SECURITIES  AND  EXCHANGE  COMMISSION
Washington,  D.C.  20549


FORM  10-KSB

ANNUAL  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)
OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934

For  the  fiscal  year  ended  November  30,  1997

Commission  File  No.  1-13830

TELESOFT  CORP.
(Exact  name  of  Registrant  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)

Registrant's  telephone  number,  including  area  code:  (602)  308-2100

Securities  registered  pursuant  to  Section  12(b)  of  the  Act:

Title  of Class                      Name of each exchange on which registered
Common  Stock,  No  Par  Value                    Pacific Stock Exchange, Inc.

Securities  registered  pursuant  to  Section  12(g)  of  the  Act  :     None

Indicate  by  check  mark  whether  the  Registrant  (1) has filed all reports
required to  be  filed  by  Section  13 or 15(d) of the Securities Exchange 
Act of 1934 during the  preceding  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 filings in this Form and no
disclosure will be contained in the definitive Proxy Statement incorporated by
reference  in  Part  III  of  this  Form  10-KSB.              X

Issuer's revenues from continuing operations for its fiscal year:  $22,593,450

As  of February 19, 1998, the number of shares of Common Stock outstanding was
3,787,500  and  the  aggregate  market value of the Common Stock (based on the
closing  price  on  that  date)  held  by non-affiliates of the Registrant was
approximately  $6,440,000.

Documents  Incorporated  By  Reference

Portions  of  the  Registrant's definitive Proxy Statement for its forthcoming
Annual  Meeting of Shareholders are incorporated herein by reference into Part
III  of  this  Report.

Exhibit  Index                                                         Page 30

PART  I

ITEM  1.    BUSINESS.

General

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.

Telesoft  Corp.  ("Company"  or  "Telesoft")  designs,  distributes, installs,
maintains  and  manages  telecommunications  systems  comprised  of integrated
hardware  and  proprietary software for the automated provision of billing and
other  telecommunications  services  to  higher  education,  Fortune  1000,
governmental  agencies, Regional Bell Operating Companies ("RBOC's"), and long
distance  interexchange carriers.  The Company offers the following integrated
hardware  and  proprietary  software systems and services: the STS Outsourcing
Program,  Customized  Billing  Outsourcing  Services, TelMaster Telemanagement
System,  Distribution  Control  System  and  RATEX  Bookstore  Solution.

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 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 Discontinued
Operations,  below)    Its 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  Revenue,
   (a)  On-Site  and  Polling  Programs,
   (b)  SunDial  Off-Campus  Program,
(2)  Customized  Billing  Outsourcing  Services.
(3)  System  Sale  and  Maintenance  revenue
   (a)  TMS  and  TelMaster,
   (b)  RATEX,
   (c)  DCS,
   (d)  Software  and  Hardware  Recurring  Maintenance  Revenue,

Through  its former 71% owned subsidiary, Telesoft Acquisition Corp II, d.b.a.
GoodNet  ("GoodNet")  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, RBOC's, Cable Television Operators and Value Added
Resellers.    In  January  1998,  the  Company  sold  GoodNet  to  Winstar
Communications
Incl.    ("Winstar")

Products  and  Services

Student  Telephone  Services  (STS)  Outsourcing  Program


     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 including 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 
system is an integrated  hardware  and  proprietary  software system, which 
extends the STS Program  services and advantages to off-campus students.  
The SunDial platform 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  "1-800" access dialing for long distance 
service anywhere in the United States  at  competitive  rates, and the 
ability to continue to use the Program after  graduating  from  the University. 
The SunDial platform uses Telesoft's proprietary software and Motorola 
hardware specially adapted for this software application.

Telesoft  markets  these  programs through alliances developed with RBOC's and
interexchange  carriers  such  as  NYNEX,  Bell  Atlantic,  MCI,  and  AT&T.

Telesoft  administers  and  operates  its STS Program on a turnkey basis on 73
university  and  college  campuses of various sizes including Rutgers College,
the University  of  Southern California, the University of Delaware, SUNY 
Buffalo, Smith  College  and  Indiana  University.

Telesoft has sold the system, software and services required to administer the
STS  Program  to  approximately  44  campuses of various sizes nationwide (See
"System  Sales  and  Maintenance  Revenue"),  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.    In the event of a sale, the Company continues to maintain 
and service  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
RBOC's.    In  1996, the Company secured a customized billing contract for 140
agencies for the State of Massachusetts in conjunction with Bell Atlantic.  In
the  third  fiscal  quarter  of  1997, the Company signed a contract with Bell
Atlantic to provide billing and customer care outsourcing services including a
new residential Centrex product ("Restrex") to be offered to Multiple Dwelling
Units  (MDU's) dwellers in New York City.  This product is expected to include
dial-tone,  long-distance,  internet  access,  and  cable  TV  services.  This
product is  expected to be released by Bell Atlantic in the second calendar 
quarter of 1998.  The  Company also provides customized billing services for 
Blue Cross & 1999.  Blue  Shield  of  Massachusetts,  and  to  the  State of 
West Virginia.

System  Sales  and  Maintenance  Revenue

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 the  higher  education,  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 1997,
TelMaster  was  installed  at the University of Oklahoma Health Sciences, Ohio
Northern  University,  Geneva  College,  Dana  Corporation,  Briggs  Stratton
Corporation,  and  the  State  of  South  Dakota.

In  addition  to  its  extensive  higher  education customer base, the Company
currently services customers such as Allied Signal Corp., St. Luke's Roosevelt
Hospital in New York, Florida, Maricopa County in Arizona, and Bolt, Beranek &
Newman.    Telesoft  also provides telecommunications data management services
and software  for  Bell  of  Pennsylvania  and  Pacific  Bell  Corp.

RATEX.    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  the University of California-Los
Angeles  bookstores.

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 including applications for
sales  order  processing,  inventory  control,  accounts  receivable and sales
analysis,  and  is  typically  installed  on  a  Motorola  Unix  server.

STS  and  System  Sales  Competition

The  telecommunications  industry  is  highly competitive and subject to rapid
technological  change.    Failure to keep pace with the 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 LCI and ACC
Corp., both  of  which  provide long distance telephone service on a resale 
basis and offer  long  distance  billing  services  to  universities.   The 
Company also competes with  MCI,  Sprint,  AT&T  and other long distance 
providers which market long distance  services  to  the  public  and  
directly  to  college  campuses.  In connection with  its  SunDial  Program, 
the  Company competes with MCI, Sprint, AT&T and similar  long  distance  
providers.

In  connection  with  its  Telemanagment system division, the Company competes
with Telco  Research  and  Comco,  both  of which provide telemanagment 
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  organizations 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 organizations could also fund existing or  new product and 
services with other  product 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.

Sales  and  Marketing

The  Company's  sales staff consists of ten 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  tie  into  or enhance existing programs.  Research 
and development costs for the  fiscal years ended November 30, 1997 and 1996 
were $414,000 and $266,000, respectively.

Regulation

The  Company's  ability  to  pursue  its  business  activities  is affected or
regulated by  various  federal  agencies  and  departments  of  state  
governments.  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 inability of the 
Company 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 compliance with 
regulations 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  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.

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 certain of 
them 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 15, 1998, the Company had 105 full-time employees, of which four
were  in  executive  positions, ten were engaged in sales and marketing, eight
were in software development and system management, 13 were in customer service
and the  balance  are  in  various  support positions.  This represents a 
decrease during the  past  year  due  to the sale of GoodNet.  The Company's 
employees are not covered  by  a  collective  bargaining  agreement.   The 
Company considers its employee  relations  to  be  satisfactory.


ITEM  2.    PROPERTIES.

During  fiscal  1996 and 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  its Phoenix office lease were approximately  $84,000 and for both 
1997 and 1996,  under a verbal month-to-month lease.  The Company vacated this 
space in January  1998  and  will  be  obligated  for  a  minimum  of  90  days.

The  Company  also  leases  office  space in Phoenix, Arizona for its STS and,
previously,  its  GoodNet  operations.  In January 1998, the Company relocated
all of  its  Phoenix,  Arizona  based  operations  to  this office.  The 
Company's obligation under the terms of this lease agreement was approximately 
$130,000 and $40,000  for  the  fiscal  years  ended  November  30,  1997  and
1996, respectively.

RATEX  leases  2,200  square  feet  in  Fort  Washington,  Pennsylvania.   The
Company's obligations  under  the  terms  of  its  Fort  Washington  office  
lease  were approximately  $32,000  and  $39,000  for  1997  and  1996,  
respectively. 

Finally, the Company leases office space in Tempe, Arizona, which was used for
GoodNet  headquarters prior to its acquisition by the Company.  The Company is
currently  subleasing  this  space  under  terms  similar  to  the  Company's
obligation for  this lease, which was $7,456 for the fiscal year ended 
November 30, 1997.

ITEM  3.    LEGAL  PROCEEDINGS.

The  Company  is  not  involved as a party to any other legal proceeding 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.


PART  II

ITEM  5.        MARKET  FOR  REGISTRANT'S  COMMON  EQUITY  AND  RELATED
           STOCKHOLDER  MATTERS.

The  following  table sets forth, for the fiscal periods shown, representative
high  and  low bid prices in dollars per share as reported by market makers in
the Company's  Common  Stock  on  the  NASDAQ  SmallCap.
<TABLE>
<CAPTION>


Year  Ended  November  30,  1997
                           Low                          High


<S>
                    <C>              <C>

First Quarter          $2 3/8          $6 1/2
Second Quarter               3            6 1/2
Third Quarter            2 3/8            4 5/8
Fourth Quarter           2 3/4            4 3/8

<CAPTION>


 Year  Ended  November  30,  1996
                           Low                          High


<S>
                    <C>              <C>

First Quarter          $4 5/8          $7 3/4
Second Quarter           4 5/8            7 5/8
Third Quarter            3 7/8            7 3/4
Fourth Quarter           2 1/2            4 1/8

</TABLE>



The  number of beneficial holders of the Common Stock of the Company as of the
close  of  business on February 18, 1998 was 419.  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  1998.


ITEM  6.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION
            AND    RESULTS    OF    OPERATIONS.

Background

The  Company  began as a value-added reseller in the wholesale distribution of
accounting software business (Distribution Control Systems) in 1982. During the
fiscal  year ended November 30, 1997, the Company derived approximately 77% 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  higher  education, Fortune 1000, governmental and 
wholesale distribution  markets.

The  Company  has  adapted  to  the  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, L.L.P., 
independent certified public accountants, for the year ended November 30, 1997 
and Coopers & Lybrand,  L.L.P. independent certified public accountants, for 
the fiscal year ended  November  30,  1996.    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 Operation Data (1):


                                                1997            1996

   Net revenues                        $22,593,450      20,742,993
   Cost of sales                         (14,330,388)    (12,821,582)
   Gross profit                            8,263,062       7,921,411
   Income from operations                    561,191       1,297,762
   Other income (expense)                    163,094         305,773
   Income from continuing operations         402,985         989,335
   Earnings per share- continuing
     operations                                $. 11           $0.26
   Weighted average number of
     shares outstanding                    3,802,874       3,817,130


<CAPTION>


Years  Ended  November  30



<S>
                                      <C>             <C>
Balance Sheet Data:                             1997            1996

   Cash & Investments                    $3,821,784     $3,722,355
   Working capital                         4,080,013       3,248,604
   Total assets                           17,640,850      14,652,936
   Short-term debt                            90,523           6,840
   Long-term debt                            371,551               -
   Total stockholders' equity              8,906,507       9,887,951
<FN>


(1)      Figures  for  1996  and  1997  are unaudited and reflect results from
continuing  operations.
</TABLE>



<TABLE>
<CAPTION>


Results  of  Operations  by  Product Line for the fiscal year ended November 30,
1997  with  comparative  totals  for  the  year  ended  November  30,  1996






<S>
           <C>            <C>            <C>       <C>           <C>
                   For the year ended November 30, 1997           Total for
                                                                the year ended
                            System Sales/  Customized          November 30, 1996
               STS           Maintenance   Billing      Total

Sales, Net    $17,430,383   $4,197,480   $965,587  $22,593,450  $20,742,993
Cost of Sales   13,288,224     1,042,164           -    14,330,388    12,821,582
              ------------   -----------   ---------  ------------  ------------
Gross Profit     4,142,159     3,155,316     965,587     8,263,062     7,921,411
              ------------   -----------   ---------  ------------  ------------
General &
 Administrative
 Expenses:
  General       3,386,395     3,177,039      210,532     6,773,966     5,732,588
Depreciation      125,470       201,682            -       327,152       312,641
Amortization            -         8,333            -         8,333         8,333
Bad Debt          197,327           655            -       197,982       264,056
Corporate
Allocations:
   General        127,155       127,155        7,706       260,015       212,824
Depreciation       44,591        87,831            -       134,423        93,207
              ------------   -----------   ---------  ------------  ------------
                3,880,938     3,602,695      218,238     7,701,871     6,623,649
              ------------   -----------   ---------  ------------  ------------
Operating
  Income (Loss)   261,221      (447,379)     747,349       561,191     1,297,762

Other Income                                               163,094       305,773
                                                      ------------  ------------
Pretax Income                                              724,285     1,603,535

Income Tax Provision                                       321,300       614,200
                                                      ------------  ------------

Income from Continuing Operations                         $402,985     $989,335
Primary Earnings per Share-Continuing Operations            $0.11        $0.26
</TABLE>



Results  of  Operations  for  the  Years  ended  November  30,  1997  and 1996

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 8.9% to $22,593,450 for the fiscal year ended November
30, 1997 compared to $20,742,993 for the fiscal year ended November 30, 1996.  
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  revenues  were  $17,430,000  for  the fiscal year ended November 30, 1997
compared  to  $15,000,000  for  the  fiscal  year  ended November 30, 1996, an
increase  of  16.2%.  A substantial portion  of this  increase occurred the 
fourth quarter of fiscal 1997 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, 
representing approximately $1,000,000  and $625,000 in revenue, respectively.  
Revenues from System Sales and  Maintenance  were  $4,198,000 for the fiscal 
year ended November 30, 1997 compared to $5,102,000 for the fiscal year ended 
November 30, 1996, a decrease of 17.7%.  This decrease was mainly attributable 
to delays in the release of TelMaster,  the  "Client/Server"  and  "Graphical  
User Interface" environment version  of the Company's existing text-based 
telemanagement software modules. See  "Future Expectations" below.  For the 
fiscal year ended November 30, 1997 and  1996,  revenues  from  Customized  
Billing  Outsourcing  Services  were approximately  $965,000 and $640,000.  
This increase is due to the development of customized  billing services for 
one primary customer.  The Company received a non-recurring  fee  of  
approximately  $320,000  from this customer during the third quarter  of  
fiscal  1997. 

Total  gross  profit increased by 4.3% to $8,263,062 for the fiscal year ended
November 30, 1997 compared to $7,921,411 for the fiscal year ended November 30,
1996.  Cost of goods sold was approximately 76% of STS revenues for the fiscal
year  ended  November 30, 1997, comparable with the fiscal year ended November
30, 1996.   Cost of goods sold as a percentage of system sale/maintenance 
revenues was  approximately  25%  for  the fiscal year ended November 30, 1997 
compared with 30%  for  the  fiscal year ended November 30, 1996.  This 
decrease is due to a higher  percentage  of  maintenance revenues, which have 
a higher gross profit rate than  system  sales  revenues,  during  fiscal  
1997. 

General  and  administrative  expenses  increased  by  16.3%, or $1,078,222 in
fiscal 1997  to $7,701,871 from $6,623,649 in fiscal 1996.  Approximately 
$105,000 of this  increase  was  attributable  to the write down of equipment 
in inventory that was  going  to  be  used for the SunDial program.  Because 
the usage levels of this program  did  not  meet  expectations  in  the 
smaller-campus environment, the effort to market the SunDial program has been 
significantly decreased and the Company has  been  unsuccessful  at  reselling  
the SunDial related equipment to date. Salaries  increased  approximately  
$600,000  from fiscal 1996 to fiscal 1997.  This is  a  result  of increased 
personnel hired for product development, sales and  marketing  and  customer  
support.    There  was no capitalization of software development  expenditures  
during  the  fiscal  year  ended November 30, 1997.   During the  fiscal  year  
ended  Novemer  30,  1996,  approximately  $276,000  was capitalized.
Research  and  development  costs for the fiscal years ended November 30, 1997
and 1996  were  $414,000  and  $266,000,  respectively.

The  provision for income taxes was $321,300 and $614,200 for the fiscal years
ended November 30, 1997 and 1996, respectively.  This represents a 44% and 38%
of  income  before  provision  for  income taxes for the fiscal 1997 and 1996,
respectively.    This increase is partially attributable to decreased interest
from  tax  free  investments  and  increased  state  income  taxes.

Income  from  continuing  operations decreased to $402,985 in fiscal 1997 from
$989,335  in fiscal 1996.  This is primarily attributable to an operating loss
from  the  Company's System Sales division of approximately $450,000 resulting
from  decreased  System  Sales  revenue.

Discontinued  Operations:  Telesoft  Acquisition  Corp  II,  d.b.a.  GoodNet
("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 (WCII: NASDAQ) 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 (based on the 20 day average price of 
WinStar stock) 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 which includes a tentative gain of approximately $1,760,000 
from the date of close  of the transaction.  The shares are restricted for a 
period of one year and  include  piggy-back  registration  rights  should the 
company complete an additional  registration.    After commissions and related 
legal expenses, the Company will realize an approximate $10,000,000 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  will  account  for  its  investment  in  WinStar  as  an
available-for-sale equity  security, which accordingly is carried at market
value.  Pursuant to a hedging  strategy implemented by the Company in January, 
1998, 400,000 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. 

Material  Changes  in  Financial  Position

Cash  and  cash  equivalents increased to $1,621,784 at November 30, 1997 from
$219,023 at November 30, 1996. During the fiscal year ended November 30, 1997,
investments decreased $1,303,332.  Combined, the Company's cash and investment
holdings  were  relatively unchanged from the prior year.  During fiscal 1997,
activities  from  continuing  operations  provided  approximately  $2,330,000.
These cash flows supported the  Company's discontinued operations, which used
approximately $1,826,000 net in cash during fiscal year 1997. Additionally, the
company used approximately $385,000 in cash to purchase property and equipment
for  its  continuing  operations.

Accounts  receivable  increased  to  $7,185,435  as  of November 30, 1997 from
$6,386,596  as  of  November  30,  1996  ($6,544,453  and  $5,678,469,  net of
allowance for  uncollectibles  as  of  November  30,  1997 and 1996 
respectively).  This increase  is  primarily due to the growth of GoodNet's 
ATM product line during the fiscal  year.      Accounts Receivable from 
GoodNet related products increased approximately  $365,000 during fiscal 1997.
 The increase is also attributable to the  increase  in  STS  revenue.  
Accounts receivable from students at Rutgers University  and  the  University 
 of Southern California, both new STS schools during  fiscal  1997,  was  
approximately  $790,000  as  of November 30, 1997. 

The  Company's  deferred  tax  asset  increased to a net deferred tax asset of
$990,700 as of November 30, 1997 from a net deferred tax asset of $80,800 as of
November  30,  1996.    $405,800  of this increase is due to expenses from the
Company's discontinued operations that will be included as a part of the basis
in its subsidiary, GoodNet, for income tax purposes.  An additional $482,200 of
this increase is due to an Internal Revenue Service ("IRS") examination, which
the  Company  underwent  during  the  current  year.    The results of the IRS
examination  has  been  recorded  as  a  current liability in the accompanying
financial  statements,  but  is  currently  in  appeals.  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.  
Approximately an additional  $40,000  of  this increase is due to net operating 
losses that the Company  should  be  able  carryforward  for  state  income tax 
purposes.  The Company believes  that  is  more likely than not that it will 
realize the net deferred tax asset  based upon the Company's future 
profitability and on its impending gain on the  sale  of GoodNet.  
Accordingly, no valuation allowance has been provided. 

Property and equipment before accumulated depreciation increased to $5,151,229
as  of  November  30,  1997  from  $3,349,371  as of November 30, 1996.   This
increase is  primarily  due  to  approximately  $1,640,000  invested in 
GoodNet related assets, including  expansion  of  GoodNet's  ATM  Backbone.

Accounts  payable  and  accrued  liabilities  increased  to  $6,632,968  as of
November 30,  1997  from  $4,085,134  as of November 30, 1996.  This increase 
is due to three primary  factors: growth of GoodNet's ATM Backbone, increased 
STS revenue, and generous  payment  terms  from  a  supplier of GoodNet ATM 
equipment.  Cost of sales, excluding  depreciation,  as  a  result of expansion 
of GoodNet's ATM backbone increased  from  approximately $85,000 per month in 
the last quarter of fiscal 1996  to  approximately  $350,000  per month 
during the last quarter of fiscal 1997.  STS  cost  of  sales increased from 
approximately $4,590,000 during the fourth quarter  of  fiscal 1996 to 
approximately $6,240,000 during the fourth quarter of fiscal  1997.    As of 
November 30, 1997, there is approximately $375,000 in payables  relating to 
ATM equipment.  The supplier of this equipment has given the  Company extended 
payment  terms.  This liability was assumed by WinStar upon the  sale  of  
GoodNet  in  January  1998.

Deferred  revenue  increased  to  $1,245,806  from $526,351 as of November 30,
1997.  This increase  is  primarily  due  to  the  growth  of  the ATM product 
line.

Future  Expectations

STS  revenues  are  projected to increase to approximately 10%-15% from fiscal
1997 levels  during  the  fiscal  year  ended  1998.  This increase is due to 
large accounts added during the fourth quarter of fiscal 1997, 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 has 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.   Certain modules of this product were released in the third 
quarter of 1996,  and  installations have been completed in the second and 
third quarters of 1997.   Based on the full product release in January 1998, 
the Company expects to sell  and install a significantly higher number of 
TelMaster systems in fiscal 1998,  however,  there  can  be  no  assurance  
that  this  will  happen.

It  is  anticipated  that  the cost of human resources will grow 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. 

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.

Accounting  Pronouncements:

In February 1997, the Financial Accounting Standards Board issued Statement of
Accounting  Standards  No.  128,  Earnings  Per  Share  (SFAS  128).  SFAS 128
specifies the  computation,  presentation  and  disclosure requirements for 
earnings per share and is effective for periods ending after December 15, 1997.
Pursuant to the provisions  of SFAS 128, the Company's basic net (loss) income 
per share would have been ($.24) and $.20 and its diluted (loss) earnings per 
share would have been  ($.22)  and  $.20 for the fiscal years ended November 
30, 1997 and 1996, respectively.

Statement of Financial Accounting Standards No. 129, Disclosure of Information
about  Capital  Structure,  ("SFAS.  129") issued by the FASB is effective for
financial  statements  ending  after  December  15,  1997.    The new standard
reinstates  various  securities  disclosure  requirements previously in effect
under Accounting  Principles Board Opinion No. 15, which has been superseded 
by SFAS NO. 129.  The Company does not expect adoption of SFAS. 129 to have a 
material effect,  if  any,  on  its  financial  position  or  results  of  
operations.

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  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.

Year  2000  Computer  Issues

All  of  the  Company's  accounting software, including software available for
sale, utilizes  a four-digit year field.  Therefore, the Company does not 
anticipate any  material  impact  from  year  2000  issues.

Liquidity  and  Capital  Resources

From  inception  through  the  present,  the Company has funded its operations
primarily  through  internally  generated  cash  flow.

The Company has available a line of credit of $1,000,000.  The credit line has
been  used  for  seasonal  fluctuations  in  cash  flow.    The credit line is
typically used  during the summer months due to the high demand for cash from 
new system and  STS  Service  Bureau  installations  for  the  following  
fall  season.

At  November  30,  1997,  the  Company  had  cash of $1,621,784 and investment
securities of $2,200,000.  In January 1998, the Company received approximately
$3,500,000 cash and 479,387 shares of WinStar restricted common stock from the
sale  of  GoodNet  valued at $18.5 million.  The Company believes that present
cash reserves  available,  the cash received from the sale of GoodNet, the 
existing line of  credit, 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.

Seasonality

The Company generally completes the sale of the majority of STS Service Bureau
and  STS  Program system installations in the higher education industry during
the spring  and early summer months.  The implementation and installation of 
these systems and services occurs during the summer months.  Revenues derived 
from STS Service  Bureaus  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 fourth and 
second quarters.

ITEM  7.    FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA.

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

ITEM  8.    CHANGES  IN  AND  DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL  DISCLOSURE.

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 CPA firm. In February 1997, the
Company  selected  Coopers  & Lybrand, LLP as its new independent accountants.

On  October  16, 1997, Coopers & Lybrand, L.L.P informed the Company that they
resigned  as  the  Company's  independent  certified  public  accountants.

Coopers  & Lybrand, L.L.P.'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, L.L.P.  on  any  matter  of  accounting  principles  or  practices,  
financial statement disclosure,   or  auditing  scope  or  procedure  through  
Coopers & Lybrand, L.L.P.'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  ending  May  31,  1997.

During  the  quarter  ended August 31, 1997, Coopers & Lybrand, L.L.P. (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  has completed such an analysis, 
and therefore should consider a write down  of  a  portion  of  its intangible 
assets related to GoodNet.  It is the opinion of the Company's management, 
based upon its internal projections, that the  Company  will  be  able  to 
recover the goodwill associated with GoodNet.  Management  believes  that  a 
majority of the goodwill associated with GoodNet was derived from its  dialup 
business,  which is 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  is  the  opinion of the 
Company's management that the Company will 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 on the direction of its Board of
Directors, selected BDO Seidman, L.L.P.(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   (See
"Discontinued  Operations"),  the  above  issues  identified  by  the  former
accountant were  not  a  concern  as  of  November  30,  1997.

The  audit  committee  did  not  discuss  the  above  issues  with  the former
accountant.

PART  III

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

The  following  sets  forth  certain information with respect to directors and
executive  officers of the Company with the year in which each director's term
expires  in  parentheses.
<TABLE>
<CAPTION>




<S>
                   <C>    <C>
Name                  Age    Position With Company and Tenure

Joseph W. Zerbib       62    President, Principal Executive Officer and
                             Director since 1982.  (1998)

Thierry E. Zerbib      36    Vice President - Technologies, Secretary and
                             Director since 1982.  (1998)

Brian H. Loeb          36    Vice President - Marketing, Sales and Operations
                             and Director since 1992.  (1998)

Michael F. Zerbib      31    Chief Financial Officer, Treasurer and Director
                             since 1990.  (1998)

Cecile Silverman       73    Director since 1995.  (1998)

Kalvan Swanky          34    Director since 1995.  (1998)
</TABLE>



Directors  hold office until the next annual meeting of shareholders and until
their  successors  are elected and qualified or until their prior resignation.
The  terms  of the executive officers are continuous, subject to the authority
of the  Company's  Board  of  Directors.

Joseph  W. Zerbib was born in Algeria and has lived in the Middle East, Europe
and  the  United  States.    From 1982 to the present, Mr. Zerbib has been the
President  of  the  Company.    He  concentrates  on  strategic  planning  and
financial, accounting  and  human  resources  management.    From 1975 to 1982 
Mr. Zerbib managed a  large  supermarket chain in Israel.  From 1960 to 1975 
Mr. Zerbib owned and managed  a  full  service  drug  store and blood analysis 
laboratory in Paris, France.

Thierry  E. Zerbib has been with the Company since 1982.  His responsibilities
include  day-to-day  supervision of software/hardware customer service, system
configuration,  system  implementation,  research and development, and quality
control.    He  holds  dual  degrees  in  computer  science  and math from the
University
of  Tel  Aviv,  Israel.

Brian  H.  Loeb  has  been  with the Company since 1982.  His responsibilities
include  day  to  day  supervision  of sales, marketing, customer service, and
service  bureau  implementation.

Michael  F.  Zerbib has been with the Company since 1990 with main emphasis on
service  bureau sales and financial reporting.  He holds a Bachelor of Science
degree  in  finance  and  a Master 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  is  a  certified  public accountant employed by the firm of
Schwartz, Cohen & Co.  She was a partner/shareholder of such firm from 1975 to
1989  and is now self-employed.  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 public  accounting.

Kalvan  Swanky  has  been  employed  for  the  past  twelve  years  by Storage
Technology Corporation,  which  develops,  manufacturers  and distributes 
computer memory devices.    Mr. Swanky has held a number of positions with 
Storage Technology, 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 and Michael  Zerbib.

Business  of  the  Board  of  Directors

During  the  fiscal  year  ended  November  30,  1997,  the Company's board of
directors
held  4  meetings.    All  directors  attended  these  meetings.

Compensation  and  Audit  Committees

The  Board  of  Directors  appointed Cecile Silverman and Kalvan Swanky to the
Compensation  and  Audit Committees of the Board of Directors in June 1995 and
they  continue  to  serve  in such capacity.  Such persons are not officers or
employees of the Company and thus are Independent Directors.  Such individuals
will  not  have any contractual or other relationships with the Company during
the present  fiscal  year,  except  as  directors.

Audit  Committee.  The functions of the Audit Committee are to receive reports
with  respect  to  loss  contingencies,  the  public  disclosure  or financial
statement notation  of  which may be legally required; annually review and 
examine those matters that  relate  to  a  financial and performance audit of 
the Company's employee  plans;  recommend to the Company's board of directors 
the selection, retention and termination of the Company's independent 
accountants; review the professional services, proposed fees and independence 
of such accountants; and provide  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, 1997.  See "Compensation Committee Interlocks and  Insider  Participation"  
in the following section.

Compensation  Committee.    The functions of the Compensation Committee are to
review annually the performance of the chairman and president and of the other
principal  officers  whose  compensation  is  subject  to  the  review  and
recommendation  by  the  Committee  to  the  Company's  board  of  directors.
Additionally,  the Compensation Committee is to review compensation of outside
directors  for  service on the Company's board of directors and for service on
committees  of  the  Company's board of directors, and to review the level and
extent  of  applicable  benefits  provided  by  the  Company  with  respect to
automobiles, travel, insurance, health and medical coverage, stock options and
other  stock  plans and benefits.  The Compensation Committee had two meetings
during  the  fiscal year ended November 30, 1997.  See "Compensation Committee
Interlocks  and  Insider  Participation"  in  the  following  section.

The  Compensation  Committee  has  adopted a policy that the Company should be
competitive  in total compensation and include as a part of total compensation
opportunities  for  equity  ownership  and  utilize  incentives  that  offer
competitive compensation.

Compensation  Committee  Interlocks  and  Insider  Participation

Cecile  Silverman  and  Kalvan  Swanky  serve  as  members of the Compensation
Committee.    They  were  appointed in June 1995 and continue to serve in such
capacity.    These  persons  are  non-employee  directors  for  purposes  of
administering  the  1995,  1996 and 1997 Incentive Stock Option Plan under SEC
Rule 16(b)(3).


Director  Compensation

Directors receive no compensation for their services as members of the Board of
Directors.    However, the Company may reimburse the independent directors for
their reasonable out-of-pocket expenses in connection with their attendance at
meetings.   Also, in 1996 and 1997 the Company issued 1,000 stock options each
per year to Ms. Silverman and Mr. Swanky.  See Item 12, "Security Ownership of
Certain  Beneficial  Owners  and  Management."

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,  1997,  1996,and  1995.
<TABLE>
<CAPTION>




<S>
            <C>   <C>       <C>    <C>      <C>      <C>       <C>    <C>
                                                Long Term Compensation (1)
                        Annual Compensation          Awards      Payouts
                                      Other      --------------             ALL
                                      Annual   Restricted                  Other
Name and                              Compen-    Stock   Options  LTIP   Compen-
Principal       Year Salary(2) Bonus  sation     Awards    SARs  Payouts  sation

Joseph W. Zerbib
President       1997 $144,000      -0-    -0-     -0-     26,000    -0-      -0-
                1996 $108,000      -0-    -0-     -0-     26,000    -0-      -0-
                1995 $120,000      -0-    -0-     -0-     41,000    -0-      -0-
Thierry E. Zerbib
Vice President -
Technologies
and Secretary   1997 $144,000      -0-    -0-     -0-     26,000    -0-      -0-
                1996 $126,000      -0-    -0-     -0-     21,000    -0-      -0-
                1995 $120,000      -0-    -0-     -0-     41,000    -0-      -0-


Michael F. Zerbib
Chief Financial
Officer and
Treasurer       1997 $104,000      -0-    -0-     -0-     26,000    -0-      -0-
                1996 $100,000      -0-    -0-     -0-     28,000    -0-      -0-
                1995 $120,000      -0-    -0-     -0-     41,000    -0-      -0-

Brian H. Loeb
Vice President -
Marketing, Sales
and Operation   1997 $144,000      -0-    -0-     -0-     26,000    -0-      -0-
                1996 $126,000      -0-    -0-     -0-     21,000    -0-      -0-
                1995 $120,000      -0-    -0-     -0-     41,000    -0-      -0-

<FN>


(1)          See  "Stock  Option Grants in 1997 Fiscal Year and Stock Options and
Restricted  Stock  Plans"  below for additional information on options which were
granted  to  these  four  officers.
</TABLE>




(2)        The Company extended one-year employment agreements with annualized
salaries of $144,000 to Joseph W. Zerbib, Thierry E. Zerbib, Brian H. Loeb and
Michael  F.  Zerbib.



Option  Grants  in  1997  Fiscal  Year

The  following executive officers were granted stock options by the Company in
fiscal  1996  in  recognition  of their past contributions to the Company.  In
each case,  the  option  price was in excess of the fair market value of the 
Common Stock  on  the  date  of  grant.
<TABLE>
<CAPTION>




<S>
                      <C>            <C>               <C>         <C>
                                        Percentage of
Name            No. of                  Total Options
                Shares Underlying       Granted           Exercise    Expiration
                Options Granted         to Employees in    Price      Date (2)
                                        Fiscal Year

Joseph W. Zerbib         26,000         11.13             $3.23       10/23/02
Thierry E. Zerbib        26,000         11.13             $3.23       10/23/02
Brian H. Loeb            26,000         11.13             $3.23       10/23/02
Michael F.  Zerbib       26,000         11.13             $3.23       10/23/02
<FN>



(1)   Options become exercisable one fourth on October 23, 1998, one fourth on
October 22, 1999, one fourth on October 22, 2000 and one fourth on October 22,
2001.
</TABLE>



Option  Exercises  in  1997  Fiscal  Year

There  were  no  exercises  of  outstanding  stock  options  in  fiscal  1997.

Stock  Option  and  Restricted  Stock  Plans

1995,  1996  and  1997  Incentive  Stock Option Plans.  The Board of Directors
adopted  the 1995 Incentive Stock Option Plan ("1995 ISO Plan") on February 1,
1995,  the  1996  Incentive  Stock  Option Plan ("1996 ISO Plan") on April 15,
1996, and  the 1997 Incentive Stock Option Plan ("1997 ISO Plan") on April 10, 
1997. (The 1995 ISO Plan, 1996 ISO Plan, and 1997 ISO Plan are collectively 
referred to  as  the  "Plans"). The terms and conditions of the 1995 ISO Plan, 
the 1996 ISO Plan, and the 1997 ISO Plan are substantively similar, therefore 
the following description  is  valid  for  both  Plans.

There  are 264,000 shares under the 1995 ISO Plan, and 260,000 shares for both
the  1996 ISO Plan and 1997 ISO Plan, reserved for issuance subject to options
granted  under  the  Plans,  for a total of 784,000 shares.  Each of the Plans
authorizes  the Company to grant to key employees of the Company (i) incentive
stock  options to purchase shares of Common Stock and (ii) non-qualified stock
options  to  purchase  shares  of  Common  Stock.

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.  The Compensation Committee, which is
comprised  of  non-employee  Directors,  has  the discretion to make awards of
stock options.   Although the Plans do not specify what portion of the shares 
may be awarded  in  the  form of incentive stock options or non-statutory 
options, at the time  of  adoption  it  was anticipated that a substantially 
greater number of incentive stock options would be awarded under the Plans.  
The incentive stock options are qualified stock options under the Internal 
Revenue Code.  Further, the  Plans  are  stock  option  plans  meeting  the 
requirements of Rule 16b-3 promulgated  under  the  Exchange Act.  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  Company's  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 Company's 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.

The Company  issued options under the 1995 ISO Plan to purchase 100,000 shares
of  Common  Stock  to certain key employees and options to purchase 164,000 
shares to its  four  executive officers, Joseph W. Zerbib, Thierry E. Zerbib, 
Michael F. Zerbib  and  Brian  H.  Loeb  in  June  1995.    Such  options are 
exercisable commencing September  28,  1995  through  September  27, 2000.  
The exercise price of the options  granted  to  key employees is $6.00 per 
share.  The exercise price of the options  granted to the executive officers 
is $6.60 per share.  See "Principal Shareholders"  and  "Certain  Relationships 
and  Related  Transactions." 

The  Company issued options under the 1996 ISO Plan to purchase 141,400 shares
of Common Stock to certain key employees and options to purchase 96,000 shares 
of Common  Stock  to  its  four  executive officers, Joseph W. Zerbib, Thierry 
E. Zerbib,  Michael  F. Zerbib and Brian H. Loeb in two grants, one in April 
1996 and one  in  October  1996.  The options granted in April 1996 are 
exercisable one fourth  on  April  14, 1997, one fourth on April 14, 1998, 
one fourth on April 14, 1999,  and  one  fourth on April 14, 2000.  The 
options granted on October 22, 1996 are  exercisable  one  fourth  on  
October 22, 1997, one fourth on October 22, 1998, one  fourth  on  October  
22,  1999  and  one  fourth  on  October  22,  2000. 

The  Company issued options under the 1997 ISO Plan to purchase 129,500 shares
of Common  Stock  to certain key employees and options to purchase 104,000 
shares of Common  Stock  to  its  four  executive officers, Joseph W. Zerbib, 
Thierry E. Zerbib,  Michael  F.  Zerbib  and  Brian H. Loeb in October 1997.  
The options granted  on  October  23, 1997 are exercisable one fourth on 
October 23, 1998, one fourth  on  October 23, 1999, one fourth on October 23, 
2000 and one fourth on October  23,  2001.

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.    Under  both Restricted Stock Plans, shares 
of Common Stock of the Company are reserved, in such amounts as determined by 
the Board of Directors, for  issuance  as  part  of the total shares reserved 
under the Plan described above.    The  Restricted  Stock Plans authorize the 
grant of shares of Common Stock to key  employees,  consultants,  researchers, 
and to members of the Advisory Board.   The Restricted Stock Plans are 
administered by the Board of Directors or a  committee  of  the  Board,  
which  determines the persons to whom shares of Common Stock  will  be  
granted  and  the  terms  of  such  share  grants. 

No  shares  have  been granted under the Restricted Stock Plans.  However, the
Company  anticipates  that  shares  will be granted under the Restricted Stock
Plans by  the Compensation Committee from time to time in the future depending 
upon the performance  of  the  Company  and availability of unreserved shares 
under the 1995 and  1996  ISO  Plans  and  Restricted  Stock  Plans.

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

The  following  table  sets  forth  information, as of February 18, 1998, with
respect  to  the  number of shares of Common Stock of the Company beneficially
owned by individual directors, by all directors and officers of the Company as
a group, and by  persons  known  by  the  Company  to  own more than 5% of the
Company's Common  Stock.    The  Company  has  no  other  class  of  stock  
outstanding.
<TABLE>
<CAPTION>




<S>
                                      <C>              <C>

Name of Beneficial Owner and Address     Number of        Percent of
                                         Shares (1)(2)    Common Stock
                                                          Owned (1)(3)

Thierry E. Zerbib
3216 North Third Street
Phoenix, Arizona  85012                  665,500          17.6

Brian H. Loeb and
Irene Loeb
3216 North Third Street
Phoenix, Arizona  85012                  665,500          17.6

Michael F. Zerbib
3216 North Third Street
Phoenix, Arizona  85012                  667,500          17.6

Joseph W. Zerbib
3216 North Third Street
Phoenix, Arizona  85012                  386,750          10.2

Nicolas Zerbib
3216 North Third Street
Phoenix, Arizona  85012                  293,750           7.8

Cecile Silverman
3216 North Third Street
Phoenix, Arizona  85012                    3,000             *

Kalvan Swanky
4725 North 33rd Street
Phoenix, Arizona  85018                    3,000             *

All directors and
officers as a group                    2,685,000          70.9
<FN>




 *          Less  than  1%.

(1)      Includes  41,000  shares  of Common Stock which are issuable upon
exercise  of stock options the Company granted to each of the following:  
Joseph W. Zerbib, Thierry  E.  Zerbib,  Michael  F. Zerbib and Brian H. Loeb. 
Such options were exercisable  commencing  September  28,  1995  through  
September  27, 2000 to purchase shares  of  Common Stock at a price of $6.60 
per share.  See "Option Grants in 1996  Fiscal  Year"  and  "Stock  Option  
and  Restricted  Stock  Plans."

(2)     Includes 1,000 shares of Common Stock which are issuable upon exercise
of stock  options  which  the Company granted each to Cecile Silverman and 
Kalvan Swanky  in  April  1996.   The options are exercisable at a price of 
$4.75 per share through  April  15, 2001 and were not issued pursuant to any 
stock option plan of the  Company.


(3)       Includes 41,000 shares of Common Stock which are issuable to each of
Joseph  W. Zerbib, Michael F. Zerbib, Thierry E. Zerbib and Brian H. Loeb upon
exercise  of  stock  options exercisable commencing September 28, 1995 through
September  27, 2000 to purchase shares of Common Stock at a price of $6.60 per
share  and  16,000  shares  of  Common Stock which are issuable to each of the
aforementioned  individuals  upon  exercise  of  stock  options  which  become
exercisable  one  fourth  on April 14, 1997, one fourth on April 14, 1998, one
fourth  on  April  14,  1999,  and  one fourth on April 14, 2000 and expire on
August 6,  2001  for  a  price  of $5.23 per share.  Includes 10,000 shares of 
Common  Stock  issuable to Joseph W. Zerbib, 5,000 shares of Common Stock 
issuable  to each of Thierry  E.  Zerbib  and  Brian  H.  Loeb,  and  12,000 
shares of Common Stock issuable to  Michael  F. Zerbib upon exercise of stock 
options which become exercisable one fourth on October  22,  1997,  one fourth
on October 22, 1998, one fourth on October 22, 1999, and one fourth on October 
22, 2000 and expire on October 22, 2001 at a purchase price of $3.30 per share.
Includes 26,000 shares of Common Stock  issuable  to each of Joseph W. Zerbib,
 Michael F. Zerbib, Thierry E. Zerbib and  Brian H. Loeb upon exercise of 
stock options which become exercisable one fourth  on  October  23,  1998,  
one fourth on October 23, 1999, one fourth on October  23, 2000 and one 
fourth on October 23, 2001 and expire on October 23, 2002  at  a  purchase  
price  of  $3.23  per  share. 
</TABLE>



ITEM  12.    CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.

Certain  Transactions

The Company leases 13,500 square feet of office space from Joseph W. Zerbib, an
officer,  director  and  principal  shareholder of the Company.  The Company's
obligations  under the terms of the lease agreement were approximately $84,336
for  fiscal 1995.  The Company leased this office in fiscal 1996 and 1997 on a
month-to-month  basis at a rate of $6,978 per month.  The Company vacated this
space  in January 1998, however is obligated to pay rent for a minimum 90 days
subsequent  to  that  time.

The  Board  of  Directors  has  adopted  a  policy  that  provides  that  all
transactions between  the  Company  and  its  executive  officers, directors, 
employees and affiliates  are  subject  to  the  approval  of  a  majority  
of disinterested directors of  the  Board of Directors and will be on terms 
that are no less favorable to the Company  than  those  that  could  be  
negotiated  with  unaffiliated parties.

The  Company  has  entered  into one-year employment agreements with Joseph W.
Zerbib,  Thierry  E.  Zerbib,  Michael  F.  Zerbib  and Brian H. Loeb in their
respective  capacities.    See  note  2  to  "Summary  Compensation  Table."


The  Company  issued  options  to purchase a total of 164,000 shares of Common
Stock to Joseph W. Zerbib, Thierry E. Zerbib, Michael F. Zerbib and Brian H. 
Loeb in fiscal  1995  under  the  1995 Incentive Stock Option Plan.  Such 
options were divided  equally  among  the four individuals.  In April 1996 
the Company also granted  options under the 1996 Incentive Stock Option Plan 
to purchase 64,000 shares of Common Stock to the same four individuals in 
equal proportions, such grants  became  effective upon approval of the Plan 
by the shareholders at the 1996  Annual  Meeting  of  Shareholders  on August 
7, 1996.  These options are exercisable at a price of $5.23 per share for a 
term of five years after their effective  date.    Also,  in April 1996 the 
Company granted options to Cecile Silverman  and  Kalvan  Swanky  exercisable 
to purchase 1,000 shares of Common Stock at  a  price  of  $4.75 per share 
through April 15, 2001.  In October 1996 the Company  granted  options  to  
purchase Common Stock under the 1996 Incentive Stock Option  Plan  to purchase 
10,000 shares in the case of Joseph W. Zerbib, 5,000 shares  each  to  
Thierry  E.  Zerbib  and  Brian H. Loeb and 12,000 shares to Michael
F.  Zerbib.    In October 1997, the Company granted options to purchase Common
Stock  under the 1997 Incentive Stock Option plan to purchase 26,000 shares to
each  of  Joseph  W. Zerbib, Michael F. Zerbib, Thierry E. Zerbib and Brian H.
Loeb upon  exercise of stock options which become exercisable one fourth on 
October 23,  1998,  one fourth on October 23, 1999, one fourth on October 23, 
2000 and one fourth  on October 23, 2001 and expire on October 23, 2002 at a 
purchase price of $3.23  per  share.  See "Option Grants in 1997 Fiscal Year,"
 "Stock Option and Restricted  Stock  Plans,"  and  "Item  12.  Security  
Ownership  of  Certain Beneficial Owners  and  Management."

Policy  Regarding  Transactions

Management believes that all of its existing transactions with affiliates are on
terms  no  less  favorable  than  could  have  been obtained from unaffiliated
parties.

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.


PART  IV

ITEM  13.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)(1)    Financial  Statements

The  following  financial  statements  of the Company and its subsidiaries are
included  in  Part  II,  Item  7  of  this  report:

     Consolidated  Balance  Sheets  as  of  November  30,  1997;
     Consolidated Statements of Operations for the fiscal years ended November
30,  1997  and  1996;
     Consolidated Statements of Changes in Stockholders' Equity for the fiscal
years  ended  November  30,  1997  and  1996;
     Consolidated Statements of Cash Flows for the fiscal years ended November
30,  1997  and  1996;  and
     Notes  to  Consolidated  Financial  Statements.

(a)(2)    Financial  Statement  Schedules

None.

All  other  schedules for which provision is made in the applicable accounting
regulations  of  the Securities and Exchange Commission are not required under
the
related  instructions or are inapplicable, and therefore have been omitted, or
the  required  information is otherwise included in the consolidated financial
statements  and  the  notes  thereto.

(a)(3)    Exhibits
<TABLE>
<CAPTION>


The  following Exhibits are filed herewith pursuant to Rule 601 of Regulation S-K
and  paragraph  (c)  of  this  Item  14.



<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 Incorporated and CSI Acquisition Corp.
                dated March 13, 1995                                        (1)
10.4            Form of Employment Agreement between the Registrant
                and Joseph W. Zerbib effective as of the date of the
                Prospectus hereunder                                        (1)
10.5            Form of Employment Agreement between the Registrant
                and Thierry E. Zerbib effective as of the date of the
                Prospectus hereunder                                        (1)
10.6            Form of Employment Agreement between the Registrant
                and Brian H. Loeb effective as of the date of the
                Prospectus hereunder                                        (1)
10.7            Form of Employment Agreement between the Registrant
                and Michael F. Zerbib effective as of the date of the
                Prospectus hereunder                                        (1)
10.9            Contract between Registrant and the University of Delaware  (1)
10.10           1996 Incentive Stock Option Plan                            (2)
10.11           1996 Restricted Stock Plan                                  (2)
11              Statement Re: Computation of per Share Earnings              *
16              Letter on Change in Certifying Accountants                  (3)
16.1            Letter on Change in Certifying Accountants                  (4)
21              Subsidiaries of Registrant                                   *
<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, dated
March  7,  1997
(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

</TABLE>



(b)    Current  Reports  on  Form  8-K

During  the  last  quarter  of  the  fiscal  year ended November 30, 1996, the
Company
issued  an 8-K regarding the change in accountants.  See "Item 9.  Changes and
Disagreements  with  Accountants  on  Accounting  and  Financial  Disclosure".

SIGNATURES

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

                                    TELESOFT  CORP.


Dated:    February  27,  1998    By

                           /s/    Joseph  W.  Zerbib

                           Joseph  W.  Zerbib,
                           President  and  Principal  Executive  Officer

Pursuant  to  the  requirements  of  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                                 February 27, 1998
Joseph  W.  Zerbib,
President,  Principal  Executive  Officer  and  Director


                  /s/  Thierry  E.  Zerbib                   February 27, 1998
Thierry  E.  Zerbib,  Vice  President  -  Technologies,
Secretary  and  Director


                   /s/  Brian  H.  Loeb                      February 27, 1998
Brian  H.  Loeb,  Vice  President  -  Marketing,
Sales  and  Operations  and  Director


                   /s/  Michael  F.  Zerbib                  February 27, 1998
Michael  F.  Zerbib,  Chief  Financial  Officer
Treasurer  and  Director


                   /s/  Cecile  Silverman                    February 27, 1998
Cecile  Silverman,  Director


                   /s/  Kalvan  Swanky                       February 27, 1998
Kalvan  Swanky,  Director
Telesoft  Corp.  and  Subsidiaries

Form  10-KSB
Item  7,  Item  14  (a)(1)  and  (2)
Index  to  the  Financial  Statements






The  following  financial  statements  required  to  be  included
 in  Item  7  are  listed  below:                                         Page


Reports  of  Independent  Certified  Public Accountants              F-2 - F-3

Consolidated  Balance  Sheet  as  of  November  30,  1997                  F-4

Consolidated  Statements  of  Operations  for  the  years  ended
   November  30,  1997  and  1996                                          F-5

Consolidated  Statements  of  Changes  in  Stockholders'  Equity
   for  the  years  ended  November  30,  1997  and 1996                   F-6

Consolidated  Statements  of  Cash  Flows  for  the  years  ended
   November  30,  1997  and  1996                                    F-7 - F-8

Notes  to  the  Consolidated Financial Statements                   F-9 - F-26


<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,  1997    and  the  related
consolidated  statements  of  operations,  stockholders'  equity,  and  cash
flows  for  the  year  then  ended.    These  financial  statements  are  the
responsibility  of  the  Company's  management.    Our  responsibility  is  to
express  an  opinion  on  these  financial  statements  based  on  our  audit.

We  conducted  our  audit  in  accordance  with  generally  accepted  auditing
standards.    Those  standards  require  that  we  plan  and perform the audit
to  obtain  reasonable  assurance  about  whether  the  financial  statements
are  free  of  material  misstatement.    An  audit  includes  examining, on a
test  basis,  evidence  supporting  the  amounts  and  disclosures  in  the
financial  statements.    An  audit  also  includes  assessing  the accounting
principles  used  and  significant  estimates  made  by management, as well as
evaluating  the  overall  presentation  of  the  financial  statements.    We
believe  that  our  audit  provides  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  their  subsidiaries  at  November  30,  1997  and  the
results  of  their  operations  and  their  cash  flows  for  the  year  then
ended,  in  conformity  with  generally  accepted  accounting  principles.



                                               /s/BDO  SEIDMAN,  LLP



Los  Angeles,  California
January  23,  1998






<PAGE>
Report  of  Independent  Accountants





To  the  Board  of  Directors

Telesoft  Corp.  and  Subsidiaries



We  have  audited  the  consolidated  statements  of  operations,
changes  in  stockholders'  equity,  and  cash  flows  of  Telesoft
Corp.  and  Subsidiaries  (the  "Company")  for  the  year  ended
November  30,  1996.    These  financial  statements  are  the
responsibility  of  the  Company's  management.    Our  responsibility
is  to  express  an  opinion  on  these  financial  statements  based  on
our  audit.



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



In  our  opinion,  the  financial  statements  referred  to  above
present  fairly,  in  all  material  respects,  the  consolidated
results    of    operations    and    cash    flows    of    the  Company  for
 the    year    ended  November  30,  1996,  in  conformity  with
generally  accepted  accounting  principles.




/s/  Coopers  &  Lybrand,  L.L.P.





Phoenix,  Arizona

March  3,  1997,  except  as  to  the  information  presented
in  Note  21,  for  which  the  date  is  February  20,  1998.

<PAGE>
<TABLE>
<CAPTION>

TELESOFT  CORP.  AND  SUBSIDIARIES
CONSOLIDATED  BALANCE  SHEET
November  30,  1997

                                          ASSETS



<S>
                                                         <C>
Cash and cash equivalents (Notes 2 and 4)                   $1,621,784
Investment securities (Notes 3 and 4)                          2,200,000
Accounts receivable, net of allowance for
   uncollectibles of $640,982 (Notes 2 and 5)                 6,544,453
Inventory (Note 6)                                               401,508
Deferred taxes (Note 11)                                       1,097,900
Income taxes receivable                                          235,981
Other                                                            233,979
                                                            ------------
Total Current Assets                                          12,335,605

Property and equipment, net (Note 7)                           3,006,567
Computer software costs, net (Note 8)                            460,442
Intangibles, net (Note 9)                                      1,303,826
Note receivable from related party (Note14)                      347,335
Other                                                            187,075
                                                            ------------
Total Assets                                                $17,640,850
                                                            ============

                       LIABILITIES AND STOCKHOLDERS' EQUITY

Note payable-current portion (Note 10)                      $90,523
Income taxes payable                                             286,295
Accounts payable and accrued liabilities                       6,632,968
Deferred revenue                                               1,245,806
                                                            ------------
Total Current Liabilities                                      8,255,592

Note payable (Note 10)                                           371,551
Deferred taxes (Note 11)                                         107,200
                                                            ------------
Total Liabilities                                              8,734,343
                                                            ------------
Commitments and contingencies (Notes 13,14,16, and 22)                 -
Minority Interest (Notes 1 and 19)                                     -

Stockholders Equity:

Common Stock, 50,000,000 shares of common stock, no par
   value, authorized; 3,787,500 issued and outstanding         7,286,159
Additional paid-in capital                                        80,069
Retained Earnings                                              1,540,279
                                                            ------------
Total Stockholders' Equity                                     8,906,507
                                                            ------------
Total Liabilities and Stockholders' Equity                  $17,640,850
                                                            ============
</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,  1997  and  1996




<S>
                                            <C>             <C>
                                                     1997               1996

Sales, net                                     $22,593,450  $20,742,993
Cost of Sales                                      14,330,388       12,821,582
                                               --------------  ---------------

Gross Profit                                        8,263,062        7,921,411
General and Administrative Expense                  7,701,871        6,623,649
                                               --------------  ---------------
Operating Income                                      561,191        1,297,762
                                               --------------  ---------------
Other Income (Expense):

Interest Income                                       177,780          308,297
Interest Expense                                            -           (3,122)
Other (expense) income                                (14,686)             598
                                               --------------  ---------------
                                                      163,094          305,773
                                               --------------  ---------------
Income before Provision for Income Taxes
  and Discontinued Operations                         724,285        1,603,535
                                               --------------  ---------------
Provision for Income Taxes (Note 11)                 (321,300)        (614,200)
                                               --------------  ---------------

Income from Continuing Operations                     402,985          989,335

Loss from Discontinued Operations, net
  Of Benefit for Income Taxes of $973,800
  and $206,500 in 1997 and 1996, respectively
  and Minority Interest of $186,350 for
  1997. (Note 20)                                  (1,326,729)        (212,758)
                                               --------------  ---------------
Net (Loss) Income                              $(923,744) $776,577
                                               ==============  ===============
Earnings per share - continuing operations
  primary and fully diluted                    $.11  $.26
                                               ==============  ===============
Loss per share - discontinued operations       $(.35) $(.06)
                                               ==============  ===============
Net (Loss) earnings per share                  $(.24) $.20
                                               ==============  ===============
Weighted average number of shares
  outstanding-primary and fully diluted             3,802,874        3,817,130
                                               ==============  ===============
</TABLE>


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

TELESOFT  CORP.  AND  SUBSIDIARIES
CONSOLIDATED  STATEMENTS  OF  CHANGES  IN  STOCKHOLDERS'  EQUITY
For  the  years  ended  November  30,  1997  and  1996

                                Common  Stock


<S>
                         <C>        <C>          <C>       <C>          <C>
                             Number of             Additional              Total
                              Shares                Paid-In    Retained  Stockholders'
                            Outstanding  Amount     Capital    Earnings    Equity

Balance, November 30, 1995  3,787,500  $7,246,159  $80,069  $1,687,446  $9,013,674
Restricted Stock Issued
  in Connection with
  GoodNet, LLC Acquisition
  (Note 19)                    30,833       97,700         -            -  97,700

Net income                          -            -         -      776,577    776,577
                            ---------  -----------  --------  -----------  --------

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

</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,  1997  and  1996






<S>
                                               <C>             <C>
                                                        1997       1996
Increase (decrease) in cash and cash equivalents:

Cash flows from operating activities:

Cash received from customers                      $22,232,221   $19,731,286
Cash paid to suppliers and employees                (19,990,408)   19,146,399)
Interest paid                                                 -        (3,121)
Interest received                                       146,234       270,241
Income taxes paid                                       (59,844)   (1,214,485)
                                                  --------------  ------------
Net cash provided by (used in) operating
 activities of continuing operations                  2,328,203      (362,478)
                                                  --------------  ------------
Cash flows from investing activities:

Purchase of property and equipment                     (384,642)     (239,758)
Cash received from sale of equipment                      3,290             -
Computer software costs                                       -      (276,472)
Disbursements for notes receivable from
  related parties                                      (502,275)     (393,053)
Collection of notes receivable from
  related parties                                       480,674       191,548
Purchase of investment securities                    (4,831,668)   (3,503,332)
Sale of investment securities                         6,135,000             -
                                                  --------------  ------------
Net cash provided by (used in) investing
  activities of continuing operations                   900,379    (4,221,067)
                                                  --------------  ------------
Cash flows from financing activities:

Proceeds from notes payable                                   -     1,200,000
Payment of notes payable                                      -    (1,210,742)
                                                  --------------  ------------
Net cash used in financing activities
  of continuing operations                                    -       (10,742)
                                                  --------------  ------------
Cash used in discontinued operations                 (1,825,821)   (2,978,605)
                                                  --------------  ------------
Net increase (decrease) in cash and
   cash equivalents                                   1,402,761    (7,572,892)

Cash and cash equivalents at
  beginning of fiscal year                              219,023     7,791,915
                                                  --------------  ------------
Cash and cash equivalents at
  end of fiscal year                              $1,621,784   $219,023
                                                  ==============  ============
</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,  1997  and  1996

                                                         1997             1996


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

Net (Loss) Income                                 $(923,744)  $776,577
                                                  --------------  -----------
Adjustments to reconcile net (loss) income
  to net cash provided by (used in) operating
  activities from continuing operations:

Loss from discontinued operations                     1,326,729      212,758
Depreciation and amortization                           469,908      414,180
Loss on sale of fixed assets                             21,082            -
Interest income included with note receivable
  from related party                                    (19,474)           -

Changes in Assets and Liabilities:

Accounts receivable                                    (401,893)    (748,248)
Inventory                                                42,932       51,043
Other current assets                                   (115,479)       2,112
Deferred taxes                                         (497,400)     164,300
Other assets                                             19,685      (10,970)
Accounts payable and accrued liabilities              1,409,751     (537,845)
Deferred revenue                                        237,250       78,200
Income taxes payable                                    611,614     (617,343)
Income taxes receivable                                 147,242     (147,242)
                                                  --------------  -----------
                                                      3,251,947   (1,139,055)
                                                  --------------  -----------
Net cash provided by (used in) operating
  activities from continuing operations           $2,328,203   $(362,478)
                                                  ==============  ===========
<FN>


Supplemental  disclosure  of  investing  and  financing  activities:

During  the  year ended November 30, 1996, the Company issued 30,833 shares of
restricted  common  stock  valued  at  $97,700  as  partial  payment  for  the
acquisition
of  the  net  assets  of  GoodNet,  LLC.

During  the  year ended November 30, 1996, the Company financed a covenant not
to compete  in  the  amount  of  $505,020.

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%  was  as 
partial  payment  of  the  sale of 24% of the outstanding shares of Telesoft 
Acquisition Corp. II.  The  remaining  50%  was  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 services.
</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, 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)
or  RATEX.     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.

Acquisitions

During  the  fiscal  year  ended November 30, 1996, the Company incorporated a
wholly  owned  subsidiary, Telesoft Acquisition Corp II.  Telesoft Acquisition
Corp  II  is a corporation whose primary business activity is to acquire other
businesses.   Subsequent to the incorporation of Telesoft Acquisition Corp II,
it  acquired  the  net  assets  of GoodNet LLC.  (See "Acquisitions", Note 19)
During  the fiscal year ended November 30, 1996, the Company also acquired the
equipment  and  customer  bases of NetZone LLC and Internet Direct, Inc.  (See
"Acquisitions",  Note  19)

Principles  of  Consolidation

The  consolidated financial statements include the accounts of Telesoft Corp.,
together  with  its wholly owned subsidiary, Telesoft Acquisition Corp and 71%
owned  subsidiary,  Telesoft  Acquisition Corp II, d.b.a. GoodNet ("GoodNet").
(See  Note  20)

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.

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. 

Intangibles
<TABLE>
<CAPTION>

Amortization  of  intangibles  is  on  a  straight-line  basis  as  follows:


<S>
                           <C>
     Covenant Not-to Compete  3  - 5 years
     Goodwill                 5 years
     Customer Base            5 years
</TABLE>



The Company assesses the recoverability of goodwill at each balance sheet date
by  determining  whether  amortization  of  the  assets  over  their  original
estimated  useful  life  could  be  recovered  through  estimated  future 
undiscounted cash flows.

Deferred  Revenue

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

<PAGE>
Telesoft  Corp.  and  Subsidiaries
Notes  to  the  Consolidated  Financial  Statements  (Continued)

1.  Summary  of  Significant  Accounting  Policies:  (Continued)

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  91-1;  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; GoodNet charges  a  fixed flat rate for Internet access, with 
the exception of certain "burst"  billings,  where  the  customer  is billed 
for incremental ATM usage. Revenues  are  recognized in the month the service 
is provided to users.  Fees collected  in  advance  of  usage  are  deferred.

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
Earnings  (Loss) per share is based upon the weighted average number of shares
of common  stock  outstanding  during  the  fiscal  year.  Fully diluted 
earnings (loss) per  share  from  discontinued operations are not presented, 
as they are anti-dilutive.

<PAGE>
Telesoft  Corp.  and  Subsidiaries
Notes  to  the  Consolidated  Financial  Statements  (Continued)

1.        Summary  of  Significant  Accounting  Policies:  (Continued)

Accounting  Pronouncements:

In February 1997, the Financial Accounting Standards Board issued Statement of
Accounting  Standards  No.  128,  Earnings  Per  Share  (SFAS  128).  SFAS 128
specifies the  computation,  presentation  and  disclosure requirements for 
earnings per share and  is effective for periods ending after December 15, 
1997.  Pursuant to the provisions  of SFAS 128, the Company's basic net 
(loss) income per share would have been ($.24) and $.20 and its diluted 
(loss) earnings per share would have been  ($.22)  and  $.20 for the fiscal 
years ended November 30, 1997 and 1996, respectively.

Statement of Financial Accounting Standards No. 129, Disclosure of Information
about  Capital  Structure,  ("SFAS.  129") issued by the FASB is effective for
financial  statements  ending  after  December  15,  1997.    The new standard
reinstates  various  securities  disclosure  requirements previously in effect
under Accounting  Principles Board Opinion No. 15, which has been superseded 
by SFAS NO. 129.  The Company does not expect adoption of SFAS. 129 to have 
a material effect,  if  any,  on  its  financial  position  or  results  of  
operations.

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  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.

<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, 1997, the Company
had
uninsured  cash and cash equivalent bank balances of approximately $1,190,000.

Suppliers

The  Company  is  provided  a  significant  portion  of  its  long-distance
telecommunications  services  by one telecommunications company.  Although the
Company  is  dependant  upon  this  supplier,  management  believes comparable
suppliers  are  available.    For the fiscal years ended November 30, 1997 and
1996,  fees  paid  to  this  company  totaled  approximately $2,555,000 and 
$3,270,000, respectively.    As  of  November  30, 1997, the outstanding 
amount due to the service  provider  was  approximately  $780,000.

Customers

For  the  fiscal  year  ended  November 30, 1996, the Company had one customer
representing ten percent of total revenues. During the year ending November 30,
1997,  the Company did not have any customers which accounted for greater than
10%  of  its  revenues.

3.        Investment  Securities:

The  amortized  cost  and  fair  value (based on quoted market prices) of debt
securities  at  November  30,  1997 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>
                                             Amortized Cost         Fair Value

Mutual Funds                                 $2,200,000       $2,200,000
</TABLE>



4.  Fair  Value  of  Financial  Instruments:

Estimated  fair  values of the Company's financial instruments are as follows:
<TABLE>
<CAPTION>


         November  30,  1997


<S>
                                     <C>                  <C>

                                        Carrying Amount      Fair Value

Cash and short-term investments         $3,821,784          $3,821,784
Long-term debt                              462,074              427,030
</TABLE>



The  carrying  amount  approximates  fair  value  of  cash  and  short-term
instruments.  The  future  fair  value of long-term debt is based on the 
current rates which the Company could borrow funds with similar remaining 
maturities.  The fair market value  of  the  note receivable from related 
party cannot be determined due to its related  party  nature.

<PAGE>

Telesoft  Corp.  and  Subsidiaries
Notes  to  the  Consolidated  Financial  Statements  (Continued)

5.          Accounts  Receivable:
<TABLE>
<CAPTION>

At November 30, 1997, accounts receivable include billed and unbilled amounts,
as  follows:


<S>
                               <C>
     Billed                            $5,216,341
     Unbilled                             1,969,094
                                       ------------
                                          7,185,435
Less:  allowance for uncollectibles        (640,982)
                                       ------------
                                       $6,544,453
                                       ============
</TABLE>



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

6.          Inventory:
<TABLE>
<CAPTION>

At  November  30,  1997,  inventory  consists  of:


<S>
                      <C>
     Parts and equipment      $204,342
     Finished products             197,166
                              ------------
                              $401,508
                              ============
</TABLE>



7.          Property  and  Equipment:
<TABLE>
<CAPTION>


At  November  30,  1997,  property  and  equipment  consists  of:


<S>
                                              <C>
     Equipment                                        $4,321,408
     Vehicles                                               44,550
     Furniture and fixtures                                230,380
     Leasehold improvements                                 47,427
     Property Leased to Others                             507,464
                                                      ------------
                                                         5,151,229
  Less:  accumulated depreciation and amortization      (2,144,662)
                                                      ------------
                                                      $3,006,567
                                                      ============
</TABLE>



Depreciation  expense  from  continuing  operations  was $316,105 and $301,600
for  the  fiscal  years  ended  November  30,  1997  and  1996,  respectively.
Depreciation  expense, included with the net loss from discontinued operations
was  $668,279  and  $169,663  for the fiscal years ended November 30, 1996 and
1996,
respectively.

<PAGE>
Telesoft  Corp.  and  Subsidiaries
Notes  to  the  Consolidated  Financial  Statements  (Continued)

8.        Computer  Software  Costs:
<TABLE>
<CAPTION>

At  November  30,  1997,  computer  software  costs  capitalized  are:


<S>
                          <C>
                Computer software            $987,885
                Accumulated amortization         (527,443)
                                             ------------
                                             $460,442
                                             ============

</TABLE>


Amortization  expense  from  continuing  operations  related  to  computer
software  cost  during the years ended November 30, 1997 and 1996 was $145,470
and $104,247,  respectively.    There  was no amortization expense attributable 
to discontinued  operations  for  the  years  ended  November  30, 1997 and 
1996.

9.          Intangibles:
<TABLE>
<CAPTION>


At  November  30,  1997,  intangibles  consist  of:


<S>
                             <C>
     Covenant Not-to-Compete-SBC     $25,000
     Covenant Not-to Compete-GoodNet     505,020
     Goodwill-GoodNet                    371,837
     Customer Base-GoodNet               785,000
                                     -----------
                                       1,686,857
     Accumulated amortization           (383,031)
                                     -----------
                                     $1,303,826
                                     ===========

</TABLE>


Amortization  expense  for  continuing  operations was $8,333 during the years
ended November 30, 1997 and 1996.  Amortization expense from discontinued 
operations was  $300,909  and  $59,206 during the years ended November 30, 
1997 and 1996, respectively.


<PAGE>
Telesoft  Corp.  and  Subsidiaries
Notes  to  the  Consolidated  Financial  Statements  (Continued)

10.        Note  Payable:
<TABLE>
<CAPTION>

At  November  30,  1997,  note  payable  consists  of:


<S>
                                                      <C>
     Note payable to an individual in 60 monthly
installments of $10,000, less imputed interest
at 7% of $94,980, beginning June 15, 1997; in
payment for a covenant not-to-compete (See Note 19)      $462,074

Less: current portion                                       (90,523)
                                                         ----------
                                                         $371,551
                                                         ==========
</TABLE>


<TABLE>
<CAPTION>


Future  minimum  principal  payments  due  on the note payable are as follows:

                Fiscal  Year  Ending
                     November  30


<S>
                       <C>              <C>
                          1998             $90,523
                          1999                 97,066
                          2000                104,083
                          2001                111,608
                          2002                 58,794
                                           ----------
                          Total            $462,074
                                           ==========
</TABLE>



Company has available a $1,000,000 operating line of credit expiring April 15,
1998.   Interest is payable monthly at the bank's prime rate plus one-percent.
The  line  of  credit  is  collateralized  by  various  corporate  assets  and
requires  compliance  with  various  loan covenants.  As of November 30, 1997,
there were  no  balances  outstanding  on  this  operating  line  of  credit.


<PAGE>
Telesoft  Corp.  and  Subsidiaries
Notes  to  the  Consolidated  Financial  Statements  (Continued)

11.        Income  Taxes:
<TABLE>
<CAPTION>

The  components of the provision for income taxes for the years ended November
30,  1997  and  1996  consist  of:


<S>
                                  <C>                    <C>
                                              1997                     1996
Current                              $818,700        $449,900
Deferred                                    (497,400)               164,300
                                     ---------------        ---------------
Provision for income taxes           $321,300        $614,200
                                     ===============        ===============
</TABLE>


<TABLE>
<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>
                                                1997                   1996
      Current                        $246,300        $545,500
      Tax exempt interest income             (25,000)               (53,500)
      Non deductible portion of
         meals and entertainment              15,000                 11,400
      State taxes, net of federal
         benefit                              85,000                110,800
                                     ---------------        ---------------
      Provision for income taxes     $321,300        $614,200
                                     ===============        ===============
</TABLE>



<TABLE>
<CAPTION>

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


<S>
                                           <C>
   Current asset
     Allowance for uncollectibles                $165,600
     Expense included as basis in subsidiary         405,800
     Deferred revenue                                297,600
     Timing differences from pending IRS audit       184,600
     State net operating loss carryforward            44,300
                                                 -----------
                                                   1,097,900
                                                 -----------
   Non-Current Liability
     Accumulated depreciation                       (115,400)
     Accumulated amortization                          8,200
                                                 -----------
                                                    (107,200)
                                                 -----------
   Net deferred tax asset                        $990,700
                                                 ===========
</TABLE>


The  Company  believes that is more likely than not that they will realize the
net deferred  tax asset based upon the company's expected future profitability 
and on its  impending  gain  on  the  sale of GoodNet (See Note 21).  
Accordingly, no further  valuation  allowance  has  been  provided.

<PAGE>
Telesoft  Corp.  and  Subsidiaries
Notes  to  the  Consolidated  Financial  Statements  (Continued)

12.        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,  1997, 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, 
1997, 125,000 common  stock  warrants  were  outstanding.

Dividend  Policy

The Company has no limitations or restrictions for declaring dividends.  As of
November  30,  1997,  no  dividends  have  been  declared.

13.        Stock  Plans:

Effective  February  1,  1995, the Board of Directors adopted two stock plans,
the 1995  Incentive  Stock  Option Plan (ISOP) and the 1995 Restricted Stock 
Plan. Under  the  1995 Plans, 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  two additional stock plans, the 1996 
ISOP and the 1996 Restricted  Stock  Plan.    These  Plans  were approved by 
the shareholders on August 7,  1996.    Under  the 1996 Plans, a total of 
260,000 shares are reserved for issuance  at the discretion of the 
compensation committee.  Effective March 7, 1997,  the  Board of Directors 
adopted two additional plans, the 1997 ISOP and the 1997  Restricted  Stock  
Plan.  Under the 1997 Plans, a total of 260,000 share are reserved  for  
issuance  at  the  discretion  of  the  compensation committee.

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.

Restricted  stock  awards issued under the restricted stock plans provide that
shares  awarded may not be sold or otherwise transferred until restrictions as
established  by  the  Committee  have lapsed.  Upon termination of employment,
death retirement  or permanent disability, the restrictions imposed shall 
lapse with the  consent  of  the  Board.  There were no shares of restricted 
stock issued under the  1995,  1996,  or  1997  Restricted  Stock  Plans  at  
November  30, 1997.

<PAGE>
Telesoft  Corp.  and  Subsidiaries
Notes  to  the  Consolidated  Financial  Statements  (Continued)

13.        Stock  Plans:    (Continued)
<TABLE>
<CAPTION>

The  following  table  summarizes  stock  option  activity:


<S>
                                     <C>              <C>

                                        Number of        Weighted Average
                                         Shares            Exercise Price


Outstanding at November 30, 1995          264,000                  $6.37

Granted                                   246,000                    4.36
Exercised                                       -
Forfeited                                  (3,100)                   6.00
                                         --------
Outstanding at November 30, 1996          506,900                    5.41

Granted                                   258,500                    3.09
Exercised                                       -
Forfeited                                 (15,600)                   4.88
                                         --------
Outstanding at November 30, 1997          749,800                    4.62
                                         ========
Options exercisable at 11/30/96           263,500                    6.37
Options exercisable at 11/30/97           326,350                    5.97
</TABLE>




     Available  for  grant  at:  (a)
     November  30,  1996              17,100
     November  30,  1997              64,400

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


Following  is  a  summary  of  the status of options outstanding at November 30,
1997:

                          Outstanding  Options               Exercisable Options
                          -------------------                -------------------


<S>
          <C>      <C>               <C>             <C>      <C>
                      Weighted
 Exercise             average           Weighted                 Weighted
 Price                remaining         average                  average
 Range       Number   contractual life  exercise price  Number   exercise price
 -----       ------   ----------------  --------------  ------   --------------
6.00-$6.60  259,500  8 years           $6.38           259,500  $6.38
3.00-$5.88  231,800  9 years            4.34            61,850   4.43
2.94-$3.23  233,500  10 years           3.07                 -      -
3.13         20,000  10 years           3.13                 -      -
4.00          5,000  10 years           4.00             5,000   4.00
-----------  -------  --------          -----          --------  -----
2.94-$6.60  749,800  9 years            4.62           326,350   5.97
===========  =======  ========          =====          ========  -----
</TABLE>



<PAGE>
Telesoft  Corp.  and  Subsidiaries
Notes  to  the  Consolidated  Financial  Statements  (Continued)

13.        Stock  Plans:    (Continued)

Other  Options

During  the  fiscal  year  ended  November 30, 1996, the Company issued 20,000
options  with  an  exercise  price of $5.625 to the Company's public relations
firm. Additionally, the Company issued 2,000 options with an exercise price 
of $4.75  and  2,000  options  with  an exercise price of $3.00 to the 
Company's outside directors  in  connection  with  board  meetings.

During  the  fiscal  year  ended  November 30, 1997, the Company issued 20,000
options  with  an  exercise price of $3.125 and 5,000 options with an exercise
price  of  $4.00  to  company  employees.

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, 1997 and 1996.
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 (loss) income and (loss) earnings per share 
for the fiscal years  ended November 30, 1997 and 1996 would have been 
(increased) reduced to the  proforma  amounts  presented  below:

<TABLE>
<CAPTION>



<S>
                                       <C>               <C>
                                                  1997              1996
Net (loss) income as reported             $(923,744)     $776,577
Proforma                                    (1,230,244)          466,577
Net (loss) income per share as reported   $(.24)     $.20
Proforma                                  $(.32)     $.12
</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 1997 and 1996; expected life of options of
1-3 years, expected volatility of 244% in 1997 and 88% in 1996, risk-free 
interest rates of 8%, and a 0% dividend yield.  The weighted average fair 
value at date of  grant  for  options  granted  during  1997  approximated 
$2.41 and options granted in  1996  approximated  $2.13,  $1.87,  and  $1.18.

<PAGE>
Telesoft  Corp.  and  Subsidiaries
Notes  to  the  Consolidated  Financial  Statements  (Continued)

14.      Related  Party  Transactions:

Lease  Commitment

The  Company  leases  its  office  facilities under a month-to-month operating
lease agreement  from  the  President  of the Company.  Rent expense was 
$83,737 for each of  the  fiscal  years  ended  November  30,  1997 and 1996. 
In addition, the Company pays  all  utilities,  insurance  and property taxes.  
During January 1998 the Company vacated this space, however, the Company has 
agreed to a minimum of an additional  90  days  of  rent.

Notes  receivable

At November 30, 1997, Telesoft has an outstanding 6% unsecured note receivable
from  the  president  of  GoodNet in the amount of $347,335, including accrued
interest.    The  note, including accrued interest, was scheduled to be due in
May 2002.    Subsequent  to  November  30,  1997,  the  Company  received a 
pledge agreement against  common  stock  in  WinStar  Communications,  Inc.  
(WCII:  NASDAQ) ("WinStar")  received by the president of GoodNet in 
conjunction with the sale of GoodNet  to  WinStar.    The  pledged  WinStar  
common  stock  is  valued  at approximately $1,000,000.   Additionally, the 
due date of the note has been rescheduled for January  1999.

During  the  fiscal year ended November 30, 1996, the Company issued a line of
credit  to  a  related  party  in  the amount of $225,000.  The line of credit
earned interest  at  the  rate  of  6% per annum and was paid in full during 
the year ended November  30,  1997.

15.    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, 1997 and 1996, 
contributions were $43,367 and $22,904,  respectively.

<PAGE>
Telesoft  Corp.  and  Subsidiaries
Notes  to  the  Consolidated  Financial  Statements  (Continued)

16.      Commitments:

Office  Lease  Commitments

The  Company  is  obligated  under  long-term  operating  leases  for  office
facilities through  the  year  2006.    (See  "Subsequent  Events",  Note  21 
below)

As  of  November  30,  1997,  future minimum lease payments due under the non-
cancelable  operating  lease  agreements  are  as  follows:
<TABLE>
<CAPTION>

Fiscal  Year  Ending
    November  30,


<S>
           <C>
1998          $379,879
1999              413,342
2000              420,422
2001              437,009
2002              463,409
Thereafter      2,578,049
              -----------
Total         $4,692,110
              ===========
</TABLE>


Rent  expense  under  all operating leases, including the related party lease,
amounted  to  approximately $304,000 and $199,500 for the years ended November
30, 1997  and  1996,  respectively.

Other  Commitments

GoodNet,  a 71% owned subsidiary of the Company, has entered into an operating
lease  agreement  for  broadband  service with a provider of its ATM services.
Under  the terms of the agreement, the Company is required to maintain minimum
service  levels  of  approximately $45,000 per month with the provider through
March 2001.  GoodNet currently has approximately $170,000 in monthly recurring
charges  from  this  provider during the quarter ended November 30, 1997.  The
Company  will  not  longer  be  obligated for this commitment upon the sale of
GoodNet.    See  Note  21  below.

GoodNet  has  also  entered  into  an  operating lease agreement for broadband
service with  another ATM provider.  Under the terms of this agreement, the 
Company is committed  to  pay  $135,000 per month beginning November 1, 1998 
and $267,000 per month from May 1, 2000 through April 31, 2002.  The Company 
will not longer be obligated  for  this  commitment upon the sale of GoodNet. 
See Note 21 below. 

<PAGE>
Telesoft  Corp.  and  Subsidiaries
Notes  to  the  Consolidated  Financial  Statements  (Continued)

17.        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  $412,743  as of November 30, 1997.  
During the fiscal  years  ended  November  30, 1997 and 1996, the Company 
received rental income  of  $180,848  and  $181,628,  respectively  under  
this  agreement.  GoodNet  is  also  the  subleasor of office space (Note 15) 
mentioned above in Tempe, Arizona.  The lease agreement expires in March 2000. 
During the fiscal year  ended  November  30,  1997,  the  Company  received  
$30,123  under this agreement.

As  of  November 30, 1997, 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
       1998                      $75,800
       1999                         76,720
       2000                         57,400
                                  --------
Total future minimum rentals     $209,920
                                 =========
</TABLE>


18.      Research  and  Development:

Research  and  development  costs for the fiscal years ended November 30, 1997
and 1996  were  $414,000  and  $266,000,  respectively.

<PAGE>
Telesoft  Corp.  and  Subsidiaries
Notes  to  the  Consolidated  Financial  Statements  (Continued)

19.      Acquisitions  and  Agreements:

GoodNet

During  the  fiscal  year  ended  November  30,  1996,  the  Company  acquired
proprietary software  and  other  net  assets  relating  to  GoodNet,  LLC in 
exchange for $115,000 cash, 30,833 restricted shares of the Company's common 
stock valued at $97,700 and  $24,630  in  additional  costs  associated with 
the purchase.  Additional consideration  was  to  be  given  under  certain  
conditions.   However, this additional consideration was subsequently modified 
(See "Agreements related to GoodNet"  below).

The  acquisition  was accounted for as a purchase.  As such, the operations of
GoodNet  were  included  in  the consolidated statement of operations from the
date of  acquisition.   Accordingly, the purchase price was allocated to the 
assets and liabilities  as  follows:
<TABLE>
<CAPTION>

                                April  30,
                                   1996


<S>
                           <C>

Cash                          $21,485
Receivables                        82,033
Property, plant and equipment      92,141
Goodwill                          400,687
Current liabilities               (69,452)
Notes payable                    (263,705)
Deferred revenues                 (25,859)
                              -----------
                              $237,330
                              ===========
</TABLE>



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.

<PAGE>
Telesoft  Corp.  and  Subsidiaries
Notes  to  the  Consolidated  Financial  Statements  (Continued)

19.      Acquisitions  and  Agreements:  (Continued)

Agreements  related  to  GoodNet  (Continued)

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.

Other  acquisitions

The  Company also acquired equipment and dial-up access and dedicated Internet
accounts  from  two local Internet providers, NetZone LLC and Internet Direct,
Inc.  in  exchange  for  $425,000  and  $440,000 cash, respectively.  Of these
amounts, $785,000 was allocated to customer base and $80,000 to equipment.  No
proforma  information  has  been  presented due to the insignificance of these
acquisitions.

20.      Discontinued  Operations:

Subsequent  to  November  30,  1997,  the  Company  together with the minority
shareholders of GoodNet, sold the Company's Internet services subsidiary. (See
Note  21)    As  a  result  of  this transaction, the results of operations of
GoodNet have  been  shown  as  discontinued  operations  in the accompanying 
financial statements.

As  of  November  30, 1997, the net current assets of GoodNet, included in the
accompanying  balance  sheets  were  $1,109,669,  net  long  term  assets were
$3,494,701,  net  current  liabilities  were  $2,086,927,  and  net  long term
liabilities  were  $371,551.

<PAGE>
Telesoft  Corp.  and  Subsidiaries
Notes  to  the  Consolidated  Financial  Statements  (Continued)

21.      Subsequent  Events:

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 (WCII:NASDAQ) 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  (based on the 20 day average price 
of WinStar stock) of  WinStar  common  stock,  which  had  an  aggregate  fair  
market  value of approximately  $13.9  million as of the close of business on 
January 12, 1998, which includes a tentative gain of approximately $1,760,000 
from the date of close  of  the transaction.  After commissions and related 
legal  expenses, the Company  will  realize  an  approximate  $10,000,000  
pretax  gain on the sale.  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  will  account  for  its  investment  in  WinStar  as  an
available-for-sale equity  security, which accordingly is carried at market
value.  Pursuant to a hedging  strategy implemented by the Company in January, 
1998, 400,000 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. 

As a result of the above transaction, the Company will be vacating a portion of
its office space in Phoenix, Arizona during the year ending November 30, 1998.
As a result, the Company will have to take steps to sublease the vacated space
or  pay  an  early  termination  fee  approximated  at  $250,000.

<TABLE>
<CAPTION>

Exhibit  11;  Loss  (Earnings)  per  common  and  common  equivalent  shares

(Loss)  Earnings  per  common  and  common  equivalent  share is calculated as
follows:

                                                      Year  Ended November 30,


<S>
                                            <C>                <C>
                                                      1997              1996
Income from continuing operations              $402,985        $989,335
Loss from discontinued operations              $(1,326,729)       $(212,758)
Net (Loss) Income                              $(923,744)       $776,577
<CAPTION>


Earnings  per  common  and  common  equivalent  shares:



<S>
                                            <C>                <C>
Weighted average number of shares outstanding    3,802,874          3,805,528

Net effect of dilutive common stock options
  and common stock warrants based on the
  treasury stock method using the period
  average market price of the Company's
  common stock                                      27,824             11,602
Weighed average number of shares and
  equivalent shares                              3,830,698           3,817,130
Earnings per share - continuing operations     $.11        $.26
Loss per share - discontinued operations       $(.35)       $(.06)
(Loss) Earnings per share                      $(.24)       $.20
<CAPTION>



<S>
                                            <C>                <C>
Earnings per share, assuming full dilution:

Weighted average number of shares outstanding    3,802,874           3,805,528
Net effect of dilutive stock options based on
  the treasury stock method using the end of
  period market price of common, if higher
  than average                                      27,824              11,602
Common Stock including assumed conversions       3,830,698           3,817,130
Earnings per share - continuing operations     $.11        $.26
Loss per share - discontinued operations       $(.33)       $(.06)
(Loss) Earnings per share                      $(.22)       $.20
</TABLE>



<PAGE>
Exhibit  21:  Subsidiaries  of  Registrant
1.    Telesoft  Acquisition  Corp.
2.    Telesoft  Acquisition  Corp.  II