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, 1996
                                 
                                OR

      [   ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
              SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
              For the Fiscal Year Ended December 31, 1996

                   
                   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.)

  6901 West Sunrise Boulevard
  Fort Lauderdale, Florida                         33313
 (Address of Principal Executive                   (Zip Code)
           Offices)
                                                                         
   Telephone:  (954) 587-2900

             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 or15(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.  __X__Yes_____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  [X].

Aggregate market value, as of April 12, 1997 of Common Stock held by
non-affiliates of the registrant:  $75,087,914.

The number of shares outstanding of the registrant's only class of Common
Stock as of April 12, 1997 was 37,308,306.

                                               PART OF DOCUMENT
DOCUMENTS INCORPORATED BY REFERENCE:        IN WHICH INCORPORATED

A list of all exhibits to this Form 10-K is on Page 65.


PART I

Item 1   Business

(a)  General Development of Business

Encore   Computer   Corporation  ("Encore"   or   the
"Company"),  founded in 1983, designs,  manufactures,
distributes and supports scalable real-time  systems,
data    storage,   data   retrieval,   and    sharing
technologies    for    mixed   platform    processing
environments.   Headquartered  in  Fort   Lauderdale,
Florida,  the Company sells its products  direct  and
through  distributors in the United  States,  Canada,
Europe and the Far East.

In  1989, Encore acquired the assets and assumed  the
liabilities  of the Gould Electronics  Inc.  Computer
Systems Division (the "Computer Systems Business"), a
business  that  was  significantly  larger  than  the
Company  itself.  Since 1989, Japan Energy Group  and
its  wholly owned subsidiaries, Gould and  EFI,  have
been  the principal source of the Company's financing
by  either  directly  providing or  guaranteeing  the
Company's   loans.   Each  of  the   Company's   debt
agreements  with Japan Energy Group  and  its  wholly
owned  subsidiaries have contained various  covenants
including   maintenance  of  cash   flow,   leverage,
tangible  net  worth ratios, limitations  on  capital
expenditures,   dividend  payments   and   additional
indebtedness.   Currently and at various times in the
past,  the  Company  has been in default  of  certain
covenants  contained  in  the   debt  agreements  but
waivers of compliance with those covenants have  been
obtained and, generally, the Company has been able to
successfully  renegotiate favorable  terms  with  its
creditor.  To continue operating in the normal course
of business, the Company is and will remain dependent
on  the  continued financial support of Japan  Energy
Group  and its subsidiaries.  Until such time as  the
Company    returns   to   a   state   of    sustained
profitability,  Encore  will  be  unable  to   secure
funding from other parties and/or generate sufficient
levels  of cash through operations to meet the  needs
of the business.

Since  the  acquisition, the  Company  has  invested
heavily  in research and  development activities  to
integrate  both  businesses'  technologies  into   a
single,  high  performance open system architecture.
This  effort  has  most  recently  resulted  in  the
announcement and delivery of products  such  as  the
Infinity  SPTM and the Infinity R/TTM.   The  Company
has invested heavily in research and development  of
the  Infinity  SPTM Universal Storage Processor  with
DataShareTM Facilities to establish its presence  in
the   multibillion   dollar   storage   marketplace.
Although  the storage marketplace is new to  Encore,
the  Company believes the Infinity SPTM product will
be a market leader.  From a storage perspective, the
Infinity  SPTM  supports multiple  environments  and
cross platform data sharing between open systems and
mainframe applications.  The Infinity SPTM is  built
around  Encore's  patented Memory Channel/Reflective
Memory   technology.   The  Infinity   SPTM   offers
extremely competitive application, connectivity  and
performance  advantages. In  the  context  of  cross
platform  shared protected storage for open  systems
and   mainframes,  the  Infinity  SPTM   family   of
products are technology leaders.

The  Infinity  SPTM storage systems  were  developed
specifically  for  the information  systems  storage
market.     These   systems   handle   the   complex
requirements of large on-line transaction processing
(OLTP),     including    IBM-compatible     customer
information  control systems (CICS), client  server,
relational  data  base management  systems  (RDBMS),
decision   support  systems  (DSS)  and  interactive
information   networks.   These   applications   are
primarily   found   in   the   banking,   brokerage,
insurance,     airline,    electronic    publishing,
information,  telecommunications and  data  services
industries.

The  newest real-time product is the Infinity R/TTM.
The  performance  features of  the  Infinity  R/TTM,
based  on  scalable system elements, along with  the
Company's  reputation  in real-time  computing  have
captured  the  attention of many of its  traditional
customers.  The Infinity R/TTM has significant price
performance  advantages  in  the  real-time  market.
This,  coupled  with Encore's proprietary  software,
yields  highly deterministic open systems solutions.
These  solutions  range  from  Encore's  traditional
markets  in simulation, energy, and data acquisition
to   newly   developed   market   opportunities   in
transportation and process control.   The  Company's
continued  development  of its  patented  Reflective
Memory R    interconnect   technology,    integration
capabilities  and  "Hard Real-Time"  software  makes
Encore a technology leader.

As  more  fully discussed in Management's  Discussion
and  Analysis of Financial Condition and  Results  of
Operations  and  in Notes B and F  of  the  Notes  to
Consolidated   Financial   Statements,   since    the
acquisition  of  the  Computer Systems  Business  the
Company's  results have been adversely  affected  by;
(i)  a  slower  than  anticipated acceptance  of  the
Company's new open systems technology products in the
information systems marketplace, (ii) the termination
of  a  reseller  agreement between  the  Company  and
Amdahl  Corporation, (iii) continued heavy investment
in   research  and  development of its  open  systems
architecture and (iv)  declining equipment  sales  as
certain   of  the  Company's  traditional   real-time
products  have reached the end of their product  life
cycle.   Total  sales  from the  Company's  new  open
systems  technology products amounted  to  $6,603,000
through December 31, 1996.

Approximately  22%  of  1996  revenues  were  derived
through  sales  to various U.S. government  agencies.
Certain of these agencies, such as the Department  of
Defense, are precluded from awarding contracts  which
require  access to classified information to  foreign
owned or controlled  companies.  The principal source
of both debt and equity financing for the Company has
been provided by Gould Electronics Inc. ("Gould") and
EFI International Inc., wholly owned subsidiaries  of
Japan  Energy Corporation ("Japan Energy"; a Japanese
corporation with $20 billion in annual net sales).

As   of  March  19,  1997,  the  Japan  Energy  Group
beneficially owned 83% of the Company's common  stock
assuming  the  full conversion of all shares  of  its
preferred  stock.   In light of  limitations  on  the
ability  of  certain  U.S.  government  agencies   to
transact  business with foreign owned  or  controlled
companies,  Encore  and the Japan Energy  Group  have
proactively   worked   to  comply   with   all   U.S.
requirements.  In this connection, the  Japan  Energy
Group   has  agreed  to  accept  certain  terms   and
conditions relating to its equity securities  in  the
Company,  including limitations on the voting  rights
of  its shares, limitations on the number of seats it
may  have  on  the  board  of directors  and  certain
restrictions  on  the  conversion  of  its  preferred
shares  into  common stock.  In connection  with  the
recapitalizations and exchanges of debt for Series  H
and Series I Preferred Convertible Stock as discussed
in  more  detail  in  Notes  J  and  M  of  Notes  to
Consolidated Financial Statements, the United  States
Defense  Investigative Service ("DIS")  has  reviewed
the  relationship between the Company and  the  Japan
Energy  Group  under revised government  requirements
relating to foreign ownership, control and influence.
Given   the  current  requirements  in  the  National
Industrial   Security   Program   Operating    Manual
("NISPOM"),  DIS has decided to replace the  previous
method  of negation of Foreign Ownership Control  and
Influence,   accomplished  by   resolution   of   the
Company's  Board of Directors, with a  more  detailed
Security  Control Agreement as prescribed by  DIS  in
the  NISPOM,  which  is currently  being  drafted  by
Encore's counsel.

Encore  is  committed  to  complying  with  all  U.S.
government  requirements regarding foreign  ownership
and  control  of U.S. companies.  At this  time,  the
Company is not aware of any circumstances that  would
adversely  affect  the position previously  taken  by
DIS.   However, should DIS change its opinion of  the
nature of Japan Energy's influence or control on  the
Company,  a  significant  portion  of  the  Company's
future  revenues  realized  through  U.S.  government
agencies could be jeopardized.


(b)  Financial Information About Industry Segments

The  Company operates in a single industry segment as
described  in  Item  1(c)  below.   Certain  required
segment   information  related   to   the   Company's
financial  operations for the  last  three  years  is
included in Note K of Notes to Consolidated Financial
Statements.


(c) Narrative Description of the Business

The  Company operates in various market niches  of  a
single  industry segment, the information  technology
industry,  which  includes the  design,  manufacture,
sale  and  service  of storage and computer  systems,
software  and other related equipment on a  worldwide
basis.


Principal Markets
Within  the  information technology industry,  Encore
participates  in  mainframe and open systems  storage
and real-time computing marketplaces.

Mainframe and Open Systems Storage Markets
The  Company  has introduced its massively  scalable,
symmetric multiprocessor-based open systems  products
into  primarily four information processing  markets;
(i)  Cross  Platform  Enterprise Data  Storage,  (ii)
Mainframe Storage, (iii) Network Attached Storage and
(iv)  Open Systems Storage.  Encore's strategy is  to
provide  a  system  that can continue  to  support  a
user's  existing critical applications while allowing
the   user  to  reengineer  some  or  all  of   those
applications to run in an open systems environment at
a much lower cost than traditional mainframes.

Data   storage   demands   within   the   information
processing  market  are expanding  due  to  increased
requirements of capturing business data  as  well  as
storing  new  forms  of  information  (e.g.  document
images, sound and video).  Accordingly, the mainframe
storage marketplace is undergoing changes similar  to
those  of  the  information  processing  marketplace.
These changes include the need for faster, denser and
more  cost  effective  storage  solutions  to  reduce
demands   on   existing  facilities   and   shrinking
mainframe  data  processing  budgets.   Today's  data
processing  environments  have  developed  a   strong
strategic requirement to leverage technology advances
being applied to the open systems environment.

Encore addresses the growing open data storage market
by  providing  the world's fastest Universal  Storage
Processors  with  DataShareTM  Facilities.   From   a
storage   perspective,  the  Infinity  SPTM  supports
multiple environments and cross-platform data sharing
between  open  systems  and  mainframe  applications.
This  means  that with Encore's Mainframe DataShareTM
Facility, mainframe sequential datasets stored on the
Infinity  SPTM can be read by attached open  systems.
Additionally   Encore's  Open   Systems   DataShareTM
Facility  provides comparable support in the opposite
direction.  Channel attached mainframes can read open
systems   volumes  stored  on  the   Infinity   SPTM.
Businesses operating applications on mainframes or in
an  open  systems environment can use the DataShareTM
Facilities  to significantly reduce the elapsed  time
and effort required to access data between platforms.
The  Infinity  SPTM offers competitive  applications,
connectivity,  and  performance  advantages.  In  the
context  of  cross-platform shared protected  storage
for open systems and mainframes, the Infinity SPTM is
a technology leader.

To  market  the new Storage Product, the Company  has
established an aggressive direct distribution and OEM
sales  and  marketing  campaign.   As  part  of  this
campaign,   the   Company  has   recruited   industry
knowledgeable  sales  people  from  leading   storage
vendors.  Additionally, Encore continues to seek  out
strategic   distribution  partners   whose   industry
presence, expertise and sales channels will allow  it
to  more efficiently bring the Company's leading edge
Storage  Product offerings to market.  The successful
acceptance  in  the marketplace of  the  new  storage
products  and  their timely development and  shipment
will  play  a  key role in determining the  Company's
results of operations and competitive strength in the
future.

Real-Time  Markets
The   Company's  real-time  computer   systems,   the
Infinity  R/TTM Family, are used for the  acquisition,
processing  and interpretation of data  primarily  in
three  market niches;  (i)  simulation,  (ii)  energy
and (iii) transportation.

Simulation is the Company's largest real-time  market
niche.    Encore   products   are   widely  used   in
simulators   that   duplicate complex  situations  in
controlled  environments.   The  Company's  installed
simulation   systems   are   used   to   safely   and
economically train commercial and military  personnel
to operate and maintain complex systems such as space
vehicles, aircraft, weapons systems,  ships,  ground-
based vehicles and nuclear power plants.

Encore  also  competes  in  the  power  and  electric
utility market niches of the energy marketplace where
the  Company's  real-time systems typically  acquire,
monitor  and  provide  supervisory  and  closed  loop
control   in   energy   management,    power    plant
monitoring  and control  and  power plant  simulation
systems.    The   Company's   systems   monitor   the
transmission  and  distribution of  electrical  power
from   generation  to substation  to  end  use.   The
system  also facilitates the training of power  plant
operators  by  putting them in simulated environments
to prepare them for emergency situations.  Within the
energy marketplace as a whole, Encore systems provide
the same real-time capability of data acquisition and
control  to other market niches such as seismic,  oil
exploration and off-shore oil platforms.

Within the transportation market niche, the Company's
products   are  installed  in  a  variety  of   rapid
transit/metro    rail   and   marine   transportation
applications.  Strategically, the Company is focusing
on  other  developing niches within this  marketplace
including intelligent vehicular highway systems .

The  Company's  real-time customers include  original
equipment    manufacturers   (OEMs)    and    systems
integrators  who combine Encore products  with  other
hardware  and/or application software for  resale  to
end  users.   The Company also sells its products  to
end  users  who  require a compatible range  of  high
performance systems which are used as the  basis  for
major internal installations.

The  Encore  customer  base in both  the  information
processing and real-time market places are technology
and  life cycle cost driven and constantly   in  need
of    increased  performance  at  lower  costs.   The
Company's  sales efforts in the real-time market  are
concentrated  on  "program" business where  typically
large  contracts are  awarded  with  multiple systems
scheduled for delivery  over  an extended  period  of
years,  including continued demand for  upgrades  and
spare  parts  as well as ongoing maintenance.


Principal Products
Encore offers two principal  families  of storage and
computer  systems targeted at the niches  within  the
storage    processing    and   real-time    computing
marketplaces  of the information technology  industry
discussed  above.   These product  families  are  the
Infinity  SPTM  Storage Processors, and  the  Infinity
R/TTM Series.  Additionally, the Company continues  to
support  its  prior generation CONCEPT/32R  real-time
computer product line.

Infinity SPTM
The  Infinity SPTM Series Universal Storage Processors
with   DataShareTM   Facilities   are   designed    to
concurrently address the mixed storage needs  of  IBM
and  plug compatible mainframes, SCSI attached hosts,
and   network  attached  clients  under   a   common,
versatile  platform.  In order for the Infinity  SPTM
to  support simultaneously all of these roles, Encore
developed   software  products  such   as   Mainframe
DataShareTM, Open Systems DataShareTM, Backup/Restore
DataShareTM,  Remote Dual Copy, Backup While Open and
others  which  take  full advantage  of  the  storage
processors   architecture  to  provide  data   center
solutions  to  the entire enterprise  in  a  seamless
fashion.   These products enable mainframe  and  open
systems data stored on the Infinity SPTM to be shared
at  disk speeds, thereby significantly narrowing  the
information gap.  The Mainframe DataShareTM  Facility
allows  MVS IBM mainframe sequential datasets  (QSAM)
stored  on  an  Infinity SPTM to be read  by  a  SCSI
attached  Open  System  Platform.   The  Open  System
DataShareTM Facilities allows selected SCSI  attached
volumes stored on an Infinity SPTM to be read  by  an
IBM  compatible mainframe running MVS with no special
software    running    on   the    mainframe.     The
Backup/Restore   DataShareTM   Facility   allows   an
Infinity SPTM to backup and restore SCSI attached and
network  attached  volumes  from  an  IBM  compatible
mainframe   running   MVS  with  existing   mainframe
resident backup utilities.

The   Infinity  SPTM  fulfills  the  diverse   storage
requirements  of  legacy  and  open  enterprises   by
eliminating the overlaps and hidden costs of multiple
conventional   fixed   function   storage   products.
Infinity  SPTM  storage  subsystems  are  capable   of
delivering  storage solutions from  48  gigabytes  to
multiple terabytes.  Encore believes the Infinity SPTM
provides  the  world  of  increasingly  heterogeneous
computing   components  simpler  and  cost  effective
solutions.

Infinity Gateway TM
The  Encore  Infinity GatewayTM,  the  lowest  priced
member   of   the   Infinity  SPTM  family   provides
mainframes  and  open  systems concurrent  access  to
shared  datasets in real-time.  The Infinity  Gateway
utilizing  DataShareTM Facilities  provides  a  disk-
based high-speed/low latency interchange path between
MVS,  UNIX R,  and  other  operating  platforms.   For
example,  mainframe data sets stored on the  Infinity
Gateway   as   IBM   3390  volumes  are   immediately
accessible  from  SCSI  and  network  attached  hosts
without  file duplication.  Such direct data  sharing
technology   bypasses  lengthy  file  transfers   and
laborious   tape  handling  currently   employed   to
exchange data between dissimilar systems.  Similarly,
open  systems may store files on the Infinity Gateway
for direct access by mainframes.

Infinity R/T
The  Encore  Infinity R/TTM offers  high  performance
real-time  solutions  with the latest  in  processor
technology.    The  Infinity  R/T  is   specifically
designed to incrementally migrate CONCEPT/32  legacy
applications  to  an  open  systems  environment  by
maintaining object code and bus compatibility.

The  Infinity R/T Model 500 Modular Computing Family
is  Encore's  entry  level  PCI  bus  based  system,
powered  by  Digital Equipment Corporation's  AlphaR
and/or Intel Corporation's PentiumR processor.  This
provides  unprecedented modularity  and  flexibility
with  tremendous price/performance leadership.   The
Infinity  R/T  Model  400   Family  of  systems   is
comprised   of  state-of-the-art  departmental   and
enterprise   Symmetrical Multi-processing computers,
powered by Digital's Alpha micro-processors  and  is
based  on  the latest PCI bus technology.   Encore's
Real-Time  software and hardware  enables  users  to
derive  ultra  high performance without  sacrificing
the  Real-Time  requirements of  low  latency,  high
determinism and fast I/O response.  Both models  are
compatible  with Encore's new PCI Reflective  Memory
subsystem  that provides high-speed R/T connectivity
for up to 256 clustered nodes.

Customer Service
Service   and   support  are  critical  elements   in
maintaining   customer  satisfaction.   The   Company
offers its customers a variety of service and support
programs  for  both  hardware and software   products
principally   through   its  own   customer   service
organization supplemented by third party  maintenance
partners  with locations throughout the  world.   The
Company   also  offers  maintenance    service    for
selected third party equipment.  Specific service and
support   programs  include  preventive  maintenance,
resident   labor  service,  customer   training   and
education,    logistics    support   programs,   data
facility   management   and  custom   technical   and
consulting   services.   In  addition,  the   Company
provides  a  dial  in  hotline  as  well  as   remote
diagnostic  capabilities to allow problem  resolution
from Encore's home office.

The  Company provides a standard product warranty  on
its  computer  systems  for  parts  and  labor  which
generally  extends  ninety  days  from  the  date  of
installation, but on certain products for up  to  two
years.  On  its storage processor product  line,  the
standard   product  warranty  for  parts  and   labor
generally extends two  and, in some cases, may extend
three years.

Sales and Distribution
Encore uses multiple channels of distribution to sell
its products.  The primary channel for storage system
sales has been its direct sales force, consisting  of
approximately 23 salespersons located throughout  the
United  States,  Canada  and  Western  Europe.    The
Company  also has joint venture operations in  Japan,
and  various  other  arrangements  with  distributors
throughout the world.

The  Company is expanding its utilization of  systems
integrators,  distributors and  independent  software
vendors    (ISVs)   in   its   distribution   network
particularly  after  the termination  of  the  Amdahl
Reseller  Agreement discussed in Note B of  Notes  to
Consolidated  Financial  Statements.   The  Company's
strategy  is  to continue to expand its  distribution
channels   through  the  establishment  of  marketing
alliances  with other industry leaders.  Examples  of
the   Company's  efforts  were  the  signing   of   a
distribution   agreement   with   Federal    Computer
Corporation   as  well  as  a  business   development
agreement with Jones & McClesky.

The  Company's ability to increase sales and  improve
operating  results  for future periods  is  dependent
upon  the acceptance of its Storage Products  in  the
marketplace,   and   the   timely   and    successful
introduction of additional functions and features for
these   products.   Encore  continues  to  seek   out
strategic   distribution  partners   whose   industry
presence, expertise and sales channels will allow  it
to  more efficiently bring the Company's leading edge
open  system and Storage Product offerings to market.
There can be no assurance that the Company's products
will   achieve   or  sustain  market  acceptance   or
successfully  compete against the products  of  other
larger, better known companies.

The  Company's general policy is to sell rather  than
lease  its  products.  The Company  generally  has  a
policy  of  no returns and does not typically  extend
payment  terms beyond those prevalent in the computer
industry.   A  significant portion of  the  Company's
sales  typically occur in the last month of a  fiscal
quarter,  a  pattern  that is  not  uncommon  in  the
computer industry.  The Company seeks to minimize the
time  from receipt of a purchase order for a computer
system  to delivery of the system.  Accordingly,  the
Company  does  not believe backlog  reported  at  any
point   in  time  aids  materially  in  the   overall
understanding of the business.  Encore's business  is
not subject to pronounced seasonal fluctuations.

During the years reported, the Company has not  been
dependent upon any one customer for a material  part
of  its  business with no single customer accounting
for  more than 10% of its sales.  However, in fiscal
1996,  1995  and 1994, approximately 22%,  24%,  and
32%,  respectively, of its sales were derived either
directly  or  indirectly from various United  States
government   agencies.   None   of   the   Company's
contracts with United States government agencies are
subject   to   the  renegotiation  of   profits   or
termination at the election of the government.

Research and Development
Storage Product
The  company  builds  and  distributes  a  family  of
revolutionary storage products designed to connect to
IBM Mainframe, Open Systems and Network Hosts.  While
competing   products  are  implemented  as  dedicated
hardware  designs intended to meet a  single  storage
requirement,  Encore's implementation is  a  software
approach based on standard hardware components.  As a
result, the Encore product is the expression  in  the
high-end  storage  market of the  following  industry
trends:

     -The   replacement  of  dedicated,  proprietary,
      single-function  electronic hardware  platforms
      with  standard,  general purpose,  "commodity,"
      computer configurations.
  
     -The   migration  of  virtually  all   computing
      platforms   to  low  cost,  personal   computer
      components.
  
     -The     replacement    of    hardware-intensive
      solutions with software-intensive ones.
  
     -The  replacement of large, stand-alone  systems
      with multiple, networked small systems.

To   accomplish  Encore's  vision,  the  Company   is
integrating the necessary elements:

     -Data   sharing  to  allow  universal  real-time
      access  to  common  data  (one  copy  of  data,
      readable  from  open and proprietary  systems).
      The   SP   is  a  "computer,"  thus  a  generic
      platform.    DataShare   represents   one   key
      application; new applications like  Intershare,
      Communications,   Storage   Management,    etc.
      further  demonstrates the inherent  flexibility
      of the architecture.

     -Encore's  current multi-node  capability  is  a
      predecessor to the ability to have hundreds  of
      storage  processors  interconnected  over  high
      speed  fiber  optics.   All  discs  across  the
      network  of  storage  processors  must   become
      available  to all hosts in a real-time  manner.
      This   requires  a  high-speed   media   (Fiber
      optics), distances to multiple kilometers,  and
      most importantly, "indistinguishable access  to
      local or remotely located discs".

     -Internet  and Intranet capabilities.  Users  on
      open  and  proprietary systems  through  Encore
      have  access via networks (e.g., Ethernet LANs,
      WANs)  as  well as access via the  Internet  or
      Intranet  to previously unseen data.  Mainframe
      data  can now be viewed via the Infinity SP  on
      to the Net.

Encore's  product vision is to use highly intelligent
and  interconnected storage processors  to  blur  the
traditional boundaries between computer networks  and
storage  environments.  Encore's systems  attempt  to
provide  a  single system view of corporate  data  by
making access to any device remote or local, open  or
proprietary, transparent.

Real Time
Encore's Research and Development strategy is defined
around the following targets of opportunity:

     -Encore's   existing  customer  base:  "Systems,
      SEL,  Gould"  -  simulation, telemetry,  energy
      and transportation.
     -Digital  Equipment Corporation (DEC)  customers
      who  need  real-time capabilities,  integration
      and high speed interconnectivity:
          - Digital UNIX real-time enhancements
          - Real-Time option modules
          - VME Alpha Systems
          - Deterministic SMP Alpha Systems
          - High Speed Clustering

     -Other   opportunities  in  which   high   speed
      interconnectivity  of  systems   (extreme   low
      latency    and    greater    throughput    than
      networking)  is  a  critical  aspect   of   the
      application.

The  Company has a long history of proprietary design
(SEL,   Concept,  RSX,  Encore  91/93)  and  a  large
installed  base.   In Real-Time/Technical  computing,
the  key trend of the 90s has been to utilize PC  and
PC-bus  technologies  because  of  their  price   and
performance  advantages.  The traditional competition
has  not  reacted to this trend and  has  lost  major
market share by continuing to do proprietary designs.
The  new  competition is made up of UNIX Servers  and
PCUs  augmented with third party offerings to provide
reasonable  real-time  capabilities.   Encore  seeing
this trend has implemented a research and development
strategy   in  which  we  utilize  industry  standard
technology (Pentium Pro, Alpha, UNIX, Windows NT,  PC
buses, etc.).  Encore's value-add is that the Company
has  developed  a set of real-time software,  scaling
technologies,   cluster   interconnects,    real-time
options, and third party integration to provide  true
real-time  capabilities  while  maintaining  industry
price and performance curves.

Because  Encore's value-adds have been  developed  as
layered products, which sit above industry solutions,
they  are  quickly  ported to the  diverse  and  ever
changing   technology.   Therefore,   the   Company's
products  avoid the classic lag time associated  with
adding   real-time  capabilities  to  the  industry's
leading technology.


Manufacturing and Raw Materials
The   Company's manufacturing operation is  ISO  9002
certified and consists primarily of the assembly  and
integration  of  purchased  parts,  components,   and
subassemblies into computer and data storage systems.
Printed  circuit boards are assembled  using  surface
mount  technology and automatic placement  equipment,
while  substantially  all peripherals  are  purchased
from third party vendors.  Extensive testing and burn
in  is  performed  at the board,  component  and  sub
assembly level and at final systems  integration.

Encore's products are comprised of a wide variety  of
electronic  and  mechanical components, raw materials
and supplies.  The Company relies heavily on external
sources  of  supply for these items as  well  as  for
other  supplies and services.  Neither the  Company's
customers  nor  its vendors require Encore  to  carry
significant  amounts  of  inventory  to  meet   rapid
delivery  requirements  or  to  assure  itself  of  a
continuous  allotment of goods from  suppliers.   The
Company has developed multiple commercial sources for
most  components  and  raw  materials  used  in   the
manufacture   of  its  computer  systems.    However,
because of the attractiveness of employing the latest
technology  in its product line, Encore does  utilize
several  single  source vendors for certain  critical
components in the Infinity SPTM product line.   While
delays  in  delivery of such single source components
could  cause  unplanned delays  in  the  shipment  of
certain  products, at this time, the Company  has  no
reason  to  believe any of its single source  vendors
present a serious business risk to the Company.

The   Company   believes   that   its   manufacturing
facilities  are  sufficient to meet its  requirements
for three years.

Competition
The    computer   storage   industry   is   intensely
competitive   and   is   characterized    by    rapid
technological  advances,  decreasing   product   life
cycles   and   price   reductions.    The   principal
competitive  factors  in the  Company's  markets  are
total  system performance and functionality, quality,
reliability,  price,  compatibility/connectivity   to
other  vendors' systems, along with long term service
and support.

Within the storage product marketplace, the Company's
competition  includes  EMC,  International   Business
Machines (IBM) and Hitachi Data Systems.  The primary
competitors  in the Company's real-time  markets  are
also   established  companies,  such  as   Concurrent
Computer Corporation and Silicon Graphics.

Many  of Encore's competitors have greater financial,
technical,  and marketing resources than Encore.   In
some   cases,   this   places  the   Company   at   a
disadvantage.  While the competition is beginning  to
utilize  software solutions to improve  functionality
in the storage marketplace, the Company considers its
level of experience and general understanding of  its
computer  architecture and software solutions  to  be
its competitive advantage.


Patents and Licenses
Encore  owns  a  number of patents,  copyrights,  and
trademarks  relating  to its products  and  business.
Encore's most important patents constitute the  basis
for  Encore's premiere Reflective Memory  technology,
which   is  incorporated  into  the  Company's  high-
performance,   high-availability   Storage    Systems
products.  Reflective Memory products permit the same
data to be broadcast (i.e. reflected) instantaneously
to  several  nodes  at once, thereby  extraordinarily
decreasing data transfer times.  Encore continues  to
develop   this   highly  valuable  and   sought-after
technology  and is actively engaged in a  program  to
protect  it's  patents  and  registered  marks   from
infringement.  The Company is also actively  pursuing
additional patents on its innovations.

From  time  to  time, companies in the industry  have
claimed   that   certain  products   and   components
manufactured by others are covered by patents held by
such  companies.  It may, therefore, be necessary  or
desirable  for  Encore  to obtain  additional  patent
licenses.   Management believes  that  such  licenses
could  be  obtained on terms which would not  have  a
material  adverse  effect on the Company's  financial
position or the results of its operations.

Encore  has  entered into licensing  agreements  with
several   third   party   software   developers   and
suppliers.  The licenses generally allow for use  and
sublicense  of certain software provided as  part  of
the computer systems marketed by the Company.  Encore
is  licensed by the Santa Cruz Operation to  use  and
sublicense  their  UNIX  operating  system   in   the
Company's computer systems.

As  discussed  in  Note  I of Notes  to  Consolidated
Financial   Statements,  in   connection   with   its
recapitalization   in  January  1991,   the   Company
licensed   substantially  all  of  its   intellectual
property  to Gould on a royalty free basis.  However,
under  the terms of the agreement, and in combination
with  certain  extensions granted  by  Gould,  Encore
retained   the  exclusive  use  of  the  intellectual
property through December 31, 1995.  Those extensions
have  expired  and effective January  1,  1996,  both
Gould  and  Encore have the right to use  the  Encore
intellectual property.

While  the  Company  maintains  the  legal  right  to
terminate the Gould license under certain conditions,
the  Company  does not currently have  the  financial
capability  to  do so.  Gould has stated  it  has  no
immediate plans to utilize the technology to  compete
with  the  Company in which it has a very substantial
investment.

Environmental Matters
Compliance  with Federal, state and local  provisions
which  have  been enacted or adopted  regulating  the
discharge  of  materials  into  the  environment,  or
otherwise   relating  to  the   protection   of   the
environment  are  not expected  to  have  a  material
effect  on  the  capital expenditures, operations  or
competitive   posture   of   the   Company   or   its
subsidiaries.


Employees
As  of  December 31, 1996, Encore had  694  full-time
employees engaged in the following activities:

                                                 Employees
                                                        
         Customer Service                           131
         Manufacturing                              125
         Research and Development/Custom Products   235
         Sales and Marketing                        147
         General and Administrative                  56
         Total                                      694

The  Company's  future success will depend  in  large
part  on  its  ability to attract and  retain  highly
skilled  and motivated personnel, who are  in   great
demand   throughout  the  industry.   None   of   the
Company's  domestic employees are  represented  by  a
labor union.


Executive Officers of the Company

The  names of the Company's executive officers and certain
information about them are set forth below.

               Name             Age         Position with Company
       Kenneth G. Fisher         66     Chairman of the Board
                                        and Chief Executive Officer
                                                                     
       Rowland H. Thomas, Jr.    61     President and 
                                        Chief Operating Officer
                                                                     
       Charles S. Anderson       67     Vice President,
                                        Corporate Relations
                                                                     
       Ziya Aral                 44     Vice President,
                                        SystemsEngineering
                                        and Chief Technology Officer
                                                                     
       Robert A. DiNanno         50     Vice President and General
                                        Manager,
                                        Global Customer Operations
                                                                     
       Charles S. Namias         38     Vice President,
                                        Corporate Alliances
                                                                     
       James C. Shaw             49     Vice President,
                                        Manufacturing Operations
                                                                     
       George S. Teixeira        40     Vice President,
                                        Product Business Group

Mr. Fisher is 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.   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.

Mr.  Thomas  has  been  a  member  of  the  Board  of
Directors  since  December 1987 and  Chief  Operating
Officer  since  June  1989.  He presently  serves  as
President of the Company, a position to which he  was
elected  in January 1991.  From June 1989 to  January
1991,  Mr.  Thomas served as Executive Vice President
of  the  Company.   In February 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 February 1988.  From  May
1983 through June 1985, Mr. Thomas was Executive Vice
President and Senior Vice President at NDC.

Mr.  Anderson, joined the Company in 1985.  From 1984
until  joining  the Company, Mr. Anderson  served  as
Director of Human Resource Operations at Data General
Corporation.    Before  joining  Data  General,   Mr.
Anderson was with Honeywell Information Systems, Inc.
serving  in various management positions since  1970,
most recently as Director of Employee Relations.

Mr. Aral joined the Company in 1987 and was appointed
to  his  present position of Chief Technology Officer
in  1993.   Since 1987, he has held various positions
of   increasing  responsibility  within  the  Company
including  Vice President of Systems Engineering  and
Senior   Technology  Consultant.   Prior  to  joining
Encore,  Mr.  Aral was employed by the  Reed-Prentice
Division   of   PMCo.  in  a  variety   of   software
engineering positions.

Mr.  DiNanno joined the Company in July 1986.   Until
June  1992, Mr. DiNanno served as Vice President  and
General  Manager, Operations.  At that time,  he  was
appointed  Vice President and General Manager,  Real-
Time  Operations.  In June of 1996, Mr.  DiNanno  was
appointed  Vice  President  and  General  Manager  of
Global  Customer Operations.  Prior  to  joining  the
Company,  he  served as Vice President, Manufacturing
at  Adage, Inc. from November 1983 to June 1986.  Mr.
DiNanno   also   held   domestic  and   international
management  assignments  with  Honeywell  Information
Systems,  Inc.  from June 1979 until  November  1983.
Mr.   DiNanno   has  experience  with  military   and
commercial  flight  simulations acquired  during  his
tenure at Singer Link.

Mr. Namias joined the Company in 1983 as Director  of
Processor  Engineering.  From 1986 to  1989  he  held
direct  sales  and  several  field  sales  management
positions.   In  1990, he was promoted  to  Director,
Strategic Business Alliances and in 1992 promoted  to
Vice  President, Business Development.  In 1993,  Mr.
Namias   was  appointed  Vice  President,   Corporate
Alliances  and an officer of the Company.   Prior  to
joining  the  Company,  Mr. Namias  was  employed  by
Digital  Equipment Corporation and  Raytheon  Missile
Systems.

Mr.   Shaw  joined  the  Company  in  1989  as   Vice
President,  Manufacturing  Operations.   In  November
1992,  he  was  appointed an officer of the  Company.
From  1985  to  1989  he served as  Senior  Director,
Manufacturing for Modicon, Inc.  Prior to that  time,
he  was  Vice President, Manufacturing for Chomerics,
Inc., a position he held from 1980 to 1985.

Mr.  Teixeira assumed his present position  in  1994.
From  1991  to  1994, he held the  position  of  Vice
President, Product Development.  Prior to  1991,  Mr.
Teixeira  held  the  positions of Vice  President  of
Marketing  and Vice President of Product  Management.
Mr.  Teixeira was Director of Product  Marketing  and
Management for the Computer Systems Business of Gould
Electronics Inc. which the Company acquired in  1989.
Prior  to  1989  he  held several progressively  more
responsible positions since joining Gould Electronics
Inc. in 1981.

(d) International Operations

The   Company maintains sales and service  operations
in    Europe    and   Canada   through   wholly-owned
subsidiaries.   In  the Far East, sales  and  service
operations  are performed through a joint venture  in
Japan,  and  distributor  agreements  throughout  the
remainder  of  the  Pacific  Rim.   In  fiscal  1996,
approximately  59%  of consolidated  net  sales  were
derived  from   foreign   operations.    The  Company
believes that its overall profit margins with respect
to  foreign  sales are not materially different  from
profit  margins from domestic sales.  In view of  the
locations   and   diversification  of   its   foreign
activities, the Company does not believe  that  there
are  any  unusual  risks beyond the  normal  business
risks   attendant  to  activities   abroad.    Encore
attempts  to  limit its foreign currency  denominated
assets  and  liabilities to reduce  its  exposure  to
foreign     currency    fluctuations.      Additional
information  relating to the Company's  international
operations,     including    financial    information
segregated by major geographic area, is contained  in
Note   K  of  the  Notes  to  Consolidated  Financial
Statements.

Item 2   Properties

Listed  below  are the Company's principal facilities
as of  December 31, 1996.

                                      Owned or  Approximate
   Location             Principal      Leased     Square
                           Use                     Feet
                                                        
   Ft. Lauderdale, FL   Administrative  Owned      232,000
                        Development/                      
                        Marketing                         
                                                         
   Melbourne, FL        Manufacturing   Owned      137,000
                                                         
   London, England      Sales/Service   Leased      35,000
                                                         
   Paris, France        Sales/Servic    Leased      23,000

In  addition  to the facilities listed above,  Encore
also  leases  space  in various  other  domestic  and
foreign  locations  for  use  as  sales  and  service
offices.    The   Company's  owned   facilities   are
encumbered by various mortgages, including  mortgages
which  collateralize the Gould loan  agreements  (See
Note   G  of  Notes  to  the  Consolidated  Financial
Statements).


Item 3   Legal Proceedings

The  Company  is  subject to  legal  proceedings  and
claims  which  arise in the ordinary  course  of  its
business.   In the opinion of management, the  amount
of  the  ultimate  liability with  respect  to  these
actions  will  not  materially affect  the  financial
position of the company.


Item  4  Submissions of Matters to a Vote of Security
Holders

No  items  were submitted to a vote of  the  security
holders during the fiscal quarter ended December  31,
1996.

PART II

Item  5   Market  for Registrant's Common  Equity  and
Related  Stockholder Matters    The  Company's  common
stock  is traded on the NASDAQ Small Cap Market System
under the symbol ENCC.

The  high  and  low closing sale prices  of  Encore's
common stock are shown for fiscal years 1996 and 1995
in the table below:

                      Fiscal 1996             Fiscal 1995
                     High       Low         High      Low
                                                             
      1st Quarter    3  7/16   1   5/8    3  9/32  1 23/32
      2nd Quarter    3 13/16   2  7/16    3        1  1/16
      3rd Quarter    3  1/32   1 11/16    2 19/32  1  1/16
      4th Quarter    1 31/32   1          2   3/4  1   1/2

The  First  National  Bank of  Boston  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:

The  First National Bank of Boston
Shareholder Services Division
P.O. Box 644
Boston, Massachusetts 02109.

As  of April 12, 1997, there were approximately 2,638
holders of record of the Company's common stock.  The
Company  has never paid cash dividends on its  common
stock  and  under the terms of the Company's  current
financing agreements, the Company is prohibited  from
paying such dividends.


Item 6 Selected Financial Data

(in thousands except  Pro Forma   For the year ended December 31,
   per share data)     1996(2)  1996    1995    1994      1993     1992
Net sales          $47,627  $47,627  $49,328  $76,550  $93,532 $130,893
Operating loss     (67,218) (67,218) (77,796) (50,848) (62,085) (22,544)
Net loss           (70,732) (70,732) (81,354) (54,556) (69,565) (32,522)
Net loss per common
  share (1)          (2.18)   (2.18)   (2.37)   (1.68)   (2.01)   (0.98)
Weighted average
 shares of common stock
 outstanding (1)    44,174   44,174    42,287  40,755    39,273  37,899
Working capital 
 (deficit)         (27,479) (67,295)    5,490  20,237     3,499  14,270
Total assets        69,256   69,256    72,537  99,021    84,070 105,686
Long term debt         476      476    40,812  89,249   112,919  66,413
Shareholders' equity
 (capital deficiency)5,806  (34,010)    2,514 (22,040)  (66,560)    508

(1)  During 1996, 1995, 1994 and 1993, preferred stock
dividends   amounted   to  $25,413,000,   $19,061,600,
$13,986,600   and   $9,184,700,   respectively.    All
preferred  stock  dividends were  paid  in  additional
shares of preferred stock.

(2)  Presents the pro forma effect of an  exchange  of
$40,000,000  indebtedness for preferred stock  between
Gould  Electronics Inc. and the Company on  March  19,
1997  as  if such transaction had occurred on December
31, 1996.

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

Overview

Encore   Computer   Corporation  ("Encore"   or   the
"Company")  was founded in May 1983 and  was  in  the
development  stage until October 1986.   During  this
period,  the  Company was primarily involved  in  the
research,  development and marketing of  UNIX R  based
computers  and  terminal servers.   In  1989,  Encore
significantly   increased  its  size  and   worldwide
marketing presence when it acquired substantially all
of  the  assets of the Computer Systems  Division  of
Gould   Electronics   Inc.  (the  "Computer   Systems
Business").  This was a significantly larger business
than  the  Company and one which for over twenty-five
years  provided real-time computer systems  solutions
to   the   simulation,  transportation   and   energy
marketplaces.

During the late 1980s, product demand in the computer
marketplace  began to migrate from  more  traditional
proprietary  computing technologies towards  an  open
systems   technology.   The  Company   targeted   its
research and development efforts towards programs  to
develop  a  new generation of open system  computers.
Since  the  beginning of 1994, the Company has  spent
approximately $94,000,000 in research and development
activities.    This  has  resulted  in  the   current
availability of a family of storage systems and  open
system  computers  including; (i) the  Infinity  SPTM
Storage  Processor  with DataShare FacilitiesTM,  and
(ii)  the  Infinity  R/TTM.  In  light  of  this  new
technology  the Company has targeted the multibillion
dollar  storage market as a strategic growth  market.
This  is a new market for the Company and is intended
to  replace the declining revenues from the real-time
market.  The Company's real-time market revenues have
decreased from $130,893,000 in 1992 to $41,024,000 in
1996.   The  Company  expects the  Infinity  SPTM  to
penetrate  the  storage market and  establish  market
presence.   The  acceptance of Encore's  Infinity  SP
Universal    Storage   Processor   with   DataShareTM
Facilities  in the market place, and the  timely  and
successful  introduction of additional functions  and
features  for  these  products  will  determine   the
Company's future results.  Through December 31, 1996,
total   sales  of  the  Company's  new  open  systems
technology products amounted to $6,603,000.

To  market  the new storage product, the Company  has
developed  a  direct distribution and OEM  sales  and
marketing   strategy.   The  Company  has   recruited
industry  knowledgeable  sales  people  from  leading
storage vendors and expanded its sales offices around
the  world.  Additionally, Encore continues  to  seek
out  strategic  distribution partners whose  industry
presence, expertise and sales channels will allow  it
to  more efficiently bring the Company's leading edge
storage  product and open system offerings to market.
The  Company  has  acquired significant  inventories,
provided  product to customers on a trial  basis  and
continues    to   improve   product   features    and
functionality.   Direct sales of  these  products  to
date  have  not  met  management's  expectations   as
customers   express  concerns  over   the   financial
viability   of   the  Company.    The   Company   was
unsuccessful in negotiating an OEM agreement in 1996,
but  continues  to discuss possible agreements,  with
several  potential OEM's.  There can be no  assurance
that  the Company's products will achieve or  sustain
market acceptance or successfully compete against the
products   of   other  larger  and  more  financially
resourceful companies.

With the net losses incurred in the three years ended
December  31,  1996, the Company  has  not  generated
sufficient   levels  of  cash  flow   to   fund   its
operations.  During this period of time the principal
source  of  financing has been provided by the  Japan
Energy  Group.  During the three years ended December
31, 1996, the Company and the Japan Energy Group have
also  entered into a series of financing transactions
involving   the   cancellation  of  $240,000,000   of
indebtedness in exchange for the issuance of  various
series   of  the  Company's  Preferred  Stock.     As
discussed   more  fully  in  Note  M  of   Notes   to
Consolidated Financial Statements, on March 19, 1997,
the Company and Gould agreed to cancel $40,000,000 of
indebtedness owed to Gould under their loan agreement
(the "Credit Agreement") in exchange for the issuance
to Gould of 400,000 shares of the Company's Series  I
Convertible  Preferred  Stock  ("Series  I")  with  a
liquidation  preference of $40,000,000.  In  addition
to  the exchange of indebtedness for shares of Series
I,  the  Company and Gould also agreed to  amend  the
Credit  Agreement  to (i) reduce the  maximum  amount
which can be borrowed by the Company from $80,000,000
to  $50,000,000 and (ii) provide that any  borrowings
in   excess  of  $41,915,869  (the  principal  amount
outstanding on March 19, 1997 after giving effect  to
the exchange of indebtedness for shares of Series  I)
may  be made only at the discretion of Gould.  As  of
April  12, 1997 the Company owed to Gould $45,525,494
under  the  Credit  Agreement,  plus  $12,974,348  in
accrued  interest.  All borrowings under  the  Credit
Agreement, plus accrued interest, are due and payable
on  May 31, 1997.  In the event of default, the  rate
of  interest to be applied will immediately  increase
by an additional 2%.

The  accompanying  consolidated financial  statements
have  been  prepared assuming that the  company  will
continue  as  a  going  concern.   Based  on  current
estimates of available cash flow, management does not
believe  it  will have sufficient cash  to  make  the
mandatory  payment on May 31, 1997, without  proceeds
from   the  sale  of  assets  or  a  refinancing   or
restructuring of the Credit Agreement prior  to  such
date.   Additionally, the Company  does  not  have  a
committed  source  of  financing  to  meet   expected
requirements  over the next year.   The  Company  has
retained  an  investment banking firm  to  assist  in
exploring strategic alternatives which include, among
other  things,  a  business  combination,  sales   of
assets,  strategic investment in  the  Company  or  a
refinancing of the Credit Agreement.  There can be no
assurance that the Company will be successful in  its
attempt   to   consummate  one   of   the   strategic
alternatives or a refinancing or restructuring of the
Credit  Agreement.  If the Company does not make  the
required  payment at maturity of the Credit Agreement
or   is  unable  to  obtain  a  committed  source  of
financing adequate to meet expected requirements,  it
may  be  unable  to  continue its normal  operations,
except  to  the extent permitted by the Japan  Energy
Group.   Substantially all of the Company's  tangible
and intangible assets are pledged as collateral under
the Credit  Agreement.

Comparison of Calendar 1996, 1995 and 1994.

Net  sales for 1996 were $47,627,000 compared to  net
sales   for   1995   and  1994  of  $49,328,000   and
$76,550,000, respectively.  Equipment sales increased
25%   in   1996  to  $27,600,000  when  compared   to
$22,005,000  in 1995.  Equipment sales in  1994  were
$38,412,000.   Service revenues for  1996,  1995  and
1994  were  $20,027,000, $27,323,000 and $38,138,000,
respectively.

Equipment sales as a percentage of total net sales in
1996,   1995  and  1994  were   58%,  45%  and   50%,
respectively.  The increase in 1996 is primarily  due
to;  (i)  sales of the Company's Storage Products  of
$6,603,000, (ii) steady sales in real-time  and  open
systems  computers and (iii) the decline  in  service
sales.  The decrease in 1995 is primarily due to; (i)
the  delay  in  the acceptance of the  Company's  new
technology   products  in  the  storage   information
systems  marketplace, (ii) the decline  in  real-time
and  open system computer sales and (iii) the adverse
effects  from the termination of the Amdahl  Reseller
Agreement.   International equipment sales  increased
68%  to $16,050,000 in 1996, while domestic equipment
sales decreased 7% to $11,550,000 compared to 1995.

Continued  declining  service  revenues  reflect  the
effect  on the service business of; (i) the Company's
prolonged decline in equipment sales, (ii) the  price
competitiveness   of  the  marketplace,   (iii)   the
completion  of long running government  programs  and
subsequent deinstallation of systems and (iv)  longer
warranty  periods  for equipment  sales  required  to
compete  in  the  storage marketplace.   The  Company
expects   this   trend  to  continue.   International
service  sales decreased 22% to $12,277,000 in  1996,
while   domestic  service  sales  decreased  33%   to
$7,750,000  compared to 1995.  The slower decline  in
International   service  revenue  is  attributed   to
limited competition.

International net sales increased 12%  in  1996  when
compared  to 1995, versus a decrease of 26%  in  1995
compared  to 1994.  Domestic net sales decreased  20%
and 44% in 1996 and 1995, respectively, when compared
to the prior year.  International sales in 1996, 1995
and 1994 were $28,327,000, $25,277,000 and 33,937,000
or  59%,  51%  and 44%, respectively,  of  total  net
sales.

During  the three years ended December 31,  1996,  no
single  customer accounted for more than 10%  of  the
Company's  annual sales.  However, sales  to  various
U.S.    government    agencies    have    represented
approximately 22%, 24% and 32% of net sales in  1996,
1995 and 1994, respectively.   The Company recognizes
that  reductions in current levels of U.S. government
agency  spending  on computers and  computer  related
services   could  adversely  affect  its  traditional
sources   of  revenue.   The  Company  believes   the
expansion  into non traditional, high growth  storage
markets  with  the  Infinity SPTM, and  the  Infinity
R/TTM  Family  of  products will  mitigate  potential
risk.

Total cost of sales decreased in 1996 to $53,608,000,
from  $55,963,000  in 1995 and $60,907,000  in  1994.
The  decrease in all years reported was due generally
to  lower  sales volumes and lower spending resulting
from  the restructuring of manufacturing and customer
service  operations  during the  three  year  period.
Since  the  beginning of 1994, combined manufacturing
and  customer service headcount has been  reduced  by
approximately  33%,  certain customer  service  field
operations  have  been closed  or  scaled  down,  and
manufacturing  operations have been  consolidated  in
Melbourne, Florida.


   
In  1996  and 1995, cost of equipment sales  exceeded
sales  by  $8,186,000 and $12,970,000  or  (30%)  and
(59%)  of net sales, respectively, compared to  a  9%
gross  margin  of $3,360,000 in 1994.  1996  cost  of
sales  included  $9,932,000 (36% of equipment sales)
in  additional  valuation reserves on Storage Product
inventory. Gross  margins were  reduced  in 1995 and
1994 due  to  the  charges associated   with  the
termination  of  the   Amdahl Reseller  Agreement and
the negative  effect  of  the under  utilization  of
manufacturing  capacity.   As discussed   in   Note  B
of  Notes  to  Consolidated Financial  Statements, in
1995 and 1994, the  Company recorded   charges  of
$14,242,000 (65% of equipment sales) and   $8,960,000
(23% of equipment sales) respectively,  in connection
with the termination  of the  Amdahl Reseller Agreement.
    


The decline in equipment gross margin as a percentage
of   revenue  in  1995  when  compared  to  1994   is
attributable  to factory variances related  to  lower
production   volumes   and   under   utilization   of
manufacturing  capacity, as well as  higher  warranty
costs  associated  with  new  product  introductions.
Equipment  gross margin remained low in 1996  due  to
the  discounting  of  Storage Products  in  order  to
penetrate  the  marketplace and  establish  reference
accounts.   Warranty  costs related  to  the  Storage
Product  were  also  higher than anticipated  due  to
engineering  changes  on  current  installations  and
spare part inventory.


   
In   1996,  gross  margins  on  service  sales   were
$2,205,000 or (11%), compared to $6,605,000 (24%) and
$12,283,000  (32%)  in 1995 and  1994,  respectively.
For 1996, 1995 and 1994, service margins were reduced
for    investments    in   various    programs    and
infrastructure  necessary  to  support  the   Storage
Product   line.  The Company invested $5,979,000 (30%
of service sales), $3,719,000 (14% of service sales)
and $2,010,000 (5% of service sales) in support of the
Storage Product line during 1996, 1995, and 1994, 
respectively.
    


All  service  sales are derived from installed  real-
time  products  and  the cost  structure  within  the
service  department  is highly variable  due  to  the
utilization  of  service  partners.   Therefore,   as
revenues  decline, costs decline as well.   Moreover,
management  continues to reduce  fixed  costs  on  an
ongoing  basis.   As  a result,  gross  margin  as  a
percentage of revenue has increased to 41%  in  1996,
from  38%  and  37% for 1995 and 1994,  respectively,
when  adjusted  for the impact of the  investment  in
Storage  Product support programs and infrastructure.
The  Company expects to achieve similar gross margins
in the future.

Research  and  development  expenses  in  1996   were
$30,260,000  compared to $33,249,000 and  $30,339,000
in 1995 and 1994, respectively.  However, in 1995 the
Company charged research and development $500,000 for
the  write  down of capitalized software projects  as
discussed  in  Note  B of the Notes  to  Consolidated
Financial  Statements.  Excluding this  charge,  1996
expenses decreased $2,489,000 or 8% when compared  to
1995.   The  decrease  in  research  and  development
expenses   in   1996   is   primarily   related    to
restructuring actions taken in the second quarter  of
1995.   Research  and  development  expenses   as   a
percentage of net sales was 64% in 1996, 67% in  1995
and  40%  in 1994. The percentage increase from  1994
was  a  result  of  both lower net sales  and  higher
expense   levels.   Over  the  three   year   period,
management increased expenditures on those  strategic
product offerings necessary for the future growth  of
the  business while significantly reducing the  level
of   investment   in  areas  outside  the   Company's
principal  focus.   To  effectively  compete  in  its
market  niches, the Company must continue  to  invest
aggressively in research and development activities.

Sales,  general and administrative ("SG&A")  expenses
in  1996 were $30,977,000 compared to $33,683,000 and
$36,152,000 in 1995 and 1994, respectively.  In  1996
and 1995, SG&A expenses decreased due to management's
actions   taken  to  minimize  headcount,  close   or
consolidate  marginally profitable field offices  and
to  more  effectively focus its advertising programs.
During 1995, SG&A expenses were also reduced by lower
commissions   on  the  year's  lower  sales.    These
reductions   were  partially  offset  by   non   cash
compensation  charges of $589,000 and  $1,424,000  in
1996  and 1995, respectively, in connection with  the
extension   of   the  expiration  date   of   certain
individual  stock option grants.  As a percentage  of
net  sales,  SG&A expenses were 65%, 68% and  47%  in
1996, 1995 and 1994, respectively.


   
As  discussed  in  Note  F of Notes  to  Consolidated
Financial Statements, in the second quarter  of  1995
management  evaluated the Company's latest  financial
projections,  and concluded; (i) the  termination  of
the   Amdahl   Reseller  Agreement, as discussed in 
Note B, resulted   in   a significant  delay  in  the
realization  of  product revenues,  (ii)  the  rate of
decline  in  real-time equipment  and  service  revenues
had  exceeded  its previous  estimates and (iii) the rate
of  worldwide sales  growth  anticipated  in  newer
product  lines remained  significantly below projected
levels.   In light  of  these conclusions, management
restructured operations  and  recorded a charge to 
operations  of $4,499,000.    The   most   significant
of    these restructuring actions were; (i) a 95 person
reduction in   workforce   primarily   in   manufacturing
and development,  resulting  in  a  severance  charge  of
$1,335,000,  (ii)  a write down of  $782,000  in  the
carrying  value of the equipment used in the  support
of  the Amdahl Reseller Agreement and (iii) the write
off  of  $1,624,000  of capitalized  software  assets
relating to the Company's UNIX R based product  lines.
Management will continue to assess its cost structure
and  the  carrying value of  its assets in  light  of
expected  future  business.   While  there   are   no
existing plans to take any additional actions, should
future  conditions require, management could  approve
additional plans to further reduce its cost  base  or
recognize  the  impairment  in  value  of  long-lived
assets.

International operating income was $1,234,000 in 1995.
In 1996 international generated an operating loss of
$1,047,000 despite higher revenues, principally due to
higher cost of sales in 1996 associated with the Company's
efforts to penetrate new international storage product 
markets.  International operating income decreased in 
1995 from 1994 by $3,002,000, due principally to lower 
revenues.
    


Interest  expense  increased in  1996  to  $3,520,000
primarily  due  to  increased debt levels.   Interest
expense   decreased  to  $2,957,000  in   1995   from
$3,363,000  in 1994.  Since February 4, 1994,  Encore
has completed a series of refinancing agreements with
the  Japan  Energy Group resulting in conversions  of
$240,000,000 of debt to preferred stock.

Other expense, net, was greater in 1996 than in  1995
and  1994 due principally to greater foreign exchange
losses.

Income  taxes  provided in 1995 and  1994  relate  to
taxes payable by foreign subsidiaries (see Note H  of
the Notes to Consolidated Financial Statements).  The
tax  credit  for  1996 reflects the reversal  of  tax
accruals  not  deemed necessary as  of  December  31,
1996.

Liquidity and Capital Resources

Because  of the continuing operating losses  incurred
for  the  five  years ended December  31,  1996,  the
Company  has  been  unable  to  generate  cash   from
operating  activities.  In 1996, 1995 and  1994,  the
Company   used   cash  in  operating  activities   of
$60,744,000,     $49,769,000     and     $64,504,000,
respectively.  As of December 31, 1996,  the  Company
had a capital deficiency of $34,010,000.

From  1995 to 1996, cash used in operating activities
increased by $10,975,000, reflecting the increase  in
working  capital  of $8,600,000, primarily  increased
inventory.  Additionally, for 1996, the net loss,  as
adjusted  for non cash items, exceeded the  1995  net
loss by $2,029,000.

Cash  used in 1995 operating activities decreased  by
$14,735,000  from  1994  reflecting  working  capital
changes  which resulted principally from  the  Amdahl
Reseller  Agreement and its termination as  discussed
more  fully  in  Note  B  of  Notes  to  Consolidated
Financial   Statements.   During  1994  the   Company
significantly  increased its investment  in  accounts
receivable  and  inventories  as  a  result  of   the
acceleration of activities under the Amdahl  Reseller
Agreement.  With the termination of this agreement in
1995,   the   Company's   related   working   capital
investment  was significantly reduced.   Accordingly,
net  changes  in accounts receivable and  inventories
amounted  to  $3,906,000 in 1995, an  improvement  of
$24,302,000  as compared to 1994.  These improvements
were partially offset by the increase in the 1995 net
loss of $10,174,000, as adjusted by non cash items.

Expenditures for property and equipment during  1996,
1995   and  1994  were  $7,433,000,  $7,335,000   and
$13,089,000,  respectively.   Purchases  of  Customer
Service spare parts in support of the Storage Product
accounted  for  40% of total property  and  equipment
spending   in  1996.   Expenditures  for  capitalized
software  during  1995  and 1994  were  $673,000  and
$2,467,000, respectively.  As of December  31,  1996,
there   were  no  material  commitments  for  capital
expenditures.

Cash  was  provided through financing  activities  of
$68,707,000,  $58,658,000 and $78,496,000,  in  1996,
1995 and 1994, respectively.  The principal source of
financing   has   been  through  various   agreements
provided  by the Japan Energy  Group.  On  April  16,
1996 the Japan Energy Group continued its support  as
discussed  in  Note  G of the Notes  to  Consolidated
Financial  Statements  by;  (i)  accepting  Preferred
Series "H" Stock in exchange for $35,000,000 of  debt
and  (ii) providing a $65,000,000 committed borrowing
facility.   Gould has allowed the Company  to  borrow
additional funds in excess of the maximum limit.   As
of   December   31,  1996,  Encore  owed   to   Gould
$72,659,000 in principal, plus $10,791,000 in accrued
interest.  On January 9, 1997 Gould and Encore agreed
to amend the credit agreement to increase the maximum
amount  of  loans to $80,000,000, however,  any  loan
exceeding  $65,000,000 will be made at the discretion
of Gould.

On  March  19, 1997, the Company and Gould agreed  to
cancel  $40,000,000  of indebtedness  owed  to  Gould
under  their  loan agreement (the "Credit Agreement")
in  exchange  for  the issuance to Gould  of  400,000
shares   of   the  Company's  Series  I   Convertible
Preferred  Stock  ("Series  I")  with  a  liquidation
preference  of  $40,000,000.   In  addition  to   the
exchange of indebtedness for shares of Series I,  the
Company  and  Gould also agreed to amend  the  Credit
Agreement to (i) reduce the maximum amount which  can
be  borrowed  by  the  Company  from  $80,000,000  to
$50,000,000  and (ii) provide that any borrowings  in
excess   of   $41,915,869   (the   principal   amount
outstanding on March 19, 1997 after giving effect  to
the exchange of indebtedness for shares of Series  I)
may  be made only at the discretion of Gould.  As  of
April  12, 1997 the Company owed to Gould $45,525,494
under  the  Credit  Agreement,  plus  $12,974,348  in
accrued  interest.  All borrowings under  the  Credit
Agreement, plus accrued interest, are due and payable
on  May 31, 1997.  In the event of default, the  rate
of  interest to be applied will immediately  increase
by an additional 2%.


   
The  accompanying  consolidated financial  statements
have  been  prepared assuming that the  company  will
continue  as  a  going  concern.   Based  on  current
estimates of available cash flow, management does not
believe  it  will have sufficient cash  to  make  the
mandatory  payment on May 31, 1997, without  proceeds
from   the  sale  of  assets  or  a  refinancing   or
restructuring of the Credit Agreement prior  to  such
date.   Additionally, the Company  does  not  have  a
committed  source  of  financing  to  meet   expected
requirements  over the next year. Therefore, the Company
is unable to generate sufficient cash to support its
operations through December 31, 1997.  The  Company  has
retained  an  investment banking firm  to  assist  in
exploring strategic alternatives which include, among
other  things,  a  business  combination,  sales   of
assets,  strategic investment in  the  Company  or  a
refinancing of the Credit Agreement.  There can be no
assurance that the Company will be successful in  its
attempt   to   consummate  one   of   the   strategic
alternatives or a refinancing or restructuring of the
Credit  Agreement.  If the Company does not make  the
required  payment at maturity of the Credit Agreement
or   is  unable  to  obtain  a  committed  source  of
financing adequate to meet expected requirements,  it
may  be  unable  to  continue its normal  operations,
except  to  the extent permitted by the Japan  Energy
Group.   Substantially all of the Company's  tangible
and intangible assets are pledged as collateral under
the Credit  Agreement.
    


The  majority  of  the  year  end  cash  on  hand  of
$3,936,000 was at various international subsidiaries.
With  minor exceptions, all cash is freely remittable
to the United States.


Item 8    Financial Statements and Supplementary Data


              REPORT OF INDEPENDENT ACCOUNTANTS


To the Shareholders and Directors
of Encore Computer Corporation

We   have   audited   the   consolidated   financial
statements  and the financial statement schedule  of
Encore  Computer Corporation and Subsidiaries listed
in  Item 14 (a) of this Form 10-K.   These financial
statements and financial statement schedule are  the
responsibility  of  the Company's  management.   Our
responsibility  is to express an  opinion  on  these
financial  statements  and the  financial  statement
schedule based on our audits.

We conducted our audits in accordance with generally
accepted   auditing  standards.    Those   standards
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.   An  audit  also   includes
assessing   the  accounting  principles   used   and
significant estimates made by management, as well as
evaluating    the   overall   financial    statement
presentation.  We believe that our audits provide  a
reasonable basis for our opinion.

In our opinion, the financial statements referred to
above present fairly, in all material respects,  the
consolidated  financial position of Encore  Computer
Corporation and Subsidiaries as of December 31, 1996
and  1995,  and  the consolidated results  of  their
operations  and  their cash flows for  each  of  the
three years in the period ended December 31, 1996 in
conformity   with   generally  accepted   accounting
principles.   In  addition,  in  our  opinion,   the
financial statement schedule referred to above, when
considered  in  relation  to  the  basic   financial
statements taken as a whole, presents fairly, in all
material  respects, the information required  to  be
included therein.

The  accompanying consolidated financial  statements
have  been  prepared assuming that the Company  will
continue  as  a  going  concern.   The  Company  has
suffered recurring losses from operations and has  a
net capital deficiency and a working capital deficit
as  of  December 31, 1996.  As discussed in Notes  G
and  M to the consolidated financial statements,  on
March  19,  1997, Japan Energy Corporation exchanged
$40    million    of   the   Company's   outstanding
indebtedness  for preferred stock and  provided  the
Company with an uncommitted credit facility of up to
$50 million.  The facility, plus accrued interest is
due  and  payable on May 31, 1997.  Based on current
estimates  of  available cash flow, management  does
not believe it will have sufficient cash to make the
payment  due at maturity.  Additionally, the Company
does  not  have a committed source of  financing  to
meet  expected  requirements  over  the  next  year.
These  matters  raise substantial  doubt  about  the
Company's  ability to continue as a  going  concern.
Management's  plans in regard to these  matters  are
described  in  Note N to the consolidated  financial
statements.   The consolidated financial  statements
do  not  include any adjustments that  might  result
from the outcome of these uncertainties.


Coopers & Lybrand L.L.P.

Miami, Florida
January 30, 1997 except for Note M as to
  which the date is March 19, 1997.



   
ENCORE COMPUTER CORPORATION                                                     
Consolidated Statements of Operations                                           
                                                                                
(in thousands except per share data)                                            
                                                                                
                                                                                
                                                                                
                                                            Year Ended          
                                                  Dec 31,   Dec 31,   Dec 31,
                                                     1996      1995      1994
Net sales:                                                                    
 Equipment                                        $27,600   $22,005   $38,412
 Service                                           20,027    27,323    38,138
                                                                               
  Total                                            47,627    49,328    76,550
                                                                                
Costs and expenses:                                                             
 Cost of equipment sales (Note B)                  35,786    34,975    35,052
 Cost of service sales                             17,822    20,718    25,855
 Research and development                          30,260    33,249    30,339
 Sales, General and Admin                          30,977    33,683    36,152
 Termination Charge (Note B)                            0     4,499         0
                                                                                
  Total                                           114,845   127,124   127,398
                                                                                
Operating loss                                    -67,218   -77,796   -50,848
                                                                                
 Int exp, princ related parties                    -3,520    -2,957    -3,363
 Interest income                                      196       171       128
 Other (expense)/income, net                         -554        75        70
                                                                                
Loss before income taxes                          -71,096   -80,507   -54,013
                                                                                
Provision for income taxes                           -364       847       543
                                                                               
Net loss                                         ($70,732) ($81,354) ($54,556)
                                                                                
                                                                                
                                                                                
Net loss per common share (Note A):                                             
                                                                                
Net loss attributable to common                                                 
 shareholders                                   ($96,145)($100,416) ($68,543)
                                                                                
Loss per common share                             ($2.61)   ($2.88)   ($2.05)
                                                                                
Weighted average shares                                                         
 of common stock                                   36,810    34,923    33,391
    
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
The accompanying notes are an integral part of the consolidated                 
financial statements.
                                                           


ENCORE COMPUTER CORPORATION                                                     
Consolidated Balance Sheets                                                     
(in thousands except share data)                                                
                                               (Unaudited)                   
                                                 Proforma                    
                                                  Dec 31,   Dec 31,   Dec 31,
                                                     1996      1996      1995
                                               (See Note M)                  
ASSETS                                                                          
Current assets:                                                                 
 Cash and cash equivalents                         $3,936    $3,936    $3,490
 Accounts receivable, less allowances of $614 in 1996 and                       
 $1,798 in 1995                                    14,970    14,970    13,030
 Inventories                                       13,896    13,896    15,796
 Prepaid expenses and other current assets          1,409     1,409     1,353
  Total current assets                             34,211    34,211    33,669
                                                                                
Property and equipment, net                        33,376    33,376    35,800
Capitalized software, net                               0         0       829
Other assets                                        1,669     1,669     2,239
  Total assets                                    $69,256   $69,256   $72,537

                                                                                
LIABILITIES AND SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY)                       
Current liabilities:                                                            
 Curr. portion long term debt-rela parties(Note E)$32,659   $72,659   $     0
 Current portion long term debt-other (Note E)        182       182       171
 Accounts payable and accrued liabilities (Note D) 28,849    28,665    28,008
  Total current liabilities                        61,690   101,506    28,179
                                                                                
Long term debt-related parties (Note E)                 0         0    40,154
Long term debt-other (Note E)                         476       476       658
Other liabilities                                   1,284     1,284     1,032
  Total liabilities                                63,450   103,266    70,023
                                                                                
Commitments and contingencies (Note I)                                          
                                                                                
Shareholders' equity (Capital deficiency) (Notes E and F):                      
 Preferred stock, $.01 par value; authorized 10,000,000 shares:                 
  Series A Convertible Participating Preferred, issued                          
   73,641 shares in 1996 and 1995                       1         1         1
  6% Cumulative Series B Convertible Preferred, issued                          
   728,722 and 707,345  in 1996 and 1995, respectively,                         
   with an aggregate liquidation preference of  $72,872,200                     
   and $70,734,500 in 1996 and 1995, respectively.      7         7         7
  6% Cumulative Series D Convertible Preferred, issued                          
   1,115,074 and 1,082,362   in 1996 and 1995, respectively,                    
   with an aggregate liquidation preference  of $111,507,400                    
   and $108,236,200 in 1996 and 1995, respectively     11        11        11
  6% Cumulative Series E Convertible Preferred, issued                          
   1,139,782 and 1,106,343 in 1996 and 1995, with an                            
   aggregate liquidation preference of $113,978,200 and                         
   $110,634,300 in 1996 and 1995, respectively         11        11        11
  6% Cumulative Series F Convertible Preferred, issued                          
   533,333 and 517,687 in 1996 and 1995, respectively,                          
   with an aggregate liquidation preference of $53,333,300                      
   and $51,768,700 in 1996 and 1995, respectively.      5         5         5
  6% Cumulative Series G Convertible Preferred, issued                          
   572,289 and 555,500 in 1996 and 1995, respectively,                          
   with an aggregate liquidation preference of $57,228,900                      
   and $55,550,000 in 1996 and 1995, respectively.      6         6         6
  6% Cumulative Series H Convertible Preferred, issued                          
   350,000 in 1996 with an aggregate liquidation preference                     
   of $35,000,000.                                      4         4         0
  6% Cumulative Series I Convertible Preferred, issued                          
   400,000 in 1996 with an aggregate liquidation preference                     
   of $40,000,000.                                      4         0         0
 Common stock, $.01 par value; authorized 200,000,000 shares;                   
  issued 37,270,457 and 36,067,792 in 1996 and 1995,                            
  respectively.                                       373       373       361
 Additional paid-in capital                       486,880   447,068   412,876
 Accumulated deficit                             -481,496  -481,496  -410,764
  Total shareholders' equity (Capital deficiency)   5,806   -34,010     2,514
  Total liab and sharehldrs' equity (Cap'l Defic.)$69,256   $69,256   $72,537
                                                                                
                                                                                
The accompanying notes are an integral part of the consolidated                 
financial statements.
                                                           


ENCORE COMPUTER CORPORATION                                                     
Consolidated Statements of Cash Flows                                           
(Unaudited)                                                                     
(in thousands)                                                                  
                                                                                
                                                                                
                                                            Year Ended          
                                                  Dec 31,   Dec 31,   Dec 31,
                                                     1996      1995      1994
                                                                                
Cash flows from operating activities:                                           
Net loss                                        ($70,732) ($81,354) ($54,556)
Adjustments to arrive at net cash used in operating activities:                 
 Depreciation and amortization                     10,747   11,750    10,850
 Non cash compensation (Note J)                       589    1,424         0
 Inventory obsolescence and writedown to lower of cost                          
  or market                                        11,013   12,367       -30
 Equity in loss of                                                              
  joint venture                                       253      773       286
 Bad debt provision (credit)                         -550    2,735     2,928
 Restructuring charges                                  0    4,499         0
 Foreign exchange loss (gain)                         412     -134       -93
 Loss (gain) on disposal of property                                            
  and equipment                                       138    1,839        -1
Net changes in operating assets and liabilities:                                
 Accounts receivable                               -1,750    4,514    -5,942
 Inventories                                       -8,888     -608    -9,765
 Prepaid expenses and other current assets            -89      375     1,217
 Other assets                                          36      381      -257
 Accounts payable and accrued liabilities          -1,922   -8,330    -9,048
 Other liabilities                                     -1        0       -93
  Net cash used in operating activities           -60,744  -49,769   -64,504
                                                                                
Cash flows from investing activities:                                           
 Additions to property and equipment               -7,433   -7,335   -13,089
 Proceeds from sale of property and equipment         114       14       220
 Capitalization of software costs                       0     -673    -2,467
  Net cash used in investing activities            -7,319   -7,994   -15,336
                                                                                
Cash flows from financing activities:                                           
 Net borrowings under revolving loan agreements    67,505   56,733    76,497
 Principal payments of long term debt                -171     -194      -169
 Dividends paid on Preferred Stock                     -2       -1        -2
 Issuance of Common Stock                           1,375    2,120     2,170
  Net cash provided by financing activities        68,707   58,658    78,496
 Effect of exchange rate changes                                                
    on cash                                          -198       78       110
Increase (decrease) in cash and cash equivalents      446      973    -1,234
                                                                                
Cash and cash equivalents, beginning                3,490    2,517     3,751
                                                                                
Cash and cash equivalents, ending                  $3,936   $3,490    $2,517
                                                                                
                                                                                
The accompanying notes are an integral part of the consolidated                 
financial statements.
                                                           


                                                                                
                                                                                
ENCORE COMPUTER CORPORATION                                                     
Consolidated Statements of Cash Flows                                           
                                                                                
                                                                                
                                                                                
                                                        1996      1995      1994
Supplemental disclosure of cash flow information (in thousands):                
                                                                                
 Cash paid during the period for interest               $150    $1,354    $2,162
                                                                                
 Cash paid during the period for income taxes            631     1,273         0
                                                                                
                                                                                
                                                                                
Non-cash investing and financing activity:                                      
                                                                                
 Indebtedness exchanged for preferred stock          $35,000  $105,000  $100,000
                                                                                
  Accruals originally established for transaction                               
  costs related to Gould capital transactions credited to                       
 additional paid-in capital                               $0      $400      $625
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
The accompanying notes are an integral part of the consolidated                 
financial statements.                                                           


ENCORE COMPUTER CORPORATION                                                     
Consolidated Statements of Shareholders' Equity (Capital Deficiency)            
(in thousands except share data)
                                                
                                   Preferred Stock                              
                     Series A          Series B         Series D                
                             Par                 Par            Par             
                     Shares  Val   Shares        Val     Shares Val
             
Bal Dec 31, 1993     73,641    1  591,625          6    905,283   9             

Common stock options                                                            
exercised,  $.63 to $2.00                                                       
per share                                                                       

Shares issued through employee                                                  
 stock purchase plan, at an avg                                                 
 price of $2.69 per share                                                       

Issuance of Series E Convertible                                                
 Preferred Stock (Note E)                                                       

Dividends issued to Preferred Stockholders                                      
 in shares of Series B, D                                                       
 and E                    0    0   74,828          1    114,504   1             

Adjustment of estimated transaction costs                                       
  relating to Gould capital transactions                                        

Net loss                                                                        
Bal Dec 31, 1994     73,641    1  666,453          7  1,019,787  10             
                                                                                
Common stock options                                                            
exercised,  $.63 to $2.31                                                       
per share                                                                       
                                                                                
Shares issued through employee                                                  
 stock purchase plan, at an avg price of                                        
 $1.75 per share                                                                
                                                                                
Issuance of Series F and G Convertible                                          
 Preferred Stock (Note E)                                                       
                                                                                
Dividends issued to Preferred Stockholders                                      
 in shares of Series B, D, E, F                                                 
 and G                    0    0   40,892          0     62,575   1             

Cash paid in lieu of fract shs                                                  

Extension of expiration date on outstanding                                     
 grant of common stock options                                                  

Adjustment of estimated transaction costs                                       
  relating to Gould capital transactions                                        
                                                                                
Net loss                                                                        
Bal Dec 31, 1995     73,641$   1  707,345 $        7  1,082,362$ 11             
                                                                                
Common stock options                                                            
exercised,  $.69 to $2.00                                                       
per share                                                                       
                                                                                
Shares issued through employee                                                  
 stock purchase plan, at an avg price of                                        
 $1.52 per share                                                                
                                                                                
Issuance of Series H Convertible                                                
 Preferred Stock (Note E)                                                       
                                                                                
Dividends issued to Preferred Stockholders                                      
 in shares of Series B, D, E, F                                                 
 and G                    0    0   21,377          0     32,712   0             

Cash paid in lieu of fract shs                                                  

Extension of expiration date on outstanding                                     
 grant of common stock options                                                  
                                                                                
Net loss                                                                        
Bal Dec 31, 1996     73,641$   1  728,722 $        7  1,115,074$ 11             
                                                                                
                                                                                
                                                                                
                                                                                
                                   Preferred Stock                              
                  Series E          Series F         Series G      Series H  
                          Par                 Par            Par          Par
                  Shares  Val   Shares        Val     Shares Val   Shares Val

Bal Dec 31, 1993       0   $0        0         $0          0  $0        0  $0
                                                                                

Common stock options                                                            
exercised,  $.63 to $2.00                                                       
per share                                                                       
                                                                                
Shares issued through employee                                                  
 stock purchase plan, at an avg                                                 
 price of $2.69 per share                                                       
                                                                                
Issuance of Series E                                                            
 Convertible Preferred                                                          
 Stock (Note E)   1,000,000   10        0          0          0   0        0   0

Dividends issued to Preferred Stockholders                                      
 in shares of Series B, D                                                       
 and E               42,381    0        0          0          0   0        0   0



                                                                                
Net loss                                                                        
Bal Dec 31, 1994  1,042,381  $10        0         $0          0  $0        0  $0

Common stock options                                                            
exercised,  $.63 to $2.31                                                       
per share                                                                       
                                                                                
Shares issued through employee                                                  
 stock purchase plan, at a price of                                             
 $1.75 per share                                                                
                                                                                
Issuance of Series F and G                                                      
 Convertible Preferred                                                          
  Stock (Note E)          0    0  500,000          5    550,000   6             
                                                                                
Dividends issued to Preferred Stockholders                                      
 in shares of Series B, D, E, F                                                 
 and G               63,962    1   17,687          0      5,500   0             

Cash paid in lieu of fract shs                                                  

Extension of expiration date on outstanding                                     
 grant of common stock options                                                  

Adjustment of estimated transaction costs                                       
  relating to Gould capital transactions                                        
                                                                                
Net loss                                                                        
Bal Dec 31, 1995  1,106,343$  11  517,687 $        5    555,500$  6             

Common stock options                                                            
exercised,  $.69 to $2.00                                                       
per share                                                                       

Shares issued through employee                                                  
 stock purchase plan, at an avg price of                                        
 $1.52 per share                                                                

Issuance of Series H Convertible                                                
 Preferred Stock (Note E)                                                       

Dividends issued to Preferred Stockholders                                      
 in shares of Series B, D, E, F                                                 
 and G               33,439    0   15,646          0     16,789   0             

Cash paid in lieu of fract shs                                                  

Extension of expiration date on outstanding                                     
 grant of common stock options                                                  


Bal Dec 31, 1996  1,139,782  $11  533,333         $5    572,289  $6  350,000  $4

                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                   Common Stock                         Shrhldrs'               
                                  Addt'l                    Eq                 
                             Par  Paid-in      Accum   (Capital                 
                     Shares  Val  Capital    Deficit       Def)
                 
Bal Dec 31, 1993 32,726,391 $327 $207,951  $-274,854   $-66,560                 
                                                                                
Common stock options                                                            
exercised,  $.63 to $2.00                                                       
per share           966,734   10    1,131          0      1,141                 
                                                                                
Shares issued through employee stock                                            
purchase plan, at an avg price of $2.69                                         
per share           382,999    4    1,025          0      1,029                 
                                                                                
Issuance of Series E                                                            
Convertible Preferred                                                           
Stock (Note E)            0    0   96,273          0     96,283                 
                                                                                
Dividends issued to Preferred Stockholders                                      
 in shares of Series B, D                                                       
 and E                    0    0       -4          0         -2                 

Adjustment of estimated  transaction                                            
costs relating                                                                  
to Gould                  0    0      625          0        625                 
                                                                                
Net loss                  0    0        0    -54,556    -54,556
                 
Bal Dec 31, 1994 34,076,124 $341 $307,001  $-329,410   $-22,040                 

Common stock options                                                            
exercised,  $.63 to $2.31                                                       
per share         1,568,934   16    1,363          0      1,379                 
                                                                                
Shares issued through employee stock                                            
purchase plan, at an avg price of $1.75                                         
per share           422,734    4      737          0        741                 
                                                                                
Issuance of Series F and G                                                      
Convertible Preferred                                                           
Stock (Note E)            0    0  101,954          0    101,965                 
                                                                                
Dividends issued to Preferred Stockholders                                      
 in shares of Series B, D, E, F                                                 
 and G                    0    0       -2          0          0                 

Cash paid in lieu of                                                            
fract shs                 0    0       -1          0         -1                 

Extension of expiration date on outstanding                                     
grant of commom                                                                 
stock options             0    0    1,424          0      1,424                 

Adjustment of estimated  transaction                                            
costs relating to Gould capital                                                 
transactions              0    0      400          0        400                 
                                                                                
Net loss                  0    0        0    -81,354    -81,354                 
Bal Dec 31, 1995 36,067,792 $361 $412,876  $-410,764     $2,514                 

Common stock options                                                            
exercised,  $.69 to $2.00                                                       
per share           808,011    8      767          0        775                 
                                                                                
Shares issued through employee stock                                            
purchase plan, at an avg price of $1.52                                         
per share           394,654    4      596          0        600                 
                                                                                
Issuance of Series H                                                            
Convertible Preferred                                                           
Stock (Note E)            0    0   32,242          0     32,246                 
                                                                                
Dividends issued to Preferred Stockholders                                      
 in shares of Series B, D, E, F                                                 
 and G                    0    0       -1          0         -1                 

Cash paid in lieu of                                                            
fract shs                 0    0       -1          0         -1                 

Extension of expiration date on outstanding                                     
grant of commom                                                                 
stock options             0    0      589          0        589                 

Net loss                  0    0        0    -70,732    -70,732
                 
Bal Dec 31, 1996 37,270,457 $373 $447,068  $-481,496   $-34,010
                 

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, designs,  manufactures,
distributes  and  supports  scalable  real  time  data
storage, data retrieval, and sharing technologies  for
mixed platform processing environments.  Headquartered
in  Fort  Lauderdale, Florida, the Company  has  sales
offices and distributors in the United States, Canada,
Europe, and the Far East.

Basis of Presentation
The  accompanying  consolidated financial  statements
have  been  prepared assuming that the  Company  will
continue as a going concern.  As discussed in Note  N
of  the  Notes to Consolidated Financial  Statements,
the   Company  has  borrowings  under  a  $50,000,000
facility  which matures May 31, 1997.   Additionally,
the  Company  does  not have a  committed  source  of
financing to meet expected requirements over the next
year.   These  matters raise substantial doubt  about
the Company's ability to continue as a going concern.
The  consolidated financial statements do not include
any adjustments that might result from the outcome of
these uncertainties.

Principles of Consolidation
The  accompanying  financial  statements  include  the
accounts  of Encore and its wholly owned subsidiaries.
All   material  intercompany  transactions  have  been
eliminated.   The  Company's  50%  investment   in   a
Japanese  joint  venture operation  is  accounted  for
under the equity method.  The Company has a commitment
to  make additional capital contributions to the joint
venture,   accordingly,  the  Company  has  recognized
losses  in  excess of its investment to the extent  of
this capital commitment.

Pervasiveness of Estimates
The  preparation of financial statements in conformity
with generally accepted accounting principles requires
management  to  make  estimates and  assumptions  that
affect  the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported
amounts  of revenues and expenses during the reporting
period.   Actual  results  could  differ  from   those
estimates.

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  is
recognized  upon  shipment.   With  respect   to   the
Company's  storage processor product line, during  the
product   introductory   period,   revenue   will   be
recognized  upon  customer  acceptance.   The  Company
expects  acceptance  to occur within  thirty  days  of
shipment.  This practice will be reviewed in 1997 and,
if   appropriate,  the  Company  will  revert  to  the
established  recognition policy.  Service  revenue  is
recognized  over  the term of the related  maintenance
agreements  which approximates the timing of  services
performed.

Inventories
Inventories are stated at the lower of cost or market.
Cost  is determined by the first-in, first-out method.
Loaned  equipment which consists primarily of finished
computer systems that are loaned to customers for test
and  evaluation is classified as inventory only if the
equipment is 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 is classified as property and equipment.

Property and Equipment
Property and equipment is stated at cost. Property and
equipment  includes customer service  inventory  which
consists  principally  of  spare  parts  utilized   to
support  repairs  at  customer  installations  and  is
generally   not   available  for  resale.   Additions,
renewals and improvements are capitalized, and  repair
and  maintenance costs are expensed.  Upon  an  assets
retirement  or  disposition,  the  cost  and   related
accumulated depreciation are removed from the accounts
and  any  resulting gain or loss is reflected  in  the
results of operations.  Depreciation is 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
are  amortized over their expected useful lives or the
lease term, whichever is shorter.

Statement  of  Financial Accounting Standards  ("FAS")
No.  121, "Accounting for the Impairment of Long-Lived
Assets  and  for Long-Lived Assets to be Disposed  Of"
was  issued  in  March 1995 and  was  adopted  in  the
Company's fiscal year beginning January 1, 1996.   FAS
121  requires that long-lived assets, such as property
and equipment, and certain identifiable intangibles to
be  held and used, be reviewed for impairment whenever
events  or changes in circumstances indicate that  the
carrying  amount  of an asset may not be  recoverable.
An  impairment loss, based on the fair  value  of  the
asset,  should  be recognized if the  expected  future
cash flows (undiscounted and without interest charges)
resulting from the use and eventual disposition of the
asset is less than the carrying amount of the asset.

As  discussed  in  Note  F of  Notes  to  Consolidated
Financial  Statements,  the Company  has  historically
written  down the carrying value of long-lived  assets
deemed permanently impaired.  However, as contemplated
by  FAS  121,  the Company's history of operating  and
cash flow losses indicates that the recoverability  of
the carrying amount of the long-lived assets should be
assessed.  Based on the Company's analysis of the fair
value  of  property and equipment,  no  adjustment  is
required in 1996.

Employer's Postemployment Benefits
The    Company   provides   employees   with    salary
continuation and job counseling services in the  event
of an employee's involuntary termination.  The Company
recognizes  such  costs on a terminal  accrual  basis,
recording   the   estimated  cost  of   postemployment
benefits at the date of the event giving rise  to  the
liability to pay those benefits.

Stock-Based Compensation
The  Company  applies APB Opinion No. 25  and  related
Interpretations in accounting for its stock option and
stock  purchase  plans.  Accordingly, no  compensation
cost  has  been  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.

Capitalized Software
Through  June  1995,  the Company capitalized  certain
internal  costs  associated with software  development
after  the  project reached technological feasibility.
Such  costs as well as capitalized costs for purchased
software,  were  amortized to cost  of  sales  by  the
greater  of; (a) straight line amortization  over  the
expected  commercial life of each  product  (three  to
five  years),  or (b) the ratio that current  revenues
for  a  product  bear  to the  total  of  current  and
anticipated   future  revenues   for   that   product.
Software  development costs incurred prior to reaching
the point of technological feasibility were considered
research  and development costs and were  expensed  as
incurred.  During June 1995, as discussed in Note B of
the  Notes  to Consolidated Financial Statements,  the
Company  took  a  charge of $500,000 to  research  and
development   to   write  down  capitalized   software
projects  in  process.  Since that time, all  software
development costs have been expensed as incurred.

Income Taxes
The   Company   utilizes  the  liability   method   of
accounting  for  deferred income  taxes.   Under  this
method,  deferred  tax  assets  and  liabilities   are
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 are expected to reverse.
Deferred   tax  assets  are  reduced  by  a  valuation
allowance  when, in the opinion of management,  it  is
more  likely than not that some or all of the deferred
tax assets will not be realized.


   
Per Share Data
Per  share data is calculated based upon the  weighted
average  number of shares of common stock  and  common
stock equivalents outstanding. In fiscal periods which
report  net  losses, the calculation does not  include
the  effect of common stock equivalents such as  stock
options since the effect on the amounts reported would
be  antidilutive.    All series of preferred
stock   have  been  determined  to  be  common   stock
equivalents  but  are  not included  in  the  weighted
average   number  of  shares  of  common   stock   and
equivalents  or  in the calculation of  net  loss  per
share  for  the periods presented because  the  effect
would be antidilutive.
    


Net  loss  per common share was determined by dividing
the  net  loss,  as  adjusted,  by  applicable  shares
outstanding.   The loss was adjusted by the  aggregate
amount  of dividends on the Company's preferred stock.
Preferred  stock  dividends amounted  to  $25,413,000,
$19,061,600 and $13,986,600 for 1996, 1995  and  1994,
respectively.   Based  on the  capital  deficiency  at
December   31,  1996,  the  Company  has   accumulated
preferred  stock  dividends amounting to  $13,417,000.
All   preferred  stock  dividends  other  than   those
accumulated as of December 31, 1996, have been paid in
additional   shares  of  the  appropriate   class   of
preferred stock.

In  February 1997, the Financial Accounting  Standards
Board  issued SFAS No. 128, Earnings Per  Share  (EPS)
("SFAS   No.  128").   SFAS  No.  128  specifies   new
standards  designed  to improve  the  EPS  information
provided  in  financial statements by simplifying  the
existing   computational  guidelines,   revising   the
disclosure    requirements,   and    increasing    the
comparability  of EPS data on an international  basis.
Some   of  the  changes  made  to  simplify  the   EPS
computations include; (a) eliminating the presentation
of  primary EPS and replacing it with basic EPS,  with
the  principal  difference  being  that  common  stock
equivalents are not considered in computing basic EPS,
(b) eliminating the modified treasury stock method and
the  three  percent  materiality  provision,  and  (c)
revising  the  contingent  share  provisions  and  the
supplemental  EPS data requirements.   SFAS  128  also
makes  a  number  of  changes to  existing  disclosure
requirements.   SFAS  128 is effective  for  financial
statements  issued for periods ending  after  December
15,  1997, including interim periods.  The Company had
not yet determined the impact of the implementation of
SFAS 128.

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


   
Warranties
The  Company  provides a standard product warranty  on
its   computer  systems  for  parts  and  labor  which
generally  extends  ninety  days  from  the  date   of
installation, but on certain products for  up  to  one
year.  On  its  storage processor  product  line,  the
standard   product  warranty  for  parts   and   labor
generally extends two, and in some cases, three  years
from the date of installation.  The estimated cost  of
providing  such warranty on products sold is  included
in cost of sales at the time revenue is recognized.  These
estimates are based upon historical data for mature products
and engineering estimates for new products.  Actual warranty
costs are reviewed on a quarterly basis and subsequent
estimates adjusted appropriately.
    


Reclassifications
Certain  reclassifications have been made  to  conform
prior years' data to the current year presentation.


   
B. Termination of Amdahl Reseller Agreement

During   1994,  the  Company  and  Amdahl  Corporation
("Amdahl") entered into a five year reseller agreement
(the "Amdahl Reseller Agreement") which granted Amdahl
the   exclusive  right  to  distribute  the  Company's
Infinity Storage Products under the Amdahl brand.  The
Amdahl  Reseller  Agreement, as  amended,  established
procurement   schedules,  which  if  certain   product
requirements were met, would have required  Amdahl  to
purchase  a  significant amount of  product  from  the
Company.   Sales  under the Amdahl Reseller  Agreement
were  anticipated to begin in the second half of  1994
with  significant sales volumes scheduled in the first
half  of  1995. 

During the second and third quarters of 1994 the Company
delivered products to Amdahl under the terms of the Amdahl
Agreement which Encore believes conformed fully with the
agreement.  However, as of December 31, 1994 Amdahl had
not paid for the products received.

The Company had continuing discussions with Amdahl requesting
payment of all past due invoices and the resumption of 
deliveries under the terms of the Amdahl Agreement.  In
response to a February 1995 letter sent by the Company to
Amdahl notifying Amdahl of its intent to terminate the 
Amdahl Agreement if past due invoices were not paid, Amdahl
filed suit in the Delaware Chancery Court on March 29, 1995
seeking to prevent Encore from terminating the agreement.
On March 30, 1995, Encore and Amdahl agreed to a "Stand-Still"
Agreement which, in effect, preserved the status quo to allow
the companies time to more thoroughly discuss the contractual
issues that existed.  The "Stand-Still" Agreement ran until
April 14, 1995.

Because of the uncertainties surrounding the outcome of the 
discussions between the companies, management and its 
independent auditors considered it prudent to establish 
certain reserves at December 31, 1994.  Reserves were 
established at December 31, 1994 by charging cost of goods
sold $8,960,000, including (i) an allowance of $3,300,000
related to Storage Product systems sales, against past due
Amdahl trade receivables of $6,100,000, and (ii) an adjustment
of $5,600,000, after consideration of estimated salvage value,
against the $22,300,000 carrying value of Infinity SP
inventory.

On April 24, 1995, the companies jointly announced that they
had reached an agreement in principle as to the existing
issues and the "Stand-Still" agreement was extended to allow
sufficient time to document the agreement.  However, the
companies were unable to reach a final agreement.  On June 8,
1995, Encore announced that the Reseller Agreement between
Encore and Amdahl for the sale of Encore's storage products
by Amdahl had been terminated.

The Company's inventory levels and overhead costs were
based  on  a plan designed to meet accelerating  sales
commitments defined in the Amdahl Reseller  Agreement.
However,  because  of the termination  of  the  Amdahl
Reseller  Agreement, product sales fell well short  of
expectations and all elements of the Company's results
of operations were adversely affected.  As a result of
these   events,  during  1995,  the  Company   charged
operations   $19,241,000,  consisting  of:(i) a charge
to cost of sales of $11,442,000 against $24,895,000 of
Storage Product inventory to reduce carrying amounts to
estimated net realizable value, (ii) a charge to cost of
sales of $2,800,000 for Amdahl   accounts  receivable,
which were deemed uncollectible in light of the termination
of the Amdahl Agreement, (iii) a charge to research and
development of $500,000 to write  down  capitalized
software projects in process relating to the Storage Product
business, and (iv) a charge to termination costs of
$4,499,000.  The termination charge related
to; (i) the recognition of the permanent impairment in
value  of  $2,406,000  of certain  long-lived  assets,
including   capitalized  software relating to the 
Company's UNIX based product line and  property   and
equipment used in support of the Amdahl Reseller
Agreement, (ii)  severance  and   benefit   pay   of
$1,335,000  as  a result of a 95 person  reduction  in
workforce,    principally   in    manufacturing    and
development, and (iii) other expenses associated  with
the termination of the Amdahl Reseller Agreement. 

The Company's estimate of asset impairments for fiscal
1994 and 1995 were based on the status of the Amdahl
negotiations at the applicable reporting dates.
    



C. Inventories

Inventories consist of the following (in thousands):

                                         December     December
                                            31,         31,
                                           1996         1995
                                                          
Purchased parts                        $   9,357    $   9,161
Work in process                              306        4,570
Finished goods                             3,981        1,799
Loaned computer equipment and
  consignment inventory                      252          266
                                        $ 13,896     $ 15,796

During   the  fourth  quarter  of  1996,  the  Company
provided an additional reserve of $7,348,000 in  light
of   the  continued  slow  market  acceptance  of  the
Company's    storage   products.    Storage    product
inventory,  amounted to $9,169,000 and $11,139,000  at
December 31, 1996 and 1995, respectively.  The Company
is  expanding  its  programs to market  the  Company's
storage  products through various direct,  distributor
and  OEM channels.  No estimate can be made of a range
of amounts of loss that are reasonably possible should
the programs not be successful.


D. Property and Equipment

Property and equipment consists of the following (in
thousands):

                                         December     December
                                            31,         31,
                                           1996         1995
                                                          
Land                                    $   5,100     $   5,100
Buildings                                  15,238        15,243
Equipment                                  36,005        44,349
Customer service inventory                 16,282        13,985
Furniture and fixtures                      2,539         2,900
Leasehold improvements                      1,298         1,309
Loaned equipment                            4,815         4,815
                                           81,277        87,701
Accumulated depreciation                                     
 and amortization                         (47,901)      (51,901)
                                         $ 33,376      $ 35,800

Depreciation  expense in 1996, 1995 and 1994  amounted
to $9,380,000, $9,260,000 and $8,619,000, respectively.


E. Capitalized Software

Capitalized software consists of the following (in
thousands):

                                         December     December
                                            31,         31,
                                           1996         1995
                                                          
Capitalized software                    $     -     $   3,708
Accumulated amortization                      -        (2,879)
                                        $     -     $     829


   
Software  costs capitalized in 1995 and 1994  amounted
to     $673,000    and    $2,467,000,    respectively.
Amortization of capitalized software costs charged  to
expense in 1996, 1995 and 1994 amounted to $1,367,000,
$2,490,000 and $2,226,000, respectively.  During 1995,
$1,625,000 was charged to termination charges in recognition
of  the  permanent impairment in value of  capitalized
software    and   $561,000   was   transferred    from
construction in progress to capitalized software.


F. Accounts Payable and Accrued Liabilities;

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

                                         December     December
                                            31,         31,
                                           1996         1995
                                                          
Accounts payable                       $   4,976   $     7,339
Accrued salaries and benefits              4,034         4,261
Accrued termination costs                    362         1,566
Accrued interest-related parties          11,614         5,921
Accrued taxes                              2,760         4,045
Deferred income, principally
 maintenance contracts                       879           827
Other accrued expenses                     4,040         4,049
                                       $  28,665     $  28,008
    


Accrued  interest  of $10,791,000 and  $5,215,000  was
payable  to  Gould  at December  31,  1996  and  1995,
respectively.   The  balance of  accrued  interest  to
related  parties is being amortized over the  term  of
the credit agreement.


G.  Debt

Debt consists of the following (in thousands):


                                (See Note                         
                                    M)
                                Pro forma                         
                                 December    December    December
                                   31,         31,         31,
                                   1996        1996        1995
                                (Unaudited)

Debt to unrelated parties:                                     
  Mortgages payable              $    658    $    658    $    829
  Current portion of debt            (182)       (182)       (171)
  Total long term debt to                              
    unrelated parties            $    476    $    476    $    658
      
Debt to related parties:                                     
  Credit Agreement with Gould                                     
    Electronics Inc.             $ 32,659    $ 72,659    $ 40,154
      Current portion of debt     (32,659)    (72,659)       -
      Total long term debt to
        related parties          $    -      $    -      $ 40,154

Since 1989, the principal source of financing for  the
Company   has  been  provided  by  the  Japan   Energy
Corporation,  through its wholly  owned  subsidiaries,
Gould    Electronics,   Inc.   ("Gould")    and    EFI
International ("EFI") (collectively, the "Japan Energy
Group").   The  Japan Energy Group is a related  party
due  to  the significant financial interests of  Gould
and  EFI  in the Company.  As discussed more fully  in
Note  J of Notes to Consolidated Financial Statements,
the  Japan Energy Group has canceled indebtedness owed
by  the  Company  in  exchange for various  series  of
convertible preferred stock.  Assuming full conversion
of  preferred stock holdings as of December 31,  1996,
the  Japan Energy Group beneficially owns 82%  of  the
Company's common stock.

During   1995,   Gould   canceled   $105,000,000    of
indebtedness   and  on  April  16,  1996,   Gould   as
authorized   by  Japan  Energy  Corporation   canceled
$35,000,000  of  indebtedness  pursuant  to  a  Credit
Agreement ("Credit Agreement") which was scheduled  to
mature on that date, in exchange for 350,000 shares of
the  Company's  Series H Convertible  Preferred  Stock
("Series   H").   In  addition  to  the  exchange   of
indebtedness  for Series H, Gould amended  the  Credit
Agreement  in  order  to provide the  Company  with  a
committed  borrowing facility of  $65,000,000.   Gould
also  has  allowed  the Company to  borrow  additional
funds  in  excess  of the maximum limit.   The  credit
facility  bears  interest at the prime  rate  plus  2%
(10.25%  at  December 31, 1996).  As of  December  31,
1996,  Encore owed to Gould $72,659,000 in  principal,
plus  $10,791,000 in accrued interest.  On January  9,
1997  Gould  and  Encore agreed to  amend  the  credit
agreement to increase the maximum amount of  loans  to
$80,000,000,  however, any loan exceeding  $65,000,000
will  be  made at the discretion of Gould.  Borrowings
are   collateralized  by  substantially  all  of   the
Company's  tangible  and  intangible  assets  and  the
agreement   contains   various   covenants   including
maintenance  of cash flow, leverage and  tangible  net
worth  ratios and limitations on capital expenditures,
dividend payments and additional indebtedness.   Gould
has  waived compliance with these financial  covenants
in the agreement until January 1, 1997.

As  discussed  more  fully  in  Note  M  of  Notes  to
Consolidated Financial Statements, on March 19,  1997,
the Company and Gould agreed to cancel $40,000,000  of
indebtedness owed to Gould under their loan  agreement
(the  "Credit Agreement") in exchange for the issuance
to  Gould of 400,000 shares of the Company's Series  I
Convertible  Preferred  Stock  ("Series  I")  with   a
liquidation preference of $40,000,000.  In addition to
the  exchange of indebtedness for shares of Series  I,
the  Company and Gould also agreed to amend the Credit
Agreement  to (i) reduce the maximum amount which  can
be   borrowed  by  the  Company  from  $80,000,000  to
$50,000,000,  and (ii) provide that any borrowings  in
excess    of   $41,915,869   (the   principal   amount
outstanding on March 19, 1997 after giving  effect  to
the  exchange of indebtedness for shares of Series  I)
may  be made only at the discretion of Gould.   As  of
April  12,  1997 the Company owed to Gould $45,525,494
under  the  Credit  Agreement,  plus  $12,974,348   in
accrued  interest.  All borrowings  under  the  Credit
Agreement, plus accrued interest, are due and  payable
on May 31, 1997.  In the event of default, the rate of
interest to be applied will immediately increase by an
additional 2%.


H. Income Taxes

The   Company   utilizes  the  liability   method   of
accounting for deferred income taxes and has  recorded
a  credit of $364,000 in 1996 due to overestimated tax
accruals  in prior years, and a provision of  $847,000
and  $543,000  for  1995 and 1994, respectively.   The
provisions  relate  to  the profitable  operations  of
certain foreign subsidiaries.

The  financial  reporting  bases  of  investments   in
certain foreign subsidiaries exceeds their tax  bases.
A  deferred  tax  liability is not  recorded  for  the
excess   because   the  investments  are   essentially
permanent.   A  reversal  of the  Company's  plans  to
permanently invest in these operations would cause the
excess to become taxable.  On December 31, 1996, these
temporary  differences were approximately  $6,000,000.
A determination of the amount of unrecognized deferred
tax  liability  related to these  investments  is  not
practicable.


   
The  significant components of the deferred tax assets
and  liabilities as of December 31, 1996 and 1995 were
as follows (in thousands):

                                        December      December
                                          31,            31,
                                          1996          1995
                                                               
Net operating losses                  $  150,195    $  126,618
Research and experimental credits          1,750         1,750
Capital losses                             4,954         4,396
Allowance for doubtful accounts              172           452
Inventory reserves                         9,023         8,113
Accrued vacation                             560           600
Various reserves/other                     4,279         3,405
Accrued termination                            7           102
                                         170,940       145,436
                                                               
Valuation allowance                     (168,739)     (143,808)
                                           2,201         1,628
                                                               
Deferred tax liabilities:                                      
Depreciation                              (1,863)         (770)
Capitalized software                        (338)         (858)
                                                               
Net                                   $       -     $       -
    



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,  1996,  the  Company  has  available
approximately $85,000,000 of pre change net  operating
losses  of  which only $30,000,000 will  be  allowable
after  application of the Section 382 limitation,  pre
change  tax credit carryforwards, principally research
and  development credits, of approximately  $1,750,000
and  post change net operating losses of $330,000,000.
These    net   operating   losses   and   tax   credit
carryforwards  expire in the years 1998 through  2012.
The  Company  also has a capital loss carryforward  of
$12,937,000  related  to the 1992  refinancing,  which
expires  in 1997, as well as, a $100,000 capital  loss
carryforward stemming from the sale of an interest  in
a  foreign  investment during 1995, which  expires  in
2000.   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.

As  of December 31, 1996, the U.S. Federal Income  Tax
Returns  for 1992 through 1994 were in the process  of
examination by the Internal Revenue Service, which the
Company  believes  will propose  certain  adjustments.
The   Company  believes  that  the  tax  returns   are
substantially   correct  as  filed  and   intends   to
vigorously    contest   any   proposed    adjustments.
Management  believes that the amounts that  have  been
provided are adequate and that the ultimate resolution
of  the  examination will result in no material impact
on the Company's consolidated results of operations or
financial position.
I.  Commitments and Contingencies

Leases
The  Company  leases office space and equipment  under
operating   leases.   Certain  building  leases   have
renewal options generally for periods ranging from one
to  five  years.   Rental expenses,  net  of  sublease
income, were approximately $3,003,000, $3,187,000  and
$3,594,000  for  1996, 1995, and  1994,  respectively.
Approximate  future  minimum  rental  payments   under
operating  leases  for  the next  five  years  are  as
follows (in thousands):

    Year                                        
    1997                               $   2,756
    1998                                   1,623
    1999                                   1,312
    2000                                   1,215
    2001                                     817

Joint Venture Capital Commitment
The  Company has committed to invest up to a total  of
$3,250,000  for  a  Japanese joint venture,  of  which
$1,285,000 has been accrued in recognition  of  losses
reported through December 31, 1996.

Litigation
The Company is subject to legal proceedings and claims
which  arise  in the ordinary course of its  business.
In  the  opinion  of  management, the  amount  of  the
ultimate liability with respect to these actions  will
not  materially affect the financial position  of  the
Company.

Intellectual Property License
In  connection with its recapitalization  in  January
1991,  the Company licensed substantially all of  its
intellectual  property to Gould  on  a  royalty  free
basis.   However, under the terms of  the  agreement,
and in combination with certain extensions granted by
Gould,  Encore  retained the  exclusive  use  of  the
intellectual  property  through  December  31,  1995.
Those  extensions have expired and effective  January
1,  1996, both Gould and Encore have the right to use
the   Encore  intellectual  property.   The   Company
maintains the right to terminate the Gould license if
all  Gould  borrowings are repaid and the commitments
under any Gould credit agreements are terminated  and
one of the following  four conditions is met; (i) the
6%  Cumulative  Series B Convertible Preferred  Stock
("Series B") is converted into common stock or Series
A  Convertible Participating Preferred Stock, or (ii)
the  Series B is redeemed; or (iii) the Company  pays
Gould  the  fair value of the license,  or  (iv)  the
Company  pays  Gould a fixed dollar amount  equal  to
$46,540,000  plus  9%  per annum interest  compounded
annually  for  the  period after  January  28,  1996,
through the date of payment.


J.  Capital Stock

Based  upon the Company's anticipated needs  to  issue
additional   shares  of  Common  Stock,  "pay-in-kind"
preferred stock dividends and the issuance of Series I
Preferred  Convertible Stock (as discussed more  fully
in   Note   M   of  Notes  to  Consolidated  Financial
Statements),   as  well  as  common   stock   reserves
established  for  the  Company's  Stock   Option   and
Purchase  plans,  the Company will attempt  to  obtain
stockholder approval to amend Encore's Certificate  of
Incorporation  to  increase the number  of  shares  of
common  stock it is authorized to issue to 300,000,000
shares.

Series A Convertible Participating Preferred Stock
Certain   of  the  Company's  operations   relate   to
classified  U.S.  Government contracts.   Accordingly,
the   United   States  Government  expressed   concern
regarding  the  extent  of Gould's  ownership  of  the
Company's  common  stock, since Gould,  the  Company's
largest  shareholder, is owned and controlled  by  the
Japan  Energy Corporation, a foreign corporation.   In
this  connection,  the Company  has  issued  to  Gould
73,641  shares  of Series A Convertible  Participating
Preferred Stock ("Series A") in lieu of common  stock.
The Company has agreed to reserve 7,364,100 shares  of
common  stock for issuance to Gould upon  exercise  of
the conversion option.

The  holder of Series A  and the Company each have the
option  at  any  time, with 30 days prior  notice,  to
convert or require to be converted, all or any portion
of  the  Series A to common stock at a ratio of  1  to
100.  Dividend rights are equal to those of the common
shares (on an assumed converted basis); however, there
are  significant restrictions on the voting rights  of
the  Series A.  The Series A is entitled to elect  two
members  of the Board of Directors but is not entitled
to participate in the election of other members of the
Board.   Based upon the characteristics and rights  of
the  Series A, the Company has deemed these shares  to
be  common  stock (on an assumed converted basis)  for
purposes of all per share calculations for the  fiscal
periods presented herein.

Cumulative Convertible Preferred Stock
The  Company's Cumulative Convertible Preferred Stock,
consisting  of Series B, D, E, F G and H (collectively
"Preferred  Stock")  has a liquidation  preference  of
$100  per  share  and carries a 6%  cumulative  annual
dividend  requirement  payable  quarterly  which   the
Company can accumulate or pay in additional shares  of
preferred stock (valued at its liquidation preference)
until   the  Company's  shareholders'  equity  exceeds
$50,000,000.   The  Series B is convertible  into  the
Company's  common  stock at $3.25  per  share  at  the
holder's  option  at  any time and  at  the  Company's
option  upon satisfaction of certain conditions.   The
Series D, E, F G and H is convertible, at the holder's
option,  into the Company's common stock at $3.25  per
share  only; (a) if the shareholder is a United States
citizen or a corporation or other entity owned in  the
majority  by  United  States  citizens,  or   (b)   in
connection with an underwritten public offering.   The
stock is convertible, at the Company's option, if  the
price of the common stock exceeds $3.90 per share  for
twenty   consecutive  days  and;  (a)   a   buyer   is
contractually committed to purchase for at least $3.90
per  share  at least 50% of the shares into which  all
outstanding Preferred Stock would be converted, or (b)
a  buyer is contractually committed to purchase for at
least $3.50 per share at least 75% of the shares  into
which   all  outstanding  Preferred  Stock  would   be
converted.  Series B Preferred Stock is redeemable  by
the  Company  at  any  time  for  cash  equal  to  the
liquidation  preference  plus  accumulated  dividends.
Series  D,E,F,G and H are not redeemable. The  Company
has  reserved  shares of common stock  sufficient  for
issuance  upon conversion of the Preferred  Stock  and
additional  shares which may be issued as a  dividend.
As  of  December 31, 1996, the number of common shares
reserved for this purpose amounts to 149,353,415.

The  Series B is non-voting, except for the  right  to
elect  a  majority of the directors of the Company  if
certain  operating income levels are not  achieved  by
the Company and the right to approve actions adversely
affecting  the Series B.  The Series B  also  has  the
right  to elect two additional directors in the  event
that  Encore  fails  to pay cash dividends  for  eight
consecutive  quarters.  As of January 1, 1997,  Encore
failed to meet this requirement.  The Series D, E, F G
and  H shares are non-voting, except for the right  to
approve  actions  adversely  affecting  the  Preferred
Stock.   The Company has not achieved operating income
levels  set  forth by the terms of the  Series  B  and
accordingly,  the  holders of the Series  B  Preferred
Stock  could elect a majority of the directors of  the
Company.  However, Gould has agreed it would not  vote
its shares of Preferred Stock or take any other action
as  a  holder  of  the Preferred Stock  to  elect  any
additional  directors  of  the  Company  due  to   the
Company's  failure  to meet the operating  income  and
cash  dividend payment requirements of  the  Series  B
until at least December 31, 1996.  The Company has not
met  these  requirements  as  of  December  31,  1996,
therefore, Gould could exercise its rights  under  the
terms of the Series B.

During 1996, 350,000 shares of Series H were issued to
Gould as part of the exchange of indebtedness totaling
$35,000,000.  During 1995, 500,000 shares of Series  F
and 550,000 shares of Series G were issued to Gould as
part   of   the  exchange  of  indebtedness   totaling
$105,000,000.  Because of the related party nature  of
these   transactions,  the  difference   between   the
carrying amount of the indebtedness exchanged and  the
par   value   of  the  securities  issued  and   other
consideration granted has been credited to  additional
paid-in  capital.   The  financial  effects  of  these
transactions are summarized as follows (in thousands):

                                         December     December
                                            31,         31,
                                           1996         1995
                                                          
Reduction of debt                      $  35,000    $  105,000
Less:                                                      
  Par value of shares issued                  (4)          (11)
  Accrued transaction costs                 (200)         (600)
  Reversal of accrued interest on                           
    previous recapitalizations               111         5,203
  Accrued interest on remaining Gould
   indebtedness for the remaining term
    of the agreements                     (2,665)       (7,638)
  Increase in additional
    paid-in capital                    $  32,242    $  101,954

In  recording the various exchanges of preferred stock
for   indebtedness,  the  Company  had   accrued   the
estimated  transaction costs of the exchanges.  Actual
costs  incurred in connection with the exchanges  were
less  than  those  initially  estimated  and  accrued.
Accordingly,  during  1995  the  Company  reduced  the
remaining  accrued liability by $400,000 and increased
additional paid-in capital.

A quarterly dividend on Preferred Stock for the period
of  October  16,  1996  through January  15,  1997  of
$6,859,600 was accumulated as of January 15, 1997.

Impact of Foreign Ownership
In   connection   with   the  various   exchanges   of
indebtedness for preferred stock discussed herein  and
in  Note  M  of  the  Notes to Consolidated  Financial
Statements,  the  United States Defense  Investigative
Service  ("DIS") has reviewed the relationship between
the  Company and the Japan Energy Group under  revised
government requirements relating to foreign ownership,
control and influence.  Given the current requirements
in  the National Industrial Security Program Operating
Manual  ("NISPOM"),  DIS has decided  to  replace  the
previous  method  of  negation  of  Foreign  Ownership
Control   and   Influence,   accomplished   by   Board
Resolution,  with  a  more detailed  Security  Control
Agreement as prescribed by DIS in the NISPOM, which is
currently being drafted by Encore's counsel.

Shareholders' Agreement
The Company, Kenneth G. Fisher, the Company's Chairman
and  Chief  Executive Officer, and Gould  have  agreed
that   as  long  as  any  shares  of  Series   A   are
outstanding,  Gould,  in all elections  of  directors,
will  vote  all  of  its  common  stock  pro  rata  in
accordance with the votes of the other shareholders of
the  Company.   In  addition, so long  as  the  credit
facility with Gould is in effect, should Gould request
it, Mr. Fisher has agreed to vote his common shares in
favor of expanding the Board of Directors and electing
an additional Gould representative to the Board.

Stock Compensation Plans
At  December  31,  1996, the Company had  three  fixed
stock  option  plans, the 1983 Incentive Stock  Option
Plan  (the "ISO Plan") which expired in 1993, the 1985
Non-Qualified Stock Option Plan (the "NQO  Plan")  and
the  1995 Long Term Performance Plan (the "Performance
Plan")  which was approved by the stockholders of  the
Company  on  June  27,  1995.   The  Performance  Plan
replaced  both  the ISO Plan and  the  NQO  Plan.   No
further  grants under the ISO Plan or  NQO  Plan  have
been  made.   The  24,000,000 shares of  Common  Stock
previously  reserved for issuance under the  ISO  Plan
and  the NQO Plan are now reserved for issuance  under
the Performance Plan to officers, directors, employees
and  certain  consultants.  The  Company  applies  APB
Opinion   No.   25  and  related  Interpretations   in
accounting    for   its   plans.    Accordingly,    no
compensation  cost has been recognized for  its  fixed
stock  option plans and its stock purchase plan.   Had
compensation  cost  for  the  Company's  stock   based
compensation plans been determined based on  the  fair
value  at the grant dates for awards under those plans
consistent with the method of FASB Statement 123,  the
Company's net loss and loss per share would have  been
reduced to the pro forma amounts indicated below:

                                               1996        1995
                                                                  
Net Loss                    As reported      ($70,732)    ($81,354)
                            Pro forma        ($71,641)    ($81,942)
                                                                  
Loss per share              As reported        ($2.18)      ($2.37)
                            Pro forma          ($2.20)      ($2.39)


   
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  1995
and  1996:  risk-free  interest  rate  of  6  percent;
dividend yield of 0 percent; expected life of 4 years;
and volatility of 104.9 percent.
    


During  1996 and 1995, 1,119,000 and 1,652,000 options
granted  to  certain  officers and  employees  of  the
Company  were  scheduled to expire if  not  exercised.
However,  at  the time the options were  scheduled  to
expire   the  Company's  policy  on  insider   trading
effectively prevented the officers from exercising the
options.  Accordingly, the Board of Directors approved
an extension of the expiration date until such time as
the  options  could  be exercised and  the  underlying
shares  sold  in accordance with Company policy.   The
extensions  were treated as cancellations of  the  old
options and a grant of new options in the same amounts
at  the  same  exercise prices.  Non-cash compensation
charges of $589,000 and $1,424,000, respectively, were
incurred  in  connection with  the  extension  of  the
expiration dates of the stock options.

A  summary of the status of the Company's fixed  stock
option  plans as of December 31, 1996, 1995 and  1994,
and changes during the years ending on those dates  is
presented below:

                            1996           1995          1994    
                              Weighted        Weighted        Weighted
                              Average         Average         Average
                       Shares Exercise Shares Exercise Shares Exercise
                        (000)   Price  (000)  Price    (000)  Price

Outstanding at beginning
 of year                9,946  $1.50  10,112   $1.44  10,026  $1.09
Granted                                         
 Price = Fair Value       666  $2.83   1,690   $1.58   1,331  $3.74
 Price > Fair Value        -   $0.00      15   $2.00      -     - 
Exercised                (808) $0.96  (1,569)  $0.88    (966) $1.18
Forfeited                (222) $2.47    (302)  $2.97    (279) $1.02
Outstanding at end
 of year                9,582  $1.62    9,946  $1.50  10,112  $1.44
                                                                 
Options exercisable
 at year end            7,445           7,290          7,311
                                                                 
Weighted-average fair value of
 options granted during
  the year              $2.09           $1.17          $1.07

The following table summarizes information about fixed
stock options outstanding at December 31, 1996:

           OPTIONS OUTSTANDING                OPTIONS EXCERCISABLE
                                                                 
                        Weighted                                 
                         Average    Weighted                 Weighted
              Number    Remaining   Average     Number       Average
Range of   Outstanding Contractual  Exercise  Excercisable   Exercise
Exercise      as of       Life     Price        as of        Price
Prices       12/31/96                          12/31/96
                                                                 
  $0.62-       713,149    2.19      $0.7525       713,149   $0.7525
  $0.81

  $0.94-     4,395,791    2.73      $0.9375     4,395,791   $0.9375
  $0.94

  $1.50-     2,606,175    6.52      $1.7197     1,560,889   $1.8193
  $2.00

  $2.38-     1,867,075    8.07      $3.4075       774,773   $3.6824
  $4.19

                                                                 
  $.062-     9,582,190    4.76      $1.6177     7,444,602   $1.3903
  $4.19


Employee Stock Purchase Plan
Under  the  1991  Employee Stock  Purchase  Plan  (the
"Purchase Plan"), the Company is authorized  to  issue
up  to  8,000,000 shares of common stock to its  full-
time  employees.   As of December 31, 1996,  4,271,669
shares  have been purchased.  Under the terms  of  the
Purchase Plan, employees can 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 is 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 is  for  a
period of approximately six months.  The percentage of
employees participating in the plan were 39%  and  29%
in  1995  and 1996, respectively.  Under the  Purchase
Plan,  the Company issued 394,654 shares at a weighted
average  price of $1.52 in 1996, 422,734 shares  at  a
weighted  average price of $1.75 in 1995, and  382,999
shares  at a weighted average price of $2.69 in  1994.
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 1995  and  1996:  dividend
yield  of  0  percent; expected life  of  six  months;
expected  volatility of 4.9% ; and risk-free  interest
rate  of  5.2%.   For  1996 and 1995,  the  Pro  forma
compensation  costs  under  the  Purchase  Plan   were
$270,000 and $337,000, respectively.


K. Segment Information

The  Company  operates  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.  In 1996, 1995,  and
1994, no single customer accounted for as much as  10%
of revenues.  During 1996, 1995 and 1994 approximately
22%,  24% and 32%, respectively, of its revenues  were
directly  or  indirectly derived from U.S.  Government
agencies.

The  Company maintains operations in Europe and Canada
principally  through consolidated  subsidiaries.   Far
East  operations are through a joint venture in Japan,
and  distributors  throughout  the  remainder  of  the
region.   Information  about the Company's  operations
for  1994,  1995,  and  1996 is  presented  below  (in
thousands).   Inter-geographic  net  sales,  operating
income  and assets have been eliminated to  arrive  at
the consolidated amounts.

             Net Sales      Inter-                Operating
             to Unrelated   Geographic     Total    Income  Identifiable
              Entities      Net Sales    Net Sales  (Loss)      Assets
1994:                                                             
United States   $ 42,613   $ 8,886   $ 51,499   $ (55,133)     $ 83,234
Europe            29,147        -      29,147       4,164        14,340
Other              4,790        -       4,790          72         2,352
Geographic Total  76,550     8,886     85,436     (50,897)       99,926
Inter-Geographic    -       (8,886)    (8,886)         49          (905)
Total          $  76,550   $   -     $ 76,550   $ (50,848)    $  99,021
                                                                  
1995:                                                             
United States  $  24,051   $ 7,893   $ 31,944   $ (78,767)    $  55,488
Europe            23,721       -       23,721       1,165        18,030
Other              1,556       -        1,556          69           189
Geographic Total  49,328     7,893     57,221     (77,533)       73,707
Inter-Geographic    -       (7,893)    (7,893)       (263)       (1,170)
Total          $  49,328   $   -     $ 49,328   $ (77,796)    $  72,537
                      
1996:                                                             
United States  $  19,300   $12,026   $ 31,326   $ (65,502)    $  46,734
Europe            26,616      -        26,616        (968)       24,258
Other              1,711      -         1,711         (79)          103
Geographic Total  47,627    12,026     59,653     (66,549)       71,095
Inter-Geographic     -     (12,026)   (12,026)       (669)       (1,839)
Total          $  47,627   $    -    $ 47,627   $ (67,218)    $  69,256

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


L.  Financial Instruments

Concentrations of Credit Risk
Financial  instruments  that potentially  subject  the
Company  to concentrations of credit risk are  limited
to  cash and trade receivables.  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.

The  Company grants credit terms in the normal  course
of business to its customers which are consistent with
industry    practices.    Generally,   the   Company's
customers  are  United States government  agencies  or
substantial international corporations often  included
among  the Fortune 500.  Additionally, as part of  its
ongoing  control procedures, the Company monitors  the
credit   worthiness   of  its  major   customers   and
establishes   individual   customer   credit    limits
accordingly.   The  Company performs  in-depth  credit
evaluations for all new customers and requires letters
of  credit if deemed necessary.  Doubtful accounts are
adequately  reserved  when identified  and  bad  debts
realized  by the Company in prior years have not  been
excessive,  except in relation to the cancellation  of
the Amdahl Reseller Agreement discussed more fully  in
Note B of Notes to Consolidated Financial Statements.

Fair Value of Financial Instruments
The   carrying  amounts  of  cash,  cash  equivalents,
accounts  receivable,  accounts  payable  and  accrued
liabilities  approximate fair  value  because  of  the
short  maturity of these items.  Based upon the unique
and  significant  financial relationship  between  the
Company  and Gould, it is not practicable to  estimate
the fair value of the Gould long term debt.


M.  Subsequent Events

As of March 19, 1997 (the "Closing Date"), the Company
and   Gould  consummated  the  transactions  described
below:

Exchange of Indebtedness for Preferred Stock
On   the   Closing  Date,  Gould  agreed   to   cancel
$40,000,000 of indebtedness owed to it by the  Company
for   400,000   newly-issued  shares   of   Series   I
Convertible   Preferred  Stock  ("Series   I").    The
canceled  debt  had represented prior to  the  Closing
Date,  a  portion  of  the indebtedness  owed  by  the
company to Gould under the Credit Agreement.

The principal terms of the Series I are as follows:

(a)   holders of such shares are entitled to  receive,
when,  as  and if declared by the Company's  board  of
directors,  an  annual dividend  per  share  equal  to
$6.00;  provided,  however,  that  if  the  number  of
authorized  shares of common stock of Company  is  not
increased to at least 300,000,000 on or prior to  July
15, 1997, then such dividend per share is increased to
$10;  and,  further provided, that if  the  number  of
shares  of  authorized common stock of the Company  is
increased  to at least 300,000,000 at any  time  after
July  15,  1997,  then  such  dividend  per  share  is
decreased from $10 to $6;

(b)   dividends  on such shares are payable  in  cash;
provided,    however,    under    certain    specified
circumstances such dividends may be paid in additional
shares of Series I Stock;

(c)    such  shares  are  entitled  to  a  liquidation
preference of $100 per share plus an amount  equal  to
accrued  and  unpaid dividends on  such  share,  which
liquidation  preference is senior in priority  to  the
Company's  common  stock and to all  other  shares  of
Preferred Stock currently outstanding;

(d)   subject to certain specified restrictions,  such
shares are convertible, at the holder's option, at any
time,  into  that  number of shares of  the  Company's
common  stock equal to (i) the liquidation  preference
divided   by   $3.25,  which  amount  is  subject   to
adjustment under certain specified circumstances;

(e)   such  shares are convertible, at  the  Company's
option,  in accordance with the conversion methodology
summarized  in paragraph (d) above, if  (i)  the  last
sale  price  of  the Company's common  stock  exceeded
$3.90  for twenty consecutive trading days and (ii)  a
buyer  is contractually committed to purchase (x)  for
at  least $3.90 per share, at least 50% of the  shares
of  common stock into which the outstanding  Series  I
are  then  convertible or (y) for at least  $3.50  per
share, at least 75% of the shares of common stock into
which  the  outstanding shares of Series  I  are  then
convertible;

(f)   such shares are non-voting shares except  as  to
matters that would adversely affect the Series I Stock
and except as to any other matters which, pursuant  to
applicable law, holders of such shares may be entitled
to vote; and

(g)   to  the  extent that there are not a  sufficient
number  of  authorized shares of the Company's  common
stock  to  allow  for a conversion of  Series  I  into
shares  of  common  stock  as described  above  (after
taking  into  account,  among other  things,  (x)  the
number  of options, warrants and other similar  rights
outstanding  and  (y) 135% of the  maximum  number  of
shares of common stock the Company may be required  to
issue  on conversion of all the shares of each  series
of  preferred stock then outstanding), then,  to  that
extent,  the  Series I is convertible into  shares  of
Series J Convertible Participating Preferred Stock  of
the  Company (the "Series J") at the rate of one share
of Series J for each 100 shares of common stock.

The principal terms of the Series J are as follows:

(a)  holders of such shares are entitled to receive  a
dividend  per  share equal to 100 times  the  dividend
that is paid by the Company with regard to a share  of
common stock of the Company;

(b)    such  shares  are  entitled  to  a  liquidation
preference  of  $1 per share plus an amount  equal  to
accrued  and  unpaid dividends on  such  share,  which
liquidation  preference is senior in priority  to  the
Company's  common  stock, and, after  the  holders  of
common  stock  have  received $0.01  per  share,  such
shares of Series I are further entitled to receive  an
amount  equal  to 100 times the amount per  shares  in
excess  of that $0.01 received by the holders  of  the
common stock;

(c)   subject to certain specified restrictions,  such
shares are convertible, at the holder's option, at any
time, in that number of shares of the Company's common
stock  equal to (i) 100 shares of common stock,  which
amount   is   subject  to  adjustment  under   certain
specified circumstances;

(d)  such shares are voting shares and holders thereof
shall be entitled to vote together with the holders of
common stock, voting as a single class, on all matters
presented  for a vote of the holders of common  stock,
which  each  share of Series J being entitled  to  100
times  the number of votes to which a share of  common
stock is entitled; and

(e)   the  Series J (i) rank prior to  the  shares  of
common  stock to the extent specifically  provided  in
the  Certificate of Designations, Powers,  Rights  and
Preferences  of  the  Series  J,  and  in  all   other
respects,  rank on parity with the common stock,  (ii)
are  on parity with the shares of Series A Convertible
Participating Preferred Stock of the Company and (iii)
are,  and  will be, junior to the shares of all  other
series  of preferred stock of the Company, other  than
series which are expressly designated as ranking on  a
parity with, or being junior to, the Series J.

Prior  to  the  transaction, Japan Energy Corporation,
and its wholly-owned subsidiaries including Gould (the
"Japan  Energy Group") beneficially owned, on a fully-
diluted  basis,  81.6%  of the  Company's  outstanding
common  stock.   Upon completion of this  transaction,
Japan  Energy Group's beneficial ownership, on a fully
converted basis, increased to 82.8%.

The Credit Agreement
As  of  the  Closing  Date, the Company  had  borrowed
$81,915,869 under the Credit Agreement. In conjunction
with  the exchange of the canceled debt for Series  I,
the  Second  Amendment  to the  Credit  Agreement  was
executed  between Encore and Gould which  (i)  reduced
the  maximum  amount  which can  be  borrowed  by  the
Company  from  $80,000,000  to  $50,000,000  and  (ii)
provides  that any borrowings in excess of $41,915,869
(the  principal amount outstanding on March  19,  1997
after  giving  effect to the exchange of  indebtedness
for  shares  of  Series I) may be  made  only  at  the
discretion of Gould.  All borrowings under the  Credit
Agreement, plus accrued interest, are due and  payable
on May 31, 1997.

Borrowings    under   the   Credit    Agreement    are
collateralized by substantially all of  the  Company's
tangible  and  intangible assets   and  the  agreement
contains  various covenants including  maintenance  of
cash flow, leverage and tangible net worth ratios  and
limitations on capital expenditures, dividend payments
and  additional indebtedness.  Interest on  the  loans
equals the prime rate plus 2%.

Financial Impact of Transactions
The completion of these transactions has the following
effect on the Company's financial statements:

(i)  shareholders' equity increased by $39,833,000  as
follows:

Reduction of debt                       $     40,000
Less:
  Par value of shares issued                      (4)
  Reversal of accrued interest                       
   on previous recapitalizations                 283
  Accrued interest on remaining Gould              
   indebtedness for the remaining term
   of the agreements                            (446)
Increase in additional paid-capital     $     39,833

Note  1  -  Because the transaction  is  considered  a
troubled debt restructuring, interest is accrued  from
the  Closing  Date until the loan's  maturity  on  the
outstanding loan balance for the remainder of the loan
agreement.


(ii)  No costs in connection with the transaction have
been  recorded as an accrued expense, due to the  over
accrual    of    costs    associated    with     prior
recapitalizations.


   
N.  Liquidity

The  accompanying  consolidated  financial  statements
have  been  prepared assuming that  the  company  will
continue   as  a  going  concern.   Since  1989,   the
principal source of financing for the Company has been
provided  by the Japan Energy Group.  As discussed  in
Note  M of Notes to Consolidated Financial Statements,
on  March 19, 1997, Gould exchanged $40 million of the
Company's outstanding indebtedness for 400,000  shares
of  Series I Convertible Preferred Stock and  provided
the Company with an uncommitted credit facility of  up
to   $50   million.   After  giving  effect   to   the
aforementioned  debt  conversion, approximately  $41.9
million  was  outstanding under the Credit  Agreement.
Any loans exceeding the $41.9 million can be made only
at  the discretion of Gould.  All borrowing under  the
Credit  Agreement, plus accrued interest, are due  and
payable  on May 31, 1997.  Based on current  estimates
of available cash flow, management does not believe it
will  have  sufficient  cash  to  make  the  mandatory
payment  on  May 31, 1997, without proceeds  from  the
sale  of  assets or a refinancing or restructuring  of
the    Credit   Agreement   prior   to   such    date.
Additionally,  the Company does not have  a  committed
source of financing to meet expected requirements over
the next year. Therefore, the Company is unable to generate
sufficient cash to support its operations through December
31, 1997.   The Company has retained an investment
banking   firm   to  assist  in  exploring   strategic
alternatives  which  include, among  other  things,  a
business   combination,  sales  of  assets,  strategic
investment  in  the  Company or a refinancing  of  the
Credit Agreement.  There can be no assurance that  the
Company   will  be  successful  in  its   attempt   to
consummate  one  of  the strategic alternatives  or  a
refinancing or restructuring of the Credit  Agreement.
If  the Company does not make the required payment  at
maturity  of  the  Credit Agreement or  is  unable  to
obtain  a  committed source of financing  adequate  to
meet  expected  requirements,  it  may  be  unable  to
continue  its normal operations, except to the  extent
permitted  by  the Japan Energy Group.   Substantially
all  of  the Company's tangible and intangible  assets
are pledged as collateral under the Credit  Agreement.
    


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

Not Applicable.


PART III


Item  10   Directors and Executive  Officers  of  the
Registrant

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

Kenneth G. Fisher, age 66

Mr. Fisher is 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.  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, Jr., age 61

Mr.  Thomas  has  been  a  member  of  the  Board  of
Directors  since  December 1987 and  Chief  Operating
Officer since June 1989. He presently also serves  as
President of the Company, a position to which he  was
appointed in January 1991. From June 1989 to  January
1991,  Mr.  Thomas served as Executive Vice President
of  the  Company.  In  February 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 February 1988.  From  May
1983 through June 1985, Mr. Thomas was Executive Vice
President and Senior Vice President at NDC.

Daniel O. Anderson, age 69

Mr.  Anderson  has  been a member  of  the  Board  of
Directors  since  May  1987. In  1991,  Mr.  Anderson
retired   as  Executive  Vice  President  and   Chief
Operating  Officer  of the Harvard  Community  Health
Plan  for  New  England,  a  position  he  held  from
November 1986. From October 1984 until July 1986, Mr.
Anderson served as Vice President and Chief Financial
Officer  of  Guilford  Transportation  Industries,  a
railroad  holding company. From November  1975  until
April  1984,  Mr.  Anderson  held  various  executive
positions with Itek Corporation, most recently  as  a
Director  and  President  of Itek  Graphics  Systems.
Prior  to  his employment with Itek Corporation,  Mr.
Anderson    was   Vice   President,    Finance    and
Administration,   North  American   Operations,   for
Honeywell Information Systems, Inc.

Robert J. Fedor, age 56

Dr. Fedor has been a member of the Board of Directors
since   July  1992.  He  is  presently  Senior   Vice
President Corporate Development at 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 55

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.

Information  regarding  executive  officers  of   the
Company is included in Part I of this Form 10-K under
the  caption "Executive Officers of the Company"  and
is incorporated herein by reference.

Item 11  Executive Compensation


Total  compensation  paid  or  accrued  for  services
rendered  during the three most recent  fiscal  years
for  the  Chief Executive Officer and the four  other
most  highly  compensated executive officers  of  the
Company for the year ended December 31, 1996  was  as
follows:


Summary Compensation Table


                    Annual Compensation           Long
                                                  Term
                                              Compensation
                                         Other    Awards          All
                                         Annual Number of Shs   Other
Name and                                 Compen-  Underlying    Compen-
Principal Position  Year Salary  Bonus   sation   Options(3)   sation(2) 

Kenneth G. Fisher  1996 $340,000 $     0 $    0     952,200      $     0
Chairman of the    1995  340,000       0      0     196,900            0
Board and Chief    1994  340,001       0      0     103,300       1,234
Executive Officer

Rowland H. Thomas  1996 $265,000 $26,095 $    0     302,800      $    0
President and      1995  265,000  26,850      0     113,600           0
Chief Operating    1994  264,617  36,833      0      59,600         728
Officer

Robert A. DiNanno  1996 $187,500 $25,835 $    0      75,800      $     0
Vice President and 1995  175,000  25,075      0      46,300            0
General Manager,   1994  175,000  39,644      0      20,000          676
Global Customer
Operations

Charles S. Namias  1996 $151,107 $19,830 $2,000      39,800      $     0
Vice President,    1995  150,000  19,825  4,800      46,300            0
Corp Alliances     1994  136,154  70,844   4800     105,000          608

Ziya Aral          1996 $150,000 $19,830 $    0      35,800      $80,000
Vice President,    1995  150,000  19,700      0      46,300            0
Chief Technical    1994  149,229  35,145      0     290,000            0
Officer



(1)   Amounts paid to Mr. Namias consist entirely  of
an    allowance   for   business-related   automobile
expenses.

(2)   All  Other  Compensation for 1994  consists  of
earnings    associated    with    the    individual's
participation  in  a company-paid sales  award  trip.
Mr. Aral received an $80,000 loan from the Company on
September  23,  1996.   The note  carries  an  annual
interest  rate  of  6%  and is  due  and  payable  on
September 22, 1999.

(3)   Includes 800,000 shares for Mr. Fisher, 215,000
shares  for Mr. Thomas, 40,000 shares for Mr. DiNanno
and 4,000 shares for Mr. Namias which were originally
granted in 1991 and were scheduled to expire in  1996
if  not  exercised.  However, at the time the options
were  scheduled  to  expire the Company's  policy  on
insider  trading  effectively  prevented  each   from
exercising their options.  Accordingly, the Board  of
Directors  approved an extension  of  the  expiration
date  to  year 2000.  The extensions has been treated
as  a cancellation of the old options and a grant  of
new  options in the same amount at the same  exercise
price.

The  following table sets forth the number of  shares
of  Common  Stock  and equivalents  of  the  Company,
including  shares which may be acquired within  sixty
days  after March 31, 1997 by exercise of outstanding
stock  options,  which  are  beneficially  owned   by
executive  officers  of  the  Company  named  in  the
Summary  Compensation  Table and  all  directors  and
executive  officers of the Company as a group  as  of
March  31,  1997  along with the  percentage  of  all
outstanding  shares of Common Stock  and  equivalents
owned by each executive officer and director on  such
date.

                                     Common Stock   Percentage of
                                   and Equivalents  Common Stock
                                     Beneficially  and Equivalents
Name                                   Owned        Outstanding(1)

Kenneth G. Fisher                    7,306,652(2)      3.5%
Chairman of the Board and
Chief Executive Officer

Rowland H. Thomas                    1,714,600(3)       .8%
President and
Chief Operating Officer

Robert A. DiNanno                     390,652(4)        .2%
Vice President and General Manager
Global Customer Operations

Charles S. Namias                     328,733(5)        .2%
Vice President
Corporate Alliances

Ziya Aral                             475,606(6)        .2%
Vice President  and
Chief Technical Officer

Total directors and executive officers as
 a group (9 people)                11,318,623(7)       5.4%


(1)  For  purposes  of  computing the  percentage  of
     Common  Stock  and equivalents outstanding,  the
     7,364,100  shares of Common Stock issuable  upon
     conversion of the outstanding shares of Series A
     Stock,  the  23,798,000  shares of Common  Stock
     issuable  upon  conversion  of  the  outstanding
     shares  of Series B Convertible Preferred  Stock
     ("Series  B  Stock"), the 36,415,230  shares  of
     Common  Stock  issuable upon conversion  of  the
     outstanding   shares  of  Series  D  Convertible
     Preferred   Stock  ("Series   D   Stock"),   the
     37,222,184 shares of Common Stock issuable  upon
     conversion of the outstanding shares of Series E
     Convertible Preferred Stock ("Series E  Stock"),
     the  17,417,138 shares of Common Stock  issuable
     upon  conversion  of the outstanding  shares  of
     Series F Convertible Preferred Stock ("Series  F
     Stock"),  the 18,689,385 shares of Common  Stock
     issuable  upon  conversion  of  the  outstanding
     shares  of Series G Convertible Preferred  Stock
     ("Series  G  Stock"), the 11,430,000  shares  of
     Common  Stock  issuable upon conversion  of  the
     outstanding   shares  of  Series  H  Convertible
     Preferred  Stock  ("Series  H  Stock")  and  the
     12,400,000 shares of Common Stock issuable  upon
     conversion of the outstanding shares of Series I
     Convertible Preferred Stock ("Series  I  Stock")
     have  been  included as well  as  the  7,430,980
     shares   issuable  upon  exercise   of   options
     exercisable within 60 days after March 31, 1997.


(2)  Includes:  (i)  53,764  shares  owned   by   Mr.
     Fisher's  wife, (ii) 2,238,400 shares which  may
     be  acquired by Mr. Fisher within 60 days  after
     March 31, 1997 by exercise of stock options  and
     (iii)  3,901,134  shares  of  Common  Stock  and
     1,113,354  shares of Common Stock issuable  upon
     conversion of the shares of Series B Stock  each
     held  by  Indian Creek Capital, Ltd., a  limited
     partnership of which Mr. Fisher is the  managing
     general partner.

(3)  Includes  500  shares owned by Mr. Thomas'  wife
     and  1,619,850 shares which may be  acquired  by
     Mr.  Thomas within 60 days after March 31, 1997,
     by exercise of stock options.

(4)  Includes  388,062 shares which may  be  acquired
     within 60 days after March 31, 1997, by exercise
     of stock options.

(5)  Includes  251,987 shares which may  be  acquired
     within 60 days after March 31, 1997, by exercise
     of stock options.

(6)  Includes  437,362 shares which may  be  acquired
     within 60 days after March 31, 1997, by exercise
     of stock options.

(7)  Includes  5,994,034 shares which may be acquired
     within 60 days after March 31, 1997, by exercise
     of  stock options and 1,113,354 shares of Common
     Stock issuable upon conversion of the shares  of
     Series B Stock  held beneficially by Mr. Fisher.


The  following  table shows, as  to  those  executive
officers  named  in  the Summary  Compensation  Table
above, the number, exercise price and expiration date
of  options to acquire Common Stock granted under the
Company's  Long-Term Performance Plan  during  fiscal
1996,  and  the potential realizable value  of  those
shares  assuming certain annual rates of appreciation
in the price of the Company's stock.

Option Grants for the year ended December 31, 1996

                                                  Potential realizable
                 Individual Grants              values at assumed annual
                Number %  of total                rates of stock price
               of shares  options                 appreciation for the
              Underlying  granted                     option term

                Options   in fiscal Exercise  Expiration
Name            granted     year   price/share  Date      5%      10%

Kenneth G. Fisher  152,200  8.5%  $2.8750   6/24/2006 $275,191 $697,363
                   800,000 44.8%   2.0000   1/21/2000  344,800  742,560

Rowland H. Thomas   87,800  4.9%   2.8750   6/24/2006  158,750  402,290
                   215,000 12.0%    .8125   1/21/2000   37,645   81,072

Robert A. DiNanno   35,800  2.0%   2.8750   6/24/2006   64,730  164,032
                    40,000  2.2%    .8125   1/21/2000    7,004   15,083

Charles S. Namias   35,800  2.0%   2.8750   6/24/2006   64,730  164,032
                     4,000   .2%    .8125   1/21/2000      700    1,508

Ziya Aral           35,800  2.0%   2.8750   6/24/2006   64,730  164,032




As  required  by  the  rules of  the  Securities  and
Exchange  Commission,  potential  values  are  stated
based  on  the prescribed assumption that the  Common
Stock  of  the Company will appreciate in value  from
the  date of grant to the end of the option  term  at
rates   (compounded  annually)   of   5%   and   10%,
respectively,  and  therefore  do  not  reflect  past
results  and  are  not intended to forecast  possible
future  appreciation, if any, in  the  price  of  the
Common Stock.

The  following table provides information  on  option
exercises in 1996 by the named executive officers and
the value of such officers' unexercised options as of
December 31, 1996.

Aggregated  Option Exercises in the year ended December  31, 1996
            and Option Values as of December 31, 1996

                                           Number of      Value of
                                     Shares Underlying   Unexercised
                                        Unexercised     In-the-Money
                                         Options at      Options at
                  Number of               12/31/96        12/31/96
               Shares Acquired Value    Exercisable/     Exercisable/
Name            on Exercise   Realized  Unexercisable   Unexercisable

Kenneth G. Fisher       0       $ 0       2,213,788/         $325,000/
                                            338,612                 0

Rowland H. Thomas       0         0       1,619,850/         405,625/
                                            181,150                0

Robert A. DiNanno 229,790   466,611         388,062/        113,300/
                                             72,238               0

Charles S. Namias  12,000    21,000         235,737/         32,750/
                                            120,363               0

Ziya Aral               0         0         423,612/         56,250/
                                            193,488               0




REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
ENCORE COMPUTER CORPORATION



Executive Compensation Philosophy
It  is the goal of the Compensation Committee of  the
Board   of  Directors  to  provide  compensation   to
executives  of  the  Company in accordance  with  the
following considerations:

     To provide compensation that is competitive with
     other  high  technology companies  that  are  of
     similar size to Encore with similar products and
     markets;

     To   provide  compensation  that  will  attract,
     retain    and    reward   superior,    industry-
     knowledgeable  executives  who  can  manage  the
     shareholders' short and long-term interest; and

     To   provide  total  compensation  wherein   the
     majority  of value to be delivered is  based  on
     the financial performance of the Company and the
     appreciation of the Company's stock.

To  meet  these  goals,  the  Committee  establishes,
administers  and  reviews several  programs  for  the
Company.  These programs are designed to address  the
above  considerations  and  consist  of  three  major
components.

Base Salary
For  executives  of  the  Company,  base  salary   is
determined  by  the  level of job responsibility  and
overall competitive practices in the labor market for
the   Company's  executive  talent.   The   Committee
recognizes  that  there  is a scarcity  of  executive
talent  with  the  technical  capabilities  that  are
critical  to  the Company's long-term  success.   The
Committee  also  considers  the  Company's   location
outside  of  traditional labor markets for  technical
talent  to  be a considerable factor for base  salary
positioning.   As such, the Committee  positions  the
Company's  executives+  base  salaries  at  the  75th
percentile  of  the competitive market and  generally
believes  that  this  base  salary  posture   is   an
essential  factor  in maintaining  a  highly  skilled
executive  team.   The Committee derives  competitive
data  representing the high technology  and  computer
products  sectors  from  an independent  compensation
consultant,  Towers  Perrin.  The Committee  believes
that  most  of  the companies in the S &  P  Computer
Systems   Index,  which  is  used  as  the  Company's
industry  comparison  line in the  performance  graph
appearing  below,  are  represented  in  the  various
surveys used by the compensation consultant.

1996  executive  base salaries were below  the  above
policy.   None of the named executives' base salaries
or  incentive bonus targets were increased  in  1996,
with  the exception of R. DiNanno. Mr. DiNanno+s base
salary and bonus were increased in conjunction with a
significant increase in his responsibilities.

Annual Incentives
All   executive  officers  are  eligible  to  receive
incentives   which  are  based  on   the   short-term
performance of the Company.  The program is  intended
to  highlight critical business goals and reward  the
achievement  of  these goals through  individual  and
team  contributions.  Target incentive  opportunities
typically  range from 15% to 45% of executives+  base
salaries  and  are  based  on  median  bonus   levels
observed  in  other  high  technology  and  computer-
related   companies.    Target   award   levels   are
structured so that at those levels, executives' total
cash compensation (base salary plus annual incentive)
would be comparable to the 75th percentile total cash
compensation  of the competitive market as  discussed
earlier.

The  specific performance criteria used for incentive
compensation goals include the attainment  of  profit
before   tax  objectives,  achievement  of  quarterly
financial   plans  and  subjective   functional   and
teamwork   goals   as   determined   by   management.
Functional   goals   include  activities   aimed   at
achieving   revenue,  bookings,  expenses,   schedule
targets, etc.  Teamwork goals include joint,   cross-
functional  activities  and projects.   The  relative
weighting  of each factor depends on the  executive's
position    within   the   Company's   organizational
structure.   Typically, profit before tax  objectives
and  quarterly financial plan targets account for 60%
to   100%   of   the  named  executives'  incentives;
functional and teamwork goals account for 25% to  40%
of  the total incentive.  In 1996 the Company did not
achieve its profit before tax objective and therefore
no  incentive payments were made that were  based  on
the Company's profit performance.  Incentive payments
that  were made to certain named executives  in  1996
reflect  the attainment of individual functional  and
teamwork goals.

Long-Term Incentives
The  Committee  believes that stock-based  incentives
provide the strongest link between the rewards earned
by   executives   and  the  returns   generated   for
shareholders.   The  Committee  also  believes   that
providing   the   potential  for  significant   share
ownership helps focus executive behavior on the long-
term  growth  and  strength of the organization.   As
such, the Committee has made significant stock option
grants throughout the Company to focus all recipients
on   long-term   growth  and   the   enhancement   of
shareholder  value.   The  Committee  has   generally
observed   that  stock  option  grants   comprise   a
significant portion of executive compensation in  the
high   technology  and  computer-related  industries.
Stock  options  represent the right to  purchase  the
Company's  stock  at  the fair market  value  of  the
Company's  stock  on the date of  grant.   Since  the
value  ultimately  realized from the  option  depends
entirely on the future success of the Company and the
growth  of  the  stock  price, an  option  serves  to
provide an incentive to the executive for years after
it has been awarded.

The  Committee has adopted formal stock option  grant
guidelines  which will base annual option  grants  on
the  executive's  base  salary grade  and  individual
performance factors.  This practice will ensure  that
executives at similar organizational levels will have
equal   long-term   incentive   opportunities   while
allowing  the  Committee some discretion  to  augment
awards   as   it   feels  appropriate  to   recognize
significant individual accomplishments.  In 1996, the
Board granted 347,400 options to the named executives
in accord with the pre-established guidelines.

The  Committee feels that it is quite important  that
executives have a significant personal investment  in
the Company.  As such, the Committee has also adopted
formal  stock ownership guidelines for  the  CEO  and
other  executive officers who report directly to  the
CEO.    The   Committee   believes   that   requiring
executives  to maintain a certain ownership  interest
in  the  Company  complements the existing  long-term
incentive  program  in that once  stock  options  are
exercised,  there is an added emphasis  on  retaining
exercised  shares  and further enhancing  shareholder
value.   The  specific guidelines  require  that,  by
April,  1997, the CEO acquire and maintain  ownership
of  Company stock with a value equal to two times his
current  base salary; direct reports to the  CEO  are
required to acquire and maintain ownership of Company
stock  with a value equal to at least one-half  their
current  base salaries.  The Committee is pleased  to
report  that  at  the end of 1996  the  CEO  had  far
exceeded his ownership requirement, and three of  the
other named executives have met the requirement.

Compensation for Mr. Fisher
Mr.  Fisher's base salary was not increased in  1996.
Mr.  Fisher's  base  salary is positioned  below  the
market average of other high technology and computer-
related  companies of similar size  to  the  Company.
The Committee intends to deliver most of Mr. Fisher's
compensation   in  the  form  of  annual   cash-based
incentives and long-term stock-based incentives  that
will deliver significant value to Mr. Fisher if,  and
only  if,  the Company achieves positive returns  and
the stock price appreciates over time.

To  focus  Mr. Fisher on the attainment of short-term
financial results, the Committee awards a bonus equal
to  5%  of the Company's profit before taxes  to  Mr.
Fisher  as  an incentive award on a quarterly  basis.
This  formula approach ensures shareholders  that  an
incentive payment will be made to Mr. Fisher only  if
the   Company  is  profitable.   In  addition,   this
approach  provides a consistent incentive to maximize
profit each quarter.  No incentive payments were made
to Mr. Fisher in 1996.

The  Committee granted 152,200 stock options  to  Mr.
Fisher in 1996 in accord with the Board's established
annual  guidelines.  Mr. Fisher continues to  have  a
significant   personal investment in the Company  and
he is well motivated to increase the overall value of
the  Company and to generate returns on behalf of all
shareholders.

Other Compensation Matters
The  Committee  continues to evaluate  the  potential
impact  of the $1 million dollar deduction limitation
on  executive  pay for the top five executives  which
was   implemented  as  part  of  the  Omnibus  Budget
Reconciliation  Act of 1993.  The 1995  Stock  Option
Plan, approved by the shareholders at the 1995 annual
meeting,  is a performance-based plan, and therefore,
any gains on stock options will not be subject to the
$1 million dollar limit.  The Committee believes this
action   adequately   protects  the   deduction   for
executive  compensation at  the  current  time.   The
Committee  will  continue to evaluate  the  Company's
potential exposure to the deduction limitation on  an
annual basis.

In  conclusion,  the  Committee feels  that  all  pay
programs  are  reasonable and appropriate  given  the
Company's    industry,   size   and    organizational
structure.    Base  salary  and  incentive   programs
provide  attractive features to attract,  retain  and
motivate executives to enhance the performance of the
Company  from year to year.  The stock option  grants
provide  a  significant incentive  to  executives  to
undertake policies and actions to enhance the overall
value of the organization well into the future.

The Compensation Committee
of the Board of Directors

D.O. Anderson, Chairman
C.D. Ferguson
K.G. Fisher


Comparison of Five Year Cumulative Total Shareholder  Return
Among
Encore Computer Corporation, the NASDAQ Market Index and the
NASDAQ Computer Index

The following chart depicts the Company's performance
for the five year period ending December 31, 1996, as
measured by total shareholder return on the Company's
Common  Stock compared with the  total return of  the
NASDAQ  Market  Stock Index and the  NASDAQ  Computer
Stock Index.


 
*  This  chart assumes an investment on December  31,
1991  of  $100  in  the Company's Common  Stock,  the
NASDAQ  Market  Stock Index and the  NASDAQ  Computer
Stock Index.  See table below:
 
Year                1991     1992    1993     1994    1995     1996
Encore              $100     $162    $446     $385    $238     $146
NASDAQ Market       $100     $116    $134     $131    $185     $227
Index

NASDAQ Computer     $100     $108    $114     $138    $211     $260
Index

The Report of the Compensation Committee on Executive
Compensation  and Comparison of Five Year  Cumulative
Total Shareholder Return above shall not be deemed to
be "soliciting material" or incorporated by reference
into any of the Company's filings with the Securities
and Exchange Commission.


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.   A
total  of  $10,000  was  paid  to  Mr.  Anderson  for
meetings  attended during fiscal 1996.  Mr.  Ferguson
and  Dr.  Fedor  have waived payment to them of  fees
for  attendance at board meetings.  Directors who are
also  officers of the Company receive no compensation
for  serving  as directors.  During the  past  fiscal
year, the Company has also reimbursed certain of  its
directors   for  reasonable  out-of-pocket   expenses
relating   to  attendance  at  Board  and   Committee
meetings.


Item  12   Security  Ownership of Certain  Beneficial
Owners and Management

PRINCIPAL STOCKHOLDERS

The  following table sets forth, to the knowledge  of
the  Company, the beneficial owners of 5% or more  of
the    Company's   outstanding   Common   Stock   and
equivalents as of March 31, 1997:


                                            Percentage of
                                 Shares     Common Stock   Percentage of
Name and Address              Beneficially and Equivalents  Common Stock
of Beneficial Owner               Owned      Outstanding(1)  Outstanding

Gould Electronics Inc.(2)(5)   135,189,230       64.5%           8.8%
35129 Curtis Boulevard
Eastlake, OH 44095

EFI International Inc.(3)       32,369,353       15.5%           0.0%
12 East 49th Street, Suite 1710
N.Y., N.Y 10017

Japan Energy Corporation(2)(3) 167,558,583       80.0%           8.8%
10-1, Toranomon 2-chome,(5)(6)
Minato-ko, Tokyo, Japan

Kenneth G. Fisher(4)             7,306,652        3.5%          13.8%
6901 West Sunrise Blvd.
Fort Lauderdale, FL 33313-4499



(1)  For  purposes  of  computing the  percentage  of
     Common  Stock  and equivalents outstanding,  the
     7,364,100  shares of Common Stock issuable  upon
     conversion of the outstanding shares of Series A
     Stock,  the  23,798,000  shares of Common  Stock
     issuable  upon  conversion  of  the  outstanding
     shares  of Series B Convertible Preferred  Stock
     ("Series  B  Stock"), the 36,415,230  shares  of
     Common  Stock  issuable upon conversion  of  the
     outstanding   shares  of  Series  D  Convertible
     Preferred   Stock  ("Series   D   Stock"),   the
     37,222,184 shares of Common Stock issuable  upon
     conversion of the outstanding shares of Series E
     Convertible Preferred Stock ("Series E  Stock"),
     the  17,417,138 shares of Common Stock  issuable
     upon  conversion  of the outstanding  shares  of
     Series F Convertible Preferred Stock ("Series  F
     Stock"),  the 18,689,385 shares of Common  Stock
     issuable  upon  conversion  of  the  outstanding
     shares  of Series G Convertible Preferred  Stock
     ("Series  G  Stock"), the 11,430,000  shares  of
     Common  Stock  issuable upon conversion  of  the
     outstanding   shares  of  Series  H  Convertible
     Preferred  Stock  ("Series  H  Stock")  and  the
     12,400,000 shares of Common Stock issuable  upon
     conversion of the outstanding shares of Series I
     Convertible Preferred Stock ("Series  I  Stock")
     have  been  included as well  as  the  7,430,980
     shares   issuable  upon  exercise   of   options
     exercisable within 60 days after March 31, 1997.

(2)  Includes  131,253,330  shares  of  Common  Stock
     issuable upon conversion of the shares of Series
     A  Stock, Series B Stock, Series D Stock, Series
     E  Stock, Series F Stock, Series G Stock, Series
     H  Stock  and Series I Stock held by Gould.  The
     Series D, Series E, Series F, Series G, Series H
     and  Series  I Stock is convertible  only  by  a
     United States citizen or a corporation or  other
     entity  owned in the majority by a United States
     shareholder   or   in   connection    with    an
     underwritten public offering.  Gould is a wholly
     owned  subsidiary  of Japan  Energy  Corporation
     ("Japan    Energy")   which   is   a    Japanese
     corporation.

(3)  Consists   of   Common   Stock   issuable   upon
     conversion  of  Series  D  Stock  held  by   EFI
     International Inc. ("EFI").  Conversion  of  the
     Series D Stock is restricted as described in (2)
     above.   EFI  is  a wholly owned  subsidiary  of
     Japan Energy.

(4)  Includes:  (i)  53,764  shares  owned   by   Mr.
     Fisher's  wife, (ii) 2,238,400 shares which  may
     be  acquired by Mr. Fisher within 60 days  after
     March 31, 1997 by exercise of stock options  and
     (iii)  3,901,134  shares  of  Common  Stock  and
     1,113,354  shares of Common Stock issuable  upon
     conversion of the shares of Series B Stock  each
     held  by  Indian Creek Capital, Ltd., a  limited
     partnership of which Mr. Fisher is the  managing
     general partner.


(5)  Gould  as the sole holder of the Series A  Stock
     is  entitled to elect two directors to the Board
     of Directors.  The remaining three directors are
     elected  by  the holders of Common Stock.   With
     respect   to   the  election  of   those   three
     directors, the 3,935,900 outstanding  shares  of
     Common  Stock  held by Gould will be  voted  pro
     rata  in accordance with the votes of the  other
     holders  of  Common  Stock  as  provided  by   a
     shareholders agreement among Gould, the  Company
     and Mr. Fisher.

(6)  Japan  Energy may be deemed to be the beneficial
     owner of the shares owned by Gould and EFI.

Information  regarding  security  ownership  of   the
executive officers of the Company is included in Item
11 above.

Item 13  Certain Relationships and Related
Transactions

Financing by Gould
During   1996,   the  Company  recorded   significant
quarterly operating losses.  Additionally, due to the
operating losses incurred, the Company was unable  to
generate sufficient levels of cash through  operating
activities  to fund the business.  Cash  requirements
were  provided by additional borrowings made under  a
credit  facility with Gould.  Gould has provided  the
Company with its loan facility since 1989.

On  April  16,  1996, Gould canceled  $35,000,000  of
indebtedness  owed  to it by the  Company  under  the
Credit  Agreement in exchange for 350,000  shares  of
the  Company's  Series H Convertible Preferred  Stock
with  a  liquidation preference of $35,000,000.   The
Series  H  carries  a 6% cumulative  annual  dividend
requirement  payable quarterly which the Company  can
accumulate  or pay in additional shares of  preferred
stock  (valued  at its liquidation preference)  until
the    Company's    shareholders'   equity    exceeds
$50,000,000.   The  Series H is convertible,  at  the
holder's  option, into the Company's common stock  at
$3.25  per  share only; (a) if the shareholder  is  a
United  States  citizen  or a  corporation  or  other
entity   owned  in  the  majority  by  United  States
citizens,  or  (b) in connection with an underwritten
public offering.  The Series H is convertible, at the
Company's  option, if the price of the  common  stock
exceeds  $3.90 per share for twenty consecutive  days
and;  (a)  a  buyer  is  contractually  committed  to
purchase for at least $3.90 per share at least 50% of
the shares into which all outstanding Preferred Stock
would  be  converted, or (b) a buyer is contractually
committed to purchase for at least $3.50 per share at
least  75%  of the shares into which all  outstanding
Preferred Stock would be converted.  The Series H  is
senior  in liquidation priority to all other  classes
of  the  Company's preferred and common stock and  is
redeemable by the Company at any time for cash  equal
to   the   liquidation  preference  plus  accumulated
dividends.

In conjunction with the above described exchange, the
Company  and  Gould also entered into an Amended  and
Restated  Credit Agreement (the "Amended Agreement").
The  Amended  Agreement provided the Company  with  a
committed  borrowing  facility  of  $65,000,000.   On
October 31, 1996, the Company+s borrowings under  the
Amended Agreement exceeded the maximum allowed by the
terms  of  the  Amended  Agreement.   Subsequent   to
October 31, 1996, Gould allowed the Company to borrow
funds  in  excess of the Amended Agreement's  maximum
limit  to  fund its daily operations and  during  the
fiscal  fourth quarter the Company began negotiations
with Gould to significantly recapitalize the Company.
As  of  December  31, 1996 the Company  had  incurred
borrowings    under   the   Amended   Agreement    of
$72,659,000.

On  January 9, 1997, the Company and Gould agreed  to
further  amend the credit agreement to  increase  the
maximum   amount   of  the  borrowing   facility   to
$80,000,000.   On  March  19, 1997,  Gould  exchanged
$40,000,000 of indebtedness owed to it by the Company
(the "Canceled Debt") for 400,000 newly-issued shares
of the Company's Series I Convertible Preferred Stock
(the  "Series  I  Stock").  The  Canceled  Debt  had,
prior  to the closing date, represented a portion  of
the  indebtedness owed by the Company to Gould  under
the Amended Agreement.

The principal terms of the Series I Stock are as follows:

(a)  holders  of such shares are entitled to receive,
     when,  as and if declared by the Company's board
     of directors, an annual dividend per share equal
     to  $6.00; provided, however, that if the number
     of  authorized shares of Common Stock of Company
     is  not increased to at least 300,000,000 on  or
     prior  to July 15, 1997, then such dividend  per
     share  is  increased  to  $10.00;  and,  further
     provided,  that  if  the  number  of  shares  of
     authorized  Common  Stock  of  the  Company   is
     increased  to at least 300,000,000 at  any  time
     after  July  15,  1997, then such  dividend  per
     share is decreased from $10.00 to $6.00;
     
(b)  dividends  on such shares are payable  in  cash;
     provided,  however, that under certain specified
     circumstances  such dividends  may  be  paid  in
     additional shares of Series I Stock;
     
(c)  such   shares  are  entitled  to  a  liquidation
     preference  of  $100 per share  plus  an  amount
     equal  to accrued and unpaid dividends  on  such
     share, which liquidation preference is senior in
     priority  to the Company's Common Stock  and  to
     all  other  shares of Preferred Stock  currently
     outstanding;
     
(d)  subject to certain specified restrictions,  such
     shares  are convertible, at the holder's option,
     at  any time, into that number of shares of  the
     Company's   Common  Stock  equal  to   (i)   the
     liquidation  preference divided by $3.25,  which
     amount  is  subject to adjustment under  certain
     specified circumstances;
     
(e)  such  shares  are convertible, at the  Company's
     option,   in   accordance  with  the  conversion
     methodology summarized in paragraph  (d)  above,
     if  (i)  the  last sale price of  the  Company's
     Common   Stock   exceeded   $3.90   for   twenty
     consecutive  trading days and (ii)  a  buyer  is
     contractually committed to purchase (x)  for  at
     least  $3.90  per  share, at least  50%  of  the
     shares   of   Common  Stock   into   which   the
     outstanding Series I Stock are then convertible,
     or  (y)  for at least $3.50 per share, at  least
     75% of the shares of Common Stock into which the
     outstanding  shares of Series I Stock  are  then
     convertible;
     
(f)  such  shares are non-voting shares except as  to
     matters that would adversely affect the Series I
     Stock  and except as to any other matters which,
     pursuant  to  applicable law,  holders  of  such
     shares may be entitled to vote; and
     
(g)  to  the  extent that there are not a  sufficient
     number  of  authorized shares of  the  Company's
     Common Stock to allow for a conversion of Series
     I Stock into shares of Common Stock as described
     above  (after taking into account,  among  other
     things, (i) the number of options, warrants  and
     other  similar rights outstanding and (ii)  135%
     of  the maximum number of shares of Common Stock
     the   Company  may  be  required  to  issue   on
     conversion of all the shares of each  series  of
     preferred stock then outstanding), then, to that
     extent,  the Series I Stock is convertible  into
     shares  of  Series  J Convertible  Participating
     Preferred  Stock of the Company (the  "Series  J
     Stock")  at  the rate of one share of  Series  J
     Stock for each 100 shares of Common Stock.

The principal terms of the Series J Stock are as follows:

(a)  holders of such shares are entitled to receive a
     dividend  per  share  equal  to  100  times  the
     dividend that is paid by the Company with regard
     to a share of Common Stock of the Company;
     
(b)  such   shares  are  entitled  to  a  liquidation
     preference of $1 per share plus an amount  equal
     to  accrued and unpaid dividends on such  share,
     which   liquidation  preference  is  senior   in
     priority  to  the Company's Common  Stock,  and,
     after  the holders of Common Stock have received
     $0.01  per share, such shares of Series I  Stock
     are  further entitled to receive an amount equal
     to  100 times the amount per shares in excess of
     that $0.01 received by the holders of the Common
     Stock;
     
(c)  subject to certain specified restrictions,  such
     shares  are convertible, at the holder's option,
     at  any  time, in that number of shares  of  the
     Company's  Common Stock equal to (i) 100  shares
     of  Common  Stock, which amount  is  subject  to
     adjustment      under     certain      specified
     circumstances;
     
(d)    such  shares  are  voting shares  and  holders
     thereof shall be entitled to vote together  with
     the  holders of Common Stock, voting as a single
     class,  on all matters presented for a  vote  of
     the holders of Common Stock, which each share of
     Series  J Stock being entitled to 100 times  the
     number of votes to which a share of Common Stock
     is entitled; and
     
(e)  the Series J Stock (i) ranks prior to the shares
     of  Common  Stock  to  the  extent  specifically
     provided  in  the  Certificate of  Designations,
     Powers,  Rights and Preferences of the Series  J
     Stock,  and  in  all  other respects,  ranks  on
     parity  with the Common Stock, (ii) is on parity
     with   the   shares  of  Series  A   Convertible
     Participating Preferred Stock of the Company and
     (iii)  is, and will be, junior to the shares  of
     all  other  series  of Preferred  Stock  of  the
     Company,  other than series which are  expressly
     designated as ranking on a parity with, or being
     junior to, the Series J Stock.

In conjunction with the exchange of the Canceled Debt
for  Series  I  Stock, the Second  Amendment  to  the
Credit Agreement was executed between the Company and
Gould which (i) reduced the maximum amount which  can
be  borrowed  by  the  Company  from  $80,000,000  to
$50,000,000 and (ii) provided that any borrowings  in
excess   of   $41,915,869   (the   principal   amount
outstanding on March 19, 1997 after giving effect  to
the  exchange of indebtedness for shares of Series  I
Stock) may be made only at the discretion of Gould.

The   Credit  Agreement  matures  on  May  31,  1997.
Borrowings    under   the   Credit   Agreement    are
collateralized by substantially all of the  Company's
tangible  and  intangible assets  and  the  agreement
contains  various covenants including maintenance  of
cash flow, leverage and tangible net worth ratios and
limitations   on   capital   expenditures,   dividend
payments  and additional indebtedness.   Interest  on
the loans equals the prime rate plus 2%.

The following tables display the beneficial ownership
of  Japan Energy Corporation through its wholly owned
subsidiaries Gould and EFI in the Company before  the
March  19, 1997 transaction as of December  31,  1996
and on a pro forma basis after the transaction as  of
December 31, 1996:


                  Before the Exchange of Indebtedness for Series I Stock
                                as of December 31, 1996

                        Debt(1)        Beneficial Ownership(2)
                 ($000's)  % of total     Shares  % of total

Gould           $  72,659   99.1%      121,141,690   62.2%
EFI                     -       -       31,891,015   16.4
Other                 658    0.9        41,862,460   21.4
Total            $ 73,317  100.0%      194,895,165  100.0%



                  After the Exchange of Indebtedness for Series I Stock
                           Pro Forma as of December 31, 1996

                         Debt(1)        Beneficial Ownership(3)
                 ($000's)  % of total     Shares   % of total

Gould           $  32,659   98.0%      133,141,690   64.4%
EFI                     -       -       31,891,015   15.4
Other                 658     2.0       41,862,460   20.2
Total           $  33,317  100.0%      206,895,165  100.0%

(1)Includes both current and long-term portion of debt.

(2)  Includes  150,193,728  shares  of  Common  Stock
     issuable upon full conversion of all outstanding
     Series  A Stock, Series B Stock, Series D Stock,
     Series E Stock , Series F Stock, Series G  Stock
     and   Series  H  Stock  after  payment   of  all
     dividends payable through  January 15,  1997  as
     well  as  shares  which may be  acquired  within
     sixty  days after December 31, 1996 by  exercise
     of outstanding stock options.

(3)  Includes  162,193,728  shares  of  Common  Stock
     issuable upon full conversion of all outstanding
     Series  A Stock, Series B Stock, Series D Stock,
     Series  E Stock, Series F Stock, Series G Stock,
     Series  H Stock and Series I Stock  as  well  as
     shares  which may be acquired within sixty  days
     after   December   31,  1996  by   exercise   of
     outstanding stock options.  The Series D  Stock,
     Series  E Stock, Series F Stock, Series G Stock,
     Series H and Series I Stock is convertible by  a
     United States citizen or a corporation or  other
     entity  owned in the majority by a United States
     shareholder   or   in   connection    with    an
     underwritten public offering.

In   connection   with  the  various   exchanges   of
indebtedness  for  preferred stock discussed  herein,
the   United  States  Defense  Investigative  Service
("DIS")  has  reviewed the relationship  between  the
Company  and  the  Japan Energy Group  under  revised
government    requirements   relating   to    foreign
ownership, control and influence.  Given the  current
requirements  in  the  National  Industrial  Security
Program  Operating Manual ("NISPOM"), DIS has decided
to replace the previous method of negation of Foreign
Ownership  Control  and  Influence,  accomplished  by
Board  Resolution,  with  a  more  detailed  Security
Control Agreement as prescribed by DIS in the NISPOM,
which is currently being drafted by Encore's counsel.

Since  1989, Japan Energy Group and its wholly  owned
subsidiaries, Gould and EFI, have been the  principal
source  of the Company's financing by either directly
providing or guaranteeing the Company's loans.   Each
of  the  Company's debt agreements with Japan  Energy
Group   and   its  wholly  owned  subsidiaries   have
contained various covenants including maintenance  of
cash  flow,  leverage, and tangible net worth  ratios
and  limitations  on  capital expenditures,  dividend
payments and additional indebtedness.   Currently and
at various times in the past, the Company has been in
default  of certain covenants contained in the   debt
agreements  but  waivers  of  compliance  with  those
covenants  have  been  obtained and,  generally,  the
Company  has  been  able to successfully  renegotiate
favorable  terms  with  its  creditor.   To  continue
operating  in  the  normal course  of  business,  the
Company is and will remain dependent on the continued
financial  support  of  Japan Energy  Group  and  its
subsidiaries.  Until such time as the Company returns
to a state of sustained profitability, Encore will be
unable  to  secure funding from other parties  and/or
generate sufficient levels of cash through operations
to meet the needs of the business.



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


  Form 10-K                                                  Page Number

  Report of independent public accountants relating to
  consolidated financial statements and financial
  statement schedule                                                  22

  Consolidated statements of operations for the years
  ended December 31, 1996, 1995 and 1994                              23

  Consolidated balance sheets at December 31, 1996 and 1995           24

  Consolidated statements of cash flows for the years ended
  December 31, 1996, 1995 and 1994                                    25

  Consolidated statements of shareholders' equity (capital
  deficiency) for the years ended December 31, 1996,
  1995, and 1994                                                      27

  Notes to consolidated financial statements                       28-44



The following consolidated financial statement
schedules are submitted herewith:


Form 10-K                                                   Page Number

Valuation and qualifying accounts                                    63




The consolidated financial statement schedules should
be   read   in   conjunction  with  the  consolidated
financial  statements  included  herein.   All  other
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.


(a)3. 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

No   reports  on Form 8-K were filed during  the last
quarter of  the year ended December 31, 1996.


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.


   
Schedule II

                           ENCORE COMPUTER CORPORATION                          
                        Valuation and qualifying accounts                       
                                 (in thousands)                                 
                                                                                
                                                                                
                                                                                
                                                                                
                                            Additions 
                                  Bal    Chrgd to  Chrgd to               Bal
                                 at Beg      costs     other            at End
                                 of Per   & expnse  accts(2) Deduct(1)  of Per
                                                                                
                                                                                
Year ended December 31, 1994:                                                   
Allow for doubtful accounts     $2,150    $2,928        $0     ($61)    $5,017

Inventory obsolescence and      14,016     4,659       941        0     11,587
  writedowns

                                                                                
Year ended December 31, 1995:                                                   
Allow for doubtful accounts     $5,017    $2,735        $0  $(5,954)    $1,798

Inventory obsolescence and      11,587    12,367         0   (4,338)    19,616
  writedowns

                                                                                
Year ended December 31, 1996:                                                   
Allow for doubtful accounts     $1,798    ($550)        $0    ($634)      $614

Inventory obsolescence and      19,616   11,013          0   (1,246)    29,383
  writedowns
                                                                                
(1) Includes amounts deemed uncollectible                                       
(2) Charged to restructuring                                                    
    



                         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)

           KENNETH G. FISHER                    EDWARD J. BAKER
       By: _________________                   ________________
           Kenneth G. Fisher                    Edward J. Baker
           Chairman of the Board                Secretary, Treasurer and
           Chief Executive Officer              Chief Accounting Officer

   
October 31, 1997

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

KENNETH G. FISHER
____________________          Chairman of the Board
Kenneth G. Fisher             Chief Executive Officer    October 31, 1997


ROWLAND H. THOMAS, JR.        President and Chief
___________________           Operating Officer and
Rowland H. Thomas, Jr.        Director                   October 31, 1997


C. DAVID FERGUSON
____________________
C. David Ferguson             Director                   October 31, 1997


ROBERT J. FEDOR
____________________
Robert J. Fedor               Director                   October 31, 1997


DANIEL O. ANDERSON
____________________
Daniel O. Anderson            Director                   October 31, 1997


EDWARD J. BAKER
____________________          Secretary, Treasurer and
Edward J. Baker               Chief Accounting Officer   October 31,1997
    



(a)3.        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
  
  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)
  
  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 l0-
               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 l0-
               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.
  
  3.5         Certificate  of  Designations,  Powers
               Rights  and Preferences of  Series  G
               Convertible Preferred Stock of Encore
               Computer   Corporation  (incorporated
               herein by reference to Exhibit 3.1 to
               the   Company's  Form  l0-Q  for  the
               period ended October 1, 1995).
  
  3.6         Certificate  of  Designations,  Powers
               Rights  and Preferences of  Series  H
               Convertible Preferred Stock of Encore
               Computer   Corporation  (incorporated
               herein by reference to Exhibit 3.1 to
               the Company's Form 10Q for the period
               ended June 30, 1996).
  
  *3.7        Certificate  of  Designations,  Powers
               Rights  and Preferences of  Series  I
               Convertible Preferred Stock of Encore
               Computer Corporation.
  
  *3.8        Certificate  of  Designations,  Powers
               Rights  and Preferences of  Series  J
               Convertible Preferred Stock of Encore
               Computer Corporation.
  
  4.1         Articles  NINTH  and  TENTH   of   the
               Certificate of Incorporation  of  the
               Company, as amended, and Certificates
               of    Stock   Designation   relating,
               respectively, to the Company's Series
               A Convertible Participating Preferred
               Stock, Series B Convertible Preferred
               Stock   and   Series   C   Redeemable
               Preferred  Stock (see  Exhibit  3.1).
               Incorporated  herein by reference  to
               the  Company's Form 10-K for the year
               ended December 31,1990.
  
  4.2          Article  1  of  the  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).
  
  4.3         Certificate   of   Stock   Designation
               relating  to the Company's  Series  D
               Convertible      Preferred      Stock
               (incorporated herein by reference  to
               Exhibit 4.3 to the Company's Form 10-
               K   for   the  year  ended   December
               31,1992).
  
  4.4         Certificate   of   Stock   Designation
               relating  to the Company's  Series  E
               Convertible      Preferred      Stock
               (incorporated herein by reference  to
               Exhibit 4.4 to the Company's Form l0-
               K  for  the  year ended December  31,
               1993).
  
  4.5         Certificate   of   Stock   Designation
               relating  to the Company's  Series  F
               Convertible Preferred Stock
  
  #10.1       The  Company's  1983  Incentive  Stock
               Option Plan, as amended (incorporated
               herein  by reference to the Company's
               Form    S-8/Form   S-3   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/Form   S-3
               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/Form   S-3
               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).
  
  10.5        Master Purchase Agreement dated as  of
               February 3, 1994 between the  Company
               and     Gould    Electronics     Inc.
               (incorporated herein by reference  to
               Exhibit  10.7b to the Company's  Form
               l0-K for the year ended December  31,
               1993).
  
  10.6        Intellectual     Property      License
               Agreement  dated as  of  January  28,
               1991,   among  the  Company,   Encore
               Computer  U.S., Inc. ("Encore  U.S.")
               and  Gould Inc. (incorporated  herein
               by  reference to Exhibit 10.9 of  the
               Company's  Form  10-K  for  the  year
               ended December 31, 1990).
  
  
  10.7a       The  Amended  and  Restated  Revolving
               Loan  Agreement dated March 31,  1992
               between  Encore Computer  Corporation
               and  Gould Inc. (incorporated  herein
               by reference to the Company's Form 10-
               K  Exhibit 10.13c for the year  ended
               December 31, 1991).
  
  10.7b       The   Second   Amended  and   Restated
               Revolving  Loan Note dated March  31,
               1992    between    Encore    Computer
               Corporation    and     Gould     Inc.
               (incorporated herein by reference  to
               the   Company's  Form  10-K   Exhibit
               10.13d  for  the year ended  December
               31, 1991).
  
  10.7c       The  Renewal  Term Notes  dated  March
               31,   1992  between  Encore  Computer
               Corporation    and     Gould     Inc.
               (incorporated herein by reference  to
               the   Company's  Form  10-K   Exhibit
               10.13e  for  the year ended  December
               31, 1991).
  
  10.7d       Amendment  Agreement to  the  Revolving
               Loan  Agreement among the Company  and
               Gould Inc. and the Term Loan Agreement
               among the Company and Gould Inc. dated
               April 12, 1993 (incorporated herein by
               reference  to  Exhibit  10.9d  to  the
               Company's Form 10-K for the year ended
               December 31, 1992).
  
  10.7e       Amended  Loan  Agreement  and  related
               letter agreement dated April 11, 1994
               between   the   Company   and   Gould
               Electronics    Inc.     (incorporated
               herein by reference to Exhibit 10.13g
               to  the  Company's Form l0-K for  the
               year ended December 31, 1993).
  
  10.8        Amended  and Restated General Security
               Agreement  dated as  of  January  28,
               1991, among the Company, Encore  U.S.
               and  Gould Inc. (incorporated  herein
               by reference to the Company's Form 10-
               K  Exhibit  10.14 for the year  ended
               December 31,1990).
  
  10.9        Support  Services  Provider  Agreement
               dated December 9, 1993 between Encore
               Computer   Corporation  and   Halifax
               Corporation  to  subcontract  certain
               customer  service  field  maintenance
               activities   to  Halifax  Corporation
               (incorporated herein by reference  to
               Exhibit  10.17 to the Company's  Form
               l0-K for the year ended December  31,
               1993).
  
  #10.10      Amendment No. 1 to Nonqualified  Stock
               Option   Agreement   between   Encore
               Computer  Corporation  and  T.  Mark.
               Morley   dated  November   10,   1993
               (incorporated herein by reference  to
               Exhibit  10.18 to the Company's  Form
               l0-K for the year ended December  31,
               1993).
  
  #10.11      Description    of    the     Company's
               Corporate Executive Compensation Plan
               (incorporated herein by reference  to
               Exhibit  10.19 to the Company's  Form
               l0-K for the year ended December  31,
               1993).
      
  
  10.13       The  Uncommitted  Loan  Agreement  and
               certain exhibits thereto dated as  of
               December  21,  1994  between   Encore
               Computer   Corporation   and    Gould
               Electronics Inc. (incorporated herein
               by  reference to Exhibit 10.13 to the
               Company's  Form  l0-K  for  the  year
               ended December 31, 1994).
  
  
  10.14       The   Amended   and  Restated   Credit
               Agreement dated as of March 17,  1995
               between  Encore Computer  Corporation
               and     Gould    Electronics     Inc.
               (incorporated herein by reference  to
               Exhibit  10.14 to the Company's  Form
               l0-K for the year ended December  31,
               1994).
  
  
  10.15       Master Purchase Agreement dated as  of
               March  17,  1995 between the  Company
               and  Gould Electronics Inc.  relating
               to   the   purchase   of   Series   F
               Convertible     Preferred      Stock,
               Cancellation   of  Indebtedness   and
               Related  Documentation  (incorporated
               herein by reference to Exhibit  10.15
               to  the  Company's Form l0-K for  the
               year ended December 31, 1994).
  
  
  10.16       The   Second   Amended  and   Restated
               Credit  Agreement dated as of  August
               17,   1995  between  Encore  Computer
               Corporation   and  Gould  Electronics
               Inc.    (incorporated    herein    by
               reference  to  Exhibit  10.1  to  the
               Company's  Form l0-Q for  the  period
               ended October 1, 1995).
  
  10.17       Certificate.   Reference made  to  the
               Master Purchase Agreement dated as of
               August  17, 1995 between the  Company
               and  Gould Electronics Inc.  relating
               to   the   purchase   of   Series   G
               Convertible     Preferred      Stock,
               Cancellation   of  Indebtedness   and
               Related    Documents    (incorporated
               herein  by reference to Exhibit  10.2
               to  the  Company's Form l0-Q for  the
               period ended October 1, 1995).
  
  #10.18      The   Company's   1985   Non-Qualified
               Stock Option Plan and 1995 Long  Term
               Performance    Plan,    as    amended
               (incorporated herein by reference  to
               the   Company's  Form  S-8/Form   S-3
               Registrations   Statement   No.   33-
               72741).
  
  10.19       The  Third Amended and Restated Credit
               Agreement dated as of April 16,  1996
               between  Encore Computer  Corporation
               and     Gould    Electronics     Inc.
               (incorporated herein by reference  to
               Exhibit 10.1 to the Company's Form l0-
               Q  for  the  period  ended  June  30,
               1996).
  
  10.20       Certificate.   Reference made  to  the
               Master Purchase Agreement dated as of
               August  17, 1995 between the  Company
               and  Gould Electronics Inc.  relating
               to   the   purchase   of   Series   H
               Convertible     Preferred      Stock,
               Cancellation   of  Indebtedness   and
               Related    Documents    (incorporated
               herein  by reference to Exhibit  10.2
               to  the  Company's Form l0-Q for  the
               period ended June 30, 1996).
  
  *10.21      Certificate.   Reference made  to  the
               Master Purchase Agreement dated as of
               March  19,  1997 between the  Company
               and  Gould Electronics Inc.  relating
               to   the   purchase   of   Series   I
               Convertible     Preferred      Stock,
               Cancellation   of  Indebtedness   and
               Related Documents.
  
  *11.0       Computation of Loss per Share
  
  *22.0       Subsidiaries of the Company.
  
  *23.1       Consent  of  Independent  Public
               Accountants.
  
  *27         Financial Data Schedule
  
  99          Cautionary Statement for the Purposes
               of the "Safe Harbor" Provisions of the
               Private Securities Litigation Reform
               Act of 1995 (incorporated herein by
               reference to Exhibit 99 to the
               Company's Form l0-Q for the period
               ended June 30, 1996).
  
  # Management contract or compensatory plan or
               arrangement
  
  * Filed herewith.