<PAGE>
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549
                                               
                            -------------------

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

[x]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 (Fee Required)  For the fiscal year ended October
     31, 1995
                                     or

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 (No Fee Required)  For the transition period from
     ___________ to ___________

                      Commission file number:  0-11254

                               COPYTELE, INC.
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           (Exact Name of Registrant as Specified in its Charter)

               Delaware                             11-2622630
-------------------------------------  -----------------------------------
   (State or Other Jurisdiction of        (I.R.S. Employer Identification
    Incorporation or Organization)                     No.)

                           900 Walt Whitman Road
                       Huntington Station, NY  11746
                               (516) 549-5900
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(Address, Including Zip Code, and Telephone Number, Including Area Code, of
                 Registrant's Principal Executive Offices)

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

                                               Name of Each Exchange
         Title of Each Class                    on Which Registered
-------------------------------------  -----------------------------------
                 NONE                

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

                        Common Stock, $.01 par value
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                              (Title of Class)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.    Yes  [x]   No  [_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statement incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [x].

Aggregate market value of the voting stock (which consists solely of shares
of Common Stock) held by non-affiliates of the registrant as of January 19,
1996, computed by reference to the closing sale price of the registrant's
Common Stock on the NASDAQ National Market System on such date ($10.25):
$219,415,938.

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.  Yes  [_]   No  [_]

On January 19, 1996, the registrant had outstanding 26,290,153 shares of
Common Stock, par value $.01 per share, which is the registrant's only
class of common stock.

                   DOCUMENTS INCORPORATED BY REFERENCE:  
                                    NONE<PAGE>

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     Item 1. Business

     CopyTele, Inc. (the "Company" or "CopyTele"), a development stage 
     enterprise, is engaged in the design and development of telecommunications
     products incorporating its ultra-high resolution charged particle
     (electrophoretic) flat panel display screen ("flat panel") for the
     receipt, transmission and printing of text, facsimile, graphics and
     pictures, as well as voice transmission.

     The Company's principal activities are the development of products,
     further enhancement of its flat panel technology, and its interest in
     Shanghai CopyTele Electronics Co., Ltd. ("Shanghai CopyTele" or "Joint
     Venture"), the Company's 55% owned joint venture in Shanghai, China,
     with Shanghai Electronic Components Corp. ("SECC") and Shanghai
     International Trade and Investment Developing Corp. ("SIT"). The
     strategy of Shanghai CopyTele is to develop, manufacture and market
     multi-functional telecommunications products in China, utilizing the
     Company's flat panel and associated proprietary hardware and software
     technology. The Company plans to purchase the Joint Venture's products
     for marketing outside of China.

     The Company has not had any revenues to support its operations and has
     expended an aggregate of approximately $16.9 million for research and
     development since its inception in 1982. There is no assurance, and
     the Company is not able to predict, if and when marketable
     telecommunications products incorporating the Company's flat panel
     technology will be produced and sold in commercial quantities. Even if
     the Company were to produce marketable products, directly or through
     the Joint Venture, there is no assurance that the Company will
     generate revenues in the future, will have sufficient revenues to
     generate profits or that other products will not be produced by other
     companies that will render the products of the Company and of the
     Joint Venture obsolete. 

     The Company's Chief Executive Officer, Denis A. Krusos, and its
     President, Frank J. DiSanto, are engaged in the management and
     operations of the Company and Shanghai CopyTele, including the
     technical aspects of the development of the Company's  products, and
     are important to the future business and financial arrangements of
     the Company and the Joint Venture.

     The Company was incorporated on November 5, 1982, under the laws of
     the State of Delaware. Its principal executive offices are located at
     900 Walt Whitman Road, Huntington Station, New York 11746 and its
     telephone number is 516-549-5900.

     Multi-Functional Telecommunications Products
     --------------------------------------------
     During the past year, the Company concentrated on the development of
     products for Shanghai CopyTele. The basic emphasis of the Company's
     contribution to the Joint Venture's products is to incorporate the
     Company's communications and imaging expertise and its advanced flat
     panel technology into a new generation of telephone-based multi-
     functional telecommunications products. Currently, two products are
     anticipated to be produced by







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     Shanghai CopyTele, which are designed to attract the high and low ends
     of the market, respectively.

     The Prototype
     -------------
     A pre-production prototype of the Company's first product, called
     "Magicom"TM, has been produced by the Company and is directed toward
     the higher end of the potential market. This prototype has unique
     capabilities that are incorporated into a compact, attractive design
     with the capability of performing numerous functions while being
     simple to operate by users. The prototype is a unique, telephone based
     multi-functional telecommunications product whose features include
     compactness, ease of use, compatibility with numerous devices and
     display quality approaching that of a printed page. The Company
     believes that these features will position the product for the needs
     of the developing digital information field and various on-line
     services. The product would enable users to have a personal
     information center in a single, compact unit which integrates voice
     communication, digital messaging, fax (transmission and paperless
     reception), copier, electronic handwriting, touch sensitive keyboard
     screen, data storage and transmission, and computer interfacing.

     CopyTele's patented flat panel technology incorporated in this
     prototype brings a new standard of readability to visually displayed
     electronic information, since its display image forms in a manner
     closely resembling the way a printed image forms on a page. Business
     documents, letters, diagrams, written messages or notes, magazine
     articles and other forms of information that can be received
     electronically can be read with the ease approaching that of a printed
     page. Users can view in a single image an entire page of information.
     The display images can be viewed from any angle under all lighting
     conditions. Once an image is seen on the display, it can be retained
     with minimal display power. This provides additional user-friendliness
     since no refreshing is necessary to view an image. Conventional
     displays, such as CRT's and LCD's, require refresh (quick repetition
     of an image) which is one reason why people find reading a printed
     page easier and more natural. The display, in combination with a high
     quality writing screen and pen, allows writing with ease approaching
     that of writing on paper. The display-writing screen combination can
     be used to create and transmit information and edit received
     documents. CopyTele has described these unique display features as
     "electronic paper". In addition, the high resolution of its display
     has enabled CopyTele to produce a compact, lightweight product capable
     of displaying a full page of information, considerably smaller than
     conventional lower resolution displays would allow. The product size
     is suitable for office and home use. 

     Main Features of Prototype
     --------------------------
     The prototype has the following main features: 

            *  Compactness and ease of use.

            *  Capable of displaying in a single image an entire page of
          information.



     NYFS11...:\95\38995\0004\1196\FRM1196M.52C
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            *  Flicker-free, ultra-high resolution display provides reading
               capability similar to that of a printed page.

            *  Information easily readable from any direction, under
               sunlight or nighttime light conditions. 

            *  Capable of retaining an image on the display with minimal
               power.

            *  Incorporates a scanner to send a fax or to input into a
               computer and provides a copier capability by interfacing
               with a compatible printer.

            *  Compatible with fax and PC computer terminals to send or
               receive information.

            *  Fax and data modems to send to and receive from fax and
               computer terminals.

            *  Handwriting viewed on the Company's flat panel display
               incorporating a writing screen and a pen. Handwriting
               information can be written clearly in any language and can
               be printed or transmitted to other fax terminals.

            *  Capable of editing received information via use of the
               writing screen and pen and transmitting such edited
               information.

            *  Utilization of a touch screen sensitive keyboard to achieve
               certain telephone and fax functions and for additional
               future capability, including pagers and on-line services,
               and accessing the Internet.

            *  Utilization of electronic memory to scan documents before
               transmission and for unattended reception.

            *  Capable of reading information, such as faxes, e-mail,
               handwriting and editing, which are sent via telephone,
               satellite or cellular links.

            *  Capable of broadcasting information to multiple locations.

            *  Capable of automatically extracting information from or by a
               remote fax terminal.

            *  Capable of interfacing with cordless and cellular phones.

            *  Digital voice answering machine capability.

            *  Voice communication via a telephone handset or via a
               simultaneous, two-way digital speaker system.























     
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            *  Capable of interfacing to a printer being developed by the
               Company or to other commercially compatible available
               printers.

            *  Utilization of user friendly screen icons and an on-screen
               instruction manual for easy use.

     The prototype also has other telecommunications capabilities, such as
     speed dialing, re-dial, flash, electronic directory, date and time. It
     is capable of incorporating on a continuing basis other functions that
     may be derived from the Company's proprietary software development.
     The Company is continuing to develop proprietary software to provide
     interfacing with on-line services, such as the Internet, and the use
     of a keyboard displayed on the Company's flat panel in conjunction
     with a touch screen and pen.  The same software development would
     permit the product to communicate with pager systems. In addition,
     simultaneous voice and information capability is being developed.

     Second Prototype
     ----------------
     A second pre-production prototype is being developed which would
     provide many of the first prototype's functions but would not include
     the Company's flat panel. It is anticipated that this prototype would
     address the lower end of its potential market. Except for the
     Company's flat panel, it would contain many of the same features as
     the first involving voice, fax, and computer communication, as well as
     self-contained printing capability and instructions to eliminate the
     need for a complex detailed manual.

     The prototypes are being designed to meet safety, interconnection,
     radiation emissions and non-interface requirements necessary for
     various regulatory approvals in various countries. The Company is
     proceeding with the testing necessary to obtain such approvals but
     there is no assurance that those approvals will be obtained. The
     success of the prototypes will be contingent upon a number of factors,
     including the ability of the Joint Venture to effectively manufacture
     the products at competitive prices in commercial quantities.

     Joint Venture
     -------------
     The Joint Venture was formed on April 10, 1995 pursuant to a Joint
     Venture Agreement dated March 28, 1995 ("the Agreement") between
     CopyTele and SECC. With this Agreement, Shanghai CopyTele was formed
     as a limited liability company in Shanghai, China having a duration of
     20 years. The Company has been advised that SECC is wholly owned by
     the government of China and is the largest electronic components
     company in China.

     The Agreement contemplates an initial investment of $7 million, of
     which half may be borrowed from banks, and a registered capital of
     $3.5 million. The parties have agreed in principle to increase the
     investment to a maximum of $25 million, depending on the nature and
     extent of the Joint Venture's business. CopyTele, which owns a 55%
     interest in the Joint Venture, is required to contribute $1,225,000 in
     cash (of which $857,500 had been contributed as of January 19, 1996)
     and technology (which was valued for purposes of the


















     
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     Agreement at $700,000 and represents 20% of the registered capital)
     which has been licensed to the Joint Venture pursuant to a Technology
     License Agreement. In accordance with Chinese regulations, the maximum
     percentage of technology which can be contributed as registered
     capital is 20%. SECC and SIT (which has acquired a 10% economic
     interest in the Joint Venture from SECC) had contributed $1,102,500 of
     their required cash commitment of $1,575,000 to the Joint Venture as
     of January 19, 1996.  The Company accounts for its investment in the
     Joint Venture under the equity method of accounting.  See Notes 2 and
     3 to the Company's Financial Statements.

     It is contemplated that additional financing for the Joint Venture, if
     required, would be obtained from a combination of third party
     borrowings and equity investments contributed by the Company and the
     other parties to the Joint Venture in proportion to their respective
     equity interests and on terms to be agreed upon. The Company may
     require additional financing in order to participate in the Joint
     Venture following its initial capital contributions and to continue
     its research and development activities. There can be no assurance,
     however, that adequate financing will be available to the Company or
     the Joint Venture, or that, if available, it will be available on
     favorable terms and conditions.

     CopyTele licensed only the flat panel application technology to
     Shanghai CopyTele for exclusive use in China. Neither SECC nor the
     Joint Venture has any rights to manufacture the Company's flat panel
     which will be supplied by the Company. As a result of licensing the
     technology, CopyTele will receive royalties for the duration of the
     Technology License Agreement on all net sales by Shanghai CopyTele,
     including sales to CopyTele for resale. CopyTele is solely authorized
     to market and sell the Joint Venture's products outside of China while
     Shanghai CopyTele is responsible for marketing and selling within
     China.

     The Board of Directors of Shanghai CopyTele is comprised of seven
     directors. In accordance with the Agreement, CopyTele has appointed
     four directors, the Vice-Chairman and the General Manager, and SECC
     has appointed three directors, the Chairman and the Vice-General
     Manager. The Joint Venture is currently engaged in limited
     administration and technical planning. It is contemplated that
     manufacturing personnel, as well as additional administrative and
     technical personnel, will be hired as Shanghai CopyTele progresses
     toward its planned mass production of products. Initial production is
     contemplated to commence in 1996 in a leased facility in Shanghai,
     China until a new facility is constructed and equipped. Equipment for
     the leased facility is in the process of being ordered.

     On October 11, 1995, Shanghai CopyTele signed contracts with the Land
     Administration Bureau of Shanghai County in Shanghai, China to obtain
     land-use rights and with a general construction company for off-lot
     infrastructure requirements. The land-use contract provides Shanghai
     CopyTele with the rights to use land in the Shanghai Songjiang
     Industrial Zone to design and construct a multi-level manufacturing
     facility of up to 100,000 square feet. The rights are for a plot of
     land approximately 100,000 square feet in size and for a duration of
     50 years. The cost of the land-use rights and infrastructure fees are
     approximately $310,000 and has been paid by the Joint Venture from the
     equity contributions of the parties. Shanghai CopyTele also has signed
     a contract with a design company for an architectural and engineering
     design, which is near completion, of a new facility presently
     anticipated to be













     
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     approximately 30,000 square feet in size. The cost of the contract is
     approximately $41,000 and is being paid in installments through its
     completion. The Joint Venture is in the process of selecting a
     construction company with the decision anticipated shortly. A
     construction plan is required to be submitted to relevant government
     authorities for their examination and approval. It is presently
     contemplated that construction of the new facility will commence in
     the spring of 1996. Upon completion, production would be relocated
     from the rental facility into the new facility. (See "Manufacturing".)

     On July 10, 1995, an Assignment Agreement was entered into by
     CopyTele, SECC and SIT whereby SECC assigned a 10% economic interest
     to SIT in the capital and profits of Shanghai CopyTele from SECC's
     original interest of 45%. SIT, an investment and trade developing
     company, is a state owned enterprise operating under the leadership of
     the Shanghai Foreign Economic Relations and Trade Commission in
     Shanghai, China. The Assignment Agreement is subject to government
     approval which is anticipated shortly. As a result of the assignment,
     SECC's interest in Shanghai CopyTele has been reduced to 35%. SECC has
     agreed to appoint to the Board of Directors one director to be
     selected by SIT (as one of the directors SECC is entitled to appoint)
     and retains all its duties and obligations under the Joint Venture
     Agreement. SIT has assumed a 10% obligation with respect to the
     capital contributions payable by SECC to Shanghai CopyTele. 

     As of January 19, 1996, $1,960,000 in cash had been contributed by the
     parties. This amount represents 70% of the $2,800,000 required cash
     contributions. The remaining 30%, or $840,000, will be contributed by
     the parties when required by the Joint Venture.  It is presently
     contemplated that these capital contributions will be sufficient to
     enable the Joint Venture to construct and equip the new facility. 
     Additional funding, if required, and working capital requirements are
     expected to be financed through third party borrowings, as previously
     noted.

     Company Technology
     ------------------
          Flat Panel Technology
          ---------------------
     The Company is continuing to enhance the characteristics of its
     compact, ultra-high resolution charged particle flat panel. The flat
     panel possesses a combination of features that are not presently
     available in other display screens, such as ultra-high resolution,
     compatibility with facsimile terminals (200 lines per inch in the
     horizontal and vertical directions with up to a full page of
     information with real-time display), a minimal amount of inactive
     space between pixels or picture elements (allowing the image to appear
     smoother), image retention without refreshing (eliminating the need
     for image repetition with resulting flicker and operator fatigue),
     approximately 180 degree viewing angle, low power consumption for
     writing and image retention with minimal power consumption. The
     Company has developed flat panels with viewing areas whose diagonals
     are 7.8, 7.2 and 5.7 inches, and containing approximately 1,150,000,
     800,000 and 630,000 pixels, respectively. The Company is utilizing its
     7.8 inch diagonal flat panel for its pre-production prototype. This
     flat panel has 1,280 lines by 896 lines with a resolution of 200 lines
     per inch in both directions. The image area is approximately 6.4 x 4.5
     inches.
















     
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     The Company is continuing to purchase, for testing and demonstration
     purposes and for incorporation into the pre-production prototypes,
     production quality flat panels from Hoya Corporation ("Hoya")
     utilizing the Company's design and technology. The flat panels
     incorporate the latest designs and improvements in production
     technology by reducing the number of steps necessary to construct the
     flat panels, thereby allowing multiple flat panels to be produced from
     a single primary glass substrate, while achieving the enhancement of
     image brightness and contrast. Hoya, a major Japanese high technology
     manufacturer of glass products, is assembling the flat panels. The
     overall size of the flat panel has been reduced while maintaining the
     same image area, thereby allowing a larger number of flat panels to be
     produced from a single glass substrate and reducing the size and
     potentially the cost of the display. The chip carrier drive system
     (see "Monolithic Technology" below) is presently being mounted on the
     flat panel by the Company, but the Joint Venture will be incorporating
     this process into its manufacturing operations. Also, the Company has
     installed in its facilities the capability of handling large scale
     fluid production in order to supply the fluid to Shanghai CopyTele for
     insertion into the flat panel.

     The Company's flat panel design is utilizing a new chip which has 128
     outputs as compared to the prior chip which had 64 outputs. The new
     chip is approximately the same size, has substantially higher speed to
     accommodate faster panel operation, and is capable of using minimal
     power when viewing an image. The new chip will be purchased by the
     Company and supplied to Shanghai CopyTele for incorporation into
     production units.

     The flat panel also utilizes fluids which were developed by the
     Company and which are suitable for production processing (see "Fluid"
     below). The fluid contains yellow particles suspended in a dark dye.
     Thus, the flat panel contains a yellow background with black writing
     or vice versa. 

     Included as an integral part of the Company's flat panel display is a
     pen and touch writing screen. Due to the ultra-high resolution of the
     flat panel display, any language may be clearly written with the use
     of a pen. In addition, with the use of a pen, various modes of
     communication can be initiated, such as fax, e-mail and access to
     information services. An integrated front illumination system (see
     "Illumination" below) also is incorporated into the flat panel. This
     system provides viewing of the flat panel from nighttime to sunlight
     ambient light conditions. By incorporating these capabilities, the
     Company's flat panel technology provides clear and comfortable
     viewing, from any angle, of pictures, text in any language, and
     graphics.

          System Technology
          -----------------
     The Company is continuing to pursue an overall image communication and
     information system strategy for the utilization of its flat panel and
     associated proprietary software and hardware technology. This strategy
     has been evolving over the years and has been based on major
     information industry trends, such as the information super-highway
     involving on-line services and the Internet being evolved by various
     companies, as well as the Company's objectives. 

















     
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     In addition to development efforts involving the flat panel and its
     components, the Company also has been devoting its efforts to
     developing the sub-systems necessary to incorporate the flat panel
     into future telecommunications products. These include several unique
     controllers which are designed to operate in, but are not limited to,
     personal computers utilizing DOS, Windows and X-Windows environments.
     The controllers enable the Company's flat panel system to capture and
     display specific image frames, move blocks of information from place
     to place on the panel, blink areas of interest, detect changing areas
     of information, and erase and rewrite specific character lines with
     enhanced writing speed. The Company also has developed a method of
     presenting an indicator or pointer (frequently called a "mouse"
     indicator in personal computer systems) which can be moved rapidly
     without loss of contrast on the flat panel.

          Illumination
          ------------
     As part of the Company's product strategy, an illumination system has
     been developed and has been included in its pre-production prototype
     model to provide illumination from nighttime to sunlight. The front
     illumination system has been integrated with the flat panel assembly.
     The light is generated by cold cathode fluorescent lamps. The design
     of these lamps was developed in conjunction with another company in
     accordance with the Company's specifications. The Company determined
     experimentally the dimensions, slit angle and phosphor color of the
     fluorescent lamp. The development also included the design of the
     optical system, its optical quality, mechanical mounting techniques
     and the generation of standards for quality control of the systems,
     brightness, contrast and uniformity.

     The Company is continuing to pursue the development of new techniques
     designed to further improve light output efficiency. These development
     activities involve advanced optics and designs, such as light shaping
     diffusers, edge illuminated holograms and pixellated illumination.  As
     part of its strategy to provide a fully integrated illumination system
     with its display, the Company has initiated an advanced optics
     research and development effort in the area of holographic optical
     gratings. This effort complements the Company's front illumination
     system using conventional optical light coupling, and could lead to
     lower cost and higher efficiency.

     A goal of the Company's advanced optics development effort includes
     the achievement of color for the flat panel display, using holographic
     grating techniques.  To that end the Company also has engaged the
     services of an optical development company.  Furthermore, the Company
     is in the process of expanding its advanced optical development by
     staffing and leasing a 5,000 square foot optical facility on Long
     Island, New York which is equipped for carrying out photopolymer and
     photoresist holographic grating development. The Company believes
     these developments, if successful, would provide the means to achieve
     color capability for the Company's flat panel display.

          Fluid
          -----
     The Company's development efforts in fluids have proceeded by using
     several combinations of surfactant types and solvent systems. In these
     efforts, several proprietary surfactants have

















     
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     been synthesized by the Company in conjunction with arrangements with
     Lehigh University. Other surfactants have been synthesized under
     Company direction by outside vendors. An outgrowth of this work has
     been the development of an alternative method of fluid preparation
     which improves performance of the Company's flat panel display. This
     fluid has been incorporated into the pre-production prototype model.  


     An environmentally controlled chamber, capable of handling the demands
     of large scale fluid production, is being prepared for delivery to the
     Company's principal offices. This chamber would provide the means to
     insure the uniformity of the characteristics of fluids produced. The
     Company has also developed methods for storing and shipping fluids for
     use at Shanghai CopyTele.  In addition, both the method of filling the
     flat panel display with fluid and of sealing the display chamber have
     been developed. These developments enhance the performance of the
     Company's flat panel and make the filling and sealing procedure
     adaptable to production requirements.

     The Company believes that the display is environmentally comparable to
     a liquid crystal display and presently is not aware of any
     "environmental hazards" associated with the small quantity of fluid
     medium inside the flat panel.

          Monolithic Technique
          --------------------
     The monolithic technique presently utilized by the Company has reduced
     the thickness of the flat panel to approximately one-eighth (1/8) of
     an inch. With this technique, which utilizes individual pixels having
     dimensions approximately equal to the diameter of a human hair, flat
     panels with ultra-high resolution of 200 lines per inch in both the
     vertical and horizontal directions (40,000 pixels per square inch)
     have been achieved. In addition, there is only a minimal amount of
     inactive space between pixels. This allows digital pictures, text or
     graphics to look smoother to the human eye as compared to most other
     currently available displays.

     The ultra-high resolution of the Company's flat panel technology
     decreases the size of the viewing area necessary to display
     information, as compared with most commercially available display
     devices. This is accomplished by compressing the size of the
     characters, using the flat panel's small pixel size and achieving a
     greater number of characters within an area. The 5.7, 7.2 and 7.8 inch
     diagonal flat panels can display approximately 1,500, 2,000 and 2,800
     characters, respectively, whose type size is approximately that of a
     standard typewriter font. By further reducing the type size to
     characters that are slightly smaller than those used for stock
     quotations in newspapers, the 5.7, 7.2 and 7.8 inch diagonal flat
     panels can display approximately 6,000, 8,000 and 11,200 characters,
     respectively.

     The flat panel structure consists of two sheets of clear glass, one or
     both of which are coated with patterned layers of transparent
     electrically conductive material. A micro-structure of thin layers of
     insulators and metals, together with a fluid, is contained between the
     transparent sheets.


















     
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     The monolithic technique integrates the structure of the flat panel
     and the chip carrier drive system. This design simplifies assembly of
     the drive system controlling all the pixels within the image area of
     the Company's flat panel. The monolithic system presently utilizes a
     low power CMOS type chip having 128 outputs per chip which has been
     incorporated into the pre-production prototype model.


     Manufacturing
     -------------
     The Joint Venture's employees are in the process of production
     planning at a portion of a facility currently being leased from SECC.
     It is presently contemplated that initial production will begin in
     1996 in a leased facility in Shanghai, China until the construction of
     the new facility is completed. In the leased facility, Shanghai
     CopyTele plans to install a multi-purpose production and assembly line
     which was designed by the Company. The Joint Venture has begun placing
     orders for production equipment.

     The planned production line for the leased facility will utilize
     modern technology and will be capable of manufacturing more than one
     product.  The Company believes that there is an ample supply of low
     cost manufacturing labor in China.  The manufacturing process will
     include assembling various sub-assemblies, such as printed circuit
     boards, a scanner, the flat panel and the case. The flat panel's
     components, including the fluid and the 128 output chips, will be sold
     by the Company to the Joint Venture. With the exception of the fluid,
     which CopyTele will manufacture, the components of the flat panel will
     be purchased by the Company from third party vendors, such as Hoya.

     The Joint Venture's products will contain various electronic
     components. The commodity-type components, such as resistors,
     capacitors and multi-purpose chips, are available from various vendors
     world-wide, including SECC. Special purpose components, such as the
     facsimile and data chip set, the chip carrier drive chips, and the
     flat panel's coated glass plates, are expected to be purchased from
     individual vendors. Although it is expected that such components will
     only be available from single-sourced vendors, it is possible that
     such components may become available from other vendors given
     sufficient production lead time.

     It is anticipated that at such time the new facility is completed in
     1996, additional production lines will be purchased and installed. 
     The planned facility has been designed for mass production and will be
     located in the Shanghai Songjiang Industrial Zone. It will be
     approximately 30,000 square feet in size, will have a potential
     production capacity of over 700,000 units per year, and will be
     constructed on a parcel of land approximately 100,000 square feet in
     total area. This planned facility will be capable of housing multiple
     production lines, warehouse space and administrative offices.

     The Songjiang Industrial Zone is approximately 20 miles from downtown
     Shanghai, 30 miles from a deep harbor and 13 miles from an
     international airport. A transportation system of connecting
     expressways, railroads and waterways, provides efficient routes to
     import raw materials and export the Joint Venture's products to world-
     wide markets. (See "Joint Venture".)
      
















     
<PAGE>

<PAGE>
     

     Marketing
     ---------
     During 1995 the Company focused its initial stage marketing activities
     on the creation of a marketing team and identifying distribution
     channels for its Joint Venture products. As a result of these efforts,
     the Company has added to its staff a Senior Vice President of
     Marketing, commencing as of February 5, 1996, with extensive
     experience in the areas of imaging and multi-media communications. The
     Company contemplates opening a sales office in the metropolitan New
     York area and anticipates growth in its marketing staff during 1996. 
     Additional consulting personnel have been added to provide marketing
     support for the United States, Europe and the Far East.

     Marketing efforts have been initiated and directed at making marketing
     alliances with major companies for distribution in the United States,
     Europe, Russia, Southeast Asia and South America.

     The Company plans to penetrate these international and domestic
     markets through independent distributors and established Original
     Equipment Manufacturers (O.E.M.'s) positioned in the field of
     telephony, inter-connect, multi-media telecommunication and business
     machines. It is intended that this marketing effort will be
     complemented by utilizing independent sales representatives who could
     capitalize on their local goodwill within their respective
     territories. The Company does not contemplate that sales, if any,
     would necessarily be dependent upon a limited number of customers due
     to the variety of possible applications and distribution channels.

     Shanghai CopyTele, which is also in its initial marketing stage, is in
     the process of developing a market plan. Shanghai CopyTele, which will
     market the Joint Venture products exclusively in China, has also been
     identifying sales channels within China. It has been reported that the
     demand for electronic equipment, including telecommunications,
     computers, and audio and video equipment in China, will continue at a
     20% growth rate.

     The overall marketing plan for the Joint Venture products anticipates
     the Company selling approximately 80% of the planned production
     outside of China and for Shanghai CopyTele to sell approximately 20%
     within China.

     Competition
     -----------
     The telecommunications market has a substantial number of competitors
     who are larger and possess financial resources greater than those of
     the Company or the Joint Venture.  Relevant competitive products
     contain displays which primarily include liquid crystal displays
     ("LCDs").  The Company believes that, if marketable telecommunications
     products incorporating the Company's flat panel are successfully
     produced, they will have an acceptable productive life and have many
     commercial applications.  These products could combine many
     characteristics which the Company believes would be desirable to
     potential customers.  However, there is no assurance that comparable
     or superior products or systems will not be developed which would
     render the Company's products and those of the Joint Venture difficult
     to market or technologically or otherwise obsolete.


















     
<PAGE>

<PAGE>
     


     Patents
     -------
     The Company has received fifty-two (52) patents, including those from
     the United States and certain foreign patent offices, expiring at
     various dates between 2005 and 2014.  The foregoing patents are
     related to the design, structure and  methods of construction of the
     flat panel, methods of operating the flat panel with certain
     characteristics, method of producing colored particles, applications
     using the flat panel, and particle generation. At the present time,
     additional patent applications with respect to the flat panel and its
     applications are pending with the United States and certain foreign
     patent offices.  The Company has been advised by its patent counsel
     that in his opinion the subject matter of the pending applications
     contain patentable material.

     The Company anticipates licensing a portion of its patents, excluding
     the flat panel manufacturing technology, to the Joint Venture on an
     exclusive basis in China.

     There is no assurance that patents will be obtained for any of the
     pending applications.  In addition, there is no assurance that any
     patents held or obtained will protect the Company against competitors
     either with or without litigation.  There is also no assurance that,
     if the Company or the Joint Venture successfully develop marketable
     products, such products will not infringe the patents of others, or
     that the Company and the Joint Venture will not have to obtain
     licenses under patents of others.

     The Company believes that the foregoing patents are significant to the
     future operations of the Company. 

     Research and Development Expenses
     ---------------------------------
     Research and development expenses, which have comprised a significant
     portion of the Company's selling, general and administrative expenses
     since its inception, were approximately $2,353,000, $2,677,000,
     $1,780,000, and $16,885,000 for the fiscal years ended October 31,
     1995, 1994, 1993 and for the period from November 5, 1982 (inception)
     through October 31, 1995, respectively.  See "Management's Discussion
     and Analysis of Financial Condition and Results of Operations" and the
     Company's Financial Statements.

     Employees and Consultants
     -------------------------
     The Company has twenty-one employees and twelve consultants. Nineteen
     of these individuals, including the Company's Chairman of the Board
     and its President, are engaged in research and development.  Their
     backgrounds include expertise in chemistry, optics and electronics. 
     Five individuals are engaged in marketing and the remaining
     individuals are engaged in administrative and financial functions for
     the Company.  None of the Company's employees are represented by a
     labor organization or union.





















     
<PAGE>

<PAGE>
     

     Item 2.  Properties.
              -----------
     The Company leases approximately 9,050 square feet of office and
     laboratory research facilities at 900 Walt Whitman Road, Huntington
     Station, New York (its principal offices) from an unrelated party
     pursuant to a lease which expires November 30, 1998, for a rental of
     approximately $151,000 per annum.  The Company has the right to cancel
     the lease as of November 30, 1996 and November 30, 1997. This lease
     does not contain provisions for its renewal and management will
     continue to evaluate the adequacy of this facility. See Note 8 to the
     Company's Financial Statements. The Company is in the process of
     entering into a one year sub-lease for approximately 5,000 square feet
     at an optical laboratory facility located in Long Island, New York. 
     It is contemplated that the lease would provide for a one year renewal
     option with the right to cancel with a 60 day notice.  The annual rent
     for this facility would be approximately $42,000.

     Management believes that the facilities, which are fully utilized at
     the present time, are adequate for the Company's current requirements.
     It is anticipated that more space may be needed depending on the
     nature and extent of the Company's business activities with the Joint
     Venture and with the growth of its marketing department.

     Item 3.  Legal Proceedings.
              ------------------
     The Company is not a party to any material pending legal proceedings.

     Item 4.  Submission of Matters to a Vote of Security Holders.
              ----------------------------------------------------
     During the fourth quarter of the Company's fiscal year ended October
     31, 1995, no matters were submitted by the Company to a vote of its
     shareholders.

     Executive Officers of the Company
     ---------------------------------
     The only executive officers of the Company are Denis A. Krusos, Frank
     J. DiSanto and Gerald J. Bentivegna.  The information required to be
     furnished with respect to these executive officers is set forth in,
     and incorporated by reference from, Item 10 Part III of this Form 10-
     K.


































     
<PAGE>

<PAGE>
     

                                     PART II
                                     -------
     Item 5.   Market for the Registrant's Common Equity and
               ---------------------------------------------
               Related Stockholder Matters.
               ----------------------------
     The common stock of the Company has been traded on the National
     Association of Securities Dealers, Inc. Automated Quotation National
     Market System ("NASDAQ - NMS"), the automated quotation system of the
     National Association of Securities Dealers, Inc. ("NASD") under the
     symbol "COPY", since October 6, 1983, the date public trading of the
     Company's common stock commenced.  The high and low sales prices, as
     reported by NASDAQ, for each quarterly fiscal period during the
     Company's fiscal years ended October 31, 1994 and 1995 have been as
     follows:


<TABLE>
<CAPTION>

             Fiscal Period                 High                       Low
           <S>                           <C>                       <C> 
           1st quarter 1994               $14.13                    $10.88
           2nd quarter 1994                12.38                      8.13
           3rd quarter 1994                12.00                      7.63
           4th quarter 1994                 9.13                      3.75
           1st quarter 1995                 8.88                      4.75
           2nd quarter 1995                 8.25                      5.63
           3rd quarter 1995                11.00                      6.38
           4th quarter 1995                10.50                      6.88

</TABLE>

     As of January 19, 1996 the approximate number of record holders of
     common stock of the Company was 1,075.

     No cash dividends have been paid on the common stock of the Company
     since its inception and the Company has no present intention to pay
     any cash dividends in the foreseeable future.

     See "Management's Discussion and Analysis of Financial Condition and
     Results of Operations - Liquidity and Capital Resources" for
     information with respect to certain minimum listing requirements for
     the NASDAQ - NMS.






























     
<PAGE>

<PAGE>
     


     Item 6.  Selected Financial Data.
              ------------------------
     The following data has been derived from the Financial Statements of
     the Company and should be read in conjunction with those statements,
     and the notes related thereto, which are included in this report.


<TABLE>
<CAPTION>

                                                                                                For the period from November
                                        As of and for the year ended October 31,                5, 1982 (inception) through
                                                                                                      October 31, 1995
                              1995           1994         1993          1992          1991
<S>                       <C>           <C>           <C>           <C>          <C>                 <C>    
Sales                      $     -       $     -       $    -        $    -        $    -              $      -

Selling General and

Administrative Expenses     3,350,125     3,651,334     2,925,627     1,978,444     1,547,331            25,980,442

Interest Income               356,226       223,817       162,778       151,088       247,339             2,665,472

Net (Loss)                 (2,993,899)   (3,427,517)   (2,762,849)   (1,827,356)   (1,299,992)         ($23,314,970)

Net (Loss) Per Share of
Common Stock (a)             ($0.12)       ($0.14)       ($0.12)       ($0.08)       ($0.06)              ($1.05)

Total Assets                9,695,398     6,614,332     8,686,241     4,358,874     4,338,545

Long Term Obligations      $    -        $     -       $     -       $     -       $     -

Shareholders' Equity        9,436,708     6,415,233     8,244,925     4,083,800     4,188,488

Cash Dividends Per Share   $    -        $     -       $     -       $     -       $     -              $      -
of Common Stock

</TABLE>
        ____________________

     (a)  Adjusted for three-for-one stock split declared in October 1985,
          five-for-four stock split declared in August 1987 and two-for-one
          stock split declared in February 1991.
     
<PAGE>

<PAGE>
     


     Item 7.  Management's Discussion and Analysis of Financial
              -------------------------------------------------
              Condition and Results of Operations.
              ------------------------------------
     The Company, which is a development stage enterprise, was incorporated
     on November 5, 1982 and has had no revenues to support its operations
     since its inception.  The Company's principal activities are the
     development of products, further enhancement of its flat panel and its
     interest in Shanghai CopyTele, the Company's 55% owned joint venture
     in Shanghai, China, which is accounted for under the equity method of
     accounting. See "Business - New Developments" and Notes 2 and 3 to the
     Company's Financial Statements.  There is no assurance, and the
     Company is not able to predict, if and when marketable
     telecommunications products incorporating the Company's flat panel
     technology will be produced or sold in commercial quantities.  Even if
     the Company were to produce marketable products, directly or through
     the Joint Venture, there is no assurance that the Company will
     generate revenues in the future, will have sufficient revenues to
     generate profit or that other products will not be produced by other
     companies that will render the products of the Company or the Joint
     Venture obsolete.

     In reviewing Management's Discussion and Analysis of Financial
     Condition and Results of Operations, reference is made to the
     Company's Financial Statements and the notes thereto.

     Results of Operations
     ---------------------
     Selling, general and administrative expenses for the fiscal years
     ended October 31, 1995, 1994 and 1993 and for the period from November
     5, 1982 (inception) through October 31, 1995 were approximately
     $3,350,000, $3,651,000, $2,926,000 and $25,980,000, respectively. 
     These amounts include research, development and tooling costs of
     approximately $2,353,000, $2,677,000, $1,780,000 and $16,885,000,
     respectively, as well as normal operating expenses.  Selling, general
     and administrative expenses decreased during fiscal 1995 as compared
     to 1994 as a result of the requirements of the present phase of the
     Company's development program and related activities. Engineering
     supplies purchases and patent application preparation and filing fees
     decreased substantially during 1995, while professional fees
     (excluding patent related fees) and business trip expenses increased. 
     Consulting and outside engineering services expenses increased during
     fiscal 1995 as compared to 1994 as a result of costs incurred in
     connection with the development of products for the Joint Venture.  

     The increase in selling, general and administrative expenses during
     fiscal 1994 as compared to 1993 resulted from increases in
     expenditures necessitated by requirements of the Company's development
     program and related activities.  Engineering supplies purchases and
     patent application preparation and filing fees increased substantially
     in 1994 while other professional fees and business trip expenses
     declined. Consulting expenses decreased during fiscal 1994 as compared
     to 1993 as a result of two former consultants to the Company




















     
<PAGE>

<PAGE>
     

     becoming employees in February 1993, one of whom has since resigned,
     and waiving salary and related pension benefits for an undetermined
     period of time. 

     Since November 1985, the Company's Chairman of the Board and its
     President have waived salary and related pension benefits for an
     undetermined period of time. Four other individuals, including a
     former officer and senior level personnel, waived salary and related
     pension benefits from January 1987 through December 1990.  Commencing
     in January 1991, these four individuals waived such rights for an
     undetermined period of time and they did not receive salary or related
     pension benefits through December 1992.  The Company's Chairman of the
     Board, its President and the three senior level personnel (exclusive
     of the former officer) continued to waive such rights commencing in
     January 1993 for an undetermined period of time.  As previously
     indicated, one additional employee is also currently waiving such
     salary and benefit rights for an undetermined period of time.  See
     "Executive Compensation" and Note 12 to the Company's Financial
     Statements for a more complete discussion regarding salary and related
     pension benefit waivers.

     The increase in interest income during fiscal 1995 as compared to 1994
     primarily resulted from a small increase in average funds available
     for investment, and an increase in interest rates.  The increase in
     interest income during fiscal 1994 as compared to 1993 resulted from
     an increase in funds available for investment and an increase in
     interest rates. Funds available for investment during 1995, 1994 and
     1993, on a monthly weighted average basis, were approximately
     $7,175,000, $7,050,000 and $6,265,000, respectively.  The investment
     instruments selected by the Company are principally money market
     accounts, treasury bills and commercial paper.

     During October 1995, the Financial Accounting Standards Board issued
     Statement of Financial Accounting Standard ("SFAS") No. 123,
     Accounting for Stock Based Compensation.  This statement establishes
     ---------------------------------------
     financial accounting and reporting standards for stock-based employee
     compensation plans.  SFAS No. 123 encourages entities to adopt a fair
     value based method of accounting for stock compensation plans. 
     However, SFAS No. 123 also permits the Company to continue to measure
     compensation costs under preexisting accounting pronouncements.  If
     the fair value based method of accounting is not adopted, SFAS No. 123
     requires pro forma disclosures of net income and earnings per share. 
     This statement will be adopted by the Company no later than fiscal
     1997.  The Company is currently evaluating the implications of SFAS
     No. 123 and, as a result, has not yet determined how it will be
     applied in its Financial Statements.  The Company has adopted all
     other recently issued accounting standards which have an impact on its
     financial statements.

     See "Business" and Note 1 to the Company's Financial Statements for
     discussions regarding uncertainties that may significantly affect
     results of future operations.


















     
<PAGE>

<PAGE>
     

     Liquidity and Capital Resources
     -------------------------------

     Since its inception, the Company has met its liquidity and capital
     expenditure needs primarily from the proceeds of the sales of its
     common stock in the initial public offering, in  private placements,
     upon exercise of warrants issued in connection with the private
     placements and public offering and upon exercise of stock options
     pursuant to the Company's Stock Option Plan, adopted by the Board of
     Directors on April 1, 1987 (the "1987 Plan") and the CopyTele, Inc.
     1993 Stock Option Plan, adopted by the Board of Directors on April 28,
     1993 and amended on May 3, 1995 (the "1993 Plan").

     During the fiscal year ended October 31, 1995, the Company received
     proceeds aggregating approximately $5,289,000 from the exercise of
     options to purchase 980,400 shares of its common stock pursuant to the
     1987 Plan and the 1993 Plan. In addition, during fiscal 1995 the
     Company received proceeds aggregating approximately $757,000 from the
     exercise of warrants by members of the immediate families of its
     Chairman of the Board and its President to purchase 137,300 shares of
     common stock.  From the period November 1, 1995 through January 19,
     1996 the Company received proceeds aggregating approximately
     $1,557,000 from the exercise of stock options for 281,850 shares of
     the Company's common stock and $200,000 from the exercise of warrants
     for 53,200 shares of the Company's common stock.  See "Certain
     Relationships and Related Transactions" and the Company's Financial
     Statements for a more complete discussion regarding sales of common
     stock.   

     The Company believes that even without sales it has sufficient funds
     to maintain its present level of development efforts and to continue
     making its initial capital contributions to the Joint Venture into the
     first quarter of fiscal 1998 (see "Business - New Developments").  The
     Company anticipates that it may require additional funds in order to
     participate in the Joint Venture following its initial capital
     contributions and to continue its research and development activities. 
     The Company's estimated funding capacity indicated above assumes,
     although there is no assurance, that the waiver of salary and pension
     benefits by the Chairman of the Board, the President and senior level
     personnel will continue. The Company's material commitments for
     capital expenditures as of October 31, 1995 were approximately
     $981,000, inclusive of $857,500 for the balance of its required total
     cash capital contribution to the Joint Venture of $1,225,000. As of
     January 19, 1996, the Company had contributed $490,000 of its
     remaining capital contribution to the Joint Venture. The balance of
     $367,500 is expected to be paid when it is required by the Joint
     Venture during 1996.

     The NASD requires that the Company maintain a minimum of $4 million of
     net tangible assets to maintain its NASDAQ - NMS listing.  See "Market
     for the Registrant's Common Equity and Related Stockholder Matters". 
     The Company anticipates that it will seek additional sources of
     funding, when necessary, in order to satisfy the NASD requirements.  

     The Joint Venture Agreement contemplates an initial investment of $7
     million, of which half may be borrowed from banks, and a registered
     capital of $3.5 million. The Company is required to contribute
     $1,225,000 in cash and SECC and SIT are required to contribute



















     
<PAGE>

<PAGE>
     

     $1,575,000 in cash to the Joint Venture.  The Company currently has no
     plans with respect to additional financing.  There can be no assurance
     that adequate funds will be available to the Company or the Joint
     Venture, including the Company's required capital contributions
     (beyond its initial capital contributions of $1,225,000) and its NASD
     funding requirements, or that, if available, the Company or the Joint
     Venture will be able to obtain such funds on favorable terms and
     conditions.  

     See "Business" and Note 1 to the Company's Financial Statements for
     discussions regarding uncertainties that may significantly affect
     future liquidity and capital resources.

     Item 8.  Financial Statements and Supplementary Data.
              --------------------------------------------
     See accompanying "Index to Financial Statements".


     Item 9.  Disagreements on Accounting and Financial Disclosure.
              -----------------------------------------------------
     Not applicable.





















































     
<PAGE>

<PAGE>
     

                                    PART III
                                    --------
     Item 10.  Directors and Executive Officers of the Registrant.
               ---------------------------------------------------
     The following table sets forth certain information with respect
     to all of the directors and executive officers of the Company:


                                                           Director
                       Position with the Company           and/or
           Name        and Principal Occupation     Age   Executive
                                                         Officer Since
     -----------------------------------------------------------------
     Denis A. Krusos   Director, Chairman of the     68      1982
                       Board and Chief Executive
                                Officer

     Frank J. DiSanto  Director and President        71      1982

     Gerald J.         Director, Vice President -    46      1994
     Bentivegna        Finance and Chief Financial
                       Officer

     John E. Gillies   Director; Partner of Gillies  69      1992
                       and Meares, Attorneys-at-Law

     John R. Shonnard  Director                      80      1988

     Mr. Krusos has been a Director, Chairman of the Board and Chief
     Executive Officer of the Company since November 1982.  He holds an
     M.S.E.E. degree from Newark College of Engineering, a B.E.E. degree
     from City College of New York and a Juris Doctor from St. John's
     University and is a member of the New York bar.

     Mr. DiSanto has been a Director and President of the Company since
     November 1982.  He holds a B.E.E. degree from Polytechnic Institute of
     Brooklyn and an M.E.E. degree from New York University.

     Mr. Bentivegna has been Vice President - Finance and Chief Financial
     Officer since September 1994 and was elected a Director in July 1995.
     Prior to joining the Company, Mr. Bentivegna was employed at Marino
     Industries Corp. for approximately 10 years, where he served as
     Controller, Treasurer and Chief Financial Officer.  He holds an MBA
     degree from Long Island University and a B.B.A. from Dowling College.

     Mr. Gillies has been a Director of the Company since January 1992.  He
     has been an attorney for over forty years and formerly served as a
     Village Justice and as a Village Attorney of the Incorporated Village
     of Farmingdale.  He is also Honorary President of St. Mary's Children
     and Family Services, a not-for-profit child care agency for which he
     has served in various capacities for over twenty years.






     
<PAGE>

<PAGE>
     

     Mr. Shonnard has been a Director of the Company since January 1988. 
     He had been a research consultant to the Company from August 1983
     until his retirement in May 1988.  Mr. Shonnard was engaged in
     development engineering in the communications field for over fifty
     years.  Mr. Shonnard has held numerous patents in the communications
     field.

     Item 11.  Executive Compensation.
               -----------------------
     Messrs. Denis A. Krusos, Chairman of the Board, Chief Executive
     Officer and Director, Frank J. DiSanto, President and Director, and
     Gerald J. Bentivegna, Vice President - Finance, Chief Financial
     Officer and Director, are the executive officers of the Company. 
     While there are no formal agreements, Denis A. Krusos and Frank J.
     DiSanto waived any and all rights to receive salary and related
     pension benefits for an undetermined period of time commencing
     November 1, 1985. As a result, Mr. Krusos received no salary or bonus
     during the last three fiscal years and no other executive officer
     received a salary or bonus in excess of $100,000 during the fiscal
     year ended October 31, 1995. The following is compensation information
     regarding Mr. Krusos for the fiscal years ended October 31, 1995, 1994
     and 1993:


                         SUMMARY COMPENSATION TABLE


                                                     Long-Term
                                     Fiscal     Compensation Awards
                Name and              Year      -------------------
           Principal Position        Ended
                                               Securities Underlying 
                                                    Options (#)
     ----------------------------------------------------------------
     Denis A. Krusos,               10/31/95          450,000
     Chairman of the Board,         10/31/94          100,000
     Chief Executive Officer and    10/31/93          500,000
     Director

     
<PAGE>

<PAGE>
     

     The following is information regarding stock options granted to Mr.
     Krusos pursuant to the "1993 Plan" during the fiscal year ended
     October 31, 1995:


<TABLE>
<CAPTION>

                                               OPTION GRANTS IN LAST FISCAL YEAR

                                     Individual Grants                                        Potential Realizable Value at
                  --------------------------------------------------------------------     Assumed Annual Rates of Stock Price
                                                                                               Appreciation for Option Term
                      Number of                                                            ------------------------------------
                      Securities      Percent of Total
                  Underlying Options Options Granted to
                   Granted (#) (1)     Employees in     Exercise Price      Expiration
       Name                             Fiscal Year         ($/Sh)             Date              5% ($)           10% ($)
--------------------------------------------------------------------------------------------------------------------------------
<S>                 <C>               <C>                 <C>               <C>             <C>              <C>
Denis A. Krusos             760              .03%         $6.738(2)          1/3/00          $      820       $     2,376
                         14,080              .54%         $6.738(2)          1/3/00          $   15,195       $    44,019

                        185,160             7.05%     $6.125(3)          1/3/05               $  713,233       $ 1,807,471
                        250,000             9.52%     $6.625(3)          5/2/05               $1,041,607       $62,639,636

</TABLE>
        ____________________

     (1)  The options are exercisable in whole or in part commencing one
          year following the date of grant unless otherwise accelerated.
          The options are not issued in tandem with stock appreciation or
          similar rights and are not transferable other than by will or the
          laws of descent and distribution.  The options terminate upon
          termination of employment, except that in the case of death,
          disability or termination for reasons other than cause, options
          may be exercised for certain periods of time thereafter as set
          forth in the 1993 Plan.

     (2)  The exercise price of these options was equal to 110% of the fair
          market value of the underlying common stock on the date of grant
          (fair market value being defined in the 1993 Plan as the last
          sales price of the Company's common stock on NASDAQ-NMS on the
          date of grant).  These options were granted as incentive stock
          options within the meaning of Section 422 of the Internal Revenue
          Code of 1986, as amended. Of these options, 14,080 were converted
          to nonqualified options as a result of an acceleration of their
          exercise date from 1996 into 1995.

     (3)  The exercise price of these options was equal to the fair market
          value of the underlying common stock on the date of grant.  These
          options are nonqualified options.























     
<PAGE>

<PAGE>
     


     The following is information regarding stock option exercises during
     fiscal 1995 by Mr. Krusos and values of his options as of October 31,
     1995:

<TABLE>
<CAPTION>

            AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
                           FY-END OPTION/VALUES

                                         Number of              Value of
                                        Securities           Unexercised In-
                                        Underlying          the-Money Options
                Shares                  Unexercised        at Fiscal Year End
               Acquired   Value      Options at Fiscal            ($)
        Name      on    Realized        Year End (#)
                                     ------------------   ----------------------
               Exercise    ($)       Exercis- Unexercis   Exercis-  Unexercis
                 (#)                  able     -able       able      -able
     ---------------------------------------------------------------------------
     <S>       <C>      <C>         <C>        <C>       <C>             <C>
     Denis A.  220,000  $690,000(1) 1,148,500    -       $1,161,591(2)   $ - (2)
     Krusos                                             
     ____________________
</TABLE>

     (1)  Such value was determined by applying the net difference between
          the selling price of the stock sold on day of exercise, and the
          exercise price for Mr. Krusos' options to the number of options
          exercised.  The exercise price of these options was equal to the
          fair market value of the underlying common stock on the date of
          grant (fair market value being defined in the "1987 Plan" as the
          last sales price of the Company's common stock on NASDAQ-NMS on
          the day preceding the date of grant).

     (2)  Such value was determined by applying the net difference between
          the last sales price of the Company's common stock on October 31,
          1995 and the exercise price for Mr. Krusos' options to the number
          of unexercised in-the-money options that he held. The exercise
          price of these options was at least equal to the fair market
          value of the underlying common stock as defined in the applicable
          Plan. 

     There is no present arrangement for the compensation of directors for
     services in that capacity.  Upon the approval of the amendment of the
     1993 Plan by the Company's shareholders on July 19, 1995, each
     nonemployee director elected at the 1995 Annual Meeting of
     Shareholders received nonqualified stock options to purchase 20,000
     shares of common stock and such nonemployee directors will receive
     nonqualified stock options to purchase 20,000 shares of common stock
     each subsequent year that such director is elected to the Board of
     Directors. In addition, any future nonemployee director elected to the
     Board of Directors will receive nonqualified stock options to purchase
     10,000 shares of common stock upon his initial election to the Board
     of Directors and 20,000 each subsequent year that such director is
     elected to the Board of Directors.














     
<PAGE>

<PAGE>
     

     Item 12.  Security Ownership of Certain Beneficial Owners
               -----------------------------------------------
               and Management.
               ---------------
     The following table sets forth certain information with respect to the
     Company's common stock beneficially owned as of January 19, 1996 by
     (a) each person who is known by the management of the Company to be
     the beneficial owner of more than 5% of the Company's common stock,
     (b) each director or executive officer of the Company and (c) all
     directors and executive officers as a group:

<TABLE>
<CAPTION>

                                             Amount and
                                             Nature of    Percent of
      Name and Address of Beneficial Owner   Beneficial     Class
                                           Ownership (1)
     ---------------------------------------------------------------
     <S>                                  <C>              <C>
     Denis A. Krusos                        3,468,630(2)      12.68%
     900 Walt Whitman Road
     Huntington Station, NY  11746

     Frank J. DiSanto                       3,462,890(2)      12.67%
     900 Walt Whitman Road
     Huntington Station, NY  11746

     Gerald J. Bentivegna                      15,000           .06%
     900 Walt Whitman Road
     Huntington Station, NY  11746

     John E. Gillies                           25,500(2)        .10%
     320 Conklin Street
     Farmingdale, NY  11735

     John R. Shonnard                         112,800(2)(3)     .43%
     12521 Rios Road
     San Diego, CA  92128

     All Directors and Executive Officers   7,084,820(2)(3)   24.87%
     as a Group                                  
     (5 persons)
</TABLE>
     ____________________

     (1)  A beneficial owner of a security includes any person who directly
          or indirectly has or shares voting power and/or investment power
          with respect to such security or has the right to obtain such
          voting power and/or investment power within sixty (60) days. 
          Except as otherwise noted, each designated beneficial owner in
          this report has sole voting power and investment power with
          respect to the shares of the Company's common stock beneficially
          owned by such person.

     (2)  Includes 1,062,500 shares, 1,040,000 shares, 15,000 shares,
          25,000 shares, 58,600 shares and 2,201,100 shares as to which
          Denis A. Krusos, Frank J.DiSanto, Gerald J.
    
<PAGE>

<PAGE>
     

          Bentivegna, John E. Gillies, John R. Shonnard and all directors
          and executive officers as a group, respectively, have the right
          to acquire within 60 days upon exercise of options granted
          pursuant to the 1987 Plan and/or the 1993 Plan. 

     (3)  Includes 54,200 shares of the Company's common stock, all of
          which are held in a revokable trust by the First Interstate Bank,
          as trustee of such trust. Mr. Shonnard and his wife, Janet L.
          Shonnard, are the beneficiaries of such trust and, under certain
          circumstances, may exercise the voting power and investment power
          of the trust jointly.


     Item 13.  Certain Relationships and Related Transactions.
               -----------------------------------------------
     In fiscal 1995, Peri D. Krusos, Denis Z. Krusos and Daniel A. DiSanto
     exercised warrants to purchase 51,950, 51,950 and 33,400 shares of
     common stock, respectively at the weighted average exercise price of
     $5.51 per share of the Company's common stock.  On January 11, 1996,
     Peri D. Krusos and Denis Z. Krusos each exercised warrants to purchase
     26,600 shares of the Company's common stock at an exercise price of
     $3.75 per share.  Each exercise price represented the fair market
     value of such stock on the date of issuance of these warrants,
     subsequently adjusted for the two-for-one stock split declared by the
     Company in February 1991 and the anti-dilution provisions of the
     warrants.  The warrants were issued in fiscal 1990 in conjunction with
     sales of common stock by the Company to the foregoing individuals. 
     Peri D. Krusos and Denis Z. Krusos are the daughter and son,
     respectively, of Denis A. Krusos and Daniel A. DiSanto is the son of
     Frank J. DiSanto.

     As of January 19, 1996, after adjustments for the two-for-one stock
     split declared in February 1991, Peri D. Krusos, Denis Z. Krusos and
     Daniel A. DiSanto each held warrants to purchase 115,511 shares of
     common stock, all of which are exercisable.

    
<PAGE>

<PAGE>
     

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

     (a)(1)(2) Financial Statement Schedules
               -----------------------------
               See accompanying "Index to Financial Statements".

        (a)(3) Executive Compensation Plans and Arrangements
               ---------------------------------------------
               Stock Option Plan (1987) (filed as Exhibit 10.18 to the
               Company's Quarterly Report on Form 10-Q for the fiscal
               quarter ended April 30, 1987).

               Amendment to Stock Option Plan (1987) (filed as Exhibit
               10.69 to the Company's Annual Report on Form 10-K for the
               fiscal year ended October 31, 1990).

               CopyTele, Inc. 1993 Stock Option Plan (filed as Annex A to
               the Company's Proxy Statement dated June 10, 1993).

               Amendment to CopyTele, Inc. 1993 Stock Option Plan (filed as
               Exhibit 4(d) to the Company's Form S-8 dated September 6,
               1995).

        (b)    Reports on Form 8-K
               -------------------
               No current report on Form 8-K was filed for the Company
               during the fourth quarter of its fiscal year ended October
               31, 1995. 

        (c)    Exhibits
               --------
               (a)   3.1      Certificate of Incorporation, as amended.

               (b)   3.2      By-laws, as amended and restated.

               (c)  10.1      Stock Option Plan, adopted on April 1, 1987
                              and approved by shareholders on May 27, 1987.

               (d)  10.2      Amendment to Stock Option Plan, adopted on
                              March 12, 1990 and approved by shareholders
                              on May 24, 1990.

               (d)  10.3      Stock Purchase Warrant, dated December 4,
                              1990, between the Registrant and Denis Z.
                              Krusos.



     
<PAGE>

<PAGE>
     

               (d)  10.4      Stock Purchase Warrant, dated December 4,
                              1990, between the Registrant and Daniel A.
                              DiSanto.

               (d)  10.5      Stock Purchase Warrant, dated December 4,
                              1990, between the Registrant and Peri D.
                              Krusos.

               (e)  10.6      Stock Purchase Warrant, dated April 26, 1991,
                              between the Registrant and Denis Z. Krusos.

               (e)  10.7      Stock Purchase Warrant, dated April 26, 1991,
                              between the Registrant and Daniel A. DiSanto.

               (e)  10.8      Stock Purchase Warrant, dated April 26, 1991,
                              between the Registrant and Peri D. Krusos.

               (f)  10.9      Stock Purchase Warrant, dated July 15, 1991,
                              between the Registrant and Denis Z. Krusos.

               (f) 10.10      Stock Purchase Warrant, dated July 15, 1991,
                              between the Registrant and Daniel A. DiSanto.

               (f) 10.11      Stock Purchase Warrant, dated July 15, 1991,
                              between the Registrant and Peri D. Krusos.

               (g) 10.12      Stock Purchase Warrant, dated September 16,
                              1991, between the Registrant and Denis Z.
                              Krusos.

               (g) 10.13      Stock Purchase Warrant, dated September 16,
                              1991, between the Registrant and Daniel A.
                              DiSanto. 

               (g) 10.14      Stock Purchase Warrant, dated September 16,
                              1991, between the Registrant and Peri D.
                              Krusos.

               (g) 10.15      Stock Purchase Warrant, dated December 16,
                              1991, between the Registrant and Denis Z.
                              Krusos.

               (g) 10.16      Stock Purchase Warrant, dated December 16,
                              1991, between the Registrant and Daniel A.
                              DiSanto.

               (g) 10.17      Stock Purchase Warrant, dated December 16,
                              1991, between the Registrant and Peri D.
                              Krusos.

     
<PAGE>

<PAGE>
     

               (h) 10.18      Stock Purchase Warrant, dated March 12, 1992,
                              between the Registrant and Denis Z. Krusos.

               (h) 10.19      Stock Purchase Warrant, dated March 12, 1992,
                              between the Registrant and Daniel A. DiSanto.

               (h) 10.20      Stock Purchase Warrant, dated March 12, 1992,
                              between the Registrant and Peri D. Krusos.

               (a) 10.21      Stock Purchase Warrant, dated July 24, 1992,
                              between the Registrant and Denis Z. Krusos.

               (a) 10.22      Stock Purchase Warrant, dated July 24, 1992,
                              between the Registrant and Daniel A. DiSanto.

               (a) 10.23      Stock Purchase Warrant, dated July 24, 1992,
                              between the Registrant and Peri D. Krusos.

               (i) 10.24      Stock Purchase Warrant, dated October 27,
                              1992, between the Registrant and Denis Z.
                              Krusos.

               (i) 10.25      Stock Purchase Warrant, dated October 27,
                              1992, between the Registrant and Daniel A.
                              DiSanto.

               (i) 10.26      Stock Purchase Warrant, dated October 27,
                              1992, between the Registrant and Peri D.
                              Krusos.

               (j) 10.27      CopyTele, Inc. 1993 Stock Option Plan,
                              adopted on April 28, 1993 and approved by
                              shareholders on July 14, 1993.

               (k) 10.28      Joint Venture Contract, dated as of March 28,
                              1995, by and between Shanghai Electronic
                              Components Corp. and CopyTele, Inc.

               (k) 10.29      Technology License Agreement, dated as of
                              March 28, 1995, by and between Shanghai
                              CopyTele Electronics Co., Ltd. and CopyTele,
                              Inc.

               (l) 10.30      Amendment No. 1 to the CopyTele, Inc. 1993
                              Stock Option Plan, adopted on May 3, 1995 and
                              approved by shareholders on July 19, 1995.





     
<PAGE>

<PAGE>
     

                   10.31      Assignment Agreement, dated as of July 10,
                              1995, by and among  Shanghai Electronic
                              Components Corp., Shanghai International
                              Trade and Investment Developing Corp. and
                              CopyTele, Inc.

                   23.1       Consent of Arthur Andersen LLP.

                   27         Financial Data Schedule

                                 
               ------------------
               (a)  Incorporated by reference to Form 10-Q for the fiscal
                    quarter ended July 31, 1992.

               (b)  Incorporated by reference to Post-Effective Amendment
                    No. 1 to Form S-8 (Registration No. 33-49402) dated
                    December 8, 1993.

               (c)  Incorporated by reference to Form 10-Q for the fiscal
                    quarter ended April 30, 1987.

               (d)  Incorporated by reference to Form 10-K for the fiscal
                    year ended October 31, 1990.

               (e)  Incorporated by reference to Form 10-Q for the fiscal
                    quarter ended April 30, 1991.

               (f)  Incorporated by reference to Form 10-Q for the fiscal
                    quarter ended July 31, 1991.

               (g)  Incorporated by reference to Form 10-K for the fiscal
                    year ended October 31, 1991.

               (h)  Incorporated by reference to Form 10-Q for the fiscal
                    quarter ended April 30, 1992.

               (i)  Incorporated by reference to Form 10-K for the fiscal
                    year ended October 31, 1992.

               (j)  Incorporated by reference to Proxy Statement dated June
                    10, 1993.

               (k)  Incorporated by reference to Form 8-K dated March 28,
                    1995.

               (l)  Incorporated by reference to Form S-8 (Registration No.
                    33-62381) dated September 6, 1995.

     
<PAGE>

<PAGE>
     

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

                                   COPYTELE, INC.


                                   By:/s/ Denis A. Krusos                  
                                      -------------------------------------
                                   Denis A. Krusos
                                   Chairman of the Board and
     January 26, 1996              Chief Executive Officer

     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 date indicated.

                                   By:/s/ Denis A. Krusos                  
                                      -------------------------------------
                                   Denis A. Krusos
                                   Chairman of the Board,
                                   Chief Executive Officer
                                   and Director (Principal Executive
     January 26, 1996              Officer)

                                   By:/s/ Frank J. DiSanto                 
                                      -------------------------------------
                                   Frank J. DiSanto
     January 26, 1996              President and Director

                                   By:/s/ Gerald J. Bentivegna             
                                      -------------------------------------
                                   Gerald J. Bentivegna
                                   Vice President - Finance, 
                                   Chief Financial Officer and
                                   Director (Principal Financial
     January 26, 1996              and Accounting Officer)

                                   By:/s/ John R. Shonnard                 
                                      -------------------------------------
                                   John R. Shonnard
     January 26, 1996              Director

                                   By:/s/ John E. Gillies                  
                                      -------------------------------------
                                   John E. Gillies
     January 26, 1996              Director 







    
<PAGE>

<PAGE>
     



     COPYTELE, INC.
     --------------
     (Development Stage Enterprise)
      ----------------------------

     INDEX TO FINANCIAL STATEMENTS
     -----------------------------
     OCTOBER 31, 1995
     ----------------


                                                            Page
                                                            ----
     Report of Independent Public Accountants               F-1

     Balance Sheets as of October 31, 1995 and 1994         F-2

     Statements of Operations for the three years 
     ended October 31, 1995
     and for the period from November 5, 1982 
     (inception) through October 31, 1995                   F-3

     Statements of Shareholders' Equity for the 
     period from November 5, 1982
     (inception) through October 31, 1983 
     and for the twelve years ended
     October 31, 1995                                   F-4 - F-7

     Statements of Cash Flows for the 
     three years ended October 31, 1995
     and for the period from November 5, 1982 
     (inception) through October 31, 1995                  F-8

     Notes to Financial Statements                      F-9 - F-16




     Information required by schedules called for under Regulation S-X is
     either not applicable or is included in the financial statements or
     notes thereto.

<PAGE>

<PAGE>
     



     REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
     ----------------------------------------




     To CopyTele, Inc.:


           We have audited the accompanying balance sheets of CopyTele,
     Inc. (a Delaware corporation in the development stage -- Note 1) as of
     October 31, 1995 and 1994, and the related statements of operations
     and cash flows for each of the three years in the period ended October
     31, 1995 and for the period from November 5, 1982 (inception) to
     October 31, 1995 and the statements of shareholders' equity for the
     period from November 5, 1982 (inception) through October 31, 1983 and
     for each of the twelve years in the period ended October 31, 1995. 
     These financial statements are the responsibility of the Company's
     management.  Our responsibility is to express an opinion on these
     financial statements based on our audits.

           We conducted our audits 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 financial position of
     CopyTele, Inc. as of October 31, 1995 and 1994, and the results of its
     operations and its cash flows for each of the three years in the
     period ended October 31, 1995 and for the period from November 5, 1982
     (inception) to October 31, 1995, and the changes in its shareholders'
     equity for the period from November 5, 1982 (inception) through
     October 31, 1983 and for each of the twelve years in the period ended
     October 31, 1995 in conformity with generally accepted accounting
     principles.


                                            ARTHUR ANDERSEN LLP



     New York, New York
     January 22, 1996




                                     

<PAGE>

<PAGE>
     

     COPYTELE, INC.
     --------------

     (Development Stage Enterprise)
     ------------------------------

     BALANCE SHEETS
     --------------


<TABLE>
<CAPTION>

                                                                             October 31,           October 31,
                                                                               1995                  1994    
                                                                           ------------          ------------
<S>                                                                       <C>                 <C>
                                                            ASSETS
                                                            -------
CURRENT ASSETS:
  Cash (including cash equivalents and interest bearing accounts of
     $8,786,210 and $6,163,435, respectively)                               $ 8,864,293           $ 6,244,801
  Accrued interest receivable                                                    36,206                17,041
  Prepaid expenses                                                               52,451                45,994
                                                                            -----------           -----------
                                                                              8,952,950             6,307,836
PROPERTY AND EQUIPMENT (net of accumulated depreciation
  of $690,420 and $628,668, respectively)                                       235,201               207,778

INVESTMENT IN JOINT VENTURE COMPANY (Notes 1, 2 and 3)                          349,687                  -   

OTHER ASSETS                                                                    157,560               98,718

DEFERRED TAX BENEFITS (net of valuation allowance of
  $15,983,000 and $13,458,000, respectively)                                       -                     -   
                                                                            -----------           -----------
                                                                            $ 9,695,398           $ 6,614,332
                                                                            ===========           ===========

                                             LIABILITIES AND SHAREHOLDERS' EQUITY
                                             -------------------------------------

CURRENT LIABILITIES:
  Accounts payable                                                          $   218,954           $   163,402
  Accrued liabilities                                                            39,736                35,697
                                                                            -----------           -----------
                                                                                258,690               199,099
                                                                            -----------           -----------
COMMITMENTS AND CONTINGENCIES (Note 8)

SHAREHOLDERS' EQUITY:
  Preferred stock, par value $100 per share; authorized 500,000 
    shares; no shares outstanding                                                     -                  -   
  Common stock, par value $.01 per share; authorized 120,000,000 
    shares; outstanding 25,955,103 and 24,837,403 shares, respectively          259,551               248,374
  Additional paid-in capital                                                 32,492,127            26,487,930
  Accumulated (deficit) during development stage                           (23,314,970)          (20,321,071)
                                                                           ------------          ------------
                                                                              9,436,708             6,415,233
                                                                           ------------          ------------
                                                                           $  9,695,398          $  6,614,332
                                                                           ============          ============

</TABLE>


      The accompanying notes are an integral part of these balance sheets.
                                       
<PAGE>

<PAGE>
     

     COPYTELE, INC.
     --------------
     (Development Stage Enterprise)
     ------------------------------
     STATEMENTS OF OPERATIONS
     ------------------------


<TABLE>
<CAPTION>

                                                                                                           For the Period From
                                                        For the Years Ended October 31,                    November 5, 1982
                                               ---------------------------------------------------         (inception) through
                                                 1995                 1994                  1993           October 31, 1995  
                                               --------             --------              ---------        ------------------
<S>                                      <C>               <C>                     <C>                     <C>       
                                               $    -             $     -                 $     -                 $    -
SALES                                           ---------           ---------                ---------               ---------  

SELLING, GENERAL AND
   ADMINISTRATIVE
   EXPENSES, including
   research and
   development expenses
   of approximately
   $2,353,000, 
   $2,677,000,
   $1,780,000 and 
   $16,885,000, 
   respectively                                3,350,125           3,651,334               2,925,627               25,980,442
                                               ---------           ---------               ---------               ----------

INTEREST INCOME                                  356,226             223,817                 162,778                2,665,472
                                               ---------           ---------               ---------               ----------

NET (LOSS)                                   ($2,993,899)        ($3,427,517)            ($2,762,849)            ($23,314,970)
                                               =========           =========               =========               ==========

NET (LOSS) PER SHARE
   OF COMMON STOCK                                 ($.12)              ($.14)                  ($.12)                  ($1.05)
                                                    ====                ====                    ====                     ====

WEIGHTED AVERAGE 
   NUMBER OF SHARES 
   OUTSTANDING                                25,257,284          24,688,696              23,886,225               22,154,108
                                              ==========          ==========              ==========               ==========


</TABLE>

The accompanying notes are an integral part of these statements.
                                       
<PAGE>

<PAGE>
     

     COPYTELE, INC.
     --------------
     (Development Stage Enterprise)
     ------------------------------
     STATEMENTS OF SHAREHOLDERS' EQUITY
     ----------------------------------
     FOR THE PERIOD FROM NOVEMBER 5, 1982 (INCEPTION)
     ------------------------------------------------
     THROUGH OCTOBER 31, 1983 AND
     ----------------------------
     FOR THE TWELVE YEARS ENDED OCTOBER 31, 1995
     -------------------------------------------
<TABLE>
<CAPTION>
                                                                                              Accumulated
                                                                                               (Deficit)
                                                              Common Stock       Additional      During
                                                     ----------------------------- Paid-in    Development
                                                          Shares    Par Value     Capital        Stage    
                                                        ----------  ---------    ----------  -------------

<S>                                                    <C>        <C>          <C>             <C>
BALANCE, November 5, 1982 (inception)                        -     $     -     $     -          $     -
 Sale of common stock, at par, to incorporators on 
   November 8, 1982                                    1,470,000      14,700           -              -
 Sale of common stock, at $.10 per share, primarily
   to officers and employees, from November 9, 
   1982 to November 30, 1982                             390,000       3,900        35,100            -
 Sale of common stock, at $2 per share, in private
   offering from January 24, 1983 to March 28, 1983      250,000       2,500       497,500            -
 Sale of common stock, at $10 per share, in public 
   offering on October 6, 1983, net of underwriting 
   discounts of $1 per share                             690,000       6,900     6,203,100            -
 Sale of 60,000 warrants to representative of 
   underwriters, at $.001 each, in conjunction with
   public offering                                          -           -               60            -
 Costs incurred in conjunction with private and
    public offerings                                        -           -         (350,376)           -
 Net (loss) for the period                                  -           -              -          (976,919)
                                                       -----------------------------------     -----------

BALANCE, October 31, 1983                              2,800,000      28,000     6,385,384        (976,919)
 Additional costs incurred in conjunction with public 
   offering                                                 -           -          (11,654)           -
 Net (loss) for the period                                  -           -              -        (1,542,384)
                                                       -----------------------------------     -----------

BALANCE, October 31, 1984                              2,800,000      28,000     6,373,730      (2,519,303)
 Common stock issued, at $12 per share, upon 
   exercise of 57,200 warrants from February 5, 1985 
   to October 16, 1985, net of registration costs         57,200         572       630,845            -            
  Proceeds from sales of common stock by individuals 
   from January 29, 1985 to October 4, 1985 under 
   agreements with the Company, net of costs incurred 
   by the Company                                           -           -          362,365            -             
 Three-for-one stock split (A)                         5,714,400      57,144       (57,144)           -             
 Net (loss) for the period                                  -           -              -        (1,745,389)
                                                       -----------------------------------      ----------

BALANCE, October 31, 1985                              8,571,600      85,716     7,309,796      (4,264,692)
 Common stock issued, at $4 per share, upon exercise
   of 2,800 warrants in December 1985                      8,400          84        33,516            - 
 Additional costs incurred by the Company in 
   conjunction with sales of common stock by 
   individuals from January 29, 1985 to 
   October 4, 1985 under agreements 
   with the Company                                         -           -          (62,146)           - 
 Net (loss) for the period                                  -           -              -        (1,806,696)
                                                       -----------------------------------      ----------
BALANCE, October 31, 1986                              8,580,000      85,800     7,281,166      (6,071,388)
</TABLE>

      Continued<PAGE>
     
<PAGE>
     COPYTELE, INC.
     --------------
     (Development Stage Enterprise)
     ------------------------------
     STATEMENTS OF SHAREHOLDERS' EQUITY
     ----------------------------------
     FOR THE PERIOD FROM NOVEMBER 5, 1982 (INCEPTION)
     ------------------------------------------------

     THROUGH OCTOBER 31, 1983 AND
     ----------------------------
     FOR THE TWELVE YEARS ENDED OCTOBER 31, 1995
     -------------------------------------------
                                    Continued
                                    ---------
<TABLE>
<CAPTION>
                                                                                              Accumulated
                                                                                               (Deficit)
                                                              Common Stock       Additional      During
                                                     ----------------------------- Paid-in    Development
                                                          Shares    Par Value     Capital        Stage    
                                                        ----------  ---------    ----------  -------------
<S>                                                   <C>           <C>         <C>          <C> 
 Sale of common stock, at market, to officers on 
   January 9, 1987 and April 22, 1987 and to members 
   of their immediate families on July 28, 1987           67,350         674       861,726             -
 Additional costs incurred by the Company in 
   conjunction with sales of common stock by 
   individuals from January 29, 1985 to October 
   4, 1985
   under agreements with the Company                        -           -           (1,474)            -
 Five-for-four stock split (A)                         2,161,735      21,617       (21,617)            -
 Fractional share payments in conjunction with 
    five-for-
    four stock split                                        -           -           (1,345)            -
 Sale of common stock, at market, to members of 
   officers' 
   immediate families on September 10, 1987 and to 
   officers on October 29, 1987                           64,740         647       309,601             -
 Net (loss) for the period                                  -          -              -             ( 1,401,736)
                                                      ------------------------------------      ---------------
BALANCE, October 31, 1987                             10,873,825     108,738     8,428,057          ( 7,473,124)
 Sale of common stock, at market, to members of 
   officers' immediate families from 
   November 24, 1987 to June 29, 1988 and 
   additional contributions by officers in 
   January 1988 and March 1988 related to 
   adjustments to sales price of common stock on 
  October 29, 1987                                       260,210       2,602     2,250,594            -
 Net (loss) for the period                                  -           -             -             ( 1,317,305)
                                                      ------------------------------------      ---------------
BALANCE, October 31, 1988                             11,134,035     111,340    10,678,651          ( 8,790,429)
 Sale of common stock, at market, to an officer on 
   February 26, 1989 and to members of officers' 
   immediate families from February 26, 1989 
   (amended 
   on March 10, 1989) to September 27, 1989              142,725       1,427     2,093,851            -
  Sale of common stock, at market, to senior level 
     personnel on February 26, 1989                       29,850         299       499,689            -
  Sale of common stock, at market, to unrelated 
     party on February 26, 1989 amended on 
     March 10, 1989                                       35,820         358       599,627            -
  Net (loss) for the period                                 -           -             -             ( 1,101,515)
                                                      ------------------------------------      ---------------
BALANCE, October 31, 1989                             11,342,430     113,424    13,871,818          ( 9,891,944)
  Sale of common stock, at market, to members of 
    officers' immediate families from November 
    14, 1989 to October 15, 1990                         117,825       1,179     1,140,725            -
  Net (loss) for the period                                 -           -             -             ( 1,111,413)
                                                      ------------------------------------      ---------------
BALANCE, October 31, 1990                             11,460,255     114,603    15,012,543          (11,003,357)
</TABLE>


    Continued
                                                <PAGE>

<PAGE>
     

COPYTELE, INC.
---------------
(Development Stage Enterprise)
-------------------------------
STATEMENTS OF SHAREHOLDERS' EQUITY
-----------------------------------
FOR THE PERIOD FROM NOVEMBER 5, 1982 (INCEPTION)
-------------------------------------------------
THROUGH OCTOBER 31, 1983 AND
-----------------------------
FOR THE TWELVE YEARS ENDED OCTOBER 31, 1995
--------------------------------------------
                                    Continued
                                    ---------

<TABLE>
<CAPTION>

                                                                                                                 Accumulated
                                                                                                                  (Deficit)
                                                                           Common Stock            Additional      During
                                                                    --------------------------      Paid-in      Development
                                                                       Shares       Par Value       Capital          Stage    
                                                                     ----------     ---------     -----------  --------------
  <S>                                                               <C>              <C>           <C>          <C> 
  Sale of common stock, at market, to members of officers'
    immediate families on December 4, 1990                              42,540            425          329,260             -   
  Two-for-one stock split (A)                                       11,502,795        115,028      (  115,028)             -   
  Sale of common stock, at market, to members of officers'
    immediate families from April 26, 1991 to September 16, 1991       102,543          1,025        1,033,981             -   
  Net (loss) for the period                                               -              -                -        ( 1,299,992)
                                                                   -----------      ---------      -----------     ------------
BALANCE, October 31, 1991                                           23,108,133        231,081       16,260,756     (12,303,349)
  Sale of common stock, at market, to members of officers'
    immediate families from December 16, 1991 to October 
    27, 1992                                                           158,910          1,589        1,754,330             -   
  Costs incurred in conjunction with registration of stock 
    option plan                                                           -              -         (   33,251)             -   
  Net (loss) for the period                                               -              -                -        ( 1,827,356)
                                                                   -----------     ----------      -----------      -----------
BALANCE, October 31, 1992                                           23,267,043        232,670       17,981,835     (14,130,705)
  Common stock issued upon exercise of stock options from
    December 16, 1992 to October 22, 1993 under stock option
    plan                                                             1,032,940         10,330        5,914,480             -   
  Common stock issued upon exercise of warrants by members
    of officers' immediate families in September 1993                  239,000          2,390          996,774             -   
  Net (loss) for the period                                               -              -                -        ( 2,762,849)
                                                                   -----------     ----------     ------------    -------------
BALANCE, October 31, 1993                                           24,538,983        245,390       24,893,089     (16,893,554)
  Cost incurred in connection with registration of stock
    option plan                                                           -              -            (50,324)             -   
  Common stock issued upon exercise of stock options from
    December 22, 1993 to June 14, 1994 under stock option plan         233,200          2,332        1,273,411             -   
  Common stock issued upon exercise of warrants by members
    of officers' immediate families in July 1994                        65,220            652          371,754             -   
  Net (loss) for the period                                               -              -                -        ( 3,427,517)
                                                                   -----------     ----------     ------------    -------------
BALANCE, October 31, 1994                                           24,837,403        248,374       26,487,930     (20,321,071)


                       
</TABLE>


          Continued



                                       


<PAGE>

<PAGE>
     

     COPYTELE, INC.
     --------------
     (Development Stage Enterprise)
     ------------------------------
     STATEMENTS OF SHAREHOLDERS' EQUITY
     ----------------------------------
     FOR THE PERIOD FROM NOVEMBER 5, 1982 (INCEPTION)
     ------------------------------------------------
     THROUGH OCTOBER 31, 1983 AND
     ----------------------------
     FOR THE TWELVE YEARS ENDED OCTOBER 31, 1995
     -------------------------------------------

                                    Continued

                                    ---------

<TABLE>
<CAPTION>


                                                                                                                 Accumulated
                                                                                                                  (Deficit)
                                                                           Common Stock            Additional      During
                                                                    --------------------------      Paid-in      Development
                                                                       Shares       Par Value       Capital          Stage    
                                                                     ----------     ---------     -----------  --------------
<S>                                                                <C>            <C>            <C>            <C>
Cost incurred in connection with registration of stock
    option plan                                                           -              -         (   29,759)             -   
  Common stock issued upon exercise of stock options from
    February 17, 1995 to October 30, 1995 under stock option plans     980,400          9,804        5,278,824             -   
  Common stock issued upon exercise of warrants by members
    of officers' immediate families in February, July and
    September 1995                                                     137,300          1,373          755,132             -   
  Net (loss) for the period                                               -              -                -       (  2,993,899)
                                                                    ----------      ---------     ------------    -------------
BALANCE, October 31, 1995                                           25,955,103      $ 259,551     $ 32,492,127    ($23,314,970)
                                                                    ==========      =========     ============     ============
<FN>

(A)  Reflects cumulative effect on all share data prior to splits described in Note 5.


</TABLE>
 The accompanying notes are an integral part of these statements.





                                       <PAGE>
<PAGE>
     COPYTELE, INC.
     --------------
     (Development Stage Enterprise)
     ------------------------------
     STATEMENTS OF CASH FLOWS
     ------------------------


<TABLE>
<CAPTION>


                                                                                                         For the Period from
                                                                  For the Years Ended October 31,         November 5, 1982
                                                            -------------------------------------------  (inception) through
                                                                1995             1994           1993      October 31, 1995  
                                                              --------         --------       --------
<S>                                                     <C>               <C>            <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Payments to suppliers, employees and consultants          ($ 3,274,894)   ($ 3,837,859)  ($ 2,724,185)      ($25,218,890)
  Interest received                                              337,061         219,727        155,459          2,629,267
  Interest paid                                                     -                -             -                  -   
                                                          --------------   -------------  -------------     --------------
        Net cash (used in) operating activities             (  2,937,833)   (  3,618,132)  (  2,568,726)      ( 22,589,623)
                                                          --------------   ------------- --------------     --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Payments for purchases of property and equipment          (     90,549)   (     51,902)  (    146,726)      (    930,262)
  Disbursements to acquire certificates of deposit
    and corporate notes and bonds                                   -               -              -          ( 12,075,191)
  Proceeds from maturities of investments                           -               -              -            12,075,191
  Investment made in Joint Venture Company                  (    367,500)           -              -          (    367,500)
                                                          --------------  -------------- --------------    ---------------
        Net cash (used in) investing activities             (    458,049)   (     51,902)  (    146,726)      (  1,297,762)
                                                          --------------  -------------- --------------    ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from sales of common stock and warrants, net
    of underwriting discounts of $690,000 related to
    initial public offering in October 1983                         -               -              -            17,647,369
  Proceeds from exercise of stock options and warrants,
    net of registration disbursements                          6,015,374       1,597,825      6,913,974         15,168,939
  Proceeds from sales of common stock by individuals
    under agreements with the Company, net of dis-
    bursements made by the Company                                  -               -              -               298,745
  Disbursements made in conjunction with sales of stock             -               -              -          (    362,030)
  Fractional share payments in conjunction with stock
    split                                                           -               -              -          (      1,345)
                                                           -------------  -------------- --------------    ---------------
        Net cash provided by financing activities              6,015,374       1,597,825      6,913,974         32,751,678
                                                           -------------  -------------- --------------    ---------------
NET INCREASE (DECREASE) IN CASH AND CASH 
  EQUIVALENTS                                                  2,619,492    (  2,072,209)     4,198,522          8,864,293

CASH AND CASH EQUIVALENTS AT BEGINNING 
  OF PERIOD                                                    6,244,801       8,317,010      4,118,488               -   
                                                          --------------  -------------- --------------     --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                   $ 8,864,293     $ 6,244,801    $ 8,317,010       $  8,864,293
                                                          ==============  ============== ==============     ==============
RECONCILIATION OF NET (LOSS) TO NET CASH 
  (USED IN) OPERATING ACTIVITIES:
    Net (loss)                                              ($ 2,993,899)   ($ 3,427,517)  ($ 2,762,849)      ($23,314,970)
    Pro-rata share of Joint Venture Company losses                17,813            -              -                17,813
    Depreciation                                                  62,518          56,002         27,903            695,061
    (Increase) in accrued interest receivable               (     19,165)   (      4,091)  (      7,319)      (     36,206)
    (Increase) decrease in prepaid expenses                 (      6,457)          1,950   (      3,780)      (     52,451)
    (Increase) decrease in other assets                     (     58,842)   (      1,951)         1,377       (    157,560)
    Increase (decrease) in accounts payable and
       accrued liabilities related to operating
       activities                                                 60,199    (    242,525)       175,942            258,690
                                                          --------------  --------------  -------------    ---------------

        Net cash (used in) operating activities             ($ 2,937,833)   ($ 3,618,132)  ($ 2,568,726)      ($22,589,623)
                                                          ==============  ==============  =============    ===============

</TABLE>

The accompanying notes are an integral part of these statements.

<PAGE>

<PAGE>
     

                                 COPYTELE, INC.
                                 ---------------
                         (Development Stage Enterprise)
                         -------------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          ------------------------------
                                OCTOBER 31, 1995
                                -----------------


     (1) Nature of business and funding:
         -------------------------------
          CopyTele, Inc. (the "Company"), which was incorporated on
           November 5, 1982, is a development stage enterprise, engaged in
           the design and development of telecommunications products
           incorporating its ultra high resolution charged particle
           (electrophoretic) flat panel display screen for the receipt,
           transmission and printing of text, facsimile, graphics and
           pictures as well as voice transmission. 

          The Company's principle activities are the development of
           products, further enhancement of its flat panel technology, and
           its interest in Shanghai CopyTele Electronics Co., Ltd. (the
           "Joint Venture Company"), the Company's 55% owned joint venture
           in Shanghai, China, with Shanghai Electronic Components Corp.
           ("SECC") and Shanghai International Trade and Investment Developing
           Corp. ("SIT").  Since its inception, the Company has had no revenues
           and there is no assurance that its product, or those of the
           Joint Venture Company, will be accepted by the market.  The
           success of future operations will be dependent primarily upon
           the sale of products incorporating the Company's flat panel
           technology.  Furthermore, if marketable products were produced,
           directly or through the Joint Venture Company , there is no
           assurance that the Company will generate revenues in the
           future, will have sufficient revenues to generate a profit or
           that other products will not be developed by other companies
           that will render the products of the Company and of the Joint
           Venture Company obsolete.  The Chairman of the Board and the
           President are engaged in the management and operations of the
           Company and the Joint Venture Company, including the technical
           aspects of the development of the Company's products, and are
           important to the future business and financial
           arrangements of the Company and the Joint Venture Company.

          The Company has received fifty-two patents from the United States
           Patent and Trademark Office and certain foreign patent offices,
           expiring at various dates between 2005 and 2014, related to the
           design, structure and methods of construction of the flat panel
           methods of operating the flat panel with certain characteristics, 
           method of producing colored particles, applications using the flat
           panel, and particle generation.  At the present time, additional
           patent applications with respect to the flat panel and particle
           generation are pending with the United States and certain foreign
           patent offices.  There is no assurance that patents will be
           obtained for any of the pending applications.  In addition,
           there is no assurance that any patents held or obtained will
           protect the Company against competitors either with or without
           litigation.  There is also no assurance that, if the Company
           or the Joint Venture Company successfully develops marketable 
           products, such products will not infringe the patents of others, 
           or that the Company and the Joint Venture Company will
           not have to obtain licenses under patents of others.  The
           Company believes that the aforementioned patents are
           significant to the future operations of the Company.













<PAGE>

<PAGE>
     


          During 1995, the Company signed a joint venture contract (the Joint
           Venture Contract) with SECC to form a joint venture in
           Shanghai, China with a 20 year duration.  With this agreement,
           the Joint Venture Company, was formed with the Company owning a
           55% share in capital, profits and losses.  The remaining 45% is
           owned by two Chinese companies, SECC which owns 35% of the
           Joint Venture Company and SIT which owns 10% as a result of an
           Assignment Agreement entered into by the Company, SECC and SIT. 
           Reference is made to Note 3 for a further discussion regarding
           the Joint Venture Company.  Pursuant to a Technology License
           Agreement entered into on the same date as the Joint Venture
           Contract, the Company has licensed its flat panel application
           technology to the Joint Venture Company for exclusive use in
           China.  The Company is solely authorized to market Joint
           Venture Company products outside of China.  The Joint Venture
           Company may require capitalization of up to $25 million,
           depending upon the nature and extent of business activities. 
           It is contemplated that this capitalization, if necessary, will
           be financed through a combination of borrowings and equity
           investments contributed by the Company, SECC and SIT in
           proportion to their respective equity interests and on terms to
           be agreed upon.  The Company may require additional financing
           in order to participate in the Joint Venture Company following
           its initial capital contributions.  No assurance can be given
           that the Company will be able to raise its share of the $25
           million capitalization, if necessary, or that adequate
           financing will be available at terms and conditions favorable
           to the Company.

          The Company has produced a pre-production multi-functional
           telecommunications prototype, called  Magicom  , that is
           directed toward the higher end of its potential market.  This
           prototype is a unique telephone based multi-functional
           telecommunications product incorporating the Company s flat
           panel and associated propriety hardware and software
           technology.  The Company believes that the features of the
           prototype will position the product for the needs of the
           developing digital information field and various on-line
           services.  The product would enable users to have a personal
           information center in a single compact unit which integrates
           voice communication, digital messaging, fax (transmission and
           paperless reception), copier, electronic handwriting, touch
           sensitive screen, data storage and transmission,
           and computer interfacing.  There is no assurance, and the
           Company is not able to predict, if and when marketable
           telecommunications products incorporating the Company s flat
           panel technology will be produced and sold in commercial
           quantities.

    
<PAGE>

<PAGE>
     


          The Company believes that it has sufficient funds to maintain the
           present level of development efforts and to continue making its
           initial capital contributions to the Joint Venture Company into
           the first quarter of fiscal 1998.  The National Association of
           Securities Dealers, Inc. (NASD) requires that the Company
           maintain a minimum of $4,000,000 of net tangible assets to
           maintain its National Association of Securities Dealers, Inc.
           Automated Quotation National Market System ("NASDAQ-NMS")
           listing.  The Company anticipates that it will seek additional
           sources of funding, when necessary, to satisfy such
           requirements or for other purposes.  There is no assurance that
           such funding, if required, will be obtained.  The Company's
           estimated funding capacity indicated above assumes, although
           there is no assurance, that the waiver of salary and pension
           benefits by the Chairman of the Board, the President and senior
           level personnel will continue.  See Note 12 for a more complete
           discussion regarding such waivers.

     (2) Summary of significant accounting policies:
         -------------------------------------------
          Cash equivalents-
          -----------------
          The Company classifies highly liquid investments with remaining
             maturities of three months or less at their date of purchase
             by the Company as cash equivalents.  These cash equivalents
             are recorded at cost, which approximates fair market value at
             October 31, 1995 and 1994, respectively.

          Property and equipment-
          -----------------------
              
           Property and equipment, consisting primarily of engineering
             equipment, is stated at cost.  Depreciation is calculated on a
             straight-line basis over five years.

          Investment in the Joint Venture Company-
          ----------------------------------------
          The Company controls four of seven votes of the Joint Venture
             Company s board of directors.  However, decisions involving
             the Joint Venture Company require either a unanimous or two-
             thirds vote of the Joint Venture Company s board of directors. 
             Since the Company has significant influence over the Joint
             Venture Company s operations but does not have control, the
             Company has reflected its investment in the Joint Venture
             Company under the equity method of accounting.

          Research, development and tooling costs-
          ----------------------------------------
           Research, development and tooling costs incurred by the Company
             are included in selling, general and administrative expenses
             in the year incurred.

          Net (loss) per share of common stock-
          -------------------------------------
           Net (loss) per share of common stock has been computed based on
             the weighted average number of shares outstanding during the
             periods.  Such amounts and shares have been restated for stock
             splits declared since inception, as more fully described in
             Note 5.  There are no common stock equivalents which have a
             dilutive effect.

     
<PAGE>

<PAGE>
     

          Recently issued accounting standards-
          -------------------------------------
          During October 1995, the Financial Accounting Standards Board
             issued Statement of Financial Accounting Standard ( SFAS ) No.
             123, Accounting for Stock Based Compensation.  This statement 
                  ---------------------------------------
             establishes financial accounting and reporting standards for
             stock-based employee compensation plans.  SFAS No. 123
             encourages entities to adopt a fair value based method of
             accounting for stock compensation plans.  However, SFAS No.
             123 also permits the Company to continue to measure
             compensation costs under preexisting accounting
             pronouncements.  If the fair value based method of accounting
             is not adopted, SFAS No. 123 requires pro forma disclosures of
             net income and earnings per share in the notes to financial
             statements.  The Company has not yet determined how this
             pronouncement will be implemented and, accordingly, has not
             determined what impact this pronouncement will have on the
             Company's financial statements.  This statement will be
             adopted by the Company no later than fiscal 1997.

          The Company has adopted all recently issued accounting standards
             which are applicable, none of which were material to the
             financial position or results of operations of the Company's
             financial statements.

     (3) Investment in Joint Venture:
         ----------------------------
          On March 28, 1995, the Company entered into the  Joint Venture
             Contract with SECC providing for the formation of Shanghai
             CopyTele Electronics Co., Ltd. in China for the development,
             manufacture and marketing of multi-functional
             telecommunications products utilizing the Company s flat panel
             and associated technology (See Note 1, Nature of business and
             funding).  The Company has a 55% interest in the capital,
             profits and losses of the Joint Venture Company.  The Company
             is required to contribute $1,225,000 in cash and technology
             which has been valued for purposes of the Joint Venture
             Contract at $700,000.  The Joint Venture Company has not
             reflected the $700,000 in technology as an asset or equity
             investment in the condensed financial statements presented
             below.  SECC and SIT will contribute cash aggregating
             $1,575,000.  In June 1995, the Company made an initial capital
             contribution of $367,500 to the Joint Venture Company.  At
             that time, SECC and SIT contributed a total of $472,500 as
             their initial capital contribution in the Joint Venture Company.
             The Company has reflected its investment in the Joint Venture
             Company under the equity method of accounting (See Note 2,
             Summary of significant accounting policies).

          Condensed financial information for Shanghai CopyTele Electronics
           Co., Ltd. at October 31, 1995 and for the period from May 18,
           1995 (inception) through October 31, 1995, is as follows:

                      Condensed Balance Sheet

           Cash                                    $   722,170
           Land occupancy rights and other assets      325,942
                                                    ----------
                   Total Assets                     $1,048,112
                                                    ==========

           Accrued expenses                         $  240,499
           Capital                                     807,613
                                                    ----------
                   Total Liabilities and Capital    $1,048,112
                                                    ==========

                         Condensed Statement of Operations

           Net sales                                $     -   
           Operating (loss)                            (35,234)
           Interest income                               2,847
                                                     ----------
                   Net (loss)                       $  (32,387)
                                                    ===========
<PAGE>

<PAGE>
          As of October 31, 1995, the Joint Venture Company has recorded
           $240,499 in liabilities relating to the acquisition of land
           rights and infrastructure fees for the new facility, which were
           paid subsequent to October 31, 1995.

          Subsequent to fiscal 1995, the Company contributed an additional
           $490,000 to the Joint Venture Company and SECC and SIT, in
           total contributed an additional $630,000.  The Company is
           required to make an additional investment of $367,500 and SECC
           and SIT are required to make an additional contribution
           aggregating $472,500.  These additional investments will be
           made upon mutual agreement of the Company, SECC and SIT.

     (4) Issuance of warrants:
         ---------------------
          In conjunction with the sale of its common stock to members of
           the immediate families of its Chairman of the Board and its
           President, the Company issued warrants to these individuals. 
           In addition, the Company also issued warrants to an unrelated
           party (which expired in May, 1994) who purchased shares of the
           Company's common stock and to its former Vice President -
           Finance.  Information regarding these warrants for the three
           years ended October 31, 1995, after adjustments for anti-
           dilutive provisions, is as follows:
<TABLE>
<CAPTION>

                                                                     Current Weighted
                                                                     Average Exercise
                                                             Shares   Price per Share
                                                             ------   ---------------
          <S>                                            <C>            <C>
          Shares covered by warrants at October 31, 1992   1,277,973    $  6.58
          Warrants exercised                                (239,000)   $  4.18
          Warrants expired                                   (47,500)   $  4.18
                                                         ------------
          Shares covered by warrants at October 31, 1993     991,473    $  7.27
          Warrants exercised                                 (65,220)   $  5.71
          Warrants expired                                  (256,920)   $  7.90
                                                         ------------
          Shares covered by warrants at October 31, 1994     669,333    $  7.15
          Warrants exercised                                (137,300)   $  5.51
          Warrants expired                                  (105,700)   $  5.82
                                                         ------------
          Shares covered by warrants at October 31, 1995      426,333   $  7.79
                                                         ============   =======

</TABLE>

          The exercise price of all of the aforementioned warrants
             represented the fair market value of the underlying common
             stock on the day preceding issuance of such warrants.  These
             warrants are exercisable for five years commencing ninety days
             from the date of issuance.  As of October 31, 1995, all of the
             warrants to purchase shares of common stock issued and
             outstanding were exercisable.

          On January 11, 1996, warrants to purchase 53,200 of the Company s
           stock were exercised at an exercise price of $3.75 per share.

<PAGE>
<PAGE>

     (5) Stock splits:
         -------------
          On October 4, 1985, the Company declared a three-for-one stock
           split, effected in the form of a 200% stock dividend, payable
           on November 8, 1985 to shareholders of record as of October 15,
           1985.  On August 13, 1987, the Company declared a five-for-four
           stock split, effected in the form of a 25% stock dividend,
           payable on September 15, 1987 to shareholders of record as of
           August 31, 1987.  On February 12, 1991, the Company declared a
           two-for-one stock split, effected in the form of a 100% stock
           dividend, payable on March 18, 1991 to shareholders of record
           as of February 25, 1991.  The weighted average number of shares
           outstanding and net loss per share amounts in the accompanying
           financial statements have been restated to reflect these stock
           splits.

     (6) Preferred stock:
         ----------------
          On May 29, 1986, the Company's shareholders authorized 500,000
           shares of preferred stock with a par value of $100 per share. 
           The shares of preferred stock may be issued in series at the
           direction of the Board of Directors, and the relative rights,
           preferences and limitations of such shares will all be
           determined by the Board.  Management of the Company currently
           has no definitive plan or agreements for issuance of any of the
           preferred stock.

     (7) Stock option plans:
         -------------------
          In May 1987 the Company's shareholders approved a stock option
           plan (the "1987 Plan") which, after giving consideration to the
           five-for-four and two-for-one stock splits described in Note 5
           as well as an amendment approved by shareholders in May 1990 to
           increase the number of shares issuable under the 1987 Plan,
           provided for the purchase of 4,500,000 shares of common stock. 
           The 1987 Plan provided for the granting of incentive stock
           options to key employees and nonqualified options to key
           employees, consultants and directors of the Company.  The
           option price was determined by the Board of Directors, but with
           respect to incentive stock options the option price could not
           be less than the fair market value at the date of grant.  The
           stock options are exercisable over a period not to exceed 10
           years, also as determined by the Board of Directors.  In July
           1992, the Company registered the shares of common stock covered
           by the 1987 Plan.  Upon the approval of the CopyTele, Inc. 1993
           Stock Option Plan (the "1993 Plan") by the Company's
           shareholders in July 1993, the 1987 Plan was terminated with
           respect to the grant of future options.

          Information regarding the 1987 Plan for the three years ended
           October 31, 1995 is as follows:
<TABLE>
<CAPTION>

                                                              Range of Option
                                                    Shares    Price per Share
                                                    ------    ---------------
<S>                                                <C>          <C>
          Shares under option at October 31, 1992   2,491,500    $  3.88 - $13.88
          Granted                                     462,500    $  9.75 - $11.25
          Exercised                                (1,032,940)   $  3.88 - $11.25
                                                   ----------
          Shares under option at October 31, 1993   1,921,060    $  3.88 - $13.88
          Exercised                                  (233,200)   $  4.94 - $ 5.50
                                                   ----------
          Shares under option at October 31, 1994   1,687,860    $  3.88 - $13.88
          Exercised                                  (631,000)   $  3.88 - $ 5.50
          Cancelled                                  (172,800)   $  5.50 - $11.25
                                                   ----------
          Shares under option at October 31, 1995     884,060    $  4.19 - $13.88
                                                   ==========    ================
</TABLE>

          The exercise price with respect to all of the options granted
           under the 1987 Plan from its inception was at least equal to
           the fair  market value of the underlying common stock on the
           date of grant.  As of October 31, 1995, all of the options to
           purchase shares of common stock granted and outstanding under
           the 1987 Plan were exercisable.  From November 1, 1995 through
           January 22, 1996 options to purchase 197,700 shares of the
           Company stock were exercised at a price range of $4.19 to $5.50
           per share.
<PAGE>
 <PAGE>
          On July 14, 1993, the Company's shareholders approved the 1993
           Plan which had been adopted by the Company's Board of Directors
           on April 28, 1993.  The 1993 Plan was amended on May 3, 1995
           to, among other things, increase the number of shares of the
           Company s common stock available for issuance pursuant to
           grants thereunder from 3,000,000 to 7,000,000.  The 1993 Plan
           provides for the granting of stock options to purchase shares
           of common stock of the Company or stock appreciation rights up
           to the aggregate of 7,000,000 shares.  Incentive options and
           rights may be granted to key employees and nonqualified options
           and rights may be granted to key employees and consultants of
           the Company.  As amended, nonqualified options to purchase
           20,000 shares of common stock will be granted annually to each
           re-elected nonemployee director of the Company and 10,000
           shares to each newly elected non-employee director.  The 1993
           Plan is administered by the Stock Option Committee, which
           determines the option price, term and provisions of each
           option; however, the purchase price of shares issuable upon the
           exercise of incentive stock options will not be less than the
           fair market value of such shares and incentive stock options
           will not be exercisable for more than 10 years.

          Information regarding the 1993 Plan from April 28, 1993 (plan's
           inception) through October 31, 1995 is as follows:
<TABLE>
<CAPTION>

                                                                Range of Option
                                                     Shares     Price per Share
                                                     ------     ---------------
          <S>                                      <C>           <C>
          Shares under option at April 27, 1993         -              -
          Granted                                  1,215,000     $13.75 - $17.00
                                                   ---------
          Shares under option at October 31, 1993  1,215,000     $13.75 - $17.00
          Granted                                  1,221,000     $ 4.88 - $17.00
          Cancelled                                 (205,000)    $11.50 - $13.75
                                                   ---------
          Shares under option at October 31, 1994  2,231,000     $ 4.88 - $17.00
          Granted                                  2,625,000     $ 4.88 - $ 9.00
          Exercised                                 (349,400)    $ 4.88 - $ 6.31
          Cancelled                                  (60,000)    $ 5.63 - $11.50
                                                   ---------
          Shares under option at October 31, 1995  4,446,600     $ 4.88 - $17.00
                                                   =========     ===============
</TABLE>

          The exercise price with respect to all of the options granted
           under the 1993 Plan from its inception was at least equal to
           the fair market value of the underlying common stock on the
           grant date.  As of October 31, 1995, 2,796,600 of the options
           to purchase shares of common stock granted and outstanding
           under the 1993 Plan are exercisable.  At October 31, 1995,
           2,204,000 options were available for future grants under the
           1993 Plan.

          From November 1, 1995 through January 22, 1996, options to
           purchase 84,150 shares of the Company stock were exercised at a
           price range of $4.88 to $7.88 per share.  In November 1995, the
           Company granted 160,000 options to purchase the Company s
           common stock pursuant to the 1993 Plan.

     (8) Commitments and contingencies:
         ------------------------------
          Leases-
          -------
           In June 1995, the Company modified and extended its current
             lease for office and laboratory research facilities with its
             landlord, an unrelated party.  The current lease, which had an
             original expiration of November 30, 1996 for approximately
             6,900 square feet, was extended to November 30, 1998 and
             modified to increase the rented space to approximately 9,050
             square feet.  The lease now contains base rentals of
             approximately $145,000 per annum as well as escalation clauses
             for increases in certain operating costs, for a total cost
             aggregating approximately $151,000 per annum.  The Company has
             the right to cancel the lease as of November 30, 1996 and
             November 30, 1997.  Such cancellation would not result in any
             material liabilities.
<PAGE>

<PAGE>

           Rent expense for the years ended October 31, 1995, 1994, 1993
             and for the period from November 5, 1982 (inception) through
             October 31, 1995 was approximately $130,000, $120,000,
             $120,000 and $1,340,000, respectively.

          Key man life insurance-
          -----------------------

           The Company maintains key man life insurance, aggregating
             $1,500,000 insuring the lives of its Chairman of the Board and
             its President.  The Company is the beneficiary under these
             policies.   Annual expenses relating to the maintenance of
             this insurance aggregated approximately $27,000.

          Purchases-
          ----------

           At October 31, 1995, the Company has a commitment to purchase
     $124,000 of lab equipment.

     (9) Employees' pension plan:
         ------------------------

          The Company adopted a noncontributory defined contribution
           pension plan, effective November 1, 1983, covering all of its
           present employees.  Contributions, which are made to a trust,
           are based upon specified percentages of compensation, as
           defined in the plan.  Pension cost, which approximated $50,000,
           $43,000, $30,000 and $373,000 for the years ended October 31,
           1995, 1994 and 1993 and in the period from the inception of the
           plan through October 31, 1995, respectively, has been accrued
           and funded on a current basis.

     (10) Accrued liabilities:
          --------------------
           Accrued liabilities at October 31, 1995 and 1994 consisted of
     the following:

                                                1995      1994  
                                              --------  --------

             Payroll and related taxes       $ 30,376   $30,237
             Other taxes                        9,360     5,460
                                           --------------------
                                             $ 39,736  $ 35,697
                                               ======    ======

     (11) Income taxes:
          -------------
          The Company adopted the provisions of SFAS No. 109, Accounting
                                                              ----------
           for Income Taxes, retroactively effective to November 1, 1992. 
           ----------------
           The implementation of SFAS No. 109 did not have a material
           impact on the Company's financial statements.  SFAS No. 109
           requires recognition of deferred tax liabilities and assets for
           the estimated future tax effects of events that have been
           recognized in the Company's financial statements or tax
           returns.  Under this method, deferred tax liabilities and
           assets are determined based on the difference between the
           financial statement and tax bases of assets and liabilities
           using enacted tax rates in effect in the years in which the
           differences are expected to reverse.

<PAGE>
<PAGE>

          Deferred tax benefits at October 31, 1995 and 1994, which are
           fully offset by valuation allowances, primarily represent the
           estimated future tax effects of Federal net operating loss and
           tax credit carryforwards aggregating approximately $13,018,000
           and $10,969,000, respectively, and the estimated future tax
           effects of New York State net operating loss and tax credit
           carryforwards aggregating approximately $2,965,000 and
           $2,489,000, respectively.

          At October 31, 1995, the Company had tax net operating loss and
           tax credit carryforwards of approximately $34,230,000 and
           $1,045,000, respectively, available, within statutory limits,
           to offset future regular Federal corporate taxable income and
           taxes payable, if any, respectively.  The tax net operating
           loss and tax credit carryforwards expire at various dates
           between 1998 and 2010.  Certain changes in stock ownership can
           result in a limitation on the amount of net operating loss and
           tax credit carryovers that can be utilized each year.

          The principal differences between the net loss for financial
           statement purposes and the tax net operating loss attributable
           to the year ended October 31, 1995 were deductions for tax
           purposes of option holders' income related to stock option
           exercises aggregating approximately $2,490,000.  If the tax
           benefits are ultimately realized relating to deductions of 
           option holders' income, those benefits will be credited 
           directly to additional paid-in capital.

          At October 31, 1995, the Company had adjusted tax net operating
           loss and tax credit carryforwards of approximately $30,029,000
           and $24,000, respectively, available to offset future Federal
           corporate alternative minimum taxable income and taxes payable,
           within statutory limits, if the Company is subject to such
           taxes.  These tax net operating loss and tax credit
           carryforwards expire at various dates between 1998 and 2010.
<PAGE>

<PAGE>
     

          If alternative minimum taxes are paid, the Company may receive an
           additional tax credit, available to reduce future regular
           taxes, in the amount of alternative minimum taxes paid in
           excess of regular taxes.

          The Company had tax net operating loss and tax credit
           carryforwards of approximately $32,616,000 and $30,000,
           respectively, at October 31, 1995, available, within statutory
           limits, to offset future New York State corporate taxable
           income and taxes payable, if any, under certain computations of
           such taxes.  The tax net operating loss carryforwards expire at
           various dates between 1998 and 2010 and the tax credit
           carryforwards expire between 1999 and 2005.

          During the years ended October 31, 1995, 1994, 1993 and the
           period from November 5, 1982  (inception) through October 31,
           1995, the Company incurred no Federal and no material State
           income taxes.

     (12) Selling, general and administrative expenses:
          ---------------------------------------------
          While there is no formal agreement, the Company's Chairman of the
           Board and its President have waived any and all rights to
           receive salary and related pension benefits for an undetermined
           period of time commencing November 1985.  The aggregate annual
           expenses for these individuals at the time of such waivers was
           approximately $325,000.

          Four other individuals, including an officer and senior level
           personnel, then employed at the Company, waived any and all
           rights to receive salary and related pension benefits for the
           period from January 1987 through December 1990.  While there
           are no formal agreements, commencing January 1991, these
           individuals waived such rights for an undetermined period of
           time and they did not receive salary or related pension
           benefits through December 1992.  The three senior level
           personnel continued to waive such rights commencing in January
           1993 for an undetermined period of time.  Additionally, in
           February 1993, two former consultants to the Company became
           employees, one of whom has since resigned, and also waived such
           salary and benefit rights for an undetermined period of time. 
           The aggregate annual expense for these five individuals, then
           employed at the Company, at the time of their respective
           initial waivers was approximately $440,000.

          The Company does not contemplate the retroactive reinstatement of
           any of the salary or related pension benefit waivers indicated
           above.








<PAGE>
<PAGE>
     


     

                                  EXHIBIT INDEX
          Exhibit
     Ref. Number         Description
     ---- -------        -----------
     (a)  3.1       Certificate of Incorporation, as amended.

     (b)  3.2       By-laws, as amended and restated.

     (c)  10.1      Stock Option Plan, adopted on April 1, 1987 and
                    approved by shareholders on May 27, 1987.

     (d)  10.2      Amendment to Stock Option Plan, adopted on March 12,
                    1990 and approved by shareholders on May 24, 1990.

     (d)  10.3      Stock Purchase Warrant, dated December 4, 1990, between
                    the Registrant and Denis Z. Krusos.

     (d)  10.4      Stock Purchase Warrant, dated December 4, 1990, between
                    the Registrant and Daniel A. DiSanto.

     (d)  10.5      Stock Purchase Warrant, dated December 4, 1990, between
                    the Registrant and Peri D. Krusos.

     (e)  10.6      Stock Purchase Warrant, dated April 26, 1991, between
                    the Registrant and Denis Z. Krusos.

     (e)  10.7      Stock Purchase Warrant, dated April 26, 1991, between
                    the Registrant and Daniel A. DiSanto.

     (e)  10.8      Stock Purchase Warrant, dated April 26, 1991, between
                    the Registrant and Peri D. Krusos.

     (f)  10.9      Stock Purchase Warrant, dated July 15, 1991, between
                    the Registrant and Denis Z. Krusos.

     (f)  10.10     Stock Purchase Warrant, dated July 15, 1991,
                    between the Registrant and Daniel A. DiSanto.

     (f)  10.11     Stock Purchase Warrant, dated July 15, 1991,
                    between the Registrant and Peri D. Krusos.

     (g)  10.12     Stock Purchase Warrant, dated September 16, 1991,
                    between the Registrant and Denis Z. Krusos.

     (g)  10.13     Stock Purchase Warrant, dated September 16, 1991,
                    between the Registrant and Daniel A. DiSanto. 







     
<PAGE>

<PAGE>
     

     (g)  10.14          Stock Purchase Warrant, dated September 16, 1991,
                         between the Registrant and Peri D. Krusos.

     (g)  10.15          Stock Purchase Warrant, dated December 16, 1991,
                         between the Registrant and Denis Z. Krusos.

     (g)  10.16          Stock Purchase Warrant, dated December 16, 1991,
                         between the Registrant and Daniel A. DiSanto.

     (g)  10.17          Stock Purchase Warrant, dated December 16, 1991,
                         between the Registrant and Peri D. Krusos.

     (h)  10.18          Stock Purchase Warrant, dated March 12, 1992,
                         between the Registrant and Denis Z. Krusos.

     (h)  10.19          Stock Purchase Warrant, dated March 12, 1992,
                         between the Registrant and Daniel A. DiSanto.

     (h)  10.20          Stock Purchase Warrant, dated March 12, 1992,
                         between the Registrant and Peri D. Krusos.

     (a)  10.21          Stock Purchase Warrant, dated July 24, 1992,
                         between the Registrant and Denis Z. Krusos.

     (a)  10.22          Stock Purchase Warrant, dated July 24, 1992,
                         between the Registrant and Daniel A. DiSanto.

     (a)  10.23          Stock Purchase Warrant, dated July 24, 1992,
                         between the Registrant and Peri D. Krusos.

     (i)  10.24          Stock Purchase Warrant, dated October 27, 1992,
                         between the Registrant and Denis Z. Krusos.

     (i)  10.25          Stock Purchase Warrant, dated October 27, 1992,
                         between the Registrant and Daniel A. DiSanto.

     (i)  10.26          Stock Purchase Warrant, dated October 27, 1992,
                         between the Registrant and Peri D. Krusos.

     (j)  10.27          CopyTele, Inc. 1993 Stock Option Plan, adopted on
                         April 28, 1993 and approved by shareholders on
                         July 14, 1993.

     (k)  10.28          Joint Venture Contract, dated as of March 28,
                         1995, by and between Shanghai Electronic
                         Components Corp. and CopyTele, Inc.

     (k)  10.29          Technology License Agreement, dated as of March
                         28, 1995, by and between Shanghai CopyTele
                         Electronics Co., Ltd. and CopyTele, Inc.


     
<PAGE>

<PAGE>
     

     (l)  10.30          Amendment No. 1 to the CopyTele, Inc. 1993 Stock
                         Option Plan, adopted on May 3, 1995 and approved
                         by shareholders on July 19, 1995.

          10.31          Assignment Agreement, dated as of July 10, 1995,
                         by and among  Shanghai Electronic Components
                         Corp., Shanghai International Trade and Investment
                         Developing Corp. and CopyTele, Inc.

          23.1           Consent of Arthur Andersen LLP.

          27             Financial Data Schedule

                       
     ------------------
     (a)  Incorporated by reference to Form 10-Q for the fiscal quarter
          ended July 31, 1992.
     (b)  Incorporated by reference to Post-Effective Amendment No. 1 to
          Form S-8 (Registration No. 33-49402) dated December 8, 1993.
     (c)  Incorporated by reference to Form 10-Q for the fiscal quarter
          ended April 30, 1987.
     (d)  Incorporated by reference to Form 10-K for the fiscal year ended
          October 31, 1990.
     (e)  Incorporated by reference to Form 10-Q for the fiscal quarter
          ended April 30, 1991.
     (f)  Incorporated by reference to Form 10-Q for the fiscal quarter
          ended July 31, 1991.
     (g)  Incorporated by reference to Form 10-K for the fiscal year ended
          October 31, 1991.
     (h)  Incorporated by reference to Form 10-Q for the fiscal quarter
          ended April 30, 1992.
     (i)  Incorporated by reference to Form 10-K for the fiscal year ended
          October 31, 1992.
     (j)  Incorporated by reference to Proxy Statement dated June 10, 1993.
     (k)  Incorporated by reference to Form 8-K dated March 28, 1995.
     (l)  Incorporated by reference to Form S-8 (Registration No. 33-62381)
          dated September 6, 1995.