHN WARD ROTTER
                                              --------------------------------
                                              JOHN WARD ROTTER
                                              Executive Vice President and
                                              Chief Financial Officer
                                              (Principal Financial and
                                              Accounting Officer)


                                       23