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                                UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                            Washington, DC  20549

                                  FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED:  JUNE 30, 1997
     
                                      OR
     
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES 
    EXCHANGE ACT OF 1934
                For the transition period from _____ to _____
     
                          Commission File Number:  0-22071
     
                              OVERLAND DATA, INC.
           (Exact name of registrant as specified in its charter)
     
          CALIFORNIA                                95-3535285
          (State or other jurisdiction            (IRS Employer
               of incorporation)                Identification No.)
                 
            8975 Balboa Avenue, San Diego, California  92123-1599
         (Address of principal executive offices, including zip code)

                                (619) 571-5555
            (Registrant's telephone number, including area code)
                            ________________________

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

         Securities registered pursuant to Section 12(g) of the Act:
                           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 voting stock held by non-affiliates of the
registrant as of September 15, 1997 was $35,477,000 based on the closing price
reported on such date by the NASDAQ National Market System.  Shares of Common
Stock held by officers and directors and by persons who hold 5% or more of the
outstanding Common Stock have been excluded from the calculation of this amount
in that such persons may be deemed to be affiliates.  This determination of
affiliate status is not necessarily conclusive.

As of June 30, 1997, the number of outstanding shares of the registrant's Common
Stock was 10,435,000.

                     DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement to be filed in connection with registrant's 1997
Annual Meeting of Shareholders to be held on November 11, 1997 (the "Proxy
Statement") are incorporated herein by reference into Part III of this Report.



<PAGE>

                              PART I

     THIS REPORT CONTAINS CERTAIN STATEMENTS OF A FORWARD-LOOKING NATURE
RELATING TO FUTURE EVENTS OR THE FUTURE PERFORMANCE OF THE COMPANY.  PROSPECTIVE
INVESTORS ARE CAUTIONED THAT SUCH STATEMENTS ARE ONLY PREDICTIONS AND THAT
ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY.  IN EVALUATING SUCH STATEMENTS,
PROSPECTIVE INVESTORS SHOULD SPECIFICALLY CONSIDER VARIOUS FACTORS IDENTIFIED IN
THIS REPORT, INCLUDING THE MATTERS SET FORTH BELOW UNDER THE CAPTION "RISK
FACTORS," WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.

ITEM 1.    BUSINESS

     Overland Data, Inc. (herein "Overland Data", "Overland" or the "Company")
designs, develops, manufactures, markets and supports magnetic tape data storage
systems used by businesses for backup, archival and data interchange functions
with mini-computers, workstations, PC/LAN (Microsoft Windows NT and Novell
Netware) and UNIX client/server networks, and personal computers.  The Company's
primary products, automated tape libraries, combine electro-mechanical robotics,
electronic hardware and firmware which are developed by the Company with an
emphasis on efficiency of design, functionality and reliability. The Company
offers three product lines which are all based on one-half inch, linear magnetic
tape technologies and, with the exception of the tape drives in its
LibraryXpress product line, are designed and manufactured in-house.  It also
distributes products manufactured by other original equipment manufacturers
("OEM's") and markets various other products, including controller cards which
connect its tape drives to personal computers, interchange software developed by
the Company, storage management software supplied by third parties, spare parts
and tape media.

PRODUCTS

     The Company produces tape drives, tape loaders and automated tape libraries
based on removable tape technologies.  It currently provides turnkey data
storage solutions to customers in distinct markets through three product lines
that utilize three generations of half-inch magnetic tape technologies. The
network backup market is served by LibraryXpress, the Company's DLT-based
automated tape library product line, which provides automated backup as
companies migrate to enterprise-wide client/server networks. The mid-range data
interchange and backup market is served by TapeXpress, the Company's 18/36-track
product line.  The desktop data interchange market is served by TapePro, the
Company's 9-track product line, which targets personal computer and workstation
users who need access to data created on legacy systems.

-    LIBRARYXPRESS - The LibraryXpress product line of automated tape 
     libraries is based on DLT technology and tape drives supplied by Quantum 
     Corporation. In March 1996, the Company commenced shipment of the LXB 
     base unit, which consists of one or two DLT drives and a ten-cartridge 
     removable magazine. The Company currently offers the LXB with 2000XT, 
     4000 or 7000 DLT tape drives. During the third quarter of fiscal year 
     1997, the Company commenced shipment of (i) the LXG global control 
     module which provides an additional 16-cartridge magazine, library 
     control from a single point and the ability to modularly stack up to 
     eight LXB or LXC capacity modules, and (ii) the LXC capacity module 
     which consists of a 16-cartridge magazine and no drives. The LXG enables 
     users to pass cartridges from module to module as one integrated unit, 
     providing true scalability and allowing end-users to expand their 
     storage capacity to meet their growing business needs while protecting 
     their original LXB investment.  In May 1997, the Company began shipping 
     the LXS MiniLibrary, a single-drive, non-scalable version of the 
     LibraryXpress to serve the lower end of the network market.
 
-    TAPEXPRESS - The TapeXpress product line of 18/36-track drives and 
     loaders is based on IBM's 3480/3490/3490E technologies. The installed 
     base of 3480 and 3490 drives and cartridges is very large and their 
     primary function currently is for data interchange.  Based on the size 
     of this installed base and the mature nature of this technology, the 
     Company considers its 18-track products to be legacy products. The 
     Company's T490E, L490E and L60E products are compatible with the 
     36-track IBM 3490E format, are used extensively on AS400 and RS6000 
     minicomputers, and are the only products in the marketplace that are 
     capable of reading and writing in both 18 and 36-track formats. 
     Overland's products connect easily to numerous hardware platforms and

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     are supported by many popular backup and hierarchical storage management 
     ("HSM") software packages.  During fiscal year 1997, IBM selected the 
     Company to be its supplier of 36-track products.

-    TAPEPRO - The TapePro product line consists of compact, lightweight and 
     low-cost desktop tape drives, and a legacy tape drive sold primarily to 
     Digital Equipment Corporation ("DEC") for replacement purposes.  
     Nine-track tape once was the only tape technology used for archive, 
     backup and data interchange functions.  Today, 9-track tape is used only 
     for data interchange, a limited function used to access data that 
     generally was stored when 9-track was the only tape technology.  Data 
     interchange continues to be important for end-users who need to access 
     data on the estimated 250 million 9-track reels worldwide.  Although new 
     information currently is not stored on 9-track tape, end-users need to 
     access information stored on these tapes periodically and it generally 
     is not cost-efficient to transfer this information to another storage 
     medium. The Company has not recently, and will not in the future, invest 
     additional research and development resources in the 9-track product 
     line.

     Each of the Company's products is installed on specific computer platforms
with the appropriate backup, data interchange or storage management software. 
Overland actively works with a number of backup and storage management software
companies to confirm that its products are properly supported. Currently, more
than 40 different software packages support the Company's products. For
instance, on the Novell Netware and Microsoft Windows NT platforms, the software
packages include products from Cheyenne Software, Seagate Software, Inc. (Arcada
and Palindrome), Legato Systems Incorporated ("Legato Systems"), and STAC Inc.
On UNIX platforms, the software packages include products from Legato Systems,
IBM, Cheyenne Software and Peripheral Device Corporation.

SALES AND MARKETING

     The Company sells its products through four channels: (i) original
equipment manufacturers ("OEM"), (ii) volume, consisting of systems integrators,
technical distributors and value added resellers ("VARs"), (iii) resellers, and
(iv) end-users.  Overland's products are sold both domestically and
internationally.  Currently, a significant portion of its 9-track, 18-track and
36-track products are sold through the OEM channel, principally to IBM and DEC.
Regardless of the channel through which they are sold, all of Overland's
products are designed and manufactured to meet OEM level requirements and
reliability standards. Because the OEM qualification process can take six to 18
months to complete, the Company's initial sales of new products are often made
to other volume and reseller customers and end-users, which typically evaluate,
integrate and adopt new technologies and products more quickly. After
qualification and acceptance, OEM sales generally represent an increasing
proportion of a product's unit sales and are important to the Company in terms
of validating its products in the marketplace and achieving desirable production
volume.

-    OEM CHANNEL - The Company currently has supply agreements with Groupe 
     Bull S.A., DEC, IBM, Intergraph Corporation, NCR Corporation and Symbios 
     Logic, Inc., all of which incorporate Overland's products into their 
     system offerings. Subsequent to June 30, 1997, the Company also entered 
     into a supply agreement with Siemens Nixdorf Informationssysteme AG in 
     Europe and expanded its agreement with DEC to cover all three of 
     Overland's product lines.  Overland often works with its OEM customers 
     early in a new product development cycle in order to design its products 
     to meet their specifications. The OEM sales cycle is often lengthy and 
     typically consists of a general technology evaluation, qualification of 
     product specifications, verification of product performance against 
     these specifications, integration testing of the product within the 
     customers' systems, product announcement and volume shipment. As is 
     typical in the industry, the Company's OEM contracts provide for annual 
     price reviews and the customers are not required to purchase minimum 
     quantities. DEC has been the Company's largest customer, accounting for 
     approximately 14%, 23% and 21% of sales in fiscal years 1997, 1996 and 
     1995, respectively.  Shipments to IBM accounted for just over 10% of 
     sales in fiscal 1997.  No other customer accounted for more than 10% of 
     sales in any year during the three-year period.  The Company supports 
     this channel through a field sales office and other Company field 
     representatives.

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-    VOLUME CHANNEL - The Company's volume channel includes systems 
     integrators, technical distributors and VARs, each of which sells to 
     both resellers and end-users. Certain of the Company's volume channel 
     customers specialize in the insurance, banking, financial, geophysical 
     and medical industries, and offer a variety of value-added services 
     relating to the Company's products. Overland's products frequently are 
     packaged by these customers as part of a complete data processing system 
     or combined with other storage devices, such as redundant array of 
     independent disks ("RAID") systems, to deliver a complete storage 
     subsystem. These customers also recommend the Company's products as 
     replacement solutions when backup systems are upgraded, and bundle its 
     products with storage management software specific to the end-user's 
     system. The Company supports this channel through a field sales office 
     and other field representatives.

-    RESELLER AND END-USER CHANNELS - The Company maintains internal 
     capabilities to serve end-user customers when its other channel partners 
     are unable to do so, even though the end-user channel as a percentage of 
     sales is decreasing. The Company supports this channel through its 
     in-house sales force.  The Company believes that direct sales and 
     contact with end-users and the resellers which sell to them, provide the 
     Company with important information about the performance of its products 
     on various platforms and with various software applications. 

-    INTERNATIONAL BUSINESS - The Company has a wholly-owned subsidiary 
     located in Wokingham, England which provides sales, technical support, 
     repair and manufacturing integration for the European marketplace.  The 
     Company assigns to its international distributors the right to sell 
     Overland's products in a country or group of countries. These 
     distributors then sell the Company's products to systems integrators, 
     VARs and end-users.  In addition, many domestic customers ship a portion 
     of the Company's products to their overseas customers.  Sales personnel 
     are located in various cities throughout Europe, while sales personnel 
     located in the Company's corporate offices serve the Pacific Rim, South 
     America, Australia, New Zealand and Mexico.  Export sales by the 
     Company, principally in Europe, for the years ended June 30, 1997, 1996 
     and 1995 were approximately $14,391,000, $12,775,000 and $7,737,000, 
     respectively.

     Overland supports its sales efforts with various marketing programs
designed to build the Company's brand name and attract new customers. Its
channel partners are provided with a full range of marketing materials,
including product specification literature, software connectivity information
and application notes. The Company's management and engineering personnel work
with the channel partners to provide support and, in certain instances, visit
potential customer sites to explain and demonstrate the technical advantages of
the Company's products. In addition, the Company holds two conferences each year
to inform its channel partners of new product developments and programs and to
discuss emerging trends in their markets. The Company also maintains press
relations both domestically and in Europe, advertises in computer systems
publications targeted to its channels and offers market development funds to all
of its channel partners except for OEM customers and end-users.  Overland
participates in national and regional trade shows both domestically and
internationally and displays its products at the CEBIT show in Europe and
domestically at COMDEX, NetWorld/InterOp and AIIM. The Company also maintains a
World Wide Web site (http://www.overlanddata.com), which features marketing
information, includes news releases and product specifications, and has a
computer BBS from which customers can download application, service and
technical support notes.

CUSTOMER SERVICE AND SUPPORT

     Overland's technical support personnel, located both in its headquarters
facility and its U.K. office, are trained with respect to the Company's products
and assist customers with "plug-and-play" compatibility between multiple
hardware platforms, operating systems and backup, data interchange and storage
management software. The Company's application engineers are available to solve
more complex customer problems and visit customer sites when necessary.
Customers that need service and support can contact the Company through its
toll-free telephone lines, facsimile and Internet e-mail.

     The Company's standard warranty is a two-year return-to-factory policy
which covers both parts and labor. For products that it distributes and for
drives and tapes used in the Company's products that are manufactured by a third
party, the Company passes on to the customer the warranty provided by the
manufacturer. The Company also

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offers on-site service for certain of its products, including 24-hour 
service, seven days a week, for which it contracts with third-party service 
providers.

COMPETITION

     The worldwide tape storage market is intensely competitive as a large 
number of manufacturers of alternative tape technologies compete for a 
limited number of customers and barriers to entry are relatively low in the 
library category.  The Company currently participates in three market areas 
which are defined by different tape technologies: (i) network data storage; 
(ii) data backup and interchange based on IBM compatible 3480/3490 
technology; and (iii) data interchange based on 9-track reel-to-reel 
technology.  In each of these areas, many of the Company's competitors have 
substantially greater financial and other resources, larger research and 
development staffs, and more experience and capabilities in manufacturing, 
marketing and distributing products than the Company. For network data 
storage, the LibraryXpress products currently compete with products made by 
Advanced Digital Information Corporation ("ADIC"), ATL Products, Inc. 
("ATL"), Breece Hill Technologies, Inc. ("Breece Hill"), Hewlett-Packard 
Company ("Hewlett-Packard"), Quantum and Storage Technology Corporation 
("Storage Technology"), and the Company believes that additional competitors 
can be expected to enter the market.  For the data backup and interchange 
market, which is based on IBM compatible 3480/3490 technology, the Company 
offers a product line of 18 and 36-track products, which the Company believes 
compete primarily with products made by Fujitsu Computer Products of America, 
Inc. ("Fujitsu"), Hitachi Data Systems Corporation ("Hitachi"), Laser 
Magnetic Storage and Storage Technology.  For the 9-track data interchange 
market, the Company believes it competes with Anritsu American Incorporated, 
Hewlett-Packard and M4 Data, Inc. 

RESEARCH AND DEVELOPMENT

     The Company currently employs 36 people in its its research and development
("R&D") department, including 22 engineers who have extensive experience in the
tape industry. Many of these engineers are former employees of tape drive
companies such as Cipher Data Products, Archive Corporation and Conner
Peripherals, Inc., and have developed significant expertise in electrical,
mechanical and firmware design. Martin D. Gray, the Company's co-founder,
formerly served as Manager of R&D at Cipher, has 25 years of experience in the
tape industry, is the inventor of several tape patents and leads the Company's
R&D efforts to develop new technologies.

     The Company's R&D department is capable of developing both tape drives and
robotic mechanisms, including the development of various aspects of data
channels, data compression, intelligent interfaces and firmware (embedded
systems software).  This includes the ability to develop and test a tape path,
which is the core of any tape technology.  Overland believes that these
capabilities provide it with a better understanding of tape technologies in
general and enable the Company to provide higher value-added content by
designing reliable products that better utilize the advantages of specific
technologies.

     The Company's current R&D efforts are focused on the commercialization of a
new tape coding technique which it has developed and which utilizes the concept
of "partial response maximum likelihood."  The Company believes that this
technique has the potential of significantly expanding the capacity and
throughput of any linear tape technology. The Company has been awarded one
patent and has other patents pending which relate to various aspects of this
technique.  No prototypes currently exist which embody the new technique, and
there can be no assurance that the Company will succeed in its efforts to
develop such a product or commence shipment within its expected time frame or at
all. In addition, the Company is working on the development of automated tape
libraries using other tape technologies and is working on enhancements to
certain of its 36-track products to increase their speed and performance.  The
Company's R&D expenditures amounted to $4.1 million, $3.7 million and $3.1
million in fiscal years 1997, 1996 and 1995, respectively, representing 7.0%,
7.8% and 8.1% of net sales, respectively.  The Company's intends to spend 7.0%
to 8.0% of net sales on a sustained basis.  Despite its R&D focus, there can be
no assurance that the Company will be able to identify, develop, manufacture,
market or support new or enhanced products successfully or on a timely basis or
that new products will gain market acceptance.

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MANUFACTURING

     The Company has a fully integrated factory in San Diego, California with
three separate production lines. Its newest line, set up in January 1996, was
established for the production of the LibraryXpress products. A second line is
used for the production of both 18-track and 36-track products and a third line
is used for 9-track products. All of the Company's production lines and
manufacturing processes have been certified by major OEM customers.  Overland
performs product assembly, integration and testing, while leaving component and
piece-part manufacturing to its supplier partners. The Company works closely
with a group of regional, national and international suppliers, which are
carefully selected based on their ability to provide quality parts and
components that meet the Company's specifications and present and future volume
requirements. A number of the Company's parts and components are not available
off the shelf, and are specifically designed by the Company for integration into
its products. The number of suppliers is kept to a minimum to utilize their
specific capabilities across several product lines. Management of this supply
chain is critical, because the average material content of the Company's
products represents approximately 80% of cost of goods sold.

     In general, products are built to an intermediate stage or standard module
and are customized at the end of the manufacturing process to meet specific
customer needs or variations in product profiles. The Company believes that this
capability represents an effective way for the Company to minimize its inventory
levels while maintaining the ability to fill specific customer orders in short
lead times. Inventory planning and management are coordinated closely with
suppliers and customers to match the Company's production to market demand.
Product orders are confirmed and, in most cases, shipped to the customer within
one week. The Company fills orders as they are received and therefore believes
that its backlog levels are not indicative of future sales.
 
     In its current facility, the Company has the capacity to support unit
output several times greater than its current run rate. All of its manufacturing
lines are capable of producing, on a single shift, double the capacity of the
current fiscal year forecast. The Company carefully controls and adjusts the
staffing of this capacity to meet the requirements at any specific time. Further
capacity increases could be achieved by adding multiple shifts or moving to a
full-time factory.

PROPRIETARY RIGHTS

     The Company believes that, because of the rapid pace of technological
change in the tape storage industry, patent, copyright, trademark and trade
secret protection are less significant than factors such as the knowledge,
ability and experience of the Company's personnel, new product introductions and
product enhancements.  Notwithstanding the foregoing, the Company relies on a
combination of patent, copyright, trademark and trade secret protection, non-
disclosure agreements and licensing arrangements to establish and protect its
proprietary rights.  Such rights, however, may not preclude competitors from
developing substantially equivalent or superior products to those of the
Company.  In addition, there can be no assurance that any patents held by, or
that may be issued to, the Company will not be challenged, invalidated or
circumvented, or that any rights granted thereunder would provide proprietary
protection to the Company.

     The Company has entered into a five-year cross-license agreement with IBM,
effective January 1, 1996. Pursuant to the terms of the agreement, the Company
may use any of the patents owned by IBM within certain designated areas of
technology and IBM may use any of the patents of the Company that were in
existence at the effective date of the agreement or which are issued during the
term of the agreement. In consideration for this agreement, the Company is
required to pay royalty fees to IBM in an amount equal to 2.7% of world-wide
revenues generated from the Company's 18 and 36-track product sales, exclusive
of those sold to IBM.

EMPLOYEES 

     The Company had 208 employees (full-time equivalents) as of June 30, 1997,
including 49 in sales and marketing, 36 in research and development, 91 in
manufacturing and operations and 32 in finance, information systems, human
resources and other management. There are no collective bargaining contracts
covering any of the Company's employees and management believes that its
relationship with its employees is good.

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                                 RISK FACTORS

     AN INVESTMENT IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. THIS
REPORT CONTAINS FORWARD-LOOKING STATEMENTS, THE ACCURACY OF WHICH IS SUBJECT TO
MANY RISKS AND UNCERTAINTIES.  THE COMPANY'S ACTUAL RESULTS MAY DIFFER
SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. 
FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THE
FOLLOWING RISK FACTORS, WHICH SHOULD BE CONSIDERED CAREFULLY IN EVALUATING THE
COMPANY AND ITS BUSINESS.

RAPID TECHNOLOGICAL CHANGE AND DEPENDENCE ON NEW PRODUCT DEVELOPMENT

     The market for the Company's products is generally characterized by rapid
technological change and evolving industry standards and is highly competitive
with respect to timely innovation.  The future success of the Company will
depend on its ability to anticipate changes in technology, to develop new and
enhanced products on a timely and cost-effective basis and to introduce,
manufacture and achieve market acceptance of such new and enhanced products.  In
particular, the Company's future success is dependent on its LibraryXpress
product line.  As a whole, the product line is relatively new and certain of the
recently announced modules have not yet achieved widespread market acceptance.
LibraryXpress is facing increasing competition both from competitive automated
tape library products, and can be expected to face competition from other
storage devices that may be developed in the future.  The DLT tape drives used
by the Company in its LibraryXpress products are obtained from a sole supplier,
Quantum Corporation ("Quantum").  From time to time, Quantum customers such as
the Company (and its competitors) have been unable to obtain as many DLT tape
drives as needed due to drive shortages or quality issues.  See "Dependence on
Certain Suppliers."  Development schedules for high technology products are
inherently subject to uncertainty and there can be no assurance that the Company
will be able to meet its product development schedules, including those for
products based on its new partial response tape coding technique, or that
development costs will be within budgeted amounts.  If the products or product
enhancements that the Company develops are not deliverable due to developmental
problems, quality issues or component shortage problems or if such products or
product enhancements do not achieve market acceptance or are unreliable, the
Company's business, financial condition and results of operations may be
materially and adversely affected.  The introduction (whether by the Company or
its competitors) of new products embodying new technology such as new sequential
or random access mass storage devices and the emergence of new industry
standards can render existing products obsolete or not marketable.

COMPETITION AND PRICE PRESSURE

     The worldwide tape storage market is intensely competitive as a large
number of manufacturers of alternative tape technologies compete for a limited
number of customers and barriers to entry are relatively low in the library
category.  The Company currently participates in three market areas which are
defined by different tape technologies: (i) network data storage; (ii) data
backup and interchange based on IBM compatible 3480/3490 technology; and (iii)
data interchange based on 9-track reel-to-reel technology.  In each of these
areas, many of the Company's competitors have substantially greater financial
and other resources, larger research and development staffs, and more experience
and capabilities in manufacturing, marketing and distributing products than the
Company. For network data storage, the LibraryXpress products currently compete
with products made by ADIC, ATL, Breece Hill, Hewlett-Packard, Quantum and
Storage Technology, and the Company believes that additional competitors can be
expected to enter the market.  For the data backup and interchange market, which
is based on IBM compatible 3480/3490 technology, the Company offers a product
line of 18 and 36-track products, which the Company believes compete primarily
with products made by Fujitsu, Hitachi, Laser Magnetic Storage and Storage
Technology.  For the 9-track data interchange market, the Company believes it
competes with Anritsu American Incorporated, Hewlett-Packard and M4 Data, Inc.
Except for the 9-track data interchange market, the markets for the Company's
products are characterized by significant price competition, and the Company
anticipates that its products will face increasing price pressure.  This
pressure could result in significant price erosion, reduced profit margins and
loss of market share, which could have a material adverse effect on the
Company's business, financial condition and results of operations. 

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DEPENDENCE ON CERTAIN SUPPLIERS

     The Company's products have a large number of components and 
subassemblies produced by outside suppliers and it is highly dependent on 
such suppliers for components and subassemblies, including DLT tape drives, 
read-write heads, printed circuit boards and integrated circuits, which are 
essential to the manufacture of the Company's products.  In addition, for 
certain of these items, the Company qualifies only a single source, which can 
magnify the risk of shortages and decrease the Company's ability to negotiate 
with its suppliers on the basis of price.  If such shortages occur, or if the 
Company experiences quality problems with suppliers, shipments of products 
could be significantly delayed or costs significantly increased, which would 
have a material adverse effect on the Company's business, financial condition 
and results of operations. Specifically, the Company's new LibraryXpress 
automated tape libraries incorporate DLT tape drives manufactured by Quantum, 
which is also a competitor of the Company in that Quantum markets its own 
tape drives and tape loader products. Currently, there are no alternative 
sources for the DLT tape drives supplied by Quantum.  The Company does not 
have a long-term contract with Quantum, which could cease supplying DLT tape 
drives directly to the Company. From time to time in the past, the Company 
has not been able to obtain as many drives as it has needed from Quantum due 
to drive shortages or quality issues. Any prolonged inability to obtain 
adequate deliveries could require the Company to pay more for components, 
parts and other supplies, seek alternative sources of supply, delay shipment 
of products and damage relationships with current and prospective customers.  
Any such delay or damage could have a material adverse effect on the 
Company's business, financial condition and results of operations. During 
fiscal 1997 and in the first quarter of fiscal 1998, the Company has 
experienced problems with the supply of DLT drives and such problems have 
adversely affected the Company's sales and earnings during this period.  
While the Company believes that the problems relating to the supply of DLT 
drives are being solved by Quantum, no assurance can be given that such 
problems will be resolved, that they will not re-occur, or that the Company 
will not experience similar or more serious disruptions in supply in the 
future.

FLUCTUATION IN RESULTS

     The Company's results can fluctuate substantially from time to time for
various reasons.  All of the markets served by the Company are volatile and
subject to market shifts, which may or may not be discernible in advance by the
Company.  A slowdown in the demand for workstations, mid-range computer systems
and networks could have a significant adverse effect on the demand for the
Company's products in any given period.  The Company has experienced delays in
receipt of purchase orders and, on occasion, anticipated purchase orders have
been rescheduled or have not materialized due to changes in customer
requirements.  The Company's customers may cancel or delay purchase orders for a
variety of reasons, including the rescheduling of new product introductions,
changes in their inventory practices or forecasted demand, general economic
conditions affecting the computer market, changes in pricing by the Company and
its competitors, new product announcements by the Company or others, quality or
reliability problems related to the Company's products, or selection of
competitive products as alternate sources of supply.  In addition, because a
large portion of the Company's sales are generated by its European channel, the
first fiscal quarter (July through September) has been impacted by seasonally
slow European orders, reflecting the summer holiday period in Europe.  The
Company's operations may reflect substantial fluctuations from period to period
as a consequence of such industry shifts, price erosion, general economic
conditions affecting the timing of orders from customers, the supply of DLT
drives, as well as other factors discussed herein. In particular, the Company's
ability to forecast sales to distributors and VARs, and increasingly to OEMs, is
especially limited as such customers typically provide the Company with
relatively short order lead times or are permitted to change orders on short
notice.  A portion of the Company's expenses are fixed and difficult to reduce
should revenues not meet the Company's expectations, thus magnifying the
material adverse effect of any revenue shortfall.  The Company's gross profit
has fluctuated and will continue to fluctuate quarterly and annually based upon
a variety of factors such as the level of utilization of the Company's
production capacity, changes in product mix, average selling prices,
manufacturing yields, increases in production and engineering costs associated
with initial production of new programs, changes in the cost of or limitations
on availability of materials and labor shortages. Generally, new products have
higher gross margins than more mature products. Therefore, the Company's ability
to introduce new products in a timely fashion is an important factor to its
profitability.  Based upon all of the foregoing, the Company believes that
period-to-period comparisons of its revenues and operating results will continue
to

                                       8

<PAGE>

fluctuate and are not necessarily meaningful and should not be relied on as 
indications of future performance. Furthermore, in some future quarter the 
Company's revenues and operating results could be below the expectations of 
public market analysts or investors, which could result in a material adverse 
effect on the price of the Common Stock.

REPLACEMENT OF INFORMATION SYSTEMS

     In July 1996, the Company began a project to replace its enterprise-wide 
information and business systems by the end of fiscal year 1997 to more 
effectively address the complexities of the Company's business and to support 
its growth in the next five years.  The project has been delayed by one 
quarter and there can be no assurance that future delays in the 
implementation process will not occur.  The failure to successfully 
accomplish the replacement of these systems in a timely manner, or any 
failure otherwise to achieve the necessary levels of information and business 
system support, could have a material adverse effect on the Company's 
business, financial condition and results of operations. 

RISKS RELATED TO FOREIGN SOURCING AND FOREIGN SALES

     Because a number of the Company's key components are currently manufactured
in Singapore and Malaysia, its results of operations can be affected by
fluctuations in currency exchange rates.  The Company's international
procurement is also subject to certain other risks common to foreign operations
in general, including government regulation and import restrictions.  During
fiscal year 1997, approximately 10% of the Company's cost of goods sold
consisted of materials purchased from suppliers in Singapore and Malaysia. An
adverse foreign exchange movement of the U.S. dollar versus the Singapore dollar
or other currency, or the imposition of import restrictions or tariffs by the
U.S. government on products or components shipped from Singapore, Malaysia or
another country could have a material adverse effect on the Company's business,
financial condition and results of operations.  In addition, because of the
Company's use of components produced overseas, the sale of the Company's
products to domestic federal or state agencies may be restricted by limitations
imposed by the Buy American Act or the Trade Agreement Act.
     
     Direct international sales accounted for 24% of sales in fiscal year 1997,
and the Company expects that international sales will continue to grow and
represent an even greater proportion of the Company's revenues in the future. 
Sales to customers outside the U.S. are subject to various risks, including the
imposition of governmental controls, the need to comply with a wide variety of
foreign and U.S. export laws, political and economic instability, trade
restrictions, changes in tariffs and taxes, longer payment cycles typically
associated with international sales, as well as the greater difficulty of
administering business overseas.  Furthermore, although the Company endeavors to
meet standards established by foreign regulatory bodies, there can be no
assurance that the Company will be able to comply with changes in foreign
standards in the future.  The inability of the Company to design products that
comply with foreign standards could have a material adverse effect on the
Company.

     In the second half of fiscal year 1997, the Company began assembling and
shipping certain of its products from its Wokingham facility in the U.K. 
Products shipped to European customers from the Wokingham facility are
denominated and invoiced in British Pounds Sterling, thereby creating foreign
currency risk as the positive cash flows being generated by the Wokingham
facility must be periodically repatriated.  Subsequent to June 30, 1997, the
Company began hedging this risk by buying U.S. dollars forward in the futures
market.  It is expected, however, that most European customers outside of the
U.K. will choose to be billed in U.S. dollars once the enterprise-wide
information and business system becomes operational and provides for the
capability of multi-currency billing.  If this occurs, then the Company's
foreign currency exposure will be lessened.

                                       9
<PAGE>

DEPENDENCE ON KEY EMPLOYEES

     The Company's future success depends in large part on its ability to 
retain certain key executives and other key personnel, many of whom have been 
instrumental in developing new technologies and setting strategic plans.  The 
Company's growth will also depend in large part on its continuing ability to 
hire, motivate and retain highly qualified management, technical, sales and 
marketing team members.  Competition for such personnel is intense and there 
can be no assurance that the Company will be able to retain its existing 
personnel or attract additional qualified personnel in the future.

TECHNOLOGY AND INTELLECTUAL PROPERTY

     The Company believes that, because of the rapid pace of technological 
change in the tape storage industry, patent and trade secret protection are 
less significant than factors such as the knowledge, ability and experience 
of the Company's personnel, new product introductions and product 
enhancements. Nonetheless, the Company's ability to compete effectively 
depends in part on its ability to develop and maintain proprietary aspects of 
its technology. There can be no assurance that any future patents will be 
granted or that any patents will be valid or provide meaningful protection 
for the Company's product innovations. In addition, the laws of certain 
foreign countries may not protect the Company's intellectual property to the 
same extent as U.S. laws.  Furthermore, there can be no assurance that 
competitors will not independently develop similar products, duplicate the 
Company's products or, if patents are issued to the Company, design around 
the patents issued to the Company.  The Company also relies on a combination 
of copyright, trademark, trade secret and other intellectual property laws to 
protect its proprietary rights. Such rights, however, may not preclude 
competitors from developing substantially equivalent or superior products to 
those of the Company's.  In addition, many aspects of the Company's products 
are not subject to significant intellectual property protection.  While the 
Company is not currently engaged in any intellectual property litigation or 
proceedings, there can be no assurance that it will not become so involved in 
the future or that its products do not infringe any intellectual property or 
other proprietary right of any third party.  An adverse outcome in litigation 
or similar proceedings could subject the Company to significant liabilities 
to third parties, require disputed rights to be licensed from others or 
require the Company to cease marketing or using certain products, any of 
which could have a material adverse effect on the Company's business, 
financial condition and results of operations.

RISKS ASSOCIATED WITH POSSIBLE ACQUISITIONS

     The Company may in the future pursue acquisitions of complementary 
businesses, products or technologies as it seeks to expand and increase the 
value-added component of its product offerings.  Acquisitions involve 
numerous risks, including difficulties in the assimilation of the operations 
and personnel of the acquired business, the diversion of management's 
attention from other business concerns, risks of entering markets in which 
the Company has no direct prior experience, and the potential loss of key 
employees of the acquired business.  In addition, future acquisitions by the 
Company may result in potentially dilutive issuances of equity securities and 
the incurrence of additional debt and amortization expenses related to 
goodwill and other intangible assets which could adversely affect the 
Company's business, financial condition and results of operations.  

WARRANTY EXPOSURE

     The Company generally provides a two-year, return-to-factory warranty on 
its products.  For certain products, it provides or offers for sale a 
two-year on-site warranty which is supplied by a third party service 
provider.  The Company pays the negotiated price of the contract to the 
service provider in advance and the service provider is then responsible for 
the costs of providing warranty service during the term of the contract.  For 
products which the Company distributes and for tape drives used in the 
Company's products but manufactured by a third party, the Company passes on 
to the customer the related manufacturer's warranty.  Although the Company 
has established reserves for the estimated liability associated with product 
warranties, there can be no assurance that such reserves will be adequate or 
that the Company will not incur substantial warranty expenses in the future 
with respect to new or established products.

                                       10

<PAGE>

ITEM 2.  PROPERTIES

     The Company leases all facilities used in its business.  Its 
headquarters are located in San Diego, California in a 3-building light 
industrial complex comprising approximately 121,000 square feet. The lease 
expires in August 2002. The San Diego facility houses all of the Company's 
research and development and administrative functions as well as a major 
portion of manufacturing, sales, sales administration, marketing and customer 
support. The Company also leases a small facility located in Wokingham, 
England which houses some light manufacturing, sales, sales administration 
and customer support for the European marketplace.  Two other small 
facilities are leased in Longmont, Colorado and in Nashua, New Hampshire for 
the development of R&D prototypes and an OEM sales office, respectively.  The 
Company believes that its facilities are suitable for their uses and are, in 
general, adequate for the Company's current and identified future needs.

ITEM 3.  LEGAL PROCEEDINGS

     The Company, its directors and certain of its officers have been named 
as defendants in two putative class action lawsuits filed on April 21, 1997 
and May 2, 1997 in the U.S. District Court for the Southern District of 
California. In both cases, the plaintiffs purport to represent a class of all 
persons who purchased the Company's Common Stock between February 21, 1997 
and March 14, 1997.  The complaints allege that the defendants violated 
various federal securities laws through material misrepresentation and 
omissions in connection with the Company's initial public offering and its 
registration statement on Form S-1 which was declared effective by the 
Securities and Exchange Commission on February 21, 1997.  The suits seek 
rescission of their share purchases or rescissory damages if their shares 
have been sold, as well as attorneys' fees and other costs and expenses.

     On September 16, 1997, the Court entered an Order permitting the 
voluntary dismissal of the first-filed lawsuit without prejudice.  The 
plaintiff in the second lawsuit now has been appointed as the Lead Plaintiff 
in this litigation, but the defendants have not yet been required to answer 
the allegations in the complaint.  No discovery has been conducted, and the 
outcome of the remaining lawsuit cannot be determined.  However, management 
believes that it has meritorious defenses and intends to defend against the 
remaining lawsuit vigorously.  The Company maintains directors' and officers' 
liability insurance to provide coverage against suits of this nature, and 
other than legal fees incurred to date, no amounts have been recorded in the 
financial statements for any losses which may result from this litigation.

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

None

                                    [caad 214]PART II

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

     The Company's Common Stock commenced trading on the Nasdaq National 
Market under the symbol "OVRL" on February 21, 1997, the effective date of 
its initial public offering.  As of September 15, 1997, there were 
approximately 100 shareholders of record.  The Company has not paid any 
dividends on its Common Stock and does not anticipate paying any dividends in 
the foreseeable future. The high and low closing prices of Overland Data 
Common Stock from February 21, 1997 through June 30, 1997 were as follows:

PRICE RANGE OF COMMON STOCK
                                            High             Low
          Fiscal 1997:
            Third quarter                  $13.00           $4.75
            Fourth quarter                   7.00            4.75


                                       11

<PAGE>

ITEM 6.   SELECTED FINANCIAL DATA

The following selected financial data has been derived from the audited
consolidated financial statements of the Company and the notes thereto.  This
information should be read in conjunction with Item 7 of this Report -
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," and with the consolidated financial statements of the Company and
the related notes thereto set forth at the pages indicated in Item 14(a)(1).

                                                              Ten
                                                             months     Year
                          At or for Years Ended June 30,     ended      ended
                        ----------------------------------  June 30,  August 31,
                          1997     1996     1995     1994    1993(3)     1992
                        -------  -------  -------  -------  --------  ----------
                                 (in thousands except per share data)
SUMMARY OF OPERATIONS
Net sales               $59,146  $47,226  $38,156  $34,044    $11,892   $9,855
Gross profit             20,371   16,081   11,115   11,154      4,848    4,320
Income (loss) from 
  operations              4,736    3,541      980      587       (456)    (664)
Income (loss) before 
  income taxes            4,987    3,413      770      356       (412)    (546)
Net income (loss)(1)      3,100    3,159      501      137       (484)    (486)
Net income (loss) per 
  share(2)                  .34      .40      .07      .02       (.09)    (.10)

BALANCE SHEET DATA
Cash and cash 
  equivalents           $18,926  $    19  $   101  $ 1,332    $    79
Working capital          36,733   10,307    6,430    5,097      4,063
Total assets             48,260   19,771   14,453   14,329      8,950
Long-term debt,
  net of current 
    portion                  --    1,500    1,400      747      1,255
Convertible redeemable
  preferred stock            --    5,200    5,567    5,879      4,315
Shareholders' equity     40,317    5,858    1,767      900        682
----------------------
(1) The Company's effective tax rate for the year ended June 30, 1996 was
affected in the fourth quarter of the year by a one-time tax valuation allowance
adjustment, which reduced income tax expense and correspondingly increased net
income by $997,000, or $.13 per share. Without this adjustment, for the year
ended June 30, 1996 net income and net income per share would have been
$2,162,000 and $.28, respectively.

(2) See Note 1 of Notes to Consolidated Financial Statements for an explanation
of shares used in computing net income (loss) per share.

(3) In 1993, the Board of Directors approved a change in the Company's fiscal
year to June 30 from August 31. Consequently, the consolidated financial
statements for the period ended June 30, 1993 reflect ten months of actual
results.



                                       12

<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
           OF OPERATIONS.

     THIS REPORT CONTAINS CERTAIN STATEMENTS OF A FORWARD-LOOKING NATURE
RELATING TO FUTURE EVENTS OR THE FUTURE PERFORMANCE OF THE COMPANY.  PROSPECTIVE
INVESTORS ARE CAUTIONED THAT SUCH STATEMENTS ARE ONLY PREDICTIONS AND THAT
ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY.  IN EVALUATING SUCH STATEMENTS,
PROSPECTIVE INVESTORS SHOULD SPECIFICALLY CONSIDER VARIOUS FACTORS IDENTIFIED IN
THIS REPORT, INCLUDING THE MATTERS SET FORTH BELOW UNDER THE CAPTION "RISK
FACTORS," WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.

GENERAL

     Overland Data designs, develops, manufactures, markets and supports 
magnetic tape data storage systems used by businesses for backup, archival 
and data interchange functions. The Company's primary products are currently 
based on three different half-inch magnetic tape technologies: (i) DLT, (ii) 18
& 36-track and (iii) 9-track.  In March 1996, the Company introduced the 
LibraryXpress, a scaleable automated tape library system incorporating DLT 
tape drives, and began shipping the LXB base module.  In the second half of 
fiscal 1997, the Company introduced two additional modules: the LXG global 
control unit and the LXC capacity module. In May 1997, the LXS MiniLibrary, a 
single-drive, non-scalable version of the LibraryXpress, was introduced to 
serve the lower end of the network market.  The Company's second product 
line, TapeXpress, consists of 18 and 36-track products based on the IBM 
3480/3490/3490E technologies. Its third product line, TapePro, consists of 
9-track reel-to-reel tape drives which are used exclusively for data 
interchange. The Company also distributes a line of DLT products manufactured 
by Quantum and markets other items supplied by third parties including 
controller cards, interchange software, storage management software, spare 
parts and tape media.

RESULTS OF OPERATIONS

     The following tables set forth certain data as a percentage of net sales:
     
          STATEMENT OF OPERATIONS:
                                          Fiscal Years Ended June 30,
                                          ----------------------------
                                            1997      1996      1995
                                          -------   --------  --------
          Net sales                        100.0%    100.0%    100.0%
          Cost of goods sold                65.6      65.9      70.9
                                          -------   --------  --------
          Gross profit                      34.4      34.1      29.1
                                          -------   --------  --------
          Operating expenses:
             Sales and marketing            12.3      12.6      12.8
             Research and development        7.0       7.8       8.1
             General and administrative      7.1       6.2       5.7
                                          -------   --------  --------
          Total Expenses                    26.4      26.6      26.6
                                          -------   --------  --------
          Income from operations             8.0       7.5       2.5
          Interest and other, net             .4       (.3)      (.5)
                                          -------   --------  --------
          Income before income taxes         8.4       7.2       2.0
          Provision for income taxes         3.2        .5        .7
                                          -------   --------  --------
          Net income                        5.2%       6.7%      1.3%
                                          -------   --------  --------
                                          -------   --------  --------


                                       13

<PAGE>

     PRODUCT MIX TABLE:

                                          Fiscal Years Ended June 30,
                                          ----------------------------
                                           1997       1996      1995
                                          -------   --------  --------
     Company products:
       LibraryXpress                        28.6%      2.6%       .0%
       36-track                             28.1      19.6       6.1
       18-track                              9.7      15.3      20.3
       9-track                              18.2      29.4      48.0
       Spare parts, controllers, other       8.4      10.3       7.0

     Other parts:
       DLT distributed products              6.9      21.5      17.8
       Other distributed products             .1       1.3        .8
                                          -------   --------  --------
     Total                                 100.0%    100.0%    100.0%
                                          -------   --------  --------
                                          -------   --------  --------

FISCAL 1997 COMPARED TO FISCAL 1996

     NET SALES.  The Company's net sales of $59.1 million in fiscal year 1997
grew by $11.9 million or 25.2% over net sales of $47.2 million in fiscal year
1996.  Sales growth in certain of the Company's products were partially offset
by declines in other product lines.  The strongest growth over the prior year
was experienced in the LibraryXpress product line, which began shipping in March
1996.  Sales of LibraryXpress in fiscal year 1997, the first full year of
shipments,  amounted to $16.9 million compared to $1.2 million in 1996. 
Although the majority of the growth was generated by sales of the LibraryXpress
LXB base module, additional sales were generated in the last half of the year
when the Company introduced three new products: the LXG global control unit, the
LXC capacity module and the LXS mini-library.  Offsetting this growth, however,
was a $6.1 million decline in sales of DLT distributed product, due principally
to a replacement of sales of Quantum DLT loaders by sales of the Company's own
LibraryXpress products.  Sales of the Company's 36-track products of $16.6
million in fiscal year 1997 grew by $7.3 million or 78.5% from $9.3 million in
1996.  This growth resulted principally from increased sales to IBM of the L490E
model pursuant to a new supply agreement entered into in the second quarter of
fiscal year 1997.  Sales of 18-track products of $5.7 million fell by $1.5
million or 20.8% from $7.2 million in the prior year.  This decline was the
result of an upward migration by the Company's customers from 18-track products
to its 36-track products and to a general decline in the use of 18-track
products in favor of other technologies.  Sales of 9-track products of
$10.9 million in fiscal year 1997 fell by $3.5 million or 24.3% from $14.4
million in 1996.  This reflects the general maturity of the 9-track technology,
a trend which the Company expects to continue in the foreseeable future. 
Additionally, during fiscal year 1997, the Company made end-of-life
announcements on certain of its 9-track products to narrow its 9-track product
offerings.

     GROSS PROFIT.  The Company's gross profit amounted to $20.4 million in
fiscal year 1997, up from $16.1 million in fiscal year 1996, which represented
gross margins of 34.4% and 34.1%, respectively.  The gross margins were improved
by the shift from sales of DLT distributed product at lower margins, to sales of
LibraryXpress products at relatively higher margins.  However, this was offset
by growth in sales to the Company's OEM customers, which are typically at
relatively lower margins than offered to its other customers.

     SALES AND MARKETING EXPENSES.  Sales and marketing expenses amounted to
$7.3 million or 12.3% of net sales in fiscal year 1997 compared to $5.9 million
or 12.6% of sales in 1996. This increase in total expenditures resulted from
costs needed to support the higher sales level, including salaries and benefits,
sales commissions, advertising and promotion and travel and related costs.

     RESEARCH AND DEVELOPMENT EXPENSES.  R&D expenses amounted to $4.1 million
or 7.0% of net sales in fiscal year 1997 compared to $3.7 million or 7.8% of net
sales in 1996. The R&D efforts during 1997 and the


                                       14

<PAGE>

increased expenses compared to 1996 related to the development of the LXG, 
LXC and LXS products within the LibraryXpress product family.  The Company 
also incurred expenses in both years related to the development of its new 
tape recording technology and coding scheme using the concept of partial 
response maximum likelihood.

     GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative expenses
amounted to $4.2 million or 7.1% of net sales in fiscal year 1997 compared to
$2.9 million or 6.2% of net sales in 1996. The higher level of expenses in 1997
included an increase in support personnel, computer related expenses, legal fees
related to the class action lawsuits filed against the Company and to patent
work related to the Company's new tape coding technique, increased bad debt
reserves related to the higher level of sales and increased facility costs.

     INTEREST INCOME/EXPENSE.  In fiscal year 1997, the Company generated net 
interest income of $223,000, compared to fiscal year 1996 when net interest 
expense amounted to $154,000.  The net interest income in 1997 resulted from 
earnings on investment of funds generated by the Company's initial public 
offering and elimination of interest expense after repayment of bank 
borrowings. The interest expense in 1996 included $124,000 related to 
borrowings under the Company's revolving bank line of credit and $30,000 of 
interest expense related to an installment note which was repaid in full in 
November 1995. Average borrowings under the Company's bank line of credit in 
fiscal year 1996 amounted to $1.4 million.

     INCOME TAXES.  The Company's fiscal year 1997 provision for state and 
federal income taxes amounted to $1.9 million or an effective tax rate of 
37.8%, which the Company believes to be representative of its normalized 
effective tax rate.  In fiscal year 1996, the tax provision amounted to 
$254,000, resulting in an abnormally low effective tax rate of 7.4%. The low 
tax rate in 1996 was the result of the release of a deferred tax valuation 
allowance of $997,000 in the fourth fiscal quarter which is discussed below 
and in Note 5 to the Consolidated Financial Statements.

FISCAL 1996 COMPARED TO FISCAL 1995

     NET SALES.  The Company's net sales of $47.2 million in fiscal year 1996 
grew by $9.0 million or 23.6% over net sales of $38.2 million in fiscal year 
1995. This sales growth was driven by new product introductions which more 
than offset declines in both 18-track and 9-track sales. In particular, the 
first shipments of the LXB, the base unit product in the Company's new 
LibraryXpress product line, were made in March 1996. Shipments of the LXB 
during the last four months of fiscal year 1996 generated $1.2 million in 
sales. An additional $3.4 million in fiscal year 1996 growth was generated 
from a 50.0% increase in sales of DLT distributed products, including the DLT 
4500/4700 loaders which were introduced during the year by Quantum. The 
largest portion of sales growth, $7.0 million, was reported in the Company's 
36-track products, with fiscal year 1996 sales of $9.3 million growing to 
four times its fiscal year 1995 level of $2.3 million. This growth was the 
result of (i) strong sales of the inaugural 36-track product, the L490E, 
which was introduced midway through fiscal year 1995, and (ii) two new 
36-track product introductions, the 60-cartridge L60E, which began shipping 
in November 1995, and the single cartridge T490E, which began shipping in 
March 1996. In the 18-track product line, sales declined by 6.8% in fiscal 
year 1996, reflecting the market's general migration to 36-track products. 
Sales of 9-track products of $14.4 million in fiscal year 1996 declined by 
$4.2 million or 22.6% from $18.6 million in fiscal year 1995, reflecting the 
general maturity of the 9-track technology. Finally, fiscal year 1996 sales 
of controllers, spare parts, software and other products amounted to $4.9 
million, an increase of 81.5% over the fiscal year 1995 level of $2.7 
million. This growth was attributable to increased sales of spare parts and 
tape media, mainly DLT tape.

     GROSS PROFIT.  The Company's gross profit amounted to $16.1 million in 
fiscal year 1996, up from $11.1 million in fiscal year 1995, which 
represented gross margins of 34.1% and 29.1%, respectively. The increased 
profitability resulted from higher margins on newly introduced products, and 
improved margins on DLT distributed product because more product was sold 
through the VAR and European channels compared to a concentration in the 
distributor channel in the prior year. In addition, gross margins in fiscal 
year 1996 were significantly improved on 18-track products as material cost 
savings were realized from an investment in re-engineering certain electrical 
components.

                                       15

<PAGE>

     SALES AND MARKETING EXPENSES.  Sales and marketing expenses amounted to 
$5.9 million or 12.6% of net sales in fiscal year 1996 compared to $4.9 
million or 12.8% of sales in 1995. This increase in total expenditures 
resulted from costs needed to support the higher sales level, including 
salaries and benefits, sales commissions, advertising and promotion and 
travel and related costs. In addition, higher costs were incurred for 
prototype units, advertising and promotions related to new product 
introductions.

     RESEARCH AND DEVELOPMENT EXPENSES.  R&D expenses amounted to $3.7 
million or 7.8% of net sales in fiscal year 1996 compared to $3.1 million or 
8.1% of net sales in 1995. The increased expenses related to the development 
of the Company's two new 36-track products, the T490E and the L60E, and to a 
greater extent, the development of the new LibraryXpress products. The 
development of the two 36-track products required a lower level of expense 
than the LibraryXpress products because they were derivative products using 
common electrical components and robotics. The Company also incurred expenses 
in fiscal year 1996 related to the development of a new tape recording 
technology and coding scheme using the partial response maximum likelihood 
concept.

     GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative 
expenses amounted to $2.9 million or 6.2% of net sales in fiscal year 1996 
compared to $2.2 million or 5.7% of net sales in 1995. The higher level of 
expenses in 1996 included legal fees related to the filing of a number of 
patent applications, increased bad debt reserves related to the higher level 
of sales and increased facility costs and computer related expenses.

     INTEREST EXPENSE.  Net interest expense amounted to $154,000 in fiscal 
year 1996 and included $124,000 of interest expense related to borrowings 
under the Company's revolving bank line of credit and $30,000 of interest 
expense related to the final installment of a note which was repaid in full 
in November 1995. Average borrowings under the Company's bank line of credit 
in fiscal year 1996 amounted to $1.4 million. In fiscal year 1995, net 
interest expense amounted to $204,000 consisting of $214,000 of interest 
expense and $10,000 of interest income. The portion of the interest expense 
relating to the installment note amounted to $145,000 and the remaining 
$69,000 of interest expense related to borrowings under the Company's 
revolving bank line of credit, which borrowings averaged $725,000 in fiscal 
year 1995.

     INCOME TAXES.  The Company's fiscal year 1996 provision for state and 
federal income taxes amounted to $254,000 or an effective tax rate of 7.4%. 
In fiscal year 1995, the tax provision amounted to $269,000 resulting in a 
more normalized effective tax rate of 35%. The low tax rate in 1996 was the 
result of the release of a deferred tax valuation allowance of $997,000 in 
the fourth fiscal quarter. As discussed in Note 5 to the Consolidated 
Financial Statements, in prior years the Company established the reserve in 
accordance with SFAS No. 109, "Accounting for Income Taxes," which requires 
that a valuation allowance be recorded "when it is more likely than not" that 
any portion of a deferred tax asset will not be realized. The reserve had 
been established to reduce the net deferred tax asset to a minimal amount, 
because of the Company's past history of operating losses and marginal 
profitability and due to the inherent uncertainty in forecasts of future 
events and operating results. However, in the fourth quarter of fiscal year 
1996, due to the significant profitability in that quarter and based on 
management's expectations of future results, the Company determined that it 
was more likely than not that deferred tax assets would be realized through 
future taxable earnings or alternative tax strategies. As a result, the 
valuation allowance was reduced to zero in that quarter.

LIQUIDITY AND CAPITAL RESOURCES

     During fiscal year 1997, the Company used $3.4 million to fund its 
operating activities, primarily to build receivables and inventories in 
support of the higher sales levels.  An additional $2.3 million was invested 
in capital expenditures, primarily for the Company's new enterprise wide 
computer system, leasehold improvements and tooling.  The Company raised 
$25.8 million in February 1997 in its initial public offering, of which $1.5 
million was used to repay outstanding bank indebtedness.

     At June 30, 1997, the Company had $18.9 million of cash and cash 
equivalents, $36.7 million of net working capital, an unused bank line of 
credit of $5 million and no other funded debt.  The Company believes that 
these resources will be sufficient to fund its operations and to provide for 
its growth for the foreseeable future.

                                       16

<PAGE>

INFLATION

     Inflation has not had a significant negative impact on the Company's 
operations during the periods presented.  With the exception of its OEM 
contracts, which contain fixed pricing for up to one year, the Company has 
historically been able to pass on to its customers increases in raw material 
prices caused by inflation. There can be no assurance, however, that the 
Company will be able to continue to pass on any future increases should they 
occur. Although the Company's exposure to the effects of inflation will be 
magnified by the expected increase in OEM business, the Company believes that 
its continuous efforts at material and labor cost reductions will minimize 
such effects.

SELECTED QUARTERLY FINANCIAL DATA
 
     The following table presents selected quarterly financial information 
for the periods indicated. This information has been derived from unaudited 
consolidated financial statements which, in the opinion of management, 
include all adjustments (consisting only of normal recurring adjustments) 
necessary for a fair presentation of such information. These operating 
results are not necessarily indicative of results for any future period.

<TABLE>

                                                          Quarters Ended
                             ---------------------------------------------------------------------------
                                        Fiscal Year 1996                       Fiscal Year 1997
                             -------------------------------------  ------------------------------------
                             Sept. 30  Dec. 31   Mar. 31   June 30  Sept. 30   Dec. 31  Mar. 31  June 30
                               1995      1995      1996     1996      1996       1996     1997    1997
                             --------  -------  --------  --------  --------  --------  -------  -------
<S>                          <C>       <C>      <C>       <C>       <C>       <C>       <C>      <C>   
Net Sales                     $11,023  $12,296   $10,889   $13,018   $12,013   $15,220  $15,404  $16,509
Gross Profit                    3,925    4,015     3,635     4,506     4,440     5,372    5,237    5,322
Income from operations            759    1,004       493     1,285       593     1,817    1,317    1,009
Income before income taxes        744      982       449     1,238       541     1,740    1,329    1,377
Net income                        472      640       284     1,763       324     1,044      797      935
Net income per share              .06      .08       .04       .22       .04       .13      .09      .08
</TABLE>

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The consolidated financial statements and supplementary data of the Company
required by this item are set forth at the pages indicated in Item 14(a)(1).

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
            FINANCIAL DISCLOSURE

     Not applicable.




                                       17

<PAGE>

                                  PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS

     The information required by this item is included under the captions
entitled "Election of Directors" and "Information Concerning Directors and
Executive Officers" in the Company's Proxy Statement and is incorporated herein
by reference.

ITEM 11.   EXECUTIVE COMPENSATION 

     The information required by this item is included under the caption
entitled "Executive Compensation" in the Company's Proxy Statement and is
incorporated herein by reference.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this item is included under the caption
entitled "Security Ownership of Certain Beneficial Owners and Management" in the
Company's Proxy Statement and is incorporated herein by reference.


ITEM 13.   CERTAIN TRANSACTIONS

     The information required by this item is included under the caption
entitled "Certain Relationships and Transactions" in the Company's Proxy
Statement and is incorporated herein by reference.


















                                       18

<PAGE>

                                   PART IV


ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (a)(1)  FINANCIAL STATEMENTS.  The following Consolidated Financial
Statements of Overland Data, Inc. and Report of Independent Accountants are
included in a separate section of this Report at the page numbers so indicated:

     Consolidated Balance Sheet as of June 30, 1997 and 1996..     F-1
     Consolidated Statement of Operations for the Years 
        Ended June 30, 1997, 1996 and 1995....................     F-2
     Consolidated Statement of Shareholders' Equity for the 
        Years Ended June 30, 1997, 1996 and 1995..............     F-3
     Consolidated Statement of Cash Flows for the Years Ended
        June 30, 1997, 1996 and 1995..........................     F-4
     Notes to Consolidated Financial Statements...............  F-5 to F-13
     Report of Independent Accountants........................     F-14

     (a)(2)  FINANCIAL STATEMENT SCHEDULES.  The following financial statement
schedule of Overland Data, Inc. for the years ended June 30, 1997, 1996 and 1995
is filed as part of this Report on the page number so indicated and should be
read in conjunction with the Consolidated Financial Statements of Overland Data,
Inc.:
     
     Schedule II - Valuation and Qualifying Accounts..........     S-1

     Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be set forth
therein is included in the Consolidated Financial Statements or Notes thereto.

     (a)(3)   EXHIBITS.

 3.1  Registrant's Amended and Restated Articles of Incorporation.*
 3.2  By-Laws.*
 4.1  Specimen stock certificate.*
 4.2  Investors' Rights Agreement, dated May 21, 1993, between the Registrant 
        and the parties named therein.*
10.1  Basic Order Agreement #16529, dated July 1, 1993 and as amended through
      November 10, 1995, between the Registrant and Digital Equipment
      Corporation.*
10.2  Production Procurement Agreement #RMSS-ODI-96-01-0, dated October 25, 
      1996, between the Registrant and International Business Machines 
      Corporation.*
10.3  Credit Agreement effective as of June 27, 1997 between the Registrant and
        Imperial Bank.
10.4  Standard Industrial Lease--Multi-Tenant, dated May 26, 1993, between the
      Registrant and Mitsui/SBD America Fund 87-1.*
10.5  First Amendment to the 1995 Stock Option Plan dated January 21, 1997. *
10.6  1996 Employee Stock Purchase Plan adopted December 12, 1996.*
11.1  Statement Re: Computation of Earnings Per Share.
21.1  Subsidiaries of the Registrant.
23.1  Consent of Price Waterhouse LLP, Independent Accountants.
24.1  Power of Attorney (included on Signature Page).
27.1  Financial Data Schedule (for EDGAR use only).
---------------------
*  Incorporated by reference to the Company's Registration Statement 
   No. 333-18583 dated February 21, 1997. 

     (b)   REPORTS ON FORM 8-K.   No reports on Form 8-K were filed by the
Company during the fourth quarter of the year ended June 30, 1997.


                                       19

<PAGE>

                                  SIGNATURES

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

                                       OVERLAND DATA, INC.
 


                                       By: /s/  SCOTT McCLENDON
                                           -----------------------------------
                                           Scott McClendon
                                           President & Chief Executive Officer
Dated:  September 27, 1997

                             POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Scott McClendon and Vernon A. LoForti, jointly
and severally, as his or her attorney-in-fact, each with the power of
substitution, for him or her in any and all capacities, to sign any amendments
to this Annual Report on Form 10-K and to file the same, with exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said attorneys-in-
fact, or his substitute or substitutes, may do or cause to be done by virtue
hereof.

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

       SIGNATURE                     TITLE                         DATE
       ---------                     -----                         ----

/s/ SCOTT McCLENDON        President, Chief Executive        September 27, 1997
    -------------------      Officer and Director
     Scott McClendon


/s/ MARTIN D. GRAY         Vice President, Secretary and     September 27, 1997
    -------------------      Director
       Martin D. Gray


/s/ VERNON A. LOFORTI      Vice President, Chief             September 27, 1997
    -------------------      Financial Officer and
     Vernon A. LoForti       Assistant Secretary


/s/ WILLIAM W. OTTERSON    Director                          September 27, 1997
    -------------------
    William W. Otterson

 
/s/ JOSEPH D. RIZZI        Director                          September 27, 1997
    -------------------
      Joseph D. Rizzi


/s/ JOHN A. SHANE          Director                          September 27, 1997
    -------------------
      John A. Shane




                                       20

<PAGE>

                                 OVERLAND DATA, INC.

                              CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>

                                                                                  JUNE 30,
                                                                  --------------------------------------
                                                                       1997                    1996
                                                                  --------------           -------------
                                                                  (IN THOUSANDS EXCEPT NUMBER OF SHARES)
ASSETS
<S>                                                               <C>                      <C> 
Current assets: 
  Cash and cash equivalents                                      $       18,926           $          19
  Accounts receivable, less allowance for doubtful accounts 
    and returns of $774 and $624, respectively                           11,151                   7,226
  Inventories                                                            12,101                   8,425
  Deferred income taxes                                                   1,743                   1,328
  Other current assets                                                      607                     364
                                                                  --------------           -------------

       Total current assets                                              44,528                  17,362

Property and equipment, net                                               3,499                   2,128
Deferred income taxes                                                        77                       5
Intangible and other assets                                                 156                     276
                                                                  --------------           -------------
                                                                 $       48,260           $      19,771
                                                                  --------------           -------------
                                                                  --------------           -------------


LIABILITIES, PREFERRED STOCK AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                               $        5,372           $       4,433
  Accrued liabilities                                                     1,377                   1,493
  Accrued payroll and employee compensation                               1,046                   1,129
                                                                  --------------           -------------

       Total current liabilities                                          7,795                   7,055

Long-term debt                                                              -                     1,500
Other liabilities                                                           148                     158
                                                                  --------------           -------------

       Total liabilities                                                  7,943                   8,713
                                                                  --------------           -------------

Convertible redeemable preferred stock, at liquidation value:
  Series A preferred stock                                                    -                     367
  Series B preferred stock                                                    -                   1,281
  Series C preferred stock                                                    -                   3,552
                                                                  --------------           -------------
                                                                              -                   5,200
                                                                  --------------           -------------

Commitments and contingencies (Note 9)

Shareholders' equity:
  Common stock, no par value, 25,000,000 shares
    authorized; 10,434,593 and 5,062,325 shares 
    issued and outstanding in 1997 and 1996, respectively                33,246                   1,896
  Cumulative translation adjustment                                           9                       -
  Retained earnings                                                       7,062                   3,962
                                                                  --------------           -------------

       Total shareholders' equity                                        40,317                   5,858
                                                                  --------------           -------------

                                                                 $       48,260           $      19,771
                                                                  --------------           -------------
                                                                  --------------           -------------
</TABLE>

             See accompanying notes to consolidated financial statements.

                                         F-1
<PAGE>

                                 OVERLAND DATA, INC.

                              CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>

                                                                                  YEAR ENDED JUNE 30,
                                                                       --------------------------------------
                                                                         1997           1996           1995
                                                                       ----------     ----------     ---------
                                                                       (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<S>                                                                    <C>            <C>            <C>
Net sales                                                             $  59,146      $  47,226      $  38,156
Cost of goods sold                                                       38,775         31,145         27,041
                                                                       ----------     ----------     ---------

  Gross profit                                                           20,371         16,081         11,115

Operating expenses:
  Sales and marketing                                                     7,298          5,935          4,891
  Research and development                                                4,125          3,697          3,076
  General and administrative                                              4,212          2,908          2,168
                                                                       ----------     ----------     ---------

                                                                         15,635         12,540         10,135
                                                                       ----------     ----------     ---------

Income from operations                                                    4,736          3,541            980

Other income (expense): 
  Interest income                                                           408              1             10
  Interest expense                                                         (185)          (155)          (214)
  Other income (expense), net                                                28             26             (6)
                                                                       ----------     ----------     ---------

Income before income taxes                                                4,987          3,413            770


Provision for income taxes                                                1,887            254            269
                                                                       ----------     ----------     ---------

Net income                                                            $   3,100      $   3,159      $     501
                                                                       ----------     ----------     ---------
                                                                       ----------     ----------     ---------

Net income per share                                                  $     .34      $     .40      $     .07
                                                                       ----------     ----------     ---------
                                                                       ----------     ----------     ---------

Shares used in computing net income per share                             9,222          7,857          7,412
                                                                       ----------     --------       ---------
                                                                       ----------     --------       ---------
</TABLE>

             See accompanying notes to consolidated financial statements.

                                         F-2
<PAGE>

                                 OVERLAND DATA, INC.

                    CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY



<TABLE>
<CAPTION>

                                                    COMMON STOCK          CUMULATIVE
                                                    ------------          TRANSLATION      RETAINED
                                               SHARES         AMOUNT      ADJUSTMENT       EARNINGS        TOTAL
                                             ----------    -----------    -----------     ----------    -----------
                                                             (IN THOUSANDS EXCEPT NUMBER OF SHARES)

<S>                                         <C>            <C>            <C>            <C>            <C>       
Balance at June 30, 1994                     3,903,661     $      543                    $      302     $      845

  Preferred stock conversion                   318,396            367                                          367

  Exercise of stock options                     39,040             30                                           30

  Issuance of common stock                      30,000             24                                           24

  Net income                                                                                    501            501
                                            ----------     ----------     ----------     ----------     ----------

Balance at June 30, 1995                     4,291,097            964                           803          1,767

  Preferred stock conversion                   318,397            367                                          367

  Exercise of stock options                    280,481            220                                          220

  Issuance of common stock                     172,350            345                                          345

  Net income                                                                                  3,159          3,159
                                            ----------     ----------     ----------     ----------     ----------

Balance at June 30, 1996                     5,062,325          1,896                         3,962          5,858

  Preferred stock conversion                 2,336,574          5,200                                        5,200

  Exercise of stock options                    168,630            142                                          142

  Issuance of common stock in
    initial public offering                  2,836,364         25,659                                       25,659

  Other issuances of common
    stock                                       30,700             92                                           92

  Foreign currency translation                                            $        9                             9

  Tax benefits from exercise of
      stock options                                               257                                          257

  Net income                                                                                  3,100          3,100
                                            ----------     ----------     ----------     ----------     ----------

Balance at June 30, 1997                    10,434,593     $   33,246     $        9     $    7,062     $   40,317
                                            ----------     ----------     ----------     ----------     ----------
                                            ----------     ----------     ----------     ----------     ----------
</TABLE>


             See accompanying notes to consolidated financial statements.

                                         F-3
<PAGE>

                                  OVERLAND DATA,INC.

                         CONSOLIDATED STATEMENT OF CASH FLOWS


<TABLE>
<CAPTION>

                                                                        YEAR ENDED JUNE 30,
                                                             ---------------------------------------
                                                               1997           1996           1995
                                                             --------       ---------      ---------
                                                                          (IN THOUSANDS)
<S>                                                          <C>            <C>            <C>
Operating activities:
  Net income                                                  $ 3,100       $  3,159       $    501
  Adjustments to reconcile net income to 
    net cash (used in) provided by operating activities:
    Deferred tax benefit                                         (487)        (1,237)           (66) 
    Depreciation and amortization                               1,050            862            725
    Loss on disposal of property and equipment                      7             50             10
    Non-cash compensation charge                                  -              -                8
    Changes in assets and liabilities:
      Accounts receivable                                      (3,925)          (926)        (1,701)
      Inventories                                              (3,676)        (3,069)           309
      Other assets                                               (243)          (278)            77
      Accounts payable and accrued liabilities                    813          1,931            296
      Accrued payroll and employee compensation                    (1)           349             28
                                                             --------       --------       --------

        Net cash (used in) provided by operating activities    (3,362)           841            187
                                                             --------       --------       --------

Investing activities:
  Capital expenditures                                         (2,308)          (841)          (670)
                                                             --------       --------       --------

        Net cash used in investing activities                  (2,308)          (841)          (670)
                                                             --------       --------       --------

Financing activities:
  Proceeds from issuance of common stock                       25,751            345             16
  Proceeds from exercise of stock options                          60            220             30
  Net (payments) proceeds under bank line of credit            (1,500)           100            700
  Principal payments on notes payable                             -             (747)        (1,494)
  Tax benefits from exercise of stock options                     257            -              -  
                                                             --------       --------       --------

        Net cash provided by (used in) financing activities    24,568            (82)          (748)
                                                             --------       --------       --------

Effect of exchange rate changes on cash                             9            -              -
                                                             --------       --------       --------

Net increase (decrease) in cash and cash equivalents           18,907            (82)        (1,231)
Cash and cash equivalents, beginning of period                     19            101          1,332
                                                             --------       --------       --------

Cash and cash equivalents, end of period                      $18,926            $19           $101
                                                             --------       --------       --------
                                                             --------       --------       --------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid for income taxes                                   $2,314         $1,150           $411
                                                             --------       --------       --------
                                                             --------       --------       --------

  Cash paid for interest                                         $186           $155           $215
                                                             --------       --------       --------
                                                             --------       --------       --------

SUPPLEMENTAL NON-CASH ACTIVITIES:

  Non-cash common stock issuance                                $ -             $-               $8
                                                             --------       --------       --------
                                                             --------       --------       --------

  Compensation recognized as equity
      upon exercise of common stock options                       $82           $-             $-  
                                                             --------       --------       --------
                                                             --------       --------       --------

  Conversion of Series A preferred stock to common stock         $367           $367           $367
                                                             --------       --------       --------
                                                             --------       --------       --------


  Conversion of Series B preferred stock to common stock       $1,281           $-             $-  
                                                             --------       --------       --------
                                                             --------       --------       --------

  Conversion of Series C preferred stock to common stock       $3,552           $-             $-  
                                                             --------       --------       --------
                                                             --------       --------       --------
</TABLE>


             See accompanying notes to consolidated financial statements.

                                         F-4
<PAGE>


                                 OVERLAND DATA, INC.

                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL

Overland Data, Inc. (the "Company") was incorporated on September 8, 1980 under
the laws of the state of California.  The Company designs, develops,
manufactures, markets and supports magnetic tape data storage systems used by
businesses for high performance network backup and archival solutions as well as
data interchange.  The Company's fiscal year ends on the Sunday closest to June
30.  For ease of presentation, the Company's year end is deemed to be June 30. 
Fiscal years 1997, 1996 and 1995 each included 52 weeks.

PRINCIPLES OF CONSOLIDATION 

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries, Overland Data (Europe) Ltd. and Overland Data
Export Limited, a foreign sales corporation.  All significant intercompany
accounts and transactions have been eliminated.

MANAGEMENT ESTIMATES AND ASSUMPTIONS

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

REVENUE RECOGNITION

Sales are recognized upon shipment of products to customers and are not subject
to any specific right of return or price protection, except for any defective
product which may be returned under the Company's warranty policy.

WARRANTY COSTS

The Company generally provides a two-year return-to-factory warranty on its 
products.  In addition, on-site warranties are provided for the Company's 
line of DLT LibraryXpress products.  The Company records a provision for 
estimated future warranty costs at the time of shipment for both the 
return-to-factory and on-site warranties.  Separately priced on-site 
warranties are offered for sale to customers of other product lines.  The 
Company contracts with outside vendors to provide service relating to all 
on-site warranties.  Warranty revenues and amounts paid in advance to outside 
service organizations are recognized in the financial statements in sales and 
cost of goods sold, respectively, over the warranty period.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs are expensed as incurred.

FAIR VALUE OF FINANCIAL INSTRUMENTS

It is management's belief that the carrying amounts shown for the Company's
financial instruments are reasonable estimates of their related fair values
based on their terms or short-term nature.

EXPORT SALES

Export sales by the Company, principally in Europe, for the years ended June 30,
1997, 1996 and 1995 were $14,391,000, $12,775,000 and $7,737,000, respectively.

                                         F-5
<PAGE>

                                 OVERLAND DATA, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

CONCENTRATIONS OF CREDIT RISK

The Company's customers include original equipment manufacturers, 
integrators, distributors, value added resellers and end users.  Financial 
instruments which potentially subject the Company to concentrations of credit 
risk are primarily accounts receivable.  The Company performs ongoing credit 
evaluations of its customers, generally requires no collateral and maintains 
allowances for potential credit losses and sales returns.  The Company's 
largest single customer accounted for approximately 14%, 23% and 21% of sales 
in fiscal 1997, 1996 and 1995, respectively, and approximately 12% and 33% of 
accounts receivable at June 30, 1997 and 1996, respectively.  The second 
largest customer accounted for 10% of sales in 1997 and 11% of accounts 
receivable at June 30, 1997.  No other customer accounted for 10% or more of 
sales in any of the three years presented.

CASH EQUIVALENTS

Highly liquid investments with original maturities of three months or less are
classified as cash equivalents.

INVENTORIES

Inventories are stated at the lower of cost (first-in-first-out method) or
market.

PROPERTY AND EQUIPMENT 

Property and equipment are recorded at cost.  Depreciation is computed using the
straight-line method over the estimated useful lives of the depreciable assets
(generally two to five years).  Leasehold improvements are amortized on a
straight-line basis over the shorter of the useful life of the asset or the
lease term.  Expenditures for normal maintenance and repair are charged to
expense as incurred, and improvements are capitalized.  Upon the sale or
retirement of property or equipment, the asset cost and related accumulated
depreciation are removed from the respective accounts and any gain or loss is
included in the results of operations.

INTANGIBLE ASSETS

Intangible assets, resulting from the acquisition of assets relating to certain
product lines, are amortized using the straight-line method over five years (the
estimated life of the products).  Accumulated amortization was $690,000 and
$570,000 in 1997 and 1996, respectively.

LONG-LIVED ASSETS

The Company assesses potential impairments to its long-lived assets when there
is evidence that events or changes in circumstances have made recovery of an
asset's carrying value unlikely.  An impairment loss would be recognized when
the sum of the expected future net cash flows is less than the carrying amount
of the asset.  No such impairment losses have been recorded by the Company.

FOREIGN CURRENCY TRANSLATION

The financial statements of the Company's foreign subsidiary are translated into
U.S. dollars using period-end exchange rates for assets and liabilities and
weighted average exchange rates during the period for revenues and expenses. 
Gains or losses from foreign currency transactions are recognized currently in
income.  Such gains and losses were not significant in any year presented.

                                         F-6
<PAGE>

                                 OVERLAND DATA, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


INCOME TAXES

The Company provides for income taxes utilizing the liability method.  Under the
liability method, a deferred tax asset and/or liability is computed for both the
expected future impact of differences between the financial statement and tax
bases of assets and liabilities, and for the expected future tax benefit to be
derived from tax credits and loss carryforwards.  A valuation allowance is
established to reflect the likelihood of realization of deferred tax assets.

STOCK-BASED COMPENSATION

The Company measures compensation expense for its stock-based employee
compensation plans using the intrinsic value method and provides pro forma
disclosures of net income and earnings per share as if the fair value-based
method had been applied in measuring compensation expense (Note 7).

NET INCOME PER SHARE 

Net income per share is computed based on the weighted average number of 
common shares and common stock equivalents, using the treasury stock method, 
outstanding during the respective periods. All issuances of common stock and 
all stock options granted within one year prior to the filing of the 
Company's registration statement for its initial public offering and through 
the effective date thereof have been included as outstanding for all periods 
presented using the treasury stock method. 

NEW ACCOUNTING PRONOUNCEMENT

In March 1997, the Financial Accounting Standards Board issued Statement of 
Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share."  SFAS 
No. 128 will be adopted by the Company as required in the second quarter of 
fiscal 1998.  Upon adoption of SFAS No. 128, the Company will present basic 
earnings per share as well as diluted earnings per share.  Basic earnings per 
share will be computed based on the weighted average number of shares of 
common stock outstanding during the period.  Diluted earnings per share will 
be computed based on the weighted average number of shares of common stock 
outstanding during the period increased by the effect of diluted stock 
options using the treasury stock method.  Pro forma basic earnings per share 
for the years ended June 30, 1997, 1996 and 1995 are $.43, $.66 and $.12, 
respectively.  Pro forma diluted earnings per share for the years ended June 
30, 1997, 1996 and 1995 are $.34, $.40 and $.07, respectively.

NOTE 2 - COMPLETION OF INITIAL PUBLIC OFFERING

On February 21, 1997, the Company completed its initial public offering of 
3,450,000 shares of common stock (of which 2,836,364 shares were sold by the 
Company and 613,636 shares were sold by certain shareholders) at a price to 
the public of $10 per share.  Net proceeds to the Company were $26,659,000 
after payment of the underwriters' commissions and deduction of offering 
expenses.

                                         F-7
<PAGE>

                                 OVERLAND DATA, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE 3 - COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS

                                                            JUNE 30,
                                                    -------------------------
                                                      1997             1996
                                                    --------         --------
                                                           (IN THOUSANDS)

Inventories:
  Raw materials                                    $  8,160          $  5,167
  Work in process                                     2,839             1,816
  Finished goods                                      1,102             1,442
                                                   --------          --------

                                                   $ 12,101          $  8,425
                                                   --------          --------
                                                   --------          --------


Property and equipment: 
  Machinery and equipment                          $  3,171          $  2,433
  Computer equipment                                  2,288             1,141
  Furniture and fixtures                                210               165
  Leasehold improvements                                779               429
                                                   --------          --------

                                                      6,448             4,168

Less accumulated depreciation and amortization       (2,949)           (2,040)
                                                   --------          --------

                                                   $  3,499          $  2,128
                                                   --------          --------
                                                   --------          --------


Depreciation expense was $930,000, $724,000 and $574,000 in 1997, 1996 and 1995,
respectively.


NOTE 4 - LONG-TERM DEBT 

The Company has a $5,000,000 unsecured revolving credit facility which expires
on November 5, 1999.  Borrowings under the line may be in the form of working
capital loans, which bear interest at the bank's prime rate, or banker's
acceptances priced at the bank's BA rate plus 2.25%.  The Company is required to
maintain certain covenants and financial ratios including working capital and
net worth ratios, and pays a .5% annual commitment fee on the unused credit. 
The Company is in compliance with all terms of the agreement.  As of June 30,
1997, no borrowings were outstanding under the credit line.  At June 30, 1996,
$1,500,000 was outstanding and $3,200,000 was available for borrowing.

                                         F-8
<PAGE>

                                 OVERLAND DATA, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE 5 - INCOME TAXES

The provision (benefit) for income taxes includes the following:

                                                       YEAR ENDED JUNE 30,
                                                ------------------------------
                                                 1997         1996       1995
                                                ------       ------     ------
                                                          (IN THOUSANDS)
Current:
  Federal                                       $1,993       $1,246     $  306
  State                                            377          236         17
  Foreign                                            4            9         12
                                                ------       ------     ------
                                                 2,374        1,491        335
                                                ------       ------     ------

Deferred:
  Federal                                         (347)      (1,053)       (66)
  State                                           (140)        (184)       -  
                                                ------       ------     ------
                                                  (487)      (1,237)       (66)
                                                ------       ------     ------
                                                $1,887         $254       $269
                                                ------       ------     ------
                                                ------       ------     ------


A reconciliation of income taxes computed by applying the federal statutory 
income tax rate of 34% to income before income taxes to the total income tax 
provision reported in the Consolidated Statement of Operations is as follows:

                                                       YEAR ENDED JUNE 30,
                                                ------------------------------
                                                 1997         1996        1995
                                                ------       ------     ------
                                                          (IN THOUSANDS)

  Federal income tax at statutory rate          $1,696       $1,160     $  262
  (Release of) increase in valuation allowance     -           (997)        48
  State income taxes, net of federal benefit       156          165         11
  Foreign sales corporation benefit                (68)         (65)        (8)
  Research and development credits                 -            -          (39) 
  Permanent differences                             32          -           -
  Other                                             71           (9)        (5)
                                                ------       ------     ------

  Provision for income taxes                    $1,887       $  254     $  269
                                                ------       ------     ------
                                                ------       ------     ------


During the fiscal year ended June 30, 1996, the Company reduced the deferred tax
valuation allowance by $997,000 to recognize deferred tax assets.  Based on
management's assessment and the Company's history of profitability, management
believes it is more likely than not that the deferred tax asset will be realized
through future taxable earnings or alternative tax strategies.

                                         F-9
<PAGE>

                                 OVERLAND DATA, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Deferred income taxes at June 30, 1997 and 1996 comprised:    

                                                             JUNE 30,
                                                     ---------------------
                                                      1997           1996
                                                     ------         ------
                                                         (IN THOUSANDS)
Deferred tax assets:
  Inventory                                          $  805         $  570
  Allowance for doubtful accounts and returns           331            195
  Warranty reserves                                     202            141
  Vacation and deferred compensation                    193            170
  License fee accrual                                    69            101
  Intangible assets                                     139             97
  State income taxes                                    122             80
  Other                                                  21             71
                                                     ------         ------

    Gross deferred tax asset                          1,882          1,425
                                                     ------         ------

Deferred tax liabilities:
  Property and equipment depreciation                   (62)           (92)
                                                     ------         ------

    Gross deferred tax liability                        (62)           (92)
                                                     ------         ------

Valuation allowance                                     -             -   
                                                     ------         ------

Net deferred income taxes                            $1,820         $1,333
                                                     ------         ------
                                                     ------         ------


NOTE 6 - CONVERTIBLE REDEEMABLE PREFERRED STOCK

At June 30, 1996, the Company had outstanding three series of preferred stocks
which had no par value and were stated in the balance sheet at their original
issue price, which was equivalent to their redemption value.  Upon completion of
the Company's initial public offering on February 21, 1997, all outstanding
shares of the preferred stock converted into 2,092,764 shares of common stock on
a one-for-one basis.  Thereafter, no shares of preferred stock were authorized,
issued or outstanding.


NOTE 7 - STOCK-BASED COMPENSATION

STOCK OPTIONS

The Company has a number of stock option plans, administered by the Compensation
Committee of the Board of Directors, which provide for the issuance of options
to employees, officers and directors.  The exercise price of a stock option is
generally equal to the fair market value of the Company's common stock on the
date the option is granted.  Certain of the plans permit options granted to
qualify as "Incentive Stock Options" under the Internal Revenue Code while other
plans are specified as non-qualified.  Additionally, certain of the
non-qualified plans call for 100% vesting of outstanding options upon a change
of control of the Company.  Options generally vest at a rate of 25 percent per
year over a period of four years from the date of grant and expire after a
period not to exceed ten years, except in the event of termination, whereupon
vested shares must be exercised within 30 days, or upon death or disability,
where a six month exercise period is specified.

                                         F-10
<PAGE>

                                 OVERLAND DATA, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

 Option activity for the three years ended June 30, 1997 is summarized as
follows:

                                                    SHARES          SHARE PRICE
                                                   --------        ------------

Options outstanding at June 30, 1994                916,248        $ .12 -  .80

  Options granted                                   285,950          .80 -  .88
  Options exercised                                 (39,040)         .42 -  .80
  Options canceled                                 (124,799)         .12 -  .80
                                                  ---------        ------------

Options outstanding at June 30, 1995              1,038,359          .12 -  .88

  Options granted                                   184,810                2.00
  Options exercised                                (280,481)         .12 -  .80
  Options canceled                                  (94,092)         .80 - 2.00
                                                  ---------        ------------

Options outstanding at June 30, 1996                848,596          .12 - 2.00

  Options granted                                   100,000         3.00 - 6.19
  Options exercised                                (168,630)         .20 - 2.00
  Options canceled                                  (23,775)         .80 - 6.19
                                                  ---------        ------------

Options outstanding at June 30, 1997                756,191        $ .12 - 6.19
                                                  ---------        ------------
                                                  ---------        ------------

The following table summarizes all options outstanding and exercisable by price
range as of June 30, 1997:

<TABLE>
<CAPTION>

                                 OPTIONS OUTSTANDING                        OPTIONS EXERCISABLE
                -------------------------------------------------   ---------------------------------
                               WEIGHTED-AVERAGE
 RANGE OF           NUMBER        REMAINING      WEIGHTED-AVERAGE       NUMBER       WEIGHTED-AVERAGE
EXERCISABLE     OUTSTANDING AT   CONTRACTUAL         EXERCISE       EXERCISABLE AT       EXERCISE
  PRICES        JUNE 30, 1997       LIFE               PRICE        JUNE 30, 1997         PRICE
------------    -------------- ----------------  ----------------   --------------   ----------------

<S>             <C>            <C>               <C>                <C>              <C>
$ .12 -  .88       496,391        5.6 years            $ .60           398,305            $ .55
$2.00 - 3.00       246,800        8.6                   2.32            40,199             2.00
$4.50 - 6.19        13,000        9.5                   5.02             1,500             6.19
------------       -------                                             -------
$ .12 - 6.19       756,191                                             440,004
------------       -------                                             -------
------------       -------                                             -------
</TABLE>

Shares available for future grant were 446,457 and 566,382 at June 30, 1997 and
1996, respectively.

                                         F-11
<PAGE>

                             OVERLAND DATA, INC.

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

1996 EMPLOYEE STOCK PURCHASE PLAN

In February 1997, the Company adopted the 1996 Employee Stock Purchase Plan 
(the "ESPP") whereby 250,000 shares of common stock were reserved for 
issuance and purchase by employees of the Company to assist them in acquiring 
a stock ownership interest in the Company and to encourage them to remain 
employees of the Company.  The ESPP is intended to qualify under Section 423 
of the Internal Revenue Code and permits eligible employees to purchase 
common stock at a discount through payroll deductions during specified 
six-month offering periods.  No employee may purchase more than $25,000 worth 
of stock in any calendar year or 1,500 shares in any one offering period. The 
ESPP is administered by an Administrative Committee appointed by the Board of 
Directors and provides generally that the purchase price must not be less 
than 85% of the fair market value of the common stock on the first or last 
day of the offering period, whichever is lower.  As of June 30, 1997, no 
shares have been purchased under the ESPP because the first offering period 
had not yet concluded.

PRO FORMA INFORMATION

The Company accounts for stock-based compensation using the intrinsic value 
method.  No compensation expense has been recognized for purchase rights 
under the ESPP or for its stock option grants, which are fixed in nature and 
have been granted at fair market value at the date of grant.  Had 
compensation expense for the Company's stock-based compensation awards issued 
during 1997 and 1996 been determined based on the fair value at the grant 
dates of awards using the method prescribed by SFAS No. 123, the Company's 
net income and net income per share would have been reduced to the pro forma 
amounts indicated below:

                                                     YEAR ENDED JUNE 30,
                                                     -------------------
                                                        1997      1996
                                                     --------    -------
                                         (in thousands except per share amounts)
Net income:
    As reported                                     $ 3,100     $3,159
    Pro forma                                         3,022      3,154

Net income per share:
    As reported                                     $   .34     $  .40
    Pro forma                                           .33        .40

The fair value of each option grant is estimated on the date of grant using 
the Black-Scholes option pricing model.  The weighted average estimated fair 
value of employee stock options granted during 1997 and 1996 was $1.04 and 
$0.49 per share, respectively.  The weighted average assumptions used for 
grants during the years ended June 30, 1997 and 1996 were: no dividend yield 
for both years, risk-free interest rates of 6.6% and 5.7%, respectively, 
expected volatility of 33% post-IPO and no volatility pre-IPO, and expected 
lives of 5.0 years for both years.

The fair value of each share purchase right under the ESPP is estimated at 
the inception of each offering period also using the Black-Scholes option 
pricing model.  The weighted average estimated fair value of each share 
purchase right granted during 1997 was $2.49 per share.  The weighted average 
assumptions used were: no dividend yield, risk-free interest rate of 5.1%, 
expected volatility of 33%, and an expected life of 6 months.

NOTE 8 - 401(k) PLAN

In January 1994, the Company adopted an employee savings and retirement plan 
(the "401(k) Plan") covering all of the Company's employees.  The 401(k) Plan 
permits but does not require matching contributions by the Company on behalf 
of all participants.  No such contributions were made during fiscal 1997, 
1996 or 1995.

                                         F-12
<PAGE>

                                 OVERLAND DATA, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE 9 - COMMITMENTS AND CONTINGENCIES

COMMITMENTS

The Company leases its office, production and sales facilities under
non-cancelable operating leases which expire in various years through fiscal
2002.  The leases provide for annual rent escalations intended to approximate
increases in cost of living indices, and certain of the leases provide for rent
abatement.  At June 30, 1997, future minimum lease payments under these
arrangements are as follows:

                                                      MINIMUM
                   YEAR ENDING                         LEASE
                     JUNE 30,                         PAYMENTS  
                   -----------                        --------
                                                   (in thousands)

                        1998                          $  886
                        1999                             937
                        2000                             964
                        2001                           1,003
                        2002                           1,043
                        Thereafter                       160
                                                      ------
                                                      $4,993
                                                      ------
                                                      ------

Rental expense is recognized ratably over the respective lease terms and
aggregated $703,000, $554,000 and $562,000 for fiscal 1997, 1996 and 1995,
respectively. 


CONTINGENCIES

The Company, its directors and certain of its officers have been named as
defendants in two putative class action lawsuits filed on April 21, 1997 and May
2, 1997 in the U.S. District Court for the Southern District of California.  In
both cases, the plaintiffs purport to represent a class of all persons who
purchased the Company's common stock between February 21, 1997 and March 14,
1997.  The complaints allege that the defendants violated various federal
securities laws through material misrepresentation and omissions in connection
with the Company's initial public offering and its registration statement on
Form S-1 filed with the Securities and Exchange Commission on February 21, 1997.
The suits seek rescission of their share purchases or rescissory damages if
their shares have been sold, as well as attorney's fees and other costs and
expenses.

The outcome of the lawsuits cannot be determined.  However, management believes
that it has meritorious defenses and intends to defend against the suits
vigorously.  The Company maintains directors' and officers' liability insurance
to provide coverage against suits of this nature.  Other than legal fees
incurred to date, no amounts have been recorded in the financial statements for
any losses which may result from these lawsuits.

                                         F-13
<PAGE>

                                 OVERLAND DATA, INC.

                          REPORT OF INDEPENDENT ACCOUNTANTS



August 4, 1997


To the Board of Directors and
   Shareholders of Overland Data, Inc.

In our opinion, the consolidated financial statements listed in the index 
appearing under Item 14(a)(1) and (2) of this Form 10-K present fairly, in 
all material respects, the financial position of Overland Data, Inc. and its 
subsidiaries at June 30, 1997 and 1996, and the results of their operations 
and their cash flows for each of the three years in the period ended June 30, 
1997, in conformity with generally accepted accounting principles.  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 of these statements in accordance 
with generally accepted auditing standards which 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, assessing the accounting principles used and 
significant estimates made by management, and evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for the opinion expressed above.

Price Waterhouse LLP
San Diego, California

                                         F-14









<PAGE>

              SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
 
              FISCAL YEARS ENDED JUNE 30, 1997, 1996 AND 1995



                BALANCE AT          ADDITIONS
                 BEGINNING         CHARGED TO                      BALANCE AT
                  OF YEAR            INCOME        DEDUCTIONS*    END OF YEAR
                ----------         ----------      -----------    ------------

ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE:
-------------------------------------------
1997               $  624            $  280            $130            $  774
1996                  446               333             155               624
1995                  297               211              62               446

ALLOWANCE FOR INVENTORY OBSOLESCENCE:
-------------------------------------
1997               $1,318            $  968            $407            $1,879
1996                  505             1,050             237             1,318
1995                  242               933             670               505

----------------
* Deductions represent amounts written off against the allowance, net of
  recoveries.


<PAGE>

                                EXHIBIT INDEX


 3.1  Registrant's Amended and Restated Articles of Incorporation.*
 3.2  By-Laws.*
 4.1  Specimen stock certificate.*
 4.2  Investors' Rights Agreement, dated May 21, 1993, between the Registrant 
        and the parties named therein.*
10.1  Basic Order Agreement #16529, dated July 1, 1993 and as amended through
      November 10, 1995, between the Registrant and Digital Equipment
      Corporation.*
10.2  Production Procurement Agreement #RMSS-ODI-96-01-0, dated October 25, 
      1996, between the Registrant and International Business Machines 
      Corporation.*
10.3  Credit Agreement effective as of June 27, 1997 between the Registrant and
        Imperial Bank.
10.4  Standard Industrial Lease--Multi-Tenant, dated May 26, 1993, between the
      Registrant and Mitsui/SBD America Fund 87-1.*
10.5  First Amendment to the 1995 Stock Option Plan dated January 21, 1997. *
10.6  1996 Employee Stock Purchase Plan adopted December 12, 1996.*
11.1  Statement Re: Computation of Earnings Per Share.
21.1  Subsidiaries of the Registrant.
23.1  Consent of Price Waterhouse LLP, Independent Accountants.
24.1  Power of Attorney (included on Signature Page).
27.1  Financial Data Schedule (for EDGAR use only).
---------------------
*  Incorporated by reference to the Company's Registration Statement 
   No. 333-18583 dated February 21, 1997.