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              IN WHICH INCORPORATED
                     REFERENCE:

Proxy Statement for the 1997 annual Meeting     Part III, Items
                            of Shareholders       10,11,12,13
                                                        
 A list of all exhibits to this Form 10-K is on Page 50.

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
SP(TM)  and  the  Infinity R/T (TM).  The Company  has  invested
heavily  in  research and development of the  Infinity  SP  (TM)
Universal  Storage  Processor with DataShare(TM)  Facilities  to
establish  its  presence  in  the  multibillion  dollar  storage
marketplace.  Although the storage marketplace is new to Encore,
the  Company  believes the Infinity SP(TM)  product  will  be  a
market  leader.  From a storage perspective, the Infinity SP(TM)
supports  multiple environments and cross platform data  sharing
between  open systems and mainframe applications.  The  Infinity
SP(TM)    is    built    around   Encore's    patented    Memory
Channel/Reflective  Memory  technology.   The  Infinity   SP(TM)
offers  extremely  competitive  application,  connectivity   and
performance advantages. In the context of cross platform  shared
protected storage for open systems and mainframes, the  Infinity
SP(TM)  family of products are technology leaders.

The  Infinity SP(TM) 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/T(TM).   The
performance features of the Infinity R/T(TM), 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/T(TM)  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
DataShare(TM)  Facilities.   From  a  storage  perspective,   the
Infinity SP(TM) supports multiple environments and cross-platform
data  sharing  between  open systems and mainframe  applications.
This  means that with Encore's Mainframe DataShare(TM)  Facility,
mainframe  sequential datasets stored on the Infinity SP(TM)  can
be  read  by  attached open systems. Additionally  Encore's  Open
Systems DataShare(TM) Facility provides comparable support in the
opposite  direction.  Channel attached mainframes can  read  open
systems  volumes  stored  on  the  Infinity  SP(TM).   Businesses
operating  applications  on mainframes  or  in  an  open  systems
environment can use the DataShare(TM) Facilities to significantly
reduce  the  elapsed  time  and effort required  to  access  data
between   platforms.   The  Infinity  SP(TM)  offers  competitive
applications,  connectivity, and performance advantages.  In  the
context  of  cross-platform  shared protected  storage  for  open
systems  and  mainframes, the Infinity  SP(TM)  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/T(TM)
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  SP(TM)  Storage Processors, and  the  Infinity  R/T(TM)
Series.  Additionally, the Company continues to support its prior
generation CONCEPT/32(R) real-time computer product line.

Infinity SP(TM)
The  Infinity  SP(TM)  Series Universal Storage  Processors  with
DataShare(TM) 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 SP(TM) to  support
simultaneously  all  of  these roles, Encore  developed  software
products   such   as   Mainframe  DataShare(TM),   Open   Systems
DataShare(TM), Backup/Restore DataShare(TM),  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
SP(TM)  to  be  shared  at  disk  speeds,  thereby  significantly
narrowing  the  information  gap.   The  Mainframe  DataShare(TM)
Facility  allows  MVS  IBM mainframe sequential  datasets  (QSAM)
stored  on an Infinity SP(TM) to be read by a SCSI attached  Open
System Platform.  The Open System DataShare(TM) Facilities allows
selected SCSI attached volumes stored on an Infinity SP(TM) to be
read  by  an IBM compatible mainframe running MVS with no special
software   running   on   the  mainframe.    The   Backup/Restore
DataShare(TM)  Facility allows an Infinity SP(TM) 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 SP(TM) 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  SP(TM) storage subsystems  are  capable  of
delivering  storage  solutions  from  48  gigabytes  to  multiple
terabytes.   Encore  believes the Infinity  SP(TM)  provides  the
world  of increasingly heterogeneous computing components simpler
and cost effective solutions.

Infinity Gateway (TM)
The  Encore Infinity Gateway(TM), the lowest priced member of the
Infinity  SP(TM)  family  provides mainframes  and  open  systems
concurrent access to shared datasets in real-time.  The  Infinity
Gateway  utilizing DataShare(TM) 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/T(TM) 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  Alpha(R)  and/or Intel  Corporation's  Pentium(R)
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 SP(TM) 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
         R & D/Custom Products                         235
         Sales and Marketing                           147
         General and                                    56
            Administrative
         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,        61      President and
       Jr.
                                        Chief Operating Officer
                                                                     
       Charles S. Anderson       67      Vice President,
                                        Corporate Relations
                                                                     
       Ziya Aral                 44      Vice President, Systems
                                       Engineering
                                        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.             Administrative/    Owned     232,000
       Lauderdale,FL    Development/
                        Marketing
                                              
       Melbourne,FL     Manufacturing      Owned     137,000
       London,England   Sales/Service      Leased     35,000
       Paris, France    Sales/Service      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   Pro       For the year ended December 31,
 except         Forma
 per share       1996(2)    1996     1995    1994    1993   1992
 data)
 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           44,174   44,174   42,287  40,755  39,273  37,899
 outstanding
 (1)
 Working capital (27,479) (67,295)   5,490  20,237   3,499  14,270
       (deficit)       
    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         5,806  (34,010)   2,514 (22,040)(66,560)    508
 deficiency)

(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
SP(TM) Storage Processor with DataShare Facilities(TM), and  (ii)
the  Infinity  R/T(TM).   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 SP(TM) to penetrate  the  storage
market and establish market presence.  The acceptance of Encore's
Infinity   SP  Universal  Storage  Processor  with  DataShare(TM)
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 SP(TM), and the Infinity R/T(TM) 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 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   and   $8,960,000
respectively,  in connection with the termination of  the  Amdahl
Reseller  Agreement.   The following table illustrates  equipment
gross margins, adjusted for this impact as well as the impact  of
Storage Product valuation reserves charged in 1996 as a result of
slow moving inventory:

                                    1996       1995      1994
                                                                
Equipment Sales                     $27,600   $22,005    $38,412
                                                                
Equipment Cost of Sales              35,786    34,975     35,052
                                                                
Amdahl Restructuring Charge               0   (14,242)    (8,960)
                                                                
Valuation Reserve Adjustment         (9,932)        0          0
                                                                
Adjusted Equipment Cost of Sales     25,854    20,733     26,092
                                                                
Adj. Equipment Gross Margin          $1,746    $1,272    $12,320
                                                                
Adj. Gross Margin as % of                6%        6%        32%
Revenue

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  following  table illustrates service gross margins  adjusted
for these investments:
                                     1996       1995      1994
                                                                 
Service Sales                        $20,027   $27,323    $38,138
                                                                 
Cost of Service Sales                 17,822    20,718     25,855
                                                                 
Investment in Storage Product        (5,979)   (3,719)    (2,010)
Support
                                                                 
Adjusted Cost of Service Sales        11,843    16,999     23,845
                                                                 
Adjusted Service Gross Margin         $8,184   $10,324    $14,293
                                                                 
Adjusted Gross Margin as % of            41%       38%        37%
Sales

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 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.

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 1996, 1995 and 1994  relate  to  taxes
payable  by  foreign subsidiaries (see Note H  of  the  Notes  to
Consolidated Financial Statements).

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.  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.
<PAGE>
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
 Restruct costs (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                              ($2.18)   ($2.37)   ($1.68)
                                                                                
Weighted average shares                                                         
 of common stock                                    44,174    42,287    40,755
                                                                                
                                                                                
                                                                                
The accompanying notes are an integral part of the consolidated                 
financial statements.                                                           
<PAGE>

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

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.                                                           
<PAGE>
                                                                                
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.                                                           
<PAGE>
                                                                                
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.                                                           
<PAGE>
                                                                                
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. Series A Convertible Participating
Preferred  Stock has been considered common stock (on  an  assumed
converted  basis) for purposes of all loss per share calculations.
All  other  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.

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.  However, after
entering into the agreement certain significant contractual issues
arose  delaying the sale of products and on June 8,  1995,  Encore
announced that the Amdahl Reseller Agreement 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 $11,442,000 charged to cost of sales to
reduce  inventory  carrying amounts to  estimated  net  realizable
value,  as  well  as  $2,800,000 charged  to  cost  of  sales  for
uncollected  Amdahl  accounts  receivable,  $500,000  charged   to
research  and  development  to  write  down  capitalized  software
projects in process and $4,499,000 charged to restructuring costs.
The  charge  related  to;  (i) the recognition  of  the  permanent
impairment  in  value of $2,406,000 of certain long-lived  assets,
including  capitalized software and property and  equipment,  (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.  As of December  31,
1994,    because   of   uncertainties   surrounding   the   Amdahl
relationship, the Company also charged cost of sales $8,960,000 in
order to reduce inventories to estimated net realizable value  and
to provide for uncollectible accounts receivable.

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 restructuring 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                       $     $     7,
                                             4,976          339
      Accrued salaries and                   4,034        4,261
                  benefits
     Accrued restructuring                     362        1,566
                     costs
  Accrued interest-related                  11,614        5,921
                   parties
             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         $           $     $  40,154
              related parties         -           -

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.

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                   1,750         1,750
                  credits
           Capital losses                   4,954         4,396
   Allowance for doubtful                     172           452
                 accounts
       Inventory reserves                   9,023         8,113
         Accrued vacation                     560           600
   Various reserves/other                   4,279         3,405
    Accrued restructuring                       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                     (4)         (11)
                    issued
  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       (2,665)      (7,638)
                          agreements
    Increase in additional              $  32,242    $  101,954
           paid-in capital

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 two  fixed  stock  option
plans, the 1983 Incentive Stock Option Plan (the "ISO Plan") which
expired in 1993, and the 1985 Non-Qualified Stock Option Plan (the
"NQO  Plan").  On January 19, 1995, the Board of Directors adopted
the  Company's  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 Income                  As reported      ($70,732)    ($81,354)
                            Pro forma        ($71,641)    ($81,942)
                                                                  
Primary earning 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 4.9 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  SharesExercise
                      (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 9,582   $1.62  9,946   $1.50  10,112  $1.44
             of year
                                                                 
 Options exercisable 7,445          7,290           7,311        
         at year end
                                                                 
    Weighted-average                                             
       fair value of
     options granted $2.09          $1.17           $1.07        
     during the year

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       Geographic  Total     Income      Identifiable
              Unrelated
              Entities      Net        Net      (Loss)      Assets
                           Sales      Sales
1994:                                                             
United       $  42,613   $  8,886   $ 51,499   $ (55,133)    $  83,234
States
       
Europe          29,147        -       29,147       4,164       14,340
Other            4,790        -        4,790         72         2,352
Geographic      76,550      8,886     85,436     (50,897)      99,926
Total
Inter-           -         (8,886)    (8,886)         49         (905)
Geographic
Total        $  76,550   $    -     $ 76,550   $ (50,848)    $  99,021
                                                                  
1995:                                                             
United       $  24,051   $  7,893   $ 31,944   $ (78,767)    $  55,488
States

Europe         23,721        -        23,721       1,165        18,030
Other           1,556        -         1,556          69           189
Geographic     49,328      7,893      57,221      (77,533)       73,707
Total
Inter-           -        (7,893)     (7,893)        (263)       (1,170)
Geographic
Total        $  49,328   $    -     $ 49,328    $ (77,796)    $  72,537

                                                                  
1996:                                                             
United       $  19,300   $ 12,026   $ 31,326   $ (65,502)    $  46,734
States
Europe          26,616        -       26,616        (968)       24,258
Other            1,711        -        1,711         (79)          103
Geographic      47,627     12,026     59,653     (66,549)       71,095
Total

Inter-            -       (12,026)  (12,026)        (669)       (1,839)
Geographic
             
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          (446)
                            agreements
  Increase in additional paid-             $  39,833
                  in capital

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.   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

Information  regarding directors of the Company included  in  the
Company's definitive Proxy Statement for the 1997 Annual  Meeting
of  Shareholders  under the caption "Election  of  Directors"  is
incorporated   herein   by  reference.    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

Information  regarding  Executive Compensation  included  in  the
Company's definitive Proxy Statement for the 1997 Annual  Meeting
of  Shareholders  under the caption "Executive  Compensation"  is
incorporated herein by reference.

Item  12   Security  Ownership of Certain Beneficial  Owners  and
Management

Information   regarding  security  ownership  of  the   executive
officers   and  directors  of  the  Company  and  certain   other
stockholders which is included in the Company's definitive  Proxy
Statement  for the 1997 Annual Meeting of Shareholders under  the
captions  "Principal Stockholders", "Election of Directors",  and
"Executive Compensation" is incorporated herein by reference.

Item 13  Certain Relationships and Related Transactions

Information   regarding   Certain   Relationships   and   Related
Transactions included in the Company's definitive Proxy Statement
for  the  1997 Annual Meeting of Shareholders under  the  caption
"Certain  Relationships and Related Transactions" is incorporated
herein by reference.

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 schedules                        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 statements28-44

The following consolidated financial statement schedules are
submitted herewith:

Form 10-K                                   Page Number

Valuation and qualifying accounts                    48

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.

                    ENCORE COMPUTER CORPORATION
                    Valuation and qualifying accounts
                        (in thousands)

              Balance             Additions                  Balance
              at        Charged to   Charged to              at End of
              Beginning costs and    other       Deductions  Period
              of        expenses     accounts(2) (1)
              Period
Year ended
Dec 31, 1994:
Allowance for $ 2,150    $ 2,928     $  -        $    (61)   $ 5,017
doubtful
accounts

Year ended
Dec 31, 1995:
Allowance for $ 5,017    $    65     $(2,800)    $   (484)   $ 1,798
doubtful
accounts

Year ended
Dec 31, 1996:
Allowance for $ 1,798    $  (550)    $   -       $   (634)   $   614
doubtful
accounts

(1) Includes amounts deemed uncollectible
(2) Charged to restructuring
<PAGE>

                               SIGNATURES

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

ENCORE COMPUTER CORPORATION
(Registrant)

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

April 15, 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  April 15,1997

ROWLAND H. THOMAS, JR.        President and Chief
___________________           Operating Officer and
Rowland H. Thomas, Jr.        Director                 April 15, 1997

C. DAVID FERGUSON
____________________
C. David Ferguson             Director                 April 15, 1997

ROBERT J. FEDOR
____________________
Robert J. Fedor               Director                 April 15, 1997

DANIEL O. ANDERSON
____________________
Daniel O. Anderson            Director                 April 15, 1997

EDWARD J. BAKER
____________________          Secretary, Treasurer and
Edward J. Baker               Chief Accounting Officer April 15,1997
<PAGE>

(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.
                                                              
                                                              
                                                  Exhibit 23.1
                                                              
                   CONSENT OF INDEPENDENT ACCOUNTANTS
                                    
We   consent  to  the  incorporation  by  reference   in   the
registration statement of Encore Computer Corporation on Forms
S-8 (Registration Statement Nos. 33-10225, 33-33907, 33-34171,
33-72458   and   33-72741)  and  on  Forms  S-3  (Registration
Statement  Nos. 33-121, 33-33907 and 33-34171) of our  reports
dated January 30, 1997 except for Note M as to which the  date
is March 19, 1997, on our audits of the consolidated financial
statements and financial statement schedule of Encore Computer
Corporation as of December 31, 1996 and 1995 and for the years
ended  December  31,  1996, 1995 and  1994,  which  report  is
included in this Annual Report on Form 10-K.

COOPERS & LYBRAND L.L.P.

Miami, Florida
April 15, 1997