<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                                   FORM 10K
(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, 2000
                                       OR
     [_]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934
            ]
                  For the Fiscal Year Ended December 31, 2000

                          Commission File No. 0-13576

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

               Delaware                                  04-2789167
----------------------------------------   -------------------------------------
       (State of Incorporation)                  (I.R.S. EMPLOYER I.D. NO.)

         34929 Curtis Boulevard
             Eastlake, Ohio                     44095
----------------------------------------   -------------------------------------
(Address of Principal Executive Offices)              (Zip Code)

Telephone:  (440) 953-5170

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share

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 the registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [_].

Aggregate market value, as of May 31, 2001 of Common Stock held by non-
affiliates of the registrant: $1,852,000.

The number of shares outstanding of the registrant's only class of Common Stock
as of May 31, 2001 was 80,746,722.

                                                    PART OF DOCUMENT
DOCUMENTS INCORPORATED BY REFERENCE:              IN WHICH INCORPORATED
                                           -------------------------------------



A list of all exhibits to this Form 10-K is on Page 41.

                                      -1-
<PAGE>

PART I
Item 1    Business
------------------

Until November 1997, Encore Computer Corporation ("Encore" or the "Company") was
engaged in manufacturing, distributing and supporting (i) scalable real-time
computer systems and (ii) data storage products for very large computer systems.
In November 1997 the Company sold its storage products business and in January
1999 the Company completed the sale of its real time computer systems business
effective December 31, 1998. Since January 1999, the Company's only assets have
been cash, claims and receivables relating to the sales of its storage products
and real-time computer systems businesses.

In 1989, Encore acquired the assets and assumed the liabilities of the Gould
Electronics Inc.'s ("Gould") Computer Systems Division, which was significantly
larger than Encore. From 1989 through November 1997, Gould (which is a wholly
owned subsidiary of Japan Energy Corporation) had been the principal source of
the Company's financing. During that period, the Company borrowed a total of
$418 million from Gould and its affiliates. Encore had invested most of this in
research and development. However, despite its efforts, Encore was unable to
penetrate the marketplace for storage products and sales of its real-time
computer systems declined significantly. By mid-1997 Gould had made it clear
that it would not provide further financing to Encore, other than working
capital to keep the storage products business operating for a short period until
a pending sale could be completed.

Sale of the Storage Products Business

On November 24, 1997, the Company sold substantially all the assets associated
with its storage products business to Sun Microsystems, Inc. ("Sun"). The Asset
Purchase Agreement under which the transaction took place contemplated that Sun
would pay $185 million for the storage products business, of which $150 million
would be paid in cash at the closing and $35 million would be paid on July 1,
1998, subject to Sun's right to make offsets against the second payment. In
fact, because of certain closing adjustments, Sun paid Encore $151,168,227 at
the closing.

In connection with the sale of Encore's storage business to Sun, Gould also
entered into an agreement with Sun under which Gould guaranteed most of Encore's
obligations under the Asset Purchase Agreement between Encore and Sun, agreed to
provide whatever funds were necessary to ensure that Encore would not become
insolvent within one year after the closing of the sale to Sun, and indemnified
Sun against any losses Sun might incur if the sale of Encore's storage products
business to Sun were challenged in an insolvency proceeding relating to Encore
commenced within two years after the closing.

Shortly before July 1, 1998, Sun asserted claims against Encore totaling
$9,692,000. Because of that, on July 1, 1998, Sun paid only $25,308,000 of the
$35,000,000, which was due on that date. On July 16, 1999, Sun and Encore
entered a Settlement Agreement and Mutual Release pursuant to which Sun paid
$2,500,000 to Gould (to which the balance of the receivable from Sun had been
assigned) as a settlement for the receivable and Sun released these claims. Sun
did not release Gould's other indemnification obligations related to Encore's
obligations under the Asset Purchase Agreement.

On November 24, 1997, Gould held (i) notes, secured by all of Encore's assets,
under which Encore owed Gould $93.55 million for money Encore had borrowed from
Gould plus unpaid interest, and (ii) convertible preferred stock of Encore with
a liquidation preference totaling $411 million, which Encore had issued to Gould
between 1991 and 1996 in exchange for cancellation of indebtedness for money
Encore had borrowed from Gould and interest on those borrowings.

                                      -2-
<PAGE>

In addition, Gould held approximately 48.44% of Encore's common stock, which
Gould had obtained as part of the consideration for the sale of its Computer
Systems Division to Encore in 1989 or through conversion of convertible
preferred stock. In connection with the sale of Encore's storage products
business to Sun, Encore and Gould agreed that Encore would repay the secured
notes and unpaid interest thereon and redeem all the convertible preferred stock
which Gould held for $60 million, of which $25 million was to be paid at the
closing of the Sun transaction, and the balance was to be satisfied with the
second payment due from Sun. In addition, Gould agreed that if it received the
entire $35 million by July 31, 1998, Gould would waive its right to receive
additional shares of preferred stock with a liquidation preference of
approximately $43 million, which were due to it as past-due dividends on the
convertible preferred stock which was being redeemed. Finally, Gould agreed that
if Encore were liquidated before November 24, 1999, Gould would waive any right
it had as a holder of Encore's common stock with regard to the first $30 million
of liquidating distributions made to Encore's common stockholders.

Because Sun withheld $9,692,000 of the payment due on July 1, 1998, Encore
remained obligated to Gould in that amount and had to either pay that amount to
Gould out of its own funds by July 31, 1998 or issue to Gould the over-due
dividend shares of convertible preferred stock, which had a liquidation
preference of $42,678,400. However, in order to give Encore more time to attempt
to resolve Sun's claims, Gould agreed that if Encore issued those dividend
shares to it, Gould would give Encore the option to repurchase the dividend
shares on or before July 31, 1999 for an amount equal to the balance of the
$9,692,000 which remained unpaid ($7,192,000 after the payment of $2,500,000
received on July 16, 1999) plus interest at 8.5% per annum from August 1, 1998.
Encore then issued the dividend shares to Gould. On July 31, 1999, Gould
extended Encore's option to repurchase the dividend shares to October 30, 1999;
Gould subsequently extended Encore's option to December 15, 1999, when it
expired.

On December 30, 1999, Encore paid Gould the $7,192,000 balance due as a result
of the redemption of convertible preferred stock from Gould, and Gould, among
other things, agreed (i) to convert the dividend shares into common stock and
(ii) that if Encore were liquidated before November 24, 2000, Gould would waive
any right it had as a holder of Encore's common stock with regard to the first
$30 million of liquidating distributions made to Encore's common stockholders.
Additionally, Gould agreed to indemnify Encore for any obligations it might
incur to indemnify its current and future directors, up to a total of
$7,192,000. On January 20, 2000, Gould converted its convertible preferred stock
into 13,295,815 shares of common stock.

Sale of the Real-Time Business

On June 4, 1998, the Company and Gores Technology Group ("Gores") entered into a
definitive agreement for the Company to sell its real-time business to Gores for
$3 million in cash.

At the same time the Company entered into the agreement to sell its real-time
computer systems business to Gores, the Company entered into a management
agreement under which Gores took over management of the real-time computer
systems business, retaining any positive cash flow and bearing any negative cash
flow, but receiving a management fee of $100,000 per month, which was to be
refunded to Encore upon closing of the sale of the real-time computer systems
business to Gores. Encore provided a $2 million line of credit to Gores to fund
its operation of the real-time computer systems business until the closing.

The sale of the real-time computer systems business to Gores was approved by the
Company's stockholders on September 11, 1998, and the transaction was completed
on January 6, 1999. At the closing of the sale, the Company received $2,750,000
(with the additional $250,000 set off against the purchase price to resolve an
alleged breach of indemnity claim) and the parties agreed

                                      -3-
<PAGE>

to resolve shortly after the closing disputed items relating to the sale,
including the amounts due to Encore under the management agreement and the line
of credit, and certain other indemnity claims by Gores. On August 10, 2000, the
Company reached an agreement in principle to resolve these items. In connection
with the agreement, Encore and Gores agreed to reduce the principal balance of
the receivable by (1) $96,000 relating to an uncollectible note receivable
purchased by Gores in the acquisition of the real-time business and (2) $150,000
for expenses incurred in the negotiation of this settlement. As a result, the
receivable balance due to Encore was $2,979,000.

In order to reduce this balance, Gores agreed to make payments on Encore's
behalf relating to the closing of certain foreign offices. Such payments
included lease termination fees and payment of taxes. During fiscal 1999, Gores
paid $35,000 relating to the termination of Encore's Belgium office lease.
Subsequent to December 31, 1999, Gores paid approximately $1,845,000 relating to
lease termination costs and a tax settlement. After these payments, the
receivable balance amounted to $1,098,000. Gores agreed to make cash payments to
Encore for the remainder of the balance. In August and October 2000, Encore
received payments totaling $500,000 toward the receivable balance. In February
2001, Encore received the remaining $598,000 plus an additional $16,000. Certain
disputed items remain, including reimbursement by Gores of amounts received
pursuant to a lease termination and indemnification claim by Gores relating to
contracts assumed in the acquisition of the real time business.

It had been contemplated that after the real-time computer systems business was
sold to Gores, Encore would be liquidated. However, because of a provision of
the agreements relating to Encore's sale of its storage products business to
Sun, Encore's stockholders could not vote on the liquidation of Encore at the
meeting on September 11, 1998 at which they approved the sale of the real-time
computer systems business. The Company's Board of Directors expects to
reconsider when the Company should be liquidated when various disputed items are
determined, including whether the Company will have any indemnification
obligations with regard to a pending lawsuit by stockholders of the Company with
regard to the Sun transaction and related redemption of convertible preferred
stock from Gould (which was tentatively settled in late 2000).

The Board of Directors terminated the employment of the Company's President on
September 30, 1998 and the employment of the Company's Chief Executive Officer
on November 24, 1998, in view of the fact that the Company no longer had any
active business. The Company's staff was reduced to its General Counsel (who
took the position of President), its Chief Financial Officer, its Vice President
of Human Resources (who continued to be involved in employee compensation
matters arising out of the sales of the storage products and the real-time
computer systems businesses) and a few clerical and administrative employees.
The Company also moved its offices to substantially smaller space, which it
occupied under a short-term lease. Those offices were closed on or about June
30, 1999, and the remaining employees terminated. The Company's further
activities are conducted in space provided by Gould in Eastlake, Ohio.

The assets of the Company available for distribution to shareholders on
liquidation of Encore would be (i) the Company's assets, less its liabilities,
at December 31, 2000, plus or minus (ii) any sum by which the amount received
from Gores is greater or less than the carrying value on the Company's December
31, 2000 balance sheet, plus or minus (iii) any amounts by which the costs of
liquidation and costs related to contingent liabilities, including pending
litigation, are less or greater than the reserves reflected on the December 31,
2000 balance sheet, minus (iv) expenses incurred after December 31, 2000 which
have not been contemplated in the accruals.

                                      -4-
<PAGE>

Item 2    Properties
--------------------

The Company does not own any facilities.

On June 19, 2000, the Company terminated its lease at its idle London facility
and has no further lease obligations for facilities.

                                      -5-
<PAGE>

Item 3    Legal Proceedings
---------------------------

Shortly before the Sun transaction was closed, shareholders of the Company
brought a lawsuit in the Delaware Chancery Court against Gould and the Company's
then Directors, C. David Ferguson, Robert Fedor, Rowland Thomas and Kenneth
Fisher. Three similar shareholder suits were also filed and all four suits have
been consolidated as Civil Action #16044, In Re Encore Computer Corporation
                                          ---------------------------------
Shareholders Litigation. The shareholders filed an amended complaint adding
-----------------------
directors Michael Veysey and Thomas Rich as defendants and eliminating the
Company as a defendant. The defendants moved to dismiss the amended complaint
and that motion was granted in June 2000. In July 2000, two of the Plaintiffs
filed a notice of appeal to the Delaware Supreme Court. Although the Company is
not a party to the litigation, the Company is obligated to indemnify its
officers and directors against liability for matters such as those which are the
subject of the litigation. Late in 2000, the plaintiffs tentatively agreed to
settle the suit on a basis that would not require settlement payments by
directors and officers that would be subject to indemnification by the Company.
Such settlement is subject to documentation and court approval.


Item 4  Submissions of Matters to a Vote of Security Holders
------------------------------------------------------------

None

                                      -6-
<PAGE>

PART II

Item 5 Market for Registrant's Common Equity and Related Stockholder Matters
----------------------------------------------------------------------------

The Company's common stock is traded on the OTC Bulletin Board under the symbol
ENCC.

The high and low closing sale prices of Encore's common stock are shown for
fiscal years 2000 and 1999 in the table below:

                                 Fiscal 2000                Fiscal 1999
                           -------------------------  ------------------------
                              High          Low         High           Low
                           -------------------------  ------------------------

     1/st/ Quarter              .0625        .015625        .05        .015625
     2nd Quarter                .0625        .015625        .04        .015625
     3rd Quarter               .03125        .015625        .04        .015625
     4/th/ Quarter            .015625        .015625        .04            .01

BankBoston, N.A. is the stock transfer agent and registrar of the Company's
common stock, and maintains shareholder records. The agent will respond to
questions on change of ownership, lost stock certificates, consolidation of
accounts and change of address. Shareholder correspondence on these matters
should be addressed to:

BankBoston, N.A.
c/o Boston EquiServe, L.P.
P.O. Box 8040
Mail Stop 45-02-64
Boston, Massachusetts 02266-8040.

As of May 31, 2001, there were 2,333 holders of record of the Company's common
stock. The Company has never paid, and will not pay in the future, cash
dividends on its common stock.

                                      -7-
<PAGE>

Item 6 Selected Financial Data
------------------------------

<TABLE>
<CAPTION>
(in thousands except                                For the year ended December 31,
                                                    -------------------------------
  per share data)                       2000        1999        1998         1997          1996
                                        ----        ----        ----         ----          ----
<S>                                   <C>        <C>          <C>         <C>           <C>
Net sales                                N/A         N/A      $ 20,435    $ 29,486      $ 47,627
Operating loss                           N/A         N/A        (7,474)    (76,528)      (67,218)
Gain on Sun Transaction                  N/A         N/A        25,308     119,890            --
Net income (loss)                        N/A         N/A        16,658      34,164       (70,732)
Changes in net assets
   in liquidation (2)                 $  486     $ 5,022           N/A         N/A           N/A
Basic income (loss)
   per common share (1)                  N/A         N/A          0.24        0.11         (2.61)
Weighted average shares of
   common stock
   outstanding (1)                       N/A         N/A        67,451      40,568        36,810
Working capital                          N/A         N/A           N/A     (21,617)      (67,295)
Total assets                           3,170       7,034        16,753      37,451        69,256
Long term debt                            --          --            --          --           476
Shareholders' equity
  (capital deficiency)                   N/A         N/A           N/A     (19,646)      (34,010)
Net assets in liquidation (2)          2,520       2,034        (2,988)        N/A           N/A
Net assets in liquidation
   per common share (2)               $  .03           0             0         N/A           N/A
</TABLE>


(1)  During 1998, 1997, and 1996, preferred stock dividends amounted to
$533,000, $29,579,900, and $25,413,000, respectively. All preferred stock
dividends were paid in additional shares of preferred stock or were accumulated.

(2)  The Company ceased operating activities as of December 31, 1998.
Additionally, management expects that liquidation of the Company will occur. As
a result, the Company has adopted the liquidation basis of accounting as of
December 31, 1998 and for all periods subsequent to December 31, 1998.

                                      -8-
<PAGE>

Item 7    Management's Discussion and Analysis of Financial Condition and
-------------------------------------------------------------------------
          Results of Operations
          ---------------------

Overview and Liquidation

The Company conducted no business operations after December 31, 1998.

During fiscal 1997, Encore sold substantially all of its assets associated with
its storage products business to Sun. During fiscal 1998, the Company sold its
real-time computer systems business to Gores. After these transactions,
management contemplated that the Company would be liquidated. However, because
of a provision of the agreements relating to Encore's sale of its storage
products business to Sun, Encore's stockholders could not vote on the
liquidation of Encore at the meeting on September 11, 1998, at which they
approved the sale of the real-time computer systems business. The Company's
Board of Directors expects to reconsider when the Company should be liquidated
when various disputed items are determined, including whether the Company will
have any indemnification obligations with regard to a pending lawsuit by
stockholders of the Company with regard to the Sun transaction and related
redemption of convertible preferred stock from Gould.

The Board of Directors terminated the employment of the Company's President on
September 30, 1998 and the employment of the Company's Chief Executive Officer
on November 24, 1998 in view of the fact that the Company no longer had any
active business. The Company's staff was reduced to its General Counsel, who
took the position of President, its Chief Financial Officer, its Vice President
of Human Resources (who continued to be involved in employee compensation
matters arising out of the sales of the storage products and the real-time
computer systems businesses) and a few clerical and administrative employees. In
fiscal 1999, all remaining employees were terminated. The Company also moved its
offices to a substantially smaller space, which it occupied under a short-term
lease. Those offices were closed on or about June 30, 1999, and the Company's
further activities are conducted in space provided by Gould in Eastlake, Ohio.
Management expects that liquidation of the Company will occur. As a result, the
Company adopted the liquidation basis of accounting as of December 31, 1998 and
for all periods subsequent to December 31, 1998.

The assets of the Company available for distribution to shareholders on
liquidation of Encore would be (i) the Company's assets, less its liabilities,
at December 31, 2000, plus or minus (ii) any sum by which the amount received
from Gores is greater or less than the carrying value on the Company's December
31, 2000 balance sheet, plus or minus (iii) any amounts by which the costs of
liquidation and costs related to contingent liabilities, including pending
litigation, are less or greater than the reserves reflected on the December 31,
2000 balance sheet, minus (iv) expenses incurred after December 31, 2000 which
have not been contemplated in the accruals.

Under the liquidation basis of accounting, assets are stated at their estimated
net realizable value and liabilities are stated at their estimated amounts.

Comparison of 2000 and 1999 and 1998

The Company ceased operations when the Gores transaction was entered into on
December 31, 1998. Throughout 2000 and 1999, the Company continued to settle
liabilities. During fiscal 2000 and1999, previously established accruals for
termination and wind down costs were adjusted based on revised estimates of the
ultimate cost of such activities. Such revisions included reduction for
overaccruals of taxes and the cost of closing foreign offices.

                                      -9-
<PAGE>

Liquidity and Capital Resources

In fiscal 2000, the Company received $500,000 from Gores as a partial payment of
amounts owed. In February 2001, the Company received the remaining amounts due.
In fiscal 1999, the Company received $2,750,000 from the sale of its real-time
computer systems business. Additionally, the Company received $2,500,000 from
the Settlement Agreement and Mutual Release with Sun. The Company does not
expect to receive any significant additional amounts of cash as it continues to
wind down its affairs. Throughout 2000 and 1999, the Company used its existing
cash resources to settle liabilities to further the wind down of its affairs.

At December 31, 2000, the Company had cash and cash equivalents totaling
$2,556,000 and was owed $614,000 by Gores, which was received in February 2001.
Its only need for funds is to pay additional sums in connection with the
termination and liquidation of its businesses, which were estimated at $650,000,
including ongoing expenses.

Year 2000

The Company determined that year 2000 issues had no impact on the Company's
future financial statements in light of the Sun Transaction and the Gores
Transaction. The Company does not have an ongoing business.

Cautionary Statement Relating to Forward-Looking Statements

The foregoing Management's Discussion and Analysis of Financial Condition and
Results of Operations contains various "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which represent the
Company's expectations and beliefs concerning future events. These statements by
their nature involve substantial risks and uncertainties and actual events or
results may differ as a result of these and other factors. The principal factors
that could cause the Company's actual results to differ materially from those in
the forward-looking statements include material differences between actual
liquidation costs and those which have been estimated. (See Exhibit 99
incorporated herein by reference to the Company's Form 10-Q for the period ended
June 30, 1996.)

                                      -10-
<PAGE>

              REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



To the Shareholders and Directors
of Encore Computer Corporation

In our opinion, the accompanying consolidated financial statements present
fairly, in all material respects, the consolidated net assets in liquidation of
Encore Computer Corporation and subsidiaries (collectively the "Company") at
December 31, 2000 and 1999, the consolidated changes in net assets in
liquidation for the years then ended and the consolidated results of its
operations and its cash flows for the year ended December 31, 1998, in
conformity with accounting principles generally accepted in the United States of
America applied on the basis described in Note A to the financial statements.
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
auditing standards generally accepted in the United States of America, 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 our opinion.

As described in Note A, management expects that liquidation will occur. As a
result, the Company changed its basis of accounting as of and for periods
subsequent to December 31, 1998 from a going concern basis to a liquidation
basis.


 PricewaterhouseCoopers LLP

Miami, Florida
May 30, 2001

                                      -11-
<PAGE>

ENCORE COMPUTER CORPORATION
CONSOLIDATED STATEMENT OF CHANGES
IN NET ASSETS IN LIQUIDATION

(In thousands)

<TABLE>
<CAPTION>
                                                                    Year Ended             Year Ended
                                                                 December 31, 2000     December 31, 1999
                                                                 -----------------     -----------------
<S>                                                              <C>                    <C>
Net assets in liquidation at beginning of period                            $2,034               ($2,988)

     Adjustment of net assets in liquidation:
          Settlement with Sun                                                                      2,500
          Refund of taxes                                                                            453
          Foreign exchange loss                                               (338)                    0
          Other adjustments of estimated amounts                               672                 1,559

     Interest income                                                           152                   510
                                                                            ------                ------
Net assets in liquidation at end of period                                  $2,520                $2,034
                                                                            ======                ======
</TABLE>

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

                                     -12-
<PAGE>

ENCORE COMPUTER CORPORATION
Consolidated Statements of Operations
-------------------------------------------------------------------------------
(in thousands except per share data)
-------------------------------------------------------------------------------

                                                               Year Ended
                                                              December 31,
                                                                  1998
                                                           --------------------
Net sales:
  Equipment                                                               8,263
  Service                                                                12,172
                                                           --------------------
      Total                                                              20,435
                                                           --------------------

Costs and expenses:
  Cost of equipment sales                                                 4,492
  Cost of service sales                                                   8,246
  Research and development                                                1,213
  Sales, general and administrative                                       8,489
  Termination charge (Note B)                                               (62)
  Liquidation costs                                                       5,531
                                                           --------------------
     Total                                                               27,909
                                                           --------------------

Operating loss                                                           (7,474)
  Interest expense, principally
     related parties                                                       (374)
  Interest income                                                           847
  Other expense, net                                                       (140)
  Gain on Sun Transaction                                                25,308
  Loss on Gores Transaction                                              (1,822)
                                                           --------------------

Net income before income taxes                                           16,345

(Benefit) Provision for income taxes                                       (313)
                                                           --------------------

 Net income                                                              16,658
                                                           ====================


 Net income per common share:

  Net income attributable to common
  shareholders                                                           16,125
                                                           ====================

  Basic earnings per common share                                          0.24
                                                           ====================

  Diluted earnings per common share                                        0.21
                                                           ====================

Weighted average shares
  of common stock-basic                                                  67,451
                                                           ====================

Weighted average shares
  of common stock-diluted                                                80,747
                                                           ====================

The accompanying notes are an integral part of the consolidated financial
statements.

The Company has adopted the liquidation basis of accounting as of
December 31, 1998 and for all periods subsequent to December 31, 1998.
Therefore, no statements of operations for periods subsequent to
December 31, 1998 are presented.

                                      13

<PAGE>

ENCORE COMPUTER CORPORATION
---------------------------
Consolidated Statements of Net Assets in Liquidation
--------------------------------------------------------------------------------
(in thousands except share data)
--------------------------------

<TABLE>
<CAPTION>
                                                                      December 31,                           December 31,
                                                                         2000                                   1999
                                                                ------------------------              ------------------------
<S>                                                             <C>                                   <C>
ASSETS
  Cash and cash equivalents                                     $                  2,556              $                  3,637
  Due from Gores                                                                     614                                 2,944
  Prepaid expenses and other current assets                                            0                                   453
                                                                ------------------------              ------------------------
     Total assets                                               $                  3,170              $                  7,034
                                                                ========================              ========================


LIABILITIES AND NET ASSETS IN LIQUIDATION
  Accounts payable and accrued liabilities                      $                    650              $                  5,000
                                                                ------------------------              ------------------------
     Total current liabilities                                                       650                                 5,000

Commitments and contingencies (Note G)

Net assets in liquidation                                                          2,520                                 2,034

                                                                ------------------------              ------------------------
     Total liabilities and net assets in liquidation            $                  3,170              $                  7,034
                                                                ========================              ========================

Number of Preferred Shares outstanding                                                 0                               432,114
                                                                ========================              ========================

Number of Common Shares outstanding                                           80,746,722                            67,450,907
                                                                ========================              ========================

Net assets in liquidation per Preferred Share                   $                   0.00              $                   4.71
                                                                ========================              ========================

Net assets in liquidation per Common Share                      $                   0.03              $                   0.00
                                                                ========================              ========================
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                      14
<PAGE>

ENCORE COMPUTER CORPORATION
---------------------------
Consolidated Statements of Cash Flows
--------------------------------------------------------------------------------
(in thousands)
--------------

<TABLE>
<CAPTION>
                                                                                                       Year Ended
                                                                                                       December 31,
                                                                                                           1998
                                                                                                -----------------------
<S>                                                                                             <C>
Cash flows from operating activities:
  Net income                                                                                    $               16,658
  Adjustments to arrive at net cash used
    in operating activities:
    Depreciation and amortization                                                                                  887
    Non cash compensation                                                                                      -
    Inventory obsolescence and writedown to lower
      of cost or market                                                                                        -
    Equity in loss of joint venture                                                                            -
    Bad debt provision (credit)                                                                                    468
    Termination charges                                                                                            (62)
    Liquidation costs                                                                                            5,531
    Gain on Sun Transaction                                                                                    (25,308)
    Loss on Gores Transaction                                                                                    1,822
    Foreign exchange (gain) loss                                                                                   (13)
    Loss on disposal of property and equipment-Other                                                               135
  Net changes in operating assets and liabilities:
    Accounts receivable                                                                                           (347)
    Inventories                                                                                                   (318)
    Prepaid expenses and other current assets                                                                      411
    Other assets                                                                                                   292
    Accounts payable and accrued liabilities                                                                   (13,115)
    Other liabilities                                                                                          -
                                                                                                 ---------------------
       Net cash used in operating activities                                                                   (12,959)
                                                                                                 ---------------------
Cash flows from investing activities:
    Additions to property and equipment                                                                           (403)
    Proceeds from Sun Transaction                                                                               25,308
    Advanced to Gores                                                                                           (4,622)
    Proceeds from sale of property and equipment-Other                                                         -
                                                                                                ----------------------
      Net cash provided (used) in investing activities                                                          20,283
                                                                                                ----------------------

Cash flows from financing activities:
    Net (payments) borrowings  under loan
      agreements                                                                                               (25,308)
    Principal payments of long term debt                                                                       -
    Dividends paid on Preferred Stock                                                                          -
    Retirement of Preferred Stock                                                                              -
    Issuance of Common Stock                                                                                   -
                                                                                                ----------------------
      Net cash used in financing activities:                                                                   (25,308)
                                                                                                ----------------------
Effect of exchange rate changes on cash                                                                            (55)
                                                                                                ----------------------
(Decrease) increase in cash and cash equivalents                                                               (18,039)
Restricted cash                                                                                                 12,785
                                                                                                ----------------------
                                                                                                                (5,254)
Cash and cash equivalents, beginning                                                                            14,544
                                                                                                ----------------------
Cash and cash equivalents, ending                                                               $                9,290
                                                                                                ======================
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

The Company has adopted the liquidation basis of accounting as of December 31,
1998 and for all periods subsequent to December 31, 1998. Therefore, no
statements of cash flows for periods subsequent to December 31, 1998 are
presented.

                                       15
<PAGE>

ENCORE COMPUTER CORPORATION
---------------------------
Consolidated Statements of Cash Flows
-------------------------------------

Supplemental disclosure of cash flow information (in thousands):

<TABLE>
<CAPTION>
                                                                                                          1998
                                                                                                -----------------------
<S>                                                                                             <C>
  Cash paid during the year for interest                                                        $                    32

  Cash paid during the year for income taxes                                                    $                   500


Non-cash investing and financing activities:

  Indebtedness exchanged for preferred stock                                                    $              -

  Due to Gould Electronics in connection
    with the sale of asset to Sun                                                               $              -
</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.


The Company has adopted the liquidation basis of accounting as of December 31,
1998 and for all periods subsequent to December 31, 1998. Therefore, no
statements of cash flows for periods subsequent to December 31, 1998 are
presented.

                                       16
<PAGE>

<TABLE>
<CAPTION>
ENCORE COMPUTER CORPORATION
Consolidated Statements of Shareholders' Equity (Capital Deficiency)
------------------------------------------------------------------------------------------------------------------------------------
(in thousands except share data)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                   Preferred Stock
                                                 -----------------------------------------------------------------------------------
                                                      Series A              Series B             Series D             Series E
                                                 -------------------- -------------------- --------------------- -----------------
                                                               Par                  Par                   Par                Par
                                                   Shares     Value     Shares     Value     Shares      Value    Shares    Value
                                                 ----------- -------- ----------- -------- ----------  --------- --------- -------
<S>                                              <C>         <C>      <C>         <C>      <C>         <C>       <C>       <C>
Balance January 1, 1998                               -       $   -           -    $   -           -     $   -          -   $   -

Shares issued through employee stock purchase
    plan at an average price of $0.23 per share

Issuance of Preferred Stock Series B, D, E, F,
    G, H and I accumulated dividends                                     64,905        1     104,190         1    106,501       1

Dividends issued to Preferred  Stockholders
    in shares of Series B, D, E, F, G, H and I                              811        -       1,301         -      1,331       -

Net income
                                                 ------       -----    --------    -----   ---------     -----   --------   -----

Balance December 31, 1998                             -       $   -      65,716    $   1     105,491     $   1    107,832   $   1


Changes in net assets in liquidation
                                                 ------       -----    --------    -----   ---------     -----   --------   -----
Balance December 31, 1999                             -       $   -      65,716    $   1     105,491     $   1    107,832   $   1


Changes in net assets in liquidation

Conversion of Preferred Stock Series B,
  D, E, F, G, H and I to Common Stock                                   (65,716)      (1)   (105,491)       (1)  (107,832)     (1)

                                                 ------       -----    --------    -----   ---------     -----   --------   -----
Balance December 31, 2000                             -       $   -           -    $   -           -     $   -          -   $   -
                                                 ======       =====    ========    =====   =========     =====   ========   =====

<CAPTION>
                                                   --------------------------------------------------
                                                            Series F                 Series G
                                                   -------------------------- ----------------------
                                                                     Par                      Par
                                                      Shares        Value       Shares       Value
                                                   ------------  ------------ -----------  ---------
<S>                                                <C>           <C>          <C>          <C>
Balance January 1, 1998                                    -        $   -            -       $   -

Shares issued through employee stock purchase
    plan at an average price of $0.23 per share

Issuance of Preferred Stock Series B, D, E, F,
    G, H and I accumulated dividends                  49,832            -       53,474           1

Dividends issued to Preferred  Stockholders
    in shares of Series B, D, E, F, G, H and I           622            -          668           -

Net income
                                                    --------        -----     --------       -----

Balance December 31, 1998                             50,454        $   -       54,142       $   1


Changes in net assets in liquidation
                                                    --------        -----     --------       -----
Balance December 31, 1999                             50,454        $   -       54,142       $   1


Changes in net assets in liquidation

Conversion of Preferred Stock Series B,
  D, E, F, G, H and I to Common Stock                (50,454)                  (54,142)         (1)

                                                    --------        -----     --------       -----
Balance December 31, 2000                                  -        $   -            -       $   -
                                                    ========        =====     ========       =====
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                       17
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
                                                            Common Stock
------------------------------------------------- -----------------------------
        Series H                 Series I                                                                            Shareholders'
------------------------- -----------------------                                  Additional                           Equity
                   Par                     Par                          Par          Paid-in        Accumulated       (Capital
    Shares        Value       Shares      Value        Shares          Value         Capital          Deficit        Deficiency)
---------------  -------- -------------- -------- ----------------- -----------   -------------    ------------    ---------------
<S>              <C>      <C>            <C>      <C>               <C>           <C>              <C>             <C>
         -        $   -           -       $   -      67,447,309       $  674      $  427,012       $  (447,332)      $  (19,646)


                                                          3,598            1               -                                  1


    32,702            -      15,180           -                                           (4)                                 -


       408            -         189           -                                           (1)                                (1)

                                                                                                        16,658           16,658
   -------        -----    --------       -----     -----------       ------      ----------       -----------       ----------

    33,110        $   -      15,369       $   -      67,450,907       $  675      $  427,007       $  (430,674)      $   (2,988)


                                                                                                         5,022            5,022
   -------        -----    --------       -----     -----------       ------      ----------       -----------       ----------
    33,110        $   -      15,369       $   -      67,450,907       $  675      $  427,007       $  (425,652)      $    2,034


                                                                                                           486              486

   (33,110)                 (15,369)                 13,295,815          132            (128)

   -------        -----    --------       -----     -----------       ------      ----------       -----------       ----------
         -        $   -           -       $   -      80,746,722       $  807      $  426,879       $  (425,166)      $    2,520
   =======        =====    ========       =====     ===========       ======      ==========       ===========       ==========
</TABLE>

                                       18
<PAGE>

Notes to Consolidated Financial Statements

A.   Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations
Encore Computer Corporation ("Encore" or the "Company"), founded in 1983,
designed, manufactured, distributed and supported scalable real-time data
systems and advanced clustering technologies. Headquartered in Fort Lauderdale,
Florida, the Company had sales offices and distributors in the United States,
Canada, Europe, and the Far East.

Intention of Liquidation
During fiscal 1997, Encore Computer Corporation ("Encore" or the "Company") sold
substantially all of its storage products business assets to Sun Microsystems,
Inc. ("Sun"). Furthermore, during fiscal 1998, the Company sold its real-time
computer systems business to Gores Technology Group. After these transactions,
management contemplated that the Company would be liquidated. However, because
of a provision of the agreements relating to Encore's sale of its storage
products business to Sun, Encore's stockholders could not vote on the
liquidation of Encore at the meeting on September 11, 1998, at which they
approved the sale of the real-time computer systems business. The Board of
Directors terminated the employment of the Company's President on September 30,
1998 and the employment of the Company's Chief Executive Officer on November 24,
1998 in view of the fact that the Company no longer had any active business. The
Company's staff was reduced to its General Counsel, who took the position of
President, its Chief Financial Officer, its Vice President of Human Resources
(who continued to be involved in employee compensation matters arising out of
the sales of the storage products and the real-time computer systems businesses)
and a few clerical and administrative employees. The Company also moved its
offices to a substantially smaller space, which it occupied under a short-term
lease. Those offices were closed on or about June 30, 1999, and the Company's
further activities are conducted in space provided by Gould Electronics Inc.
("Gould") in Eastlake, Ohio. Management expects that liquidation of the Company
will occur. As a result, the Company has adopted the liquidation basis of
accounting as of December 31, 1998 and for all periods subsequent to December
31, 1998.

The assets of the Company available for distribution to shareholders on
liquidation of Encore would be (i) the Company's assets, less its liabilities,
at December 31, 2000, plus or minus (ii) any sum by which the amount received
from Gores is greater or less than the carrying value on the Company's December
31, 2000 statement of net assets in liquidation, plus or minus (iii) any amount
by which severance and other costs related to the sale of the Company's
businesses are less or greater than the accruals for them on the December 31,
2000 statement of net assets in liquidation, plus or minus (iv) any amounts by
which the costs of liquidation and costs related to contingent liabilities,
including pending litigation, are less or greater than the reserves reflected on
the December 31, 2000 statement of net assets in liquidation, minus (v) expenses
incurred after December 31, 2000 which have not been contemplated in the
accruals.

Under the liquidation basis of accounting, assets are stated at their estimated
net realizable value and liabilities are stated at their estimated amounts.

                                      -19-
<PAGE>

The valuation of assets and liabilities necessarily requires many estimates and
assumptions, and there are substantial uncertainties in liquidating the Company.
The valuations presented in the accompanying Statement of Net Assets in
Liquidation represent estimates, based on present facts and circumstances, of
the estimated realizable values of assets, estimated liabilities and estimated
costs associated with carrying out the liquidation of the Company. The actual
values and costs could be higher or lower than the amounts recorded as of
December 31, 2000.

Accounts payable and accrued liabilities as of December 31, 2000 include
estimates of costs to be incurred in carrying out the liquidation of the
Company. The actual costs could vary significantly from the related provisions
due to uncertainty related to the length of time required to liquidate the
Company and complexities and contingencies.

The Company provided employees with salary continuation in the event of an
employee's involuntary termination. The Company recorded the estimated cost of
post-employment benefits at the date of the event, giving rise to the liability
to pay those benefits. The salary continuation costs amounting to approximately
$1,629,000 are included in the 1998 consolidated statement of operations. There
were no salary continuation costs in fiscal 2000 or 1999.

Principles of Consolidation
The accompanying financial statements include the accounts of Encore and its
wholly owned subsidiaries. All material intercompany transactions have been
eliminated.

Cash and Cash Equivalents
Cash equivalents consist of highly liquid investments with maturities at the
date of purchase of three months or less.

Revenue Recognition
Revenue related to equipment and software sales was recognized upon shipment.
With respect to the Company's storage product line, during the product
introductory period, revenue was recognized upon customer acceptance. The
Company expected acceptance to occur within thirty days of shipment. Service
revenue was recognized over the term of the related maintenance agreements,
which approximated the timing of services performed.

Inventories
Inventories were stated at the lower of cost or market. Cost was determined by
the first-in, first-out method. Loaned equipment, which consisted primarily of
finished computer systems that were loaned to customers for test and evaluation
was classified as inventory only if the equipment was intended for resale and
anticipated to be in service for a period of less than 12 months prior to sale.
Loaned equipment in service for more than 12 months was classified as property
and equipment.

Property and Equipment
Property and equipment was stated at cost. Property and equipment included
customer service inventory, which consisted principally of spare parts utilized
to support repairs at customer installations and was generally not available for
resale. Additions, renewals and improvements were capitalized, and repair and
maintenance costs were expensed. Upon an asset retirement or disposition, the
cost and related accumulated depreciation were removed from the accounts and any
resulting gain or loss was reflected in the results of operations. Depreciation
was provided on a straight-line basis over the estimated lives of the assets,
generally three years for loaned equipment, five years for equipment and
customer service inventory, ten years for furniture and fixtures, and 25 to 30
years for buildings. Leasehold improvements were amortized over their expected
useful lives or the lease term, whichever was shorter.

                                      -20-
<PAGE>

Stock-Based Compensation
The Company applied APB Opinion No. 25 and related Interpretations in accounting
for its stock option and stock purchase plans. Accordingly, no compensation cost
was recognized for these plans with the exception of extension of the expiration
date of certain individual stock option grants. Pro forma disclosure of the fair
value impact on earnings and earnings per share as required in FAS 123,
"Accounting for Stock-Based Compensation" is presented in Note J of the Notes to
Consolidated Financial Statements.

Income Taxes
The Company utilized the liability method of accounting for deferred income
taxes. Under this method, deferred tax assets and liabilities were determined
based on the difference between the financial statement and tax bases of assets
and liabilities using enacted tax rates in effect for the year in which the
differences were expected to reverse. Deferred tax assets were reduced by a
valuation allowance when, in the opinion of management, it was more likely than
not that some or all of the deferred tax assets would not be realized.

Earnings Per Share
Basic earnings per common share calculations are determined by dividing earnings
available to common shareholders by the weighted average number of shares of
common stock outstanding during the year. Diluted earnings per common share
calculations are determined by dividing earnings available to common
shareholders by the weighted average number of shares of common stock and
dilutive common stock equivalents outstanding.

Preferred stock dividends amounted to $533,000 for 1998. All preferred stock
dividends were paid in additional shares of the appropriate class of preferred
stock.

Foreign Currency Translation and Transactions
Management determined that the functional currency of each of the Company's
subsidiaries was the United States dollar. Consequently, assets and liabilities
of foreign operations were translated into U.S. dollars at period end exchange
rates, except that inventory and property and equipment were translated at
historical exchange rates. Income and expenses were translated at the average
rates prevailing during the year, except that cost of sales and depreciation
were translated at historical exchange rates. All gains and losses arising from
changes in exchange rates were included in operating results in the period
incurred.

Warranties
The Company provided a standard product warranty on its real-time computer
systems for parts and labor, which generally extended ninety days from the date
of installation, but on certain products for up to one year. Gores assumed all
warranty obligations relating to the Company's installed real-time product base.
On its storage product line, the standard product warranty for parts and labor
generally extended two, and in some cases, three years from the date of
installation. Sun assumed all warranty obligations relating to the Company's
installed storage product base. The estimated cost of providing warranty on
products sold was included in cost of sales at the time revenue was recognized.
These estimates were based upon historical data for mature products and
engineering estimates for new products. Actual warranty costs were reviewed on a
quarterly basis and subsequent estimates adjusted appropriately. Management does
not expect any significant losses from product warranties in the future.

                                      -21-
<PAGE>

B.   Asset Purchase Agreement with Sun Microsystems

On November 24, 1997, the Company sold substantially all the assets associated
with its storage products business to Sun Microsystems, Inc. ("Sun"). The Asset
Purchase Agreement under which the transaction took place contemplated that Sun
would pay $185 million for the storage products business, of which $150 million
would be paid in cash at the closing and $35 million would be paid on July 1,
1998, subject to Sun's right to make offsets against the second payment. In
fact, because of certain closing adjustments, Sun paid Encore $151,168,227 at
the closing.

In connection with the sale of Encore's storage product business to Sun, Gould
also entered into an agreement with Sun under which Gould guaranteed most of
Encore's obligations under the Asset Purchase Agreement between Encore and Sun,
agreed to provide whatever funds were necessary to ensure that Encore would not
become insolvent within one year after the closing of the transaction with Sun,
and indemnified Sun against any losses Sun might incur if the sale of Encore's
storage products business to Sun were challenged in an insolvency proceeding
relating to Encore commenced within two years after the closing.

Shortly before July 1, 1998, Sun asserted claims against Encore totaling
$9,692,000. Because of that, on July 1, 1998, Sun paid only $25,308,000 of the
$35,000,000, which was due on that date. On July 16, 1999, Sun and Encore
entered a Settlement Agreement and Mutual Release pursuant to which Sun paid
$2,500,000 to Gould as a settlement for the receivable and Sun released these
claims. Sun did not release Gould's other indemnification obligations related to
Encore's obligations under the Asset Purchase Agreement.

On November 24, 1997, Gould held (i) notes, secured by all of Encore's assets,
under which Encore owed Gould $93.55 million for money Encore had borrowed from
Gould plus unpaid interest, and (ii) convertible preferred stock of Encore with
a liquidation preference totaling $411 million, which Encore had issued to Gould
between 1991 and 1996 in exchange for cancellation of indebtedness for money
Encore had borrowed from Gould and interest on those borrowings. In addition,
Gould held approximately 48.44% of Encore's common stock, which Gould had
obtained as part of the consideration for the sale of its Computer Systems
Division to Encore in 1989 or through conversion of convertible preferred stock.
In connection with the sale of Encore's storage products business to Sun, Encore
and Gould agreed that Encore would redeem all the convertible preferred stock
which Gould held for $60 million, of which $25 million was to be paid at the
closing of the Sun transaction, and the balance was to be satisfied with the
second payment due from Sun. In addition, Gould agreed that if it received the
entire $35 million by July 31, 1998, Gould would waive its right to receive
additional shares of preferred stock with a liquidation preference of
approximately $43 million, which were due to it as past-due dividends on the
convertible preferred stock which was being redeemed.

Finally, Gould agreed that if Encore were liquidated before November 24, 1999,
Gould would waive any right it had as a holder of Encore's common stock with
regard to the first $30 million of liquidating distributions made to Encore's
common stockholders.

Because Sun withheld $9,692,000 of the payment due on July 1, 1998, Encore
remained obligated to Gould in that amount and had to either pay that amount to
Gould out of its own funds by July 31, 1998 or issue to Gould the over-due
dividend shares of convertible preferred stock, which had a liquidation
preference of $42,678,400. However, in order to give Encore more time to attempt
to resolve Sun's claims, Gould agreed that if Encore issued those dividend
shares to it, Gould would give Encore the option to repurchase the dividend
shares on or before July 31, 1999 for an amount

                                      -22-
<PAGE>

equal to the balance of the $9,692,000 which remained unpaid ($7,192,000 after
the payment of $2,500,000 received on July 16, 1999) plus interest at 8.5% per
annum from August 1, 1998.
Encore then issued the dividend shares to Gould. On July 31, 1999, Gould
extended Encore's option to repurchase the dividend shares to October 30, 1999;
Gould subsequently extended Encore's option to December 15, 1999, when it
expired.

On December 30, 1999, the Company paid $7,192,000 to Gould to settle its
obligation for the amounts withheld by Sun, and Gould, among other things,
agreed to convert the dividend shares into common stock and agreed that if
Encore were liquidated before November 24, 2000, Gould would waive any right it
had as a holder of Encore's common stock with regard to the first $30 million of
liquidating distributions made to Encore's common stockholders. Additionally,
Gould agreed to indemnify Encore for any obligations it might incur to indemnify
its current and future directors, up to a total of $7,192,000. On January 20,
2000, Gould converted its convertible preferred stock to 13,295,815 shares of
common stock.

C.   Sale to Gores Technology Group

When the Company completed the sale of its storage products business, the Board
of Directors decided that, at least until the Board's January 1998 meeting, the
Company should (a) explore the possibility of attempting to develop and market
clustering software related to Windows NT(R) and (b) explore the feasibility of
the Company's continuing, and attempting to expand, its real-time computer
systems business. In January 1998, the Board of Directors (i) decided the
Company should discontinue its efforts to develop clustering software relating
to Windows NT and (ii) authorized the Company to retain an investment banker to
try to find a purchaser for the real-time computer systems business.

On March 2, 1998, the Company signed a non-binding letter of intent to sell its
real-time computer systems business to Gores Technology Group ("Gores") for
approximately $5.5 million, based on an estimated December 31, 1997 balance
sheet for that business. On June 4, 1998, the Company and Gores entered into a
definitive agreement for the Company to sell the real-time business to Gores for
$3 million in cash. The reduction in price from that contemplated in the letter
of intent reflected operating results during the first quarter of 1998 and
differences between the estimated December 31, 1997 balance sheet and the actual
balance sheet at March 29, 1998.

At the same time the Company entered into the agreement to sell its real-time
computer systems business to Gores, the Company entered into a management
agreement under which Gores took over management of the real-time computer
systems business, retaining any positive cash flow and bearing any negative cash
flow, but receiving a management fee of $100,000 per month, which was to be
refunded to Encore upon closing of the sale of the real-time computer systems
business to Gores. Encore provided a $2 million line of credit to Gores to fund
its operation of the real-time computer systems business until the closing.

The sale of the real-time computer systems business to Gores was approved by the
Company's stockholders on September 11, 1998, and the transaction was completed
on January 6, 1999. At the closing of the sale, the Company received $2,750,000
(with the additional $250,000 set off against the purchase price to resolve an
alleged breach of indemnity claim) and the parties agreed to resolve shortly
after the closing disputed items relating to the sale, including the amounts due
to Encore under the management agreement and the line of credit, and certain
other indemnity claims by Gores. On August 10, 2000, the Company reached an
agreement in principle to resolve such items. In connection with the agreement,
Encore and Gores agreed to reduce the principal balance of the receivable by (1)
$96,000 relating to an uncollectible note receivable purchased by Gores in the
acquisition of the real-time business and (2) $150,000 for expenses incurred in
the negotiation of this settlement. As a result, the receivable balance due to
Encore was $2,979,000.

                                      -23-
<PAGE>

In order to reduce this balance, Gores agreed to make payments on Encore's
behalf relating to the closing of certain foreign offices. Such payments include
lease termination fees and payment of taxes. During fiscal 1999, Gores paid
$35,000 relating to the termination of Encore's Belgium office lease. As a
result, the outstanding balance of the receivable was $2,944,000 as of December
31, 1999.

Subsequent to December 31, 1999, Gores paid approximately $1,845,000 relating to
lease termination costs and a tax settlement. After these payments, the
receivable balance amounted to $1,098,000. Gores agreed to make cash payments
for the remainder of the receivable balance. In August and October 2000, Encore
received payments totaling $500,000 toward the receivable balance. In February
2001, the Company received the remaining $598,000 plus an additional $16,000.
Certain disputed items remain, including reimbursement by Gores of amounts
received pursuant to a lease termination and indemnification claim by Gores
relating to contracts assumed in the acquisition of the real time business.

                                      -24-
<PAGE>

D.   Property and Equipment

Depreciation expense in 1998 amounted to $736,000. Fixed assets with a net book
value of approximately $27,148,000 and $595,000 were sold to Sun Microsystems
and Gores Technology Group, respectively. There are no fixed assets as of
December 31, 2000 or 1999.

                                      -25-
<PAGE>

E.   Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of the following (in
thousands):

                                               December 31,         December 31,
                                                   2000                 1999
                                                   ----                 ----
         Accrued restructuring costs               $150               $3,750
         Accrued liquidation costs                  500                1,250
                                                   ----               ------
                                                   $650               $5,000
                                                   ====               ======


F.   Income Taxes

The Company utilized the liability method of accounting for deferred income
taxes and recorded a provision of $1,903,000, for the year ended 1997. There was
no taxable income for the years ended December 31, 2000, 1999 and 1998.

The significant components of the deferred tax assets and liabilities as of
December 31, 2000 and 1999 were as follows (in thousands):

                                                   December 31,     December 31,
                                                       2000             1999
                                                   ------------     ------------
Deferred tax assets:
    Net operating losses                              $ 143,849       $ 143,477
    Research and experimental credits                     2,272           2,272

    Accrued restructuring                                 1,316           1,900
                                                          -----           -----
                                                        147,437         147,649
Valuation allowance                                    (147,437)       (147,649)
                                                   ------------    ------------

    Net                                               $      -0-             -0-
                                                   ============    ============


For income tax purposes the Company had a change in ownership, as defined by
Internal Revenue Code Section 382, in connection with the Gould debt exchange on
January 28, 1991. The change in ownership resulted in an annual limitation of
approximately $2,000,000 on the amount of net operating losses incurred prior to
January 28, 1991 that can be utilized to offset the Company's future taxable
income. At December 31, 1997, the Company utilized approximately $14,000,000 of
the available pre change net operating losses.

                                      -26-
<PAGE>

At December 31, 2000, the Company has available approximately $50,000,000 of pre
change net operating losses. Of this amount, a maximum of approximately
$16,000,000 will be allowable in future years after application of the Section
382 limitation. In addition, pre change tax credit carryforwards, principally
research and development credits, of approximately $1,750,000, AMT credits of
$522,000 and post change net operating losses of $279,900,000 will be available
to offset future taxable income. These net operating losses and tax credit
carryforwards expire in the years 1999 through 2020. Future changes in share
ownership could result in another Section 382 limitation. For financial
reporting purposes, the full amount of the deferred tax assets was offset by a
valuation allowance due to uncertainties associated with the eventual
realization of such benefits.


G.   Contingencies

Litigation

Shortly before the Sun Transaction was closed, shareholders of the Company
brought a derivative suit in the Delaware Chancery Court against Gould and the
Company's then directors, C. David Ferguson, Robert Fedor, Rowland Thomas and
Kenneth Fisher. Three similar shareholder suits were also filed and all four
suits have been consolidated as Civil Action #16044, In Re Encore Computer
                                                     ---------------------
Corporation Shareholders Litigation. The shareholders filed an amended complaint
-----------------------------------
adding directors Michael Veysey and Thomas Rich as defendants and eliminating
the Company as other than a nominal defendant. The defendants moved for summary
judgement and that motion was granted on June 16, 2000. Two of the Plaintiffs
filed a notice of appeal to the Delaware Supreme Court. Although the Company is
not a party to the litigation, the Company has indemnified its officers and
directors against liability for matters such as those which are the subject of
the litigation. Nonetheless, the Company does not believe the shareholder suit
will have a significant financial impact on the Company.

Intellectual Property License

In conjunction with the Sun Transaction, Sun and Encore entered into a
Technology License Agreement pursuant to which Sun granted to Encore a
non-exclusive, non-transferable, royalty free, worldwide license in the
intellectual property sold to Sun as part of the storage products business to
create and distribute real-time products based on the intellectual property for
use by Encore in its real-time business, subject to certain limitations, but not
for any other purpose. Encore also agreed not to use the intellectual property
in any storage products or to compete with Sun's storage products business, and
to grant to Sun a non-exclusive, royalty-free, paid up, non-terminable,
worldwide license in any derivative works created by Encore derived from the
intellectual property, so long as Sun does not use this grant back license to
create or distribute real-time products.

                                      -27-
<PAGE>

H.   Earnings Per Share

The following table reconciles for the year ended 1998, net income (loss) and
weighted average shares outstanding used to calculate basic and diluted earnings
(loss) per share (in thousands except per share data):

Basic                                                                    1998
-----                                                                    ----
Net income (loss)                                                      $16,658

Series B, D, E, F, and G Preferred Stock Dividends                         ---

Series B, D, E, F, G, H, and I Preferred Stock Dividends                  (533)
                                                                       -------

Net income (loss) attributable to common shareholders                  $16,125
                                                                       =======

Weighted average common shares outstanding                              67,451
                                                                       -------

Basic income (loss) per common share                                      0.24
                                                                       =======

                                      -28-
<PAGE>

Diluted                                                                  1998
-------                                                                  ----

Net income (loss)                                                      $16,658
Weighted average common shares outstanding                              67,451

Series A assumed converted                                                ----
Series B assumed converted                                               2,022
Series D assumed converted                                               3,246
Series E assumed converted                                               3,318
Series F assumed converted                                               1,552
Series G assumed converted                                               1,666
Series H assumed converted                                               1,019
Series I assumed converted                                                 473

Exercise of options reduced by the number
  of shares purchased with proceeds                                     ------
                                                                          ----

Weighted average shares outstanding                                     80,747
                                                                        ======

Diluted income (loss) per common share:                                   0.21
                                                                        ======


I.   Capital Stock

Stock Compensation Plan

At December 31, 1998, the Company had a Long Term Performance Plan (the
"Performance Plan"), which was approved by the shareholders of the Company on
June 27, 1995 and replaced all previous stock option plans. Shares of common
stock were reserved for issuance to officers, directors, ___ employees and
certain consultants. The Company applies APB Opinion No. 25 and related
Interpretations in accounting for its plan. Accordingly, no compensation cost
has been recognized for its fixed stock option plan or its stock purchase plan.
Had compensation cost for the Company's stock based compensation plan been
determined based on the fair value at the grant dates for awards under the plans
consistent with the method of FASB Statement 123, the Company's 1998 net income
(loss) and income (loss) per share would have been reduced to the pro forma
amounts indicated below:
                                                                 1998
                                                                 ----

      Net income              As reported                      $16,658
                              Pro forma                        $16,438

      Income per share        As reported                      $  0.24
                              Pro forma                        $  0.24

The fair value of each option grant was estimated on the date of grant using the
Black-Scholes option-pricing model with the following assumptions for 1998:
risk-free interest rates of 5.625 percent; dividend yield of 0 percent; expected
life of 4 years; and volatility of 234.6 percent.

                                      -29-
<PAGE>

A summary of the status of the Company's stock options as of December 31, 2000,
 1999 and 1998 and changes during the years ending on those dates is presented
                                     below:


<TABLE>
<CAPTION>
                                            2000                 1999                   1998
                                     -----------------    ------------------     ------------------
                                              Weighted              Weighted               Weighted
                                               Average               Average                Average
                                     Shares   Exercise    Shares    Exercise     Shares    Exercise
                                      (000)     Price      (000)      Price       (000)      Price
                                     -----------------    ------------------     ------------------
<S>                                  <C>      <C>         <C>       <C>          <C>       <C>
Outstanding at beginning
  of year                             1,929     $2.09      4,918      $1.56       9,020      $1.62

Forfeited                            (1,100)    $1.67     (2,989)     $0.94      (4,102)     $2.09
                                     ------               ------                 ------

Outstanding at end of year              829     $2.65      1,929      $2.09       4,918      $1.56
                                     ======               ======                 ======

Options exercisable at year end         805                1,929                  4,894
                                     ======               ======                 ======
</TABLE>

The following table summarizes information about stock options outstanding at
December 31, 2000:

<TABLE>
<CAPTION>
                             OPTIONS OUTSTANDING                                         OPTIONS EXERCISABLE
------------------------------------------------------------------------------    -----------------------------------

                                               Weighted
                                                Average           Weighted                                Weighted
                            Number             Remaining          Average               Number            Average
     Range of           Outstanding as        Contractual         Exercise          Exercisable as        Exercise
Exercise Prices           of 12/31/00             Life             Price              of 12/31/00          Price
--------------------   ------------------   -----------------  ---------------    --------------------  -------------
<S>                    <C>                  <C>                <C>                <C>                   <C>

    $1.56-$2.88                  543,719          1.39                $1.9963                 519,611        $1.9963
    $3.56-$3.97                  285,525          3.33                $3.8716                 285,525        $3.8716
                       -----------------                                          -------------------

    $1.56-$3.97                  829,244          1.32                $  2.65                 805,136        $  2.65
                       =================                                          ===================
</TABLE>

                                      -30-
<PAGE>

Employee Stock Purchase Plan

Under the 1991 Employee Stock Purchase Plan (the "Purchase Plan"), the Company
was authorized to issue up to 8,000,000 shares of common stock to its full-time
employees. As of December 31, 2000, 4,614,432 shares had been purchased. Under
the terms of the Purchase Plan, employees could choose each year to have up to
10 percent of their annual base earnings withheld to purchase the Company's
common stock. The purchase price per share of common stock in any offering under
the Purchase Plan was the lower of; (i) 85% of the closing price per share of
common stock on the commencement of the offering, or (ii) 85% of the closing
price of a share of common stock on the termination of the offering. Each
offering was for a period of approximately six months. The percentage of
employees participating in the plan was 1% in 1998. Under the Purchase Plan, the
Company issued 3,598 shares at a price of $.23 in 1998. The employee stock
purchase plan was discontinued on May 22, 1998. Pro forma compensation cost is
recognized for the fair value of the employees' purchase rights, which was
estimated using the Black-Scholes model with the following assumptions for 1998:
dividend yield of 0 percent; expected life of six months; expected volatility of
234.6%; and risk-free interest rate of 5.6%. For 1998, the pro forma
compensation cost under the Purchase Plan was $0.


J. Segment Information

Prior to January 1999, the Company operated in a single industry segment which
includes developing, manufacturing, marketing, installing and servicing business
information processing systems, principally in the United States, Europe, the
Far East, and Canada. During 1998, one of the Company's customers accounted for
approximately 16% of its sales. However, in fiscal 1998, approximately 40% of
its sales were derived either directly or indirectly from various United States
government agencies.

                                      -31-
<PAGE>

The Company maintained operations in Europe and Canada principally through
consolidated subsidiaries. Far East operations were conducted through
distributors throughout the region and until December 5, 1997, a joint venture
in Japan. Information by geographic region about the Company's operations for
1998 is presented below (in thousands). Inter-geographic net sales, operating
income and assets have been eliminated to arrive at the consolidated amounts.

<TABLE>
<CAPTION>
                            Net Sales             Inter-                              Operating
                           to Unrelated         Geographic           Total              Income            Identifiable
                             Entities           Net Sales          Net Sales            (Loss)               Assets
                       ---------------------------------------------------------------------------     ----------------
<S>                    <C>                  <C>                <C>                <C>                  <C>
1998:
United States          $          11,400    $          776     $      12,176      $       (7,810)      $      13,659
Europe                             8,850                 -             8,850                 354               3,089
Other                                185                 -               185                (126)                  5
                       ------------------   ----------------   ----------------   ----------------     ----------------
Geographic Total                  20,435               776            21,211              (7,582)             16,753
Inter-Geographic                       -              (776)             (776)                108                   -
                       ------------------   ----------------   ----------------   ----------------     ----------------
Total                  $          20,435    $            -     $      20,435      $       (7,474)      $      16,753
                       ==================   ================   ================   ================     ================
</TABLE>

Inter-geographic net sales were recorded principally at 60% of list price;
however, inter-geographic net sales of the Company's storage processor product
line were recorded at 85% of end selling price. Identifiable assets were all
assets, including corporate assets, identified with operations in each region.


K. Financial Instruments

Concentrations of Credit Risk
Financial instruments that potentially subject the Company to concentrations of
credit risk are limited to cash. The Company maintains its cash in bank deposit
accounts which, at times, may exceed federally insured limits. The Company has
not experienced any losses in such accounts.

While it was engaged in business, the Company granted credit terms in the normal
course of business to its customers, which were consistent with industry
practices. Generally, the Company's customers were United States government
agencies or substantial international corporations often included among the
Fortune 500. Additionally, as part of its ongoing control procedures, the
Company monitored the credit worthiness of its major customers and established
individual customer credit limits accordingly. The Company performed in-depth
credit evaluations for all new customers and required letters of credit if
deemed necessary. Doubtful accounts were adequately reserved when identified and
bad debts realized by the Company in prior years have not been excessive.

                                      -32-
<PAGE>

Item 9 Changes in and Disagreements with Accountants on Accounting and Financial
--------------------------------------------------------------------------------
Disclosure.
----------

Not Applicable.

Item 10 Directors and Executive Officers of the Company

The names of the Company's Directors and certain information about them are set
forth below:

Kenneth G. Fisher, age 70

Mr. Fisher was a founder of the Company and has served as a Director, Chairman
and Chief Executive Officer of the Company since the Company's inception in May
1983. He was the Company's President from its inception until December 1985 and
also served in that capacity from December 1987 to January 1991. In November of
1998, Mr. Fisher was terminated as Chief Executive Officer of the Company. From
January 1982 until May 1983, Mr. Fisher was engaged in private venture
transactions. From 1975 to 1981, Mr. Fisher was President and Chief Executive
Officer of Computervision (formerly Prime Computer, Inc.). Before joining
Computervision, Mr. Fisher was Vice President of Central Operations for
Honeywell Information Systems. Inc.

Rowland H. Thomas, age 65

Mr. Thomas has been a member of the Board of Directors since December 1987 and
Chief Operating Officer since June 1989. He also served as President of the
Company from January 1991 until September 1998. From June 1989 to January 1991,
Mr. Thomas served as Executive Vice President of the Company. In January 1988,
he was named President and Chief Executive Officer of Netlink Inc. Prior to
joining Netlink, Mr. Thomas was Senior Executive Vice President of National Data
Corporation ("NDC"), a transaction processing company, a position he held from
June 1985 to January 1988. From May 1983 through June 1985, Mr. Thomas was
Executive Vice President and Senior Vice President at NDC.

Robert J. Fedor, age 60

Dr. Fedor has been a member of the Board of Directors since July 1992. He is
presently Senior Vice President Corporate Development Gould, a position he has
held since July 1992. From December 1989 to July 1992 he was Vice President,
Corporate Business Development at Gould. Prior to assuming that position, Dr.
Fedor was General Manager of Gould's U.S. and Far East Foil Business since 1985.
Since joining Gould in 1964, he has served in various senior marketing and
research positions. Dr. Fedor holds a Ph.D. in Metallurgical Engineering from
Case Western Reserve University.

C. David Ferguson, age 60

Mr. Ferguson has been a member of the Board of Directors since April 1989. He is
presently the President and Chief Executive Officer and a director of Gould, a
position he has held since October 1988. Prior to such time, he served as
Executive Vice President, Materials and Components, at Gould's Foil Division
from 1986 until October 1988. He transferred to the Foil Division in 1967 from
the Gould Engine Parts Division where he began his career in 1963.

                                      -33-
<PAGE>

Thomas N. Rich, age 49

Mr. Rich has been a member of the Board of Directors since November 1997 and was
named Treasurer of Encore in March 1999. He is also presently Vice President-
Finance and Corporate Controller at Gould, a position he has held at Gould since
July 1994. From December 1991 until July 1994, he was Vice President-Corporate
Controller at Gould. Prior to assuming that position, Mr. Rich was Vice
President-Financial Controller since joining Gould in July 1990. From 1973
through June 1990, Mr. Rich was employed at Ernst & Young, an international
professional services firm. He holds a B.A. degree in Accounting from Duke
University.

Michael C. Veysey, age 57

Mr. Veysey has been a member of the Board of Directors since November 1997. He
is presently Senior Vice President, General Counsel and Secretary at Gould, a
position he has held since July 1992. He also serves as President of Encore
since March 1999. From January 1989 to July 1992, he was Vice President, General
Counsel and Secretary at Gould. Prior to assuming that position, Mr. Veysey had
held various positions in Gould's Law Department since 1980. Mr. Veysey holds a
J.D. degree from Boston College Law School.


Item 11  Executive Compensation

Encore did not pay any compensation to Mr. Veysey or Mr. Rich in 2000 or 1999.


REPORT ON EXECUTIVE COMPENSATION

Since June 1999, all the Company's officers have been employees of Gould, who
served without compensation from the Company.


DIRECTORS' COMPENSATION

The Board of Directors has fixed the compensation of non-officer directors at
$2,500 per regular board meeting attended. No compensation is paid for special
meetings held by telephone conference. Everyone who was a director during 2000
and 1999 waived payment of fees for attendance at board meetings.

                                      -34-
<PAGE>

Item 12 Security Ownership of Certain Beneficial Owners and Management


PRINCIPAL STOCKHOLDERS

The following table sets forth, to the best knowledge of the Company, the
beneficial owners of 5% or more of the Company's outstanding Common Stock and
equivalents as of December 31, 2000:

                                      Shares                  Percentage of
Name and Address of                Beneficially                Common Stock
Beneficial Owner                       Owned                   Outstanding
----------------                       -----                   -----------

Gould Electronics Inc.              45,968,984                    56.93%
34929 Curtis Blvd.
Eastlake, OH 44095

Japan Energy Corporation            45,968,984                    56.93%
10-1, Toranmon 2-chome,
Minato-ko, Tokyo, JAPAN

Kenneth G. Fisher (1)                5,057,708                     6.26%
7786 Wiles Road
Coral Springs, FL 33067

   (1)  Includes 53,764 shares owned by Mr. Fisher's wife.


Item 13  Certain Relationships and Related Transactions

From 1989 through November 1997, Gould (which is a wholly owned subsidiary of
Japan Energy Corporation) had been the principal source of the Company's
financing. During that period, the Company borrowed a total of $418 million from
Gould and its affiliates. Encore had invested most of this in research and
development. However, despite its efforts, Encore was unable to penetrate the
marketplace for storage products and sales of its real-time computer systems
declined significantly. By mid-1997 Gould had made it clear that it would not
provide further financing to Encore, other than working capital to keep the
storage products business operating for a short period until a pending sale
could be completed.

On November 24, 1997, Gould held (i) notes, secured by all of Encore's assets,
under which Encore owed Gould $93.55 million for money Encore had borrowed from
Gould plus unpaid interest, and (ii) convertible preferred stock of Encore with
a liquidation preference totaling $411 million, which Encore had issued to Gould
between 1991 and 1996 in exchange for cancellation of indebtedness for money
Encore had borrowed from Gould and interest on those borrowings. In addition,
Gould held approximately 48.44% of Encore's common stock, which Gould had
obtained as part of the consideration for the sale of its Computer Systems
Division to Encore in 1989 or through conversion of convertible preferred stock.
In connection with the sale of Encore's storage products business to Sun, Encore
and Gould agreed that Encore would repay the secured notes and unpaid interest
thereon and redeem all the convertible preferred stock which Gould held for $60
million, of which $25 million was to be paid at the closing of the Sun
transaction, and the balance was to be satisfied with the second payment due
from Sun. In addition, Gould agreed that if it

                                      -35-
<PAGE>

received the entire $35 million by July 31, 1998, Gould would waive its right to
receive additional shares of preferred stock with a liquidation preference of
approximately $43 million which were due to it as past-due dividends on the
convertible preferred stock which was being redeemed. Finally, Gould agreed that
if Encore were liquidated before November 24, 1999, Gould would waive any right
it had as a holder of Encore's common stock with regard to the first $30 million
of liquidating distributions made to Encore's common stockholders.

In connection with the sale of Encore's storage products business to Sun, Gould
also entered into an agreement with Sun under which Gould guaranteed most of
Encore's obligations under the Asset Purchase Agreement between Encore and Sun,
agreed to provide whatever funds were necessary to ensure that Encore would not
become insolvent within one year after the closing of the sale to Sun, and
indemnified Sun against any losses Sun might incur if the sale of Encore's
storage products business to Sun were challenged in an insolvency proceeding
relating to Encore commenced within two years after the closing.

Because Sun withheld $9,692,000 of the payment due on July 1, 1998, Encore
remained obligated to Gould in that amount and had to either pay that amount to
Gould out of its own funds by July 31, 1998 or issue to Gould the over-due
dividend shares of convertible preferred stock, which had a liquidation
preference of $42,678,400. However, in order to give Encore more time to attempt
to resolve Sun's claims, Gould agreed that if Encore issued those dividend
shares to it, Gould would give Encore the option to repurchase the dividend
shares on or before July 31, 1999 for an amount equal to the balance of the
$9,692,000 which remained unpaid ($7,192,000 after the payment of $2,500,000
received on July 16, 1999) plus interest at 8.5% per annum from August 1, 1998.
Encore then issued the dividend shares to Gould. On July 31, 1999, Gould
extended Encore's option to repurchase the dividend shares to October 30, 1999;
Gould subsequently extended Encore's option to December 15, 1999, when it
expired.

On December 30, 1999, the Company paid $7,192,000 to Gould to settle its
obligation for the amounts withheld by Sun, and Gould, among other things,
agreed to convert the dividend shares into common stock and agreed that if
Encore were liquidated before November 24, 2000, Gould would waive any right it
had as a holder of Encore's common stock with regard to the first $30 million of
liquidating distributions made to Encore's common stockholders.

Subsequent to June 30, 1999, all of the Company's activities (consisting only of
administration of final winding down steps) were moved to Gould's offices in
Eastlake, Ohio, where they have been conducted without charge by Gould
employees.

                                      -36-
<PAGE>

PART IV

Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K
--------------------------------------------------------------------------

(a)1. and (a)2. Index to Financial Statements and Financial Statement Schedules

<TABLE>
<CAPTION>
          Form 10-K                                                        Page Number
          ---------                                                        -----------
          <S>                                                              <C>
          Report of independent certified public accountants relating to
          consolidated financial statements                                    11

          Consolidated Statement of Changes in Net Assets in
          Liquidation for the years ended December 31, 2000 and 1999           12

          Consolidated statement of operations for the year
          ended December 31, 1998                                              13

          Consolidated statements of net assets in liquidation at
          December 31, 2000 and 1999                                           14

          Consolidated statement of cash flows for the year ended
          December 31, 1998                                                 15-16

          Consolidated statement of shareholders' equity (capital
          deficiency) for the years ended December 31, 1998, 1999 and       17-18
          2000.

          Notes to consolidated financial statements                        19-32
</TABLE>

All schedules have been omitted since the required information is not present or
is not present in amounts sufficient to require submission of the schedule, or
because the information required is included in the consolidated financial
statements and notes thereto.

                                      -37-
<PAGE>

(a) Index to Exhibits

The exhibits listed on the accompanying index to exhibits immediately following
the signature page are incorporated herein by reference.


(b) Reports on Form 8-K

None.


UNDERTAKINGS

For purposes of complying with the amendments to the rules governing Form S-8
under the Securities Act of 1933, the undersigned registrant hereby undertakes
as follows, which undertaking shall be incorporated by reference into the
Registrant's Registration Statements on Form S-8 Nos. 33-34171 and 33-33907.

Insofar as indemnification of liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by the appropriate
jurisdiction, litigate the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

                                      -38-
<PAGE>

                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned as the chief accounting officer and an officer of the registrant
thereunto duly authorized.

ENCORE COMPUTER CORPORATION
(Registrant)


By:/s/ Michael C. Veysey                    By:/s/ Thomas N. Rich
   -----------------------------               ------------------------------
   Michael C. Veysey                           Thomas N. Rich
   President                                   Treasurer


June 29, 2001

Pursuant to the requirements of the Securities Exchange 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/ Michael C. Veysey
----------------------------
Michael C. Veysey                    President           June 29, 2001


/s/ Thomas N. Rich
----------------------------
Thomas N. Rich                       Treasurer           June 29, 2001


/s/ C. David Ferguson
----------------------------
C. David Ferguson                    Director            June 29, 2001


/s/ Robert J. Fedor
----------------------------
Robert J. Fedor                      Director            June 29, 2001


/s/ Kenneth G. Fisher
----------------------------
Kenneth G. Fisher                    Director            June 29, 2001


/s/ Rowland H. Thomas, Jr.
----------------------------
Rowland H. Thomas, Jr.               Director            June 29, 2001

                                      -39-
<PAGE>

(a)  Index to Exhibits.
----------------------

The exhibit numbers in the following index correspond to the numbers assigned to
such exhibits in the Exhibit Table of Item 601 of Regulation S-K.

Exhibit No.                              Description
----------                               -----------

   2.1         Asset Purchase Agreement dated as of July 17,1997 among the
               registrant, Encore Computer U.S., Inc., Encore Computer
               International, Inc., Sun Microsystems, Inc. and Sun Microsystems
               International, B.V. (without exhibits), and the Modification
               Agreement thereto dated as of November 24, 1997 (incorporated
               herein by reference to the Company's Form 8-K dated December 9,
               1997).

   2.2         Technology License Agreement entered into between the registrant
               and Sun (incorporated herein by reference to the Company's
               Form 8-K dated December 9, 1997).

   2.3         The respective Inducement Agreements entered into by Gould and
               its affiliates with Sun, and the Gould Modification Agreement
               among such parties (incorporated herein by reference to the
               Company's Form 8-K dated December 9, 1997).

   2.4         June 1998 Agreement with Gould Electronics Inc. regarding Accrued
               Dividend Shares (incorporated herein by reference to the
               Company's Form 10-K for the year ended December 31, 1998)

   2.5         Asset Purchase Agreement among the Company, certain of the
               Company's subsidiaries, Gould Electronics Inc. and the Buyer
               dated as of June 1, 1998 (incorporated herein by reference to the
               Company's Proxy Statement dated August 11, 1998).

   2.6         Amendment Number One to Asset Purchase Agreement dated October
               27, 1998 among the registrant, Encore Computer U.S., Inc., Encore
               Computer International, Inc., Gould Electronics Inc. and Encore
               Acquisition Corp. (incorporated herein by reference to the
               Company Form 8-K dated January 19, 1999).

   2.7         Amendment Number Two to Asset Purchase Agreement dated as of
               December 31, 1998 among the registrant, Encore Computer U.S.,
               Inc., Encore Computer International, Inc., Gould Electronics Inc.
               and Encore Acquisition Corp. (incorporated herein by reference to
               the Company Form 8-K dated January 19, 1999).

   2.8         Reconciliation Agreement dated as of December 31, 1998 among the
               registrant, Encore Computer U.S., Inc., Encore Computer
               International, Inc., Gould Electronics Inc. and Encore
               Acquisition Corp. (incorporated herein by reference to the
               Company Form 8-K dated January 19, 1999).

   3.1         Certificate of Incorporation of the Company, as amended
               (incorporated herein by reference to the Company's Form 10-K for
               the year ended December 31, 1990)

                                      -40-
<PAGE>

     3.1a      Amendment to the Certificate of Incorporation filed with the
               Delaware Secretary of State on March 26, 1992 (incorporated
               herein by reference to Exhibit 3.1a to the Company's Form 10-K
               for the year ended December 31, 1991).

     3.2       By-laws of the Company, as amended (incorporated herein by
               reference to Exhibit 3.2 to the Company's Form 10-K for the year
               ended December 31, 1989).

     3.3       Amendment to the Certificate of Incorporation dated September 30,
               1993 increasing the number of authorized common shares from
               120,000,000 to 150,000,000 (incorporated herein by reference to
               Exhibit 3.3 to the Company's Form 10-K for the year ended
               December 31, 1993).

     3.4       Amendment to the Certificate of Incorporation dated August 8,
               1995 increasing the number of authorized common shares from
               150,000,000 to 200,000,000.

    10.1       The Company's 1983 Incentive Stock Option Plan, as amended
               (incorporated herein by reference to the Company's Form S-8
               Registration Statement No. 33-34171).

    10.2       The Company's 1985 Non-Qualified Stock Option Plan, as amended
               (incorporated herein by reference to the Company's Form S-8
               Registration Statement No. 33-34171).

    10.3       The Company's 1990 Employee Stock Purchase Plan, as amended
               (incorporated herein by reference to the Company's Form S-8
               Registration Statement No. 33-72458).

    10.4       Form of Indemnification Agreement between the Company and its
               executive officers (incorporated herein by reference to Exhibit
               10.4 to the Company's Form 10-K for the year ended December 31,
               1989).

   *22.0       Subsidiaries of the Company




   * Filed herewith.

                                      -41-