SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                     FORM 10-K


(Mark One)
[X}                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
                   For the fiscal year ended September 30, 1998

                                          OR

[ ]                TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
                   For the transition period from        to

                   Commission file number:  0-29672


                              FORECROSS CORPORATION
                              ---------------------
             (Exact name of registrant as specified in its charter)


                    California                              94-2823882
                    ----------                              ----------
         (State or other jurisdiction                    (I.R.S. Employer
         incorporation or organization                  Identification No.)

      90 New Montgomery Street, San Francisco, California               94105
    -----------------------------------------------------               -----
     (Address  of  principal  executive  offices)                  (Zip  Code)


     Registrant's  telephone  number,  including  area  code:     (415) 543-1515


Securities registered pursuant to Section 12(g) of the Act:

                                 Common Stock
                               (Title of Class)

     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   .

     Indicate  by  check  mark  if  disclosure of delinquent  filers pursuant to
Item 405 of  Regulation S-K (s229.405 of this chapter)  is not contained herein,
and will not be contained, to the best of registrant's knowledge,  in definitive
proxy or information statements incorporated by  reference in  Part  III of this
Form 10-K or any amendment to this Form 10-K.  [ ]

     The  aggregate  market  value  of  the  voting   common   stock  held    by
non-affiliates  of  the  Registrant  as  of  December 15, 1998 was  $15,106,000.

<PAGE>
                 INFORMATION REQUIRED IN REGISTRATION STATEMENT

CAUTIONARY  NOTE  REGARDING  FORWARD-LOOKING  STATEMENTS

     This  Form 10-K of  Forecross Corporation  ("Forecross"  or the  "Company")
contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Litigation  Reform Act") that are subject to
risks and  uncertainties.  Statements  indicating  that  the  Company "expects,"
"estimates"  or "believes"  are forward-looking,  as  are all  other  statements
concerning future financial results, product offerings or other events that have
not yet occurred.  There are several important factors  that  could cause actual
results or events to differ  materially  from those anticipated by the  forward-
looking  statements contained  in this Form 10-K. Such  factors include, but are
not  limited  to, the Company's  unprofitable  operating  history  and   limited
financial resources; potential requirements for additional financing; volatility
of the Company's common stock; fluctuation of its quarterly  operating  results;
existing and potential competition;  dependence on a small  number of customers;
market size;  no  assurance  of  success of the  Company's  marketing  strategy;
dependence on year 2000 revenues;  no  assurance  of  the  ability  to  continue
product  development as required  and in a  timely  manner;  limited  experience
of management in the management of growth;  control by officers  and  directors;
dependence on key personnel; the ability to adequately  protect its intellectual
property; and general  economic  and  market  conditions. Additional information
on these and  other certain business  concerns  is  included  elsewhere  in this
Form 10-K.


ITEM  1.     BUSINESS
--------     --------

GENERAL  BUSINESS  DESCRIPTION

     Forecross  is a  software  company  that,  together  with  its  predecessor
corporations,  has been in business since 1982. Forecross develops,  markets and
sells sophisticated  software and associated services to large organizations for
the  automated   conversion   ("migration")   of  existing   business   software
applications to new computing environments. Forecross also develops, markets and
sells  similar  software and services to large  organizations  for the automated
assessment  and  renovation  of  non-year   2000-compliant   business   software
applications.


INDUSTRY  BACKGROUND

     In recent years,  dramatic and fundamental  changes have taken place in the
computer  industry.  These developments have had a significant impact on the way
in which business  applications are developed,  have extended the useful life of
existing  applications  and  have  presented  unique  challenges  to  Management
Information Systems ("MIS") departments.

     SIGNIFICANT  INDUSTRY  DEVELOPMENTS

     First,  there  has  been  a  dramatic  reduction  in  the  cost of computer
processing  power. This has led to the  "downsizing" from larger "mainframe" and
"super-mini"  computers  to  smaller  computers  capable  of processing the same
amount  of  work  at  significantly  lower    cost.

     Second,  standard  computing  environments,  referred to as "open  systems"
architecture,  have increasingly dominated the market.  Previously,  large scale
MIS organizations were forced to implement business  applications using database
software  and  languages   proprietary  to  particular  vendors.   Open  systems
architecture  has, to a  significant  extent,  freed the MIS  manager  from this
constraint by  permitting  the  components  of an overall  hardware and software
solution to be acquired from a number of different,  and  frequently  competing,
vendors.  Examples of these new standards include the UNIX operating system, the
database  language called SQL and programming  languages such as COBOL,  C++ and
JAVA.

     Third,  the network which each business establishes to connect the personal
computers on the desks of each  user ("clients") to  the open  systems  hardware
("servers") for business applications has  expanded  over the past four years to
include  connections  to, and often web sites on, the Internet.  The "world-wide
web" enables a business to connect all of its employees to each other and to the
company's  vendors  and  customers easily and inexpensively.  This unprecedented
level  of  connectivity  is  driving  a  rapid  evolution  in the way businesses
inter-relate.

     Fourth,  over the past few years the computer industry has been shaken by a
latent  problem  imbedded in many existing applications, known as the "year 2000
problem."  Historically, computer disk space was extremely expensive and storage
capacity  was  very small.  To lessen the cost impact and increase the available
capacity,  dates  in many applications  were stored in an abbreviated form.  For
example,  1997 was stored as '97' and programs assumed the century was '19' even
though  it  was  not  stored  as  part  of  the  date.   When presented with the
abbreviated  date '00', many applications assume the complete date is 1900, when
it should   be  2000,  resulting   in  incorrect   ordering,   comparisons   and
calculations.

     Fifth,  even  though there has been a decrease in the cost of some computer
hardware,  there  has  also  been  a  reduction  in  many  MIS  budgets  with no
corresponding  reduction  in  the  costs  of  software  or  technical personnel.


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<PAGE>
     Finally,  the broad-based application assessment that has been necessitated
by the year 2000 problem has brought unparalleled awareness to MIS management of
the  attributes,  costs  and  risks   inherent  in  their  business  application
portfolios.    What  has  been  discovered is a hodge-podge of environmental and
development software that has resulted in: immense, yet unnecessary, complexity;
duplicated  and high costs of ownership; and serious risks of future maintenance
failures  caused  by  a  lack  of personnel knowledgeable in the older installed
software.

     BUSINESS  IMPACT

     Existing  systems  represent  a  huge  financial  investment  and are often
functionally  rich  and  mission-critical  to  the  business.  Due to this, many
applications  which  would have been rewritten after three-to-five years are now
remaining  in  service  for ten years or more.  However, due to their underlying
technologies, they may not be meeting all of the needs of the organization.  For
example,  they may not be fully integrated with newer business applications, may
have  data  which  is  not easily accessible to users, may operate on technology
platforms  which  are no longer cost-effective, or may not have been designed to
correctly  handle  the year 2000 problem.  Furthermore, personnel who understand
and  can  maintain  applications developed using older technologies are becoming
more  difficult  to  find  and  retain,  and  are,  therefore,  more  expensive.

     The  challenge  for  businesses  is to find a cost-effective way to upgrade
these  sizable  existing systems to be year 2000-compliant and to take advantage
of the new technologies which have a more readily available manpower pool, while
preserving  all  of  their  valuable  functionality.

     AVAILABLE  SOLUTIONS

     The Company's management believes that there  are three  options  available
to an MIS manager  wishing to take advantage of these developments and upgrade a
system to be year 2000-compliant.

     One  option  is  to  acquire  commercially  available  application software
packages specifically designed to operate on the new technology platforms and to
be  year 2000-compliant. However, a suitable package may not always be available
and,  even when it is, the new software package will commonly require adaptation
to  the distinctive business policies and practices of the user organization. In
addition  to  the  initial cost of the package, these adaptations are frequently
expensive  and  may  take  too  long to implement as well as require specialized
technical  resources.

     Another  option  is  to  rewrite  the  computer source code of the existing
possibly  non-year  2000-compliant  application  to  make  it  usable in the new
computing  environment.  This  course  is  time  consuming  to implement, can be
error-prone,  requires  significant  and  specialized  personnel  resources  not
routinely  available,  and  may,  therefore,  be  expensive  and  risky.

     Both  of  these  choices also involve the risk that business-specific rules
and  functionality  currently  imbedded  in the existing application will not be
accurately  or  completely incorporated into the adapted software package or the
rewritten  application.

     The  products  of  Forecross  represent  a third solution.  The Company has
developed  a  proprietary  and innovative technology for the automated migration
and  assessment/renovation/confirmation of  existing applications.   This allows
businesses to replace  existing technologies (i.e., the system is re-hosted to a
new technology platform or made  year  2000-ready) while leaving the application
functionally intact (see "-Products"). Consequently, this option usually has the
lowest cost and least risk  associated  with  it.   For the Company's experience
competing  against  these  other  solutions,   see    "Competition---Competitive
Position".


MARKET

     At its broadest,  the potential  worldwide market for Forecross products is
comprised of approximately 30,000 large computer-using organizations.  Generally
referred to as "enterprise  computing" users, they include the so-called Fortune
2,000 companies,  and comparable  government,  financial  services,  healthcare,
education and other service organizations. Most of these organizations automated
their major business applications before the advent of the new technologies and,
hence, find themselves with a large inventory  of  crucial  information  systems
based on rapidly obsolescing technology.

     Forecross  initially  focused its primary attention upon the portion of the
North American  enterprise computing market that was,  at the time, comprised of
approximately  1,000 users  (now  450 users) of  Computer  Associates Integrated
Database  Management System (CA-IDMS) (based on information  supplied  in   July
1998 by Computer Intelligence Corporation, an industry  research  organization).
CA-IDMS  includes a  database management  system  (CA-IDMS/DB),  user  interface
language  (CA-IDMS/DC) and fourth-generation  language (CA-ADSO) which, together
with certain  other related products, were originally  developed and marketed by
Cullinane  Corporation,  later by  Cullinet  Corporation,  and  now  by Computer
Associates International.  Based  upon reports in the industry press,  Forecross
believes that there is a growing shift  of enterprise  computing users away from
CA-IDMS and that over the next ten years a substantial  number of the 450  users
will have decided to move to newer,  more cost-effective  and flexible computing
environments.  The Company's  initial  estimates  indicated  that  outside North


                                        2
<PAGE>
America  there  were  an  additional 1,000  or  more CA-IDMS organizations.  The
estimate of  current  CA-IDMS  users outside North America is approximately 400.
These users also represent a potential market in which Forecross has already had
some initial success.

     In addition  to the CA-IDMS  portion of the  enterprise  computing  market,
there are also  additional  portions  related  to other  proprietary  technology
platforms.   They  include   areas  related  to  computer   languages   such  as
CA-Easytrieve from Computer  Associates, CSP from IBM Corporation,  CA-UFO  from
Computer Associates and ADF from IBM Corporation, and databases such as IMS from
IBM and  Adabas from   SoftwareAG  (initially  estimated at 20,000 users for all
products listed,  this  portion  of the enterprise computing market is currently
estimated to be between 15,000 and 20,000 users for all products listed).  These
additional  areas create  opportunities for Forecross  to develop other products
and give the Company added flexibility in responding to changes and developments
in the marketplace.

     One  other market to which the Company has responded is the large market of
computer-using  organizations  affected  by  the  year 2000 problem.  A uniquely
large  market  has been created by the fact that virtually all 30,000 enterprise
computing  organizations  have  one  or  more  applications  that  are  not year
2000-compliant  and  need  to  become  so  in  the  near  future.


PRODUCTS

     The  Company has licensed and delivered its products and ancillary services
to  customers throughout North America, and in Taiwan, France, Belgium, Germany,
and South Africa.  Historically,  customers  have included Aetna Life Insurance,
AT&T, Bank of America NT & SA,  Bank of Montreal,  Bear  Stearns &  Company, IBM
Corporation,  Home Savings of America, Kimberly-Clark Corporation, New Brunswick
Telephone, Price Waterhouse LLP, Royal Bank of Canada and Union Gas Corporation.
Recent  and current Forecross customers include  Charles Schwab & Company, Inc.,
Brown Brothers Harriman & Co.,  Sapiens USA., Inc., Ciber, Inc., Electronic Data
Systems Corporation and BDM International (now part of TRW Inc.)

     Forecross  products  are  designed to automate up to 100% of the conversion
and  year 2000 assessment and renovation of an existing application. It has been
the  experience  of  the  Company  that  95% or more of the business application
programs  commonly found in large computerized organizations (see "-Market") can
be  converted, assessed and renovated with full (100%) automation. The remaining
5%  can  usually  be  processed  with a significant degree of automation (80% or
more),  enough  to  make conversion with Forecross products a cost-effective and
lower risk alternative.  Converted applications are  functionally  equivalent to
their  unconverted  counterparts,  and,  in  the   experience  of  the  Company,
maintainability and performance in the new environment are typically  unaffected
or  enhanced.   Each   Forecross  product  includes  a  significant  number   of
customization options which can  be selected by the  user  to  achieve  specific
conversion  or  renovation objectives.


UNDERLYING  PROPRIETARY  TECHNOLOGY

     The  Company's  powerful  and  flexible   technology  known  as  the  XCODE
architecture,  has been  refined  over the last  thirteen  years  and  forms the
foundation for all Forecross products, tools, and associated services.

     The  proprietary  XCODE  architecture  of  Forecross  supports  all  of the
functions  ordinarily  required  to  automate  the  conversion,  assessment  and
renovation  of  existing systems. This includes parsing the source code, storing
the  code  in  a  common  repository, identifying areas of the code that require
technology  or  year  2000  upgrades,  transforming  the  old  technology and/or
non-year-2000-compliant  elements  of  the  source  code  and generating revised
source  code for the operation of the application in the new year 2000-compliant
environment.

     Forecross  began  developing its technology in 1982.  The prototype for the
XCODE  architecture  was  built  in 1985 to permit a customer to convert a major
application  from a proprietary language to COBOL. The first generation of XCODE
was  developed  and  enhanced between 1985 and 1986, in connection with language
conversion  projects  undertaken for Price Waterhouse, LLP. This resulted in the
first  version  of  the  Convert/ADSO  to  COBOL  product.    In  response  to a
requirement  of  Chemical  Bank  of  New  York, a second generation of XCODE was
developed  in  1987,  resulting  in  the development of the first version of the
Convert/IDMS-DB  to  SQL  product.

     In  1990,  Forecross developed the first version of Convert/IDMS-DC to CICS
in  connection with a migration project undertaken for American President Lines.
In  the  same year, under a contract with IBM, the third generation of XCODE was
produced.   In 1992-93, in connection with a project for Cincom Systems, Inc. of
Ohio,  Forecross  developed  the  Fastforward/VSAM  to SUPRA database conversion
software.  At that time, all the components of XCODE were redeveloped to operate
in  a  PC  environment.

     The  XCODE  architecture is modular in design.  Modular architecture refers
to  the  design  of a system into  separate components that can be connected and
combined  together  in  many  different configurations.  The strength of modular
architecture  is  that any one component can be replaced, added or moved without
altering  the  rest of the system.  The Company's modular XCODE architecture is,
therefore,  readily  adaptable  to the development of new migration and new year
2000  products.  This lowers the cost, shortens the time and reduces the risk of
new  product  development.


                                        3
<PAGE>
     COMMERCIALLY  AVAILABLE  PRODUCTS

     Forecross  has,  to  date,  developed  nine  migration  products. Migration
products  are  named  by  reference  to  the source language or database and the
target  language  or  database:

-              Convert/IDMS-DC  to  CICS    (user interface language conversion)
-              Convert/ADSO  to  COBOL    (language  conversion)
-              Convert/IDMS-DB  to  SQL    (database  conversion)
-              Convert/VSAM  to  SQL    (database  conversion)
-              Convert/CSP  to  COBOL    (language  conversion)
-              Redirect  II  COBOL/VS  to  COBOL  II    (language  conversion)
-              IMSADF  II  to Cross System Product Migration Facility  (language
               conversion)
-              Convert/IMSADF  II  to  APS/COBOL    (language  conversion)
-              Fastforward/VSAM  to  SUPRA    (database  conversion)

     Forecross is the owner of six of these products. Ownership of the following
products  is  shared:  IMSADF  II  to  Cross  System Product Facility, which was
developed  by  Forecross,  but  is  owned jointly with IBM; Convert/IMSADF II to
APS/COBOL,  which  was developed by Forecross, but is owned jointly with Bank of
America; and Fastforward/VSAM to SUPRA which was developed by Forecross pursuant
to  a  Development  and  License  Agreement  dated  April  22, 1991, with Cincom
Systems,  Inc.  (the "Cincom Agreement") and is jointly owned by the Company and
Cincom.    Forecross  and  IBM have joint marketing rights to the first product,
Forecross and Bank of America have joint marketing rights to the second product,
and  Cincom  has  exclusive marketing rights to the third product. None of these
jointly  owned  products  is presently material to the Company's business or its
near-term  business  plans.

     Forecross has, to  date,  developed three year 2000 renovation products for
thirteen  languages (plus 2 products that the Company no longer markets, for the
REXX and CLIST languages):  Assess/2000,  Renovate/2000 and Confirm/2000,  which
are integrated into the Complete/2000TM software solution.  Languages  currently
supported   by  these  products  include  COBOL,  C, C++,  PL/I,  CA-Easytrieve,
PowerBuilder, CSP,  IMSADF II,  CA-ADS,  CA-UFO,  APS,  CA-Ideal  and  CA-Telon.
Assess/2000 is used to  automatically  analyze  computer program source code and
identify all instances where year 2000 issues must be addressed.   Renovate/2000
is used to automatically modify all  code found  to be  non-year-2000-compliant.
Confirm/2000 is used to automatically analyze  code which has been determined to
be year 2000 compliant, thereby  providing  an audit  or independent  validation
function, to ensure  that  no  year 2000 issues have been missed or not properly
renovated. Forecross is the owner of all of these products.

     PRODUCT  DEVELOPMENT

     The  Company's  strategy  in developing new migration software and services
for  existing  applications  is to respond to the particular needs of a specific
customer  after  research has determined that there is an identifiable potential
for  further  licensing  of  the product, and delivery of associated services to
other  organizations.    Before  Forecross  undertakes  the development of a new
product,  it generally requires that the customer agree to share the development
cost.    One  example of this strategy is the Convert/CSP to COBOL product which
was developed for Kimberly-Clark Corporation in 1994, under an agreement whereby
Kimberly-Clark  contributed $300,000 of the total $350,000 in development costs.
Another  example  is  the  Convert/IMSADF  II  to  APS/COBOL  product  which was
developed for and financed by Bank of America  in 1994 and 1995  at  a  cost  of
$480,000.

     One  factor  which  greatly  enhances  the Company's ability to employ this
strategy  is its proprietary XCODE architecture.  The XCODE architecture enables
the  Company  to  develop a new migration product in an average of approximately
six  months  of  elapsed  time,  with  three  persons  employed full-time on the
project.  This  is a considerably shorter and less costly development cycle than
traditional industry experience for products of comparable scope and complexity.
It  also allows the Company to fund most or all of the development cost from the
license  revenue  generated  by  the  initial  development-funding  customer.

     Extension of the Complete/2000TM products to support new languages has also
been  greatly  facilitated  by  the  XCODE  architecture.   As requirements have
dictated,  and  may  dictate  in  the  future,  new languages have been added to
Complete/2000TM    in  an  average  of  eight-weeks  with  two  developers.

     Research and development expenses  were $1,520,709, $1,006,768 and $253,743
in the years ended September 30, 1998,  1997 and 1996, respectively.  Additional
expenses of  $29,067 in the year  ended  September 30,  1996  were  incurred  on
products funded by customers and are included in cost of  revenues.  There  were
no  such  costs  in  the  years  ended September 30, 1998 or 1997.


PRODUCT  LICENSING

     MIGRATION  PRODUCT  LICENSING

     Forecross grants its customers a non-exclusive,  non-assignable  license to
use  its  software,  including  programs,  options,   documentation,   data  and
information.  While certain provisions in the license agreement (e.g., as to the
number of locations at which the licensed  software may be used,  and the extent
of the customer's  right to receive  upgrades and  enhancements  without charge)
vary  according to the  circumstances,  certain  general terms are common to all
such  agreements.  Each  contains a warranty  by  Forecross  against  defects in
design, operation and usability in the customer's computer environment, and each

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<PAGE>
contains a covenant by the licensee not to attempt to decipher,  develop  source
code, copy, modify,  duplicate,  create or recreate all or any part of it except
to the extent  required by its normal  operating  procedures.  The licensee also
agrees to take reasonable  steps to prevent access by anyone whose access is not
reasonably  necessary and to ensure that authorized  persons with access refrain
from  duplicating,  reproducing  or disclosing  information  with respect to the
licensed software.

     The  license  is  granted  for  the  conversion  of  a  specified number of
application  programs,  and  may  be  terminated  on  fifteen  days  notice  for
non-payment  of  amounts payable under it, on twenty-four hours notice by either
party  if  the  other  becomes insolvent or (except in certain circumstances) if
bankruptcy or other similar proceedings are commenced against it, or it makes an
assignment  for  the benefit of creditors. The agreement is also terminable upon
fifteen  days  notice  in the event of a material breach being committed, unless
the  breach  is  cured  before  the  expiration  date  of  the  notice  period.

     COMPLETE/2000TM  LICENSING  AND  FACTORY  SERVICES

     Forecross  offers  product  licensing  for its Assess/2000 products.  These
licenses  are  identical  to  the  migration  licenses  described above with two
exceptions.    First, they are granted for the assessment of an unlimited number
of  application  programs and related components.  Second, they may be purchased
in  single-user  or  multiple-user  configurations,  priced  accordingly.

     Forecross  offers  "factory"  services for customers of its Complete/2000TM
renovation and confirmation software.   By "factory", the Company means an array
of multiple  server-class  computers  operated  by  a small  number  of computer
operators,  running  two  to  three  shifts  per day, up to seven days per week,
depending  on work  volume.   "Factory services" also implies the methodology by
which  customer  code  flows  into  Forecross, through the factory, to the rules
engineers  for issue resolution, to quality assurance for final review, and back
to the customer.  Licenses  are  not  currently  offered.  Utilizing the factory
renovation services,  a customer  sends  its  application  code to the Forecross
factory  where the code is either renovated for year 2000-compliance,  compiled,
then shipped back to the customer for testing and production implementation,  or
analyzed  to  confirm  that all year 2000 renovations previously made, have been
made completely and correctly.  The  factory  uses  a combination of procedures,
processes  and  software  that  allow for up to 100% automation of all phases of
code renovation and confirmation.


INTELLECTUAL  PROPERTY

     Forecross  has chosen to protect  the  intellectual  property  value of its
products  and its  proprietary  XCODE  architecture  through  trade  secret  and
confidentiality    provisions   in   its   product    licensing    arrangements,
confidentiality  agreements with its employees and through copyright  protection
for system  externals  such as display  formats  and  documentation.  Additional
protection is provided by the complex nature of both the XCODE architecture, and
the products  themselves.  This approach is consistent with standard practice in
the  industry,  and  provides  reasonable  assurance  against  misappropriation.
Software theft,  which can be a serious problem in the consumer software market,
is relatively rare in the large-scale  software products market. Large corporate
buyers tend not to engage in product  piracy.  The  Company's  products are also
protected  against  unauthorized  use by imbedded  and external  access  control
codes.  There can be no assurance,  however,  that the protection relied upon by
the Company will be effective.  Monitoring and identifying  unauthorized  use of
the Company's  technology  may prove  difficult,  and the cost of litigation may
impair the Company's ability to guard adequately against such infringement.  The
commercial  success  of the  Company  may  also  depend  upon its  products  not
infringing any intellectual property rights of others and upon no such claims of
infringement  being  made.  Even if such  claims  are found to be  invalid,  the
dispute  process  could  have a  materially  adverse  effect  on  the  Company's
business, results of operations and prospects.


MARKETING  AND  SALES  STRATEGY

     EXISTING  APPLICATION  MIGRATIONS

     The  developments  in  computer  technology described above (see "-Industry
Background:  Significant  Industry  Developments") have converged to produce the
need  and  create  the  opportunity to convert existing applications. Because of
this, the Company has had to experiment with a number of different techniques to
create  market  awareness of its technology and products, and to provide an easy
way  for  potential  customers  to  evaluate  and  license  its  products.

     Between 1989 and 1992, Forecross experimented with two different approaches
using third parties to market and sell its products.  One approach  involved  an
exclusive marketing and sales agreement with a large  technology  services  firm
principally  engaged in  providing  consulting  services.   The  other  approach
involved a technology transfer agreement  relating to  three  specific  software
products (Convert/ADSO to COBOL,  Convert/IDMS-DC  to  CICS  and Convert/IDMS-DB
to  SQL), and  an  exclusive  distribution  agreement, with a  start-up software
company, AdvantEdge Systems Group,  Inc.  ("ASG").   Neither of these approaches
proved successful.


                                        5
<PAGE>
     In  view of its experience with selling its products through third parties,
Forecross  decided in 1992 to develop and implement its own direct marketing and
sales  strategy. The Company's marketing and sales strategy has several elements
designed  to  overcome  the  problems  previously  encountered.  It has expanded
product  offerings  to include a broad range of service and license alternatives
that  better  adapt  to  meet  the  needs  of  the  marketplace   and  serve  to
differentiate  Forecross  from  its competitors. Conventional techniques such as
trade  publication  notices, direct mail, telemarketing, and, most recently, its
own  site  (www.forecross.com)  on  the  Internet  are  being  used to bring the
Company's products and their benefits to the attention of prospective customers.
Additionally,  Forecross  has  focused on building a reference base of satisfied
customers.

     Recognizing  that  aversion  to risk is one of the major characteristics of
the decision making process for many MIS  organizations, Forecross has created a
strategy  to simplify the process for potential customers to evaluate and invest
in  its  products.    The  Company  has  accordingly  adopted a phased marketing
approach  which  allows a potential customer to pursue its interest in automated
migration in a series of measured steps, with each step in the process providing
demonstrable  value.

     The  Company's   principal   marketing   programs   involve  the  Migration
Alternatives  Planning   Seminar  ("MAPS")  and   either  Factory   Compile   or
License-Only  sales.

     MAPS is an  introduction,  for a fee, to the conversion  process through an
intensive  two-day  customer-site  program  for those  considering  a  migration
project.  Designed to address  conversion  issues,  it includes formal technical
briefings,  expert consulting, an evaluation of the risks, costs and benefits of
various  alternatives and a feasibility analysis of the automated migration of a
selection  of  the  customer's   application  software.   MAPS  is  promoted  by
telemarketing  and is conducted by two senior  members of the  Forecross  staff.
Evaluations  of prior MAPS  sessions  suggest  that many of the  Company's  MAPS
customers will decide to select Factory  Compile or  License-Only  within twelve
months of the MAPS session.

     Forecross offers its customers the option to  use its  proprietary software
on  behalf  of  the  customer  to  perform  the  entire conversion process, thus
relieving the customer of the requirements for allocating the personnel and time
necessary  to learn to perform the migration.   Forecross  calls  this  type  of
engagement a "Factory Compile."  The  customer's role is  limited to testing the
converted  application  in its  new  environment.  The average  Factory  Compile
project  requires  one  senior  and  two  junior  technical  staff  members  for
approximately  four months.

     License-Only  is  an  offering  in  which  the  customer licenses Forecross
products and, with  training  and  additional  optional  consulting  provided by
Forecross, performs  the  entire  conversion  process  with  its  own personnel.
As  in  the Factory  Compile  option,  the  customer  also  tests  the converted
application in the new environment.    No customer  has  chosen the License-Only
offering  in the  past few  years,  preferring  to use the  Company's  automated
factory facilities.

     Although  there are no separately chargeable software license fees, Factory
Compile  projects  require  the  customer  to  sign a standard Forecross Product
License  Agreement.  For  both  offerings  (Factory Compile and License-Only), a
customer's use of Forecross products is limited to the conversion of a specified
maximum  number  of  application  programs,  at  which time the license expires.

     YEAR  2000  RENOVATION

     Because  of  the potentially massive scope of the year 2000 problem and the
relatively  short  period  of time left in which to solve the problem (less than
400  days),  Forecross took an approach to marketing its year 2000 products that
was slightly different from its migration marketing.

     The Company adopted a two-pronged strategy designed  to rapidly  reach  the
broadest possible market without having to hire, train and manage a large sales,
marketing and  customer support staff.  For the assessment  function,  Forecross
offers its Assess/2000 product through non-exclusive license  arrangements  with
consulting firms and other solution providers who do not market similar software
from  other  vendors.  For the renovation and confirmation functions,  Forecross
seeks and enters into contractual  arrangements  with  distributors  who,  for a
fee, obtain  exclusive marketing rights for Complete/2000TM  within a geographic
territory.   Exclusivity  is  generally  for  an initial term of one year and is
automatically extended annually for a total of four subsequent  years   provided
that the distributor  has  caused  at least a specified    number  of  year 2000
contracts of  at  least a  specified  value to be  closed  during  the year.  In
exchange   for   marketing,  project   management  services   and  staffing  for
substantially all  on-site work, the distributor generally receives a fee  equal
to  twenty-five  percent  (25%) of collected  revenues.   In  the  case  of  one
contract, under  which  a substantial  portion of the current year 2000 projects
are  conducted, the   distributor's  fee  is  fifty  percent  (50%) of collected
revenues until $1,500,000 has been received by  the distributor and  twenty-five
percent  (25%)   of  revenue  collected  thereafter.   During  fiscal  1998, the
$1,500,000 amount had been earned, with all  subsequent fees to be earned at the
25% rate.  At  the   present  time, Forecross  has four distributors:    Gardner
Solution 2000, L.L.C. in New York and New  Jersey; Y2K Solutions, L.P. in Texas;
CY2K  Solutions,  L.L.C.  in California;  and  PY2K Solutions,  L.L.C. in  North
Carolina,  South  Carolina, Georgia  and  Florida.   The  President   and  Chief
Executive Officer of Gardner Solution 2000, L.L.C.,  is also the Chief Executive
Officer of Y2K Solutions, L.P., CY2K Solutions,  L.L.C.  and   PY2K   Solutions,
L.L.C.   Additional distributorships are  contemplated  for  the  United  States

                                        6
<PAGE>
and eventually various international  locations.    While Forecross  may  market
its year 2000  products  and  services  directly in territories  not represented
by distributors, its strategy is to leverage its ability to  penetrate the large
nationwide market by using a network of licensees and distributors.  

     In  addition,  the  Company has formed alliances through teaming agreements
with consulting firms and service providers. As of September 30, 1998, Forecross
has  signed  teaming  agreements  with  BDM International, Inc., Electronic Data
Systems  Corporation  (EDS),  NCR  Corporation,  Sapiens USA, Inc.,  Ciber, Inc.
 SCB Computer Technology, Inc., as well as some smaller firms.


SALES  AND  LICENSING  REVENUES

     From  1994  though 1996, the Company's revenues were generated primarily by
migration  projects,  with  some  revenues  contributed  by  MAPS presentations.
During  that  period,  the  Company  performed  work  on  between ten and twenty
projects  per  year,  of  which four projects typically represented in excess of
fifty  per cent of total revenues.  In the fiscal years ended September 30, 1998
and 1997,  year 2000 assessment projects,  sales of licenses to the  Assess/2000
software, and fees associated with distributorships for Complete/2000TM products
and   services   accounted   for   sixty-two   percent  and  forty-two  percent,
respectively, of total revenue.


COMPETITION

     The  marketplace  for  application  migrations  and  year 2000 solutions is
served  by  both  software  and services vendors.  Forecross is not aware of any
vendor,  whether  of  software  or  services, who offers the degree of automated
conversion  achievable  through  use  of  Forecross  products.

     SOFTWARE  VENDORS

     The Company believes that the principal focus of other software vendors has
been on the development
and  licensing of software which speeds the rewriting alternative for migration.
Examples  of  software  delivering  this  type  of migration solution assistance
include  ViaSoft  Inc.'s  tools  for  application  re-engineering,  and Carleton
Corporation's software to support data migration.  In both of these cases, as in
all others of which Forecross is aware, the software products do not provide the
near-complete and comprehensive automated conversion of business applications as
those  performed  by  Forecross  products.

     In the year 2000 market, the Company believes that  the  principal focus of
software  vendors  has  been  on  the  semi-automated  or automated  analysis of
applications  written  in  the COBOL language.   The  Company believes that many
vendors  also  assess  other languages, but most use a rudimentary text scanning
approach similar to the "Find and Replace" function commonly found in most  word
processing  software today.  With respect  to renovation,  there are a number of
software vendors  whose  products address COBOL with a relatively high degree of
automation,  but  Forecross  is aware of very few vendors who address any of the
other  dozen  major  languages  used  in  most  large  MIS organizations without
substantial  manual  effort  augmenting  semi-automated  tools.   The  Company's
Complete/2000TM  product already addresses fourteen of the  non-COBOL  languages
(although the Company has decided not to market its products for two of  these),
and others  can  be added within  eight to twelve weeks.   Examples  of software
vendors delivering automated or semi-automated assessment tools include ViaSoft,
Inc., Micro Focus  Group,  P.L.C.,   and  Platinum  Technologies, Inc.   Vendors
with automated or semi-automated renovation products include Computer Associates
International, Inc.,   Peritus  Software,  Alydaar Software  and  Eleventh  Hour
Systems.

     SERVICE  SUPPLIERS

     In  both  the  migration  and  year  2000   renovation   markets,   service
organizations  such as accounting  firms and companies  like BDM  International,
EDS,  IBM,  Computer  Horizons Corporation, Case Consult, GmbH and Computer Task
Group offer conversion services.   Automated  conversion   facilities   provided
by  these   service organizations  typically  embrace between 25% and 80% of the
source code,  with the  balance of  the conversion   being  performed  manually.
The  Company's  management  believes  that  any  manual conversion is subject to
inconsistency, high risk of error, high cost and delays.  Since they are service
providers, these companies tend to focus on  turnkey  projects  costing  several
millions  of dollars  which can,  therefore,  support  the high  manpower  costs
involved.

     Since the Company's software automates significantly more of the conversion
(95% to 100%) than can be achieved with other products, management believes that
Forecross is  able to compete  effectively  with  such  service  suppliers.  The
Company typically prices its Factory Compile offering (see "-Marketing and Sales
Strategy") below  the  prices  quoted  by  the  service  suppliers  who  perform
conversions.  Management  believes  that  its  Factory  Compile  offering can be
marketed successfully,  because it can be presented to the  marketplace  as  the
solution which uses a significantly greater degree of automation than is offered
by service suppliers, thereby reducing the costs, time and risks of the project.


                                        7
<PAGE>
     COMPETITIVE  EXPERIENCE

     The  Company's  experience  in  the competitive bidding process employed by
many  of  its  prospective  customers,  leads it to believe that it has a  price
advantage  over  a  majority  of  the  other  bidders.   Such bidders' costs are
typically higher due to their dependence on skilled people, as compared with the
Company's  dependence  on  less costly automation.  However, the Company has not
historically  enjoyed the same degree of market recognition as many of its large
competitors, such as the national consulting or accounting firms against whom it
often  competes.

     Until  the  emergence  of  the  year  2000  problem, some customers did not
embrace the idea that automation could help them solve their problem. Management
believes  that  such uncertainty  would  sometimes  cause  a customer to award a
contract to the more recognizable  bidder,  in  spite of the higher price.  This
extra cost was often viewed as an "insurance policy" against any problems in the
future.  The Company has observed a shift in this trend over the past years, and
many  customers  now  will  not  entertain  bids which do not contain the use of
automated  software  tools.   In addition,  a  number  of the year 2000 solution
vendors,  particularly  those  offering  software  tools,  are small, heretofore
unrecognized companies.  Management believes that potential  customers of  these
tools and services  are now more  accustomed to dealing  with such vendors.  The
Company believes that it has the capability  to  compete  favorably  because  of
these trends,  and because  it  has  steadily  built  its  reputation  and  name
recognition over the same period of time.


COMPETITIVE  POSITION

     It  is  possible  that  other software or services companies may attempt to
develop  new  proprietary conversion software or service offerings or to enhance
existing  proprietary  conversion  software,  or  service  offerings, to compete
directly  in  the Company's chosen market. There are, in addition, certain other
elements  of  risk  which  bear  upon  the  Company's  competitive position (see
"(see "Management's Discussion and Analysis of  Financial Condition and  Results
of Operations: Certain  Business Concerns:  Additional  Financing;  Competition;
Market Size; No Assurance of Success of Marketing Strategy; Product Development;
and  Limited Experience of Management in  the Management of Growth").  Moreover,
(as indicated  under  "-Industry  Background:  Available  Solutions") there  are
alternatives to migration  as  a  means of adapting to technological change, and
there can be no assurance  that  enterprise  computing  users  will  not  prefer
one  of  these alternatives.

     It is difficult for the Company to assess how many potential customers have
availed  themselves  of the other  alternatives  (i.e.,  the  purchase  of a new
software  package that is year 2000  compliant  and  operates on new  technology
platforms or rewriting the computer  source  codes),  since  Forecross  does not
actively  track  prospects  who  fail  to  meet  the  Company's   initial  sales
qualification criteria. Among qualified prospects who ultimately do not purchase
from Forecross, the rewriting option generally prevails.


CORPORATE  HISTORY  AND  EMPLOYEES

     CORPORATE  HISTORY

     The  Company  was  formed  on  January  1, 1987 by a merger pursuant to the
provisions  of the California Corporations Code of two predecessor corporations,
Jonescast, Inc., and its wholly owned subsidiary, Genasys Software Systems, Inc.
(subsequently renamed Genasys Technologies, Inc., and later changed to Forecross
Corporation), each incorporated under the laws of California in June, 1982. As a
result  of the merger, Forecross succeeded to the business that had been carried
on  by the predecessor corporations since 1982.  References in this Form 10-K to
Forecross  Corporation,  Forecross,  or the Company should be taken to include a
reference  to  its  predecessor  companies.

     EMPLOYEES

     As of September 30,  1998, Forecross had  62 employees. Of these, seventeen
work  primarily in the Factory or on customer Factory Compile projects, nine are
engaged  primarily  in  research  and  development  work,  nine  are in  project
management,  five are in technical support, six are in quality assurance,  three
are in  sales and  marketing and thirteen are in finance and administration. All
employees  are  required  to enter into a Confidentiality and Proprietary Rights
Agreement  which  requires  that they not disclose any confidential information,
restricts their right to engage or have an interest in competing businesses, and
requires  them to promptly disclose to Forecross the product of all work done by
them  while  employed by, and for, the Company, and to assign to the Company all
rights  in  such  work  product.

     BACKLOG

     Backlog  was  $531,000  at  September 30, 1998 as   compared to  $4,281,000
(including  approximately  $615,000  to  be  performed  after  fiscal  1998)  at
September 30, 1997.  See (see "Management's Discussion and Analysis of Financial
Condition  and  Results of Operations.)




                                        8
<PAGE>
ITEM  2.     PROPERTIES
--------     ----------

     The  Company's principal executive offices are located at 90 New Montgomery
Street,  San Francisco, California  94105, where it occupies approximately 6,200
square feet of leased space under a lease which expires in February 2002. Annual
base rent under the lease is approximately  $150,000.  The Company  occupies  an
additional  4,000  square feet space in its current location under a lease which
expires in  December 2001.  Annual  base  rent for this space  is  approximately
$143,000 per year. The Company also maintains a small sales office in San Diego,
California,  and a  small  apartment in San Francisco for use by its out-of-town
staff while visiting the executive offices.



ITEM  3.     LEGAL  PROCEEDINGS
--------     ------------------
     None.



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



ITEM  5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
--------     -------------------------------------------------------------
	    MATTERS
             -------

     As of September 30, 1998, the Company had issued and outstanding 11,763,612
shares of Common Stock held of record by 60 shareholders.   The Company's Common
Stock is traded on the Over-the-Counter/Bulletin Board market  under  the symbol
FRXX.    The  Over-the-Counter/Bulletin Board  quotations  reflect  inter-dealer
prices, without retail mark-up, mark-down or commission, and may not necessarily
represent  actual  transactions.  From  August  1994  to  October 28, 1998,  the
Company's Common Stock  was  listed  on  the  Vancouver Stock Exchange under the
symbol FRX.U.  Listed below are the  high and low bid prices (U.S. dollars)  for
the Company's Common Stock for  the  periods indicated.

<TABLE>
<CAPTION>

THREE MONTHS ENDED   HIGH    LOW
------------------  ------  ------
<S>                 <C>     <C>

09/30/98 . . . . .  $ 8.00  $ 2.25
06/30/98 . . . . .   11.80    5.75
03/31/98 . . . . .   12.70    6.70
12/31/97 . . . . .   20.00   10.00

09/30/97 . . . . .  $20.00  $11.65
06/30/97 . . . . .   25.00   13.05
03/31/97 . . . . .   16.95    6.00
12/31/96 . . . . .    7.00    3.00

</TABLE>

     The Company has not paid any dividends to date and does not anticipate that
any  cash  dividends  will  be  declared  in  the  foreseeable  future.

     RECENT  SALES  OF  UNREGISTERED  SECURITIES

     The  following  table  sets forth information regarding issuances of Common
Stock  by the Company during the three years ended September 30, 1998.

<TABLE>
<CAPTION>

NUMBER OF SHARES  GROSS PROCEEDS ($U.S.)   NATURE OF CONSIDERATION
----------------  -----------------------  -----------------------
<C>               <C>                      <S>

         551,250  $               330,750  Cash(1)
         282,000                1,128,000  Cash(2)
          14,000                   39,550  Cash(3)
          12,000                   48,000  Cash(4)

<FN>
1.     These  shares  were issued in November 1995 upon the exercise of warrants
issued  in connection with a private placement of 735,000 common  shares  to two
individuals and three investment funds in May 1995.
2.     These shares were issued in connection with a private placement completed
in  December  1996  of  Units  consisting  of  one share of Common Stock and one
non-transferable  share  purchase  warrant  to  purchase  an additional share of
Common  Stock for a period of two years from the date of issuance at an exercise
price  of  $4.00  per  share in the first year and $4.60 per share in the second
year.    The purchasers of the shares are family members of the president of the
Company.    The Company incurred $5,275 of costs related to this  sale.

                                        9
<PAGE>
3.     These shares were issued during the fiscal year ended  September 30, 1997
upon  the  exercise  of stock options for 12,500 shares at $2.00 per share, and,
1,500  shares  at  $9.70  per  share.
4.     These  shares  were issued in October and November 1997 upon the exercise
of warrants issued in connection with the private placement of 282,000 shares in
December  1996.
</TABLE>

The  Company  has  issued  shares  of  its  Common  Stock  to  certain employees
(including officers) pursuant to compensation benefit plans of the Company.  The
transactions  described  in  this  paragraph  were  exempt from the registration
requirements  of  the Securities Act based upon Rule 701 promulgated thereunder.



ITEM  6.     SELECTED FINANCIAL DATA
--------     -----------------------

     The  selected  financial  data set forth  below with  respect to the fiscal
years ended  September  30,  1998,  1997 and 1996 and the balance  sheet data at
September  30, 1998 and 1997 are derived from the audited  financial  statements
included elsewhere in this Annual Report. The financial data for the years ended
September  30, 1995 and 1994 and the balance  sheet data at September  30, 1996,
1995 and 1994 are derived from audited financial statements not included in this
Annual Report.  The  information  set  forth below should be read in conjunction
with the audited  financial  statements  and  notes  included  elsewhere in this
Annual Report and Management's  Discussion and Analysis of  Financial  Condition
and Results of Operations included elsewhere herein.

<TABLE>
<CAPTION>
                                                              YEAR ENDED
                                                             SEPTEMBER 30,
                                 --------------------------------------------------------------------
                                     1998          1997          1996          1995          1994
                                 ------------  ------------  ------------  ------------  ------------
<S>                              <C>           <C>           <C>           <C>           <C>
STATEMENT OF OPERATIONS DATA:
Net revenues:
   Services and maintenance . .  $ 6,623,752   $ 4,930,456   $ 2,199,672   $  1,445,009   $ 1,785,035
   Software licenses and
   distributorship fees
   - related parties. . . . . .      545,000       844,582       200,000         10,071             -
                                 ------------  ------------  ------------  ------------  ------------
   Total net revenues . . . . .    7,168,752     5,775,038     2,399,672      1,455,080     1,785,035
Cost of services and
   maintenance including fees
   to related parties of
   $346,000, $213,000, $0, $0,
   and $0, respectively . . . . .  4,419,347     3,366,608      1,431,489       738,986       983,298
                                 ------------  ------------  ------------  ------------  ------------
Gross margin. . . . . . . . . .    2,749,405     2,408,430        968,183       716,094       801,737
                                 ------------  ------------  ------------  ------------  ------------
Operating expenses:
   Sales and marketing
     including fees to related
     parties of $1,037,000,
     $640,000, $0, $0, and $0,
     respectively . . . . . . .    1,838,126      1,490,479       711,545       685,360       682,454
   Research and development . .    1,520,709      1,006,768       253,743       358,133       628,023

   General and administrative .    1,413,312        887,039       332,500       446,031       704,302
                                 ------------  ------------  ------------  ------------  ------------
Total operating expenses. . . .    4,772,147      3,384,286     1,297,788     1,489,524     2,014,779
                                 ------------  ------------  ------------  ------------  ------------
Loss from operations. . . . . .   (2,022,742)      (975,856)     (329,605)     (773,430)   (1,213,042)
Other (expense), net . .            (305,110)       (68,855)     (129,141)      (37,720)      (51,825)
                                 ------------  ------------  ------------  ------------  ------------
Loss before provision
   for income taxes . . . . . .   (2,327,852)    (1,044,711)     (458,746)     (811,150)   (1,264,867)
Provision for income taxes. . .         (800)          (800)       (2,300)      (31,616)         (800)
                                 ------------  ------------  ------------  ------------  ------------
Net loss. . . . . . . . . . . .  $(2,328,652)  $ (1,045,511)  $  (461,046)  $  (842,766)  $(1,265,667)
                                 ============  ============  ============  ============  ============
Net loss per share. . . . . . .  $     (0.20)  $      (0.09)  $     (0.04)  $     (0.08)  $     (0.15)
                                 ============  ============  ============  ============  ============
Dividends . . . . . . . . . . .            -              -             -             -             -
                                 ============  ============  ============  ============  ============
Shares used in computing
per share data. . . . . . . . .   11,761,920     11,681,035    11,370,804    10,344,934     8,366,350
                                 ============  ============  ============  ============  ============
BALANCE SHEET DATA:
Cash and cash equivalents . . .  $    98,249   $    275,243   $    99,427   $    14,474   $   332,683
Working capital (deficit) . . .   (1,735,813)       442,765    (1,077,531)     (890,040)     (437,183)
Total assets. . . . . . . . . .    1,995,719      3,301,051       726,896       410,801     1,010,628
Deferred revenue, long-term . .    1,545,417      2,110,417             -             -             -
Long-term debt and capital
lease obligations (net of current
portion). . . . . . . . . . . .      673,059              -       223,923       262,593       280,393
Shareholders' deficit . . . . .   (3,276,564)      (995,912)   (1,120,649)     (999,092)     (551,434)
</TABLE>
                                        10 
<PAGE>

ITEM  7.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
--------     -------------------------------------------------------------------
             RESULTS OF OPERATIONS
             ---------------------

     The following  summary of the Company's  material  activities for the years
ended  September  30,  1998,  1997 and 1996 is qualified  by, and should be read
in  conjunction  with  more  detailed   information  along  with  the  financial
statements  and accompanying  notes to the financial  statements included at the
end of this Annual Report.  Each  recipient  of this  Annual Report is  urged to
read this Annual Report in its entirety.

     The  Private  Securities  Litigation  Reform  Act of 1995 (the  "Litigation
Reform Act") provides a "safe harbor" for  forward-looking  statements.  Certain
information   included   in   this   Form  10K contains   statements   that  are
forward-looking,  such as  statements  relating to plans for future  activities.
Such forward-looking information involves important risks and uncertainties that
could significantly affect results in the future and, accordingly,  such results
may differ from those expressed in any forward-looking  statements made by or on
behalf of the  Company.  These  risks  and  uncertainties  include,  but are not
limited  to,  those  relating  to  the  Company's  growth   strategy,   customer
concentration,  outstanding  indebtedness,  dependence  on  expansion  and other
activities   of   competitors,   changes  in  federal  or  state  laws  and  the
administration  of such laws,  protection  of trademarks  and other  proprietary
rights and the general condition of the economy and its effect on the securities
markets. See "Certain Business Concerns."


BACKGROUND  AND  OVERVIEW

     From the  commencement of operations of its  predecessor  companies in June
1982,  the  goal of  Forecross  has  been to  focus a  small  group  of  skilled
technicians  on  providing   automated   solutions  to  the  specialized   niche
requirements  of the MIS  departments  of medium to large  enterprise  computing
organizations  seeking  to  adapt  their  business  applications  software  to a
changing technology, economic and business environment.

     From  1982  through  1988,  the  Company developed and licensed specialized
migration  software products to service providers and other software vendors for
delivery  to  the  MIS  marketplace.  The Company's customers during this period
included  Price  Waterhouse,  LLP,  KPMG  Peat Marwick, IBM Corporation, On-Line
Software  International,  Inc., Pansophic Systems, Inc., Fujitsu, Ltd., Sterling
Software  and  Cincom  Systems,  Inc.

     From 1989 through  1992,  Forecross  revenues  were  derived from  software
development  contracts  with other  software  vendors,  royalties  from  various
consulting firms, and software product license fees. At the same time, Forecross
continued to develop additional commercial migration software products.

     From  1992  through 1997, Forecross developed and implemented a strategy of
utilizing  internal  sales and marketing resources instead of relying upon third
parties,  and  focused upon pursuing migration services contracts as compared to
the  previous  focus  on  development  contracts.    Major  customers  utilizing
migration services have included Bank of Montreal, Bear Stearns, Kimberly Clark,
New  Brunswick  Telephone  and  Union  Gas.

     In addition to the  migration  services  contracts,  and in response to its
customers'  growing year 2000 migration  demands and utilizing the technology it
had  developed  over the past  fifteen  years,  during 1996 and 1997 the Company
introduced  its  Complete/2000(TM)  software  products and related  services and
methodologies.  In  June  1996,  the  Company  authorized  its  first  exclusive
distributorship and sold its first software license for the Assess/2000 product.
Initial customer projects commenced during fiscal 1997. During 1997,  additional
sets of Assess/2000 licenses were sold,  additional  exclusive  distributorships
were  authorized,  and additional  customer  projects were signed and commenced.
Once  collectibility of the distributor and license fees is reasonably  assured,
and  if  there  are  no  significant  post-delivery  obligations,   the  Company
recognizes the fees associated  with the  exclusivity  and the software  license
ratably  over the contractual term (including  renewals - generally five  years)
commencing with the date of signing of the  agreements.  Revenues for  technical
and sales training, maintenance and support are recognized ratably over the term
of the support period.


RESULTS  OF  OPERATIONS

     YEAR 2000 COMPLIANCE

     Forecross, like any other  company, owns or uses computer software that may
be impacted by  the year 2000 problem, and also relies upon vendors of equipment
and  services  whose  products  and  services  may  be impacted by the year 2000
problem.  The  Company's  year  2000  compliance issues include (i) the computer
hardware  and  internally developed software which it uses in the performance of
services  for its customers, (ii) the hardware and third-party software which it
uses  for  corporate administration, (iii) the services of third-party providers
which  it  purchases  for  certain  professional services, and (iv) the external
services  such  as  telecommunications  and  electrical  power.  The Company has
initiated  a  project  that  will  attempt to identify all computer hardware and
software,  other  significant  equipment, and services upon which it relies that
may  be  impacted.   After identification of such items, the Company will verify
whether  those  products and services are year 2000-compliant.  The verification
process  will  include  both  accessing  the  websites  of  vendors  and service

                                        11
<PAGE>
providers to verify such compliance, and, if necessary, contacting those vendors
and service providers to determine their compliance or plans to become compliant
prior  to  December  31, 1999.  It is the intent of the Company to complete this
verification  process  by  early 1999.

     The Company's  administrative and operating systems are primarily PC-based,
utilizing  commercially  available  software.  Based on initial inquiries, which
have  not  yet  been  completed,  management  of the Company believes that these
commercial  software    applications  are either year 2000-compliant now or will
have  upgrades available at nominal cost which will be year 2000-compliant.  The
Company  has  already  purchased  an upgrade to its accounting systems that will
make  it  year  2000-compliant,  for  less  than $200.  The Company's System 390
mainframe software is not year 2000-compliant, and the Company intends to obtain
an  upgrade  to such  software from its  vendor by  March 31, 1999  at a cost of
less  than  $5,000.

     A preliminary review of the Company's  PC-based  servers  and computers has
indicated  that  several hardware systems are not currently year-2000 compliant,
but that there  is a simple procedure to make them compliant in the year 2000 at
no  cost.   On  January  1,  2000,  the  dates  in   these   computers    revert
automatically to January  1, 1980.   The Company will execute a procedure, which
it has already tested  on all of the non-compliant computers,  to reset the date
to the correct, year 2000  date.   If,  nonetheless,  the Company is not able to
modify those systems to become year-2000 compliant, it anticipates that the cost
of replacing such systems would be approximately $10,000, that the time required
to replace such  systems  would  not  exceed  two  weeks,  and  that, during the
replacement period,  the  Company's  other,  compliant  systems could be used to
perform the work  normally  performed  by  the  systems  being  replaced.

     The Company relies upon outside service providers for the processing and/or
administration of its payroll,  401(K) plan  and  benefits  insurance  programs.
Based    on  initial inquiries, which have not yet been completed, management of
the  Company  believes that  those  service providers will have systems that are
year  2000-compliant  or  that  the   Company  will  be  able  to  select  other
providers whose systems are year 2000-compliant  with no significant increase in
the  cost  of  those  services.

     The internal  software  which   the  Company  utilizes  for  performing the
migration projects, and the year 2000 assessment  and  renovation  projects,  is
year 2000-compliant.

     The Company is developing  a list of "non-computer" systems  upon  which it
relies, such as telecommunications equipment, building elevators, etc., in order
to determine whether such  systems are  in compliance with the year 2000.  It is
anticipated   that  this  review   will  be  completed  by  December  31,  1998.
Preliminary  review  of  such  vendors'  websites  indicates  that the Company's
vendors  all  have  projects  in process to ensure compliance well in advance of
December  31,  1999.

     The Company has not deferred  any  information technology  projects to date
due to the need to assess or  ensure year  2000-compliance of its systems,  and,
based upon its initial efforts to date as described herein, does  not anticipate
that any other information technology projects will be delayed in the future due
to this year 2000 project.

     For the  foregoing reasons,  the Company does not  anticipate  that it will
have an incomplete or untimely resolution of the year 2000 issue.   Although the
total costs of compliance have not as yet been definitely determined, management
believes  that  such  costs will not be material.  As previously indicated, with
respect to its internal systems as outlined above, the Company  believes that it
has or will  have achieved year 2000 compliance in advance of December 31, 1999.
With respect to external services provided by third parties, the Company is less
certain  of the impact of year 2000 non-compliance.  In the worst case scenario,
a  failure  of  the  electrical  system  which  supplies  power to the Company's
computers  would  disrupt  both the Company's ability to conduct business and to
communicate with its customers, vendors and other suppliers, since the Company's
telephone  system  also  requires  electrical power.  In this event, the Company
would  be  required  to purchase these services from alternative providers.  The
Company  intends, as part of its "non-computer" systems review, to determine any
extraordinary  costs  and the amount of implementation time associated with such
change  of  providers.

     YEAR ENDED SEPTEMBER 30, 1998 COMPARED TO YEAR ENDED SEPTEMBER 30, 1997

     Revenues  for  the  year  ended  September  30,  1998  were  $7,168,752  as
compared  to  $5,775,038 in 1997, an increase of 24%.  This increase in revenues
for  the  period  reflected  several factors:  first, revenue of $4,364,000 from
year  2000  assessment  and   renovation  contracts   and  the  amortization  of
Assess/2000 software licenses in 1998 as compared to $1,788,000 in 1997; second,
the decrease in revenue from  the  amortization  of  exclusive   distributorship
agreements of $110,000  in  1998 compared to  $660,000  in 1997; and, third, the
decrease in migration services  revenue to  $2,695,000  in  1998  as compared to
$3,326,000 in 1997.  Revenues for the three months ended September 30, 1998 were
$1,512,658 as compared to $1,368,442 for the same period in 1997, and $2,270,675
for the three months ended June 30, 1998. The decrease in revenue from the third
quarter ended  June 30, 1998 was due primarily to the significant revenue earned
on one major year  2000 renovation  project and the  completion of another large
year 2000  renovation project during the  June  quarter.   While other year 2000



                                        12
<PAGE>
project revenues in the September  1998 quarter were comparable to the June 1998
quarter,  these two major  projects had no comparable projects in the  September
quarter.  Backlog was  $531,000 at September 30,  1998 as compared to $4,281,000
(including approximately  $615,000 to be performed after fiscal  1998) in  1997.
       
     The reduction in backlog is attributable to numerous factors.  First is the
substantial completion of one  major  migration/renovation project during fiscal
1998. This project was significantly larger in  terms of  dollar value than most
Forecross contracts, and therefore made the backlog  substantially  larger  than
its historical norms.   Second  is that year 2000  contracts, unlike application
migration  projects,  are  typically  of  much  shorter  duration.   The average
application migration  project takes  from six to  eighteen  months to complete,
whereas the average year 2000  project  can be completed in eight weeks or less.
Therefore, revenue associated with  year 2000 projects may be booked, recognized
and completed without appearing in the quarterly or annual backlog amount. Third
is that there were two developments in the marketplace which Forecross  believes
negatively affected  the backlog:  (1) the temporary diversion  of resources and
attention away from  valuable  but  optional  application  migrations,  into the
mandatory resolution of  the  year 2000 problem;  and  (2) the decision  of some
prospective customers to  attempt  to  perform  the  year  2000  renovation work
internally, or to delay commencing  this  work  in  favor  of  evaluating  other
alternatives  (see  "Business:  Available  Solutions".)   While  both  of  these
developments  appear  to be  temporary,  they have had the effect of slowing the
rate  at  which  Forecross  has  been  able  to  obtain contracts for such work,
especially during the second half of the Company's fiscal year.

     Gross  margin was $2,749,405 and $2,408,430 in 1998 and 1997, respectively.
The gross margin percentage was 38% in 1998 and 42% in 1997.  While the revenues
from the  year  2000  products  and  services  increased  significantly in  1998
compared to 1997 as discussed above, they have not reached the level anticipated
by the Company and industry in general.  The Company added substantial resources
to address the year 2000 market, and the lower than anticipated level of revenue
adversely  impacted  gross  margins in 1998. In addition,  the  Company  had not
realized  the  efficiencies and  cost  savings  originally  anticipated  for the
off-site work  performed  primarily  by subcontractors on the migration services
projects.  During the second  quarter of  fiscal  1998, the Company  implemented
some  modifications  to  its procedures for pricing, performing, and controlling
the  migration  services  projects in order to improve the gross margin on those
projects and  avoid  any  further decline  in gross margins as compared with the
preceding year.

     Sales and  marketing  expenses  were  $1,838,126  in  1998  as  compared to
$1,490,479 in  1997.  Distributor fees were  $1,037,008  in  1998 as compared to
$639,715  in  1997.  Increases in commission and trade show expenses in  1998 as
compared to 1997 were offset by reductions in bonuses and consultant expenses in
1998.

     Research and  development  expenses  increased  to $1,520,709  in 1998 from
$1,006,768  in  1997, or  51%  due  to an increase in the number of personnel to
support the development activity  associated  with  the  Complete/2000TM product
and enhancements to existing software products.

     General and administrative  expenses  were  $1,413,312 and $887,039 in 1998
and  1997,  respectively,  reflecting:  additional personnel;  increased  use of
legal, audit, and other professional services in connection with  the  Company's
Form 10 registration  statement in  1998;  and, increased  rent and insurance in
1998 to support the increased level of business activity.

     Net  interest  expense  was  $305,110 for the year ended September 30, 1998
as  compared  to  $68,856  in  1997,  reflecting  the  increased  use in 1998 of
short-term  receivables  financing and loans from senior officers of the Company
to meet its working capital needs.

     The overall net  loss for the year ended  September 30, 1998 was $2,328,652
or $0.20 per share compared with a loss of $1,045,511 or $0.09 per share for the
year ended  September  30, 1997 (based on the  weighted average number of shares
outstanding during  the respective  periods).  The net loss for the three months
ended  September 30, 1998 was $669,489 as compared to a net loss of  $911,841 in
1997, and a net loss of $319,205 for the three months ended  June 30, 1998.  The
net loss per share  was $0.06  for the three  months  ended  September 30, 1998,
$0.08 for the comparable period in 1997, and $0.03 for the  three  months  ended
June 30, 1998.

     The provision for income tax expense is the tax payable for the period plus
the change during the period in deferred tax assets and liabilities.  Due to the
uncertainty of realization, a valuation allowance has been provided to eliminate
the net deferred tax assets at September 30, 1998 and 1997 (see Notes 2 and 7 of
Notes to Financial Statements).


     YEAR  ENDED  SEPTEMBER  30,  1997 COMPARED TO YEAR ENDED SEPTEMBER 30, 1996

     Revenues for the year ended  September 30, 1997 were $5,775,038 as compared
to $2,399,672  in 1996,  an increase of 141%.  This increase in revenues for the
year reflected several factors: first, the significant increase in its migration
services  revenue  ($3,326,172 in 1997 compared to $2,199,672 in 1996);  second,
revenue  from year 2000  assessment  and  renovation  contracts  and the revenue
recognized from Assess/2000  software licenses of $1,788,450 in 1997 as compared
to  $200,000   in  1996;   and  third,   revenue   recognized   from   exclusive
distributorship agreements of $660,416 in 1997 compared to no comparable revenue
in 1996. Backlog was $4,281,000 at September 30, 1997,  including  approximately
$615,000 to be performed after fiscal 1998, as compared to $1,709,000 in 1996.


                                        13
<PAGE>
     Gross  margin  was  $2,408,430 and $968,183 in 1997 and 1996, respectively.
The  gross margin percentage was 42% in 1997 and 40% in 1996.  The gross margins
reflect  the  impact  of both initial inefficiencies of additional personnel and
subcontractors hired during 1996 and 1997, and new methods of performing work on
both  the  migration  services and year 2000 assessment and renovation projects,
which  methods  were  introduced  by the Company during 1996.  While the methods
adopted for use at its main San Francisco facility were performing substantially
as  planned  during  1997, the Company did not realize the efficiencies and cost
savings  anticipated for the off-site work performed primarily by subcontractors
on  the migration  services  projects.  As a result, the Company in early fiscal
1998 implemented some modifications to its  procedures for  pricing,  performing
and controlling the migration services projects in order to  improve  the  gross
margin on  those  projects.

     During  the  three  months  ended  September 30, 1997, the Company provided
reserves  of  $300,000  against revenues and cost of revenues, primarily against
revenues  recorded  under  year 2000 projects. These reserves adversely impacted
the  gross  margin  for  the  year  ended  September  30,  1997.

     Sales  and  marketing  expenses  were  $1,490,479  in  1997  as compared to
$711,545 in 1996.  The increase in 1997 was due primarily  to  distributor  fees
earned on year 2000 projects in 1997, commissions  on  the  increased  migration
project sales, and participation  in  trade  shows  and other  costs  associated
with the initial and marketing of the Complete/2000TM  and  Assess/2000 products
and services.

     Research and  development  expenses  increased to  $1,006,768  in 1997 from
$253,743  in 1996,  or 297% due to an  increase  in the number of  personnel  to
support the development activity associated with the  Complete/2000TM  products,
enhancements to existing  software products and the decreased use of some of the
research and development personnel on migration services contracts in 1997.

     General  and administrative expenses were $887,039 and $332,500 in 1997 and
1996,  respectively,  reflecting  additional  personnel, increased use of legal,
audit,  and  other  professional  services,  and increased insurance, telephone,
business  and  payroll  taxes in 1997 to support the increased level of business
activity.

     Net  interest  expense was $68,855 in 1997 as compared to $129,141 in 1996,
reflecting the decreased use in 1997 of short-term receivables financing to meet
its  working  capital  needs, as well as the repayment of the Company's interest
bearing  debt  in  March  1997.

     The overall net loss for the year ended  September 30, 1997  was $1,045,511
or $0.09 per share compared with a loss of $461,046 or $0.04 per  share  for the
year ended September 30, 1996 (based on  the  weighted  average number of shares
outstanding  during  the  respective  periods).


LIQUIDITY  AND  CAPITAL  RESOURCES

     Through September 30, 1998, the Company had sustained recurring losses from
operations  and, at September  30, 1998, had  a net capital deficiency and a net
working capital deficiency.  These conditions raise substantial doubts about the
ability  of  the  Company to continue as a going concern (see Note 1 of Notes to
Financial  Statements).

     For  the year ended September 30, 1998, operations were funded through cash
derived from the sale in fiscal 1997 of software  licenses for  Assess/2000, new
exclusive  distributor  agreements,  and  software  maintenance  agreements  for
Assess/2000, short-term receivables financing, loans from senior officers of the
Company, and lease and other  financing of additions to  equipment and leasehold
improvements.

     Cash received from the sale  of common stock and warrants, and the exercise
of warrants, amounted to $48,000, $1,162,275, and  $328,422  in the  years ended
September 30, 1998, 1997 and 1996, respectively.

     In  October  1995,  the  Company  entered into a factoring agreement with a
financial  organization  whereby  the  Company  is  able  to obtain financing by
borrowing against its accounts receivable on a recourse basis.  At September 30,
1998, $467,734 was outstanding  under  the  agreement.   At  September 30, 1997,
there was  no outstanding  indebtedness  under the agreement.  The agreement may
be terminated by  either  the  factor  or  the  Company  at  any  time.

     In  December  1997,  the  Company received a loan in the amount of $350,000
from a senior  officer  of the Company.  The loan is for a term of two years, is
unsecured  and  will  accrue  interest  at  a  rate  of  24%  per  annum.

     In  February  1998,  the  Company received a loan in the amount of $225,000
from  another  senior  officer  of  the  Company.  The loan is for a term of two
years, is unsecured and  will  accrue interest  at  a  rate  of  24%  per annum.

     During fiscal 1999, the  Company's management intends to seek to  meet  its
working  capital  and  other  cash  requirements  with  cash  derived  from  its
operations, short-term receivables and other financing as required, and software
license  fees  from  organizations  desiring  access  to  the  Company's various
product  offerings.  In addition,  the  Company  must  continue  to  improve the
efficiency of its operations to achieve and maintain  positive  cash  flow  from
operations.



                                        14
<PAGE>
     During the first quarter of 1999, the Company's working capital was reduced
to levels that were lower than  customary.   This was due to the slowdown in the
Company's application migration business and the lack of a substantial number of
year 2000 customer contracts  (see "-Year ended September 30, 1998  compared  to
year  ended  September 30, 1997".)   The  Company  has  therefore taken steps to
reduce costs.  These include payroll reductions of approximately 20%  through  a
reduction in pay for certain members of the management,  not  replacing  certain
staff  members  upon  their  departures and laying off certain staff members who
were hired in anticipation of substantially more  year 2000  business  than  the
Company  has  seen to date.   Management  believes  that these staff cuts, which
affected 5 employees, do not negatively impact the Company's  ability to conduct
its  migration  or  year  2000  business.    Moreover,  with  the  current staff
complement, management believes that the Company has sufficient resources in all
required  areas  to  conduct all booked business and a substantial amount of the
business presently in its sales pipeline. Further, should a ramp-up of resources
be  required  to  accommodate  business  in  excess  of  the  Company's  current
capacity,  management  believes that such resources are readily available in the
San Francisco Bay area where the Company  is  located.  Further  cost  reduction
efforts  are  still  under  consideration,  but  will  not  result in savings as
substantial as the payroll reductions described above. 

     In addition to cost reductions,the Company anticipates completing a private
placement  of  securities  from  which  it  expects  to  receive net proceeds of
approximately $250,000 to $330,000 by mid-January 1999.   Beyond  these  actions
already  taken  to  address liquidity concerns, the Company  expects  additional
revenue  in  January  and  February, 1999 from  some  of the year 2000 contracts
currently  under negotiation.   While these actions should  cause  liquidity  to
improve somewhat, the Company does not expect that working capital  will  return
in the  short  term  to the  levels seen during 1996 and 1997, when revenue from
distributorships inflated historical norms.      
   
     With the significant  reduction in the  backlog  at  September 30,  1998 as
discussed above, the Company must obtain a significant amount of new projects to
achieve revenue levels in fiscal 1999  comparable  to fiscal  1998. As discussed
above in the "Year Ended September 30, 1998 as Compared to Year Ended  September
30, 1997", Year 2000 renovation projects are typically shorter in duration  than
comparable migration  projects, and thus could generate revenues   more  quickly
than migration projects.   With the deadline  for year  2000  renovation rapidly
approaching,  the  Company  believes that  it  will  be able  to secure such new
renovation  projects.   In  the  meantime,  management  is continuing to closely
monitor  the  Company's prospective year 2000 project volume to evaluate whether
the existing sources of financing  are  adequate  to  support  the operations of
the Company, or  whether  additional  means  of  financing,  including  debt  or
equity financing, may be required  to  satisfy  its  working  capital  and other
cash  requirements.

     Management  believes  that  if  it  obtains  the  anticipated  level of new
business, then continued use of short-term  receivables financing, together with
the successful completion of a private placement of the Company's securities in 
January 1999,  will be  sufficient  to
meet the Company's needs through the balance  of fiscal 1999.   There  can be no
assurance, however, that cash from operations  and  the other sources  described
above will be achieved or will be sufficient for the Company's needs.

     The Company  anticipates that its capital expenditures for fiscal 1999 will
be approximately $50,000 to $100,000.


RECENT  ACCOUNTING  PRONOUNCEMENTS

     During  1997,  the  Financial  Accounting Standards Board released SFAS No.
130,  Reporting  Comprehensive  Income,  and  SFAS  No.  131,  Disclosures about
Segments  of  an Enterprise and Related Information, both of which are effective
for  a fiscal year beginning after December 15, 1997.  The Company believes that
these  pronouncements  will  not  have  a  material  effect  upon  the financial
condition  or  results  of  operations  of  the  Company (see Note 2 of Notes to
Financial  Statements).

     In  1997,  the  American Institute of Certified Public Accountants released
Statement  of  Position  (SOP)  97-2, effective for fiscal years beginning after
December  15,  1997,  which provides revised guidance for recognizing revenue on
certain software transactions.  The Company believes that  the new guidance will
not have a material effect upon the financial condition or results of operations
of  the  Company (see  Note  2  of  Notes  to  Financial  Statements).

     In October 1998, the FASB issued SFAS No. 132, Employers' Disclosures about
Pensions and Other Postretirement Benefits. SFAS No. 132, which is effective for
fiscal years beginning  after December 31, 1997,  revises employers' disclosures
about pensions  and  other  postretirement  benefits.   It  does  not change the
measurement of recognition of those plans, and, accordingly, will have no effect
on  results of operations  and financial position  when  it  is  adopted  by the
Company.


CERTAIN  BUSINESS  CONCERNS

     UNPROFITABLE  OPERATING  HISTORY  AND  LIMITED  FINANCIAL  RESOURCES

     The Company has not historically  been  profitable, and as of September 30,
1998,  had  suffered  cumulative operating losses aggregating $7,992,079, and at
September 30,  1998,  had a  net  capital deficiency  and  a net working capital
deficiency.   These conditions raise substantial doubts about the ability of the
Company to continue as a going concern.  During fiscal 1999, the Company expects


                                        15
<PAGE>
to  meet  its working capital and other cash requirements with cash derived from
operations, short-term receivables and other financing as required, and software
license fees from organizations desiring access to the Company's various product
offerings. The Company must continue to improve the efficiency of its operations
to achieve and maintain positive cash flow from operations (see "-Liquidity  and
Capital Resources," and  Note 1 of Notes to Financial Statements).  There  is no
assurance, however, that cash from operations and the  other  sources  described
above will be  achieved or will be sufficient for the  Company's needs, nor that
the Company will be able to achieve profitability  on a  consistent basis.


     ADDITIONAL  FINANCING

     Forecross  may require additional funds to continue product development and
marketing, and to support its working capital requirements. The Company may seek
such  additional  financing  through   private  placements  of  debt  or  equity
financing, and through collaborative arrangements with others. If adequate funds
are not available when  required  or  on  acceptable  terms, the  Company may be
required to delay, scale back  or  eliminate its  product development activities
and sales and marketing efforts.  If this  were  to  become  necessary, it could
adversely affect the Company's  business,  results  of  operations and prospects
(see  "-Liquidity  and  Capital  Resources").


     VOLATILITY  OF  COMMON  STOCK

     The  Company's  stock  price  has  been  volatile  since its initial public
offering  on  the  Vancouver  Stock  Exchange in 1994. After the registration of
its  stock in  the United  States  during  1998,  the  stock  has  continued  to
experience significant volatility.  The  Company  believes that factors  such as
awareness of the  year 2000 problem,  quarterly fluctuations in the  results  of
operations,  announcements of  new  products by the  Company or its competitors,
changes  in  revenue or  earnings estimates by  securities analysts, changes  in
accounting  principles  or  their application and other factors  may  cause  the
market  price  of  the  Company's  stock  to  continue  to  fluctuate,   perhaps
substantially.  In addition, stock prices of many technology companies fluctuate
widely  for  reasons  that may be unrelated to operating results.  Due to market
and  securities  analysts'  expectations  of  continued  growth  and  the higher
price/earnings  ratio  at  which the Company's stock may trade, any shortfall in
meeting such expectations may have a rapid and significant adverse effect on the
price of the Company's stock in the future.  Fluctuations in the Company's stock
may  in  turn  adversely  affect  the  Company's  ability  to attract and retain
qualified  personnel,  and  to  gain  access to capital and financing if needed.


     FLUCTUATION  OF  QUARTERLY  RESULTS

     The  Company  has  experienced quarterly and other fluctuations in revenues
and  operating results and expects these fluctuations to continue in the future.
The  Company  believes  that  these  fluctuations  have been attributable to the
timing,  size  and  nature  of  the  Company's contracts with its customers; the
performance  of its distributors; the timing of the introduction of new products
or  services  by its competitors; the decision of potential customers to perform
such projects  using  internal  resources;  changes in the  Company's  operating
expenses;  personnel changes;  and fluctuations in economic and financial market
conditions.

     The timing,  size and nature of the Company's  contracts with its customers
are  important  factors  in the  Company's  operating  results.  Many  of  these
contracts involve large dollar amounts, and the sales cycle is often lengthy and
unpredictable.  Uncertainties  include  customers'  budgetary  constraints,  the
timing of their budget cycles and their internal approval process.  There can be
no assurance that the Company will be successful in closing such large contracts
on a timely  basis or at all.  As to the  nature of the  contracts,  most of the
Company's  migration  contracts are for a fixed fee. The Company's  projects for
year 2000  services  are  generally  based  upon a fixed  price per line of code
assessed and/or renovated.  Although the contracts contain  provisions  allowing
the  Company  to charge  additional  fees to its  customers  in the  event  that
unanticipated  or 'out of scope'  work must be done,  the  Company  nevertheless
bears the risk of cost overruns and inflation.  A significant  percentage of the
Company's  revenue that is derived from these  contracts  is  recognized  on the
percentage-of-completion  method, which requires revenue to be recorded over the
term of the contract.  A loss is recorded at the time when current  estimates of
project costs exceed unrecognized  revenue.  The Company's operating results may
be adversely affected by inaccurate estimates of contract completion costs.

     The Company's  expense levels are based, in part, on its expectations as to
future revenue and are fixed, to a large extent, in the short term. As a result,
the Company may be unable to adjust  spending in a timely  manner to  compensate
for any unexpected revenue shortfall.  Accordingly, any significant shortfall in
revenue  relative to the  Company's  expectations  would have an  immediate  and
material adverse effect on the Company's business.

     Due  to  the  foregoing factors, the Company believes that period-to-period
comparisons  of  its  operating  results are not necessarily meaningful and that
such  comparisons  cannot  be  relied  upon as indicators of future performance.
There  can  be  no  assurance that future revenue and operating results will not
vary  substantially.  It  is  also  possible  that  in  some  future period, the
Company's  operating  results  will  be  below the expectations of public market
analysts and investors.  In either case, the price of the Company's common stock
could  be  materially  adversely  affected.

                                        16
<PAGE>

     COMPETITION

     Forecross  is  not  currently aware of any direct competitors that license,
use  or  sell  fully automated, near-complete migration software.  While certain
vendors  do offer or use such software, none of the products currently available
provides  the  near-complete and comprehensive automated conversion performed by
the Company's products.  It is possible, however, that other software developers
and  vendors may create such software directed at the Company's market.  If this
should happen, or if the costs and risks associated with an enterprise rewriting
its  business  applications for the new technologies are otherwise significantly
reduced,  it  is  possible  that significantly fewer enterprises will choose the
migration  alternative using the Company's products.  The Company does have some
indirect  competitors  in  the  form  of  service  organizations,  such  as  the
accounting  and  computer  consulting  companies  which provide a combination of
automated  and  manual  conversion,  and  certain  of  these  organizations have
significantly  greater  resources,  both  of  capital  and  personnel,  than the
Company, and much greater general name recognition (see "Business:  Competition"
and  "Business:  Competitive  Position").

     In  the  year  2000  renovation  market,  the  Company  is aware of various
software  vendors  whose  products currently address COBOL, one of the languages
addressed  by  the Company's products. The Company is aware of far fewer vendors
who  currently  address  any of the other major non-COBOL languages addressed by
the  Company's  year  2000  products.  It is possible, however, that these other
software  vendors,  many  of whom have substantially more resources available to
them  than the Company, may develop other products to compete with the non-COBOL
products  offered  by  the   Company  (see  "Business:  Competition  -  Software
Vendors").  Further,  both the Company and its industry competitors must compete
with  the internal information  systems departments of their potential customers
for year 2000 renovation projects with those potential customers.

     There  can be no  assurance  that the  Company's  migration  and year  2000
products and services  will  compete  effectively  with those of its current and
potential  competitors,  nor that  future  competition  for  product  sales  and
services will not have a material  adverse  effect on the  business,  results of
operations and financial condition of the Company (see "Business: Competition").


     DEPENDENCE  ON  A  SMALL  NUMBER  OF  CUSTOMERS

     The Company's results of operations are attributable to a limited number of
orders, the average size of  which  exceeds  $500,000.  During  the  year  ended
September 30, 1998,  Brown  Brothers  Harriman &  Company  (40%), Charles Schwab
& Co., Inc. (12%), and the Company's Distributors, treated as one customer (10%)
represented  sixty-two   percent  (62%)  of  total  revenues. The President  and
Chief  Executive Officer of  Gardner Solution  2000, L.L.C.,  is  also the Chief
Executive  Officer of  Y2K  Solutions, L.P.,   CY2K Solutions, L.L.C.  and  PY2K
Solutions, L.L.C.   During  the  fiscal  year  ended  September  30, 1997,   the
Company's Distributors, treated as one customer (17%),  NCR  Corporation  (15%),
Aetna Life Insurance Company (11%) and  Brown Brothers Harriman & Company  (10%)
represented  fifty-three  percent (53%) of total revenues.    During  1996, Bear
Stearns  &  Company, Inc. (20%),  Humana  Incorporated   (14%),   New  Brunswick
Telephone (13%) and Aetna Life Insurance Company (10%)  represented  fifty-seven
percent(57%) of total revenues.  The loss or deferral of one or more significant
sale(s)  or  failure  to  collect on a  significant accounts receivable from any
customer  could  cause  substantial  fluctuations  in  the Company's  results of
operations  (see Notes 2 and 3 of Notes  to Financial  Statements).   While  the
Company  believes  that  the year 2000  market will offer it the opportunity  to
expand the number of customers and projects in process at any given  time, there
can be no assurance that it will be successful in its sales  efforts  or that  a
weakening in customer demand would not have an immediate material adverse effect
on the Company.


     MARKET  SIZE

      The  market  for  Forecross  migration  products  may  be smaller than the
Company  projects,  whether  because  companies  in  the  marketplace  elect for
budgetary  or  other reasons not to pursue automated migration or any other form
of  software conversion, or because they do so at a rate that is much lower than
Forecross expects (see "Business: Market").  If this should happen, it will have
a  direct  impact  upon  the rate of the Company's growth.  Although the overall
market for renovation in the year 2000 renovation market is estimated to be very
large,  the  number  of competing software products being offered and developed,
the  number  of service suppliers actively soliciting year 2000 projects and the
limited  time  available  in which to address the year 2000 problem may serve to
limit  the number of year 2000 renovation opportunities that the Company is able
to  obtain.


     NO  ASSURANCE  OF  SUCCESS  OF  MARKETING  STRATEGY

     Forecross has, over the years, experimented with a variety of approaches to
the marketing of its products.  The Company's current strategy for its migration
products and services is based on direct  marketing  which has been in place for
approximately  five years.  While present  indications  are that the strategy is
well-adapted to the market which has been targeted by Forecross, there can be no
assurance   that  over  the  long  term  it  will  be   successful.   Successful
implementation  of the marketing  plan requires,  among other things,  sales and



                                        17
<PAGE>
marketing  personnel  with  an  ability  to  communicate  clearly  to  potential
customers   the  ability  of  the  Company  to   complete   migration   projects
successfully,  and this requires an understanding of both the technology and the
marketplace.  For the year 2000 renovation  market,  the Company's  strategy has
been  developed  over the past  year.  While the  Company  has been able to sell
several  licenses  to its  Assess/2000  product,  several  distributorships  and
several  assessment and renovation  projects,  the Company's  experience in this
market is too  limited at the current  time to  determine  whether the  strategy
being pursued for this market will be successful (see  "Business:  Marketing and
Sales Strategy").


     DEPENDENCE  ON  YEAR  2000  REVENUES

     The  growth in the Company's revenues in fiscal 1998 resulted in large part
from increased demand for Assess/2000 and Complete/2000TM  services and licenses
as awareness of the year 2000 problem has grown.  Year 2000 services and related
revenue  increased from 8% in fiscal 1996 to 42% of the Company's total revenues
in  fiscal 1997 and 62% of total revenues for the year ended September 30, 1998.
Should  the  demand  for the  Company's year 2000 solutions and products decline
significantly as a result of new technologies, competition or any other factors,
the   Company's   professional services  fees  and  license  revenues  would  be
materially  and  adversely affected.  The Company anticipates that demand in the
year  2000  market  will  decline,  perhaps  rapidly,  following  the year 1999.

     The Company experienced  a  decline  in  revenue  from its  core  migration
services to  $2,695,000 in  1998 from  $3,326,000 in 1997.  The Company believes
that new migration services projects are being delayed by potential customers as
they focus their efforts on renovating their  systems for year 2000  compliance.
During  fiscal  1999, the Company believes that focus by its  customers on  year
2000  projects may  continue to  impact its  ability to  significantly  increase
revenues from its  core  migration  services.  After  January 1, 2000, it is the
Company's  strategy to leverage customer relationships and knowledge of customer
application  systems  derived from its year 2000 services solutions  to continue
to grow its  migration and other products and services offerings beyond the year
2000 market.  However,  there can be  no  assurance that this  strategy  will be
successful,  and should the  Company be  unable to  market  other  products  and
services as  demand in the year  2000  market  declines,  whether as a result of
competition,  technological  change or other  factors, the  Company's  business,
results of  operations and financial  condition will be materially and adversely
affected.


     LIABILITY  EXPOSURE

     The Company markets its products and services to customers for managing the
renovation  of  mission-critical  computer  software systems.  As noted above in
"Dependence  on  Year  2000  Revenues",  a  large  and increasing portion of the
Company's business is devoted to addressing the year 2000 problem, which affects
the performance and reliability of many mission-critical systems.  The Company's
agreements with its customers typically contain provisions designed to limit the
Company's  exposure  to  potential  product and service liability claims.  It is
possible,  however, that the limitation of liability provisions contained in the
Company's  customer  agreements  may not be effective as a result of existing or
future  federal,  state,  local  or  foreign  laws  or ordinances or unfavorable
judicial  decisions.    Although  the  Company  has not experienced any material
product  or  service  liability  claims  to  date,  the  sale and support of its
products  and  services  may entail the risk of such claims, particularly in the
year 2000 market, which could be substantial in light of the use of its products
and  services  in mission-critical applications.  The Company does not presently
maintain  insurance  coverage  for  its  products  and services and a successful
product  or  service  liability  claim  brought against the Company could have a
material  adverse  effect  upon  the  Company's  business, operating results and
financial  condition.


     PRODUCT  DEVELOPMENT

     The  development  of  complex,  large-scale,  multiple environment computer
software  presents  a  difficult  engineering challenge, and it is possible that
Forecross  may  not be able to continue to develop products responsive to market
requirements  on  a  timely  or  cost-effective basis, or at all. If that should
happen,  there is a risk that other competing products might be launched earlier
and  capture  a significant part of the market targeted by the Company.  Because
of  the  time  constraints  posed by the year 2000 market, there is no assurance
that the Company will be able to develop products in a timely manner in order to
obtain  sufficient  projects  using  those  products.


     LIMITED  EXPERIENCE  OF  MANAGEMENT  IN  THE  MANAGEMENT  OF  GROWTH

     While the present management of the Company, having been its founders, have
been  principally  responsible  for the growth of its business to date, they may
not  be in a position to provide the full range of skills required to manage the
further  growth  of  the  Company's business, and it may be necessary to recruit
competent personnel to supplement their skills and experience. While the Company
believes  that  it will be able to recruit competent personnel with the required
skills,  competition for such personnel is intense and there can be no assurance
that  Forecross  will  be  successful in finding, attracting and retaining them.
Failure  to  do  so  could  have  an adverse impact upon the Company's business.



                                        18
<PAGE>
     CONTROL  BY  DIRECTORS  AND  OFFICERS

     The  current  directors  and  officers  of  the  Company  beneficially  own
approximately  34%  of  the  Common Shares outstanding. As a result, the current
directors and officers of the Company will continue to exercise control over its
affairs.


     DEPENDENCE  ON  KEY  PERSONNEL

     The  Company's  progress to date has to a significant extent been dependent
on the skills of certain key personnel, including Kim O. Jones and Bernadette C.
Castello,  the  founders  and  principal  shareholders  and,  respectively,  the
President  and  Chief  Executive Officer and the Senior Vice President and Chief
Financial  Officer  of  the Company. The Company has not entered into employment
contracts  with  these or any other members of management or other employees. In
addition,  competition  for  highly  skilled  technical,  management, financial,
marketing  and  sales,  and other personnel in the computer industry is intense.
Loss  of  the  services  of  any  of  the Company's present key personnel, or an
inability  to  attract  and  retain  needed  additional  personnel  could have a
materially adverse effect upon the Company.  In addition, the  Company sometimes
relies upon qualified, experienced subcontractors to support both its  migration
services  and  year  2000  renovation  work.    The inability to find and retain
sufficient  qualified  subcontractors  may  adversely  impact  the  Company's
operations.


     INTELLECTUAL  PROPERTY  PROTECTION

     While  the  Company   believes  that  its  products  and  technologies  are
adequately  protected  against   infringement  by  confidentiality   agreements,
licensing agreements,  copyright laws and the complex nature of the products and
technologies  themselves,  there can be no assurance  of  effective  protection.
Monitoring  and  identifying  unauthorized  use of the Company's  technology may
prove difficult, and the cost of, distraction,  and time required for litigation
may impair or completely  frustrate the  Company's  ability to guard  adequately
against such infringement.


     GENERAL  ECONOMIC  AND  MARKET  CONDITIONS

     Forecross  products  are  designed  for large organizations which typically
make  significant  investments  in  their  MIS departments. Expenditures by such
organizations  tend  to vary in cycles that reflect overall economic conditions.
The  business of the Company is, therefore, vulnerable to variations in economic
conditions generally, or to those variations which affect the economic prospects
of  corporations  and organizations in its target market, and which could affect
the capital spending or budget cycles of prospective customers.  The time period
during  which  companies  may  address  and  correct  their  year 2000 issues is
limited.  Consequently,  such  companies  may  feel  an  urgency to contract for
assessment  and  renovation  services with other companies before the Company is
able to address a sufficient portion of the market through its direct marketing,
distributors,  and  licensed  service providers. This could adversely affect the
Company's  ability  to  obtain  year  2000  renovation  projects.


     EFFECT  OF  YEAR  2000  PROBLEM  UPON  COMPANY  OPERATIONS

     Forecross, like any other company, owns or uses computer  software that may
be impacted by the  year 2000  problem.  During 1998, the Company began a review
of the software it is currently using in order to identify any systems that need
to be made year 2000-compliant. It is anticipated that this review will  include
a survey of vendors  of software or services to the Company to ensure that their
software  will also  be  year 2000-compliant. The Company intends to ensure that
all such software will be year  2000-compliant well in  advance  of December 31,
1999. Management has not yet completed its assessment of the Company's potential
year 2000  compliance  costs and related potential  on the Company's operations,
however, management  does  not  believe  that  the  expense or  effect  of  such
compliance will be  material to the  Company.   See  also  Item 7  "Management's
Discussion  and  Analysis  of  Financial  Condition  and  Results of Operations:
Results of Operations-Year 2000 Compliance".



ITEM   8.     FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA
---------     -----------------------------------------------

     The  financial  statements required by this item are set forth on pages F-1
through  F-15  hereof.



ITEM   9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS  ON  ACCOUNTING  AND
---------     ------------------------------------------------------------------
              FINANCIAL  DISCLOSURE
              ---------------------

     On  July  2,  1997, the Company received the resignation of its independent
auditor,  Coopers  &  Lybrand, L.L.P. ("Coopers & Lybrand"). Prior to receipt of
the  resignation, the decision to change auditors was not discussed, recommended
or  approved  by  any  committee  of  the  Board of Directors or by the Board of


                                        19
<PAGE>                                    
Directors. By resolution dated September 10, 1997, the Board of Directors of the
Company  appointed  BDO  Seidman,  LLP ("BDO  Seidman")  as the new  independent
auditor of  the  Company,  effective  September  10,  1997.  Subsequent to their
appointment  as  auditor,  BDO  Seidman re-audited  and  opined on the financial
statements of the Company for the years  ended  September  30,  1996  and  1995,
previously opined on by Coopers & Lybrand.

     Subsequent to the release of the Company's unaudited  financial  statements
for the quarter and six months ended  March 31, 1997,  Coopers & Lybrand advised
the Company that Coopers & Lybrand disagreed with the Company's  accounting  for
two specific transactions entered into in March 1997. Both transactions involved
the licensing of software and the granting of certain exclusive marketing rights
to two of the Company's distributors.  It was the view of Coopers & Lybrand that
the Company  did  not have sufficient information to support  the allocation and
recognition of revenue between the software licenses and the exclusive marketing
rights because  the Company had never  sold these  two elements separately.  The
Company believed that its reporting was appropriate and consistent with  advice,
but  Coopers  &  Lybrand  continued  to  disagree.

     Subsequent  to  the  resignation  of  Coopers  &  Lybrand,  BDO Seidman was
retained to advise the Company on a recommended method of accounting for the two
transactions  in  question  as  well  as  a subsequent similar transaction.  BDO
Seidman  has  recommended a method of accounting whereby the total dollar amount
of  the  software  license  and  distributor  agreements  will be amortized over
periods  commencing  with  the  dates  of  their  respective  signing and ending
December  31,  1999.    The Company accepted this recommendation and accordingly
restated  its  interim financial statements for the period ended March 31, 1997.
The  Company  has authorized Coopers & Lybrand to fully respond to any inquiries
of  BDO  Seidman  concerning  the  disagreement.

     The  Company  has never been advised by Coopers & Lybrand that: (1) it does
not  have  the  internal  controls  necessary  for  the  development of reliable
financial  statements; or (2) any information came to the attention of Coopers &
Lybrand  that  led  it  to conclude that it could no longer rely on management's
representations, or made it unwilling to be associated with financial statements
prepared  by  management; or (3) there was any need to increase the scope of its
audits.

     The  Company  has  been  advised  by  Coopers & Lybrand that except for the
disagreement  regarding  the  two specific transactions described above, nothing
has  come  to  the attention of Coopers & Lybrand that in its opinion materially
impacts  the  fairness of  financial  statements  for  the  fiscal  years  ended
September  30,  1996  and  1995 previously audited by Coopers & Lybrand.

     In connection with the filing of a Registration Statement on Form 10/A, the
Company  in  June  1998,  modified its accounting policy and recognizes revenues
ratably  over the contractual term (including renewals) of the  software license
and distributor agreements.  As a result,  the  Company  restated the  financial
information  reported in the  Registration  Statement  from  amounts  previously
reported.



ITEM  10.     DIRECTORS  AND  EXECUTIVE  OFFICERS
---------     -----------------------------------

     The  directors,  executive officers and key employees of the Company are as
follows:

<TABLE>
<CAPTION>
Name                         Age                           Position
---------------------------  ---  -----------------------------------------------------------
<S>                          <C>  <C>
Kim O. Jones. . . . . . . .   54  Chief Executive Officer, President and Director

Bernadette C. Castello. . .   44  Senior Vice President, Chief Financial Officer and Director
Richard A. Carpenter. . . .   56  Director
Richard L. Currier, Jr. (1)   53  Director
Ronald Herbst . . . . . . .   56  Director of Customer Care
Carl H. Johnson . . . . . .   53  Director of Project Management
Charles T. Nelson . . . . .   52  Director of Software Products
Kenneth J. Paris. . . . . .   51  Senior Database Specialist
Peggy A. Payne. . . . . . .   49  Director of Migration Services
<FN>
(1)  Denotes  member  of  audit  committee.
</TABLE>

     KIM  O.  JONES  (54) founded Forecross together with Bernadette Castello in
1982  and  has  been  in  his present position since that time. Mr. Jones is the
chief  architect  of  the  Company's  products. He has been active as a software
industry  entrepreneur  and  industry  participant  since  1971.  Prior  to  the
establishment of Forecross, Mr. Jones served from 1980 to 1982 as a Director and
Vice  President  of Computer Systems Design, Inc., of San Francisco, California,
in  charge  of  software  product  development  and marketing. In 1970 Mr. Jones
co-founded  Genasys  Systems,  Inc.,  a  software and services firm based in San
Francisco, California, for which he worked initially as Chief Technology Officer
and,  later, as President until 1980. From 1967 to 1970, he was a Vice President
of  Liberty  National  Bank  of  San Francisco, California, responsible for data
processing.  Mr.  Jones  was  a member of the Board of Directors of the American
Software  Association,  a  division of the Information Technology Association of
America.

                                        20
<PAGE>
     BERNADETTE C. CASTELLO (44) co-founded Forecross with Kim Jones in 1982 and
has  been in her present position since that time.  Ms. Castello manages the day
to  day  operations  of  the Company. From 1973 to 1977, Ms. Castello worked for
KPMG  Peat  Marwick in New York, designing and managing the installation and use
of  some  of the earliest automated applications in that firm. Thereafter, until
1980,  she worked as an analyst in Peat Marwick's computer resources department.
From 1980 to 1982, when she left to found Forecross with Mr. Jones, Ms. Castello
was  a  Senior  Consultant  at  Computer  Systems Design, Inc. in San Francisco,
developing  applications  for  the  financial  and  manufacturing  industries.

     RICHARD A.  CARPENTER  (56) is the  President  of Carpenter  Associates,  a
consulting  firm  which  provides   strategic  planning  and  product  marketing
assistance  to early stage  software  companies.  Mr.  Carpenter  also serves as
Chairman of the Board of two companies which he co-founded:  Corex Technologies;
and,  Healthcourt  Technologies.  Prior  to  co-founding  these  companies,  Mr.
Carpenter  had  co-founded  Index  Systems (now  CSC/Index)  in 1969,  and Index
Technology (now part of Intersolv) in 1983 where he served as Chairman/CEO until
its merger with Sage Software in 1991 to form Intersolv Software.  Mr. Carpenter
became a director  in March 1998.  Mr.  Carpenter  does not  provide  consulting
services to any direct or indirect competitor of the Company.

     RICHARD L.  CURRIER,  JR. (53) is the Chairman of Strategic  Marketing,  an
independent  software marketing  consulting firm based in Park City, Utah, which
supplies  strategic  sales and  marketing  consulting  services to the  software
industry.  Mr. Currier has over 20 years of senior management  experience in the
software  industry,  including  positions as Chairman of Panoramic  Inc., of San
Jose, California,  and President of Walker Interactive Systems of San Francisco.
Mr.  Currier's  technical  background  includes  service  as  Director  of  Data
Communications   Software   Development  for  Project  Apollo  of  the  National
Aeronautics and Space Administration,  and as a consultant to the Departments of
Defense and Agriculture and the Executive Offices of the President of the United
States.  Originally  engaged  as a  consultant  to  provide  advice on sales and
marketing  strategies,  Mr. Currier became a director of Forecross on October 1,
1993.  He does  not  provide  consulting  services  to any  direct  or  indirect
competitor of the Company.

     RONALD  HERBST  (56)  joined  the  Company  in December 1995 as Director of
Project  Management  and  currently  serves  as Director of Customer Care.  From
November  1993  through  December  1995,  Mr. Herbst was an independent software
consultant  providing such services as conceptual and detailed system design and
implementation  and  system programming.  From August 1993 through October 1993,
Mr.  Herbst was Vice President, Research and Development for Dynamic Bytes, Inc.
From  July  1989 through July 1993, Mr. Herbst served as Vice President, Windsor
Technologies,  Inc.    Mr.  Herbst  has  over twenty  years of senior management
experience serving the information technology industry.

     CARL H. JOHNSON  (53)  joined  the  Company  in  March  1997 as Director of
Project  Management.  From  1993  to  1997,  Mr.  Johnson  was Director, General
Accounts  for Affiliated Computer Services, Inc.  From 1988 to 1993, Mr. Johnson
was  Manager,  Corporate  Applications  for Amdahl Corporation.  Mr. Johnson has
over  twenty  years  of  senior  management  experience  serving the information
technology  industry.

     CHARLES  T. NELSON (52) joined Forecross in December 1991 and has served in
a  variety  of technical and research and development capacities.  In June 1996,
Mr. Nelson was named Director of Software Products.  Prior to joining Forecross,
Mr.  Nelson  had over twenty years' experience managing and supervising software
and  hardware  technical  support  activities  for  several  large corporations.

     KENNETH  J. PARIS (51) Senior Database Specialist was with the Company from
1989  through  March  1996, and rejoined the Company in October 1996. From March
1996  through  September  1996,  Mr.  Paris  served  as  an independent software
consultant  to  various  companies,  including  Forecross.    Prior  to  joining
Forecross  in 1989, Mr. Paris spent eleven years with KPMG Peat Marwick, both as
Database  Administrator and as director of database research and development for
the  consulting  department  of  KPMG Peat Marwick's National Technology Center.
From  1985  to  1986,  Mr.  Paris  served  as Director of Product Development at
Pansophic  Systems,  Inc.  of  Oak  Brook, Illinois. He was also for six years a
member  of  the  database committee of the American National Standards Institute
(ANSI)  which  developed  the SQL standard. Mr. Paris was the initial Conference
Chairman  and  then  President  of  the  International  DB2  Users  Group.

     PEGGY  A.  PAYNE (49) joined Forecross in May 1996 as Director of Migration
Services.    From  February  1993  through  May  1996, Ms. Payne was Director of
Information  Management  and Technology for Revo Corporation.  From July 1988 to
February  1993,  Ms.  Payne  was  manager,  information systems for Westinghouse
Security  Electronics.   Ms. Payne has over twenty years of technical experience
and  has  served  in  various  capacities  for technical organizations including
Association  of  Corporate Computing Professionals, Bay Area MAPICS Users Group,
and  Information  Technology  Executives  Association.



ITEM  11.     EXECUTIVE  COMPENSATION
---------     -----------------------

     The  following  table sets forth the amount of all compensation paid by the
Company  during  each  of  1998,  1997  and  1996  to  the person serving as the
Company's  Chief Executive Officer, and to the Company's most highly compensated
executive  officer,  other  than the Chief Executive Officer, whose compensation
exceeded  $100,000  during  any  such  year  (the  "Named  Executive Officers").


                                        21
<PAGE>
<TABLE>
<CAPTION>
                                                               Long-Term
                                     Annual Compensation     Compensation
                                   -----------------------  ---------------
Name and Principal Position  Year    Salary      Bonus        Securities      All Other
---------------------------  ---- -----------  -----------    Underlying     Compensation
                                                            Option(#)(1)(2)  ------------
                                                            ---------------
<S>                          <C>   <C>         <C>          <C>              <C>
Kim O. Jones. . . . . . . .  1998  $  185,000  $      None             None          None
Chief Executive Officer . .  1997     156,511       51,320             None          None
                             1996     129,515         None          250,000          None

Bernadette C. Castello. . .  1998  $  185,000  $      None             None          None
Senior Vice President . . .  1997     156,511       56,970             None          None
                             1996     129,515         None          250,000          None
<FN>
(1)  The  stock  options  granted  to  the named officers are fully vested.  The
     options are exercisable at $1.43 per share and expire five years  from  the
     date of  grant.
(2)  There  are  no  other  long-term incentive compensation plans which require
     disclosure.
</TABLE>

     Stock  Option  Grants  in  Last Fiscal Year.  There were no grants of stock
options  to  either  of the Company's Named Executive Officers during the fiscal
year  ended  September  30,  1998.

     Aggregated  Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values.    The  following  table  sets  forth  for  each Named Executive Officer
information  regarding  stock  option  exercises  during  the  fiscal year ended
September  30,  1998 as well as the fiscal year end value of unexercised options
for  each  such  person:

<TABLE>
<CAPTION>
                                                   Number of Securities         Value of Unexercised
                                                  Underlying Unexercised      In-the-Money Options at
                                                 Options at 1998 Year End         1998 Year End
               Shares Acquired                  --------------------------  ---------------------------
Name             on Exercise    Value Received  Exercisable  Unexercisable  Exercisable   Unexercisable
-------------  ---------------  --------------  -----------  -------------  ------------  -------------
<S>            <C>              <C>             <C>          <C>            <C>           <C>
Kim O. Jones                 0               0      250,000              0  $    405,000              0
Bernadette C.
 Castello .                  0               0      250,000              0  $    405,000              0
</TABLE>

DIRECTOR  COMPENSATION

     Directors  receive  no  compensation for service on the Board of Directors.

     Mr. Currier is paid a retainer of $817 per month for consulting services in
connection with the Company's  marketing  strategy.  Non-employee  directors are
reimbursed for reasonable out-of-pocket expenses incurred in connection with the
attendance of Board meetings. Non-employee directors are entitled to participate
in the  Company's  1994 Stock Option Plan.  During the year ended  September 30,
1998, Mr. Carpenter received a stock option grant for 7,500 shares at $11.50 per
share.  During  the  year  ended  September 30,  1996,  Mr.  Currier  received a
a stock option grant for 5,000 shares at $4.75 per share.  During the year ended
September  30,  1997, no options were granted to non-employee  directors.



ITEM  12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
---------     --------------------------------------------------------------

     The following table sets forth certain information regarding the beneficial
ownership of the Company's outstanding shares of Common Stock  as  of  September
30, 1998 by (i) each person known to the Company beneficially to own 5% or  more
of the outstanding shares of  its  Common  Stock,  (ii)  each  of  the Company's
directors,  (iii)  each of the Company's executive officers named in the Summary
Compensation  Table  below,  and  (iv)  all  directors  and officers as a group.
Except  as  indicated  in  the footnotes to this table, the persons named in the
table have sole voting and investment power with respect to all shares of Common
Stock  shown  as  beneficially owned by them, subject to community property laws
where  applicable.


                                        22
<PAGE>
<TABLE>
<CAPTION>
Name of Owner                           Number of Shares   Percent of Class
                                       Beneficially Owned  Beneficially Owned
-------------------------------------  ------------------  ------------------
<S>                                    <C>                 <C>
Kim O. Jones (1). . . . . . . . . . .           2,218,344               18.1%
Bernadette C. Castello (2). . . . . .           2,223,944               18.1%
Richard A. Carpenter  (3) . . . . . .              32,100                0.3%
Richard L. Currier, Jr. (4) . . . . .               5,000                0.0%
All directors and executive officers
as a group (4 persons) (5). . . . . .           4,479,388               36.5%
<FN>
(1)  Includes  250,000 shares subject to stock option which is exercisable as of
     September 30, 1998.
(2)  Includes  250,000 shares subject to stock option which is exercisable as of
     September 30, 1998.
(3)  Includes  7,500  shares  subject to stock option which is exercisable as of
     September 30, 1998.
     Mr. Carpenter's business address is 25 Marion Street, Hingham, MA 02043.
(4)  Includes  5,000  shares  subject to stock option which is exercisable as of
     September 30, 1998.
     Mr.  Currier's business address is P.O. Box 770-369, Park City, Utah 84060.
(5)  Includes  512,500  shares subject to stock options which are exercisable as
     of September 30, 1998.
</TABLE>



ITEM  13.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS
---------     --------------------------------------------------

      As of September 30, 1998, the Company had the following  notes  receivable
from/payable  to  its  officers:

     In  December  1997,  the Company borrowed $350,000 from Kim O. Jones, Chief
Executive  Officer,  under  an  unsecured promissory note due December 30, 1999.
The  note  bears  interest  at  24.0%  per  annum.

     In  February  1998,  the  Company  borrowed  $225,000  from  Bernadette  C.
Castello, Senior Vice President, under an unsecured promissory note due February
28, 2000.  The  note  bears  interest  at  24.0%  per  annum.

     Note  receivable  from  Kim  O. Jones, Chief Executive Officer, of $65,429,
with  interest  at  10%,  due December 31, 1997. This represents the balance due
from  amounts  advanced  at  various  times between 1987 and 1993 principally to
assist  in  the purchase of a principal residence by Mr. Jones. Accrued interest
receivable  amounted  to  $24,536 at September 30, 1997. The note receivable and
accrued  interest  receivable  were  paid  in  full  on  December  31,  1997.



ITEM  15.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
---------     ----------------------------------------------------------------

(a)          Financial  Statements

1.        Financial Statements.  The following Financial Statements of Forecross
--        --------------------
Corporation,  and  the  Report of Independent Public Accountants are included at
pages  F-1  through  F-15  of  this  Annual Report.

<TABLE>
<CAPTION>
DESCRIPTION                                                         PAGE NO.
--------------------------------------------------------------  ----------------
<S>                                                             <C>
Report of BDO Seidman, LLP,
  Independent Certified Public Accountants . . . . . . . . . .  F-1

Balance Sheets as of September 30, 1998 and 1997 . . . . . . .  F-2
Statements of Operations for each of the Three Years
  in the Period Ended September 30, 1998.  . . . . . . . . . .  F-3
Statements of Shareholders' Deficit for each of the
  Three Years in the Period Ended September 30, 1998 . . . . .  F-4
Statements of Cash Flows for each of the Three Years
  in the Period Ended September 30, 1998 . . . . . . . . . . .  F-5
Notes to Financial Statements. . . . . . . . . . . . . . . . .  F-6 through F-15
</TABLE>

2.     Financial Statement Schedule.  The following financial statement schedule
--     ----------------------------
of  Forecross  Corporation  for  each  of  the  three  years in the period ended
September 30, 1998 is  filed as part of this Annual Report and should be read in
conjunction with the Financial Statements of Forecross Corporation.

     Valuation  and  Qualifying  Accounts                       S-1

                                        23
<PAGE>
 3.    Index  and  Description  of  Exhibits
---    -------------------------------------

<TABLE>
<CAPTION>
Exhibit No.  Description
-----------  --------------------------------------------------------------------------------
<C>          <S>

      3.1+   Restated Articles of Incorporation

      3.2+   By-Laws
     10.1+   Lease Agreement, dated January 1, 1997
             between the Company and The Canada Life Assurance Company
     10.2+   Form of Indemnification Agreement entered into
             between the Company and each of its officers and
             directors
     10.3+   1993 Restricted Stock Purchase Plan
     10.4+   1994 Stock Option Plan and Form of Option Agreement
     10.5*   Exclusive Distributor Agreement between the
             Company and Gardner Solution 2000, L.L.C., and
             Amendment
     10.6*   Exclusive Distributor Agreement between the
             Company and Y2K Solutions, L.P.,
     10.7*   Software License Agreement between the Company
             and Y2K Solutions, L.P.
     10.8+   Factoring Agreement, dated October 30, 1995, between
             the Company and Silicon Valley Financial Services
     10.9+   Lease Expansion Proposal dated November 17, 1997, between
             the Company and The Canada Life Assurance Company
     10.10+  Factoring Modification Agreement, dated January 13, 1998, between the Company
             and Silicon Valley Financial Services
     10.11*  Exclusive Distributor Agreement between the Company and CY2K Solutions, L.L.C.
     10.12*  Software License Agreement between the Company and CY2K Solutions, L.L.C.
     10.13*  Exclusive Distributor Agreement between the Company and PY2K Solutions, L.L.C.
     10.14*  Software License Agreement between the Company and PY2K Solutions, L.L.C.
     16.1+   Notice of Change of Auditor dated September 23, 1997, issued to all holders of
             common shares of Forecross Corporation
     16.2+   Letter dated September 23, 1997 from BDO Seidman, LLP to the British Columbia
             Securities Commission and to the Vancouver Stock Exchange confirming the
             accuracy of the information contained in the Notice of Change of Auditor of
             Forecross Corporation dated September 23, 1997
     16.3+   Letter dated September 23, 1997 from Coopers & Lybrand, L.L.P. to the British
             Columbia Securities Commission and to the Vancouver Stock Exchange confirming
             the accuracy of the information contained in the Notice of Change of Auditor of
             Forecross Corporation dated September 23, 1997
     16.4+   Letter dated September 23, 1997 from the Board of Directors of Forecross
             Corporation to the shareholders of Forecross Corporation, the British Columbia
             Securities Commission and the Vancouver Stock Exchange confirming the review of
             the Board of Directors of the Notice of Change of Auditor and the related letter
             dated September 23, 1997 from BDO Seidman, LLP and Coopers & Lybrand,
             L.L.P.

     27.1    Financial Data Schedule, September 30, 1998



<FN>
          +  Previously filed as part of the Company's Form 10/A, effective June 16, 1998.

          *  The Company has requested that certain portions of the documents be given
             confidential  treatment.  The entire documents, including the redacted portions,
             have  been  filed  with  the  SEC.
</TABLE>

(4)          REPORTS ON FORM 8-K
---         --------------------

            None

                                       24
<PAGE>
SIGNATURES


Pursuant  to  the  requirements  of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this Annual Report to be signed on
its  behalf  by  the  undersigned,  thereunto  duly  authorized.

                         Registrant

                         FORECROSS  CORPORATION


January 13, 1999         BY:  /S/ Bernadette C. Castello
                         ---------------------------------
                         Bernadette C. Castello
                         Senior Vice President and Chief Financial Officer



                                       25
<PAGE>
INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS'  REPORT


To  the  Stockholders  and  Board  of  Directors  of  Forecross  Corporation


We  have  audited the accompanying balance sheets of Forecross Corporation as of
September  30,  1998  and  1997,  and  the  related  statements  of  operations,
shareholders'  deficit  and cash flows for each of the three years in the period
ended  September  30,  1998.    We  have also audited the Schedule listed in the
accompanying  index at Item 15.  These financial statements and the Schedule are
the responsibility of Forecross Corporation's management.  Our responsibility is
to  express  an  opinion on these financial statements and the Schedule based on
our  audits.

We  conducted   our  audits  in  accordance  with  generally  accepted  auditing
standards.    These  standards  require  that  we plan and perform the audits to
obtain  reasonable assurance about whether the financial statements and Schedule
are  free  of  material  misstatement.    An audit includes examining, on a test
basis,  evidence  supporting  the  amounts  and  disclosures  in  the  financial
statements  and  Schedule.   An  audit  also  includes  assessing the accounting
principles used and  significant estimates  made  by  management,   as  well  as
evaluating the overall presentation  of the financial  statements and  Schedule.
We believe that our audits provide a reasonable  basis  for  our  opinion.

In our opinion,  the  financial statements referred to above present fairly,  in
all  material  respects,  the  financial  position  of Forecross  Corporation at
September  30,  1998  and  1997,  and the results of its operations and its cash
flows  for  each  of  the  three years in the period ended September 30, 1998 in
conformity  with  generally  accepted  accounting  principles. 

Also, in our opinion, the Schedule presents fairly  in all material respects the
information set forth therein.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue  as  a  going  concern.    As discussed in Note 1 to the
financial statements, the Company has sustained recurring losses from operations
and  has  net capital deficiencies and negative working capital at September 30,
1998.  These conditions raise substantial doubt about the ability of the Company
to continue as a going concern.  Management's plans as to these matters are also
discussed  in  Note  1.  The financial statements do not include any adjustments
that  might  result  from  the  outcome  of  this  uncertainty.



                                      /s/ BDO SEIDMAN, LLP
                                          BDO SEIDMAN, LLP
                                          San Francisco, California
November  19,  1998

                                       F-1
<PAGE>
<TABLE>
<CAPTION>
                                              FORECROSS CORPORATION
                                                 BALANCE SHEETS

                                                                                September 30,
                                                                            1998          1997
                                                                        ------------  ------------
<S>                                                                     <C>           <C>
                                  ASSETS

Current assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $    98,249   $   275,243
Accounts receivable, including unbilled receivables of $489,808
and $1,754,691, net of allowance of $136,650 and
$300,340, respectively (Notes 3 and 6) . . . . . . . . . . . . . . . .    1,170,117     2,112,982
Current portion of notes receivable from officers (Note 4) . . . . . .            -       112,504
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . .       49,628       128,582
                                                                        ------------  ------------
  Total current assets . . . . . . . . . . . . . . . . . . . . . . . .    1,317,994     2,629,311
Equipment and furniture, net (Notes 2,  4 and 5) . . . . . . . . . . .      568,235       540,804
Notes receivable from officers, net, less current portion (Note 4) . .            -        37,013
Notes receivable from others . . . . . . . . . . . . . . . . . . . . .       67,131        63,150
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       42,359        30,773
                                                                        ------------  ------------
  Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 1,995,719   $ 3,301,051
                                                                        ============  ============

                   LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . .  $   224,991   $   452,651
Accrued compensation and related benefits (Note 11). . . . . . . . . .      235,135       152,421
Accrued liabilities. . . . . . . . . . . . . . . . . . . . . . . . . .       73,301        89,518
Accrued commissions and distributors' fees (Note 4). . . . . . . . . .    1,228,375       639,138

Payable to factor (Note 6) . . . . . . . . . . . . . . . . . . . . . .      467,734             -
Accrued warranty costs . . . . . . . . . . . . . . . . . . . . . . . .      205,975        96,589

Capital lease obligations due within one year. . . . . . . . . . . . .       20,103             -
Deferred revenue (Notes 2 and 4) . . . . . . . . . . . . . . . . . . .      598,193       756,229
                                                                        ------------  ------------
  Total current liabilities. . . . . . . . . . . . . . . . . . . . . .    3,053,807     2,186,546
Deferred revenue, less current portion (Notes 2 and 4) . . . . . . . .    1,545,417     2,110,417
Notes payable to officers, net (Note 4). . . . . . . . . . . . . . . .      631,392             -
Capital lease obligations, less current portion. . . . . . . . . . . .       41,667             -
                                                                        ------------  ------------
  Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . .    5,272,283     4,296,963
                                                                        ------------  ------------
Commitments and contingencies (Notes 2, 11 and 12)
Shareholders' deficit (Notes 8, 9 and 10):
Common stock, no par value; authorized 20,000,000 shares; issued and
 outstanding 11,763,612 and 11,751,612, respectively . . . . . . . . .    4,715,515     4,667,515
Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . . . . .   (7,992,079)   (5,663,427)
                                                                        ------------  ------------
Total shareholders' deficit. . . . . . . . . . . . . . . . . . . . . .   (3,276,564)     (995,912)
                                                                        ------------  ------------
  Total liabilities and shareholders' deficit. . . . . . . . . . . . .  $ 1,995,719   $ 3,301,051
                                                                        ============  ============
</TABLE>

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

                                       F-2
<PAGE>
<TABLE>
<CAPTION>
                                             FORECROSS CORPORATION
                                           STATEMENTS OF OPERATIONS

                                                     For the Years Ended
                                                        September 30,
                                          ----------------------------------------
                                              1998          1997          1996
                                          ------------  ------------  ------------
<S>                                       <C>           <C>           <C>          
Net revenues (Notes 2, 3 and 4):
Services and maintenance . . . . . . . .  $ 6,623,752   $ 4,930,456   $ 2,199,672
Software licenses and distributorship
 fees-related parties. . . . . . . . . .      545,000       844,582       200,000
                                          ------------  ------------  ------------
  Total net revenues . . . . . . . . . .    7,168,752     5,775,038     2,399,672
Cost of services and maintenance
including fees to related parties of
$346,000, $213,000, and $0,
 respectively (Notes 2 and 4). . . . . .    4,419,347     3,366,608     1,431,489
                                          ------------  ------------  ------------
Gross margin . . . . . . . . . . . . . .    2,749,405     2,408,430       968,183
                                          ------------  ------------  ------------
Operating expenses:
Sales and marketing including fees to
  related parties of $1,037,000,
  $640,000, and $0, respectively 
  (Note 4) . . . . . . . . . . . . . . .    1,838,126     1,490,479       711,545
Research and development . . . . . . . .    1,520,709     1,006,768       253,743

General and administrative . . . . . . .    1,413,312       887,039       332,500
                                          ------------  ------------  ------------
Total operating expenses . . . . . . . .    4,772,147     3,384,286     1,297,788
                                          ------------  ------------  ------------
Loss from operations . . . . . . . . . .   (2,022,742)     (975,856)     (329,605)
Interest expense, net. . . . . . . . . .     (305,110)      (68,855)     (129,141)
                                          ------------  ------------  ------------
Loss before provision for income taxes .   (2,327,852)   (1,044,711)     (458,746)
Provision for income taxes (Note 7). . .         (800)         (800)       (2,300)
                                          ------------  ------------  ------------
  Net loss . . . . . . . . . . . . . . .  $(2,328,652)  $(1,045,511)  $  (461,046)
                                          ============  ============  ============
Net loss per share - basic and diluted  .  $    (0.20)  $     (0.09)  $     (0.04)
                                          ============  ============  ============
Shares used in computing per share data.   11,761,920    11,681,035    11,370,804
                                          ============  ============  ============
</TABLE>

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

                                       F-3
<PAGE>
<TABLE>
<CAPTION>
                                            FORECROSS CORPORATION
                                     STATEMENTS OF SHAREHOLDERS' DEFICIT

                                                                 Notes Receivable
                                              Common Stock             from        Accumulated     Total
                                          Shares       Amount      Shareholders      Deficit      Deficit
                                        -----------  -----------  --------------  ------------  ------------
<S>                                     <C>          <C>          <C>             <C>           <C>
Balances at September 30, 1995 . . . .  10,904,362   $3,176,818    $    (19,040)  $(4,156,870)  $  (999,092)

Issuance of common stock upon
exercise of  warrants, net of stock
issuance costs of  $2,328 (Note 8) . .     551,250      328,422               -             -       328,422
Payments received from . . . . . . . .           -            -          11,067             -        11,067
shareholders (Note 9)
Net loss . . . . . . . . . . . . . . .           -            -               -      (461,046)     (461,046)
                                        -----------  -----------  --------------  ------------  ------------
Balances at September 30, 1996 . . . .  11,455,612    3,505,240          (7,973)   (4,617,916)   (1,120,649)

Issuance of common stock for
cash, net of  stock issuance costs of
 $5,275 (Note 8) . . . . . . . . . . .     282,000    1,122,725               -             -     1,122,725
Issuance of common stock upon. . . . .      14,000       39,550               -             -        39,550
 exercise of  options (Note 10)
Payments received from
 shareholders (Note 9) . . . . . . . .           -            -           7,973             -         7,973

Net loss . . . . . . . . . . . . . . .           -            -               -    (1,045,511)   (1,045,511)
                                       -----------  -----------  --------------  ------------  ------------
Balances at September 30, 1997 . . . .  11,751,612    4,667,515               -    (5,663,427)     (995,912)

Issuance of common stock upon
 exercise of  warrants (Note 8). . . .      12,000       48,000               -             -        48,000

Net loss . . . . . . . . . . . . . . .           -            -               -    (2,328,652)   (2,328,652)
                                        -----------  -----------  --------------  ------------  ------------
Balances at September 30, 1998. . . .   11,763,612   $4,715,515    $          -   $(7,992,079)  $(3,276,564)
                                        ===========  ===========  ==============  ============  ============
</TABLE>

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

                                       F-4
<PAGE>
<TABLE>
<CAPTION>

                                              FORECROSS CORPORATION
                                            STATEMENTS OF CASH FLOWS

                                                             For the Years
                                                          Ended September 30,
                                                    1998        1997        1996
                                                ------------ -----------  ----------
<S>                                             <C>          <C>           <C>
Increase (decrease) in cash resulting from:
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . .  $(2,328,652) $(1,045,511)  $(461,046)
Adjustments to reconcile net loss to  net cash
 provided by (used in) operating activities-
Provision for uncollectible amounts. . . . . .      124,952      300,000      (3,160)
Depreciation and amortization. . . . . . . . .      277,938      115,873      53,918
Changes in operating assets and liabilities-
Accounts receivable. . . . . . . . . . . . . .      529,611   (2,020,177)   (199,067)
Other assets and accrued interest on notes
 receivable from officers. . . . . . . . . . .      175,191     (148,552)     (9,021)
Accounts payable and accrued liabilities . . .      939,270      471,082     233,974
Deferred compensation. . . . . . . . . . . . .            -     (156,834)          -
Deferred revenue . . . . . . . . . . . . . . .     (723,036)   2,713,193     128,678
                                                ------------   ----------  ----------
Net cash provided by (used in) operating
 activities. . . . . . . . . . . . . . . . . .   (1,004,726)     229,074    (255,724)
                                                ------------   ----------  ----------
Cash used in investing activities:
Purchase of equipment and furniture. . . . . .     (234,423)    (577,076)    (73,812)
Loans to officers. . . . . . . . . . . . . . .            -      (35,000)          -
Payments received on loans to officers . . . .            -       35,000           -
Loans to key employees . . . . . . . . . . . .            -      (62,057)          -
Payments received on loans to key employees. .          700          450           -
                                                ------------   ----------  ----------
  Net cash used in investing activities. . . .     (233,723)    (638,683)    (73,812)
                                                ------------   ----------  ----------
Cash flows from financing activities:
Proceeds from factoring of accounts receivable    4,714,085      785,200     830,400
Repayment of borrowings under factoring
 arrangement . . . . . . . . . . . . . . . . .   (4,246,351)    (905,200)   (710,400)
Borrowings under note payable to officers . . .     575,000            -           -
Repayment of borrowings under capitalized leases    (29,279)           -           -
Repayment of borrowings under  notes payable .            -     (458,023)    (45,000)

Repayment of borrowings under notes payable
-officers. . . . . . . . . . . . . . . . . . .            -       (6,800)          -
Net proceeds from issuance of  common shares .       48,000    1,162,275     328,422
Payments received from shareholders. . . . . .            -        7,973      11,067
                                                ------------   ----------  ----------
  Net cash provided by financing activities. .    1,061,455      585,425     414,489
                                                ------------   ----------  ----------
  Net increase (decrease) in cash. . . . . . .     (176,994)     175,816      84,953
Cash at beginning of year. . . . . . . . . . .      275,243       99,427      14,474
                                                ------------   ----------  ----------
Cash at end of year. . . . . . . . . . . . . .  $    98,249    $ 275,243    $ 99,427
                                                ============   ==========  ==========
</TABLE>

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

                                       F-5
<PAGE>

                              FORECROSS CORPORATION
                          NOTES TO FINANCIAL STATEMENTS




1.   THE COMPANY:

OPERATIONS:

Forecross  Corporation  ("Forecross"  or  the  "Company")  is  a  publicly  held
California corporation  whose common  stock  is  traded on the Over-the-Counter/
Bulletin Board market.  Prior  to  October 28, 1998,  the Company's common stock
had  been  traded  on  the  Vancouver  Stock  Exchange.   The  Company  provides
comprehensive  automated conversion solutions for  migrating  existing  software
applications to new computing platforms,  including downsized  and client server
environments.   In addition,  during fiscal 1996,  the  Company  introduced  its
Assess/2000 and  Complete/2000TM  automated  conversion  software  products  and
related services and methodologies, which address the year 2000  problem.    The
year 2000 problem exists  because  many  existing computer programs use only two
digits to  identify  a year in the date field.  These programs were designed and
developed before the impact of the upcoming  change  in  the  century  was fully
appreciated by their developers.   If not corrected, many computer  applications
could  fail or create erroneous results. Forecross year 2000  software  products
assist  in identifying, analyzing and correcting  these  problems  in  a  highly
automated manner.  The Company's migration services and software  products  have
been  designed to meet the specialized requirements  of  management  information
systems  departments  of  medium-sized  to  large  commercial  and  governmental
organizations. Forecross also licenses its Assess/2000  software product for use
by customers and  distributors (see Note 4).  The Company's   customers  include
banks and other industrial and commercial corporations  in  Canada,  the  United
States  and  Europe.


BASIS  OF  PRESENTATION  AND  GOING  CONCERN:

Through  September 30, 1998, the Company had  sustained   recurring  losses from
operations  and,  at  September 30, 1998, had a net capital deficiency and a net
working  capital deficiency.  These conditions raise substantial doubt about the
ability  of the Company to continue as a going concern.  During fiscal 1999, the
Company  expects  to  meet  its working capital and other cash requirements with
cash  derived  from  operations,  short-term  receivables and other financing as
required, and software license  fees from organizations desiring access  to  the
Company's  various product  offerings.   The Company's  continued  existence  is
dependent upon  its  ability  to  achieve and  maintain profitable operations by
controlling expenses and obtaining additional business. Management believes that
the combination  of  increased  automation of its  services for  both  migration
projects and year 2000 renovation projects, the creation of potential year  2000
renovation products to address additional software languages, and cost reduction
actions implemented in late fiscal 1998 and early fiscal 1999 should improve the
Company's profitability in fiscal 1999.  However, there can be no assurance that
the Company's efforts to  achieve  and  maintain  profitable operations will be,
successful.  Additionally the  Company is highly dependent on revenues from year
2000 contracts.  The financial statements  do not include any  adjustments  that
might result from  the  outcome  of  this  uncertainty.

DEPENDENCE  ON  YEAR  2000  REVENUES:

The  growth in the Company's revenues in fiscal 1998 and 1997  resulted in large
part from  increased demand  for Assess/2000  and  Complete/2000TM  services and
licenses  as  awareness  of  the  year 2000  century date conversion problem has
grown.   Year  2000  services  and related revenue increased from 8% in the year
ended  September  30, 1996  to 42% of  the  Company's total revenues in the year
ended  September 30, 1997,  and  62% of  total  revenues  for  the  year   ended
September 30, 1998. Should the demand for the Company's year 2000 solutions  and
products decline significantly as a result of new technologies,  competition  or
any other factors, the Company's professional services fees and license revenues
would be materially and adversely affected.  The Company anticipates that demand
in the year 2000 market will decline, perhaps rapidly, following the year  1999.


The Company  has  experienced  a  decline  in  its core migration services.  The
Company  considers  this  a  temporary  development  resulting from the pressure
placed on many of its prospective customers to address  their year  2000 problem
to   the   exclusion   of   most  or  all  other  non-mission-critical projects.
Nonetheless, it is the Company's  strategy  to leverage  customer  relationships
and  knowledge  of customer  application  systems  derived  from  its  year 2000
services  solutions  to  continue to  grow  its migration and other products and
services beyond the year 2000 market.  However,  there can be no assurance  that
this strategy will be successful, and should the  Company  be  unable  to market
other products and services as demand in the year 2000 market declines,  whether
as a result of competition, technological change or other factors, the Company's
business,  results of operations and  financial condition will be materially and
adversely  affected.

The  Company  markets  its  products  and services to customers for managing the
maintenance and redevelopment of mission-critical computer software systems.  As
noted above, a large and increasing portion of the Company's business is devoted
to  addressing  the  year  2000  problem,  which  affects  the  performance  and
reliability of many mission-critical systems.  The Company's agreements with its
 
             
                                       F-6
<PAGE>
customers  typically contain provisions designed to limit the Company's exposure
to  potential  product  and  service liability claims.  It is possible, however,
that  the limitation of liability provisions contained in the Company's customer
agreements  may  not  be  effective  as  a result of existing or future federal,
state,  local  or  foreign laws or ordinances or unfavorable judicial decisions.
Although  the  Company  has  not  experienced  any  material  product or service
liability  claims to date, the sale and support of its products and services may
entail  the  risk  of  such  claims, particularly in the year 2000 market, which
could  be  substantial  in  light  of  the  use  of its products and services in
mission-critical  applications.  A successful product or service liability claim
brought  against  the  Company  could  have  a  material adverse effect upon the
Company's  business,  operating  results  and  financial  condition.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

USE  OF  ESTIMATES:

The  preparation  of  financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported   amounts  of  assets  and  liabilities  and  disclosures;
contingent  assets and liabilities at the date of the financial statements; and,
the  reported  amounts  of  revenue  and  expenses  during the reporting period.
Accordingly,  actual  results  could  differ  from  those  estimates.   The most
significant  estimates  subject  to  future  uncertainties are those relating to
calculations of percentage of completion for projects in process and estimations
of warranty liability.  It is at least  reasonably possible that the significant
estimates used will change within a year.

CASH:

The  Company  maintains  its  cash  balances with one financial institution.  At
times,  such  balances  may  be  in  excess  of  the  FDIC  insurance  limit.

EQUIPMENT  AND  FURNITURE:

Equipment  and  furniture is recorded at cost.  Depreciation and amortization is
calculated  using  the  straight-line  method  over the assets' estimated useful
lives,  which  range  from  three  to  five  years.  Leasehold  improvements are
amortized over the life of the lease, generally five years.

CAPITALIZED  SOFTWARE  COSTS:

Costs  incurred  internally  in  creating computer software products to be sold,
leased,  or  otherwise marketed are charged to expense when incurred as research
and  development  until  technological  feasibility has been established for the
product.  Thereafter,  such costs are capitalized until the product is available
for general release to customers and amortized based on either estimated current
and  future  revenue  for  each  product  or straight-line amortization over the
remaining  estimated  life of the product, whichever produces the higher expense
for  the  period.  Purchased  computer software to be sold, leased, or otherwise
marketed  is treated the same if it has no alternative future use, or, if it has
an  alternative  future  use, it is capitalized when acquired and amortized over
its  estimated  useful  life.  No  costs  have  been  capitalized for internally
developed software products because the amount of development costs eligible for
capitalization   was    not  significant.   Non-capitalizeable  development  and
marketing  costs  related  to the software licenses are included in research and
development  expense  or  sales  and  marketing  expense,  as  discussed in "Net
Revenues  and  Cost  of  Services  and  Maintenance"  below.

The  Company  has  capitalized certain purchased software technology rights (see
Note  4)  which  can  be  used  both in connection with its internally developed
software  products  and  in  alternative  standalone applications.  Accordingly,
these rights are included with other purchased software in fixed assets, and are
being  amortized  over their estimated useful life of three years.  Amortization
of  these  purchased  software  technology rights was $50,000 and $12,500 in the
years  ended  September  30,  1998  and 1997, respectively.

LONG-LIVED  ASSETS:

Long-lived  assets are  assessed  for  possible  impairment  whenever  events or
changes  in  circumstances  indicate  that  the  carrying  amounts  may  not  be
recoverable,  or whenever  management  has committed to a plan to dispose of the
assets.  Such  assets  are  carried  at the lower of book value or fair value as
estimated  by  management  based  on  appraisals,   current  market  value,  and
comparable  sales value, as appropriate.  Assets to be held and used affected by
such  impairment  loss are depreciated or amortized at their new carrying amount
over the remaining  estimated life;  assets to be sold or otherwise  disposed of
are not subject to further depreciation or amortization.  In determining whether
an impairment exists,  the Company uses undiscounted  future cash flows compared
to the carrying value of the asset.

NET  REVENUES  AND  COST  OF  SERVICES  AND  MAINTENANCE:

The  Company's  migration  projects  have  ranged from six to eighteen months in
duration.  The  Company's  year  2000  projects have ranged from two to eighteen
months in duration.  Revenues for migration services and year 2000 assessment or
renovation  projects are recognized using the percentage of completion method in
the  ratio  that  actual costs incurred to date bear to total estimated costs at
completion.  Provisions  for  estimated  losses  on  uncompleted  contracts  are
recognized  in  the period in which the likelihood of such losses is determined.
Reserves provided for estimated adjustments of contract revenues are included as



                                       F-7
<PAGE>
reductions  of  gross  revenues.  Cost  of  revenues  is  primarily comprised of
subcontractors'  fees  and  salaries  and  benefits of employees assigned to the
contracts,  and distributors' fees.  Subcontractors' fees, salaries and benefits
are  allocated  based  on  the  amount  of  time devoted to each contract by the
subcontractors  and  employees; distributors' fees are accrued based on revenues
earned  for  specific  projects  for  which  the  distributors provide services.
Billings  are  issued based upon specific contractual terms which may or may not
relate  to  the percentage of completion for the respective contracts.  Unbilled
receivables  represent  revenue recognized in excess of amounts billed.  Amounts
for  billings  in excess of revenue recognized are included in deferred revenue.

The  Company  has  authorized  several  exclusive  distributor   agreements  for
specified areas for its Complete/2000TM automated  conversion  software products
and related services and  methodologies.  Under the agreements, the  distributor
retains  exclusive rights for the territory for a specified period. In addition,
the Company  licenses the rights to use its  Assess/2000  software,  which as of
September 30, 1998, had been sold primarily to the exclusive distributors above.
Once  collectibility of the distributor and license fees is reasonably  assured,
and  if  there  are  no  significant  post-delivery  obligations,   the  Company
recognizes the fees associated  with the  exclusivity  and the software  license
ratably over the contractual term (including  renewals), generally  five  years,
commencing with the date of the  respective  signing of  the agreements.   Costs
associated with the licenses for Assess/2000 have  been included in research and
development expense as  such costs did  not  qualify for  capitalization.  Costs
associated with the marketing and negotiation of distributor customer  proposals
and/or sales contracts have been included in sales and marketing expense.

Revenues   for  technical  and  sales  training,  maintenance  and  support  are
recognized  ratably  over  the  term  of  the  support  period.

RESEARCH  AND  DEVELOPMENT  EXPENSE:

Research  and  development  costs  are  expensed  as  incurred.  In prior years,
certain  research  and  development  projects  have   been  funded   in  part by
customers.  In  such  cases,  the  Company  retains  ownership  of the resulting
products, which  are   developed  for  resale to  multiple  customers; both  the
initial and subsequent customers acquire licenses to use the developed products.
During the three years ended September 30, 1998,  there  were  no  such customer
funded research and development projects.

WARRANTY  EXPENSE:

The  Company  provides  a  reserve for warranty costs based upon its estimate of
such related costs and expenses.  The reserve is accrued ratably as revenues are
earned.    The  accrued  warranty reserve is amortized over the related warranty
period  for  the respective contract,  typically a period of three to six months
for  application  migration  projects,  and  one  year  for  year 2000 projects.
Amortization for year 2000 projects will commence January 1, 2000.    

INCOME  TAXES:

The  Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards (SFAS) No. 109, Accounting for Income Taxes, which requires
recognition  of  deferred tax liabilities and assets for the expected future tax
consequences  of events that have been recognized in the financial statements or
tax  returns.    Under  this  method,  deferred  tax  liabilities and assets are
determined based on the difference between the financial statement and tax bases
of  assets  and  liabilities  using  enacted tax rates in effect for the year in
which  the  differences  are  expected  to  affect  taxable  income.   Valuation
allowances  are  established when necessary to reduce deferred tax assets to the
amount expected to be realized.  The provision for income tax expense is the tax
payable  for the period plus the change during the period in deferred tax assets
and  liabilities.

NET  LOSS  PER  SHARE:

Basic  earnings  per  share  is  computed  by dividing  income or loss available
to  common  shareholders  by  the  weighted average number of shares outstanding
for  the  period.  Diluted earnings per  share reflect the potential dilution of
securities  that could share in the earnings  of an entity.  Due to the  losses,
there  were  no  includable  equivalents  in any period presented.

Securities  outstanding  at  September 30,  1998,  the future potential dilutive
effect of which would be dependent upon the exercise price of the securities and
the market price of the Company's common stock at that time, include warrants to
purchase  270,000  shares of common stock and options to purchase 700,300 shares
of common stock.  See Note 8  "Common Stock" and Note 10 "Stock Option Plan" for
details  on  these  securities.

STOCK-BASED  COMPENSATION:

Effective October 1, 1996, the Company  adopted  the  disclosure  provisions  of
Statement  of  Financial  Accounting Standards (SFAS) No.  123,  Accounting  for
Stock-Based  Compensation,  which requires pro forma disclosure  of  net  income
and  earnings  per  share  as  if  the  SFAS No. 123  fair value method had been
applied.  The Company continues to apply the provisions of Accounting Principles
Board (APB) Opinion No. 25,  Accounting for Stock Issued to Employees,  for  the
preparation  of  its  basic  financial  statements.

                                       F-8
<PAGE>
FINANCIAL  INSTRUMENTS:

At  September 30,  1998 and 1997, the Company's financial instruments consist of
cash, and accounts and notes receivable. The carrying value of cash and accounts
receivable approximate fair value based upon the liquidity and short-term nature
of the assets.  The carrying value of notes receivable substantially approximate
fair value based upon current market  interest  rates, the  short-term  maturity
of  certain  of  the notes  and  relative  amounts  owed.  The fair value of the
Company's notes payable to officers  cannot  be currently determined, as similar
borrowing sources and terms are unavailable.   The carrying value of capitalized
leases  approximates fair value at September 30, 1998,  since  the  leases  were
entered  into  during  fiscal  1998  at  rates  which  approximate  the rates at
September 30, 1998.

RECLASSIFICATIONS:

Certain  prior-year  amounts  have  been reclassified to conform to current year
presentation.

OTHER  RECENTLY  ISSUED  ACCOUNTING  STATEMENTS:

During  1997,  the Financial  Accounting Standards Board (FASB)released SFAS No.
130,  Reporting  Comprehensive  Income.    SFAS  No. 130, which is effective for
fiscal  years  beginning  December 15, 1997, establishes standards for reporting
and  display of comprehensive income and its components in an entity's financial
statements.  The objective of SFAS No. 130 is to report a measure of all changes
in  the equity of an enterprise that result from transactions and other economic
events  of  the period.  Comprehensive income is the total of net income and all
other  non-owner  changes  in  equity.   SFAS No. 130 does not address issues of
recognition  or  measurement  for  comprehensive  income and its components, and
therefore,  it  will not have an impact on the financial condition or results of
operation  of  the  Company  upon  adoption.

In 1997,  the  American  Institute  of  Certified  Public  Accountants  released
Statement  of  Position  (SOP)  97-2,   which  provides   revised  guidance  for
recognizing  revenue on certain software  transactions.  The Company has not yet
evaluated  the  effect,  if any,  that  the new  guidance  will  have on  future
operating results and financial position.  This SOP is required to be adopted in
fiscal years  beginning  after December 15, 1997,  and, thus, will be adopted by
the  Company for the year  ending  September  30,  1999.    The Company believes
that the  new  guidance  will  not  have a  material  effect  upon the financial
condition or results of operations of the Company.

In  June  1997,  the  FASB issued SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information,  which  supersedes  SFAS  No.  14, Financial
Reporting for Segments of a  Business  Enterprises.    SFAS No. 131  establishes
standards for the way that public companies report  information  about operating
segments in  annual  financial  statements and requires  reporting  of  selected
information about operating segments in interim  financial  statements issued to
the public.  It also establishes standards for  disclosures  regarding  products
and  services,  geographic  areas  and  major customers.   SFAS No. 131  defines
operating  segments  as components  of a  company about which separate financial
information  is  available  that  is  evaluated regularly by the chief operating
decision   maker  in  deciding  how  to  allocate  resources  and  in  assessing
performance.

SFAS No.131 is effective  for  financial  statements for periods beginning after
December  15, 1997, and requires comparative information for earlier years to be
restated.    The Company believes it operates under one business segment and has
already   substantially   complied   with   the   required  financial  statement
disclosures.  Results  of  operations  and  financial position, however, will be
unaffected  by  implementation  of  this  standard.

In October 1998,  the FASB issued  SFAS No. 132,  Employers'  Disclosures  about
Pensions and Other Postretirement Benefits. SFAS No. 132, which is effective for
fiscal years beginning  after December 31, 1997,  revises employers' disclosures
about  pensions  and  other  postretirement  benefits.   It  does not change the
measurement of recognition of those plans, and, accordingly, will have no effect
on  results  of  operations  and  financial  position  when it is adopted by the
Company.

3.   CONCENTRATIONS OF CREDIT RISK AND FOREIGN SALES:

The  Company  performs ongoing credit evaluations of its customers and generally
does  not  require  collateral  on  accounts  receivable  as the majority of the
Company's  customers  are  large,  well-established  companies.  Four  customers
accounted for approximately 30%, 17%, 14% and  12%  of  the  accounts receivable
balance at September 30, 1998, and four customers  accounted  for  approximately
23%,  17%,  13% and 12% at September 30,  1997.  Additionally,  three customers,
including revenues from  the  Company's  Distributors  treated as resulting from
one  customer (see Note 4),  accounted  for  approximately  40%,  12% and 10% of
total  revenues for the fiscal year ended  September  30, 1998. Four  customers,
including revenues from the Company's Distributors treated as resulting from one
customer (see Note 4), accounted for 17%, 15%, 11% and 10% of total revenues for
the  fiscal year ended September 30, 1997, and four customers accounted for 20%,
14%, 13% and 10% of total revenues for the fiscal year ended September 30, 1996.
Net revenues from Canadian and European customers  were  as  follows:

                                       F-9
<PAGE>

<TABLE>
<CAPTION>
                                              Years Ended
                                             September 30,
                                         -------------------
                                          1998   1997   1996
                                         -----  -----  -----
<S>                                      <C>    <C>    <C>
Canada    . . . . . . . . . . . . . . . .  2%     9%    15%
Europe    . . . . . . . . . . . . . . . .  1%     1%    --
</TABLE>

4.   RELATED PARTY TRANSACTIONS:

The Company has certain transactions with related parties in the ordinary course
of  business  as  set  forth  below.

Notes  receivable  and  payable:
-------------------------------

Notes  receivable  and  payable  from  officers  consist  of  the  following:

<TABLE>
<CAPTION>
                                                                   September 30,
                                                                 --------  ---------
                                                                  1998      1997
                                                                 --------  ---------
<S>                                                             <C>        <C>
10% Uncollateralized notes receivable from president, due
 December 31, 1997 . . . . . . . . . . . . . . . . . . . . . .  $       -  $ 65,429
5.7 to 10% Uncollateralized notes receivable from Senior Vice
President,   due in varying amounts through September 30, 1999     37,013    53,442
Accrued interest receivable. . . . . . . . . . . . . . . . . .      2,132    30,646
                                                                ---------  ---------
  Total receivable from officers . . . . . . . . . . . . . . .     39,145   149,517
                                                                ---------  ---------
24% Uncollateralized notes payable to president, due
 December 30, 1999 . . . . . . . . . . . . . . . . . . . . . .   (350,000)        -
24% Uncollateralized notes payable to senior vice president,
 due February 28, 2000 . . . . . . . . . . . . . . . . . . . .   (225,000)        -
Accrued interest payable . . . . . . . . . . . . . . . . . . .   ( 95,537)        -
                                                                ---------  ---------
  Total payable to officers. . . . . . . . . . . . . . . . . .   (670,537)        -
                                                                ---------  ---------
Notes receivable from (payable to) officers, net . . . . . . .   (631,392)  149,517
Less current portion under original terms. . . . . . . . . . .          -   112,504
                                                                ---------  ---------
                                                                $(631,392) $ 37,013
                                                                =========  =========
</TABLE>

Software  Licenses  and  Distributorships:
-----------------------------------------

The  Company  has  entered   into   agreements   with  several   entities   (the
"Distributors") for licenses and distributorship  arrangements for its year 2000
software products, Assess/2000 and  Complete/2000TM, and related  services.  The
Distributors  are  related to each  other  through  some  common  ownership  and
management;  a shareholder of the Company is a founding  investor and officer of
each of the other entities.

At  least  one  other shareholder of the Company is also an investor in at least
one  of  the  Distributors.   As of September 30, 1996, this shareholder pledged
150,000  shares  of Company stock as collateral for $800,000 due under the terms
of  the first of the contracts; the entire amount was collected in January 1997.


Under    the    distributorship    agreements,    the    Distributors    receive
territorially  exclusive  rights  to  market year 2000 renovation projects to be
performed  by  the Company   using  the Complete/2000TM  software, and year 2000
assessment  projects  to  be    performed    either    by    the  Company or the
Distributor  using  the  Assess/2000  software.      In  exchange for  sales and
marketing  services and support, customer contact, project  management  services
and  staffing  for  a portion of the on-site  work,  the  Distributor  generally
receives a fee equal to 25% of collected revenues. The Company  allocates  those
fees  25%  to  cost  of services and maintenance, and 75% to sales and marketing
expense.  The  exclusivity  rights  under these  contracts are generally for  an
initial  one-year  period,  but are  renewable for up to  four additional  years
based  on certain  performance  conditions.   The  Distributors  generally  have
separate  agreements  for license  rights for unlimited usage of the Assess/2000
product. In the case of one contract, fees payable are 50% of collected revenues
until $1,500,000  has  been received  by  the  Distributor, and 25%  of  revenue
collected thereafter. During fiscal 1998, the $1,500,000 amount had been earned,
with all subsequent fees  to be earned at the 25% rate.

The  licensing and distributorship fees received from the Distributors, totaling
$3,125,000  and  $200,000  in  1997 and 1996,  respectively, have generally been
deferred  and recognized over a five year period  commencing with the signing of
the  respective agreements.    Of  these amounts, approximately  $1,955,000  and


                                       F-10
<PAGE>
$2,500,000    is   deferred   at  September  30,  1998  and September  30, 1997,
respectively.    Additional    fees  of  approximately    $672,000  for training
programs,  annual  software maintenance, and customer  support  were received in
1997;  of  this  amount,  approximately  $155,000  and  $332,000  is deferred at
September 30, 1998 and September  30,  1997, respectively. The year 2000 project
fee expense  related to the distributor contracts, included in  cost of revenues
in  the   accompanying   statements of  operations, was approximately  $346,000,
$213,000  and  $0  for  the  years ended  September  30,  1998,  1997 and  1996,
respectively.  The  year  2000  expenses  related  to the distributor contracts,
included  in  sales  and  marketing  expenses,  were  approximately  $1,037,000,
$640,000  and  $0  for  the  years  ended  September  30,  1998,  1997 and 1996,
respectively.

Purchased  Software:
-------------------

During the year ended September 30, 1997, the Company commissioned and purchased
a  $150,000  data  analysis module for use with its year 2000 software products.
The  software  developer is an entity owned in part by the senior vice president
of the Company, another employee of the Company, and another shareholder.


5.   EQUIPMENT AND FURNITURE:

Equipment  and  furniture  is  comprised  of  the  following:

<TABLE>
<CAPTION>
                                                September 30,
                                           ----------------------
                                              1998        1997
                                           ----------  ----------
<S>                                        <C>         <C>
Computer equipment and software . . . . .  $ 852,137   $ 700,554
Furniture and equipment . . . . . . . . .    310,890     218,971
Leasehold improvements  . . . . . . . . .     77,117      25,599
                                           ----------  ----------
                                           1,240,144     945,124
Accumulated depreciation and amortization   (671,909)   (404,320)
                                           ----------  ----------
                                           $ 568,235   $ 540,804
                                           ==========  ==========
</TABLE>

6.   PAYABLE TO FACTOR:

In  October 1995, the Company entered into a recourse factoring agreement with a
financial  organization whereby the Company is able to obtain financing of up to
80% of  purchased  trade accounts receivable, with a maximum  available limit of
$1,250,000. In addition to an administrative fee of 1% of each invoice financed,
the Company will incur interest at the rate of 2%  per  month on the outstanding
gross amount of the receivables financed.  The Company's  obligations under this
agreement  have  been  personally  guaranteed by the  president and  senior vice
president of the Company,  who are significant shareholders of  the Company.  At
September 30, 1998,  the Company's  outstanding indebtedness under the agreement
was $468,000.  There was no outstanding indebtedness under the agreement  as  of
September 30, 1997.  The agreement may be terminated by either the factor or the
Company at any time.

7.   INCOME TAXES:

The  components  of  the  provision  for income taxes are summarized as follows:

<TABLE>
<CAPTION>
                                               Years Ended
                                              September 30,
                                          ----------------------
                                           1998    1997    1996
                                          -----  ------  -------
<S>                                       <C>    <C>     <C>
Current:
State. . . . . . . . . . .  . . . . . . . $ 800  $  800  $   800

Foreign. . . . . . . . . .  . . . . . . .     -       -    1,500
                                          -----  ------  -------
Total provision for income
 taxes . . . . . . . . . .  . . . . . . . $ 800  $  800  $ 2,300
                                          =====  ======  =======
</TABLE>

The effective income tax rate differs from the statutory federal income tax rate
primarily due to the full valuation allowance against the Company's deferred tax
assets  arising  from  its  net  operating  losses.

Significant  components  of  the  Company's  net  deferred  tax  balances are as
follows:

                                       F-11
<PAGE>
<TABLE>
<CAPTION>
                                                        September 30,
                                                --------------------------
                                                    1998          1997
                                                ------------  ------------
<S>                                             <C>           <C>
Deferred tax assets (liabilities):
Accrual to cash adjustment . . . . . . . . . .  $ 1,236,000   $   804,000

Net operating loss carryforwards . . . . . . .    1,793,000     1,422,000
State taxes, net of federal benefit, and other     (147,000)     (122,000)
                                                ------------  ------------
  Total deferred tax assets. . . . . . . . . .    2,882,000     2,104,000
Valuation allowance. . . . . . . . . . . . . .   (2,882,000)   (2,104,000)
                                                ------------  ------------
  Net deferred tax assets. . . . . . . . . . .  $         -   $         -
                                                ============  ============
</TABLE>

Since the Company  could not determine if it was more  likely  than not that the
deferred tax assets  would be  realized,  a 100%  valuation  allowance  has been
provided  to  eliminate the  deferred tax assets at September 30, 1998 and 1997.
The increase in  the  valuation  allowance  was $778,000, $552,000, and $715,000
in the years ended September 30, 1998, 1997 and 1996,  respectively. Of the 1996
increase,  $448,000 represented a change in the expected federal rate at date of
realization from 20% to 34%.

At September 30, 1998,  the Company  has net operating  loss  carryforwards  for
federal and California state income tax purposes of approximately $4,660,000 and
$2,269,000, respectively.  These carryforwards expire in varying amounts between
1998  and  2012.    Pursuant  to  the  provisions of the Tax Reform Act of 1986,
utilization  of  these  net  operating  loss  carryforwards may be subject to an
annual  limitation  due  to  a  greater  than 50% change in the ownership of the
Company  within  a  three-year  period.

8.   COMMON STOCK:

In  connection  with a  May  1995  private  placement in  which the Company sold
735,000 of its shares of common  stock, the Company issued  735,000 warrants  to
purchase  additional  shares  of  common  stock  at  $.40  and $.60 per share if
exercised  prior  to  August 31, 1995 and  November 30, 1995,  respectively.  In
August 1995,  warrants  were  exercised  to  purchase 183,750 shares at $.40 per
share. Warrants to purchase the remaining 551,250 shares of common stock at $.60
per share were exercised  in  November  1995.

In  December  1996,  the  Company  sold  282,000 shares of its common stock in a
private  placement  resulting  in  proceeds of $1,128,000.  The Company incurred
$5,275  of costs related to this sale.  In connection with the sale, the Company
issued  to  the  investors  nontransferable  warrants  to purchase an additional
282,000  shares  of  common stock.  The warrants are exercisable for a period of
two  years, at a price of $4.00 per share during the first year and at $4.60 per
share  during  the  second  year.  During  the  year  ended  September 30, 1998,
warrants  to  purchase 12,000 shares of common stock were exercised resulting in
proceeds  of  $48,000.

9.   RESTRICTED STOCK PURCHASE PLAN:

In June 1993, the Board of Directors approved the 1993 Restricted Stock Purchase
Plan (the "Plan").  The Plan allows employees and consultants to purchase shares
of  the  Company's  common  stock  at a price not less than the fair value.  The
maximum aggregate number of shares which may be sold under the Plan is 1,000,000
shares of common stock.  During the year ended September 30, 1994, 50,000 shares
were  sold  under the Plan.  No  shares  were sold  under the Plan in 1998, 1997
1996,  or  1995.

Shares  purchased  under the Plan are  subject to a right of  repurchase  by the
Company at the original  purchase price upon the  termination of the purchaser's
employment or consulting  relationship with the Company.  Except for the initial
stock  purchases in 1993, for which the vesting  commenced on June 25, 1992, the
right to repurchase  generally  lapses at the rate of one-third  (1/3) after one
year from the date of  purchase,  and  one-thirty-sixth  (1/36) of the  original
number  of  shares  purchased  per month  thereafter. At September 30,  1998 and
1997,  no shares  are  subject  to the  Company's repurchase  option  under this
provision. No shares were repurchased during the years ended September 30, 1998,
1997  or  1996.
 .

In  partial  consideration  for  stock  purchased  under  the  Plan, the Company
received  promissory  notes  with an aggregate balance of $7,973 as of September
30,  1996.    These  notes  were  paid  in  full  during  1997.

10.  STOCK OPTION PLAN:

In  April  1994,  the  Board  of  Directors approved the 1994 Stock Option Plan,
whereby  employees  and  consultants  may be granted incentive and non-statutory
stock  options.    Depending  on  the  employee's  stock  ownership  percentage,


                                       F-12
<PAGE>
incentive  stock  options  are granted with exercise prices ranging from 100% to
110%  of  the  fair  value  of  stock  at the date of grant.  Depending on stock
ownership  percentage,  non-statutory  stock  options  are granted with exercise
prices ranging from 85% to 110% of the fair value of stock at the date of grant.
The maximum aggregate number of shares of common stock which may be optioned and
sold  under the plan is 950,500.  The term of each option is that stated in each
specific  option agreement provided that the term does not exceed ten years from
the  date  of grant (five years in the case of an optionee already owning common
stock  representing  10%  or  more  of  the  voting  power).

Stock  option  activity  under  the  Plan  is  as  follows:


<TABLE>
<CAPTION>
                                                                    OPTIONS OUTSTANDING
                                     SHARES    --------------------------------------------------------------
                                   AVAILABLE                                      AGGREGATE    WEIGHTED AVG.
                                   FOR GRANT   NO. OF SHARES   PRICE PER SHARE      PRICE     EXERCISE PRICE
                                   ----------  --------------  ----------------  -----------  ---------------
<S>                                <C>         <C>             <C>               <C>          <C>
Balance, September 30, 1995 . . .    908,000          42,500   $           2.00  $   85,000   $          2.00
Granted during 1996 . . . . . . .   (561,500)        561,500          1.43-4.75   1,007,125              1.79
Canceled during 1996. . . . . . .     10,000         (10,000)              2.00     (20,000)             2.00
                                   ----------  --------------  ----------------  -----------  ---------------
Balance, September 30, 1996 . . .    356,500         594,000          1.43-4.75   1,072,125              1.80
Granted during 1997 . . . . . . .   (131,800)        131,800         9.70-19.00   1,809,010             13.73
Exercised during 1997 . . . . . .          -         (14,000)         2.00-9.70     (39,550)             2.83
Canceled during 1997. . . . . . .      8,500          (8,500)         2.00-4.75     (33,500)             3.94
                                   ----------  --------------  ----------------  -----------  ---------------
Balance, September 30, 1997 . . .    233,200         703,300         1.43-19.00   2,808,085              3.99
Granted or repriced during 1998. .  (164,800)        164,800         8.02-11.50   1,663,996             10.10
Exercised during 1998  . . . . . .         -               -                  -           -                 -
Canceled during 1998. . . . . . .    144,300        (144,300)        4.75-19.00  (1,915,710)            13.28
                                   ----------  --------------  ----------------  -----------  ---------------
Balance, September 30, 1998 . . .    212,700         723,800   $     1.43-11.50  $2,556,371    $         3.53
                                   ==========  ==============  ================  ===========  ===============
</TABLE>

The  following  table  summarizes  information  with  respect  to  stock options
outstanding  at  September 30, 1998.

<TABLE>
<CAPTION>
                              OPTIONS OUTSTANDING                                          OPTIONS EXERCISABLE
--------------------------------------------------------------------------------  --------------------------------------
RANGE OF          NUMBER OUTSTANDING   WEIGHTED AVG. REMAINING    WEIGHTED AVG.    NUMBER EXERCISABLE    WEIGHTED AVG.
EXERCISE PRICE   AT SEPTEMBER 30, 1998  CONTRACTUAL LIFE (YEARS)  EXERCISE PRICE   AT SEPTEMBER 30, 1998  EXERCISE PRICE
===============  ====================  ========================  ===============  ====================  ================
<S>              <C>                   <C>                       <C>              <C>                   <C>
1.43-$2.00 . .                517,500                      2.40  $          1.45               517,500  $          1.45
4.75. . . . . .                52,500                      3.17             4.75                52,500             4.75
8.02-11.50 . .                153,800                      4.24            10.12               135,792            10.05
---------------  --------------------  ------------------------  ---------------  --------------------  ----------------
1.43-11.50 . .                723,800                      2.85  $          3.53               705,792  $          3.35
===============  ====================  ========================  ===============  ====================  ================
</TABLE>

In  April  1998,  at  the request of the Board of Directors, the Vancouver Stock
Exchange approved  a  repricing of  the options  then outstanding  at $15.35 and
$19.00 per share to $11.15 per share, which equaled the market price at the date
of the repricing grant.  Other  terms of  those options remain the same.

In  June  1998,  at  the request of the Board of  Directors, the Vancouver Stock
Exchange  approved  a repricing  of  the  options  then outstanding at $9.70 and
$12.70 per  share  to  $8.02 per share,  which  equaled  the market price at the
date of the repricing grant.  Other terms of those options remain the same.

The  Company  applies  APB  Opinion  No.  25,  Accounting  for  Stock  Issued to
Employees,  in accounting for its plan.  Accordingly,  no compensation  cost has
been  recognized  for its  stock  option  plan.  Had  compensation  cost for the
Company's  stock  option  plan been  determined  consistent  with SFAS No.  123,
Accounting for Stock-Based Compensation, the Company's net loss and net loss per
share would have been the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                           Years Ended
                                                          September 30,
                                                   ---------------------------------------
                                                       1998          1997         1996
                                                   ------------  ------------  -----------
<S>                                   <C>          <C>           <C>           <C>
Net loss . . . . . . . . . . . . . .  As reported  $(2,328,652)  $(1,045,511)  $  (461,046)
                                      Pro forma    $(2,893,374)  $(2,043,097)  $(1,038,641)

Net loss per share-basic and diluted  As reported  $     (0.20)  $     (0.09)  $     (0.04)
                                      Pro forma    $     (0.25)  $     (0.18)  $     (0.09)
</TABLE>

                                       F-13
<PAGE>
The  fair  value  of  the  Company's  stock  option grants is amortized over the
vesting  period.    The  average fair values of options granted during the years
ended September 30, 1998, 1997 and 1996 (including repriced options) were $2.35,
$10.09 and $1.03, respectively.  The fair value was estimated as of the date  of
grant  using a  modified  Black-Scholes  option   pricing  method based upon the
following weighted average assumptions:

<TABLE>
<CAPTION>
                                         Years Ended
                                        September 30,
                                     ---------------------
                                      1998   1997    1996
                                      -----  -----   -----
<S>                                   <C>    <C>     <C>
Expected life (years). . . . . .      2.1    2.5     2.5
Expected volatility. . . . . . .      116%   125%    102%
Risk free interest rate. . . . .      5.60%  6.22%   5.70%
</TABLE>

11.  PROFIT SHARING AND RETIREMENT PLANS:

The  Company  has  a  401(k)  profit  sharing  plan  covering  substantially all
employees,  and  matches  employee salary deferrals up to a maximum of 4% of the
participant's  eligible  compensation.   The Company's cost of the 401(k) profit
sharing  plan  was   $73,499,  $66,670 and  $25,556  in  the  fiscal years ended
September  30,  1998,  1997  and 1996, respectively.

The  Company also has a Money Purchase Pension Plan (Pension Plan).  The Company
was  required  to  contribute  10%  of  total  participant  compensation through
December  1992  and  6%  of  total participant compensation from January 1, 1993
through  December  31,  1994.    Effective January 1, 1995, contributions to the
Pension  Plan were discontinued as  the Company now contributes to the 401K Plan
as described above.  There were no contributions to this Plan during  1998, 1997
or 1996.   The Company's cost of the Pension Plan was $12,736 in the fiscal year
ended  September  30,  1995.



12.  LEASE COMMITMENTS:

The Company  leases  office space and equipment  under  operating  leases.  Rent
expense under operating  leases  was  $354,684,  $184,344,  and  $125,820 in the
fiscal  years ended  September  30, 1998,  1997  and  1996, respectively.  As of
September 30,  1998,  future  minimum  lease  payments  under  operating  leases
are as follow:

<TABLE>
<CAPTION>
Years Ending September 30,
--------------------------
<S>                         <C>
1999 . . . . . . . . . . .    $331,564
2000 . . . . . . . . . . .     315,923
2001 . . . . . . . . . . .     312,726
2002 . . . . . . . . . . .      94,550
2003 . . . . . . . . . . .         209
                            ----------
                            $1,054,972
                            ==========
</TABLE>


13.  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

<TABLE>
<CAPTION>
                                         Years Ended
                                        September 30,
                                  -------------------------
                                     1998     1997     1996
                                 --------  --------  -------
<S>                              <C>       <C>       <C>
Interest paid . . . . . . . . .  $220,053  $290,648  $59,647
</TABLE>

SUPPLEMENTAL  DISCLOSURE  OF  NON-CASH  INVESTING  AND  FINANCING  ACTIVITIES:

                                       F-14
<PAGE>
<TABLE>
<CAPTION>
                                                              Years Ended
                                                             September 30,
                                                        -------  -------  -------
                                                         1998     1997     1996
                                                        -------  -------  -------
<S>                                                     <C>       <C>      <C>
Outstanding travel advances converted to a note
  receivable from the Senior Vice President. . . . . .  $      -  $37,013  $    -
Writeoff of accounts receivable against accrued
  distributors' fees related thereto . . . . . . . . .  $288,302  $     -  $    -
Acquisition of equipment and furniture through
  capital lease . . . . . . . . . . .  . . . . . . . .  $ 70,946  $     -  $    -
Accrued interest on notes payable to officers. . . . .  $ 93,405  $     -  $    -
</TABLE>

                                       F-15
<PAGE>
<TABLE>
<CAPTION>
                                        FORECROSS CORPORATION
                                  VALUATION AND QUALIFYING ACCOUNTS


ALLOWANCES  AGAINST  RECEIVABLES:
--------------------------------


                                                     Additions -
                                                ---------------------
                                   Balance,      Charges to Revenues       Deductions-      Balance,
                                 Beginning of       or Costs and           Write-offs        End of
                                 -------------                                              ---------
                                    Period          Expenses (1)       Charged to Reserve    Period
                                 -------------  ---------------------  -------------------  ---------
<S>                              <C>            <C>                    <C>                  <C>
Year Ended September 30,

1998. . . . . . . . . . . . . .  $     300,340  $            124,952   $         288,642    $ 136,650

1997. . . . . . . . . . . . . .            340               300,000                   -      300,340

1996. . . . . . . . . . . . . .          3,500                     -               3,160          340
<FN>
(1)    Certain allowances related to contract estimations for amounts of revenue
recognized  on  percentage-of-completion  basis are charged directly to revenues
</TABLE>

                                       S-1
<PAGE>