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

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

                                   FORM 10-QSB

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


    For the quarter ended                             Commission File Number
      September 30, 2003                                      0-12969

                         TOUCHSTONE SOFTWARE CORPORATION
             (Exact name of registrant as specified in its charter)


                  Delaware                                 95-3778226
       (State or other jurisdiction                     (I.R.S. Employer
    of  incorporation or organization)                 Identification No.)


        1538 Turnpike St., North Andover, Massachusetts         01845
           (Address of principal executive offices)           (Zip Code)


                                 (978) 686-6468
              (Registrant's telephone number, including area code)

                                      None
                     (Former name, former address and former
                   fiscal year, if changed since last report)


       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 past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
                                    Yes  X    No
                                        ---      ---

       The number of shares of Common Stock of the Registrant outstanding as of
November 6, 2003 was 11,440,060 shares.

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

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                                      INDEX
                                                                           Page
                                                                          Number
                                                                          ------
PART I.     FINANCIAL INFORMATION

ITEM 1.     Financial Statements

            Consolidated Balance Sheet -- September  30, 2003 ..........     3

            Consolidated Income Statements -- Three and Nine Months
              Ended September 30, 2003 and 2002 ........................     4

            Consolidated Statements of Cash Flows -Nine Months Ended
              September 30, 2003 and 2002 ..............................     5

            Notes to Consolidated Financial Statements .................   6-8

ITEM 2.     Management's Discussion and Analysis of Financial
              Condition and Results of Operations ......................  9-12

ITEM 3.     Controls and Procedures ....................................    13

PART II.    OTHER INFORMATION

ITEM 1.      Legal Proceedings .........................................    13

ITEM 2.      Changes in Securities

ITEM 3.      Defaults Upon Senior Securities

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

ITEM 5.      Other Information

ITEM 6.      Exhibits and Reports on Form 8-K ..........................    13

Signatures .............................................................    15

Exhibits ............................................................... 16-21







                                       2
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                         PART I - FINANCIAL INFORMATION

                          ITEM 1. Financial Statements
                           CONSOLIDATED BALANCE SHEET
                               September 30, 2003
                                   (unaudited)

<TABLE><CAPTION>
<S>                                                                      <C>
ASSETS
------
Current assets:
       Cash and cash equivalents ................................        $    342,872
       Accounts receivable, net ($760 allowance for bad debt) ...              18,826
       Inventories ..............................................              25,329
        Deferred Tax Asset ......................................              25,318
       Prepaid expenses and other current assets ................              14,409
                                                                         ------------
                Total current assets ............................             426,754

Note receivable, related party ..................................              96,724
Investments, other ..............................................             164,227
Property, and equipment, net ....................................              12,783
                                                                         ------------
                                                                         $    700,488
                                                                         ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
       Current maturities of long-term debt .....................        $     18,517
       Accounts payable .........................................              38,808
       Accrued payroll and related expenses .....................              46,701
        Accrued income taxes ....................................              25,318
       Other accrued expenses ...................................              83,650
                                                                         ------------
              Total current liabilities .........................             212,994
                                                                         ------------

              Total liabilities .................................             212,994
                                                                         ------------

Shareholders' equity:
       Preferred stock, $.001 par value, 3,000,000 shares
          authorized, none issued or outstanding
       Common stock, $.001 par value, 20,000,000 shares
          authorized, 11,440,060 issued and outstanding .........              11,440
       Additional paid-in capital ...............................          20,979,684
       Deferred compensation ....................................             (42,634)
       Accumulated deficit ......................................         (20,460,996)
                                                                         ------------
              Total shareholders' equity ........................             487,494
                                                                         ------------
                                                                         $    700,488
                                                                         ============

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
                                       3
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                         CONSOLIDATED INCOME STATEMENTS
                                   (unaudited)


<TABLE><CAPTION>
                                                               Three Months Ended                 Nine Months Ended
                                                                  September 30,                      September 30,
                                                         ------------------------------      ------------------------------
(unaudited)                                                  2003              2002              2003              2002
                                                         ------------      ------------      ------------      ------------
<S>                                                      <C>               <C>               <C>               <C>
Revenues:
     Product sales .................................     $    350,344      $    411,192      $  1,088,257      $  1,355,969
     Royalty income ................................            2,345            23,789            81,004           105,675
                                                         ------------      ------------      ------------      ------------
        Net revenues ...............................          352,689           464,981         1,169,261         1,461,644
Cost of revenues ...................................           38,764            50,507           139,027           176,315
                                                         ------------      ------------      ------------      ------------
        Gross profit ...............................          313,925           414,474         1,030,234         1,285,329
                                                         ------------      ------------      ------------      ------------

Operating expenses:
     Sales,marketing, general and administrative ...          204,605           246,324           617,033           831,160
     Research and development ......................          120,800           129,938           416,089           394,975
                                                         ------------      ------------      ------------      ------------

     Total Operating Expenses ......................          325,405           376,262         1,033,122         1,226,135
                                                         ------------      ------------      ------------      ------------

Income (Loss) from Operations ......................          (11,480)           38,212            (2,888)           59,194

Impairment loss on Investment ......................                           (176,500)                           (176,500)
Gain on sale of investment .........................           31,014              --              44,214              --
Other income, net ..................................            1,944               222            56,014            26,458
                                                         ------------      ------------      ------------      ------------
Income (loss) before provision for income taxes ....           21,478          (138,066)           97,340           (90,848)
Provision for income taxes .........................             --                --                --               7,057
                                                         ------------      ------------      ------------      ------------
Net Income(loss) ...................................     $     21,478      $   (138,066)     $     97,340      $    (97,905)
                                                         ============      ============      ============      ============

Basic earnings (loss) per share ....................     $       0.01      $      (0.01)     $       0.01      $      (0.01)

Basic weighted average shares outstanding ..........       11,440,060        11,440,060        11,440,060        11,440,060

Diluted  earnings (loss) per share .................     $       0.01      $      (0.01)     $       0.01      $      (0.01)

Diluted weighted average shares outstanding ........       12,301,010        11,440,060        12,301,010        11,440,060


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

                                       4
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

<TABLE><CAPTION>
                                                                                                  Nine months ended
                                                                                         ---------------------------------
                                                                                         September 30,        September 30,
                                                                                             2003                 2002
                                                                                         ------------         ------------
<S>                                                                                      <C>                  <C>
Cash flows from operating activities:
    Net Income (loss) ...........................................................        $     97,340         $    (97,905)
       Adjustments to reconcile net Income (loss) to net cash used in
          operating activities
              Depreciation ......................................................              10,681               15,516
              Amortization of deferred compensation .............................               1,350                1,350
              Provision for doubtful accounts ...................................                (239)               3,351
                 Loss on investment, net ........................................                                  176,500
                 Gain on sale of investment .....................................             (44,214)
              Deferred income taxes .............................................             (13,318)                --
                 CHANGES IN OPERATING ASSETS AND LIABILITIES
              Accounts receivable ...............................................              (8,294)              (5,972)
              Inventories .......................................................                 859                1,576
              Prepaid expenses and other current assets .........................              (8,349)              (3,208)
              Accounts payable ..................................................            (241,155)             (53,142)
                Accrued liabilities .............................................               8,130              (64,200)
                                                                                         ------------         ------------
                 Net cash used in operating activities ..........................            (197,209)             (26,134)
                                                                                         ------------         ------------

Cash flows from investing activities:
         Proceeds from sale of investments ......................................             490,487                 --
       Principle repayments on note receivable, related party ...................                  45               70,707
                                                                                         ------------         ------------
              Net cash provided by investing activities .........................             490,532               70,707
                                                                                         ------------         ------------

Cash flows from financing activities:
       Payment on long-term debt ................................................             (22,877)             (21,549)
                                                                                         ------------         ------------
                 Net cash used in financing activities ..........................             (22,877)             (21,549)
                                                                                         ------------         ------------

Net increase in cash and cash equivalents .......................................             270,446               23,024
Cash and cash equivalents, beginning of period ..................................              72,426                 --
                                                                                         ------------         ------------
Cash and cash equivalents, end of period ........................................        $    342,872         $     23,024
                                                                                         ------------         ------------

Supplemental disclosure of cash flow information: Cash paid during the period
       for:
                 Interest .......................................................        $      2,803         $      4,401
                                                                                         ------------         ------------
                 Income taxes ...................................................        $       --           $       --
                                                                                         ------------         ------------

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
                                       5
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS. TouchStone Software Corporation and subsidiaries
("TouchStone" or the "Company") markets, and supports a line of computer
problem-solving utility software and supporting products and engineering
services which simplify personal computer installation, support, and
maintenance. TouchStone operates from one location in the United States. The
Company markets its products, domestically and internationally, directly to
original equipment manufacturers and end users.

PRINCIPLES OF CONSOLIDATION. The consolidated financial statements of the
Company include the financial statements of the Company's four wholly-owned
subsidiaries; eSupport.com, Inc., TouchStone Investments, Inc., (inactive) TSC
Investments, LLC, (inactive) Unicore Software, Inc, (inactive). All
inter-company transactions and balances have been eliminated.

BASIS OF PRESENTATION. The accompanying unaudited consolidated financial
statements have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission regarding interim
financial reporting. Accordingly, they do not include all of the information and
footnotes in accordance with generally accepted accounting principles for
complete consolidated financial statements and should be read in conjuction with
the audited consolidated financial statements included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2002. In the opinion of
management, the accompanying unaudited consolidated financial statements contain
all adjustments necessary for fair presentation of the Company's financial
position, results of operations and cash flows at the dates and for the periods
presented. Such adjustments consisted only of normal recurring items.

The operating results for the nine months ended September 30, 2003 are not
necessarily indicative of the results to be expected for the full year.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The Company has suffered recurring operating losses and operating
cash flow deficits, has an accumulated deficit of $20,460,996 at September 30,
2003, and is dependent on its current cash reserves to fund future operations
and operating cash flow. In addition, the Company is subject to a number of
risks. Principally among these risks are marketing of its products and services,
which are susceptible to increased competition from other companies and
obsolescence of its products and services. Also amoung these risks are the
decreased sales leads the Company is facing with the change of Phoenix
Technology's website. Prior to February 2003 the Company's website was linked to
Phoenix's website by a Company logo prominently displayed. In February 2003 the
logo was removed. These factors, among others, raise substantial doubt about the
Company's ability to continue as a going concern at September 30, 2003. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

Management's reorganization plan of providing for significant staff reductions
in non-core operating and support functions, limitations on corporate travel and
a realignment of senior management responsibilities has been fully executed. In
order to meet its cash requirements over the next twelve months, management
expects to supplement cash flow benefits expected from these initiatives with
current cash reserves. Other additional sources of financing, including
additional private debt or equity capital, are being explored, along with
seeking merger candidates with whom the Company has synergies.

                                       6
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

2.       EARNINGS PER SHARE

Pursuant to Statement of Financial Accounting Standards No. 128, "EARNINGS PER
SHARE" (SFAS 128), the Company provides dual presentation of "Basic" and
"Diluted" Earnings Per Share (EPS). Basic EPS excludes dilution from common
stock equivalents and is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding for the
period. Diluted EPS reflects the potential dilution from common stock
equivalents. Common stock equivalents consisted of outstanding stock options and
warrants for the period ended September 30, 2003. At September 30, 2003 the
number of outstanding stock options and warrants were 860,950. Common stock
equivalents have not been included in the calculation of diluted EPS for the
nine months ended September 30, 2002 as their effect would have been
antidilutive.

                                                          For the Nine Months
                                                          Ended September 30,

                                                           2003          2002
                                                           ----          ----
Weighted average number of shares outstanding basic:    11,440,060    11,440,060


Weighted average number of shares outstanding diluted:  12,301,010    11,440,060

3.       NOTE RECEIVABLE - RELATED PARTY

During 2000, the Company entered into an agreement to advance up to $500,000 to
Metro Investments, LLC ("Metro"), to invest in internet-based companies. Metro
is owned 100% by Pierre Narath, the Company's Chairman of the Board and Jason
Raza, the Company's President and Chief Executive Officer. The advances are
supported by a 5-year promissory note. The terms of the note, as amended in
November 2001, require interest to accrue at the rate of 8% per annum payable
monthly, beginning January 2002. The note is secured by investments held by
Metro. Proceeds from the sale of any of the underlying investments must be used
to pay outstanding principal and interest prior to any distribution of income or
assets to the members of Metro. All outstanding principal and interest is due
December 31, 2004.

Total advances under this agreement amounted to $350,000 plus accrued interest
of $49,230, of which $302,506 has been repaid through September 30, 2003. The
balance at September 30, 2003 is $96,724.


4.       INVESTMENTS

INVESTMENTS, MARKETABLE SECURITIES. The security which accounted for the
Company's Investments, Marketable Securities at December 31, 2002, closed a
merger transaction in February 2003 from which the Company received $390,000 in
cash during March 2003 in exchange for its ownership interest in that entity.

INVESTMENTS, OTHER. Investments, other at September 30, 2003, include equity
instruments of privately held internet and technology companies. These
investments are accounted for under the cost method as the Company's ownership
represents less than 20% of each investee. During June 2003 the Company sold a
portion of one of these investment for $30,000 in cash. The transaction resulted
in a $13,200 gain. During September 2003 the Company sold a portion of one of
these investment for $70,487 in cash. The transaction resulted in a $31,014
gain. The Company's carrying value of these investments represents their
adjusted cost at September 30, 2003.

         The Company regularly reviews the assumptions underlying the operating
performance and cash flow forecasts in assessing carrying value and or
impairment of its investments. At September 30, 2003, the Company has concluded
there has been no further decline in the value of these investments, therefore
no adjustment has been made to these investments during the nine months ended
September 30, 2003.

                                       7
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

5.       INCOME TAXES

No provision for income taxes is shown in the accompanying consolidated income
statements as the Company has sufficient net operating loss carryforwards
available to offset current taxable income levels at September 30, 2003 and
2002, respectively.

6.       STOCK OPTION

The Company accounts for its stock-based employee compensation plan under the
recognition and measurement principles of APB Opinion No. 25, ACCOUNTING FOR
STOCK ISSUED TO EMPLOYEES, and related Interpretations. No stock-based employee
compensation cost is reflected in net income, as all options granted under those
plans had an exercise price equal to the market value of the underlying common
stock on the date of grant. The following table illustrates the effect on net
income (loss) and earnings (loss) per share as if the company had applied the
fair value recognition provisions of FASB Statement No. 123, ACCOUNTING FOR
STOCK-BASED COMPENSATION, to stock-based employee compensation.

<TABLE><CAPTION>
                                          Three Months Ended                     Nine Months Ended
                                             September 30,                         September 30,
                                    ------------------------------         ------------------------------
                                        2003               2002               2003               2002
                                        ----               ----               ----               ----
<S>                                 <C>                <C>                 <C>                <C>
     Net income (loss) as
        Reported                    $    21,478        $  (138,066)        $    97,340        $   (97,905)
     Pro forma impact of
        expensing options                   164                236                 492                708
     Pro forma net
        income (loss)               $    21,314        $  (138,302)        $    96,484            (98,613)


     Earnings per share:
         Basic-as reported          $      0.01        $     (0.01)        $      0.01        $     (0.01)
         Basic-pro forma            $      0.01        $     (0.01)        $      0.01        $     (0.01)

         Diluted-as reported        $      0.01        $     (0.01)        $      0.01        $     (0.01)
         Diluted-pro forma          $      0.01        $     (0.01)        $      0.01        $     (0.01)
</TABLE>

7.       LITIGATION

In May 2003, the Company reached a settlement agreement in a counterclaim action
against its former legal counsel. The terms of the settlement called for the
waiver of approximately $32,000 in legal fees owed to the former counsel and for
the Company to receive $51,500 in cash. The Company reversed a reserve for the
$32,000 in legal fees during the first quarter of 2003. The $51,500 cash
settlement was received during the second quarter of 2003 and recorded as other
income.

In July, 2003 the Company settled a lawsuit with a former reseller of its
products for $30,000. The settlement stipulates that the Company is to pay
$10,000 upon the execution of the settlement and $5,000 monthly through November
2003. The Company had fully reserved for the liability in a prior year.

                                       8
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

OVERVIEW

       TouchStone Software Corporation, Inc. and its consolidated subsidiaries,
("TouchStone" or "the Company") is a provider of system management software,
which includes basic input/output ("BIOS") software upgrades, personal computer
("PC") diagnostics for personal computers and embedded systems. System
management software is one of the fundamental layers in any microprocessor-based
system (including PCs) architecture and provides an essential interface between
the systems's operating software and hardware. Organized in 1982 as a California
corporation, the Company reincorporated in Delaware in January 1997. The
Company's executive offices are located at 1538 Turnpike Street, North Andover,
Massachusetts 01845, and its telephone number is (978) 686-6468.

       In January 2000, the Company formed eSupport.com, Inc. (a New Hampshire
Corporation), a wholly-owned subsidiary, which currently conducts the day to day
operations. The Company's core product is BIOS, which is the software initially
executed after the system is turned on, tests and initializes hardware
components, initiates the operating system and then provides advanced interface
functions. BIOS software upgrades allow end-users of desktop PCs to extend the
life of their systems and reduce the overall ownership cost of a PC. During the
past several years, eSupport has grown into a full-service engineering company
supplying not only BIOS software upgrades, but also PC diagnostics software and
NRE (non-recurring engineering) services to both end-users and OEM customers. As
the evolution of software and hardware has become more complex, the need for
compatibility has increased in importance. The Company believes that its
experience and customer focus allow it to quickly identify solutions and market
products compatible with the array of operating systems, application programs,
utilities and hardware products available.

       eSupport's customers include primarily end-users, enterprises such as a
majority of Fortune 500 corporations, government agencies, major educational and
financial institutions, designers and manufacturers of motherboards, PC systems
and other microprocessor-based or embedded devices. eSupport markets and
licenses its products and services worldwide.

INDUSTRY OVERVIEW

During the last decade, the personal computer industry has grown rapidly -
fueled most recently by the Internet. The Company believes that the market will
continue to expand in the future as technological advances and increased
functionality, combined with lower pricing, will increasingly make personal
computers common for use in both homes and businesses. Future changes in the
operating systems that run personal computers may contain some of the
functionality of certain utility software of the kind marketed by the Company.
The software industry, including the utility market, is increasingly being
dominated by a few very large competitors. However, the Company believes that
the complexities created by the Internet, multimedia and connectivity utilizing
enhanced video, storage, animation, and audio capabilities will continue to
drive the demand for new, sophisticated, separately installed utility software
and BIOS upgrades.






                                       9
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

RESULTS OF OPERATIONS

The following is a discussion of the financial condition and results of
operations of the Company as of September 30, 2003 and September 30, 2002 and
should be read in conjunction with the accompanying consolidated financial
statements and notes thereto and the Company's audited consolidated financial
statements and notes thereto for the year ended December 31, 2002, included in
the Company's Annual Report on Form 10-KSB and is qualified in its entirety by
reference thereto.


            The following table sets forth, for the periods indicated certain
consolidated statement of operations information as a percentage of the
Company's total revenues represented by each item. The Company's historical
results are not necessarily indicative of results in any future period.

<TABLE><CAPTION>
                                                               Three Months    Three Months    Nine Months     Nine Months
                                                                 ended           ended           ended           ended
                                                               September 30,   September 30,   September 30,   September 30,
                                                                  2003            2002            2003            2002
                                                                ------------------------------------------------------
<S>                                                                 <C>             <C>             <C>             <C>
         Revenues:
             Product sales                                          99%             95%             93%             93%
             Royalty income                                          1               5               7               7
                                                                ------------------------------------------------------
         Total revenues                                            100             100             100             100
         Cost of revenues                                           11              11              12              12
                                                                ------------------------------------------------------
         Gross profit                                               89              89              88              88
                                                                ------------------------------------------------------
         Operating expenses:
             Sales, marketing, general and
                Administrative                                      58              53              52              57
             Research and development                               34              28              36              27
                                                                ------------------------------------------------------
                     Total operating expenses                       92              81              88              84
                                                                ------------------------------------------------------
         Income (loss) from operations                              (3)              8            --                 4
         Gain on sale of investment                                  9            --                 4
         Impairment Loss                                           (38)            (12)
         Other income, net                                        --              --                 5               2
                                                                ------------------------------------------------------
         Income (loss) before provision for income taxes
                                                                     6             (30)              9              (6)
         Provision for income taxes                               --              --                 1
                                                                ------------------------------------------------------
         Net loss                                                    6%            (30)%             9%             (7)%
                                                                ======================================================
</TABLE>





                                       10
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

COMPARISON OF NINE MONTH PERIODS ENDED SEPTEMBER 30, 2003  AND 2002

            REVENUES. The Company's revenues consist of product sales, royalties
and engineering services revenues. Product revenues are recorded at the time
products are shipped. Royalty income is recognized upon receipt of a royalty
report from the licensee. Engineering services revenue generally consists of
amounts charged for customization of the software prior to delivery and are
generally recognized as the services are performed. For the nine months ended
September 30, 2003 the Company experienced an overall decline in revenues of 20%
as compared to the same period a year ago. The decrease in revenues is due to
major changes that were made to Phoenix Technology's website which has decreased
the flow of traffic to the Company's website. Phoenix Technology is the
manufacturer of Phoenix and Award Bios, which constitutes 86% of the BIOS
upgrade revenue and 64% of the Company's total revenue for the nine months ended
September 30, 2003. Prior to February 2003 the Company's website was linked to
Phoenix's website by a Company logo prominently displayed. In February 2003 the
logo was removed. This change drastically reduced the Company's leads. These
leads enable the Company to sell other core products, most of which have also
decreased in 2003. The Company is currently working with Phoenix Technologies on
a solution that will satisfy both parties. Future revenue could be adversely
affected by the current situation if a change to Phoenix's website is not made.
BIOS product sales decreased approximately 9% as compared to the same period one
year ago. Royalty revenue decreased by approximately 23% as compared to the same
period one year ago. This is a direct result of both royalty agreements the
Company had in place coming to an end.

            COST OF REVENUES. Cost of revenues consists of the cost of
materials, freight expenses, royalties paid to other software development
companies and direct costs associated with engineering services revenues. Cost
of revenues as a percentage of revenue remained at 12% of revenues for the nine
month period ended September 30, 2003 as it was for the same period a year ago.
Royalty expense decreased 17% for the nine months ending September 30, 2003 from
the same period a year ago. This is due primarily to the decline of award BIOS
sales.

            SALES, MARKETING, GENERAL AND ADMINISTRATIVE. Sales, marketing,
general and administrative expenses consist primarily of salaries & commissions,
professional services and facilities costs. Sales, marketing, general and
administrative expenses decreased by approximately $214,000, or 26%, for the
nine month period ended September 30, 2003, from the same period one year ago.
This reduction is related to various cost cutting efforts to keep expenses in
line with revenue. Another factor in this decrease is the settlement agreement
between the Company and former legal counsel which waived approximately $32,000
in fees which were recorded in a prior year and reversed during the first
quarter of 2003.

            RESEARCH AND DEVELOPMENT. Research and development expenses consist
primarily of engineering personnel and related expenses. Research and
development expenses increased by approximately $21,000 or 5%, for the nine
month period ended September 30, 2003 from the same period one year ago. This is
directly related to a purchase agreement the Company entered into with Storage
Technologies. The agreement allowed the Company to buy the rights to use a
product called Power BIOS. This product is used to target BIOS upgrades for
motherboards that the Company was not able to upgrade without this technology.

            GAIN ON SALE OF INVESTMENT. In June 2003 the Company sold 30,000
shares of one of its investments for $30,000 in cash. The transaction resulted
in a gain of $13,200. In September 2003 the Company sold another 70,487 shares
of the same investment for $70,487 in cash. The transaction resulted in a gain
of approxiamtely $31,000.

            OTHER INCOME, NET. Other income, net consist of a $51,500 settlement
payment received from the Company's former legal counsel and interest income
associated with the related party note partially offset by interest expense
associated with the long term debt. The increase from the same nine month period
a year ago is primarily a result of the legal settlement.

LIQUIDITY AND CAPITAL RESOURCES

            During the nine months ended September 30, 2003, cash resources of
approximately $197,000 were used by the Company's operating activities as
compared to cash of approximately $26,000 used during the same period a year
ago.

                                       11
<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

            The Company's cash balance at September 30, 2003 was approximately
$343,000 as compared to approximately $23,000 a year ago. Investments in
marketable securities totaled $0 at September 30, 2003, as compared to $348,400
a year ago. This security, PartsBase, Inc., closed a merger transaction on
February 21, 2003 where each share of PartsBase, Inc. common stock was converted
into the right to receive $1.50 in cash. The Company held 260,000 shares of
Partsbase, Inc. and received $390,000 in cash in March 2003. The Company has
also received a settlement payment of $51,500 from the lawsuit settled with its
former legal counsel and proceeds of $100,487 from the sale of a portion the
Company's investment in Xdimensional.

            Working capital increased from approximately $39,500 at September
30, 2002 to approximately $214,000 at September 30, 2003 primarily driven by the
net income over the nine month period and Xdimensional sale. A portion of these
proceeds has been used to pay down a portion of the Company's current
liabilities. During the quarter ended September 30, 2003 three principal and
interest payments were made on the debt related to the settlement agreement with
a former CEO, aggregating approximately $8,100. The remaining outstanding
principal balance as of September 30, 2003 is approximately $18,500 and is
scheduled to be repaid through April 2004.

            Management expects that the cash balance and the benefits from the
reduction in overall operating expenses to be sufficient to meet its cash
requirements. Other additional sources of financing, including additional
private debt or equity capital are being explored, along with seeking merger
candidates with whom the Company has substantial synergies.

            The Company continues to operate with no material commitments for
capital expenditures and we anticipate that expenditures will continue to
decrease in the immediate future as we continue to cut costs during our efforts
to restructure current operating expenditure in line with our current revenue
stream.

            The impact of inflation during 2003 has had no material impact on
our business and financial results.

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

            The report, other than historical financial information, includes
forward-looking statements that involve known and unknown risks and
uncertainties, including quarterly flucutations in results. Such statements are
made pusuant to the "safe harbor" provisions established by recent securities
legislations, and are based on the assumptions and expectations of the Company's
management at the time such statements are made. Important factors that could
cause actual results to differ include the timely availability and acceptance of
new products, general market conditions governing supply and demand, the impact
of competitive products and pricing and other risks detailed in the Company's
filings with the Securities and Exchange Commission. Actual results may vary
materially. Accordingly you should not place undue reliance on any
forward-looking statements. Unless otherwise required by law, the Company
disclaims any obligations to revise or update such forward-looking statements in
order to reflect future events or developments.


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<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

ITEM 3.  CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE AND CONTROLS AND PROCEDURES. Based on their evalution
of the Company's disclosure controls and procedures as defined in Rules
13a-15(c) and 15d-15(c) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") as of the end of the preriod covered by this quarterly
report on Form 10-QSB the Company's chief executive officer and accounting
manager have concluded that the Company's disclosure controls and procedures are
designed to ensure that information required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms and are operating in an effective manner.

CHANGES IN INTERNAL CONTROLS. There were no significant changes in the Company's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their most recent evaluation.


                           PART II--OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

            In May 2003, the Company reached a settlement agreement in a
counterclaim action against its former legal counsel. The terms of the
settlement called for the waiver of approximately $32,000 in legal fees owed to
the former counsel and for the Company to receive $51,500 in cash. The Company
reversed a reserve for the $32,000 in legal fees during the first quarter of
2003. The $51,500 cash settlement was received during the second quarter of 2003
and recorded as other income.

            In July, 2003 the Company settled a lawsuit with a former reseller
of its products for $30,000. The settlement stipulates that the Company is to
pay $10,000 upon the execution of the settlement and $5,000 monthly through
November 2003. The Company had fully reserved for the liability in a prior year.

            The Company is also subject to other legal proceedings and claims,
which arise, in the ordinary course of its business. Although occasional adverse
decisions (or settlements) may occur, the Company believes that the final
disposition of such matters will not have a material adverse effect on the
financial position or results of operations of the Company.

ITEM 2.  CHANGES IN SECURITES
         None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
         None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         None

ITEM 5.  OTHER INFORMATION
         None


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                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES




ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)   Ehibits

               31.1 Certification by CEO to Section 302
               31.2 Certification by Accounting Manager to Section 302
               32.1 Certification by CEO to Section 906
               32.2  Certification by Accounting Manager to Section 906

         (b) Reports on Form 8-K

               On September 25, 2003 the Company filed a current report on form
8-K under item 4 Changes in Company Certifying Accountant. Effective September
25, 2003, TouchStone Software Corporation replaced its current independent
public accountants, Vitale Caturano & Company, P.C. with Sullivan Bille, P.C.
The Company had no accounting disputes with VCC but felt a need to change to a
new audit form due to a need to reduce its future audit expenses.
























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<PAGE>

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                                   SIGNATURES

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

                                            TouchStone Software Corporation
                                                      (Registrant)

         Name                             Title                      Date
         ----                             -----                      ----



/s/   Jason K. Raza                 Chief Executive Officer     November 6, 2003
--------------------------------    and President
      Jason K. Raza



/s/   Michelle L. Carrozzella       Accounting Manager          November 6, 2003
--------------------------------
    Michelle L. Carrozzella






















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