SecProbe.io

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Room 4561
      June 10, 2005

David Ayres
President
Prism Software Corporation
15500-C Rockfield Blvd.
Irvine, California  92618

      Re:	Prism Software Corporation
		Form 10-KSB for Fiscal Year Ended December 31, 2004
      Form 10-QSB for Fiscal Quarter Ended March 31, 2005
		File No. 0-19470

Dear Mr. Ayres,

      We have reviewed the above referenced filings and have the
following comments.  Please note that we have limited our review
to
only your financial statements and related disclosures and do not
intend to expand our review to other portions of your document. We
may ask you to provide us with additional information so we may
better understand your disclosure.  Please be as detailed as
necessary in your explanation.  After reviewing this information,
we
may raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Form 10-KSB for the Fiscal Year Ended December 31, 2004
Financial Statements
Revenue Recognition, page F-8

1. Your disclosure indicates that revenues related to initial 12-
month maintenance agreements are recognized upon delivery of the
software and any revenues associated with maintenance renewals are
deferred and recognized on a straight-line basis over the duration
of
the renewal periods. Explain to us the basis for this revenue
recognition policy.  Please refer to the relevant paragraphs of
SOP
97-2 and explain how you applied this guidance in concluding that
your policy is appropriate.

Form 10-QSB for the Fiscal Quarter Ended March 31, 2005
Management`s Discussion and Analysis or Plan of Operation
Liquidity and Capital Resources, page 9

2. Please explain to us the basis for your belief that expected
cash
flows from operations, borrowing, and the possible proceeds from
sales of securities will be sufficient to finance your operations
at
currently anticipated levels for a period of at least twelve
months.
Provide us with details regarding how you intend to increase cash
flows from operations, secure additional borrowings and sell
securities in order to fund your operations over the next twelve
months and beyond. In addition, explain why you believe your
disclosures are sufficient considering there appear to be
significant
uncertainties related to your liquidity. Refer to Section IV of
SEC
Release No. 33-8350.

      As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response.  Please submit all correspondence and
supplemental
materials on EDGAR as required by Rule 101 of Regulation S-T.  You
may wish to provide us with marked copies of any amendment to
expedite our review.  Please furnish a cover letter with any
amendment that keys your responses to our comments and provides
any
requested information.  Detailed cover letters greatly facilitate
our
review.  Please understand that we may have additional comments
after
reviewing any amendment and your responses to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

      In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Brent Watson, Staff Accountant, at (202)
551-
3483, Mark Kronforst, Senior Staff Accountant, at (202) 551-3451
or
me at (202) 551-3730 if you have any questions regarding these
comments.

							Very truly yours,

							Craig Wilson
						Senior Assistant Chief Accountant
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David Ayres
Prism Software Corporation
June 10, 2005
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