California Software Reports Record Fiscal 1999 Results.

Business/Technology Editors

SANTA ANA, Calif.--(BUSINESS WIRE)--March 13, 2000

California Software Corp. (OTC BB: CAWC), a leader in IBM migration products and developer of the award-winning BABY(TM) product line, today announced its audited financial results for the twelve months ended December 31, 1999.

Sales grew to record levels of $12.0 million for fiscal 1999. Income before taxes rose to $3.35 million. California Software reported $0.87 basic earnings per share and $0.66 per share on a fully diluted basis for fiscal 1999. The Company attributed its improvement in sales and income to the widespread market acceptance of its new product releases, including a record order of 4,000 licenses for BABY/GUI, which was introduced in the fourth quarter of fiscal 1999.

As of December 31, 1999, cash and receivables rose to $4.78 million and total assets increased to $6.07 million. The Company had working capital of $4.23 million at the close of fiscal 1999.

Bruce Acacio, President and Chief Executive Officer of California Software, stated, "Through the conversion of a $2,250,00 note payable in the first quarter of 2000, all long-term debt has been eliminated."

Acacio continued, "Our strong balance sheet combined with steady top-line growth during fiscal 1999 and a forthcoming 2-for-1 stock split (for shareholders on record as of March 15 with an ex-dividend date of March 22, 2000) is rapidly positioning the Company to make the transition for listing on the American Stock Exchange. We plan to file for an AMEX(R) listing next week, which is ahead of schedule."

Carol Conway, Vice President of California Software, commented,"In the ever-changing mid-market sector, our upcoming e-business solution, BABY.com, will capitalize on the need for businesses to integrate operations over the Internet and is poised to rival competitors, such as Jacada (NASDAQ: JCDA)."

Conway continued, "The proven success of several product introductions during fiscal 1999 has generated significant sales momentum, which we expect will contribute to fiscal 2000 revenues of over $20 million."

"A private placement of $10 million this year will fuel our aggressive growth-through-acquisition strategy. During fiscal 2000, we plan to add several highly qualified acquisitions," added Conway.

                   (financial statements to follow)

                    California Software Corporation
                 Condensed Consolidated Balance Sheet


(Audited)                       December 31, 1999   December  31, 1998

Cash                                $  402,782            $15,395
Accounts Receivable                 $4,381,742            $     0
Total current assets                $5,171,395            $     0
Other assets                        $  847,785            $ 3,480
Total assets                        $6,070,652            $     0
Total current liabilities           $  939,193            $     0
Notes payable(A)                    $2,250,000            $     0
Total liabilities                   $3,189,193            $     0
Total shareholders' equity          $2,881,459            $15,743
Total liabilities
 & shareholders' equity             $6,070,652            $15,743


                    California Software Corporation
            Condensed Consolidated Statement of Operations


(Audited)                        Fiscal year ended   Fiscal year ended
                                 December 31, 1999   December 31,1998

Gross Sales                       $ 12,009,377           $       0
Less Sales Discounts             ($  1,763,144)          $       0

Net Sales                         $ 10,246,193           $       0
Cost and Expenses
Wages and Salaries                $  1,262,959           $       0
Selling, General,
 and Administrative               $  1,587,214           $  19,955
Returned Product Reserve          $  3,906,214           $       0
Amortization of
 intangible assets                $    211,956           $      12
Depreciation Expense              $     54,117           $       0
Total Costs and Expenses          $  7,022,460           $  19,977
Net Operating Income
 (Loss) Before Income Taxes       $  3,223,733           $ (19,977)
Other Income
Deferred  Taxes                   $    112,539                  NA
Interest Income                   $     14,221           $       0
Net Income (Loss)
 Before Income Taxes              $  3,350,493           $ (19,977)
Provision for Income Tax          $    520,497           $       0
Net Income (Loss)                 $  2,829,996           $ (19,977)
Net income (loss) per
 common share - primary           $       0.87           $   (0.01)
Equivalents for
 convertible debt(A)                 1,000,000                  NA
Net income (loss)
 per share - diluted(A)                   0.66                  NA
Weighted average
 number of common                    3,270,900           3,270,900

Notes to Consolidated Financial Statements 

(A) The $2,250,000 note payable was eliminated in the first quarter of 2000 through the issuance of 1,000,000 shares of common stock, which effected a fully diluted earnings per share of $0.66.

California Software Corp. is the international leading provider of IBM Midrange migration software solutions marketed under the brand name BABY. These products support the migration of IBM AS/400 screens and applications into PC-LAN business environment and enjoy over 100,000 installations in 56 countries.

Forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including without limitation, continued acceptance of the Company's products, increased levels of competition for the Company, new products and technological changes, the Company's dependence on third-party suppliers, and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.