U.S.  SECURITIES  AND  EXCHANGE  COMMISSION
     WASHINGTON,  D.C.  20549


     FORM  10-KSB

     ANNUAL  REPORT  UNDER  SECTION  13  OR  15(D)
     OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934

                  FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1999

                          COMMISSION FILE NO. 1-13830


     TELESOFT  CORP.
     (Name  of  Small  Business  Issuer  as  specified  in  its  charter)
     ARIZONA          86-0431009
     (State  of  Incorporation)          (IRS  Employer  Identification  No.)

     3443  NORTH  CENTRAL  AVENUE  #1800
     PHOENIX,  ARIZONA          85012
     (Address  of  principal  executive  offices)          (Zip  Code)

     ISSUER'S  TELEPHONE  NUMBER,  INCLUDING  AREA  CODE:  (602)  308-2100

     SECURITIES  REGISTERED  UNDER  SECTION  12(B)  OF  THE  EXCHANGE  ACT:

     Title  of  Class          Name  of  each  exchange  on  which  registered
     ----------------          -----------------------------------------------

     COMMON  STOCK,  NO  PAR  VALUE          PACIFIC  STOCK  EXCHANGE,  INC.


     SECURITIES  REGISTERED  UNDER  SECTION 12(G) OF THE EXCHANGE ACT :   NONE

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 filer in response to Item 405 of
Regulation  S-B contained in this form and no disclosure will be contained, to
the  best  of  the  Issuer's  knowledge,  in  definitive  proxy or information
statements  incorporated  by  reference in Part III of this Form 10-KSB or any
amendment  of  this  Form  10-KSB      X
                                     ---

  Issuer's revenues from continuing operations for its most recent fiscal year
                               were $29,377,592.

As  of February 10, 2000, the number of shares of Common Stock outstanding was
3,711,500  and  the  aggregate  market value of the Common Stock (based on the
closing  price  on  that  date)  held  by  non-affiliates  of  the  Issuer was
approximately  $8,420,000.

     -28-




     PART  I

ITEM  1.    DESCRIPTION  OF  BUSINESS.

GENERAL

     Telesoft  Corp. (the "Company" or "Telesoft") provides telecommunications
billing  and customer care solutions to educational institutions, corporations
and government agencies.  The Company offers the following integrated hardware
and  proprietary  software  systems and services: the STS Outsourcing Program,
Customized  Billing  Outsourcing  Services,  TelMaster  Telemanagement System,
Distribution  Control  System  and RATEX Bookstore Solution.  The Company also
assists  large  organizations  in  analyzing, recovering, and optimizing their
telecommunications  expenditures.

HISTORICAL  HIGHLIGHTS

     The  Company  was incorporated in Arizona in May 1982.  From 1982 to 1986
the Company focused primarily on its Distribution Control System product line.
In  1986,  the  Company  began  to shift its focus to developing and marketing
proprietary  software  and  integrated  systems  to  serve  the  long distance
telecommunications  and  data  management  and  call  processing  needs of the
university  and  college  market. In April 1996, the Company acquired Telesoft
Acquisition  Corp  II,  d.b.a.  GoodNet ("GoodNet"), an Arizona-based internet
service  provider,  to  deploy  a  nationwide  ATM  network to sell high-speed
connectivity  to  high-bandwidth  users.    In  January 1998, the Company sold
GoodNet  to  Winstar  Communications,  Inc.  ("Winstar").    See "Management's
Discussion  and  Analysis  of  Financial Condition and Results of Operations -
Discontinued Operations".  The Company's executive offices are located at 3443
North  Central  Avenue,  Suite 1800, Phoenix, Arizona 85012, and its telephone
number  is  (602)  308-2100.    The  Company's  website  is  located  at
www.telesoft.com.

RECENT  DEVELOPMENTS

     Self-Tender  Offer

     On  February  3, 2000, the Company commenced an offer to repurchase up to
2.3  million  shares  of  its  common  stock  pursuant  to  a  "Dutch auction"
self-tender offer.  The tender offer price will be between $7.00 and $7.50 per
share  in cash, which would result in the payment to tendering stockholders of
an up to a maximum of an aggregate of $17.25 million if all 2.3 million shares
are  tendered. The offer will expire at 12 Midnight, New York City time, March
6,  2000,  unless  extended.

     Joseph  Zerbib  Retires  as  President  and  Chief  Executive  Officer

     Effective  February  1,  2000,  Joseph Zerbib retired his position as the
Company's  president  and  chief executive officer. He will remain chairman of
the  board.   The board of directors has appointed Michael Zerbib as president
and  chief  executive  officer  of  the  Company.

In connection with his retirement, Joseph Zerbib has agreed to sell all of his
293,750 shares of the Company's common stock back to the Company at a price of
$7.25  per  share.  The Company will purchase the shares at the earlier of the
time  the  Company is deemed to have accepted for payment the shares of common
stock  with  the  self-tender  offer  described  above  and  March  31,  2000.

<PAGE>


 PRODUCTS  AND  SERVICES

     The  Company's  products  and  services  are  broken  down  as  follows:

(1)  STS  Outsourcing  Program
(2)  Customized  Billing  Outsourcing  Services
(3)  System  Sales  and  Maintenance
     (a)  TelMaster  Telemanagement  System  ("TMS")
     (b)  RATEX  Bookstore  Solution
     (c)  Distribution  Control  System  ("DCS")
     (d)  Software  and  Hardware  Recurring  Maintenance  Revenue
(4)  Telesoft  Recovery  Services  ("TRC")
(5)  Network  Services


             STUDENT TELEPHONE SERVICES (STS) OUTSOURCING PROGRAM


     The  Company provides an outsourcing program to universities and colleges
to  establish  long  distance  resale  programs  to  residence  hall students,
off-campus  students,  administrative  staff  and faculty. Through its Student
Telephone  Services  Outsourcing Program ("STS Program"), the Company offers a
complete  billing  solution  which  includes  the  following  services:    (1)
production  and  distribution  of  marketing  literature  for the program, (2)
on-site  solicitation  and  registration  of  program  participants,  (3)
installation  of  hardware  and  billing software, (4) collection, costing and
processing  of  long-distance billing data, (5) production and distribution of
individual  bills,  (6)  on-site  or  remote  customer  service  center,  (7)
management of accounts receivable and collections, (8) clearing-house services
for  the  various  suppliers  involved  with  the  program,  and (9) financial
reporting  services  to  the  university  or college on the performance of the
program.

     In  August  1994, the Company began to offer these services to off-campus
residents  through  its  SunDial  Program  ("SunDial  Program").   The SunDial
Program  is  an  integrated  hardware  and  proprietary software system, which
extends  the  STS Program services and advantages to off-campus students.  The
SunDial  Program  allows  STS  subscribers  to  place long distance calls from
off-campus  housing  using a local number for long distance service from local
area  dwellings  or  using  toll-free access dialing for long distance service
anywhere  in the United States at competitive rates.  The SunDial Program also
enables  STS subscribers to continue to use the program after graduation.  The
SunDial  Program  uses  Telesoft's  proprietary software and Motorola hardware
specially  adapted  for  this  software  application.

     Telesoft  markets  these  programs through alliances developed with RBOCs
and  interexchange  carriers  such  as  NYNEX, Bell Atlantic, MCI WorldCom and
AT&T.

     Telesoft  administers  and operates its STS Program on a turnkey basis on
74 university and college campuses of various sizes including Rutgers College,
the  University  of  Southern California, the University of Delaware and Smith
College.

     Telesoft  has  also  sold  the  system, software and services required to
administer  the STS Program to approximately 75 additional campuses of various
sizes  nationwide,  including Yale University, State University of New York at
Oswego,  Case  Western  Reserve University, the University of Oklahoma, Auburn
University,  and  Fairfield  University.      Once  a sale is consummated, the
Company  maintains  and  services  the  hardware  and software under renewable
one-year  maintenance  contracts.

<PAGE>

                    CUSTOMIZED BILLING OUTSOURCING SERVICES

     The  Company  has  concentrated its marketing efforts on the provision of
customized  billing  outsourcing  applications  to  Fortune 1000 companies and
governmental  agencies  in  conjunction with large Inter eXchange Carriers and
RBOCs.    During  1999,  the  Company implemented a customized billing service
contract  for  approximately 25,000 Qwest Talk subscribers. Under the terms of
the  contract,  the  Company handles billing and customer service and provides
marketing  assistance  for  the  Talk  series  of  products.  The Company also
provides  customized  billing  services  for  Bell  Atlantic  Data  Solutions.

     During  fiscal 1999, the Company has been developing a custom convergence
billing,  reporting  and support system for Pacific Bell and MCI customer care
services for the State of California's CALNET contract.  This service contract
is  valued  at  approximately  $7  million  over  ten  years.


                         SYSTEM SALES AND MAINTENANCE


     The  Company  offers  the  following  integrated hardware and proprietary
software  systems  and  services:  the  Telecommunications  Management System,
TelMaster,  the RATEX Bookstore Solution, and the Distribution Control System.

     Telecommunications  Management  System  and  TelMaster.    The
Telecommunications  Management  System  ("TMS")  is  a  proprietary text-based
software  solution used by universities, Fortune 1000 companies and the health
care  and governmental agency markets to manage telephony data for billing and
ad-hoc  reporting  purposes.  TMS is comprised of a series of software modules
and is typically sold in a package including hardware, software, installation,
training  and  on-going  hardware  and  software  maintenance.

     TelMaster is Telesoft's third generation telemanagement system.  Based on
client  server  technology, this product was released in the fourth quarter of
1996.    During  1999,  TelMaster  implementations  were initiated at American
General  Life,  Aramark Corporation, California State University - Sacramento,
Colgate  Palmolive,  GE  Capital,  3M  Corporation,  and  others.

     In  addition to its extensive higher education customer base, the Company
currently  services  customers such as GTE Internetworking, Pennsylvania State
Geisinger  Health  Systems,  Los  Angeles  County  Public Works and St. Luke's
Roosevelt  Hospital  in  New  York.  Telesoft also provides telecommunications
data  management  services  and  software for Bell of Pennsylvania and Pacific
Bell  Corp.

     TelMasterWeb  is  a  newly introduced Java based set of modules providing
secured  intranet  access  to  enterprise  directory, charge back reports, and
real-time  access  to  billing  and  call  detail  information.

     RATEX  Bookstore Solution.  In March 1995, the Company acquired the RATEX
line of software and related assets.  RATEX is a software program designed for
university  bookstores  to track merchandise through the ordering cycle to the
point  of  sale.    The  RATEX  product  line  includes  software  modules for
merchandise  and  inventory  management,  buyer  information,  financial  and
accounting,  point  of  sale  and  scanning  for  management  acceptance  of
credit/debit cards, mail order and general merchandise management application.
RATEX  systems  have  been installed in over 70 universities in North America,
including  Ohio  State  University  and  Stanford  University.      In  1999,
installations  of  RATEX  systems  were  initiated  at  Auraria  Book  Center,
University  of  New  Mexico,  Ohio State University, Brigham Young University,
University  College  of  the  Fraser  Valley,  among  others.

     Distribution  Control  System.  The  Company  has offered the DCS product
since  1982.    DCS  is  an  automated  control  solution  for  the  wholesale
distribution  industry.    The Company includes extensive on-site training and
maintenance  services  as  part  of  its  DCS  package.   The fully integrated
software  package  has a modular design, which includes applications for sales
order  processing,  inventory control, accounts receivable and sales analysis.
DCS  runs  on  the IBM RS6000 server family. DCSWEB is a newly introduced Java
based  business  to  business  software  module.    This  fully integrated web
offering  provides  electronic  catalog  publishing  with  real time inventory
control  and  flexible  pricing  shopping-cart  system.

                          TELESOFT RECOVERY SERVICES

     During  the  second  quarter  of  fiscal  1999,  the  Company  hired  two
executives  to  run  the Company's Recovery Services division headquartered in
New  Jersey.   These individuals have 27 years of combined industry experience
in  two  leading  companies.    The  Recovery  Services division assists large
organizations  in  analyzing,  recovering,  and  optimizing  their
telecommunications  expenditures.  Initial marketing efforts for this division
have  focused  on  the  East  Coast.

                               NETWORK SERVICES

     During  1999,  the  Company  formed  a  Network Services division to sell
telecommunication  services,  including dial tone and data transport services,
via  strategic  agent  relationships  with  Regional Bell Operating Companies.
This  division  was  discontinued  in  August  1999  due  to  unsatisfactory
performance.


COMPETITION

     The  telecommunications  industry  is  highly  competitive and subject to
rapid  technological change.  Failure to keep pace with technological advances
could  adversely  affect  the  Company's  competitive  position  and  future
prospects.    In  order  to maintain or improve its position, the Company must
continue to enhance its current products and develop new products and services
in  a  timely  fashion.

     In connection with its STS Program, the Company competes with AT&T, which
provides  long  distance  telephone  service on a resale basis and offers long
distance billing services to universities.  The Company also competes with MCI
WorldCom,  Sprint and other long distance providers which market long distance
services  to  the public and directly to college campuses.     The STS product
also competes with calling cards, prepaid cards and cellular/wireless service.

     In  connection  with  its  telemanagement  system  division,  the Company
competes  with  Telco  Research  Corporation,  IntegraTRAK  Inc., Stonehouse &
Company  and  ISI  Infortext,  all of which provide telemanagement systems and
services  to  the  university,  health  care,  government and general business
markets.

     In  connection  with  its  RATEX  product line, the Company competes with
large  book  wholesalers,  such  as  Nebraska  Book Company and Missouri Books
Systems,  which  provide  management  systems  to  universities  and  college
bookstores.

     The  Company  believes  that the factors for its success include quality,
technical capability, reliability, price and promptness of performance.  While
the  Company  has competed successfully against the foregoing companies, most,
if  not  all,  of the Company's existing and potential competitors have longer
operating  histories  and  significantly  greater financial, technical, sales,
marketing  and  human and other resources than the Company.  Most, if not all,
of  these  companies have greater name recognition and a larger installed base
than  the  Company.  The Company's competitors could, in the future, introduce
products  and  services with more features and lower prices than the Company's
product  and  service  offerings.  These companies also could fund existing or
new  products and services with other products or services to compete with the
Company.  While the Company has operated successfully against such competition
in  the  past,  there can be no assurance that it will be able to do so in the
future.


MAJOR  CUSTOMERS  AND  SUPPLIERS

     MCI  WorldCom  Inc  provides  a  significant  portion  of  the  Company's
long-distance  telecommunications  service.  Although the Company is dependent
upon  this  supplier,  management believes comparable suppliers are available.

     During the fiscal years ended November 30, 1999 and 1998, the Company did
not  have  any  customers that accounted for greater than 10% of its revenues.

SALES  AND  MARKETING

     The  Company's  sales staff consists of 21 people who are responsible for
all of the Company's marketing and sales efforts.  Sales personnel are paid on
both  a  salary  and  commission basis.  The Company's executive officers also
devote  a  substantial  amount  of  their  time  to developing and maintaining
personal  relationships  with the Company's customers and with prospective new
customers.

RESEARCH  AND  DEVELOPMENT

     The  Company  conducts  an  active  and  ongoing research and development
program  that  focuses  on  developing new and improved software products, and
particularly  those  that  are  compatible  with or enhance existing programs.
Research  and  development  costs for the fiscal years ended November 30, 1999
and  1998  were  $1,424,000 and $622,000, respectively.  These costs have been
expensed during their respective fiscal years.  Research and development costs
have  a  current  annual  run-rate  of  approximately  $1,756,000.

REGULATION

     The  Company's  business  is  subject  to  various  federal  and  state
regulations.    Commencement of new services frequently requires licenses from
public  utilities  commissions.  There is no assurance that the Company or its
customers,  if  required,  will  be  successful  in  their  efforts  to obtain
necessary licenses or regulatory approvals.  The Company's inability to secure
any  necessary  licenses  or approvals could have a material adverse effect on
its  business.  In addition to specific regulations, the Company is subject to
all  federal,  state  and  local rules and regulations imposed upon businesses
generally.    The cost of regulatory compliance is an additional cost of doing
business for the Company.  The Company cannot predict the impact, if any, that
future  regulation  or  regulatory  changes  may  have  on  its  business.

WARRANTIES

     The  Company  offers  a  90-day  warranty on hardware and software and an
extended  warranty  program  in  connection  with  the  Company's  service and
maintenance  programs.  The Company has not had any material claims made under
its  warranty  program.

PATENTS,  TRADEMARKS,  LICENSES  AND  COPYRIGHTS

     The  Company  regards its software as proprietary and attempts to protect
it  with  copyrights,  trademarks, and though the use of trade secret laws and
restrictions  on disclosure, copying and transferring title.  The Company also
attempts  to  preserve  its  proprietary  rights by contractual non-disclosure
safeguards  and  restrictions  on  transferability  in  its  software  license
agreements.    Additionally, the Company does not provide the source codes for
its  products  to  its customers.  The Company's products are not patented and
are  not  the subject of any current patent application, nor is it anticipated
that  any  of  its  products will be patented.  Existing copyright laws afford
only  limited  practical  protection  for  its software.  Accordingly, despite
precautions  taken  by  the Company, it may be possible for unauthorized third
parties  to  copy certain portions of the Company's products and to obtain and
use  information  that  the  Company  regards  as  proprietary.

     Key officers and employees have assigned to the Company certain technical
and other information and patent rights, if any, acquired by them during their
employment  by  the Company and after termination of their employment with the
Company,  if  such  information or rights arose out of information obtained by
them  during  their  employment.  They have also agreed not to use or disclose
any  such information for a period of two years following termination of their
employment.

     In  spite  of  these  precautions,  it may be possible for competitors or
users to copy aspects of the Company's products or to obtain information which
the  Company regards as trade secrets.  However, the Company believes that due
to  the  rapid  pace  of  innovation  within  its  industry,  factors  such as
technological  and  creative  skills  of  its  personnel are more important to
establishing  and  maintaining  a  technology  leadership  position within the
industry  than  are  the  various  legal  protections  of its technology.  The
Company  believes  that  its  products  and  technology do not infringe on any
proprietary  rights  of  others, although there can be no assurance that third
parties  will  not  assert  infringement  claims  in  the  future.

     The  Company has not obtained trademark or trade name registration on the
use  of the names "Student Telephone Services," "STS Service Bureau," "SunDial
Program,"  "RATEX",  "DCS" or "Sunbelt Business Computers."  The Company is in
the  process  of  investigating  the  feasibility and protection that might be
afforded  by registration of these names, or as trademarks or trade names on a
national,  regional  or  local  basis.

BACKLOG

     Backlog  is  not  material  to  the Company's business since it ships and
installs  its software and systems promptly upon receipt of customers' orders.
While  the  Company  does  tend  to experience higher installation activity on
university  campuses  during  the  summer  months, it has not historically had
problems  installing  its  products  and  performing  its services in a timely
fashion.

EMPLOYEES

     As of February 10, 2000, the Company had 164 full-time employees, four of
which  are  in  executive positions, 21 are engaged in sales and marketing, 23
are  in software development and system management, 43 are in customer service
and the balance are in various support positions.  The Company's employees are
not  covered  by a collective bargaining agreement.  The Company considers its
employee  relations  to  be  satisfactory.


<PAGE>

ITEM  2.    DESCRIPTION  OF  PROPERTY.


     During fiscal 1998, the Company leased 13,500 square feet of office space
in Phoenix, Arizona, from Joseph W. Zerbib, an officer, director and principal
shareholder of the Company.  The Company's obligations under the terms of this
verbal month to month lease were approximately  $55,800 for 1998.  The Company
vacated  this  space  in  January  1998  and  signed  a  ten-year  lease  for
approximately  30,000  square  feet  of office space in Phoenix, Arizona.  The
Company's obligation under the terms of this lease agreement was approximately
$392,000  and  $346,000 for the fiscal years ended November 30, 1999 and 1998,
respectively.

     The  Company leases 2,200 square feet of office space in Fort Washington,
Pennsylvania, which houses its RATEX operations.  This lease agreement expires
in  May  2001.    The Company's obligations under the terms of this lease were
approximately $47,000 and $43,000 for the fiscal years ended November 30, 1999
and  1998,  respectively.

     The  Company  leases  approximately  2,100  square  feet in Cranford, New
Jersey,  which  houses  its  Telesoft Recovery Services operation.  This lease
agreement  expires in July 2000.  The Company's obligations under the terms of
this  lease  were  approximately  $15,000 for 1999.  There were no obligations
under  this  lease  agreement  during  1998.

     The  Company  leases  office  space in Tempe, Arizona, which was used for
GoodNet  headquarters  prior  to its acquisition by the Company in April 1996.
This  lease  agreement  expires  in  March  2000.    The  Company is currently
subleasing this space under terms similar to the Company's obligation for this
lease,  which  was $37,000 and $33,300 for the fiscal years ended November 30,
1999  and  1998,  respectively.

ITEM  3.    LEGAL  PROCEEDINGS.

     The  Company  is  not  involved as a party to any legal proceedings other
than various claims and lawsuits arising in the normal course of its business,
none of which, in the opinion of the Company's management, are individually or
collectively  material  to  the  Company's  business.


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

     No  matter  was submitted to security holders through the solicitation of
proxies  or  otherwise during the fourth quarter of the fiscal year covered by
this  report.

<PAGE>

     PART  II

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

     The  following  table  sets  forth,  for  the  fiscal  periods  shown,
representative  high  and  low  bid  prices  of  the Company's Common Stock as
reported  by  the  Nasdaq  SmallCap Market.  The prices represent inter-dealer
quotations,  which  do  not include retail mark-ups, mark-downs or commissions
and  may  not  necessarily  represent  actual  transactions.
<TABLE>
<CAPTION>




YEAR ENDED NOVEMBER 30, 1999    LOW      HIGH
----------------------------  -------  --------
<S>                           <C>      <C>
                              $ 4 7/8  $      6
 First Quarter
 Second Quarter. . . . . . .   4 3/16         5
 Third Quarter . . . . . . .    4 3/8         4
 Fourth Quarter. . . . . . .   4 1/16   4 11/16


<CAPTION>




 YEAR ENDED NOVEMBER 30, 1998    LOW      HIGH
-----------------------------  --------  ------
<S>                            <C>       <C>
                               $2 21/32  $5 1/8
 First Quarter
 Second Quarter . . . . . . .         4       5
 Third Quarter. . . . . . . .     3 3/8       6
 Fourth Quarter . . . . . . .    3 9/16       5

</TABLE>



     As  of  February 10, 2000, there were 604 holders of record of the Common
Stock of the Company.  Although the Company has no limitations or restrictions
on  declaring dividends, the Company has not declared or paid dividends on its
Common  Stock  and does not expect to declare or pay dividends in fiscal 2000.


ITEM 6.     MANAGEMENT'S  DISCUSSION  AND  ANALY-SIS  OF  FINANCIAL  CONDITION
AND  RESULTS    OF    OPERATIONS.

FORWARD  LOOKING  INFORMATION

     This  report  contains  forward-looking  statements within the meaning of
section  27A  of  the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934.  Such statements involve certain risks and uncertainties
that  could  cause  actual  results  to  differ  materially  from those in the
forward-looking statements including uncertainties regarding the effectiveness
of  initiatives  to  introduce  and  implement the TelMaster product.  Certain
factors which may cause such a difference include, but are not limited to, the
following:  the  impact  of  increased  competition  from  competitors  with
significant  financial  resources and market share; and the amount and rate of
growth  in  general  and  administrative  expenses  associated with building a
strengthened  corporate  infrastructure  to  support  operations.


<PAGE>


BACKGROUND

     The Company began as a value-added reseller in the wholesale distribution
of  accounting  software  (Distribution  Control  System) in 1982.  During the
fiscal  year ended November 30, 1999, the Company derived approximately 67% of
its revenues from continuing operations from its STS Outsourcing Program.  The
balance  of  revenues  were  derived  from hardware, software, maintenance and
other  services  in  the  university, Fortune 1000, governmental and wholesale
distribution  markets.

     The  Company  has  adapted  to  fast-paced market changes by shifting its
resources  from  providing  generic or general system hardware and software to
providing  a  full  range of services in its specialty niches.  The Company is
continuously  developing  new products and services to maintain and expand its
market  share.

SELECTED  FINANCIAL  DATA

     The  following  selected  financial  data  are derived from the Financial
Statements  of  the  Company  which  have  been  audited  by BDO Seidman, LLP,
independent  certified  public  accountants,  for the years ended November 30,
1999  and  1998.    Such selected financial data should be read in conjunction
with  the Company's financial statements and related notes set forth in Item 7
herein.
<TABLE>
<CAPTION>




                                       Years Ended November 30,
                                      --------------------------
<S>                                   <C>                         <C>
STATEMENT OF OPERATIONS DATA (1):. .                       1999           1998
                                      --------------------------  -------------

   Net sales . . . . . . . . . . . .  $              29,377,592   $ 28,250,373
   Cost of sales . . . . . . . . . .                (16,780,838)   (18,033,402)
                                      --------------------------  -------------
   Gross profit. . . . . . . . . . .                 12,596,754     10,216,971
   Income from operations. . . . . .                  1,261,686      1,544,157
   Other income. . . . . . . . . . .                    567,157        332,012
   Income from continuing operations                  1,249,043      1,089,578
   Diluted earnings per share- . . .  $                    . 33   $       . 28
       Continuing operations
   Weighted average number of. . . .                  3,832,067      3,888,033
       shares outstanding-diluted

<CAPTION>
                              Years Ended November 30,




<S>                            <C>          <C>
                                      1999         1998
                               -----------  -----------

BALANCE SHEET DATA:
   Cash and investments . . .  $14,425,071  $17,677,008
   Working capital. . . . . .   18,452,329   16,970,488
   Total assets . . . . . . .   26,862,937   27,620,329
   Short-term debt. . . . . .            -            -
   Long-term debt . . . . . .            -            -
   Total stockholders' equity   19,990,765   18,395,164
<FN>


(1)      Figures for 1999 and 1998 reflect results from continuing operations.
</TABLE>



<PAGE>

<TABLE>
<CAPTION>

RESULTS  OF  OPERATIONS  BY  PRODUCT  LINE  FOR  THE  FISCAL  YEARS  ENDED  NOVEMBER  30,  1999  AND  1998
(in  thousands  except  per  share  items)

                        Year  ended  November  30,  1999                            Year  ended  November  30,  1998
                        --------------------------------                            --------------------------------

                                System   Custom    Network     Recovery                      System  Custom
<S>                    <C>      <C>      <C>       <C>         <C>         <C>      <C>      <C>     <C>       <C>
                       STS      Sales    Billing   Services    Services    Total    STS      Sales   Billing   Total
                       -------  -------  --------  ----------  ----------  -------  -------  ------  --------  -------
Sales, net. . . . . .  $19,816  $ 7,857  $  1,404  $     165   $     136   $29,378  $21,461  $5,570  $  1,219  $28,250
Cost of sales . . . .   14,766    1,980        35          -           -    16,781   16,504   1,529         -   18,033
                       -------  -------  --------  ----------  ----------  -------  -------  ------  --------  -------
Gross profit. . . . .    5,050    5,877     1,369        165         136    12,597    4,957   4,041     1,219   10,217
                       -------  -------  --------  ----------  ----------  -------  -------  ------  --------  -------
General &
administrative
   expenses:
General . . . . . . .    3,563    4,901     1,046        285         453    10,248    3,366   3,455       696    7,517
Depreciation. . . . .      160      137        21          -           -       318      190     109         -      299
Amortization. . . . .        -        -         -          -           -         -        -       2         -        2
Bad debt. . . . . . .      215        7        53          -           -       275      332      94         3      429
Corporate
  allocations:
General . . . . . . .      195       52        17          1           1       266      177      47        16      240
Depreciation. . . . .      101       99        23          5           -       228      137      37        12      186
                       -------  -------  --------  ----------  ----------  -------  -------  ------  --------  -------
                         4,234    5,196     1,160        291         454    11,335    4,202   3,744       727    8,673
                       -------  -------  --------  ----------  ----------  -------  -------  ------  --------  -------

Operating income. . .      816      681       209       (126)       (318)    1,262      755     297       492    1,544
    (loss)
Other income. . . . .                                                          567                                 332
                                                                           -------                             -------

Pretax income . . . .                                                        1,829                               1,876
Income tax provision.                                                          580                                 786

                                                                           -------                             -------
Income from
  continuing
  operations. . . . .                                                      $ 1,249                             $ 1,090
                                                                           =======                             =======

Diluted earnings per
  share-continuing
  operations. . . . .                                                      $  0.33                             $  0.28
                                                                           =======                             =======
</TABLE>





<PAGE>
RESULTS  OF  OPERATIONS  FOR THE FISCAL YEARS ENDED NOVEMBER 30, 1999 AND 1998

     The  results  of  operations of the Company do not include the results of
operations  GoodNet, its former 71% owned subsidiary which was sold in January
1998  and  which  is  treated  as  a  discontinued  operation in the Company's
financial  statements.

     Revenues  increased  by  4.0%  to  $29,377,592  for the fiscal year ended
November  30, 1999, compared to $28,250,373 for the fiscal year ended November
30,  1998.  The Company's revenue is derived from four principal product lines
and  services:  STS  Outsourcing Programs (STS), System Sales and Maintenance,
Customized  Billing  Outsourcing  Services,  and  Recovery  Services.  Network
Services,  which began operations in December 1998, was discontinued in August
1999  due  to  unsatisfactory  performance.

       STS  Program  revenues  were  $19,815,617  for  the  fiscal  year ended
November  30,  1999 compared to $21,461,885 for the fiscal year ended November
30,  1998,  a  decrease of 7.7%.  This decrease resulted from a 22% decline in
STS  Program  revenues  in  the  fourth quarter of 1999 compared to the fourth
quarter  1998.  This decrease was primarily due to market pressure on both the
retail  and wholesale sides, including increased competition from calling card
and  wireless  services.  The Company is adjusting to market pressures both on
the  retail and wholesale sides and is attempting to rebuild subscriber counts
by  lowering rates.  We expect this trend to stabilize at an approximately 22%
decline  in  revenues.

     Revenues from System Sales and Maintenance were $7,856,532 for the fiscal
year  ended November 30, 1999 compared to $5,569,733 for the fiscal year ended
November  30,  1998,  an  increase  of 41.1%.  Revenues from the TelMaster and
RATEX  products  increased  by  139%  and 15% respectively, for the year ended
November  30,  1999,  compared  to  the  year  ended  November  30, 1998.
This reflects an increase in excess of 200% in both the TelMaster and Ratex
products  from  the  fourth  quarter 1998 to the fourth quarter 1999 and a 50%
increase  in  TelMaster  revenues  from  the  third quarter 1999 to the fourth
quarter  1999.   Approximately $1,044,000, or 49%, of the fiscal year increase
in  TelMaster  revenues  is  related  to  ongoing  development  of  a  custom
convergence  billing,  reporting  and  support system for Pacific Bell and MCI
customer care services for the State of California's CALNET contract.  Revenue
from  the DCS product declined by 13% during the year ended November 30, 1999.
This  decrease  was  primarily due to a significant decline in demand for this
text-based  product.    We  expect  DCS  revenue to continue to decline in the
future.

     For  the  fiscal  years  ended  November 30, 1999 and 1998, revenues from
Customized  Billing  Outsourcing  Services  were  approximately $1,404,000 and
$1,219,000,  respectively.  Recovery Services, which began operations in March
1999,  had  revenues  of  approximately  $135,000 during fiscal 1999.  Network
Services,  which  began  operations  in December 1998 and ceased operations in
August  1999,  had  revenues  of  approximately  $165,000  during fiscal 1999.
<TABLE>
<CAPTION>

          Fiscal  Year  Ended  November  30,

                      1999         1998         1997         1996         1995
                   -----------  -----------  -----------  -----------  -----------
<S>                <C>          <C>          <C>          <C>          <C>
REVENUE
Telemanagement. .  $ 3,652,921  $ 1,526,959  $ 1,368,985  $ 1,630,932  $ 1,963,787
DCS . . . . . . .    1,393,617    1,606,088    1,684,631    1,892,470    1,943,454
RATEX . . . . . .    2,809,994    2,436,686    1,143,864    1,578,444      873,497
                   -----------  -----------  -----------  -----------  -----------
     System Sales    7,856,532    5,569,733    4,197,480    5,101,846    4,780,738
STS . . . . . . .   19,815,617   21,460,885   17,430,383   15,092,010   14,465,157
Custom Billing. .    1,404,230    1,219,755      965,587      549,137      331,010
Network Services.      165,435            -            -            -            -
Recovery Services      135,778            -            -            -            -
                   -----------  -----------  -----------  -----------  -----------
                   $29,377,592  $28,250,373  $22,593,450  $20,742,993  $19,576,905
</TABLE>


     Total  gross profit increased by 23.3% to $12,596,754 for the fiscal year
ended  November  30,  1999,  compared to $10,216,971 for the fiscal year ended
November 30, 1998.  Cost of goods sold was approximately 74.5% of STS revenues
for  the  fiscal  year  ended  November  30, 1999, compared with 76.9% for the
fiscal  year  ended  November 30, 1998.  This decrease is primarily due to the
decreased  cost  of long distance services from the Company's suppliers.  Cost
of  goods  sold  as  a percentage of system sales and maintenance revenues was
25.2%  for the fiscal year ended November 30, 1999 compared with 27.5% for the
fiscal  year  ended  November  30, 1998.  This improvement was due to a higher
percentage  of  TelMaster  sales during fiscal 1999, which have a higher gross
profit  rate  than  the  RATEX  and  DCS  products.

     General and administrative expenses increased by 30.7%, or $2,662,254, in
fiscal  1999 to $11,335,068 from $8,672,814 in fiscal 1998.  This increase was
primarily  due  to  an  increase  in human resources in the areas of TelMaster
research and development, implementation, sales, and support services, as well
as  the  addition  of  the  Network  Services and Recovery Services divisions.
Research  and  development costs incurred and expensed during the fiscal years
ended  November  30, 1999 and 1998 were $1,424,000 and $622,000, respectively.
Sales  and  support  related  expenses  increased  $267,000  and  $238,000,
respectively  from  fiscal  1998  to  fiscal  1999.    Increased effort in the
Customized  Billing division, primarily as a result of the Qwest project, also
contributed  approximately  $130,000  in  increased  customer  service related
expenses.  Recovery  Services  and  Network  Services  divisions had operating
expenses  of  approximately  $454,000  and  $291,000, respectively, during the
fiscal year ended November 30, 1999.  General and administrative expenses as a
percentage  of  revenues  increased  to 38.6% for the fiscal 1999, compared to
30.7%  for  the  fiscal  1998.   The Company expects to continue to experience
increases  in  TelMaster  research  and  development,  sales  and professional
service  expenses  as  part of its effort to increase TelMaster product sales.

     The  provision  for income taxes was $579,800 and $786,591 for the fiscal
years ended November 30, 1999 and 1998, respectively.  This represents 32% and
42%  of  income  before  provision  for income taxes for fiscal 1999 and 1998,
respectively.  This percentage decrease is primarily attributable to increased
interest  from  tax-free  investments.

     Income  from continuing operations increased to $1,249,043 in fiscal 1999
from  $1,089,578  in  fiscal  1998.    This was attributable to an approximate
$384,000  and  $61,000  increase in operating income from the System Sales and
STS  product  lines,  offset by operating losses of approximately $126,000 and
$318,000  from  the  Network  Services  and  Recovery  Services  divisions,
respectively.    The increase was also attributable to an approximate $250,000
increase  in  interest  income.

     For  the  year  ended  November  30,  1999,  gain  on the sale of GoodNet
represents  additional  gain realized as a result of the sale of 79,387 shares
of  Winstar  common  stock  received  in  the sale of GoodNet to Winstar.  See
"Investment  Securities  -  Winstar  Shares"  in the notes to the consolidated
financial  statements.  It  also  represents  the  reversal  of  accrued lease
termination  fees  in  the amount of $300,000.  The Company no longer believes
that  it  will  need to terminate any portion of its lease, as it will be used
for  future  expansion  of  the  Company.


<PAGE>
DISCONTINUED  OPERATIONS

     Effective  January  12,  1998,  the  Company,  together with the minority
shareholders  of  GoodNet,  entered into an agreement with Winstar to sell the
Company's  Internet  services  subsidiary  for  approximately  $22.0  million,
consisting  of  $3.5 million cash and shares of common stock of Winstar having
an  aggregate  market  value  of  approximately  $18.5  million.

     Under  the  terms  of  the  agreement, the Company received approximately
$3,500,000  in  cash  plus  479,387 shares of Winstar restricted common stock,
which  had an aggregate fair market value of approximately $13.9 million as of
the  close  of  business  on  January 12, 1998.  After commissions and related
legal  expenses, the Company realized an approximate $13.2 million pretax gain
on  the  sale  in the first quarter of fiscal 1998.  Additionally, the Company
received  $235,000  in  cash  to  offset GoodNet's net cash disbursements from
December  12,  1997  through  the  date  of  the  sale.

MATERIAL  CHANGES  IN  FINANCIAL  POSITION

     Cash  and  cash  equivalents decreased to $2,157,701 at November 30, 1999
from  $7,740,219  at November 30, 1998.  During the fiscal year ended November
30,  1999,  investment  securities increased by approximately $2,331,000.  The
Company's  cash  and  investment  holdings combined decreased by approximately
$3,251,000.    During  fiscal  1999,  net  cash  from  operating activities of
continuing  operations  used  $2,563,489,  which  includes  net  taxes paid of
approximately  $818,000.    The Company used approximately $580,000 in cash to
purchase  property  and equipment for its continuing operations. Additionally,
the  Company  used  approximately $184,000 in cash to purchase treasury stock.
The  Company  received  $2,909,232  upon  the sale of 79,387 shares of Winstar
stock  and  paid  $844,600  in taxes related to the sale of GoodNet, including
this  sale  of  the  Winstar  stock.

     Accounts  receivable increased to $9,937,537 as of November 30, 1999 from
$7,435,184  as  of  November  30,  1998  ($9,484,936  and  $6,933,089,  net of
allowance  for uncollectibles as of November 30, 1999 and 1998, respectively).
This  approximate  $2,500,000  increase  is  due  to an approximate $1,000,000
increase  in TelMaster revenues for the month of November 1999 versus November
1998  and  an  approximate $700,000 increase in RATEX revenues from the fourth
quarter  1998  to  the  fourth  quarter  1999.

     As  of  November 30, 1999, the Company had a net current and deferred tax
asset  of  $158,900  compared  with  a  net  deferred  tax asset of $43,700 on
November 30, 1998.  This is due to the payment of taxes related to the Winstar
stock  sale  and  the sale of GoodNet, as well as an increase in estimated tax
payments  for the current fiscal year.  The Company believes that it is likely
to  realize  the  net  deferred  tax asset subject to the Company's ability to
generate  profits in the future.  Accordingly, no valuation allowance has been
provided.

     Accounts  payable  and  accrued  liabilities  ("payables")  decreased  to
$5,880,975  as  of  November 30, 1999 from $8,208,584 as of November 30, 1998.
This  is  partially  attributable  to an approximate $1,800,000 decline in STS
Program cost of sales from the fourth quarter 1998 to the fourth quarter 1999.
Additionally,  a  $300,000  accrual  for  an  early  lease termination fee was
reversed  during  fiscal  1999.    This  has  been  included with the "Gain on
disposal  of  GoodNet  subsidiary"  in  the accompanying financial statements.

LIQUIDITY  AND  CAPITAL  RESOURCES

     At  November  30, 1999, the Company had cash of $2,157,701 and investment
securities  of  $12,267,370.   The Company believes that present cash reserves
available,  along  with  anticipated  cash  flows  from  its business, will be
adequate  to  supply  currently  anticipated  operating  requirements  for the
Company  for  the next 12 months.  However, there can be no assurance that the
Company  will  not  require  additional  funding  within this time frame.  The
Company  may  be  required to raise additional funds through public or private
financing,  strategic  relationships,  or other arrangements.  There can be no
assurance  that such additional funding, if needed, will be available on terms
attractive  to  the  Company,  or  at all.  Furthermore, any additional equity
financing  may  be  dilutive  to  existing  stockholders.

     On  February  3, 2000, the Company commenced an offer to repurchase up to
2.3 million shares of its common stock pursuant to a modified "Dutch auction''
self-tender offer.  The tender offer price will be between $7.00 and $7.50 per
share  in cash, which would result in the payment to tendering stockholders of
up  to  a  maximum of an aggregate of $17.25 million if all 2.3 million shares
are  tendered. The offer will expire at 12:00 Midnight, New York City time, on
Monday,  March  6,  2000,  unless  extended.   As a result of this tender, the
Company  has  established  a  12-month  line of credit in order to satisfy the
terms  of the tender offer.  If the maximum number of shares are tendered, the
Company  believes  it  will  require  initial  financing  of  approximately
$3,000,000.    While  the  Company  believes that it will be able to extend or
replace  the  current line of credit, there can be no assurance that this will
happen.   The Company believes that cash flows from its business will allow it
to  service  the  interest  payments  the Company will incur on this facility.

ACCOUNTING  PRONOUNCEMENTS

     In  June  1998,  the Financial Accounting Standards Board Issued SFAS No.
133  "Accounting  for Derivative Instruments and Hedging Activities". SFAS No.
133  requires companies to recognize all derivative contracts as either assets
or  liabilities  in  the  balance  sheet and to measure them at fair value. If
certain  conditions  are met, a derivative may be specifically designated as a
hedge,  the  objective  of  which  is  to  match  the  timing  of gain or loss
recognition  as the hedging derivative with the recognition of (i) the changes
in  the  fair  value of the hedged asset or liability that are attributable to
the  hedged  risk  or  (ii)  the  earnings  effect  of  the  hedged forecasted
transaction. For a derivative not designated as a hedging instrument, the gain
or  loss  is  recognized  in  income  in the period of change. SFAS No. 133 is
effective  for  all  fiscal years beginning after June 15, 2000. Historically,
the Company has not entered into derivative contracts either to hedge existing
risks  or  for  speculative  purposes.  The  Company has not yet evaluated the
financial  statement  impact  of  adopting  this  new  standard.

<PAGE>
YEAR  2000  COMPUTER  ISSUES

     Many currently installed computer systems and software products are coded
to  accept  only  two  digit  entries in the date code field.  These date code
fields  needed to accept four digit entries to distinguish 21st century dates.
As a result, computer systems and/or software used by many companies needed to
be  upgraded  to  comply  with  such  "Year  2000"  requirements.  Significant
uncertainty  exists  in the software industry concerning the potential effects
associated  with  such  compliance. Although the Company's internal systems as
well  as its software and applications are designed to be Year 2000 compliant,
there can be no assurance that such systems and software contain all necessary
date  code  changes.

The  Company  conducted  an  assessment  of  its information technology ("IT")
systems  and  non-IT systems (such as building security, voice mail, telephone
and  other systems containing embedded microprocessors) and has made all known
material  changes to internal systems in order to be Year 2000 compliant.  The
Company's  material internal IT systems consist principally of human resources
and sales force automation application software created by third parties, plus
internally  developed  project accounting software applications.  Although the
Year  2000  is  now underway, it is possible that Year 2000 issues could still
arise.   If compliance efforts of which the Company is not currently aware are
required  and  are  not  completed  on  time,  or  if the cost of any required
updating,  modification or replacement of the Company's IT systems exceeds the
Company's  estimates, the Year 2000 issue could have a material adverse effect
on  the  Company.

     In  addition  to  the  Company's  internal systems, the Company relies on
third  party  relationships in the conduct of its business. For example, third
party  vendors  handle  the  payroll function for the Company, and the Company
also  relies on the services of landlords of its facilities, telecommunication
companies, banks, utilities, and commercial airlines, among others.   Although
there  have  been  no  material  Year  2000  issues  to  date, there can be no
assurance  there  will  be  no failure of critical client systems or processes
that may be directly or indirectly connected or related to systems or software
analyzed,  designed, developed, or implemented by the Company, the Company may
be  subjected  to  claims  regardless of whether the failure is related to the
services  provided  by the Company. If asserted, the resolution of such claims
(and the associated defense costs) could have a material adverse effect on the
Company.

SEASONALITY

     The  Company  generally completes the sale of the majority of STS Program
system  installations  in  the  university  market during the spring and early
summer  months.    The  implementation  and  installation of these systems and
services typically occurs during the summer months.  Revenues derived from STS
Programs  begin  in  the  fall and weaken during winter holiday and the summer
months  when  students  are  on vacation.  As a result, the Company's revenues
have  consistently  been  highest  during  the  second  and  fourth  quarters.


ITEM  7.    FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA.

     The  financial  statements and schedules are included herewith commencing
on  page  F-1.

<PAGE>

ITEM  8.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL  DIS-CLOSURE.

     There  has  been  no  disagreement on accounting and financial disclosure
with  the  Company's accountants within the two years prior to the date of the
most  recent financial statements requiring disclosure under this item and any
accountants'  reports  on the financial statements of the Company for the past
two  years  has  contained no adverse opinion and no disclaimer of opinion and
was  not  qualified  as  to uncertainty, audit scope or accounting principles.

                                   PART III

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

     The  following  sets  forth  certain  information  with  respect  to  the
Company's  directors  and  executive  officers.

<TABLE>
<CAPTION>



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

Michael F. Zerbib(1)(2)..   33  President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director

Joseph W. Zerbib. . . . .   64  Chairman of the Board of Directors

Thierry E. Zerbib . . . .   38  Vice President-Technologies, Secretary and Director

Brian H. Loeb . . . . . .   38  Vice President-Marketing, Sales and Operations and
    Director

Cecile Silverman(1)(2) ..   75  Director

Kalvan Swanky (2) . . . .   36  Director

</TABLE>


______________________________________

(1)          Member  of  Audit    Committee.
(2)          Member  of  Compensation  Committee.


     Michael  F.  Zerbib has been President and Chief Executive Officer of the
Company  since  February  2000  and  Chief  Financial Officer, Treasurer and a
director  of the Company since 1990.  He holds a Bachelor of Science degree in
finance  and  a  Master's  degree  in  taxation  and financial accounting from
Arizona  State  University.    Mr.  Zerbib also holds a certification from the
Arizona  State  Board  of  Accountancy.

     Joseph  W. Zerbib has been Chairman of the Board of Directors since 1982.
From 1982 to February 2000, he served as President and Chief Executive Officer
of  the  Company.

     Thierry  E.  Zerbib has been Vice President-Technologies, Secretary and a
director of the Company since 1982.  He holds dual degrees in computer science
and  math  from  Tel  Aviv  University,  Israel.

     Brian  H.  Loeb  has  been Vice President-Marketing, Sales and Operations
since  1982  and  a  director  of  the  Company  since  1992.

     Cecile Silverman has been a director of the Company since June 1995.  Ms.
Silverman  is  a  certified public accountant and has been self employed since
1989.    From 1975 to 1989, she was a partner at the firm of Schwartz, Cohen &
Co.    Ms.  Silverman  specializes  in  tax  planning  for  corporations  and
individuals,  as  well  as  representing  clients  before various governmental
agencies.  She graduated from Syracuse University with a degree in accounting.

     Kalvan  Swanky has been a director of the Company since June 1995.  Since
1986,  he  has  been employed by Storage Technology Corporation ("STC"), which
develops,  manufactures  and  distributes computer memory devices.  Mr. Swanky
has held a number of positions with STC, most recently as Direct Sales Manager
for  Arizona  and  Nevada.   He received a Bachelor of Science degree from the
University  of  Colorado.

     Joseph W. Zerbib is the father of Thierry E. Zerbib and Michael F. Zerbib
and  the  father-in-law  of Brian H. Loeb.  Accordingly, Thierry E. Zerbib and
Michael  F.  Zerbib  are  brothers  and Brian H. Loeb is the brother-in-law of
Thierry  E.  Zerbib  and  Michael  F.  Zerbib.

BOARD  MEETINGS,  COMMITTEES  AND  COMPENSATION

     During  the  fiscal  year ended November 30, 1999, the Board of Directors
held  three  meetings.    All  directors  attended  these  meetings.

     Audit  Committee.    The Board of Directors maintains an Audit Committee,
which  currently  is  composed  of  Cecile  Silverman and Michael Zerbib.  The
responsibilities  of  the  Audit  Committee include, in addition to such other
duties  as  the  Board  of  Directors  may specify, (i) receiving reports with
respect  to  loss  contingencies, the public disclosure or financial statement
notation  of  which  may  be  legally  required,  (ii)  annually reviewing and
examining  those  matters  that relate to a financial and performance audit of
the Company's stock option plans, (iii) recommending to the Board of Directors
the  selection,  retention  and  termination  of  the  Company's  independent
accountants,  (iv)  reviewing  the  professional  services,  proposed fees and
independence  of  such  accountants, and (v) providing for the periodic review
and  examination  of  management  performance in selected aspects of corporate
responsibility.    The Audit Committee held one meeting during the fiscal year
ended  November  30,  1999.

     Compensation  Committee.  The Board of Directors maintains a Compensation
Committee, which currently is composed of Cecile Silverman, Kalvan Swanky, and
Michael  Zerbib.   The responsibilities of the Compensation Committee include,
in  addition  to  such other duties as the Board of Directors may specify, (i)
reviewing  and  recommending  to  the  Board  of  Directors  the  salaries,
compensation  and  benefits  of  the  Company's  executive  officers  and  key
employees,  (ii)  reviewing any related party transactions on an ongoing basis
for  potential  conflicts  of  interest, and (iii) administering the Company's
stock  plans.   The Compensation Committee held two meetings during the fiscal
year  ended  November  30,  1999.

     The  members  of  the  Board  of  Directors  do  not  receive  any  cash
compensation for serving as directors.  However, the Company may reimburse the
independent  directors  for  their  reasonable  out-of-pocket  expenses  in
connection  with  their  attendance  at  meetings.  In April 1996, the Company
granted  immediately  exercisable  options  to purchase 1,000 shares of Common
Stock to each of Ms. Silverman and Mr. Swanky.  The options are exercisable at
a  price  of $4.75 per share through April 2001.  In October 1996, the Company
granted  each  of Ms. Silverman and Mr. Swanky immediately exercisable options
to purchase 1,000 shares of Common Stock at a price of $3.00 per share through
October  2001.  In October 1997, the Company granted each of Ms. Silverman and
Mr.  Swanky immediately exercisable options to purchase 1,000 shares of Common
Stock  at  a  price  of  $2-15/16 per share through October 2002.  None of the
options  granted  were  pursuant  to  any  stock  option  plan.

SECTION  16(A)  BENEFICIAL  OWNERSHIP  REPORTING  COMPLIANCE

     Section  16(a)  of  the  Exchange Act, as amended, requires the Company's
officers,  directors and persons who beneficially own more than ten percent of
the  Company's  Common  Stock  to  file  reports  of  ownership and changes in
ownership  with  the Commission.  These reporting persons also are required to
furnish  the Company with copies of all Section 16(a) forms they file.  To the
Company's  knowledge,  based  solely on its review of the copies of such forms
furnished  to  it and representations that no other reports were required, the
Company  believes  that all Section 16(a) reporting requirements were complied
with  during  the  fiscal  year  ended  November  30,  1999.


<PAGE>

ITEM  10.          EXECUTIVE  COMPENSATION.

SUMMARY  COMPENSATION  TABLE

     The  following  table  sets  forth the total compensation received by the
chief  executive  officer  and  each  additional  executive  officer  whose
compensation  exceeded  $100,000,  paid to the named individuals and group for
services  rendered  in  all capacities to the Company and its subsidiaries for
the  fiscal  years  ended  November  30,  1999,  1998,  and  1997.
<TABLE>
<CAPTION>

<S>                   <C>  <C>           <C>         <C>      <C>         <C>         <C>      <C>
                                                                Long Term Compensation (1)
                                                              ----------------------------------------

                            Annual Compensation               Awards                  Payouts
                            --------------------------------  ----------------------  ----------------


                                                     Other                Securities           All
                                                     Annual   Restricted  Underlying           Other
Name and . . . . . .                                 Compen-  Stock       Options/    LTIP     Compen-
Principal Position .  Year  Salary(2)     Bonus      sation   Awards      SARs        Payouts  sation
--------------------  ----  ------------  ---------  -------  ----------  ----------  -------  -------
Joseph W. Zerbib . .  1999  $    144,000  -0-        -0-      -0-         -0-         -0-      -0-
President and Chief
Executive Officer
                      1998  $    144,000  $ 150,000  -0-      -0-         -0-         -0-      -0-
                      1997  $    144,000  -0-        -0-      -0-         26,000      -0-      -0-
--------------------  ----  ------------  ---------  -------  ----------  ----------  -------  -------
Thierry E. Zerbib. .  1999  $    154,000  -0-        -0-      -0-         -0-         -0-      -0-
Vice President -
Technologies and
 Secretary
                      1998  $    144,000  $ 150,000  -0-      -0-         -0-         -0-      -0-
                      1997  $    144,000  -0-        -0-      -0-         26,000      -0-      -0-
--------------------  ----  ------------  ---------  -------  ----------  ----------  -------  -------
Michael F. Zerbib. .  1999  $    144,000  -0-        -0-      -0-         -0-         -0-      -0-
Chief Financial
Officer
and Treasurer
                      1998  $    144,000  $ 150,000  -0-      -0-         -0-         -0-      -0-
                      1997  $    104,000  -0-        -0-      -0-         26,000      -0-      -0-
--------------------  ----  ------------  ---------  -------  ----------  ----------  -------  -------
Brian H. Loeb. . . .  1999  $    144,000  -0-        -0-      -0-         -0-         -0-      -0-
Vice President -
Marketing, Sales and
Operations
                      1998  $    144,000  $ 150,000  -0-      -0-         -0-         -0-      -0-
                      1997  $    144,000  -0-        -0-      -0-         26,000      -0-      -0-
--------------------  ----  ------------  ---------  -------  ----------  ----------  -------  -------

<FN>


(1)          See "Security Ownership of Certain Beneficial Owners and Management" below for additional information on
options  which  were  granted  to  these  four  officers.
</TABLE>



     The executive officers of the Company named above routinely receive other
benefits from the Company, the amounts of which are customary in the industry.
The  Company  has  concluded,  after  reasonable  inquiry,  that the aggregate
amounts of such benefits during the years ended November 30, 1999 and 1998 did
not exceed the lesser of $50,000 or 10% of the compensation set forth above as
to  any  named  individual.

<PAGE>

OPTION  GRANTS  IN  FISCAL  1999

     There  were no options granted to the Company's executive officers during
fiscal  1999.

<TABLE>
<CAPTION>
OPTION  EXERCISES  IN  FISCAL  1999
<S>                <C>         <C>        <C>                     <C>
                                          Number  of  Securities  Value  of  Unexercised
                                          Underlying Unexercised  In-the-Money Options
                   Shares                 Options at FY-End       at FY-end
                   Acquired     Value     Exercisable /           Exercisable /
Name               on Exercise  Realized  Unexercisable           Unexercisable
----------------   -----------  --------  ----------------------  ----------------------
Joseph W. Zerbib   -0-          $0        73,500 / 19,500         $21,650 / $16,588
Thierry E. Zerbib  -0-          $0        69,750 / 18,250         $17,853 / $15,322
Michael F. Zerbib  -0-          $0        75,000 / 20,000         $23,169 / $17,094
Brian H. Loeb      -0-          $0        69,750 / 18,250         $17,853 / $15,322


</TABLE>

STOCK  OPTION  PLANS

     1995  and  1996  Incentive  Stock  Option  Plans.  The Board of Directors
adopted  the 1995 Incentive Stock Option Plan ("1995 ISO Plan") on February 1,
1995  and the 1996 Incentive Stock Option Plan ("1996 ISO Plan") and, together
with  the  1995  ISO  Plan,  the  ("Plans")  on  April  15,  1996.  The  Plans
subsequently  were  approved by the shareholders.  The terms and conditions of
the  Plans  are  substantively  similar.

     There  are  264,000  shares authorized for grant under the 1995 ISO Plan.
As  of  November  30, 1999, options to purchase 264,000 shares of Common Stock
were  outstanding  under the 1995 ISO Plan, which includes options to purchase
(i)  164,000  shares currently held by executive officers at an exercise price
of $6.60 per share and (ii) 100,000 shares currently held by certain employees
of the Company at an exercise price of $6.00 per share.  The exercise price of
the  options  granted to the executive officers exceeded the fair market value
of  the  Common  Stock  on  the  date  of  grant.

     There  are  260,000  shares authorized for grant under the 1996 ISO Plan.
As  of  November  30, 1999, options to purchase 237,400 shares of Common Stock
were  outstanding  under the 1996 ISO Plan, which includes options to purchase
(i)  96,000  shares  currently  held  by executive officers at exercise prices
ranging  from  $3.30 to $5.23 per share and (ii) 141,400 shares currently held
by  certain  employees of the Company at exercise prices ranging from $3.00 to
$4.75  per  share.  The exercise price of the options granted to the executive
officers  exceeded  the  fair  market value of the Common Stock on the date of
grant.

     Each  of  the Plans authorizes the Company to grant to key employees both
incentive  options and non-qualified options.  Incentive options are qualified
options  under  the Internal Revenue Code.  The objectives of the Plans are to
provide  incentives  to  key  employees  to achieve financial results aimed at
increasing  stockholder  value  and  attracting  talented  individuals  to the
Company.  Persons eligible to participate in the Plans will be those employees
of  the  Company  whose  performance,  in  the  judgment  of  the Compensation
Committee,  can  have  significant  effect  on  the  success  of  the Company.

     The  Plans  are administered by the Compensation Committee, which has the
authority  to  interpret  their  provisions,  to establish and amend rules for
their  administration, to determine the types and amounts of awards to be made
pursuant  to  the  Plans,  subject  to  the Plans' limitations, and to approve
recommendations  made  by  management  of the Company as to who should receive
awards.

     Incentive stock options may be granted under the Plans for terms of up to
ten  years  and at an exercise price at least equal to 100% of the fair market
value  of the Common Stock as of the date of grant, and 85% of the fair market
value  in  the  case  of  non-statutory options, except that incentive options
granted  to any person who owns stock possessing more than 10% of the combined
voting  power  of  all  classes  of  the  Company's  stock or of any parent or
subsidiary  corporation  must have an exercise price at least equal to 110% of
the fair market value of the Common Stock on the date of grant.  The aggregate
fair  market  value,  determined  as  of the time an incentive stock option is
granted, of the Common Stock with respect to which incentive stock options are
exercisable  by  an employee for the first time during any calendar year shall
not exceed $100,000.  There is no aggregate dollar limitation on the amount of
non-statutory  stock options which may be exercisable for the first time by an
employee  during any calendar year.  Payment of the exercise price is to be in
cash,  although  the  Compensation  Committee  may,  in  its discretion, allow
payment in the form of shares of the Common Stock under certain circumstances.
Any  option  granted  under  the  Plans  will  expire at the time fixed by the
Committee, which will not be more than ten years after the date it is granted.
Any  employee  receiving  a  grant  must  remain  continuously employed by the
Company  for  a  period  of  twelve  months  after the date of the grant, as a
condition  to the exercise of the option.  The Compensation Committee may also
specify  when all or part of an option becomes exercisable, but in the absence
of  such  specification, the option will ordinarily be exercisable in whole or
part at any time during its term.  In addition, optionees who are directors or
executive  officers  of  the Company may not exercise any portion of an option
within  six  months  of  the  date  of  grant.   Subject to the foregoing, the
Compensation  Committee may accelerate the exercisability of any option in its
discretion.

     Options  granted  under  the  Plans  are  not assignable.  Options may be
exercised  only while the optionee is employed by the Company or within twelve
months  after  termination  by reason of death, within twelve months after the
date of disability, or within ten days after termination for any other reason.

The  Company  may  assist  optionees  in  paying the exercise price of options
granted  under  the Plans by either the extension of a loan by the Company for
payment  by the optionee of the exercise price in installments, or a guarantee
by  the  Company  of  a loan obtained by the optionee from a third party.  The
terms  of any loan, installment payments or guarantees, including the interest
rate  and  terms  of  repayment  and collateral requirements, if any, shall be
determined  by  the  Board  of  Directors  in  its  sole  discretion.

     1997  Performance  Equity  Plan.  ("1997  Plan")  On October 2, 1997, the
Board  of  Directors  adopted  the  1997  Plan.  On May 15, 1998, the Board of
Directors  amended  the  1997 Plan. The 1997 Plan was subsequently approved by
the  shareholders.  The Board of Directors has authorized 1,000,000 shares for
grant under the 1997 Plan.  In October 1997, the Company granted options under
the  1997  Plan  to  purchase  an aggregate of 233,500 shares of Common Stock,
129,500 shares of which were granted to certain employees of the Company at an
exercise  price  of $2.9375 per share and 104,000 shares of which were granted
to  the  Company's executive officers at an exercise price of $3.23 per share.
The  exercise  price of the options granted to the executive officers exceeded
the  fair  market value of the Common Stock on the date of grant.  In February
1998,  the Company granted 14,600 options to employees at an exercise price of
$4.25 per share, the fair market value of the underlying shares at the date of
grant.

<PAGE>


ITEM  11.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The  following  table  sets  forth certain information as of February 10,
2000,  with  respect  to  (i)  those persons or groups known to the Company to
beneficially  own  more  than  5%  of  the  Company's  Common Stock, (ii) each
director, (iii) each executive officer whose compensation exceeded $100,000 in
the  fiscal year ended November 30, 1999, and (iv) all directors and executive
officers  as  a  group.  The information is determined in accordance with Rule
13d-3  promulgated  under the Securities Exchange Act of 1934 ("Exchange Act")
based upon information furnished by the persons listed or contained in filings
made  by  them  with  the  Securities  and Exchange Commission ("Commission").
Except  as  indicated  below,  the shareholders listed possess sole voting and
investment  power  with  respect  to  their  shares.

<TABLE>
<CAPTION>


                                          Amount and Nature of     Percent
<S>                                      <C>                      <C>
                                         Beneficial Ownership(2)  of Class
                                         -----------------------  ---------
Name and Address of Beneficial Owner(1)
---------------------------------------
Thierry E. Zerbib . . . . . . . . . . .               647,250(3)      15.9%

Brian H. Loeb . . . . . . . . . . . . .               647,250(4)      15.9%

Michael F. Zerbib . . . . . . . . . . .               647,500(5)      15.9%

Joseph W. Zerbib. . . . . . . . . . . .               367,250(6)       9.0%

Nicholas Zerbib . . . . . . . . . . . .               293,750          7.2%

Cecile Silverman. . . . . . . . . . . .                 3,000(7)         *

Kalvan Swanky . . . . . . . . . . . . .                 3,000(7)         *

All executive officers and directors
  as a group (six persons). . . . . . .               2,315,250(8)    56.73%
<FN>

______________________________

 *          Less  than  1%.

(1)      The address of each of the persons listed is c/o Telesoft Corp., 3443
North  Central  Avenue,  Suite  1800,  Phoenix,  Arizona  85012.

(2)         A person is deemed to be the beneficial owner of voting securities
that can be acquired by such person within 60 days from February 10, 2000 upon
the  exercise of options, warrants or convertible securities.  Each beneficial
owner's  percentage ownership is determined by assuming that options, warrants
or  convertible securities that are held by such person (but not those held by
any  other  person)  and  which are exercisable within 60 days of February 10,
2000,  have  been  exercised.



(3)          Includes  69,750 shares of Common Stock issuable upon exercise of
currently exercisable options.  Does not include 18,250 shares of Common Stock
underlying  options, 4,000 of which vest in April 2000, 7,750 of which vest in
October  2000  and  6,500  of  which  vest  in  October  2001.

(4)      Represents 577,500 shares of Common Stock, which are owned jointly by
Mr.  Loeb  and  his  spouse,  and  69,750 shares of Common Stock issuable upon
exercise  of currently exercisable options.  Does not include 18,250 shares of
Common  Stock  underlying options, 4,000 of which vest in April 2000, 7,750 of
which  vest  in  October  2000  and  6,500  of  which  vest  in  October 2001.

(5)          Includes  75,000 shares of Common Stock issuable upon exercise of
currently exercisable options.  Does not include 20,000 shares of Common Stock
underlying  options, 4,000 of which vest in April 2000, 9,500 of which vest in
October  2000  and  6,500  of  which  vest  in  October  2001.

(6)          Includes  73,500 shares of Common Stock issuable upon exercise of
currently exercisable options.  Does not include 19,500 shares of Common Stock
underlying  options, 4,000 of which vest in April 2000, 9,000 of which vest in
October  2000  and  6,500  of  which  vest  in  October  2001.

(7)          Includes  3,000  shares of Common Stock issuable upon exercise of
currently  exercisable  options.

(8)         Includes those shares of Common Stock deemed to be included in the
respective  beneficial  ownership of Messrs. Thierry E. Zerbib, Brian H. Loeb,
Michael F. Zerbib, Joseph W. Zerbib, Kalvan Swanky and Ms. Cecile Silverman as
described  in  notes  3,  4,  5,  6  and  7  above.


</TABLE>



ITEM  12.    CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.

     The  Company  leased  13,500  square  feet of office space from Joseph W.
Zerbib,  an  officer,  director and principal shareholder of the Company.  The
Company  leased  this office in fiscal 1996 and 1997 on a month-to-month basis
for  $6,978  per  month.   The Company vacated this space in January 1998, but
continued  to  pay  rent  through  July  1998.

     In  February 2000, in connection with the Company's self-tender offer and
Joseph  Zerbib's  retirement  as  the  Company's President and Chief Executive
Officer, the Board of Directors approved to purchase all 293,750 shares of the
Company's Common Stock held by Joseph W. Zerbib at a price of $7.25 per share.
The  Company will purchase these shares at the earlier of the time the Company
is  deemed  to  have  accepted  for  payment the shares of Common Stock in the
self-tender  off  and  March  31,  2000.

     The  Board  of  Directors  has  adopted a policy that all future material
transactions  and  loans  between  the  Company  and  its  executive officers,
directors,  employees  and  affiliates  will be subject to the approval of the
majority of independent and disinterested directors and that such transactions
and  loans,  and  any  forgiveness of loans, will be on terms that are no less
favorable  to  the  Company  than  those  that  are  generally  available from
unaffiliated  third  parties.

<PAGE>
ITEM  13.    EXHIBIT  LISTAND  REPORTS  ON  FORM  8-K.

(a)  Exhibits
<TABLE>
<CAPTION>




<S>    <C>                                                                                <C>
       DESCRIPTION                                                                        REFERENCE
       ---------------------------------------------------------------------------------  ----------
 NO.
-----
3.1 .  Amended and Restated Articles of Incorporation of Registrant dated April 13, 1995         (1)

4.1 .  Form of Common Stock Certificate                                                          (1)

10.1.  1995 Incentive Stock Option Plan                                                          (1)

10.2.  1995 Restricted Stock Plan                                                                (1)

10.3.  Asset Purchase Agreement between Telesoft Acquisition Corp., Uniquest                     (1)
       Incorporated and CSI Acquisition Corp. dated March 13, 1995

10.4.  Form of Employment Agreement between the Registrant and Joseph W. Zerbib                  (1)

10.5.  Form of Employment Agreement between the Registrant and Thierry E. Zerbib                 (1)

10.6.  Form of Employment Agreement between the Registrant and Brian H. Loeb                     (1)

10.7.  Form of Employment Agreement between the Registrant and Michael F. Zerbib                 (1)

10.8.  Contract between Registrant and the University of Delaware                                (1)

10.9.  1996 Incentive Stock Option Plan                                                          (2)

10.10  1996 Restricted Stock Plan                                                                (2)

10.11  1997 Performance Equity Plan                                                              (3)

21. .  Subsidiaries of Registrant                                                                 *

27. .  Financial Data Schedule                                                                    *
<FN>


*          Filed  herewith
(1)          Filed  with  Registration  Statement  No.  33-91234-LA,  dated  June  30,  1995.
(2)          Filed  with  Form  10-KSB/A  for  the  fiscal  year  ended  November  30,  1996
(3)          Filed  with  Definitive  Proxy  Statement  dated  June  16,  1998
</TABLE>



(b)    Current  Reports  on  Form  8-K

There  were  no  Current  Reports  on  Form 8-K filed during the quarter ended
November  30,  1999.


<PAGE>
The  Accompanying  Notes  are  an  Integral  Part
of  the  Consolidated  Financial  Statements
                                     F-27
     SIGNATURES

     In  accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934,  the  Registrant  caused  this  report to be signed on its behalf by the
undersigned,  thereunto  duly  authorized.

                         TELESOFT  CORP.


Dated:  February  28,  2000  By      /s/  Michael  F.  Zerbib
                                  ----------------------------------
                                  Michael  F.  Zerbib,
                                  President  and  Chief  Executive  Officer

     In  accordance  with the Securities Exchange Act of 1934, this report has
been  signed below by the following persons on behalf of the Registrant and in
the  capacities  and  on  the  dates  indicated.

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



     /s/  Michael  F.  Zerbib                                February 28, 2000
-----------------------------
Michael  F.  Zerbib,  President,  Chief  Executive  Officer,
Chief  Financial  Officer,  Treasurer  and  Director  (and
principal  accounting  officer)


     /s/  Joseph  W.  Zerbib                                 February 28, 2000
----------------------------
Joseph  W.  Zerbib,
Chairman  of  the  Board  of  Directors


     /s/  Thierry  E  Zerbib                                 February 28, 2000
----------------------------
Thierry  E.  Zerbib,  Vice  President  -  Technologies,
Secretary  and  Director


     /s/  Brian  H.  Loeb                                    February 28, 2000
-------------------------
Brian  H.  Loeb,  Vice  President  -  Marketing,
Sales  and  Operations  and  Director

     /s/  Cecile  Silverman                                  February 28, 2000
---------------------------
Cecile  Silverman,  Director


     /s/  Kalvan  Swanky                                     February 28, 2000
------------------------
Kalvan Swanky, Director


TELESOFT  CORP.  AND  SUBSIDIARIES

<TABLE>
<CAPTION>


INDEX  TO  THE  FINANCIAL  STATEMENTS



PAGE
<S>                                                                                                        <C>

Report of Independent Certified Public Accountants. . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-2

Consolidated Balance Sheets as of November 30, 1999 and 1998. . . . . . . . . . . . . . . . . . . . . . .  F-3

Consolidated Statements of Operations for the years ended November 30, 1999 and 1998. . . . . . . . . . .  F-4 - F-5

Consolidated Statements of Changes in Stockholders' Equity for the years ended November 30, 1999 and 1998  F-6

Consolidated Statements of Cash Flows for the years ended November 30, 1999 and 1998. . . . . . . . . . .  F-7 -  F-8

Notes to the Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-9 - F-26
</TABLE>





<PAGE>
REPORT  OF  INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS



The  Board  of  Directors  and  Stockholders
Telesoft  Corp.  and  Subsidiaries

We have audited the accompanying consolidated balance sheets of Telesoft Corp.
and Subsidiaries as of November 30, 1999 and 1998 and the related consolidated
statements  of  operations, stockholders' equity, and cash flows for the years
then  ended.    These  financial  statements  are  the  responsibility  of the
Company's  management.    Our responsibility is to express an opinion on these
financial  statements  based  on  our  audits.

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

In  our  opinion,  the  consolidated  financial  statements  referred to above
present  fairly,  in all material respects, the financial position of Telesoft
Corp.  and Subsidiaries at November 30, 1999 and 1998 and the results of their
operations  and  their  cash flows for the years then ended in conformity with
generally  accepted  accounting  principles.

/s/  BDO  Seidman,  LLP


Los  Angeles,  California
January  14,  2000

<TABLE>
<CAPTION>

TELESOFT  CORP.  AND  SUBSIDIARIES
CONSOLIDATED  BALANCE  SHEETS
NOVEMBER  30,  1999  AND  1998
                                                                             1999         1998
                                                                             ----         ----


ASSETS
<S>                                                                          <C>          <C>
Cash and cash equivalents (Note 2). . . . . . . . . . . . . . . . . . . . .  $ 2,157,701  $ 7,740,219
Investment securities (Notes 3 and 17). . . . . . . . . . . . . . . . . . .   12,267,370    9,936,789
Accounts receivable, net of allowance for uncollectibles of $452,601 and. .
 $502,095, respectively   (Notes 2 and 4) . . . . . . . . . . . . . . . . .    9,484,936    6,933,089
Inventory (Note 5). . . . . . . . . . . . . . . . . . . . . . . . . . . . .      366,794      626,170
Income taxes receivable . . . . . . . . . . . . . . . . . . . . . . . . . .      462,626            -
Deferred taxes (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . .      221,100      170,800
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      301,774      661,486
                                                                             -----------  -----------

Total Current Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . .   25,262,301   26,068,553
Property and equipment, net (Note 6). . . . . . . . . . . . . . . . . . . .    1,320,246    1,146,766
Computer software costs, net (Note 7) . . . . . . . . . . . . . . . . . . .      169,667      314,962
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      110,723       90,048
                                                                             -----------  -----------

Total Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $26,862,937  $27,620,329
                                                                             ===========  ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Income taxes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $         -  $   147,239
Accounts payable and accrued liabilities (Note 2) . . . . . . . . . . . . .    5,880,975    8,208,584
Deferred revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      928,997      742,242
                                                                             -----------  -----------
Total Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . .    6,809,972    9,098,065
Deferred taxes (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . .       62,200      127,100
                                                                             -----------  -----------

Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    6,872,172    9,225,165
                                                                             -----------  -----------

Commitments and contingencies (Notes 11, 13 and 14)

Stockholders' Equity: (Notes 10 and 12)
Preferred Stock, no par value, 10,000,000 shares authorized; none
    issued and outstanding. . . . . . . . . . . . . . . . . . . . . . . . .            -            -
Common Stock, no par value, 50,000,000 shares authorized;
    3,787,500 issued and 3,711,500 and 3,748,500 outstanding, respectively.    6,919,095    7,103,400
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . .       80,069       80,069
Accumulated other comprehensive income (Note 3) . . . . . . . . . . . . . .       66,120       84,566
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12,925,481   11,127,129
                                                                             -----------  -----------
Total Stockholders' Equity. . . . . . . . . . . . . . . . . . . . . . . . .   19,990,765   18,395,164
                                                                             -----------  -----------
Total Liabilities and Stockholders' . . . . . . . . . . . . . . . . .  $26,862,937  $27,620,329
                                                                             ===========  ===========

</TABLE>

The  Accompanying  Notes  are  an  Integral  Part
of  the  Consolidated  Financial  Statements

<PAGE>

<TABLE>
<CAPTION>

TELESOFT  CORP.  AND  SUBSIDIARIES
CONSOLIDATED  STATEMENTS  OF  OPERATIONS
FOR  THE  YEARS  ENDED  NOVEMBER  30,  1999  AND  1998



<S>                                                      <C>           <C>
                                                                1999          1998
                                                         ------------  ------------

Sales, net. . . . . . . . . . . . . . . . . . . . . . .  $29,377,592   $28,250,373
Cost of sales (Note 2). . . . . . . . . . . . . . . . .   16,780,838    18,033,402
                                                         ------------  ------------
Gross profit. . . . . . . . . . . . . . . . . . . . . .   12,596,754    10,216,971
General and administrative expenses (Note 16) . . . . .   11,335,068     8,672,814
                                                         ------------  ------------
Operating income. . . . . . . . . . . . . . . . . . . .    1,261,686     1,544,157
                                                         ------------  ------------
Other income (expense):
Interest income . . . . . . . . . . . . . . . . . . . .      564,804       292,295
Interest expense. . . . . . . . . . . . . . . . . . . .         (270)       (1,277)
Other income (expense). . . . . . . . . . . . . . . . .        2,623        40,994
                                                         ------------  ------------

                                                             567,157       332,012
                                                         ------------  ------------
Income from continuing operations before provision. . .    1,828,843     1,876,169
    for income taxes
Provision for income taxes (Note 9) . . . . . . . . . .     (579,800)     (786,591)
                                                         ------------  ------------
Income from continuing operations . . . . . . . . . . .    1,249,043     1,089,578
Discontinued operations (Note 17):
    Loss from operations of GoodNet subsidiary (net of.            -       (68,428)
         income tax of $2,173 in 1998)
    Gain on disposal of GoodNet subsidiary (net of
         income taxes of $357,700 in 1999 and
         $4,611,099 in 1998). . . . . . . . . . . . . .      549,309     8,565,700
                                                         ------------  ------------
Net income. . . . . . . . . . . . . . . . . . . . . . .    1,798,352     9,586,850
Other comprehensive (loss) income, net of tax
   Unrealized holding (losses) gains arising during . .
     period . . . . . . . . . . . . . . . . . . . . . .      (18,446)       84,566

                                                         ------------  ------------
Comprehensive income. . . . . . . . . . . . . . . . . .  $ 1,779,906   $ 9,671,416
                                                         ============  ============
</TABLE>
The  Accompanying  Notes  are  an  Integral  Part
of  the  Consolidated  Financial  Statements


<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
CONSOLIDATED  STATEMENTS  OF  OPERATIONS  (CONTINUED)
FOR  THE  YEARS  ENDED  NOVEMBER  30,  1999  AND  1998

<TABLE>
<CAPTION>


                                      1999        1998
                                   ----------  -----------
<S>                                <C>         <C>

Basic earnings (loss) per share
Continuing operations . . . . . .  $     0.33  $     0.29
Discontinued operations . . . . .           -       (0.02)
Sale of discontinued operations .        0.15        2.26
                                   ----------  -----------
Net income. . . . . . . . . . . .  $     0.48  $     2.53
                                   ==========  ===========

Diluted earnings (loss) per share
Continuing operations . . . . . .  $     0.33  $     0.28
Discontinued operations . . . . .           -       (0.02)
Sale of discontinued operations .        0.14        2.20
                                   ----------  -----------
Net income. . . . . . . . . . . .  $     0.47  $     2.46
                                   ==========  ===========

Weighted average number
   of shares outstanding
- basic . . . . . . . . . . . . .   3,713,601   3,784,793
- diluted . . . . . . . . . . . .   3,832,067   3,888,033
                                   ==========  ===========

The  Accompanying  Notes  are  an  Integral  Part
of  the  Consolidated  Financial  Statements
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

TELESOFT  CORP.  AND  SUBSIDIARIES
CONSOLIDATED  STATEMENTS  OF  CHANGES  IN  STOCKHOLDERS'  EQUITY
FOR  THE  YEARS  ENDED  NOVEMBER  30,  1999  AND  1998




                                    Common Stock
                                   --------------
<S>                                <C>             <C>           <C>             <C>           <C>              <C>
                                                                                 Accumulated
                                   Number of                     Additional      Other
                                   Shares                        Paid-In         Comprehensive Retained         Total Stockholders'
                                   Outstanding     Amount        Capital         Income        Earnings         Equity
                                   --------------  ------------  --------------  ------------  ---------------  -------------------
Balance, November 30, 1997. . . .      3,787,500   $ 7,286,159   $       80,069  $         -   $     1,540,279  $         8,906,507

Treasury Stock acquired (Note 10)        (39,000)     (182,759)               -            -                 -             (182,759)

Unrealized gain on investment
     Securities . . . . . . . . .              -             -                -       84,566                 -               84,566

Net income. . . . . . . . . . . .              -             -                -            -         9,586,850            9,586,850
                                   --------------  ------------  --------------  ------------  ---------------  -------------------

Balance, November 30, 1998. . . .      3,748,500     7,103,400           80,069       84,566        11,127,129           18,395,164

Treasury Stock acquired (Note 10)        (37,000)     (184,305)               -            -                 -             (184,305)
Change in unrealized gain on
    Investment securities . . . .              -             -                -      (18,446)                -              (18,446)

Net income. . . . . . . . . . . .              -             -                -            -         1,798,352            1,798,352
                                   --------------  ------------  --------------  ------------  ---------------  -------------------

Balance, November 30, 1999. . . .      3,711,500   $ 6,919,095   $       80,069  $    66,120   $    12,925,481   $       19,990,765
                                   ==============  ============  ==============  ============  ===============  ===================
</TABLE>

The  Accompanying  Notes  are  an  Integral  Part
of  the  Consolidated  Financial  Statements

<PAGE>
<TABLE>
<CAPTION>

TELESOFT  CORP.  AND  SUBSIDIARIES
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
FOR  THE  YEARS  ENDED  NOVEMBER  30,  1999  AND  1998



<S>                                                     <C>            <C>
                                                                1999           1998
                                                        -------------  -------------

Increase (decrease) in cash and cash equivalents:

Cash flows from operating activities:
Cash received from customers . . . . . . . . . . . . .  $ 26,737,413   $ 26,498,226
Cash paid to suppliers and employees . . . . . . . . .   (28,989,264)   (23,120,762)
Interest paid. . . . . . . . . . . . . . . . . . . . .          (270)        (1,277)
Interest received. . . . . . . . . . . . . . . . . . .       506,597        208,311
Income taxes paid. . . . . . . . . . . . . . . . . . .      (817,965)      (900,165)
                                                        -------------  -------------

Net cash (used) provided by operating activities
     of continuing operations. . . . . . . . . . . . .    (2,563,489)     2,684,333
                                                        -------------  -------------

Cash flows from investing activities:
Purchase of property and equipment . . . . . . . . . .      (578,912)      (617,037)
Cash received from sale of equipment . . . . . . . . .         7,653         27,951
Disbursements for notes receivable from related
   Parties . . . . . . . . . . . . . . . . . . . . . .       (50,000)        (2,000)
Collection of notes receivable . . . . . . . . . . . .       373,153              -
Purchase of investment securities. . . . . . . . . . .    (6,616,250)    (7,350,000)
Sale of investment securities. . . . . . . . . . . . .     4,874,232     13,971,131
                                                         ------------  -------------

Net cash (used) provided by investing activities
     of continuing operations. . . . . . . . . . . . .    (1,990,124)     6,030,045
                                                        -------------  -------------

Cash flows from financing activities:
Purchases of treasury stock. . . . . . . . . . . . . .      (184,305)      (182,759)
                                                        -------------  -------------

Net cash used in financing activities of
     continuing operations . . . . . . . . . . . . . .      (184,305)      (182,759)
                                                        -------------  -------------

Cash (used) provided by continuing operations. . . . .    (4,737,918)     8,531,619

Cash used in discontinued operations, including income
   taxes paid in the amount of $844,600 in 1999 and
   $3,866,100 in 1998. . . . . . . . . . . . . . . . .      (844,600)    (2,413,184)
                                                        -------------  -------------

Net (decrease) increase in cash and cash equivalents .    (5,582,518)     6,118,435

Cash and cash equivalents at beginning of fiscal year.     7,740,219      1,621,784
                                                        -------------  -------------

Cash and cash equivalents at end of fiscal year. . . .  $  2,157,701   $  7,740,219
                                                        =============  =============
</TABLE>

The  Accompanying  Notes  are  an  Integral  Part
of  the  Consolidated  Financial  Statements

<PAGE>
<TABLE>
<CAPTION>

TELESOFT  CORP.  AND  SUBSIDIARIES
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS  (CONTINUED)
FOR  THE  YEARS  ENDED  NOVEMBER  30,  1999  AND  1998



                                                        1999          1998
                                                    ------------  ------------
<S>                                                 <C>           <C>
Reconciliation of Net Income to Net Cash
    (Used) Provided by Operating Activities
    from Continuing Operations:

Net Income . . . . . . . . . . . . . . . . . . . .  $ 1,798,352   $ 9,586,850
                                                    ------------  ------------

Adjustments to reconcile net income (loss) to net
    cash (used) provided by operating activities
    from continuing operations:

Loss from discontinued operations. . . . . . . . .            -        68,428
Gain on sale of discontinued operations. . . . . .     (549,309)   (8,565,700)
Income taxes payable and deferred taxes
   related to sale of discontinued operations. . .      486,900      (744,999)
Depreciation and amortization. . . . . . . . . . .      545,590       486,481
Gain on sale of fixed assets . . . . . . . . . . .       (2,516)      (20,659)
Interest income included with note receivable. . .       (2,294)      (21,525)

Changes in Assets and Liabilities:
Accounts receivable. . . . . . . . . . . . . . . .   (2,551,847)   (1,424,169)
Inventory. . . . . . . . . . . . . . . . . . . . .      259,376      (269,574)
Other current assets . . . . . . . . . . . . . . .       38,853       (85,871)
Deferred taxes . . . . . . . . . . . . . . . . . .     (115,200)      534,500
Other assets . . . . . . . . . . . . . . . . . . .      (20,675)        5,227
Accounts payable and accrued liabilities . . . . .   (2,027,609)    2,957,442
Deferred revenue . . . . . . . . . . . . . . . . .      186,755        80,977
Income taxes payable . . . . . . . . . . . . . . .     (147,239)     (139,056)
Income taxes receivable. . . . . . . . . . . . . .     (462,626)      235,981
                                                    ------------  ------------
                                                     (4,361,841)   (6,902,517)
                                                    ------------  ------------

Net cash (used) provided by operating activities .  $(2,563,489)  $ 2,684,333
  from continuing operations                        ============  ============
<FN>


Supplemental  disclosure  of  investing  and  financing  activities:
--------------------------------------------------------------------

During  the  year  ended  November  30,  1998,  the Company sold its 71% owned
subsidiary,  Telesoft Acquisition Corp. II, for $3,500,000 in cash and 479,387
shares  of  Winstar  common  stock  valued at $13,902,223 on the date of sale.
Expenses  paid  and  accrued  relating  to  the  sale  were  $2,094,205.

</TABLE>


The  Accompanying  Notes  are  an  Integral  Part
of  the  Consolidated  Financial  Statements

<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS



1.          SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES:

Telesoft  Corp.  (the  "Company"  or  "Telesoft"), an Arizona corporation, was
incorporated  on May 4, 1982.  The Company provides three principal continuing
product  lines  and  services:  long distance and telecommunications division,
d.b.a.  Student  Telephone  Services  (STS);  Customized  Billing  Outsourcing
Services;  and  computer  software and hardware sales, d.b.a. Sunbelt Business
Computers  (SBC).    The  long  distance  and  telecommunications  division is
primarily  involved  in long distance and telecommunication services to higher
education  institutions.    The  software  and  hardware division is primarily
involved  in  the  design,  distribution,  installation,  and  maintenance  of
computer  hardware  and  software  systems.

The  Company  originally  operated as B.P. & J Investors, Ltd., d.b.a. Sunbelt
Business Computers.  Effective April 12, 1995, the Company changed its name to
Telesoft  Corp.

PRINCIPLES  OF  CONSOLIDATION

The  consolidated financial statements include the accounts of Telesoft Corp.,
together  with  its  wholly  owned subsidiaries, Telesoft Acquisition Corp and
Telesoft  Recovery  Corp.,  and  its  former  71%  owned  subsidiary, Telesoft
Acquisition  Corp  II,  d.b.a.  GoodNet  ("GoodNet").    (See  Note  17)
All  significant  intercompany accounts and transactions have been eliminated.

USE  OF  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.

CASH  AND  CASH  EQUIVALENTS

The Company considers all highly liquid investments purchased with an original
maturity  of  three  months  or  less  to be cash and cash equivalents for the
purposes  of  reporting  cash  flows.

<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS (CONTINUED)

1. SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES:  (CONTINUED)

INVESTMENTS

The  Company  has  classified  its  entire  investment  portfolio  as
available-for-sale  in  accordance  with  the  provisions  of  SFAS  No.  115,
"Accounting  for  Certain  Investments  in  Debt  and  Equity  Securities".
Available-for-sale  securities  are stated at fair value with unrealized gains
and  losses  included  in  shareholders'  equity.   The amortized cost of debt
securities is adjusted for amortization of premiums and accretion of discounts
to  maturity.    Such  amortization  is included in interest income.  Realized
gains  and  losses  are  included  in  other  income  (expense).   The cost of
securities  sold  is  based  on  the  specific  identification  method.

FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

The  Company  has cash and cash equivalents, receivables, accounts payable and
accrued  liabilities  for which the carrying value approximates the fair value
due  to  the  short-term  nature  of  these  instruments.

LONG-LIVED  ASSETS

Statement  of  Financial  Accounting  Standards  No.121,  Accounting  for  the
                                                          --------------------
Impairment  of  Long-Lived Assets and for Long-Lived Assets to Be Disposed of"
       -----------------------------------------------------------------------
("SFAS  121")  issued  by the Financial Accounting Standards Board ("FASB") is
effective  for  financial statements for fiscal years beginning after December
15,  1995.    The  standard  establishes  guidelines regarding when impairment
losses  on  long-lived  assets, which include plant and equipment, and certain
identifiable intangible assets, should be recognized and how impairment losses
should  be  measured.    The  Company  adopted  SFAS 121 during the year ended
November 30, 1997.  The Company does not believe any assets are impaired as of
November  30,  1999.

INVENTORY

Inventory  is  stated at the lower of cost, first-in, first-out (FIFO) method,
or  market.   Inventory quantities are reviewed periodically for obsolescence.

PROPERTY  AND  EQUIPMENT

     Property  and  equipment  are recorded at cost.  Depreciation is provided
for on the straight-line method over the estimated useful lives of the assets.
The  average  lives  range  from  three  to  seven years.  The gain or loss on
disposal  of  assets  is  reflected  in  earnings,  and  the  cost and related
accumulated  depreciation  are  removed  from  the  accounts.  Maintenance and
repairs  that  neither  materially  add  to  the  value  of  the  property nor
appreciably  prolong its life are charged to expense as incurred.  Betterments
or  renewals  are  capitalized  when  incurred.    Leasehold  improvements are
recorded  at cost and amortized over the shorter of the lives of the leases or
estimated  useful  lives.

     COMPUTER  SOFTWARE  COSTS

     The  Company  capitalizes  software  development costs in accordance with
Financial  Accounting  Standards  Board Statement No. 86 ("FASB 86").  FASB 86
requires  software  development  costs  to  be  capitalized when technological
feasibility  is  reached  and discontinued when the product is ready for sale.
Software  development  costs not qualifying for capitalization are expensed as
research  and  development  costs.    Capitalized  costs  are  amortized  on
product-by-product  basis  using  the greater of the straight line method over
the  product's  remaining  estimated economic life or the ratio of the current
year's gross revenues to the total of a product's current year and anticipated
revenues.    The  Company evaluates the estimated net realizable value of each
software  product  at  each balance sheet date and records write-downs for any
products  for  which  net  book  value  is  in excess of net realizable value.


<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS (CONTINUED)


1.          SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES:  (CONTINUED)

DEFERRED  REVENUE

Deferred  revenue  represents deferred income from maintenance contracts.  The
income  is  recognized  ratably  over  the  applicable lives of the respective
contracts.

INCOME  TAXES

     The  Company  accounts for income taxes in accordance with the provisions
of  SFAS No. 109, "Accounting for Income Taxes."  Under SFAS No. 109, deferred
income  taxes  are  recognized  for  the  tax  consequences  of  "temporary
differences"  by  applying  enacted  statutory  tax rates applicable to future
years  to differences between the financial statement carrying amounts and the
tax  bases  of  existing  assets  and  liabilities.

REVENUE  RECOGNITION

     The  Company  recognizes  revenues  as follows: System sales and software
revenues  are  recognized  when the equipment and software have been delivered
and  installed  in  accordance with AICPA Statement of Position 97-2 "Software
Revenue  Recognition" ("SOP 97-2").  Revenues from collection of long-distance
charges  are  recognized  as  the  charges  are incurred.  The Company accrues
revenues  from  customers  based  upon  actual  usage  as reported on billings
received  from  long-distance carriers and estimates of the amount of unbilled
revenues  based upon the number of days in the billing cycle and past usage by
customers.

STOCK  COMPENSATION

     In  October  1995,  the  Financial  Accounting  Standards  Board  issued
Financial Accounting Standard No. 123, Accounting for Stock-Based Compensation
("SFAS  No.  123"),  which became effective during the year ended November 30,
1997.  The Company has adopted the disclosure-only provisions of SFAS No. 123.

WARRANTIES

     The  Company offers a warranty of 90 days on hardware and software and an
extended  warranty  program  in  connection  with  the  Company's  service and
maintenance  programs.  The Company has not had any material claims made under
its  warranty  program  to  date.

EARNINGS  (LOSS)  PER  SHARE

     Basic  earnings  per  share of common stock were computed by dividing net
earnings  by  the  weighted  average  number  of  common  shares.

     Diluted  earnings  per  share  are computed based on the weighted average
number  of  shares  of common stock and dilutive securities outstanding during
the  period.  Dilutive securities are options that are freely exercisable into
common stock at less than market exercise prices.  Dilutive securities are not
included  in  the  weighted  average  number  of  shares  when inclusion would
increase  the  earnings  per  share  or  decrease  the  loss  per  share.


<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS (CONTINUED)


1.          SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES:  (CONTINUED)

ACCOUNTING  PRONOUNCEMENTS:

In  June  1998,  the  Financial Accounting Standards Board Issued SFAS No. 133
"Accounting  for  Derivative Instruments and Hedging Activities". SFAS No. 133
requires  companies  to recognize all derivative contracts as either assets or
liabilities in the balance sheet and to measure them at fair value. If certain
conditions  are  met,  a derivative may be specifically designated as a hedge,
the  objective  of which is to match the timing of gain or loss recognition as
the  hedging  derivative  with  the recognition of (i) the changes in the fair
value  of  the  hedged  asset or liability that are attributable to the hedged
risk  or  (ii) the earnings effect of the hedged forecasted transaction. For a
derivative  not  designated  as  a  hedging  instrument,  the  gain or loss is
recognized  in  income  in the period of change. SFAS No. 133 is effective for
all  fiscal years beginning after June 15, 2000. Historically, the Company has
not  entered  into  derivative contracts either to hedge existing risks or for
speculative  purposes.  The  Company  has  not  yet  evaluated  the  financial
statement  impact  of  adopting  this  new  standard.

2.   CONCENTRATION  OF  CREDIT  RISK:

     The  Company  maintains  cash balances at various financial institutions.
The  Federal  Deposit  Insurance Corporation insures deposits not in excess of
$100,000  on  deposit  at each institution.  At November 30, 1999, the Company
had  uninsured  cash  and  cash  equivalent  bank  balances  of  approximately
$2,203,000.

     SUPPLIERS

     One  telecommunications  company  provides the Company with a significant
portion  of  its  long  distance  telecommunications  services.   Although the
Company  is  dependent  upon  this  supplier,  management  believes comparable
suppliers  are  available.    For the fiscal years ended November 30, 1999 and
1998,  fees  paid  to  this  company  totaled  approximately  $2,323,000  and
$2,640,000, respectively.  As of November 30, 1999, the outstanding amount due
to  the  service  provider  was  approximately  $583,000.

     CUSTOMERS

     During  the  years  ended November 30, 1999 and 1998, the Company did not
have  any  customers  that  accounted  for  greater  than 10% of its revenues.

<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS (CONTINUED)

 3.          INVESTMENT  SECURITIES:
     The  following  is  a summary of investment securities as of November 30,
1999 and 1998:
<TABLE>
<CAPTION>



<S>                               <C>                <C>               <C>
                                  Cost               Gross             Estimated
                                                     unrealized gains  Fair Value
November 30, 1999
--------------------------------
Available-for-sale securities:
U.S. Corporate Equity Securities  $         151,250  $         66,120  $   217,370
Municipal bonds. . . . . . . . .         12,050,000               -0-   12,050,000
                                  -----------------  ----------------  -----------
                                  $      12,201,250  $         66,120  $12,267,370


<CAPTION>

<S>                               <C>                <C>               <C>
                                  Cost               Gross             Estimated
                                                     unrealized gains  Fair Value
November 30, 1998
--------------------------------
Available-for-sale securities:
U.S. Corporate Equity Securities  $2,302,223          $        84,566  $ 2,386,789
Municipal bonds. . . . . . . . .   7,550,000                      -0-    7,550,000
                                  -----------------   ----------------  ----------
                                  $9,852,223          $        84,566  $ 9,936,789


</TABLE>

The  amortized  cost or carrying amount and fair value (based on quoted market
prices) of securities available for sale at November 30, 1999 are shown below.
Expected maturities will differ from contractual maturities because issuers of
the  securities  may  have  the  right  to  call or prepay obligations with or
without  call  or  prepayment  penalties.
<TABLE>
<CAPTION>


                                                  Securities Available-for-Sale
                                                  ------------------------------

<S>                                               <C>                             <C>
                                                  Amortized cost                  Fair Value
                                                  ------------------------------  -----------
Due after twenty-five years through thirty years                       6,500,000    6,500,000
Due after thirty years through thirty-five years                       5,550,000    5,550,000
                                                  ------------------------------  -----------
                                                  $                   12,050,000  $12,050,000


</TABLE>


<TABLE>
<CAPTION>
Investment income fro the years ended November 30, 1999 and 1998:

                                                  1999        1998
<S>                                               <C>         <C>

Interest income. . . . . . . . . . . . . . . . .  $  564,804  $292,295
Gross realized gains, included with continuing .         107        92
  operations
Gross realized gains, included with discontinued     607,009   371,130
  operations                                      ----------  --------
                                                  $1,171,920  $663,517
                                                  ==========  ========
</TABLE>


4.      ACCOUNTS  RECEIVABLE:
<TABLE>
<CAPTION>

At November 30, 1999, accounts receivable include billed and unbilled amounts,
as  follows:


<S>                                  <C>
  Billed. . . . . . . . . . . . . .  $8,275,609
  Unbilled. . . . . . . . . . . . .   1,661,928
                                     -----------

                                      9,937,537
Less:  allowance for uncollectibles    (452,601)
                                     -----------

                                     $9,484,936
                                     ===========
</TABLE>



Unbilled  accounts receivable represent amounts earned but not billed for long
distance  telephone  service.

<TABLE>
<CAPTION>

At  November  30,  1999,  accounts  receivable  by  product  line  is  as  follows:

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

            STS            Custom     System Sales/   Recovery    Network      Total
            Outsourcing    Billing    Maintenance      Services   Services
            -------------  ---------  ---------------  ---------  ---------  -----------
Billed . .  $  3,472,295   $366,156   $    4,380,521   $  28,629  $  28,008  $8,275,609
Unbilled .     1,630,428     31,500              -0-         -0-        -0-   1,661,928
Allowance.      (336,691)   (54,800)         (61,110)        -0-        -0-    (452,601)
            -------------  ---------  ---------------  ---------  ---------  -----------
Total, Net  $  4,766,032   $342,856   $    4,319,411   $  28,629  $  28,008  $9,484,936
            =============  =========  ===============  =========  =========  ===========
</TABLE>




At  November  30,  1998,  accounts  receivable  by product line is as follows:


                 STS             Custom          System Sales/     Total
                 Outsourcing     Billing         Maintenance
                 -----------     -----------     ------------     ------------
      Billed     $ 3,031,956     $   672,945     $  1,503,777     $  5,208,678
      Unbilled     2,392,996        (163,800)          (2,690)       2,226,506
      Allowance     (410,791)         (2,300)         (89,004)        (502,095)
                 -----------     -----------     ------------     ------------

 Total, Net      $ 5,014,161     $   506,845     $  1,412,083     $  6,933,089
                 ===========     ===========     ============     ============



5.          INVENTORY:
<TABLE>
<CAPTION>

At November 30, 1999, inventory consists of:
<S>                                           <C>
Parts and equipment. . . . . . . . . . . . .  $183,918
  Finished products. . . . . . . . . . . . .   182,876
                                              --------
                                              $366,794
                                              ========
</TABLE>

<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS (CONTINUED)





6.          PROPERTY  AND  EQUIPMENT:
<TABLE>
<CAPTION>



At November 30, 1999, property and equipment consists of:
<S>                                                        <C>
Equipment . . . . . . . . . . . . . . . . . . . . . . . .  $ 2,229,851
Vehicles. . . . . . . . . . . . . . . . . . . . . . . . .       28,458
Furniture and fixtures. . . . . . . . . . . . . . . . . .      402,638
Leasehold improvements. . . . . . . . . . . . . . . . . .       71,513
Property leased to others . . . . . . . . . . . . . . . .      351,518
                                                           ------------
                                                             3,083,978
Accumulated depreciation and amortization . . . . . . . .   (1,763,732)
                                                           ------------
                                                           $ 1,320,246
                                                           ============
</TABLE>

     Depreciation  and  amortization  expense  from  continuing operations was
$400,295  and  $338,917 for the fiscal years ended November 30, 1999 and 1998,
respectively.    Depreciation  expense,  included  with  the  net  loss  from
discontinued  operations  was  $113,846 for the fiscal year ended November 30,
1998.

7.          COMPUTER  SOFTWARE  COSTS:
<TABLE>
<CAPTION>

At November 30, 1999, computer software costs capitalized are:
<S>                                                             <C>
Computer software. . . . . . . . . . . . . . . . . . . . . . .  $ 987,885
Accumulated amortization . . . . . . . . . . . . . . . . . . .   (818,218)
                                                                ----------
                                                                $ 169,667
                                                                ==========
</TABLE>

     Amortization  expense  from  continuing  operations  related  to computer
software  cost  during the years ended November 30, 1999 and 1998 was $145,295
and $145,480, respectively.  There was no amortization expense attributable to
discontinued  operations  for  the  years  ended  November  30, 1999 and 1998.

8.          INTANGIBLES:

<TABLE>
<CAPTION>

At November 30, 1999, intangibles consist of:
<S>                                            <C>
Covenant Not-to-Compete-RATEX . . . . . . . .  $ 25,000
Accumulated amortization. . . . . . . . . . .   (25,000)
                                               ---------
                                               $      -
                                               =========

</TABLE>

     Amortization  expense  for  continuing  operations  was $2,084 during the
years  ended  November  30,  1998.    Amortization  expense  from discontinued
operations  was  $35,294  during  the  year  ended  November  30,  1998.

<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS (CONTINUED)


9.          INCOME  TAXES:
<TABLE>
<CAPTION>

The  components of the provision for income taxes for the years ended November 30, 1999 and 1998 consist
of:
                                                                                    1999       1998
                                                                                   --------  -----------
<S>                                                                                <C>       <C>
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $764,718  $5,347,917
Deferred. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   172,782      47,600
                                                                                   --------  -----------
Provision for income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $937,500  $5,395,517
                                                                                   ========  ===========

Provision for income taxes attributable to continuing operations. . . . . . . . .  $579,800  $  786,591
Income tax benefit attributable to loss from operations of GoodNet subsidiary . .         -      (2,173)
Provision for income taxes attributable to Gain on disposal of GoodNet subsidiary   357,700   4,611,099
                                                                                   --------  -----------
Provision for income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $937,500  $5,395,517
                                                                                   ========  ===========

<CAPTION>

The  Company's  tax  expense  differs  from  the  expense calculated using the
statutory  federal  income  tax  rate  for  the  following  reasons:


<S>                                  <C>         <C>
                                          1999       1998
                                     ----------  ---------
Expected. . . . . . . . . . . . . .  $ 621,800   $637,891
Tax exempt interest income. . . . .   (148,400)   (55,000)
Non deductible portion of
     meals and entertainment. . . .     10,200      9,600
State taxes, net of federal benefit     96,200    194,100
                                     ----------  ---------
Provision for income taxes
   attributable to continuing
   operations . . . . . . . . . . .  $ 579,800   $786,591
                                     ==========  =========
</TABLE>


<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS (CONTINUED)


9.          INCOME  TAXES:    (CONTINUED)
<TABLE>
<CAPTION>

The  income  tax  effect  of  temporary  differences between financial and tax
reporting  gives  rise  to  the  deferred income tax assets and liabilities as
follows:


<S>                                                 <C>         <C>
                                                         1999        1998
                                                    ----------  ----------
Current asset
Allowance for uncollectibles . . . . . . . . . . .  $ 153,900   $ 225,900
Deferred revenue . . . . . . . . . . . . . . . . .     19,000     247,200
Inventory allowance. . . . . . . . . . . . . . . .     23,000           -
Timing differences from IRS audit. . . . . . . . .     25,200     184,600
Gain on sale of subsidiary - sale of Winstar Stock          -    (486,900)
                                                    ----------  ----------
                                                      221,100     170,800
                                                    ----------  ----------
Non-current liability
Deferred revenue . . . . . . . . . . . . . . . . .          -      25,200
Accumulated depreciation . . . . . . . . . . . . .    (68,000)   (160,800)
Accumulated amortization . . . . . . . . . . . . .      5,800       8,500
                                                    ----------  ----------
                                                      (62,200)   (127,100)
                                                    ----------  ----------
Net deferred tax asset . . . . . . . . . . . . . .  $ 158,900   $  43,700
                                                    ==========  ==========
</TABLE>



The  Company  believes that it is likely to realize the net deferred tax asset
subject  to  the  Company's  ability  to  generate  profits  in  the  future.
Accordingly,  no  valuation  allowance  has  been  provided.

<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS (CONTINUED)

10.          STOCKHOLDERS'  EQUITY:

SERIAL  PREFERRED  STOCK

The  Company  is  authorized  to  issue  10,000,000 shares of serial preferred
stock,  no par value.  As of November 30, 1999, there were no shares issued or
outstanding.

COMMON  STOCK  WARRANTS

During  the  year  ended  November 30, 1995, the Company issued 125,000 common
stock warrants to the underwriters of the Company's initial public offering in
exchange  for  $100.   The warrants are exercisable at $7.20 per warrant for a
period of four years beginning July 1, 1996.  As of November 30, 1999, 125,000
common  stock  warrants  were  outstanding.

DIVIDEND  POLICY

The Company has no limitations or restrictions for declaring dividends.  As of
November  30,  1999,  no  dividends  have  been  declared.

TREASURY  STOCK

The  Board  of  Directors  has  authorized  the repurchase of up to 10% of the
Company's  outstanding  stock.    During the years ended November 30, 1999 and
1998,  the Company repurchased 37,000 and 39,000 shares of its common stock on
the  open  market  for  $184,305  and  $182,759,  respectively.

11.          STOCK  PLANS:

INCENTIVE  STOCK  OPTION  PLANS

Effective  February 1, 1995, the Board of Directors adopted the 1995 Incentive
Stock  Option  Plan (ISOP). Under the 1995 ISOP, a total of 264,000 shares are
reserved  for  issuance  at  the  discretion  of  the  compensation committee.
Effective  April  15, 1996, the Board of Directors adopted an additional stock
plan,  the 1996 ISOP.  This plan was approved by the shareholders on August 7,
1996.    Under  the  1996  Plan,  a  total  of 260,000 shares are reserved for
issuance  at  the  discretion  of  the  compensation  committee.

On October 2, 1997, the Board of Directors adopted the 1997 Performance Equity
Plan  ("1997 Plan").  On May 15, 1998, the Board of Directors amended the 1997
Plan.  The 1997 Plan was subsequently approved by the shareholders.  The Board
of  Directors  has  authorized 1,000,000 shares for grant under the 1997 Plan.
In  October  1997, the Company granted options under the 1997 Plan to purchase
an  aggregate  of 233,500 shares of Common Stock, 129,500 shares of which were
granted  to  certain  employees of the Company at an exercise price of $2.9375
per  share and 104,000 shares of which were granted to the Company's executive
officers  at  an exercise price of $3.23 per share.  The exercise price of the
options  granted  to  the executive officers exceeded the fair market value of
the  Common Stock on the date of grant.  In February 1998, the Company granted
14,600  options  to  employees  at  an  exercise price of $4.25 per share.  In
December  1998, the Company granted 25,000 options to employees at an exercise
price  of  $4.875  per  share.


<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS (CONTINUED)

11.    STOCK  PLANS:    (CONTINUED)

1995,  1996,  AND  1997  RESTRICTED  STOCK  PLANS.

The  Board  of Directors adopted the 1995 Restricted Stock Plan on February 1,
1995, the 1996 Restricted Stock Plan on April 15, 1996 and the 1997 Restricted
Stock  Plan on April 10, 1997.  The 1995 Restricted Stock Plan was approved by
the  stockholders  at  a  Special  Meeting  of Stockholders, which was held on
February  1,  1995.    The  1996  Restricted  Stock  Plan  was approved by the
stockholders  at  the  1996  Annual Meeting held on August 7, 1996.  No shares
were  granted  under  any  of the Restricted Stock Plans.  On May 15, 1998, in
connection  with  the  amendments  to  the  1997 Plan (which permits grants of
restricted stock awards), the Board of Directors determined that it was in the
best  interests of the Company to terminate the 1995, 1996 and 1997 Restricted
Stock Plans.  Any restricted stock awards that the Company may wish to make in
the  future  may  be  made  pursuant  to  the  1997  Plan.

The Company's stock plans, approved by the shareholders, provide for grants of
nonqualified  or  incentive  stock  options  and restricted stock awards.  All
plans  are  administered  by the Company and the Compensation Committee of the
Board  of  Directors  ("Committee") comprised of outside directors.  Incentive
stock  options may be granted under the 1995, 1996, and 1997 ISOP for terms of
up to ten years at an exercise price at least equal to 100% of the fair market
value  of the common stock as of the date of grant, and 85% of the fair market
value  in  the  case  of  nonstatutory  options, except that incentive options
granted  to any person who owns stock possessing more than 10% of the combined
voting  power  of  all  classes  of  the  Company's  stock or of any parent or
subsidiary corporations, must have an exercise price at least equal to 110% of
the  fair  market  value  of  the Company's common stock on the date of grant.
Options  granted become exercisable in installments of 25% per year commencing
one  year  from  the  date of grant or over a vesting period determined by the
Committee.

<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS (CONTINUED)


11.          STOCK  PLANS:    (CONTINUED)
<TABLE>
<CAPTION>


The following table summarizes stock option activity:
<S>                                            <C>        <C>
                                               Number of  Weighted Average
                                               Shares     Exercise Price
                                               ---------  ----------------

Outstanding at December 1, 1997                  749,800  $           4.62

Granted . . . . . . . . . . . . . . . . . . .     14,600              4.25
Exercised . . . . . . . . . . . . . . . . . .          -                 -
Forfeited . . . . . . . . . . . . . . . . . .    (37,600)             4.55
                                               ---------  ----------------
Outstanding at November 30, 1998                 726,800              4.61

Granted . . . . . . . . . . . . . . . . . . .     25,000             4.875
Exercised . . . . . . . . . . . . . . . . . .          -                 -
Forfeited . . . . . . . . . . . . . . . . . .     (2,900)             3.04
                                               ---------  ----------------
Outstanding at November 30, 1999                 748,900              4.62
                                               =========  ================
Options exercisable at November 30, 1999. . .    573,875              4.96
</TABLE>


     Available  for  grant  at:  (a)
     November  30,  1998          772,700
     November  30,  1999          775,100

(a)          Available for grant includes shares that may be granted as either
stock  options  or  restricted  stock,  as  determined  by  the  Committee.
<TABLE>
<CAPTION>

Following  is  a  summary  of  the status of options outstanding at November 30, 1999:

                           Outstanding Options                        Exercisable Options
                           -------------------                        -------------------
<S>              <C>               <C>               <C>              <C>     <C>
                                   Weighted                                   Weighted
                                   average           Weighted                 Average
Exercise price                     remaining         average                  Exercise
Range            Number            contractual life  exercise price  Number   price
---------------  ---------------   ----------------  --------------  -------  ----------
6.00-$6.60 . .           245,400         6 years     $         6.40  245,400  $    6.40
3.00-$5.88 . .           221,700         7 years               4.33  167,575       4.35
2.94-$3.23 . .           221,800         8 years               3.08  110,900       3.10
3.13 . . . . .            20,000         8 years               3.13   20,000       3.13
4.00 . . . . .             5,000         8 years               4.00    2,500       4.00
4.25 . . . . .            10,000         9 years               4.25    2,500       4.25
4.88 . . . . .            25,000        10 years               4.88   25,000       4.88
2.94 - $6.60 .           748,900         7 years     $         4.62  573,875  $    4.96
===============  ===============   ================  ==============  =======  =========
</TABLE>



<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS (CONTINUED)


11.          STOCK  PLANS:    (CONTINUED)

OTHER  OPTIONS

No  other  options  were  granted during the years ended November 30, 1999 and
1998.

STOCK  BASED  COMPENSATION

All stock options issued to employees have an exercise price not less than the
fair  market  value  of  the  Company's common stock on the date of grant.  In
accordance  with  accounting  for  such  options utilizing the intrinsic value
method,  there  is  no  related compensation expense recorded in the Company's
financial  statements  for  the fiscal years ended November 30, 1999 and 1998.
Had  compensation  cost  for stock-based compensation been determined based on
the fair value of the options at the grant dates consistent with the method of
SFAS  123,  the  Company's  net  income and diluted earnings per share for the
fiscal  years  ended November 30, 1999 and 1998 would have been reduced to the
pro-forma  amounts  presented  below:

<TABLE>
<CAPTION>

<S>                               <C>         <C>
                                        1999        1998
                                  ----------  ----------
Net income as reported . . . . .  $1,798,353  $9,586,850
Pro-forma. . . . . . . . . . . .  $1,636,018  $9,572,002
Net income per share as reported  $     0.47  $     2.46
Pro-forma. . . . . . . . . . . .  $     0.43  $     2.46

</TABLE>


The  fair  value  of  the  option  grants is estimated as of the date of grant
utilizing  the  Black-Scholes option-pricing model with the following weighted
average  assumptions  for grants in 1999 and 1998; expected life of options of
one  to  three  years,  expected  volatility  of  24% in 1999 and 37% in 1998,
risk-free interest rates of 8%, and a 0% dividend yield.  The weighted average
fair value at date of grant for options granted during 1999 approximated $1.03
and  options  granted  in  1998  approximated  $1.16.

12.          RELATED  PARTY  TRANSACTIONS:

LEASE  COMMITMENT

The  Company  leased  its  office  facilities under a month-to-month operating
lease  agreement from the President of the Company.  Rent paid was $55,824 for
the  fiscal  year  ended November 30, 1998.  In addition, the Company paid all
utilities,  insurance  and  property  taxes.   During January 1998 the Company
vacated  this space, however, based upon the agreement with the President, the
Company  paid  rent  through  July  1998.

LINE  OF  CREDIT

At  November  30,  1999, the Company has an outstanding a 7%, $500,000 line of
credit  from  an  officer.  The line of credit is secured by 572,500 shares of
the Company's common stock held by the officer.  The line of credit, including
accrued  interest,  is  due  in  June  2000.    As  of  November 30, 1999, the
outstanding  balance  on  the  line  of  credit  was  $50,000.

13.          EMPLOYEE  BENEFIT  PLANS:

     The Company maintains a 401(k) profit sharing plan covering substantially
all  full-time employees. Under the terms of the plan, the employees may elect
to  contribute  a portion of their salary to the plan.  The Company has agreed
to  make  matching  contributions  equal to fifty percent of the first $500 in
deferred  compensation  plus  twenty-five  percent  of  deferrals in excess of
$1,000.   In addition, the Company may make discretionary contributions to the
plan.    For  the fiscal years ended November 30, 1999 and 1998, contributions
were  $46,878  and  $37,085,  respectively.

<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS (CONTINUED)

14.          COMMITMENTS:

OFFICE  LEASE  COMMITMENTS

The  Company  is  obligated  under  long-term  operating  leases  for  office
facilities  through  the  year  2006.

As  of  November  30,  1999,  future  minimum  lease  payments  due  under the
non-cancelable  operating  lease  agreements  are  as  follows:
<TABLE>
<CAPTION>
              FISCAL YEAR ENDING
                 NOVEMBER 30,      AMOUNT
              -------------------  ----------
<S>           <C>                  <C>
              2000                 $  490,978
              2001                    457,909
              2002                    463,409
              2003                    477,709
              2004                    490,909
              Thereafter            1,609,429
                                   ----------
              Total                $3,990,343
              ===================  ==========
</TABLE>


Rent  expense  under  all  operating leases, including the related party lease
amounted  to  approximately $335,000 and $304,000 for the years ended November
30,  1999  and  1998,  respectively.

15.          OPERATING  LEASES:

The  Company  is  the  lessor  of  equipment  under operating lease agreements
expiring  through  June  2000.    The  equipment had an original cost basis of
$351,518.    Accumulated  depreciation  was  $330,131 as of November 30, 1999.
During the fiscal years ended November 30, 1999 and 1998, the Company received
rental  income  of  $47,587  and $90,787, respectively under these agreements.
The  Company  is  also  the  sublessor of office space in Tempe, Arizona.  The
lease  agreement expires in March 2000.  During the fiscal year ended November
30,  1999  and  1998,  the  Company received $37,065 and $33,288, respectively
under  this  agreement.

As  of  November 30, 1999, a schedule of future minimum rentals to be received
under  the  non-cancelable  lease  agreements  was  as  follows:
<TABLE>
<CAPTION>

                              FISCAL YEAR ENDING
<S>                           <C>                  <C>
                              NOVEMBER 30,         AMOUNT
                              -------------------  ---------
                              2000                 $  57,400
                                                   ---------

Total future minimum rentals                       $  57,400
                                                   =========
</TABLE>


16.          RESEARCH  AND  DEVELOPMENT:

Research and development costs included in general and administrative expenses
for  the  fiscal  years  ended  November 30, 1999 and 1998 were $1,424,000 and
$622,000,  respectively.    These  costs  have  been  expensed  during  their
respective  fiscal  years.


<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS (CONTINUED)

17.    DISCONTINUED  OPERATIONS/SALE  OF  GOODNET

Effective  January  12,  1998,  the  Company  together  with  the  minority
shareholders  of  GoodNet,  entered  into  an  agreement  with  Winstar
Communications,  Inc.  ("Winstar")  to  sell  the  Company's Internet services
subsidiary,  GoodNet,  for  approximately  $22.0  million,  consisting of $3.5
million  cash and shares of common stock of Winstar having an aggregate market
value  of  approximately  $18.5  million.

Under  the  terms  of  the  agreement,  the  Company  received  approximately
$3,500,000  in  cash  plus  479,387 shares of Winstar restricted common stock,
which  had an aggregate fair market value of approximately $13.9 million as of
the  close  of  business  on  January 12, 1998.  After commissions and related
legal  expenses, the Company realized an approximate $13.2 million pretax gain
on  the  sale  in the first quarter of fiscal 1998.  Additionally, the Company
received  $235,000  in  cash  to  offset GoodNet's net cash disbursements from
December  12,  1997  through  the  date  of  the  sale.

The  results  of  operations  of  GoodNet  have  been  shown  as  discontinued
operations  in  the  accompanying  financial  statements.

<TABLE>
<CAPTION>

The following table reconciles the numerators and denominators of the basic and diluted earnings per share:


                                                       YEAR ENDED NOVEMBER 30,
                                                       -----------------------
<S>                                                    <C>           <C>
                                                       1999          1998
                                                       ------------  ----------
BASIC EARNINGS PER COMMON SHARE:
----------------------------------------------
NUMERATOR
Income from continuing operations. . . . . . . . . .     $1,249,043  $1,089,578
Loss from operations of GoodNet subsidiary                       -     (68,428)
Gain on disposal of GoodNet. . . . . . . . . . . . .        549,309   8,565,700
                                                       ------------  ----------
Net earnings available to common shareholders. . . .     $1,798,352  $9,586,850
                                                       ============  ==========
DENOMINATOR
<S>                                                    <C>           <C>
Weighted average number of shares outstanding          3,713,601     3,784,793

PER SHARE AMOUNTS
Income from continuing operations. . . . . . . . . .   $     .33     $      .29
Loss from operations of GoodNet subsidiary . . . . .           -          (.02)
Gain on disposal of GoodNet. . . . . . . . . . . . .         .15           2.26
                                                      -----------    ----------
Net earnings (loss) available to common shareholders  $      .48     $     2.53
                                                      ==========     ==========
<CAPTION>

<S>                                                    <C>           <C>
                                                       1999          1998
                                                       ------------  ----------
DILUTED EARNINGS PER COMMON SHARE:
----------------------------------------------
NUMERATOR
Income from continuing operations. . . . . . . . . .     $1,249,043  $1,089,578
Loss from operations of GoodNet subsidiary                       -     (68,428)
Gain on disposal of GoodNet. . . . . . . . . . . . .        549,309   8,565,700
                                                       ------------  ----------
Net earnings available to common shareholders. . . .     $1,798,352  $9,586,850
                                                       ============  ==========
DENOMINATOR
Weighted average number of shares outstanding. . . . .    3,713,601   3,784,793
Effect of dilutive securities: . . . . . . . . . . . .      339,700     342,500
Options and warrants
Stock acquired with proceeds . . . . . . . . . . . . .     (221,234)   (239,260)
                                                       ------------  ----------
Weighted average common shares and assumed conversions
     outstanding . . . . . . . . . . . . . . . . . . .    3,832,067   3,888,033
                                                       ============  ==========
PER SHARE AMOUNTS
Income from continuing operations. . . . . . . . . . . $        .33  $      .28
Loss from operations of GoodNet subsidiary . . . . . .            -       (.02)
Gain on disposal of GoodNet. . . . . . . . . . . . . .          .14        2.20
                                                       ------------  ----------
Net earnings (loss) available to common shareholders . $        .47  $     2.46
                                                       ============  ==========
</TABLE>

<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS (CONTINUED)

20.  EARNINGS  PER  SHARE:  (CONTINUED)


At November 30, 1999, warrants and options to acquire 535,200 shares of common
stock,  at  various  prices per share, were not included in the computation of
diluted  EPS  because the options' exercise price was greater than the average
market  price  of  the  common  shares.
At November 30, 1998, warrants and options to acquire 510,300 shares of common
stock,  at  various  prices per share, were not included in the computation of
diluted  EPS  because the options' exercise price was greater than the average
market  price  of  the  common  shares.


<PAGE>
TELESOFT  CORP.  AND  SUBSIDIARIES
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS (CONTINUED)

21.  SEGMENT  INFORMATION
The  Company's  products  and  services  are  broken  down  as  follows:

1)  STS  Outsourcing  Program
(2)  Customized  Billing  Outsourcing  Services
(3)  System  Sales  and  Maintenance
     (a)  TelMaster  and  Telecommunications  Management  System  ("TMS")
     (b)  RATEX  Bookstore  Solution
     (c)  Distribution  Control  System  ("DCS")
     (d)  Software  and  Hardware  Recurring  Maintenance  Revenue
(4)  Telesoft  Recovery  Services  ("TRC")
(5)  Network  Services

<TABLE>
<CAPTION>
Following  is  selected  segment  information.  (in thousands except per share
items)

                        Year  ended  November  30,  1999                            Year  ended  November  30,  1998
                        --------------------------------                            --------------------------------

                                System   Custom    Network     Recovery                      System  Custom
<S>                    <C>      <C>      <C>       <C>         <C>         <C>      <C>      <C>     <C>       <C>
                       STS      Sales    Billing   Services    Services    Total    STS      Sales   Billing   Total
                       -------  -------  --------  ----------  ----------  -------  -------  ------  --------  -------
Sales, net. . . . . .  $19,816  $ 7,857  $  1,404  $     165   $     136   $29,378  $21,461  $5,570  $  1,219  $28,250
Cost of sales . . . .   14,766    1,980        35          -           -    16,781   16,504   1,529         -   18,033
                       -------  -------  --------  ----------  ----------  -------  -------  ------  --------  -------
Gross profit. . . . .    5,050    5,877     1,369        165         136    12,597    4,957   4,041     1,219   10,217
                       -------  -------  --------  ----------  ----------  -------  -------  ------  --------  -------
General &
administrative
   expenses:
General . . . . . . .    3,563    4,901     1,046        285         453    10,248    3,366   3,455       696    7,517
Depreciation. . . . .      160      137        21          -           -       318      190     109         -      299
Amortization. . . . .        -        -         -          -           -         -        -       2         -        2
Bad debt. . . . . . .      215        7        53          -           -       275      332      94         3      429
Corporate
  allocations:
General . . . . . . .      195       52        17          1           1       266      177      47        16      240
Depreciation. . . . .      101       99        23          5           -       228      137      37        12      186
                       -------  -------  --------  ----------  ----------  -------  -------  ------  --------  -------
                         4,234    5,196     1,160        291         454    11,335    4,202   3,744       727    8,673
                       -------  -------  --------  ----------  ----------  -------  -------  ------  --------  -------

Operating income. . .      816      681       209       (126)       (318)    1,262      755     297       492    1,544
    (loss)
Other income. . . . .                                                          567                                 332
                                                                           -------                             -------

Pretax income . . . .                                                        1,829                               1,876
Income tax provision.                                                          580                                 786
                                                                           -------                             -------
Income from
  continuing
  operations. . . . .                                                      $ 1,249                             $ 1,090
                                                                           =======                             =======
Diluted earnings per
  share-continuing
  operations. . . . .                                                      $  0.33                             $  0.28
                                                                           =======                             =======
</TABLE>

<PAGE>






Exhibit  21:  Subsidiaries  of  Registrant
<TABLE>
<CAPTION>


  Date of Incorporation     State of Incorporation
--------------------------  ----------------------
<S>                         <C>                     <C>
Name of Subsidiary
--------------------------
Telesoft Acquisition Corp.  March 24, 1992          Arizona
Telesoft Recovery Corp.. .  April 13, 1999          Arizona
</TABLE>