UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                 AMENDMENT NO. 1
                                       on
                                  FORM 10-KSB/A

                    X ANNUAL REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                    For the Fiscal Year Ended March 31, 1998


                         Commission File Number: 0-25612

                              STARBASE CORPORATION
             (Exact name of Registrant as specified in its charter)

                     Delaware                            33-0567363
          (State or Other Jurisdiction of             (I.R.S. Employer
          Incorporation or Organization)           Identification Number)

             18872 MacArthur Boulevard
                Irvine, California                          92612
     (Address of principal executive offices)           (Zip code)

                                 (714) 442-4400
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:   None.

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

                              Title of each class:
                              -------------------
                          Common Stock, $0.01 par value

Indicate by check mark whether the registrant has (1) 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) 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 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 registrant's revenues for its most recent fiscal year:   $2,139,000.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant as of May 31, 1998,  based on the closing price as reported by NASDAQ
was $ 37,611,000.

Number of shares outstanding as of May 31, 1998:   Common Stock:  18,645,726

Documents Incorporated By Reference: None

<PAGE>



         The purpose of this  Amendment  No. 1 to the Annual  Report of StarBase
Corporation  a Delaware  Corporation  (the  "Company"),  on Form  10-KSB for the
fiscal year ended March 31, 1998 is to amend the following item: Part III, Items
9, 10, 11 and 12 to include the actual  information and, thereby,  eliminate the
incorporation of the Company's definitive proxy statement by reference.

         Part III is amended to the following:


Part III

Item 9.  Directors and Executive Officers of the Registrant

Directors

         The  directors and  executive  officers of the Company,  their ages and
present positions with the Company are as follows:
<TABLE>
<CAPTION>


             Name                      Age            Position with the Company
             ----                      ---            -------------------------

<S>                                    <C>       <C>                                                
William R. Stow III                       53         Chief Executive Officer, Chairman of the Board
                                                        and Director
Donald R. Farrow                          52         President, Chief Operating Officer and Director
Daniel P. Ginns                           48         Director
Phillip E. Pearce                         69         Director
John R. Snedegar                          48         Director
Carlos H. Caballero                       46         Vice President, Marketing
William T. McManes                        48         Vice President, Sales
Alan D. Kucheck                           46         Vice President, Engineering
Douglas S. Norman                         34         Director of Finance, Chief Accounting Officer
                                                               and Assistant Secretary
</TABLE>

Directors are elected to one-year terms.  Executive  Officers of the Company are
appointed by the Board of Directors to serve until their removal by the Board of
Directors  or  resignation.  At a meeting of the Board of  Directors on July 27,
1998,  Donald R.  Farrow  resigned as  President  and Chief  Operating  Officer,
William  R. Stow III was  appointed  President  of the  Company  by the Board of
Directors,  and Mr.  Farrow was  appointed  Vice  Chairman of the Company by the
Board of Directors.

Information about Directors

                  The  following is a brief  summary of the  background  of each
director:

                  William R. Stow III founded the Company in September 1991. Mr.
Stow has served as Chief Executive  Officer of the Company since September 1991,
exclusive of the period from August 1996 to January  1997.  Mr. Stow also served
as President of the Company from September 1991 to August 1996, exclusive of the
period from April 1994 through  July 1995.  Mr. Stow has served as a Director of
the Company since September 1991,  Co-Chairman of the Board from October 1994 to
August 1996 and Chairman of the Board since August 1996.

                                       -2-

<PAGE>

                  Donald R.  Farrow has served as the  President  of the Company
since January 1997,  Chief  Operating  Officer and Director of the Company since
February 1997.  Mr. Farrow had been Vice  President,  Sales and Marketing  since
August 1996;  Vice  President,  Sales since May 1996;  and a  consultant  to the
Company since March 1996.  Prior to that,  Mr. Farrow held  executive  positions
with Symantec,  Vice President Sales; Novell, Director Western Area; CommVision,
Vice President Sales and Marketing; Menlo Corporation,  President; and VisiCorp,
Director Western Area.

                  Daniel  P.  Ginns has been a  Director  of the  Company  since
January 1997.  Since October 1996,  Mr. Ginns has been Chairman of the Board and
Chief Executive  Officer of Datametrics  Corporation,  a reporting company which
designs, develops and manufacture printers and computers. From 1989 to 1996, Mr.
Ginns was  President  of Belmont  Capital,  Inc.,  a  management  and  financial
advisory firm.

                  Phillip E.  Pearce has been a Director  of the  Company  since
January 1996.  Mr.  Pearce is the owner of Phil Pearce & Associates  since 1986.
Prior to that,  he was  Senior  Vice  President  and a  member  of the  Board of
Directors of E. F. Hutton & Co.,  from 1971 through  1983, a member of the Board
of  Governors  of the New York  Stock  Exchange,  and  Chairman  of the Board of
governors  of the  NASD.  Mr.  Pearce  is a member  of the  Board  of two  other
reporting companies, RX Medical Services Corporation and Xybernaut Corporation.

                  John R.  Snedegar  has been a Director  of the  Company  since
December 1991.  Since May 1990, Mr.  Snedegar has served as President,  Director
and Chief  Executive  Officer of United  Digital  Network  Inc.,  a  diversified
telecommunications provider based in Irving, Texas. From March 1981 to May 1992,
Mr.  Snedegar  served as  President  and Chief  Executive  Officer  of  AmeriTel
Management,  Inc.,  currently known as WCT Communications,  Inc. Mr. Snedegar is
also a  member  of the  Board  of Star  Telecommunications,  Inc.,  a  reporting
company.

Information about non-Director Executive Officers

                  The  following is a brief  summary of the  background  of each
executive officer of the Company who is not also a director of the Company:

                  Carlos H.  Caballero has been a Vice  President,  Marketing of
StarBase since December 1997. Prior to that, Mr. Caballero had been President of
Digital  Graffiti,  Inc.,  a provider of marketing  communications  products and
services for emerging  business-to-business  software vendors, since July, 1996;
from December 1996 to August 1997, Director of Marketing Communications for True
Software, a software configuration  management vendor;  Director of Marketing at
Quest Software from July,  1993 through July,  1996; and from July, 1987 through
July 1993, Director of Product Management at Softool Corporation,  a provider of
software configuration management solutions.

                  William  T.  McManes  has been the  Vice  President,  Sales of
StarBase since September,  1997. Previously, Mr. McManes had been Vice President
of Sales at Magic Software Enterprise,  Inc. since October, 1996;  Director-West
Region and  consultant  for  Amdahl  Corporation  from  December,  1993  through
October,  1996; Owner of Glencoe Consulting from January,  1996 through October,
1996,  which was operated  exclusively  for 2 clients -- Amdahl  Corporation and
Select Software;  and  Vice-President of Sales,  Template Software from January,
1991 to December, 1993.

                                       -3-

<PAGE>



                  Alan D. Kucheck has been the Vice  President,  Engineering  of
StarBase since January 1995.  From July 1993 to January 1995 served as a Project
Director  for the  Company.  From  August 1990 to March  1993,  Mr.  Kucheck was
Manager, Software Development for IMI, Inc.

                  Douglas S. Norman  founded the Company in September  1991. Mr.
Norman has been the Chief Accounting  Officer since September,  1997;  Assistant
Secretary of the Company since  February,  1997;  Director of Finance since June
1996;  Financial Manager from 1991 to 1996.  Douglas S. Norman is the son-in-law
of William R. Stow III.

Section 16(a) Beneficial Ownership Reporting Compliance

                  Section  16(a)  of the  Securities  Act of 1934,  as  amended,
requires the Company's  directors and  executive  officers,  and persons who own
more than ten percent of the Company's Common Stock, to file with the Securities
and Exchange  Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
To the  Company's  knowledge,  based  solely on a review  of the  copies of such
reports furnished to the Company during the fiscal year ended March 31, 1998 and
written representations from its Directors and Executive Officers, there were no
late or delinquent filings except that each of Messrs. Ginns, McManes and Sexton
(a former  Director) failed to file one Form 4 and Mr. Norman failed to file one
Form 5.

Involvement in certain legal proceedings

                  No director or officer of the Company has within the last five
years prior to the date  hereof,  been  subject to any  penalties  or  sanctions
imposed by a court or  securities  regulatory  authority  relating to trading in
securities, promotion or management of a publicly traded issuer, theft or fraud.

                  No director or officer of the Company has within the last five
years  prior to the date  hereof,  been  declared  bankrupt  or made a voluntary
assignment in bankruptcy, nor made a proposal or been subject to any proceedings
under any legislation relating to bankruptcy or insolvency.

                                       -4-

<PAGE>



Item 10.  Executive Compensation

General and Summary Compensation Table

                  The  following  table sets forth certain  summary  information
regarding  compensation  paid or accrued by the Company to, or on behalf of, the
Company's  Chief  Executive  Officer  and  the  other  most  highly  compensated
executive officers of the Company (the "Named Executive Officers"), for services
rendered in all  capacities  to the Company  during the fiscal years ended March
31, 1996, 1997, and 1998.  Except as otherwise noted, no Named Executive Officer
received any restricted stock award,  stock  appreciation right or payment under
any long-term incentive plan.

<TABLE>
<CAPTION>


                                          Summary Compensation Table (1)

                                                        Annual Compensation          Long-Term Compensation
                                                ------------------------------------ -----------------------

                                                                             Other                All Other
                                                                            Annual   Securities  Compensation
                                                                            Compen-  Underlying      (7)
    Name and Principal Position        Year        Salary        Bonus      sation   Options (2)
------------------------------------ ---------  ------------  ------------ --------- -------------------------

<S>                               <C>       <C>             <C>        <C>       <C>           <C>      
William R. Stow III (3)                1998      150,000         $    --    $   --    249,790       $   --   
  Chief Executive Officer,             1997      137,818              --        --    175,000           --   
  Chairman of the Board and Director   1996      115,000              --        --         --           --   
                                                                                                    
Carlos H. Caballero                    1998       40,000              --        --    150,000           --    
  Vice President, Marketing            1997            -              --        --         --           --    
                                       1996            -              --        --         --           --             
                                                                                             
Donald R. Farrow (4)                   1998      150,000              --        --    297,447           --
  President, Chief Operating           1997      101,031              --        --    231,250       62,942     
   Officer and Director                1996           --              --        --         --           --
                                                                                            
Alan D. Kucheck (5)                    1998      120,833              --        --    245,075           --
  Vice President, Engineering          1997      110,000              --        --     65,667           --
                                       1996      110,000           6,358        --    110,000           --

                                                                                                  
William T. McManes                     1998       70,096              --        --     150,000      18,990
  Vice President, Sales                1997           --              --        --          --          --
                                       1996           --              --        --          --          --
                                                                                                 
Douglas S. Norman (6)                  1998       72,100              --        --      91,700          --
  Director of Finance                  1997       66,326              --        --      37,924          --
  Chief Accounting Officer             1996       56,000              --        --      16,666          --
  Assistant Secretary                             


-------------
</TABLE>

(1)      Certain  columns  have been  omitted if they do not apply to any of the
         Named Executive Officers.

(2)      Amounts  represent stock options granted and/or repriced for the period
         shown.

(3)      Options  granted  during  fiscal year 1998 include  options to purchase
         156,666  shares of the Company's  Common Stock,  originally  granted in
         prior years, that were repriced.
                                       -5-

<PAGE>



(4)      Options  granted  during  fiscal year 1998 include  options to purchase
         206,250  shares of the Company's  Common Stock,  originally  granted in
         prior years, that were repriced.

(5)      Options  granted  during  fiscal year 1998 include  options to purchase
         175,667  shares of the Company's  common stock,  originally  granted in
         prior  years,  that were  repriced.  Fiscal  year 1996  listed  options
         include the right to purchase  59,000  shares of the  Company's  common
         stock that had been granted  prior to 1996 and were  repriced in fiscal
         year 1996.

(6)      Options  granted  during  fiscal year 1998 include  options to purchase
         54,590 shares of the  Company's  common  stock,  originally  granted in
         prior  years,  that were  repriced.  Fiscal  year 1996  listed  options
         include  the right to purchase  3,332  shares of the  Company's  common
         stock that had been granted  prior to 1996 and were  repriced in fiscal
         year 1996.

(7)      Amounts listed as All Other Compensation  represent  commissions earned
         or consulting fees.

                                       -6-

<PAGE>



Stock Options

         The  following  table sets forth  information  concerning  stock option
grants made  during the fiscal  year ended  March 31,  1998 under the  Company's
Stock Option Plan to Named Executive Officers. No stock appreciation rights were
granted to such individuals during the fiscal year.

                 Option/SAR Grants In Year Ended March 31, 1998

<TABLE>
<CAPTION>

                                       Individual Grants
-----------------------------------------------------------------------------------------------


                         Number of
                    Securities Underlying  Percent of Total
                       Options/ SARS         Options/SARS        Exercise
                          Granted        Granted to Employees  or Base Price    Expiration
       Name          (# of Shares) (1)    In Fiscal Year (2)    ($/Sh) (3)         Date
------------------- -------------------- --------------------- -------------  ---------------

<S>                             <C>            <C>                   <C>           <C>
William R. Stow                    6,666           *                    $ 1.75        1/30/05
                                 150,000           4                      1.25         8/7/06
                                  15,000           *                      0.84         5/7/07
                                  25,000           1                      1.52        9/24/07
                                  53,124           1                      1.63        1/22/08

Carlos H. Caballero              100,000           3                      1.35        12/1/07
                                  50,000           1                      1.63        1/22/08

Donald R. Farrow                 125,000           3                      1.25         5/3/06
                                  31,250           1                      1.25        11/8/06
                                  50,000           1                      1.25        2/12/07
                                  20,625           1                      0.84         5/7/07
                                  25,000           1                      1.52        9/24/07
                                  45,572           1                      1.63        1/22/08

Alan D. Kucheck                   59,000           2                      1.25        4/21/03
                                   6,000           *                      1.25        8/11/05
                                  45,000           1                      1.25        12/7/05
                                  65,667           2                      1.25        11/8/06
                                  17,567           *                      0.84         5/7/07
                                  51,841           1                      1.63        1/22/08

William T. McManes               125,000           3                      1.52        9/24/07
                                  25,000           1                      1.63        1/22/08

Douglas S. Norman                  1,666           *                      1.25        1/25/03
                                   1,666           *                      1.25       10/25/04
                                   9,334           *                      1.25        8/11/05
                                   4,000           *                      1.25        12/7/05
                                  18,333           *                      1.25         5/8/06
                                  19,591           1                      1.25        11/8/06
                                  20,459           1                      0.84         5/7/07
                                  16,651           *                      1.63        1/22/08
                                        
</TABLE>
                        
                                       -7-

<PAGE>




(1)    Options granted to purchase common stock. Generally,  twenty-five percent
       of the  shares  granted  vest  one year  from the date of grant  with the
       remaining  shares vesting equally over the following  thirty-six  months.
       All of the  options  shown have a maximum  term of ten years,  subject to
       earlier  termination  following the optionee's  cessation of service with
       the Company.

(2)    The Company  granted  options to purchase a total of 2,045,827  shares of
       Common  Stock to  employees  during the year  ended  March 31,  1998.  In
       addition,  options to purchase  1,715,580  shares of the Company's Common
       Stock were granted in prior years and were repriced.

(3)    The  exercise  price may be paid in cash or in  shares of Common  Stock
       valued at fair market value on the exercise date.

*      Less than 1%.

Option Exercises, Holdings  and Fiscal Year-End Values

       The  following  table sets  forth  information  concerning  the number of
shares covered by both exercisable and unexercisable options held by each of the
Named Executive  Officers as of March 31, 1998. No options were exercised during
the fiscal year ended March 31, 1998 by any of the Named Executive Officers.

                 AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1998
                     AND OPTION VALUES AS OF MARCH 31, 1998

<TABLE>
<CAPTION>


                          Shares                      Number of Securities
                         Acquired                    Underlying Unexercised          Value of Unexercised
                            on         Value               Options at              in-the-Money Options at
                         Exercise    Realized         March 31, 1998 (# of            March 31, 1998 (1)
                                                            shares)
                                                 ------------------------------ ------------------------------

         Name               (#)         ($)       Exercisable    Unexercisable   Exercisable    Unexercisable
----------------------  ----------- -----------  --------------  -------------- --------------  --------------

<S>                    <C>          <C>            <C>             <C>          <C>             <C>      
William R. Stow III         --          --              109,789         165,001      $ 195,502       $ 309,121

Carlos H. Caballero         --          --                   --         150,000             --         266,313

Donald R. Farrow            --          --              140,622         181,825        259,537         347,419

Alan D. Kucheck             --          --              110,075         135,000        216,710         253,284

William T. McManes          --          --                   --         150,000             --         252,063

Douglas S. Norman           --          --               28,591          63,109         56,289         126,307
------------
</TABLE>

(1)    Calculated  based on the closing price of the  Company's  Common Stock as
       reported on the NASDAQ  SmallCap on March 31, 1998 of $3.21875 per share,
       less the applicable exercise price.

Board Compensation

       Prior to January  1998,  directors  who are not  employees of the Company
were not compensated,  except for reimbursement of travel expenses.  Starting in
January 1998, directors who are not employees receive $1,000 per

                                       -8-

<PAGE>



month in addition to reimbursement of travel expenses. Pursuant to the Company's
Stock Option Plan, non-employee directors may receive non-qualified stock option
grants  for  shares of the  Company's  Common  Stock.  All  options  awarded  to
non-employee  directors  have an exercise price per share at the market price of
the Common Stock on the date of grant. The options have a 10-year term.

       In addition,  Mr. Pearce performed certain consulting  services for which
he was compensated $600 during fiscal 1998.

Option Repricing

       The following  table  provides  information  relating to the repricing of
certain  options  held by the  executive  officers of the  Company  named in the
Summary  compensation table that occurred during the fiscal year ended March 31,
1998. The only previous  repricing of any options  granted by the Company to any
executive officer was done in August and September, 1995.

                              Option/SAR Repricings
<TABLE>
<CAPTION>


                                             Number of                                                Length of
                                             Securities         Exercise                           Original Option
                                             Underlying      Price of Stock                             Term
                                              Options          at Time of             New           Remaining at
                                            Repriced or       Repricing or         Exercise            Date of
                                              Amended           Amendment            Price          Repricing or
         Name                  Date             (#)             ($/Share)           ($/Sh)            Amendment
-----------------------    ------------    --------------   -----------------    -------------    -----------------

<S>                          <C>             <C>                <C>              <C>           <C>  
Donald R. Farrow               5/7/1997            31,250            2.60             1.25            9.5 yrs.
                               5/7/1997            50,000            1.74             1.25            9.7 yrs.
                               5/7/1997           125,000            3.50             1.25            9.0 yrs.

Alan D. Kucheck                5/7/1997            59,000            2.21             1.25            6.0 yrs.
                               5/7/1997             6,000            2.21             1.25            8.3 yrs.
                               5/7/1997            45,000            2.32             1.25            8.5 yrs.
                               5/7/1997            65,667            2.60             1.25            9.5 yrs.

Douglas S. Norman              5/7/1997             1,666            2.21             1.25            5.7 yrs.
                               5/7/1997             1,666            2.21             1.25            7.5 yrs.
                               5/7/1997             9,334            2.21             1.25            8.3 yrs.
                               5/7/1997             4,000            2.32             1.25            8.5 yrs.
                               5/7/1997            18,333            4.32             1.25            9.0 yrs.
                               5/7/1997            19,591            2.60             1.25            9.4 yrs.

William R. Stow III            5/7/1997           150,000            3.07             1.25            9.2 yrs.
                               8/5/1997             6,666            5.69             1.75            7.7 yrs.

</TABLE>

Report of Repricing of Options

         In May and August 1997 the Board of Directors reviewed the grant prices
of stock  options to determine if the options were still  effective as long-term
incentives to encourage commitment to the Company. Because the exercise price of
most stock  options had been above the market price of the  Company's  stock for
some time, the Board of Directors  decided to reprice certain  outstanding stock
options.  As a result of the  review  the Board of  Directors  offered to option
holders an opportunity to terminate  their existing  options in exchange for the
grant
                                       -9-

<PAGE>



of new options above the current  market price of the Company  stock.  All other
terms of the stock option grants remained the same.


Item 11.  Security Ownership of Certain Beneficial Owners and Management

Security Ownership of Certain Beneficial Owners

         The  following  table sets forth at June 30, 1998  certain  information
regarding the ownership of each class of the Company's voting securities by each
person known by the Company to be the beneficial owner of more than five percent
of each class of the Company's outstanding voting securities.




                                                  Number of          Percentage
                                                  Shares of              of
Name (1)                                        Common Stock        Common Stock
--------                                        ------------        ------------

Amerindo Investment Advisors, Inc.                 1,751,721       9.2
One Embarcadero, Suite 2300
San Francisco, California 94111-3162


-------------

(1)      Beneficial  ownership is expressly  disclaimed  for Amerindo  Advisors,
         Inc.  (922,093  shares of Common Stock) and Amerindo  Advisors,  Inc. -
         Panama (829,628 shares of Common Stock).  Messrs.  Alberto W. Vilar and
         Gary A. Tanaka,  as the sole  shareholders and directors of the Advisor
         Entities,  share with each other investment and dispositive power as to
         all of the shares shown as owned by the Advisor Entities, who otherwise
         have sole investment and dispositive power with respect thereto, except
         that each client of the Advisor  Entities has the  unilateral  right to
         terminate the advisory agreement with the Advisor Entity in question on
         notice which typically need not exceed 30 days.

                                      -10-

<PAGE>



Security Ownership of Management

         The  following  table sets forth at June 30, 1998  certain  information
regarding the ownership of each class of the Company's voting  securities by (i)
each of the Company's Directors,  (ii) each of the Named Executive Officers, and
(iii) all executive officers and Directors of the Company as a group.

<TABLE>
<CAPTION>


                                                     Number of Shares of      Percentage of 
Name (1)                                                 Common Stock         Common Stock  
--------                                                 ------------         ------------ 
 
<S>                                                         <C>          <C>            
Carlos H. Caballero (3)                                           0              *%         
Donald R. Farrow (2)(3)(4)                                  188,760              1.0        
Daniel P. Ginns  (2)(5)                                     217,658              1.1        
Alan D. Kucheck (3)(6)                                      127,718               *         
William T. McManes (3)                                            0               *         
Douglas S. Norman (3)(7)                                     55,284               *         
Phillip E. Pearce  (2)(6)                                    73,958               *         
John R. Snedegar (2)(8)                                     176,155               *         
William R. Stow III (2)(3)(9)                               753,559              3.9        
Total:  All directors and named executive officers        1,593,092              8.1        
(9 persons) (10)                                                              

</TABLE>
-------------

(1)      Except as otherwise  noted,  the persons  named in the above table have
         sole voting and  investment  power with  respect to all shares shown as
         beneficially  owned by them,  subject to community  property laws where
         applicable.  Unless  otherwise  indicated,  the  address of each person
         named in the  above  table is in care of  StarBase  Corporation,  18872
         MacArthur Boulevard, Irvine, California 92612.

(2)      Director.

(3)      Named Executive Officer.

(4)      Includes  173,760  shares of Common Stock issuable upon the exercise of
         stock options that are exercisable or will be exercisable by August 29,
         1998.

(5)      Includes  48,958  shares of Common Stock  issuable upon the exercise of
         stock options that are exercisable or will be exercisable by August 29,
         1998 and 5,500  shares of Common  Stock held by Mrs.  Ginns.  Mr. Ginns
         disclaims beneficial ownership of the shares held by Mrs. Ginns.

(6)      Represents  shares of Common Stock  issuable upon the exercise of stock
         options that are exercisable or will be exercisable by August 29, 1998.

(7)      Includes  40,498  shares of Common Stock  issuable upon the exercise of
         stock options that are exercisable or will be exercisable by August 29,
         1998.  Also  includes  13,786 shares  subject to a  Performance  Escrow
         Agreement.

(8)      Includes  62,290  shares of Common Stock  issuable upon the exercise of
         stock  options  by  Mr.  Snedegar  that  are  exercisable  or  will  be
         exercisable by August 29, 1998. Also includes 14,944 shares held by Mr.
         Snedegar  as trustee of the  Snedegar  Revocable  Living  Trust;  1,667
         shares held by Norexco  Petroleum of which Mr.  Snedegar is  President;
         and  83,501  shares  held by  Access  Financial  Limited  of which  Mr.
         Snedegar is the general partner.

(9)      Includes  573,119 shares of Common Stock held by Mr. Stow as trustee of
         the Stow  Family  Trust,  of which,  568,124  shares  are  subject to a
         Performance  Escrow  Agreement.  Also  includes an  aggregate  of 1,749
         shares of Common  Stock held by Mr. Stow in trust for his  daughter and
         minor  son.  Also  includes  135,310  shares of Common  Stock and 9,499
         shares of Common Stock  issuable  upon the exercise of stock options by
         Mr. Stow and Mrs. Stow,  respectively,  that are exercisable or will be
         exercisable by August 29, 1998. Mr. Stow disclaims beneficial ownership
         of the shares exercisable by Mrs. Stow.

                                      -11-

<PAGE>



(10)     Includes  a total of  671,991  shares of  Common  Stock  issuable  upon
         exercise of stock  options held by all  directors  and named  executive
         officers of the Company as a group.

*        Less than 1%.

Item 12. Certain Relationships and Related Transactions

Certain Transactions

         In fiscal 1995,  the Board of Directors  authorized the Company to loan
William Stow III, then  President and CEO of StarBase,  the sum of $126,000.  At
March 31, 1998,  the  principal  and accrued  interest  amounts were $76,153 and
$13,294, respectively. The loan is evidenced by a promissory note and is secured
by shares of the Company's  common stock,  which are owned by Mr. Stow. The note
is payable on November 4, 1998 and bears  interest at a rate of 6.34% per annum,
payable at maturity.
                                                                    
                                      -12-

<PAGE>



SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned,  thereunto duly authorized,  on the 29th day of July,
1998.

                                                     STARBASE CORPORATION



                                            By:  /s/ Douglas S. Norman
                                                 -------------------------------
                                                     Douglas S. Norman
                                                     Director of Finance
                                                     Chief Accounting Officer

                                      -13-