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, 1996
                               -----------------

/   /   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                                    13-3475943
 (State  or  other  jurisdiction  of      (I.R.S. Employer Identification No.)
  incorporation  or  organization)

         95  ROCKWELL  PLACE
        BROOKLYN,  NEW  YORK                             11217
 (Address  of  principal  executive  offices)          (Zip  Code)

                              (718)  855-0044
                       (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 
                                      REDEEMABLE  WARRANTS

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.    /  X  /

State  issuer's  revenues  for  its  most  recent  fiscal  year.  $20,536,448
                                                                  -----------

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  28,  1997  of  $1.25  per  share.  $3,271,173
                                             ----------

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

  4,523,710 SHARES OF COMMON STOCK, $.01 PAR VALUE, AS OF FEBRUARY 28, 1997.
  ---------

                      DOCUMENTS INCORPORATED BY REFERENCE
                      -----------------------------------
                             [SEE INDEX TO EXHIBITS]

<PAGE>
                                    PART I
                                    ------


ITEM  1.    DESCRIPTION  OF  BUSINESS.

INTRODUCTION

     The  Company  was  incorporated  in  Delaware in June 1988, maintains its
executive offices in New York City and employs a work force in other locations
in  the U.S. and approximately 2,700 persons in the Philippines and Sri Lanka.
The Company is a worldwide electronic publishing services company specializing
in  high  quality  data  conversion  for  Internet,  CD-ROM,  print and online
database  publishers  around  the  globe.   Services include all the necessary
steps  for  product  development  and data capture:  the highest accuracy data
entry  (99.995%+), OCR, SGML and custom coding, hypertext linking, imaging and
document  management  systems,  page  composition,  copyediting,  indexing and
abstracting,  and  applications  programming.  The Company also offers medical
transcription  services to healthcare providers through its Statline division.

     The Company intends to utilize its labor force to perform such additional
tasks  in  the  high-tech  information  and  related  industries  as  may  be
economically  performed  by  large labor forces at competitive wage rates.  As
technology  develops  in  these  industries,  the  Company will seek to employ
persons  with  advanced  skills to exploit these areas of opportunity.  At the
same  time, the Company intends to diminish or eliminate areas of its business
which  may become, or may be rendered, less important or obsolete by advancing
technology.


THE  COMPANY'S  SERVICES

DATA  ENTRY  AND  CONVERSION
----------------------------

The  Company's procedures for converting data to the required format depend on
the  type  of information the customer must use in its business, the manner in
which  such  information  is  used,  the  source of the data (e.g., microfilm,
microfiche,  magnetic files or hard copy), turnaround time, and the customer's
updating  and  processing  procedures.  The Company typically performs some or
all  of  the  following  tasks:

     a.  Data  Preparation  and  Coding

     The customer's data is received in the Philippines either in hard copy by
courier  or  electronically through scanning and telecommunications equipment.
Customers  may  elect  to  locate  scanning equipment on their premises or may
choose  to  use  equipment  which  is  available  in the Company's New Jersey,
Maryland  or  United Kingdom offices.  The source data is coded with character
strings  or  schemes  which allow the customer to readily process the finished
product  on  its  computers  and/or to print the finished product with defined
composition.   Customers may select various coding schemes, including Standard
Generalized  Markup  Language  (SGML),  which is an international standard for
electronic  data  formatting.

     b.  Data  Entry

     Coded  material  is keyed once or twice, as requested by the customer, by
separate  groups  of  data  entry  personnel.  The Company guarantees a higher
level of accuracy when the data is keyed twice.  The two versions of the keyed
data  are  programmatically  compared.    Software  automatically  flags  any
deficiencies  for  correction by the Company's editors.  A "merged" version of
the  keyed  data  is prepared.  The Company also performs these services using
OCR  technology,  where  appropriate.

     c.  Proofreading  and  Quality  Control

     The  Company has developed a system for data quality audit.  As a result,
each  employee's  work  is  measured  both  quantitatively  and qualitatively.

For  projects which require extremely high quality levels, each character that
is  keyed  is  proofread  at  least twice.  Such projects command a premium in
price.    During  the entire keying process, on-line spell checkers and syntax
verification  programs  are  used  to  verify  quality  and  accuracy.

          d.  Delivery  of  Converted  Data

At  this  stage, the converted data may be returned to the Company's customers
for  commercial  or  in-house  processing.  Completed  data  is  compiled  and
transmitted  to  the United States over the Company's dedicated communications
circuit.  The  Company's U.S. staff downloads the data onto tapes or diskettes
which  are  forwarded to each customer.  The customer then loads the data into
its  computer  system  for printing, publication of CD-ROM's, or dissemination
on-line.  Alternatively, the customer may determine to use the data to produce
camera-ready  copy  for  production  of  books  and  journals.


INDEXING  AND  ABSTRACTING
--------------------------

     The  Company's  indexers  analyze  and  categorize articles, professional
papers  or similar materials based on content and the selection of appropriate
descriptive  terms  from a list of predefined terms.  Subscribers to databases
offered  by  the Company's customers consult the same list of predefined terms
in  order  to  access  information  corresponding  to  an  area  of  inquiry.

     The  Company's  abstracting  personnel  summarize an entire document in a
short  paragraph  in order to allow a database subscriber to quickly determine
whether  a  given  document  contains  information relevant to the topic being
researched.    Abstracting requires an understanding of the document's subject
matter  to  ensure  that  the  summary  is  complete  and  relevant.

     Employees  who perform indexing and abstracting work must be sufficiently
knowledgeable  to  understand,  analyze  and classify material on an extensive
array  of  subjects.    Most  of  these  employees  have  degrees  and/or work
experience  related  to  the  specific  material  which  they  abstract.


TYPESETTING  AND  COMPOSITION
-----------------------------

     The Company offers composition and typesetting services which are managed
from its facility in Halethorpe, Maryland, with services performed in Maryland
and  in  the  Philippines.   The Company performs the entire process from data
capture  of  manuscripts  to  finished  camera-ready  copy.


IMAGING  AND  SCANNING  CONVERSION
----------------------------------

The  Company's  Imaging  Services  division  assists companies in successfully
integrating  imaging  and  document  management  systems,  CAD,  and  imaging
applications.    It  provides  document  management  software, peripherals, or
complete  systems  depending  on  client requirements.  It works to select the
appropriate  document  management  system,  workflow and viewing software that
would  best  suit  the  customer  specifications  and  supports  the latest in
state-of-the-art  equipment  from high-speed document scanners to large format
and  film scanners.  The capabilities of the Imaging Services division include
the  scanning  and  indexing  of  all  different  types of business documents,
technical  manuals,  engineering  drawings, 35mm aperture cards and microfilm.


MEDICAL  TRANSCRIPTION  SERVICES
--------------------------------

The  Company's  Statline  division  provides medical transcription services to
health  care  providers  by providing proprietary software to its customers to
establish  data  base  information  regarding  medical  records.   The Company
provides a portion of such services from its off-shore facilities.  The growth
of  this  business  is  dependent  on the employment and training of qualified
medical  transcriptionists  in  the  United  States  and  in  its  off-shore
facilities.

INTERNET  TECHNICAL  SUPPORT
----------------------------

The Company provides electronic technical support through a strategic alliance
with  Softbank  Services  Group  ("SSG"). The alliance combines internet based
services  with  proprietary software to create superior customer service.  The
Company  responds to both technical and customer service queries from internet
based  end-users with skilled technical support personnel from its call center
facility  in  Manila,  Philippines. Once determined, solutions are routed back
through  the  Company's  high  bandwidth  overseas  channel  to SSG's software
system,  and  ultimately  delivered  to  the  end-user  via  internet  e-mail.


ACQUISITIONS

     On  January  2,  1996  the Company acquired the business of International
Imaging, Inc. ("II").  II provides imaging and document management systems and
scanning/conversion  services.    The purchase price consisted of $40,000 cash
and  50,000 shares of the Company's restricted common stock.  The Company also
paid  approximately  $300,000  of  II's  outstanding  lease obligations.  II's
revenues  for  the year ended December 31, 1995 were approximately $1,000,000.

     On  December  1, 1994, the Company acquired certain assets of Engineering
Images  ("EI").    EI is a provider of imaging and document management systems
and  scanning/conversion  services.   The purchase price consisted of $427,270
cash  (including  expenses  of  $27,270), three-year subordinated notes in the
aggregate  principal  amount  of  $300,000  payable  in  36  equal  monthly
installments commencing December 15, 1994 plus interest at the prime rate, and
56,764  restricted  shares  of  the  Company's  common  stock  with piggy-back
registration  rights  valued  at  $200,000.    The  assets  acquired  consist
principally  of  certain  fixed  assets  and  goodwill.


OCR  AND  SIMILAR  TECHNOLOGIES

     Optical  Character  Recognition ("OCR") involves first producing an image
which is a digital representation of a document and then using one of many OCR
engines to convert that image into a text file corresponding to the characters
on  the page. The Company utilizes OCR technology where there are cost savings
to  the Company and its customers, and seeks to utilize other new technologies
which  may  permit  it  to  further  automate  its  operations.

     The  Company  recognizes  that  OCR  and  existing  or as yet undeveloped
technologies  could  eventually  render  straight  data  entry  obsolete.
Accordingly, advances in OCR or other technologies (such as voice recognition)
will  increase  the  relative  importance  to  the Company of its higher level
services  such  as  indexing,  abstracting,  photocomposition  and  developing
document  management systems, and of other opportunities which will arise as a
result  of  new  technologies  or  other  factors.


EQUIPMENT

     The  Company's  U.S.  and  Philippine  facilities,  as well as its United
Kingdom sales office, are interconnected by leased circuits.  Each facility is
a local call on the other's PABX, and customers need only dial the Hackensack,
New  Jersey  office  to  be  transferred,  at  no  additional  cost, to either
Philippine facility.  This leased circuit enables the Company to transmit data
and  image  documents  to and from the Philippines, rather than by air courier
which  can take up to five days.  The Company also utilizes scanning equipment
in  New  Jersey,  Halethorpe, Maryland and in the United Kingdom to facilitate
the  transmission  of  information  to  the  Philippines.


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 by
seeking  direct  personal  access  to  decision-makers.   The Company has also
obtained visibility by way of articles published in the trade press.  To date,
the  Company  has  not  conducted  any significant advertising campaign in the
general  media.

     The  Company's  Imaging  Services  division  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.    The  Imaging Services
division's  traditional  markets  include  Fortune  500  manufacturers,  major
utilities,  governmental  departments,  hospital  medical  records, litigation
support  and  commercial  back-office  applications.


COMPETITION

     The  Company's  ability  to  compete  favorably  is, in significant part,
dependent upon its ability to control costs, react timely and appropriately to
short  and  long-term  trends  and  competitively  price  its services.  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 which
they  can  perform  on  an economic basis.  Major competitors operating in the
Philippines  are  Saztec  Philippines,  Inc., Systems and Encoding Corporation
(Sencor),  Unidata  Corporation,  ASEC  International  Phils.,  Inc., Equidata
Philippines,  Inc., Data Solutions, Inc., Phil Database and Services, Inc. and
Direct  Data  Capture,  Ltd.   QHData and Beijing Formax are major competitors
that perform work in mainland China and APEX Data Services, Inc. performs work
primarily  in  India.    Saztec  International,  Inc.,  First Image Data Input
division  of  First  Financial  Management Corporation and ASEC International,
Inc. are the Company's major competitors with operations in the United States.
There  are  also  numerous  other companies worldwide, with a concentration in
third  world  countries  (including India, Mexico, Sri Lanka and the Caribbean
Basin) which may be regarded as competitive with the Company.  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.

     The Company makes substantial efforts to maintain the quality of its work
force.    The Company also competes on the basis of its perceived proximity to
its  customers.  Many offshore conversion companies do not maintain a presence
outside  of  the country in which their production facility is located.  While
such companies are compelled to conduct business and service customers through
brokers or via fax and telephone calls, many of the Company's customer related
functions,  including  sales, delivery of completed data products and customer
service,  are  performed  in  the  United  States.

     The  Company's scanning conversion services conducted through its Imaging
Services  division  competes  with  numerous  companies  which  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  which  they  can  perform  on  an  economic  basis.   Major national
competitors  include  Wesco  and  Docucon.   Smaller local competitors include
Drawing  Management,  Kruse Industries and Berhan Associates.  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.

     The  Company's  Statline  transcription services division competes on the
basis of quality, speed of turn-around and price.  It competes with many local
transcription  services,  including  work-at-home individuals and medical care
providers'  in-house  staffs.


RESEARCH  AND  DEVELOPMENT

     The  Company  has  not made significant expenditures in 1996 for research
and  development,  although  expenditures were incurred in connection with OCR
technology  developments,  enhancing  its  networking  and  telecommunications
capabilities  and  exploring  new  business  ventures,  including the internet
technical  support  business.


CUSTOMERS

     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.

     During 1996 and 1995, one customer that is comprised of twelve affiliated
companies,  accounted for 24% and 29% of the Company's revenues, respectively.
No  other  customer  accounted  for  10%  or  more  of the Company's revenues.
Revenues  from  the European market increased to 19% of total revenues in 1996
from  18%  in  1995.


FACTORS  AFFECTING  BUSINESS  IN  THE  PHILIPPINES

     While  the  major  part of the Company's operations are carried on in the
Philippines,  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  in the
Philippines as it would be if it depended on revenues from sources internal to
the  Philippines.    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.  For example, in the
first  few months of 1994, the minimum wage rates in the Philippines increased
an  aggregate  of  approximately  23%.  Additional minimum wage increases have
also  been  mandated  in  1997.

     Certain  aspects  of  the Philippine economy directly affect the Company.
While  the political situation currently appears to be stable, business in the
Philippines  was  significantly disrupted by the political turmoil surrounding
the  fall  of  the  Marcos  administration  in the late 1980s.  Further unrest
occurred  during the Aquino administration.  The Philippines 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.

     As  a  United  States  corporation  engaged in business operations in the
Philippines,  through March 31, 1995 the Company had been subject to both U.S.
and Philippine income tax with respect to the Philippine source income derived
by  the  Company.  In addition, the Philippine source income of the Company is
subject  to  other Philippine taxes such as the value-added tax and tax on the
repatriation  of  profits from the Philippine operations to the Company in the
United  States.   Under U.S. tax law, the U.S. foreign tax credit is available
(subject  to  various  limitations) to reduce the burden of double taxation on
the  Philippine  source  income  of  the Company.  However, as a result of the
foreign  tax  credit  limitation,  the Company may only be entitled to claim a
foreign  tax  credit  with respect to a portion of the income taxes payable in
the  Philippines.    In addition, the foreign tax credit is not available with
respect  to any value added taxes or any other non-income taxes payable in the
Philippines.  The Philippines and the United States entered into an Income Tax
Treaty  effective October 16, 1982.  The Company believes that such treaty has
no  material  adverse  effect  on  the  Company.

     Commencing April 1, 1995, the Philippine operations are conducted through
a  wholly-owned  subsidiary  that has been granted an income tax holiday for a
four-year  period.    Accordingly, no income taxes will be payable on earnings
from  operations  of  the subsidiary during such period, unless repatriated to
the  U.S.

     The  Company funds its operations in the Philippines through the transfer
of  United States dollars to the Philippines only as needed and generally does
not  maintain any significant amount of funds or monetary assets in Philippine
pesos.    Since  the  Company does not have income generating customers in the
Philippines,  the  direction of currency flow is largely into the Philippines.
However,  to  the  extent  that the Company needs to bring currency out of the
Philippines  in  the course of its operations, it will be affected by currency
control  regulations.    Foreign  currency  or  foreign  exchange  may only be
exported  from the Philippines in accordance with the rules and regulations of
the  Central  Bank  of the Philippines.  Foreign investments which are made in
the  Philippines  and  are  duly  registered  with  the Central Bank or with a
custodian  bank  duly  designated by the foreign investor are entitled to full
and  immediate  capital  repatriation  and  dividend  and  interest remittance
privilege  without  prior Central Bank approval.  The Company's investment has
been  registered  with  the  Central Bank.  However, there can be no assurance
that these regulations may not be altered in the future in a way that would be
unfavorable  to  the  Company.

     The  Philippines has historically experienced high rates of inflation and
major fluctuations in exchange rate between the Philippine peso and the United
States  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.

     The  Philippines  is subject to relatively frequent earthquakes, volcanic
eruptions, floods and other natural disasters, which may disrupt the Company's
operations.    However,  the  eruption of Mt. Pinatubo, which is 50 miles from
Manila,  did  not  prevent  the  Company  from fulfilling its customer orders,
although  it  did have to rely more heavily on electronic transmission of data
since  the  airports were closed, preventing the arrival and shipping of paper
documents  and  electronic  storage disks.  The Company has a facility in Cebu
City,  which  is  located on a separate island 350 miles from Manila and which
also  may  serve  as  a disaster recovery site.  The Company has an additional
facility  in  Sri Lanka and expects to open an additional facility in India in
1997.

     Power  outages lasting for periods of as long as eight hours per day have
occurred.    The  Company's  facilities  in  Manila and Cebu 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,  1997,  the  Company  employed  an  aggregate  of
approximately  100  persons  in  the United States and the United Kingdom, and
approximately  2,700  persons  in  the  Philippines  and  Sri  Lanka.

     Employees  at the Company's Manila facilities voted to join 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  ended  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 24.  A
significant  number  of  employees have college degrees.  A substantial middle
management infrastructure, grown both from within the ranks of the Company and
though  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.


ITEM  2.    DESCRIPTION  OF  PROPERTY

     The Company's Manila, Philippines premises are occupied under a five-year
lease  which  expires  on  December  31,  1998  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  $27,000  in  1997  and  $30,000  in  1998.

     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
$8,000.

     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
Maryland  for  approximately  $7,000  per  month.  The lease expires February,
2002.

     The  Company  has  various short-term leases in Sri Lanka, California and
the  United  Kingdom  with lease payments aggregating approximately $8,000 per
month.

     The  Company  has  entered into agreements to lease production facilities
currently under construction in India.  Pursuant to its terms, upon completion
of  the facilities, the Company will be obligated to make payments aggregating
approximately  $150,000  per  year  for  an  initial  term  of  five  years.

     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.

     The  following  matters  were  voted  on  at  the November 7, 1996 Annual
Meeting  of  Stockholders.    The  total  shares  voted  were  3,848,466.
<TABLE>

<CAPTION>



<S>                      <C>        <C>      <C>      <C>       <C>

                         FOR        AGAINST  ABSTAIN  WITHHELD  NOT VOTED
                         ---------  -------  -------  --------  ---------

ELECTION OF DIRECTORS:
Barry Hertz              3,820,209                      28,257
Todd Solomon             3,715,577                     132,889
Jack Abuhoff             3,718,364                     130,102
Martin Kaye              3,824,364                      24,102
Albert Drillick          3,820,759                      27,707
E. Bruce Fredrikson      3,822,259                      26,207
Morton Mackof            3,824,364                      24,102
Stanley Stern            3,824,864                      23,602

1996 STOCK OPTION PLAN   2,146,538  332,897   41,667            1,327,364

APPOINTMENT OF AUDITORS  3,826,928   11,202   10,336
</TABLE>




<PAGE>
                                    PART II
                                    -------


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

     The  Company's  Common  Stock  and  Redeemable Warrants are quoted on the
NASDAQ  National  Market  System  under  the  symbols  "INOD"  and  "INODW",
respectively.   On February 28, 1997, there were 100 stockholders of record of
the  Company's  Common  Stock,  and  54  holders  of  record of the Redeemable
Warrants  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  1,600.

     The  following  tables  set  forth  the  high  and  low sales prices on a
quarterly  basis  for  the  Company's Common Stock and Redeemable Warrants, as
reported  on  NASDAQ  NMS,  for  the  two  years  ended  December  31,  1996.
<TABLE>

<CAPTION>



<S>             <C>           <C>      <C>                  <C>

                COMMON STOCK           REDEEMABLE WARRANTS
                SALE PRICES            SALE PRICES

1995            HIGH          LOW      HIGH                 LOW
--------------  ------------  -------  -------------------  ----

First Quarter              5    3/1/8                  3/4  3/16

Second Quarter         5-3/8    3-1/4                13/16   3/8

Third Quarter              5    3-1/4                 7/16   1/4

Fourth Quarter         5-1/8    3-3/4                 7/16  7/32

1996
--------------                                                  

First Quarter          5-3/4  3-11/16                 7/16  3/16

Second Quarter         4-5/8    3-3/8                 7/16  3/32

Third Quarter          3-3/4  1-15/16                  1/4  3/32

Fourth Quarter         2-3/8        1                 7/32  3/32
</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.


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,                               1996          1995          1994         1993         1992
                                               ------------  ------------  ------------  -----------  ----------

REVENUES                                       $20,536,448   $20,767,405   $14,344,914   $9,619,722   $5,893,383
                                               ------------  ------------  ------------  -----------  ----------

OPERATING COSTS AND EXPENSES
     Direct operating costs                     16,783,595    14,044,067    10,764,658    7,003,288    3,817,000
     Costs resulting from project termination            -             -       393,195            -            -
     Selling and administrative                  4,799,739     4,344,793     2,834,534    1,966,103    1,000,131
     Interest expense                               36,383        18,476         7,392       82,375       86,089
     Interest and dividend income                 (123,771)     (151,319)     (160,689)     (89,767)           -
                                               ------------  ------------  ------------  -----------  ----------

          Total                                 21,495,946    18,256,017    13,839,090    8,961,999    4,903,220
                                               ------------  ------------  ------------  -----------  ----------

(LOSS) INCOME BEFORE
   INCOME TAXES                                   (959,498)    2,511,388       505,824      657,723      990,163
INCOME TAXES                                      (357,000)    1,000,000       199,000      215,000      315,000
                                               ------------  ------------  ------------  -----------  ----------

NET (LOSS) INCOME                              $  (602,498)  $ 1,511,388   $   306,824   $  442,723   $  675,163
                                               ============  ============  ============  ===========  ==========

(LOSS) INCOME PER SHARE                        $      (.13)  $       .32   $       .07   $      .13   $      .25
                                               ============  ============  ============  ===========  ==========

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


AS OF DECEMBER 31,                                    1996          1995          1994         1993         1992
                                               ------------  ------------  ------------  -----------  ----------

WORKING CAPITAL                                $ 4,774,121   $ 6,247,708   $ 4,972,682   $5,526,467   $   73,723
                                                                           ============  ===========  ==========

TOTAL ASSETS                                   $12,416,296   $12,538,694   $10,077,049   $9,014,247   $2,018,127
                                               ============  ============  ============  ===========  ==========

LONG-TERM DEBT                                 $   195,960   $    92,180   $   191,666   $        -   $  209,068
                                               ============  ============  ============  ===========  ==========

STOCKHOLDERS' EQUITY                           $ 9,477,471   $ 9,747,655   $ 8,327,601   $7,877,512   $  682,204
                                               ============  ============  ============  ===========  ==========

</TABLE>



                     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, 1996, 1995 and 1994 included in Item 7 of this Form 10-KSB.


RESULTS  OF  OPERATIONS

General

     The  Company  is  a  worldwide  electronic  publishing  services  company
specializing  in  high quality data conversion for Internet, CD-ROM, print and
online  database  publishers  around  the  globe.    Services  include all the
necessary steps for product development and data capture: the highest accuracy
data entry (99.995%+), OCR, SGML and custom coding, hypertext linking, imaging
and  document  management systems, page composition, copyediting, indexing and
abstracting,  and  applications  programming.  The Company also offers medical
transcription services to health-care providers through its Statline division.


YEARS  ENDED  DECEMBER  31,  1996  AND  1995

     Revenues decreased 1% to $20,536,448 for the year ended December 31, 1996
compared  to  $20,767,405  for  the  similar  period in 1995.  The decrease in
revenues  was due principally to a decrease in volume from existing customers,
net of approximately $846,000 of revenues from International Imaging which was
acquired in January 1996 and the addition of new customers.  Revenues from the
European  market  increased to 19% of total revenues in 1996 from 18% in 1995.
Revenues  have  been  primarily  attributable  to  data  entry  and conversion
services  which  accounted  for approximately 63% of the Company's revenues in
1996  and  72%  of  the Company's revenues in 1995.  During 1996 and 1995, one
customer  comprised  of twelve affiliated companies, accounted for 24% and 29%
of  the Company's revenues, respectively.  No other customer accounted for 10%
or  more  of  the  Company's  revenues.

     Direct  operating  expenses  were $16,783,595 for the year ended December
31,  1996  and $14,044,067 for the similar period in 1995, an increase of 20%.
Direct operating expenses as a percentage of revenues increased to 82% in 1996
compared to 68% in 1995. The increase in direct operating expenses in 1996 was
due  to  higher  fixed  costs  in  the  Company's imaging services division of
approximately  $700,000,  principally  resulting  from  the  acquisition  of
International  Imaging,  and  increased  payroll  and  related  costs  in  the
Philippines  of  approximately  $1,000,000  resulting  principally  from  a
collective  bargaining  agreement  that became effective on April 1, 1996.  In
addition,  costs  related  to  telecommunications,  occupancy  costs  and
depreciation  in  the  U.S. based operations increased approximately $800,000.
Direct  operating  costs include primarily direct payroll, telecommunications,
freight,  computer  services,  supplies  and  occupancy.

     Selling  and administrative expense was $4,799,739 and $4,344,793 for the
years ended December 31, 1996 and 1995, respectively, representing an increase
of  10% in 1996 from 1995.  Selling and administrative expense as a percentage
of  revenues  was  23%  in 1996 and 21% in 1995. The dollar increase primarily
reflects the expansion of the Company's management team, and also reflects the
added  overhead  and  sales related expenses of International Imaging acquired
during 1996.  Selling and administrative expense includes management salaries,
sales  and  marketing salaries, clerical and administrative salaries, rent and
utilities  not  included  in  direct  costs,  trade shows, travel expense, and
administrative  overhead.

     Income  tax (benefit) expense as a percentage of pre-tax income was (37)%
in  1996  and  40%  in  1995.

     Net  (loss)  income  was  $(602,498)  in 1996 and $1,511,388 in 1995. Net
income  was reduced significantly in 1996 due to the increased costs discussed
above  with  no  commensurate  increase  in  revenues.


YEARS  ENDED  DECEMBER  31,  1995  AND  1994

     Revenues  increased  45%  to  $20,767,405 for the year ended December 31,
1995  compared to $14,344,914 for the similar period in 1994.  The increase in
revenues was due principally to an increase in volume from existing customers,
to  the  addition  of  approximately  $2,250,000  of revenues from Engineering
Images  which  was  acquired  in  December  1994  and, to a lesser extent, the
addition of new customers.  Revenues from the European market increased to 18%
of  total  revenues  in  1995  from 16% in 1994.  Revenues have been primarily
attributable  to  data  entry  and  conversion  services  which  accounted for
approximately  72%  of the Company's revenues in 1995 and 82% of the Company's
revenues  in  1994.    During  1995 and 1994, one customer comprised of twelve
affiliated companies, accounted for 29% and 37% (14% from one of the companies
in 1994) of the Company's revenues, respectively.  No other customer accounted
for  10%  or  more  of  the  Company's  revenues.

     Direct  operating  expenses  were $14,044,067 for the year ended December
31,  1995  and $10,764,658 for the similar period in 1994, an increase of 30%.
Direct operating expenses as a percentage of revenues decreased to 68% in 1995
compared  to  75% in 1994.  A wage increase was mandated in the Philippines in
1994.    The  effect of such increase has since been reduced primarily through
efficiencies  in  the  production  process.    Further, significant costs were
incurred  in 1994 from a single project outside of the Company's core business
that  negatively  impacted profits from July 1993 until its termination at the
end  of March 1994.  Costs associated with this project, primarily for payroll
and  high  speed  telecommunication  lines, exceeded revenues by approximately
$300,000 in 1994.  In addition, the Company did not realize its normal margins
on work performed in connection with such revenues.  The Company also incurred
expenses  attributable  to  terminating  this  project  of  $393,195.

     Selling  and administrative expense was $4,344,793 and $2,834,534 for the
years ended December 31, 1995 and 1994, respectively, representing an increase
of  53% in 1995 from 1994.  Selling and administrative expense as a percentage
of  revenues  was  21% in 1995 and 20% in 1994.  The dollar increase primarily
reflects  the  expansion  of  the  Company's sales and marketing efforts which
resulted  in  significant  increases  in  revenue, and to a lesser extent also
reflects  increases  in  general overhead as a result of the increased volume,
including  additional  employees.  The dollar increase also reflects the added
overhead and sales related expenses of Engineering Images acquired in December
1994  of  approximately  $600,000.

     Income  tax expense as a percentage of pre-tax income was 40% in 1995 and
39%  in  1994.

     Net  income was $1,511,388 in 1995 and $306,824 in 1994.  The substantial
increase in 1995 is due principally to the increased revenues in 1995 and that
1994  was  adversely  impacted  by  the increased direct costs from the single
project  discussed  above  and  the expenses of termination of that project in
March  1994.


LIQUIDITY  AND  CAPITAL  RESOURCES

     Net  cash  provided  by  operating  activities  was  $897,085 in 1996 and
$654,622  in  1995.    Net  cash provided by operating activities for the year
ended  December  31,  1996  was  increased  due  to  a  decrease  in  accounts
receivable,  offset  by  a  loss  from operations.  Net cash used in investing
activities  was $401,919 in 1996 and $1,193,973 in 1995.  The decrease in 1996
was  due  to  the  acquisition  of  International  Imaging  utilizing  cash of
$410,646,  offset  by  proceeds from short-term investments of $1,240,000.  In
1996,  net cash provided by financing activities was $35,373 and, in 1995, net
cash of $257,863 was used in financing activities principally for the purchase
of  treasury  stock  and  payments  of  borrowings.

     The  Company has a commitment to purchase a perpetual license for certain
production  process  software  for cash totaling $190,000 and 35,000 shares of
the  Company's  common  stock.    Payment  is  contingent  upon the successful
completion  and  testing  of  the  software,  expected  to  occur during 1997.

     In  January  1997  the  Company entered into a revolving credit agreement
with a bank providing for borrowings up to $1,000,000 for equipment purchases.
The  borrowings  will  convert to a term loan payable over a three year period
commencing January 1998.  During 1997 interest is payable at  % over prime and
interest has been fixed on the term loan at 10.1% per annum.  In addition, the
bank  has  provided  a  line  of  credit  up  to  $2,000,000 based on eligible
receivables,  as  defined.  Interest is payable at  % over prime.  The line of
credit  is reviewed annually on June 30 and borrowings are collateralized by a
lien  on  the  assets  of  the  Company.

     The  Company expects to open a production facility in India in the second
half  of  1997.  In addition, the Company expects to make capital expenditures
on an ongoing basis for the expansion of its existing production facilities in
the  Philippines  and  Sri  Lanka  and for additional equipment for its United
States  operations.    The  Company  estimates these capital expenditures will
aggregate  approximately  $1,500,000  during  1997.


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.


ITEM  7.    FINANCIAL  STATEMENTS.

                     INNODATA CORPORATION AND SUBSIDIARIES
                         INDEX TO FINANCIAL STATEMENTS
<TABLE>

<CAPTION>



<S>                                                                        <C>

                                                                           PAGE
                                                                           --------

Independent Auditors' Report                                               II-7

Consolidated Balance Sheets as of December 31, 1996 and 1995               II-8

Consolidated Statements of Operations for the three years ended            II-9
December 31, 1996

Consolidated Statements of Stockholders' Equity for the three years ended  II-10
December 31, 1996

Consolidated Statements of Cash Flows for the three years ended            II-11
December 31, 1996

Notes to Consolidated Financial Statements                                 II-12-22
</TABLE>





<PAGE>
INDEPENDENT  AUDITORS'  REPORT



Board  of  Directors  and  Stockholders
Innodata  Corporation
Brooklyn,  New  York


We  have  audited  the  accompanying  consolidated  balance sheets of Innodata
Corporation and subsidiaries as of December 31, 1996 and 1995, and the related
consolidated statements of operations, stockholders' equity and cash flows for
each  of  the  three  years  in  the  period  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  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, 1996 and 1995, and the results
of  their  operations  and their cash flows for each of the three years in the
period  ended  December  31,  1996  in  conformity  with  generally  accepted
accounting  principles.



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




<PAGE>
                     INNODATA CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                          DECEMBER 31, 1996 AND 1995
<TABLE>

<CAPTION>



<S>                                                                        <C>           <C>

                                                                                  1996          1995 
                                                                           ------------  ------------
ASSETS

CURRENT ASSETS:
  Cash and equivalents                                                     $ 2,097,193   $ 1,566,654 
  Accounts receivable-net of allowance for doubtful accounts of $140,000
       in 1996 and $175,000 in 1995 (Note 10)                                3,718,283     5,057,028 
  Short-term investments (Note 2)                                                    -     1,259,784 
  Prepaid expenses and other current assets                                  1,130,510       638,101 
  Deferred income taxes (Notes 1 and 4)                                        220,000        72,000 
                                                                           ------------  ------------

               TOTAL CURRENT ASSETS                                          7,165,986     8,593,567 

FIXED ASSETS-NET (NOTES 1 AND 3)                                             3,617,939     2,965,596 

GOODWILL (NOTES 1 AND 5)                                                     1,159,946       782,270 

OTHER ASSETS                                                                   472,425       197,261 
                                                                           ------------  ------------

TOTAL                                                                      $12,416,296   $12,538,694 
                                                                           ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Current portion of long-term debt (Notes 5 and 6)                        $   208,298   $    87,500 
  Accounts payable and accrued expenses                                      1,279,519       813,565 
  Accrued salaries and wages                                                   625,479       524,488 
  Taxes, other than income taxes                                               278,569       194,112 
  Income taxes payable (Notes 1 and 4)                                               -       726,194 
                                                                           ------------  ------------

               TOTAL CURRENT LIABILITIES                                     2,391,865     2,345,859 
                                                                           ------------  ------------

LONG-TERM DEBT, LESS CURRENT PORTION (NOTES 5 AND 6)                           195,960        92,180 
                                                                           ------------  ------------

DEFERRED INCOME TAXES (NOTES 1 AND 4)                                          351,000       353,000 
                                                                           ------------  ------------

COMMITMENTS AND CONTINGENT LIABILITIES (NOTES 7, 8 AND 9)

STOCKHOLDERS' EQUITY (NOTES 2, 5, 8 AND 9):
  Common stock, $.01 par value-authorized 20,000,000 shares;
     issued 4,565,210 shares in 1996 and 4,477,273 shares in 1995               45,652        44,773 
  Additional paid-in capital                                                 8,824,696     8,497,453 
  Unrealized loss on available-for-sale securities                                   -        (4,192)
  Retained earnings                                                            751,000     1,353,498 
                                                                           ------------  ------------

                                                                             9,621,348     9,891,532 
  Less: treasury stock - at cost; 41,500 shares                               (143,877)     (143,877)
                                                                           ------------  ------------

               TOTAL STOCKHOLDERS' EQUITY                                    9,477,471     9,747,655 
                                                                           ------------  ------------

TOTAL                                                                      $12,416,296   $12,538,694 
                                                                           ============  ============

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



<PAGE>
                     INNODATA CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                 YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>

<CAPTION>



<S>                                                      <C>           <C>           <C>

                                                                1996          1995          1994 
                                                         ------------  ------------  ------------

REVENUES (NOTE 10)                                       $20,536,448   $20,767,405   $14,344,914 
                                                         ------------  ------------  ------------

OPERATING COSTS AND EXPENSES
     Direct operating costs                               16,783,595    14,044,067    10,764,658 
     Costs resulting from project termination (Note 11)            -             -       393,195 
     Selling and administrative expenses                   4,799,739     4,344,793     2,834,534 
     Interest expense                                         36,383        18,476         7,392 
     Interest income                                        (123,771)     (151,319)     (160,689)
                                                         ------------  ------------  ------------

                    TOTAL                                 21,495,946    18,256,017    13,839,090 
                                                         ------------  ------------  ------------

(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES             (959,498)    2,511,388       505,824 

(BENEFIT) PROVISION FOR INCOME TAXES (NOTES 1 AND 4)        (357,000)    1,000,000       199,000 
                                                         ------------  ------------  ------------

NET (LOSS) INCOME                                        $  (602,498)  $ 1,511,388   $   306,824 
                                                         ============  ============  ============

(LOSS) INCOME PER SHARE (NOTE 1)                         $      (.13)  $       .32   $       .07 
                                                         ============  ============  ============

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




<PAGE>
                     INNODATA CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>

<CAPTION>



<S>                                <C>        <C>           <C>      <C>          <C>           <C>           <C>

                                   ---COMMON STOCK---  ADDITIONAL   UNREALIZED
                                   ------------------  PAID-IN      LOSS ON       RETAINED      TREASURY
                                   SHARES     AMOUNT   CAPITAL      SECURITIES    EARNINGS      STOCK
                                   ---------  -------  -----------  ------------  ------------  ----------

JANUARY 1, 1994                    4,210,000  $42,100  $ 6,984,445  $         -   $   850,967   $       - 

  Net income                               -        -            -            -       306,824           - 

  Unrealized loss on
    available-for-sale
    securities                             -        -            -      (56,735)            -           - 

  Payment of 5%
    stock dividend                   210,509    2,105    1,313,576            -    (1,315,681)          - 

  Issuance of common stock
    as partial acquisition cost       56,764      568      199,432            -             -           - 
                                   ---------  -------  -----------  ------------  ------------  ----------

DECEMBER 31, 1994                  4,477,273   44,773    8,497,453      (56,735)     (157,890)          - 

  Net income                               -        -            -            -     1,511,388           - 

  Unrealized gain on
    available-for-sale
    securities                             -        -            -       52,543             -           - 

  Purchase of treasury stock               -        -            -            -             -    (143,877)
                                   ---------  -------  -----------  ------------  ------------  ----------
DECEMBER 31, 1995                  4,477,273   44,773    8,497,453       (4,192)    1,353,498    (143,877)

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

  Issuance of common stock
    upon exercise of stock
    options                           22,937      229       65,539            -             -           - 

  Issuance of common stock
    as partial acquisition costs      65,000      650      193,303            -             -           - 

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

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

DECEMBER 31, 1996                  4,565,210  $45,652  $ 8,824,696  $         -   $   751,000   $(143,877)
                                   =========  =======  ===========  ============  ============  ==========




<S>                                <C>




                                   TOTAL
                                   -----------

JANUARY 1, 1994                    $7,877,512 

  Net income                          306,824 

  Unrealized loss on
    available-for-sale
    securities                        (56,735)

  Payment of 5%
    stock dividend                          - 

  Issuance of common stock
    as partial acquisition cost       200,000 
                                   -----------

DECEMBER 31, 1994                   8,327,601 

  Net income                        1,511,388 

  Unrealized gain on
    available-for-sale
    securities                         52,543 

  Purchase of treasury stock         (143,877)
                                   -----------

DECEMBER 31, 1995                   9,747,655 

  Net loss                           (602,498)

  Issuance of common stock
    upon exercise of stock
    options                            65,768 

  Issuance of common stock
    as partial acquisition costs      193,953 

  Warrant costs for
    consulting arrangement             68,401 

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

DECEMBER 31, 1996                  $9,477,471 
                                   ===========


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



<PAGE>
                     INNODATA CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                 YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>

<CAPTION>



<S>                                                           <C>           <C>           <C>

                                                                     1996          1995          1994 
                                                              ------------  ------------  ------------

OPERATING ACTIVITIES:
  Net (loss) income                                           $  (602,498)  $ 1,511,388   $   306,824 
  Adjustments to reconcile net (loss) income to net
    cash provided by operating activities:
    Depreciation and amortization                               1,372,731       972,669       717,300 
    Deferred income taxes                                        (150,000)      240,000        41,000 
    Changes in operating assets and liabilities:
      Accounts receivable                                       1,380,498    (2,299,781)     (696,539)
      Prepaid expenses and other current assets                  (479,251)     (462,274)      137,572 
      Other assets                                               (271,413)      (46,957)     (115,782)
      Accounts payable and accrued expenses                       187,764      (103,117)      313,990 
      Accrued salaries and wages                                  100,991       211,029       119,409 
      Taxes, other than income taxes                               84,457        93,727        30,997 
      Income taxes payable                                       (726,194)      537,938        42,004 
                                                              ------------  ------------  ------------

         Net cash provided by operating activities                897,085       654,622       896,775 
                                                              ------------  ------------  ------------

INVESTING ACTIVITIES:
  Expenditures for fixed assets                                (1,231,273)   (1,193,973)     (773,485)
  Payments in connection with acquisitions                       (410,646)            -      (527,270)
  Short-term investments                                        1,240,000             -             - 
                                                              ------------  ------------  ------------

        Net cash used in investing activities                    (401,919)   (1,193,973)   (1,300,755)
                                                              ------------  ------------  ------------

FINANCING ACTIVITIES:
  Proceeds from borrowings                                        626,014             -             - 
  Proceeds from exercise of stock options                          65,768             -             - 
  Purchase of treasury stock                                            -      (143,877)            - 
  Payments of borrowings                                         (656,409)     (111,986)     (234,686)
  Redemption of preferred stock                                         -        (2,000)            - 
                                                              ------------  ------------  ------------

         Net cash provided by (used in) financing activities       35,373      (257,863)     (234,686)
                                                              ------------  ------------  ------------

INCREASE (DECREASE) IN CASH AND EQUIVALENTS                       530,539      (797,214)     (638,666)
CASH AND EQUIVALENTS, BEGINNING OF YEAR                         1,566,654     2,363,868     3,002,534 
                                                              ------------  ------------  ------------

CASH AND EQUIVALENTS, END OF YEAR                             $ 2,097,193   $ 1,566,654   $ 2,363,868 
                                                              ============  ============  ============

SUPPLEMENTAL DISCLOSURES OF CASH
  FLOW INFORMATION
  Cash paid during the year for:
    Interest                                                  $    35,238   $    14,963   $     6,253 
                                                              ============  ============  ============

    Income taxes                                              $   922,789   $   222,062   $   116,000 
                                                              ============  ============  ============


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

<PAGE>
                                     
INNODATA  CORPORATION  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  DECEMBER  31,  1996,  1995  AND  1994
---------------------------------------------------


1.           SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

     BUSINESS  AND  BASIS  OF  PRESENTATION  -  Innodata  Corporation  and
subsidiaries  (the  "Company") performs data entry, data conversion, scanning,
imaging  and  document  management  systems,  indexing  and  abstracting,  and
typesetting  and  composition services tailored to customer requirements.  The
Company  also  offers medical transcription services to health care providers.
The  Company's  services  are  principally  performed in production facilities
located in the Philippines, Sri Lanka 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.    Track  Data  Corporation  owns
approximately  28%  of  the  Company  and  shares  certain  management.

     The  financial statements have been prepared in conformity with generally
accepted  accounting  principles,  which  requires  the  use  of  management's
estimates.

     REVENUE  RECOGNITION  -  Revenue is recognized in the period in which the
service  is  performed.    The  Company's  typesetting and composition service
projects  are  generally  performed  over four to six month periods.  Revenues
from  these projects are recognized using the percentage of completion method.

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

     FOREIGN  CURRENCY  - The functional currency for the Company's production
operations located in the Philippines and Sri Lanka is U.S. dollars.  As such,
transactions  denominated  in  Philippine  pesos  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, 1996 and 1995 were translated at the exchange rate
in  effect  as of those dates.  Exchange gains and losses resulting from these
transactions  were  immaterial.   In addition, the Company periodically enters
into  contracts  to  purchase foreign currency as a hedge against a portion of
its foreign production costs.  Gains and losses resulting from these contracts
are  included  as  a  component  of  the  related  transactions.

     CASH  AND  EQUIVALENTS - 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>         <C>    <C>

                                                 1996    1995        1994 

Acquisition costs                           $ 563,771   $   -  $1,027,270 
Notes issued                                        -       -    (300,000)
Common stock issued                          (153,125)      -    (200,000)
                                            ----------  -----  -----------

  Payments in connection with acquisitions  $ 410,646       -  $  527,270 
                                            ==========  =====  ===========
</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.

     GOODWILL  -  Goodwill arising from acquisition costs exceeding net assets
acquired  is  being  amortized on a straight-line basis over a 15 year period.
Management  assesses  the  recoverability  of  the remaining unamortized costs
based  principally upon a comparison of the carrying value of the asset to the
undiscounted  expected future cash flows to be generated by the asset whenever
events  or  changes in circumstances indicate that the carrying amount may not
be  recoverable.    If  management  concludes  that the asset is impaired, its
carrying  value  is  adjusted  to  its  net  realizable  value.

     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."

     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.

     (LOSS)  INCOME  PER  SHARE - (Loss) income per share is computed based on
the  weighted  average number of shares outstanding.  In 1995, pursuant to the
modified  treasury  stock  calculation  method,  the  calculation includes the
effects  of  the assumed exercise of all outstanding options and warrants, the
repurchase  of  20% of the outstanding shares of the Company, and after giving
effect  to  assumed  interest earned on the net proceeds from the exercise and
repurchase.  The number of common and common equivalent shares utilized in the
per  share  computations were 4,509,588, 5,456,266 and 4,425,239 in 1996, 1995
and  1994, respectively.  Outstanding options and warrants were not considered
in  1996  and  1994  as they would have been antidilutive in 1996 and were not
dilutive  in  1994.

2.          SHORT-TERM  INVESTMENTS

     At  December 31, 1995, short-term investments consisted of corporate debt
securities  due  in  1996.    These  securities  were  classified  as
available-for-sale.    At  December  31,  1995,  the fair market value of such
securities  was  less  than  their  net  cost  by  approximately $4,000, and a
valuation  allowance  was  established as a reduction of stockholders' equity.

3.          FIXED  ASSETS

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

<CAPTION>



<S>                            <C>         <C>           <C>

                                           DECEMBER 31,

                                     1996                      1995

Equipment                      $6,092,985                $4,401,308
Furniture and fixtures            375,465                   316,697
Leasehold improvements            401,987                   308,563
                               ----------                ----------

          Total                 6,870,437                 5,026,568

Less accumulated depreciation
     and amortization           3,252,498                 2,060,972
                               ----------                ----------

                               $3,617,939                $2,965,596
                               ==========                ==========

</TABLE>



     As  of  December  31,  1996  and 1995, the net book value of fixed assets
located  at  the  Company's  production  facilities in the Philippines and Sri
Lanka was approximately $1,513,000 and $1,476,000, respectively.  In addition,
equipment  financed  by  capital  leases  has  a net book value of $337,000 at
December  31,  1996.

4.          INCOME  TAXES

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

<CAPTION>



<S>                                        <C>         <C>         <C>

                                                1996         1995      1994

Current income tax (benefit) expense:
     Foreign                               $       -   $   10,000  $ 60,000
     Federal                                (159,000)     535,000    69,000
     State and local                         (48,000)     215,000    29,000
                                           ----------  ----------  --------

                                            (207,000)     760,000   158,000

Deferred income tax (benefit) expense       (150,000)     240,000    41,000
                                           ----------  ----------  --------

(Benefit from) provision for income taxes  $(357,000)  $1,000,000  $199,000
                                           ==========  ==========  ========
</TABLE>



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

<CAPTION>



<S>                                                   <C>      <C>    <C>

                                                         1996   1995   1994 

Federal statutory rate                                (34.0)%  34.0%  34.0%

Effect of:
     State income taxes (net of federal tax benefit)   (5.4)    6.1    3.8 
     Other                                              2.2    (0.3)   1.5 
                                                      -------  -----  -----

Effective rate                                        (37.2)%  39.8%  39.3%
                                                      =======  =====  =====

</TABLE>


     As  of  December  31, 1996 and 1995, the composition of the Company's net
deferred  taxes  is  as  follows:
<TABLE>

<CAPTION>



<S>                                       <C>           <C>

                                                 1996        1995 

Deferred income tax assets:
     Allowances not currently deductible  $   105,000   $  72,000 
     Expenses not deductible until paid       115,000           - 
     Net operating loss carryforward          700,000           - 
                                          ------------  ----------

                                              920,000      72,000 
                                          ------------  ----------

Deferred income tax liabilities:
     Foreign source income, not taxable
          unless repatriated                 (815,000)   (235,000)
     Depreciation and amortization           (236,000)   (118,000)
                                          ------------  ----------

                                           (1,051,000)   (353,000)
                                          ------------  ----------

Net deferred income tax liability         $  (131,000)  $(281,000)
                                          ============  ==========

</TABLE>



     The Company's net operating loss carryforward of approximately $1,750,000
expires  in  2011.

5.          ACQUISITIONS

     On  December  1, 1994, the Company acquired certain assets of Engineering
Images  ("EI"),  an unaffiliated partnership.  EI is a provider of imaging and
document  management  systems  and scanning/conversion services.  The purchase
price  consisted  of $427,270 cash (including expenses of $27,270), three-year
subordinated notes in the aggregate principal amount of $300,000 payable in 36
equal  monthly  installments commencing December 15, 1994 plus interest at the
prime  rate  (8.25% at December 31, 1996), and 56,764 restricted shares of the
Company's common stock with piggy-back registration rights valued at $200,000.
The  assets acquired consist principally of certain fixed assets and goodwill.
The  acquisition  has  been  accounted for as a purchase and, accordingly, the
results  of  operations  of  EI  are  included  since the date of acquisition.
Further,  in  January  1994,  the  Company  acquired the medical transcription
business  of  Statline,  Inc.  for  approximately  $100,000  cash, principally
consisting  of  fixed  assets.

     On  January 2, 1996, the Company acquired certain assets of International
Imaging, Inc. ("II").  II is located in Azusa, California and provides imaging
and  document  management  systems  and  scanning/conversion  services.    The
purchase  price  consisted  of $40,000 cash and 50,000 shares of the Company's
restricted common stock.  The Company also paid approximately $300,000 of II's
outstanding  lease obligations.  II's revenues for the year ended December 31,
1995  were  approximately  $1,000,000.

6.          LONG-TERM  DEBT

     Long-term  debt  is  as  follows:
<TABLE>

<CAPTION>



<S>                                          <C>       <C>

                                                 1996      1995
Equipment leases, at 9.6% to 13.5%           $365,846  $      -
Acquisition notes - subordinated, at prime     91,667   179,680
                                             --------  --------

                                              457,513   179,680
Less: deferred interest                        53,255         -
                                             --------  --------

Total                                         404,258   179,680
Less: current portion of long-term debt       208,298    87,500
                                             --------  --------

Long-term debt                               $195,960  $ 92,180
                                             ========  ========

</TABLE>



     Aggregate  maturities  of  long-term  debt  are  as  follows:
<TABLE>

<CAPTION>



<S>   <C>

1997  $236,855
1998   139,038
1999    55,458
2000    19,043
2001     7,119
      $457,513
      ========
</TABLE>



7.          COMMITMENTS  AND  CONTINGENT  LIABILITIES

     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  2001,  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 $500,000.  For the years ended December 31, 1996,
1995  and  1994,  rent  expense  totaled  approximately $825,000, $500,000 and
$408,000,  respectively.

     At  December  31,  1996,  future  minimum  annual  rental  commitments on
noncancellable  leases  are  as  follows:
<TABLE>

<CAPTION>



<S>   <C>

1997  $314,000
1998   275,000
1999   275,000
2000    80,000
      --------

      $944,000
      ========
</TABLE>



     EMPLOYMENT  AGREEMENTS - The Company has an employment agreement with its
President  that  expires  on September 30, 1999, pursuant to which he receives
annual compensation consisting of $231,000 plus a bonus of up to an additional
15%  based upon performance criteria, and options to purchase 31,000 shares of
the  Company's  common stock in each year of the agreement at the market price
of  the  common  stock  at  each  date  of  grant.    In  addition, if certain
performance  criteria  are  achieved,  he is eligible to receive, on an annual
basis,  options to purchase up to an additional 30,000 shares of common stock.

     Furthermore,  if  the President is employed on September 30, 1999 and the
Company has met certain earnings criteria, as defined, for a period of 30 days
ending  October  30,  1999, he may "put" up to 400,000 shares of the Company's
common stock owned by him, to the Company at $5.00 per share.  If the "put" is
exercised,  payment  is  to be made in equal monthly installments over a three
year  period.

     OTHER COMMITMENTS - The Company has a commitment to  purchase a perpetual
license for certain production process software for cash totaling $190,000 and
35,000  shares  of the Company's common stock.  Payment is contingent upon the
successful  completion  and  testing of the software, expected to occur during
1997.    In  addition,  the  Company has contracts to purchase an aggregate of
$1,500,000  of  Philippine  pesos  on  various  dates  through  February 1997.

     The  Company  has  entered into agreements to lease production facilities
currently under construction in India.  Upon completion of the facilities, the
Company  will be obligated to make payments aggregating approximately $150,000
per  year  for  an  initial  term  of  five  years.

     Employees  at the Company's Manila facilities voted to join 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  ended  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, 1996.  Under the legislation, the Company is
not  required  to  fund  future  costs,  if  any.

8.          CAPITAL  STOCK

     COMMON STOCK DIVIDEND - On August 9, 1994 the Board of Directors declared
a  5%  stock  dividend  to  holders  of  record on August 25, 1994, payable on
September 19, 1994.  All share and per share information have been adjusted to
reflect  such  dividend.

     COMMON  STOCK  AND REDEEMABLE WARRANTS - In August and September 1993 the
Company  sold  pursuant to a public offering 1,610,000 shares (1,690,500 after
dividend)  of  its  common  stock  at  $5.00  per share and 2,415,000 warrants
("Redeemable  Warrants")  at  $.10 per warrant and realized net proceeds after
all expenses of the offering of $6,752,585.  From August 10, 1994 until August
9,  1997  the holders may exchange four Redeemable Warrants for 1.05 shares of
common stock upon payment of $6.68 per whole share.  No fractional shares will
be  issued.    The  warrants are redeemable by the Company at $.10 per warrant
upon  30  days  prior  written  notice,  provided the closing bid price of the
common  stock  equals  or exceeds $9.50 per share for 20 trading days within a
period  of  30  consecutive  trading  days.

     In  connection with the offering, the Company sold to the underwriter for
nominal  consideration  warrants  to  purchase  up to 147,887 shares of common
stock at $7.81 per share and 210,000 warrants at $.157 per warrant to purchase
55,015  shares of common stock at $6.68 per share through August 9, 1998.  The
warrants  are  substantially identical to the Redeemable Warrants, except they
are  not  redeemable.    The  underwriter's  warrants  contain  piggy-back
registration rights for a period of seven years with respect to the underlying
securities  and a demand registration right for a period of five years for two
registration  filings,  one  of  which  is  at  the  Company's  expense.

     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.  During 1995, the Company redeemed its Series A
and  Series  B  preferred  stock  for  an  aggregate  consideration of $2,000.

     COMMON  STOCK  RESERVED  - At December 31, 1996, the Company reserved for
issuance 2,878,637 shares of its common stock as follows: (a) 1,728,063 shares
pursuant  to the Company's Stock Option Plans (including 21,000 options issued
to the Company's Chairman which were not granted under the plans); (b) 632,672
shares  upon  conversion  of  Redeemable Warrants; (c) 202,902 shares issuable
upon  exercise of underwriter's warrants; and (d) 315,000 shares issuable upon
exercise  of  warrants  issued  to  consultants.

9.          STOCK  OPTIONS  AND  WARRANTS

STOCK  OPTIONS

     The Company adopted, with stockholder approval, 1993, 1994, 1995 and 1996
Stock  Option Plans (the "1993 Plan," "1994 Plan," "1994 DD Plan," "1995 Plan"
and the "1996 Plan") which provide for the granting of options to purchase not
more than an aggregate of 262,500, 315,000, 52,500, 600,000 and 500,000 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 and under the 1996
Plan,  after  July  8,  2006.

     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  1996 and 1995 consistent with the provisions of SFAS No. 123,
the  Company's  net  loss  would have been $(738,987), or $(.16) per share, in
1996  and  net  income would have been $1,496,341, or $.32 per share, in 1995.
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 6.4% in 1996 and 6.2%
in  1995;  expected volatility of 40%; and a zero dividend yield.  The effects
of  applying  SFAS  No.  123  in  this disclosure are not indicative of future
disclosures.    SFAS  No.  123  does  not  apply  to  awards  prior  to  1995.

<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 1/1/94    $    4.76 - 7.38      262,763             4  $    5.15
       Canceled   $           4.76       (8,400)
       Repriced   $    4.76 - 7.38     (241,763)
       Repriced   $    2.63 - 3.01      199,763             3  $    2.86
       Repriced   $    4.33 - 5.63       42,000             3  $    5.31
       Granted    $    2.63 - 3.25      220,600             5  $    2.63
       Granted    $    4.20 - 5.95       78,000             5  $    4.73
                                    ------------                                                           

Balance 12/31/94  $    2.63 - 3.25      420,363             4  $    2.74
                  $    4.20 - 5.95      132,600             4  $    4.92
                                    ------------                                                           
                                        552,963                               143,791  $    3.66

       Canceled   $    2.63 - 4.63      (24,275)
       Granted    $    3.38 - 4.63      274,550             5  $    3.91                          $    1.57
                                    ------------                                                           

Balance 12/31/95  $    2.63 - 3.25      398,088             3  $    2.75
                  $    3.38 - 5.95      405,150             3  $    4.31
                                    ------------                                                           
                                        803,238                               360,295  $    3.46

       Canceled   $           3.01         (500)
       Granted    $    2.31 - 3.93       89,000             5  $    3.06                          $    1.22
       Exercised  $    2.63 - 3.01      (22,937)
                                    ------------                                                           

Balance 12/31/96  $    2.31 - 3.25      416,151             3  $    2.71      334,541  $    2.96
                  $    3.38 - 5.95      452,650             3  $    4.23      267,473  $    4.39
                                                                          -----------                      
                                        868,801                               602,014
                                    ============                          ===========                      

</TABLE>



     The majority of options become exercisable one-third on each of the first
three  anniversary  dates.

WARRANTS

     In  February  1995,  the  Company  entered  into  financial  consulting
arrangements  with  an  entity  and  two  individuals  pursuant  to  which the
consultants  are  to  assist  the  Company for a two year period in merger and
acquisition  transactions  and developing financial strategies and plans.  Two
of  the  consultants  were  granted  warrants  to  purchase 150,000 and 50,000
shares,  respectively,  at  $4.50  per  share  exercisable  in  25% cumulative
quarterly  increments commencing April 1995 and expiring on December 31, 1997.
Another consultant was granted warrants to purchase 65,000 shares at $4.00 per
share  exercisable  in  25% cumulative increments commencing September 1, 1995
and  expiring on December 31, 1997.  All warrants contain demand and piggyback
registration  rights  after  the  warrants  first  become  exercisable.

     In  addition,  in  connection with a consulting agreement on December 18,
1995,  the  Company  issued  a warrant to purchase 50,000 shares at a price of
$3.8125  per  share.   The warrant is exercisable commencing December 18, 1996
and  expires  in  2000.

10.          REVENUES  AND  ACCOUNTS  RECEIVABLE

     During  1996,  1995  and  1994,  one customer that is comprised of twelve
affiliated  companies,  accounted  for  24%,  29% and 37% (14% from one of the
companies),  of  the  Company's  revenues,  respectively.  No  other  customer
accounted  for  10% or more of the Company's revenues.  Further, in 1996, 1995
and  1994, export revenues, all of which were derived from European customers,
accounted  for  19%,  18%  and  16%,  respectively,  of  total  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.

11.          COSTS  RESULTING  FROM  PROJECT  TERMINATION

     Costs  resulting  from  project  termination  represent the provision for
expenses  and  losses  that were attributable to the termination in 1994 of an
unprofitable  project  that  commenced  in  1993.

12.          SUBSEQUENT  EVENT

     In  January  1997,  the Company entered into a revolving credit agreement
with a bank providing for borrowings up to $1,000,000 for equipment purchases.
The  borrowings  will  convert to a term loan payable over a three year period
commencing January 1998.  During 1997 interest is payable at  % over prime and
interest has been fixed on the term loan at 10.1% per annum.  In addition, the
bank  has  provided  a  line  of  credit  up  to  $2,000,000 based on eligible
receivables,  as  defined.  Interest is payable at  % over prime.  The line of
credit  is reviewed annually on June 30 and borrowings are collateralized by a
lien  on  the  assets  of  the  Company.


13.          QUARTERLY  RESULTS  OF  OPERATIONS  (UNAUDITED)

Not  reviewed  by  independent  accountants.
<TABLE>

<CAPTION>


                               (in thousands, except per share)
<S>                           <C>        <C>      <C>        <C>

                              FIRST      SECOND   THIRD      FOURTH
                              QUARTER    QUARTER  QUARTER    QUARTER
1994

Revenues                      $  3,088   $ 3,414  $  3,702   $  4,141 
Net (loss) income                 (355)      134       244        284 
Net (loss) income per share   $   (.08)  $   .03  $    .06   $    .06 

1995

Revenues                      $  4,442   $ 5,219  $  5,532   $  5,574 
Net income                         316       372       408        415 
Net income per share          $    .07   $   .08  $    .09   $    .08 

1996

Revenues                      $  5,590   $ 5,250  $  4,951   $  4,745 
Net income (loss)                  326        13      (405)      (536)
Net income (loss) per share   $    .07   $     -  $   (.09)  $   (.11)

</TABLE>



<PAGE>
ITEM  8.    CHANGE  IN  ACCOUNTANTS.

     None.


<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               47  Chairman of the Board of Directors

Todd Solomon              35  President, Chief Executive Officer and Director

Martin Kaye               49  Vice President - Finance, Secretary and Director

Jack Abuhoff              35  Director

Dr. Albert Drillick       51  Director

Dr. E. Bruce Fredrikson   59  Director

Morton Mackof             49  Director

Stanley Stern             46  Director
</TABLE>



     BARRY  HERTZ  has been Chairman since 1988 and Chief Executive Officer of
the  Company  until August 1995.  He is involved in the strategic planning and
management  of  the  Company.   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.    Track  was  a principal stockholder of Global, a
company  engaged  in  the  financial  information  services  market.    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).

     TODD  SOLOMON  has been President and a Director of the Company since its
founding  by  him  in  1988.    He was appointed as Chief Executive Officer in
August  1995.   He is responsible for the day to day operations of the Company
world  wide.    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 is also a director of TDC.

     MARTIN KAYE has been Chief Financial Officer of the Company since October
1993  and  was  elected  Vice  President  -  Finance  in  August 1995.  He was
appointed  as  a  Director in 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).

     JACK  ABUHOFF  has  been  a  Director  of  the Company since 1990.  He is
currently  Managing  Director  of    CRC, an international computer technology
consulting  firm.   Until 1994, he was employed as an attorney by Chadbourne &
Parke.    He has practiced law for more than the past five years.  He holds an
A.B.  degree  from  Columbia College (1983) and a J.D. degree from Harvard Law
School  (1986).

     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 which 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
had  been  executive  vice  president  of  Track  since  February 1991 and its
President  since  December  1994 until his resignation 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
has  served as chief operating officer of Track, and in predecessor positions,
for  more  than  five  years  and  since  the  Merger serves as Executive Vice
President of TDC.  Mr. Stern holds a B.B.A. from Baruch College (1973).  He is
also  a  director  of  TDC.

     There  are  no  family  relationships  between  or among any directors or
officers  of  the  Company.   A.S. Goldmen & Co., Inc., the underwriter of the
Company's  public offering of its common stock on August 10, 1993, is entitled
to  designate  one member of the Board of Directors for five years expiring on
August  9,  1998.    No  such  member has been elected to date.  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, 1996 through
December  31,  1996  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, 1996 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

Barry Hertz             1996  $      50,000  $    -               -
Chairman                1995              -       -          45,000
                        1994              -       -          45,000
                                                          21,000(A)

Todd Solomon            1996  $     231,000  $    -          31,000
President, CEO          1995        222,814       -          31,000
                        1994        175,000       -          74,350
                                                          78,750(A)

<FN>
   A)  Options  granted  1993  and  repriced  in  1994.
</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  plan.

                       OPTION GRANTS IN LAST FISCAL YEAR

                               INDIVIDUAL GRANTS
<TABLE>

<CAPTION>



<S>           <C>        <C>                        <C>              <C>

              NUMBER OF  PERCENT OF TOTAL OPTIONS                    EXPIR-
              OPTIONS    GRANTED TO EMPLOYEES IN    EXERCISE PRICE   ATION
NAME          GRANTED    FISCAL YEAR                PER SHARE        DATE

Todd Solomon     31,000                        35%  $         2.313  10/2001
</TABLE>


The  options  become  exercisable  one-third  on  each  of  the  first  three
anniversary  dates.

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

<TABLE>

<CAPTION>



<S>           <C>              <C>                         <C>

                               NUMBER OF UNEXERCISED       VALUE OF UNEXERCISED IN-THE-
              SHARES ACQUIRED  OPTIONS AT FISCAL YEAR END  MONEY OPTIONS AT FISCAL YEAR END
NAME          ON EXERCISE      EXERCISABLE/ UNEXERCISABLE  EXERCISABLE/ UNEXERCISABLE

Barry Hertz   None                          66,000/45,000  $                            -/$-

Todd Solomon  None                         138,649/76,451  $                            -/$-
</TABLE>




DIRECTORS  COMPENSATION

     Dr.  E. Bruce Fredrikson and Jack Abuhoff 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  Abuhoff  received  options to
purchase  7,000  and  3,500  shares,  respectively,  in  1996.


EMPLOYMENT  AGREEMENT

     The  Company has an employment agreement with Todd Solomon, its President
and  Chief  Executive  Officer.   The agreement expires on September 30, 1999.
Mr.  Solomon's  annual compensation consists of $231,000 plus a bonus of up to
an  additional  15%  based on performance criteria established by the Board of
Directors.    Further,  he  is to receive options to purchase 31,000 shares in
each year and is eligible to receive up to an additional 30,000 shares in each
year  based  on  performance,  as  detemined  by  the  Board of Directors.  In
addition,  if  Mr. Solomon is employed on September 30, 1999, and provided the
Company  has  achieved  certain  earnings criteria during the four years ended
September  30,  1999,  then  during the month of October 1999, Mr. Solomon may
"put"  up  to 400,000 shares of the Company's common stock owned by him to the
Company  at  $5.00  per  share  to  be  paid  over  a  three-year  period.



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

     The  following  table  sets  forth,  as  of February 28, 1997 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>

                                 SHARES OWNED BENEFICIALLY (1)

                                 AMOUNT AND NATURE
NAME AND ADDRESS OF              OF BENEFICIAL
BENEFICIAL OWNER                 OWNERSHIP                      PERCENT OF CLASS

Track Data Corporation (2)                           1,366,825              30.2%

Barry Hertz (3)                                      1,310,244              28.5%

Todd Solomon (4)                                       678,596              14.6%

Martin Kaye (5)                                         33,833                 * 

Jack Abuhoff (5)
263 W. 93 Street
New York, NY 10025                                      18,550                 * 

Albert Drillick (5)                                      6,575                 * 

Dr. E. Bruce Fredrikson (5)
Syracuse University
School of Management
Syracuse, NY 13244                                      24,500                 * 

Morton Mackof (5)                                        6,575                 * 

Stanley Stern (5)                                        6,575                 * 

All Officers and Directors
as a Group (8 persons)
(2)(3)(4)(5)                                         2,208,029              45.8%
______________________________
<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.
2.         Consists of 1,244,244 shares owned by Track Data Corporation, which is
majority owned by Mr. Hertz, and 122,581 shares which are owned by the Track Data
Corporation  Employee  401K  Savings  Plan.
3.          Includes  1,244,244  shares owned by Track Data Corporation, which is
majority owned by Mr. Hertz, and currently exercisable options to purchase 66,000
shares  of  Common  Stock.
4.          Includes  currently exercisable options to purchase 138,649 shares of
Common  Stock.
5.     Consists of shares issuable upon exercise of currently exercisable options
granted  under  the  Company's  Stock  Option  Plans.
</TABLE>


<PAGE>
ITEM  12.    CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.

There  were  no  material  related  party  transactions.


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

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

4.1      Form of Redeemable Warrant Agreement between      Exhibit 4.1 to Form SB-2 Registration Statement No. 33-62012
         the Company and the Warrant Agent

4.2      Specimens of Common Stock and Redeemable          Exhibit 4.2 to Form SB-2 Registration Statement No. 33-62012
         Warrant certificates

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

10.2     Contract of Lease with JM and Company, Inc.       Exhibit 10.2 to Form 10-KSB for year ended December 31, 1993

10.3     Contract of Lease with Elcado Realty Corporation  Exhibit 10.3 to Form SB-2 Registration Statement No. 33-62012

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

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

10.6     Employment Agreement dated August 24, 1995        Exhibit 10.6 to Form 10-QSB for the Quarter ended September 30
         with Todd Solomon                                                                                          , 1995

10.7     1994 Disinterested Directors Stock Option Plan    Exhibit B to Definitive Proxy dated August 9, 1994

10.8     Agreement dated July 13, 1992 between the         Exhibit 10.7 to Form SB-2 Registration Statement No. 33-62012
         Company and West Publishing Co.

10.9     Form of Financial Advisory and Consulting         Exhibit 10.8 to Form SB-2 Registration Statement No. 33-62012
         Agreement

10.10    Agreement of Purchase and Sale of Engineering     Exhibit 10.10 to Form 8-K dated as of December 1, 1994
         Images dated December 1, 1994

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

10.12    1995 Stock Option Plan                            Exhibit A to Definitive Proxy dated August 10, 1995

10.13    1996 Stock Option Plan                            Exhibit A to Definitive Proxy dated November 7, 1996

10.14    Revolving Credit Agreement                        Filed herewith

11       Statement re Computation of Per Share Earnings    Filed herewith

21       Subsidiaries of Small Business Issuer             Filed herewith

23       Consent of Margolin, Winer & Evens LLP            Filed herewith

27       Financial Data Schedule                           Filed herewith
</TABLE>



(b)          There  were no reports on Form 8-K filed during the quarter ended
December  31,  1996.


<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, 1997
-----------------------                                                      
Barry Hertz


    /s/                  President, Chief Executive Officer    March 25, 1997
-----------------------                                                      
Todd Solomon             and Director


    /s/                  Vice President - Finance  (Principal  March 25, 1997
-----------------------                                                      
Martin Kaye              Accounting and Financial Officer),
                         Director

    /s/                  Director                              March 25, 1997
-----------------------                                                      
Jack Abuhoff


    /s/                  Director                              March 25, 1997
-----------------------                                                      
Dr. Albert Drillick


    /s/                  Director                              March 25, 1997
-----------------------                                                      
Dr. E. Bruce Fredrikson


    /s/                  Director                              March 25, 1997
-----------------------                                                      
Morton Mackof


    /s/                  Director                              March 25, 1997
-----------------------                                                      
Stanley Stern
</TABLE>