SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB

(Mark  One)
/X/    Annual report under section 13 or 15(d) of the securities exchange act of
1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
                                             -----------------

/ /   Transition report under section 13 or 15(d) of the securities exchange act
of  1934

COMMISSION  FILE  NUMBER  0-22196

                              INNODATA CORPORATION
                 (Name of small business issuer in its charter)


                                    DELAWARE
         (State or other jurisdiction of incorporation or organization)

                                   13-3475943
                      (I.R.S. Employer Identification No.)

                             THREE UNIVERSITY PLAZA
                             HACKENSACK, NEW JERSEY
                    (Address of principal executive offices)

                                      07601
                                   (Zip Code)

                                 (201) 488-1200
                           (Issuer's telephone number)

Securities  registered  under  Section  12(b)  of  the  Exchange  Act:     NONE

Securities registered under Section 12(g) of the Exchange Act:     COMMON STOCK,
$.01  PAR  VALUE


Check  whether  the issuer (1) filed all reports required to be filed by Section
13  or  15(d)  of  the  Exchange  Act during the past twelve 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
/  /

Check  if  disclosure of delinquent filers in response to Item 405 of Regulation
S-B  is  not contained in this form, and no disclosure will be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated  by  reference  in Part III of this Form 10-KSB or any amendment to
this  Form  10-KSB.  /  /

State  issuer's  revenues  for  its  most  recent  fiscal  year.  $19,593,353
                                                                  -----------

State  the  aggregate market value of the voting stock held by non-affiliates of
the  registrant  based  on  the  closing  price of the Company's Common Stock on
February  26,  1999  of  $5.88  per  share.  $6,279,281
                                             ----------

State the number of shares outstanding of each of the issuer's classes of common
equity,  as  of  the  latest  practicable  date.

   1,491,985 SHARES OF COMMON STOCK, $.01 PAR VALUE, AS OF FEBRUARY 28, 1999.

                       DOCUMENTS INCORPORATED BY REFERENCE
                             [SEE INDEX TO EXHIBITS]



<PAGE>

                                     PART I
                                     ------


ITEM  1.  DESCRIPTION  OF  BUSINESS.

GENERAL

Innodata  Corporation  ("Innodata"  or  the  "Company") is a leading provider of
Internet  and on-line data conversion and content management services, providing
all  the  necessary  steps for product development and data conversion to enable
its  customers  to  disseminate vast amounts of information both on-line and via
the  Internet. The Company's operations are classified in two business segments:
Internet  and  On-Line  Data  Conversion  and  Content  Management  Services and
Document  Imaging  Services.  See  Note 8 of the Notes to Consolidated Financial
Statements  in Item 7 of this report for further information about the Company's
business  segments.

The  Company  was incorporated in Delaware in June 1988, maintains its executive
offices  in  Hackensack,  New  Jersey,  and employs globally approximately 3,000
persons  in offices in Hackensack, New Jersey; Garden Grove, California; London,
U.K.;  Manila, The Philippines; Cebu, The Philippines; Delhi, India; and Colombo
Sri  Lanka.

INDUSTRY  BACKGROUND

Since  its  founding,  Innodata  has  provided  a host of services to commercial
electronic data providers that publish CD-ROM and on-line products ("traditional
electronic  publishers").  Historically,  the market has been dominated by a few
large  competitors in most vertical markets (e.g., Dialog, Lexis/Nexis, Westlaw,
Elsevier Science BV). These traditional electronic publishers obtain information
from  a  variety  of different providers and resell it to targeted groups of end
users  (e.g.,  Dialog and Elsevier Science to libraries, Lexis/Nexis and Westlaw
to  attorneys).

Traditional  electronic  publishers discovered that outsourcing offered the most
efficient  and  cost-effective  way  to  develop  and  deploy massive electronic
content  to  meet  their  on-line  publishing  goals.

With  the rapid growth and popularity of the Internet and the wide acceptance of
Internet  publishing  standards, the market for electronic information has grown
enormously. The Internet offers traditional electronic publishers and new market
entrants  unprecedented  opportunities  for  global  information  distribution.

Traditional  electronic  publishers  have  responded  by  becoming  increasingly
ambitious  in delivering large quantities of information quickly to subscribers,
and  new  market entrants have developed novel electronic information offerings,
such as adding image content to traditional text products and offering new media
deliverables  such  as PDF (Portable Document Format) and XML (eXtensible Markup
Language).

In  order  to stay competitive, traditional electronic publishers and new market
entrants  are  becoming  more  focused  on speed of product delivery and product
quality,  and  increasing  the  value  added  which accrues to their information
content.

At  the same time, as standards regarding Internet and Web protocols have become
universal  and  solutions  for  data  security  have become more reliable, major
corporations have begun to implement electronic knowledge management initiatives
as  a  way  of  mitigating  the  cost  of  lost  knowledge,  isolated islands of
information,  and redundancies and duplication in work efforts. Corporations are
viewing  the  Web  as a viable publishing environment for enabling unprecedented
information  access  to  knowledge  workers.

As a result, many document-intensive companies are confronted with the challenge
of  making  large  quantities  of data accessible to both current and new users.
This is causing a revolution in the way organizations create, manage, and access
information of all types. Providing timely and accurate information to knowledge
workers  is  a  publishing  process,  and  corporations  -  no matter what their
business  - are becoming de facto electronic publishers of product and technical
documentation  and  policy  and  procedures  manuals.

CORPORATE  STRATEGY

The  Internet  opportunity  for  Innodata  is  five-fold:  1) enable traditional
electronic  information providers and new market entrants to prepare and deliver
increasingly  massive  amounts  of  content  over  the  Internet  reliably  and
efficiently;  2)  support  electronic  publishers'  race for product currency by
becoming  increasingly  flexible  with a focus on delivering information quickly
and  reliably;  3)  respond  to  opportunities to provide increased value-add to
content;  4)  configure  service  offerings  specifically  geared  to  corporate
organizations'  knowledge  management  initiatives,  which  is a new fast-growth
market area where the Company's core competencies apply; and 5) provide industry
thought  leadership  and specific service offerings around XML as it becomes the
key  part  of  the  future  of  the Internet, intranets, and the World Wide Web.

CLOSE  RELATIONSHIPS  WITH  CUSTOMERS

Innodata  views  the  long-term  partnerships  with  its customers as a critical
element  in its historical and future success. Innodata's customers include many
of  the  largest  and most highly regarded electronic publishers and Fortune 500
companies.  In  order  to  continue  to  meet  the  needs  of  its  existing and
prospective  customers  in a timely fashion, the Company works directly with its
customers  to identify and develop new and improved services. To promote a close
and continuing relationship with customers, the Company sells through its direct
sales  organizations  in North America and Europe, provides consulting expertise
through  its  Professional  Services  Group,  and  provides 24/7 project support
through  its  Customer  Service  Center.

The Company generally performs its work for its customers under project-specific
contracts  or  long-term  contracts,  which  are subject to numerous termination
provisions.

During  1998, 1997 and 1996, one customer that is comprised of twelve affiliated
companies,  accounted for 21%, 16% and 28% of the Company's Internet and on-line
data  conversion  and  content  management  services revenues, respectively. One
other customer accounted for 13%, 10% and 10% of such revenues in 1998, 1997 and
1996,  respectively.  No  other  customer  accounted  for  10%  or  more of such
revenues.  Further,  in  1998, 1997 and 1996, export revenues, all of which were
derived  from  European customers, accounted for 22%, 24% and 22%, respectively,
of  such  revenues.  A  significant amount of the Company's revenues are derived
from  customers in the publishing industry.  Accordingly, the Company's accounts
receivable  generally  include  significant  amounts  due  from  such customers.

During  1998,  1997  and 1996 one customer accounted for 53%, 11% and 12% of the
Company's  document  imaging  service  revenues,  respectively. Another customer
accounted  for  10% and 12% of such revenues in 1997 and 1996. No other customer
accounted  for  10%  or  more  of  such  revenues.

RECURRING  BUSINESS

The  Company's  marketing,  pricing,  and  support strategies are focused on the
generation  of  both  one-time  and  recurring  revenues.  Many of the Company's
customers  are  involved in publishing information content that requires regular
updating,  thus  providing  Innodata  with  recurring business. To support these
initiatives  and  preserve  recurring  revenue,  Innodata has configured on-site
facilities  management  service  offerings.  In addition, the Company is working
with  many  of  its  long-time  customers to migrate their products to new, less
proprietary  formats,  and  to  add  both  more  and  richer  content.

COMPREHENSIVE  SERVICE  OFFERINGS

The  Company's  comprehensive set of services distinguishes the Company from its
competitors. Many competitors offer only a single service, such as data capture,
or  do  not  offer  the  full complement of specialized services to enable large
organizations  to  develop  on-line/Internet services. Innodata provides a broad
range  of  conversion  and processing services and consulting services to enable
its  clients  to  publish  massive  content  databases quickly and economically.

INTERNET  AND  ON-LINE  DATA  CONVERSION  AND  CONTENT  MANAGEMENT  SERVICES
----------------------------------------------------------------------------

Innodata's customers represent an array of major electronic publishers of legal,
scientific,  educational, and medical information, as well as document-intensive
companies  repurposing  their  proprietary information into electronic resources
that  can  be  referenced  via  web-centric  applications.

The  Company's  specific  services  include:

     Consulting  and  Support

Through  its  Professional  Services  Group,  the  Company  offers  customers
vendor-neutral  conversion  and  consulting  services,  including SGML (Standard
Generalized  Markup  Language),  XML  (eXtensible  Markup  Language),  and  HTML
(Hypertext  Markup  Language)  consulting  services,  customized programming and
conversion  application  development,  document  analysis,  DTD  architecture
analysis,  and  design  and  database  quality  assurance.

The  Company  operates  two  Customer  Support  Centers, one located at its U.S.
headquarters  in  New  Jersey  and  one located at its Asian headquarters in the
Philippines. Seamlessly linked over a proprietary fiber-optic wide area network,
the  Customer  Support  Centers offer customers 24/7 hotline project support and
remote  dial-in  services  for  data  transmission.

     Data  Conversion

For  customers  desiring  the  ability  to  use  electronic  data  for  on-line
information  retrieval,  intranet, extranet, or Internet distribution, permanent
archives,  electronic  publishing,  CD-ROM  and  DVD distribution or printing on
demand, the Company converts massive hardcopy and paper collections to a variety
of  output  formats including Adobe PDF (Portable Document Format), tagged ASCII
(American  Standard  Code  for  Information  Interchange),  and EBCDIC (Extended
Binary Coded Decimal Interchange Code), as well as SGML, XML and HTML conforming
electronic  files.

To  accomplish  this,  the Company utilizes high speed scanning and a variety of
commercial  and  proprietary OCR/ICR (optical/intelligent character recognition)
applications,  in  concert with structured methodologies and work flow processes
designed  to  accomplish  rapid turnaround of data with high degrees of accuracy
(typically  guaranteeing  up  to 99.995% character accuracy). Its systems enable
multiple  production  processes to be performed simultaneously at one or more of
its  production  sites. In addition, the Company uses a wide variety of advanced
tools  for  data enhancement and validation, and its Conversion Engineers create
automatic  procedures - utilizing industry standards such as Omnimark, DynaText,
Adept, etc. - to ensure validated SGML structure for legacy data files. Finally,
Editorial  Specialists  enhance  the  structured  files  by  adding  hyperlinks,
ensuring  quality  of  tagging  and  inserting  electronic  markers.

In  addition,  the  Company  converts a broad range of legacy-formatted data and
proprietary electronic formatted data to SGML and SGML-related electronic files.
The  Company  maintains  a  staff  of  experienced engineers and programmers who
utilize  custom  conversion  filters  and  parsers  for  this  purpose.

Two  of the Company's conversion facilities have been accorded ISO 9003 and 9002
Certifications.  The ISO 9000-series certification program is an internationally
recognized  marque  of  quality  assurance  and  process  conformity.  Regularly
scheduled  ISO  audits  assure  a  high degree of staff acuity to the documented
processes  and  serve to build accountability within all levels of the Company's
delivery  organizations.  Increasingly,  customers  rely  on  their  vendors'
conformity  to  documented  processes  and  promised  quality levels when making
purchasing  decisions. Innodata's early adoption of the ISO program has resulted
in  such  processes  having  become engrained in its operating culture, which in
turn  serves  as  a  major  contributor  to  generating and maintaining customer
confidence  in  the  Company's  ability  to  make  deliveries  as  promised.

     Content  Development  and  Data  Enhancement

The  Company's teams of Content Editors enhance customers' databases by creating
links  to  related  material  and building indexes and abstracts as the basis of
subject  links  and  access  points.

Innodata's  highly  educated  professionals  are trained to index and abstract a
wide  variety  of  scientific,  medical,  and  technical data in diverse fields,
including  law,  medicine,  biology,  pharmacology,  and  engineering.

New  services  include  Web  mining and indexing of information published on the
Internet.

DOCUMENT  IMAGING  SERVICES
---------------------------

The  Company  also  provides  high volume backfile and day-forward conversion of
business  documents,  technical  manuals,  engineering drawings, aperture cards,
roll film, and microfiche, providing high quality computer accessible images and
indexing.

After  conversion,  these  documents  are stored on various optical and magnetic
media  to  populate  document management systems such as Documentum and FileNet.
Traditional  markets  for  document  imaging  services  include  Fortune  500
manufacturers,  major  utilities,  governmental  departments,  hospital  medical
records,  and  commercial  back-office.

The  Company  utilizes  the  latest  in state-of-the-art equipment from high-end
document  scanners to large format and film scanners. Throughout its operations,
the  Company  maintains a quality control program to ensure the integrity of the
imaging  and  indexing.  The  Company  provides Document Imaging Services at its
production  facility  in  Garden  Grove,  California.  Upon  client request, the
Company  can  provide  equipment  to  process  documents  at  remote client-site
locations.

SALES  AND  MARKETING

Sales and marketing functions are primarily conducted by the Company's full-time
sales  personnel.  Sales  and  marketing  activities have consisted primarily of
exhibiting  at  trade  shows in the United States and Europe, and seeking direct
personal  access to decision-makers. The Company has also obtained visibility by
way  of  articles  published  in  the  trade  press.  The  Company's Director of
Professional  Services  has  authored  a widely acclaimed book on the subject of
data  conversion  for  the  Internet  and  regularly publishes articles in trade
magazines  and  on  vendor  websites. To date, the Company has not conducted any
significant  advertising  campaign  in  the  general  media.

The  direct sales effort is closely supported by sales engineering and pre-sales
consulting  personnel  from  the  Company's  Professional  Services Group. These
individuals  assist  the  sales  force  in  understanding the technical needs of
customers  and  providing  responses  to  these needs, including demonstrations,
prototypes,  pricing  quotations  and  time  estimates.

Document Imaging Services has a reseller program that allows qualified companies
in  document  and  records  management,  micrographics, reprographics and CAD to
resell  conversion  services.  The  division  also works with strategic document
imaging  systems  vendors.

COMPETITION

     Internet  and  On-Line  Data  Conversion  and  Content  Management Services

The  Company's  ability  to compete favorably is, in significant part, dependent
upon  its ability to control costs, react swiftly and appropriately to short and
long-term trends, harness technology and competitively price its services. Firms
compete  based  on quality, speed, accuracy, and "customer intimacy," as well as
on  the  relative  ability  to  accomplish  massive and complex data conversions
economically.  Major  competitors  include:  for  document  and  information
outsourcing,  F.Y.I.  Inc.  and Lason Inc.; for data conversion services, Saztec
Philippines,  Inc., Access Innovations, Inc., APEX Data Services, Inc. and Jouve
S.A.;  for SGML/XML and related consulting services, Database Publishing Systems
Ltd. and KPMG Consulting. The Company may also be considered in competition with
customers'  and  potential  customers'  in-house  personnel  who  may attempt to
duplicate  the  Company's  services.

     Document  Imaging  Services

The  Company's  scanning  conversion  services  conducted  through  its  Imaging
Services  division  competes with numerous companies that may have substantially
greater  financial,  technical,  and  other  resources  than  the Company. Firms
compete  based on price, geographic location, quality, and speed of turn-around,
as well as on the size of project and the complexity and level of work that they
can  perform on an economic basis. Major national competitors include Lason Inc.
and IKON Office Solutions Inc. The Company may also be considered in competition
with  customers'  and potential customers' in-house personnel who may attempt to
duplicate  the  Company's  services.

RESEARCH  AND  DEVELOPMENT

The  Company has not made significant expenditures for research and development,
although  expenditures  were  incurred  in  connection  with  OCR  technology
developments  and  enhancing its networking and telecommunications capabilities.

FACTORS  AFFECTING  BUSINESS  OVERSEAS

While  the  major  part  of  the  Company's  operations  are  carried  on in the
Philippines,  India  and Sri Lanka, the Company's headquarters are in the United
States  and  its  customers  to  date have all been located in North America and
Europe.  As  a  result,  the  Company  is not as affected by economic conditions
overseas  as  it  would  be  if it depended on revenues from sources internal to
those  countries.  However, such adverse economic factors as inflation, external
debt,  negative  balance  of  trade,  political  pressure  to raise salaries and
underemployment  may  significantly  impact  the  Company.

Certain  aspects  of  overseas  economies directly affect the Company.  Overseas
operations  remain vulnerable to political unrest which could interfere with the
Company's  operations.  Political  instability  could  also  change  the present
satisfactory  legal  environment  for  the  Company  through  the  imposition of
restrictions  on  foreign  ownership, repatriation of funds, adverse labor laws,
and  the  like.

Since  April  1,  1995  and April 1, 1997, the Philippine and Indian operations,
respectively,  are  conducted  through  wholly-owned subsidiaries that have been
granted income tax holidays for four-year periods.  Accordingly, no income taxes
will  be  payable  on  earnings  from operations of the subsidiaries during such
period,  unless  repatriated  to  the  U.S.

The Company funds its overseas operations through transfers of U.S. dollars only
as  needed  and  generally  does not maintain any significant amount of funds or
monetary assets overseas. To the extent that the Company needs to bring currency
to  the  United  States  from  its  overseas  operations, it will be affected by
currency  control  regulations.

The  Philippines  has historically experienced high rates of inflation and major
fluctuations  in  exchange rate between the Philippine peso and the U.S. dollar.
Continuing  inflation  without corresponding devaluation of the peso against the
dollar,  or  any other increase in value of the peso relative to the dollar, may
have  a  material  adverse  effect  on  the  Company's  operations and financial
condition.  From  time  to time, the Company has purchased futures contracts for
pesos  at  fixed  prices,  in  order to ensure a stable cost of services. In the
second half of 1997 and the first part of 1998 these contracts stabilized prices
for  the  Company's services at a time when the peso was significantly devalued.
As  a  result,  the  Company  was  unable  to  enjoy  the benefits it would have
otherwise  received.

The  Philippines  is  subject  to  relatively  frequent  earthquakes,  volcanic
eruptions,  floods  and other natural disasters, which may disrupt the Company's
operations. Further, power outages lasting for periods of as long as eight hours
per  day  have  occurred.  The  Company's  facilities  are equipped with standby
generators  which  have  produced  electric power during these outages; however,
there  can  be  no assurance that the Company's operations will not be adversely
affected  should  municipal  power  production  capacity  deteriorate  further.

EMPLOYEES

As  of  February 28, 1999, the Company employed an aggregate of approximately 50
persons  in  the  United  States and the United Kingdom, and approximately 3,000
persons  in  the  Philippines,  Sri  Lanka  and  India.

Employees  at  the  Company's  Manila  facilities  are  members of a union.  The
Company  reached  agreement  in  1996 on a collective bargaining agreement which
provides  for  approximately  10%  wage increases per annum plus one-half of any
government  mandated  increases  for  the  five  years  ending  March  31, 2001.

No  other  of  the  Company's employees are represented by any labor union.  The
Company  believes  that  its  relations  with  its  employees  are satisfactory.

Production  Staff;  Recruitment  and  Training-Philippines
----------------------------------------------------------

The  Philippines offers a well-educated workforce trained in an English language
school  system. Economic opportunity in the Philippines is not commensurate with
the  level  of  education  in  the  workforce.  The  overall  depressed economic
conditions  and  low  wage  scale  permit  an  educated  professional to enjoy a
comfortable standard of living on an income that is relatively low when compared
to  that  in  developed  nations.

The  Company's  staff  in  the  Philippines  has  a  median age of approximately
twenty-five.  A  significant  number  of  employees  have  college  degrees.  A
substantial  middle  management infrastructure, grown both from within the ranks
of  the  Company and through experienced hires, is in place.  These managers are
in  charge  of  departmental  responsibilities,  including  personnel,  public
relations,  facilities,  quality  control, programming, systems and development.

The  Company  maintains  a  vigorous recruiting, screening and training program.
All  applicants  are  given an extensive battery of written and practical tests,
many  developed specifically by the Company, over a two-day period.  The Company
hires  less  than  10%  of  all applicants.  Diagnostic tests and equipment have
allowed  the Company to hire the brightest people available rather than focusing
solely  on  typing  ability.

Once  hired,  the  Company  uses intensive efforts to train its employees and to
ensure  that  their skills are constantly upgraded.  Training is performed under
close supervision by senior personnel.  In addition, the Company has an in-house
training  program for new employee applicants who have all the requisite skills,
excepting  the speed of their performance.  The course consists of approximately
three  weeks  of  half-day  sessions.  Upon  satisfactory  completion, full time
employment  is  offered.

The  Company  seeks  to  maintain  high  levels of motivation and retention.  It
offers  its  employees  what  it  believes  to  be one of the most comprehensive
benefit  packages  available  in  the  Philippines.  This  package  includes
comprehensive  medical insurance, eye care, food subsidies, a subsidized general
store  and  canteen, tuition credits, and free computer-programming classes.  It
maintains a modern and well-appointed facility. It conducts aggressive incentive
programs  tied  to  performance.  It affords to its employees the opportunity to
advance.

Similar conditions and methods are in place at the Company's facilities in India
and  Sri  Lanka.


ITEM  2.  DESCRIPTION  OF  PROPERTY

The  Company's Manila, Philippines premises are occupied under a five-year lease
which  expires  on  December  31,  2003 and which is cancelable at the Company's
option.  The  premises consist of a four-story, 45,000 square foot building with
a  separate  cafeteria  building.  The  lease  provides  for monthly payments of
approximately  $23,000.

The  Company's  operations  in  the  Philippines  city  of Cebu are conducted in
approximately  10,000 square feet of space leased through March 2001, cancelable
at  the  Company's  option,  at  a  monthly  rental  of  approximately  $5,500.

The  Company has a lease for a 12,000 square foot office and production facility
located  in  Hackensack,  New  Jersey.  The  lease  provides  for monthly rental
payments  of  approximately  $16,000  through  December  1999.  In addition, the
Company  leases a 6,000 square foot office and production facility in California
for  approximately  $5,000  per  month.  The  lease  expires  February  2002.

The  Company  leases  its  production facility in India and is obligated to make
payments aggregating approximately $125,000 per year for an initial term of five
years.

The  Company's  operations  in Colombo, Sri Lanka are conducted in approximately
7,000 square feet of space leased through July 2001, cancelable at the Company's
option,  at  a  monthly  rental  of  approximately  $2,700.

The  Company  believes  that  it  maintains  adequate  fire, theft and liability
insurance  for  its  facilities  and  that  its  facilities are adequate for its
present  needs.


ITEM  3.  LEGAL  PROCEEDINGS.

There  is  no  material litigation pending to which the Company is a party or of
which  any  of  its  property  is  the  subject.


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

See  Part  II,  Item  4  of  Form 10-QSB for September 30, 1998 as to results of
voting  at  the  Company's  Annual  Meeting  held  on  November  5,  1998.

<PAGE>



                                     PART II
                                     -------


ITEM  5.  MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS.

The  Company's  Common  Stock  is quoted on the Nasdaq SmallCap Market under the
symbol  "INOD."  On  February 28, 1999, there were 101 stockholders of record of
the  Company's  Common  Stock  based  on  information  provided by the Company's
transfer agent.  Virtually all of the Company's publicly held shares are held in
"street  name"  and the Company believes the actual number of beneficial holders
of  its  Common  Stock  to  be  approximately  1,000.

The  following  table  sets  forth  the high and low sales prices on a quarterly
basis  for  the Company's Common Stock, as reported on Nasdaq, for the two years
ended  December  31,  1998,  after  giving retroactive effect to a one-for-three
reverse  stock  split  on  March  25,  1998.


<TABLE>
<CAPTION>

<S>              <C>        <C>   
                 COMMON STOCK SALE PRICES
1997             HIGH       LOW
----             -------    -------          

First Quarter      4-1/2    3-3/16

Second Quarter   3-27/32     1-7/8

Third Quarter      3-3/4     2-1/4

Fourth Quarter    3-9/16     2-1/4

1998
----                                 
First Quarter    2-29/32     1-1/8

Second Quarter     6-1/4    1-5/32

Third Quarter      9-1/2     3-1/2

Fourth Quarter     8-3/8    3-9/16
</TABLE>



DIVIDENDS

The  Company  has  never  paid  cash  dividends on its Common Stock and does not
anticipate  that it will do so in the foreseeable future.  The future payment of
dividends,  if any, on the Common Stock is within the discretion of the Board of
Directors  and  will  depend on the Company's earnings, its capital requirements
and  financial  condition  and  other  relevant  factors.


<PAGE>
ITEM  6.  SELECTED  FINANCIAL  DATA  AND  MANAGEMENT'S  DISCUSSION AND ANALYSIS.

                             SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
<S>                                                    <C>           <C>           <C>           <C>           <C>
YEAR ENDED DECEMBER 31,                                       1998          1997          1996          1995          1994 
                                                       ------------  ------------  ------------  ------------  ------------

REVENUES                                               $19,593,353   $20,116,935   $20,536,448   $20,767,405   $14,344,914 
                                                       ------------  ------------  ------------  ------------  ------------

OPERATING COSTS AND EXPENSES
     Direct operating costs                             13,068,660    16,007,051    16,783,595    14,044,067    10,764,658 
     Selling and administrative                          4,982,127     5,283,891     4,799,739     4,344,793     2,834,534 
     Restructuring costs, impairment of assets
          and other                                        133,141     1,500,000             -             -       393,195 
     (Gain) loss on settlement of currency contracts      (487,458)    1,400,000             -             -             - 
     Interest expense                                       77,594        85,595        36,383        18,476         7,392 
     Interest income                                       (98,391)      (59,384)     (123,771)     (151,319)     (160,689)
                                                       ------------  ------------  ------------  ------------  ------------

          Total                                         17,675,673    24,217,153    21,495,946    18,256,017    13,839,090 
                                                       ------------  ------------  ------------  ------------  ------------

INCOME (LOSS) BEFORE
   INCOME TAXES                                          1,917,680    (4,100,218)     (959,498)    2,511,388       505,824 
INCOME TAXES (BENEFIT)                                    (332,000)      100,000      (357,000)    1,000,000       199,000 
                                                       ------------  ------------  ------------  ------------  ------------

NET INCOME (LOSS)                                      $ 2,249,680   $(4,200,218)  $  (602,498)  $ 1,511,388   $   306,824 
                                                       ============  ============  ============  ============  ============

BASIC INCOME (LOSS) PER SHARE                          $      1.52   $     (2.80)  $      (.40)  $      1.02   $       .21 
                                                       ============  ============  ============  ============  ============

DILUTED INCOME (LOSS) PER SHARE                        $      1.49   $     (2.80)  $      (.40)  $       .97   $       .21 
                                                       ============  ============  ============  ============  ============

CASH DIVIDENDS PER SHARE                                         -             -             -             -             - 
                                                       ============  ============  ============  ============  ============


AS OF DECEMBER 31,                                            1998          1997          1996          1995          1994 
                                                       ------------  ------------  ------------  ------------  ------------

WORKING CAPITAL                                        $ 4,749,101   $ 2,091,848   $ 4,774,121   $ 6,247,708   $ 4,972,682 
                                                       ============  ============  ============  ============  ============

TOTAL ASSETS                                           $10,595,508   $10,029,247   $12,416,296   $12,538,694   $10,077,049 
                                                       ============  ============  ============  ============  ============

LONG-TERM DEBT                                         $    24,089   $    79,604   $   195,960   $    92,180   $   191,666 
                                                       ============  ============  ============  ============  ============

STOCKHOLDERS' EQUITY                                   $ 7,485,438   $ 5,254,133   $ 9,477,471   $ 9,747,655   $ 8,327,601 
                                                       ============  ============  ============  ============  ============

</TABLE>



<PAGE>
                                     ------
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                      ------------------------------------

The  following  discussion  should  be  read  in  conjunction  with  the Audited
Financial  Statements  and  related  Notes  thereto of the Company for the years
ended  December  31, 1998, 1997 and 1996 included in Item 7 of this Form 10-KSB.

RESULTS  OF  OPERATIONS

YEARS  ENDED  DECEMBER  31,  1998  AND  1997

Revenues  decreased  3%  to  $19,593,353  for  the  year ended December 31, 1998
compared  to  $20,116,935  for  the  similar  period  in 1997. Revenues from the
Internet  and  online  data  conversion  and content management services segment
decreased  to  $17,401,346  in  1998  from  $18,032,232 in 1997. The 1997 period
included  approximately  $2,612,000 from journal and book pagination and medical
transcription  businesses  that  were  discontinued.  During  1998 and 1997, one
customer that is comprised of twelve affiliated companies, accounted for 21% and
16% of the Company's Internet and on-line data conversion and content management
services revenues, respectively. One other customer accounted for 13% and 10% of
such  revenues  in  1998 and 1997, respectively. No other customer accounted for
10%  or  more of such revenues.  Further, in 1998 and 1997, export revenues, all
of  which  were  derived  from  European  customers,  accounted for 22% and 24%,
respectively,  of  such  revenues.  Revenues  from the document imaging services
segment increased to $2,192,007 in 1998 from $2,084,703 in 1997. During 1998 and
1997,  one  customer accounted for 53% and 11% of the Company's document imaging
service revenues, respectively. The Company has no present arrangement with this
customer  for 1999. Another customer accounted for 10% of such revenues in 1997.
No  other  customer  accounted  for  10%  or  more  of  such  revenues.

Direct  operating expenses were $13,068,660 for the year ended December 31, 1998
and  $16,007,051  for  the  similar  period  in 1997, a decrease of 18%.  Direct
operating  expenses  for  the  Internet  and on-line data conversion and content
management  services  decreased to $10,701,569 in 1998 from $14,265,974 in 1997,
or  25%.  Direct operating expenses as a percentage of revenues were 61% in 1998
and  79%  in  1997.  The  decrease  in direct operating expenses in 1998 was due
primarily  to  a favorable foreign exchange rate for the Philippine peso and the
elimination of journal and book page making services.  Direct operating expenses
in  the  document  imaging services segment increased to $2,367,091 in 1998 from
$1,741,077  in  1997.  The  increase  in 1998 was due principally to significant
inefficiencies  incurred  in  connection  with  a  project that required offsite
management  and  hiring  of  temporary  workers  as well as a staggered workflow
provided  by  the  segment's largest customer. Direct operating expenses include
primarily  direct  payroll,  telecommunications,  freight,  computer  services,
supplies  and  occupancy.

Selling  and  administrative expense was $4,982,127 and $5,283,891 for the years
ended December 31, 1998 and 1997, respectively, representing a decrease of 6% in
1998  from 1997.  Selling and administrative expense as a percentage of revenues
was 25% in 1998 and 26% in 1997. The decrease primarily reflects the elimination
of  pagination  services  offset  by the addition of sales and technical support
staff,  primarily  at  the  beginning of the third quarter, for expansion of the
Company's  sales  and  marketing  efforts.  Selling  and  administrative expense
includes  management  salaries,  sales  and  marketing  salaries,  clerical  and
administrative  salaries,  rent  and  utilities  not  included  in direct costs,
marketing  costs  and  administrative  overhead.

During the second quarter of 1997 management determined to reduce its U.S. based
overhead.  The  principal  actions  were  to  eliminate  U.S. production for the
publishing  services division and merge the east and west coast document imaging
operations  into  one  facility  on  the  west  coast.  The  restructuring costs
consisted  of estimated losses on leases and severance pay, while the impairment
costs  consisted  of  a  write-off  of  goodwill in connection with the document
imaging  business  and  equipment  in  connection  with  both  the  imaging  and
publishing  services  businesses. The restructuring and impairment costs totaled
$1,500,000.

In  the  fourth  quarter  of  1998,  management  determined  that  its  plans to
significantly  increase  the  revenues  of the document imaging services segment
were  not realized. While management continues to evaluate this business, it was
determined that the remaining goodwill associated with the business could not be
recovered. Accordingly, the remaining unamortized amount of $382,000 was written
off  at  December  31,  1998.  Further,  certain  estimated  liabilities  for
restructuring  and other items totaling $249,000 were deemed in excess of actual
amounts  payable  and  were  recognized as a gain in the fourth quarter of 1998.

The  Company  recognized  an unrealized loss of $1,400,000 in 1997 in connection
with  foreign  currency contracts that were in dispute. The loss represented the
difference between the contract rate for Philippine pesos and the estimated fair
value  at  December 31, 1997. In the second quarter of 1998, the Company reached
an  agreement  regarding  the  disputed  currency  contracts. This resulted in a
reduction  of  the  estimated liability previously provided by $487,000 that was
recognized  as  a  gain.

In  1998,  the  Internet  and  on-line  data  conversion  and content management
services  segment  realized  income before income taxes of $3,151,928, while the
document  imaging  services  segment  incurred a loss of $1,234,248, including a
write-off  of  goodwill  in  the  amount  of $382,000. In 1997, the Internet and
on-line  data conversion and content management services segment incurred a loss
before  income  taxes  of  $2,894,158,  including  a  loss  on  foreign currency
contracts  and  restructuring  costs  of  $2,107,000, while the document imaging
services segment incurred a loss of $1,206,060, including restructuring costs of
$793,000.

The  Company  recognized a benefit from income taxes in 1998 from a reduction in
the  tax  valuation  allowance  and  a  utilization  of  net  operating  loss
carryforwards  that  were  not  recognized  as  tax  benefits in 1997 for losses
incurred  in  that  year.

As  a  result  of  the  aforementioned items, the Company realized net income of
$2,249,680  in  1998  and  incurred a net loss of $(4,200,218) in 1997. The 1997
loss  was  principally due to the charges set forth above, no benefit for income
taxes  and  higher  overhead.

YEARS  ENDED  DECEMBER  31,  1997  AND  1996

Revenues  decreased  2%  to  $20,116,935  for  the  year ended December 31, 1997
compared  to  $20,536,448  for  the  similar  period  in 1996. Revenues from the
Internet  and  on-line  data  conversion and content management services segment
increased to $18,032,232 in 1997 from $17,852,384 in 1996. During 1997 and 1996,
one customer that is comprised of twelve affiliated companies, accounted for 16%
and  28%  of  the  Company's  Internet  and  on-line data conversion and content
management services revenues, respectively. One other customer accounted for 10%
of  such  revenues in 1997 and 1996. No other customer accounted for 10% or more
of such revenues.  Further, in 1997 and 1996, export revenues, all of which were
derived  from  European  customers,  accounted for 24% and 22%, respectively, of
such  revenues. Revenues from the document imaging services segment decreased to
$2,084,703 in 1997 from $2,684,064 in 1996. This decrease was primarily due to a
restructuring in 1997 and closing of the east coast facility which resulted in a
loss of customers in that area. During 1997 and 1996 two customers accounted for
11%  and  10% of such revenues in 1997 and 12% and 12% in 1996, respectively. No
other  customer  accounted  for  10%  or  more  of  such  revenues.

Direct  operating expenses were $16,007,051 for the year ended December 31, 1997
and  $16,783,595  for  the  similar  period  in  1996, a decrease of 5%.  Direct
operating  expenses  for  the  Internet  and on-line data conversion and content
management  services  decreased  to $14,265,974 in 1997 from $14,655,036 in 1996
due  principally  to a favorable Philippine peso exchange rate. Direct operating
expenses  for  the  document imaging services segment decreased to $1,741,077 in
1997  from  $2,128,559  in  1996 principally due to lower revenues in that year.

Selling  and  administrative expense was $5,283,891 and $4,799,739 for the years
ended  December 31, 1997 and 1996, respectively, representing an increase of 10%
in  1997  from  1996.  Selling  and  administrative  expense  as a percentage of
revenues  was 26% in 1997 and 23% in 1996. The dollar and percentage increase in
1997  primarily  reflects  the  expansion  of  the Company's sales and marketing
efforts.

During the second quarter of 1997 management determined to reduce its U.S. based
overhead.  The  principal  actions  were  to  eliminate  U.S. production for the
publishing  services division and merge the east and west coast document imaging
operations  into  one  facility  on  the  west  coast.  The  restructuring costs
consisted  of estimated losses on leases and severance pay, while the impairment
costs  consisted  of  a  write-off  of  goodwill in connection with the document
imaging  business  and  equipment  in  connection  with  both  the  imaging  and
publishing  services  businesses. The restructuring and impairment costs totaled
$1,500,000.

The  Company  recognized  an unrealized loss of $1,400,000 in 1997 in connection
with  foreign  currency  contracts that were in dispute. The loss represents the
difference between the contract rate for Philippine pesos and the estimated fair
value  at  December  31,  1997.

Internet  and on-line data conversion and content management services incurred a
loss  before  income  taxes of $2,894,158 in 1997 and $475,744 in 1996. Document
imaging  services  incurred  a  loss  before income taxes of $1,206,060 in 1997,
including  restructuring  costs  of  $793,000,  and  $483,754  in  1996.

The  Company  did not recognize tax benefits in 1997 for losses incurred in that
year.

The  Company incurred net losses of $(4,200,218) in 1997 and $(602,498) in 1996.
The  1997  loss  was  greater  than that incurred in 1996 due to the charges set
forth  above,  no  benefit  for  income  taxes  and  higher  overhead.

LIQUIDITY  AND  CAPITAL  RESOURCES

Net  cash  provided by operating activities increased to $2,547,013 in 1998 from
$1,128,671  in 1997, principally from profitable operations in 1998. Net cash of
$841,710  and  $1,015,088  was  used  in  investing activities in 1998 and 1997,
respectively,  for  the  purchase  of  fixed  assets. Net cash used in financing
activities  decreased to $139,622 in 1998 from $240,924 in 1997 principally from
lower  payments  on  borrowings  in  1998.

The Company expects to make capital expenditures of approximately $2,000,000 for
its  production  facilities  in  1999.

The  Company  has  a line of credit with a bank in the amount of $1 million. The
line  is  collateralized by the assets of the Company. Interest is charged at 2%
above  the  bank's  prime  rate and is due on demand. The line is believed to be
sufficient  for  the  Company's  cash  requirements.

The  Company  relies  on  certain  hardware,  software  and  operating  systems
(collectively,  "Systems")  for  production,  financial  reporting  and  general
administration.  The  Company  has  been  evaluating  these  Systems to identify
potential  Year  2000  compliance  problems  and  has  been planning appropriate
remedial  efforts  and  testing,  where  required.  In  addition,  it  has  been
evaluating  its  external  interfaces  with  customers  and service suppliers to
coordinate  Year  2000  compliance.

The  Company has planned to replace older, non-compliant Systems components as a
means  by  which  to  obtain  Year  2000  compliance  and  to  obtain  increased
functionality  and  efficiency.  These  new  Systems  components  will  cost
approximately  $500,000,  most of which will be capitalized as fixed assets. All
such  historical costs have been funded out of existing cash and cash flows from
operations,  and the Company expects that future costs will be funded similarly.

The  Company  has  obtained  compliance  statements from each of its significant
service  suppliers,  most  of  which have provided positive assurances regarding
their  compliance.

Based  on  currently  available  information, the Company expects to attain Year
2000 compliance and institute appropriate final testing of its modifications and
replacements  no  later  than  June 30, 1999. The foregoing notwithstanding, the
Company  plans  to  have in place contingency plans to deal with the possibility
that  any  component  of  the  Systems fails to pass final testing by such date.
Such  contingency plans may include, without limitation, implementing substitute
production  Systems  and obtaining services from substitute vendors. The Company
does  not anticipate that the cost of effecting Year 2000 compliance will have a
material  impact  on the Company's financial condition or results of operations.
Nevertheless,  achieving  Year  2000  compliance is dependent upon many factors,
some  of  which  are not completely within the Company's control.  Should either
one  or  more of the Company's critical Systems components or one or more of its
critical  vendors,  including  those  vendors  providing  services  in  foreign
countries  in  which  the  Company  has  operations,  fail  to achieve Year 2000
compliance,  the  Company's  business  and  its  results  of operations could be
adversely  affected.

INFLATION,  SEASONALITY  AND  PREVAILING  ECONOMIC  CONDITIONS

To date, inflation has not had a significant impact on the Company's operations.
The  Company  generally  performs  its  work for its customers on a task by task
at-will  basis,  or under short-term contracts or contracts which are subject to
numerous termination provisions.  The Company has flexibility in its pricing due
to  the  absence  of  long-term  contracts.   The  Company's  revenues  are  not
significantly  affected  by  seasonality.

Disclosures  in  this  Form  10-KSB  contain certain forward-looking statements,
including  without  limitation,  statements concerning the Company's operations,
economic performance and financial condition, including in particular, Year 2000
and  market risk information. These forward-looking statements are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995.  The words "believe," "expect," "anticipate" and other similar expressions
generally  identify  forward-looking  statements.  Readers  are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
their dates. These forward-looking statements are based largely on the Company's
current  expectations  and  are  subject to a number of risks and uncertainties,
including without limitation, changes in external market factors, changes in the
Company's  business  or  growth strategy or an inability to execute its strategy
due to changes in its industry or the economy generally, the emergence of new or
growing  competitors,  various  other  competitive  factors  and other risks and
uncertainties  indicated  from  time  to  time in the Company's filings with the
Securities  and Exchange Commission. Actual results could differ materially from
the  results  referred  to  in the forward-looking statements. In light of these
risks  and uncertainties, there can be no assurance that the results referred to
in  the  forward-looking  statements  contained in this Form 10-KSB will in fact
occur.



<PAGE>


INDEPENDENT  AUDITORS'  REPORT



Board  of  Directors  and  Stockholders
Innodata  Corporation
Hackensack,  New  Jersey


We  have  audited  the  accompanying  consolidated  balance  sheets  of Innodata
Corporation  and  subsidiaries as of December 31, 1998 and 1997, and the related
consolidated  statements  of operations, stockholders' equity and cash flows for
the  years then ended.  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  consolidated  financial  position  of  Innodata
Corporation  and  subsidiaries  as  of  December  31,  1998  and  1997,  and the
consolidated  results  of their operations and their consolidated cash flows for
the  years  then  ended  in  conformity  with  generally  accepted  accounting
principles.



Grant  Thornton  LLP
Parsippany,  New  Jersey
February  25,  1999



<PAGE>
INDEPENDENT  AUDITORS'  REPORT



Board  of  Directors  and  Stockholders
Innodata  Corporation
Brooklyn,  New  York


We  have  audited  the  accompanying  consolidated  statements  of  operations,
stockholders' equity and cash flows of Innodata Corporation and subsidiaries for
the  year  ended  December  31,  1996.  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  audit.

We conducted our audit 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  audit  provides  a  reasonable  basis  for  our opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material respects, the consolidated results of operations and cash flows of
Innodata  Corporation  and  subsidiaries for the year ended December 31, 1996 in
conformity  with  generally  accepted  accounting  principles.



Margolin,  Winer  &  Evens  LLP
Garden  City,  New  York
March  14,  1997





<PAGE>


                      INNODATA CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
<S>                                                                                <C>           <C>
                                                                                          1998          1997 
                                                                                   ------------  ------------
ASSETS

CURRENT ASSETS:
  Cash and equivalents                                                             $ 3,535,533   $ 1,969,852 
  Accounts receivable-net of allowance for doubtful accounts of
        $425,000 in 1998 and $450,000 in 1997                                        2,943,422     3,188,920 
  Prepaid expenses and other current assets                                            555,127       825,586 
  Deferred income taxes                                                                376,000       136,000 
                                                                                   ------------  ------------

               TOTAL CURRENT ASSETS                                                  7,410,082     6,120,358 

FIXED ASSETS-NET                                                                     2,669,892     2,909,619 

GOODWILL                                                                                     -       410,076 

OTHER ASSETS                                                                           515,534       589,194 
                                                                                   ------------  ------------

TOTAL                                                                              $10,595,508   $10,029,247 
                                                                                   ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Current portion of long-term debt                                                $    56,718   $   122,450 
  Accounts payable and accrued expenses                                              1,295,347     1,507,866 
  Accrued salaries and wages                                                           849,608       641,186 
  Estimated loss on foreign currency contracts                                               -     1,400,000 
  Income and other taxes                                                               459,308       357,008 
                                                                                   ------------  ------------

               TOTAL CURRENT LIABILITIES                                             2,660,981     4,028,510 
                                                                                   ------------  ------------

LONG-TERM DEBT, LESS CURRENT PORTION                                                    24,089        79,604 
                                                                                   ------------  ------------

DEFERRED INCOME TAXES                                                                  425,000       667,000 
                                                                                   ------------  ------------

COMMITMENTS AND CONTINGENT LIABILITIES

STOCKHOLDERS' EQUITY:
  Common stock, $.01 par value-authorized 20,000,000 shares;
     issued - 1,528,402 shares in 1998 and 1,521,736 shares in 1997                     15,284        15,217 
  Additional paid-in capital                                                         8,890,661     8,870,731 
  Deficit                                                                           (1,199,538)   (3,449,218)
                                                                                   ------------  ------------

                                                                                     7,706,407     5,436,730 
  Less: treasury stock - at cost; 48,083 shares in 1998 and 26,400 shares in 1997     (220,969)     (182,597)
                                                                                   ------------  ------------

               TOTAL STOCKHOLDERS' EQUITY                                            7,485,438     5,254,133 
                                                                                   ------------  ------------

TOTAL                                                                              $10,595,508   $10,029,247 
                                                                                   ============  ============

<FN>
 See  notes  to  consolidated  financial  statements.
</TABLE>


<PAGE>

                      INNODATA CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
<S>                                                        <C>           <C>           <C>
                                                                  1998          1997          1996 
                                                           ------------  ------------  ------------

REVENUES                                                   $19,593,353   $20,116,935   $20,536,448 
                                                           ------------  ------------  ------------

OPERATING COSTS AND EXPENSES
     Direct operating costs                                 13,068,660    16,007,051    16,783,595 
     Selling and administrative expenses                     4,982,127     5,283,891     4,799,739 
     Restructuring costs, impairment of assets and other       133,141     1,500,000             - 
     (Gain) loss on foreign currency contracts                (487,458)    1,400,000             - 
     Interest expense                                           77,594        85,595        36,383 
     Interest income                                           (98,391)      (59,384)     (123,771)
                                                           ------------  ------------  ------------

                    TOTAL                                   17,675,673    24,217,153    21,495,946 
                                                           ------------  ------------  ------------

INCOME (LOSS) BEFORE (BENEFIT) PROVISION
     FOR INCOME TAXES                                        1,917,680    (4,100,218)     (959,498)

(BENEFIT) PROVISION FOR INCOME TAXES                          (332,000)      100,000      (357,000)
                                                           ------------  ------------  ------------

NET INCOME (LOSS)                                          $ 2,249,680   $(4,200,218)  $  (602,498)
                                                           ============  ============  ============

BASIC INCOME (LOSS) PER SHARE                              $      1.52   $     (2.80)  $      (.40)
                                                           ============  ============  ============

DILUTED INCOME (LOSS) PER SHARE                            $      1.49   $     (2.80)  $      (.40)
                                                           ============  ============  ============

<FN>
 See  notes  to  consolidated  financial  statements
</TABLE>


<PAGE>

                      INNODATA CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
<S>                               <C>           <C>          <C>          <C>           <C>           <C>         <C>
                                  ADDITIONAL    UNREALIZED     (DEFICIT)
                                  COMMON STOCK  PAID-IN      LOSS ON      RETAINED      TREASURY
                                  ------------                                                                                
                                  SHARES        AMOUNT       CAPITAL      SECURITIES    EARNINGS      STOCK       TOTAL
                                  ------------  -----------  -----------  ------------  ------------  ----------  ------------

JANUARY 1, 1996                      1,492,424  $    14,924  $ 8,527,302  $    (4,192)  $ 1,353,498   $(143,877)  $ 9,747,655 

  Net loss                                   -            -            -            -      (602,498)          -      (602,498)

  Issuance of common stock
    upon exercise of stock
    options                              7,645           76       65,692            -             -           -        65,768 

  Issuance of common stock
    as partial acquisition costs        21,667          217      193,736            -             -           -       193,953 

  Warrant costs for
    consulting arrangement                   -            -       68,401            -             -           -        68,401 

  Redemption of available-
     for-sale securities                     -            -            -        4,192             -           -         4,192 
                                  ------------  -----------  -----------  ------------  ------------  ----------  ------------

DECEMBER 31, 1996                    1,521,736       15,217    8,855,131            -       751,000    (143,877)    9,477,471 

  Net loss                                   -            -            -            -    (4,200,218)          -    (4,200,218)

  Warrant costs for
    consulting arrangement                   -            -       15,600            -             -           -        15,600 

  Purchase of treasury stock                 -            -            -            -             -     (38,720)      (38,720)
                                  ------------  -----------  -----------  ------------  ------------  ----------  ------------

DECEMBER 31, 1997                    1,521,736       15,217    8,870,731            -    (3,449,218)   (182,597)    5,254,133 

  Net income                                 -            -            -            -     2,249,680           -     2,249,680 

  Issuance of common stock
     upon exercise of stock
     options                             6,666           67       19,930            -             -           -        19,997 

  Purchase of treasury stock                 -            -            -            -             -     (38,372)      (38,372)
                                  ------------  -----------  -----------  ------------  ------------  ----------  ------------

DECEMBER 31, 1998                    1,528,402  $    15,284  $ 8,890,661  $         -   $(1,199,538)  $(220,969)  $ 7,485,438 
                                  ============  ===========  ===========  ============  ============  ==========  ============


<FN>
 See  notes  to  consolidated  financial  statements
</TABLE>



<PAGE>
                      INNODATA CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
<S>                                                            <C>           <C>           <C>
                                                                      1998          1997          1996 
                                                               ------------  ------------  ------------

OPERATING ACTIVITIES:
  Net income (loss)                                            $ 2,249,680   $(4,200,218)  $  (602,498)
  Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
    Depreciation and amortization                                1,322,721     1,321,555     1,372,731 
    Restructuring costs, impairment of assets and other            133,141     1,500,000             - 
    Gain on disposal of fixed assets                               (74,399)            -             - 
    (Gain) loss on foreign currency contracts                     (487,458)    1,400,000             - 
    Deferred income taxes                                         (482,000)      400,000      (150,000)
    Changes in operating assets and liabilities:
      Accounts receivable                                          419,834       529,363     1,380,498 
      Prepaid expenses and other current assets                    120,459       304,924      (479,251)
      Other assets                                                  23,660      (116,769)     (271,413)
      Accounts payable and accrued expenses                        (76,805)     (104,330)      187,764 
      Liability for foreign currency contracts                    (912,542)            -             - 
      Accrued salaries and wages                                   208,422        15,707       100,991 
      Income and other taxes payable                               102,300        78,439      (641,737)
                                                               ------------  ------------  ------------

         Net cash provided by operating activities               2,547,013     1,128,671       897,085 
                                                               ------------  ------------  ------------

INVESTING ACTIVITIES:
  Expenditures for fixed assets                                 (1,024,622)   (1,015,088)   (1,231,273)
  Proceeds from disposal of fixed assets                           182,912             -             - 
  Payments in connection with acquisition                                -             -      (410,646)
  Short-term investments                                                 -             -     1,240,000 
                                                               ------------  ------------  ------------

        Net cash used in investing activities                     (841,710)   (1,015,088)     (401,919)
                                                               ------------  ------------  ------------

FINANCING ACTIVITIES:
  Proceeds from borrowings                                               -       577,000       626,014 
  Payments of borrowings                                          (121,247)     (779,204)     (656,409)
  Proceeds from exercise of stock options                           19,997             -        65,768 
  Purchase of treasury stock                                       (38,372)      (38,720)            - 
                                                               ------------  ------------  ------------

         Net cash (used in) provided by financing activities      (139,622)     (240,924)       35,373 
                                                               ------------  ------------  ------------

INCREASE (DECREASE) IN CASH AND EQUIVALENTS                      1,565,681      (127,341)      530,539 
CASH AND EQUIVALENTS, BEGINNING OF YEAR                          1,969,852     2,097,193     1,566,654 
                                                               ------------  ------------  ------------

CASH AND EQUIVALENTS, END OF YEAR                              $ 3,535,533   $ 1,969,852   $ 2,097,193 
                                                               ============  ============  ============

SUPPLEMENTAL DISCLOSURES OF CASH
  FLOW INFORMATION
  Cash paid during the year for:
    Interest                                                   $    32,524   $    85,595   $    35,238 
    Income taxes                                                         -             -       922,789 

<FN>
 See  notes  to  consolidated  financial  statements
</TABLE>


<PAGE>


INNODATA  CORPORATION  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  DECEMBER  31,  1998,  1997  AND  1996
---------------------------------------------------

1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

BUSINESS  AND BASIS OF PRESENTATION - Innodata Corporation and subsidiaries (the
"Company") performs data conversion and content management services and document
imaging  services  tailored to customer requirements. The Company's services are
performed  in production facilities located in the Philippines, Sri Lanka, India
and  the  United  States.  The  consolidated  financial  statements  include the
accounts  of  the  Company  and its subsidiaries, all of which are wholly owned.
All  intercompany  transactions  and  balances  have  been  eliminated  in
consolidation.

USE  OF  ESTIMATES  -  In  preparing  financial  statements  in  conformity with
generally  accepted  accounting  principles,  management  is  required  to  make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and the disclosure of contingent assets and liabilities at the date
of  the  financial  statements  and  revenues  and expenses during the reporting
period.  Actual  results  could  differ  from  those  estimates.

REVENUE  RECOGNITION  - Revenue is recognized in the period in which the service
is  performed.

WORK-IN-PROCESS - Work-in-process, included in other current assets, consists of
actual  labor  and  certain  other  costs  incurred for uncompleted and unbilled
services.

FOREIGN  CURRENCY  -  The  functional  currency  for  the  Company's  production
operations  located in the Philippines, India and Sri Lanka is U.S. dollars.  As
such,  transactions denominated in Philippine pesos, Indian and Sri Lanka rupees
were  translated  to  U.S. dollars at rates which approximate those in effect on
transaction  dates.  Monetary  assets  and  liabilities  denominated  in foreign
currencies at December 31, 1998 and 1997 were translated at the exchange rate in
effect  as  of  those dates.  In 1997, the Company recognized a gain of $125,000
resulting  from  such foreign currency translation. Exchange gains and losses in
1998  and  1996  resulting  from  such  transactions  were  immaterial.

STATEMENT  OF  CASH  FLOWS  -  For  financial statement purposes (including cash
flows),  the Company considers all highly liquid debt instruments purchased with
an  original  maturity  of  three months or less to be cash equivalents.  During
1996,  the  Company  leased  equipment  under  capital  leases for approximately
$237,000.  Supplemental  disclosure  of  non-cash  investing  and  financing
activities  is  as  follows:

<TABLE>
<CAPTION>
<S>                                      <C>
                                              1996 

Acquisition costs                        $ 563,771 
Common stock issued                       (153,125)
                                         ----------

Payments in connection with acquisition  $ 410,646 
                                         ==========
</TABLE>



DEPRECIATION  -  Depreciation  is  provided on the straight-line method over the
estimated  useful  lives  of  the  related  assets  which  are  as  follows:

<TABLE>
<CAPTION>
<S>                     <C>
                        ESTIMATED USEFUL
CATEGORY                LIVES

Equipment                      3-5 years
Furniture and fixtures          10 years

</TABLE>

Leasehold improvements are amortized on the straight-line basis over the shorter
of  their  estimated  useful  lives  or  the  lives  of  the  leases.

INCOME TAXES - Deferred taxes are determined based on the difference between the
financial  statement  and tax basis of assets and liabilities, using enacted tax
rates, as well as any net operating loss or tax credit carryforwards expected to
reduce  taxes  payable  in  future  years.

ACCOUNTING  FOR  STOCK-BASED  COMPENSATION  - The Financial Accounting Standards
Board  issued  Statement  of  Financial  Accounting  Standards ("SFAS") No. 123,
"Accounting  for  Stock-Based Compensation," which became effective in 1996.  As
permitted  by  SFAS  No. 123, the Company has elected to continue to account for
employee  stock  options  under  APB  No.  25,  "Accounting  for Stock Issued to
Employees."

SEGMENT  REPORTING  -  The  Company  adopted  Statement  of Financial Accounting
Standards SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information"  for  the  year ended December 31, 1998. SFAS No. 131 requires that
the Company disclose certain information about its operating segments defined as
"components  of  an  enterprise  about  which  separate financial information is
available  that  is evaluated regularly by the chief operating decision maker in
deciding  how  to  allocate  resources and in assessing performance." Generally,
financial  information  is  required to be reported on the basis that it is used
internally  for  evaluating  segment  performance  and  deciding how to allocate
resources  to  segments.

FAIR  VALUE  OF FINANCIAL INSTRUMENTS - The Company has estimated the fair value
of  financial instruments using available market information and other valuation
methodologies  in accordance with SFAS No. 107, "Disclosures About Fair Value of
Financial  Instruments."  Management of the Company believes that the fair value
of  financial  instruments  for  which  estimated  fair  value  has  not  been
specifically  presented  is  not  materially different than the related carrying
value.  Determinations  of  fair  value  are  based  on  subjective  data  and
significant  judgment  relating  to  timing  of payments and collections and the
amounts  to  be realized.  Different assumptions and/or estimation methodologies
might  have  a  material  effect  on the fair value estimates.  Accordingly, the
estimates  of  fair  value  are  not  necessarily  indicative of the amounts the
Company  would  realize  in  a  current  market  exchange.

INCOME  (LOSS)  PER  SHARE  -  Basic earnings per share is based on the weighted
average  number  of common shares outstanding without consideration of potential
common stock. Diluted earnings per share is based on the weighted average number
of  common  and  potential common shares outstanding. The calculation takes into
account the shares that may be issued upon exercise of stock options, reduced by
the  shares  that  may be repurchased with the funds received from the exercise,
based  on  average  prices  during  the  year.

2.     FIXED  ASSETS

Fixed  assets,  stated  at  cost less accumulated depreciation and amortization,
consist  of  the  following:

<TABLE>
<CAPTION>
<S>                            <C>         <C>
DECEMBER 31,                         1998        1997

Equipment                      $6,647,870  $6,095,004
Furniture and fixtures            427,807     372,566
Leasehold improvements            678,557     472,574
                               ----------  ----------

          Total                 7,754,234   6,940,144

Less accumulated depreciation
     and amortization           5,084,342   4,030,525
                               ----------  ----------

                               $2,669,892  $2,909,619
                               ==========  ==========

</TABLE>



As  of December 31, 1998 and 1997, the net book value of fixed assets located at
the  Company's production facilities in the Philippines, India and Sri Lanka was
approximately  $1,553,000  and $1,600,000, respectively.  In addition, equipment
financed  by  capital  leases  has  a net book value of $153,000 at December 31,
1998.

3.     INCOME  TAXES

The  significant components of the provision for (benefit from) income taxes are
as  follows:

<TABLE>
<CAPTION>
<S>                                        <C>         <C>         <C>
                                                1998        1997        1996 
Current income tax expense (benefit):
     Foreign                               $  50,000   $       -   $       - 
     Federal                                  55,000    (300,000)   (159,000)
     State and local                          45,000           -     (48,000)
                                           ----------  ----------  ----------

                                             150,000    (300,000)   (207,000)

Deferred income tax (benefit) expense       (482,000)    400,000    (150,000)
                                           ----------  ----------  ----------

(Benefit from) provision for income taxes  $(332,000)  $ 100,000   $(357,000)
                                           ==========  ==========  ==========

</TABLE>



During  1998 the Company utilized approximately $1,100,000 of net operating loss
carryforwards,  resulting  in  a  tax  benefit  of  $375,000.

Reconciliation  of the U.S. statutory rate with the Company's effective tax rate
is  summarized  as  follows:

<TABLE>
<CAPTION>
<S>                                                    <C>       <C>       <C>
                                                       1998      1997      1996 

Federal statutory rate                                  34.0%    (34.0)%   (34.0)%

Effect of:
     Valuation allowance                               (35.0)     34.0         - 
     Utilization of net operating loss carryforwards
          not previously recognized                    (19.5)        -         - 
     State income taxes (net of federal tax benefit)     1.6         -      (5.4)
     Foreign taxes                                       2.6         -         - 
     Other                                              (1.0)      2.4       2.2 
                                                       -----     -----     -----           

Effective rate                                         (17.3)%     2.4%    (37.2)%
                                                       =====     =====     =====   

</TABLE>



As  of December 31, 1998 and 1997, the composition of the Company's net deferred
taxes  is  as  follows:

<TABLE>
<CAPTION>
<S>                                       <C>         <C>
                                               1998        1997 

Deferred income tax assets:
     Allowances not currently deductible  $ 266,000   $ 247,000 
     Expenses not deductible until paid      60,000     161,000 
     Net operating loss carryforwards       150,000     500,000 
                                          ----------  ----------

                                            476,000     908,000 
Less:  valuation allowance                 (100,000)   (772,000)
                                          ----------  ----------

Deferred income tax assets                  376,000     136,000 
                                          ----------  ----------

Deferred income tax liabilities:
     Foreign source income, not taxable
          unless repatriated               (415,000)   (415,000)
     Depreciation and amortization          (10,000)   (252,000)
                                          ----------  ----------

                                           (425,000)   (667,000)
                                          ----------  ----------

Net deferred income tax liability         $ (49,000)  $(531,000)
                                          ==========  ==========

</TABLE>



The  valuation  allowance  reduces  total  deferred  tax  assets  to  an  amount
management believes will likely be realized. At December 31, 1998, the Company's
net operating loss carryforward for federal income tax purposes of approximately
$400,000  expires  in  2012. These net operating losses may be limited to annual
use  based  on  IRS  regulations.

4.     LONG-TERM  DEBT

Long-term  debt  is  as  follows:

<TABLE>
<CAPTION>
<S>                                       <C>      <C>
                                             1998      1997
Equipment leases, at 9.6% to 13.5%        $88,581  $226,335
Less: deferred interest                     7,774    24,281
                                          -------  --------

Total                                      80,807   202,054
Less: current portion of long-term debt    56,718   122,450
                                          -------  --------

Long-term debt                            $24,089  $ 79,604
                                          =======  ========

</TABLE>



Long  term  debt  matures as follows: 1999 - $62,494; 2000 - $19,299; and 2001 -
$6,788.

5.     COMMITMENTS  AND  CONTINGENT  LIABILITIES

LINE  OF  CREDIT - The Company has a line of credit with a bank in the amount of
$1 million. The line is collateralized by the assets of the Company. Interest is
charged  at  2%  above  the  bank's prime rate and is due on demand. The line is
presently  unused.

LEASES  -  The Company is obligated under various operating lease agreements for
office  and  production  space.  The  agreements  contain escalation clauses and
requirements  that  the Company pay taxes, insurance and maintenance costs.  The
lease  agreements  for production space in the Philippines, which expire through
2003,  contain provisions pursuant to which the Company may cancel the leases at
any  time.  The  annual  rental  for  the  leased  space  in  the Philippines is
approximately  $350,000.  For  the years ended December 31, 1998, 1997 and 1996,
rent  expense  totaled  approximately  $700,000,  $940,000  and  $825,000,
respectively.

At  December  31,  1998,  future  minimum  annual  rental  commitments  on
non-cancellable  leases  are  as  follows:

<TABLE>
<CAPTION>
<S>       <C>
1999      $382,000
2000       191,000
2001       193,000
2002       165,000
          --------
           931,000
          ========          
</TABLE>



EMPLOYMENT  AGREEMENTS  -     The  Company has a three-year employment agreement
through  August  2000  with  its President and CEO.  He is currently paid at the
rate  of  $240,000  per  annum  with  any  bonuses  and  future increases at the
discretion  of the Board of Directors.  In addition, each December 31 during the
term of the agreement he will receive 10,333 options to purchase common stock of
the Company at then prevailing market prices. In consideration of the signing of
the  agreement  he  was granted five year options as follows (after repricing in
June 1998): 10,000 options at $3.00 per share; 16,666 at $5.00; 23,333 at $6.00;
30,000  at  $7.00;  and  33,333 at $15.50.  The options are exercisable upon the
earliest  to  occur  of (i) various dates during 1999; or (ii) in the event of a
sale  of  the Company where a third party acquires more than 50% of the Company.

The  Company  has  an  employment  agreement  with  its former President and CEO
expiring September 30, 2000 that provides for a salary of $75,000 per annum.  He
will  serve  as  Vice  Chairman  of  the  Board  and  in executive capacities as
designated  by  the  CEO  or  the  Board  of  Directors.

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

FOREIGN  CURRENCY  -  The  Company's  production  facilities  are located in the
Philippines,  India  and  Sri  Lanka. To the extent that the currencies of these
countries  fluctuate,  the  Company  is  subject  to  risks of changing costs of
production  after pricing is established for certain customer projects, although
most  arrangements  are  at  will  and  can  be  terminated  or  renegotiated.

OTHER COMMITMENTS - Employees at the Company's Manila facilities voted to join a
union.  The Company has a collective bargaining agreement with the rank and file
employees  at  its  Manila  facility  which  provides for approximately 10% wage
increases  per  annum plus one-half of any government mandated increases through
March  31,  2001.

PHILIPPINE  PENSION  REQUIREMENT - The Philippine government enacted legislation
requiring  businesses to provide a lump-sum pension payment to employees working
at  least  five  years  and  who  are  employed by the Company at age 60.  Those
eligible  employees are to receive approximately 59% of one month's pay for each
year  of  employment  with  the Company.  The terms of the collective bargaining
agreement  provide  benefits  similar  to  the  government.  Based  on actuarial
assumptions  and  calculations  in  accordance  with  SFAS  No.  87, "Employers'
Accounting  for Pensions," the liability for the future payment is insignificant
at  December  31,  1998.  Under  the legislation, the Company is not required to
fund  future  costs,  if  any.

6.     CAPITAL  STOCK

COMMON  STOCK  -  In 1993 the Company sold pursuant to a public offering 563,500
shares  of  its  common  stock  and  certain  warrants  that expired in 1997 and
realized  net  proceeds  after  all  expenses  of  the  offering  of $6,752,585.

The  Company's  stockholders  approved  a  one-for-three  reverse  stock  split
effective  on March 25, 1998. All share and per share amounts have been restated
to  reflect  such  split.

PREFERRED STOCK - The Board of Directors is authorized to fix the terms, rights,
preferences  and  limitations  of the preferred stock and to issue the preferred
stock in series which differ as to their relative terms, rights, preferences and
limitations.

COMMON  STOCK RESERVED - At December 31, 1998, the Company reserved for issuance
999,356  shares  of  its common stock as follows: (a) 982,690 shares pursuant to
the  Company's  Stock  Option  Plans  (including  120,332  options issued to the
Company's  Chairman  and  its President which were not granted under the plans);
and (b) 16,666 shares issuable upon exercise of warrants issued to a consultant.

7.     STOCK  OPTIONS  AND  WARRANTS

STOCK  OPTIONS

The  Company adopted, with stockholder approval, 1993, 1994, 1995, 1996 and 1998
Stock  Option  Plans (the "1993 Plan," "1994 Plan," "1994 DD Plan," "1995 Plan,"
"1996  Plan"  and  the "1998 Plan") which provide for the granting of options to
purchase not more than an aggregate of 87,500, 105,000, 17,500, 200,000, 166,666
and  300,000  shares  of common stock, respectively, subject to adjustment under
certain  circumstances.  Such  options  may  be incentive stock options ("ISOs")
within  the meaning of the Internal Revenue Code of 1986, as amended, or options
that  do  not  qualify  as  ISOs  ("Non-Qualified  Options").

The  option  exercise price per share may not be less than the fair market value
per  share  of common stock on the date of grant (110% of such fair market value
for  an  ISO, if the grantee owns stock possessing more than 10% of the combined
voting  power  of  all  classes of the Company's stock).  Options may be granted
under  the  Stock  Option  Plan  to all officers, directors and employees of the
Company  and, in addition, Non-Qualified Options may be granted to other parties
who  perform services for the Company.  No options may be granted under the 1993
Plan  after  April 30, 2003, under the 1994 Plan and 1994 DD Plan, after May 19,
2004,  under  the 1995 Plan, after May 16, 2005, under the 1996 Plan, after July
8,  2006  and  under  the  1998  Plan,  after  July  8,  2008.

The  Plans  may  be  amended  from time to time by the Board of Directors of the
Company.  However, the Board of Directors may not, without stockholder approval,
amend  the  Plans  to increase the number of shares of common stock which may be
issued  under  the  Plans (except upon changes in capitalization as specified in
the  Plans), decrease the minimum exercise price provided in the Plans or change
the  class  of  persons  eligible  to  participate  in  the  Plans.

The Company has adopted the disclosure-only provisions of Statement of Financial
Accounting  Standards (SFAS) No. 123, "Accounting for Stock Based Compensation."
Accordingly,  no  compensation  expense  has  been  recognized for stock options
granted  to  employees.  Had  compensation  cost  for the Company's stock option
grants  been  determined based on the fair value at the grant date for awards in
1998,  1997  and  1996  consistent  with  the  provisions  of  SFAS No. 123, the
Company's  net income would have been $1,463,259, or $1.00 per share, basic, and
$.97  per  share,  diluted,  in  1998, net loss would have been $(4,359,807), or
$(2.90)  per  share,  in 1997 and $(738,987), or $(.49) per share, in 1996.  The
fair  value  of  options  at date of grant was estimated using the Black-Scholes
pricing  model with the following weighted average assumptions: expected life of
four  years;  risk  free  interest rate of 5% in 1998 and 6.4% in 1997 and 1996;
expected  volatility  of  107%  in  1998  and  40%  in 1997 and 1996; and a zero
dividend yield.  The effects of applying SFAS No. 123 in this disclosure are not
indicative  of  future  disclosures.

<TABLE>
<CAPTION>
<S>                   <C>               <C>           <C>           <C>        <C>           <C>        <C>

                                                                                                        WEIGHTED
                                                      WEIGHTED                                          AVERAGE
                                                      AVERAGE       WEIGHTED                 WEIGHTED   FAIR
                      PER SHARE                       REMAINING     AVERAGE                  AVERAGE    VALUE,
                      RANGE OF          NUMBER        CONTRACTUAL   EXERCISE   NUMBER        EXERCISE   DATE OF
                      EXERCISE PRICES   OUTSTANDING   LIFE          PRICE      EXERCISABLE   PRICE      GRANT
                      ----------------  ------------  ------------  ---------  ------------  ---------  -------

Balance 1/1/96        $    7.89 - 9.75      132,696         3       $    8.25
                      $  10.14 - 17.85      135,050         3       $   12.93
                                        ------------                                                           
                                            267,746                                120,098   $  10.38
                                                                               ============                                    

       Canceled       $           9.03         (166)
       Granted        $   6.93 - 11.79       29,666         5       $    9.18                           $  3.66
       Exercised      $    7.89 - 9.03       (7,646)
                                        ------------                                                           

Balance 12/31/96      $    6.93 - 9.75      138,717         3       $    8.13       111,513  $   8.88
                      $  10.14 - 17.85      150,883         3       $   12.69        89,157  $  13.17
                                        ------------                            ------------                               
                                            289,600                                 200,670 
                                                                                ============                                    

       Canceled       $   7.89 - 13.89      (48,883)
       Granted        $    3.00 - 6.00      100,000         5       $    3.63                           $  1.26
       Granted        $   9.00 - 21.00       86,666         5       $   13.44                           $   .18
                                        ------------                                                           

Balance 12/31/97      $    3.00 - 9.75      246,192         4       $    6.42       115,969  $   8.16
                      $  10.14 - 21.00      181,191         3       $   14.10        93,996  $  12.96
                                        ------------                            ------------                               
                                            427,383                                 209,965 
                                                                                ============                                    

       Canceled       $   3.75 - 10.50     (161,366)
       Canceled       $  11.44 - 21.00     (162,543)
       Granted        $    3.00 - 6.38      176,299         5       $    5.49                           $  4.00
       Granted and
            Repriced  $    5.00 - 8.63      267,260         2       $    6.34                           $  2.67
       Granted and
            Repriced  $          15.50       33,333         3       $   15.50                           $  1.98
       Exercised      $           3.00       (6,666)
                                        ------------                                                           

BALANCE 12/31/98      $    3.00 - 9.03      537,217              3  $    5.67        97,496  $    4.13
                      $  14.28 - 17.85       36,483              2  $   15.69         3,150  $   17.65
                                        ------------                            ------------                               
                                            573,700                                 100,646 
                                        ============                            ============                                

</TABLE>



WARRANTS

In  connection  with  a  consulting  agreement on December 18, 1995, the Company
issued  a  five-year  warrant to purchase 16,666 shares at a price of $11.44 per
share.


8.     SEGMENT  REPORTING

The  Company's  operations are classified in two business segments; Internet and
on-line  data  conversion  and  content management services and document imaging
services.

Internet and on-line data conversion and content management services provide all
the  necessary  steps  for product development and data conversion to enable its
customers  to  disseminate  vast amounts of information both on-line and via the
Internet.  Its  customers  represent  an array of major electronic publishers of
legal,  scientific,  educational,  and  medical  information,  as  well  as
document-intensive  companies  repurposing  their  proprietary  information into
electronic  resources  that  can  be  referenced  via  web-centric applications.

During  1998, 1997 and 1996, one customer that is comprised of twelve affiliated
companies,  accounted for 21%, 16% and 28% of the Company's Internet and on-line
data conversion and content management service revenues, respectively. One other
customer accounted for 13%, 10% and 10% of such revenues in 1998, 1997 and 1996,
respectively.  No  other  customer  accounted  for 10% or more of such revenues.
Further, in 1998, 1997 and 1996, export revenues, all of which were derived from
European  customers,  accounted  for  22%,  24%  and  22%, respectively, of such
revenues.  A  significant  amount  of  the  Company's  revenues are derived from
customers  in  the  publishing  industry.  Accordingly,  the  Company's accounts
receivable  generally  include  significant  amounts  due  from  such customers.

The  document  imaging  services  segment  provides  high  volume  backfile  and
day-forward  conversion  of  business  documents, technical manuals, engineering
drawings,  aperture  cards,  roll  film,  and microfiche, providing high quality
computer  accessible  images  and  indexing.

During  1998,  1997  and 1996 one customer accounted for 53%, 11% and 12% of the
Company's  document  imaging  service revenues, respectively. The Company has no
present arrangements with this customer for 1999. Another customer accounted for
10%  and  12% of such revenues in 1997 and 1996. No other customer accounted for
10%  or  more  of  such  revenues.
<TABLE>

<CAPTION>



<S>                            <C>            <C>           <C>   
                                      1998           1997           1996
Revenues
--------
Internet and on-line services  $17,401,346    $18,032,232*   $17,852,384
Document imaging services        2,192,007      2,084,703      2,684,064
                               -----------    -----------    -----------             

Total consolidated             $19,593,353    $20,116,935    $20,536,448
                               ===========    ===========    ===========             

<FN>
*  Includes $2,612,000 from journal and book pagination and medical transcription
businesses  that  were  discontinued  in  1997.
</TABLE>



<TABLE>
<CAPTION>
<S>                                <C>              <C>              <C>           
Income (loss) before income taxes
---------------------------------                                                           
Internet and on-line services      $ 3,151,928(a)   $(2,894,158)(c)  $(475,744)
Document imaging services           (1,234,248)(b)   (1,206,060)(d)   (483,754)
                                   ------------     ------------     ----------

Total consolidated                 $ 1,917,680      $(4,100,218)     $(959,498)
                                   ============     ============     ==========                 

<FN>
(a)     Includes  gain  on  foreign  currency contracts and reversal of previously estimated
liabilities  of  $736,000.
(b)     Includes  write  off  of  goodwill  of  $382,000.
(c)     Includes  loss  on foreign currency contracts and restructuring costs of $2,107,000.
(d)     Includes  restructuring  costs  of  $793,000.
</TABLE>



<TABLE>
<CAPTION>
<S>                            <C>          <C>          <C>
                                      1998         1997         1996
Total assets
-----------------------------                                       
Internet and on-line services  $ 9,520,116  $ 8,703,927  $ 9,501,943
Document imaging services        1,075,392    1,325,320    2,914,353
                               -----------  -----------  -----------

Total consolidated             $10,595,508  $10,029,247  $12,416,296
                               ===========  ===========  ===========

Capital expenditures
--------------------
Internet and on-line services  $   980,218  $   907,535  $ 1,071,190
Document imaging services           44,404      107,553      160,083
                               -----------  -----------  -----------

Total consolidated             $ 1,024,622  $ 1,015,088  $ 1,231,273
                               ===========  ===========  ===========

Depreciation and amortization
-----------------------------                                       
Internet and on-line services  $ 1,116,445  $ 1,048,875  $ 1,115,674
Document imaging services          206,276      272,680      257,057
                               -----------  -----------  -----------

Total consolidated             $ 1,322,721  $ 1,321,555  $ 1,372,731
                               ===========  ===========  ===========
</TABLE>




9.     INCOME  (LOSS)  PER  SHARE
<TABLE>
<CAPTION>
<S>                                                   <C>         <C>           <C>
                                                            1998         1997         1996 

Net income (loss)                                     $2,249,680  $(4,200,218)  $ (602,498)
                                                      ==========  ============  ===========

Weighted average common shares outstanding             1,478,408    1,501,043    1,503,196 
Dilutive effect of outstanding warrants and options       31,391            -            - 
                                                      ----------  ------------  -----------

Adjusted for dilutive computation                      1,509,799    1,501,043    1,503,196 
                                                      ==========  ============  ===========

Basic income (loss) per share                         $     1.52  $     (2.80)  $     (.40)
                                                      ==========  ============  ===========

Diluted income (loss) per share                       $     1.49  $     (2.80)  $     (.40)
                                                      ==========  ============  ===========

</TABLE>



Reference is made to Note 7 with respect to options and warrants that would have
been  dilutive  in  1997  and  1996  had  there  not been a loss in those years.


10.     RESTRUCTURING  COSTS  AND  IMPAIRMENT  OF  ASSETS

During  the  second  quarter of 1997 management implemented a plan to reduce the
Company's  U.S.  based  overhead.  The  principal actions were to eliminate U.S.
production  for  the  publishing  services  division and merge the east and west
coast  document  imaging  operations  into  one  facility on the west coast. The
restructuring  costs  consisted  of estimated losses on leases and severance pay
totaling  approximately  $325,000,  while  the  impairment  costs consisted of a
write-off  of goodwill in connection with the document imaging business totaling
approximately  $700,000  and  fixed  assets  related  to  both  the  imaging and
publishing  services  businesses  totaling  approximately  $475,000.

In  the  fourth  quarter  of  1998,  management  determined  that  its  plans to
significantly  increase  the  revenues  of the document imaging services segment
were  not realized. While management continues to evaluate this business, it was
determined  that  the  goodwill  associated  with  the  business  could  not  be
recovered. Accordingly, the remaining unamortized amount of $382,000 was written
off  at  December  31,  1998.  Further,  certain  estimated  liabilities  for
restructuring  and other items totaling $249,000 were deemed in excess of actual
amounts  payable  and  were  recognized as income in the fourth quarter of 1998.

11.     FOREIGN  CURRENCY  CONTRACTS

The  Company  recognized  an unrealized loss of $1,400,000 in 1997 in connection
with  foreign  currency contracts that were in dispute. The loss represented the
difference between the contract rate for Philippine pesos and the estimated fair
value  at  December 31, 1997. In the second quarter of 1998, the Company reached
an  agreement  regarding  the  disputed  currency  contracts. This resulted in a
reduction  of  the  estimated liability previously provided by $487,000 that was
recognized  as  a  gain.

<PAGE>
ITEM  8.  CHANGE  IN  ACCOUNTANTS.

Margolin, Winer & Evens LLP ("MWE") was the principal auditor of the Company for
each  of  the three years in the period ended December 31, 1996. On November 11,
1997 the Company and MWE agreed that MWE would not serve as principal accountant
for  the  year  ended  December  31,  1997.

MWE  reports on the financial statements of the Company for the Company's fiscal
years  ended December 31, 1996 and 1995 contained no adverse opinion, disclaimer
of  opinion, modification, or qualification. During the two years ended December
31,  1996  and  the  interim  period  through  November  11, 1997, there were no
disagreements  with  MWE  on  any matter of accounting principles and practices,
financial  statement  disclosure,  or  audit  scope  and  procedure,  which
disagreement,  if  not resolved to the satisfaction of MWE, would have caused it
to  make  reference to the subject matter of the disagreement in connection with
its  reports.

On November 12, 1997, the Company selected Grant Thornton LLP as its auditor for
the  fiscal  year  ended  December  31,  1997.




<PAGE>
                                    --------
                                    PART III
                                    --------

ITEM  9.     DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT.

OFFICERS  AND  DIRECTORS

The  officers  and  directors  of  the  Company  are  as  follows:

<TABLE>
<CAPTION>
<S>                         <C>  <C>
NAME                        AGE  POSITION
--------------------------  ---  ------------------------------------------------------

Barry Hertz                  49  Chairman of the Board of Directors

Jack Abuhoff                 37  President, Chief Executive Officer and Director

Todd Solomon                 37  Vice Chairman of the Board of Directors and Consultant

Martin Kaye                  51  Executive Vice President, Chief Financial Officer,
                                 Secretary and Director

Stephen Agress               37  Vice President - Finance

Jurgen Tanpho                34  Vice President - Operations

Jan Palmen                   44  Vice President - Sales

Dr. Albert Drillick          53  Director

Dr. E. Bruce Fredrikson      61  Director

Morton Mackof                51  Director

Stanley Stern                48  Director
</TABLE>



BARRY  HERTZ  has  been  Chairman  since 1988 and Chief Executive Officer of the
Company until August 1995.  He founded Track Data Corporation ("Track") in 1981.
He  was  Track's  sole  stockholder and Chief Executive Officer until its merger
(the  "Merger")  on  March  31,  1996  with  Global  Market  Information,  Inc.
("Global"),  a  public company co-founded by Mr. Hertz, who was its Chairman and
Chief  Executive  Officer.  Upon  consummation of the Merger, Global changed its
name  to  Track  Data  Corporation  ("TDC").  Mr.  Hertz  holds a B.S. degree in
mathematics  from Brooklyn College (1971) and an M.S. degree in computer science
from  New  York  University  (1973).

JACK ABUHOFF was retained as President and CEO effective September 15, 1997.  He
has  been a Director of the Company since its founding. From 1995 to 1997 he was
Chief  Operating  Officer of Charles River Corporation, an international systems
integration  and  outsourcing  firm.  From  1992  to  1994,  he  was employed by
Chadbourne  & Parke, and engaged in Sino-American technology joint ventures with
Goldman  Sachs.  He practiced international corporate law with White & Case from
1986  to  1992.  He holds an A.B. degree from Columbia College (1983) and a J.D.
degree  from  Harvard  Law  School  (1986).

TODD  SOLOMON  has  been  Vice  Chairman and consultant to the Company since his
resignation as  President and CEO on September 15, 1997.  He served as President
and  a  Director  of the Company since its founding by him in 1988.  He had been
Chief  Executive  Officer  since August 1995.  Mr. Solomon was President of Ruck
Associates,  an  executive  recruiting  firm  from 1986 until 1987.  Mr. Solomon
holds  an  A.B.  in history and physics from Columbia University (1986).  He was
also  a  director  of  TDC  until  his  resignation  in  December  1997.

MARTIN  KAYE  has been Chief Financial Officer of the Company since October 1993
and  was  elected  Vice  President  -  Finance  in  August  1995 and was elected
Executive  Vice  President  in  March  1998.  He has been a Director since March
1995.  He  is  a  certified  public  accountant  and serves as Vice President of
Finance and a Director of TDC.  Mr. Kaye had been an audit partner with Deloitte
& Touche for more than five years until his resignation in 1993.  Mr. Kaye holds
a  B.B.A.  in  accounting  from  Baruch  College  (1970).

STEPHEN  AGRESS was elected Vice President - Finance in March 1998. He served as
Corporate  Controller  since joining the Company in August 1995. Mr. Agress is a
certified  public accountant and had been a senior audit manager with Deloitte &
Touche  for  more  than  five years prior to his resignation in 1995. Mr. Agress
holds  a  B.S.  in  accounting  from  Yeshiva  University  (1982).

JURGEN  TANPHO  was elected Vice President - Operations in March 1998. He served
in  various  management  capacities  since  joining  the  Company  in 1991, most
recently  in the position of Assistant to the President of Manila Operations. He
holds  a  B.S.  degree  in  industrial  engineering  from  the University of the
Philippines  (1986).

JAN  PALMEN  was elected Vice President - Sales in February 1999. Mr. Palmen was
chief  operating  officer at SPI Technologies, Inc., a leading competitor of the
Company,  from  1995  through  1998.  Prior  to  SPI,  he  was  general manager,
production for Reed/Elsevier from 1991 through 1995. He was also a member of the
steering  committee for global SGML implementation.  Before that, he spent three
years with United Dutch Publishers as head of sales and production and two years
with a global management consultancy company as a strategic consultant. He holds
a  M.B.A.  degree  (1979) in marketing, economics and logistics management and a
B.B.A. degree (1976) in economics and marketing, both from Erasmus University in
Amsterdam.

DR.  ALBERT  DRILLICK  has  been  a  Director of the Company since 1990.  He has
served as a director of applications and senior systems analyst for TDC for more
than  the past five years.  He holds a Ph.D. degree in mathematics from New York
University  Courant  Institute  (1971).

DR.  E.  BRUCE  FREDRIKSON has been a Director of the Company since August 1993.
He  is  currently  a  professor  of  finance  at  Syracuse  University School of
Management  where he has taught since 1966 and has previously served as chairman
of  the  finance  department.  Dr.  Fredrikson  has  a  B.A.  in  economics from
Princeton  University  and  a  M.B.A.  and  a  Ph.D.  in  finance  from Columbia
University.  He  is  a  director of Eagle Finance Corp., a company that acquires
and  services  non-prime  automobile installment sales contracts.  He is also an
independent  general  partner  of Fiduciary Capital Partners, L.P. and Fiduciary
Capital  Pension  Partners,  L.P.  He  is  also  a  director  of  TDC.

MORTON  MACKOF  has  been  a  Director  of  the Company since April 1993.  He is
President  and  CEO  of  Third Millennium Technology Inc., a company involved in
information  technology  consulting  and  software  development.  He  had  been
executive  vice  president  of  Track  since  February  1991 and was elected its
President in December 1994, and since the Merger served as President of TDC.  He
resigned  as President in November 1996.  From 1986 to 1991, he was president of
Medical  Leasing  of  America,  Inc.  From 1981 to 1986 he was vice president of
sales  with  Fonar  Corp.  He holds a B.S. degree in electrical engineering from
Rensselaer  Polytechnic  Institute  (1970)  and  did  graduate  work in computer
science.  He  is  also  a  director  of  TDC.

STANLEY  STERN  has  been  a  Director of the Company since August 1988.  He was
chief  operating  officer  of Track, and in predecessor positions, for more than
five  years  and  since the Merger was Executive Vice President of TDC until his
resignation  in  December  1996.  Mr.  Stern  holds a B.B.A. from Baruch College
(1973).  He  was also a director of TDC until his resignation in September 1997.

There  are no family relationships between or among any directors or officers of
the  Company.  Directors  are  elected to serve until the next annual meeting of
stockholders  and  until  their  successors  are elected and qualified. Officers
serve  at  the  discretion  of  the  Board.

COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT.

The  Company  believes  that  during  the  period  from  January 1, 1998 through
December  31,  1998  all  officers,  directors  and  greater  than  ten-percent
beneficial  owners  complied  with  Section  16(a)  filing  requirements.

ITEM  10.  EXECUTIVE  COMPENSATION.

EXECUTIVE  COMPENSATION

The  following table sets forth information with respect to compensation paid by
the  Company  for  services  to  the Company during the three fiscal years ended
December  31,  1998  to  those  executive officers whose aggregate cash and cash
equivalent  compensation  exceeded  $100,000.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
<S>                        <C>           <C>           <C>       <C>
                                         ANNUAL COMPENSATION
                                         ---------------------   NUMBER OF
NAME AND PRINCIPAL         CALENDAR                              STOCK OPTIONS
POSITION                   YEAR          SALARY        BONUS     AWARDED

Jack Abuhoff                       1998  $ 200,000     $20,000        20,833
President, CEO since                                              (A)109,514
September 1997                     1997     37,500        -          114,500

Barry Hertz                        1998  $  75,000     $  -           14,000
Chairman                                                           (A)37,000
                                   1997     50,000        -           13,333
                                   1996     50,000        -             -

Todd Solomon                       1998  $  93,750     $  -           10,500
President, CEO through                                             (A)71,699
September 1997, Vice               1997    209,166        -           20,333
Chairman of the Board              1996    231,000        -           10,333
and Consultant thereafter

<FN>
(A)  Options  granted  in  prior  years  and  repriced  in  1998
</TABLE>



The  above  compensation  does  not include certain insurance and other personal
benefits,  the total value of which does not exceed as to any named officer, the
lesser  of  $50,000  or 10% of such person's cash compensation.  The Company has
not  granted  any  stock  appreciation  rights  nor  does it have any "long-term
incentive  plans,"  other  than  its  stock  option  plans.

                        OPTION GRANTS IN LAST FISCAL YEAR
                                INDIVIDUAL GRANTS

<TABLE>
<CAPTION>
<S>           <C>       <C>            <C>         <C>
              PERCENT
              OF TOTAL
              NUMBER    OPTIONS
              OF        GRANTED TO     EXERCISE    EXPIR-
              OPTIONS   EMPLOYEES IN   PRICE       ATION
NAME          GRANTED   FISCAL YEAR    PER SHARE   DATE

Jack Abuhoff    20,833      12%        $3.00-6.00  7/2003
Barry Hertz     14,000       8%        $     6.00  7/2003
Todd Solomon    10,500       6%        $     6.00  7/2003
</TABLE>



The options become exercisable one half on the first anniversary and one half on
the  second  anniversary.

                 AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR;
                          FISCAL YEAR END OPTION VALUES

<TABLE>
<CAPTION>
<S>           <C>          <C>                   <C>
                           NUMBER OF             VALUE OF UNEXERCISED
                           UNEXERCISED           IN-THE- MONEY
                           OPTIONS AT FISCAL     OPTIONS AT FISCAL
              SHARES       YEAR END              YEAR END
              ACQUIRED     EXERCISABLE/          EXERCISABLE/
NAME          ON EXERCISE  UNEXERCISABLE         UNEXERCISABLE

Jack Abuhoff    None       21,499/120,014        $   69,872/$30,238

Barry Hertz     None        13,333/51,000        $   43,332/$12,800

Todd Solomon    None        20,333/82,199        $   66,082/$43,978

</TABLE>


DIRECTORS  COMPENSATION

Dr. E. Bruce Fredrikson and Stanley Stern were compensated at the rate of $1,250
and  $833  per month, respectively, plus out-of-pocket expenses for each meeting
attended.  No  other  director  is  compensated  for  his  services as director.
Further,  Messrs.  Fredrikson  and  Stern received options to purchase 2,500 and
1,200  shares,  respectively,  in  1998.

EMPLOYMENT  AGREEMENTS

The  Company has a three-year employment agreement through August 2000 with Jack
Abuhoff,  its  President  and CEO.  He is currently paid at the rate of $240,000
per  annum  with any bonuses and future increases at the discretion of the Board
of Directors.  In addition, each December 31 during the term of the agreement he
will  receive  10,333  options  to  purchase common stock of the Company at then
prevailing  market  prices.  In consideration of the signing of the agreement he
was  granted five year options as follows (after repricing in June 1998): 10,000
options  at  $3.00 per share; 16,666 at $5.00; 23,333 at $6.00; 30,000 at $7.00;
and 33,333 at $15.50.  The options are exercisable upon the earliest to occur of
(i)  various  dates  during  1999; or (ii) in the event of a sale of the Company
where  a  third  party  acquires  more  than  50%  of  the  Company.

The  Company has an employment agreement with Todd Solomon, its former President
and  CEO,  expiring September 30, 2000 that provides for a salary of $75,000 per
annum.  He  will serve as Vice Chairman of the Board and in executive capacities
as  designated  by  the  CEO  or  the  Board  of  Directors.



<PAGE>
ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND MANAGEMENT.

The  following  table  sets forth, as of February 28, 1999 information regarding
the  beneficial  ownership  of  the  Company's  Common Stock based upon the most
recent  information  available  to  the Company for (i) each person known by the
Company  to  own  beneficially  more  than  five  (5%)  percent of the Company's
outstanding Common Stock, (ii) each of the Company's officers and directors, and
(iii)  all  officers  and directors of the Company as a group.  Unless otherwise
indicated,  each  stockholder's  address  is  c/o  Company,  95  Rockwell Place,
Brooklyn,  NY  11217.
<TABLE>

<CAPTION>



<S>                                      <C>              <C>       
NAME AND                                 AMOUNT
ADDRESS OF                               AND NATURE       PERCENT
BENEFICIAL                               OF BENEFICIAL    OF
OWNER                                    OWNERSHIP        CLASS

Track Data Corporation (2)                     214,748      14.4%

Barry Hertz (3)                                251,381      16.5%

Todd Solomon (4)                               236,827      15.3%

Jack Abuhoff (5)                                58,796       3.8%

Martin Kaye (6)                                 23,374       1.5%

Stephen Agress (7)                               7,458         * 

Jurgen Tanpho (8)                                  902         * 

Albert Drillick (9)                              5,325         * 

Dr. E. Bruce Fredrikson (10)
Syracuse University
School of Management
Syracuse, NY 13244                               8,581         * 

Morton Mackof (9)                                5,325         * 

Stanley Stern (9)                                2,750         * 

All Officers and Directors
as a Group (11 persons)
(3)(4)(5)(6)(7)(8)(9)(10)                      600,719      36.3%
<FN>

*  Less  than  1%.
1.     Except  as  noted  otherwise,  all  shares  are owned beneficially and of
record.  Includes  shares pursuant to options presently exercisable or which are
exercisable  within  60  days.  Based  on  1,491,985  shares  outstanding.
2.     Consists  of  214,748  shares  owned  by Track Data Corporation, which is
majority  owned  by  Mr.  Hertz.
3.     Includes  214,748  shares  owned  by  Track  Data  Corporation,  which is
majority owned by Mr. Hertz, 2,800 shares held in a pension plan for the benefit
of  Mr.  Hertz  and  currently  exercisable options to purchase 33,833 shares of
Common  Stock.
4.     Includes  currently  exercisable  options  to  purchase  56,845 shares of
Common  Stock.
5.     Includes  currently  exercisable  options  to  purchase  49,796 shares of
Common  Stock.
6.     Includes  currently  exercisable  options  to  purchase  20,041 shares of
Common  Stock.
7.     Includes currently exercisable options to purchase 6,458 shares of Common
Stock.
8.     Consists  of  shares  issuable  upon  exercise  of  currently exercisable
options  granted  under  the  Company's  Stock  Option  Plans.
9.     Includes currently exercisable options to purchase 1,172 shares of Common
Stock  and 4,153 shares for Messrs. Drillick and Mackof and 1,578 shares for Mr.
Stern  held in the Track Data Phantom Unit Trust to be released upon termination
of  association  with  the  Company  or  Track Data Corporation, or earlier with
approval  of  the  Board  of  Directors.
10.     Includes  currently  exercisable  options  to  purchase  5,248 shares of
Common  Stock.
</TABLE>




ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.RELATIONSHIPS  AND
RELATED  TRANSACTIONS

There  were  no  material  related  party  transactions.

<PAGE>


ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)     Exhibits  which  are indicated as being included in previous filings are
incorporated  herein  by  reference.

<TABLE>
<CAPTION>
<S>       <C>                             <C>
EXHIBIT   DESCRIPTION                     FILED ASEXHIBIT
--------  ------------------------------  -------------------------------------------

3.1       Restated Certificate of         Exhibit 3.1 to Form SB-2 Registration
          Incorporation                   Statement No. 33-62012

3.2       By-Laws                         Exhibit 3.2 to Form SB-2 Registration
          Statement No. 33-62012

4.2       Specimen of Common Stock        Exhibit 4.2 to Form SB-2 Registration
          certificate                     Statement No. 33-62012

10.1      1994 Stock Option Plan          Exhibit A to Definitive Proxy dated August
                                          9, 1994

10.2      Contract of Lease with JM and   Filed herewith
          Company, Inc.

10.3      Contract of Lease with Elcado   Filed herewith
          Realty Corporation

10.4      1993 Stock Option Plan          Exhibit 10.4 to Form SB-2 Registration
                                          Statement No. 33-62012

10.5      Form of Indemnity Agreement     Exhibit 10.5 to Form SB-2 Registration
          with Directors                  Statement No. 33-62012

10.6      1994 Disinterested Directors    Exhibit B to Definitive Proxy dated August
          Stock Option Plan               9, 1994

10.7      Contract of Sublease with       Exhibit 10.11 to Form 10-KSB for year ended
          Computer Leasing, Inc.          December 31, 1995

10.8      1995 Stock Option Plan          Exhibit A to Definitive Proxy dated August
                                          10, 1995

10.9      1996 Stock Option Plan          Exhibit A to Definitive Proxy dated
                                          November 7, 1996

10.10     Employment Agreement dated      Exhibit 10.11 to Form 10-KSB for the year
          August 19, 1997 with            ended December 31, 1997
          Jack Abuhoff

10.11     1998 Stock Option Plan          Exhibit A to Definitive Proxy dated
                                          November 5, 1998

21        Subsidiaries of Small Business  Filed herewith
          Issuer

23.1      Consent of Grant Thornton LLP   Filed herewith

23.2      Consent of Margolin, Winer &    Filed herewith
          Evens LLP

27        Financial Data Schedule         Filed herewith
</TABLE>



(b)     There  were  no  reports  on  Form  8-K  filed  during the quarter ended
December  31,  1998.

<PAGE>
                                   SIGNATURES

In  accordance  with  Section  13  or  15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

INNODATA  CORPORATION


By     /s/
     ------------------------
     Barry  Hertz
     Chairman  of  the  Board

In  accordance  with  the Exchange Act, this report has been signed below by the
following  persons  on behalf of the registrant and in the capacities and on the
dates  indicated.

<TABLE>

<CAPTION>



<S>                      <C>                                   <C>
Signature                Title                                 Date
-----------------------  ------------------------------------  -----------------

    /s/                  Chairman of the Board                 March 25, 1999
-----------------------                                                         
Barry Hertz

    /s/                  President, Chief Executive Officer    March 25, 1999
-----------------------                                                         
Jack Abuhoff             and Director

    /s/                  Vice Chairman of the Board            March 25, 1999
-----------------------                                                         
Todd Solomon

    /s/                  Executive Vice President (Principal   March 25, 1999
-----------------------                                                         
Martin Kaye              Financial Officer), Director

    /s/                  Vice President - Finance (Principal   March 25, 1999
-----------------------                                                         
Stephen Agress           Accounting Officer)

    /s/                  Director                              March 25, 1999
-----------------------                                                         
Dr. Albert Drillick

    /s/                  Director                              March 25, 1999
-----------------------                                                         
Dr. E. Bruce Fredrikson

    /s/                  Director                              March 25, 1999
-----------------------                                                         
Morton Mackof

    /s/                  Director                              March 25, 1999
-----------------------                                                         
Stanley Stern
</TABLE>



<PAGE>


<PAGE>