UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC. 20549

                    -----------------------------------------
                                    FORM 10-K
                    -----------------------------------------

(Mark One)

(X)   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934 [Fee Required] For the fiscal year ended: December 31, 1996

                                       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: 1-5513
                    -----------------------------------------

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

               Connecticut                           06-0682273
     (State or other jurisdiction of              (I.R.S. Employer
     incorporation or organization)               Identification No.)

                                 61 Wilton Road
                               Westport, CT 06880
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (203) 226-1144

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

    Title of each class                Name of each exchange on which registered
--------------------------------       -----------------------------------------
 Common Stock, Without Par Value                       NASDAQ

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

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

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 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 other amendment
to this Form 10-K. [_]

As of March 14, 1997 the aggregate market value of the registrant's issued and
outstanding voting stock held by non-affiliates of the registrant was
$72,500,000.

As of March 14, 1997 the registrant had outstanding 5,373,310 shares of common
stock, without par value.

                        Exhibit Index appears on page 33
<PAGE>

PART I

ITEM 1. BUSINESS

General

Tridex Corporation ("Tridex" or the "Company"), through its wholly-owned
subsidiaries Ultimate Technology Corporation ("Ultimate") and Cash Bases GB
Limited ("Cash Bases") and its Tridex Ribbons Division, is primarily engaged in
the design, development, manufacture, integration and sale of custom-designed
terminal devices, customer displays, keyboards, cash drawers and other
peripheral devices used in a variety of transactions at the retail point-of-sale
("POS") and ribbon cartridges for specialty dot matrix printers. See Note 2 to
the Company's 1996 Consolidated Financial Statements for a discussion of
discontinued operations. All amounts within this report, unless otherwise
indicated, exclude any results of discontinued operations.

(A)    General Development of Business since December 31, 1996

       As of the date of this report, Tridex owns 5,400,000 shares, or
       approximately 80.3%, of the outstanding common stock of TransAct
       Technologies Incorporated ("TransAct"). Tridex has announced that on
       March 31, 1997 it intends to distribute those shares pro rata to persons
       who were Tridex stockholders of record on March 14, 1997.

       In November 1995, the Board of Directors of Tridex approved a plan to
       combine the business operations of two wholly-owned subsidiaries,
       Magnetec Corporation ("Magnetec") and Ithaca Peripherals Incorporated
       ("Ithaca"), under unified management. TransAct was incorporated in
       Delaware on June 17, 1996 as a wholly-owned subsidiary of Tridex.
       Following the incorporation, Tridex, TransAct, Magnetec and Ithaca
       entered into a Plan of Reorganization, pursuant to which: (i) Ithaca
       merged into Magnetec; (ii) TransAct transferred to Tridex certain assets
       of Magnetec used in the Tridex Ribbons Division; (iii) TransAct issued
       5,400,000 shares of its common stock to Tridex in exchange for all the
       outstanding shares of Magnetec; (iv) TransAct sold in an initial public
       offering 1,322,500 shares, or approximately 19.7%, of its outstanding
       common stock; (v) TransAct repaid $8,500,000 of intercompany indebtedness
       to Tridex; (vi) Tridex applied to the Internal Revenue Service (the
       "IRS") for a ruling that the pro rata distribution of the 5,400,000
       shares of TransAct owned by Tridex to Tridex stockholders (the
       "Distribution") would constitute a tax-free reorganization for federal
       income tax purposes; and (vii) Tridex agreed to effect the Distribution
       promptly after receipt of a favorable ruling from the IRS and the
       satisfaction of certain other conditions.

       Net proceeds from the TransAct's initial public offering were
       approximately $9 million after payment of approximately $2.3 million of
       offering expenses. TransAct repaid Tridex $7.5 million of the $8.5
       million of intercompany indebtedness in August 1996 and, in February
       1997, repaid the balance, plus interest at the rate charged by Tridex's
       bank under its revolving credit agreement (8.25% at December 31, 1996).

       On February 12, 1997, Tridex received a favorable ruling from the IRS
       confirming the tax-free nature of the Distribution and announced that it
       would effect the Distribution on March 31, 1997. The financial
       information included in this report consists of, or is derived from,
       historical financial statements which have been restated to reflect the
       fact that, upon completion of the Distribution, Tridex will no longer own
       any of the capital stock of TransAct. See Note 2 to the Company's
       Consolidated Financial Statement.

(B)    Financial Information about Industry Segments

       Tridex operates in one industry segment, the design, development,
       manufacture, integration and sale of terminal devices, cash drawers,
       customer displays, keyboards, and other peripheral devices, and ribbon
       cartridges for specialty dot matrix printers.

(C)    Narrative Description of Business

       (i)    Principal Products and Services

              Tridex designs, manufactures and sells customer displays,
              keyboards, terminal devices and custom cash drawers for POS
              applications. Tridex manufactures and markets POS customer
              displays, keyboards and terminal devices for use in Twinax,
              Unix/Aix and PC-based POS applications. Tridex's terminals and
              other peripheral products are sold to system integrators, original
              equipment manufacturers and directly to end users by a direct
              sales force located in New York, New Hampshire, Illinois, Texas,
              the United Kingdom, Germany, France, and Spain. The Company's cash
              drawers,


                                       2
<PAGE>

              constructed of metal, are high quality, custom products, for use
              with POS terminals primarily in supermarkets, specialty stores and
              convenience stores. Cash drawers are fabricated in the United
              Kingdom and are sold primarily in Western Europe through a direct
              sales force. Sales by major product line, exclusive of
              discontinued operations, were:

<TABLE>
<CAPTION>
                                             Year Ended                  Nine Months Ended     Year Ended
                              ----------------------------------------   ----------------------------------
                              December 31, 1996      December 31, 1995   December 31, 1995    April 1, 1995
                              -----------------      -----------------   -----------------    -------------
<S>                                 <C>                   <C>                   <C>                 <C>
              POS Related           58%                   58%                   60%                 53%
              Cash Drawers          40                    39                    37                  44
              Other                  2                     3                     3                   3
                              -----------------      -----------------   -----------------    -------------
                                   100%                  100%                  100%                100%
                              =================      =================   =================    =============
</TABLE>

       (ii)   Sources and Availability of Raw Materials

              The principal raw materials used in the manufacture of custom
              keyboards and customer displays are injection molded plastic
              parts, formed metal parts and electronic subassemblies, all of
              which are readily available from a number of sources. The assembly
              of POS terminals combines the keyboard and customer display
              manufactured by the Company with a printer, monitor, cash drawer
              and other peripheral devices purchased from various suppliers, all
              of which are readily available from a number of sources. The
              principal raw materials used in the manufacture of cash drawers
              are sheet metal, molded plastic parts, fabricated drawer slides,
              locking mechanisms, wiring harnesses and electronic subassemblies,
              which are available from several sources.

       (iii)  Patents

              The Company regards certain hardware designs and software
              incorporated into its products as proprietary and attempts to
              protect them with a combination of copyright, trademark and trade
              secret laws, employee and third party nondisclosure agreements and
              similar means. It may be possible for unauthorized third parties
              to copy certain portions of the Company's products or to reverse
              engineer or otherwise obtain and use, to the Company's detriment,
              information that the Company regards as proprietary. Moreover, the
              laws of some foreign countries do not afford the same protection
              to the Company's proprietary rights as do United States laws.
              There can be no assurance that legal protections relied upon by
              the Company to protect its proprietary rights will be adequate or
              that the Company's competitors will not independently develop
              products that are substantially equivalent or superior to the
              Company's. In addition, some of the intellectual property used by
              Ultimate is not proprietary. No assurance can be given that such
              intellectual property will not be used by Ultimate's competitors.

       (iv)   Seasonality and Practices Relating to Working Capital Items

              Sales of the Company's products are not subject to material
              seasonal variations. As a result, the Company has not historically
              been required to maintain significant inventories of raw materials
              or finished goods in order to fill customer orders.

       (v)    Certain Customers

              Sales to Lowes Companies, Inc. accounted for approximately 13% of
              net sales for the year ended December 31, 1996. Sales to Advance
              Stores Company Inc. ("Advance Auto") accounted for approximately
              12% of net sales for the nine months ended December 31, 1995.

       (vi)   Backlog

              The Company's backlog of firm orders was approximately $4,600,000
              as of March 14, 1997, approximately $3,100,000 as of February 24,
              1996 and approximately $5,200,000 as of May 27, 1995. Tridex
              expects to fill all of its backlog within the current fiscal year.

       (vii)  Competition

              Competition is intense in all of the Company's markets. Many of
              the Company's current and potential competitors are large
              multi-national enterprises with extensive experience and resources
              in designing, manufacturing and marketing a wide range of
              peripheral devices and systems. Ultimate competes with other POS
              manufacturers and system integrators, including NCR and IBM, as
              well as distributors



                                       3
<PAGE>

              of terminals, keyboards and customer pole displays. Cash Bases
              competes with other manufacturers of cash drawers, primarily in
              Europe.

              In certain markets, the Company's competitors can sometimes offer
              lower prices than the Company because of lower overhead,
              attributable to higher volume production and off-shore
              manufacturing locations, which enjoy cheaper sources of labor and
              raw materials. Many of the Company's domestic competitors,
              particularly those that are divisions of substantially larger
              companies, have greater financial and other resources than Tridex.

       (viii) Research and Development Activities

              The Company spent approximately $1,040,000 in 1996, $777,000
              during the nine months ended December 31, 1995, and $651,000 in
              fiscal year 1995, on engineering, design and product development
              efforts in connection with specialized engineering and design to
              introduce a number of new products and to customize products for
              the Company's customers.

       (ix)   Environment

              Allu Realty Trust ("Allu"), a Massachusetts business trust with
              transferable shares, all of which are owned by Tridex, is the
              former owner of land improved with a manufacturing-warehouse
              building located at 100 Foley Street, Somerville, Massachusetts
              (the "Site"). Although Allu has sold the property to 100 Foley
              Street Incorporated ("Foley"), an unrelated entity, Allu and
              Tridex remain responsible for certain environmental problems
              associated with the Site.

              During July 1984, Allu and Tridex disclosed to the Massachusetts
              Department of the Attorney General the existence of chromium, oil
              and grease at the Site. As a result, the Environmental Protection
              Division of the Department of the Attorney General and the
              Massachusetts Department of Environmental Protection ("MDEP")
              conducted an investigation of the Site. At MDEP's request, the
              Company retained an environmental engineering firm, which
              completed a Phase II investigation study of the Site. The Company
              has conducted further studies to more specifically characterize
              and assess the Site and to determine appropriate long term
              clean-up.

              In January 1993, the Company entered into an agreement with Foley
              pursuant to which Tridex and Foley agreed to pay 75% and 25%,
              respectively, of the costs incurred after January 1, 1992 in
              connection with the investigation and remediation of the Site (the
              "Site Participation Agreement"). The Site Participation Agreement
              also provides that, to the extent there are available proceeds
              from the sale of the Site or, if not sold, from the operation of
              the Site after January 1, 1997, Tridex shall be reimbursed for all
              or a portion of the $260,000 it expended in connection with the
              Site prior to January 1, 1992. Under the terms of an Escrow
              Agreement entered into by Tridex and Foley simultaneously with the
              Site Participation Agreement (the "Escrow Agreement"), Tridex and
              Foley each placed $125,000 in escrow to fund the payment of their
              obligations under the Site Participation Agreement. Under the
              terms of the Escrow Agreement, Tridex has provided $85,000 and is
              obligated to provide an additional $15,000 in escrow at the
              request of the Escrow Agent and thereafter the amount of any
              additional funds required by the Escrow Agent shall be contributed
              75% by Tridex and 25% by Foley. As of December 31, 1996,
              approximately $1,000 was being held in escrow, all of which was
              contributed by Foley.

              As of December 31, 1996, the Company had spent approximately
              $664,000 in connection with the Site. Of this amount,
              approximately $494,000 relates to investigation and remediation
              costs incurred at the Site. Although it is difficult to
              distinguish between amounts spent for investigation and
              remediation, the Company estimates that approximately $394,000 has
              been spent in connection with investigation and approximately
              $100,000 has been spent in connection with remediation of the
              Site. The Company estimates that it will spend approximately
              $100,000 to $300,000 in connection with the Site during 1997,
              including expenditures from the escrow account.

              Based upon preliminary estimates provided by a consulting
              environmental engineer and based upon the likely future uses of
              the property, as of December 31, 1996, the Company had accrued
              $322,000 for the Site, which represents the currently estimated
              minimum cost of remediation, after considering the cost sharing
              arrangement discussed above. Accordingly, although no assurances
              can be given regarding the materiality of the total costs which
              may be incurred, the Company does not believe at


                                       4
<PAGE>

              this time that the remediation of the Site is reasonably likely to
              have a material effect on the Company's financial condition,
              results of operations or liquidity. The implementation of clean-up
              measures has commenced, and may be completed in 1997, in which
              case the entire amount of remediation costs to be borne by the
              Company would be incurred and paid in 1997. The precise scope and
              timing of remediation is dependent upon a proposed sale of the
              property, which is subject to negotiations to which the Company is
              not a party. The Company expects that, as in the past, funds being
              held in escrow, cash from operations and the Company's credit
              facilities will be sufficient to pay the costs of remediation
              without a material effect on the Company's operations.

              The Company has also been notified by an adjacent property owner,
              Cooper Industries ("Cooper"), that certain petroleum products that
              may have migrated from the Site have been detected in a monitoring
              well located on Cooper's property. The Company and Foley are
              investigating possible oil contamination along the border between
              the Site and the property owned by Cooper.

       (x)    Employees

              As of March 14, 1997, Tridex and its subsidiaries employed
              approximately 273 persons, of which 265 were full time and 6 were
              temporary employees.

(D)    Financial Information About Foreign and Domestic Operations and Export
       Sales

       Prior to fiscal 1995, the Company had no foreign operations and export
       sales were minimal. Primarily as a result of the acquisition of Cash
       Bases in June 1994, the Company had approximately $14,713,000 of sales
       which originated outside the United States during the twelve months ended
       December 31, 1996 and approximately $8,486,000 during the nine months
       ended December 31, 1995. For the amounts of revenue, operating profit or
       loss and identifiable assets by geographic area, see Note 13 to the
       Consolidated Financial Statements included in this report. In addition,
       the Company had export sales from the United States of approximately
       $130,000 in 1996, $100,000 for the nine months ended December 31, 1995,
       and $731,000 in fiscal 1995, the majority of which was to Canada.

(E)    Directors and Executive Officers of the Registrant

       (i)    Directors of the Registrant

<TABLE>
<CAPTION>
                 Director Name        Principal Occupation         Employer Name             Principal Business of Employer
                 -------------        --------------------         -------------             ------------------------------
                 <S>                  <C>                          <C>                       <C>
                 Seth M. Lukash       Chairman of the Board,       Tridex Corporation        Manufacturer of computer
                                      President, Chief                                       peripheral equipment for POS
                                      Executive Officer and                                  applications.
                                      Chief Operating Officer

                 Paul J. Dunphy       Management Consultant        Self-employed             Management consulting

                 C. Alan Peyser       President                    Country Long Distance     Communications Service

                 Thomas R. Schwarz    Retired                      None                      Personal Investments

                 Graham Y. Tanaka     President                    Tanaka Capital            Investment advising
                                                                   Management, Inc.
</TABLE>

       (ii)   Executive Officers of the Registrant

                 Name                     Age     Position
                 ----                     ---     --------

                 Seth M. Lukash           50      Chairman of the Board of
                                                  Directors, President, Chief
                                                  Executive Officer, Chief
                                                  Operating Officer and Director

                 George T. Crandall       50      Vice President, Treasurer,
                                                  Controller and Secretary

                 Dennis J. Lewis          42      President, Ultimate Technology
                                                  Corporation, a wholly-owned
                                                  subsidiary of the Company

                 Hugh T. Burnett          57      Managing Director, Cash Bases
                                                  GB Limited, a wholly-owned
                                                  subsidiary of the Company


                                       5
<PAGE>

                 Bart C. Shuldman         39      President, TransAct
                                                  Technologies Incorporated, an
                                                  80.3% owned subsidiary of the
                                                  Company (through March 31,
                                                  1997)

              Seth M. Lukash has been a senior Executive Officer of the Company
              since 1977 and has been a Director since 1979. He has served as
              Chairman of the Board of Directors of the Company since November
              1988, Chief Executive Officer since August 1987, and President and
              Chief Operating Officer since June 1989. Mr. Lukash previously
              served as President of the Company from September 1983 to August
              1988 and as Chief Operating Officer from September 1983 to August
              1987. Mr. Lukash is the son of Alvin Lukash, a Director Emeritus
              of the Company.

              George T. Crandall has been a Vice President of the Company since
              September 1992, Treasurer since November 1990 and Corporate
              Controller since March 1989. Prior to joining Tridex in November
              1988, Mr. Crandall was a consultant to Northeast Manufacturing
              Companies, Inc. and was previously employed by Revere Copper and
              Brass Incorporated.

              Dennis J. Lewis has been President of Ultimate since its
              acquisition by the Company on January 20, 1993. Prior to the
              acquisition, Mr. Lewis had served as Ultimate's President, Chief
              Executive Officer and a Director since founding Ultimate in 1988.
              Prior to 1988, Mr. Lewis held senior management positions related
              to the sales, engineering and service of computer peripherals with
              Digital Equipment Corporation, Naum Brothers, RS Engineering, Serv
              Tech and Add Electronics.

              Hugh T. Burnett was appointed Managing Director of Cash Bases
              simultaneously with its acquisition by Tridex on June 20, 1994.
              Prior to the acquisition and since 1991, he was senior marketing
              executive with Cash Bases. Mr. Burnett previously was Managing
              Director of Omron Systems UK Ltd. from 1983 to 1991.

              Bart C. Shuldman was appointed President of the Printer Group in
              December 1995 and President of Magnetec in July 1993. From 1989 to
              1993 he was employed by Mars Electronics International, a division
              of Mars, Incorporated, in several management positions, most
              recently as Business Manager for the North American Amusement,
              Gaming and Lottery operations. Mr. Shuldman previously held
              manufacturing and sales management positions with General Electric
              Company from 1979 to 1989.

ITEM 2. PROPERTIES

The Company's operations are currently conducted at the six facilities described
below:

<TABLE>
<CAPTION>
                                                                            Owned or
Location                 Operations Conducted        Size - Approx. Sq. Ft.  Leased    Lease Expiration Date
--------                 --------------------        ---------------------- --------   ---------------------
<S>                      <C>                                  <C>            <C>          <C>
Westport, Connecticut    Principal executive offices           5,000         Leased       July 31, 2001

Victor, New York         Manufacturing facility               57,000         Leased       January 31, 2002

Newhaven, England        Manufacturing facility               28,000         Leased       March 25, 2000

Bloomfield, Connecticut  Non-operating facility held          23,000         Owned        N/A
                         for sale

Wallingford, Connecticut Manufacturing facility               44,000         Leased       March 31, 2005

Ithaca, New York         Manufacturing facility               36,000         Leased       November 21, 2002
</TABLE>

The Company believes that its facilities generally are in good condition,
adequately maintained and suitable for their present and currently contemplated
uses. The Wallingford and Ithaca facilities, which are in TransAct operations
exclusively, will cease to be Company facilities upon completion of the
Distribution. See Item 1(A).

ITEM 3. LEGAL PROCEEDINGS

See Item 1(C)(ix) "Environment" set forth above and Note 9(b) of the Notes to
Consolidated Financial Statements included in this report.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


                                       6
<PAGE>

No matters were submitted to a vote of security holders during the last quarter
of the year covered by this report.

PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED SECURITY HOLDER
        MATTERS

The Company's common stock is traded on the NASDAQ National Market System under
the symbol "TRDX." Prior to August 9, 1995, the Company's common stock was
traded on the American Stock Exchange. As of March 14, 1997 there were 1,296
holders of record of the common stock. The high and low sales prices of the
common stock reported during the years ended December 31, 1996, and December 31,
1995, by quarter, were as follows:

                                                 Year Ended
                          ------------------------------------------------------
                             December 31, 1996               December 31, 1995
                             -----------------               -----------------
                            High            Low            High             Low
                            ----            ---            ----             ---

January - March           7 15/16          6 1/4           7 1/2           5 5/8
April - June              12 3/16          7 1/8           6 7/8           5 1/2
July - September           12 1/4          8 1/2          10 1/4           6 1/4
October - December         14 1/8         10 3/4             9             6 3/4

No dividends on the common stock have been declared in more than five years. The
Company does not anticipate declaring dividends in the foreseeable future. The
Company's credit agreement with Fleet National Bank prohibits the payment of
cash dividends for the term of the agreement.

ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                       Year Ended             Nine Months Ended               Fiscal Year Ended
                                  --------------------      --------------------      ---------------------------------
                                  December    December      December    December       April        April        April
                                  31, 1996    31, 1995      31, 1995    31, 1994      1, 1995      2, 1994      3, 1993
                                  -------      -------      -------      -------      -------      -------      ------
                                                                                         (A)                       (B)
                                                        (Dollars in thousands, except per share amounts)
<S>                               <C>          <C>          <C>          <C>          <C>          <C>          <C>
Statement of Operations:
     Net sales from
       continuing operations
                                  $37,053      $30,756      $22,872      $16,115      $23,999      $12,516      $3,195
                                  =======      =======      =======      =======      =======      =======      ======
     Income (loss) from
     continuing operations
                                  $ 5,991      $(1,118)     $(1,913)     $  (408)     $   382      $   520      $ (264)
                                  =======      =======      =======      =======      =======      =======      ======
     Income (loss) from
     continuing operations
     per common and common
       equivalent share           $  1.44      $ (0.28)     $ (0.52)     $ (0.11)     $  0.10      $  0.14      $(0.09)
                                  =======      =======      =======      =======      =======      =======      ======
     Cash dividends per
       common share                  None         None         None         None         None         None        None
                                  =======      =======      =======      =======      =======      =======      ======
</TABLE>

(A) Includes the results of operations of Cash Bases GB Limited since June
    20, 1994.
(B) Includes the results of operations of Ultimate Technology Corporation
    since January 20, 1993.

<TABLE>
<CAPTION>
                                                           As of
                         ----------------------------------------------------------------------
                         December     December     December     April       April       April
                         31, 1996     31, 1995     31, 1994     1, 1995     2, 1994     3, 1993
                         --------     --------     --------     -------     -------     -------
<S>                      <C>          <C>          <C>          <C>         <C>         <C>
Balance Sheet Data:
     Total assets        $38,653      $31,647      $18,663      $21,181     $10,545     $8,611
                         =======      =======      =======      =======     =======     ======
</TABLE>


                                       7
<PAGE>

<TABLE>
<S>                      <C>          <C>          <C>          <C>         <C>         <C>
     Long term debt      $   809      $ 8,324      $ 6,892      $ 6,185     $ 5,307     $7,298
                         =======      =======      =======      =======     =======     ======
</TABLE>

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

Certain statements included in this report, including, but not limited to,
statements in this Management's Discussion and Analysis of the Results of
Operations and Financial Condition, which are not historical facts may be deemed
to contain forward looking statements with respect to events the occurrence
which involves risks and uncertainties, including, but not limited to, the
Company's expectations regarding net sales, gross profit, operating income and
financial condition.

(A)    Results of Operations

       As described in Note 2 of the Notes to Consolidated Financial Statements
       included Item 8 of this report, and in "Business - General Development of
       Business Since December 31, 1996" in Item 1(A), the Company intends to
       distribute on March 31, 1997 all of the 5,400,000 shares of common stock
       of TransAct which it owns, pro rata to the holders of record of the
       Company's common stock on March 14, 1997. After the Distribution,
       TransAct will no longer be a consolidated subsidiary of the Company. The
       Selected Financial Data are derived from the Company's Consolidated
       Financial Statements, which have been restated from historical financial
       statements to present the results of operations of TransAct as
       discontinued operations. The Consolidated Financial Statements may not
       necessarily reflect what the results of operations or the financial
       position of the Company would have been if TransAct had been a separate
       entity during the periods presented. The discussion and analysis set
       forth below is based upon continuing operations only.

       (i)    Year ended December 31, 1996 compared to year ended December 31,
              1995

              Consolidated net sales for the year ended December 31, 1996
              increased $6,297,000 (20%) to $37,053,000 from $30,756,000 for the
              prior year. Sales of POS terminal systems and related products
              into the POS market accounted for approximately $3,500,000 of the
              increase. The balance of the increase is attributable to increased
              shipments of custom cash drawers.

              Consolidated gross profit increased $1,525,000 (18%) to
              $10,014,000 from $8,489,000 in the prior year, primarily due to
              the increase in the volume of shipments of both POS terminal
              systems and custom cash drawers. The gross margin declined
              slightly to 27.0% from 27.6% in the prior year due to the sales
              mix of POS terminal systems and to start-up costs of a
              standardized product line of cash drawers. However, cash drawer
              manufacturing operations implemented significant productivity
              improvements to correct production inefficiencies experienced in
              the prior year.

              Consolidated engineering, design and product development costs
              increased $48,000 (5%) to $1,040,000 from $992,000 in the prior
              year. The increase reflects the ongoing cost of developing new
              products and enhancing existing products.

              Consolidated selling, administrative and general expenses
              decreased $525,000 (6%) to $7,805,000 from $8,330,000 in the prior
              year. Such expenses in the prior year included $680,000 for the
              settlement of certain litigation, $339,000 for establishing an
              unfunded pension arrangement and other non-recurring charges
              totaling approximately $246,000. During 1995, the Company also
              recorded a $125,000 provision for restructuring to cover the costs
              associated with the reduction of levels of employment at Cash
              Bases and the discontinuance of certain products. Current year
              expenses include a provision of $320,000 to amend the unfunded
              pension arrangement established in the prior year.

              Operating income for the current period was $1,169,000 compared to
              an operating loss of $958,000 in the prior year. The increase in
              operating profit reflects increased volume of shipments of POS
              terminal systems and custom cash drawers and the correction of
              production inefficiencies experienced in the prior year. Operating
              profit as a percentage of revenue was 3.2% in 1996 compared to an
              operating loss of 3.1% in the prior year.

              Net interest expense decreased $464,000 (35%) to $879,000 from
              $1,343,000 in the prior year. The decrease in interest expense was
              due primarily to lower levels of indebtedness under the working
              capital facility, repayment of bank debt and the conversion of
              debentures to common stock.


                                       8
<PAGE>

              Non-operating income includes the non-taxable gain of $6,200,000
              on the sale of subsidiary stock. Other non-operating expense,
              (net) for the current period includes a provision of $163,000 for
              loss on the anticipated disposal of unused real estate held for
              sale, and $79,000 for net realized transactional foreign exchange
              losses. The prior year includes a provision of $135,000 for
              environmental matters, net realized gains on foreign exchange of
              $94,000 and an additional provision of $92,000 for loss on the
              anticipated disposal of real estate held for sale.

              The provision for taxes for 1996 is $232,000. The effective tax
              rate for 1996 was 4% compared to a benefit of 54% in 1995. The
              1996 provision was benefited by a $6,200,000 non-taxable gain
              recognized upon the sale of subsidiary stock. The remaining
              provision is related to state income taxes and non-deductible
              amortization of goodwill.

              Income from continuing operations for the current period was
              $5,991,000 (or $1.44 per share). Exclusive of the one-time gain on
              the sale of subsidiary stock, the loss from continuing operations
              was $209,000 (or $.05 per share) compared to a loss of $1,118,000
              (or $.28 per share) in the prior year. Discontinued operations
              reflect the equity in the income of TransAct. Spin-off related
              expenses consist of professional services and other costs related
              to the spin-off of TransAct.

              Net income for the current period was $8,848,000 (or $2.13 per
              share, $1.98 on a fully diluted basis) as compared to net income
              of $214,000 (or $.05 per share) in the prior year's period. The
              average number of common and common equivalent shares outstanding
              during 1996 was 4,154,000. The average number of common and common
              equivalent shares outstanding during 1995 was 3,930,000 shares.

       (ii)   Nine months ended December 31, 1995 compared to nine months ended
              December 31, 1994

              Consolidated net sales for the nine months ended December 31, 1995
              increased $6,757,000 (42%) to $22,872,000 from $16,115,000 in the
              comparable period of the prior year. The increase is due to
              greater volume of shipments of POS terminals, customer displays
              and other peripherals and to the sales of custom cash drawers by
              Cash Bases, which was acquired on June 20, 1994 and included in
              only six and one third months of the nine months ended December
              31, 1994.

              Consolidated gross profit increased $1,253,000 (26%) to $6,029,000
              from $4,776,000 in the prior year's period, primarily due to the
              greater volume of shipments of POS terminals and to the effect of
              the Cash Bases acquisition. Gross profit in the current period was
              adversely impacted by the production inefficiencies experienced at
              Cash Bases. Consolidated gross margin decreased to 26.4% from
              29.6% in the prior year's period. The decrease in gross margin
              reflects a change in sales mix of products and the production
              inefficiencies.

              Consolidated engineering, design and product development costs
              increased $341,000 (78%) to $777,000 from $436,000 in the prior
              year's period. The increase is primarily the result of the
              inclusion of such costs for Cash Bases, as well as the cost of
              developing new products and enhancing existing products,
              particularly for the POS market.

              Consolidated selling, administrative and general expenses
              increased $2,580,000 (65%) to $6,541,000 from $3,961,000 in the
              prior year's period. The increase in selling expenses is primarily
              the result of the inclusion of such costs for Cash Bases and the
              increased staff to support a greater selling effort, in both the
              United States and the European markets. The increase in general
              and administrative expenses is primarily the result of the
              inclusion of such costs for Cash Bases and certain non-recurring
              charges. Such non-recurring charges include a provision for
              damages of $680,000 awarded in a lawsuit with a former landlord,
              the cost of establishing an unfunded pension arrangement of
              $339,000, and other non-recurring charges totaling approximately
              $246,000.

              During the quarter ended December 31, 1995, the Company recorded a
              provision for restructuring of $125,000 to cover reductions of
              levels of employment at Cash Bases and the discontinuance of
              certain products. A substantial portion of the provision relates
              to employee severance costs.

              Operating loss for the nine months ended December 31, 1995 was
              $1,414,000 compared to operating profit of $379,000 in the prior
              year's period, primarily as a result of the non-recurring charges


                                       9
<PAGE>

              discussed above and unfavorable results at Cash Bases. Operating
              profit was adversely impacted by production inefficiencies,
              increased operating costs at Cash Bases, and temporary softness in
              the European cash drawer market. Operating income as a percentage
              of revenue was 2.4% in the prior year's period.

              Net interest expense increased $176,000 (20%) to $1,035,000 from
              $859,000 in the prior year's period. The increase in interest
              expense was due primarily to additional borrowings under working
              capital facilities and to the indebtedness incurred to acquire
              Cash Bases.

              Other non-operating expense, (net) includes a provision of $75,000
              for environmental matters, $42,000 for loss on the anticipated
              disposal of real estate held for sale, and $29,000 for net
              realized transactional foreign exchange gains. The prior year's
              period includes realized gains on foreign exchange of $15,000,
              offset by an additional provision of $120,000 for loss on the
              anticipated disposal of real estate held for sale.

              The provision for taxes for the nine-month period ended December
              31, 1995 was a credit of $631,000. The effective rate is 24.8%.
              The provision amount is low relative to the pre-tax loss due to
              minimum state income taxes and non-deductible amortization of
              goodwill. The effective tax rate in the prior period was 28.8 %.

              The loss from continuing operations for the 1995 period was
              $1,913,000 (or $.52 per share) compared with a loss of $408,000
              (or $.11 per share) in the 1994 period. Discontinued operations
              reflects the equity in the income of TransAct.

              Net loss for the 1995 period was $997,000 (or $0.27 per share) as
              compared to net income of $1,475,000 (or $0.38 per share) in the
              1994 period. The average number of common shares outstanding
              during the nine months ended December 31, 1995 was 3,722,000.
              Common equivalent shares are not considered in net loss per share
              calculations as the incremental shares are non-dilutive. The
              average number of common and common equivalent shares outstanding
              during the 1994 period was 3,860,000 shares.

       (iii)  Liquidity and Capital Resources

              The Company's working capital at December 31, 1996 was $3,300,000
              compared with $1,136,000 at December 31, 1995. The current ratio
              was 1.3 : 1 at December 31, 1996 compared with 1.1 : 1 at December
              31, 1995. The increase in working capital and current ratio
              reflects the repayment of intercompany debt from TransAct, the
              repayment of bank debt by the Company, a higher level of operating
              activity and the conversion of $1,010,000 principal amount of
              debentures into 112,210 shares of common stock.

              During the third quarter, the Company's TransAct subsidiary
              completed the initial public offering of 1,322,500 shares of its
              common stock at a price of $8.50 per share. TransAct received net
              proceeds from the offering of $8,991,000, and used $7,500,000 to
              repay intercompany indebtedness to Tridex. The balance was used
              for TransAct's working capital and general corporate purposes. Of
              the $7,500,000 received from TransAct, the Company used
              approximately $5,254,000 to repay all outstanding indebtedness to
              Fleet National Bank.

              The Company has a $2,000,000 Working Capital Facility (the
              "Working Capital Facility") with Fleet National Bank ("Fleet").
              Under this facility, the Company is required to comply with
              certain financial covenants, including a minimum tangible net
              worth, a maximum leverage ratio, a minimum interest coverage
              ratio, and a minimum current ratio, or Fleet may withdraw its
              commitment. The Company was in compliance with these covenants at
              December 31, 1996 and expects to be in compliance with these
              covenants for the foreseeable future.

              During 1996, the Company's cash requirements were satisfied by
              cash flow from operations, borrowings under its lines of credit
              and by the repayment of intercompany indebtedness from TransAct.
              At December 31, 1996, the Company had availability of $2,000,000
              under the Working Capital Facility. During 1996, $1,010,000
              principal amount of debentures were converted into 112,210


                                       10
<PAGE>

              shares of common stock. The conversion satisfied a $740,000
              sinking fund payment due on December 15, 1996.

              In June 1996, the Company filed with the IRS an application for a
              ruling that the pro-rata Distribution of the 5,400,000 shares of
              TransAct common stock owned by the Company would constitute a tax
              free reorganization for purposes of the Internal Revenue Code of
              1986, as amended (the "Code"). On February 12, 1997, the Company
              received a favorable ruling from the IRS confirming the tax-free
              nature of the Distribution and announced that it will effect the
              Distribution on March 31, 1997 to Tridex stockholders of record on
              March 14, 1997. At March 14, 1997, the Company had outstanding
              5,373,310 shares of common stock. Therefore, the ratio for the
              Distribution is 1.005 shares of TransAct common stock for each
              share of Tridex. Tridex will distribute cash in lieu of fractional
              shares. After the Distribution, the 5,400,000 shares of TransAct
              common stock owned by the Company prior to the Distribution will
              be owned by the holders of Tridex common stock, Tridex and
              TransAct will be separate publicly traded companies.

              In connection with the Distribution, the Board of Directors
              accelerated the vesting of outstanding options, including options
              under the Plan, and issued notices of redemption of convertible
              debentures.

              During the period January 1, 1997 through March 14, 1997, the
              Company issued common stock as follows: (a) 599,300 shares to
              optionees under the Plan upon payment of $4,185,000 exercise
              price, (b) 260,632 shares to holders of warrants upon payment of
              $2,211,000 exercise price, (c) 273,318 shares to holder of 10.5%
              Debentures upon conversion of $2,460,000 principal amount of
              debentures, (d) 104,127 shares to holders of 8% Notes upon
              conversion of $1,250,000 aggregate principal amount, and (e)
              100,000 shares to certain officers of Ultimate in accordance with
              the Stock Incentive Compensation Agreement.

              In connection with the exercise of options under the Plan, the
              Company offered loans to all employees whose total exercise price
              of options under the Plan exceeded $50,000. The loans, which total
              $893,000, are full recourse loans due in May 1998, bear interest
              at the rate of 6.08% and are secured by pledges of the shares
              acquired by the employees through the exercise of Plan options.

              Certain items on the Company's Consolidated Balance Sheet at
              December 31, 1996 would, on a pro forma basis giving effect to
              these exercises and conversions, change as follows: cash and cash
              equivalents would increase from $3,354,000 to $8,857,000; current
              portion of long term debt would decrease from $3,997,000 to
              $362,000; and shareholders' equity would increase from $26,015,000
              to $37,638,000.

              After giving effect to the Distribution, the Company consists of
              its wholly-owned subsidiaries Ultimate Technology Corporation
              ("Ultimate") and Cash Bases GB Limited ("Cash Bases") and its
              Tridex Ribbons Division. The Company's management expects that
              Ultimate, Cash Bases and the Tridex Ribbons Division will have net
              sales in 1997 greater than 1996 levels and will be profitable for
              the foreseeable future. However, the Company will have fewer
              product lines and, therefore, will be more susceptible to the
              adverse effects of a downturn or disruption in the demand for any
              single product line.

              As part of its business strategy, the Company intends (i) to focus
              on internal growth through the development of products that
              broaden and extend the business of providing integrated systems
              and peripheral devices to the POS, financial services and other
              transaction based markets and (ii) to pursue joint ventures,
              strategic alliances or other transactions, including transactions
              to complement its existing products and markets, acquire new
              product lines or enter new markets. Implementation of this
              strategy may require substantial capital expenditures. There can
              be no assurance that the Company will be able to successfully
              implement its strategy, or that the Company can successfully
              manage any new operations.

              The Company believes that funds generated from operations, its
              cash balances and borrowings under the Working Capital Facility,
              if necessary, will continue to satisfy its working capital needs,
              support a certain level of growth and meet scheduled debt
              retirements.

(B)    Impact of Inflation

       Tridex believes that its business has not been affected to a significant
       degree by inflationary trends because of the low rate of inflation during
       the past three years and cost reduction programs at each of its
       operations. Tridex believes that any increase in cost due to inflation
       can be recovered by price increases or offset by cost reductions and
       productivity improvements.


                                       11
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                                                           Page
                                                                          Number
       Report of Independent Accountants                                    13

       Tridex Corporation and Subsidiaries consolidated financial
       statements:

              Consolidated balance sheets as of December 31, 1996
              and December 31, 1995.                                        14

              Consolidated statements of operations for the years           16
              ended December 31, 1996 and December 31, 1995
              (unaudited), the nine months ended December 31,
              1995 and December 31, 1994 (unaudited), and the
              year ended April 1, 1995.

              Consolidated statements of shareholders' equity for           17
              the year ended December 31, 1996 and the nine
              months ended December 31, 1995.

              Consolidated statements of cash flows for the years           18
              ended December 31, 1996 and December 31, 1995
              (unaudited), the nine months ended December 31,
              1995 and December 31, 1994 (unaudited), and the
              year ended April 1, 1995.

              Notes to consolidated financial statements.                   19

       Financial Statement Schedules - All schedules are omitted
       since the required information is either (a) not present
       or not present in amounts sufficient to require submission
       of the schedule or (b) included in the financial
       statements or notes thereto.


                                       12
<PAGE>

                        Report of Independent Accountants


To the Board of Directors and Shareholders
of Tridex Corporation

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, shareholders' equity and of cash flows
present fairly, in all material respects, the financial position of Tridex
Corporation and its subsidiaries at December 31, 1996 and 1995, and the results
of their operations and their cash flows for the year ended December 31, 1996,
the nine months ended December 31, 1995 and the year ended April 1, 1995, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

Price Waterhouse LLP
Hartford, Connecticut

February 13, 1997,
except as to Note 15
which is as of March 14, 1997


                                       13
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                     ASSETS

                             (Dollars in thousands)

                                          December 31, 1996    December 31, 1995
                                          -----------------    -----------------
Current Assets:
   Cash and cash equivalents                   $ 3,354              $   933
   Receivables (Note 4)                          5,681                4,160
   Inventories (Note 5)                          5,609                3,244
   Deferred tax assets (Note 11)                   140                  271
   Other current assets                            345                  289
                                          -----------------    -----------------
     Total current assets                       15,129                8,897
                                          -----------------    -----------------
Plant and equipment:
   Machinery, furniture and equipment            5,608                3,794
   Leasehold improvements                          308                  282
                                          -----------------    -----------------
                                                 5,916                4,076
   Less accumulated depreciation                (2,381)              (1,921)
                                          -----------------    -----------------
                                                 3,535                2,155

Excess of cost over fair value of net
assets acquired                                  6,493                7,190

Other assets                                     1,923                1,703

Investment in net assets of discontinued
TransAct operations (Note 2)                    11,573               11,702
                                          -----------------    -----------------
                                               $38,653              $31,647
                                          =================    =================

                 See notes to consolidated financial statements.


                                       14
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      LIABILITIES AND SHAREHOLDERS' EQUITY

                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                   December 31, 1996    December 31, 1995
                                                   -----------------    -----------------
<S>                                                   <C>                  <C>
Current liabilities:
   Bank loans payable (Note 7)                            $740                 $396
   Current portion of long term debt (Note 7)            3,997                2,411
   Accounts payable                                      3,859                1,805
   Accrued liabilities (Note 6)                          3,018                3,085
   Income taxes payable                                    215                   64
                                                   -----------------    -----------------
     Total current liabilities                          11,829                7,761
                                                   -----------------    -----------------
Long term debt, less current portion (Note 7)              809                8,324
                                                   -----------------    -----------------
Commitments and contingencies (Note 9)

Shareholders' equity (Notes 1 and 10):
   Preferred stock, $1 par value; authorized
     2,000,000 shares; issued none
   Common stock, no par value, stated value
     $.25; authorized 10,000,000 shares; issued
     4,160,431 and 3,900,807 shares                      1,043                  978
   Additional paid-in capital                           23,361               21,939
   Retained earnings (accumulated deficit)               2,239               (6,609)

   Cumulative valuation adjustments                        245                   82

   Common stock held in treasury, at cost,
     124,498 and 119,996 shares                           (873)                (828)
                                                   -----------------    -----------------
                                                         26,015               15,562
                                                    -----------------    -----------------
                                                        $38,653              $31,647
                                                   =================    =================
</TABLE>

                 See notes to consolidated financial statements.


                                       15
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                         ----------------------       -----------------------      ----------
                                                                Year Ended               Nine Months Ended         Year Ended
                                                         ----------------------       -----------------------      ----------
                                                         December      December       December       December        April
                                                         31, 1996      31, 1995       31, 1995       31, 1994       1, 1995
                                                         --------      --------       --------       --------       -------
                                                                      (unaudited)                  (unaudited)
<S>                                                       <C>           <C>            <C>            <C>            <C>
Net sales                                                 $37,053       $30,756        $22,872        $16,115        $23,999
                                                         --------      --------       --------       --------       -------
Operating costs and expenses:
   Cost of sales                                           27,039        22,267         16,843         11,339         16,763
   Engineering, design and product
     development costs                                      1,040           992            777            436            651
   Selling, administrative and general expenses             7,805         8,330          6,541          3,961          5,750
   Provision for restructuring (Note14)                      --             125            125
                                                         --------      --------       --------       --------       -------
                                                           35,884        31,714         24,286         15,736         23,164
                                                         --------      --------       --------       --------       -------
Operating income (loss)                                     1,169          (958)        (1,414)           379            835

Other charges (income):
   Gain on sale of subsidiary stock (Note 2)               (6,200)
   Interest expense, net                                      879         1,343          1,035            859          1,168
   Other, net                                                 267           156             95             93            154
                                                         --------      --------       --------       --------       -------
                                                           (5,054)        1,499          1,130            952          1,322
                                                         --------      --------       --------       --------       -------
Income (loss) from continuing operations
before  income taxes                                        6,223        (2,457)        (2,544)          (573)          (487)

Provision (benefit) for income taxes                          232        (1,339)          (631)          (165)          (869)
                                                         --------      --------       --------       --------       -------
Income (loss) from continuing operations                    5,991        (1,118)        (1,913)          (408)           382

Discontinued operations (Note 2):
   Equity in subsidiary's income from
     discontinued operations                                3,109         1,332            916          1,883          2,304
   Spin-off related expenses, net of
      taxes of $68                                            252
                                                         --------      --------       --------       --------       -------
Net income (loss)                                         $ 8,848       $   214        $  (997)       $ 1,475        $ 2,686
                                                         ========      ========       ========       ========       =======
Earnings (loss) per common and common
   equivalent share:
   Primary:
     Income (loss) from continuing operations             $  1.43       $ (0.28)       $ (0.52)       $ (0.11)       $  0.10
     Income from discontinued operations                     0.70          0.33           0.25           0.49           0.59
                                                         --------      --------       --------       --------       -------
                                                          $  2.13         $0.05        $ (0.27)       $  0.38          $0.69
                                                         ========      ========       ========       ========       =======
   Fully diluted:
     Income from continuing operations                    $  1.35
     Income from discontinued operations                     0.63
                                                         --------
                                                          $  1.98
                                                         ========
Weighted average common and common
   equivalent shares outstanding:
     Primary                                            4,154,000     3,930,000      3,722,000      3,860,000      3,868,000
                                                        =========     =========      =========      =========      ========
     Fully diluted                                      4,648,000
                                                        =========
</TABLE>

                 See notes to consolidated financial statements.


                                       16
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                            Common stock
                                     Common stock         held in treasury    Additional               Cumulative
                                  -------------------     ----------------     paid-in    Accumulated   Valuation
                                  Shares       Amount     Shares    Amount     capital      deficit    Adjustments
                                  ------       ------     ------    ------     -------      -------    -----------
<S>                             <C>           <C>        <C>         <C>      <C>           <C>          <C>
Balance, April 1, 1995          3,789,682     $  950     109,996     $738     $ 21,853      $(5,612)     $ 124

Exercise of warrants and
   stock options                  111,125         28                                86

Purchase of treasury stock                                10,000       90

Translation adjustment                                                                                     (99)
Appreciation of marketable
   securities held for sale                                                                                 57
Net loss                                                                                       (997)
                                ---------     ------     -------     ----     --------      -------      -----

Balance, December 31, 1995      3,900,807        978     119,996      828        21,939      (6,609)        82

Exercise of warrants and
   stock options                  147,414         37                               482

Purchase of treasury stock                                 4,502       45

Conversion of debentures          112,210         28                               940

Translation adjustment                                                                                     163

Net income                                                                                    8,848
                                ---------     ------     -------     ----     --------      -------      -----

Balance, December 31, 1996      4,160,431     $1,043     124,498     $873     $ 23,361      $ 2,239      $ 245
                                =========     ======     =======     ====     ========      =======      =====
</TABLE>


                                       17
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                  Year Ended              Nine Months Ended       Year Ended
                                                           -----------------------      --------------------      ----------
                                                           December       December      December     December        April
                                                           31, 1996       31, 1995      31, 1995     31, 1994       1, 1995
                                                           --------       --------      ---------    --------       -------
                                                                        (unaudited)               (unaudited)
<S>                                                        <C>            <C>           <C>          <C>          <C>
Cash flows from operating activities:
   Net income (loss)                                       $   8,848      $     214     $    (997)   $   1,475    $   2,686
     Adjustments to reconcile net income to net cash
       provided by operating activities:
         Equity in (used in) subsidiary's income from
           discontinued operations                            (3,109)        (1,332)         (916)      (1,883)      (2,304)
         Gain on sale of subsidiary stock                     (6,200)
         Depreciation and amortization                         1,721          1,658         1,265          957        1,350
         Deferred income taxes                                   720           (688)          (80)                     (608)
         Loss (gain) on disposal of assets                      (153)             8             6          104          106
         Changes in operating assets and liabilities:
           Receivables                                        (1,210)          (854)        1,592        1,697         (749)
           Inventory                                          (2,250)          (652)         (590)        (524)        (586)
           Other current assets                                  (29)          (125)           54           42         (137)
           Other assets                                         (129)           (64)          (28)         (38)         (74)
           Accounts payable, accrued liabilities and
              income taxes payable                             1,878            937           143         (228)         566
           Other                                                                 36                                      36
                                                           ---------      ---------     ---------    ---------    ---------
              Net cash provided by (used in) operating
                activities                                        87           (862)          449         1602          286
                                                           ---------      ---------     ---------    ---------    ---------
Cash flows from investing activities:
   Purchases of plant and equipment                           (2,011)          (964)         (439)        (757)      (1,282)
   Proceeds from sale of assets                                  333              7             3           (7)          (2)
   Acquired net assets and acquisition costs, net of cash                       (68)                    (5,508)      (5,576)
   Other                                                                         81            31          (64)         (15)
                                                           ---------      ---------     ---------    ---------    ---------
              Net cash used in investing activities           (1,678)          (944)         (405)      (6,336)      (6,875)
                                                           ---------      ---------     ---------    ---------    ---------
Cash flows from financing activities:
   Net change in borrowings under line of credit                 285           (343)       (1,993)         750        2,400
   Net proceeds from issuance of long term debt                  997          5,782         5,676        3,500        3,606
   Principal payments on long term borrowings                 (6,096)        (4,357)       (3,573)        (882)      (1,666)
   Proceeds from exercise of stock options and warrants          474             25            24           47           48
   Proceeds from repayment of TransAct debt                    7,500
   Net transactions with TransAct prior to IPO                 1,087            278           551        2,131        1,863
   Other                                                        (291)          (140)         (134)         644          638
                                                           ---------      ---------     ---------    ---------    ---------
              Net cash provided by financing activities        3,956          1,245           551        6,190        6,889
                                                           ---------      ---------     ---------    ---------    ---------

Effect of exchange rate changes on cash                           56                           (9)          (1)           8
                                                           ---------      ---------     ---------    ---------    ---------

Increase (decrease) in cash and cash equivalents               2,421           (561)          586        1,455          308
Cash and cash equivalents at beginning of year                   933          1,494           347           39           39
                                                           ---------      ---------     ---------    ---------    ---------
Cash and cash equivalents at end of year                   $   3,354      $     933     $     933    $   1,494    $     347
                                                           =========      =========     =========    =========    =========
Supplemental cash flow information:
   Interest paid                                           $     899      $     788     $     621    $     851    $   1,018
   Income taxes paid                                           1,226          1,155           498          435        1,092

Supplemental non-cash investing and financing activities:
     Conversion of convertible debentures to common stock  $   1,010
</TABLE>

                 See notes to consolidated financial statements.


                                       18
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Business and summary of significant accounting policies:

       Business: Tridex Corporation (the "Company"), through its wholly-owned
       subsidiaries Ultimate Technology Corporation ("Ultimate") and Cash Bases
       GB Limited ("Cash Bases"), and its Tridex Ribbons Division, operates in
       one industry segment, computer peripheral equipment. Operations in this
       segment include the design, development, manufacture and sale of terminal
       devices, customer displays, keyboards and cash drawers for point-of-sale
       ("POS") applications and ribbon cartridges for specialty dot matrix
       printers.

       Principles of consolidation: The accompanying consolidated financial
       statements include the accounts of the Company after elimination of all
       material intercompany accounts and transactions. See Note 2 for treatment
       of discontinued operations. Prior years have been restated to reflect
       discontinued operations.

       Change in fiscal year end: In December 1995, the Company changed its
       fiscal year to end on December 31, effective December 31, 1995.
       Previously, the Company's fiscal year ended on the Saturday closest to
       March 31.

       Cash and cash equivalents: Cash equivalents consist primarily of
       certificates of deposit with maturities of less than ninety days and are
       carried at cost which approximates market value.

       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 disclosure of contingent assets and liabilities at the
       date of the financial statements and the reported amounts of revenues and
       expenses during the reporting period. Actual results could differ from
       those estimates.

       Foreign Currency: The financial position and results of operations of the
       Company's foreign subsidiaries are measured using local currency as the
       functional currency. Assets and liabilities of such subsidiaries have
       been translated at current exchange rates, and related revenues and
       expenses have been translated at weighted average exchange rates. The
       aggregate effect of translation adjustments so calculated is included as
       a separate component of shareholders' equity. Transaction gains and
       losses are included in other income.

       Inventories: Inventories are stated at the lower of cost (principally
       first-in, first-out) or market.

       Plant and equipment and depreciation: Plant and equipment and leasehold
       improvements are stated at cost. Depreciation is provided for primarily
       by the straight-line method over the estimated useful lives. The
       estimated useful life of machinery, furniture and equipment is five to
       ten years. Leasehold improvements are amortized over the shorter of the
       term of the lease or the useful life of the asset.

       Excess of cost over fair value of net assets acquired: The excess of cost
       over fair value of net assets acquired (goodwill) resulted from the
       acquisitions of Cash Bases in fiscal year 1995 and Ultimate in fiscal
       year 1993. The amount applicable to these acquisitions totaled $6,493,000
       at December 31, 1996, and is being amortized on the straight line method
       between ten and twenty years. Accumulated amortization of the excess of
       cost over fair value of net assets acquired was $2,469,000 and $1,772,000
       at December 31, 1996 and December 31, 1995, respectively. The Company
       periodically reviews goodwill to assess recoverability based upon
       expectations of non-discounted cash flows from operations for each
       subsidiary having a material goodwill balance. The Company believes that
       no material impairment of goodwill exists at December 31, 1996 or
       December 31, 1995.

       Other assets: Included in other assets at December 31, 1996 are deferred
       tax assets of $460,000 (see Note 11) and real estate held for sale in the
       amount of $196,000. At December 31, 1995, such amounts were $1,049,000
       and $196,000, respectively. Also included in other assets are bond issue
       costs (see Note 7) which are being amortized over the term of the bond.
       Accumulated amortization of other assets was $361,000, and $285,000 at
       December 31, 1996, and December 31, 1995, respectively.


                                       19
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Business and summary of significant accounting policies: (continued)

       Revenue recognition: Sales are recognized when the product is shipped.
       Sales to Lowe's Companies, Inc. accounted for approximately 13% of net
       sales for the year ended December 31, 1996. Sales to Advance Stores
       Company Inc. ("Advance Auto") accounted for approximately 12% of net
       sales for the nine months ended December 31, 1995.

       Income taxes: Income tax expense is based on estimated taxes payable or
       refundable on a tax return basis for the current year and changes in the
       amount of deferred tax assets and liabilities during the year. Deferred
       income taxes are provided for revenue and expenses which are recognized
       in different periods for income tax and financial statement purposes. The
       Company accounts for income taxes in accordance with FAS 109 "Accounting
       for Income Taxes," which mandates the liability method for computing
       deferred income taxes. The objective of the liability method is to
       recognize the amount of current and deferred taxes payable or refundable
       at the financial statement date resulting from all events that have been
       recognized in the financial statement based upon the provisions of
       enacted tax laws. See Note 11 for a further discussion.

       Earnings (loss) per share: Primary earnings (loss) per common and common
       equivalent share are based on the weighted average number of common
       shares outstanding during the period, including stock options and
       warrants when the result is dilutive. Fully diluted earnings per common
       share assumes conversion of dilutive securities, when the result is
       dilutive.

2.     Discontinued Operations:

       During 1996, the Company implemented a Plan to spin-off its printer
       group, which was formed in December 1995 by combining the operations of
       its subsidiaries, Magnetec Corporation ("Magnetec") and Ithaca
       Peripherals Incorporated ("Ithaca"). In April 1996, the Company announced
       that it had engaged an investment banking firm to pursue an underwritten
       public offering of up to 20% of the printer group. In June 1996, the
       Company incorporated TransAct Technologies Incorporated ("TransAct") as a
       wholly-owned subsidiary of Tridex. Following the incorporation, Tridex,
       TransAct, Magnetec and Ithaca entered into a Plan of Reorganization (the
       "Plan of Reorganization"), pursuant to which: (i) Ithaca merged into
       Magnetec; (ii) TransAct transferred to Tridex certain assets of Magnetec
       used in manufacturing operations of the Tridex Ribbons Division; (iii)
       TransAct issued 5,400,000 shares of its common stock to Tridex in
       exchange for all the outstanding shares of Magnetec; (iv) TransAct sold
       in an initial public offering 1,322,500 shares or approximately 19.7% of
       its common stock; (v) TransAct repaid $8,500,000 of intercompany
       indebtedness to Tridex; (vi) Tridex applied to the Internal Revenue
       Service (the "IRS") for a ruling that the pro rata distribution to Tridex
       stockholders of the 5,400,000 shares of TransAct owned by Tridex (the
       "Distribution") would constitute a tax-free reorganization for federal
       income tax purposes; and (vii) Tridex agreed to effect the Distribution
       promptly after receipt of a favorable ruling from the IRS and the
       satisfaction of certain other conditions. TransAct received approximately
       $8,991,000 of net proceeds from its initial public offering and used
       $7,500,000 to repay intercompany indebtedness to Tridex. The balance was
       used for TransAct's working capital and general corporate purposes. Of
       the $7,500,000 received from TransAct, Tridex used approximately
       $5,254,000 to repay all outstanding indebtedness to Fleet National Bank.
       TransAct paid the remaining $1,000,000 of intercompany indebtedness on
       February 14, 1997, together with interest at the rate of 8.25 percent.

       On February 12, 1997, the Company received a favorable ruling from the
       IRS confirming the tax-free nature of the Distribution and announced that
       it will effect the Distribution on March 31, 1997 to Tridex stockholders
       of record on March 14, 1997. After the Distribution, Tridex and TransAct
       will be separate publicly traded companies. The Consolidated Financial
       Statements have been restated from historical financial statements to
       present the results of operations of TransAct as discontinued operations.
       Such results are summarized below.


                                       20
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     Discontinued Operations: (continued)

                              Year Ended      Nine Months Ended      Year Ended
                           -----------------  -----------------    -------------
                           December 31, 1996  December 31, 1995    April 1, 1995
                           -----------------  -----------------    -------------
                                           (Dollars in thousands)

       Net sales                $42,134            $25,497            $33,362
       Operating income           5,233              1,579              3,705
       Net income                 3,340                916              2,304
       Earnings per share       $  0.57            $  0.17            $  0.43

3.     Business combinations:

       On June 20, 1994 the Company completed the acquisition of Cash Bases, of
       Newhaven, England. The acquisition has been accounted for using the
       purchase method of accounting. The acquired company's assets and
       liabilities have been recorded in the Company's financial statements at
       their estimated fair values at the acquisition date. The Consolidated
       Statements of Operations include the results of operations of the
       acquired company from the acquisition date. On a pro forma (unaudited)
       basis, if the acquisition had occurred at the beginning of fiscal 1995,
       fiscal 1995 data would have been: Net sales $26,624,000; Operating income
       $1,042,000; Net income $2,749,000; and earnings per common and common
       equivalent shares $0.70. The fair value of assets acquired, excluding
       cash acquired, was $3,881,000 and goodwill was $3,978,000. The
       acquisition was financed by debt incurred of $4,800,000, the assumption
       of liabilities of $2,351,000, the issuance of warrants of $644,000 and
       the use of $64,000 in cash.

4.     Receivables:

       Receivables are net of the allowance for doubtful accounts. The
       reconciliation of the allowance for doubtful accounts is as follows:

<TABLE>
<CAPTION>
                                                        Year Ended       Nine Months Ended      Year Ended
                                                     -----------------   -----------------    -------------
                                                     December 31, 1996   December 31, 1995    April 1, 1995
                                                     -----------------   -----------------    -------------
                                                                      (Dollars in thousands)
<S>                                                        <C>                 <C>               <C>
       Balance at beginning of year                        $ 116               $ 113             $ 130
          Provision for doubtful accounts                     24                   5                25
          Accounts written off, net of recoveries            (22)                 (2)              (42)
                                                     -----------------   -----------------    -------------
       Balance at end of year                              $ 118               $ 116             $ 113
                                                     =================   =================    =============
</TABLE>

5.     Inventories:

       The components of inventories are:

                                           December 31, 1996   December 31, 1995
                                           -----------------   -----------------
                                                    (Dollars in thousands)

       Raw materials and component parts        $2,051              $1,663
       Work-in-process                             359                 477
       Finished goods                            3,199               1,104
                                           -----------------   -----------------
                                                $5,609              $3,244
                                           =================   =================


                                       21
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6.     Accrued liabilities:

       The components of accrued liabilities are:

<TABLE>
<CAPTION>
                                                       December 31, 1996   December 31, 1995
                                                       -----------------   -----------------
                                                              (Dollars in thousands)
<S>                                                         <C>                 <C>
       Payroll, fringe benefits and commissions             $  822              $  773
       Unfunded pension obligation                             577                 318
       Interest and taxes other than income taxes              241                 150
       Customer advances, deferred revenue and warranty         57                  37
       Environmental matters                                   322                 347
       Professional services and insurance                     220                 181
       Restructuring                                                               326
       Litigation                                                                  776
       Other                                                   779                 177
                                                       -----------------   -----------------
                                                            $3,018              $3,085
                                                       =================   =================
</TABLE>

7.     Bank credit agreement and long term debt:

       On August 30, 1996, the Company and Fleet National Bank ("Fleet"),
       entered into an amended agreement (the "Fleet Credit Agreement") which
       provides the Company with a $2,000,000 working capital revolving credit
       facility. The working capital facility expires on June 30, 1998, bears
       interest payable monthly at a rate equal to Fleet's prime rate (8.25% at
       December 31, 1996), and bears a non-utilization fee of .25% of the unused
       facility. Under the prior agreement, Fleet provided the Company with a
       $5,500,000 term loan (included in the accompanying table as "Term Loan
       Payable") which was repaid in full during 1996. The Fleet Credit
       Agreement is secured by a first priority security interest in certain
       assets, imposes certain covenants (including a minimum tangible net
       worth, a maximum leverage ratio, a minimum interest coverage ratio and a
       minimum current ratio) and restricts the amount available for payment in
       cash dividends and capital stock distributions.

       During 1996, Fleet waived compliance with certain covenants of the prior
       agreement for the period ended December 31, 1995, and amended the Working
       Capital Facility to reduce the minimum tangible net worth requirement for
       the quarter ended March 30, 1996. As of December 31, 1996, the Company
       was in full compliance with all covenants of the Fleet Credit Agreement
       and expects to be in full compliance with all covenants during 1997.

       The components of long term debt are:

<TABLE>
<CAPTION>
                                                   December 31, 1996    December 31, 1995
                                                   -----------------    -----------------
                                                            (Dollars in thousands)
<S>                                                     <C>                  <C>
       Term loan payable                                                     $ 5,500
       10.5% Senior Subordinated Convertible
         Debentures due 1997, net of discount of $6
         and $16                                        $ 2,454                3,454
       8% Subordinated Convertible Term Promissory
         Notes due 1997, net of discount of $76 and       1,174                1,414
       Other                                              1,178                  367
                                                   -----------------    -----------------
                                                          4,806               10,735
       Current portion                                    3,997                2,411
                                                   -----------------    -----------------
                                                        $   809              $ 8,324
                                                   =================    =================
</TABLE>

       The 10.5% Senior Subordinated Convertible Debentures due 1997 (the "10.5%
       Debentures") were issued in 1993 in conjunction with the acquisition of
       Ultimate. Interest is payable quarterly on March 15, June 15, September
       15 and December 15. The 10.5% Debentures are convertible into Tridex
       common stock at $9.00 per share. As of December 31, 1996, the Company had
       reserved 273,318 shares of common stock pursuant to the conversion
       feature. The indenture restricts the amount available for the payment of
       cash


                                       22
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.   Bank credit agreement and long term debt: (continued)

     dividends and capital stock distributions. In conjunction with the issuance
     of the 10.5% Debentures, the Company issued to each debenture holder
     detachable warrants (the "Warrants") to purchase common stock of Tridex at
     a rate of 10 shares per $1,000 principal amount of debentures. The Warrants
     are exercisable for a period of five years at $9.25 per share. As of
     December 31, 1996, the Company had reserved 42,500 shares of common stock
     for the exercise of the Warrants. The estimated fair market value of the
     Warrants has been recorded as a discount to the principal amount of the
     outstanding debentures and is being amortized over the term of the debt.
     Costs incurred in connection with the issuance of the 10.5% Debentures of
     approximately $448,000 are recorded in other assets and are being amortized
     over the term of the debentures.

     The 8% Subordinated Convertible Term Promissory Notes (the "8% Notes") were
     issued in conjunction with the acquisition of Ultimate from its former
     shareholders. The 8% Notes are payable in quarterly installments over five
     years and are convertible into Tridex common stock at $12.00 per share. As
     of December 31, 1996, the Company had reserved 104,127 shares of common
     stock pursuant to this conversion feature. The discount on the 8% Notes
     represents imputed interest at a rate of approximately 18%. The discount,
     recorded as a reduction of the purchase price of Ultimate, is being
     amortized over the life of the notes using the interest rate method. During
     1996, certain holders of 8% Notes requested that quarterly principal
     payments be suspended indefinitely. At December 31, 1996, such suspended
     principal payments aggregated $450,000. Holders may require payment of any
     suspended payments upon five days notice.

     Cash Bases has an agreement with Barclay's Bank that provides line of
     credit, term loan and equipment financing facilities. At December 31, 1996,
     (pounds) 432,000 (approximately $740,000) was outstanding under the line of
     credit facility with availability of (pounds) 68,000 (approximately
     $116,000). Other long term debt consists of the term notes payable and
     equipment financing obligations of Cash Bases. The equipment financing
     obligations are collateralized by the underlying equipment.

     Maturities of long term debt, including sinking fund requirements and
     scheduled retirement of the 10.5% Debentures and 8% Notes are as follows:
     $4,079,000 in 1997, $282,000 in 1998, $204,000 in 1999, $177,000 in 2000,
     and $146,000 in 2001. See Note 15 for discussion of debt conversions.
     Interest expense is stated net of interest income of $92,000 in 1996,
     $14,000 in the nine months ended December 31, 1995, and $33,000 in fiscal
     1995.

8.   Pension plan:

     Effective December 31, 1995, the Company established a non-qualified
     unfunded pension arrangement for Alvin Lukash, a significant shareholder
     and former corporate officer and director. The pension arrangement, which
     replaced a prior consulting services agreement, requires the Company to pay
     an annual benefit of $100,000, payable monthly, through the earlier of
     March 31, 2000 or the death of Mr. Lukash. Effective December 31, 1996, the
     arrangement was amended to provide the annual benefit through the death of
     Mr. Lukash. The unfunded accumulated benefit obligation at December 31,
     1996 of $577,000 is included in Accrued Liabilities in the accompanying
     balance sheet. The Company recorded the actuarial present value of the
     benefits calculated at a 7.2% discount rate. The Company recorded pension
     expense of $358,000 in 1996, of which $320,000 was related to the 1996
     amendment and was recorded in the quarter ended December 31, 1996.

9.     Commitments and contingencies:

       (a)    Lease obligations:

              At December 31, 1996, the Company was lessee on long term
              operating leases for equipment and real property. The terms of
              certain leases provide for escalating rent payments in later years
              of the lease as well as payment of minimum rent and real estate
              taxes. Rent expense amounted to approximately $555,000 in 1996,
              $329,000 in the nine months ended December 31, 1995, and $381,000
              in fiscal 1995. Minimum aggregate rental payments required under
              operating leases that have initial or remaining non-cancelable
              lease terms in excess of one year as of December 31, 1996 are as
              follows: $567,000 in 1997, $567,000 in 1998; $543,000 in 1999;
              $443,000 in 2000; $334,000 in 2001 and $16,000 thereafter.


                                       23
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.     Commitments and contingencies: (continued)

       (b)    Environmental matters:

              The Company is involved in one significant environmental matter:
              Allu Realty Trust ("Allu"), a Massachusetts business trust with
              transferable shares, all of which are owned by Tridex, is the
              former owner of land improved with a manufacturing-warehouse
              building located at 100 Foley Street, Somerville, Massachusetts
              (the "Site"). Although Allu has sold the property to 100 Foley
              Street Incorporated ("Foley"), an unrelated entity, Allu and
              Tridex remain responsible for certain environmental problems
              associated with the Site.

              During July 1984, Allu and Tridex disclosed to the Massachusetts
              Department of the Attorney General the existence of chromium, oil
              and grease at the Site. As a result, the Environmental Protection
              Division of the Department of the Attorney General and the
              Massachusetts Department of Environmental Protection ("MDEP")
              conducted an investigation of the Site. At MDEP's request, the
              Company retained an environmental engineering firm, which
              completed a Phase II investigation study of the Site. The Company
              has conducted further studies to characterize and assess the Site
              more specifically and to determine appropriate long term clean-up
              measures. In January 1993, the Company entered into an agreement
              with Foley pursuant to which Tridex and Foley agreed to pay 75%
              and 25%, respectively, of the costs incurred after January 1, 1992
              in connection with the investigation and remediation of the Site
              (the "Site Participation Agreement"). The Site Participation
              Agreement also provides that, to the extent there are available
              proceeds from the sale of the Site or, if not sold, from the
              operation of the Site after January 1, 1997, Tridex shall be
              reimbursed for all or a portion of the $260,000 it expended in
              connection with the Site prior to January 1, 1992. Under the terms
              of an Escrow Agreement entered into by Tridex and Foley
              simultaneously with the Site Participation Agreement (the "Escrow
              Agreement"), Tridex and Foley each placed $125,000 in escrow to
              fund the payment of their obligations under the Site Participation
              Agreement. Under the terms of the Escrow Agreement, Tridex must
              place an additional $100,000 in escrow at the request of the
              Escrow Agent and thereafter the amount of any additional funds
              required by the Escrow Agent shall be contributed 75% by Tridex
              and 25% by Foley. Approximately $1,000 is being held in escrow as
              of December 31, 1996, all of which was contributed by Foley.

              As of December 31, 1996, the Company had spent approximately
              $664,000 in connection with the Site. Of this amount,
              approximately $494,000 relates to investigation and remediation
              costs incurred at the Site. Although it is difficult to
              distinguish between amounts spent for investigation and
              remediation, the Company estimates that approximately $394,000 has
              been spent in connection with investigation and approximately
              $100,000 has been spent in connection with remediation of the
              Site. The Company estimates that approximately $100,000 to
              $300,000 will be spent in connection with the Site during 1997,
              including expenditures from the escrow account. Based upon
              preliminary estimates provided by a consulting environmental
              engineer and based upon the likely future uses of the property, as
              of December 31, 1996, the Company had accrued $322,000 for the
              Site, which represents currently estimated minimum cost of
              remediation, after considering the cost sharing arrangement
              discussed above. Accordingly, although no assurances can be given
              regarding the materiality of the total costs which may be
              incurred, the Company does not believe at this time that the
              remediation of the Site is reasonably likely to have a material
              effect on the Company's financial condition, results of operations
              or liquidity. The implementation of clean-up measures has
              commenced, and may be completed in 1997, in which case the entire
              amount of remediation costs to be borne by the Company would be
              incurred and paid in 1997. The precise scope and timing of
              remediation is dependent upon a proposed sale of the property,
              which is subject to negotiations to which the Company is not a
              party. The Company expects that, as in the past, funds being held
              in escrow, cash from operations and the Company's credit
              facilities will be sufficient to pay the costs of remediation
              without a material effect on the Company's operations.

              The Company has also been notified by an adjacent property owner,
              Cooper Industries ("Cooper"), that certain petroleum products that
              may have migrated from the Site have been detected in a monitoring
              well located on Cooper's property. The Company and Foley are
              investigating possible oil contamination along the border between
              the Site and the property owned by Cooper.


                                       24
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10.    Stock options and warrants:

       1989 Long Term Incentive Plan

       The 1989 Long Term Incentive Plan (the "Plan") permits stock-based
       incentive compensation in the form of: (a) stock options, (b) stock
       appreciation rights, (c) restricted stock, (d) deferred stock, (e) stock
       purchase rights and (f) other stock-based compensation. Pursuant to the
       Plan, up to 1,250,000 shares of common stock may be distributed to
       officers, key employees and non-employee directors of the Company.
       Options granted are at prices equal to 100% of the fair market value of
       the common stock at the date of grant. No charge against income was
       required with respect to options. Options granted are exercisable at the
       discretion of the Stock Option Committee, but in no event shall the
       period be for more than ten years. Ninety days after an employee's
       termination, the outstanding options are canceled. At December 31, 1996
       the Company had reserved 932,506 shares of common stock for issuance upon
       the exercise of options granted under the Plan. The following table
       summarizes the activity of the Plan for the year ended December 31, 1996,
       for the nine months ended December 31, 1995 and for the year ended April
       1, 1995.

<TABLE>
<CAPTION>
                                                             Year Ended             Nine Months Ended             Year Ended
                                                      ----------------------     -----------------------      ----------------------
                                                         December 31, 1996          December 31, 1995            April 1, 1995
                                                      ----------------------     -----------------------      ----------------------
                                                                    Weighted                    Weighted                    Weighted
                                                                     Average                     Average                     Average
                                                                    Exercise                    Exercise                    Exercise
                                                      Shares         Price        Shares         Price        Shares         Price
                                                     --------       --------     --------       --------      -------       --------
<S>                                                   <C>            <C>          <C>            <C>          <C>            <C>
       Outstanding at beginning of period             669,530        $6.33        612,465        $5.44        513,855        $5.00

            Granted                                    99,000         8.08        211,800         6.40        127,150         7.05
            Exercised                                 (96,964)        2.99       (111,125)        1.12        (14,440)        1.21
            Canceled                                  (42,206)        6.24        (43,610)        7.44        (14,100)        8.30
                                                     --------                    --------                     -------

       Outstanding at end of period                   629,360         7.13        669,530         6.33        612,465         5.44
                                                     ========                    ========                     =======

       Options exercisable at end of period           236,412         6.68        213,870         5.02        255,295         3.43
                                                     ========                    ========                     =======
       Weighted average fair value of options
         granted during the period:
            Equal to market price                    $   5.70                    $   4.07
                                                     ========                    ========
            Exceeding market price                   $   5.74                    $   2.68
                                                     ========                    ========
</TABLE>

       The following summarized additional information about stock options
       outstanding at December 31, 1996:

<TABLE>
<CAPTION>
                                                   Options Outstanding                      Options Exercisable
                                  ------------------------------------------------------------------------------------
                                      Number            Weighted-                           Number
                                  Outstanding at         Average         Weighted-      Exercisable at    Weighted-
                                   December 31,         Remaining         Average        December 31,      Average
       Range of Exercise Prices        1996          Contractual Life  Exercise Price        1996       Exercise Price
       ------------------------   --------------     ----------------  --------------   --------------  --------------
<S>       <C>                     <C>                      <C>            <C>           <C>                <C>
          $  0.75  -   $ 5.00         39,790               4.23           $ 1.34             38,690        $ 1.25
             5.01  -     7.50        343,840               7.57             6.52             89,520          6.34
             7.51  -    10.00        228,730               5.48             8.75            107,002          8.88
            10.01  -    11.75         17,000               7.40            11.19              1,200         10.75
                                  --------------                                        --------------
                                     629,360                                                236,412
                                  ==============                                        ==============
</TABLE>

       Had compensation expense been recognized based on the fair value of the
       options at their grant dates, as prescribed in Financial Accounting
       Standard No. 123, the Company's net income (loss) and earnings per share
       would have been:


                                       25
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10.    Stock options and warrants: (continued)

                                            Year Ended        Nine Months Ended
                                        -----------------     -----------------
                                        December 31, 1996     December 31, 1995
                                        -----------------     -----------------
                                                 (Dollars in thousands)
       Net income (loss):
         As reported                         $ 8,848              $   (997)
         Pro forma under FAS 123               8,673                (1,103)

       Pro forma earnings per share:
         As reported                         $  2.13              $  (0.27)
         Pro forma under FAS 123                2.09                 (0.30)

       The fair value of each option grant is estimated on the date of grant
       using the Black-Scholes option pricing model with the following
       assumptions used for the grants made during the year ended December 31,
       1996 and the nine months ended December 31, 1995: dividend yield of 0%
       for both periods; risk-free interest rates ranging from 5.04% to 5.07%
       for options granted during the year ended December 31, 1996 and 5.24% to
       5.91% for options granted during the nine months ended December 31, 1995;
       expected volatility factors ranging from 57.0% to 57.6% for the year
       ended December 31, 1996 and 42.9% to 45.0% for the nine months ended
       December 31, 1995; and an expected option term ranging from five to ten
       years for both periods.

       Warrants:

       As of December 31, 1996, the Company had outstanding stock purchase
       warrants for an aggregate of 233,382 shares of common stock. Stock
       purchase warrants for 117,550 shares expiring five years from date of
       grant are held by directors of the Company and for 115,832 shares
       expiring December 31, 1997 originally issued to the purchasers of the
       10.5% debentures and the placement agent for the debentures. The
       following table summarizes the activity of outstanding warrants for the
       year ended December 31, 1996, for the nine months ended December 31, 1995
       and for the year ended April 1, 1995.

<TABLE>
<CAPTION>
                                                        Year Ended             Nine Months Ended             Year Ended
                                                -----------------------     -----------------------      ----------------------
                                                    December 31, 1996          December 31, 1995            April 1, 1995
                                                -----------------------     -----------------------      ----------------------
                                                               Weighted                    Weighted                    Weighted
                                                                Average                     Average                     Average
                                                               Exercise                    Exercise                    Exercise
                                                  Shares         Price        Shares         Price        Shares         Price
                                                 --------      --------     --------       --------      -------       --------
<S>                                              <C>            <C>          <C>            <C>          <C>            <C>
         Outstanding at beginning of period       283,832       $ 7.64       283,832        $ 7.64        318,832       $ 6.90

              Exercised                           (50,450)        4.54             0                      (35,000)         .88
                                                ----------     --------     --------       --------      ---------     --------

         Outstanding at end of period             233,382         8.31       283,832          7.64        283,832         7.64
                                                ----------     --------     --------       --------      ---------     --------

         Warrants exercisable at end of period    209,582         8.43       236,932          7.72        236,932         7.72
                                                ----------     --------     --------       --------      ---------     --------
</TABLE>

       The following summarized additional information about warrants
       outstanding at December 31, 1996:

                                          Warrants Outstanding
                           -----------------------------------------------------
                           Number Outstanding at      Weighted-Average Remaining
       Exercise Prices       December 31, 1996             Contractual Life
       ---------------     ---------------------      --------------------------
            $5.25                   22,500                       0.29
            $7.25                   65,050                       4.33
            $9.25                  145,832                       1.00
                           ---------------------
                                   233,382
                           =====================


                                       26
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.    Income taxes:

       The sources of profit (loss) before income taxes are as follows:

<TABLE>
<CAPTION>
                               Year Ended        Nine Months Ended         Year Ended
                           -----------------     -----------------       -------------
                           December 31, 1996     December 31, 1995       April 1, 1995
                           -----------------     -----------------       -------------
                                               (Dollars in thousands)
<S>                           <C>                    <C>                   <C>
         United States        $  5,462               $ (1,991)             $ (1,714)
         Foreign                   761                   (553)                1,227
                           -----------------     -----------------       -------------
                              $  6,223               $ (2,544)             $   (487)
                           =================     =================       =============
</TABLE>

       The components of the income tax provision (benefit) are as follows:

<TABLE>
<CAPTION>
                               Year Ended        Nine Months Ended         Year Ended
                           -----------------     -----------------       -------------
                           December 31, 1996     December 31, 1995       April 1, 1995
                           -----------------     -----------------       -------------
                                               (Dollars in thousands)
<S>                           <C>                    <C>                   <C>
         Current:
            Federal           $   (685)              $   (426)             $  (748)
            State                   94                     54                   57
            Foreign                103                   (141)                 430
                           -----------------     -----------------       -------------
                              $   (488)                  (513)                (261)
                           -----------------     -----------------       -------------
         Deferred:
            Federal                553                    (97)                (554)
            State                  (16)                    (9)                  (9)
            Foreign                183                    (12)                 (45)
                           -----------------     -----------------       -------------
                                   720                   (118)                (608)
                           -----------------     -----------------       -------------
         Provision
          (benefit) for
          income taxes     $       232               $   (631)             $  (869)
                           =================     =================       =============
</TABLE>

       Deferred income taxes arise from temporary differences between the tax
       basis of assets and liabilities and their reported amounts in the
       financial statements. The Company's gross deferred tax assets and
       liabilities were comprised of the following:

<TABLE>
<CAPTION>
                                                       December 31, 1996   December 31, 1995
                                                       -----------------   -----------------
                                                               (Dollars in thousands)
<S>                                                         <C>                 <C>
       Gross deferred tax assets:
       Current non-deductible liabilities and reserves      $  869              $1,026
       Net operating loss carryforwards                        609                 582
       Federal business and foreign  tax credit
         carryforwards                                         415                 615
       Federal minimum tax credit carryforwards                 88                 211
       Depreciation                                                                 57
                                                       -----------------   -----------------
                                                            $1,981              $2,491
                                                       =================   =================
       Gross deferred tax liabilities:
       Depreciation                                         $  254
                                                       =================
</TABLE>


                                       27
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.    Income taxes: (continued)

       At December 31, 1996 and December 31, 1995, valuation allowances of
       $1,127,000 and $1,171,000, respectively, have been recorded which relate
       primarily to state net operating loss and federal foreign tax credit
       carryforwards, and certain state deferred tax deductions for which a tax
       benefit will not likely be realized. The net change since December 31,
       1995 in the valuation allowance for deferred tax assets was a decrease of
       $44,000 related primarily to a decrease in deferred state tax benefits.

       At December 31, 1996, the Company had $7,906,000 of state net operating
       loss carryforwards that expire principally in 1996 through 2000. Foreign
       tax credit carryforwards which are available to offset future federal
       income taxes total $384,000 and principally expire in 1997 through 2002.
       The Company has a federal minimum tax credit carryforward of
       approximately $88,000 which will be available to reduce federal tax in
       future years.

       Differences between the U.S. statutory federal income tax rate and the
       company's effective income tax rate are analyzed below:

<TABLE>
<CAPTION>
                                            Year Ended   Nine Months Ended  Year Ended
                                           ------------  -----------------  -----------
                                           December 31,    December 31,      April 1,
                                               1996            1995            1995
                                           ------------  -----------------  -----------
<S>                                            <C>            <C>             <C>
       Federal statutory tax rate              34.0%          (34.0%)          (34.0%)
       Nondeductible purchase
          accounting                            3.8             7.0             45.1
       State income taxes, net of
         federal income taxes                   .07             1.0              5.9
       Gain on sale of subsidiary stock       (33.9)
       Valuation allowance                     (0.7)           --             (231.5)
       Federal benefit of acquired loss
         carryforwards used to reduce
         goodwill                              --              --                6.9
       Effect of foreign operations             0.4             2.0             26.1
       Other                                    .03            (0.8)             3.1
                                           ------------  -----------------  -----------
       Effective tax rate                       3.7%          (24.8%)         (178.4%)
                                           ============  =================  ===========
</TABLE>

12.    Disclosure about Fair Value of Financial Instruments:

       The carrying amount of cash, trade accounts receivable, other current
       assets, trade accounts payable, and accrued expenses approximate fair
       value because of the short maturity of those instruments. The carrying
       amount of borrowings under the Barclay's agreement approximates their
       fair value. The fair value of the Company's debt is estimated based on
       the quoted market prices of the same or similar issues or on the current
       rates offered to the Company for debt of the same remaining maturities.
       The estimated fair values of the Company's debt instruments at 12/31/96
       are as follows:

                                                   Carrying Amount    Fair Value
                                                       (Dollars in thousands)

                        10.5% Debentures              $2,454            $3,835
                        8% Notes                       1,174             1,600

13.    International Operations:

       Prior to fiscal year 1995, the Company had no foreign operations and
       export sales were minimal. As a result of the acquisition of Cash Bases,
       the Company acquired manufacturing facilities in the United Kingdom.
       Amounts included in the accompanying consolidated financial statements
       associated with operations outside the United States consist of the
       following (in 000's):


                                       28
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13.    International Operations:  (continued)

<TABLE>
<CAPTION>
                                                                                                              At and for the
                                         At and for the Years Ended       At and for the Nine Months Ended     Year Ended
                                      -------------------------------     --------------------------------    --------------
                                      December 31,       December 31,      December 31,       December 31,       April 1,
                                         1996               1995              1995               1994             1995
                                      ------------       ------------      ------------       ------------    --------------
                                                         (Unaudited)                          (Unaudited)
                                                                     (Dollars in thousands)
<S>                                   <C>                <C>               <C>                <C>                <C>
         Sales:
            Domestic                  $  22,340          $  18,874         $  14,413          $   9,010          $  13,471
            Foreign                      14,713             11,902             8,486              7,105             10,528
            Elimination                                        (20)              (27)
                                      ------------       ------------      ------------       ------------    --------------
            Total                     $  37,053          $  30,756         $  22,872          $  16,115          $  23,999
                                      ------------       ------------      ------------       ------------    --------------
         Operating Income:
            Domestic                  $     280          $    (446)        $    (878)         $    (470)         $    (158)
            Foreign                         889               (512)             (536)               849                993
                                      ------------       ------------      ------------       ------------    --------------
            Total                     $   1,169          $    (958)        $  (1,414)         $     379          $     835
                                      ------------       ------------      ------------       ------------    --------------
         Identifiable Assets:
            Domestic                  $  16,246          $  11,613         $  11,613          $  10,981          $  14,994
            Foreign                      10,985              8,332             8,332              7,682              8,887
                                      ------------       ------------      ------------       ------------    --------------
            Total                     $  27,231          $  19,945         $  19,945          $  18,663          $  23,881
                                      ------------       ------------      ------------       ------------    --------------
</TABLE>

       Net sales are based on the location of the operation. Transfers between
       geographic areas are recorded at amounts generally above cost and in
       accordance with the regulations of applicable taxing jurisdictions.
       Operating income consists of total net sales less operating expenses and
       corporate expenses, and does not include either interest, other income or
       income taxes. Identifiable assets of geographic areas are those assets
       used in the Company's operations in each area.

       The Company had export sales from its United States operations of
       approximately $130,000 in 1996, $100,000 in the nine months ended
       December 31, 1995 and $731,000 in fiscal year 1995. Such sales were
       primarily to Canada and were not material in prior years. Export sales
       from the Company's foreign operations, which were primarily to European
       countries, totaled approximately $7,760,000 in 1996, $4,900,000 and in
       the nine months ending December 31, 1995. The Company recorded net
       foreign exchange transaction losses of approximately $264,000 in 1996,
       $29,000 in the nine months ended December 31, 1995 and $85,000 in the
       year ended April 1, 1995.

14.    Other Significant Transactions:

       See Note 2 for discussion regarding the formation and spin-off of
       TransAct Technologies Incorporated. During the quarter ended December 31,
       1996, the Company recorded a $320,000 provision to amend the unfunded
       pension arrangement established in the prior year.

       During the quarter ended December 31, 1995, the Company recorded
       provisions for the following non-recurring operating expenses: litigation
       settlement of $680,000, restructuring costs of $125,000, pension of
       $339,000 and other non-recurring items totaling $246,000. In addition,
       the Company recorded other charges of $42,000 for estimated loss on
       disposal of unused real estate and $75,000 for environmental clean-up.
       The provision for restructuring covers the discontinuance of certain
       products. A substantial portion of the provision relates to employee
       severance costs.

       During the fourth quarter of fiscal 1995, the Company recorded an
       additional provision for the estimated loss on disposal of unused real
       estate of $50,000 and an additional provision for estimated environmental
       clean-up costs of $60,000. Also in the fourth quarter, the Company
       recorded an adjustment to fully recognize federal deferred tax benefits.


                                       29
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15.    Subsequent events:

       In connection with the Distribution, the vesting of all outstanding
       options to purchase Tridex common stock was accelerated so that all such
       options became exercisable. The Company also issued a notice of
       redemption of its convertible debentures with a March 14, 1997 redemption
       date.

       During the period January 1, 1997 through March 14, 1997, the Company
       issued common stock as follows: (a) 599,300 shares to optionees under the
       Company's 1989 Long Term Incentive Plan upon payment of $4,185,000
       exercise price, (b) 260,632 shares to holders of warrants upon payment of
       $2,211,000 exercise price, (c) 273,318 shares to holders of 10.5%
       Debentures upon conversion of $2,460,000 principal amount of debentures,
       (d) 104,127 shares to holders of 8% Notes upon conversion of $1,250,000
       principal amount, and (e) 100,000 shares to certain officers of Ultimate
       in accordance with the Stock Incentive Compensation Agreement.

       In connection with the exercise of options under the Plan, the Company
       offered loans to all employees whose total exercise price of options
       under the Plan exceeded $50,000. The loans, which total $893,000, are
       full recourse loans due in may 1998, bear interest at the rate of 6.08%
       and are secured by pledges of the shares acquired by the employees
       through the exercise of Plan options.

       At March 14, 1997, the Company had outstanding 5,373,310 shares of common
       stock. Thus the ratio for the distribution of TransAct shares is 1.005
       shares of TransAct for each share of Tridex Corporation.

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

       None.


                                       30
<PAGE>

                       TRIDEX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(A)    Directors.

       The information contained in "Information Concerning Nominees for
       Election as Directors and Executive Officers" of the Company's Proxy
       Statement (the "Proxy Statement") for its Annual Meeting of Shareholders
       which is scheduled to be held on May 14, 1997 is hereby incorporated
       herein by reference. Also see Item 1(E)(i) above.

(B)    Executive Officers.

       See Item 1(E)(ii) above.

(C) Compliance with Section 16(a) of the Exchange Act.

       The information contained in "Compliance with Section 16(a)" of the Proxy
       Statement is hereby incorporated by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information contained in "Compensation of Directors and Executive Officers"
of the Proxy Statement is hereby incorporated herein by reference.

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

The information contained in "Security Ownership of Certain Beneficial Owners
and Management" of the Proxy Statement is hereby incorporated herein by
reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTION

The information contained in "Certain Relationships and Related Transactions" of
the Proxy Statement is hereby incorporated herein by reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(A)    The following financial statements and exhibits are filed as part of this
       report:

       (i)    Financial statements

              See Item 8 on page 12.

       (ii)   Financial statement schedules

              See Item 8 on page 12.

       (iii)  List of Exhibits.

              See Exhibit Index on page 33.

(B)    Reports on Form 8-K.

       The Company did not file any Current Reports on Form 8-K during the last
       quarter of the period covered by this report.



                                       31
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                        TRIDEX CORPORATION


                                        By:  /s/ Seth M. Lukash
                                            ------------------------------
                                            Seth M. Lukash
                                            Chairman of the Board, President,
                                            Chief Executive Officer, Chief
                                            Operating Officer and Director
                                            Date: March 25, 1997

Pursuant to the requirements of the Securities Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

Signature                                   Title                      Date
---------                                   -----                      ----


   /s/ Seth M. Lukash               Chairman of the Board,        March 25, 1997
------------------------------      President, Chief
Seth M. Lukash                      Executive Officer,
(Principal Executive Officer)       Chief Operating Officer
                                    and Director

   /s/ George T. Crandall           Vice President, Treasurer,    March 25, 1997
------------------------------      Controller and Secretary
George T. Crandall                  (Principal Accounting
                                    Officer)

   /s/ Graham Y. Tanaka             Director                      March 25, 1997
------------------------------
Graham Y. Tanaka


   /s/ Paul J. Dunphy               Director                      March 25, 1997
------------------------------
Paul J. Dunphy


   /s/ C. Alan Peyser               Director                      March 25, 1997
------------------------------
C. Alan Peyser


   /s/ Thomas R. Schwarz            Director                      March 25, 1997
------------------------------
Thomas R. Schwarz


                                       32
<PAGE>

                          Exhibit Index
                                                                       Page
                                                                       Number
                                                                       ------
   3.1    Certificate of Incorporation of Tridex, as amended,
          filed on June 28, 1985 as Exhibit 3.1 to the Company's
          Annual Report on Form 10-K for the fiscal year ended
          March 30, 1985, is hereby incorporated herein by
          reference.
   3.2    Certificate of Amendment of Incorporation of Tridex,
          dated October 1, 1987, filed on July 18, 1988 as
          Exhibit 3.2 to the Company's Annual Report on Form 10-K
          for the fiscal year ended April 2, 1988 is hereby
          incorporated herein by reference.
   3.3    Certificate of Amendment of Incorporation of Tridex,
          dated August 15, 1988, filed on June 29, 1989 as
          Exhibit 3.3 to the Company's Annual Report on Form 10-K
          for the fiscal year ended April 1, 1989 is hereby
          incorporated herein by reference.
   3.4    Certificate of Amendment of Incorporation of Tridex,
          dated March 31,1989 filed on June 29, 1989 as Exhibit
          3.4 to the Company's Annual Report on Form 10-K for the
          fiscal year ended April 1, 1989 is hereby incorporated
          herein by reference.
   3.5    Bylaws of Tridex, as amended and restated as of January
          22, 1996, filed on March 26, 1996 as Exhibit 3.5 to the
          Company's Transition Report on Form 10-K for the
          transition year ended December 31, 1995 is hereby
          incorporated herein by reference.
   4.1    Description of the Company's common stock set forth in
          the Company's Registration Statement on Form 8-A filed
          July 14, 1986, is hereby incorporated herein by
          reference.
   4.2    The Tridex Corporation 1989 Long Term Incentive Plan
          (as amended and restated), filed as Exhibit A to the
          Company's Proxy Statement for Annual Meeting of
          Shareholders filed September 14, 1994 is hereby
          incorporated herein by reference.
   4.3    Form of 8% Subordinated Convertible Term Promissory
          Notes dated January 20, 1993, by and among the Company
          and the shareholders of Ultimate Technology
          Corporation, filed as an Exhibit to Current Report on
          Form 8-K filed February 10, 1993, is hereby
          incorporated herein by reference.
   4.4    Form of Registration Rights Agreement, dated January
          20, 1993, filed as an Exhibit to Current Report on Form
          8-K filed February 10, 1993, is hereby incorporated
          herein by reference.
   4.5    Indenture dated as of December 31, 1992 by and among
          the Company and American Stock Transfer & Trust
          Company, as Trustee, filed as an Exhibit to Current
          Report on Form 8-K filed February 10, 1993, is hereby
          incorporated herein by reference.
   4.6    Form of 10.5% Senior Subordinated Convertible
          Debentures due December 31, 1997, filed as an Exhibit
          to Current Report on Form 8-K filed February 10, 1993,
          is hereby incorporated herein by reference.
   4.7    Form of Warrant, dated January 20, 1993, to purchase
          shares of Tridex common stock, filed as an Exhibit to
          Current Report on Form 8-K filed February 10, 1993, is
          hereby incorporated herein by reference.
   4.8    Form of Registration Rights Agreement, filed as an
          Exhibit to Current Report on Form 8-K filed February
          10, 1993, is hereby incorporated herein by reference.
   4.9    Form of Warrant dated January 20, 1993, to purchase
          common stock of Tridex Corporation, filed as an exhibit
          to the Company's Annual Report on Form 10-K for the
          fiscal year ended April 3, 1993 is hereby incorporated
          herein by reference.
   10.1   Employment and Non-Competition Agreement, dated as of
          January 20, 1993, between Ultimate Technology
          Corporation and Dennis J. Lewis, filed as an exhibit to
          the Company's Annual Report on Form 10-K for the fiscal
          year ended April 3, 1993 is hereby incorporated herein
          by reference.
   10.2   The Tridex Corporation 1989 Long Term Incentive Plan
          (as amended and restated) filed as Exhibit A to the
          Company's Proxy Statement for Annual Meeting of
          Shareholders filed July 23, 1992 is hereby incorporated
          herein by reference.
   10.3   Employee Performance Compensation Agreement, dated
          January 20, 1993 by and among Tridex and the Ultimate
          shareholders, filed as an exhibit to the Company's
          Annual Report on Form 10-K for the fiscal year ended
          April 3, 1993 is hereby incorporated herein by
          reference.
   10.4   Amended and Restated Credit Agreement dated as of
          December 15, 1995 among Tridex Corporation, Ithaca
          Peripherals Incorporated, Ultimate Technology
          Corporation, Magnetec Corporation, Cash Bases
          Incorporated and Fleet Bank, National Association.
          Filed on March 29, 1996 as Exhibit 10.12 to the
          Company's Transition Report on Form 10-K for the
          transition period ended December 31, 1995 is hereby
          incorporated herein by reference.
   10.5   Amendment No. 1, dated as of March 15, 1996 to Amended
          and Restated Credit Agreement, dated as of December 14,
          1995, among Tridex Corporation, Ithaca Peripherals
          Incorporated, Ultimate Technology Corporation, Magnetec
          Corporation, Cash Bases Incorporated and Fleet Bank,
          National Association. Filed on March 29, 1996 as
          Exhibit 10.13 to the Company's Transition Report on
          Form 10-K for the transition period ended December 31,
          1995 is hereby incorporated herein by reference.


                               33
<PAGE>

                                                                       Page
                                                                       Number
                                                                       ------
   10.6   Amendment No. 2, dated as of August 30, 1996 to Amended
          and Restated Credit Agreement, dated as of December 14,
          1995, among Tridex Corporation, Ithaca Peripherals
          Incorporated, Ultimate Technology Corporation, Magnetec
          Corporation, Cash Bases Incorporated and Fleet National
          Bank, filed on November 12, 1996 as Exhibit 10.9 to the
          Company's Quarterly Report on Form 10-Q for the quarter
          ended September 28, 1996 is hereby incorporated herein
          by reference.
   10.7   Service Agreement, dated June 20, 1994, between Cash
          Bases G.B. Limited and Hugh T. Burnett filed on June
          30, 1994 as Exhibit 10.13 to the Company's Annual
          Report on Form 10-K for the fiscal year ended April 2,
          1994 is hereby incorporated by reference.
   10.8   Retirement Agreement, dated as of December 31, 1995,
          between Tridex Corporation and Alvin Lukash, Filed on
          March 29, 1996 as Exhibit 10.15 to the Company's
          Transition Report on Form 10-K for the transition year
          ended December 31, 1995 is hereby incorporated herein
          by reference.
   10.9   First Amendment to Retirement Agreement dated December
          31, 1996 between Tridex Corporation and with Alvin
          Lukash.                                                          35
   10.10  Employment Agreement dated December 2, 1996 between
          Tridex Corporation and Seth M. Lukash.                           36
   10.11  Employment Agreement dated August 7, 1996 between
          Tridex Corporation and George T. Crandall.                       42
   10.12  Plan of Reorganization dated as of June 24, 1996 among
          Tridex Corporation ("Tridex"), Magnetec Corporation
          ("Magnetec"), TransAct Technologies Incorporated
          ("TransAct") and Ithaca Peripherals Incorporated
          ("Ithaca"), filed on November 12, 1996 as Exhibit 10.1
          to the Company's Quarterly Report on Form 10-Q for the
          quarter ended September 28, 1996 is hereby incorporated
          herein by reference.
   10.13  Amendment to Plan of Reorganization dated as of August
          30, 1996 among Tridex, Magnetec, TransAct and Ithaca,
          filed on November 12, 1996 as Exhibit 10.2 to the
          Company's Quarterly Report on Form 10-Q for the quarter
          ended September 28, 1996 is hereby incorporated herein
          by reference.
   10.14  Agreement and Plan of Merger dated as of July 16, 1996
          between Magnetec and Ithaca, filed on November 12, 1996
          as Exhibit 10.3 to the Company's Quarterly Report on
          Form 10-Q for the quarter ended September 28, 1996 is
          hereby incorporated herein by reference.
   10.15  Asset Transfer Agreement dated as of July 31, 1996
          between Magnetec and Tridex, filed on November 12, 1996
          as Exhibit 10.4 to the Company's Quarterly Report on
          Form 10-Q for the quarter ended September 28, 1996 is
          hereby incorporated herein by reference.
   10.16  Manufacturing Support Services Agreement dated as of
          September 28, 1996 between Magnetec and Tridex, filed
          on November 12, 1996 as Exhibit 10.5 to the Company's
          Quarterly Report on Form 10-Q for the quarter ended
          September 28, 1996 is hereby incorporated herein by
          reference.
   10.17  Corporate Services Agreement dated as of June 24, 1996
          between Tridex and TransAct, filed on November 12, 1996
          as Exhibit 10.6 to the Company's Quarterly Report on
          Form 10-Q for the quarter ended September 28, 1996 is
          hereby incorporated herein by reference.
   10.18  Printer Supply Agreement dated as of July 30, 1996
          between Magnetec and Ultimate Technology Corporation,
          filed on November 12, 1996 as Exhibit 10.7 to the
          Company's Quarterly Report on Form 10-Q for the quarter
          ended September 28, 1996 is hereby incorporated herein
          by reference.
   10.19  Tax Sharing Agreement dated as of July 31, 1996 between
          Tridex and TransAct, filed on November 12, 1996 as
          Exhibit 10.8 to the Company's Quarterly Report on Form
          10-Q for the quarter ended September 28, 1996 is hereby
          incorporated herein by reference.
   10.20  Stock Incentive Compensation Agreement among Tridex
          Corporation, Ultimate Technology Corporation, 47 Dennis
          Lewis, Gary German and Paul Wolf dated March 10, 1997.           47
   10.21  Employment Agreement dated February 21, 1997 between
          Ultimate Technology Corporation and Dennis Lewis.                57
   10.22  Employment Agreement dated February 21, 1997 between
          Ultimate Technology Corporation and Gary German.                 63
   10.23  Employment Agreement dated February 21, 1997 between
          Ultimate Technology Corporation and Paul Wolf.                   69
   11.1   Statement re:  computation of per share earnings.                75
   21.1   List of Subsidiaries of Tridex.                                  76
   23.1   Consent of Independent Accountants.                              77
   23.2   Consent of Independent Accountants.                              78
   27.1   Financial Data Schedule.


                               34