==============================================================

                        SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB/A

(Mark One)

  [ X ]         ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED MARCH 31, 1996

                                   OR

 [    ]            TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
                        THE SECURITIES EXCHANGE ACT OF 1934

                    For the transition period from            to                
                       Commission file number 0-13992

                            CYBER DIGITAL, INC.
                (Name of small business issuer in its charter)


      New York                                       11-2644640
(State or other jurisdiction				                 	(I.R.S. Employer
of incorporation or organization)				             Identification No.)

                400 Oser Avenue, Hauppauge, New York 11788
           (Address of principal executive offices) (Zip Code)

                              (516) 231-1200
                       (Issuer's telephone number)

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

      Securities registered under Section 12(g) of the Exchange Act:

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

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 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. 

Yes   X      No       
    _____      _____

Check if there is no 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.

Yes   X      No       
    ____       _____

This issuer's revenues for its most recent fiscal year are $352,701.

The aggregate market value of the voting stock held by nonaffiliates of the
Registrant at March 31, 1996 was $27,127,647 based on a total of 9,864,599
shares held by nonaffiliates and the closing bid price in the Over-the-Counter
Market on that date which was $2.75.

The number of shares of stock outstanding at March 31, 1996:
15,110,311 shares of Common Stock, par value $.01 per share.

Documents Incorporated by Reference:  None

      =================================================================
<PAGE>

                                     PART I

ITEM 1 - DESCRIPTION OF BUSINESS

The Company

Cyber Digital, Inc. (the "Company") designs, develops, manufactures, 
markets and services a family of high performance distributed digital 
switching and networking systems that enable both public telephone
exchanges and private network operators to provide cost effective 
simultaneous communication of voice and data services to a large number 
of users.  The Company's systems are based on its proprietary software 
technology which permits "modemless" transmission of data between a 
variety of incompatible and dissimilar end-user equipment, such as 
computers, printers, work stations and data terminals, over standard 
telephone lines.  To date, the Company has applied its technology 
primarily to voice-only office systems and, to a lesser extent, office 
automation -- voice-and-data integrated systems.  The Company's systems 
allow for the connection of telephones and/or data devices up to a distance 
of one mile from a system's node, which can network geographically dispersed 
users, such as in large office complexes, hospitals and campus settings.  
Additionally, by interfacing the Company's systems with existing public 
carrier networks, users can be connected world-wide.  The Company's systems 
have been designed in response to perceived market opportunities arising 
out of the proliferation of increasingly sophisticated and relatively 
low-cost data devices and advances in telecommunications technologies.

The Company has pioneered the concept of utilizing a flexible distributed
switching platform designed to support a vast array of voice, data and
simultaneous voice and data services for both the domestic and
international telecommunications networks.  The Company's multi-service
and multi-functional switching systems permit telephone operating companies
and private telecommunication providers to implement switching services that
best fit the subscriber's requirements and applications with 
price/performance characteristics that the Company believes are competitive
with currently available single function monolithic centralized switches.
The Company's products are based on its proprietary operting system
software which provides high performance, reliability and multi-
functionality.  Unlike centralized switching systems, the Company's
systems are neither labor nor capital intensive but are software intensive.
The Company believes that the applications capability and flexibility of
its systems are comparatively advantaged over its competitor's products.

The Company's system architecture is software-based and
includes compact, universal hardware consisting of modular
cabinets, or nodes, each with 512 ports (lines) for voice, data
or trunk connections.  Systems can be configured to add nodes,
upon initial installation or as needed, to increase the number
of users in the network.  A system's node contains
interchangeable printed circuit boards which operate the system
and perform the system's various networking
capabilities networking internal telephones and data equipment
and providing trunk connections to external analog and digital
telephone lines, digital microwave, satellite and fiber optic
voice and data networks.  Data capabilities can be added by
incorporating the Company's integrated service terminal ("iST"),
a digital telephone containing a microprocessor, which can be
programmed to connect a corresponding data device to the system.
The Company believes that the broad range of capabilities
combined in its systems, including system flexibility in
permitting upgrading to continuously increase the number of
users and add data capabilities and the ability to achieve
end-to-end connectivity between incompatible and dissimilar data
devices, provides cost-effective solutions for voice-and-data
integrated systems applications.

The Company has sold approximately 75 systems, substantially all of 
which have been the Cyber Switch Exchange ("CSX"), an integrated voice 
and data switch which functions as a private network for up to 100,000 
users.  The Company has developed, but not yet commercialized, the Cyber 
Local Area Network ("CLAN") and Cyber Hub Controller ("CHUB") office
switching products.  CLAN is a data-only switch designed to function as 
a local area network for up to 2,400 data devices. CHUB is designed as 
an integrated voice and data switch which combines the capabilities of 
CSX and CLAN systems.  The Company has also developed Cyber Rural Exchange 
("CRX"), a voice-only switch which functions as a rural telephone exchange 
to connect widely dispersed subscribers and Cyber Distributed Central
Office ("CDCO"), a voice-only switch designed to connect rural
exchanges or subscribers in densely populated metropolitan
areas.  The Company has sold only one CRX system to date and has
not yet commercialized its CDCO system.

The Company has sold CSX systems in the People's Republic of China 
("China") to Tianchi Telecommunications Corporation ("TTC"), a  corporation 
owned in part by China, and in the United States to federal and state 
government agencies, primarily for use in voice-only office applications.  
Federal Telephone System 2000 (the "FTS 2000") program is facilitating
the development of an "information highway" connecting federal
government offices over a long-distance fiber optic network. The
FTS 2000 is intended to permit end-to-end digital voice, data
and video connectivity.  The Company has installed five CSX
systems, connecting three U.S. naval sites, a U.S. Coast Guard facility
and a U.S. Postal Services facility to the FTS 2000 network.  
The Company believes that implementation of FTS 2000, the growth in
emerging markets and the adoption of telecommunications standards for
integrated services digital networks ("ISDN") have created
significant opportunities to expand its business.

Unlike in advanced countries, where the existing public voice telephone
network consists of monolithic centralized digital switches, the developing
countries are seeking an alternative, cost effective approach, such as
the Company's distributed digital switching systems.  The Company
believes that the trend in the telecommunications industry towards 
distributed switching from monolithic centralzied switching is similar
to the trend in the computer industry towards distributed networking
personal computers from monolithic centralized mainframe computers.
Similar to the computer industry where personal computing has been
bought closer to the users, the Company's distributed switching systems
are also being installed closer to groups of subscribers, thereby 
dramatically reducing the cost of cabling.  The Company believes that
with its distributed switching system, the public telephone operating
companies in the developing countries can rapidly provide telephone
services to their customers.  It is substantially easier to install
small distributed switches than large monolithic centralized switches
with its corresponding long cabling infra-structure.  The Company
believes that its systems are ideally suited for developing countries.

The Company recently commenced marketing CDCO and CRX systems in developing
nations.  The Company just recently signed a manufacturing licensing
contract with the National Telecommunications Company ("NTC") of Egypt,
pursuant to which the NTC will assemble the systems in Egypt with parts
provided by the Company.  In addition, the NTC will market, install,
maintain and service the Company's systems in Egypt, Kenya, Tanzania, Uganda,
Sudan, Yemen, United Arab Emirates and Qatar.  The Company plans to
expand its marketing efforts in other foreign countries which have
regulatory environments that the Company believes are favorable and
which are seeking to upgrade their telecommunication network infrastructure,
such as the former Soviet republics, India and China and other countries
in Asia, Eastern Europe and Latin America.  Consistent with this
strategy, the Company may seek to enter into strategic alliance, 
licensing, joint venture and other similar arrangements with government
authorities which typically operate public telephone network.

On July 11, 1996, the Company concluded a private placement of its
Series A Preferred Stock and accompanying warrants to accredited
institutional investors and received net proceeds of approximately
$7.1 million.  Such proceeds will be used primarily to fund the
working capital requirements, expansion of international sales and
marketing activities, continued research and development of wireless
digital switching systems, reduction of long-term debt, and
modernization of the Company's manufacturing facilities.

The Company was incorporated under the laws of the State of New
York in 1983.  The Company's principal executive offices are
located at 400 Oser Avenue, Hauppauge, New York 11788, and its
telephone number is (516) 231-1200.

                             BUSINESS

The Company designs, develops, manufactures, markets and services a family
of high performance distributed digital switching and networking systems 
that enable both public telephone exchanges and private network
operators to provide cost effective simultaneous communication of voice 
and data services to a large number of users.  The Company's systems 
are based on its proprietary software technology which permits 
"modemless" transmission of data between a variety of incompatible 
and dissimilar end-user equipment, such as computers, printers, 
work stations and data terminals, over standard telephone lines.  
The Company's systems have been designed in response to perceived 
market opportunities arising out of the proliferation of increasingly 
sophisticated and relatively low-cost data devices and advances in
telecommunications technologies.

Industry Background

In the past, voice communication technologies were developed and managed by
large telephone operating companies which were largely insulated
from competition.  The data communications industry grew
independently, and provided the specialized communications link
between computers and office systems.  In recent years, there
has also been a proliferation of office systems consisting of
personal computers, work stations, printers and storage devices,
which has resulted in the growth of a separate office automation
industry.  These three industries developed in parallel and took
independent approaches to the application of technology.

In the area of voice communications, digital technology enabled telephone
companies to improve the quality of voice communication and also
provide additional features and services such as call forwarding
and conferencing and least-cost-routing for long distance calls
by microprocessor-based software control.  Such digital
technology has been applied to both public exchanges which serve
cities, towns and villages and private branch exchanges (or
PBXs) which serve offices and other large organizations.  The
need for data communications arose largely within the office
environments.  These needs were met by local area networks
("LANs") which require a different type of cabling and
associated equipment.  Such LANs are limited to small offices
typically having less than a hundred data users.

The numerous productivity enhancing devices and systems which
have been introduced into the market by the office automation
industry also created a greater need for the accessing, sharing
and exchange of information.  Traditionally, these products and
systems could communicate with one another only if they were
made by the same manufacturer.  Furthermore, as the number of
data users increase, where each user is connected to all other
users, a network becomes increasingly complex and less
manageable.

As separate data networks became more prevalent, it became
apparent that a data network which utilizes the existing
telephone cabling would be the most cost effective solution, and
also provide greater manageability with an increasing numbers of
users.  In an effort to facilitate such deployment of integrated
voice and data networks (commonly referred to as Integrated
Service Digital Networks ("ISDN")), the Consultive Committee on
International Telephone and Telegraph ("CCITT") adopted
international standards for ISDN in 1987; Bell Communications
and Research ("BELLCORE") adopted ISDN standards for the U.S.
market in November 1992.  It is anticipated that the combined
power of ISDN based switches and fiber optic cables will provide
the basis for the growth in an array of applications and
electronic information services computer-to-computer
communications, office systems integration, video-text,
video-phone, video-conferencing, electronic mail, informational
data bases, multi-media usage and access, all simultaneously
with voice transmission capability over the same network.

In technologically advanced countries, extensive public voice
telephone networks are already in place.  Innovation and change
in the form of simultaneous voice and data communications are
now taking place in the domain serviced by private networks.
Private networks providing new types of services are, therefore,
growing at a much faster rate than public voice networks. On the
other hand, in the developing world (Eastern Europe, Russia,
China, India, and Latin America), there is demand for voice-only
public networks to serve individuals and business subscribers in
cities, towns and villages.  The Company's systems are designed
to meet the sophisticated voice/data needs of private networks
in the United States, and the basic voice-only needs of public
networks in developing countries.

Unlike in advanced countries, where existing public voice telephone
consists of monolithic centralized digital switches, the developing
countries are seeking alternative, cost effective approach, such
as the Company's distributed digital switching systems.  The Company
believes that the trend in the telecommunications industry towards
distributed switching from monolithic centralized switching is similar
to the trend in the computer industry towards networking personal
computers from monolithic centralized mainframe computers.  Similar
to the computer industry where personal computing has been bought
closer to the users, the Company's distributed switching systems are
also being installed closer to groups of subscribers, thereby
dramatically reducing the cost of cabling.  The Company believes that
with its distributed switching system, the public telephone operating
companies in the developing countries can rapidly provide telephone
services to their customers.  It is substantially easier to install small
distributed switches than large monolithic centralized switches with
its corresponding long cabling infra-structure.  The Company believes that
its systems are idealy suited for developing countries.

The Company's Systems

System Architecture

The Company's systems consist of software and hardware that
combine to permit voice and data transmission over standard
telephone lines.  The system hardware, which is common to each
of the Company's systems, consists primarily of modular
cabinets, or nodes, which contain the system's control and
interface circuitry and the system operating software.  Each
node provides for 512 ports, or lines, connections to telephones
and data devices within the network and connections to public
telephone exchanges.  A standard 512 line node measures
approximately 2' by 2' by 3'.  Nodes can be connected to
increase capacity to up to 100,000 lines.

Each node contains slots for the insertion of printed circuit
boards, which contain microprocessors which are programmed by
the Company to provide the functions required by a particular
customer.  Two boards, the Main Processor Unit and the Time
Switch Unit, comprise the equipment common to all of the
system's applications.  The node also provides for an additional
30 slots for the insertion of any configuration of four
additional types of circuit boards which provide interfacing
capabilities through use of standard telephone wire to internal
telephones and data equipment and trunk connections to external
analog and digital trunk lines, digital microwave systems,
satellite systems and fiber optic voice and data networks.  

The node also contains a disk drive module which is the center
for the system's operating software.  The Company has developed
software that enables the Company to program its systems to
employ a combination of circuit and packet switching
technologies to provide for the transmission of voice and data,
either separately or simultaneously.  The system's various
switching and interfacing functions are programmed in the
microprocessors contained on the various circuit boards.

The Company's systems can be used with existing analog
telephones for voice-only applications.  For enhanced voice
capabilities and for data capabilities, the Company provides its
proprietary digital telephone, the iST.  The iST is a telephone
that contains a microprocessor and microchip that are programmed
to transform voice from analog form to digital form and
transmits the digitized voice over standard telephone wire.  In
addition, the iST in conjunction with the system provides a full
range of voice features, including call forwarding, call
waiting, least cost routing and conferencing.

The iST, through the programming of the microprocessor and
microchip contained in the unit, can also be equipped to provide
for data transmission.  A data device can be plugged into the
iST, which connects the device to the system and permits a user
to use the iST to talk while simultaneously transmitting data
over the same telephone line.  Through format and protocol
conversions and packet switching parameters programmed into the
iST, the iST permits communication between dissimilar and
incompatible devices without the use of modems.

Analog telephones and iSTs can be connected to the system's
node by ordinary telephone wire.  This permits the system to
connect users located within an area of up to one mile from the
system's node.  The system can interface with existing public
lines to connect to the outside world, including other systems
located beyond one mile from the system node.

The Company believes that the architecture of its systems
possesses the following characteristics:

	*  Easily Upgradable - The modularity of the Company's system
and the software-based nature of the system permits for  system
capacity and capabilities to be upgraded or modified on a prompt
and cost-effective basis.  Nodes can be added to increase the
number of available lines.  The system operating software and
circuit board microprocessors can be reprogrammed to provide
system functions required by a particular customer.

	*  End-to-End Connectivity and Compatibility with Existing
Technologies - The Company's system can be programmed to be
compatible with the operating parameters of most existing data
communication technologies.  The Company's systems allow data
devices with incompatible communications parameters to
communicate with each other through functions programmed into
the iSTs and microprocessors contained in the node circuit
boards.  The Company believes that its system is the only one
available with this capability.  In voice applications, the
Company's systems can interface with virtually all existing
forms of telecommunication exchanges and transmission speeds,
and conform to telecommunication standards in effect in the
United States and Europe.

	*  Distributed Processing - The Company system functions are
performed by numerous microprocessors.  By distributing the
functions in this way, the risk of total system failure as a
result of failure in one microprocessor is greatly minimized
This feature also prevents blocking of transmissions by
providing multiple routes for transmission completion, thereby
allowing more members of a network to use lines simultaneously.

Types of Systems

The Company completed the development of its first technology in
1987, at which time it began marketing its CSX system on a
limited basis.  The Company has jsut recently developed additional
technologies and software that has enabled it to create new systems 
for various applications, primarily for the developing countries
such as the CDCO and CRX.  Although the Company has just started 
to market these new systems, the Company believes that these systems 
are capable of providing the functions for which they have been designed.

CyberSwitch Exchange
____________________

CyberSwitch Exchange ("CSX") is a digital switching system
designed for use as a private network for offices, universities,
hospitals and other large organizations.  The CSX system employs
nodes, each offering 512 ports, which can be used to network up
to 100,000 users within one mile from each node.  Users are
equipped with iSTs which permit communication between data
devices.  The CSX system enables data device users to
communicate with other users without single purpose data links
and modems.  The system also accommodates traditional analog
telephones.  The CSX can be designed to provide voice-only
applications.  The Company has sold approximately 75 CSX systems to
date, each of which is operational and the largest of which
serves approximately 4,000 users.  

Cyber Local Area Network
________________________

The Company has developed but not yet commercialized the Cyber
Local Area Network ("CLAN").  CLAN is a data only local area
network which, unlike most LANs which cover distances of a few
hundred feet at most, can network users up to a distance of
approximately one mile.  The CLAN can serve even much larger
distances, effectively making it a wide area network.  The CLAN
provides data-only capabilities and consists of a system node
and iSTs, without a handset, which serves as a data server unit,
transmitting and receiving data.  The iST allows a user to
exchange data in a manner similar to making a telephone call,
pressing a button and keying in the destination for the data to
be communicated.  A single node CLAN can accommodate up to 240
users, with the ability to upgrade to 2,400 data users.         

Cyber Hub
_________

The Company has developed but not yet commercialized the Cyber
Hub Controller ("CHUB").  CHUB is an integrated voice and data
switch which combines the capabilities of the CLAN and CSX
systems to offer total integrated data and voice communications
capability in a single, multi-purpose system.  CHUB offers
digital transmission, switching and networking capabilities,
thus enabling voice and data communications both within a local
area and with the outside world.   A single node CHUB is capable
of supporting 512 lines for data, voice or trunk connections.
Through its digital networking and transmission capabilities,
several nodes can be networked to provide up to 100,000 lines.

Cyber Distributed Central Office
________________________________

The Company has developed but not yet commercialized the Cyber
Distributed Central Office ("CDCO") which is designed to provide
digital voice communications to subscribers in densely populated
urban areas.  The CDCO is essentially a digital switch with
trunk and tandem exchange capabilities enabling it to connect
subscribers served by other exchanges.  The CDCO system
interfaces with digital telecommunications networks and older
analog telephone networks.  The CDCO system consists of nodes
connected by standard digital links which permit optimization of
the network with respect to specific size, required traffic
capacity, and desired applications.  The modularity derived from
the nodal structure of the CDCO provides an economical digital
switching exchange from as little as a few hundred lines up to
100,000 lines capacity.  

Cyber Rural Exchange
____________________

The Company has developed the Cyber Rural Exchange ("CRX"),
which is a specialized version of the CDCO.  The Company has
sold only one CRX system to date, which is currently serving
about 400 users.   The CRX is designed to handle the traffic
requirements of widely dispersed single-line users, such as
users in a small town or rural area.      

Sales and Marketing

Customers

To date, the Company has sold approximately 75 systems, substantially 
all of which have been the CSX.  The Company has not commercialized 
the CLAN, the CHUB or the CDCO and has sold only one CRX.  The Company 
has sold its systems to federal and state government agencies and to 
TTC in China.  The Company has been engaged in limited marketing activities
relating to the CSX system due to its limited marketing experience and 
limited financial, personnel and other resources to undertake extensive 
marketing activities.

Sales of the Company's systems to federal and local government agencies 
accounted for approximately 100% and 93% of the Company's revenues in 
the years ended March 31, 1996 and 1995, respectively.  A portion of 
the Company's government contracts are obtained through a competitive 
bidding process.  The Company has been limited in its ability to bid 
on larger contracts and to obtain bid and performance bonds due to the
Company's current limited capital resources.  

The Company just recently signed a manufacturing licening contract with the
National Telecommunications Companys ("NTC") of Egypt, pursuant to which
the NTC will assemble the sytems in Egypt with parts provided by the
Company.  In addition, the NTC will market, install maintain and service
the Company's systems in Egypt, Kenya, Tanzania, Uganda, Sudan, Yemen,
United Arab Emirates and Qatar.

Government Contracts

A portion of the Company's business consists and will continue to consist 
of sales under United States government contracts.  Certain of these 
contracts are competitive bid contracts, which are awarded after a 
formal bid and proposal competition among suppliers.

Virtually all of the Company's United States government
contracts are fixed price contracts, pursuant to which the
Company agrees to provide a system for a fixed price and assumes
the risk of cost overruns.  The Company has not experienced cost
overruns on fixed price contracts.

The Company's United States government contracts generally may
be terminated as a result of factors which may not depend on the
Company, including termination for the convenience of the
customer.  In the event of a termination for convenience, the
Company would be entitled to reimbursement for its incurred
contract costs and to payment of a proportionate share of its
fee or profit for the work actually performed.

Competition

The telecommunications and related networking industries are
characterized by intense competition.  The Company competes with
numerous well-established foreign and domestic companies, many
of which possess substantially greater financial, marketing,
personnel and other resources than the Company and have
established reputations for success in the development, sale and
service of high-speed digital switching and networking and
related products.

Products which perform many of the functions of the Company's
systems are readily available from several competitors,
including AT&T, Rolm, Intecom, Northern Telecom, Siemens,
Fujitsu and NEC, as well as computer networking companies
engaged in system integration, such as Novell, Xerox, IBM and
Corvus, certain of which dominate the industry and have already
established a significant base of their products or achieved
significant market penetration in selected geographic areas.
These competitors also have the research and development
capabilities and financial and technical resources necessary to
enable them to respond to technical advances as well as evolving
industry requirements and standards.

The Company believes that it competes primarily on the basis of
the capabilities of its systems, price, reliability and quality,
and ease of installation and use.  The Company believes, based
on its own research and information available to it from
industry sources and from customers, that it offers the only
digital switching and networking system that provides end-to-end
connectivity between incompatible and dissimilar data devices.
In addition, the Company believes that certain features of its
system architecture, including the software based nature of the
system, the distributed processing system and the compact and
modular nature of the system hardware, provide advantages over
competitive products which are mostly hardware intensive and
employ centralized processing methods which increase the
potential for blocking transmissions.

The Company expects that companies which have developed or are
developing new technologies or products, as well as other
companies which have the expertise which would encourage them to
attempt to develop and market competitive products may attempt
to develop new products directly competitive with the Company's
products.  In particular, the Company is aware that Microsoft, a
leading software company, is currently developing office system
software designed to connect incompatible and dissimilar
end-user equipment.  According to published reports, however,
Microsoft's proposal would require third-party hardware
manufacturers to adapt their products to be compatible with
Microsoft's software systems.  The Company's system can be used
with currently available hardware.  In addition, Microsoft has
announced that its proposed product will not be commercialized
for three to four years.

Proprietary Technology

The Company does not hold any patents or copyrights, nor has it
filed any patent or copyright applications, relating to its
products or software technology.  The Company regards its
software technology and certain components of its system
hardware, including the iSTs, as proprietary and relies for
protection upon copyright and trade secret laws and
confidentiality agreements with its employees.  In addition, the
Company requires customers to enter into a license and
confidentiality agreement permitting the customer the exclusive
use of the system operating software, which is furnished to the
customer in object form .

The  Company believes that these protections are
sufficient to  protect  the  Company's  rights  as to its
systems and software.  Despite these protections,  however,  it
is  possible  that  competitors, employees, licensees or others
may copy one or more of the Company's products or its technology
or obtain information that the Company regards as proprietary.
In addition, there can be no assurance that others will not
independently develop products or technologies similar to those
of the Company, that confidentiality agreements will not be
breached or that the Company will have adequate resources to
protect its proprietary technology. The Company believes,
however, that because of the rapid pace of technological change
in the digital switching and networking industries, protection
for its systems is less significant than the knowledge, ability
and experience of the Company's employees, the frequency of
product enhancements and the level of service and support
provided by the Company.

In 1987, the Company entered into a Technology License
Agreement with TTC (the "License Agreement") pursuant to which
the Company granted to TTC an exclusive, royalty-free, perpetual
license to use the Company's technology for the purpose of
manufacturing, distributing and selling products in China.  In
addition, the Company granted TTC a non-exclusive thirty-year
license in the licensed technology to manufacture, sell and
distribute products in certain foreign countries and states in
the United States, and appointed a U.S.-based joint venture
partner as a non-exclusive distributor of the Company's products
in certain states in the U.S. Under the License Agreement, the
Company trained employees of TTC in the use of the licensed
technology and delivered certain products to TTC for which the
Company was entitled to receive $1,000,000 and 5% ownership of
the U.S.- based joint venture partner.  To date, the Company has
not received such ownership interest and has received only
$650,000 from TTC for such training and product.  Currently, the
Company sells system components to TTC on a purchase order basis
from time to time in the ordinary course of business.  The
Company sells components to TTC only upon the issuance of a
letter of credit satisfactory to the Company.

Government Regulation and Industry Standards

The telecommunications and related networking industries in
which the Company competes are highly regulated in both the
United States and internationally.  Imposition of public carrier
tariffs and taxation of telecommunications services could
materially adversely affect demand for the Company's products.
Furthermore, regulation or deregulation of public carrier
services by the United States and other governments, including
recent proposals to permit local carriers to manufacture
switching equipment, may determine the extent to which the
Company will be able to enter and penetrate markets in the
United States and internationally and may result in
significantly increased competition, which would significantly
impact the Company's future operating results.  In addition, the
Company's products must comply with equipment, interface and
installation standards promulgated by communications regulatory
authorities, including the Federal Communications Commission.

In addition, the Company is required to obtain a license from
the Department of Commerce prior to export sales to certain
countries.  A denial of an export license to the Company would
be based upon a policy which likewise affects all other American
companies exporting similar products.

Industry standards bodies such as CCITT and BELLCORE have
created committees to address the matter of standards within the
telecommunications industry.  The purpose of such standards is
to facilitate the interoperability of products from various
vendors and, through standardization, create a competitive
environment which is anticipated to result in lower product
costs.  During the past few years, many new standards have been
adopted and more are pending.  The International Standards
Organization ("ISO"), one of the primary standard setting bodies
in the communications industry, has developed a framework for
network standard called the Open System Interconnection
Reference Model (the "OSI Model").  The OSI Model represents a
standard approach by which information can be communicated
throughout a network, so that a variety of independently
developed computer and communications devices can interoperate.
The design of the Company's products incorporates the OSI Model
and accommodates most existing and pending ISDN standards,
including applicable BELLCORE and CCITT specifications.  In most
foreign countries, government departments or ministries set
industry standards.  

Changes in government policies, regulations and interface and
installation standards or industry standards imposed by domestic
and foreign carriers in the future could require the Company to
alter methods of operation, resulting in additional costs, which
could have a material adverse effect on the Company.

Production and Supply

The Company engages in manufacturing, software programming,
assembly, system testing and quality assurance operations at its
facility in Hauppauge, New York.  The Company's operations
involve the creation of the required system software, the
inspection of system components manufactured by third parties,
programming of microchips and microprocessors, assembly of the
components of the system hardware and quality and testing to
certify final performance specification.  The Company believes
that it has sufficient excess production capacity to satisfy any
increased demand for the Company's systems in the foreseeable
future.

The Company is dependent on third-party arrangements for the
manufacture of all of its component parts incorporated into the
Company's systems.  The Company purchases its component parts
from numerous third-party manufacturers and believes that
numerous alternative sources of supply are readily available.
The Company currently purchases all of its requirements of
specially designed plastic parts for the iST from a single
source supplier.  The Company believes that alternative sources
of supply for such components are available.  The Company is
substantially dependent on the ability of its suppliers, among
other things, to satisfy performance and quality specifications
and dedicate sufficient production capacity for plastic parts
within scheduled delivery times.  The Company does not maintain
contracts with any of its suppliers and purchases system
components pursuant to purchase orders placed   from time to
time in the ordinary course of business.  Failure or delay by
the Company's suppliers in supplying necessary components to the
Company would adversely affect the Company's ability to obtain
and deliver products on a timely and competitive basis.

The Company's sales cycle for government contracts
generally commences at the time a prospective customer issues a
request for a proposal and ends upon execution of a sales
contract with that customer and typically ranges from 3 to 12
months.  The period from the acceptance of the Company's bid and
execution of the sales contract until delivery, installation and
acceptance of a system, at which time the Company recognizes
revenues, typically ranges from 2 to 18 months.  The principal
factors affecting delivery and installation time are the
configuration and complexity of the system and the availability
of third-party hardware components.  In addition, the Company
generally does not receive cash payment until approximately
three to four months after acceptance of a system by a
government agency.   At March 31, 1996, the Company maintained
an inventory of system components of $433,582.  Because the
Company generally expects to fill orders shortly after receipt,
backlog is not expected to be material to the Company's business.

The Company offers a one-year warranty, for sales in the United
States, covering operating defects during which period the
Company will replace parts and make repairs to the system
components at its expense.  For sales in China, the Company
offers a 100-day warranty.  To date, the Company has not
incurred any significant warranty expense.

Research and Development

Since its inception, the Company has devoted substantial
resources to the design and development of the Company's
systems.  For the fiscal years ended March 31, 1996 and
1995, the Company expended approximately $41,679 and $86,383
respectively, on research and development.  Although the
Company's basic systems have been developed, the Company is
continually seeking to refine and enhance its systems, including
enhancements to comply with emerging regulatory or industry
standards or the requirements of a particular customer or
country.

The markets for the Company's products are characterized by
rapidly changing technology and evolving industry standards,
often resulting in product obsolescence or short product
lifecycles.  Accordingly, the Company's ability to compete will
depend in large part on its ability to introduce its products to
the marketplace in a timely manner, to continually enhance and
improve such products and maintain development capabilities to
adapt to technological changes and advances in the
communications industry, including insuring continuing
compatibility with evolving industry standards.  There can be no
assurance that the Company will be able to compete successfully,
that competitors will not develop technologies or products that
render the Company's systems obsolete or less marketable, or
that the Company will be able to keep pace with the
technological demands of the marketplace or successfully enhance
and adapt its products to satisfy industry standards.

Service and Support

The Company believes that service, support and training are
important factors in promoting sales and customer satisfaction.
Service and support include system planning, site preparation,
installation, customer training, and maintenance.  The Company
typically charges an annual fee for ongoing support services. 

Because the Company's system hardware consists of a cabinet
with shelves having printed circuit boards inserted into
physical slots, a substantial part of repair and maintenance can
be accomplished by simply substituting the component in need of
repair.  In addition, the Company's systems are designed to be
accessible by computer from the Company's headquarters, allowing
the Company's service personnel to remotely call up, diagnose
and otherwise support systems and reducing response time and
cost.

In addition, the Company intends to enter agreements with third
party service providers to provide customer support on a local
basis in foreign markets.

Employees

As of March 31, 1996, the Company had six full time
employees, of which one was engaged in marketing and sales
activities, one was engaged in research and development and
support engineering, two were engaged in production and
operations, and two were in administration.  None of the
Company's employees is represented by a labor union.  The
Company considers its employee relations satisfactory.

ITEM 2 - Description of  Property

The Company's executive offices and assembly operations are located 
in approximately 8,200 square feet of leased space in Hauppauge, New York.  
The lease expires on March 31, 1998, with a renewal option and an 
annual rental payment of $51,250.  The Company believes that its facility 
is adequate for its current and reasonably foreseeable future
needs.  The Company believes that additional physical capacity
at its current facility will accommodate expansion, if required.

ITEM 3 - Legal Proceedings

The Company is presently not a party to any material legal
proceedings.  

On December 22, 1987, the Company filed a petition for
reorganization under Chapter 11 of the United States Bankruptcy
Code.  At the time of such filing, the Company was in default of
two secured loans - a $1 million loan from the RDC and a $2
million revolving line of credit loan, of which $750,000 was
outstanding, from Empire of America, F.S.B. ("Empire"), $1
million of which was guaranteed by the JDA, which subsequently
succeeded to Empire's position.  On June 20, 1990, the
Bankruptcy Court of the Eastern District of New York confirmed
the Company's Plan of Reorganization.

ITEM 4 - Submission of Matters to a Vote of Security Holders

None.

                                PART II

ITEM 5 - Market for Common Equity and Related Stockholder Matters

The Company's Common Stock is traded in the over-the-counter
market and quoted on the National Association of Securities
Dealers' Electronic Bulletin Board (the "Bulletin Board") under
the symbol "CYBD" since its initial public offering in 1984. The
following table sets forth, for each of the fiscal periods
indicated, the high and low bid prices for the Common Stock, as
reported on the Bulletin Board.  These per share quotations
represent inter-dealer prices in the over-the-counter market, do
not include retail markups, markdowns or commissions and may not
represent actual transactions.
<TABLE>
<CAPTION>
                                              	  Price Per Share
                                                 _______________
                                                	High	       Low
                                                 ____       ____
<S>                                              <C>        <C>
Fiscal Year Ended March 31, 1996
       	First Quarter		                          $1.43      $0.87
       	Second Quarter		                          1.09       0.68
       	Third Quarter		                           3.50       0.68
       	Fourth Quarter 	                          3.93       2.25

Fiscal Year Ended March 31, 1995
       	First Quarter	                           $1.25      $0.75
       	Second Quarter		                          1.43       0.62
       	Third Quarter                             1.18       0.62
       	Fourth Quarter		                          1.50       0.81

On March 31, 1996, the closing bid price of the Common Stock as
reported on the Bulletin Board was $2.75 per share.  As of such
date, there were approximately 700 holders of record of the
Company's Common Stock. 

To date, the Company has not paid any dividends on its Common
Stock and does not expect to declare or pay any dividends in the
foreseeable future.  Instead, the Company intends to retain all
earnings for use in the Company's business operations.

ITEM 6 - Management's Discussion and Analysis or Plan of Operation

Overview

The Company was incorporated in April 1983 to develop,
manufacture and market high performance software controlled
digital switching and networking systems providing simultaneous
voice and data communications over standard telephone lines.
Since completion of development of its first technology in 1987,
which resulted in the development of CSX, CLAN and CHUB systems
for private communications networks, the Company has been
engaged in limited marketing activities with respect to CSX
systems only and, therefore, generated limited revenues.  The
Company has not yet commercialized CLAN and CHUB office
switching systems as it is devoting most of its efforts to the
marketing of CSX.   

As part of the Company's plans to expand its marketing 
efforts in foreign countries with favorable regulatory environments 
and which are seeking to upgrade their telecommunications network 
infrastructure, the Company completed the initial development of CDCO 
and CRX systems in late fiscal 1994 and continued enhancements of
these systems in fiscal 1996.  The Company recently singed a manufacturing
licensing contract with the NTC of Egypt, pursuant to which the NTC will
assemble the systems in Egypt with parts provided by the Company.  In
addition, the NTC will market, install, maintain and service the Company's 
systems in Egypt, Tanzania, Uganda, Sudan, Yemen, United Arab Emirates and 
Qatar.  Consistent with this strategy, the Company may seek to enter into 
long-term contracts, licensing, joint venture or other similar arrangements 
with government authorities which typically operate public telephone 
networks.  To date the Company has sold one CRX system and has not yet 
commercialized its CDCO system.

During the past two years, the Company's revenues have
been derived principally from contract awards, which include installation,
maintenance and service, solely from system sales to Federal Government
agencies.  In order to gain rapid penetration of its systems, the Company's 
strategy is to use a combination of long-term contracts, licening, joint 
venture and other similar arrangements besides contract awards. To date the 
Company has been successful in receiving small contract awards based on 
specific projects from Federal Government agencies.  During fiscal 1996 and
1995, the Company was awarded long-term multi-million dollar contracts but
could not qualify due to limited cash and working capital resources.  The
Company is currently pursuing long-term contracts and joint venture 
arrangements with certain foreign countries.  However, to date the Company
has not gained rapid market penetration of its systems and there can be no
assurance that it will be able to do so.  To the extent the Company enters 
into long-term contracts and joint venture arrangements, the revenues 
derived from such arrangements are expected to represent a significant portion
of the Company's revenues.

A relatively limited number of customers have historically accounted for 
a substantial portion of the Company's net sales. Approximately 100% and 
93% of the Company's revenues in the years ended March 31, 1996 and 1995, 
respectively, were derived from contracts with federal government agencies.  
Government contracts are subject to certain risks, including delays in
funding, lengthy review processes for awarding contracts,
non-renewal, delay, termination, reduction or modification of
contracts in the event of changes in the government's policies
or as a result of budgeting constraints and increased or
unexpected costs resulting in losses, any or all of which could
have an adverse effect on the Company.  The Company believes
that it is one of a limited number of companies to have received
GSA certification to sell digital switching equipment to federal
government agencies.  Failure by the Company to maintain GSA
certification for its products or the grant of GSA certification
to additional competitors could have an adverse effect on the
Company.  In addition, as the Company expands its marketing 
efforts in foreign countries, it may be subject to all risks 
associated with foreign trade, including shipping delays, increased
credit risks, trade restrictions, export duties and tariffs, 
fluctuations in foreign currency rates and international, political,
regulatory and economic developments, any of which could have an
adverse effect on the Company.

During fiscal 1996, the Company invested significant
research and development, and marketing resources to focus on
the completion of CRX and CDCO systems and the initial
introduction of these systems to targeted foreign countries such
as Egypt, India, Russia and Tajikistan.  However, there can be no
assurance that the Company will be successful in establishing a
reasonable business in such countries.

Results of Operations

Year Ended March 31, 1996, Compared to Year Ended March 31, 1995

Net sales

The Company's net sales for the year ended March 31,
1996, were $352,701, representing an increase of $118,584 or
approximately 50% from $234,117 for the year ended March 31,
1995.  The increase in net sales was primarily attributable to
an increase in sales to Federal Government Agencies.  In 1996 the
Company experienced diminished bidding activity on small
contracts as most bids entailed large contracts or multiyear
long-term contracts where the Company was at a disadvantage
against large competitors due to its limited working capital. 

Gross margin

The Company includes in its cost of sales the materials
and labor used, subcontractor costs and overhead incurred in the
manufacture of its systems.  The Company's gross margin
increased from 53% to 78% of net sales from  fiscal 1995 to
1996.  Fluctuations in gross margins are primarily
attributable to inventory changes, material price changes and changes 
in sales mix by system.

Selling, general and administrative

Selling, general and administrative expenses decreased
from $553,591 in fiscal 1995 to $474,924 in fiscal 1996,
representing a decrease of $78,667 or approximately 14%.  The
absolute dollar decreases in selling, general and administrative
expenses from fiscal 1995 to fiscal 1996 were principally the
result of reduced selling expenses incurred with respect to
introductory and exploratory marketing efforts in Egypt, India
and Russia.  Such efforts have not resulted in any sales
to these countries.  

Provision for bad debt

Bad debt expense amounted to zero in fiscal 1996 as compared to 
$156,719 in fiscal 1995.

Research and development

Research and development expenses decreased from $86,383, or 37% of 
net sales, in fiscal 1995 to $41,679, or 6% of net sales, in fiscal 1996.  
These dollar decreases in research and development expenses were 
primarily due to lesser allocation of personnel.  All development 
costs are expensed in the period incurred.  The Company expects to 
continue to commit reasonable resources to research and development 
in the future, particularly for certification of CDCO and CRX in foreign 
countries, and as commercialization of ISDN applications for the CSX 
continue to be developed in the U.S. and digital voice applications in the 
developing countries.

Income (loss) from operations or income (loss) before extraordinary item

Loss from operations in fiscal 1996 was $287,115 or $.02 per share 
as compared with $743,098 or $.05 per share in fiscal 1995.

Extraordinary item

Extraordinary gain on debt restructure in fiscal 1996 was $912,974 
or $.06 per share as compared to zero in fiscal 1995.

Net income (loss)

As a result of the foregoing, the net income in fiscal 1996 was
$625,859 or $.04 per share as compared to a net loss of $743,098 or 
$.05 per share in fiscal 1995.

Liquidity and Capital Resources

The Company has financed its operations to date through
the sale of its equity securities, long-term debt and cash
generated from operations.  At March 31, 1996 the Company had
working capital of $133,360 compared to $403,507 at March 31,
1995.   The current ratio decreased to 1.2 to 1 in fiscal 1996
from 3.1 to 1 in fiscal 1995.  Current levels of inventories are
adequate to meet at least four times the fiscal 1996 net sales.
There were no significant capital expenditures in fiscal 1996.

Net cash used in operating activities was $483,303 and
$374,726 for fiscal 1996 and 1995 respectively.  The increase
from fiscal 1995 to 1996 was primarily due to the net income,
foregiveness of debt and increase in accounts receivable.

The Company used $2,399 and $25,649 during fiscal 1996
and 1995 respectively, for investing activities.  The cash used
for investing activities relates primarily to purchases of
equipment in fiscal 1996 and 1995.

Net cash provided by (used in) financing activities was
$559,841 and $(35,034) for fiscal 1996 and 1995, respectively.
The increase in net cash provided by financing activities from
fiscal 1995 to 1996 was principally due to issuance of common
stock, and proceeds from debt.  The Company made principal payments 
of long-term debt of $5,219 and $73,034 in fiscal 1996 and 1995, 
respectively.  The payments of long-term debt principally relate 
to the JDA and RDC in each of the fiscal years during which years 
both JDA and RDC have agreed to revise the payment terms.  For 1996, 
the Company is obligated to pay to JDA only 5% of the outstanding 
principal amount of such indebtedness, without interest.  As of 
February 14, 1996, all of the Company's indebtedness
to RDC was settled for $100,000 cash and the issuance of warrants
to purchase 100,000 shares of Common Stock at $1.00 per share.
As of May 31, 1996, JDA has agreed to settle all of the Company's
indebtedness to JDA for a cash settlement of $300,000 made prior to November
20, 1996.  On July 11, 1996, the Company concluded a private placement of
its Series A Preferred Stock and accompanying warrants to accredited
institutional investors and received net proceeds of approximately
$7.1 million.  The Company allocated a portion of the net proceeds to
repay outstanding indebtedness.

Pursuant to the completion of a private placement on July 11,
1996, resulting in the Company receiving net proceeds of approximately
$7.1 million, the Company's current sources of liquidity has significantly
improved, and together with expected cash flow from operations, will be
sufficient to meet its needs for the next 24 months.

Impact of Inflation

Inflation has historically not had a material effect on
the Company's operations.

New Accounting Pronouncements

Effective April 1, 1993, the Company adopted Statement
of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS No. 109").  SFAS No. 109 requires a change
from the deferred method of accounting for income taxes pursuant
to Accounting Principles Board Opinion No. 11 to the asset and
liability method of accounting for income taxes.  This change in
accounting did not have any impact on the Company's financial
statements.

ITEM 7 - Financial Statements

The Financial Statements of the Company are listed in
the "Index to Financial Statements and Schedule" filed as part
of this Form 10-KSB.

ITEM 8 - Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure.

None.

                                  PART III

ITEM 9 - Directors,  Executive Officers , Promotors and Control
Persons; Compliance With Section 16(a) of the Exchange Act.

The directors and executive officers of the Company are:

</TABLE>
<TABLE>
<CAPTION>
Name				                  	Age          Office
<S>                        <C>          <C>
Jawahar C. Chatpar			      47	          Chairman of the Board, President, and 
                                        Chief Executive Officer

Jack P. Dorfman				        57	          Director

Dr. Anil K. Agarwal			     53	          Director


Jawahar C. Chatpar is a founder of the Company and has served
as Chairman of the Board, Chief Executive Officer and President
since March 1991, as Chairman of the Board, Chief Executive
Officer and Secretary from November 1986 until March 1991, and
as President and Chief Executive Officer since inception until
November 1986.  Mr. Chatpar has also served as a director since
inception.  Mr. Chatpar founded the Company in 1983 as a
successor to a Canadian corporation of the same name which he
founded in 1982.  From 1980 to 1982, Mr. Chatpar was employed by
Bayly Engineering Limited, a manufacturer of digital
telecommunication systems and a member of A.E.G. Telefunken
Group, as a Manager of Digital Transmission and Fiber Optics
Engineering (research and development).  From 1974 to 1980, Mr.
Chatpar served in various engineering, management and marketing
positions with Northern Telecom.  He holds an M.S. degree in
Electrical Engineering from the University of Waterloo.

Jack P. Dorfman joined the Company as a Director in November
1993.  Since 1992, Mr. Dorfman has served as consultant and
manager for an independent community pharmacy.  From 1990 to
1992, he served as a management consultant for Clark Container,
a division of Mark IV Industries, a conglomerate.  From 1988 to
1990, he served as Vice President and Treasurer of US
Distribution, a transportation company.  Prior to 1988, he
owned, managed and operated an independent community pharmacy
for over fifteen years.

Anil K. Agarwal, M.D., joined the Company as a Director in
November 1993.  Since 1976, Dr. Agarwal has been practicing at
the Omaha Orthopedics Clinic and Sports Medicine, Omaha,
Nebraska and at Orthopedic Clinic, Iowa, as an American Board
Certified Orthopedic Surgeon.  In addition, he has active
appointments with Bergen Mercy Hospital and Jenny Edmundson
Hospital.  From 1977 to 1991, he also taught at the Creighton
University School of Medicine.

ITEM 10 - Executive Compensation

Summary Compensation Table

The following table sets forth information concerning the
compensation for services in all capacities for the fiscal years
ended March 31, 1996 and March 31, 1995 of those persons who
were, at March 31, 1996, the chief executive officer and the
most highly compensated executive officer of the Company.  No
executive officer of the Company received compensation in excess
of $100,000 in fiscal years ended March 31, 1996 and  March 31,
1995.

</TABLE>
<TABLE>
<CAPTION>
                                               Long Term Compensation
   	                                           ______________________
               Annual Compensation(1)       			Awards 		    Payouts
               __________________________________________________________________           
Name and       Year   Salary   Bonus   Other   Restricted   Securities    LTIP      All
Principal                              Annual    Stock      Underlying    Payouts   Other
Position                               Compen-  Awards        Options/              Compen-
                                       sation                SARs(#)                sation
___________________________________________________________________________________________
<S>            <C>    <C>      <C>     <C>      <C>          <C>          <C>       <C>
J.C. Chatpar   1996   $80,000  None(2) None      None        None         None      None
Chairman of    1995   $80,000  None    None      None        None         None      None
Board,
President and
Chief Executive
Officer
___________________________________________________________________________________________
</TABLE>

(1)	The Company has concluded that the aggregate amount of
    perquisites and other personal benefits paid to each of the
    executive officers named in the table for the 1996 and 1995
    fiscal years did not exceed the lesser of 10% of such officer's
    total annual salary and bonus for the 1996 and 1995 fiscal years
    or $50,000; such amounts are not included in the table.

(2)	An employment agreement with Mr. Chatpar provides for an
    annual bonus as described in "Employment Agreements and 
    Insurance."  Mr. Chatpar waived his right to receive a
    bonus for fiscal year 1996.

1983 Stock Option Plan

The Company has adopted a 1983 Stock Option Plan (the "Plan").
The Plan expired in April 1993.  Under the terms of the Plan,
1,462,500 shares were reserved for issuance to officers,
directors and key employees meeting certain qualifications.
Options relating to 559,125 shares have been exercised at prices
between $.07 and $1.65 per share.  Under the Plan, incentive
stock options are granted at 100% of fair market value on the
date of grant, and the employee's rights to exercise the options
accrued in respect to one-quarter of the shares subject to
grant, each year that the employee is employed by the Company.
Options granted under the plan automatically expire ten (10)
years from the date on which they are granted.  Options shall
not be granted to any shareholder owning more than 10% of the
Company's voting securities unless (i) the option price shall be
at least 110% of the fair market value of the shares covered by
the option and (ii) the option expires not less than five (5)
years from the date it is granted.  Payment of the option price
shall be at the time of and together with notice of exercise of
such option.  Based upon their terms of issuance, options
relative to 50,000 shares are exercisable in this fiscal year
at a price of $.25 per share.

Subject to certain limitations, the employee to whom an option
is granted must remain in the continuous employ of the Company
at all times during the period beginning on the granting of the
option and ending not more than three months before the date the
option is exercised.  The Plan is administered by the Board of
Directors or by a committee of the Board.  Eligibility for
participation in the Plan is limited to those who in the opinion
of the Board are capable of contributing in a substantial
measure to the successful performance of the Company.

Option Grants.  During fiscal 1996, the Company granted stock
option to Mr. J.C. Chatpar to purchase 440,000 shares at $1.00
per share.  

The following table sets forth information regarding the
exercise of stock options during the last fiscal year by the
executive named in the Summary Compensation Table and the fiscal
year-end value of unexercised options held by such executive,
all of which are presently exercisable:
<TABLE>
<CAPTION>
                                                            Value of
                                            Number of       Unexercised
                                            Unexercised     in-the-Money
              Shares Acquired     Value     Options at      Options at
Name           on Exercise      Realized    March 31, 1996  March 31, 1996(1)
____          _______________   ________    ______________  _________________
<S>           <C>               <C>         <C>             <C>
J.C. Chatpar 	None 	            N/A 	       480,000         $852,400 (exercisable)
                                            (exercisable)  
</TABLE>

(1)  Based on the closing trade price of $2.75 on March 31, 1996, 
     less the applicable exercise price.

Compensation of Directors

The directors of the Company are paid $250 per Board meeting.
In addition, the Company currently reimburses each director for
expenses incurred in connection with his or her attendance at
each meeting of the Board of Directors or a committee on which
he or she serves.

Employment Agreements and Insurance

The Company has entered into an employment agreement with Mr.
J.C. Chatpar for a three-year term commencing on March 1, 1992.
Such three-year term shall be automatically extended for another
three-year term commencing on the third anniversary date of the
current term.  The Board, however, has the authority to
terminate such extension either based upon cause or without
cause.  "Cause" is defined as proven material dishonesty, fraud
or physical disability preventing performance of Mr. Chatpar's
duties for a continuous period of 180 days.  Mr. Chatpar is
entitled to receive a salary of $80,000 per annum.  In
recognition of the complex scientific and technical leadership
which Mr. Chatpar brings to the Company, the Company has also
agreed that its Board of Directors may raise his salary during
the three-year term as soon as the financial resources of the
Company and other business conditions permit.  In such event Mr.
Chatpar's salary shall be at a level comparable to that of chief
executive officers of other comparable technology-driven
publicly held companies.

In addition, to his base salary, Mr. Chatpar shall be entitled
to receive a bonus based upon the following formula:  (a) 1% of
gross revenues for each fiscal year in excess of $3 million
provided, however, that the Company shall be profitable, (b)
plus 5% of net income after deduction of the bonus provided for
in (a) above, and (c) plus 10% of the increase in net income
over that of the prior fiscal year after deduction of the bonus
provided for in (a) above.  In the event of a termination of Mr.
Chatpar's employment without cause prior to February 28, 1998,
Mr. Chatpar shall receive an amount equal to 5% of gross
revenues earned by the Company each month beginning on the date
of termination and continuing for a period of five years.

The Company does not have employment contracts with any other
officer or director.  The Company currently maintains a
$1,000,000 term life insurance policy on the life of J.C.
Chatpar with benefits payable to the Company.  The Company
offers basic health, major medical and life insurance to its
employees. No retirement, pension or similar program has been
adopted by the Company.

1993 Stock Option Plan

On November 5, 1993, the Company's Board of Directors adopted
the Company's 1993 Stock Incentive Plan (the "1993 Plan").  The
purpose of the 1993 Plan is to provide the recipients of awards
thereunder with an incentive (i) to enter into and remain in the
service of the Company, (ii) to enhance the long-term
performance of the Company, and (iii) to acquire or increase a
proprietary interest in the success of the Company.  The 1993
Plan is a successor to the Company's 1983 Stock Option Plan. The
total number of shares of Common Stock of the Company, par value
$.01, which may be issued pursuant to the 1993 Plan shall not
exceed 853,375, subject to adjustment in the event of a stock
split or similar action.  Such shares may be authorized but
unissued Common Stock or authorized and issued Common Stock held
in the Company's treasury or acquired by the Company for the
purposes of the 1993 Plan.

Pursuant to the 1993 Plan, incentive stock options,
nonqualified stock options, restricted stock and stock
appreciation rights may be granted to such officers, directors,
and employees of the Company, and to such consultants to the
Company and such other persons or entities, as the Stock Option
Committee of the Board of Directors (the "Committee") shall
select.  All incentive stock options ("ISOS"), which may be
granted only to employees and which provide certain tax
advantages to the optionee, must have an exercise price of at
least 100 percent of the fair market value of a share of Common
Stock on the date the option is granted.  No ISOS will be
exercisable more than 10 years after the date of grant.  ISOS
granted to ten percent shareholders must have an exercise price
of at least 110 percent of fair market value and may not be
exercisable after the expiration of five years from grant.  The
exercise price and the term of nonqualified stock options
("NQSOs") are determined by the Committee at the time of grant.
The exercise price of any option may be paid in cash or by
surrender of shares of Common Stock already owned by the
optionee, valued at fair market value at time of surrender.  If
the optionee is an employee of the Company, he may pay the
exercise price by delivery of a promissory note, the terms of
which are set by the Committee.  The Committee may allow other
methods of payment in its discretion.

Stock appreciation rights ("SARs") may be granted independently
or in connection with all or any part of any option granted
under the 1993 Plan, either at the time of grant of the option
or at any time thereafter.   The holder of an SAR has the right
to receive from the Company, in cash or in shares as the
committee shall determine, an amount equal to the excess of the
fair market value of the shares covered by the SAR at the date
of exercise over the exercise price set at the date of grant of
the SAR.  At the request of the holder of an option, the
committee may in its discretion substitute, for the exercise of
the option, compensation (in cash or in shares) in an amount
equal to or less than the excess of the fair market value of the
shares covered by the option at the request date over the
exercise price set at the grant of the option.  Options and SARs
may not be transferred during the lifetime of a holder.  Options
and SARs may be exercised for up to three months (one year in
the case of death or disability) after the termination of the
grantee's association with the Company, except that options and
SARs expire immediately upon a termination for cause.

A restricted stock award, entitling the recipient to acquire
shares of Common Stock for a purchase price at least equal to
par value, may be granted to such persons and in such amounts
and subject to such terms and conditions as the Committee may
determine.  Shares of restricted stock may not be sold,
assigned, transferred, pledged or otherwise encumbered or
disposed of except as specified in the 1993 Plan or the written
agreement governing the grant (a "Plan Agreement").  The
Committee, at the time of grant, will specify the date or dates
on which the nontransferability of the restricted stock shall
lapse.  During the 120 days following the termination of the
grantee's employment for any reason, the Company has the right
to require the return of any shares to which restrictions on
transferability apply, in exchange for which the Company shall
repay to the grantee any amount paid by the grantee for such
shares.

Unless sooner terminated by the Board, the provisions of the
1993 Plan regarding the grant of ISOS shall terminate on the
tenth anniversary of the adoption of the 1993 Plan by the Board.
No ISOS shall thereafter be granted under the Plan, but all ISOS
granted theretofore shall remain in effect in accordance with
their terms.

Whenever cash is paid pursuant to an award under the 1993 Plan,
the Company is entitled to deduct therefrom an amount sufficient
in its opinion to satisfy all federal, state and other
governmental tax withholdings related to such payment.  Whenever
shares of Common Stock are delivered pursuant to an award under
the 1993 Plan, the Company is entitled to require as a condition
of delivery that the grantee remit to the Company an amount
sufficient in the opinion of the Company to satisfy all federal,
state and other governmental tax withholding requirements
related thereto.  With the approval of the Committee, which it
shall have sole discretion to grant, the grantee may satisfy the
foregoing condition by electing to have the Company withhold
from delivery shares having a value equal to the amount of tax
to be withheld.  Such shares shall be valued at their fair
market value as of the date on which the amount of tax to be
withheld is determined.

To date, no options have been granted under the 1993 Plan.

ITEM 11 - Security Ownership of Certain Beneficial Owners and
Management

The following table sets forth the number of shares of Common Stock of the 
Company owned beneficially, as of March 31, 1995,
by (i) each person owning more than 5% of the outstanding Shares
of the Company, (ii) each director of the Company, and (iii) by
all directors and officers individually and as a group:
<TABLE>
<CAPTION>
Names and Addresses      Amount and Nature of      Percentage of Outstanding
of Beneficial Owners 	   Beneficial Ownership      Shares of Common Stock
____________________     ____________________      _________________________
<S>                      <C>                               <C>
J.C. Chatpar(1)          5,205,712                         34.5
400 Oser Avenue, 
Hauppauge, New York 11788

Dr. Anil Agarwal(2)        630,000                          4.2
804 Meadow Drive 
Omaha, NE  68152 	 

Jack P. Dorfman(3)         160,000                          1.0
21 Rosewood Drive 
Williamsville, NY 14221 	 

All Directors and Officers 
as a group:  (3) persons 
                         5,995,712                         39.7
</TABLE>

(1)	Does not include 476,000 shares owned by Sylvie Chatpar, his
    wife, and 175,000 shares owned by certain other relatives, as to
    which shares beneficial ownership is disclaimed.  Includes 
    480,000 shares as to which Mr. Chatpar holds a non-qualified
    option, which is exercisable at any time.

(2)	Includes 230,000 shares as to which Dr. Agarwal holds a
    non-qualified option which is exercisable at any time.

(3) Includes 40,000 shares as to which Mr. Dorfman holds a
    non-qualified option which is exercisable at any time.  Does not
    include 360,000 shares owned by his wife, Sandra Dorfman, as to
    which beneficial ownership is disclaimed.

ITEM 12 - Certain Relationships and Related Transactions

In December 1993, the Company issued an aggregate of 817,200
shares of its Common Stock in a private placement at a price of
$1.00 per share.  One of the investors, Dr. Anil Agarwal, who
purchased 400,000 shares of Common Stock, is a director of the
Company.  In August 1995, Dr. Anil Agarwal was granted warrants 
to purchase 100,000 shares at $1.50 per share pursuant to a loan
agreement.

In fiscal 1996, the Company issued to Dr. Anil Agarwal, J.C. Chatpar
and Jack P. Dorfman, directors of the Company, non-qualified stock
options to purchase 20,000; 440,000; and 30,000 shares of common
stock of the Company at an exercise price of $1.00 per share
respectively.

                             PART IV

ITEM 13 - Exhibits and Reports on Form 8-K

(a) (1)    The Registrant's financial statements together with a
           separate table of contents are annexed hereto.

    (2)    Financial Statement Schedules are listed in the
           separate table of contents annexed hereto.

(b)        No reports on Form 8-K were filed for the three months
           ended March 31, 1996.

(c)        Exhibits:  See Index to Exhibits.

(d)        Financial Statement Schedules:  The response to
           this portion of ITEM 13 is submitted as a separate              
           section of this report. 

                           Index to Exhibits

Exhibit Number                    Description         
______________                    ___________

3(a)         	Company's Certificate of Incorporation, as
              amended. 

3(a)(i)      	Company's Amended and Restated Certificate of
              Incorporation.

3(b)         	Company's By-Laws, as amended (incorporated herein
              by reference to Exhibit 3(c) to the Company's Registration
              Statement No. 2-87696-NY on Form S-18 ("Registration Statement
              No. 1")). 

10(a)        	1993 Stock Incentive Plan.

10(b)        	Employment Agreement with J.C. Chatpar.

11          		Statement regarding Computation of Loss Per Share. 



                            SIGNATURES

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

                                                                
                                        CYBER DIGITAL, INC.  

                                                                
                                        By: /s/   J.C. Chatpar  
                                            __________________
                                            J.C. Chatpar, President
  
                                                                
                                        By: /s/   Jack P. Dorfman
                                            _____________________
                                            Jack P. Dorfman, Secretary

Dated:  April 15, 1997

Pursuant to the requirements of the Securities Act of 1934, this
report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the date
indicated.

       Name                  Title

/s/   J.C. Chatpar           Chairman and President
__________________
      J.C. Chatpar

/s/  Jack P. Dorfman         Secretary and Director
____________________
     Jack P. Dorfman

Dated: April 15, 1997
<PAGE>
<TABLE>
<CAPTION>
                        TABLE OF CONTENTS 
                                                          Page No.
                                                          ________
<S>                                                       <C>
Report of Independent Certified Public Accountants. . .    F-1 - F-2

Financial Statements
  
  Balance Sheets. . . . . . . . . . . . . . . . . . . .         F-3

  Statements of Operations. . . . . . . . . . . . . . .         F-4
 
  Statements of Changes in Shareholders' Equity (Deficit). .    F-5

  Statements of Cash Flows. . . . . . . . . . . . . . . .       F-6

  Notes to Financial Statements . . . .. . . . . . . . . .  F-7 - F-18

  Schedule VIII - Valuation and Qualifying Accounts. . . .      F-19

     All other schedules have been omitted because they are
     not required, not applicable, or the information has
     otherwise been supplied.
</TABLE>
<PAGE>
           REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



To the Board of Directors and Stockholders
Cyber Digital, Inc.
Hauppauge, New York

We have audited the accompanying balances sheet of Cyber Digital,
Inc. as of March 31, 1996 and 1995, and the related statements of
operations, shareholders' equity (deficit), and cash flows for the 
years then ended.  These financial statements are the responsibility 
of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit. 

We conducted our audits in accordance with the 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 report dated July 15, 1996, we expressed a qualified opinion on the
March 31, 1996 and 1995 financial statements because of the following 
factors: We were unable to verify the collectability of $611,928 of accounts
receivables at March 31, 1996. As described in Note 14, the Company 
subsequently provided additional information which allowed us to determine
that of this amount, $263,219 represented accounts receivable and $348,709 
represents a gain contingency.  The financial statements have been restated
to reflect this change.  Also, in accordance with the terms of our previous
engagement, we did not apply auditing procedures to the amounts comprising 
the balance sheet at March 31, 1994 which materially affect the determination
of the results of operations and cash flows for the year ended March 31, 1995.
We were subsequently engaged to expand the scope of our engagement to include 
work to express an opinion on the accompanying statements of operations, 
shareholders' deficit and cash flows for the year ended March 31, 1995.  
Accordingly, our present opinion on the March 31, 1996 and 1995 financial
statements are presented herein, is different from that expressed in our
previous report.  Except for the procedures applied to the opening balances 
at March 31, 1994 as descibed in Note 14, we have not performed any auditing
procedures with respect to the March 31, 1996 and 1995 financial statements
since the date of our previous report.
                              F-1
<PAGE>
                                     
In our opinion, the accompanying balance sheets referred to in the first
paragraph presents fairly, in al material repects, the financial position
of Cyber Digital, Inc. as of March 31, 1996 and 1995 and the results of its 
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

We have also audited Schedule VIII of Cyber Digital, Inc. for the year ended
March 31, 1996.  In our opinion, this schedule presents fairly, in all 
material repects, the information required to be set forth therein.

/s/ Albrecht, Viggiano, Zureck & Company, P.C.

Hauppauge, New York
July 15, 1996, except for Note 14, as to which the date is February 28, 1997
 


                              F-2
<PAGE>
                          CYBER DIGITAL, INC.
                           BALANCE SHEETS
                          March 31, 1996 and 1995
<TABLE>
<CAPTION>
 
                                          1996               1995
                                          __________         __________ 
ASSETS 	
<S>                                       <C>                <C>
Current Assets 	 					
	Cash and cash equivalents  	             $ 	156,027       		$ 	 81,888 
	Accounts receivable                         336,166             16,432 
	Inventories  		                             433,582            494,301 
	Prepaid and other                             4,007              4,779
                                          __________         __________
    Total Current Assets 	                   929,782            597,400 

Property and Equipment, net 	 	               30,691             32,756 

Other Assets 	 					
	Deferred financing costs, net of 
  accumulated amortization of $150,483 
  and $140,328 at March 31, 1996 and 1995, 					
  respectively 	                               	 -0-             10,155 
 Other  		                                    10,680             64,041
                                           _________         __________
                                          $  971,153         $  704,352
                                          ==========         ==========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) 		   			   

Current Liabilities 						
	Accounts payable and accrued expenses    $   48,385         $   37,899
	Current maturities of long-term debt 		     748,037            155,994
                                          __________         __________
	     Total Current Liabilities 	            796,422            193,893

Long-Term Debt, less current maturities 	    148,997          1,554,089 
                                          __________         __________
                                             945,419          1,747,982
                                          __________         __________ 

Commitments and Contingencies 			 			 

Shareholders' Equity (Deficit) 	 		 			 
  Preferred Stock - $.05 par value; 
  authorized, 10,000,000 shares;
  issued and outstanding, none 		        			        
Common Stock - $.01 par value; authorized,
  30,000,000 shares; issued and outstanding, 
  15,110,311 shares and 13,752,801 shares 
  at March 31, 1996 and 1995, respectively   	151,103 		       137,528 
Additional paid-in capital                  6,253,146        5,801,661
Accumulated deficit                        (6,378,515)      (6,982,819)  
                                            _________        _________                                           		
                                               25,734       (1,043,630)
                                            _________        _________                
                                  							  $  971,153     		$  704,352
                                           ==========       ==========
</TABLE>
   See independent auditors' report and notes to financial statements
                              F-3

<PAGE>
                           CYBER DIGITAL, INC.
                        STATEMENTS OF OPERATIONS
                     Years ended March 31, 1996 and 1995
<TABLE>
<CAPTION>

                          	              		    1996	            1995 
                                            __________       __________  
<S>                                         <C>              <C>
Net Sales  		                               $ 	352,701     		$ 	234,117 

Cost of Sales                               			 76,236          111,013 
                                            __________       __________

Gross Profit 		                                276,465          123,104
                                            __________       __________
     
Operating Expenses 			 			 

	Selling, general and 
  administrative expenses 	                    474,924          553,591 
 Provision for bad debt 		                         -0-          156,719
 Research and development		                     41,679           86,383
 Other Expense                                  43,551           69,080
                                             _________        _________

                Total Operating Expenses 	     560,154          865,773
                                            __________        _________

                Income (Loss) before 
                Income taxes and extraordinary
                item                          (283,689)        (742,669)

Provision for taxes                              3,426              429
                                            __________        ________
                Income (Loss) before
                extraordinary item          $ (287,115)       $(743,098)
                                             _________        _________
       
Extraordinary item (less applicable
 income taxes)                                 912,974              -0-
                                             _________        _________
   
                Net Income 	                $  625,859        $(743,098) 
                                             =========        =========
Earnings per share calculations

Income (loss) before extraordinary item
per common and common equivalent share      $     (.02)        $    (.05)

Extraordinary item                                 .06               -0-
                                             _________         _________
Net Income                                  $      .04        $     (.05)
                                            =========        =========
   
Weighted average number of 
common shares outstanding                		14,570,469        13,652,585
                                           ==========        ==========
</TABLE>
      See independent auditors' report and notes to financial statements
                                 F-4
<PAGE>
<TABLE>
<CAPTION>
                                  CYBER DIGITAL, INC.
                 STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
                           Year Ended March 31, 1996 and 1995

	               																  					Additional 			Accu- 			
		              Common Stock 	 	 	    		Paid-In 	 		 mulated 			
	               Shares 			  Amount 	  		Capital 	  		Deficit 			Total 
		 			 			 	 	 	 			 
<S>             <C>         <C>        <C>         <C>           <C>
Balance at 
March 31, 1994 	13,615,801  $ 136,158  $5,765,031  $(6,239,721)  $   (338,532)  12,738,601 		$ 	127,386 	 	$

Exercise of 
stock options 	    117,000      1,170       6,830                       8,000

Sale of 
common stock       20,000         200   		 29,800                      30,000


Net loss 		 			 	 		 	                                (743,098) 	   	(743,098) 

		 			 			 	 	 	 _________   ________   __________  __________   ____________			 

Balance at 
March 31, 1995  13,752,801   		137,528   5,801,661   (6,982,819)   (1,043,630)

Exercise of 
stock options 		 1,357,510      13,575     451,485                    465,060

Prior Period
adjustment                                              (21,555)      (21,555)

Net Income                                              625,859       625,859
               ___________   _________  __________   __________    __________

Balance at 
March 31, 1996 	15,110,311   $ 151,103  $6,253,146 		$(6,029,806)  $  374,443
                ==========   =========  ==========   ===========   ==========
</TABLE>
    See independent auditors' report and notes to financial statements
                                    F-5
<PAGE>
<TABLE>
<CAPTION>
                           CYBER DIGITAL, INC.
                       STATEMENTS OF CASH FLOWS
                  Years Ended March 31, 1996 and 1995
                                                            
                                                   1996           1995
                                                _________       ________

<S>                                             <C>             <C>
Cash Flows from Operating Activities
 Net income (loss)                              $  625,859      $ (743,098)
Adjustments to reconcile net earnings (loss) to  		 		 	 
  net cash provided by (used in) operating activites: 		 			 
 Depreciation                                        9,608         		6,510
 Amortization 		                                    10,155          15,048
 Forgiveness of debt                              (912,974)            -0-
 (Increase) decrease in operating assets: 		 		 	 
   Accounts receivable                            (319,734)      		219,855
   Inventories 	                                    60,719         	69,317
   Other assets 	                                   54,133         	68,476
 Increase (decrease) in operating liabilities: 				 	 
   Accounts payable, accrued expenses, and taxes   (11,069)      		(10,834)
                                                __________      __________

							 Net Cash Used in Operating Activities  	 	(483,303)       (374,726)
                                                __________      __________

Cash Flows from Investing Activities 			 		 	 
	Purchase of equipment                              (2,399)       	(25,649)
                                                __________       _________

							  Net Cash Used in Investing Activities 	    (2,399)       	(25,649)
                                                __________       _________
 
Cash Flows from Financing Activities 			 		 	 
	Issuance of common stock 	                        465,060         	38,000 
	Payments of long-term debt 		                      (5,219)        (73,034)
 Proceeds from long-term debt                      100,000             -0-
                                                 _________       _________
	  Net cash Provided (Used in) by 
    Financing Activities 	                         559,841         (35,034)
                                                 _________       _________

  Net Increase (Decrease)in Cash and 
   Cash Equivalents                                 74,139        (435,409)
     	       
Cash and Cash Equivalents at Beginning of Period    81,888         517,297
                                                 _________       _________
 
Cash and Cash Equivalents at End of Period       $ 156,027     		$ 	81,888 
                                                 =========       =========
	 		 	 
Supplemental Disclosures of Cash Flow Information: 			 			 
	Cash paid during the period for: 		 			 
	  Income taxes 	                                $    	421     		$    	429
	  Interest                                          4,606           		386

Supplemental Schedule of Non Cash Investing
 and Financing Activities:
  Issuance of common stock in exchange for
   consulting services                           $  51,700       $     -0-
                                                 =========       =========
  Issuance of common stock in exchange for
   legal services                                $  20,000       $     -0-
                                                 =========       =========

</TABLE>
         See independent auditors' report and notes to financial statements
                                  F-6
<PAGE>
                              CYBER DIGITAL, INC.
                        NOTES TO FINANCIAL STATEMENTS
                          March 31, 1996 and 1995


Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business
_______________________

Cyber Digital, Inc. (the "Company") is a New York corporation
that designs, develops, manufactures and markets digital
switching and networking systems that enable simultaneous
communication of voice and data to a large number of users.  The
Company's systems are based on its propriety software technology
which permits "modemless" transmission of data between a variety
of incompatible and dissimilar end-user equipment, such as
personal computers, printers, work stations and data terminals,
over standard telephone lines.

Operating and Financing Matters
_______________________________

Since inception, the Company has devoted substantial resources
to the design and development of the Company's systems.  As
such, the Company has not achieved revenue growth and has
incurred operating losses.  At March 31, 1996, the Company had
an accumulated deficit of $6,378,515 and shareholders' equity 
of $ 25,734.  The increase in equity from March 31, 1995 to 
March 31, 1996 is due mainly to the recognition of an extraordinary
gain on the forgiveness of debt as more fully described in Note 12.
The Company had working capital of $133,360 at March 31, 1996 
relating largely to inventory.  The Company historically has 
sufficient cash flow generated mainly from the issuance of debt 
and equity securities and funding from state and local agencies 
as discussed in Note 6 and Note 13.

Estimates
_________

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period.  Actual results 
could differ from those estimates.

Fair Value of Financial Instruments
___________________________________

The Company has a number of financial instruments, none of which are 
held for trading purposes.  The Company estimates that the fair value
of all financial instruments at March 31, 1996, does not differ 
materially from the aggregate carrying values of its financial
instruments recorded in the accompanying balance sheet.  The estimated
fair value amounts of have been determined by the Company using
available market information and the appropriate valuation
methodologies.  Considerable judgment is necessarily required in 
the interpreting market data to develop the estiamtes of fair value, and,
accordingly, the estimates are not necessarily indicative of the
amounts that the Company could realize in a current market exchange.

                 See independent auditor's report
                           F-7
<PAGE>
                          CYBER DIGITAL, INC.
                     NOTES TO FINANCIAL STATEMENTS
                       March 31, 1996 and 1995


Note 1 - Summary of Significant Accounting Policies (continued)

Cash and Cash Equivalents
_________________________

The Company considers highly liquid temporary cash investments
with an original maturity of three months or less to be cash
equivalents.

Accounts Receivable
___________________

Accounts receivable are considered fully collectible and are
presented net of a zero allowance for doubtful accounts.

Inventories
___________

The Company uses a cost system which approximates the first-in,
first-out method.  Inventories are valued at the lower of cost or 
market.

Property and Equipment
______________________

Property and equipment are stated at cost, less accumulated
depreciation.  Depreciation and amortization are computed by the
straight-line method over their estimated useful lives
(generally 5 to 7 years).

Deferred Financing Costs
________________________

Deferred financing costs consisting of loan origination fees,
legal, accounting and other fees associated with obtaining loans
from the Buffalo and Erie County Regional Development
Corporation ("RDC") and the New York State Job Development
Agency ("JDA"), have been capitalized and are being amortized on
a straight-line basis over the original term of the related
credit agreements.  The amortization of deferred financing costs
was $10,155 and $15,048 for the years ended March 31, 1996 and 1995.

Revenue Recognition
___________________

The Company recognizes product system sales upon shipment and
acceptance by the customer.  Component part and software sales
are recognized upon shipment to the customer.

Income Taxes
____________

Income taxes are provided for the tax effects of transactions
reported in the financial statements and consists of taxes
currently due plus deferred taxes related primarily to
differences between the bases of assets and liabilities for
financial and income tax reporting.  The deferred tax assets and
liabilities represent the future tax return consequences of
those differences, which will either be taxable or deductible
when the assets and liabilities are recovered or settled.

                     See independent auditors' report.
                                F-8
<PAGE>
                           CYBER DIGITAL, INC.
                     NOTES TO FINANCIAL STATEMENTS
                         March 31, 1996 and 1995

Note 1 - Summary of Significant Accounting Policies (continued)

Income Taxes (continued)
____________

Deferred taxes also are recognized for operating losses that are
available to offset future federal income taxes.  The Company
accounts for investment tax credits using the flow-through
method, and thus reduces income tax expense in the year the
related assets are placed in service.

Research and Development Costs
______________________________

Research and development costs are charged to expense when
incurred.

Warranty Expense
________________

The Company records warranty expense as incurred and does not
make a provision as shipments are made.  Such expense is not
significant.

Earnings (Loss) Per Share
_________________________

The computation of earnings per common and common equivalent
share is based upon the weighted average number of common shares
outstanding during the period plus (in periods in which they
have a dilutive effect) the effect of common shares contingently
issuable from stock options.

Prior Period Adjustment
_______________________

During the current year it was discovered that there was an error 
in calculation of the New York State alternative minimum taxes due
for the fiscal years ended March 31, 1993 and 1992.  The following
schedule outlines the effect on each of the years:
<TABLE>
<S>                                        <C>
March 31, 1993                             $10,998
March 31, 1992                              10,557
                                           _______
Total Prior Period Adjustment              $21,555
                                           =======
</TABLE>
These errors have no effect on Net Income (Loss) for the fiscal years
ended March 31, 1996 or 1995.

Reclassifications
_________________

Certain amounts in the 1995 financial statements have been reclassified
to conform with the 1996 presentation.

                    See independent auditors' report.
                                F-9
<PAGE>
                            CYBER DIGITAL, INC.
                        NOTES TO FINANCIAL STATEMENTS
                          March 31, 1996 and 1995

Note 2 - Accounts Receivable

Pursuant to a federal government agency contract that was terminated at the 
convenience of the government, the Company was requested by the government
for actual costs incurred plus a reasonable mark-up for profit. 
In accordance with this request, the Company has billed the government agency
$263,219 and has included this amount in accounts receivable at March 31,
1996.

Note 3 - Inventories

Inventories consist of:
<TABLE>
<CAPTION>
                            	 	March 31 	 	 
                        ________________________
                           1996 	        1995 
                        _________      _________  
<S>                     <C>           <C>
Raw Materials 	         $ 276,593 	   $ 285,650 
Work-in-process 	          33,123 	 	    33,701 
Finished goods 	          123,866 	 	   174,950
                        _________	 	 	_________

                        $ 433,582 	 	 $ 494,301 
                        =========     =========
</TABLE>
Note 4 - Property and Equipment

Major classes of property and equipment consist of the following:
<TABLE>
<CAPTION>
                             	   	March 31 	 	 
                           ______________________
                       	 	   1996 	     	  1995  
                           _________    _________
  <S>                      <C>          <C> 
 	Machinery and equipment 	$ 625,060 	 	$ 617,517 
 	Furniture and fixtures 	    53,988       53,988 
                           _________    _________
 	 	                         679,048      671,505
 	Less:  Accumulated 
        depreciation         648,357      638,749
                           ---------    ---------
                           $  30,691    $  32,756
                           =========    =========

Note 5 - Other Assets

Other assets consist of up-front costs in connection with a
private placement, security deposits, and cash surrender value
on officers' life insurance.
  
                         See independent auditors' report
                                  F-10
<PAGE>
                           CYBER DIGITAL, INC.
                     NOTES TO FINANCIAL STATEMENTS
                      March 31, 1996 and 1995

Note 6 - Long-Term Debt

The Company's Plan of Reorganization was confirmed by the United
States Bankruptcy Court for the Eastern District of New York in
June 1990.  Pursuant to the Plan, the Company is required to
repay an aggregate of $1,102,557 and $788,032 of principal to
the Buffalo and Erie County Regional Development Corporation and
the New York State Job Development Agency, respectively, as well
as the unsecured creditors, as follows:

</TABLE>
<TABLE>
<CAPTION>
                               									               March 31            
                                                  ________________________
                                                      1996        1995
                                                  _________    __________
<S>                                               <C>          <C>
BUFFALO AND ERIE REGIONAL 
DEVELOPMENT CORPORATION ("RDC")

Collateralized by substantially all of 
the Company's assets, including its
software technology; payable in accordance 
with the Company's Plan of Reorganization 
(as noted above) at 5% of the outstanding
principal during the first year increasing 
to 10% during the second year, 15% in each 
of the third, fourth and fifth years, and 
20% thereafter until maturity, without interest.
Interest will be applied to the outstanding 
principal balance at a rate of 5% per
annum in any fiscal year in which the 
Company's net income exceeds $2,000,000.
The RDC has agreed to revise the payment 
terms to 2.5% per annum for months 
which fall within the calendar year 1995 
and 20% for months which fall within 
calendar year 1996.	                           				$  100,000    $1,012,974

NEW YORK STATE JOB DEVELOPMENT AGENCY ("JDA")

Collateralized by substantially all of the 
Company's assets, including its software 
technology; payable in accordance with the Company's
Plan ofReorganization (as noted above) at 5% 
of the outstanding principal during the first 
year increasing to 10% during the second year, 15%
in each of the third, fourth and fifth years, 
and 20% thereafter until maturity, without interest.
Interest will be applied to the outstanding 
principal balance at a rate of 5% per annum 
in any fiscal year in which the Company's net 
income exceeds $2,000,000.  The JDA has agreed 
to revise the payment terms to 5% per annum
for months which fall within the calendar 
year 1995 and 20% for months which fall within
calendar year 1996.							                            591,756     591,756

DR. ANIL K. AGARWAL
Collateralized by substantially off the of
Company's assets, including its software
technology.  This loan is due and payable in
full four (4) years from the date of
issurance.  Interest will be applied to the
outstanding balance at a rate of 15% per 
annum                                                 100,000        -0-

LOAN PAYABLE - BANK OF SMITHOWN
Secured by an transportation equipment
payable over sixty months at $158 per month
including interest at 8.4%; final payment
due in April 1997.                                      5,144        -0-
      
UNSECURED CREDITORS
Pursuant to the reorganization plan, the 
unsecured creditors have selected either of 
the following two options:  Option I - unsecured
creditors will receive 100% of their 
allowed claims commencing July 1990, paid
quarterly withoutinterest over a seven year 
period as follows:  year 1 - 5%, year 2 - 10%, 
years 3 - 5 - 15% and years 6 and 7 - 20%;  
Option II- unsecured creditors will receive
5% of their allowed claim in July 1990 and 
20% of said claim on the anniversary 
of the first payment, without interest, 
in full and complete satisfaction of said
claim.                                                100,134        105,353
                                                   __________     __________               
                                                      897,034      1,710,083
  Less:  Current maturities							                    748,037        155,994
                                                   __________     __________
                                                   $  148,997 				$1,554,089
                                                   ==========     ==========
</TABLE>
                             See independent auditors' report
                                     F-11
<PAGE>
                            CYBER DIGITAL, INC.
                        NOTES TO FINANCIAL STATEMENTS
                        March 31, 1996 and 1995

                 
Note 6 - Long-Term Debt (continued)

Maturities of long-term debt are as follows:
<TABLE>
   <S>                              <C>
			Years ending March 31, 1997   			$ 748,037
                          1998         48,997
                          1999            -0-
                          2000        100,000
                                    _________
                                    $ 897,034
                                    =========
</TABLE>
This schedule assumes that the original restructured repayment
terms will be in effect on any remaining unpaid balances will be
repaid in fiscal year ending March 31, 1998.

In accordance with the confirmed Plan of Reorganization, the
secured creditors agreed to share the respective lien interests
in the collateral with future lenders, if any, on a pari passu
basis.

In the event of a default by the Company on its repayment
obligations, the RDC and the JDA could declare the Company's
indebtedness to be due and currently payable and foreclose on
the Company's assets used to secure such debts.

Note 7 - Stock Option Plans

The Company adopted a 1983 Stock Option Plan which expired in
accordance with its terms in April 1993.  Under the terms of the
Plan, 1,462,500 shares were reserved for issuance to officers,
directors and key employees meeting certain qualifications.
Under the Plan, incentive stock options are granted at 100% of
fair market value on the date of grant, and the employee's
rights to exercise the options accrued in respect to one-quarter
of the shares subject to grant each year that the employee is
employed by the Company.  Options granted under the plan
automatically expire ten years from the date on which they are
granted.  Options will not be granted to any stockholder owning
more than 10% of the Company's voting securities unless the
option price is at least 110% of the fair market value of the
shares covered by the option and will expire not less than five
years from the date it is granted.   With exercise price
$.25 per share, 50,000 shares are exercisable at March 31, 1996.
Incentive stock options relative to 125,000 shares were 
exercised at a price of $.07 per share during fiscal year 
ended March 31, 1996.

The Company's Board of Directors adopted, on November 5, 1993, a
1993 Stock Incentive Plan (the "1993 Plan").  The 1993 Plan is a
successor to the Company's 1983 Incentive Stock Option Plan as
amended, which has expired.  The total number of shares of
common stock of the Company, which may be issued pursuant to the
1993 Plan, shall not exceed 853,375, subject to adjustment in
the event of a stock split or similar action.

                      See independent auditors' report
                                 F-12
<PAGE>
                        CYBER DIGITAL, INC.
                   NOTES TO FINANCIAL STATEMENTS
                    March 31, 1996 and 1995

Pursuant to the 1993 Plan, incentive stock options, nonqualified
stock options, restricted stock and stock appreciation rights
may be granted to such officers, directors, and employees of the
Company, and to such consultants to the Company and such other
persons or entities, as the Stock Option Committee of the Board
of Directors (the "Committee") shall select.  All incentive
stock options ("ISO"), which may be granted only to employees and
which provide certain tax advantages to the optionee, must have an
exercise price of at least 100 percent of the fair market value 
of a share of common stock on the date the option is granted.  
No ISOs will be exercisable more than 10 years after the date of 
grant.  ISOs granted to ten percent shareholders must have an 
exercise price of at least 110 percent of fair market value and 
may not be exercisable after the expiration of five years from grant.  
The exercise price and the term of nonqualified stock options will
be determined by the Committee at the time of grant.

Stock appreciation rights ("SARS") may be granted independently
or in connection with all or any part of any option granted
under the 1993 Plan, either at the time of grant of the option
or at any time thereafter.  The holder of an SAR has the right
to receive from the Company, in cash or in shares as the
Committee shall determine, an amount equal to the excess of the
fair market value of the shares covered by the SAR at the date
of exercise over the exercise price set at the date of grant of
the SAR.  At the request of the holder of an option, the
committee may at its discretion substitute for the exercise of
the option, compensation (in cash or in shares) in an amount
equal to or less than the excess of the fair market value of the
shares covered by the option at the request date over the
exercise price set at the grant of the option.

A restricted stock award, entitling the recipient to acquire
shares of common stock for a purchase price at least equal to
par value may be granted to such persons and in such amounts and
subject to such terms and conditions as the Committee may
determine.  Shares of restricted stock may not be sold,
assigned, transferred, pledged or otherwise encumbered or
disposed of except as specified in the 1993 Plan or the written
agreement governing the grant.  The Committee at the time of
grant, will specify the date or dates on which the
nontransferability of the restricted stock shall lapse.  During
the 120 days following the termination of the grantee's
employment for any reason, the Company has the right to require
the return of any shares to which restrictions on
transferability apply, in exchange for which the Company shall
repay to the grantee any amount paid by the grantee for such
shares.

Unless sooner terminated by the Board, the provisions of the
1993 Plan regarding the grant of ISOs shall terminate on the
tenth anniversary of the adoption of the 1993 Plan by the Board.
No ISOs shall thereafter be granted under the Plan, but all ISOs
granted therefore shall remain in effect in accordance with
their terms.

There has been no activity in connection with the 1993 Plan
through March 31, 1996.

                         See independent auditors' report
                              F-13
<PAGE>
                           CYBER DIGITAL, INC.
                     NOTES TO FINANCIAL STATEMENTS
                        March 31, 1996 and 1995

Note 7 - Stock Option Plans (continued)

In addition to these plans, the Company has issued non-qualified
stock options and warrants upon the approval by the Board of Directors.  
Such options are granted at 100% of fair market value on the date of
the grant.  Information with respect to nonqualified stock
options and warrants is summarized as follows:
<TABLE>
<CAPTION>
                            				  Price 		                 Shares 
 <S>                            <S>                      <S> 
	Outstanding, March 31, 1995 			$0.05 to $1.25 		          910,000 
  Granted                       $1.00 to $1.75           1,425,000
  Exercised                     $ .05 to $1.38            (676,000)
  Canceled                      $ .05 to $ .05             (90,000)
                                                         _________
                                                         1,569,000
                                                         =========
</TABLE>
Note 8 - Commitments and Contingencies

Employment Contract
___________________

The Company is obligated under an employment agreement with the
Chairman to pay him $80,000 during each of the years ended
February 28, 1996 through 1998. 

In addition to such base salary, the Chairman shall be entitled
to receive a bonus based upon the following formula:  (i) 1% of
gross revenues for each fiscal year in excess of $3 million,
provided, however, that the Company shall be profitable, (ii)
plus 5% of net income after deduction of the bonus provided for
in (i) above, (iii) plus 10% of the increase in net income over
that of the prior fiscal year after deduction of the bonus
provided for in (i) above.  In the event of the termination of
the Chairman's employment without cause prior to February 28,
1998, he shall receive an amount equal to 5% of gross revenues
earned by the Company each month beginning on the date of
termination and continuing for a period of five years.  The 
Chairman has waived his right to receive the bonus for fiscal
year ended March 31, 1996.


Operating Leases
________________

Effective April 1, 1994, the Company commenced a noncancelable
operating lease that expires on March 31, 1998, with a renewal 
option, with respect to the Company's executive offices
and operations.  Rent expense was $46,681 and $49,200 for the
years ended March 31, 1996 and 1995.

                      See independent auditor's report
                                 F-14
<PAGE>
                      CYBER DIGITAL, INC.
               NOTES TO FINANCIAL STATEMENTS
                   March 31, 1996 and 1995

Note 8 - Commitments and Contingencies (continued)

Operating Leases (continued)
____________________________

The Company also entered into non-cancelable operating leases
for a vehicle and office equipment.  The monthly rental on the 
vehicle and office equipment is $364 and $205, respectively.  
The amount charged to expense was $2,546 and $2,504, respectively, 
for the year ended March 31, 1996 and $4,368 and $2,460, respectively,
for the year ended March 31, 1995.  The lease on the vehicle expired
in November 1995.

Future minimum rentals are as follows:
<TABLE>
<CAPTION>
    <S>                                 <C>
				For years ending March 31, 1997   		$ 57,873
                  							      1998       51,250
                                        ________
                                        $109,123
                                        ========
</TABLE>
Government Regulation
_____________________

The Company's operations are highly sensitive to regulations
promulgated by the United States and throughout the world in
which the Company has targeted it marketing efforts.  These
regulations or deregulations could affect both the competition
for the Company's product as well as the costs associated with
doing business abroad.

Cash in Excess of FDIC Limit
____________________________

The bank balance at the Bank of New York At March 31, 1996 is $167,316.  
The current FDIC insured limited is $100,000 per financial institution.

Note 9 - Income Taxes

The Company was subject to alternative minimum tax for federal and New York
state due to a net operating loss carryforward.  The Company was only 
subject to the New York state minimum tax for the year ended March 31,1995.

The following is a reconciliation of the effective income tax
rate to the Federal statutory rate on losses:
<TABLE>
<CAPTION>
                                                    		  	March 31 	 	 
                                                    __________________
                                                  			1996 		    1995 
                                                    _______    _______
       <S>                                          <C>        <C>
					 	Federal statutory rate 	                    	(34.0)% 	 	(34.0)% 
      	State income taxes, net of 
        Federal tax benefit                       	 	(5.0)%     (5.0)% 
      	Operating loss generating 
        no current tax benefits 	                   	39.0% 	    39.0% 
                                                    _______    _______
       Effective rate 	                                	0% 	 	     0% 
                                                    _______    _______

                       
</TABLE>
                                  See independent auditors' report
                                            F-15
<PAGE>
                            CYBER DIGITAL, INC.
                       NOTES TO FINANCIAL STATEMENTS
                        March 31, 1996 and 1995

Note 9 - Income Taxes (continued)

The Company has net operating loss carryforwards for tax
purposes amounting to approximately $6.3 million that may be
offset against future taxable income which expires through 2009.
In addition, The Company has investment and research and
development tax credits for tax purposes amounting to
approximately $196,000 which expire through 2003.

Deferred income taxes are recognized for differences between the
bases of assets and liabilities for financial statement and
income tax purposes.  The utilization of these tax attributes is
contingent upon the Company's ability to generate future taxable
income and tax before the tax attributes expire as well as
Internal Revenue Code limitations.  As a result, a valuation
allowance equal to the full extent of the deferred tax asset has
been established.  The change in the deferred tax asset (as well
as the valuation account) was approximately $156,000 for the
fiscal year ended March 31, 1996.

Note 10 - Segment Information and Significant Customers

Significant Customers
_____________________

The Company considers itself to be in a single industry defined
as the design, manufacturing and marketing of high performance
distributed digital switching and networking systems.  In fiscal
year ended March 31, 1996 the Company derived 100% of its revenue
from Federal government agencies as opposed to 93% in fiscal
year ended March 31, 1995.

Export Sales
____________

The Company derived 0% of its revenue from China in fiscal year
ended March 31, 1996 as opposed to 7% in fiscal year ended
March 31, 1995.  As previously noted, the Company is subject to
all risks associated with foreign trade including but not
limited to trade restrictions, export tariffs and foreign
currency fluctuations as well as international and political
developments which could adversely effect the industry in which
the Company operates.

Note 11 - Related Party Transactions

On September 25, 1995, the Company borrowed $100,000 from Dr. Anil K. 
Agarwal, a director of the Company, for working capital purposes
as stated in Note 5.  The note is due and payable September 25, 1999.

                     See independent auditors' report
                               F-16
<PAGE>
                    CYBER DIGITAL, INC.
              NOTES TO FINANCIAL STATEMENTS
               March 31, 1996 and 1995

Note 12 - Extraordinary Item

On November 1, 1995 the Company entered into an agreement to restructure
the debt with the Buffalo and Erie County Regional Development Corporation
("RDC").  The agreement calls for the Company to pay $100,000 and issue
five year warrants to purchase 100,000 shares of common stock with a
purchase price of $1.00 per share.  The agreement for the payment of the
$100,000 expired on April 14, 1996 and has been extended until July 30,
1996.  The extraordinary item in the amount of $912,974 is included in
the calculation of net income for the fiscal year ended March 31, 1996
and has been calculated as follows:
<TABLE>
<S>                                                 <C>
Debt payable to the RDC                             $1,012,974
Cash payable in settlement of debt                     100,000
                                                    __________
Extraordinary gain on extinguishment of debt        $  912,974
                                                    ==========
</TABLE>
Note 13 - Subsequent Events

On May 31, 1996, JDA has agreed to settle all of the Company's 
indebtedness to JDA in the amount of $591,756 for a cash settlement
of $300,000 made prior to Novebmer 20, 1996.

On July 11, 1996, the Company concluded a private placement of its
Series A Preferred Stock and accompanying warrants to accredited
institutional investors and received net proceeds of $7,049,500.

On May 31, 1996, the Company entered into a 36 month operating lease
for transportation equipment.  The monthly payment are $303 relating
to this lease.

Note 14 - Previously Issued Audit Report

March 31, 1996
Pursuant to the federal government agency contract which was terminated 
at the convenience of the government as discussed in Note 2, the Company
has submitted a delay claim to the government.  After reviewing information
submitted subsequent to our original report date, it was determined that 
$348,709 of this amount represented a gain contingency.  This amount was 
previously included in accounts receivable in its financial statements dated
July 15, 1996.  In accordance with generally accepted accounting principles,
gain contingencies should not be reflected in income, as doing so may result
in recognizing revenue prior to its realization.  The Company has therefore 
restated its accounts receivable and financial statements to be in accordance
with generally accepted accounting principles.  The effect of this adjustment
was to reduce accounts receivable, net sales and stockholders' equity by 
$348,709 at March 31, 1996, which have been reflected in the financial 
statements herein.

                See independents auditors' report
<PAGE>                       F-17

March 31, 1995
Subsequent to the issuance of our report dated July 15, 1996, we were engaged 
to expand the scope of our previous engagement to include wotk sufficient
to express an opinion on the statement of operation, shareholders' deficit 
and cash flows for the year ended March 31, 1995.  In accordance with this 
engagement, we applied auditing procedures primarily to cash, accounts 
receivable, inventory and debt which materially affect the determination
of the results of operations, shareholders' deficit, and cash flows for the 
year ended March 31, 1995.  No material adjustments were necessary as a 
result of these procedures. 

<PAGE>                       F-18
                             

<PAGE>
                        CYBER DIGITAL, INC.
           SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
                 Years ended March 31, 1996 and 1995

<TABLE>
<CAPTION>
         SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
              Years Ended March 31, 1996 and 1995

Column A 	                	Column B 	        	 Column C 	 	    Column D 		Column E 	
________                   __________  ______________________  ________   ________
                         		Balance at 	Charged to 		Charged to 	           Balance  	
		                         Beginning 		Costs and 	 	Other 				             at End 	
	                          of Period 	 Expenses 		  Accounts 		Deductions 	of Period 	
<S>                        <C>         <C>          <C>        <C>         <C>
Year ended March 31, 1996 						 					
Allowance for doubtful 											
accounts 		                $   -0-   		$    -0-                $    -0-    $    -0-
                           _________   ________                _________   ________

Year ended March 31, 1995 											
Allowance for doubtful 											
accounts 	                	$460,423 			$156,719                $267,139(b) $    -0- (a)
                           ________    ________                ________    ________
</TABLE>
(a)  Deducted from accounts receivable.

(b)  Uncollectible accounts receivable charged against allowance.
                   
                            See independent auditors' report
                                   F-18
<PAGE>
                               CYBER DIGITAL, INC.
                                  EXHIBIT A
                  COMPUTATION OF NET LOSS PER COMMON SHARE
                   (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
                                           	       	Year Ended March 31,     			
	                                        1996     1995     1994     1993     1992
<S>                                      <C>      <C>      <C>      <C>      <C>
Net  Income (Loss)                       $626    	$(743)  	$(208)  	$(224) 	 $109 
                                        	====     ======  	======  	======  	====
Shares: 					

Weighted average Common shares 
outstanding 	                            14,256   13,653  	13,039   12,739 	 12,521 

Dilutive effect of assumed conversion of  	 	 	 	 	 
incentive stock options and a 
non qualified option (a) 	                1,619     ---     	---    	---      1,072 

	 	 	 	 	 
Weighted Average common shares outstanding  	 	 	 	 	 
as adjusted                              15,875  	13,653  	13,039  	12,739  	13,593 
                                        	====== 	 ======  	======  	======  	======
 
Net Income (loss) per common share: 	 	 	 	 	 

	 	 	 	 	 
Primary                                  $0.04   	$(0.05) 	$(0.02) 	$(0.02) 	$0.01
Fully Diluted 	                          $0.04    $(0.05) 	$(0.02) 	$(0.02) 	$0.01 

</TABLE>