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, 1997
                                            -----------------

/  /    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


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.  $20,116,935
                                                                  -----------

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  27,  1998  of  $1.67  per  share,  after  retroactive  effect  of  a
one-for-three  reverse  stock  split  on  March  25,  1998.  $1,931,317
                                                             ----------

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

   1,495,336 SHARES OF COMMON STOCK, $.01 PAR VALUE, AS OF FEBRUARY 28, 1998,
                          AFTER REVERSE STOCK SPLIT.

                      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 2,500 persons in the Philippines, India 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,  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 at the Company's production facilities
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, California 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.

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.

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.,  Philippine  and  Indian 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 its
facilities.    This  leased  circuit  enables the Company to transmit data and
image  documents  to  and from its facilities rather than by air courier which
can  take  up  to  five  days.

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. 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 1997 and 1996 for
research  and  development,  although expenditures were incurred in connection
with  OCR  technology  developments  and  enhancing  its  networking  and
telecommunications  capabilities.

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 1997 and 1996, one customer that is comprised of twelve affiliated
companies,  accounted for 14% and 24% 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 22% of total revenues in 1997
from  19%  in  1996.

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.

     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.

     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.  Prior  to  April 1, 1995, as a U.S. corporation engaged in business
operations  in  the Philippines, the Company had been subject to both U.S. and
Philippine  income tax with respect to the Philippine source income derived by
the  Company.  Under  U.S.  tax law, the U.S. foreign tax credit was available
(subject  to  various  limitations) to reduce the burden of double taxation on
the  Philippine  source  income  of  the  Company.

     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.  In  the  second  half  of  1997  and  the  first part of 1998 these
contracts stabilized prices for the Company's services at a time when the peso
was  significantly  devalued. As a result, the Company was unable to enjoy the
benefits  it  would  have  otherwise  received.

     The  Philippines  is subject to relatively frequent earthquakes, volcanic
eruptions, floods and other natural disasters, which may disrupt the Company's
operations.    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 also has facilities
in  Sri  Lanka  and  India.

     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,  1998,  the  Company  employed  an  aggregate  of
approximately  50  persons  in  the  United States and the United Kingdom, and
approximately  2,500  persons  in  the  Philippines,  Sri  Lanka  and  India.

     Employees at the Company's Manila facilities are members of a union.  The
Company  reached  agreement in 1996 on a collective bargaining agreement which
provides  for  approximately 10% wage increases per annum plus one-half of any
government  mandated  increases  for  the  five  years  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 approximately
25.    A  significant number of employees have college degrees.  A substantial
middle  management  infrastructure,  grown  both  from within the ranks of the
Company  and  through  experienced  hires, is in place.  These managers are in
charge  of  departmental  responsibilities,  including  personnel,  public
relations,  facilities, quality control, programming, systems and development.

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

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

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

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


ITEM  2.    DESCRIPTION  OF  PROPERTY

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

     The Company's operations in the Philippines city of Cebu are conducted in
approximately  10,000  square  feet  of  space  leased  through  March  2001,
cancelable  at  the  Company's  option,  at  a monthly rental of approximately
$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
California  for  approximately  $5,000 per month.  The lease expires February,
2002.

     The  Company  leases its production facility in India and is obligated to
make  payments aggregating approximately $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,  other than in the ordinary
course  of  business,  to  which the Company is a party or of which any of its
property is the subject, except for an action brought by the Equitable Banking
Corporation  on  December  3,  1997  in a Regional Trial Court in Makati City,
Philippines  against  the  Company.  The action seeks to recover approximately
$1,000,000  in  connection  with  certain  foreign currency forward contracts.
Although  these  contracts  are presently in dispute, the Company has recorded
this  liability, as well as an estimate for contracts scheduled after the date
of  this  action.


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

     The  following  matters  were  voted  on  at the December 18, 1997 Annual
Meeting  of Stockholders.  The total shares voted were 1,256,735, adjusted for
a  one-for-three reverse stock split which became effective on March 25, 1998.


                        FOR        WITHHELD
                        ---------  --------
ELECTION OF DIRECTORS:
Jack Abuhoff            1,241,560    15,174
Albert Drillick         1,250,299     6,436
E. Bruce Fredrikson     1,250,194     6,541
Barry Hertz             1,247,135     9,599
Martin Kaye             1,250,177     6,557
Morton Mackof           1,245,260    11,474
Todd Solomon            1,245,030    11,704
Stanley Stern           1,250,099     6,636



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


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

     The  Company's Common Stock is quoted on the Nasdaq SmallCap Market under
the  symbol  "INOD."    On  February  28, 1998, there were 101 stockholders of
record  of  the  Company's  Common  Stock based on information provided by the
Company's transfer agent.  Virtually all of the Company's publicly held shares
are  held  in  "street  name"  and  the  Company believes the actual number of
beneficial  holders  of  its  Common  Stock  to  be  approximately  1,500.

     The  following  table  sets  forth  the  high  and  low sales prices on a
quarterly basis for the Company's Common Stock, as reported on Nasdaq, for the
two  years  ended  December  31,  1997,  after  giving retroactive effect to a
one-for-three  reverse  stock  split  on  March  25,  1998.


                     COMMON STOCK
                     SALE PRICES
1996                 HIGH          LOW
--------------       ------------  -------

First Quarter            17-1/4    11-1/16

Second Quarter           13-7/8     10-1/8

Third Quarter            11-1/4    5-13/16

Fourth Quarter            7-1/8        3

1997
--------------

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

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

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

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


STOCK  SPLIT

The  Company  filed  an  Information Statement, distributed to stockholders on
March  4, 1998, pursuant to which 56% of stockholders approved a one-for-three
reverse stock split effective on March 25, 1998. The table above and all other
share  and  per  share  amounts  in  this  report  reflect  such  split.


DIVIDENDS

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


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

                            SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
<S>                                   <C>           <C>           <C>           <C>           <C>

YEAR ENDED DECEMBER 31,                     1997          1996          1995          1994         1993
                                      -----------   -----------   -----------   -----------   ----------

REVENUES                              $20,116,935   $20,536,448   $20,767,405   $14,344,914   $9,619,722
                                      -----------   -----------   -----------   -----------   ----------

OPERATING COSTS AND EXPENSES
     Direct operating costs            16,007,051    16,783,595    14,044,067    10,764,658    7,003,288
     Selling and administrative         5,283,891     4,799,739     4,344,793     2,834,534    1,966,103
     Costs resulting from project
        Termination                             -             -             -       393,195            -
     Restructuring costs and
        impairment of assets            1,500,000             -             -             -            -
     Unrealized loss on foreign
        currency contracts              1,400,000             -             -             -            -
     Interest expense                      85,595        36,383        18,476         7,392       82,375
     Interest income                      (59,384)     (123,771)     (151,319)     (160,689)     (89,767)
                                      -----------   -----------   -----------   -----------   ----------
          Total                        24,217,153    21,495,946    18,256,017    13,839,090    8,961,999
                                      -----------   -----------   -----------   -----------   ----------

(LOSS) INCOME BEFORE
   INCOME TAXES                        (4,100,218)     (959,498)    2,511,388       505,824      657,723
INCOME TAXES                              100,000      (357,000)    1,000,000       199,000      215,000
                                      -----------   -----------   -----------   -----------   ----------

NET (LOSS) INCOME                     $(4,200,218)  $  (602,498)  $ 1,511,388   $   306,824   $  442,723
                                      ===========   ===========   ===========   ===========   ==========

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

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

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

AS OF DECEMBER 31,                           1997          1996          1995          1994         1993
                                      -----------   -----------   -----------   -----------   ----------

WORKING CAPITAL                       $ 2,091,848   $ 4,774,121   $ 6,247,708   $ 4,972,682   $5,526,467
                                      ===========   ===========   ===========   ===========   ==========

TOTAL ASSETS                          $10,029,247   $12,416,296   $12,538,694   $10,077,049   $9,014,247
                                      ===========   ===========   ===========   ===========   ==========

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

STOCKHOLDERS' EQUITY                  $ 5,254,133   $ 9,477,471   $ 9,747,655   $ 8,327,601   $7,877,512
                                      ===========   ===========   ===========   ===========   ==========
</TABLE>

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


     The  following  discussion should be read in conjunction with the Audited
Financial  Statements  and  related Notes thereto of the Company for the years
ended  December  31,  1997,  1996,  and  1995  included in Item 7 of this Form
10-KSB.

RESULTS  OF  OPERATIONS

General

     Innodata  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,  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,  1997  AND  1996

     Revenues decreased 2% to $20,116,935 for the year ended December 31, 1997
compared  to  $20,536,448  for  the  similar period in 1996. Revenues from the
European  market  increased to 22% of total revenues in 1997 from 19% in 1996.
During  1997  and 1996, one customer comprised of twelve affiliated companies,
accounted  for  14% and 24% of the Company's revenues, respectively.  No other
customer  accounted  for  10%  or  more  of  the  Company's  revenues.

     Direct  operating  expenses  were $16,007,051 for the year ended December
31,  1997  and  $16,783,595  for the similar period in 1996, a decrease of 5%.
Direct operating expenses as a percentage of revenues decreased to 80% in 1997
compared to 82% in 1996. The decrease in direct operating expenses in 1997 was
due  primarily  to  the  devaluation of the Philippine peso.  Direct operating
costs  include primarily direct payroll, telecommunications, freight, computer
services,  supplies  and  occupancy.

     Selling  and administrative expense was $5,283,891 and $4,799,739 for the
years ended December 31, 1997 and 1996, respectively, representing an increase
of  10% in 1997 from 1996.  Selling and administrative expense as a percentage
of  revenues  was  26%  in 1997 and 23% in 1996. The dollar increase primarily
reflects  the  expansion of the Company's sales and marketing efforts. Selling
and  administrative  expense includes management salaries, sales and marketing
salaries,  clerical  and  administrative  salaries,  rent  and  utilities  not
included  in  direct  costs,  marketing  costs  and  administrative  overhead.

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

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

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

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

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.

     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.

     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.


LIQUIDITY  AND  CAPITAL  RESOURCES

     Net  cash of $1,128,671 and $897,085 was provided by operating activities
for  the  years  ended  December  31, 1997 and 1996, respectively, principally
resulting  from  increased  collection  of  accounts  receivable.  Net cash of
$1,015,088  and  $401,919  was  used in investing activities in 1997 and 1996,
respectively,  for  the  purchase  of  fixed  assets  in  both  years,  and
additionally,  in  1996, $410,646 was used for payments in connection with the
acquisition  of International Imaging. These outlays were substantially offset
by  the  redemption  of  certain  short-term  investments in 1996. Net cash of
$240,924  was used in financing activities in 1997 and $35,373 was provided by
financing  activities  in  1996.  In  1996, the Company received proceeds from
short-term  borrowings  and  from  the  exercise  of  stock  options offset by
payments  of long-term debt. In 1997, payments on borrowings exceeded proceeds
from  borrowings.

     The  Company  opened  its  new  production facility in India in 1997. The
Company  expects to make capital expenditures for this facility as well as for
its  existing  production facilities in the Philippines and Sri Lanka, and for
additional  equipment  for  its  U.S.  operations. The Company estimates these
capital  expenditures  will aggregate approximately $1,000,000 during the next
12  months.

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

     The  Company  has  initiated  a  program  to prepare computer systems and
applications  for  the  Year 2000. The Company expects to incur internal staff
costs  as  well as consulting and other expenses related to infrastructure and
facilities  enhancements necessary to prepare the systems for the Year 2000. A
portion  of  such costs are not likely to be incremental costs to the Company,
but  rather will represent the redeployment of existing information technology
resources. The Company is also communicating with customers and suppliers with
whom it conducts business to help identify and resolve the Year 2000 issue. It
is  possible  that  if  all aspects of the Year 2000 issues are not adequately
resolved  by  these  parties, the Company's future business operations and, in
turn,  its  financial  position  and results of operations could be negatively
impacted. Management has not yet quantified the Year 2000 compliance and other
related  expenses,  however,  management  believes these costs will not have a
material  affect  on  its  financial  position.

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.

<PAGE>
ITEM  7.    FINANCIAL  STATEMENTS.

                     INNODATA CORPORATION AND SUBSIDIARIES
                         INDEX TO FINANCIAL STATEMENTS
                                                                 PAGE
                                                                 --------

Independent Auditors' Reports                                    II-7-8

Consolidated Balance Sheets as of December 31, 1997 and 1996     II-9

Consolidated Statements of Operations for the three years        II-10
ended December 31, 1997

Consolidated Statements of Stockholders' Equity for the          II-11
three years ended December 31, 1997

Consolidated Statements of Cash Flows for the three years        II-12
ended,December 31, 1997

Notes to Consolidated Financial Statements                       II-13-21



<PAGE>
INDEPENDENT  AUDITORS'  REPORT



Board  of  Directors  and  Stockholders
Innodata  Corporation
Brooklyn,  New  York


We  have  audited  the  accompanying  consolidated  balance  sheet of Innodata
Corporation  and  subsidiaries  as  of  December  31,  1997,  and  the related
consolidated statements of operations, stockholders' equity and cash flows for
the year then ended.  These financial statements are the responsibility of the
Company's  management.    Our responsibility is to express an opinion on these
financial  statements  based  on  our  audit.

We  conducted  our  audit  in  accordance  with  generally  accepted  auditing
standards.    Those  standards  require  that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting  the amounts and disclosures in the financial statements.  An audit
also  includes  assessing  the  accounting  principles  used  and  significant
estimates  made  by  management,  as  well as evaluating the overall financial
statement presentation.  We believe that our audit provides a reasonable basis
for  our  opinion.

In  our opinion, the financial statements referred to above present fairly, in
all  material  respects,  the  consolidated  financial  position  of  Innodata
Corporation  and  subsidiaries  as  of December 31, 1997, and the consolidated
results  of  their  operations  and their consolidated cash flows for the year
then  ended  in  conformity  with  generally  accepted  accounting principles.



Grant  Thornton  LLP
Parsippany,  New  Jersey
March  4,  1998



<PAGE>
INDEPENDENT  AUDITORS'  REPORT



Board  of  Directors  and  Stockholders
Innodata  Corporation
Brooklyn,  New  York


We  have  audited  the  accompanying  consolidated  balance  sheet of Innodata
Corporation  and  subsidiaries  as  of  December  31,  1996,  and  the related
consolidated statements of operations, stockholders' equity and cash flows for
each  of the two 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 the consolidated
results  of their operations and their cash flows for each of the two 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, 1997 AND 1996
<TABLE>
<CAPTION>
<S>                                                                     <C>           <C>

                                                                        1997          1996
                                                                        -----------   -----------
ASSETS

CURRENT ASSETS:
  Cash and equivalents                                                  $ 1,969,852   $ 2,097,193
  Accounts receivable-net of allowance for doubtful
         accounts of $195,000 in 1997
         and $140,000 in 1996 (Note 10)                                   3,188,920     3,718,283
  Prepaid expenses and other current assets                                 825,586     1,130,510
  Deferred income taxes (Notes 1 and 3)                                     136,000       220,000
                                                                        -----------   -----------

               TOTAL CURRENT ASSETS                                       6,120,358     7,165,986

FIXED ASSETS-NET (NOTES 1, 2 AND 11)                                      2,909,619     3,617,939

GOODWILL (NOTES 1 AND 11)                                                   410,076     1,159,946

OTHER ASSETS                                                                589,194       472,425
                                                                        -----------   -----------

TOTAL                                                                   $10,029,247   $12,416,296
                                                                        ===========   ===========
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Current portion of long-term debt (Note 5)                            $   122,450   $   208,298
  Accounts payable and accrued expenses                                   1,507,866     1,279,519
  Accrued salaries and wages                                                641,186       625,479
  Estimated loss on foreign currency contracts (Note 6)                   1,400,000             -
  Taxes, other than income taxes                                            357,008       278,569
                                                                        -----------   -----------

               TOTAL CURRENT LIABILITIES                                  4,028,510     2,391,865
                                                                        -----------   -----------

LONG-TERM DEBT, LESS CURRENT PORTION (NOTE 5)                                79,604       195,960
                                                                        -----------   -----------

DEFERRED INCOME TAXES (NOTES 1 AND 3)                                       667,000       351,000
                                                                        -----------   -----------

COMMITMENTS AND CONTINGENT LIABILITIES (NOTES 6, 7 AND 8)

STOCKHOLDERS' EQUITY (NOTES 6, 7, 8 AND 12):
  Common stock, $.01 par value-authorized 20,000,000 shares;
     issued 1,521,736 shares                                                 15,217        15,217
  Additional paid-in capital                                              8,870,731     8,855,131
  (Deficit) retained earnings                                            (3,449,218)      751,000
                                                                        -----------   -----------
                                                                          5,436,730     9,621,348
  Less: treasury stock - at cost; 26,400 shares
       in 1997 and 13,833 shares in 1996                                   (182,597)     (143,877)
                                                                        -----------   -----------

               TOTAL STOCKHOLDERS' EQUITY                                 5,254,133     9,477,471
                                                                        -----------   -----------

TOTAL                                                                   $10,029,247   $12,416,296
                                                                        ===========   ===========
<FN>
 See  notes  to  consolidated  financial  statements
</TABLE>




<PAGE>
                     INNODATA CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                 YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

<TABLE>

<CAPTION>



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

                                                                    1997          1996          1995
                                                             -----------   -----------   -----------

REVENUES (NOTE 10)                                           $20,116,935   $20,536,448   $20,767,405
                                                             -----------   -----------   -----------

OPERATING COSTS AND EXPENSES
     Direct operating costs                                   16,007,051    16,783,595    14,044,067
     Selling and administrative expenses                       5,283,891     4,799,739     4,344,793
     Restructuring costs and impairment of assets (Note 11)    1,500,000             -             -
     Unrealized loss on foreign currency contracts (Note 6)    1,400,000             -             -
     Interest expense                                             85,595        36,383        18,476
     Interest income                                             (59,384)     (123,771)     (151,319)
                                                             -----------   -----------   -----------

                    TOTAL                                     24,217,153    21,495,946    18,256,017
                                                             -----------   -----------   -----------

(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES               (4,100,218)     (959,498)    2,511,388

PROVISION FOR INCOME TAXES (BENEFIT) (NOTES 1 AND 3)             100,000      (357,000)    1,000,000
                                                             -----------   -----------   -----------

NET (LOSS) INCOME                                            $(4,200,218)  $  (602,498)  $ 1,511,388
                                                             ===========   ===========   ===========

BASIC (LOSS) INCOME PER SHARE (NOTES 1 AND 9)                     $(2.80)        $(.40)        $1.02
                                                                  ======         =====         =====

DILUTED (LOSS) INCOME PER SHARE (NOTES 1 AND 9)                   $(2.80)        $(.40)         $.97
                                                                  ======         =====         =====

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




<PAGE>
                     INNODATA CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>

<CAPTION>



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

                                            ADDITIONAL   UNREALIZED    (DEFICIT)
                                            PAID-IN      LOSS ON       RETAINED      TREASURY
                        SHARES     AMOUNT   CAPITAL      SECURITIES    EARNINGS      STOCK       TOTAL
                        ---------  -------  -----------  -----------   -----------   ---------   -----------

JANUARY 1, 1995         1,492,424  $14,924  $ 8,527,302  $   (56,735)  $  (157,890)  $       -   $ 8,327,601

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

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

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

DECEMBER 31, 1995       1,492,424   14,924    8,527,302       (4,192)    1,353,498    (143,877)    9,747,655

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

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

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

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

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

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

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

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

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

DECEMBER 31, 1997       1,521,736  $15,217  $ 8,870,731  $         -   $(3,449,218)  $(182,597)  $ 5,254,133
                        =========  =======  ===========  ===========   ===========   =========   ===========
<FN>
 See  notes  to  consolidated  financial  statements
</TABLE>




<PAGE>
                     INNODATA CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                 YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>

<CAPTION>



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

                                                                     1997          1996          1995
                                                              ------------  -----------   -----------
OPERATING ACTIVITIES:
  Net (loss) income                                           $(4,200,218)  $  (602,498)  $ 1,511,388
  Adjustments to reconcile net (loss) income to net
    cash provided by operating activities:
    Depreciation and amortization                               1,321,555     1,372,731       972,669
    Restructuring costs and impairment of assets                1,500,000             -             -
    Unrealized loss on foreign currency contracts               1,400,000             -             -
    Deferred income taxes                                         400,000      (150,000)      240,000
    Changes in operating assets and liabilities:
      Accounts receivable                                         529,363     1,380,498    (2,299,781)
      Prepaid expenses and other current assets                   304,924      (479,251)     (462,274)
      Other assets                                               (116,769)     (271,413)      (46,957)
      Accounts payable and accrued expenses                      (104,330)      187,764      (103,117)
      Accrued salaries and wages                                   15,707       100,991       211,029
      Taxes, other than income taxes                               78,439        84,457        93,727
      Income taxes payable                                              -      (726,194)      537,938
                                                              ------------  -----------   -----------

         Net cash provided by operating activities              1,128,671       897,085       654,622
                                                              ------------  -----------   -----------

INVESTING ACTIVITIES:
  Expenditures for fixed assets                                (1,015,088)   (1,231,273)   (1,193,973)
  Payments in connection with acquisition                               -      (410,646)            -
  Short-term investments                                                -     1,240,000             -
                                                              ------------  -----------   -----------

        Net cash used in investing activities                  (1,015,088)     (401,919)   (1,193,973)
                                                              ------------  -----------   -----------

FINANCING ACTIVITIES:
  Proceeds from borrowings                                        577,000       626,014             -
  Proceeds from exercise of stock options                               -        65,768             -
  Purchase of treasury stock                                      (38,720)            -      (143,877)
  Payments of borrowings                                         (779,204)     (656,409)     (111,986)
  Redemption of preferred stock                                         -             -        (2,000)
                                                              ------------  -----------   -----------

         Net cash (used in) provided by financing activities     (240,924)       35,373      (257,863)
                                                              ------------  -----------   -----------

(DECREASE) INCREASE IN CASH AND EQUIVALENTS                      (127,341)      530,539      (797,214)
CASH AND EQUIVALENTS, BEGINNING OF YEAR                         2,097,193     1,566,654     2,363,868
                                                              ------------  -----------   -----------

CASH AND EQUIVALENTS, END OF YEAR                             $ 1,969,852   $ 2,097,193   $ 1,566,654
                                                              ===========   ===========   ===========

SUPPLEMENTAL DISCLOSURES OF CASH
  FLOW INFORMATION
  Cash paid during the year for:
    Interest                                                  $    85,595   $    35,238   $    14,963

    Income taxes                                                        -       922,789       222,062

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




INNODATA  CORPORATION  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  DECEMBER  31,  1997,  1996  AND  1995
---------------------------------------------------

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  services,  indexing  and  abstracting, and
typesetting  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,  India  and  the  United  States.   The consolidated
financial statements include the accounts of the Company and its subsidiaries,
all  of  which  are  wholly-owned.  All intercompany transactions and balances
have  been  eliminated  in  consolidation.

     On March 25, 1998, a one-for-three reverse stock split becomes effective.
All  share  and  per  share  amounts  have been restated to reflect such stock
split.

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

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

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

     FOREIGN  CURRENCY  - The functional currency for the Company's production
operations  located  in  the Philippines, India and Sri Lanka is U.S. dollars.
As  such,  transactions  denominated in Philippine pesos, Indian and Sri Lanka
rupees  were  translated  to  U.S. dollars at rates which approximate those in
effect  on  transaction dates.  Monetary assets and liabilities denominated in
foreign  currencies  at  December  31,  1997  and  1996 were translated at the
exchange  rate in effect as of those dates.  In 1997, the Company recognized a
gain  of  $125,000  resulting from such foreign currency translation. Exchange
gains  and  losses  in  1996  and  1995  resulting from such transactions were
immaterial.

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

                                              1996

Acquisition costs                           $ 563,771
Common stock issued                          (153,125)
                                            ---------
Payments in connection with acquisition     $ 410,646
                                            =========


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

                             ESTIMATED USEFUL
CATEGORY                         LIVES

Equipment                      3-5 years
Furniture and fixtures          10 years



     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.   See Note 11.

     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  -  In 1997, the Company adopted SFAS No. 128,
"Earnings  Per  Share,"  which  requires  public  companies  to  present basic
earnings  per  share  and,  if  applicable,  diluted  earnings  per  share. In
accordance  with SFAS No.128, all comparative periods have been restated as of
December  31,  1997. Basic earnings per share is based on the weighted average
number  of common shares outstanding without consideration of potential common
stock.  Diluted  earnings per share is based on the weighted average number of
common  and  potential  common  shares outstanding. The calculation takes into
account  the shares that may be issued upon exercise of stock options, reduced
by  the  shares  that  may  be  repurchased  with  the funds received from the
exercise,  based  on average prices during the year.  In addition, earnings
per  share  have  been restated to reflect a one-for-three reverse stock split
that  is  effective  on  March  25,  1998.

2.          FIXED  ASSETS

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

DECEMBER 31,                         1997        1996

Equipment                      $6,095,004  $6,092,985
Furniture and fixtures            372,566     375,465
Leasehold improvements            472,574     401,987
                               ----------  ----------
          Total                 6,940,144   6,870,437

Less accumulated depreciation
     and amortization           4,030,525   3,252,498
                               ----------  ----------
                               $2,909,619  $3,617,939
                               ==========  ==========

     As  of  December  31,  1997  and 1996, the net book value of fixed assets
located  at  the Company's production facilities in the Philippines, India and
Sri  Lanka  was  approximately  $1,600,000  and  $1,513,000, respectively.  In
addition,  equipment  financed  by  capital  leases  has  a  net book value of
$228,000  at  December  31,  1997.

3.          INCOME  TAXES

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

                                                 1997        1996         1995
Current income tax expense (benefit):
     Foreign                                $       -   $       -   $   10,000
     Federal                                 (300,000)   (159,000)     535,000
     State and local                                -     (48,000)     215,000
                                            ---------   ---------   ----------
                                             (300,000)   (207,000)     760,000

Deferred income tax expense (benefit)         400,000    (150,000)     240,000
                                            ---------   ---------   ----------

Provision for (benefit from) income taxes   $ 100,000   $(357,000)  $1,000,000
                                            =========   =========   ==========

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

                                                   1997    1996    1995

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

Effect of:
     Valuation allowance                           34.0       -       -
     State income taxes (net of federal
        tax benefit)                                  -    (5.4)    6.1
     Other                                          2.4     2.2    (0.3)
                                                  -----   -----    ----
Effective rate                                      2.4%  (37.2)%  39.8%
                                                  =====   ======   ====

     As  of  December  31, 1997 and 1996, the composition of the Company's net
deferred  taxes  is  as  follows:

                                               1997          1996

Deferred income tax assets:
     Allowances not currently deductible  $ 247,000   $   105,000
     Expenses not deductible until paid     161,000       115,000
     Net operating loss carryforward        500,000       700,000
                                          ---------   -----------
                                            908,000       920,000
Less:  valuation allowance                 (772,000)            -
                                          ---------   -----------
                                            136,000       920,000
                                          ---------   -----------
Deferred income tax liabilities:
     Foreign source income, not taxable
          unless repatriated               (415,000)     (815,000)
     Depreciation and amortization         (252,000)     (236,000)
                                          ---------   -----------
                                           (667,000)   (1,051,000)
                                          ---------   -----------
Net deferred income tax liability         $(531,000)  $  (131,000)
                                          =========   ===========

     The  valuation  allowance in 1997 reduces total deferred tax assets to an
amount  management  believes  will  likely  be  realized.  The  Company's  net
operating  loss  carryforward for federal income tax purposes of approximately
$1,500,000  expires  in  2012.  These  net  operating losses may be limited to
annual  use  based  on  IRS  regulations.

4.          ACQUISITION

     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 16,667 shares of the Company's
restricted common stock.  The Company also paid approximately $300,000 of II's
outstanding  lease  obligations.

5.          LONG-TERM  DEBT

     Long-term  debt  is  as  follows:

                                                 1997      1996
Equipment leases, at 9.6% to 13.5%           $226,335  $365,846
Acquisition notes - subordinated, at prime          -    91,667
                                             --------  --------
                                              226,335   457,513
Less: deferred interest                        24,281    53,255
                                             --------  --------
Total                                         202,054   404,258
Less: current portion of long-term debt       122,450   208,298
                                             --------  --------
Long-term debt                               $ 79,604  $195,960
                                             ========  ========



     Aggregate  maturities  of  long-term  debt  are  as  follows:

1998  $138,960
1999    61,306
2000    19,298
2001     6,771
      --------
      $226,335
      ========



6.          COMMITMENTS  AND  CONTINGENT  LIABILITIES

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

     LEASES  -  The  Company  is  obligated  under  various  operating  lease
agreements for office and production space.  The agreements contain escalation
clauses and requirements that the Company pay taxes, insurance and maintenance
costs.    The  lease agreements for production space in the Philippines, which
expire  through  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, 1997,
1996  and  1995,  rent  expense  totaled  approximately $940,000, $825,000 and
$500,000,  respectively.

     At  December  31,  1997,  future  minimum  annual  rental  commitments on
noncancellable  leases  are  as  follows:

1998  $  357,000
1999     362,000
2000     170,000
2001     173,000
2002      40,000
      ----------
      $1,102,000
      ==========

     EMPLOYMENT  AGREEMENTS  -          The  Company entered into a three-year
employment  agreement  on  August  19,  1997 pursuant to which a member of the
Company's  Board  is to serve as President and CEO of the Company.  He will be
paid  at  the rate of $200,000 per annum with any bonuses and future increases
at  the  discretion  of the Board of Directors.  In addition, each December 31
during  the  term  of the agreement he will receive 10,333 options to purchase
common stock of the Company at then prevailing market prices. In consideration
of  the  signing of the agreement he was granted five year options as follows:
10,000 options at $3.00 per share; 16,666 at $6.00; 23,333 at $9.00; 30,000 at
$12.00;  and  33,333 at $21.00.  The options are exercisable upon the earliest
to  occur of (i) ninety days before the expiration of the five year term; (ii)
the  date the market price is at least $7.50 for ten consecutive trading days;
or  (iii)  in  the event of a sale of the Company where a third party acquires
more  than  50%  of  the  Company.

     The  Company  had  an  employment agreement with its former President and
CEO.  This  agreement  was  replaced  by  a  new three-year agreement expiring
September  30,  2000 that provides for a salary of $100,000 for the year ended
September  30,  1998  and $75,000 per annum thereafter.  He will serve as Vice
Chairman  of the Board and in executive capacities as designated by the CEO or
the  Board  of  Directors.

     OTHER  COMMITMENTS - The Company has a commitment to purchase a perpetual
license  for certain production process software for cash totaling $70,000 and
11,666  shares  of the Company's common stock.  Payment is contingent upon the
successful  completion  and  testing of the software, expected to occur during
1998.

     As  of  December  31,  1997,  the  Company's  wholly-owned subsidiary has
foreign  currency forward contracts to purchase $2,600,000 in Philippine pesos
on  various  dates  through  June  1998.  These  contracts, as well as certain
foreign currency contracts that became due during 1997 and remain unpaid, have
an  estimated fair value at December 31, 1997 of approximately $1,400,000 less
than  their  contractual  amount.  The  bank  has  brought  an  action  in the
Philippines  to  recover  such  amounts. While such contracts are presently in
dispute,  the  Company  recognized  the  total  unrealized  loss  in  1997.

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

     PHILIPPINE  PENSION  REQUIREMENT  -  The  Philippine  government  enacted
legislation  requiring  businesses  to  provide  a lump-sum pension payment to
employees  working  at least five years and who are employed by the Company at
age  60.    Those  eligible  employees are to receive approximately 59% of one
month's  pay  for  each year of employment with the Company.  The terms of the
collective  bargaining  agreement  provide benefits similar to the government.
Based  on  actuarial  assumptions and calculations in accordance with SFAS No.
87, "Employers' Accounting for Pensions," the liability for the future payment
is  insignificant at December 31, 1997.  Under the legislation, the Company is
not  required  to  fund  future  costs,  if  any.

7.          CAPITAL  STOCK

     COMMON  STOCK  AND REDEEMABLE WARRANTS - In August and September 1993 the
Company  sold pursuant to a public offering 563,500 shares of its common stock
and  certain  warrants ("Redeemable Warrants") and realized net proceeds after
all  expenses  of the offering of $6,752,585.  The Redeemable Warrants expired
on  August  9,  1997.

     In  connection with the offering, the Company sold to the underwriter for
nominal consideration warrants to purchase up to 49,295 shares of common stock
at $23.43 per share through August 9, 1998. 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, 1997, the Company reserved for
issuance  767,948  shares  of  its common stock as follows: (a) 701,987 shares
pursuant to the Company's Stock Option Plans (including 120,333 options issued
to  the  Company's Chairman and its President which were not granted under the
plans);  (b)  49,295  shares issuable upon exercise of underwriter's warrants;
and  (c)  16,666  shares  issuable  upon  exercise  of  warrants  issued  to
consultants.

8.          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 87,500, 105,000, 17,500, 200,000 and 166,666 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 1997, 1996 and 1995 consistent with the provisions of SFAS No.
123,  the  Company's  net  loss  would  have been $(4,359,807), or $(2.90) per
share,  in 1997, $(738,987), or $(.49) per share, in 1996 and net income would
have  been $1,496,341, or $.96 per share, diluted, 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 1997 and 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>


<PAGE>

<PAGE>
                                                                                                  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 1/1/95    $    7.89 - 9.75      140,121             3  $    8.22
                  $  12.60 - 17.85       44,200             3  $   14.76
                                    -----------
                                        184,321                                47,930  $   10.98
                                                                           ==========
       Canceled   $   7.89 - 13.89       (8,091)
       Granted    $  10.14 - 13.89       91,516             4  $   11.73                          $    4.71
                                    -----------
Balance 12/31/95  $    7.89 - 9.75      132,696             2  $    8.25
                  $  10.14 - 17.85      135,050             2  $   12.93
                                    -----------
                                        267,746                               120,098  $   10.38
                                                                           ==========
       Canceled   $           9.03         (166)
       Granted    $   6.93 - 11.79       29,666             4  $    9.18                          $    3.66
       Exercised  $    7.89 - 9.03       (7,646)
                                    -----------
Balance 12/31/96  $    6.93 - 9.75      138,717             2  $    8.13      111,513  $    8.88
                  $  10.14 - 17.85      150,883             2  $   12.69       89,157  $   13.17
                                     -----------                           ----------
                                       289,600                                200,670
                                                                           ==========
       Canceled   $   7.89 - 13.89      (48,883)
       Granted    $    3.00 - 6.00      100,000             5  $    3.63                          $    1.26
       Granted    $   9.00 - 21.00       86,666             5  $   13.44                          $     .18
                                    -----------
Balance 12/31/97  $    3.00 - 9.75      246,192             4  $    6.42      115,969  $    8.16
                  $  10.14 - 21.00      181,191             3  $   14.10       93,996  $   12.96
                                    -----------                            ----------
                                        427,383                               209,965
                                    ============                           ==========

</TABLE>



     The  majority  of  options  granted  prior  to  1997  become  exercisable
one-third  on each of the first three anniversary dates. Option grants in 1997
become exercisable the earlier of (i) ninety days before the expiration of the
five  year  term;  (ii)  the  date  the market price is at least $7.50 for ten
consecutive trading days; or (iii) in the event of a sale of the Company where
a  third  party  acquires  more  than  50%  of  the  Company.

WARRANTS

     In  connection  with  a  consulting  agreement  on December 18, 1995, the
Company  issued  a  warrant to purchase 16,666 shares at a price of $11.44 per
share.  The warrant is exercisable commencing December 18, 1996 and expires in
2000.

9.          (LOSS)  INCOME  PER  SHARE

                                            1997         1996         1995

Net (loss) income                    $(4,200,218)  $ (602,498)  $1,511,388
                                     ===========   ==========   ==========
Weighted average common
  shares outstanding                   1,501,043    1,503,196    1,482,824
Dilutive effect of outstanding
  warrants and options                         -            -       75,172
                                     -----------   ----------   ----------

Adjusted for dilutive computation      1,501,043    1,503,196    1,557,996
                                     ===========   ==========   ==========

Basic (loss) income per share             $(2.80)       $(.40)       $1.02
                                          ======        =====        =====

Diluted (loss) income per share           $(2.80)       $(.40)        $.97
                                          ======        =====         ====


     Reference  is made to Notes 7 and 8 with respect to options and warrants
That would  have  been dilutive in 1997 and 1996 had there not been a loss in
Those years.

10.          REVENUES  AND  ACCOUNTS  RECEIVABLE

     During  1997,  1996  and  1995,  one customer that is comprised of twelve
affiliated  companies,  accounted  for  14%,  24%  and  29%  of  the Company's
revenues,  respectively.  No  other  customer accounted for 10% or more of the
Company's  revenues.  Further, in 1997, 1996 and 1995, export revenues, all of
which  were  derived  from European customers, accounted for 22%, 19% and 18%,
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.          RESTRUCTURING  COSTS  AND  IMPAIRMENT  OF  ASSETS

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

12.          SUBSEQUENT  EVENT

     The  Company  filed an Information Statement, distributed to stockholders
on  March  4,  1998,  pursuant  to  which  56%  of  stockholders  approved  a
one-for-three  reverse  stock split effective on March 25, 1998. All share and
per  share  amounts  have  been  restated  to  reflect  such  split.

<PAGE>
ITEM  8.    CHANGE  IN  ACCOUNTANTS.

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

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

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



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

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

OFFICERS  AND  DIRECTORS
     The  officers  and  directors  of  the  Company  are  as  follows:

NAME                     AGE  POSITION
-----------------------  ---  -----------------------------------------------

Barry Hertz               48  Chairman of the Board of Directors

Todd Solomon              36  Vice Chairman of the Board of Directors and
                              Consultant

Jack Abuhoff              36  President, Chief Executive Officer and Director

Martin Kaye               50  Executive Vice President, Chief Financial
                              Officer, Secretary and Director

William Schieffelin       49  Vice President - Business Development

Stephen Agress            36  Vice President - Finance

Jurgen Tanpho             33  Vice President - Operations

Dr. Albert Drillick       52  Director

Dr. E. Bruce Fredrikson   60  Director

Morton Mackof             50  Director

Stanley Stern             47  Director


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

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

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

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

     WILLIAM  SCHIEFFELIN was elected Vice President - Business Development in
March 1998. He joined the Company in July 1996. Prior thereto, he was employed
by  the  Research  Institute  of  America  Group for seven years, serving most
recently  as Vice President, Strategic Alliances. Mr. Schieffelin holds a B.A.
from  Baylor  University (1970) and a J.D. degree from the University of Texas
School  of  Law  (1973).

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

     JURGEN  TANPHO  was elected Vice President - Operations in March 1998. He
served  in  various  management  capacities since joining the Company in 1991,
most  recently  in  the  position  of  Assistant  to  the  President of Manila
Operations.  He  holds  a  B.S.  degree  in  industrial  engineering  from the
University  of  the  Philippines  (1981).

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

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

     There  are  no  family  relationships  between  or among any directors or
officers  of  the  Company.   A.S. Goldmen & Co., Inc., the underwriter of the
Company's  initial  public  offering  of  its  common  stock,  is  entitled to
designate  one member of the Board of Directors until 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, 1997 through
December  31,  1997  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, 1997 to those executive officers whose aggregate cash and
cash  equivalent  compensation  exceeded  $100,000.

                          SUMMARY COMPENSATION TABLE

                                     ANNUAL COMPENSATION
                                     -------------------    NUMBER OF
NAME AND PRINCIPAL         CALENDAR                         STOCK OPTIONS
POSITION                   YEAR      SALARY      BONUS      AWARDED

Jack Abuhoff                   1997  $ 37,500  $    -        114,500
President, CEO since
September 1997

Barry Hertz                    1997  $ 50,000  $    -         13,333
Chairman                       1996    50,000       -              -
                               1995         -       -         15,000

Todd Solomon                   1997  $ 209,166  $    -         20,333
President, CEO through         1996    231,000       -         10,333
September 1997, Vice           1995    222,814       -         10,333
Chairman of the Board
and Consultant thereafter


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

                       OPTION GRANTS IN LAST FISCAL YEAR

                               INDIVIDUAL GRANTS

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

Jack Abuhoff  114,500             61%          *   9/2002
Barry Hertz    13,333              7%  $    3.00  12/2002
Todd Solomon   20,333             11%  $    3.00  10/2002




*         11,166 @ $3.00; 16,666 @ $6.00; 23,333 @ $9.00; 30,000 @ $12.00; and
33,333  @  $21.00

The  options  become  exercisable  the  earlier  of (i) ninety days before the
expiration  of  the five year term; (ii) the date the market price is at least
$7.50 for ten consecutive trading days; or (iii) in the event of a sale of the
Company  where  a  third  party  acquires  more  than  50%  of  the  Company.

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

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

Jack Abuhoff  None      6,183/114,500     $-/$-

Barry Hertz   None      32,000/18,333     $-/$-

Todd Solomon  None      61,366/30,666     $-/$-


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  2,333  and  1,166  shares,  respectively, in 1997. In December 1997,
Stanley  Stern  replaced  Jack  Abuhoff  as  an  independent  director  and is
compensated  at  the  rate  of  $833  per  month.

EMPLOYMENT  AGREEMENTS

     The  Company  entered  into  a  three-year employment agreement with Jack
Abuhoff  on  August 19, 1997 pursuant to which Mr. Abuhoff serves as President
and  CEO  of  the  Company.    Mr.  Abuhoff will be compensated at the rate of
$200,000  per annum with any bonuses and future increases at the discretion of
the  Board of Directors.  In addition, each December 31 during the term of the
agreement  Mr. Abuhoff will receive 10,333 options to purchase common stock of
the  Company at then prevailing market prices. In consideration of the signing
of  the agreement Mr. Abuhoff was granted five year options as follows: 10,000
options  at  $3.00  per  share;  16,666  at  $6.00; 23,333 at $9.00; 30,000 at
$12.00;  and  33,333 at $21.00.  The options are exercisable upon the earliest
to  occur of (i) ninety days before the expiration of the five year term; (ii)
the  date the market price is at least $7.50 for ten consecutive trading days;
or  (iii)  in  the event of a sale of the Company where a third party acquires
more  than  50%  of  the  Company.

     The Company had an employment agreement with Todd Solomon to serve as its
President  and  CEO.   The agreement was to expire on September 30, 1999.  Mr.
Solomon's  annual  compensation consisted of $231,000 plus a bonus of up to an
additional  15%  based  on  performance  criteria  established by the Board of
Directors.    Further,  he was to receive options to purchase 10,333 shares in
each year and is eligible to receive up to an additional 10,000 shares in each
year  based  on  performance,  as  determined by the Board of Directors.  This
agreement  was  replaced by a three-year employment agreement with the Company
expiring  September  30,  2000  that provides for a salary of $100,000 for the
year  ended  September 30, 1998 and $75,000 per annum thereafter.  Mr. Solomon
will  serve  as  Vice  Chairman  of  the  Board and in executive capacities as
designated  by  the  CEO  or  the  Board  of  Directors.



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

     The  following  table  sets  forth,  as  of February 28, 1998 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.


                             SHARES OWNED
                             BENEFICIALLY (1)
                             AMOUNT
                             AND NATURE
NAME AND ADDRESS OF          OF BENEFICIAL
BENEFICIAL OWNER             OWNERSHIP         PERCENT OF CLASS

Track Data Corporation (2)            214,748              14.4%

Barry Hertz (3)                       249,548              16.3%

Todd Solomon (4)                      241,349              15.5%

Martin Kaye (5)                        20,166               1.3%

Jack Abuhoff (7)                        6,183                 *

Albert Drillick (7)                     2,191                 *

Dr. E. Bruce Fredrikson (6)
Syracuse University
School of Management
Syracuse, NY 13244                     11,500                 *

Morton Mackof (7)                       2,191                 *

Stanley Stern (7)                       2,191                 *

Heartland Advisors, Inc.
790 N. Milwaukee Street
Milwaukee, WI 53202                   148,333               9.9%

All Officers and Directors
as a Group (8 persons)
(2)(3)(4)(5)(6)(7)                    535,319              32.9%

*  Less  than  1%.



1.         Except as noted otherwise, all shares are owned beneficially and of
record.    Includes  shares pursuant to options presently exercisable or which
are  exercisable  within  60  days.    Based  on 1,495,336 shares outstanding.
2.        Consists of 214,748 shares owned by Track Data Corporation, which is
majority  owned  by  Mr.  Hertz.
3.          Includes  214,748 shares owned by Track Data Corporation, which is
majority  owned  by  Mr.  Hertz,  2,800  shares held in a pension plan for the
benefit  of  Mr.  Hertz  and  currently exercisable options to purchase 32,000
shares  of  Common  Stock.
4.         Includes currently exercisable options to purchase 61,366 shares of
Common  Stock.
5.         Includes currently exercisable options to purchase 16,833 shares of
Common  Stock.
6.          Includes currently exercisable options to purchase 8,166 shares of
Common  Stock.
7.          Consists of shares issuable upon exercise of currently exercisable
options  granted  under  the  Company's  Stock  Option  Plans.

<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 AS EXHIBIT
-------  ------------------------------------------------  ---------------------------------------------------------------

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

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

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

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

10.9     1995 Stock Option Plan                            Exhibit A to Definitive Proxy dated August 10, 1995

10.10    1996 Stock Option Plan                            Exhibit A to Definitive Proxy dated November 7, 1996

10.11    Employment Agreement dated August 19, 1997        Filed herewith
         with Jack Abuhoff

21       Subsidiaries of Small Business Issuer             Filed herewith

23.1     Consent of Grant Thornton LLP                     Filed herewith

23.2     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,  1997.

<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.


Signature                Title                                 Date
-----------------------  ------------------------------------  --------------

    /s/                  Chairman of the Board                 March 25, 1998
-----------------------
Barry Hertz

    /s/                  President, Chief Executive Officer    March 25, 1998
-----------------------
Jack Abuhoff             and Director

    /s/                  Vice Chairman of the Board            March 25, 1998
-----------------------
Todd Solomon

    /s/                  Executive Vice President (Principal   March 25, 1998
-----------------------
Martin Kaye              Financial Officer), Director

    /s/                  Vice President - Finance (Principal   March 25, 1998
-----------------------
Stephen Agress           Accounting Officer)

    /s/                  Director                              March 25, 1998
-----------------------
Dr. Albert Drillick

    /s/                  Director                              March 25, 1998
-----------------------
Dr. E. Bruce Fredrikson

    /s/                  Director                              March 25, 1998
-----------------------
Morton Mackof

    /s/                  Director                              March 25, 1998
-----------------------
Stanley Stern