[DATARAM LOGO]



                       DATARAM CORPORATION



                       2002 ANNUAL REPORT
















Financial Highlights and Table of Contents

(Dollar figures in thousands, except per share amounts)

Fiscal Year                  2002     2001     2000     1999
                           _______  _______  _______   _______

Revenues                 $  81,190 $ 130,577 $109,152 $ 75,853
Net earnings (loss)         (8,101)    8,595    7,846    5,635

Net earnings(loss)per
common and common share
equivalent (diluted)          (.95)      .88      .81      .60

Working capital             13,513    20,533   22,711   17,438
Stockholders' equity        29,828    38,043   26,894   20,019





Table of Contents

1 A Message from the President

2 Company Profile

4 Management's Discussion and Analysis
  of Financial Condition and Results
  of Operations

7 Financial Review

24 Selected Financial Data




[PICTURE OF ROBERT TARANTINO]

To Our Shareholders


The last fiscal year has been a challenging year for business in general and
especially so for the information technology industry. Our fiscal year 2002
began with industry-wide issues of excess inventory and manufacturing
capacity, which drove memory prices down to historical lows at a pace that
left little time for operational fine-tuning.  The impact of volatile memory
prices was exacerbated by reduced demand.  As a result, our earnings were
negatively affected and we incurred our first quarterly loss in twenty-four
quarters.

We quickly reacted to the deteriorating market conditions by accelerating our
plans for a global restructuring following the acquisition of Memory Card
Technology's assets.  This action, which occurred in the first quarter of
fiscal 2002, reduced operating expenses by approximately $4 million,
annually, and resulted in a quick return to positive cash earnings.

To further strengthen our financial position, we capitalized on the
prevailing low interest rate environment by renegotiating our credit facility
and eliminating $13.7 million in term debt and capital lease obligations in
our fiscal third quarter.  This initiative resulted in a projected savings of
an additional $600,000 in annual interest costs.

During our fiscal fourth quarter, signs of a memory market recovery were
beginning to emerge.  However, this trend proved brief and, as the much
anticipated economic recovery fell short of expectations, weak demand
continued to pressure memory prices.  Our fiscal fourth quarter financial
results were disappointing. We have taken action to further streamline the
Company's operations by integrating and centralizing our worldwide
manufacturing and engineering management as well as other administrative
functions.  This consolidation, which was announced in late June of the
current fiscal year, is expected to save an additional $2.5 million per year.

Throughout fiscal year 2002, we continued to introduce new memory products to
the market, many of which were first to market offerings featuring leading-
edge configurations which exceeded the capacity of products available from
the original equipment manufacturers.  We received the Computer Memory Tests
Labs Award, for the highest number of Intel advanced memory qualifications,
for the second year in a row. We continued to work to maintain our
competitive position of being the best choice in memory by offering the
latest technologies at competitive price points, supported by world-class
service and support.  These value-added qualities have sustained our success
throughout our 36-year history.

The affect of the slowing economy over the last fifteen months have had an
onerous impact on the memory market in general.  We have confronted the many
challenges presented during this period by maintaining our lead in memory
solutions; fine-tuning our operations to adapt to changing economic
conditions and integrating our newly acquired assets with the focus on
achieving profitable growth.

Our product offering, which traditionally had been gigabyte-class memory for
high-performance network servers, was broadened to include compatible memory
for PCs, workstations and laptops with the acquisition of Memory Card
Technology's assets. The acquisition also expanded our sales resources
throughout the world, especially in Europe and the Pacific Rim.

During the fourth quarter we experienced an increase in our OEM program
business.  We believe this area has growth potential as customers expand
their outsourcing strategies and consolidate their suppliers with global
capabilities.

Notwithstanding the lingering economic uncertainty, Dataram is financially
secure, operationally efficient and fully equipped to expand our markets and
customer base. We have streamlined our operations, saving an estimated $7.1
million, annually, while preserving our key resources. We approach the new
fiscal year with confidence in our future.


On behalf of the Board of Directors, I would like to thank our shareholders
for their continued support and our employees for their hard work and
dedication. Their focused effort to achieving their best is a requisite to
our continued success.  We look forward to a prosperous fiscal year.




July 23, 2002



Robert V. Tarantino
Chairman of the Board of Directors,
President and Chief Executive Officer

                                     1




Company Profile

The Best Choice in Memory


Dataram is a worldwide leader in the design, development and manufacture of
memory products. Our products are sold worldwide to OEMs, distributors,
value-added resellers, corporate accounts, government and military agencies.
Dataram memory powers the Internet, corporate data centers, medical imaging
devices, petroleum exploration, national labs server farms, small businesses
and personal computers. These systems run a wide range of industrial and
consumer applications from transactions processing, decision support systems,
telecommunications, design engineering and simulations. Our products support
the continuing development of the Internet, its backbone and infrastructure,
allowing our partners to fully exploit the possibilities of new mainstream
digital technologies.

Today, technology continues its rapid evolution.  Processors, buses, and
memory run at blazing speeds delivering unprecedented system performance.  As
the Linux operating system continues to mature more memory is utilized.
UNIX powerhouses Solaris, HP-UX and AIX evolve into more scalable, powerful
and reliable offerings utilizing more memory and fueling tremendous
performance gains.
Dataram is the best choice in memory.  Being at the forefront of design,
manufacturing and marketing, Dataram delivers the fastest, highest density
and most cost effective memory solutions available.  Our products are
scalable from the most economical PC's to the most advanced enterprise
servers.  Many products debut well ahead of independent competitors and
occasionally before the OEM.  Our rich reserve of technological and
engineering expertise propels the reliability, compatibility and quality that
have made Dataram a trusted brand in the industry.


Our Mission

Our mission is to meet and surpass our customers' expectations by providing a
total performance package with leading-edge product design and development,
delivery just as agreed, reliability and compatibility guaranteed,
competitive price performance, and the industries best customer service and
support.


Market Responsiveness

Our understanding of the market has enabled us to create a sales model that
gives us an important competitive advantage in the memory industry. This
foundation positions us uniquely throughout the world to provide our
customers with exceptional personalized service and support.

Dataram focuses on key channel partners in our three global regions.  In the
Asia Pacific region, we are well positioned in strategic countries to execute
our plans and increase our market share.  In EMEA (Europe/Middle East/Africa)
we continue our growth, penetrating new markets and countries from our
expanded European sales offices.  In the U.S. market, Dataram continues to
focus on its traditional customer base, key channel partners and selected
major end users customers as well as working diligently developing new
relationships with embedded systems, industrial specialty, contract
electronics and network infrastructure manufacturers to provide standard and
custom memory solutions.


Product Offerings and Innovations

Dataram provides memory for HP/Compaq, Dell, Fujitsu-Siemens, IBM, Intel,
SGI, Sun Microsystems and Toshiba computers.  Server, workstation, desktop,
notebook, motherboard and custom products comprise the types of memory
products offered.  As a CMTL Server and Desktop Certified Manufacturer,
Dataram achieved the highest number of memory certifications for Intel
motherboards over the past year.  CMTL (CMT Labs) is the only independent
test laboratory approved by Intel for system level validations.  Dataram
guarantees reliability, compatibility, prompt secure delivery, competitive
pricing and provides a lifetime warranty.  We consider these parameters the
minimum for providing the best possible service to customers.

Timely, new product development and innovation are keys to our success.
Dataram takes pride in being first-to-market with new strategic memory
solutions that keep pace with today's intense computing environments. At the
cornerstone of Sun Microsystems offerings, Dataram was first-to-market with
an 8GB upgrade for the Sun Fire 280R and Sun Blade 1000/2000 series.  For
HP/Compaq DDR based workstations, we were first to offer a high-density 1GB
upgrade, and in the rack mount 1U server arena, Dataram was first-to-market
with a high-density low-profile monolithic 1GB registered module.  We
introduced several new Compaq ProLiant and Alpha server memories notably the
DRQ380/2GB and DRQES45/4GB upgrades.  For IBM servers, the DRIM80/8GB and
DRIH80/2GB upgrade for the P-series 660 and 620 servers have been widely
received.  Our DTM line for Intel servers is complete with Chipkill supported
modules from 256MB to 1GB.  Dataram continues to offer the only cost
effective 1GB unbuffered module for Intel's successful 845D chipset.

                                     2


Manufacturing Flexibility-Global Reach

A key component of our value advantage is consistently being the best in
product quality, customer service and responsiveness.  Dataram manufactures a
vast range of memory. Utilizing advanced packaging technologies, densities up
to two gigabytes on a single module are a reality and are shipping in
quantity.  Around the globe, our customers' needs are met by our ability to
ship from distribution centers located on three continents.  These centers
are stocked from our state of the art high volume ISO9001 certified
manufacturing facilities located in the U.S. and Denmark.

Our Difference

Dataram has the sales infrastructure, global network, professional competence
and strategic focus to ensure that value is added at every link of the chain.
Our financial stability, knowledge of our markets and understanding of our
partners' needs ensures that we remain the best choice in memory.

                                     3


Management's Discussion and Analysis of Financial Condition and
Results of Operations

Overview

Dataram is a developer, manufacturer and marketer of memory products for
entry- to enterprise-level servers, workstations and notebooks from Dell,
Fujitsu/Siemens, HP/Compaq, IBM, SGI, Sun, Toshiba and Intel platforms.

The Company's memory products are sold worldwide to original equipment
manufacturers, distributors, value-added resellers and end users. The Company
has manufacturing facilities in Denmark and the United States with sales
offices in the United States, Europe, and the Asia Pacific region.

The Company is an independent memory manufacturer specializing in high
capacity memory and competes with several other large independent memory
manufacturers as well as the original equipment manufacturers mentioned
above. The primary raw material used in producing memory boards are dynamic
random access memory (DRAM) chips. The purchase cost of DRAM chips typically
represents approximately 80% of the total cost of a finished memory board.
Consequently, average selling prices for computer memory boards are
significantly dependent on the pricing and availability of DRAM chips.

Results of Operations

The following table sets forth consolidated operating data expressed as a
percentage of revenues for the periods indicated.


Years Ended April 30,                   2002       2001      2000
_________________________________________________________________

Revenues                               100.0%     100.0%    100.0%

Cost of sales                           69.9       74.7      75.0
                                       _____      _____     _____

Gross profit                            30.1       25.3      25.0

Engineering and development              2.3        1.3       1.3

Selling, general and administrative     26.5       13.5      12.5

Restructuring charges                    1.5          -         -

Intangible asset
amortization expense                     7.2        0.2        -
                                       _____      _____     _____

Earnings (loss) from operations         (7.4)      10.3      11.2

Other income (expense), net             (1.1)       0.6       0.4
                                       _____      _____     _____

Earnings (loss) before income tax       (8.5)      10.9      11.6
expense

Income tax expense                       1.4        4.3       4.4
                                       _____      _____     _____

Net earnings (loss)                     (9.9)       6.6       7.2
                                       =====      =====     =====


Fiscal 2002 Compared With Fiscal 2001


In fiscal 2002, the Company continued to be adversely effected by the
worldwide retrenchment in computer sales.  Capital spending on new
information technology equipment remained soft in light of the general
economic uncertainty. In part, the Company was able to offset this trend by
the sale of upgrades for existing equipment. The Company was also affected by
the continuing worldwide decline in DRAM prices. DRAM costs represent
approximately 80% of the cost of the Company's final product.  Generally,
competitive pressures require the Company to pass through these decreases to
its customers.  Consequently, average selling prices fell by approximately
75% from the previous fiscal year. Revenues in fiscal 2002 totaled $81.2
million, a decrease of 38% from fiscal 2001 revenues of $130.6 million,
primarily as a result of the change in selling prices. The change in selling
prices was partially offset by an increase in unit volume that occurred as a
result of the Company's acquisition of certain assets of MCT in March of
fiscal 2001. Unit volume measured as gigabytes shipped in fiscal 2002
increased by approximately 69% over fiscal 2001 levels.

Cost of sales decreased $40.9 million in fiscal 2002 to $56.7 million from
fiscal 2001 cost of sales of $97.6 million. The decrease is mainly
attributable to the decrease in revenue. Cost of sales as a percentage of
revenue decreased by 4.8% in fiscal 2002 from fiscal 2001. The decrease in
percentage is primarily attributable to product mix.

Engineering and development costs amounted to $1.8 million in fiscal 2002
compared to $1.7 million in fiscal 2001. The Company maintains its commitment
to the timely introduction of new memory products.

Selling, general and administrative costs were $21.5 million in fiscal 2002
versus $17.6 million in fiscal 2001. Fiscal 2002 expenses include $10.5
million of expense from the Company's acquired operations, compared to $1.4
million in fiscal 2001. During the first quarter of fiscal 2002 the Company
initiated a world-wide restructuring of its operations, which resulted in a
25% reduction of workforce and other cost efficiencies. The restructuring
resulted in a one time charge of $1.2 million primarily for severance.

The Company further streamlined its operations and eliminated redundancies
during the first quarter of fiscal 2003. The restructuring resulted in a
workforce reduction of  approximately 24%, and is expected to generate
approximately $2.5 million of additional savings in fiscal 2003.

During fiscal 2002 the Company conducted an evaluation of its goodwill and
intangible assets. The evaluation of the carrying value of the Company's
goodwill resulted in no change in value. The evaluation of intangible assets
resulted on a one-time non-cash charge of $5.3 million. As a result, the
Company will no longer incur future intangible asset amortization charges.

Other income (expense), net for fiscal year 2002 totaled ($916,000) of net
interest expense versus $855,000 of net interest income in fiscal 2001.
Fiscal 2002 interest income (expense), net consisted of $291,000 of interest
income, offset by ($1,207,000) of interest expense. During fiscal 2002 the
Company elected to prepay certain capital lease obligations, which resulted
in an incremental interest charge of $141,000. The Company also terminated
early its interest rate swap agreement, which resulted in a one-time interest
charge of $259,000. fiscal 2001 other income (expense), net consisted of
interest income of $1,038,000 offset by ($183,000) of interest expense.
Interest income in fiscal 2001 was due to higher cash balances.

                                     4


Fiscal 2001 Compared With Fiscal 2000

Revenues in fiscal 2001 were $130.6 million, an increase of 20% from fiscal
2000 revenues of $109.2 million. Fiscal 2001 included approximately $4.4
million of revenues from the Company's acquired operations. Fiscal 2001 was a
year characterized by a significant change in market conditions. For the
first half of the year, demand for the Company's products continued to
accelerate driven by increased capital spending for internet and corporate
infrastructure. DRAMS became slightly more expensive than they had been in
the prior fiscal year and the Company's average selling prices increased as
well. In the second half of the year, largely as a result of the widely
publicized slowdown in technology and telecommunications spending, DRAMS
declined significantly in price resulting in a decline in average selling
prices of the Company's products of approximately 35% from the first half of
the year. The conditions of economic slowdown, decreased capital spending and
declining selling prices continued into fiscal 2002.

Cost of sales increased $15.7 million in fiscal 2001 to $97.6 million from
fiscal 2000 cost of sales of $81.9 million. Cost of sales as a percentage of
revenue decreased by 0.3% in fiscal 2001 from fiscal 2000.


Engineering and development costs amounted to $1.7 million in fiscal 2001
compared to $1.4 million in fiscal 2000. The Company has maintained its
commitment to the timely introduction of new memory products as new computers
were introduced.

Selling, general and administrative expenses were $17.6 million in fiscal
2001 versus $13.7 million in fiscal 2000. Fiscal 2001 expenses included
approximately $1.4 million of expenses from the Company's acquired
operations.

Goodwill and intangible asset amortization expense was $300,000 in fiscal
2001 versus nil in fiscal 2000. Fiscal 2001 expense was a result of the
acquisition. Annual expected future goodwill and intangible asset
amortization is $2.6 million.

Other income, net totaled $855,000 and $491,000 in fiscal 2001 and 2000,
respectively. Other income, net in fiscal 2001 consists of interest income of
$1,038,000 and interest expense of $183,000. Fiscal 2000 other income, net
consists of interest income of $533,000 and interest expense of $42,000.

Liquidity and Capital Resources

The Company's cash and working capital position remains strong. Working
capital at the end of fiscal 2002 amounted to $13.5 million, including cash
and cash equivalents of $3.7 million, compared to working capital of $20.5
million, including cash and cash equivalents of $10.2 million in fiscal 2001.
Current assets at year end were 2.6 times current liabilities compared to 2.5
at the end of fiscal 2001.

Inventories at the end of fiscal 2002 were $5.4 million compared to fiscal
2001 year end inventories of $5.9 million. The decrease in inventories is
mainly attributable to the decrease in the price of DRAM.

Capital expenditures, net of dispositions were $358 thousand in fiscal 2002
compared to $2.2 million in fiscal 2001. Capital expenditures in both years
were primarily for manufacturing equipment, leasehold improvements and
management information systems upgrades. At the end of fiscal 2002,
contractual commitments for capital purchases were zero. Fiscal 2003 capital
expenditures are expected to be approximately at the same levels as fiscal
2002 expenditures.

On June 15, 1999, the Company announced an open market repurchase plan
providing for the repurchase of up to 500,000 shares of the Company's common
stock. As of April 30, 2002, the total number of shares authorized for
purchase under the program is 197,750 shares. Approximately $650,000 of
common stock was repurchased in fiscal 2002. Management expects that the
Company will continue to repurchase shares in fiscal 2003.

During fiscal 2001, the Company entered into a credit facility with its bank,
which provided for a $10 million term loan and a $15 million revolving credit
line. The Company's prior $12 million revolving credit facility was closed.
The $10 million term loan was repaid during this year's fiscal 2002. In
January, 2002 the Company amended and restated its credit facility with its
bank. The agreement contains certain restrictive covenants, specifically, a
fixed charge coverage ratio, a quick ratio and a total liabilities to
tangible net worth ratio with which the Company was in compliance with at
year-end. As of April 30, 2002, $3.8 million was outstanding on the $15
million revolving credit line and $11.2 million was available for borrowing.
Management believes that the Company's operating cash flows and availability
under borrowings will be sufficient to meet short term liquidity needs as the
Company does not expect any unforeseen demands beyond general operating
requirements for cash. Management further believes that its working capital
together with internally generated funds from its operations and its bank
line of credit are adequate to finance the Company's long term operating
needs and future capital requirements.

Future minimum lease payments under noncancellable operating leases (with
initial or remaining lease terms in excess of one year) as of April 30, 2002
are as follows:

                                        Operating leases
Year ending April 30:                   ________________
   2003                                 $    1,312
   2004                                      1,108
   2005                                      1,127
   2006                                      1,113
   2007                                        855
   Thereafter                                2,214
                                     ________________
                                             7,729
                                     ================

Inflation has not had a significant impact on the Company's revenue and
operations.
                                     5


New Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 143, "Accounting for Retirement
Obligations" (SFAS 143). SFAS 143 establishes accounting standards for the
recognition and measurement of an asset retirement obligation and its
associated asset retirement cost. It also provides accounting guidance for
legal obligations associated with the retirement of tangible long-lived
assets. SFAS 143 is effective for fiscal years beginning after June 15, 2002,
with early adoption permitted. The Company currently is evaluating the
provisions of SFAS 143, but expects that the provisions will not have a
material impact on its operations and financial position upon adoption.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets" (SFAS 144). SFAS 144 supersedes SFAS 121,
but retains its fundamental provisions for the (a) recognition and
measurement of impairment of long-lived assets to be held and used, and (b)
measurement of long-lived assets to be disposed of by sale. SFAS 144 also
supersedes the accounting / reporting provisions of APB No. 30 for segments
of a business to be disposed of, but retains the requirement to report
discontinued operations separately from continuing operations and extends
that reporting to a component of an entity that either has been disposed of
or is classified as held for sale. SFAS 144 became effective for us on May 1,
2002. The Company does not expect the adoption of this statement to have a
material impact on its financial statements.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections" (SFAS 145). SFAS 145 updates, clarifies and simplifies existing
accounting pronouncements. SFAS 145 rescinds Statement No.4, which required
all gains and losses from extinguishment of debt to be aggregated and, if
material, classified as an extraordinary item, net of related income tax
effect. As a result, the criteria in APB No. 30 will now be used to classify
those gains and losses because Statement No. 4 has been rescinded. Statement
No. 44 was issued to establish accounting requirements for the effects of
transition to provisions of the Motor Carrier Act of 1980. Because the
transition has been completed, Statement No. 44 is no longer necessary.

SFAS 145 amends Statement No. 13 to require that certain lease modifications
that have economic effects similar to sale-leaseback transactions be
accounted for in the same manner as sale-leaseback transactions. This
amendment is consistent with FASB's goal of requiring similar accounting
treatment for transactions that have similar economic effects. SFAS 145 also
makes technical corrections to existing pronouncements. While those
corrections are not substantive in nature, in some instances, they may change
accounting practice. We are required to adopt SFAS 145, effective for fiscal
2003. We do not expect the adoption of SFAS 145 to have a material impact on
our consolidated financial statements.

Critical Accounting Policies

The Company's accounting policies are described in note 1 to the Consolidated
Financial Statements

Quantitative and Qualitative Disclosure About Market Risk


The Company does not invest in market risk sensitive instruments. The
Company's investments during the past fiscal year have consisted of overnight
deposits with banks. The average principal sum invested was approximately
$8.3 million and the weighted average effective interest rate for these
investments was approximately 3.5%. The Company's rate of return on its
investment portfolio changes with short-term interest rates, although such
changes will not effect the value of its portfolio. The Company's objectives
in connection with its investment strategy is to maintain the security of its
cash reserves without taking market risk with principal.

The Company purchases and sells primarily in U.S. dollars. The Company sells
in foreign currency to a limited number of customers and as such incurs some
foreign currency risk. At any given time, approximately 15 to 20 percent of
the Company's accounts receivable are denominated in currencies other than
U.S. dollars. The Company also incurs expenses in these same currencies,
primarily payroll and facilities costs which hedge these assets. At present,
the Company does not purchase forward contracts as hedging instruments, but
intends to do so as circumstances warrant.

Common Stock Information

The Common Stock of the Company is traded on the NASDAQ National Market with
the symbol "DRAM". The following table sets forth, for the periods indicated,
the high and low prices for the Common Stock.



                          2002                   2001
                   ___________________     __________________

                    High         Low        High        Low
                   ___________________     __________________
First Quarter      $13.88      $ 8.38      $47.50     $17.00
Second Quarter       9.50        5.25       35.00      14.50
Third Quarter       10.20        5.29       22.88       9.75
Fourth Quarter       8.79        6.01       17.50       7.63


At April 30, 2002 there were approximately 7,000 shareholders.

The Company has never paid a dividend and does not at present have an
intention to pay a dividend in the foreseeable future.


                                     6



               DATARAM CORPORATION AND SUBSIDIARIES
                   Consolidated Balance Sheets
                     April 30, 2002 and 2001
         (In thousands, except share and per share amounts)




                                               2002       2001
                                              ______     ______
Assets
Current assets:
  Cash and cash equivalents                  $ 3,656    $10,236
  Trade receivables, less allowance for
    doubtful accounts and sales returns
    of $320 and $450 in 2002 and 2001         12,177     17,641
  Inventories:
    Raw materials                              3,118      2,841
    Work in process                              182        236
    Finished goods                             2,135      2,848
                                              ______     ______
                                               5,435      5,925
  Deferred income taxes                           76        502
  Other current assets                           456        386
                                              ______     ______
               Total current assets           21,800     34,690
                                              ______     ______
Property and equipment:
  Land                                           875        875
  Machinery and equipment                     17,151     17,714
                                              ______     ______
                                              18,026     18,589
  Less accumulated depreciation
  and amortization                             8,816      5,363
                                              ______     ______
               Net property and equipment      9,210     13,226

Goodwill, less accumulated amortization
  of $210 in 2001                             11,144      9,957
Intangible assets, less accumulated
  amortization of $90 in 2001                     -       7,043
Other assets                                     408        365
                                              ______     ______
                                             $42,562    $65,281
                                              ======     ======
Liabilities and Stockholders' Equity
Current liabilities:
  Current installments of long-term debt     $    -     $ 2,000
  Current installments of obligations
    under capital leases                          -         978
  Accounts payable                             6,600      7,219
  Accrued liabilities                          1,687      3,960
                                              ______     ______
               Total current liabilities       8,287     14,157
  Deferred income taxes                          647        948
  Long term debt, excluding current
    installments                               3,800      8,000
  Obligations under capital leases,
    excluding current installments                -       4,133
                                              ______     ______
               Total liabilities              12,734     27,238
                                              ______     ______

  Stockholders' equity:
    Common stock, par value $1.00 per share.
      Authorized 54,000,000 shares; issued
      and outstanding 8,493,819 in 2002
      and 8,492,219 in 2001                    8,494      8,492
    Additional paid-in capital                 4,405      4,065
    Retained earnings                         16,830     25,403
    Accumulated other comprehensive income-      99         83
     foreign currency translation adjustment  ______     ______
               Total stockholders' equity     29,828     38,043

                                              ______     ______
  Commitments and contingencies

                                             $42,562    $65,281
                                              ======     ======


See accompanying notes to consolidated financial statements.




                                     7




               DATARAM CORPORATION AND SUBSIDIARIES
               Consolidated Statements of Operations
             Years ended April 30, 2002, 2001 and 2000
             (In thousands, except per share amounts)



                                         2002     2001     2000
                                       _______  _______  _______

Revenues                              $ 81,190 $130,577 $109,152
                                       _______  _______  _______
Costs and expenses:
  Cost of sales                         56,737   97,588   81,877
  Engineering and development            1,839    1,673    1,391
  Selling, general and administrative   21,532   17,600   13,701
  Restructuring charges                  1,200        -        -
  Intangible asset amortization
       Expense                           5,856      300        -
                                       _______  _______  _______
                                        87,164  117,161   96,969
                                       _______  _______  _______
Earnings (loss) from operations         (5,974)  13,416   12,183

Other income (expense):
  Interest income                          291    1,038      533
  Interest expense                      (1,207)    (183)     (42)
                                       _______  _______  _______
                                          (916)     855      491
                                       _______  _______  _______

Earnings(loss)before income tax expense (6,890)  14,271   12,674

Income tax expense                       1,211    5,676    4,828
                                       _______  _______  _______
Net earnings (loss)                    $(8,101) $ 8,595  $ 7,846
                                       =======  =======  =======
Net earnings(loss) per common share:
  Basic                                $  (.95) $  1.01  $   .99
                                       =======  =======  =======
  Diluted                              $  (.95) $   .88  $   .81
                                       =======  =======  =======

See accompanying notes to consolidated financial statements.




                                     8



              DATARAM CORPORATION AND SUBSIDIARIES
              Consolidated Statements of Cash Flows
            Years ended April 30, 2002, 2001 and 2000
                          (In thousands)

                                         2002     2001     2000
                                        ______    _____   ______

Cash flows from operating activities:
  Net earnings (loss)                  $(8,101)  $8,595   $7,846
Adjustments to reconcile net earnings
  (loss) to net cash provided by
    operating activities:
     Depreciation and amortization      10,450    1,785    1,307
     Bad debt expense (recovery)           (65)     163       58
     Deferred income tax expense(benefit)  125       33     (138)
     Changes in assets and liabilities:
       (net of effect from the
        acquisition of business):
       (Increase) decrease in trade
        and other receivables            5,529    6,578   (4,283)
       (Increase) decrease in
   inventories                             490    1,858   (1,361)
   Increase in other current assets       (291)    (230)     (50)
        Increase in other assets           (43)    (348)      (8)
        Increase (decrease) in
        accounts payable                  (619)  (4,144)   5,193
        Increase (decrease)in
        accrued liabilities             (2,256)    (518)     787
                                         _____    _____    _____
  Net cash provided by
   operating activities                  5,219   13,772    9,351
                                         _____    _____    _____
Cash flows from investing activities:
    Additions to property and
    equipment, net                        (358)  (2,184)  (2,823)
    Acquisition of business, net of
     cash acquired                           -  (27,326)       -
                                         _____    _____    _____
Net cash used in investing activities     (358) (29,510)  (2,823)
                                         _____    _____    _____

Cash flows from financing activities:
  Proceeds (payments) of term loan     (10,000)  10,000        -
  Borrowings under revolving line
  Of credit                              3,800        -        -
  Principal payments under capital
   lease obligations                    (5,111)    (147)       -
  Purchase and subsequent cancellation
   of shares of common stock              (650)  (1,027)  (3,205)
  Proceeds from sale of common shares
   under stock option plan (including
   tax benefits)                           520    3,498    2,234
                                         _____    _____    _____
  Net cash provided by (used in)
   financing activities                (11,441)  12,324     (971)
                                         _____    _____    _____
Net increase (decrease) in cash
 and cash equivalents                   (6,580)  (3,414)   5,557
Cash and cash equivalents at
 beginning of year                      10,236   13,650    8,093
                                         _____    _____    _____
Cash and cash equivalents at end
 of year                              $  3,656 $ 10,236 $ 13,650
                                         =====    =====    =====

Supplemental disclosures of cash flow information:

  Cash paid during the year for:
    Interest                          $ 1,177   $   106  $    40
    Income taxes                      $ 1,772   $ 2,885  $ 2,950
                                        =====     =====    =====

See accompanying notes to consolidated financial statements.




                                     9




                 DATARAM CORPORATION AND SUBSIDIARIES
    Consolidated Statements of Stockholders' Equity and Comprehensive
                             Income(loss)
            Years ended April 30, 2002, 2001 and 2000
               (In thousands, except share amounts)

                                                                        Total
                                      Additional         Accumulated   stock-
                              Common  paid-in   Retained comprehens. holders'
                              stock   capital   earnings      income   equity
                              ______  ________  ________  ________  ________


Balance at April 30, 1999    $ 5,237  $     -   $14,782   $     -   $20,019

Three-for-two common stock
   split                       2,640      (263)  (2,377)        -         -
Issuance of 740,100 shares
 under stock option plans        740     1,494         -        -     2,234
 including income tax
 benefit of $1,280
Purchase and subsequent
   cancellation of 339,104
   shares                       (339)     (250)  (2,616)        -    (3,205)
Net earnings                       -         -    7,846         -     7,846
                              ______  ________  _______    _______  ________

Balance at April 30, 2000      8,278       981   17,635         -    26,894

  Issuance of 301,216 shares
   under stock option plans,
   including income tax
   benefit of $2,690             301     3,197        -         -     3,498
  Purchase and subsequent
   cancellation of
   87,400 shares                 (87)     (113)   (827)         -    (1,027)

  Comprehensive Income:
  Foreign exchange translation
    adjustment, net of tax         -        -        -         83        83
  Net earnings                     -        -    8,595          -     8,595
                                                                     _______
  Total comprehensive income                                          8,678
                              ______  ________  ______      _______  _______
Balance at April 30, 2001      8,492     4,065  25,403         83    38,043

  Issuance of 98,550 shares
   under stock option plans,
   including income tax
   benefit of $191                99       421       -          -       520
  Purchase and subsequent
   cancellation of
   96,950 shares                 (97)      (81)   (472)         -      (650)

  Comprehensive Income:
  Foreign exchange translation
    adjustment, net of tax         -        -        -         16        16
  Net loss                         -        -   (8,101)         -    (8,101)
                                                                    _______

  Total comprehensive loss                                           (8,085)
                              ______  ________ _______     _______  _______
Balance at April 30, 2002    $ 8,494  $  4,405 $16,830       $ 99   $29,828
                              ======  ======== =======     =======  =======

See accompanying notes to consolidated financial statements.



                                     10


Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

(1)  Significant Accounting Policies

Description of Business

Dataram Corporation is a worldwide provider of server, workstation and PC
memory. The Company offers a specialized line of gigabyte-class memory for
entry to enterprise-level servers and workstations as well as desktop,
notebook and flash memory.

Principles of Consolidation

The consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America and
include the accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany transactions and balances have been eliminated.
The Company's foreign subsidiaries' functional currency is the U.S. dollar as
all revenues are received in U.S. dollars and a majority of expenditures are
made in U.S. dollars. The Company and its foreign subsidiaries report in U.S.
dollars. For subsidiaries that maintain their accounts in currencies other
than the U.S. dollar, the Company uses the current method of translation
whereby the statements of earnings are translated using the average exchange
rate and the assets and liabilities are translated using the year-end
exchange rate. Foreign currency translation gains or losses are recorded as a
separate component of accumulated other comprehensive income or loss. Foreign
currency transaction gains or losses, if any, are included in the
consolidated statements of operations. There were none in fiscal 2002, 2001
or 2000.

Cash and Cash Equivalents

Cash and cash equivalents consist of unrestricted cash, money
market accounts and commercial paper purchased with original maturities of
three months or less.

Inventory

Inventories are stated at the lower of cost or market, with cost
determined by the first-in, first-out method.

Property and Equipment

Property and equipment is recorded at cost. Depreciation is generally
computed on the straight-line basis. Depreciation and amortization rates are
based on the estimated useful lives or lease terms for capital leases,
whichever is shorter, which range from three to five years for machinery and
equipment. When property or equipment is retired or otherwise disposed of,
related costs and accumulated depreciation are removed from the accounts.

Repair and maintenance costs are charged to operations as
incurred.

Goodwill and Acquired Intangible Assets

In July 2001, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other
Intangible Assets. Statement 141 requires that the purchase method of
accounting be used for all business combinations initiated after June 30,
2001 as well as all purchase method business combinations completed after
June 30, 2001. SFAS 141 also specifies criteria intangible assets acquired in
a purchase method business combination must meet to be recognized and
reported apart from goodwill, noting that any purchase price allocable to an
assembled workforce may not be accounted for separately. SFAS 142 requires
that goodwill and intangible assets with indefinite useful lives no longer be
amortized, but instead tested for impairment at least annually in accordance
with the provisions of SFAS 142. SFAS 142 also requires that intangible
assets with definite useful lives be amortized over their respective
estimated useful lives to their estimated residual values, and reviewed for
impairment in accordance with SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be disposed of. The Company
adopted the provisions of SFAS 141 upon issuance. The Company has elected to
adopt the provisions of SFAS 142 as of May 1, 2001, as allowed by the
Statement.

                                     11


SFAS 141 requires, upon adoption of SFAS 142, that the Company evaluate its
existing intangible assets and goodwill that were acquired in a prior
purchase business combination, and to make any necessary reclassifications in
order to conform to the new criteria in SFAS 141 for recognition apart from
goodwill. Effective May 1, 2001, approximately $1.2 million assigned to the
value of the MCT workforce has been reclassified to goodwill (see note 3).
Since the Company has adopted SFAS 142, the Company reassessed, as of May 1,
2001 the useful lives and residual values of all intangible assets acquired
in purchase business combinations, and did not make any amortization period
or carrying value adjustments. In addition, to the extent an intangible asset
is identified as having an indefinite useful life, the Company is required to
test the intangible asset for impairment in accordance with the provisions of
SFAS 142 in the first interim period. There are no indefinite life intangible
assets.

In connection with the transitional goodwill impairment evaluation, SFAS 142
requires that the Company  perform an assessment of whether there is an
indication that goodwill is impaired as of the date of adoption. To
accomplish this the Company must identify its reporting units and determine
the carrying value of each reporting unit by assigning the assets and
liabilities, including the existing goodwill and intangible assets, to those
reporting units as of the date of adoption. The Company then has up to six
months from the date of adoption to determine the fair value of each
reporting unit and compare it to the reporting unit's carrying amount. To the
extent a reporting unit's carrying amount exceeds its fair value, an
indication exists that the reporting unit's goodwill may be impaired and the
Company must perform the second step of the transitional impairment test. In
the second step, the Company must compare the implied fair value of the
reporting unit's goodwill, determined by allocating the reporting unit's fair
value to all of it assets (recognized and unrecognized) and liabilities in a
manner similar to a purchase price allocation in accordance with SFAS 141, to
its carrying amount, both of which would be measured as of the date of
adoption. This second step is required to be completed as soon as possible,
but no later than the end of the year of adoption. Any transitional
impairment loss will be recognized as the cumulative effect of a change in
accounting principle in the Company's statement of earnings. The Company
completed this task in its second quarter ended October 31, 2001 and
concluded that the estimated fair value of its acquired business (MCT), which
is the reporting unit as defined by SFAS 142, as of May 1, 2001, exceeded its
carrying amount and therefore no indication of an impairment of the goodwill
on the MCT transaction existed upon the adoption of the statement. Goodwill
will be tested for impairment under the provisions of SFAS 142 annually at
the end of each fiscal year. See note 3 for additional information on
goodwill and acquired intangible assets.

Long-Lived Assets

Long-lived assets consist of property and equipment, and identifiable
intangible assets.

The Company reviews long-lived assets for impairment whenever events or
changes in business circumstances occur that indicate that the carrying
amount of the assets may not be recoverable. Impairments are recognized when
the expected future undiscounted cash flows derived from such assets are less
than their carrying value. For such cases, losses are recognized for the
difference between the fair value and the carrying amount. The Company
considers various valuation factors, principally discounted cash flows, to
assess the fair values of long-lived assets.
Intangible assets are being amortized using the straight-line method over  3-
10 years.

Revenue Recognition

Revenue from product sales is recognized when the related goods are shipped
to the customer. Estimated warranty costs are accrued upon product shipment.

Product Development and Related Engineering

The Company expenses product development and related engineering costs as
incurred. Engineering effort is directed to the development of new or
improved products as well as ongoing support for existing products.

Income Taxes

The Company utilizes the asset and liability method of accounting for income
taxes in accordance with the provisions of Statement of Financial Accounting
Standards (SFAS) No. 109, "Accounting for Income Taxes". Under the asset and
liability method of SFAS No. 109, deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to
differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets
and liabilities are measured using enacted tax rates in effect for the year
in which those temporary differences are expected to be recovered or settled.
Under SFAS No. 109, the effect on deferred tax assets and liabilities of a
change in tax rates is recognized in earnings in the period that the tax rate
changes.
                                     12


Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration
of credit risk consist primarily of cash and cash equivalents. The Company
maintains its cash and cash equivalents in financial institutions and
brokerage accounts.  To the extent that such deposits exceed the maximum
insurance levels, they are uninsured. The Company performs ongoing
evaluations of its customers' financial condition, as well as general
economic conditions and, generally, requires no collateral from its
customers.

Net Earnings/(Loss) Per Share

Net Earnings/(Loss) Per Share is presented in accordance with SFAS No. 128,
"Earnings Per Share". Basic net earnings/(loss) per share is calculated by
dividing net earnings/(loss) by the weighted average number of common shares
outstanding during the period. Diluted net earnings per share in 2001 and
2000 was calculated in a manner consistent with basic net earnings per share
except that the weighted average number of common shares outstanding also
includes the dilutive effect of stock options outstanding (using the treasury
stock method). During 2002, the Company excluded the dilutive effect of stock
options in the calculation of diluted net loss per share, because to do so
would be anti-dilutive. As such, the numerator and denominator used in
computing basic and diluted net loss per share are equal.

The following presents a reconciliation of the numerator and denominator used
in computing Basic and Diluted net earnings per share for fiscal 2001 and
2000.



 (Earnings in thousands)
                                   Year ended April 30, 2001
                              Earnings      Shares      Per share
                             (numerator) (denominator)   amount
                              _________   ___________   _________

Basic net earnings per share
-net earnings and weighted
average common shares
outstanding                    $ 8,595     8,498,000     $  1.01

Effect of dilutive securities
-stock options                       -     1,309,000
                               _______     _________     ______
Diluted net earnings per share
-net earnings, weighted
average common shares
outstanding and effect of
stock options                  $ 8,595     9,807,000     $  .88
                               =======     =========     ======

                                   Year ended April 30, 2000
                              Earnings     Shares       Per share
                             (numerator) (denominator)   amount
                              _________   ___________   _________

Basic net earnings per share
-net earnings and weighted
average common shares
outstanding                    $ 7,846     7,953,000     $  .99

Effect of dilutive securities
-stock options                       -     1,773,000
                               _______     _________     ______
Diluted net earnings per share
-net earnings, weighted
average common shares
outstanding and effect of
stock options                  $ 7,846     9,726,000     $  .81
                               =======     =========     ======



Diluted net earnings (loss) per common share does not include the effect of
options to purchase 1,797,800 shares of common stock for the year ended April
30, 2002 because they are anti-dilutive.

Basic and diluted net earnings per common share does not include the effect
of options to purchase 153,000 shares of common stock for the year ended
April 30, 2001 because they are anti-dilutive. For the year ended April 30,
2000, there were no shares that were anti-dilutive.

                                     13


Use of Estimates

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

Fair Value of Financial Instruments

The fair value of financial instruments is determined by reference to market
data and other valuation techniques as appropriate. The Company believes that
there is no material difference between the fair value and the reported
amounts of financial instruments in the consolidated balance sheets.

Stock Based Compensation

Stock based compensation is recognized using the intrinsic value method in
accordance with the provisions of Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25"), and related
interpretations. For disclosure purposes, net earnings(loss) and net
earnings(loss) per common share data included in note 8 are provided in
accordance with SFAS No. 123, "Accounting for Stock-based Compensation"
("SFAS 123"), as if the fair value method had been applied.


(2) Acquisition

On March 23, 2001, the Company acquired certain assets, principally including
inventory, accounts receivable and equipment of Memory Card Technology A/S
("MCT"), a corporation in suspension of payments under Danish bankruptcy law.
MCT designs and manufactures memory from its facility in Denmark and has
sales offices in Europe, Latin America and the Pacific Rim. The Company
purchased the assets from MCT for total consideration of approximately
$32,006 of which approximately $28,581 was paid in cash plus the assumption
of certain payables and accrued expenses, certain direct transaction cost and
certain MCT employee rationalization costs all of which total approximately
$3,425. The net assets acquired by the Company were recorded at their
respective fair values under the purchase method of accounting. Accordingly,
the excess of the purchase price over the fair value of identifiable net
tangible and identifiable intangible assets acquired in the amount of $10,167
represents goodwill, which was being amortized on a straight-line basis over
a period of 10 years. Through the adoption of SFAS 142 on May 1, 2001, the
fair value of identifiable intangible assets acquired include both customer
base of $5,931 (see note 3), and workforce of $1,202 which were being
amortized on a straight-line basis over 3 and 5 years, respectively, through
April 30, 2001, at which time the value of the work force was reclassified to
goodwill.  The results of operations of MCT for the period from the
acquisition date, March 23, 2001 through April 30, 2001 and for the full 2002
fiscal year, have been included in the consolidated results of operations of
the Company.

The total consideration of the acquisition has been allocated to the fair
value of the assets and liabilities of MCT as follows:

Cash                                                $  1,255
Accounts receivable and other current assets           8,141
Inventory                                              3,131
Property, plant and equipment                          7,437
Intangible assets                                      7,133
Goodwill                                              10,167
Capital lease obligations                             (5,258)
                                                    --------
Total                                               $ 32,006
                                                    --------


The pro forma results of operations for the Company as if the acquisition had
been consummated at May 1, 1999 is as follows (calculated before the effects
of adoption of SFAS 141 and 142):

                                   Fiscal year          Fiscal year
                                        ended               ended
                                     April 30,           April 30,
                                         2001                2000
                                   -----------         -----------
Revenue                            $   226,073         $   228,557
Net Loss                               (47,976)            (13,615)
Basic and diluted loss per share   $     (5.65)        $     (1.71)
                                   -----------         -----------

The pro forma results have been prepared for comparative purposes and do not
purport to be indicative of what would have occurred had the acquisition been
made at the beginning of the Company's previous fiscal years ended April 30,
2001 and 2000 or the results that may occur in the future.

                                     14



(3)  Goodwill and Intangible Assets

As of May 1, 2001, the date of adoption, the Company had unamortized goodwill
in the amount of $11,144 (which includes $1,187 of acquired workforce which
was previously classified as an intangible asset prior to the adoption of
Statement 142) and unamortized identifiable intangible assets (acquired
customer base) in the amount of $5,856, all of which have been subject to the
transition provisions of Statements 141 and 142. Amortization expense related
to goodwill (including value assigned to the workforce) was $255 for the
period from the March 23, 2001, the date of acquisition, through the year
ended April 30, 2001. The Company's proforma basic and diluted earnings per
share for fiscal 2001 as if the Company adopted Statement 142 at the
beginning of fiscal 2001 would have been $1.04 and $0.90 per share
respectively versus $1.01 and $0.88 per share respectively as previously
reported, had this amortization expense not been reported during the year
ended April 30, 2001.  Pro forma net earnings and pro forma basic and diluted
earnings per share for fiscal 2000 would have been the same as previously
reported, as the Company had no goodwill or intangible assets during that
fiscal year.

The Company evaluated the carrying value of both its intangible assets and
goodwill as of May 1, 2001 and concluded that such assets had not been
impaired. Due to the pressure on the Company's worldwide operations during
fiscal 2002 caused by continued economic weakness and its associated impact
on capital spending coupled with the overall decline in pricing for DRAMs and
its associated impact on the Company's selling prices, the Company was
required to perform another impairment analysis for both the intangible
assets and the acquired goodwill. That analysis was performed in the third
quarter ended January 31, 2002. The Company evaluated the carrying value of
goodwill as of that date and concluded that the asset had not been impaired.
The Company also evaluated the carrying value of its intangible assets
(acquired customer base) and concluded that it was in fact impaired. The
Company's integration activities have included: narrowing its combined
product offerings to certain strategic platforms; redefining its targeted
customer base; and directing the efforts of its acquired sales force to sell
memory products only for those identified platforms through the targeted
customer base. As a result, the Company's customer base has changed and the
future cash flows expected to be generated by the acquired customer base, as
it existed at the date of acquisition no longer supported any carrying value
for those assets. Accordingly, the Company has fully amortized its intangible
assets in fiscal 2002.

(4)     Restructuring

In fiscal 2002, the Company initiated a restructuring of its operations,
which resulted in a workforce reduction of approximately 25% or approximately
69 people in primarily the sales and marketing functions at the Company. As a
result, the Company recorded a restructuring charge of approximately $1,200,
which primarily relates to severance payments. As of April 30, 2002, the
Company had paid out approximately $1,157 of the charges with the balance
expected to be paid within the next three months.

(5) Long-Term Debt

On March 31, 2001, the Company drew $10,000 against its existing credit
facility to fund a portion of the purchase price of the MCT acquisition. On
April 16, 2001, the Company entered into a new $10,000 term note ("term
note") and a $15,000 revolving credit line ("credit line") with a commercial
bank (together, referred to as the "credit facility"), which expires on April
16, 2004. The credit facility contains financial covenants as defined in the
agreement for which the Company was in compliance with at April 30, 2002. The
proceeds from the term note were used to repay the existing obligation under
the original credit facility. The term note was due in twenty quarterly
installments of $500 until March 31, 2006. The term note bore interest, which
was payable monthly in arrears, at the LIBOR rate for 90 day maturities plus
1.9% computed on the basis of a 360 day year for the actual number of days
elapsed. In January 2002, the Company amended and restated its credit
facility. In doing so, the Company repaid the term note in its entirety. As
of April 30, 2002, the amount available for borrowing under the credit line
was $11,200 all of which can be drawn down.

                                     15


In an effort to limit its interest expense and cash flow exposure, the
Company entered into an interest rate swap agreement on and for the duration
of the Company's $10,000 variable rate term note. The swap agreement fixed
the interest rate at 7.16% for the entire loan balance. In accordance with
the provisions in SFAS 133, the Company designated this swap as a cash flow
hedge and recorded the fair value of the instruments on the balance sheet at
that date, with a corresponding adjustment to accumulated other comprehensive
income. On January 6, 2002, the Company repaid its term loan and terminated
its interest rate swap agreement. The early termination of the interest rate
swap agreement resulted in a charge of approximately $259, which was recorded
as interest expense in the consolidated statements of operations for the year
ended April 30, 2002.

(6) Income Taxes

Income tax expense(benefit)for the years ended April 30 consists of the
following:

(In thousands)                 2002         2001         2000
                               _____        _____        _____
Current:
     Federal                 $   870      $ 4,822      $ 4,184
     Foreign                     103            -            -
     State                       113          821          782
                               _____        _____        _____

                               1,086        5,643        4,966
                               _____        _____        _____
Deferred:
     Federal                      (8)         144         (120)
     Foreign                     134         (134)           -
     State                        (1)          23          (18)
                               _____        _____        _____
                                 125           33         (138)
                               _____        _____        _____
Total income tax expense     $ 1,211      $ 5,676      $ 4,828
                               =====        =====        =====

The actual income tax expense differs from "expected" tax expense
(computed by applying the U. S. corporate tax rate of 35% to
earnings before income taxes) as follows:

                                2002         2001         2000
                               _____        _____        _____

Computed "expected" tax
  expense(benefit)           $(2,411)     $ 4,995      $ 4,309
Foreign tax losses for
  which no benefit provided        -          247            -
State income taxes(net
  of Federal income tax
  benefit)                        74          557          504
Difference in federal
 graduated rates                 (21)           -            -
Difference in foreign
 income tax                      451            -            -
Foreign taxes                    103            -            -
Foreign permanent differences    598            -            -
Change in valuation
 allowances                    2,400            -            -
Other                             17         (123)          15
                               _____        _____        _____

                             $ 1,211      $ 5,676      $ 4,828
                               =====        =====        =====


The fiscal 2002 tax provision was calculated based on domestic earnings
before income tax expense of approximately $2,100 and foreign losses before
income tax expense of approximately $9,000.

The fiscal 2001 tax provision was calculated based on domestic earnings
before income tax expense of approximately $15,000 and foreign losses before
income tax expense of approximately $1,000.

                                     16

The tax effect of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities are
presented below:

(In thousands)                              2002         2001
                                            ____         ____
Deferred tax assets:
  Compensated absences, principally due
   to accrual for financial reporting
   purposes                                $  79        $ 115
  Accounts receivable, principally due
   to allowance for doubtful accounts
   and sales returns                         119           22
  Property and equipment, principally
   due to differences in depreciation      1,004          219
  Inventory, principally due to
   reserve for obsolescence                   86           78
  Foreign net operating losses             1,700          134
                                            ____         ____
  Total gross deferred tax assets         $2,988        $ 568
                                            ____         ____
  Less valuation allowance                (2,400)           -

  Net deferred tax asset                     588          568

Deferred tax liabilities:
  Investment in wholly-owned subsidiary,
   principally due to unremitted
   earnings of DISC                         (663)        (664)
  Other                                     (496)        (350)
                                            ____         ____
  Total gross deferred tax liabilities    (1,159)      (1,014)
                                            ____         ____
  Net deferred tax liabilities             $(571)       $(446)
                                            ====         ====

A valuation allowance has been provided in 2002 of $2,400 on the deferred tax
assets (primarily foreign net operating losses) since management believes
that it is more likely than not that such assets will not be realized through
the reversal of existing deferred tax liabilities, future taxable income, or
certain tax planning strategies. The Company has foreign net operating loss
carryforwards of approximately $9,000, which can be used to offset foreign
income through 2007.

(7) Stock Splits

On November 10, 1999, the Company's Board of Directors announced a three-for-
two stock split effected in the form of a dividend for shareholders of record
at the close business on November 24, 1999 and payable December 15, 1999. The
stock split was charged to additional paid-in capital and retained earnings
at par value. Share amounts in the notes to the consolidated financial
statements, weighted average shares outstanding and net earnings per share
have been retroactively adjusted to reflect the stock split.

                                     17


(8) Stock Option Plans

The Company has an 1992 incentive and nonstatutory stock option plan for the
purpose of permitting certain key employees to acquire equity in the Company
and to promote the growth and profitability of the Company by attracting and
retaining key employees. In general, the plan allows granting of up to
2,850,000 shares, adjusted for stock splits, of the Company's common stock at
an option price to be no less than the fair market value of the stock on the
date such options are granted.  The holder of the option may purchase 20% of
the common stock with respect to which the option has been granted on or
after the first anniversary of the date of the grant and an additional 20% of
such shares on or after each of the four succeeding anniversary dates.  At
April 30, 2002, 954,750 of the outstanding options are exercisable.

The Company also has a 2001 incentive and nonstatutory stock option plan for
the purpose of permitting certain key employees and outside directors to
acquire equity in the Company and to promote the growth and profitability of
the Company by attracting and retaining key employees. In general, the plan
allows granting of up to 1,800,000 shares of the Company's common stock at an
option price to be no less than the fair market value of the Company's common
stock on the date such options are granted. The holder of the option may
purchase 25% of the common stock with respect to which the option has been
granted on or after the first anniversary of the date of the grant and an
additional 25% of such shares on or after each of the three succeeding
anniversary dates. At April 30, 2002, none of the outstanding options are
exercisable.

The status of the plans for the three years ended April 30,
2002, is as follows:

                                         Options Outstanding
                           ________________________________________________
                                           Exercise price   Weighted average
                               Shares         per share       exercise price
                             _________        ____________     ___________

Balance April 30, 1999       2,145,000      $ 1.708- 3.604    $      1.757
    Granted                    240,000        4.833-12.583           6.936
    Exercised                 (758,650)       1.708- 3.604           2.387
    Cancelled                  (24,000)       3.604- 4.833           4.219
                             _________        ____________     ____________
Balance April 30, 2000       1,602,350        1.708-12.583           3.374
   Granted                     198,000       11.380-24.250          22.122
   Exercised                  (239,700)        1.708-6.000           2.767
   Cancelled                   (19,200)        2.313-3.604           2.797
                             _________        ____________     ____________

Balance April 30, 2001       1,541,450        1.708-24.250           5.626
   Granted                     192,900        6.610-10.000           8.316
   Exercised                   (38,300)        1.708-6.000           4.458
   Cancelled                  (253,000)        1.708-6.000          12.652
                             _________        ____________      ___________

Balance April 30, 2002       1,443,050      $ 1.708-24.250    $      4.785
                             =========        ============      ===========

                                     18


The Company also granted non-qualified options to acquire 150,000 shares of
common stock to certain employees in connection with the acquisition of
certain assets of MCT. These options are exercisable at a price of $9.875 per
share which represents the fair value at the date of grant and expire ten
years after the date of grant. Of each option, 20% are exercisable on or
after the first anniversary of the date of the grant and an additional 20% on
or after each of the four succeeding anniversary dates. At April 30,2002,
30,000 of the outstanding options are exercisable.

The Company also periodically grants nonqualified stock options to
nonemployee directors of the Company. These options are granted for the
purpose of retaining the services of directors who are not employees of the
Company and to provide additional incentive for such directors to work to
further the best interests of the Company and its shareholders. The options
granted to these nonemployee directors are exercisable at a price
representing the fair value at the date of grant, and expire five years after
date of grant. Of each option, 25% is first exercisable on or after the date
of the grant and an additional 25% on each of three succeeding anniversary
dates. At April 30, 2002, 164,750 of the outstanding options are exercisable.

The status of the nonemployee director options for the three years ended
April 30, 2002, is as follows:


                                        Options Outstanding
                             ________________________________________________
                                           Exercise price    Weighted average
                               Shares          per share       exercise price
                               ______        ____________        ____________

Balance April 30, 1999        450,000       $ 2.313-2.813       $       2.713
   Granted                         -                   -                   -
   Exercised                 (162,500)        2.313-2.813               2.605
   Cancelled                       -                   -                   -
                              _______        ____________        ____________
Balance April 30, 2000        287,500         2.313-2.813               2.773
   Granted                         -                   -                   -
   Exercised                  (62,500)           2.813                  2.813
   Cancelled                       -                   -                   -
                              ________        ____________       ____________

Balance April 30, 2001        225,000         2.313-2.813               2.763
   Granted                     40,000            7.980                  7.980
   Exercised                  (60,250)        2.313-2.813               2.626
   Cancelled                       -                   -                   -
                             ________        ____________        ____________

Balance April 30, 2002        204,750       $ 2.313-2.813      $        2.813
                             ========        ============        ============

                                     19


The following table summarizes information about stock options outstanding at
April 30, 2002:

          Options outstanding            Options exercisable
___________________________________   ____________________________

                 Number     Weighted               Number
                   out-      average    Weighted   exercis-  Weighted
Range of       standing    remaining     average    able at   average
exercise       at April  contractual    exercise  April 30,  exercise
price          30, 2002         life       price       2002     price
____________   _________   _________   ________  _________  ________
$1.708- 2.813  1,019,750        3.71   $   2.62    917,750  $   2.60
 3.250- 3.604    242,550        5.67       3.50    164,550      3.49
 4.833- 7.980    255,700        9.01       7.37     18,000      5.46
 9.875-11.380    213,800        8.94      10.11     36,000     10.13
    24.250        66,000        8.25      24.25     13,200     24.25
____________   _________   __________   _______   _________  _______
$1.708-24.250  1,797,800        5.52   $  4.21    1,149,500 $   3.26
============   =========   ==========   =======   =========  =======



The Company applies APB Opinion 25 in accounting for its Plans and,
accordingly, compensation cost for stock options is measured as the excess,
if any, of the quoted market price at the date of the grant over the amount
an employee must pay to acquire the stock. Because the Company grants options
at a price equal to the market price of the stock at the date of grant, no
compensation expense is recorded. Had the Company determined compensation
cost based on the fair value at the grant date consistent with the provisions
of SFAS No. 123, the Company's net earnings(loss)would have been changed to
the pro forma amounts indicated below:


(In thousands, except per share amounts)
                                             April 30,
                                      ________________________

                                      2002     2001     2000
                                      ____     ____     ____
Net earnings(loss):

 As reported                       $(8,101) $ 8,595   $ 7,846
 Pro forma                         $(9,292) $ 7,905   $ 7,503
                                    ======   ======    ======
Net earnings(loss) per common share
 Basic:
  As reported                      $  (.95) $  1.01  $   .99
  Pro forma                        $ (1.10) $   .93  $   .94
                                    ======   ======    ======
 Diluted:
  As reported                      $  (.95) $   .88  $   .81
  Pro forma                        $ (1.10) $   .81  $   .77
                                    ======   ======   ======

The weighted average fair value of the stock options granted during the years
ended 2002, 2001 and 2000 was $5.62, $14.72, and $2.80, respectively, on the
date of grant using the Black Scholes option pricing model with the following
assumptions: for 2002 - expected dividend yield 0.0%, risk free interest rate
of 5.0%, expected volatility of 63%, and an expected life of 7.5 years; for
2001 - expected dividend yield 0.0%, risk free interest rate of 6.0%,
expected volatility of 99%, and an expected life of 7.5 years; for 2000 -
expected dividend yield 0.0%, risk free interest rate of 6.5%, expected
volatility of 43%, and an expected life of 7.5 years.


(9) Accrued Liabilities

Accrued liabilities consist of the following at April 30:


                                          2002      2001
                                      --------  --------
Payroll, including vacation           $    830  $    937
Commissions and bonuses                    157     1,000
Acquisition costs                           -      1,079
Royalties                                   -         39
Other                                      700       905
                                      --------  --------
                                      $  1,687  $  3,960
                                      ========  ========

                                    20


(10) Commitments

Leases

The Company and its subsidiaries occupy various facilities and
operate various equipment under operating lease arrangements.
Rent charged to operations pursuant to such operating leases amounted to
approximately $1,375 in 2002, $678 in 2001 and $689 in 2000. The Company
prepaid all of its preexisting capital lease obligations during fiscal 2002
for approximately $5,111.

Future minimum lease payments under noncancellable operating leases (with
initial or remaining lease terms in excess of one year)as of April 30, 2002
are as follows:

                              Operating
Year ending April 30:          Leases
                              -------
2003                         $  1,312
2004                            1,108
2005                            1,127
2006                            1,113
2007                              855
Thereafter                      2,214
                              -------
Total minimum lease payments $  7,729
                              =======

License Agreements

The Company has entered into certain licensing agreements with varying terms
and conditions. The Company is obligated to pay royalties on certain of these
agreements.

Legal Proceedings

The Company is involved in various other claims and legal actions arising in
the ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's consolidated financial position, results of operations or
liquidity.


(11) Employee Benefit Plan

The Company has a defined contribution plan (the Plan) which is available to
all qualified employees. Employees may elect to contribute a portion of their
compensation to the Plan, subject to certain limitations. The Company
contributes a percentage of the employee's contribution, subject to a maximum
of 6 percent of the employee's eligible compensation, based on the employee's
years of service. The Company's matching contributions aggregated
approximately $210, $289 and $258 in 2002, 2001 and 2000, respectively.

                                    21


(12) Financial Information by Geographic Location

The Company operates in one business segment and develops, manufactures and
markets a variety of memory systems for use with servers, workstations,
desktop and notebook computers which are manufactured by various companies.
Revenues and total assets for 2001, 2000 and 1999 by geographic region is as
follows:


(in thousands)
________________
                          United   Europe    Other   Consolidated
                          States
                         _______  _______   ______   ____________
April 30, 2002
  Revenues             $  39,296 $ 27,131   $14,763     $  81,190
  Total assets         $  14,671 $ 25,658   $ 2,233     $  42,562
  Long lived assets    $   5,103 $ 15,071   $   180     $  20,354

April 30, 2001
  Revenues             $  93,557 $ 24,273   $12,747     $ 130,577
  Total assets         $  24,041 $ 35,536   $ 5,704     $  65,281
  Long lived assets    $   6,214 $ 20,962   $ 3,050     $  30,226

April 30, 2000
  Revenues             $  85,832 $ 14,865   $8,455      $ 109,152
  Total assets         $  39,693 $    448   $    -      $  40,141
  Long lived assets    $   5,007 $      -   $    -      $   5,007


(13)  Quarterly Financial Data (Unaudited)
     (In thousands, except per share amounts)
                                               Quarter Ended
                               ____________________________________________
Fiscal 2002                    July 31   October 31   January 31   April 30
___________                    _______   __________   __________   ________

Revenues                       $22,570      $19,173      $19,646    $19,801
Gross profit                     6,945        7,121        7,099      3,287
Net earnings(loss)              (1,761)         160       (4,783)    (1,717)
Net earnings (loss)per diluted
Common and common equivalent      (.21)         .02         (.57)      (.20)
share

                                               Quarter Ended
                               ____________________________________________
Fiscal 2001                    July 31   October 31   January 31   April 30
___________                    _______   __________   __________   ________

Revenues                       $37,996      $39,866      $26,829    $25,886
Gross profit                     9,135        9,111        6,991      7,752
Net earnings                     2,879        3,051        2,030        635
Net earnings per diluted common
and common equivalent share        .29          .31          .21        .07

Earnings per share is calculated independently for each quarter and therefore
does not equal the total for the year.

                                     22


                     INDEPENDENT AUDITORS' REPORT


The Board of Directors and Stockholders
Dataram Corporation:


We have audited the accompanying consolidated balance sheets of Dataram
Corporation and subsidiaries as of April 30, 2002 and 2001, and the related
consolidated statements of operations, stockholders' equity and comprehensive
income (loss), and cash flows for each of the years in the three-year period
ended April 30, 2002. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Dataram
Corporation and subsidiaries as of April 30, 2002 and 2001, and the results
of their operations and their cash flows for each of the years in the three-
year period ended April 30, 2002, in conformity with accounting principles
generally accepted in the United States of America.

As discussed in note 1 to the consolidated financial statements, the Company
adopted the provisions of Statement of Financial Accounting Standards
("SFAS") No. 141, "Business Combinations," for all business combinations
consummated after June 30, 2001 and the provisions of SFAS No. 142, "Goodwill
and Other Intangible Assets" effective May 1, 2001.


KPMG LLP


Short Hills, New Jersey
June 5, 2002


                                     23



Selected Financial Data

(Not covered by independent auditors' report)
(In thousands, except per share amounts)

Years Ended April 30,        2002       2001       2000       1999       1998
______________________       ____       ____       ____       ____       ____

Revenues                $  81,190  $ 130,577  $ 109,152   $ 75,853   $ 77,286
Net earnings               (8,101)     8,595      7,846      5,635      3,722
Basic earnings
  per share                  (.95)      1.01        .99        .69        .42
Diluted earnings
  per share                  (.95)       .88        .81        .60        .40
Current assets             21,800     34,690     35,127     23,874     21,022
Total assets               42,562     65,281     40,151     27,374     24,464
Current liabilities         8,287     14,157     12,416      6,436      6,483
Long-term debt              3,800     10,000          -          -          -
Total stockholders'
equity                     29,828     38,043     26,894     20,019     16,968
Cash dividends                  -          -          -          -          -

Earnings per share data has been adjusted to reflect the three-for-two stock
split for shareholders of record on November 24, 1999.




                                     24



DIRECTORS AND CORPORATE OFFICERS

Directors


Robert V. Tarantino
President and Chief Executive Officer
of Dataram Corporation

Richard Holzman*
Private Investor

Thomas A. Majewski*
Principal, Walden Inc.

Bernard L. Riley*
Private Investor

Roger Cady*
Principal, Arcadia Associates

*Member of audit committee


Corporate Officers

Robert V. Tarantino
President and Chief Executive Officer

Lars Marcher
Executive Vice President,
and Chief Operating Officer

Mark E. Maddocks
Vice President, Finance and
Chief Financial Officer

Jeffrey H. Duncan
Vice President of Manufacturing
and Engineering

Hugh F. Tucker
Vice President, Sales

Mark R. Bresky
Vice President, Information Technology


Thomas J. Bitar
Secretary
Member, Dillon, Bitar & Luther, L.L.C.



Corporate Headquarters

Dataram Corporation
186 Princeton Road (Route 571)
West Windsor, NJ  08550
609-799-0071


Auditors

KPMG LLP
Short Hills, NJ


General Counsel

Dillon, Bitar & Luther, L.L.C.
Morristown, NJ


Transfer Agent and Registrar

First Union National Bank
Customer Information Center
1525 West W.T. Harris Boulevard
Building 3C3
Charlotte, NC  28288


Stock Listing

Dataram's common stock is listed on
the NASDAQ with the trading symbol DRAM.


Annual Meeting

The annual meeting of shareholders
will be held on Wednesday, September 18,
2002, at 2:00 p.m. at Dataram's
corporate headquarters at:
     186 Princeton Road (Route 571)
     West Windsor, NJ 08550


Form 10-K

A copy of the Company's annual report
on Form 10-K filed with the Securities
& Exchange Commission is available
without charge to shareholders.

Address requests to:

Vice President, Finance
Dataram Corporation
186 Princeton Road (Route 571)
West Windsor, NJ  08550





Corporate Headquarters
Dataram Corporation
186 Princeton Road (Route 571)
West Windsor, NJ 08550
Toll Free: 800-DATARAM
Phone: 609-799-0071
Fax: 609-799-6734
www.dataram.com