<PAGE>  1


                               UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C.  20549

                                FORM 10-Q


[X]         	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
              OF THE SECURITIES EXCHANGE ACT OF 1934
                For the Quarterly period ended March 31, 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 0-27280


                            META Group, Inc.
            (Exact name of registrant as specified in its charter)

                 Delaware                           06-0971675
         ---------------------            ------------------------
        (State or other jurisdiction of   (IRS Employer Identification No.)
         incorporation or organization)


              208 Harbor Drive, Stamford, Connecticut  06912-0061
              ---------------------------------------------------
        (Address of principal executive offices, including Zip Code)


                              (203) 973-6700
                              --------------
          (Registrant's telephone number, including area code)

                    --------------------------------

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 the number of shares outstanding of each of the issuer's classes 
of common stock, as of the latest practicable date: The number of shares 
of the issuer's Common Stock, $.01 par value per share, outstanding as of
April 30, 1997 was 7,307,312.

                       Total Number of Pages:   14
                      Exhibit Index is on Page  13

___________________________________________________________________________
<PAGE>   2
                          META Group, Inc.


                              INDEX


                                                                   Page
                                                                   ____

Part  I         FINANCIAL INFORMATION

      Item 1.   Financial Statements


                Balance Sheets:
                  March 31, 1997 (unaudited) and December 31, 1996    3


                Statements of Income (unaudited):
                  Three months ended March 31, 1997 and 1996          4
 

                Statements of Cash Flows (unaudited):
                  Three months ended March 31, 1997 and 1996          5
 

                Notes to Financial Statements                         6



      Item 2.   Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                 7


Part II         OTHER INFORMATION


      Item 1.  	Legal Proceedings                                     11
                                                                        

      Item 6.   Exhibits and Reports on Form 8-K                      11


Signature                                                             12



<PAGE> 3


PART  I - FINANCIAL INFORMATION

      Item 1.  Financial Statements


                              META Group, Inc.


                               BALANCE SHEETS

                               (in thousands)

<TABLE>
<CAPTION>
                                                March 31,       December 31,
                                                  1997             1996
                                                _________       ___________
<S>                                           <C>               <C>
Assets
Current assets:                               (unaudited)
  Cash and cash equivalents                      $18,813            $19,335
  Marketable securities                           15,899             15,684
  Accounts receivable, net                        14,169             18,136
  Deferred commissions                             1,690              1,475
  Deferred tax asset                               1,175              1,175
  Other current assets                               775                481
                                                 -------            -------
     Total current assets                         52,521             56,286

Furniture and equipment, net                       2,486              2,330

Deferred tax asset                                10,308              5,532

Other assets                                       6,644              6,023
                                                 -------             ------
     Total assets                                $71,959            $70,171
                                                 =======            =======

Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable                               $   304            $   837
  Accrued compensation and other expenses            895              3,721
  Deferred revenues                               21,184             22,885
                                                 -------            -------
     Total current liabilities                    22,383             27,443

Stockholders' equity:
  Preferred stock
  Common stock                                        78                 68
  Additional paid-in capital                      48,819             43,088
  Retained earnings (accumulated deficit)            999               (108)
  Treasury stock, at cost                           (320)              (320)
                                                  ------             ------
     Total stockholders' equity                   49,576             42,728
                                                 -------            -------
     Total liabilities and stockholders' equity  $71,959            $70,171
                                                 =======            =======



                     See notes to financial statements.
</TABLE>


<PAGE>   4

                          META Group, Inc.
                       STATEMENTS OF INCOME
               (in thousands, except per share data)
                           (unaudited)

<TABLE>
<CAPTION>
                                               For the three months ended
                                                       March 31,
_____________________________________________________________________________
                                                   1997              1996
                                               ----------         ----------
<S>                                            <C>                <C>
Revenues:
  Continuous services                           $ 9,172            $6,707
  Other, principally consulting and conferences   1,639             1,431
                                                 ------            ------
     Total revenues                              10,811             8,138


Operating expenses:
  Cost of services and fulfillment                5,532             4,541
  Selling and marketing                           2,341             1,792
  General and administrative                      1,158               802
  Depreciation and amortization                     333               225
                                                -------            ------

     Total operating expenses                     9,364             7,360
                                                -------            ------

Operating income                                  1,447               778

Interest income                                     465               464
                                                -------            ------
Income before provision for income taxes          1,912             1,242

Provision for income taxes                          805               523
                                                -------            ------

Net income                                      $ 1,107            $  719
                                                =======            ======

Net income per common and common 
  equivalent share                              $   .14            $  .09
                                                =======            ======

Weighted average common and common equivalent
  shares outstanding                              7,964             7,978
                                                =======            ======

</TABLE>


                      See notes to financial statements.


<PAGE>   5

                             META Group, Inc.

                         STATEMENTS OF CASH FLOWS
                             (in thousands)
                               (unaudited)

<TABLE>
<CAPTION>
                                                 For the three months ended
                                                           March 31,
____________________________________________________________________________
                                                       1997          1996
                                                  ----------       ----------
<S>                                               <C>            <C>
Operating activities: 
Net income                                           $1,107        $   719
  Adjustments to reconcile net income to net 
    cash provided by (used in) operating activities:
  Depreciation and amortization                         333            225
  Deferred income taxes                                 805            464
  Changes in assets and liabilities:
    Accounts receivable                               3,967          1,338
    Deferred commissions                               (215)          (332)
    Other current assets                               (294)           (37)
    Other assets                                       (115)           (32)
    Accounts payable                                   (533)          (676)
    Accrued compensation and other expenses          (2,893)        (2,277)
    Deferred revenues                                (1,701)           438
                                                    -------         ------
Net cash provided by (used in) operating activities     461           (170)
                                                    -------         ------

Investing activities:
  Capital expenditures                                 (489)          (301)
  Investments in marketable securities                 (215)
  Investments and advances                             (506)
                                                    -------         ------

Net cash used in investing activities                (1,210)          (301)


Financing activities:
  Proceeds from exercise of stock options               227            118
  Costs related to Initial Public Offering                             (33)
                                                    -------         ------
Net cash provided by financing activities               227             85
                                                    -------         ------
Net decrease in cash and cash equivalents              (522)          (386)

Cash and cash equivalents, beginning of period       19,335         35,525
                                                    -------        -------

Cash and cash equivalents, end of period            $18,813        $35,139
                                                    =======        =======

</TABLE>


                   See notes to financial statements.


<PAGE>   6

                            META Group, Inc.

                    NOTES TO FINANCIAL STATEMENTS




Note  1 - Interim Financial Statements
______________________________________


    The accompanying unaudited interim financial statements have been 
prepared in accordance with generally accepted accounting principles for 
interim financial information and pursuant to the rules and regulations of 
the Securities and Exchange Commission for reporting on Form 10-Q.  Accord-
ingly, certain information and footnote disclosures required for complete 
financial statements are not included herein. It is recommended that these 
financial statements be read in conjunction with the financial statements 
and related notes of META Group, Inc. (the "Company") as reported on the 
Company's Annual Report on Form 10-K for the year ended December 31, 1996.
In the opinion of management, all adjustments (consisting of normal 
recurring adjustments) considered necessary for a fair presentation of 
financial position, results of operations and cash flows at the dates and 
for the periods presented have been included.


Note  2 - Income Taxes
______________________

    The Company recorded a tax provision of $805,000 and $523,000 during 
the quarter ended March 31, 1997 and 1996, respectively, reflecting an 
effective tax rate of 42%. The Company was not required to pay federal 
income tax in either quarter due to the utilization of net operating loss 
carryforwards. Total deferred tax asset, including the current portion, 
increased to $11.5 million at March 31, 1997 from $6.7 million at 
December 31, 1996 as a result of recognition of compensation to employees 
for tax purposes from the exercise of non-qualified stock options.


Note  3 - Reclassification
__________________________

    Under the terms of the Company's international sales representative 
agreements, the Company realizes revenues from the international sales 
representative organizations at rates of 40% to 60% of amounts billed to 
those clients. Revenues and expenses for the quarter ended March 31, 1996
have been reclassified to conform to the current year presentation of 
revenues and expenses attributable to international operations.


<PAGE>   7


Item  2   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

The discussion and analysis below contains trend analysis and other 
forward-looking statements. Actual results could differ materially from 
those projected in the forward-looking statements as a result of the risk 
factors set forth below under "Certain Factors That May Affect Future 
Results" and in the Company's other filings with the Securities and
Exchange Commission.

Overview

    META Group is an independent market assessment company providing 
research and analysis of developments, trends and organizational issues 
relating to the computer hardware, software, communications and related 
information technology industries to users and vendors of information 
technology ("IT"). IT user organizations utilize META Group's research, 
analysis and recommendations to develop and employ cost-effective strategies
for selecting and implementing timely IT solutions and for aligning these 
solutions with business priorities. IT vendors use META Group's services 
for help in product positioning, marketing and market planning, as well as 
for internal IT decision making. 

    Continuous Services subscriptions, which are annually renewable 
contracts and generally payable by clients in advance, comprised 
approximately 85% and 82% of the Company's total revenues for the quarters
ended March 31, 1997 and 1996, respectively. Billings attributable to the 
Company's Continuous Services are initially recorded as deferred revenues 
and then recognized pro rata over the contract term. The Company's other 
revenues are derived from project consulting, benchmarking, conferences, 
speaker engagement fees and publications. The Company's consulting clients 
typically consist of Continuous Services clients seeking additional advice 
tailored to their individual IT requirements.

    One measure of the volume of the Company's business is its annualized 
"Contract Value", which the Company calculates as the aggregate annualized 
subscription revenue recognized from all Continuous Services contracts in 
effect at a given point in time, without regard to the remaining duration 
of such contracts. While Contract Value is not necessarily indicative of 
future revenues, Contract Value has grown every quarter since the Company's
inception and increased 37% to $36.7 million at March 31, 1997 from $26.8
million at March 31, 1996. At March 31, 1997, the Company had over 2,820 
Continuous Services subscribers in approximately 1,200 client organizations 
worldwide.

    Continuous Services revenues attributable to international clients are 
billed and collected by the Company's international sales representative 
organizations. The Company realizes revenues from the international sales 
representative organizations at rates of 40% to 60% of amounts billed to 
those clients.

    The Company's operating expenses consist of cost of services and 
fulfillment, selling and marketing expenses, general and administrative 
expenses and depreciation and amortization expense. Cost of services and
fulfillment represents the costs associated with production and delivery of 
the Company's products and services and includes the costs of research, 
development and preparation of periodic reports, analyst telephone 
consultations, executive briefings and conferences, publications, 
consulting services, new product development and all associated editorial 
and support services. Selling and marketing expenses include the costs of 
salaries, commissions and related benefits for such personnel, travel and 
promotion. General and administrative expenses include the costs of the 
finance and accounting departments, legal, human resources, corporate IT 
and other administrative functions of the Company.


THREE MONTHS ENDED MARCH 31, 1997 AND 1996

TOTAL REVENUES  Total revenues increased 33% to $10.8 million in the quarter
ended March 31, 1997 from $8.1 million in the quarter ended March 31, 1996.
Revenues from Continuous Services increased 37% to $9.2 million in the 
quarter ended March 31, 1997 from $6.7 million in the quarter ended 
March 31, 1996. The increases in total revenues and revenues from 
Continuous Services were primarily due to continued expansion of

<PAGE>   8

the Company's domestic sales force, increases in average selling prices, 
and growing worldwide market acceptance of the Company's products. The 
Company increased Contract Value 37% to $36.7 million at March 31, 1997 
from $26.8 million at March 31, 1996. The Company grew its subscriber 
client base 25% to 2,820 Continuous Service clients at March 31, 1997 
from 2,250 clients at March 31, 1996.

    Other revenues, consisting principally of revenues from consulting,
conferences and publications, increased 15% to $1.6 million in the quarter 
ended March 31, 1997 from $1.4 million in the quarter ended March 31, 1996, 
and decreased as a percentage of total revenues to 15% from 18%. The 
increase in other revenues was primarily attributable to the expansion of 
the META Group Consulting practice and the increase in paid attendance at 
the Company's major conferences. 

    Revenues attributable to international clients increased 129% to 
$1.1 million in the quarter ended March 31, 1997 from $545,000 in the 
quarter ended March 31, 1996, and increased as a percentage of total 
Continuous Services revenues to 12% from 8%. The increase was primarily 
due to the growth of the Company's products in existing international 
markets and, to a lesser extent, the expansion in the total number of 
international sales representative organizations. The Company expects that 
international revenues will continue to account for a significant portion 
of its total revenues.

COST OF SERVICES AND FULFILLMENT  Cost of services and fulfillment 
increased 22% to $5.5 million in the quarter ended March 31, 1997 from 
$4.5 million in the quarter ended March 31, 1996 principally due to
increased analyst staffing and related compensation expense. During the 
quarter ended March 31, 1997, the Company launched three new Continuous 
Services, while it had no development costs associated with new services 
in the quarter ended March 31, 1996. Cost of services and fulfillment 
decreased as a percentage of total revenues to 51% from 56%. This decrease 
primarily reflects the growth in the Company's increased average selling
prices to $16,000 per Continuous Service subscription in the quarter
ended March 31, 1997 versus $14,400 during the quarter ended March 31, 1996.
Within the seven core Continuous Services, the average client/analyst ratio 
decreased to 44-to-1 during the quarter ended March 31, 1997 as compared 
to a ratio of 46-to-1 during the quarter ended March 31, 1996, which
increased cost of services as a percent to sales.

SELLING AND MARKETING EXPENSES  Selling and marketing expenses increased 
31% to $2.3 million in the quarter ended March 31, 1997 from $1.8 million 
in the quarter ended March 31, 1996 and remained constant as a percentage 
of total revenues at 22%. The increase in expenses was principally due to 
increased sales-related compensation expense associated with increased 
revenues, as well as higher marketing and promotional expenditures related 
to the launch of new services. While the Company anticipates continuing 
increases in the amount of selling and marketing expenses, it expects that 
such expenses as a percentage of total revenues will increase only slightly.

GENERAL AND ADMINISTRATIVE EXPENSES  General and administrative expenses 
increased 44% to $1.2 million in the quarter ended March 31, 1997 from 
$802,000 in the quarter ended March 31, 1996 and increased as a percentage 
of total revenues to 11% from 10%. The increase in expenses was principally
due to increased finance, accounting and corporate IT staffing and expenses 
required to support the Company's continued growth. The Company anticipates
continuing increases over the prior year in the amount of general and 
administrative expenses and expects such expenses to decrease slightly as 
a percentage of total revenues.

DEPRECIATION AND AMORTIZATION  Depreciation and amortization expense 
increased 48% to $333,000 in the quarter ended March 31, 1997 from $225,000 
in the quarter ended March 31, 1996. The increase in depreciation and 
amortization expense was principally due to purchases of computer equipment 
and office furniture required to support business growth, and the completion
of leasehold improvements associated with the relocation of the Company's 
Reston, Virginia and Waltham, Massachusetts offices during late 1996.

INTEREST INCOME  Interest income was $465,000 in the quarter ended 
March 31, 1997, compared to $464,000 in the quarter ended March 31, 1996.
Cash balances remained relatively stable from twelve months ago, due to a
positive cash flow from operations during the year ended December 31, 1996,
offset by investments made in several companies during 1996.

PROVISION FOR INCOME TAXES  Provision for income taxes of $805,000 was 
recorded for the quarter ended March 31, 1997, as compared to a provision 
of $523,000 recorded for the quarter ended March 31, 1996, reflecting an
effective tax rate of 42% for both quarters. The Company was not required 
to pay federal income tax in either quarter due to the utilization of net 
operating loss carryforwards. Total deferred tax asset, including the 
current portion, increased to $11.5 million at March 31, 1997 from $6.7 
million at December 31, 1996, as a result of the recognition of 
non-qualified stock option exercises as compensation to employees for 
tax purposes.

<PAGE>   9

EARNINGS PER SHARE  EPS increased to $.14 per common share for the first 
quarter of 1997 as compared to $.09 for the first quarter of 1996 as a 
result of increased net income. The Company's weighted average shares
outstanding remained constant at 7,964,000 versus 7,978,000 shares in the 
first quarter of 1996.

LIQUIDITY AND CAPITAL RESOURCES

    The Company generated $461,000 of cash from operations during the 
quarter ended March 31, 1997 compared with $170,000 of cash used in 
operations in the quarter ended March 31, 1996. The increase in cash
generated from operations in 1997 is primarily due to the collection of 
accounts receivable as of December 31, 1996, partially offset by payment 
of 1996 bonuses in the first quarter of 1997.

    The Company used $489,000 of cash in the quarter ended March 31, 1997 
and $301,000 in the quarter ended March 31, 1996 for the purchase of 
furniture, equipment, computers and related software for use by the 
Company's employees. The Company expects that additional purchases of 
equipment will be made as the Company's employee base continues to grow. 
As of March 31, 1997, the Company had no material commitments for capital 
expenditures.

    The Company regularly invests excess funds in high quality short-term 
investments, such as repurchase agreements, short-term commercial paper and 
money market funds. As these investments generally have terms of less than 
three months, they are included under the caption "Cash and cash equivalents"
in the balance sheet.

    In addition, the Company invests in other short-term (less than one 
year maturity), high quality investment grade marketable debt securities. 
Generally, these securities are purchased in denominations of $5 million 
and held to maturity. No losses have been experienced on such investments.

    As of March 31, 1997, the Company had cash and cash equivalents of 
$18.8 million, marketable securities of $15.9 million and working capital 
of $30.1 million. The Company currently has an unused $1.0 million bank 
line of credit. The Company believes that existing cash balances and 
anticipated cash flows from operations will be sufficient to meet its 
working capital and capital expenditure requirements at least through the 
following twelve months.


CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

    The Company does not provide forecasts of the future financial 
performance of the Company. However, from time to time, information provided
by the Company or statements made by its employees may contain "forward-
looking" information that involve risks and uncertainties. In particular, 
statements contained in this Form 10-Q that are not historical facts 
(including, but not limited to, statements concerning international 
revenues, anticipated operation expense levels and such expense levels 
relative to the Company's total revenues) constitute forward-looking 
statements and are made under the safe harbor provisions of the Private 
Securities Litigation Reform Act of 1995. The Company's actual results of 
operations and financial condition have varied and may in the future vary 
significantly from those stated in any forward-looking statements. Factors 
that may cause such differences include, without limitation, the risks, 
uncertainties and other information discussed below, as well as the 
accuracy of the Company's internal estimates of revenue and operation 
expense levels. Each of these factors, and others, are discussed from 
time to time in the filings made by the Company with the Securities and 
Exchange Commission.

    The Company's future operating results are subject to substantial risks 
and uncertainties. The Company currently derives most of its revenues from 
subscriptions to its Continuous Services. As a result, any decline in the
Company's ability to secure subscription renewals may have a material 
adverse effect on the Company's results of operations. The Company's 
ability to secure subscription renewals, at favorable average selling 
prices, as well as to successfully market and sell its consulting services,
is dependent upon the Company's ability to deliver consistent, high-quality 
and timely analysis and advice with respect to issues, developments and 
trends that clients view as important. The Company's successful delivery of 
such analysis and advice is, in turn, dependent upon many factors, 
including, among other things: its ability to recruit and retain highly 
talented professionals in a competitive job market, to understand and 
anticipate rapidly changing technologies and market trends so as to keep 
its analysis focused on the changing needs of its clients, and to deliver 

<PAGE>  10

products and services of sufficiently high quality and timeliness to 
withstand competition from competitors which may have greater financial, 
information gathering and marketing resources than the Company. The 
Company's ability to market and sell its products and services could also 
be adversely affected by the emergence of new competitors into one or more
of the market segments addressed by the Company's products and services, 
which could cause pricing pressure and loss of market share. In addition, 
a significant portion of the Company's revenues are attributable to 
international clients, which may be adversely affected by factors including 
difficulties in developing and managing relationships with international 
sales representative organizations, reliance on sales entities which the 
Company does not control, greater difficulty in maintaining direct client 
contact, fluctuations in exchange rates, adverse political and economic 
conditions, tariffs and other trade barriers, longer accounts receivable 
collection cycles and adverse tax consequences. The Company's future 
financial results also depend in part on the development or acquisition of 
new products and services, which may not successfully be achieved due to 
the inherent costs and risks associated with development, assimilation and 
marketing of a new product or service, as well as the Company's limited 
experience in introducing new products and services.

    Furthermore, the Company's quarterly operating results may fluctuate 
significantly due to various factors. Since a disproportionately large 
portion of the Company's Continuous Services contracts expire in the fourth
quarter of each year, the Company incurs operating expenses in the fourth 
quarter at a higher level than would otherwise be required by its 
sequential growth, and such increased expenses are not normally offset 
immediately by higher revenues. In addition, the Company's operating 
results may fluctuate as a result of a variety of other factors, including 
the level and timing of renewals of subscriptions to Continuous Services, 
the timing and amount of business generated by the Company, the mix of 
domestic versus international business, the timing of the development, 
introduction and marketing of new products and services, the timing of the 
hiring of research analysts, changes in the spending patterns of the 
Company's target clients, the Company's accounts receivable collection 
experience, changes in market demand for IT research and analysis and 
competitive conditions in the industry. Due to these factors, the Company 
believes period-to-period comparisons of results of operations are not 
necessarily meaningful and should not be relied upon as an indication of 
future results of operations. The potential fluctuations in the Company's
operating results make it likely that, in some future quarter, the Company's
operating results will be below the expectations of securities analysts and
investors, which would have a material adverse effect on the price of the 
Company's Common Stock.

<PAGE>  11


PART II - OTHER INFORMATION


Item 1.   Legal Proceedings.
          _________________

      As disclosed in the Company's Annual Report on Form 10-K for the 
year ended December 31, 1996, in November, 1995, a complaint was filed in 
the Bridgeport Judicial District of the Superior Court of Connecticut by
a former consultant to the Company naming the Company and its Chief 
Executive Officer as defendants. There have been no material developments 
in this matter during the quarter ended March 31, 1997.

      The Company is a party to certain other legal proceedings. However, 
the Company believes that none of these proceedings is likely to have a 
material adverse effect on the Company's business, results of operations 
or financial condition.


Item 6.  Exhibits and Reports on Form 8-K.
         _________________________________

          (a) 	Exhibits.
               _________


         Exhibit
         Number            Description
         _______           ____________

          11.1             Statement re computation of per-share earnings


          (b)  Reports on Form 8-K.
               ____________________


          There were no reports on Form 8-K filed by the Company for
          the quarter ending March 31, 1997.




<PAGE>  12


                                   SIGNATURE


Pursuant to the requirements 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.



                                  META Group, Inc.




Date: May 14, 1997             By:/s/ Bernard F. Denoyer
                                  _________________________________________
                                  Bernard F. Denoyer
                                  Vice President, Finance, Chief Financial
                                  Officer, Treasurer and Secretary
                                  (Principal Financial and Accounting Officer)




<PAGE>  13


                                 EXHIBIT INDEX



Exhibit
Number                            Description
_______      _________________________________________________________

11.1             Statement re computation of per-share earnings

27.1             Financial Data Schedule

___________

<PAGE>  14

EXHIBIT 11.1

                               META Group, Inc.
    
                    EXHIBIT TO ANNUAL REPORT ON FORM 10-Q

                   Computation of Net Income Per Common Share

<TABLE>
<CAPTION>
                                     Three Months Ended   Three Months Ended
                                        March 31, 1997       March 31, 1996
                                      __________________   __________________
<S>                                      <C>                 <C>
Net income                                $1,107,000              $719,000

Weighted average number of common and
  common equivalent shares outstanding:

    Average number of common shares
      outstanding during the period        6,796,922             5,553,282

    Add common share equivalents - 
      options to purchase common shares    1,167,248             2,425,140
                                          ----------            ----------
                                           7,964,170             7,978,422
                                          ----------            ----------

Net income per common share                  $.14                   $.09
                                          ----------           -----------
</TABLE>