SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C.  20549
                        _____________________

                              FORM 10-K
                        _____________________

   Annual Report Pursuant to Section 13 or 15(d) of the Securities
                        Exchange Act of 1934
             For the fiscal year ended December 31, 1997

                   ______________________________

                     Commission File No. 0-22065

                        RADIANT SYSTEMS, INC.

                        A Georgia Corporation
            (IRS Employer Identification No. 11-2749765)
                         1000 Alderman Drive
                      Alpharetta, Georgia 30005
                           (770) 772-3000

           Securities Registered Pursuant to Section 12(b)
               of the Securities Exchange Act of 1934:

                                NONE

           Securities Registered Pursuant to Section 12(g)
               of the Securities Exchange Act of 1934:

                     Common Stock, no par value

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

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

The aggregate market value of the common stock of the registrant
held by nonaffiliates of the registrant (7,020,717 shares) on
March 25, 1998 was approximately $202,775,801 based on the closing
price of the registrant's common stock as reported on The Nasdaq
National Market on March 25, 1998.  For the purposes of this
response, officers, directors and holders of 5% or more of the
registrant's common stock are considered the affiliates of the
registrant at that date.

The number of shares outstanding of the registrant's Common
Stock, as of March 25, 1998 15,933,939 shares of no par value
Common Stock.

                 DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Registrant's definitive proxy statement to
be delivered to the shareholders in connection with the Annual
Meeting of the Shareholders to be held on May 15, 1998 are
incorporated by reference in response to Part III of this Report.
<PAGE>
                               PART I

Item 1.   Business.

     Radiant Systems, Inc. (the "Company" or "Radiant") provides
enterprise-wide technology solutions to the retail industry.  The
Company offers fully integrated retail automation solutions
including point of sale systems, consumer-activated ordering
systems, back office management systems and headquarters-based
management systems.  The Company's products enable retailers to
interact electronically with consumers, capture data at the point
of sale, manage site operations and logistics and communicate
electronically with their sites, vendors and credit networks.  In
addition, the Company offers system planning and design services
that tailor the automation solution to each retailer's
specifications as well as implementation services to facilitate
installation of the Company's products.

     Certain retail markets require many of the same product features
and functionality.  As a result, the Company believes it can continue to
leverage its existing technology across various retail markets
with limited incremental product development efforts.


Recent Acquisitions

     In May 1997, the Company completed the acquisitions of Restaurant
Management and Control Systems, Inc. ("ReMACS"), based in
Pleasanton, California, and RSI Merger Corporation
(d.b.a.Twenty/20 Visual Systems) ("Twenty/20"), based in Dallas,
Texas.  ReMACS is a leading provider of back office management
systems for customers in the restaurant industry with over 8,000
installed or licensed sites. Twenty/20 is a provider of point of
sale and table management systems for full-service restaurants.

     In October 1997, the Company acquired RapidFire Software, Inc.
("RapidFire Software") and EquiLease Financial Services, Inc.
("EquiLease") (collectively "RapidFire") based in Hillsboro,
Oregon. RapidFire Software is a leading provider of point of sale
systems to the pizza industry and other delivery restaurants,
with installations in over 2,000 restaurant sites nationwide.
EquiLease provides lease financing to certain customers of
RapidFire.

     In November 1997, the Company completed its acquisition of
Logic Shop, Inc. ("Logic Shop"), based in Atlanta, Georgia.
Logic Shop is a leading provider of management software to the
convenient automotive service center market, with over 1,500
sites installed.


Industry Background

     Successful retailers increasingly require information systems
that capture a detailed picture of consumer activity at the point
of sale and store that data in an accessible fashion.  Early
technology innovators in the retail industry deployed robust,
integrated information systems at the point of sale and used the
information to react rapidly to changing consumer preferences,
ultimately gaining market share in the process.  In addition,
these integrated information systems helped retailers achieve
operational efficiencies.  Many large national retailers have
followed suit by investing in proprietary information systems.

     For many types of retailers, however, this type of automation did
not make economic or business sense.  In particular, merchants
with a large number of relatively small sites, such as
convenience stores, petroleum retailers, convenient automotive service
centers, restaurants and entertainment venues, generally have not
been able to cost-effectively develop and deploy sophisticated,
enterprise-wide information systems.  Economic and standardization
<PAGE>
problems for these markets are exacerbated by the fact that many sites
operate as franchises, dealerships or other decentralized ownership
and control structures.  Without an investment in technology, these
retailers continue to depend on labor and paper to process
transactions.  Management believes that high labor costs, lack of
centralized management control of remote sites and inadequate
informational reporting, together with emerging technology trends,
have caused many of these retailers to reexamine how technology
solutions can benefit their operations.

     A large number of retail sites face these challenges.  At the end
of 1996, there were more than 94,000 convenience stores
nationwide, while the cinema industry had approximately 29,600
screens at 6,500 sites nationwide.  As of April 1997, the
restaurant and food service industry had over 400,000 domestic
units, of which approximately 180,000 were classified as quick
service restaurants ("QSR").  Typically, the existing systems in these
industries consist of stand-alone devices such as cash registers or
other point of sale systems with little or no integration with either
the back office of the site or an enterprise-wide information system.
Implementation of systems providing this functionality typically
involves multiple vendors and an independent systems integration
firm.  The resulting proprietary solutions are often difficult to
support and have inherently high risks associated with
implementation.  Management believes that technology solutions
that are highly functional and scalable, relatively inexpensive,
and easy to deploy are critical for successful implementation in
these retail markets.

     In the absence of an integrated solution, retailers in these
markets typically rely on manual reporting to capture data on
site activity and disseminate it to different levels of
management at the regional and national headquarters.  Basic
information on consumers (i.e., who they are, when they visit and
what they buy) is not captured in sufficient detail, at the right
time or in a manner that can be communicated easily to others in
the organization.  Similarly, information such as price changes
does not flow from headquarters to individual sites in a timely
manner.  In addition, communications with vendors often remain
manual, involving paperwork, delays and related problems.

     Recent trends in the retailing industry have accelerated the need
for enterprise-wide information and have heightened demand for
integrated retailing systems.  Based in part upon industry
association reports and other studies, as well as the Company's
experience in marketing its products, the Company believes
consumer preferences have shifted away from retailer loyalty
toward value and convenience, creating a greater need for timely
data concerning consumer buying patterns and preferences.
Management also believes that convenient consumer-activated
ordering and payment systems, such as ATMs, voice response units
and "pay at the pump" systems, have become important to retailers
who wish to retain and build a customer base.  Additionally,
retailers can improve operational and logistical efficiencies
through better management of inventory, purchasing,
merchandising, pricing, promotions and shrinkage control.
Management believes that the constant flow of information among
the point of sale, the back office, headquarters and the supply
chain has become a key competitive advantage in the retail
industry, causing retailers to demand more sophisticated,
integrated solutions from their systems vendors.

     In a parallel development, technological advances have improved
the capability of systems available to retailers.  With the price
of computing power declining, technology investments have become
economically feasible for many retailers.  Further, computing
power has become increasingly flexible and distributable,
facilitating data capture and processing by applications located
at the point of sale.  Also, new front-end graphical user
interfaces are making systems easier to use, which reduces
training time and transaction costs and facilitates more types of
consumer-activated applications.

     To meet increasing systems demands from retailers, providers of
hardware and software point of sale solutions are attempting to
integrate existing products.  This process often requires
independent systems integrators to provide enterprise-wide data
communications.  These systems often are based on proprietary,
closed protocols and technology platforms from several different
vendors.  As a result, the effort required to implement and
maintain these systems can be difficult, time consuming and
expensive.
<PAGE>


The Radiant Solution

     The Company offers fully integrated technology solutions that
enable retailers to improve site operations, serve consumers
better and route information throughout their organization and
supply chains.  The Company believes its core technology and
solutions are applicable to a variety of retail markets.  The
Company's suite of products links store level point of sale
information with centralized merchandising and financial
functions that ultimately drive replenishment communications with
suppliers and vendors.  The Company believes that its site
solutions are easy to implement, typically requiring less than a
week to install and a few hours to train individual users.  The
following summarizes the solutions provided by the Company:


     A five segment diagram presenting in brief form the principal
features and functions of the Company's primary technology
solutions and services.  The diagram includes the text:

CONSUMER-ACTIVATED
- - - - - - - - - - - - - - - - - -
Touch Screen Interactive
Video, Graphics, Audio
Credit/Cash Payment
Compact, Enclosed Terminals
Suggestive Selling


HEADQUARTERS
- - - - - - - - - - - - -
Executive Information
Electronic Price Book
Vendor EDI
Centralized Menu Management

POINT OF SALE
- - - - - - - - - - - -
Touch Screen Interactive
Transaction Auditing
Credit Processing
Data Capture
Peripheral Integration
Cash Reconciliation
Table Management

BACK OFFICE
- - - - - - - - - - -
Inventory Control
Vendor Management
Purchasing/Receiving
Employee Management
Recipe Management
Menu Management

SERVICES
<PAGE>
- - - - - - - -
Consulting
Training
Maintenance
Technical Support
Integration

     The Company's technology solutions enable retailers to: allow
consumers to place their own orders for items such as food, movie
tickets and concessions through graphical touch screen
interfaces; capture transaction information and communicate with
credit card networks; manage and analyze in-store inventory
movement, including electronic ordering; schedule and manage
staffing; and connect headquarters to each of the retailer's
local sites and vendors, enabling management to quickly change
pricing and review operating performance in a timely and
efficient manner.  The Company's products have been deployed
successfully in retail operations ranging in size from one to
more than 800 sites.

     Retailers derive the following benefits from Radiant's solutions:

     Integrated information flows.  The Company's technology solutions
     provide retailers with tools for monitoring and analyzing sales
     data, stock status, vendor relationships, merchandising and other
     important activities, both at their sites and headquarters.
     These products further enable retailers to communicate
     electronically with their suppliers in order to exchange purchase
     orders, invoices and payments.

     Centralized management of highly decentralized operations.
     Information provided by the Company's solutions enables
     headquarters management to monitor site performance in a
     consistent manner on a near-real time basis, implement price
     changes simultaneously throughout the enterprise and rapidly
     initiate targeted marketing programs.

     Tighter on-site control over operations.  The Company's back
     office systems enable site managers to closely manage inventory,
     reconcile accounts and control issues such as shift scheduling
     and hourly wage calculations.  The Company's solutions
     incorporate sophisticated inventory management techniques to help
     a retailer optimize its merchandising strategy.

     Improved labor productivity.  The Company incorporates user
     friendly graphics within its solutions, reducing employee
     training and order processing times which are important benefits
     in retail environments due to high employee turnover.  The
     Company's back office solutions can alleviate extensive paperwork
     required of site managers, allowing them more time to focus on
     operations.

     Improved customer service.  The Company's consumer-activated
     ordering systems permit customers to place their own orders,
     answer surveys and electronically communicate with the retailer.
     These systems can improve customer service, reduce site labor
     costs and, through automating suggestive selling concepts, help
     the retailer implement revenue enhancement opportunities.

     Lower cost of technology deployment.  In addition to the cost
     savings realized through better site management, the actual cost
     of ownership of the Company's multimedia networking platform is
     less than networked PC systems due to platform efficiencies.
     Software modification requirements are limited due to the high
     degree of functionality inherent in the core applications, and
     systems integration problems are minimized because the Company
     offers an integrated solution based on an open-architecture
     design, which facilitates integration with other systems.
<PAGE>


Company Strategy

     The Company's objective is to be the leading worldwide provider
of enterprise-wide technology solutions to the retail markets it
serves.  The Company is pursuing the following strategies to
achieve this objective:

     Expand existing position in selected markets.  The Company
     believes that it is in a strong position to expand its current
     market share in the convenience store, restaurant, entertainment
     and convenient automotive service center markets due to its
     highly functional solutions and its practical experience in
     deploying and implementing retail solutions.  The Company has
     experience integrating all aspects of its solutions into existing
     retail technology infrastructures.  In particular, the Company
     has developed interfaces with a number of the widely used
     electronic information and payment networks, including networks
     of certain major petroleum retailers.  The Company currently is
     developing interfaces to credit networks of additional major
     petroleum retailers, which if certified, will allow the Company
     access to a large number of potential sites.

     Introduce new products to current markets.  The Company has
     introduced a variety of new products and services since the
     beginning of 1996, including consumer-activated systems, a
     headquarters-based, enterprise-wide management system, Decision
     Support System ("DSS"), a Windows NT version of its local
     site-based products, consulting services and its multimedia
     networking platform.  Additional products and services, such as
     Windows CE-based products and solutions utilizing the Internet,
     are in development or under review.

     Continue to develop sales and services infrastructure.  To meet
     the anticipated requirements of growth in its business, the
     Company intends to continue expanding its direct sales force and
     its professional services organization.  The Company also plans
     to develop its telesales efforts to smaller retail chains.

     Expand markets for the Company's solutions.  The Company believes
     that its core technology and solutions are applicable to a
     variety of retail markets.  The Company has made five
     acquisitions in the restaurant and entertainment markets, which
     combined with its existing systems and technology, will enable it
     to broaden its presence in these markets.

     Attract and retain outstanding personnel.  The Company believes
     its strongest asset is its people. To attract and retain top
     talent, the Company intends to maintain its entrepreneurial
     culture and to continue offering competitive benefit programs.
     The Company has granted stock options to a majority of its
     employees and will strive to continue to align employee interests
     with those of the Company's shareholders.

     Continue to make strategic acquisitions.  The Company has
     accelerated its entry into new vertical markets through
     acquisitions and joint venture arrangements.  To the extent the
     Company believes acquisitions can better position it to serve its
     markets or penetrate others, it will pursue such opportunities.

Retail Markets

     To date, the Company's product applications have been focused
toward the convenience store, restaurant, entertainment and
convenient automotive service center markets, as these markets
require many of the same product features and functionality.  The
Company believes it can continue to leverage its existing
technology across these and other retail markets with limited
incremental product development efforts.
<PAGE>
     Convenience Store Market

     In the United States, there currently are approximately 94,000
convenience store sites, which derive a significant portion of
revenues from selling products other than gasoline.
Additionally, the Company believes that the international
convenience store market represents a substantial opportunity for
its solutions.  Management believes that the industry is
currently under-invested in technology.  Only 24.4% of the
industry's retail sites use scanning equipment, compared to
grocery stores, which have implemented scanning at approximately
90.0% of their locations.

     The Company thus believes that the demand for the Company's
solutions in the convenience store market for the foreseeable
future will remain strong.  This demand is fueled in part by the
fact that many convenience store operators are finding that their
consumers prefer "pay at the pump" systems, and many operators
are upgrading their POS systems to interface with these
consumer-activated systems. Thirty-one percent of convenience
stores currently utilize pay at the pump technology.
Implementing this technology requires a site to upgrade its
system for controlling and managing fuel sales.  Management
believes that installation of pay at the pump systems will remain
strong for the foreseeable future, encouraging additional
investment in store automation.


     Restaurant Market

     The domestic restaurant market includes approximately 425,000
sites as of April 1997.  Restaurants increasingly require
sophisticated systems which integrate with evolving headquarters
information systems and enable more timely and accurate
management of site operations.  At the site, managers seek real
time information access and management systems that permit
employees to increase the speed and accuracy with which they take
an order, prepare the food, and fill the order, often
accommodating numerous concurrent consumer orders at multiple
table-top, counter-top and drive-through locations.  Managers at
all levels are seeking solutions to better manage menu and
pricing functions, optimizing profitability and inventory
management.  The market for automated information and transaction
systems for restaurants is typically more advanced than in the
convenience store, convenient automotive service center  and
entertainment markets but is highly fragmented and includes a large
number of proprietary, closed systems.

     Entertainment Market

     The domestic cinema industry is concentrated, with the top six
chains operating approximately 49.0% of the cinema screens.  In
addition to increasing screens per site, "megaplexes" have
evolved, which combine restaurants, movies and other forms of
entertainment in one facility. There are approximately 29,600
cinema screens in the United States.  These screens are operated
at approximately 6,500 sites, with recent trends emphasizing more
screens per site.   While cinema sites typically are operated in
a decentralized manner, the Company believes cinema operators are
focused on implementing cost controls from headquarters.

     Convenient Automotive Service Center Market

     The convenient automotive service center market includes quick
oil change centers, full service car washes and various repair
centers.  In the United States, there currently are approximately
9,000 quick oil change centers and approximately 22,500 full
service car washes.  The Company believes that the international
automotive service center market also represents a substantial
opportunity for its solutions, as well as various repair centers
such as transmission and clutch specialty shops and tire stores.
<PAGE>


Retail Products

     While the Company believes that its core technology may be
adapted to provide solutions to a variety of markets, it has
concentrated its efforts to date in the convenience store,
restaurant, entertainment and convenient automotive service
center markets.  The Company's principal products, sales and
marketing efforts, customers and competitors are discussed below
for these markets. The Company markets a variety of products and
services as part of its strategy to serve as an integrated
solutions provider.  From consumer-activated ordering solutions
to feature-rich, highly functional point of sale and back office
systems tied into headquarters through advanced client/server
software, the Company's enterprise-wide solutions interact with
the consumer, site employees and management and the senior
management of a retailer's operations.  To help retailers
optimize the impact these systems have on their operations, the
Company also offers a wide array of consulting, training and
support services provided by experienced professionals.  The
Company further provides "ruggedized" hardware systems designed
to cope with harsh retailing environments.

     Consumer-Activated Ordering Systems


      Within each of the markets the Company serves, the trend toward
increased branded service offerings and more focused customer
service has created a demand for consumer-activated ordering
systems.  In response, the Company has developed an easy to use,
consumer-activated system which allows a consumer to preview
movies and purchase tickets or place a food order, pay with a
plastic card and make inquiries and view promotions through the
use of a touch screen.  The product's development environment and
authoring tools allow various media, such as video clips, logos,
pictures and recordings, to be quickly integrated into a
consumer-friendly application.

     Management believes consumer-activated technology allows a
retailer to increase labor productivity, increase revenues
through suggestive selling, increase consumer ordering speed and
accuracy, capture consumer information at the point of sale and
respond quickly to changing consumer preferences. The Company's
initial consumer-activated ordering system was commercially
released in the second quarter of 1996, and, to date, the Company
has sold systems or licensed software to a number of retailers.


     Point of Sale Systems

     The Company offers a variety of point of sale products which can
be licensed as modules or as a complete system.  These point of
sales products are comprehensive solutions that allow retailers
to process transactions and capture data, as well as manage other
front office operations.  The products feature a touch screen
interface, user-friendly applications and flexibility in set-up
and configuration to accommodate operational variables at each
sites.  They are based on an open architecture and run on either
the Windows NT or Novell platform.  The applications may support
multiple point of sale terminals and a separate back office
system as well as having the capacity to be upgraded so that
customers can phase in their investment with additional hardware
and software modules.  The products offer customers scalability,
such that the same application can be run in chains with widely
varying numbers and sizes of sites; yet the enterprise solution
remains consistent and supportive of each site.

     Back Office Management Systems

     Back office software provides various types of retail
operators with the capabilities to manage employees and
inventory, schedule labor, automate daily reports, analyze costs
and forecast results.  Additionally, this system provides the
means for retailers to readily gather point of sale and
management information including real-time sales monitoring, with
automatic updates of point of sale information.  The Company's
back office management systems were developed with a user
friendly, graphical interface and are based on open architecture.
<PAGE>

     Headquarters-Based Management Systems

     Headquarters-based management systems permit retailers to
manage individual sites from headquarters. Management believes
that within each of the markets it serves there is demand for
this type of solution.

      In 1996, the Company introduced a client/server based
software application which allows retailers to better manage
multiple convenience store sites. The following is a summary of
the features and functionality:

     Price book-allows retailers to set prices for products in a
     timely manner on a site-by-site, zone-by-zone or system wide
     basis.  Price book also allows retailers to target prices based
     on a variety of different factors, including markups based on
     cost, gross margins, and target margins.

     Site configuration and management-allows retailers to define and
     control the parameters of site operations, such as prohibiting
     clerks from authorizing fuel dispensing without prepayment.

     Fuel management-allows retailers to manage fuel inventory
     movement and pricing.  Such features allow management to define
     and regulate site pricing and strategies, including responding to
     price changes at competitors' sites.

     Decision Support System ("DSS")-supports headquarters analysis of
     site operations, such as sales vs. cost analysis, sales vs.
     budget analysis, labor productivity analysis and category
     management analysis.  DSS also facilitates "what if" analyses,
     allowing retailers to incorporate and ascertain the sensitivities
     of operational variables such as price, cost and volume.

     Electronic Data Interchange-supports the routing and analysis of
     purchase orders and vendor invoices.

     The Company believes that its headquarters-based product is one
of the most functional and comprehensive headquarters management
applications widely marketed to convenience store chains.  The
product is built with state of the art software tools and is
flexible and expandable based on application architecture and
database structure.  The application is written in PowerBuilder,
and the database, Microsoft SQL Server, is highly scalable.  The
user interface is intuitive and easy to use.

     To provide restaurant, entertainment and convenient automotive
service center operators with additional information and
functionality at headquarters, the Company plans to combine
certain features and functions of its convenience store
headquarters-based product with the restaurant, entertainment and
convenient automotive service center product lines.


Sales and Marketing

     The Company has a dedicated sales effort to address the
requirements of different retail operators.  The Company believes
this strategy positions its sales force to understand its
customers' businesses, trends in the marketplace, competitive
products and opportunities for new product development and allows
the Company to take a consultative approach to working with
customers.


     The Company has a staff of personnel focusing on selling its
solutions to major petroleum companies and other large accounts,
both domestically and internationally. Further, the Company is
building a telemarketing organization and distribution network to
market its solutions and provide service

<PAGE>
to chains with a limited number of sites.  All sales personnel are
compensated with a base salary and commission based on revenue quotas,
gross margins and other profitability measures.

     To date, the Company's primary marketing objective has been to
increase awareness of all of the Company's technology solutions.
To this end, the Company has attended industry trade shows and
selectively advertised in industry publications.  The Company
intends to increase its sales and marketing activities both
domestically and internationally, and will expand its advertising
in relevant industry publications. Additionally, the Company
intends to continue developing an independent distribution
network to sell and service its products to certain segments of
the domestic and international markets

Customers

     Customers who have selected the Company as their technology
solutions provider operate over 15,000 sites.  As of
December 31, 1997, the Company has installed its technology
solutions in over 4,000 of these sites.  In 1995, two customers
accounted for 59.4% of the Company's total revenues, as
follows: Conoco, Inc. (15.8%) and Emro Marketing Company (43.6%).
During 1996, four customers accounted for greater than 10.0% of the
Company's total revenues, as follows: Ultramar Diamond Shamrock
Corporation (21.5%), Emro Marketing Company (13.2%), Sheetz, Inc.
(11.7%) and Loews Theatre Management Corp.(13.8%). In 1997, three
customers accounted for 36.4% of the Company's total revenues,
as follows: Speedway SuperAmerica, LLC, formerly Emro Marketing
Company (12.8%), Ultramar Diamond Shamrock Corporation (12.2%)
and Conoco, Inc. (11.4%).

     The following is a partial list of major customers who have
licensed or purchased the Company's products and services:



Amoco Oil Company
Chick-fil-A
Cineplex Odeon
Compass Group USA, Inc.
Conoco, Inc.
General Cinema Theatres, Inc.
KFC
Loews Theatre Management Corp.
Longhorn Steaks
Marsh Supermarkets, LLC
National Amusements, Inc.
Petronas Dagangan Berhad
Q-Lube, Inc.
Regal Cinemas, Inc.
Speedway SuperAmerica, LLC, formerly Emro Marketing Company
Super Lube 10-Minute Oil Change, Inc.
Texaco, Inc.
Tosco Marketing Company
Ultramar Diamond Shamrock Corporation
Wawa, Inc.

Competition

     In marketing its technology solutions, the Company faces intense
competition, including internal efforts by potential customers.
The Company believes the principal competitive factors are
product quality, reliability, performance, price, vendor and
product reputation, financial stability, features and functions,
ease of use, quality of support and degree of integration effort
required with other systems.

     Within the markets it serves, the Company believes it is the only
integrated technology solution provider of point of sale, back office
and headquarters-based management systems.  Within these product
lines, the Company faces intense levels of competition from a variety
of competitors.  International Business Machines, Inc., NCR
Corporation, Verifone, Inc. a subsidiary of Hewlett Packard
Company, Dresser Industries, Inc., Gilbarco, Inc., Stores
Automated Software, Inc., Pacer/CATS, a subsidiary of
Tickemaster, Inc., Micros Systems, Inc., Par Technology Corp. and
others provide point of sale systems with
<PAGE>
varying degrees of functionality. Back office and headquarters
client/server software providers include The Software Works!,
Professional Datasolutions Inc. and JDA Software Group, Inc.  In
addition, the Company faces competition from systems integrators and
other companies such as Tandem Computers, Inc. who offer an integrated
technology solutions approach by integrating other third party
products.


     The Company believes there are barriers to entry in the market
for convenience store automation solutions.  The Company has
invested a significant amount of time and effort to create the
functionality of its consumer-activated point of sale and back
office headquarters-based management systems.  The Company
believes that the time required for a competitor to duplicate the
functionality of these products is substantial and would require
detailed knowledge of a retailer's operations at local sites and
headquarters.  Also, developing a credit card network interface
often can take an additional six to nine months, as the
certification process can be time consuming.  Moreover, the major
petroleum companies are extremely selective about which
automation system providers are permitted to interface to their
credit networks.  As of March 15, 1998, the Company was certified
on eight credit networks, and it currently has initiated the
process to become certified on three other major petroleum
company credit networks.

Professional Services

     In 1995, the Company determined that the integration, design,
implementation, application and installation of technology
solutions were critical to its ability to effectively market its
solutions.  Consequently, in early 1996, the Company established
its Radiant Solutions Group to provide these services to its
customers.  The following is a summary of some of the
professional services the Company provides:

     Consulting.  Business consultants, systems analysts and technical
     personnel assist retailers in all phases of systems development,
     including systems planning and design, customer-specific
     configuration of application modules and on-site implementation
     or conversion from existing systems.  Directors in the Company's
     consulting organization typically have significant consulting or
     retail technology experience.  The Company's consulting personnel
     undergo extensive training in retail operations and the Company's
     products.  Consulting services typically are billed on a per diem
     basis.

     Customization.  The Company provides custom application
     development work for customers billed on a project or per diem
     basis.  Such enhancements remain the property of the Company.

     Training.  The Company has a formalized training program
     available to its customers, which is provided on a per diem rate
     at the Company's offices or at the customer's site.

     Integration.  Typically, as part of its site solution, the
     Company integrates standard PC components for its customers.
     This is done as part of the overall technology solution for the
     customers to maximize the quality of the overall site solution
     and to provide the customers with a system that is easy to
     support over the long term.


     The market for the Company's professional services is intensively
competitive.  The Company believes the principal competitive
factors are the professional qualifications, expertise and
experience of individual consultants.  In the market for
professional services, the Company competes with the consulting
divisions of the big six accounting firms, Electronic Data
Systems, Inc., International Business Machines, Inc. and other
systems integrators.
<PAGE>
Maintenance and Customer Support

     The Company offers customer support on a 24-hour basis, a service
that historically has been purchased by a majority of its
customers and also entitles the customer to product upgrades.  In
some cases, hardware support is provided by third parties.  The
Company can remotely access its customers' systems in order to
perform quick diagnostics and provide on-line assistance.  The
annual support option is typically priced at a percentage of the
software and hardware cost.


Product Development

     The Company's product development strategy is focused on creating
common technology elements that can be leveraged in applications
across various vertical retail markets.  The base technology
architecture is designed so that it can be integrated with
products developed by other vendors and can be phased into a
retailer's operations.  The Company has developed numerous
applications running on a Windows NT platform.  The software
architecture incorporates Microsoft's Component Object Model,
providing an efficient environment for application development. In
addition, the Company is currently developing technology based
on the Windows CE platform for use in various retail applications.

     Management believes that the acquisition of ReMACS will
accelerate the development of the Company's next generation of
back office products.  ReMACS' Microsoft NT-based back office
application suite is currently under development for the
restaurant market.  The Company intends to use the ReMACS back
office technology platform to develop other back office products.  The
Company is currently integrating its point of sale products with
ReMACS' back office product.  Additionally, the Company will integrate
Twenty/20's restaurant point of sale products with its restaurant
products.


Proprietary Rights

     The Company's success and ability to compete is dependent in part
upon its proprietary technology, including its software source
code.  To protect its proprietary technology, the Company relies
on a combination of trade secret, nondisclosure, copyright and
patent law, which may afford only limited protection.  In
addition, effective copyright and trade secret protection may be
unavailable or limited in certain foreign countries.  Although
the Company relies on the limited protection afforded by such
intellectual property laws, it also believes that factors such as
the technological and creative skills of its personnel, new
product developments, frequent product enhancements, name
recognition and reliable maintenance are essential to
establishing and maintaining a technology leadership position.
The Company presently has one patent and one patent pending.  The
source code for the Company's proprietary software is protected
both as a trade secret and as a copyrighted work.  The Company
generally enters into confidentiality or license agreements with
its employees, consultants and customers and generally controls
access to and distribution of its software, documentation and
other proprietary information.  Although the Company restricts
the use by the customer of the Company's software and does not
permit the re-sale,
<PAGE>
sublicense or other transfer of such software, there can be no
assurance that unauthorized use of the Company's technology will not
occur.

     Despite the measures taken by the Company to protect its
proprietary rights, unauthorized parties may attempt to reverse
engineer or copy aspects of the Company's products or to obtain
and use information that the Company regards as proprietary.
Policing unauthorized use of the Company's products is difficult.
In addition, litigation may be necessary in the future to enforce
the Company's intellectual property rights, to protect the
Company's trade secrets, to determine the validity and scope of
the proprietary rights of others, or to defend against claims of
infringement or invalidity.  Such litigation could result in
substantial costs and diversion of resources and could have a
material adverse effect on the Company's business, operating
results and financial condition.

     Certain technology used in conjunction with the Company's
products is licensed from third parties, generally on a
non-exclusive basis.  These licenses usually require the Company
to pay royalties and fulfill confidentiality obligations.  The
Company believes that there are alternative resources for each of
the material components of technology licensed by the Company
from third parties.  However, the termination of any such
licenses, or the failure of the third-party licensors to
adequately maintain or update their products, could result in
delay in the Company's ability to ship certain of its products
while it seeks to implement technology offered by alternative
sources.  Any required replacement licenses could prove costly.
Also, any such delay, to the extent it becomes extended or occurs
at or near the end of a fiscal quarter, could result in a
material adverse effect on the Company's results of operations.
While it may be necessary or desirable in the future to obtain
other licenses relating to one or more of the Company's products
or relating to current or future technologies, there can be no
assurance that the Company will be able to do so on commercially
reasonable terms or at all.

     In the future, the Company may receive notices claiming that it
is infringing on the proprietary rights of third parties, and
there can be no assurance that the Company will not become the
subject of infringement claims or legal proceedings by third
parties with respect to current or future products.  In addition,
the Company may initiate claims or litigation against third
parties for infringement of the Company's proprietary rights or
to establish the validity of the Company's proprietary rights.
Any such claim could be time consuming, result in costly
litigation, cause product shipment delays or force the Company to
enter into royalty or license agreements rather than dispute the
merits of such claims.  Moreover, an adverse outcome in
litigation or similar adversarial proceedings could subject the
Company to significant liabilities to third parties, require the
expenditure of significant resources to develop non-infringing
technology, require disputed rights to be licensed from others or
require the Company to cease the marketing or use of certain
products, any of which could have a material adverse effect on
the Company's business, operating results and financial
condition.  To the extent the Company desires or is required to
obtain licenses to patents or proprietary rights of others, there
can be no assurance that any such licenses will be made available
on terms acceptable to the Company, if at all.  As the number of
software products in the industry increases and the functionality
of these products further overlaps, the Company believes that
software developers may become increasingly subject to
infringement claims.  Any such claims against the Company, with
or without merit, as well as claims initiated by the Company
against third parties, can be time consuming and expensive to
defend, prosecute or resolve.


Employees

     As of December 31, 1997 the Company employed 581 persons.  None
of the Company's employees is represented by a collective
bargaining agreement nor has the Company experienced any work
stoppage.  The Company considers its relations with its employees
to be good.


     The Company's future operating results depend in significant part
upon the continued service of its key technical, consulting and
senior management personnel and its continuing ability to attract
and retain
<PAGE>
highly qualified technical and managerial personnel.
Competition for such personnel is intense, and there can be no
assurance that the Company will retain its key managerial or
technical personnel or attract such personnel in the future.  The
Company has at times experienced and continues to experience
difficulty recruiting qualified personnel, and there can be no
assurance that the Company will not experience such difficulties
in the future.  The Company, either directly or through personnel
search firms, actively recruits qualified product development,
consulting and sales and marketing personnel.  If the Company is
unable to hire and retain qualified personnel in the future, such
inability could have a material adverse effect on the Company's
business, operating results and financial condition.


Forward-Looking Statements

     Certain statements contained in this filing are "forward-looking
statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, such as statements relating to
financial results and plans for future business development
activities, and are thus prospective.  Such forward-looking
statements are subject to risks, uncertainties and other factors
which could cause actual results to differ materially from future
results expressed or implied by such forward-looking statements.
Potential risks and uncertainties include, but are not limited
to, economic conditions, competition and other uncertainties
detailed from time to time in the Company's Securities and
Exchange Commission filings.

Item 2.  Properties.

     The Company's principal facility occupies approximately 60,000
square feet in Alpharetta, Georgia, under two lease agreements.
These lease agreements expire on January 31, 2000 and August 31,
2000, respectively. In January 1997, the Company leased
additional space at its current location, which increased the
square footage leased by the Company from 43,000 to 60,000 square
feet.

     Effective October 1997, the Company gave notice of termination
under its existing lease as the Company plans to vacate its
current premises upon completion of its new corporate
headquarters in Alpharetta, Georgia.  The building, which is
currently under construction, is approximately 107,000 square
feet and is expected to be completed in the fall of 1998.  The
Company signed a ten-year lease for the building in October 1997.

     In November 1997, the Company signed a five-year lease to house
the Integration and Customer Support Operations.  The building,
also in Alpharetta, Georgia,  is approximately 55,000 square
feet.  The Company also has regional offices in Dallas, Texas;
Pleasanton, California and Hillsboro, Oregon.


Item 3.   Legal Proceedings.

     There are no material pending legal proceedings to which the
Company is a party or of which any of its properties are subject;
nor are there material proceedings known to the Company to be
contemplated by any governmental authority. There are no material
proceedings known to the Company, pending or contemplated, in
which any director, officer or affiliate or any principal
security holder of the Company, or any associate of any of the
foregoing is a party or has an interest adverse to the Company.

Item 4.   Submission of Matters to a Vote of Security Holders.

     No matter was submitted during the fourth quarter ended December
31, 1997 to a vote of security holders of the Company.
<PAGE>

                               PART II

Item 5.   Market for Registrant's Common Equity and Related
          Stockholder Matters.


     The Common Stock has been included for quotation on the Nasdaq
National Market under the symbol "RADS" since the Company's
initial public offering on February 13, 1997.  Prior to that
time, there was no public market for the Common Stock.  The
following table sets forth the high and low sale prices per share
for the Common Stock for the periods indicated as reported by the
Nasdaq National Market.



First Quarter (from February 13, 1997)      $14 1/8      $8 1/4
Second Quarter                               26 1/4       7
Third Quarter                                27          18 1/2
Fourth Quarter                               29 3/8      17 3/4


     As of March 16, 1998, there were 46 holders of record of the
Common Stock.  Management of the Company believes that these are
in excess of 400 beneficial holders of its Common Stock.

     The Company currently anticipates that all of its earnings will
be retained for development of the Company's business and does
not anticipate paying any cash dividends in the foreseeable
future. Future cash dividends, if any, will be at the discretion
of the Company's Board of Directors and will depend upon, among
other things, the Company's future earnings, operations, capital
requirements and surplus, general financial condition,
contractual restrictions and such other factors as the Board of
Directors may deem relevant.

     Recent Issuances of Unregistered Securities.  In connection with
the acquisition of RapidFire on October 31, 1997, the Company
issued 102,230 shares of Common Stock to Mr. Kevin Eldredge, the
sole shareholder of RapidFire.  In addition, the Company issued
employee stock options to Mr. Eldredge to purchase up to 276,690
shares of common stock of the Company.  These options are
exercisable on October 31, 2005 (subject to acceleration upon the
attainment of certain performance targets) at an exercise price
of $21.685 per share.

     On November 18, 1997, the Company issued 46,032 shares of Common
Stock to the sole shareholder of Logic Shop, Inc. in connection
with the acquisition of that company by the Company.

     The issuances of securities described above were made in reliance
on the exemption from registration provided by Section 4(2) of
the Securities Act of 1933 as transactions by an issuer not
involving a public offering.  All of the securities were acquired
by the recipients thereof for investment and with no view toward
the resale or distribution thereof.  In each instance, the offers
and sales were made without any public solicitation, the
certificates bear restrictive legends and appropriate stop
transfer instructions have been or will be given to the transfer
agent.  No underwriter was involved in the transactions and no
commissions were paid.
<PAGE>
Item 6.  Selected Consolidated Financial Data

     The following table sets forth selected consolidated
financial data of the Company for the periods indicated, which
data has been derived from the consolidated financial statements
of the Company.  The consolidated financial statements of the
Company as of December 31, 1994, 1995, 1996 and 1997, and for
each of the years in the five-year period ended December 31,
1997, have been audited by Arthur Andersen LLP, independent
public accountants.  This selected consolidated financial data
should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements of the Company and the
notes thereto included elsewhere herein.

<TABLE>
                                                                       Year Ended December 31,

                                                           1993       1994        1995      1996        1997
                                                                   (in thousands, except per share data)
<S>                                                       <C>        <C>        <C>        <C>        <C>
Statement of Operations Data:

Revenues:
     Systems sales                                        $3,748     $13,529    $14,078    $35,888    $ 66,798
     Customer support, maintenance and other services        552         919      1,804      5,055      11,205
                                                          ------     -------    -------    -------    --------
          Total revenues                                   4,300      14,448     15,882     40,943      78,003

Cost of revenues:
     Systems sales                                         2,307       9,459      9,863     22,270      34,019
     Customer support, maintenance and other services        588       1,208      2,300      5,465      10,298
                                                          ------     -------    -------    -------    --------
          Total cost of revenues                           2,895      10,667     12,163     27,735      44,317
                                                          ------     -------    -------    -------    --------

Gross profit                                               1,405       3,781      3,719     13,208      33,686
Operating expenses:
     Product development                                     271         984      1,640      3,328       6,898
     Purchased research and development costs                 --          --         --      3,930      28,871
     Stock compensation expense                               --          --         --         --       1,214
     Sales and marketing                                     209         470        607      1,487       5,819
     Depreciation and amortization                            46         178        583        948       2,384
     General and administrative                              332       2,243      2,990      5,664       9,059
                                                          ------     -------    -------    -------    --------

Income (loss) from operations                                547         (94)    (2,101)    (2,149)    (20,559)
Interest (income)expense, net                                 19          82        166        712        (989)
Minority interest in earnings of PrysmTech                    --          --         --        628          --
Other income                                                  --          --       (406)        --          --
                                                          ------     -------    -------    -------    --------
Income (loss) before extraordinary item and
   income taxes                                              528        (176)    (1,861)    (3,489)    (19,570)
Income tax provision (benefit)(1)                            206         (61)      (709)    (1,333)       (212)
Extraordinary item, net of taxes(2)                           --          --         --         --         131
                                                          ------     -------    -------    -------    --------
Net income (loss)                                         $  322     $  (115)   $(1,152)   $(2,156)   $(19,489)
                                                          ======     =======    =======    =======    ========
Basic earnings (loss) per share:
     Income (loss) before extraordinary item              $ 0.02     $ (0.01)   $ (0.13)   $ (0.26)   $  (1.49)
     Extraordinary loss on early extinguishment of debt       --          --         --         --       (0.01)
                                                          ------     -------    -------    -------    --------

Total basic earnings (loss) per share (3)(4)              $ 0.02     $ (0.01)   $ (0.13)   $ (0.26)   $  (1.50)
                                                          ======     =======    =======    =======    ========

Diluted earnings (loss) per share:
     Income (loss) before extraordinary item              $ 0.02     $ (0.01)   $ (0.13)   $ (0.26)   $  (1.49)
     Extraordinary loss on early extinquishment of debt       --          --         --         --       (0.01)
                                                          ------     -------    -------    -------    --------

Total diluted earnings (loss) per share (3)(4)            $ 0.02     $ (0.01)   $ (0.13)   $ (0.26)   $  (1.50)
                                                          ======     =======    =======    =======    ========
<PAGE>
     Weighted average shares outstanding:
          Basic (3) (4)                                   13,714      13,199      9,073      8,300      13,024
                                                          ======     =======    =======    =======    ========

          Diluted (3) (4)                                 13,714      13,199      9,073      8,300     13,024
                                                          ======     =======    =======    =======    =======
</TABLE>

<TABLE>
                                                                              December 31,
                                                           1993        1994       1995       1996       1997
<S>                                                       <C>        <C>        <C>        <C>        <C>
Balance Sheet Data:
Working capital                                           $ (102)    $(1,027)   $(3,664)   $   812    $57,259
Total assets                                               2,716       4,818      4,235     14,616     93,516
Long-term debt and shareholder loan,
   including current portion                                  89       1,067        970      9,174      4,729
Shareholders' equity (deficit)                               145        (722)    (3,154)    (4,500)    71,021
</TABLE>

(1)  As a result of its election to be treated as an S Corporation for
     income tax purposes, prior to completion of its initial public
     offering in February 1997, the Company was not subject to federal
     or state income taxes.  For periods prior to the termination of
     the S Corporation status, pro forma net income amounts include
     additional income tax benefits determined by applying the
     Company's anticipated statutory tax rate to pretax income (loss),
     adjusted for permanent tax differences.  From February (C
     Corporation inception) until December 31, 1997, the Company did
     not record a tax benefit, primarily due to nondeductible
     purchased research and development costs. See Note 6 to the
     consolidated financial statements.
(2)  Represents loss from early extinguishment of debt, net of income
     tax of $82,000.
(3)  In 1997, the Financial Accounting Standards Board issued
     Statement of Financial Accounting Standards No. 128, "Earnings
     Per Share" ("SFAS No. 128"), effective for fiscal years ending
     after December 15, 1997.  The Company adopted the new guidelines
     for the calculation and presentation of earnings per share, and
     all prior periods have been restated.
(4)  Pursuant to the Securities and Exchange Commission ("SEC") Staff
     Accounting Bulletin ("SAB") No. 83, common stock and common stock
     equivalents issued at prices below the public offering price
     during the 12-month period prior to the offering were included in
     the calculation as if they were outstanding for all periods
     presented, regardless of whether they are dilutive.  In February
     1998, the SEC staff released SAB No. 98 on computations of
     earnings per share.  SAB No. 98 replaces SAB No. 83 in its
     entirety and requires, among other items, that only "nominal
     issuances" of common stock be reflected in the calculation as if
     they were outstanding for all periods presented and that the
     calculation be made in accordance with SFAS No. 128 for all
     periods subsequent to the offering. Accordingly, for all periods
     presented, common stock equivalents have been excluded from
     diluted weighted average shares outstanding, as their impact was
     antidilutive

Item 7.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations

     The following discussion should be read in conjunction with the
consolidated financial statements of the Company (including the
notes thereto) contained elsewhere in this Report.

Overview
Radiant Systems, Inc.  (the "Company"), provides enterprise-wide
technology solutions to the retail industry.  The Company offers
fully integrated retail automation solutions including point of
sale systems, consumer-activated ordering systems, back office
management systems and headquarters-based management systems.
The Company's products enable retailers to interact
electronically with their customers, capture detailed data at the
point of sale, manage labor and inventory at their sites and
communicate electronically with their sites, vendors and credit
networks.  In addition, the Company offers system planning,
design and implementation services to tailor its solutions to
each retailer's specifications.
<PAGE>
     The Company derives its revenues primarily from the sale of
integrated systems, including software, hardware and related
support and consulting services. The Company plans to increase
licensing of certain of its software products on a stand-alone
basis. In addition, the Company offers implementation and
integration services which are billed on a per diem basis.  The
Company's revenues from its various technology solutions are, for
the most part, dependent on the number of installed sites a
customer has.  Accordingly, while the typical sale is the result
of a long, complex process, the Company's customers usually
continue installing additional sites over an extended period of
time. Revenues from software and systems sales are recognized as
products are shipped, provided that collection is probable and no
significant post shipment vendor obligations remain. Revenues from
customer support, maintenance and other services are generally
recognized as the service is performed.

     Prior to 1993, the Company developed software solutions for the
video rental and car care markets.  The Company entered the
convenience store market in 1993 by introducing a new product
line. In order to increase the Company's focus on revenue growth
and profitability, the Company expanded its senior management
team in 1995 and 1996. In addition, the Company has responded to
strong demand for its technology solutions by investing heavily
in new product development.  The Company also identified
additional market opportunities for its new products.  As a
result of these and other factors, the Company has substantially
increased its sales, marketing and product development
activities.

     Since November 1995, a number of events resulted in strong
revenue growth for the Company.  The Company developed new
products, established relationships with new customers and
increased sales to existing customers. The Company expanded its
presence into the retail industry in November 1995 by entering
into a joint venture (PrysmTech) to market enterprise-wide
technology solutions to the cinema operators. On December 31,
1996, the Company purchased the remaining interest in PrysmTech.
Accordingly, the operations of PrysmTech are reflected in the
1996 financial statements of the Company with a deduction for the
minority interest in the earnings of PrysmTech.  Continuing its
growth in the retail industry, in May 1996 the Company purchased
Liberty Systems International, Inc. ("LSI"), a technology
solution provider to the QSR operators.  To broaden its presence in
the restaurant market, the Company acquired Restaurant Management and
Control Systems, Inc. ("ReMACS") and RSI Merger Corporation d.b.a.
Twenty/20 Visual Systems, Inc. ("Twenty/20"), in May 1997 and
RapidFire Software, Inc. and EquiLease Financial Services, Inc.
(collectively "RapidFire") in October 1997. In November 1997, the
Company acquired Logic Shop, Inc. ("Logic Shop") to serve the
convenient automotive service centers. During this period, the Company
also expanded its sales force and continued to add management,
consulting and product development personnel.  The revenue growth
of the Company has resulted in profitability since the second
quarter of 1996, before accounting for one-time, nonrecurring
purchased research and development costs, and other
acquisition-related costs.
<PAGE>

     As a result of its election to be treated as an S Corporation for
income tax purposes, prior to the completion of its initial
public offering in February 1997, the Company was not subject to
federal or state income taxes.  Pro forma net loss amounts
discussed herein include additional income tax benefits
determined by applying the Company's anticipated statutory tax
rate to pretax loss, adjusted for permanent tax differences.  The
Company's S Corporation status terminated upon completion of its
initial public offering in February 1997.

     The Company is currently in the process of performing a review of
its business systems, including its computer systems and its product
offerings, and is querying its customers, vendors and resellers as to
their progress in identifying and addressing problems that their
computer systems may face in correctly interrelating and processing
date information as the year 2000 approaches and is reached.  The
Company does not expect that the cost to modify its information
technology infrastructure to be Year 2000 compliant will be material
to its financial condition or results of operations.  To date, the
expense of upgrading product applications to be Year 2000 compliant
has not ben material.  Moreover, the Company does not anticipate any
material disruption in its operations as a result of any failure
by the Company to be in compliance. In the event that any of the
Company's significant suppliers or customers does not
successfully and timely achieve Year 2000 compliance, the
Company's business or operations could be adversely affected.

Results of Operations

     The following table sets forth, for the periods indicated, the
percentage relationship of certain statement of operation items
to total revenues:

<TABLE>
                                                                  Year ended December 31,
                                                           1995            1996         1997
<S>                                                        <C>            <C>          <C>
Revenues:
     Systems sales                                          88.6%          87.7%        85.6%
     Customer support, maintenance and other services       11.4           12.3         14.4
                                                           -----          -----        -----
          Total revenues                                   100.0          100.0        100.0

Cost of revenues:
     Systems sales                                          62.1           54.4         43.6
     Customer support, maintenance and other services       14.5           13.3         13.2
                                                           -----          -----        -----
          Total cost of revenues                            76.6           67.7         56.8
Gross profit                                                23.4           32.3         43.2
Operating expenses:
     Product development                                    10.3            8.1          8.8
     Purchased research and development costs                 --            9.6         37.0
     Stock compensation expense                               --             --          1.6
     Sales and marketing                                     3.8            3.6          7.5
     Depreciation and amortization                           3.7            2.3          3.1
     General and administrative                             18.8           13.9         11.6
                                                           -----          -----        -----
Loss from operations                                       (13.2)          (5.2)       (26.4)
Interest (income) expense, net                               1.0            1.7         (1.3)
Minority interest                                             --            1.6           --
Other income                                                (2.5)            --           --
                                                           -----          -----        -----
Loss before income taxes and extraordinary Item            (11.7)          (8.5)       (25.1)
Income tax benefit                                          (4.4)          (3.3)        (0.3)
Extraordinary item, net of  taxes                             --             --          0.2
                                                           -----          -----        -----
Net loss                                                    (7.3)%         (5.2)%      (25.0)
                                                           =====          =====        =====
</TABLE>
<PAGE>
Year Ended December 31, 1997 Compared to Year Ended December 31,
1996

     Systems Sales. The Company derives the majority of its
revenues from sales and licensing fees for its headquarters and
point of sale solutions. Systems sales increased 86.1% to $66.8
million for the year ended December 31, 1997 ("1997"), compared
to $35.9 million for the year ended December 31, 1996 ("1996").
The increase related to sales and license fees from new and
existing customers, and the expansion of the Company through its
acquisitions of ReMACS and Twenty/20 in the second quarter of
1997 and RapidFire, and Logic Shop in the fourth quarter of 1997.



     Customer Support, Maintenance and Other Services.   The
Company also derives revenues from customer support, maintenance
and other services, which increased 121.7% to $11.2 million for
1997, compared to $5.1 million for  1996. The increase was due to
increased support, maintenance and services revenues, within its
existing markets as well as those related to the Company's 1997
acquisitions.  Additionally, increased customer demand of
professional services which the Company began offering in the
first quarter of 1996, has contributed to this increase.

     Cost of Systems Sales. Cost of systems sales consists
primarily of hardware and peripherals for site-based systems and
labor. These costs are expensed as products are shipped. Cost of
systems sales increased 52.8% to $34.0 million for 1997, compared
to $22.3 million for 1996. The increase was directly attributable
to the increase in systems sales. Cost of systems sales as a
percentage of systems revenues decreased to 50.9% from 62.1%. The
decreases were due primarily to increased efficiencies associated
with the manufacturing of site-based systems; as well as
increased sales of existing and newly introduced and acquired
products, such as its back office and headquarters-based
management systems software.  These products typically have
higher gross margins than the site-based systems sold by the
Company.

     Cost of Customer Support, Maintenance and Other Services.
Cost of customer support, maintenance and other services consists
primarily of personnel and other costs associated with the
Company's services operations. Cost of customer support,
maintenance and other services increased 88.4% to $10.3 million
for 1997 from $5.5 million for 1996. The increase was due
primarily to the Company's decision to expand its professional
services offerings and the related increase in wages associated
with this effort. Cost of customer support, maintenance and other
services as a percentage of customer support, maintenance and
other services revenues decreased to 91.9% from 108.1%.

     Product Development Expenses. Product development expenses
consist primarily of wages and materials expended on product
development efforts. Product development expenses increased
107.3% to $6.9 million for 1997, compared to $3.3 million for
1996. The increase was due to higher development costs associated
with new product development, including development activity
associated with the acquisitions of ReMACS, Twenty/20, RapidFire
and Logic Shop and the development of new credit card network
interfaces. Product development expenses as a percentage of total
revenues increased to 8.8% from 8.1%, as product development
expenses increased at a faster pace than total revenues. The
Company capitalizes a portion of its software development costs.
In  1997, software development costs of $1.4 million, or 16.5% of
its total product development costs, were capitalized by the
Company, as compared to approximately $635,000, or 16.0% of its
total product development costs for 1996.

     Purchased Research and Development Costs. Purchased research
and development costs represent the estimated fair value of
acquired incomplete research and development projects as
determined by independent appraisal.   During 1997, in connection
with the acquisition of ReMACS,  Twenty/20, RapidFire, and Logic
Shop, the Company recorded non-recurring charges of $28.9 million
for purchased research and development costs.  During 1996, the
Company recorded $3.9 million in such costs associated with the
acquisitions of LSI and PrysmTech.
<PAGE>
     Stock Compensation Expense. Stock compensation expense
represents the excess of the fair market value of the Company's
Common Stock on the date of the grant of stock options over the
aggregate exercise price of such options. In connection with the
acquisition of Twenty/20, the Company granted such stock options,
a portion of which immediately vested, and recorded a
non-recurring charge of $1.2 million.  No such charge was
recorded in 1996.

     Sales and Marketing Expenses.   Sales and marketing expenses
increased 291.3% to $5.8 million during 1997, compared to $1.5
million in 1996. The increase was associated with the Company's
acquisitions, continued expansion of its sales activities and
increased commission expense attributable to higher sales. Sales
and marketing expenses as a percentage of total revenues
increased to 7.5% from 3.6%.

     Depreciation and Amortization.  Depreciation and
amortization expenses increased 151.3% to $2.4 million for 1997,
compared to approximately $948,000 for 1996. The increase
resulted from an increase in computer equipment and other assets
required to support an increased number of employees, as well as
increased goodwill amortization resulting from acquisitions.
Depreciation and amortization as a percentage of total revenues
increased to 3.1% from 2.3% during the period, primarily because
associated personnel support costs increased at a pace higher
than associated revenues. Additionally, amortization of
capitalized software development costs increased 37.5% to
$328,000 for 1997, compared to $239,000 for 1996 as a result of
increased investment by the Company in new product development.

     General and Administrative Expenses.   General and
administrative expenses increased 59.9% to $9.1 million for 1997,
compared to $5.7 million for 1996. The increase was due primarily
to personnel increases in 1997 and the Company's acquisitions.
General and administrative expenses as a percentage of total
revenues declined to 11.6% from 13.9% as a result of higher sales
volumes.

      Interest (Income) Expense. Interest (income) expense
increased 239.0% to net interest income of $989,000 for 1997,
compared to net interest expense of $712,000 for 1996. The increase
resulted primarily from interest income earned on the proceeds of
the sale of 5.4 million shares of the Company's Common Stock
during 1997, compared to interest expense resulting from the
Company borrowing $4.5 million in 1996 and the borrowing costs
associated therewith.

     Minority Interest in Earnings of PrysmTech.   In  1997, the
Company recognized no minority interest in earnings of PrysmTech
compared to $628,000 in 1996, as the remaining interest in
PrysmTech was acquired by the Company during the fourth quarter
of 1996.

     Income Tax Benefit. As a result of its election to be
treated as an S Corporation for income tax purposes, the Company,
prior to the completion of its initial public offering in
February 1997, was not subject to federal or state income taxes.
The Company's S Corporation status was terminated upon completion
of its initial public offering in February 1997 and upon
termination of its S Corporation status, the Company recorded
deferred tax assets in the amount of $592,000. Simultaneously,
with the recording of these deferred tax assets, the Company
recorded a tax benefit of $305,000 and a valuation allowance of
$287,000. The valuation allowance was recorded due to the
uncertainty surrounding the future utilization of such deferred
tax assets.   For all periods presented, the accompanying
financial statements reflect provisions for income taxes computed
in accordance with the provisions of Statement of Accounting
Standards No. 109, "Accounting for Income Taxes".  For those
periods prior to the Company's initial public offering, the tax
benefit has been presented on a pro forma basis as if the Company
had been liable for federal and state income taxes during those
periods.  The pro forma effective tax rate for the period from January
1, 1997 through February 19, 1997, the date the Company terminated its
S Corporation status was a benefit of 1.1%, compared to a benefit of
38.2% for 1996. The decrease resulted primarily from nondeductible
<PAGE>
purchased research and development costs.

     Extraordinary Item.  During 1997, a loss from early
extinguishment of debt of $213,000, net of taxes of $82,000, was
recognized due to the write off of certain unamortized loan
origination costs and unamortized debt discounts associated with
the repayment of outstanding indebtedness to Sirrom Capital
Corporation of $4.5 million.

     Net Loss.   For 1997, the Company recognized a net loss of
$19.5 million compared to a net loss of $2.2 million for 1996.
The loss in 1997 resulted from the recording of
acquisition-related expenses consisting of purchased research and
development costs and stock compensation expense associated with
the purchase of ReMACS, Twenty/20, RapidFire and Logic Shop
during 1997 of $30.1 million, which were partially offset by
increased revenues and improved margins during 1997 as compared
to 1996. Net income before extraordinary items and acquisition
related charges for 1997, was $6.3 million or $0.40 per share, an
increase of $6.1 million or $0.38 per share over the net income
of $273,000 or $0.02 per share for 1996.

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

     Systems Sales.  Systems sales increased 154.9% to $35.9 million
for the year ended December 31, 1996 (" 1996"), compared to $14.1
million for the year ended December 31, 1995 (" 1995").  The
increase related to sales and license fees from new and existing
customers; the acquisition of PrysmTech that contributed $9.1
million to system sales in 1996; and the introduction of several
new products in 1996, including its headquarters-based management
systems, its consumer-activated ordering system and a Windows NT
version of its point of sale system.

     Customer Support, Maintenance and Other Services.  Customer
support, maintenance and other services increased 180.2% to $5.1
million for 1996, compared to $1.8 million for 1995.  The
increase was due to increased support, maintenance and services
revenues, including $1.1 million related to PrysmTech, and the
establishment and expansion of Company's professional services
offerings.

     Cost of Systems Sales.  Cost of systems sales increased 125.8% to
$22.3 million for 1996, compared to $9.9 million for 1995.  The
increase was directly attributable to the increase in systems
sales.  Cost of systems sales as a percentage of systems revenues
declined to 62.1% from 70.1%.  The decreases were due to
increased sales of existing and newly introduced and acquired
products, such as the headquarters-based management system and
the PrysmTech product line, which have higher margins than
site-based systems sold by the Company in prior years.

     Cost of Customer Support, Maintenance and Other Services.  Cost
of customer support, maintenance and other services increased
137.6% to $5.5 million for 1996 from $2.3 million for 1995.  The
increase was due primarily to the Company's decision to offer
professional services to its customers and the related increase
in wages associated with this effort, as well as the inclusion of
PrysmTech's results. Cost of customer support, maintenance and
other services as a percentage of customer support, maintenance
and other services revenues declined to 108.1% from 127.5%.
These declines reflect higher service margins from PrysmTech
operations, partially offset by the Company's investment in the
Radiant Solutions Group.

     Product Development Expenses.  Product development expenses
increased 102.9% to $3.3 million for  1996, compared to $1.6
million for  1995.  The increase was due to higher development
costs associated with new product development, including
development activity associated with the Company's QSR products
and development of new credit card network interfaces, as
well as the inclusion of PrysmTech's results.  Product
development expenses as a percentage of total revenues declined
to 8.1% from 10.3% because total revenues increased at a faster
pace than product development expenses.  The
<PAGE>
Company capitalizes a portion of its software development costs.  In
1996, software development costs of $635,000 were capitalized by the
Company, as compared to $329,000 for 1995.  The Company capitalized
16.0% of its product development costs in 1996, as compared to 16.7%
for 1995.

     Purchased Research and Development Costs.  Purchased research and
development costs were $3.9 million for 1996.  These one-time,
nonrecurring costs represent in-process research and development
costs expensed by the Company in connection with its acquisition
of PrysmTech.

     Sales and Marketing Expenses.  Sales and marketing expenses
increased 145.1% to $1.5 million during 1996, compared to
$607,000 for  1995.  The increase was associated with the
Company's expansion of its sales force, the inclusion of
PrysmTech's results and increased commission expense attributable
to higher sales.  Sales and marketing expenses as a percentage of
total revenues declined to 3.6% from 3.8%.

     Depreciation and Amortization.  Depreciation and amortization
expenses increased 62.5% to $948,000 for  1996, compared to
$583,000 for  1995.  The increase resulted from an increase in
computer equipment and other assets required to support an
increased number of employees, as well as the inclusion of
PrysmTech's results.  Depreciation and amortization as a
percentage of total revenues declined to 2.3% from 3.7% during
the period, primarily because revenues increased at a faster pace
than associated personnel support costs.  Additionally,
amortization of capitalized software development costs increased
140.8% to $239,000 for  1996, compared to $99,000 for  1995 as a
result of higher capitalized software development costs.

     General and Administrative Expenses.  General and administrative
expenses increased 89.4% to $5.7 million for  1996, compared to
$3.0 million for  1995.  The increase was due primarily to
personnel increases in  1996, as well as the inclusion of
PrysmTech's results.  General and administrative expenses as a
percentage of total revenues declined to 13.9% from 18.8% as a
result of higher sales volumes.

     Interest Expense.  Interest expense increased 327.6% to $712,000
for  1996, compared to $166,000 for  1995.  The increase resulted
from the Company borrowing $4.5 million in the second and third
quarters of  1996 and the borrowing costs associated therewith.
Interest expense as a percentage of total revenues increased to
1.7% from 1.0% due to the increase in borrowings.

     Minority Interest in Earnings of PrysmTech.  In  1996, the
minority interest in earnings of PrysmTech was $628,000, compared
to none in 1995.  This amount reflects the pro rata ownership
interest not owned by the Company in 1996.

     Other Income.  In  1996, the Company recognized no other income.
In  1995, the Company recognized $406,000 in other income, which
primarily represented a gain on the sale of Company assets.

     Pro Forma Income Tax Provision (Benefit).  The pro forma
effective tax rate for 1996 was a benefit of 38.2%, compared to a
benefit of 38.1% for  1995.

     Pro Forma Net Income (Loss).  Pro forma net loss increased 87.2%
to $2.2 million for  1996, compared to $1.2 million for  1995.
The increase in net loss resulted primarily from one-time,
nonrecurring charges for purchased research and development
costs, partially offset by increased revenues and improved
margins in  1996 over  1995.


Quarterly Information

The following tables set forth certain unaudited financial data
for each of the Company's last eight calendar quarters and such
data expressed as a percentage of the Company's total revenues
for the respective quarters.  The information has been derived
from unaudited consolidated financial statements
<PAGE>
that, in the opinion of management, reflect all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of such quarterly information.  The operating results for
any quarter are not necessarily indicative of the results to be
expected for any future period.

<TABLE>


                                                       Quarter ended
                          Mar. 31,    June 30,    Sept. 30,    Dec. 31,    Mar. 31,    June 30,    Sept. 30,    Dec. 31,
                            1996       1996         1996        1996        1997        1997        1997        1997
<S>                       <C>         <C>         <C>         <C>         <C>         <C>          <C>         <C>
Revenues:
   Systems sales          $ 3,849     $ 9,752     $ 9,741     $ 12,546    $10,742     $ 14,466     $17,532     $24,058
   Customer support
     Maintenance and
     other Services           698       1,097       1,448        1,812      1,818        2,694       3,258       3,435
                          -------     -------     -------     --------    -------     --------     -------     -------
       Total revenues       4,547      10,849      11,189       14,358     12,560       17,160      20,790      27,493
Cost of revenue
   Systems sales            2,768       6,331       5,592        7,579      6,278        7,942       8,071      11,728
   Customer support,
     Maintenance and
     other Services         1,003       1,215       1,600        1,646      1,749        2,395       2,795       3,359
                          -------     -------     -------     --------    -------     --------     -------     -------
Total cost of revenues      3,771       7,546       7,192        9,225      8,027       10,337      10,866      15,087
                          -------     -------     -------     --------    -------     --------     -------     -------
Gross profit                  776       3,303       3,997        5,133      4,533        6,823       9,924      12,406
Operating expenses:
   Product development        701         768         900          959      1,153        1,466       1,984       2,294
   Purchased research and
     development costs         --          30          --        3,900         --       19,134          --       9,737
   Stock compensation
     expense                   --          --          --           --         --        1,214          --          --
   Sales and marketing        285         292         311          599        872        1,243       1,447       2,258
   Depreciation and
     amortization             194         224         265          265        367          533         666         818
   General and
     administrative         1,010       1,407       1,394        1,854      1,689        1,911       2,424       3,035
                          -------     -------     -------     --------    -------     --------     -------     -------
Income (loss) from
   operations              (1,414)        582       1,127       (2,444)       452      (18,678)      3,403      (5,736)
Interest (income)
   expense, net                39          40         229          404        209          (44)       (576)       (578)
Other income                   --          --          --           --         --           --          --          --
Minority interest in
   earnings of PrysmTech       55         215         206          152         --           --          --          --
                          -------     -------     -------     --------    -------     --------     -------     -------
Income (loss) before
   income taxes and
   extraordinary items     (1,508)        327         692       (3,000)       243      (18,634)      3,979      (5,158)
Income tax provision
   (benefit)                 (576)        125         264       (1,146)      (212)          --       1,532      (1,532)
Extraordinary item,
   net of taxes                --          --          --           --        131           --          --          --
                          -------     -------     -------     --------    -------     --------     -------     -------
Net income (loss)         $  (932)    $   202     $   428     $ (1,854)   $   324     $(18,634)    $ 2,447     $(3,626)
                          =======     =======     =======     ========    =======     ========     =======     =======
</TABLE>
<PAGE>
<TABLE>
                                                      Quarter ended
                          Mar. 31,    June 30,    Sept. 30,    Dec. 31,    Mar. 31,    June 30,    Sept. 30,    Dec. 31,
                            1996       1996         1996        1996        1997        1997        1997        1997

<S>                         <C>         <C>         <C>         <C>         <C>         <C>          <C>         <C>
Revenues:
   Systems sales             84.7%       89.9%       87.1%       87.4%       85.5%       84.3%        84.3%       87.5%
   Customer support,
     maintenance and
     other services          15.3        10.1        12.9        12.6        14.5        15.7         15.7        12.5
                            -----       -----       -----       -----       -----       -----        -----       -----
        Total revenues      100.0       100.0       100.0       100.0       100.0       100.0        100.0       100.0
Cost of revenue
   Systems sales             60.9        58.4        50.0        52.8        50.0        46.3         38.8        42.7
   Customer support,
     maintenance and
     other services          22.1        11.2        14.3        11.5        13.9        14.0         13.4        12.2
                            -----       -----       -----       -----       -----       -----        -----       -----
        Total cost of
          revenues           83.0        69.6        64.3        64.3        63.9        60.3         52.2        54.9
                            -----       -----       -----       -----       -----       -----        -----       -----
Gross profit                 17.0        30.4        35.7        35.7        36.1        39.7         47.8        45.1
Operating expenses:
   Product development       15.4         7.1         8.0         6.7         9.2         8.5          9.5         8.3
   Purchased research and
     development costs         --         0.2          --        27.2          --       111.5           --        35.4
   Stock compensation
     expense                   --          --          --          --          --         7.1           --          --
   Sales and marketing        6.3         2.7         2.8         4.1         7.0         7.2          7.0         8.2
   Depreciation and
     amortization             4.2         2.1         2.4         1.8         2.9         3.1          3.2         3.0
   General and
     administrative          22.2        12.9        12.4        12.9        13.4        11.1         11.7        11.0
                            -----       -----       -----       -----       -----       -----        -----       -----
Income (loss) from
   operations               (31.1)        5.4        10.1       (17.0)        3.6      (108.8)        16.4       (20.8)
Interest (income)
   expense, net               0.9         0.4         2.1         2.8         1.7        (0.3)        (2.8)       (2.1)
Other income                   --          --          --          --          --          --           --          --
Minority interest in
   earnings of PrysmTech      1.2         2.0         1.8         1.1          --          --           --          --
                          -------     -------     -------     --------    -------     --------     -------     -------
Income (loss) before
  income taxes and
  extraordinary item        (33.2)        3.0         6.2       (20.9)        1.9      (108.5)        19.2        (18.7)
Income tax provision
  (benefit)                 (12.7)        1.1         2.4        (8.0)       (1.7)         --          7.4         (5.7)
Extraordinary item, net        --          --          --          --         1.0          --           --           --
                            -----       -----       -----       -----       -----       -----        -----        -----
Net income (loss)           (20.5)%       1.9%        3.8%      (12.9)%       2.6%     (108.5)%       11.8%      (13.0)%
                            =====       =====       =====       =====       =====       =====        =====       =====
</TABLE>
Liquidity and Capital Resources

     In February 1997, the Company completed its initial public
offering of Common Stock, in which the Company received net
proceeds of approximately $24.3 million after deducting
underwriting discounts and offering expenses. The Company applied
the proceeds of the offering to (i) repay all of the Company's
outstanding indebtedness to Sirrom Capital Corporation ($4.5
million), (ii) repay debt incurred in connection with its
acquisition of PrysmTech ($3.1 million), (iii) repay outstanding
shareholder notes ($1.1 million) and (iv) to repurchase an
aggregate of 793,073 shares of Common Stock from two shareholders
from whom the Company had a right of repurchase at a substantial
discount to the initial public offering price ($2.1 million).
<PAGE>

     The exercise of outstanding warrants to purchase 1,333,002 shares
of Common Stock in connection with the initial public offering in
February 1997 provided the Company with proceeds of approximately
$960,000.

     Prior to the initial public offering, the Company financed its
operations primarily through cash generated from operations and
from debt financing obtained during 1996.

     In July 1997, the Company completed a public offering of 2.6
million shares of common stock, in which the Company received net
proceeds of approximately $58.4 million after deducting
underwriting discounts and offering expenses.  A portion of the
offering proceeds was used to repay $3.3 million of debt incurred
in connection with the acquisition of ReMACS.  The remaining
proceeds will be used for general corporate purposes, including
research and development, sales and marketing, possible strategic
acquisitions and the general working capital requirements.  As of
December 31, 1997, the Company had $47.6 million in cash and cash
equivalents.

     In 1995, the Company's operating activities provided cash of
$841,000, while during 1996 and 1997, the Company's operating
activities used cash of $1.4 million and $8.4 million,
respectively. Extended payment terms with vendors primarily
contributed to cash flows provided by the Company's operating
activities in 1995. During 1996, the Company's use of operating
cash was primarily the result of cash payments received from
customers in advance of shipments offset by increased accounts
receivables and inventories.  The Company's uses of cash in 1997
were primarily the result of increased accounts receivables and
inventory purchases due to increased sales and a decrease in
customer deposits and unearned revenues, as products were
delivered to customers.

     Cash used in investing activities in 1995, 1996 and 1997 was
$641,000, $727,000 and $15.0 million, respectively.  As more
fully described in Note 4 of the consolidated financial
statements, the use of cash for 1997 in investing activities
consisted primarily of the acquisitions of ReMACS, Twenty/20,
RapidFire, and Logic Shop for approximately $10.3 million in cash
consideration. Purchases of property and equipment were
approximately $312,000, $493,000 and $3.3 million in 1995, 1996
and 1997, respectively.  These costs were primarily for purchases
of computer equipment, furniture and fixtures.  Total product
development expenditures were $2.0 million, $4.0 million and $8.3
million in 1995, 1996 and 1997, respectively.  Of these costs,
the Company capitalized $329,000, 635,000 and $1.4 million in
software development costs in 1995, 1996 and 1997, respectively.

     Cash used in financing activities was approximately $402,000 in
1995, while $4.3 million and $68.6 million was provided by
financing activities during 1996 and 1997, respectively.
Financing activities during 1995 consisted of shareholder
distributions and repayment of a shareholder note. Financing
activities in 1996 consisted primarily of borrowings of $4.5
million from Sirrom Capital Corporation.  These loan proceeds
were offset somewhat by payment of loan origination fees as well
as continued repayments of borrowings under capital lease
agreements. In 1997, the cash provided by financing activities
primarily resulted from the issuance of common stock of
approximately $82.4 million offset by the repayment of long-term
debt and shareholder loans of approximately $12.8 million. See
Note 7 of the consolidated financial statements of the Company.


Accounting Pronouncements

     In February 1997, the Financial Accounting Standards Board issued
SFAS No. 128, "Earnings per Share." SFAS 128 supersedes APB 15,
"Earnings per Share" and promulgates new accounting standards for
the computation and manner of presentation of the Company's
earnings (loss) per share.  The Company is required to adopt the
provisions of SFAS 128 for the year ending December 31, 1997.
Earlier application is not permitted; however, upon adoption the
Company will be required to restate previously reported
<PAGE>
annual and interim earnings (loss) per share in accordance with the
provisions of SFAS 128.  See Note 2 to the consolidated financial
statements of the Company included elsewhere in this
Report for disclosure of loss per share for the years ended
December 31, 1996 and 1997 using the provisions of SFAS 128.

     The American Institute of Certified Public Accountants has issued
Statement of Position 97-2, Software Revenue Recognition" in
November 1997 to amend the provisions of Statement of Position
("SOP") 91-1, "Software Revenue Recognition".  The Company
adopted the provision in January 1998.   Retroactive application
of the provision is not permitted.  The adoption of the standards
in the SOP is not expected to have a significant impact on the
Company's consolidated financial statements.

Forward-Looking Statements

     Certain statements contained in this filing are "forward-looking
statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, such as statements relating to
financial results and plans for future business development
activities, and are thus prospective.  Such forward-looking
statements are subject to risks, uncertainties and other factors
which could cause actual results to differ materially from future
results expressed or implied by such forward-looking statements.
Potential risks and uncertainties include, but are not limited
to, economic conditions, competition and other uncertainties
detailed from time to time in the Company's Securities and
Exchange Commission filings.

Item 7 A.    Quantitative and Qualitative Disclosures About Market
             Risk.

Not Applicable.

Item 8.      Financial Statements and Supplementary Data

     The following consolidated financial statements are filed
     with this Report:

     Report of Independent Public Accountants

     Consolidated Balance Sheets at December 31, 1996 and 1997.

     Consolidated Statements of Operations for the years ended
     December 31, 1995, 1996 and 1997.

     Consolidated Statements of Shareholders' Equity (Deficit)
     for the years ended December 31, 1995, 1996 and 1997.

     Consolidated Statements of Cash Flows for the years ended
     December 31, 1995, 1996 and 1997.

     Notes to Consolidated Financial Statements.

<PAGE>

              REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS






To the Shareholders and Board of Directors of
Radiant Systems, Inc.:


We have audited the accompanying consolidated balance sheets of
RADIANT SYSTEMS, INC. (a Georgia corporation) AND SUBSIDIARIES as
of December 31, 1996 and 1997 and the related consolidated
statements of operations, shareholders' equity (deficit), and
cash flows for each of the three years in the period ended
December 31, 1997.  These financial statements are the
responsibility of the Company's management.  Our responsibility
is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the 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 financial statements referred to above
present fairly, in all material respects, the financial position
of Radiant Systems, Inc. and subsidiaries as of December 31, 1996
and 1997 and the results of their operations and their cash flows
for each of the three years in the period ended December 31, 1997
in conformity with generally accepted accounting principles.




/s/ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 4, 1998
<PAGE>
<TABLE>
                                        RADIANT SYSTEMS, INC. AND SUBSIDIARIES


                                              CONSOLIDATED BALANCE SHEETS

                                              DECEMBER 31, 1996 AND 1997



                                                        ASSETS
                                                                                          1996                 1997

<S>                                                                                    <C>                  <C>
CURRENT ASSETS:
   Cash and cash equivalents                                                           $ 2,342,079          $47,567,406
   Accounts receivable, net of allowances for doubtful accounts of
      $120,000 and $350,000 in 1996 and 1997, respectively                               4,885,209           17,556,997
   Inventories                                                                           3,304,933            8,706,346
   Other                                                                                   417,351            1,866,669
                                                                                       -----------          -----------
         Total current assets                                                           10,949,572           75,697,418

PROPERTY AND EQUIPMENT, net                                                              1,517,902            4,844,473

SOFTWARE DEVELOPMENT COSTS, net                                                            736,418            1,772,508

INTANGIBLES, net                                                                           957,405           10,332,260

OTHER ASSETS                                                                               454,579              869,194
                                                                                       -----------          -----------
                                                                                       $14,615,876          $93,515,853
                                                                                       ===========          ===========

                                    LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
   Accounts payable                                                                    $ 4,400,654          $ 7,233,911
   Accrued liabilities                                                                   1,975,909            5,887,325
   Customer deposits and deferred revenue                                                3,052,518            4,644,399
   Current portion of shareholder loan                                                     126,536                    0
   Current portion of long-term debt                                                       582,230              672,216
                                                                                       -----------          -----------
         Total current liabilities                                                      10,137,847           18,437,851

SHAREHOLDER LOAN, less current portion                                                   3,193,888                    0

LONG-TERM DEBT, less current portion                                                     5,271,368            4,056,444
                                                                                       -----------          -----------
         Total liabilities                                                              18,603,103           22,494,295
COMMITMENTS AND CONTINGENCIES (Note 8)

PUT WARRANTS                                                                               513,200                    0
                                                                                       -----------          -----------
SHAREHOLDERS' EQUITY (DEFICIT):
   Preferred stock, no par value; 5,000,000 shares authorized,
      0 shares issued                                                                            0                    0
   Common stock, no par value; 30,000,000 shares authorized,
      6,857,112 and 15,423,587 shares issued and outstanding in 1996
      and 1997, respectively                                                                    63                  146
   Class A common stock, no par value; 10,000,000 shares authorized,
      1,442,889 and 0 shares issued and outstanding in 1996 and 1997,
      respectively                                                                              13                    0
   Additional paid-in capital                                                            2,099,997           90,708,399
   Warrants                                                                              1,185,000                    0
   Deferred compensation                                                                         0             (535,747)
   Deferred sales discount                                                                (132,105)                   0
   Accumulated deficit                                                                  (7,653,395)         (19,151,240)
                                                                                       -----------          -----------
         Total shareholders' equity (deficit)                                           (4,500,427)          71,021,558
                                                                                       -----------          -----------
                                                                                       $14,615,876          $93,515,853
                                                                                       ===========          ===========
</TABLE>

The accompanying notes are an integral part of these consolidated
balance sheets.
<PAGE>
<TABLE>
                                        RADIANT SYSTEMS, INC. AND SUBSIDIARIES

                                         CONSOLIDATED STATEMENTS OF OPERATIONS

                                 FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997



                                                                1995                      1996                  1997

<S>                                                          <C>                       <C>                  <C>
REVENUES:
   Systems sales                                             $14,077,704               $35,888,342          $66,797,848
   Customer support, maintenance, and other services           1,804,291                 5,054,979           11,204,662
                                                             -----------               -----------          -----------
         Total revenues                                       15,881,995                40,943,321           78,002,510
                                                             -----------               -----------          -----------
COST OF REVENUES:
   Systems sales                                               9,862,477                22,270,161           34,019,155
   Customer support, maintenance, and other services           2,300,239                 5,464,533           10,297,733
                                                             -----------               -----------          -----------
         Total cost of revenues                               12,162,716                27,734,694           44,316,888
                                                             -----------               -----------          -----------
GROSS PROFIT                                                   3,719,279                13,208,627           33,685,622
                                                             -----------               -----------          -----------
OPERATING EXPENSES:
   Product development                                         1,639,669                 3,327,630            6,897,358
   Purchased research and development costs                            0                 3,930,000           28,871,417
   Stock compensation expense                                          0                         0            1,214,000
   Sales and marketing                                           606,658                 1,487,087            5,819,238
   Depreciation and amortization                                 583,483                   948,385            2,383,740
   General and administrative                                  2,990,039                 5,664,246            9,059,074
                                                             -----------               -----------          -----------
         Total operating expenses                              5,819,849                15,357,348           54,244,827
                                                             -----------               -----------          -----------
LOSS FROM OPERATIONS                                          (2,100,570)               (2,148,721)         (20,559,205)

INTEREST EXPENSE (INCOME), net                                   166,478                   711,848             (989,335)

MINORITY INTEREST IN EARNINGS OF PRYSMTECH                             0                   628,137                    0

OTHER INCOME                                                    (406,292)                        0                    0
                                                             -----------               -----------          -----------
LOSS BEFORE PRO FORMA INCOME TAXES AND EXTRAORDINARY ITEM     (1,860,756)               (3,488,706)         (19,569,870)

PRO FORMA INCOME TAX BENEFIT                                    (709,165)               (1,333,142)            (211,750)

INCOME TAX PROVISION (BENEFIT)                                         0                         0                    0
                                                             -----------               -----------          -----------
LOSS BEFORE EXTRAORDINARY ITEM                                (1,151,591)               (2,155,564)         (19,358,120)

EXTRAORDINARY ITEM:
   Loss from early extinguishment of debt, net of taxes                0                         0              131,370
                                                             -----------               -----------          -----------
NET LOSS                                                     $(1,151,591)              $(2,155,564)        $(19,489,490)
                                                             ===========               ===========          ===========

BASIC LOSS PER SHARE:
   Loss before extraordinary item                                 $(0.13)                   $(0.26)              $(1.49)
   Extraordinary loss on early extinguishment of debt               0.00                      0.00                (0.01)
                                                             -----------               -----------          -----------
         Total basic loss per share                               $(0.13)                   $(0.26)              $(1.50)
                                                             ===========               ===========          ===========

DILUTED LOSS PER SHARE:
   Loss before extraordinary item                                 $(0.13)                   $(0.26)              $(1.49)
   Extraordinary loss on early extinguishment of debt               0.00                      0.00                (0.01)
                                                             -----------               -----------          -----------
         Total diluted loss per share                             $(0.13)                   $(0.26)              $(1.50)
                                                             ===========               ===========          ===========

WEIGHTED AVERAGE SHARES OUTSTANDING:
   Basic                                                       9,073,014                 8,300,001           13,023,569
                                                             ===========               ===========          ===========

   Diluted                                                     9,073,014                 8,300,001           13,023,569
                                                             ===========               ===========          ===========
</TABLE>


The accompanying notes are an integral part of these consolidated
statements.
<PAGE>
<TABLE>
                                        RADIANT SYSTEMS, INC. AND SUBSIDIARIES


                               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)

                                 FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997

                                                                              Class A
                                                      Common Stock          Common Stock
                                                    Shares     Amount    Shares      Amount      APIC         Warrants

<S>                                               <C>          <C>      <C>           <C>     <C>            <C>
BALANCE, December 31, 1994                        10,285,668   $  94      342,856     $ 3     $        0     $  240,000

   Sales of software licenses under
      customer warrants                                    0       0            0       0              0              0
   Treasury stock purchase                        (3,428,556)    (31)     800,033       7              0              0
   Distributions to shareholders                           0       0            0       0              0              0
   Loss before pro forma income taxes                      0       0            0       0              0              0
                                                  ----------   -----    ---------     ---     ----------     ----------
BALANCE, December 31, 1995                         6,857,112      63    1,142,889      10              0        240,000

   Issuance of customer warrant                            0       0            0       0              0         79,000
   Sales of software licenses under
      customer warrants                                    0       0            0       0              0              0
   Shares issued in PrysmTech acquisition                  0       0      300,000       3      2,099,997              0
   Issuance of warrant for loan origination fees           0       0            0       0              0         40,000
   Accretion of put warrants                               0       0            0       0              0              0
   Accretion of customer warrant                           0       0            0       0              0        826,000
   Distributions to shareholders                           0       0            0       0              0              0
   Loss before pro forma income taxes                      0       0            0       0              0              0
                                                  ----------   -----    ---------     ---     ----------     ----------
BALANCE, December 31, 1996                         6,857,112      63    1,442,889      13      2,099,997      1,185,000

   Issuance of common stock                        5,427,888     $54            0     $ 0    $82,422,442     $        0
   Automatic conversion of Series A common stock   1,442,889      13   (1,442,889)    (13)             0              0
   Exercise of stock purchase warrants             1,352,819      13            0       0      2,658,186     (1,185,000)
   Exercise of employee stock options                161,136       1            0       0        440,811              0
   Shares issued for acquired companies              974,836      10            0       0     11,571,578              0
   Stock options granted below fair market value           0       0            0       0      1,840,875              0
   Amortization of deferred compensation                   0       0            0       0              0              0
   Repurchase of common stock from a shareholder    (600,033)     (6)           0       0     (1,125,062)             0
   Repurchase of common stock from a customer       (193,060)     (2)           0       0       (997,033)             0
   Sales of software licenses under warrant                0       0            0       0              0              0
   Reclassification of S corporation
      accumulated deficit                                  0       0            0       0     (8,203,395)             0
   Loss before pro forma income taxes and
      extraordinary item                                   0       0            0       0              0              0
   Extraordinary item, net of tax                          0       0            0       0              0              0
                                                  ----------   -----    ---------     ---     ----------     ----------
BALANCE, December 31, 1997                        15,423,587    $146            0     $ 0    $90,708,399     $        0
                                                  ==========   =====    =========     ===     ==========     ==========
</TABLE>
<TABLE>
                                                                  Deferred
                                                   Deferred        Sales           Accumulated
                                                 Compensation     Discount           Deficit           Total
<S>                                               <C>            <C>              <C>              <C>
BALANCE, December 31, 1994                        $       0      $(202,500)       $  (760,028)     $  (722,431)
   Sales of software licenses under
      customer warrants                                   0         90,600                  0           90,600
   Treasury stock purchase                                0              0           (616,000)        (616,024)
   Distributions to shareholders                          0              0            (45,703)         (45,703)
   Loss before pro forma income taxes                     0              0         (1,860,756)      (1,860,756)
                                                  ---------      ---------        -----------      -----------
BALANCE, December 31, 1995                                0       (111,900)        (3,282,487)      (3,154,314)

   Issuance of customer warrant                           0        (79,000)                 0                0
   Sales of software licenses under
      customer warrants                                   0         58,795                  0           58,795
   Shares issued in PrysmTech acquisition                 0              0                  0        2,100,000
   Issuance of warrant for loan origination fees          0              0                  0           40,000
   Accretion of put warrants                              0              0            (45,200)         (45,200)
   Accretion of customer warrant                          0              0           (826,000)               0
   Distributions to shareholders                          0              0            (11,002)         (11,002)
   Loss before pro forma income taxes                     0              0         (3,488,706)      (3,488,706)
                                                  ---------      ---------        -----------      -----------
BALANCE, December 31, 1996                                0       (132,105)        (7,653,395)      (4,500,427)
<PAGE>

   Issuance of common stock                       $       0      $       0        $         0      $82,422,496
   Automatic conversion of Series A
      common stock                                        0              0                  0                0
   Exercise of stock purchase warrants                    0              0                  0        1,473,199
   Exercise of employee stock options                     0              0                  0          440,812
   Shares issued for acquired companies                   0              0                  0       11,571,588
   Stock options granted below fair market value   (626,875)             0                  0        1,214,000
   Amortization of deferred compensation             91,128              0                  0           91,128
   Repurchase of common stock from a shareholder          0              0                  0       (1,125,068)
   Repurchase of common stock from a customer             0              0                  0         (997,035)
   Sales of software licenses under warrant               0        132,105                  0          132,105
   Reclassification of S corporation
      accumulated deficit                                 0              0          8,203,395                0
   Loss before pro forma income taxes and
      extraordinary item                                  0              0        (19,569,870)     (19,569,870)
   Extraordinary item, net of tax                         0              0           (131,370)        (131,370)
                                                  ---------      ---------        -----------      -----------
BALANCE, December 31, 1997                        $(535,747)     $       0       $(19,151,240)     $71,021,558
                                                  =========      =========       ============      ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
statements.
<PAGE>
<TABLE>
                                        RADIANT SYSTEMS, INC. AND SUBSIDIARIES


                                         CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997



                                                              1995                    1996                1997
<S>                                                       <C>                    <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                               $(1,151,591)           $(2,155,564)         $(19,489,490)
   Adjustments to reconcile net loss to net
      cash provided by (used in) operating activities:
        Pro forma income tax benefit                         (709,165)            (1,333,142)             (211,750)
        Deferred income taxes                                       0                      0            (1,573,180)
        Depreciation and amortization                         583,483                948,385             2,383,747
        Amortization of debt discount                               0                305,731               331,908
        Gain on disposition of assets                        (374,018)                     0                     0
        Discounts earned on software license sales             90,600                 58,795               132,105
        Purchased research and development costs                    0              3,930,000            28,871,417
        Stock compensation expense                                  0                      0             1,214,000
        Amortization of deferred compensation                       0                      0                91,128
        Minority interest in earnings of PrysmTech                  0               (628,137)                    0
        Changes in assets and liabilities:
           Accounts receivable                                255,303             (3,229,660)          (11,420,152)
           Inventories                                        287,754               (774,048)           (5,193,978)
           Other assets                                      (132,587)              (502,992)             (449,176)
           Accounts payable                                 1,177,653                562,634             1,747,675
           Accrued liabilities                              1,147,721                711,444               383,969
           Accrued customer rebates                           324,513                 57,834                     0
           Customer deposits and deferred revenue            (659,111)               673,790            (5,227,305)
                                                          -----------            -----------          ------------
              Net cash provided by (used in)
                operating activities                          840,555             (1,374,930)           (8,409,082)
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment                       (312,104)              (492,656)           (3,305,658)
   Purchases of acquired entities, net of cash acquired             0                400,769           (10,313,505)
   Capitalized software development costs                    (328,900)              (634,642)           (1,364,465)
                                                          -----------            -----------          ------------
              Net cash used in investing activities          (641,004)              (726,529)          (14,983,628)
                                                          -----------            -----------          ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from the issuance of common stock,
      net of issuance costs                                         0                      0            82,422,496
   Proceeds from issuance of common stock warrants                  0                      0               960,000
   Repurchase of common stock from shareholders                     0                      0            (2,122,103)
   Exercise of employee stock options                               0                      0               440,812
   Repayments of shareholder loan                            (145,302)              (157,361)                    0
   Borrowings of long-term debt                                     0              4,594,207                     0
   Repayments of long-term debt                              (169,878)              (457,711)           (5,418,163)
   Dividends received from PrysmTech                                0                255,355                     0
   Distributions to shareholders                              (45,703)               (11,002)                    0
   Repayments of note from shareholder                         13,628                 30,500            (7,343,429)
   Shareholder loans                                                0                      0              (330,000)
   Other                                                      (55,000)                25,000                 8,424
                                                          -----------            -----------          ------------
              Net cash (used in) provided by
                financing activities                         (402,255)             4,278,988            68,618,037
                                                          -----------            -----------          ------------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS             (202,704)             2,177,529            45,225,327

CASH AND CASH EQUIVALENTS, beginning of year                  367,254                164,550             2,342,079
                                                          -----------            -----------          ------------
CASH AND CASH EQUIVALENTS, end of year                    $   164,550            $ 2,342,079          $ 47,567,406
                                                          ===========            ===========          ============
</TABLE>


The accompanying notes are an integral part of these consolidated
statements.
<PAGE>
               RADIANT SYSTEMS, INC. AND SUBSIDIARIES


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                  DECEMBER 31, 1995, 1996, AND 1997

1.   ORGANIZATION AND BACKGROUND
     Radiant Systems, Inc. (the "Company") provides enterprise-wide
     technology solutions to the retail industry.  The Company offers
     fully integrated retail automation solutions, including
     point of sale systems, consumer-activated order systems, back
     office management systems, and headquarters-based management
     systems.  The Company's products enable retailers to interact
     electronically with consumers, capture data at the point of sale,
     manage site operations and logistics, and communicate
     electronically with their sites, vendors, and credit networks.
     In addition, the Company offers system planning, design, and
     implementation services that tailor the automation solution to
     each retailer's specifications as well as a variety of
     post-implementation services such as a help desk and technical
     support.

     The Company originally was organized under the laws of the state
     of New York on August 1, 1985 and was subsequently reincorporated
     under the laws of the state of Georgia on October 27, 1995.  The
     name of the company was changed to Radiant Systems, Inc. from
     Softsense Computer Products, Inc. on November 13, 1996.  In
     connection with the reincorporation of the Company in October
     1995, each outstanding share of common stock and Class A common
     stock of the Company was exchanged for 109,714 shares of common
     stock and Class A common stock, as applicable.  The shares
     outstanding and all other references to shares of common stock
     and Class A common stock reported have been restated to give
     effect to the reincorporation.

     Upon completion of the initial public offering (the "IPO") (Note
     7), the Company converted from an S corporation to a C
     corporation and one of the Company's principal shareholders
     contributed his 21% ownership in Liberty Systems International,
     Inc. ("LSI") to the Company, whereby LSI became a wholly owned
     subsidiary of the Company.

  2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Principles of Consolidation

     The accompanying consolidated financial statements include the
     accounts of Radiant Systems, Inc. and, since May 1996, its
     79%-owned subsidiary, LSI.  From May 1996 until the Company's
     IPO, the remaining 21% ownership of LSI was combined with the
     Company's financial statements, since it was contributed to the
     Company in connection with the IPO.  In December 1997, LSI
     changed its name to Radiant Hospitality Systems, Inc.  All
     significant intercompany accounts have been eliminated.
<PAGE>
     Presentation

     The preparation of the 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 disclosures 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.

     Revenue Recognition

     The Company's revenue is generated primarily through software and
     system sales, support and maintenance, and installation and
     training:

          Software and System Sales

          The Company sells its products, which include both software
          licenses and hardware, directly to end users.  Revenue from
          software licenses and system sales is generally recognized
          as products are shipped, provided that no significant vendor
          and postcontract support obligations remain and that the
          collection of the related receivable is probable.

          Support and Maintenance
          The Company offers to its customers postcontract support in
          the form of maintenance, telephone support, and unspecified
          software enhancements.  Revenue from support and maintenance
          is generally recognized as the service is performed.

          Installation and Training

          The Company offers installation and training services to its
          customers.  Revenue from installation and training is
          generally recognized at the time the service is performed.

     Payments received in advance are recorded as customer deposits
     and deferred revenue in the accompanying balance sheets and are
     recognized as revenue when the related product is shipped or
     related revenue is earned.

     Inventories

     Inventories consist principally of computer hardware and software
     media and are stated at the lower of cost (first-in, first-out
     method) or market.

     Property and Equipment

     Property and equipment are recorded at cost, less accumulated
     depreciation and amortization.  Depreciation and amortization are
     provided using the straight-line method over estimated useful
     lives of three to five years.
<PAGE>
     Property and equipment at December 31, 1996 and 1997 are
     summarized as follows:

                                             1996            1997

     Computers and office equipment       $2,295,579      $4,731,994
     Furniture and fixtures                  488,961       1,249,797
     Purchased software                      172,043       1,110,849
     Leasehold improvements                        0         552,087
                                          ----------      ----------
                                           2,956,583       7,644,727
     Less accumulated depreciation
        and amortization                  (1,438,681)     (2,800,254)
                                          ----------      ----------
                                          $1,517,902      $4,844,473
                                          ==========      ==========

     Software Development Costs

     Capitalized software development costs consist principally of
     salaries and certain other expenses directly related to the
     development and modification of software products. Capitalization
     of such costs begins when a working model has been produced as
     evidenced by the completion of design, planning, coding, and
     testing, such that the product meets its design specifications
     and has thereby established technological feasibility.
     Capitalization of such costs ends when the resulting product is
     available for general release to the public.  Amortization of
     capitalized software development costs is provided at the greater
     of the ratio of current product revenue to the total of current
     and anticipated product revenue or on a straight-line basis over
     the estimated economic life of the software, which the Company
     has determined is not more than three years.  At December 31,
     1996 and 1997, accumulated amortization of capitalized software
     development costs was $360,203 and $688,578, respectively.

     Purchased Research and Development Costs

     As more fully described in Note 4, based on independent
     appraisal, the Company allocated $3.9 million in 1996 and $28.9
     million in 1997 of the purchase price for its acquisitions to
     incomplete research and development projects.  Accordingly, these
     costs were expensed as of the acquisition dates.  These
     allocations represent the estimated fair value based on
     risk-adjusted cash flows related to incomplete projects.  The
     development of these projects had not yet reached technological
     feasibility, and the technology has no alternative future use.
     The technology acquired in these acquisitions will require
     substantial additional development by the Company.

     Net Loss Per Share

     In 1997, the Financial Accounting Standards Board issued
     Statement of Financial Accounting Standards ("SFAS") No. 128,
     "Earnings Per Share," effective for fiscal years ending after
     December 15, 1997.  The Company adopted the new guidelines for
     the calculation and presentation of earnings per share, and all
     prior periods have been restated. Basic loss per share is based
     on the weighted average number of shares outstanding.  Diluted
     loss per share is based on the weighted average number of shares
     outstanding and the dilutive effect of common stock equivalent
     shares ("CSEs") issuable upon the exercise of stock options and
     warrants (using the treasury stock method).
<PAGE>
     Pursuant to the Securities and Exchange Commission ("SEC") Staff
     Accounting Bulletin ("SAB") No. 83, common stock and CSEs issued
     at prices below the public offering price during the 12-month
     period prior to the offering were included in the calculation as
     if they were outstanding for all periods presented, regardless of
     whether they were dilutive.  In February 1998, SEC staff released
     SAB No. 98 on computations of earnings per share. SAB No. 98
     replaces SAB No. 83 in its entirety and requires, among other
     items, that only "nominal issuances" of common stock be reflected
     in the calculation as if they were outstanding for all periods
     presented and that the calculation be made in accordance with
     SFAS No. 128 for periods subsequent to the offering.
     Accordingly, for all periods presented, common stock equivalents
     have been excluded from diluted weighted average shares
     outstanding, as their impact was antidilutive.

     Fair Value of Financial Instruments

     The book values of cash, trade accounts receivable, trade
     accounts payable, and other financial instruments approximate
     their fair values principally because of the short-term
     maturities of these instruments.  The fair value of the Company's
     long-term debt is estimated based on the current rates offered to
     the Company for debt of similar terms and maturities.  Under this
     method, the Company's fair value of long-term debt was not
     significantly different than the stated value at December 31,
     1997.

     Statements of Cash Flows

     The Company considers all highly liquid investments purchased
     with a maturity of three months or less to be cash.

     Cash paid for interest was $166,478, $432,042, and $243,616 in
     1995, 1996, and 1997, respectively.  Cash paid for income taxes
     was $0, $0, and $155,000 in 1995, 1996, and 1997, respectively.
     The Company acquired equipment of $217,568, $306,945, and $42,949
     in 1995, 1996, and 1997, respectively, under capital lease
     obligations.

     During 1995, 1996 and 1997, the Company recorded bad debt expense
     of approximately $130,000, $110,000 and $150,000, respectively.

     Significant Customer Concentration

     A majority of the Company's customers operate within the
     convenience store market, and a significant portion of the
     Company's revenues is derived from a limited number of customers.
     During the years ended December 31, 1995, 1996, and 1997, the
     following clients individually accounted for more than 10% of the
     Company's revenue:
<PAGE>
                                               December 31
                                       1995       1996      1997

     Customer A                        15.8%        *       11.4%
     Customer B                        43.6       13.2%     12.8
     Customer C                          *        21.5      12.2
     Customer D                          *        11.7        *
     Customer E                          *        13.8        *

     *Accounted for less than 10% of total revenues for the period
     indicated.


     At December 31, 1997, 24.3% of the Company's accounts receivable
     related to customers A, B, and C.

     New Accounting Pronouncements

     In November 1997, the American Institute of Certified Public
     Accountants issued a Statement of Position 97-2, "Software
     Revenue Recognition."  The adoption of the standards is not
     expected to have a significant impact on the Company's
     consolidated financial statements.

     Reclassifications

     Certain reclassifications have been made to prior year financial
     statements to conform to the current year presentation.

  3. PRODUCT DEVELOPMENT EXPENDITURES

     Product development expenditures, excluding purchased research
     and development costs (Notes 2 and 4) for the years ended
     December 31, 1995, 1996, and 1997 are summarized as follows:

<TABLE>
                                                       1995           1996          1997
     <S>                                            <C>            <C>           <C>

     Total development expenditures                 $1,968,569     $3,962,272    $8,261,823
     Less additions to capitalized software
        development costs prior to amortization        328,900        634,642     1,364,465
                                                    ----------     ----------    ----------
     Product development expense                    $1,639,669     $3,327,630    $6,897,358
                                                    ==========     ==========    ==========
</TABLE>
<PAGE>

     The activity in the capitalized software development account
     during 1996 and 1997 is summarized as follows:

                                                     December 31
                                                 1996          1997

     Balance at beginning of period, net       $340,630    $  736,418
        Additions                               634,642     1,364,465
        Amortization expense                   (238,854)     (328,375)
                                               --------    ----------
     Balance at end of period, net             $736,418    $1,772,508
                                               ========    ==========


  4. ACQUISITIONS
     From January 1, 1996 through December 31, 1997, the Company
     acquired six businesses, all of which were accounted for under
     the purchase method of accounting.  These businesses were
     acquired for a combination of cash, notes payable, and shares of
     the Company's common stock.  The value of the common stock
     reflects the market value of the Company's common stock at the
     closing of each acquisition, adjusted to account for restrictions
     common to unregistered securities and for registration rights, if
     applicable.

     The following describes each of the acquisitions completed by the
     Company in 1996 and 1997:

          PrysmTech

          In November 1995, the Company and Billmart, L.L.C.
          ("Billmart") formed PrysmTech to pursue the development and
          sale of integrated site solutions to the entertainment
          market.  The Company contributed an exclusive license to
          market its software to the entertainment market, while
          Billmart contributed net assets of $143,253 and an exclusive
          license to modify and market the Billmart software.  Each
          party received a 50% interest for its contribution.

          On December 31, 1996, the Company acquired Billmart's
          interest in PrysmTech for 300,000 shares of common stock and
          $3.2 million in notes.  Total consideration, including
          transaction costs of approximately $100,000, was $5.4
          million.  Intangibles of $869,000 were recorded, after
          adjusting for purchased research and development costs of
          $3.9 million (Note 2), which are being amortized over five
          years.  The accompanying financial statements include the
          operating results of PrysmTech since January 1, 1995, with
          applicable deductions for minority interest earnings.

          LSI

          On May 17, 1996, the Company acquired LSI for $100 cash and
          assumed net liabilities of $78,349.  Intangibles of $48,349
          were recorded, after adjusting for purchased research and
          development costs of $30,000, which are being amortized over
          seven years.
<PAGE>
          ReMACS

          On May 23, 1997, the Company purchased all of the
          outstanding common stock of Restaurant Management and
          Control Systems, Inc. ("ReMACS"), a provider of back office
          management systems for customers in the restaurant industry.
          The purchase price consisted of 627,500 shares of common
          stock, $3.3 million in cash, $3.3 million in notes, and
          assumption of net liabilities of $4.5 million.  Total
          consideration, including transaction costs of approximately
          $150,000, was $18.5 million. Intangibles of $3.2 million
          were recorded, after adjusting for purchased research and
          development costs of $15.8 million, which are being
          amortized over four to ten years.  In connection with the
          acquisition, the Company entered into employment agreements
          with five employees for terms expiring June 2002.

          Twenty/20

          On May 30, 1997, the Company purchased all of the
          outstanding common stock of RSI Merger Corporation (d.b.a.
          Twenty/20 Visual Systems) ("Twenty/20"), a provider of point
          of sale and table management systems for full service
          restaurants.  The purchase price consisted of 199,074 shares
          of common stock and $1.3 million in cash.  Total
          consideration, including transaction costs of approximately
          $100,000, was $3.7 million.  Intangibles of $644,000 were
          recorded, after adjusting for purchased research and
          development costs of $3.4 million, which are being amortized
          over four to ten years.

          RapidFire

          On October 31, 1997, the Company purchased all of the
          outstanding common stock of RapidFire Software, Inc.
          ("RapidFire Software") and EquiLease Financial Services,
          Inc. ("EquiLease"), (collectively "RapidFire"), a leading
          provider of point of sale systems to the pizza industry and
          other delivery restaurants.  The purchase price consisted of
          102,230 shares of common stock, $4.2 million in cash, and
          $3.8 million in notes. Intangibles of $5.2 million were
          recorded, after adjusting for purchased research and
          development costs of $6.9 million, which are being amortized
          over four to ten years.  Separately, the Company has agreed
          to loan up to $1.5 million to the sole shareholder, which
          debt matures October 31, 2005 and bears interest at a rate
          of 5% per annum.  The Company has also entered into a
          five-year employment agreement with the sole shareholder.

          Logic Shop

          On November 18, 1997, the Company purchased all of the
          outstanding common stock of Logic Shop, Inc. ("Logic Shop"),
          a provider of point of sale and back office management
          software to the convenient automotive service center market.
          The purchase price consisted of 46,032 shares of common
          stock and $2.0 million in cash.  Intangibles of approximately
          $829,000 were recorded, after adjusting for purchased
          research and development costs of $2.8 million, which are
          being amortized over four to ten years.
<PAGE>
          The Company's unaudited pro forma consolidated results of
          operations for 1996 and 1997 shown below are presented
          assuming that the Company's business combinations had been
          consummated on January 1, 1996:

                                             For the Years Ended
                                                  December 31
                                            1996             1997

          Pro forma revenue               $56,904,810      $87,862,715
          Pro forma net (loss) income      (2,657,976)       3,801,308
          (Loss) income per share:
             Basic                             $(0.29)           $0.28
             Diluted                            (0.29)            0.23

          The Company's unaudited pro forma results of operations are
          presented for informational purposes only and may not
          necessarily reflect the future results of operations of the
          Company or what the results of operations would have been
          had the Company owned and operated these businesses as of
          January 1, 1996.

  5. LONG-TERM DEBT

     Long-term debt, including obligations under capital leases,
     consists of the following:

<TABLE>
                                                                                         December 31
                                                                                1996                   1997

     <S>                                                                     <C>                    <C>
     Notes payable to Sirrom Capital Corporation ("Sirrom") ("Sirrom
     Notes"), interest at 14%, paid in full in February 1997                 $4,266,000             $        0

     Note payable to Emro Marketing Corporation, interest at 6%, paid
     in full in February 1997                                                   872,501                      0

     Capital lease obligations, interest ranging from 5% to 31%,
     payable monthly through 1999, secured by equipment                         715,097                375,060

     Noninterest bearing promissory note; lump-sum payment of $6
     million due October 31, 2005 (earlier acceleration upon the
     attainment certain financial targets); net of imputed interest of
     $2.2 million at an interest rate of 6%                                           0              3,798,318
<PAGE>

     Notes payable; unsecured; payable in monthly installments of
     $23,556, including interest between 12% and 19%; maturing through
     September 2001                                                                   0                354,702

     Other                                                                            0                200,580
                                                                             ----------             ----------
                                                                              5,853,598              4,728,660

     Less current portion                                                      (582,230)              (672,216)
                                                                             ----------             ----------
                                                                             $5,271,368             $4,056,444
                                                                             ==========             ==========
</TABLE>

     In connection with the purchase of RapidFire on October 31, 1997,
     the Company issued a noninterest-bearing note in the amount of $6
     million to the sole shareholder of the acquired company.  The
     note is nonnegotiable and nonassignable.  All outstanding
     principal is due and payable in full in a single lump-sum payment
     on October 31, 2005, unless maturity is accelerated by
     RapidFire's ability to attain certain net income levels.  A
     principal payment not to exceed $2.0 million is due on March 31,
     1999, 2000, and 2001 if RapidFire meets or exceeds specified net
     income levels for the years ended December 31, 1998, 1999, and
     2000, respectively.

     At December 31, 1997, aggregate maturities of long-term debt,
     including obligations under capital leases, are as follows:

          1998                                       $  672,216
          1999                                          164,642
          2000                                           79,740
          2001                                           13,744
          2002                                                0
          Thereafter                                  3,798,318
                                                     ----------
                                                     $4,728,660
                                                     ==========

     The Sirrom Notes were issued in June 1996 and September 1996 for
     $3.0 million and $1.5 million, respectively.  As discussed in Note
     7, warrants ("Put Warrants") to purchase 174,642 shares at $.01
     per share were issued with the notes.  The value of these Put
     Warrants was determined to be $468,000 based on the relative fair
     value of the warrants to the notes.  A corresponding amount of
     the proceeds that has been allocated to the warrants has been
     accounted for as a debt discount and was being amortized over the
     expected life of the related notes using the effective interest
     method.  At December 31, 1996, the unamortized debt discount
     amounted to $234,000.  The Company used proceeds from the IPO to
     repay the Sirrom Notes.  As a result of the acceleration of this
     debt, the remaining unamortized discount of $131,370, net of a
     tax benefit of $82,240, has been charged against income as an
     extraordinary item.

     On May 27, 1994, the Company entered into an agreement with a
     customer whereby the customer would receive a cash rebate upon
     purchasing a defined number of software licenses.  In the event
     the Company was unable to pay the rebates when due, the
<PAGE>
     agreement provided the customer the option of applying the rebate
     to the purchase of additional licenses or requiring the Company
     to deliver a promissory note for any remaining portion of the
     rebate.  During 1996, the customer met the purchase criteria, at
     which time the Company delivered a promissory note in the amount
     of $872,501.  The note was repaid in 1997.

  6. INCOME TAXES

     Prior to the Company's IPO, the Company elected to be treated as
     an S corporation for federal and state income tax purposes.
     Accordingly, all income or losses of the Company were recognized
     by the Company shareholders on their individual tax returns.  In
     connection with the IPO, the Company converted from an S
     corporation to a C corporation and is now subject to federal and
     state income taxes.  Upon conversion to C corporation status, the
     Company recorded net deferred tax assets of $592,000.
     Simultaneously, with the recording of these deferred tax assets,
     the Company recorded a tax benefit of $305,000 and a valuation
     allowance of $287,000.  The valuation allowance was recorded due
     to the uncertainty surrounding the future utilization of certain
     deferred tax assets.

     For all periods presented, the accompanying financial statements
     reflect provisions for income taxes computed in accordance with
     the provisions of SFAS No. 109, "Accounting for Income Taxes."
     For those periods prior to the IPO, the tax benefit has been
     presented on a pro forma basis as if the Company had been liable
     for federal and state income taxes during those periods.  The
     following summarizes the components of the income tax benefit:

<TABLE>
                                               1995              1996               1997

          <S>                               <C>              <C>                <C>
          Current taxes:
             Federal                        $       0        $         0        $ 2,280,316
             State                                  0                  0            394,069
          Deferred taxes                            0                  0         (2,674,385)
          Pro forma taxes                    (709,165)        (1,333,142)          (211,750)
                                            ---------        -----------        -----------
          Income tax benefit                $(709,165)       $(1,333,142)       $  (211,750)
                                            =========        ===========        ===========
</TABLE>
     In addition to the above, the Company recorded a tax benefit of
     $82,240 in 1997 related to the extraordinary loss from early
     extinguishment of debt.
<PAGE>
     Reconciliation from the federal statutory rate to the combined
     pro forma and actual income tax benefit, is as follows:

<TABLE>
                                                        1995               1996              1997

     <S>                                                <C>                <C>
     Statutory federal tax rate                         (34.0)%            (34.0)%          (35.0)%
     State income taxes, net of federal tax benefit      (4.5)              (4.5)            (5.0)
     Purchased research and development                   0.0                0.0             40.2
     Conversion from S corporation to C corporation       0.0                0.0             (1.6)
     Other                                                0.4                0.3              0.3
                                                        -----              -----            -----
                                                        (38.1)%            (38.2)%           (1.1)%
                                                        =====              =====            =====
</TABLE>

     The components of the net deferred tax asset as of 1997 are as
     follows:

          Deferred tax assets:
             Allowance for doubtful accounts              $   140,000
             Intangibles                                    1,244,225
             Deferred revenue                                 520,000
                                                          -----------
                                                            1,904,225
          Valuation allowance                                (287,000)
                                                          -----------
               Total deferred tax assets                    1,617,225
                                                          -----------
          Deferred tax liabilities:
             Depreciation                                    (190,030)
             Capitalized software                            (709,003)
             Other                                           (194,105)
                                                          -----------
               Total deferred tax liabilities              (1,093,138)
                                                          -----------
          Net deferred tax asset                          $   524,087
                                                          ===========

     As of December 31, 1997, the Company has recorded a net deferred
     tax asset of $524,087.  Realization is dependent on generating
     sufficient taxable income in future periods.  Although
     realization is not assured, management believes it is more likely
     than not that the deferred tax asset will be realized.

  7. SHAREHOLDERS' EQUITY (DEFICIT)

     Stock Offerings

     In February 1997, the Company completed an IPO of its common
     stock. The Company issued 2,825,000 shares, including the
     underwriters overallotment of 325,000 shares, at an offering
     price of $9.50.  The total proceeds of the IPO, net of
     underwriting discounts and offering expenses, were approximately
     $24.2 million.  Subsequent to the public offering of common
     stock, the Company repaid outstanding debt of $8.7 million and
     repurchased and subsequently retired 793,093 shares of common
     stock from two shareholders for a total of $2.1 million.

     In July 1997, the Company completed a follow-on public offering
     of its common stock.  The Company issued 2,602,888 shares at an
     offering price of $23.75.  The total proceeds of
<PAGE>
     the offering, net of underwriting discounts and offering
     expenses, were approximately $58.2 million.

     Common Stock

     At December 31, 1996, the authorized capital of the Company
     consists of 40,000,000 shares of capital stock comprised of
     30,000,000 shares of no par common stock and 10,000,000 shares of
     no par Class A common stock.  Both classes of stock have a stated
     value of $.00001 per share.  In February 1997, the Class A common
     stock was automatically converted into common stock at a rate of
     one share of common stock for one share of Class A common stock.

     Preferred Stock

     In January 1997, the Company authorized 5,000,000 shares of
     preferred stock with no par value.  The board of directors have
     the authority to issue these shares and to fix dividends, voting
     and conversion rights, redemption provisions, liquidation
     preferences, and other rights and restrictions.

     Options

     The Company's 1995 Stock Option Plan (the "Plan"), as amended,
     provides for the issuance of up to 5,000,000 incentive and
     nonqualified stock options to key employees.  Options are granted
     at an exercise price which is not less than fair value as
     estimated by the board of directors and become exercisable as
     determined by the board of directors, generally over a period of
     four to five years.  Options granted under the Plan expire ten
     years from the date of grant.  At December 31, 1997, options to
     purchase 750,327 shares of common stock were available for future
     grant under the Plan.

     The Company has granted 540,690 nonqualified stock options
     outside the Plan.  Of these options, 164,000 vest over four
     years, and the remaining 376,690 options vest over periods no
     greater than ten years, subject to acceleration based on
     specified terms within the agreements.

     During 1997, the Company adopted the Non-Management Directors'
     Stock Option Plan (the "Directors' Plan") for non-management
     directors of the Company, under which the Company may grant up to
     100,000 options to nonemployee directors of the Company to
     purchase shares of the Company's common stock.  Options are
     granted at an exercise price which is not less than fair value as
     estimated by the board of directors and become exercisable as
     determined by the board of directors, generally over a period of
     four to five years.  Options granted under the Plan expire ten
     years from the date of grant.  The Company has granted 40,000
     options under the Directors' Plan at December 31, 1997.
<PAGE>
     Stock option activity for each of the three years ended December
     31, 1997 is as follows:
<TABLE>

                                                                        Weighted
                                                         Number          Average
                                                           of             Price
                                                         Options        Per Share

     <S>                                                <C>             <C>
     Plan inception, December 1995                              0       $  0.00
        Granted                                         1,774,000          1.00
                                                        ---------
     Options outstanding at December 31, 1995           1,774,000          1.00
        Granted                                         1,625,750          4.51
        Canceled                                          (64,000)         1.00
        Exercised                                               0          0.00
                                                        ---------
     Options outstanding at December 31, 1996           3,335,750          2.64
        Granted                                         1,660,163         15.26
        Canceled                                         (165,550)        15.71
        Exercised                                        (169,203)         2.80
                                                        ---------
     Options outstanding at December 31, 1997           4,661,160          7.01
                                                        =========

     Exercisable at December 31, 1997                     698,279
                                                        =========
</TABLE>


     The following table sets forth the range of exercise prices,
     number of shares, weighted average exercise price, and remaining
     contractual lives by groups of similar price and grant date:


<TABLE>
                                           Options Outstanding                     Options Exercisable

                                                                   Weighted
                                                                    Average
                                                  Weighted         Remaining                   Weighted
        Range of                    Number         Average        Contractual       Number      Average
     Exercise Prices              of Shares         Price            Life         of Shares      Price

      <S>                           <C>            <C>               <C>            <C>         <C>
      $1.00-$2.00                   2,072,001      $ 1.15            8.05           222,127     $ 1.11
      $4.50-$9.00                   1,331,549        6.03            8.92           420,652       5.73
      $9.25-$15.38                    545,684       13.80            9.35            55,500      15.38
      $18.00-$28.50                   711,926       20.88            9.76                 0       0.00
                                    ---------                                       -------
          Total                     4,661,160        7.04            8.71           698,279       5.03
                                    =========                                       =======
</TABLE>

     As part of the acquisition of Twenty/20, the Company granted two
     employees options to purchase 140,000 shares of the Company's
     common stock at an exercise price less than the fair market value
     of the Company's common stock on the date of such grant.  In
     connection with the issuance of the 100,000 options, which vested
     immediately, the Company recorded a nonrecurring compensation
     charge of $1.2 million.  Additionally, the Company recorded
     $303,500 as deferred compensation for 40,000 options that vested
     over four years, for the excess of the fair market value of the
     Company's common stock on the date of grant over the aggregate
     exercise price of such options.  The deferred compensation
<PAGE>
     will be amortized ratably over the four-year vesting period.
     Also during 1997, the Company issued certain employees options to
     purchase 26,500 of shares of the Company's common stock at a
     price less than fair market value on the date of grant.  Deferred
     compensation of $323,375 was recorded and is being amortized
     ratably over a four-year vesting period.

     During 1995, the Financial Accounting Standards Board issued SFAS
     No. 123, "Accounting for Stock-Based Compensation," which defines
     a fair value-based method of accounting for an employee stock
     option plan or similar equity instrument.  However, it also
     allows an entity to continue to measure compensation cost for
     those plans using the method of accounting prescribed by
     Accounting Principles Board ("APB") Opinion No. 25, "Accounting
     for Stock Issued to Employees."  Entities electing to remain with
     the accounting in APB No. 25 must make pro forma disclosures of
     net income and, if presented, earnings per share, as if the fair
     value-based method of accounting defined in the statement had
     been applied.

     The Company has elected to account for its stock-based
     compensation plan under APB No. 25; however, the Company has
     computed for pro forma disclosure purposes the value of all
     options granted during 1995, 1996, and 1997 using the
     Black-Scholes option pricing model as prescribed by SFAS No. 123
     using the following weighted average assumptions used for grants
     in 1995, 1996, and 1997:

                                            1995      1996     1997

          Risk free interest rate           5.8%     5.8%      5.9%
          Expected dividend yield           0.0%     0.0%      0.0%
          Expected lives                  4 years   4 years   4 years
          Expected volatility                56%      56%       62%


     The total value of the options granted during the years ended
     December 31, 1995, 1996, and 1997 were computed as approximately
     $867,000, $3,527,000, and $10,734,000 respectively, which would
     be amortized over the vesting period of the options.  If the
     Company had accounted for these plans in accordance with SFAS No.
     123, the Company's reported pro forma net loss and pro forma net
     loss per share for the years ended December 31, 1995, 1996, and
     1997 would have increased to the following pro forma amounts:

                             1995            1996           1997

     Net loss:
        As reported      $(1,151,591)    $(2,155,564)    $(19,489,490)
        Pro forma         (1,202,028)     (2,984,410)     (22,408,720)
     Basic:
        As reported           $(0.13)         $(0.26)          $(1.50)
        Pro forma              (0.13)          (0.36)           (1.72)
     Diluted:
        As reported            (0.13)          (0.26)           (1.50)
        Pro forma              (0.13)          (0.36)           (1.72)


     Warrants

          Customer Warrants

          In May 1994, the Company and one of its customers (the
          "Customer") entered into an agreement (the "Agreement")
          whereby the Customer was granted the right (the "Customer
          Warrant") to acquire 10% of the Company's outstanding Class
          A common stock for $800,000, provided the Customer meets
          certain purchase criteria. A deferred sales discount of
          $240,000 was charged on the date of grant, which represented
          the fair market value of the Customer Warrant on such date,
          and is being amortized as a reduction of sales as the
          Customer makes purchases under the Agreement.

          In February 1996, the Company amended the Agreement such
          that the Customer Warrant was increased to 12% of the
          Company's outstanding common shares.  An additional deferred
          sales discount of $79,000 was charged on the date of grant,
          which represented the fair market value on the date of the
          increase of the Customer Warrant.  The Company had the
          option to repurchase one-sixth of the shares issuable under
          the Customer Warrant at a price midway between the
          Customer's exercise price and the fair market value of the
          shares.  Because the Company intended to exercise its option
          to repurchase the shares, it was accreting to the expected
          redemption value of the shares.  For the year ended December
          31, 1996, the Company recorded accretion of $826,000.

          In February 1997, the Company repurchased 193,060 shares of
          common stock for approximately $1 million which represented
          one-sixth of the shares issuable under the Customer Warrant.
          Additionally, the customer exercised the remaining 646,304
          shares issuable under the warrant for proceeds of $6,463.

          Put Warrants

          In connection with the issuance of the Sirrom Notes (Note
          5), the Company issued Put Warrants to purchase 1.5% of the
          Company's outstanding common stock at an exercise price of
          $.01.

          In February 1997, Sirrom exercised its warrant to purchase
          1.5% of the Company's outstanding common stock, which
          represented 174,642 shares of common stock.

          Loan Origination Warrant

          In 1996, the Company issued warrants to purchase 20,000
          shares of Class A common stock at an exercise price of $.01
          for payment of loan origination fees.  The fair value of the
          warrant was determined to be $40,000 and has been
          capitalized as loan origination fees.  In February 1997, the
          warrant was exercised for proceeds of $200.
<PAGE>
  8. COMMITMENTS AND CONTINGENCIES

     Leases

     The Company leases office space, equipment, and certain vehicles
     under noncancelable operating lease agreements expiring on
     various dates through 2008.  At December 31, 1997, future minimum
     rental payments for noncancelable leases with terms in excess of
     one year were as follows:

          1998                                     $2,155,156
          1999                                      2,965,083
          2000                                      2,316,119
          2001                                      2,277,829
          2002                                      2,052,022
          Thereafter                                9,953,864


     Total rent expense under operating leases was, $374,206, $503,530
     and $1,067,808 for the years ended December 31, 1995, 1996, and
     1997, respectively.

     Benefit Plan

     The Company has a 401(k) profit-sharing plan (the "Plan")
     available to all employees of the Company who have completed six
     months of service and have attained age 21.  The Plan includes a
     salary deferral arrangement pursuant to which employees may
     contribute a minimum of 3% and a maximum of 15% of their salary
     on a pretax basis.  The Company may make both matching and
     additional contributions at the discretion of the board of
     directors.  The Company made no such contributions during 1995,
     1996, or 1997.

     Employment Agreements

     The Company has entered into employment agreements with eight
     employees.  Under each agreement, in the event employment is
     terminated (other than voluntarily by the employee or by the
     Company for cause or upon the death of the employee), the Company
     is committed to pay certain benefits, including specified monthly
     severence of not more than $16,666 per month.  The benefits are
     to be paid from the date of termination to dates ranging from
     December 31, 2000 to November 1, 2002.

  9. RELATED-PARTY TRANSACTIONS

     In October 1994, the Company repurchased 3,085,700 shares of
     common stock for a note in the amount of $473,086.  The note is
     unsecured, bears interest at 8% per annum, and is payable in
     monthly installments of $14,825 through December 31, 1997.  In
     connection with the share repurchase, the Company entered into an
     agreement with the shareholder whereby the Company would pay the
     shareholder an initial payment of $150,000 and a monthly payment
     of $14,000 for five years in return for certain consulting
     services, as defined.  In October 1995, this agreement was
     amended in order to reduce the quantity of services and related
     monthly payment.  Fees paid under the consulting agreement were
     $131,000, $27,500, and $27,500 in 1995, 1996, and 1997,
     respectively.
<PAGE>
     In May 1995, the Company entered into an agreement with a
     shareholder to transfer certain assets and technology to the
     shareholder in a tax-free exchange in return for 2,628,523 shares
     of common stock.  A gain of $374,018, included in other income,
     was recorded in connection with the transaction, which represents
     the excess of the fair market value of the stock acquired over
     the net assets distributed.  As part of the transaction, the
     Company recorded a note receivable in the amount of $61,171,
     which is payable in monthly installments of $2,966 through May
     1997.

     In June 1996, a shareholder sold 200,000 shares of Class A common
     stock for $1.875 per share.  The shareholder also issued to one
     of the Company's principal shareholders an option to repurchase
     the remaining 600,033 shares of Class A common stock for $1.875
     per share through June 1997.  In January 1997, the principal
     shareholder assigned this option to the Company, at which time
     the Company repurchased all 600,033 shares for $1,125,062.

     During 1997, two shareholders received a loan from the Company in
     the amount of $165,000 each.  The notes, together with interest
     at a rate of 7% per year, mature on December 31, 2001.  Interest
     income recorded during 1997 related to these notes was
     approximately $16,000.
<PAGE>


Item 9.   Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure.

There has been no occurrence requiring a response to this Item.

                              PART III

     Items 10, 11, 12 and 13 will be furnished by amendment
hereto on or prior to April 30, 1998 or the Company will
otherwise have filed a definitive proxy statement involving
election of directors pursuant to Regulation 14A which will
contain such information

                               PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on
          Form 8-K.

(a)
     1.   Financial Statements. The following consolidated
financial statements, together with the applicable report of
independent public accountants, have been filed as Item 8 in Part
II of this Report:
          Report of Independent Public Accountants

          Consolidated Balance Sheets at December 31, 1996 and 1997

          Consolidated Statements of Operations for the years ended
          December 31, 1995, 1996 and 1997

          Consolidated Statements of Shareholders' Equity (Deficit)
          for the years ended December 31, 1995, 1996 and 1997

          Consolidated Statements of Cash Flows for the years ended
          December 31, 1995, 1996 and 1997

          Notes to Consolidated Financial Statements

2.   Financial Statement Schedules.  No schedules are included
with this Report, as they are not applicable or the information
required to be set forth therein is included in the combined
financial statements or notes thereto.

3.   Exhibits.

     The following exhibits are filed with or incorporated by
reference into this report.  The exhibits which are denominated
by an asterisk (*) were previously filed as a part of, and are
hereby incorporated by reference from (i) a Registration
Statement on Form S-1 for the Registrant, Registration No.
333-17723, as amended (referred to herein as "2/97 S-1"), (ii) a
Registration Statement on Form S-1 for the Registrant,
Registration No. 333-30289 (referred to herein as "6/97 S-1"),
and (iii) a Registration Statement on Form S-8 for the
Registrant, Registration No. 333-41291 (referred to herein as
"S-8").  The exhibit number corresponds to the exhibit number in
the referenced document.
<PAGE>
Exhibit
Number    Description of Exhibit

*3. (i)   Amended and Restated Articles of Incorporation (2/97 S-1)

*3. (ii)  Amended and Restated Bylaws (2/97 S-1)

*4.1     Specimen Certificate of Common Stock (2/97 S-1)

*10.1    Form of License, Support and Equipment Purchase Agreement
         (2/97 S-1)

*10.2    Stock Transfer and Redemption Agreement dated May 29,
         1995 by and between the Registrant and Thomas Barrella (2/97
         S-1)

*10.3    Amended and Restated 1995 Stock Option Plan (2/97 S-1)

*10.3.1  Amendment No. 1 to Amended and Restated 1995 Stock
         Option Plan (S-8)

*10.5    Promissory Note dated March 27, 1996 from the Registrant to
         Emro Marketing Company in the principal amount of Paragraph
         872,501 (2/97 S-1)

*10.6    Promissory Note dated October 31, 1994 from the Registrant to
         Lawrence D. Parker in the principal amount of Paragraph
         473,086 (2/97 S-1)

*10.7    Consulting Agreement dated October 31, 1994, as amended on
         October 24, 1995, by and between the Registrant and LP
         Technologies, Inc. (2/97 S-1)

*10.8    Commercial Lease Agreement dated December 19, 1994 by and
         between the Registrant and Digital Communications Associates,
         Inc. for lease of office space in Alpharetta, Georgia (2/97
         S-1)

*10.9    Office Lease dated June 30, 1995 by and between the
         Registrant and Attachmate Corporation for lease of office
         space in Alpharetta, Georgia (2/97 S-1)

*10.9.1  Office Lease Amendment dated January 15, 1997 by and
         between the Registrant and Equifax, Inc. for lease of office
         space in Alpharetta, Georgia (2/97 S-1)

*10.10   Software License, Support and Equipment Purchase Agreement
         dated May 27, 1994, as amended, by and between the Registrant
         and Emro Marketing Company (2/97 S-1)
<PAGE>
*10.11   Acquisition Agreement and Plan of Merger dated December 31,
         1996 regarding acquisition of PrysmTech, LLC by the
         Registrant (2/97 S-1)

*10.12   Employment Agreement dated December 31, 1996 by and
         between the Registrant and H. Martin Rice (2/97 S-1)

*10.13   Non-Management Directors' Stock Option Plan (6/97 S-1)


<PAGE>
21.1     Subsidiaries of the Registrant

23.1     Consent of Arthur Andersen LLP

27.1     Financial Data Schedule (for SEC use only)
<PAGE>

                             SIGNATURES

     In accordance with the requirements of Section 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, in the
City of Alpharetta, State of Georgia on March 30, 1998.

                                RADIANT SYSTEMS, INC.


                                By:   /s/ Erez Goren
                                      Erez Goren
                                      Chief Executive Officer


     Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed by the following persons on
behalf of the Registrant in the capacities and on the dates
indicated.


Signature                              Title                    Date


/s/ Erez Goren        Co-Chairman of the Board and           March 30, 1998
Erez Goren            Chief Executive Officer (principal
                      executive officer)

/s/ Alon Goren        Co-Chairman of the Board and           March 30, 1998
Alon Goren            Chief Technology Officer

/s/ Eric B. Hinkle    President, Chief Operating Officer     March 30, 1998
Eric B. Hinkle        and Director

/s/ John H. Heyman    Executive Vice President, Chief        March 30, 1998
John H. Heyman        Financial Officer and Director
                      (principal financial officer)


/s/ Paul Ilse         Controller                             March 30, 1998
Paul Ilse             (principal accounting officer)

/s/ James S. Balloun  Director                               March 30, 1998
James S. Balloun

/s/ Evan O. Grossman  Director                               March 30, 1998
Evan O. Grossman
<PAGE>


<PAGE>
                           EXHIBIT INDEX


Exhibit
Number                   Description of Exhibit

21.1                Subsidiaries of the Registrant

23.1                Consent of Arthur Andersen LLP

27.1                Financial Data Schedule (for SEC use only)
<PAGE>
                                             Exhibit 21.1

                   SUBSIDIARIES OF THE REGISTRANT

Equilease Financial Services, Inc., an Oregon corporation

Radiant Automotive, Inc., a Georgia corporation

Radiant Hospitality Systems, Inc., a Georgia corporation

Radiant Systems Central Europe, Inc., a Georgia corporation

Radiant Systems International, Inc., a Georgia corporation

RapidFire Software, Inc., an Oregon corporation

Restaurant Management and Control Systems, Inc., a Georgia corporation

RSI Acquisition Corporation, a Georgia corporation
<PAGE>

                                                       Exhibit 23.1


              CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS




     As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 10-K, into the
Company's previously filed Registration Statements on Form S-8 (File
No. 333-23237, 333-41291 and 333-41327).

/s/ Arthur Andersen LLP


Atlanta, Georgia
March 26, 1998