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, 1998

                          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 $28,250,373.

As  of  January 29, 1999, 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  $8,080,000.

<PAGE>


     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  ("DCS")  and  RATEX  Bookstore  Solution.

HISTORICAL  HIGHLIGHTS

     The  Company  was incorporated in Arizona in May 1982.  From 1982 to 1986
the  Company  focused primarily on its DCS 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  its GoodNet subsidiary.  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  products  and  services  are broken down in the following
product  lines  for  financial  reporting  purposes:

(1)  STS  Outsourcing  Program
(2)  Customized  Billing  Outsourcing  Services
(3)  System  Sales  and  Maintenance
     (a)  Telecommunication's  Management  System  ("TMS")  and  TelMaster
     (b)  RATEX  Bookstore  Solution
     (c)  Distribution  Control  System  ("DCS")
     (d)  Software  and  Hardware  Recurring  Maintenance  Revenue

     Through  GoodNet,  its  former 71% owned subsidiary which was acquired in
April 1996, Telesoft became a national service provider offering high capacity
data communication to the Internet for high-bandwidth users including Internet
Service  Providers,  universities and colleges, large landlords, Regional Bell
Operating  Companies  ("RBOCs"),  cable  television  operators and value added
resellers.    In  January  1998,  the  Company  sold  GoodNet  to  WinStar
Communications,  Inc.    ("WinStar")

<PAGE>
PRODUCTS  AND  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 such service 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, Smith
College  and  Indiana  University.

     Telesoft  has  sold  the  system,  software  and  services  required  to
administer  the  STS  Program  to  approximately  50 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, Fairfield University and George Mason University.   Once a sale is
consummated,  the  Company  maintains  and  services the hardware and software
under  renewable  one-year  maintenance  contracts.

                    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 interexchange carriers and
RBOCs.  In the first quarter of 1999, the Company secured a customized billing
service  contract  for approximately 30,000 Qwest Talk subscribers nationwide.
Under  the terms of the contract, the Company will handle billing and customer
service  and  provide  marketing assistance for their Talk series of products.
The  Company  also  provides customized billing services for Blue Cross & Blue
Shield  of  Massachusetts  and  the  Commonwealth  of  Massachusetts.

     During  fiscal  1998,  the Company received authorization to proceed with
the  implementation of a 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
graphical  user  interface technology, this product was released in the fourth
quarter of 1996 and was installed at SUNY Oswego and GE Medical.  During 1998,
TelMaster installations included Auburn University, Duquesne Light, Loma Linda
University,  and  Tulane  University  Medical  Center.    Select  TelMaster
web-enabled  modules  were  released  in  the  fourth  quarter  of  1998  with
additional  releases  scheduled  for  the  first  and second quarters of 1999.

     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.

     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 60 universities in North America,
including  Cornell  University,  Stanford  University  and  the  University of
Illinois-Chicago.

     Distribution  Control  System.  The  Company has offered the Distribution
Control  System  ("DCS") 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  is  typically  installed  on  a  Motorola  Unix  server.

<PAGE>

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.

     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

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

     During the fiscal years ended November 30, 1998 and 1997, the Company did
not  have  any  customers that accounted for greater than 10% of its revenues.



<PAGE>

SALES  AND  MARKETING

     The  Company's sales staff consists of fifteen people who are responsible
for  all  of  the  Company's  marketing  and  sales  efforts.  The Company has
agreements  with  certain  of  its  key  sales  personnel,  which  contain
confidentiality provisions, and prohibits such persons from competing with the
Company within certain territories during the term of their employment and for
a  period of six months thereafter.  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, 1998
and  1997  were $622,000 and $414,000, respectively.   These  costs  have been
expensed during their respective fiscal years.  Research and development costs
have  a  current  run-rate of approximately $850,000 and are expected to reach
$1  million  for  1999.

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 which 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 January 31, 1999, the Company had 122 full-time employees, four of
which  are  in  executive positions, 15 are engaged in sales and marketing, 14
are  in software development and system management, 37 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 1997, 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 and $84,000 for 1998
and  1997.    The  Company  vacated  this  space  in January 1998 and signed a
ten-year  lease  for  approximately  15,000  square  feet  of  office space in
Phoenix,  Arizona.    The  Company's  obligation under the terms of this lease
agreement  was  approximately $346,000 and $130,000 for the fiscal years ended
November  30,  1998  and  1997,  respectively.

     The  Company  leases  2,200 square feet in Fort Washington, Pennsylvania,
which  houses its RATEX operations.  This lease agreement expires in May 2001.
The  Company's obligations under the terms of its Fort Washington office lease
were  approximately  $43,000  and  $32,000  for  1998  and 1997, respectively.

     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  $33,300 and $7,500 for the fiscal years ended November 30,
1998  and  1997,  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, 1998    LOW      HIGH
----------------------------  --------  ------
<S>                           <C>       <C>
 First Quarter . . . . . . .  $2 21/32  $5 1/8
 Second Quarter. . . . . . .         4       5
 Third Quarter . . . . . . .     3 3/8       6
 Fourth Quarter. . . . . . .    3 9/16       5


<CAPTION>




 YEAR ENDED NOVEMBER 30, 1997   LOW     HIGH
-----------------------------  ------  ------
<S>                            <C>     <C>
 First Quarter  . . . . . . .  $2 3/8  $    6
 Second Quarter . . . . . . .       3       6
 Third Quarter. . . . . . . .   2 3/8   4 5/8
 Fourth Quarter . . . . . . .       2   4 3/8

</TABLE>



     As  of  January  19, 1999, there were 582 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 1999.


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.  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;  unforeseen  difficulties  in  integrating acquired businesses; and the
amount  and  rate  of growth in general and administrative expenses associated
with  building  a strengthened corporate infrastructure to support operations.

BACKGROUND

     The Company began as a value-added reseller in the wholesale distribution
of  accounting  software  (Distribution  Control Systems) in 1982.  During the
fiscal  year ended November 30, 1998, the Company derived approximately 76% 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,
1998  and  1997.    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):. .                       1998           1997 
                                      --------------------------  -------------

   Net revenues. . . . . . . . . . .  $              28,250,373     22,593,450 
   Cost of sales . . . . . . . . . .                (18,033,402)   (14,330,388)
                                      --------------------------  -------------
   Gross profit. . . . . . . . . . .                 10,216,971      8,263,062 
   Income from operations. . . . . .                  1,544,157        561,191 
   Other income. . . . . . . . . . .                    332,012        163,094 
   Income from continuing operations                  1,089,578        402,985 
   Diluted Earnings per share- . . .  $                    . 28   $       . 11 
       continuing operations
   Weighted average number of. . . .                  3,888,033      3,830,698 
       shares outstanding-Diluted

<CAPTION>
                              Years Ended November 30,




<S>                            <C>          <C>
                                      1998         1997
                               -----------  -----------

BALANCE SHEET DATA:
   Cash and Investments . . .  $17,677,008  $ 3,821,784
   Working capital. . . . . .   16,970,488    4,080,013
   Total assets . . . . . . .   27,620,329   17,640,850
   Short-term debt. . . . . .            -       90,523
   Long-term debt . . . . . .            -      371,551
   Total stockholders' equity   18,395,164    8,906,507
<FN>


(1)      Figures for 1998 and 1997 reflect results from continuing operations.
</TABLE>



<PAGE>
<TABLE>
<CAPTION>


RESULTS  OF  OPERATIONS  BY  PRODUCT  LINE  FOR  THE  FISCAL  YEARS  ENDED  NOVEMBER 30, 1998 AND 1997
(in  thousands  except  per  share  items)

                              Year  Ended  November  30,  1998       Year  Ended  November  30,  1997
                              --------------------------------       --------------------------------

<S>                          <C>       <C>      <C>       <C>      <C>      <C>      <C>       <C>
                                       System   Custom                      System   Custom           
                             STS       Sales    Billing   Total    STS      Sales    Billing   Total

Sales, Net. . . . . . . . .  $21,461   $ 5,570  $  1,219  $28,250  $17,430  $4,198   $    965  $22,593
Cost of Sales . . . . . . .   16,504     1,529         -   18,033   13,288   1,042          -   14,330
                             --------  -------  --------  -------  -------  -------  --------  -------
Gross Profit. . . . . . . .    4,957     4,041     1,219   10,217    4,142   3,156        965    8,263
                             --------  -------  --------  -------  -------  -------  --------  -------
General and Administrative
   Expenses:
General . . . . . . . . . .    3,366     3,455       696    7,517    3,387   3,177        210    6,774
Depreciation. . . . . . . .      190       109         -      299      125     202          -      327
Amortization. . . . . . . .        -         2         -        2        -       8          -        8
Bad Debt. . . . . . . . . .      332        94         3      429      197       1          -      198
Corporate Allocations:
General . . . . . . . . . .      177        47        16      240      127     127          8      262
Depreciation. . . . . . . .      137        37        12      186       45      88          -      133
                             --------  -------  --------  -------  -------  -------  --------  -------
                               4,202     3,744       727    8,673    3,881   3,603        218    7,702
                             --------  -------  --------  -------  -------  -------  --------  -------

Operating Income (Loss) . .      755       297       492    1,544      261    (447)       747      561
Other Income. . . . . . . .                                   332                                  163
                                                         --------                              -------   

Pretax Income . . . . . . .                                 1,876                                  724
Income Tax Provision. . . .                                  (786)                                (321)
                                                         --------                              -------
Income from Continuing                                    $ 1,090                              $   403
  Operations                                             ========                              =======  

Diluted Earnings per
  Share-Continuing
  Operations. . . . . . . .                               $  0.28                              $  0.11
                                                         ========                              =======  
</TABLE>





<PAGE>

RESULTS  OF  OPERATIONS  FOR THE FISCAL YEARS ENDED NOVEMBER 30, 1998 AND 1997

     The  results  of  operations of the Company do not include the results of
operations  of  Telesoft  Acquisition Corp II, d.b.a. GoodNet ("GoodNet"), its
former  71%  owned  subsidiary  which  was sold effective January 12, 1998 and
which  is  treated  as  a  discontinued  operation  in the Company's financial
statements.

     Revenues  increased  by  25%  to  $28,250,373  for  the fiscal year ended
November  30, 1998, compared to $22,593,450 for the fiscal year ended November
30, 1997.  The Company's revenue is derived from three principal product lines
and  services:  STS  Outsourcing Programs (STS), System Sales and Maintenance,
and  Customized  Billing  Outsourcing  Services.

       STS  Program  revenues  were  $21,461,885  for  the  fiscal  year ended
November  30,  1998 compared to $17,430,383 for the fiscal year ended November
30, 1997, an increase of 23.1%. A substantial portion of this increase was due
to  the  implementation of service at Rutgers University and the conversion of
the  University  of  Southern California from the Company's Customized Billing
Service  to  the  STS  Program  during  the fourth quarter of fiscal 1997. The
addition  of  these  universities  increased  the  Company's  revenues  by
approximately  $1,555,000 and $916,000, respectively, during fiscal 1998.  The
addition  of  eleven  new  universities  during  fiscal  1998  represented
approximately $2,410,000 in STS Program revenues.  These increases were offset
by  the  termination  of service at nine primarily smaller universities, which
contributed  approximately  $1,711,000  in  revenues  during  fiscal  1997 and
$1,094,000  in  revenues  during  fiscal  1998.

     Revenues from System Sales and Maintenance were $5,569,733 for the fiscal
year  ended November 30, 1998 compared to $4,197,480 for the fiscal year ended
November  30,  1997,  an  increase  of  32.7%.    This  increase  was  mainly
attributable  to increased sales from the Company's RATEX product, which had a
$1.3  million revenue increase from fiscal 1997 to 1998.  For the fiscal years
ended November 30, 1998 and 1997, revenues from Customized Billing Outsourcing
Services  were  approximately  $1,219,000  and  $965,000,  respectively.  This
increase  was  due  to  the development of customized billing services for two
primary  customers,  offset  by  the  conversion of the University of Southern
California  to  an  STS  Program  customer.

     Total  gross profit increased by 23.6% to $10,216,971 for the fiscal year
ended  November  30,  1998,  compared  to $8,263,062 for the fiscal year ended
November 30, 1997.  Cost of goods sold was approximately 76.9% of STS revenues
for  the  fiscal  year  ended  November  30, 1998, compared with 76.2% for the
fiscal  year  ended  November 30, 1997.  Cost of goods sold as a percentage of
system  sale/maintenance  revenues was approximately 27.5% for the fiscal year
ended November 30, 1998 compared with 24.8% for the fiscal year ended November
30,  1997.    This  increase  was  due  to a higher percentage of system sales
revenues  during  fiscal  1998,  which  have  a  lower  gross profit rate than
maintenance  revenues.

     General  and  administrative expenses increased by 12.6%, or $970,943, in
fiscal  1998  to  $8,672,814  from  $7,701,871  in  fiscal 1997.  Salaries and
recruitment  expenses  increased  approximately  $700,000  from fiscal 1997 to
fiscal  1998.    This  is  a  result  of increased personnel hired for product
development  and  sales  and  marketing.   Bad debt was approximately $227,000
higher in fiscal 1998 due to additional allowances for doubtful accounts taken
against revenues from terminated universities.  Research and development costs
for  the  fiscal  years  ended  November  30,  1998 and 1997 were $622,000 and
$414,000,  respectively.     These  costs  have  been  expensed  during  their
respective fiscal years.  Research  and development expenses are  expected  to
increase  to  approximately  $1  million  for  1999.   Operating expenses as a
percentage  of  revenue  decreased to 30.7% for the fiscal year ended November
30,  1998,  compared  to  34.1%  for  the fiscal year ended November 30, 1997.

<PAGE>
     The  provision  for income taxes was $786,591 and $321,300 for the fiscal
years ended November 30, 1998 and 1997, respectively.  This represents 42% and
44%  of  income  before  provision  for income taxes for fiscal 1998 and 1997,
respectively.      This  percentage  decrease  is  partially  attributable  to
increased interest from tax-free investments and increased state income taxes.

     Income  from continuing operations increased to $1,089,578 in fiscal 1998
from $402,985 in fiscal 1997.  This is primarily attributable to approximately
$297,000  of  operating  income  from  the  Company's  System  Sales  division
resulting from increased System Sales revenue versus a $447,000 operating loss
in  fiscal  1997. 

DISCONTINUED  OPERATIONS

     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  for  approximately  $22.0 million, consisting of $3.5 million cash
and  shares  of  common  stock  of  WinStar (NASDAQ: WCII) 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  Company  accounts  for its investment in WinStar as an available-for-sale
equity security, which accordingly is carried at market value.  400,000 of the
WinStar  shares  were sold in November, 1998 resulting in net proceeds, before
taxes,  of  approximately $11,970,000.  As of November 30, 1998, pursuant to a
hedging  strategy  implemented  by  the  Company  during  1998,  31,448 of the
remaining  WinStar shares are hedged, utilizing the purchase of puts and calls
in  combination  to  minimize  the  downside  risk of loss should the price of
WinStar  stock  decline while allowing for limited upside participation should
the  stock  price rise.  The call option is secured by shares of WinStar stock
held by the Company.  Subsequent to November 30, 1998, the Company sold 47,939
shares  of  WinStar  stock  for  $1,733,382.   This amount will be retained in
escrow  through  the  end of 1999 pursuant to the terms of an escrow agreement
among  the  Company,  GoodNet,  the  minority shareholders of GoodNet, and the
escrow  agent.

As  a  result of the sale of GoodNet, the Company may be vacating a portion of
its office space in Phoenix, Arizona during the year ending November 30, 1999.
As a result, the Company will have to take steps to sublease the vacated space
or  pay  an  early  termination  fee  approximated  at  $300,000.  This amount
has  been  included  in  accounts  payable  and  accrued  liabilities  in  the
accompanying financial statements.

<PAGE>
MATERIAL  CHANGES  IN  FINANCIAL  POSITION

     Cash  and  cash  equivalents increased to $7,740,219 at November 30, 1998
from  $1,621,784  at November 30, 1997.  During the fiscal year ended November
30,  1998,  investment  securities  (excluding  WinStar  stock)  increased  by
$5,350,000.   The Company's cash and investment holdings combined increased by
approximately $11,470,000.  During fiscal 1998, net cash provided by operating
activities of continuing operations provided approximately $2,684,000, a 15.3%
increase  from  fiscal  1997.    This  increase  was  offset by an increase of
approximately  $900,000  in  income  taxes  paid  for continuing operations in
fiscal  1998.    The  Company  used approximately $600,000 in cash to purchase
property and equipment for its continuing operations. The Company received net
cash  proceeds  of  approximately $1,406,000 from the sale of its discontinued
operations,  an  additional  $11,970,000  upon  the  sale of 400,000 shares of
WinStar stock, and paid $3,866,100 in taxes related to these two transactions.

     Accounts  receivable increased to $7,435,184 as of November 30, 1998 from
$7,185,435  as  of  November  30,  1997  ($6,933,089  and  $6,544,453,  net of
allowance  for uncollectibles as of November 30, 1998 and 1997, respectively).
Accounts  receivable  at  November  30,  1997,  excluding  GoodNet  related
receivables,  was  $5,877,021.   This increase of approximately $1,558,000 was
primarily  attributable  to  the  increase  in  STS Program revenue.  Accounts
receivable from students at STS Program universities that began service during
fiscal  1998  were  approximately  $1,154,000  as  of  November  30,  1998.

     The  Company's deferred tax asset decreased to $43,700 as of November 30,
1998  from  $990,700 as of November 30, 1997.  This decrease was primarily due
to the sale of GoodNet, but was offset by an approximate $457,000 deferred tax
asset  attributable  to an Internal Revenue Service ("IRS") examination, which
the  Company underwent during fiscal 1997.  The results of the IRS examination
have  been  recorded  as  a  current  liability  in the accompanying financial
statements,  but  are  currently being appealed.  Virtually all of the pending
issues  are due to timing differences that the Company will be able to utilize
in  future years should the appeal be unfavorable to the Company.  The Company
believes that it is more likely than not that it will realize the net deferred
tax  asset  based  upon  the  Company's future profitability.  Accordingly, no
valuation  allowance  has  been  provided.

     Property  and  equipment  before  accumulated  depreciation  decreased to
$2,679,829  as  of  November 30, 1998 from $5,151,229 as of November 30, 1997.
This  decrease  was  primarily  due  to  the  sale  of  GoodNet,  which  had
approximately  $2,916,000 in unamortized property and equipment as of November
30,  1997.  The decrease from the sale of GoodNet was offset by an increase of
approximately  $445,000  in  property and equipment for continuing operations.
This was due to the purchase of approximately $70,000 in STS Program equipment
to  support  growth,  the  purchase  of  approximately  $420,000 in furniture,
fixtures,  and  leasehold improvements as a result of the Company's relocation
of  its  office  facilities,  less  approximately  $120,000  in  furniture and
fixtures  sold  and  $30,000  in  leasehold  improvements  from the old office
facilities  that  were  retired.

     Accounts  payable  and  accrued  liabilities  ("payables")  increased  to
$8,208,584  as  of  November 30, 1998 from $6,632,968 as of November 30, 1997.
Excluding  GoodNet  related  payables  of  approximately $1,382,000 payable at
November  30,  1997,  payables  at  November  30,  1997  were  approximately
$5,251,000,  resulting  in  a  $2,958,000  increase in payables for continuing
operations.    STS  Program  payables  relating  to  new  universities  were
approximately  $1,770,000  at  November 30, 1998, and there was an approximate
$720,000 increase in costs from continuing universities accrued as of November
30,  1998.    Also  included in the November 30, 1998 payables was $300,000 in
estimated  lease  termination  expenses  accrued  upon  the  sale  of GoodNet.

     Deferred  revenue  decreased  to  $742,242  as  of November 30, 1998 from
$1,245,806  as  of  November  30,  1997.  This decrease was due to the sale of
GoodNet,  which had approximately $585,000 in deferred revenue at November 30,
1997.

LIQUIDITY  AND  CAPITAL  RESOURCES

     At  November  30, 1998, the Company had cash of $7,740,219 and investment
securities  of  $9,936,789.   Included within investment securities are 79,387
shares  of  WinStar stock with a fair market value of $2,474,089.  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.

FUTURE  EXPECTATIONS

     STS  revenues  are  projected to increase by approximately 5% from fiscal
1998  levels  during  the  fiscal  year ending November 30, 1999.  The Company
expects  that  this  increase  will be due to accounts added during the fourth
quarter of fiscal 1998.  However, there can be no assurance that revenues will
increase  as  expected.

     The Company expects revenues from Customized Billing Services to increase
based  upon  existing  proposals  outstanding.  However, it is not possible to
ascertain  the  amount  of  such increase until actual contracts are in place.

     The  Company  had  experienced  delays in the release and installation of
certain  modules  of  TelMaster,  the  "Client/Server"  and  "Graphical  User
Interface"  environment  version  of  the  Company's  existing  text  based
telemanagement  software  modules.    The  TelMaster system began full product
release in January 1998 and the Company expects to sell and install increasing
numbers  of  TelMaster  systems  in  fiscal  1999.    However, there can be no
assurance  that  this  will  happen.

     It  is  anticipated  that  the  cost  of  human  resources for continuing
operations  will increase by 5%-10% as the Company increases its employee base
to  expand  its products, services and market penetration.  This increase will
ensure  adequate  research  and  development,  and  sales  and  support  for
anticipated  short  and  long-term  growth.


<PAGE>

ACCOUNTING  PRONOUNCEMENTS
     Statement  of  Financial  Accounting  Standards  No.  130,  Reporting
                                                                 ---------
Comprehensive  Income,  ("SFAS  130")  issued  by  the  Financial  Accounting
          -----------
Standards  Board  ("FASB")  is  effective for financial statements with fiscal
years  beginning  after  December 15, 1997.  Earlier application is permitted.
SFAS  130  establishes  standards  for  reporting and display of comprehensive
income  and  its  components  in  a  full  set  of  general-purpose  financial
statements.    The  Company  does  not  expect  adoption of SFAS 130 to have a
material  effect,  if any, on its financial position or results of operations.
     Statement  of  Financial  Accounting Standards No. 131, Disclosures about
                                                             -----------------
Segments  of an Enterprise and Related Information, ("SFAS 131") issued by the
  ------------------------------------------------
FASB  is  effective for financial statements with fiscal years beginning after
December  15, 1997.  Earlier application is permitted.  SFAS 131 requires that
public  companies  report  certain  information  about  operating  segments,
products,  services  and  geographical  areas  in which they operate and their
major  customers.   The Company does not expect adoption of SFAS 131 to have a
material  effect,  if any, on its financial position or results of operations.
     Statement  of  Position  97-2  Software  Revenue  Recognition, (SOP 97-2)
                                    ------------------------------
issued  by  the AICPA's Accounting Standards Executive Committee, is effective
for  fiscal  years  beginning after December 15, 1997.  Earlier application is
permitted.    SOP  97-2 provides guidance on when revenue should be recognized
and  in  what amounts for licensing, selling, leasing, or other wise marketing
computer software.  The Company does not expect adoption of SOP 97-2 to have a
material  effect,  if any, on its financial position or results of operations.
     Statement  of  Financial  Accounting  Standards  No.  132,  Employers'
                                                                 ----------
Disclosures  About  Pensions  and  Other Postretirement Benefits, ("SFAS 132")
         -------------------------------------------------------
issued  by  the  FASB  is effective for financial statements with fiscal years
beginning  after  December  15, 1997.  SFAS 132 revises employers' disclosures
about  pension  and  other postretirement benefit plans.  The Company does not
expect  adoption  of  SFAS  132  to  have  a  material  effect, if any, on its
financial  position  or  results  of  operations.
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
                                                     -------------------------
Instruments  and  Hedging  Activities,  ("SFAS  133")  issued  by  the FASB is
-------------------------------------
effective  for financial statements with fiscal years ending June 15, 1999 and
-------
later.  SFAS 133 establishes accounting and reporting standards for derivative
instruments  embedded  in  other  contracts  (collectively  referred  to  as
derivatives) and for hedging activities.  The Company does not expect adoption
of  SFAS  133  to have a material effect, if any, on its financial position or
results  of  operations.
Statement  of  Financial  Accounting  Standards  No.  134,  Accounting  for
                                                            ---------------
Mortgage-Backed Securities Retained After the Securitization of Mortgage Loans
          --------------------------------------------------------------------
Held  for  Sale  By  A Mortgage Banking Enterprise, ("SFAS 134") issued by the
--------------------------------------------------
FASB  is  effective for financial statements with fiscal years beginning after
---
December  15,  1998.    SFAS  134  amends  SFAS No. 65, Accounting for Certain
-                                                       ----------------------
mortgage  Banking  Activities,  which  establishes  accounting  and  reporting
-     -----------------------
standards  for  certain  activities  of mortgage banking enterprises and other
enterprises  that  conduct  operations  which are substantially similar to the
primary  operations  of  a  mortgage banking enterprise.  The Company does not
expect  adoption  of  SFAS  134  to  have  a  material  effect, if any, on its
financial  position  or  results  of  operations.

<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  will  need  to  accept  four digit entries to distinguish 21st century
dates. As a result, in less than a year, computer systems and/or software used
by  many  companies  may  need  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  is conducting 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 is in the process
of determining the nature and extent of the work required, if any, to make any
material  internal systems Year 2000 compliant. This assessment is expected to
be  completed by the end of the second quarter of 1999. 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.  The Company also expects
that  each  of  these  third  party  applications will be upgraded, as well as
tested  by  the  Company  for  Year  2000  compliance by the end of the second
quarter  of  1999.  The  Company's  internally developed applications are also
expected  to  be Year 2000 compliant by the end of the second quarter of 1999.
The  Company's  is conducting an assessment of its computer hardware platforms
and  operating  systems,  principally  servers  and  collection  devises  with
manufacturers  and the Company expects to have completed testing by the end of
1999.

Based  on  currently  available  information, the Company believes the expense
associated  with  these  efforts  will  be immaterial and has provided for the
enhancement  of  these  systems  in  its operating and capital budgets for the
current  fiscal  year.  However, 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. The
Company  is  currently  obtaining  assurances  from its landlords and material
vendors  and  suppliers  that  there  will  be no interruption of service as a
result  of  the  Year  2000  issue,  and to the extent such assurances are not
given,  the  Company  intends  to  devise  contingency plans to ameliorate the
negative  effects  on  the Company in the event the Year 2000 issue results in
the unavailability of services. There can be no assurance that any contingency
plans  developed  by the Company will prevent any such service interruption on
the part of one or more of the Company's third party vendors or suppliers from
having  a  material adverse effect on the Company. In addition, the failure on
the  part  of  the accounting systems of the Company's clients due to the Year
2000  issue  could  result in a delay in the payment of invoices issued by the
Company  for  services  and expenses. A failure of the accounting systems of a
significant  number  of  the  Company's  clients would have a material adverse
effect  on  the Company. Although the Company's principal service offerings do
not include Year 2000 remediation services, former, present and future clients
could  assert  that  certain services performed by the Company involved or are
related  to  the Year 2000 issue. The Company has recommended, implemented and
customized  various  third-party software packages for its clients, certain of
which  may  not  be  Year  2000  compliant.  Because the Company has designed,
developed  and  implemented software and systems for a large number of clients
since  1982,  there  can be no way of assuring that all such software programs
and systems will be Year 2000 compliant. In particular, the Company's solution
delivery  methodology,  in many cases, empowers clients to maintain, alter and
upgrade  systems  after  the completion of an engagement. Due to the potential
significance  of  the Year 2000 issue upon client operations, upon any 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.

     In  January  1997,  the  Company, acting at the direction of its Board of
Directors,  informed Semple & Cooper, PLC, that it desired to obtain proposals
for  its November 30, 1996 audit from a national accounting firm.  In February
1997,  the  Company  selected  Coopers  &  Lybrand, LLP as its new independent
accountants.
     On  October  16,  1997,  Coopers & Lybrand, LLP informed the Company that
they  resigned  as  the  Company's  independent  certified public accountants.
     Coopers  &  Lybrand,  LLP's reports on the Company's financial statements
for  the  year ended November 30, 1996 did not contain an adverse opinion or a
disclaimer  of  opinion  and were not qualified or modified as to uncertainty,
audit  scope,  or  principles.    There  were  no disagreements with Coopers &
Lybrand,  LLP  on  any matter of accounting principles or practices, financial
statement  disclosure,  or  auditing  scope  or  procedure  through  Coopers &
Lybrand,  LLP's issuance of their report in connection with their audit of the
Company's  financial  statements  for  the  year  ended  November 30, 1996 and
through  the  interim  period  ended  May  31,  1997.
During  the  quarter  ended  August  31, 1997, Coopers & Lybrand, LLP ("former
accountant")  brought  the  following issues to the attention of the Company's
management:
Goodwill  GoodNet: the former accountant informed the Company that in order to
evaluate  the  recoverability of goodwill associated with GoodNet, the Company
would  need  to  prepare a detailed forecast of GoodNet's projected income and
cash  flows.   Based on the results of this forecast the Company must evaluate
whether the asset is expected to be recovered through GoodNet's earnings based
on  guidance  of SFAS 121 "Impairment of Long Lived Assets".  If the projected
earnings  are  not sufficient to recover the goodwill, the Company is required
to  consider  whether  the  asset  is impaired as defined by SFAS 121.  If the
Company  determines  that  the asset is impaired, it is required to reduce the
goodwill  to  its net realizable value.  The former accountant did not believe
that  the  Company completed such an analysis, and therefore should consider a
write  down  of a portion of its intangible assets related to GoodNet.  It was
the  opinion of the Company's management, based upon its internal projections,
that  the  Company  would  be  able  to  recover  the goodwill associated with
GoodNet.   Management believed that a majority of the goodwill associated with
GoodNet  was  derived from its dialup business, which was a profitable line of
business.
Deferred  Tax  Asset: The former accountant informed the Company that deferred
tax  assets  must  be  evaluated  for  recoverability  in  accordance with the
provisions  of  SFAS 109 "Accounting for Income Taxes".  In the opinion of the
former  accountant,  the  Company has sold 25% of the its interest in GoodNet,
and therefore the Company is unable, from the date of sale, to include GoodNet
in the consolidated tax return of the Company.  The former accountant believes
that  since  GoodNet  has  no proven prior taxable income and that there is no
assurance of sufficient amount of future income, a $653,000 deferred tax asset
relating  to  GoodNet  should  be reserved for at the end of the quarter ended
August  31,  1997.    It  was the opinion of the Company's management that the
Company would utilize the deferred tax asset either through future earnings or
by  securing  additional  interest  in GoodNet in order to include them in the
consolidated  tax  return  of  the  Company.
     On  December  15, 1997, the Company, acting at the direction of its Board
of  Directors,  selected  BDO  Seidman,  LLP  (BDO),  as  its  new independent
certified  public  accountants.  Management did not consult with BDO regarding
the  above  issues  prior to engaging them as the new accountants.  Management
did  give the former accountant authorization to discuss the above issues with
BDO.
     Due  to the subsequent sale of GoodNet at a substantial profit, the above
issues  identified  by the former accountant were not a concern as of November
30,  1997.    See "Management's Discussion and Analysis of Financial Condition
and  Results  of  Operations  -  Discontinued  Operations.")
The  audit  committee  did  not  discuss  the  above  issues  with  the former
accountant.


                                   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>
                           AGE  POSITION
                           ---  ---------------------------------------------------
NAME
-------------------------                                                          
Joseph W. Zerbib. . . . .   63  President, Chief Executive Officer and Director

Thierry E. Zerbib . . . .   37  Vice President-Technologies, Secretary and Director

Brian H. Loeb . . . . . .   37  Vice President-Marketing, Sales and Operations and
                                Director
Michael F. Zerbib(1)(2)..   32  Chief Financial Officer, Treasurer and Director

Cecile Silverman(1)(2) ..   74  Director

Kalvan Swanky (2) . . . .   35  Director

</TABLE>


______________________________________

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


     Joseph  W.  Zerbib  has  been President,  Chief Executive Officer  and  a
director  of  the  Company  since  1982.

     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.

     Michael  F.  Zerbib  has  been  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.

     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, 1998, the Board of Directors
held  four  meetings.    All  directors  attended  these  meetings.

     Audit  Committee.    The  Board of Directors currently 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,  1998.

     Compensation  Committee.    The  Board of Directors currently 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,  1998.

     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 and were not granted pursuant to
any  stock  option  plan.    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.
These  options  also  were  not  granted  pursuant  to  any stock option plan.

COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT

     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,  1998.


<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,  1998,  1997,  and  1996.
<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. . . .                        1998  $    144,000  $   150,000      -0-      -0-       -0-         -0-     -0-
President and Chief                            1997  $    144,000          -0-      -0-      -0-    26,000         -0-     -0-
Executive Officer . . .                        1996  $    108,000          -0-      -0-      -0-    26,000         -0-     -0-


Thierry E. Zerbib . . .                        1998  $    144,000  $   150,000      -0-      -0-       -0-         -0-     -0-
Vice President -. . . .                        1997  $    144,000          -0-      -0-      -0-    26,000         -0-     -0-
Technologies and. . . .                        1996  $    126,000          -0-      -0-      -0-    21,000         -0-     -0-
 Secretary
-----------------------                                                                                                  

Michael F. Zerbib . . .                        1998  $    144,000  $   150,000      -0-      -0-       -0-         -0-     -0-
Chief Financial Officer                        1997  $    104,000          -0-      -0-      -0-    26,000         -0-     -0-
and Treasurer . . . . .                        1996  $    100,000          -0-      -0-      -0-    28,000         -0-     -0-


Brian H. Loeb . . . . .                        1998  $    144,000  $   150,000      -0-      -0-       -0-         -0-     -0-
Vice President -. . . .                        1997  $    144,000          -0-      -0-      -0-    26,000         -0-     -0-
Marketing, Sales and. .                        1996  $    126,000          -0-      -0-      -0-    21,000         -0-     -0-
Operations
-----------------------                                                                                                  

<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>




(2)          The  Company extended one-year employment agreements to Joseph W.
Zerbib,  Thierry  E.  Zerbib,  Brian  H.  Loeb  and  Michael  F.  Zerbib.

<PAGE>

OPTION  GRANTS  IN  FISCAL  1998

     There  were  no  options  granted  to  officers  during  fiscal  1998.


OPTION  EXERCISES  IN  FISCAL  1998

     There  were  no  exercises  of  outstanding  stock options by officers in
fiscal  1998.

STOCK  OPTION  AND  RESTRICTED  STOCK  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, 1997, 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, 1997, 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.

     1995,  1996,  and  1997  Restricted  Stock  Plan.  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.  The 1997 Restricted Stock
Plan  has  not  yet  been  approved  by the shareholders.  No shares have been
granted  under  any  of  the  Restricted Stock Plans.  Accordingly, 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.


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

     The  following  table  sets  forth certain information as of February 17,
1999,  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 and nominee, (iii) each executive officer whose compensation exceeded
$100,000  in  the  fiscal year ended November 30, 1998, 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>

<S>                                         <C>                         <C>                        
                                            Amount and Nature of        Percent  
Name and Address of Beneficial Owner(1)     Beneficial Ownership(2)     of Class
---------------------------------------     -----------------------     --------
Thierry E. Zerbib                           639,500(3)                  15.3%

Brian H. Loeb                               639,500(4)                  15.3%

Michael F. Zerbib                           638,000(5)                  15.3%
                                       
Joseph W. Zerbib                            358,250(6)                   8.6%
                                       
Nicholas Zerbib                             293,750                      7.0%
                                       
Cecile Silverman                            2,000(7)                    *
                                       
Kalvan Swanky.                              2,000(7)                    *
                                       
All  executive  officers  and  directors
  as  a  group  (six  persons)              2,279,500(8)                54.5%
</TABLE>
______________________________

 *          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 17, 1999 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 17,
1999,  have  been  exercised.



(3)          Includes  62,000 shares of Common Stock issuable upon exercise of
currently exercisable options.  Does not include 26,000 shares of Common Stock
underlying  options, 4,000 of which vest in April 2000, 7,750 of which vest in
each  of  October  1999  and  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  62,000  shares of Common Stock issuable upon
exercise  of currently exercisable options.  Does not include 26,000 shares of
Common  Stock  underlying options, 4,000 of which vest in April 2000, 7,750 of
which vest in each of October 1999 and 2000 and 6,500 of which vest in October
2001.

(5)          Includes  65,500 shares of Common Stock issuable upon exercise of
currently exercisable options.  Does not include 29,500 shares of Common Stock
underlying  options, 4,000 of which vest in April 2000, 9,500 of which vest in
each  of  October  1999  and  2000  and  6,500  of which vest in October 2001.

(6)          Includes  64,500 shares of Common Stock issuable upon exercise of
currently exercisable options.  Does not include 28,500 shares of Common Stock
underlying  options, 4,000 of which vest in April 2000, 9,000 of which vest in
each  of  October  1999  and  2000  and  6,500  of which vest in October 2001.

(7)          Includes  2,000  shares of Common Stock issuable upon exercise of
currently  exercisable options.  Does not include 1,000 shares of Common Stock
underlying  options,  250  of  which  vest  in  each October 1999, April 2000,
October  2000  and  2001.

(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.




ITEM  12.    CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.

CERTAIN  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
will  continued  to  pay  rent  through  July  1998.

     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>
NO.    DESCRIPTION                                                                        REFERENCE
----   ---------------------------------------------------------------------------------  ----------
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                                                              (5)

16. .  Letter on Change in Certifying Accountants                                                (3)

16.1.  Letter on Change in Certifying Accountants                                                (4)

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  Current  Report  on  Form  8-K/A,  dated  February  27,  1997
(4)          Filed  with  Current  Report  on  Form  8-K,  dated  October  23,  1997
(5)          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,  1998.


<PAGE>
The  Accompanying  Notes  are  an  Integral  Part
of  the  Consolidated  Financial  Statements
                                     F-50
     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:    March 1,  1999  By /s/ Joseph W. Zerbib
                             Joseph  W.  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/ Joseph W. Zerbib                                             March 1, 1999
Joseph  W.  Zerbib,
President,  Chief Executive  Officer  and  Director


/s/ Thierry E. Zerbib                                            March 1, 1999
Thierry  E.  Zerbib,  Vice  President  -  Technologies,
Secretary  and  Director


/s/ Brian H. Loeb                                                March 1, 1999
Brian  H.  Loeb,  Vice  President  -  Marketing,
Sales  and  Operations  and  Director


/s/ Michael F. Zerbib                                            March 1, 1999
Michael  F.  Zerbib,  Chief  Financial  Officer
Treasurer  and  Director  (and  principal  accounting  officer)


/s/ Cecile Silverman                                             March 1, 1999
Cecile  Silverman,  Director


/s/ Kalvan Swanky                                                March 1, 1999
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 Sheet as of November 30, 1998. . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-3

Consolidated Statements of Operations for the years ended November 30, 1998 and 1997                       F-4 -  F-5

Consolidated Statements of Changes in Stockholders' Equity for the years ended November 30, 1998 and 1997  F-6
Consolidated Statements of Cash Flows for the years ended November 30, 1998 and 1997                       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 sheet of Telesoft Corp.
and  Subsidiaries  as  of  November  30,  1998  and  the  related consolidated
statements  of  operations, stockholders' equity, and cash flows for the years
ended  November  30,  1998  and  1997.    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 audits 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,  1998  and  the  results  of their
operations  and  their  cash  flows  for the years ended November 30, 1998 and
1997,  in  conformity  with  generally  accepted  accounting  principles.

/s/  BDO  Seidman  LLP


Los  Angeles,  California
February  5,  1999

<TABLE>
<CAPTION>

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


ASSETS
<S>                                                                                      <C>
Cash and cash equivalents (Note 2). . . . . . . . . . . . . . . . . . . . . . . . . . .  $  7,740,219
Investment securities (Notes 3 and 18) . . . . . . . . . . . . . . . . . . . . . . . . .    9,936,789
Accounts receivable, net of allowance for uncollectibles of $502,095 (Notes 2 and 4)        6,933,089
Inventory (Note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      626,170
Deferred taxes (Note 9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      170,800
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      661,486
                                                                                         ------------
Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26,068,553
                                                                                                                   
Property and equipment, net (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . .    1,146,766
Computer software costs, net (Note 7). . . . . . . . . . . . . . . . . . . . . . . . . .      314,962
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       90,048
                                                                                         ------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 27,620,329
                                                                                         ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $   147,239
Accounts payable and accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . .    8,208,584
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      742,242
                                                                                         ------------
Total Current Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9,098,065
Deferred taxes (Note 9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      127,100
                                                                                         ------------
Total Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9,225,165
                                                                                         ------------

Commitments and contingencies (Notes 11 and 14)
Minority Interest (Note 17). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            -

Stockholders Equity: (Note 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 3,748,500 outstanding . . . . . . . . . . . . . . . . . . . . .    7,103,400
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       80,069
Unrealized gain on investment securities (Note 3). . . . . . . . . . . . . . . . . . . .       84,566
Retained Earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11,127,129
                                                                                         ------------
Total Stockholders Equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     18,395,164
                                                                                         ------------
Total Liabilities and Stockholders' Equity . . . . . . . . . . . . . . . . . . . . . . .  $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,  1998  AND  1997



<S>                                                      <C>           <C>
                                                                1998          1997 
                                                         ------------  ------------

Sales, net. . . . . . . . . . . . . . . . . . . . . . .  $28,250,373   $22,593,450 
Cost of sales . . . . . . . . . . . . . . . . . . . . .   18,033,402    14,330,388 
                                                         -----------   -----------  
Gross profit. . . . . . . . . . . . . . . . . . . . . .   10,216,971     8,263,062 
General and administrative expenses . . . . . . . . . .    8,672,814     7,701,871 
                                                         -----------   -----------
Operating income. . . . . . . . . . . . . . . . . . . .    1,544,157       561,191 
                                                         -----------   ----------- 
Other income (expense):
Interest income . . . . . . . . . . . . . . . . . . . .      292,295       177,780 
Interest expense. . . . . . . . . . . . . . . . . . . .       (1,277)            - 
Other income (expense). . . . . . . . . . . . . . . . .       40,994       (14,686)
                                                         -----------   -----------
                                                             332,012       163,094 
                                                         ------------  ------------
Income from continuing operations before provision. . .    1,876,169       724,285 
    for income taxes
Provision for income taxes (Note 9) . . . . . . . . . .     (786,591)     (321,300)
                                                         -----------   ------------
Income from continuing operations . . . . . . . . . . .    1,089,578       402,985 
Discontinued operations (Note 18):
    Loss from operations of GoodNet subsidiary (net of.      (68,428)   (1,326,729)
         income tax of $2,173 in 1998 and income tax
         benefit of $973,800 and minority interest of
         $186,350 for 1997)
    Gain on disposal of GoodNet subsidiary (net of. . .    8,565,700             - 
         income taxes of $4,611,099)
                                                         ------------  ------------
Net Income (Loss) . . . . . . . . . . . . . . . . . . .  $ 9,586,850   $  (923,744)
                                                         ============  ============
</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,  1998  AND  1997

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

Basic earnings (loss) per share
Continuing operations. . . . . . .  $     0.29   $     0.11 
Discontinued operations. . . . . .       (0.02)       (0.35)
Sale of discontinued operations. .        2.26            - 
                                    -----------  -----------
Net income (loss). . . . . . . . .  $     2.53   $    (0.24)
                                    ===========  ===========

Diluted earnings (loss) per share
Continuing operations. . . . . . .  $     0.28   $     0.11 
Discontinued operations. . . . . .       (0.02)       (0.35)
Sale of discontinued operations. .        2.20            - 
                                    -----------  -----------
Net income (loss). . . . . . . . .  $     2.46   $    (0.24)
                                    ===========  ===========

Weighted average number
   of shares outstanding
- basic. . . . . . . . . . . . . .   3,784,793    3,802,874 
- diluted. . . . . . . . . . . . .   3,888,033    3,830,698 
                                    ===========  ===========


<PAGE>
</TABLE>




<PAGE>

<PAGE>
<TABLE>
<CAPTION>

TELESOFT  CORP.  AND  SUBSIDIARIES
CONSOLIDATED  STATEMENTS  OF  CHANGES  IN  STOCKHOLDERS'  EQUITY
FOR  THE  YEARS  ENDED  NOVEMBER  30,  1998  AND  1997



 
                                              Common Stock
                                              --------------                                                                       
<S>                                    <C>             <C>           <C>          <C>          <C>               <C>
                                                                                  Unrealized                                       
                                       Number of                     Additional   Gain on
                                       Shares                        Paid-In      Investment   Retained          Total Stockholders'
                                       Outstanding     Amount        Capital      Securities   Earnings          Equity     
                                       --------------  ------------  -----------  -----------  ----------------  -------------------

Balance, November 30, 1996. . . . . .      3,818,333   $ 7,343,859   $    80,069  $         -  $     2,464,023   $9,887,951 

Restricted stock reacquired and
     retired in connection with sale
     of a minority interest in
     Telesoft Acquisition Corp II
     (Note 19). . . . . . . . . . . .        (30,833)      (57,700)            -            -                -      (57,700)

Net loss. . . . . . . . . . . . . . .              -             -             -            -         (923,744)    (923,744)
                                           ---------    ----------   -----------  -----------  ----------------  -----------
Balance, November 30, 1997. . . . . .      3,787,500     7,286,159        80,069            -        1,540,279    8,906,507 

Treasury Stock acquired (Note 12) . .        (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 
                                       ==============  ============  ===========  ===========  ===============  =========== 
</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,  1998  AND  1997



<S>                                                                 <C>            <C>
                                                                            1998           1997 
                                                                    -------------  -------------

Increase (decrease) in cash and cash equivalents:

Cash flows from operating activities:
Cash received from customers . . . . . . . . . . . . . . . . . . .  $ 26,498,226   $ 22,232,221 
Cash paid to suppliers and employees . . . . . . . . . . . . . . .   (23,120,762)   (19,990,408)
Interest paid. . . . . . . . . . . . . . . . . . . . . . . . . . .        (1,277)             - 
Interest received. . . . . . . . . . . . . . . . . . . . . . . . .       208,311        146,234 
Income taxes paid. . . . . . . . . . . . . . . . . . . . . . . . .      (900,165)       (59,844)
                                                                    -------------  -------------
Net cash provided by operating activities of continuing operations     2,684,333      2,328,203  
                                                                    -------------  -------------

Cash flows from investing activities:
Purchase of property and equipment . . . . . . . . . . . . . . . .      (617,037)      (384,642)
Cash received from sale of equipment . . . . . . . . . . . . . . .        27,951          3,290 
Disbursements for notes receivable from related parties. . . . . .        (2,000)      (502,275)
Collection of notes receivable from related parties. . . . . . . .             -        480,674 
Purchase of investment securities. . . . . . . . . . . . . . . . .    (7,350,000)    (4,831,668)
Sale of investment securities. . . . . . . . . . . . . . . . . . .    13,971,131      6,135,000 
                                                                    -------------  ------------
Net cash provided by investing activities of continuing operations     6,030,045        900,379 
                                                                    -------------  ------------

Cash flows from financing activities:
Purchases of treasury stock. . . . . . . . . . . . . . . . . . . .      (182,759)             - 
                                                                    -------------  ------------
Net cash used in financing activities of continuing operations . .      (182,759)             - 
                                                                    -------------  ------------

Cash provided by continuing operations . . . . . . . . . . . . . .     8,531,619      3,228,582 
Cash used in discontinued operations, including income . . . . . .    (2,413,184)    (1,825,821)
   taxes paid in the amount of $3,866,100
                                                                    -------------  ------------
Net increase in cash and cash equivalents                              6,118,435      1,402,761 


Cash and cash equivalents at beginning of fiscal year. . . . . . .     1,621,784        219,023 
                                                                    -------------  ------------
Cash and cash equivalents at end of fiscal year. . . . . . . . . .  $  7,740,219   $  1,621,784 
                                                                    =============  ============
</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,  1998  AND  1997



                                                         1998         1997
                                                     ------------  -----------
<S>                                                  <C>           <C>
Reconciliation of Net (Loss) Income to Net Cash
    Provided by Operating Activities from
    Continuing Operations:

Net Income (Loss) . . . . . . . . . . . . . . . . .  $ 9,586,850   $ (923,744)
                                                     ------------  -----------

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

Loss from discontinued operations . . . . . . . . .       68,428    1,326,729 
Gain on sale of discontinued operations . . . . . .   (8,565,700)           - 
Income taxes payable and deferred taxes
   related to sale of discontinued operations . . .     (744,999)           - 
Depreciation and amortization . . . . . . . . . . .      486,481      469,908 
(Gain) Loss on sale of fixed assets . . . . . . . .      (20,659)      21,082 
Interest income included with note receivable . . .      (21,525)     (19,474)

Changes in Assets and Liabilities:
Accounts receivable . . . . . . . . . . . . . . . .   (1,424,169)    (401,893)
Inventory . . . . . . . . . . . . . . . . . . . . .     (269,574)      42,932 
Other current assets. . . . . . . . . . . . . . . .      (85,871)    (115,479)
Deferred taxes. . . . . . . . . . . . . . . . . . .      534,500     (497,400)
Other assets. . . . . . . . . . . . . . . . . . . .        5,227       19,685 
Accounts payable and accrued liabilities. . . . . .    2,957,442    1,409,751 
Deferred revenue. . . . . . . . . . . . . . . . . .       80,977      237,250 
Income taxes payable. . . . . . . . . . . . . . . .     (139,056)     611,614 
Income taxes receivable . . . . . . . . . . . . . .      235,981      147,242 
                                                     ------------  -----------  
                                                      (6,902,517)   3,251,947 
                                                     ------------  -----------

Net cash provided by operating activities from. . .  $ 2,684,333   $2,328,203 
  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 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.

During  the year ended November 30, 1997, the Company reacquired 30,833 shares
of  its  common  stock  valued  at  $57,700.   Of this amount, 50% represented
partial  payment  of  the  sale  of  24% of the outstanding shares of Telesoft
Acquisition  Corp. II.  The remaining 50% represented a reduction in goodwill.

During  the  year  ended  November  30,  1997,  Telesoft  Acquisition Corp. II
(GoodNet)  issued  576  shares  of  common  stock,  representing a 4% minority
interest  in  GoodNet,  valued  at  $100,000  to key employees in exchange for
</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 subsidiary, Telesoft Acquisition Corp and its
former  71%  owned  subsidiary,  Telesoft  Acquisition Corp II, d.b.a. GoodNet
("GoodNet").    (See  Note  18)

The minority interest in the accompanying consolidated statement of operations
represents the minority shareholder's proportionate share of the net loss from
GoodNet during fiscal year 1997.  As of November 30, 1997, there was no equity
attributable  to  the  minority  shareholders  of  GoodNet.

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, and accounts payable
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,  1998.

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.

     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>

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  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.
During  the  year  ended  November  30,  1998,  the  Company adopted Financial
Accounting  Standards  Board  Statement of Accounting Standards No. 128 ("SFAS
128").  As a result, earnings (loss) per share for all prior periods have been
restated.    The  restatement  did  not  impact  previously  reported amounts.

<PAGE>

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


1.  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES:  (CONTINUED)
    ACCOUNTING  PRONOUNCEMENTS:

Statement  of  Financial Accounting Standards No. 130, Reporting Comprehensive
                                                       -----------------------
Income,  ("SFAS 130") issued by the FASB is effective for financial statements
 -----
with  fiscal  years beginning after December 15, 1997.  Earlier application is
permitted.    SFAS  130  establishes  standards  for  reporting and display of
comprehensive  income  and  its  components  in  a full set of general-purpose
financial  statements.    The  Company does not expect adoption of SFAS 130 to
have  a  material  effect,  if  any,  on  its financial position or results of
operations.

Statement  of  Financial  Accounting  Standards  No.  131,  Disclosures  about
                                                            ------------------
Segments  of an Enterprise and Related Information, ("SFAS 131") issued by the
       -------------------------------------------
FASB  is  effective for financial statements with fiscal years beginning after
December  15, 1997.  Earlier application is permitted.  SFAS 131 requires that
public  companies  report  certain  information  about  operating  segments,
products,  services  and  geographical  areas  in which they operate and their
major  customers.   The Company does not expect adoption of SFAS 131 to have a
material  effect,  if any, on its financial position or results of operations.

Statement  of Position 97-2 Software Revenue Recognition, (SOP 97-2) issued by
                            ----------------------------
the  AICPA's Accounting Standards Executive Committee, is effective for fiscal
years  beginning  after  December 15, 1997.  Earlier application is permitted.
SOP  97-2  provides  guidance on when revenue should be recognized and in what
amounts  for  licensing,  selling,  leasing,  or other wise marketing computer
software.  The Company does not expect adoption of SOP 97-2 to have a material
effect,  if  any,  on  its  financial  position  or  results  of  operations.

Statement  of  Financial  Accounting Standards No. 132, Employers' Disclosures
                                                        ----------------------
About  Pensions  and Other Postretirement Benefits, ("SFAS 132") issued by the
  ------------------------------------------------
FASB  is  effective for financial statements with fiscal years beginning after
December  15, 1997.  SFAS 132 revises employers' disclosures about pension and
other  postretirement  benefit plans.  The Company does not expect adoption of
SFAS  132  to  have  a  material  effect, if any, on its financial position or
results  of  operations.

Statement of Financial Accounting Standards No. 133, Accounting for Derivative
                                                     -------------------------
Insturments  and  Hedging  Activities,  ("SFAS  133")  issued  by  the FASB is
-------------------------------------
effective  for financial statements with fiscal years ending June 15, 1999 and
-------
later.  SFAS 133 establishes accounting and reporting standards for derivative
instruments  embedded  in  other  contracts  (collectively  referred  to  as
derivatives) and for hedging activities.  The Company does not expect adoption
of  SFAS  133  to have a material effect, if any, on its financial position or
results  of  operations.

Statement  of  Financial  Accounting  Standards  No.  134,  Accounting  for
                                                            ---------------
Mortgage-Backed Securities Retained After the Securitization of Mortgage Loans
          --------------------------------------------------------------------
Held  for  Sale  By  A Mortgage Banking Enterprise, ("SFAS 134") issued by the
--------------------------------------------------
FASB  is  effective for financial statements with fiscal years beginning after
---
December  15,  1998.    SFAS  134  amends  SFAS No. 65, Accounting for Certain
-                                                       ----------------------
mortgage  Banking  Activities,  which  establishes  accounting  and  reporting
-     -----------------------
standards  for  certain  activities  of mortgage banking enterprises and other
enterprises  that  conduct  operations  which are substantially similar to the
primary  operations  of  a  mortgage banking enterprise.  The Company does not
expect  adoption  of  SFAS  134  to  have  a  material  effect, if any, on its
financial  position  or  results  of  operations.

<PAGE>

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


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, 1998, the Company
had  uninsured  cash  and  cash  equivalent  bank  balances  of  approximately
$781,000.
 
     SUPPLIERS
     The  Company  is  provided  a  significant  portion  of its long-distance
telecommunications  services  by one telecommunications company.  Although the
Company  is  dependent  upon  this  supplier,  management  believes comparable
suppliers  are  available.    For the fiscal years ended November 30, 1998 and
1997,  fees  paid  to  this  company  totaled  approximately  $2,640,000  and
$2,555,000, respectively.  As of November 30, 1998, the outstanding amount due
to  the  service  provider  was  approximately  $1,293,000.

     CUSTOMERS
     During  the  years  ended November 30, 1998 and 1997, the Company did not
have  any  customers  that  accounted  for  greater  than 10% of its revenues.

 3.          INVESTMENT  SECURITIES:

     The  amortized  cost  or  carrying amount and fair value (based on quoted
market prices) of securities available for sale at November 30, 1998 are shown
below.    Expected  maturities will differ from contractual maturities because
issues  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>
                                             Carrying Cost/
                                             Amortized Cost                  Fair Value
                                             ------------------------------  -----------
Short term investments, equity. . . . . . .  $                    2,386,789  $ 2,386,789
Municipal Bonds, maturing from 2025 to 2033                       7,550,000    7,550,000
                                             ------------------------------  -----------
Investment Securities                        $                    9,936,789  $ 9,936,789
</TABLE>



<PAGE>

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


4.      ACCOUNTS  RECEIVABLE:
<TABLE>
<CAPTION>

At November 30, 1998, accounts receivable include billed and unbilled amounts,
as  follows:


<S>                                  <C>
  Billed. . . . . . . . . . . . . .  $5,208,678 
  Unbilled. . . . . . . . . . . . .   2,226,506 
                                     ----------

                                      7,435,184 
Less:  allowance for uncollectibles    (502,095)
                                     ----------

                                     $6,933,089 
                                     ==========
</TABLE>



Unbilled  accounts receivable represent amounts earned but not billed for long
distance  telephone  service  and  internet  dialup  service.
<TABLE>
<CAPTION>

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


                 STS        Custom Billing    System Sales/ Maintenance      Total
            -------------  ----------------  ---------------------------  -----------
<S>         <C>            <C>               <C>                          <C>
            Outsourcing
            -------------                                                            
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 
            =============  ================  ===========================  ===========
</TABLE>



5.          INVENTORY:
<TABLE>
<CAPTION>



At November 30, 1998, inventory consists of:
<S>                                           <C>
Parts and equipment. . . . . . . . . . . . .  $308,820
  Finished products. . . . . . . . . . . . .   317,350
                                              --------
                                              $626,170
                                              ========
</TABLE>
<PAGE>

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


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



At November 30, 1998, property and equipment consists of:
<S>                                                        <C>
                                                           $ 1,687,161 
Equipment
Vehicles. . . . . . . . . . . . . . . . . . . . . . . . .       28,458 
Furniture and fixtures. . . . . . . . . . . . . . . . . .      401,219 
Leasehold improvements. . . . . . . . . . . . . . . . . .       55,527 
Property leased to others . . . . . . . . . . . . . . . .      507,464 
                                                           ------------
                                                             2,679,829 
Accumulated depreciation and amortization . . . . . . . .   (1,533,063)
                                                           -----------
                                                           $ 1,146,766 
                                                           ============
</TABLE>



     Depreciation expense from continuing operations was $338,917 and $316,105
for  the  fiscal  years  ended  November  30,  1998  and  1997,  respectively.
Depreciation  expense, included with the net loss from discontinued operations
was  $113,846  and  $668,279  for the fiscal years ended November 30, 1998 and
1997,  respectively.

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



At November 30, 1998, computer software costs capitalized are:
<S>                                                             <C>
Computer software. . . . . . . . . . . . . . . . . . . . . . .  $ 987,885
Accumulated amortization . . . . . . . . . . . . . . . . . . .   (672,923)
                                                                ---------
                                                                $ 314,962 
                                                                =========

</TABLE>


     Amortization  expense  from  continuing  operations  related  to computer
software  cost  during the years ended November 30, 1998 and 1997 was $145,480
and $145,470, respectively.  There was no amortization expense attributable to
discontinued  operations  for  the  years  ended  November  30, 1998 and 1997.

8.          INTANGIBLES:

<TABLE>
<CAPTION>



At November 30, 1998, intangibles consist of:
<S>                                            <C>
Covenant Not-to-Compete-SBC . . . . . . . . .  $ 25,000
Accumulated amortization. . . . . . . . . . .   (25,000)
                                               ---------
                                               $      - 
                                               =========

</TABLE>

     Amortization  expense  for  continuing  operations  was $2,084 and $8,333
during the years ended November 30, 1998 and 1997, respectively.  Amortization
expense from discontinued operations was $35,294 and $300,909 during the years
ended  November  30,  1998  and  1997,  respectively.

<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,  1998  and  1997  consist  of:


<S>                         <C>       <C>
                                1998       1997 
                            --------  ----------
Current. . . . . . . . . .  $738,991  $ 818,700 
Deferred . . . . . . . . .    47,600   (497,400)
                            --------  ----------
Provision for income taxes  $786,591  $ 321,300 
                            ========  ==========
<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>
                                         1998       1997 
                                     ---------  ---------
Current . . . . . . . . . . . . . .  $637,891   $246,300 
Tax exempt interest income. . . . .   (55,000)   (25,000)
Non deductible portion of
     meals and entertainment. . . .     9,600     15,000 
State taxes, net of federal benefit   194,100     85,000 
                                     ---------  ---------
Provision for income taxes. . . . .  $786,591   $321,300 
                                     =========  =========
<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>
Current asset
Allowance for uncollectibles . . . . . . . . . . .  $ 225,900 
Deferred revenue . . . . . . . . . . . . . . . . .    247,200 
Timing differences from pending IRS audit. . . . .    184,600 
Gain on sale of subsidiary - sale of WinStar stock   (486,900)
                                                    ----------
                                                      170,800 
                                                    ----------
Non-current liability
Deferred revenue . . . . . . . . . . . . . . . . .     25,200 
Accumulated depreciation . . . . . . . . . . . . .   (160,800)
Accumulated amortization . . . . . . . . . . . . .      8,500 
                                                    ----------
                                                     (127,100)
                                                    ----------
Net deferred tax asset . . . . . . . . . . . . . .  $  43,700 
                                                    ==========
</TABLE>



The  Company  believes  that it is more likely than not that they will realize
the  net  deferred  tax  asset  based  upon  the  Company's  expected  future
profitability.  Accordingly, no further 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, 1998, 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, 1998, 125,000
common  stock  warrants  were  outstanding.

DIVIDEND  POLICY

The Company has no limitations or restrictions for declaring dividends.  As of
November  30,  1998,  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 year ended November 30, 1998, the
Company  repurchased  39,000 shares of its common stock on the open market for
$182,759.

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.

<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.  The 1997
Restricted  Stock  Plan  has  not  yet  been approved by the shareholders.  No
shares  have  been  granted  under  any  of  the  Restricted  Stock  Plans.

Accordingly,  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.    During  the  year  ended November 30, 1997 and 1996, 104,000 and
96,000  common  stock  options,  respectively,  were  issued to persons owning
greater  than  10%  of  the  Company's  currently  outstanding  common  stock.

<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 Shares   Weighted Average Exercise Price
                                                       -----------------  --------------------------------

Outstanding at December 1, 1996 . . . . . . . . . . .           506,900   $                           6.37
Granted . . . . . . . . . . . . . . . . . . . . . . .           258,500                               3.09
Exercised . . . . . . . . . . . . . . . . . . . . . .                 - 
Forfeited . . . . . . . . . . . . . . . . . . . . . .           (15,600)                              4.88
                                                       -----------------
Outstanding at November 30, 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
                                                       =================
Options exercisable at 11/30/97 . . . . . . . . . . .           326,350                               5.97
Options exercisable at 11/30/98 . . . . . . . . . . .           417,650                               5.38
</TABLE>




     Available  for  grant  at:  (a)
     November  30,  1997           64,400
     November  30,  1998          772,700

(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, 1998:

                                     Outstanding Options            Exercisable Options
                                     -------------------            -------------------
<S>              <C>               <C>             <C>             <C>      <C>
                                   Weighted         Weighted                Weighted   
                                   average          average                 Average
Exercise price.                    remaining        exercise                exercise
range                 Number       contractual life price          Number    price     
  --------------  ---------------  ---------------- -------------  -------  ---------  
6.00-$6.60 . .           245,500         7 years    $        6.40  245,500  $    6.40
3.00-$5.88 . .           221,700         8 years             4.33  113,450       4.37
2.94-$3.23 . .           221,800         9 years             3.08   55,450       3.08
3.13 . . . . .            20,000         9 years             3.13    2,000       4.04
4.00 . . . . .             5,000         9 years             4.00    1,250       4.00
4.25 . . . . .            12,800        10 years             4.25        -          -
---------------  ----------------  --------------   -------------  -------  ---------  
2.94 - $6.60 .           726,800         8 years    $        4.61  417,650  $    5.38
===============  ================  ==============   =============  =======  =========
</TABLE>



<PAGE>

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

11.          STOCK  PLANS:    (CONTINUED)
 
OTHER  OPTIONS
 
During  the  fiscal  year  ended  November 30, 1997, the Company issued 20,000
options  with  an  exercise price of $3.125 and 2,000 options with an exercise
price  of  $4.25  to  the Company's outside directors in connection with board
meetings.

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, 1998 and 1997.
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 (loss) and diluted earnings (loss) per
share  for  the  fiscal years ended November 30, 1998 and 1997 would have been
reduced  (increased)  to  the  pro-forma  amounts  presented  below:
<TABLE>
<CAPTION>

<S>                                      <C>         <C>
                                               1998         1997 
                                         ----------  ------------
Net income (loss) as reported . . . . .  $9,586,850  $  (923,744)
Pro-forma . . . . . . . . . . . . . . .   9,572,002  $(1,230,244)
Net income (loss) per share as reported  $     2.46  $      (.24)
Pro-forma . . . . . . . . . . . . . . .  $     2.46  $      (.32)
</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 1998 and 1997; expected life of options of
1-3  years,  expected  volatility  of  37% in 1998 and 244% in 1997, risk-free
interest  rates  of  8%,  and  a 0% dividend yield.  The weighted average fair
value  at date of grant for options granted during 1998 approximated $1.16 and
options  granted  in  1997  approximated  $2.41.

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 and
$83,737  for  each  of  the fiscal years ended November 30, 1998 and 1997.  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.

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, 1998 and 1997, contributions
were  $37,085  and  $43,367,  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,  1998,  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>
1999 . . . .  $           453,382
2000 . . . .              461,606
2001 . . . .              457,909
2002 . . . .              463,409
2003 . . . .              477,709
  Thereafter            2,100,339
              -------------------        
  Total. . .  $         4,414,354
              ===================        
</TABLE>


Rent  expense  under  all operating leases, including the related party lease,
amounted  to  approximately $274,900 and $304,000 for the years ended November
30,  1998  and  1997,  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
$507,464.    Accumulated  depreciation  was  $449,410 as of November 30, 1998.
During the fiscal years ended November 30, 1998 and 1997, the Company received
rental  income  of  $90,787 and $180,848, 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,  1998,  the  Company  received  $33,288  under  this  agreement.

As  of  November 30, 1998, 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>
NOVEMBER 30,                    AMOUNT
                                ------------
1999 . . . . . . . . . . . . .         76,720
2000 . . . . . . . . . . . . .         57,400
                                -------------        
Total future minimum rentals    $     134,120
                                =============        
</TABLE>


16.          RESEARCH  AND  DEVELOPMENT:

Research and development costs included in general and administrative expenses
for  the  fiscal  years  ended  November  30,  1998 and 1997 were $622,000 and
$414,000, respectively. These costs have been expensed during their respective
fiscal years.

<PAGE>

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


17.          AGREEMENTS:


Agreements  related  to  GoodNet

On  March  12,  1997, the Company entered into an agreement effective February
28, 1997, with the former owners of GoodNet, LLC whereby the Company agreed to
the  following:

-          The  Company  agreed  to pay one of the former owners an additional
$393,638  in exchange for the return and relinquishment of all of that owner's
claims  to  the  Company's  common  stock,  issued or contingently issuable in
conjunction  with  the  purchase  of  GoodNet's  assets  in  fiscal  1996.
-          The  former  owner  agreed  to  repay  the  Company  $57,500.
-      The Company agreed to pay the former owner $10,000 per month commencing
June  15,  1997,  for  a  period  of  five  years  in  exchange for a covenant
not-to-compete.
-       The Company agreed to pay $48,000 to other former owners of GoodNet in
exchange  for  the  assignment  of  their  interest  in  GoodNet.

The  above  transaction  has resulted in a $384,138 settlement expense for the
fiscal year ended November 30, 1997.  This amount is included in the loss from
discontinued  operations  in  the  Consolidated  Statements  of  Operations.
Additionally, the Company has included in intangibles the cost of the covenant
not-to-compete  ($505,020) and a corresponding note payable.  These items were
sold,  along  with  the  other  net  assets  of  GoodNet  in  January  1998.

Effective  May  31,  1997,  the  Company  entered  into  an agreement with the
remaining  former  owner of GoodNet, LLC to exchange a 24% interest in GoodNet
for  the  return  of  the  Company's  stock  issued  and  rights  to  receive
contingently  issuable  stock in conjunction with the purchase of GoodNet, LLC
in  fiscal  1996.  Under terms of the agreement, the remaining former owner of
GoodNet,  LLC agreed to repay the Company $57,500 plus accrued interest, which
the  former owner received in conjunction with the purchase of GoodNet, LLC in
fiscal  1996.    This  transaction  resulted in a $86,350 increase in minority
interest  during  fiscal  1997  comprising of $28,850, 50% of the value of the
return  of  the  30,833  shares  issued  in  conjunction  with  the  original
acquisition  of  GoodNet LLC, and the $57,500 cash to be repaid by this former
owner.

<PAGE>

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


18.          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  for  approximately  $22.0 million, consisting of $3.5 million cash
and  shares  of  common  stock  of  WinStar (NASDAQ: WCII) having an aggregate
market  value  of  approximately  $18.5  million.

Under  the  terms  of  the  agreement,  the  Company  received  approximately
$3,500,000  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  Company  accounts  for its investment in WinStar as an available-for-sale
equity security, which accordingly is carried at market value.  400,000 of the
WinStar  shares  were sold in November, 1998 resulting in net proceeds, before
taxes,  of  $11,971,131.    As  of  November  30,  1998, pursuant to a hedging
strategy  implemented  by  the  Company  during  1998, 31,488 of the remaining
WinStar  shares  are  hedged,  utilizing  the  purchase  of  puts and calls in
combination  to minimize the downside risk of loss should the price of WinStar
stock decline while allowing for limited upside participation should the stock
price rise.  The call option is secured by shares of WinStar stock held by the
Company.   Subsequent to November 30, 1998, the Company sold 47,939 shares for
$1,733,382.

As a result of the above transaction, the Company may be vacating a portion of
its office space in Phoenix, Arizona during the year ending November 30, 1999.
As a result, the Company will have to take steps to sublease the vacated space
or  pay  an  early  termination  fee  approximated  at  $300,000.  This amount
has  been  included  in  accounts  payable  and  accrued  liabilities  in  the
accompanying financial statements.

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

19.    SUBSEQUENT  EVENTS

TREASURY  STOCK

Subsequent  to  November  30, 1998, the Company purchased an additional 37,000
shares  of  the  Company's  common  stock  for  $184,305.


<TABLE>
<CAPTION>

20.     EARNINGS (LOSS) PER SHARE:

The following table reconciles the numerators and denominators of the basic 
and diluted earnings (loss) per share:
                                                      YEAR ENDED NOVEMBER 30,
                                                      -----------------------  
                                                      1998         1997
<S>                                                   <C>          <C>

<CAPTION>



BASIC EARNINGS (LOSS) PER COMMON SHARE:
----------------------------------------------------                   
NUMERATOR
Income from continuing operations                     1,089,578       402,985
Loss from operations of GoodNet subsidiary              (68,428)   (1,326,729)
Gain on disposal of GoodNet                           8,565,700        -
                                                      ----------  -----------
Net earnings (loss) available to common shareholders  9,586,850      (923,744)
                                                      ==========  ===========
DENOMINATOR
<S>                                                   <C>         <C>
   Weighted average number of shares outstanding . . . . . . .      3,784,793    3,802,874
PER SHARE AMOUNTS
   Income from continuing operations . . . . . . . . . . . . .            .29          .11 
   Loss from operations of GoodNet subsidiary. . . . . . . . .           (.02)        (.35)
   Gain on disposal of GoodNet . . . . . . . . . . . . . . . .           2.26            - 
                                                                    ----------  -----------
Net earnings (loss) available to common shareholders . . . . .           2.53         (.24)
                                                                    ==========  ===========
<CAPTION>

<S>                                                                 <C>         <C>
DILUTED EARNINGS (LOSS) PER SHARE
------------------------------------------------------------------                         
     NUMERATOR
Income from continuing operations. . . . . . . . . . . . . . . . .  1,089,578      402,985 
Loss from operations of GoodNet subsidiary . . . . . . . . . . . .    (68,428)  (1,326,729)
Gain on disposal of GoodNet. . . . . . . . . . . . . . . . . . . .  8,565,700            - 
                                                                    ----------  -----------
Net earnings (loss) available to common shareholders . . . . . . .  9,586,850     (923,744)
                                                                    ==========  ===========
     DENOMINATOR
Weighted average number of shares outstanding. . . . . . . . . . .  3,784,793    3,802,874 
Effect of dilutive securities. . . . . . . . . . . . . . . . . . .    342,500      109,900 
Options and warrants
Stock acquired with proceeds . . . . . . . . . . . . . . . . . . .   (239,260)     (84,863)
                                                                    ----------  -----------
Weighted average common shares and assumed conversions outstanding  3,888,033    3,827,911 
                                                                    ==========  ===========
     PER SHARE AMOUNTS
Income from continuing operations. . . . . . . . . . . . . . . . .        .28          .11 
Loss from operations of GoodNet subsidiary . . . . . . . . . . . .       (.02)        (.35)
Gain on disposal of GoodNet. . . . . . . . . . . . . . . . . . . .       2.20            - 
                                                                    ----------  -----------
Net earnings (loss) available to common shareholders . . . . . . .       2.46         (.24)
                                                                    ==========  ===========
</TABLE>




<PAGE>

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

20.  EARNINGS  (LOSS)  PER  SHARE:  (CONTINUED)


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.

At November 30, 1997, warrants and options to acquire 532,400 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 in the following product
lines  for  financial  reporting  purposes:

(1)  STS  Outsourcing  Program
(2)  Customized  Billing  Outsourcing  Services
(3)  System  Sales  and  Maintenance
     (a)  Telecommunication's  Management  System  ("TMS")  and  TelMaster
     (b)  RATEX  Bookstore  Solution
     (c)  Distribution  Control  System  ("DCS")
          (d)  Software  and  Hardware  Recurring  Maintenance  Revenue

Following  is  selected  segment  information.
<TABLE>
<CAPTION>

                                Year Ended November 30, 1998          Year Ended November 30, 1997
                                ----------------------------          ----------------------------    
<S>                          <C>       <C>      <C>       <C>      <C>      <C>      <C>       <C>
                                       System   Custom                      System   Custom           
                             STS       Sales    Billing   Total    STS      Sales    Billing   Total

Sales, Net. . . . . . . . .  $21,461   $ 5,570  $  1,219  $28,250  $17,430  $4,198   $    965  $22,593
Cost of Sales . . . . . . .   16,504     1,529         -   18,033   13,288   1,042          -   14,330
                             --------  -------  --------  -------  -------  -------  --------  -------
Gross Profit. . . . . . . .    4,957     4,041     1,219   10,217    4,142   3,156        965    8,263
                             --------  -------  --------  -------  -------  -------  --------  -------
General and Administrative
   Expenses:
General . . . . . . . . . .    3,366     3,455       696    7,517    3,387   3,177        210    6,774
Depreciation. . . . . . . .      190       109         -      299      125     202          -      327
Amortization. . . . . . . .        -         2         -        2        -       8          -        8
Bad Debt. . . . . . . . . .      332        94         3      429      197       1          -      198
Corporate Allocations:
General . . . . . . . . . .      177        47        16      240      127     127          8      262
Depreciation. . . . . . . .      137        37        12      186       45      88          -      133
                             --------  -------  --------  -------  -------  -------  --------  -------
                               4,202     3,744       727    8,673    3,881   3,603        218    7,702
                             --------  -------  --------  -------  -------  -------  --------  -------

Operating Income (Loss) . .      755       297       492    1,544      261    (447)       747      561
Other Income. . . . . . . .                                   332                                  163
                                                         --------                              -------

Pretax Income . . . . . . .                                 1,876                                  724
Income Tax Provision. . . .                                  (786)                                (321)
                                                         --------                              --------
Income from Continuing. . .                               $ 1,090                              $   403
    Operations                                           ========                              ========

Diluted Earnings per
  Share-Continuing
  Operations. . . . . . . .                               $  0.28                              $  0.11
                                                         ========                              ========
</TABLE>



<PAGE>


Exhibit  21:  Subsidiaries  of  Registrant
1.    Telesoft  Acquisition  Corp.