SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C. 20549
                               FORM 10-KSB

(Mark One)

X Annual Report Pursuant to Section 13 or 15(d) of the 
Securities Exchange Act of 1934

For the Fiscal Year Ended March 31, 1997

_ Transition report under Section 13 or 15(d) of the 
Securities Exchange Act of 1934

For the transition period from ____________ to ____________

Commission File Number __0-26336_________________________________________

                      New Paradigm Software Corp.
            (Name of Small Business Issuer in Its Charter)


            NEW YORK                             13-3725764
         (State or Other Jurisdiction of     (I.R.S. Employer
         Incorporation or Organization)      Identification No.)

733 Third Avenue, New York, NY                    10017
(Address of Principal Executive Offices)        (zip code)

                             (212) 557-0933
          (Registrant's telephone number, including area code)

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


     Securities Registered under Section 12(g) of the Exchange Act:

                 Common Stock, par value $.01 per share
                              (Title of Class)

                            Redeemable Warrants
                              (Title of Class)
                            
Check whether the issuer (1) has filed all reports required 
to be filed by Section 13 or 15(d) of the Exchange Act 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 requirement for the past 90 days.

Yes  ___X___ No  ______

Check if disclosure of delinquent filers in response to Item 
405 of Regulation S-B is not contained within this form, and 
no disclosure will 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-KSB or 
any amendment to this form 10-KSB  _

State the issuer's revenues for its most recent fiscal year. $69,976

The aggregate market value of Common Stock held by non-
affiliates of the Registrant based on the closing sale price 
on the Nasdaq Bulletin Board on June 27, 1997 was $390,000

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY 
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the Registrant has filed all 
documents and reports required to be filed by Section 12, 13, 
or 15(d) of the Securities Exchange Act of 1934 subsequent to 
the distribution of securities under a plan confirmed by a 
Court. 

Yes___________No____X______Not Applicable

APPLICABLE ONLY TO CORPORATE REGISTRANTS
At June 28, 1997 there were an aggregate of 2,451,729 shares 
of Common Stock of the Registrant outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None

Transitional Small Business Disclosure Format (check one)

Yes _______     No ___X___


TABLE OF CONTENTS

PART I
     ITEM                                          PAGE
       1.  Description of Business                   4
       2.  Description of Property                   15
       3.  Legal Proceedings                         15
       4.  Submission of Matters to a Vote of        15
           Security Holders

PART II
       5.  Market for Registrant's Common            16
           Equity and Related Stockholder 
           Matters
       6.  Management's Discussion and               16
           Analysis of Financial Condition and 
           Results of Operations
       7.  Financial Statements                      22
       8.  Changes in and Disagreements with         22
           Accountants On Accounting and 
           Financial Disclosure

PART III
       9. Directors, Executive Officers,             23
          Promoters and Control Persons; 
          Compliance with Section 16(a) of           
          the Exchange Act
       10.Executive Compensation                     24
       11.Security Ownership of Certain              28
          Beneficial Owners and Management
       12.Certain Relationships and Related          31
          Transactions

PART IV
       13.Exhibits and Reports on Form 8-K           34
       


PART I

Item 1.  Description of Business

General

New Paradigm intends to devote its efforts in future to the 
development of its Internet business (see "Description of 
Business - Internet").  However throughout the period which 
is covered by this report, the Company was primarily focused 
on its COPERNICUS(R) business which it has agreed to sell, 
subject to shareholder approval, and its EDI business, which 
has already been sold. (See "Description of Business - 
General - COPERNICUS" and "Description of Business - General 
- EDI").

General - Sale of COPERNICUS - Circumstances and 
Background

The intended sale of Copernicus and the New Paradigm 
Architecture is the most significant recent development for 
the Company.  The Company's management and Board of Directors 
have actively explored options for preserving shareholder 
value while overcoming the liquidity problems which the 
Company has experienced.  Many potential transactions were 
pursued and examined.  In addition, the Company approached 
many prospective investors in, and potential acquirers of, 
the COPERNICUS asset. These included many investor groups and 
large software companies both in the U.S. and overseas. 
Summarized below are the steps taken by the Company in 
arriving at the decision to seek to sell COPERNICUS.

September 1996
By September 1996 it was obvious to management that the 
Company would need to raise significant additional funds in 
order to proceed with its business plan.  The direct sales 
which had been expected had not materialized and revenues 
were therefore below the Company's expectations.  The Company 
decided to reduce costs by eliminating its direct sales 
force, all of whom were released at that time.  The Company 
was at the time negotiating with several parties with a view 
to establishing U.S. and international distribution via third 
party channels. Management decided to focus the Company's 
activities on promoting and supporting these third party 
distributors. In September 1996, the Company reached a verbal 
agreement with International Business Machines Corporation 
("IBM") to sign a distribution agreement (the "IBM 
Agreement") whereby IBM would distribute the Company's 
COPERNICUS product with IBM's MQ Series message-passing 
middleware.  

October 1996
In light of the verbal agreement with IBM, the Company 
attempted to arrange a best efforts private placement with 
its investment bankers, Josephthal, Lyon and Ross 
Incorporated.  At this time the Company's Common stock was 
trading at a daily high of $2.00 or above, reaching a high of 
$3 1/8 on October 18, 1996.  The private placement was 
intended to raise approximately $3 million and was 
conditional upon the actual signing of the IBM Agreement.  
The financing was documented and meetings with various other 
investment banks who were interested in participating in the 
private placement were held.  Although the principal business 
points of the IBM Agreement had been agreed, it took 
considerably longer than either the Company or IBM expected 
to complete the legal formalities and the agreement was not 
finally signed until December 18, 1996.  

September - December 1996
During this time, the Company's management pursued a number 
of other alternatives to raising the funding necessary to 
sustain the Company until the sales expected through IBM and 
the other distributors materialized.  It was considered 
highly unlikely that significant revenues would arise from 
these sources before the second half of 1997 at the earliest.  
Discussions were held with a number of companies who 
expressed an interest in merging with the Company. However, 
none of the proposals which management was able to solicit 
proved satisfactory (e.g., no immediate injection of funds, 
extreme dilution to existing shareholders, minimal revenue 
contribution by the other party).  Discussions also took 
place over a period of several months with a major vendor of 
middleware about a possible acquisition of the Company or the 
COPERNICUS product, but these were preempted when that vendor 
acquired another company with a product which was perceived 
by them to be competitive with COPERNICUS.  During this 
period the Company's total assets fell below $2 million, 
raising concerns about the possible delisting of the 
Company's Stock form the Nasdaq SmallCap market.

December 1996
The Company also investigated the possibility of a placement 
to European investors under Regulation S of the Securities 
Act.  A presentation to relevant investors by a 
representative of the Company's management took place in the 
first week of December 1996, and appeared to generate 
considerable interest.  Nevertheless, during December the 
Company's Common Stock price fell from a high of $2.00 on 
December 5, 1996 to a low of $1.00 on December 31, 1996.  
Management believes that a significant factor in the decline 
of the price of the Company's Common Stock was investor 
concern about the Company's liquidity problems and the 
likelihood of a delisting from the Nasdaq SmallCap market.  
Under these circumstances, the interest of overseas investors 
disappeared and the Company's investment bankers advised that 
a private placement with U.S. investors was now impossible. 
Due to the Company's liquidity crisis, all employees not 
absolutely essential to the maintenance of current business 
and the relationship with IBM were terminated as of December 
31, 1996.

January 1997
In January and February 1997, the Company engaged in lengthy 
discussions with a high-net worth individual with 
considerable experience in the enterprise software market.  
The investor carried out certain due diligence on COPERNICUS 
and an investment of $2 million in exchange for a 51% 
interest in the Company was discussed.  As the two parties 
moved toward documenting the proposed transaction, the 
investor withdrew, based on the investor's unwillingness to 
invest in a small and troubled public company.

Loan from Mr. Robert Trump
In order to continue operating, the Company solicited a 
$150,000 loan from Mr. Robert Trump which was received on 
January 16, 1997.  Mr. Trump is an investor, who together 
with Midland Associates with whom he is affiliated, is the 
Company's largest shareholder. Mr. Trump was approached by 
management and requested to make the loan on the basis that 
the negotiations and discussions in progress were likely to 
lead to a significant investment in the Company in the near 
future.  The principal terms of this loan were as follows:

o Advance:              $150,000.
o Term:         6 months (to expire July 14th, 1997).
o Interest Rate:        To be paid in warrants, see below.
o Warrants:             150,000 three-year warrants with an 
exercise price of $2.00 per share, in lieu of interest.
		Other terms:	The 180,000 Midland Warrants, held 
by Midland Associates, an affiliate of Mr. Trump, were 
amended as follows:  The expiration date was changed from 
August 11, 1998 to January 16, 2002 and the exercise price 
reduced from $3.75 to $2.00 per share. See "Certain 
Transactions".

The Loan was used to pay certain pressing payables, including 
arrears of salary to all employees.

February 1997
During late January and early February 1997 the Company 
reached an advanced stage of negotiating a transaction with 
another public company whereby the other company would sell 
to the Company a subsidiary with assets in excess of $1.5 
million and inject $1 million cash into the Company in 
exchange for 10 million shares of the common stock of the 
Company.  The effect of this transaction would have been to 
increase the Company's assets to the point where the Company 
would have fulfilled the requirements for continued listing 
on the Nasdaq SmallCap market.  However, during the due 
diligence process, it was discovered that the resulting 
combination would have had a significantly greater negative 
cash flow than had originally been foreseen.  There were also 
some unresolved valuation questions relating to the 
subsidiary which it was proposed the Company would acquire.  
The parties therefore decided not to proceed with the 
transaction.

The VIE transaction - preliminary negotiations
In mid-February of 1997, the Company began discussion with 
representatives of the group of investors who eventually 
formed VIE Systems, Inc. in order to offer to acquire 
COPERNICUS.  The group of investors included the high net 
worth individual with whom the Company had been conducting 
detailed discussions in January 1997.  This investor group 
(which is referred to hereafter as VIE notwithstanding that 
VIE Systems, Inc. was not actually formed until some time 
later) initially offered $1.6 million and a 5% equity stake 
in VIE in order to acquire COPERNICUS and its related assets.  
This offer was received in writing on February 20, 1997.  In 
light of other indications which had been received, it seemed 
that a better price could be obtained, and this offer was 
therefore declined.  However, negotiations continued and the 
terms of the offer were improved.

March 1997 - Delisting from Nasdaq SmallCap Market
As a result of the above circumstances, the Company had not 
met the $2 million in total assets requirement for continued 
listing on the Nasdaq SmallCap market since September 1996.  
Accordingly on March 3, 1997 the Company's Common Stock and 
Redeemable Warrants were delisted from the Nasdaq SmallCap 
market. on the grounds that the Company failed to meet the $2 
million in total assets requirement for continued listing.  
The Common Stock is now trading on the Nasdaq Bulletin Board. 
"Penny stock" rules now apply to the Company's stock. Listing 
on the Nasdaq Bulletin Board may result in reduced liquidity 
in trading in the Common Stock.  Together these circumstances 
will likely increase the costs and reduce the likelihood of 
success in the event that the Company seeks to raise further 
funds through the sale of equity securities.

Series C Redeemable Preferred Stock
On March 13, 1997, Mr. Robert Trump agreed to advance the 
Company a further $50,000 which the Company urgently required 
in order to continue its operations and meet its payroll 
obligations. Management believed that employee morale was low 
as a direct consequence of the Company being unable to meet 
its payroll obligations, and that further resignations of 
staff members would significantly reduce the value of the 
Company's primary asset, COPERNICUS. The Company therefore 
approached Mr. Trump to seek a further advance to cover 
arrears of payroll while management pursued discussions with 
Level 8 Systems, Inc., VIE, and other parties to secure the 
best possible offer for the COPERNICUS assets. 

In order to secure further funds at this time when the 
Company was in severe financial difficulties it was agreed 
that Mr. Trump would receive sufficient votes via the 
creation of a new class of Preferred Stock in order to be 
able to maximize the possibility of recovering both this 
advance and the earlier advance of $150,000.  As a result of 
these negotiations the earlier $150,000 advance and the March 
13, 1997 $50,000 advance were combined into $200,000 to be 
used to subscribe for 800,000 shares of Series C Redeemable 
Preferred Stock, $0.01 par value, with the following 
principal terms:

o Each Series C Redeemable Preferred Share has four (4) votes 
on any matter to be put to a vote of the Company's 
shareholders.
o The Series C Redeemable Preferred Stock can be redeemed at 
the Company's option at any time upon payment of $200,000.
o The Series C Redeemable Preferred Stock can be redeemed at 
the holder's option following any investment in the Company 
or a sale of any of the Company's assets where the proceeds 
are $2,000,000 or more.
o The Series C Redeemable Preferred Stock will have 
preference in the event of any liquidation of the Company 
to the extent of $200,000.

The Company therefore intends to redeem the Series C 
Redeemable Preferred Stock using $200,000 of the proceeds of 
the sale in when the sale of COPERNICUS is approved.  

Management Deliberations Concerning Creation of the 
Series C Preferred Stock.
Management considered the creation of the Series C Preferred 
Stock carefully.  Among the factors taken into account were 
the following:

o At that time, there were no other sources of funds actually 
offered to the Company.
o If further members of staff left the Company's employment 
because of the inability of the Company to meet its payroll 
obligations, management believed that the value of 
COPERNICUS would decrease as the Company would be unable to 
service either its existing customers or the new prospects 
being introduced by IBM.
o   Management believes that these terms were the best it 
could secure at that time, and these terms were arrived at 
through arms-length negotiations with Mr. Trump.  
o The level of four votes per share was required by the 
lender in order to give him significant influence in the 
approval of any potential sale of COPERNICUS to ensure that 
the advance was repaid.  The issuance of the Series C 
Preferred Stock to Mr. Trump increased his proportion of 
the votes on any matter to be put to a vote of the 
Company's shareholders from 18% to 64%.
o Management believes that the Company was able to secure 
both firm offers and improved terms from Level 8 and then 
from VIE as a result of this transaction.
o The board determined that the Company was not required to 
solicit proxies for this issuance as BCL paragraph 502 (c) 
gives the board the authority to fix the terms of preferred 
stock where such terms are not fixed in the charter of the 
Company.

 Level 8 Systems, Inc.
Throughout the negotiations with VIE, the Company continued 
to aggressively pursue other potentially interested parties.  
Several of them indicated strong interest, and one, Level 8 
Systems Inc. ("Level 8") made a formal offer to the Company.  
In order to move quickly, Level 8 verbally offered to make an 
immediate advance of $550,000 to the Company to enable it to 
make crucial payments to employees and creditors.  After 
further negotiation, a written  offer was made early on March 
19, 1997.  At this point the Company had received a verbal 
offer from VIE to acquire COPERNICUS and therefore sought a 
better offer from Level 8.  This was not immediately 
forthcoming,  however Level 8 did agree to improve the terms 
of its offer, to include an immediate cash infusion.  The 
offer accepted by the Company was made later on the same day 
(March 19, 1997) with the following principal terms:  

o Advance:              $550,000.
o Term:                 120 days (expiring July 17, 1997).
o Interest Rate:        10% per annum.
o Collateral:           Secured by the COPERNICUS product and 
related assets.
o Additional Terms:     The Company was free to continue to 
negotiate with VIE and other third parties. In the event 
that the Company were to sell COPERNICUS on or before the 
repayment of the loan, a break-up fee would be payable to 
Level 8 of $100,000.  The proposed sale of COPERNICUS to 
VIE as described herein would represent such a sale, and it 
is therefore envisaged that the break-up fee will be paid 
to Level 8 from the proceeds of the sale when the sale of 
COPERNICUS is approved.

The Board of Directors of the Company believed that it was 
imperative to receive a significant cash infusion of some 
kind since many of the employees were actively seeking other 
employment, as they had not received salary for some time.  
It was considered necessary to retain at least certain key 
employees in order to protect the value of COPERNICUS.  This 
value would erode swiftly in the event that no staff were 
available to maintain the existing customers and to support 
the IBM sales effort.  Therefore, despite the risks of not 
being able to achieve a satisfactory offer for COPERNICUS 
during the 120 days, the Board decided to proceed with the 
transaction and preserve the COPERNICUS business as a going 
concern in order to have the best opportunity to achieve 
maximum shareholder value from the COPERNICUS asset. Level 8 
is not and has never been an affiliate of the Company, any 
member of the Company's management, any of its principal 
shareholders or any related parties.  Certain employees of 
the Company at that time were asked by the management to 
consider offers of employment from Level 8 in order to 
enhance the value of the sale to the Company's shareholders.  
No employees accepted these offers.

The only other offer which the Company had managed to confirm 
at the time was a verbal offer from an investor to invest 
$500,000 in the Company in exchange for a 70% equity interest 
in the Company. The advantage of this proposed transaction 
was that it did not impose the same time constraint with 
respect to negotiating a satisfactory offer as the Level 8 
secured loan.  The disadvantage was that it would produce 
substantial dilution to existing shareholders so that  an 
offer for COPERNICUS more than three times as high as the 
existing proposals would have been required in order to 
obtain the same value for existing shareholders.  In view of 
the fact that employees had left for more secure employment 
and that more were likely to do so, the ability of the 
Company to maintain the value of the COPERNICUS asset over a 
period longer than 120 days was limited, and it was thus 
decided to proceed with the Level 8 proposal.


The VIE transaction - later negotiations
On March 20, 1997, after being advised of Level 8's serious 
interest, VIE made a substantially increased offer to the 
Company, with the following principal terms:

o VIE would acquire COPERNICUS and certain related assets for 
$2 million in cash plus a 10% share in VIE.  The parties 
would immediately enter into a purchase agreement, 
conditional upon shareholder approval, which would take 
effect following shareholder approval.
o VIE would immediately advance $400,000 as a secured loan 
while the Company sought shareholder approval for the sale.  
This would represent a  prepayment of the purchase price.
o The Company would provide undertakings from the required 
majority of shareholders to vote in favor of the sale at 
the shareholders meeting.
o Mr. John Brann, the Company's Vice President of technology, 
and Mr. Diran Cholokian, the head of third party sales 
would enter into employment agreements with VIE.
o The Company would obtain shareholder approval within 60 
days of signing the proposed purchase agreement.
o Pending the shareholders meeting, VIE would immediately 
receive a world-wide non-exclusive license for COPERNICUS 
together with a perpetual exclusive license in the United 
States for the health-care, financial services, food, 
airline and hotel industries and an assignment of the IBM 
contract.  There would be a  5% royalty under this license 
payable to the Company.  Any payments under the license 
prior to closing the purchase agreement would constitute 
prepayments under the purchase agreement.
o If for any reason the sale was not approved by shareholders 
or there was a change of control of the Company, or in 
certain other circumstances defined as "Break-up events", 
VIE would have received a break-up fee of the greater of 
$250,000 and 50% of the difference in the value of the cash 
components of the two competing offers.

While this offer appeared to be the most favorable yet 
received from the point of view of shareholder value, the 
Company had a number of concerns.  Among other points, these 
included the sweeping nature of the proposed interim license 
(particularly the perpetual nature of the exclusive license 
and the fact that it covered all areas where the Company had 
experienced any success in licensing COPERNICUS), the lack of 
any provision for the Company to continue to utilize 
COPERNICUS in any fashion and the probability of the 
Company's interest in VIE being diluted by the need for 
further financing.

After further discussions with VIE it became apparent that 
there was a willingness on both sides to negotiate a mutually 
satisfactory transaction.

The Company therefore duly gave notice to Level 8 that it had 
received a written offer.  Level 8 declined to match the 
terms of the offer and instead made the following offer, 
which it termed "Final" on March 27, 1997:

Level 8 would acquire COPERNICUS and related assets, the 
Company would receive $700,000 in cash and $300,000 in Level 
8 Stock.

In view of Level 8's unwillingness to match the terms of the 
VIE offer (the Company judged the value of Level 8's offer to 
be significantly lower than that of the VIE offer) and VIE's 
apparent readiness to negotiate an acceptable proposal, the 
Company entered into a letter agreement to negotiate with VIE 
on March 31, 1997.  This agreement allowed the Company to 
continue to solicit interest in COPERNICUS and investments in 
the Company during the negotiations and if there were to be 
such a sale or investment there would be a break-up fee 
payable to VIE of $150,000, unless VIE had previously broken 
off negotiations.

Through April and the first week of May negotiations with VIE 
continued on both business points and on the most appropriate 
legal language until the agreements described in "The VIE 
Agreements" were entered into as of May 9, 1997.

Management Deliberations on VIE Offer

Without limitation, among the factors taken into account by 
the Company's board of directors in deciding to accept the 
offer from VIE were the following:(i) the Company had proven 
unable to raise the funding necessary to continue developing 
and marketing COPERNICUS, despite aggressively pursing 
several different possible methods; (ii) the Company had 
insufficient liquid resources to meet its existing and 
ongoing liabilities;(iii) the Company was losing staff at a 
rapid pace because of its inability to continue to finance 
its business, which management believed was likely to reduce 
the value of the assets; (iv) the Company had discussed a 
sale of COPERNICUS widely among potentially interested 
parties in the Middleware and related markets, both in the 
United States and overseas, and this was the best offer 
available; (v) the offer allows New Paradigm Shareholders to 
continue to benefit from any success in sales of COPERNICUS 
through the Royalty; (vi)  management believed that  a higher 
value could be achieved from a sale of the COPERNICUS 
business as a going concern than in the event the Company was 
forced to cease operations.

The Board of Directors decided that a third party analysis of 
the fairness of the transaction was not necessary in the 
circumstances.  Without limitation, some of the reasons why 
this course of action was considered to be appropriate and 
why management believes this offer to be fair and reasonable 
are (i) the Company had solicited offers from a wide range of 
potentially interested parties in the industry and related 
markets, both within the United States and overseas; (ii) the 
Company had serious competitive interest from different 
unrelated parties throughout the process; (iii) Level 8, a 
significant Company in the middleware market place with a 
strong interest in COPERNICUS (as evidenced by the loan 
advanced to the Company) declined to match the terms offered 
by VIE; and (iv) the Company did not have the cash resources 
to finance such a third-party analysis

Once it became apparent that VIE required Mr. John Brann to 
agree to join their management as a condition precedent of 
any transaction, Mr Brann declared a conflict of interest to 
the Company's Board of Directors and abstained from all 
further votes on the matter.  From that point on, Mr Brann 
abstained, with all the other directors voting unanimously in 
favor of the decisions to negotiate and then conclude the 
transaction with VIE.  As soon as the decision to accept the 
VIE offer was made, Mr. Brann resigned from the Company's 
Board of Directors in order to avoid any conflict of 
interest.  Since the incorporation of the Company, the Board 
of Directors has observed a policy that all potential 
conflicts of interest should be declared to the Board before 
a vote is taken on any matter.

General - COPERNICUS

Until May 9th 1997, New Paradigm was primarily engaged in the 
development, marketing, licensing and support of its 
COPERNICUS software product. As of May 9, 1997 the Company 
entered into an agreement (the "Purchase Agreement"), to 
sell, subject to shareholder approval, the rights to 
COPERNICUS, the New Paradigm Architecture and certain related 
assets to VIE Systems, Inc., a Delaware corporation ("VIE") 
for $2,050,000 in cash and a 5% royalty on future COPERNICUS 
related license fees payable commencing after the first 12 
months. Subject to VIE's approval, the Company will have the 
right to enter into OEM agreements with VIE on commercially 
reasonable terms, to incorporate COPERNICUS within future 
products which the Company may develop or acquire.  Under the 
Purchase Agreement the Company has appointed VIE as its 
exclusive agent for the operation of all aspects of the 
COPERNICUS related business and VIE is entitled to retain all 
revenues received in connection therewith. This agreement 
will terminate at the earlier of the closing of the sale or 
180 days from May 9, 1997.  VIE has entered into Voting 
Agreements with the holders of 68.1% of the voting rights 
entitled to vote at a meeting of New Paradigm Shareholders, 
and the Company therefore expects the sale to be approved and 
completed during July 1997.  In the event that the sale is 
not approved, the Company sells the COPERNICUS assets to a 
third party, or in certain other circumstances VIE is 
entitled to receive a break-up fee of $350,000.

As of May 9, 1997 the Company entered into a license 
agreement (the "VIE License") to license certain rights to 
its COPERNICUS product and to assign certain agreements to 
VIE. The VIE License gives VIE a five year exclusive license 
to market COPERNICUS to the financial services, healthcare, 
food & government industries in US & Canada and a perpetual 
non-exclusive worldwide license with respect to all 
industries. Under the VIE license the Company is entitled to 
receive a 5% royalty on all license fees received by VIE 
relating to the COPERNICUS product. The license also permits 
VIE to produce the product on additional platforms and 
enhance the product as it sees fit. The source code for the 
product may not be distributed to another party without the 
prior written consent of the Company. Finally the Company has 
assigned to VIE certain agreements, including a distribution 
agreement with IBM. The VIE license will terminate upon the 
closing of the sale under the Purchase Agreement and any 
royalties payable thereunder shall be offset against the 
purchase price payable at the closing.

Until the closing of the contemplated sale of COPERNICUS 
pursuant to the Purchase Agreement, New Paradigm will 
continue to be engaged, through its exclusive agent, VIE, in 
the development, marketing, licensing and support of its 
COPERNICUS software for large-scale computer users. Most 
large organizations have many different computer systems. The 
need to pass information among those often incompatible 
systems is growing rapidly. Passing information among 
disparate computer systems is called "systems integration." 
COPERNICUS automates systems integration by converting the 
data entered into or generated by one program or system into 
the form needed by another program or system. The Company 
believes that its customers can achieve systems integration 
using COPERNICUS in a more timely and cost-effective way than 
the traditional approach of writing custom software on a 
case-by-case basis. An application for a United States patent 
on COPERNICUS is pending.

COPERNICUS replaces the laborious construction of custom 
systems integration programs with a method of systems 
integration that is activated by pointing and clicking a 
"mouse" in the same manner as with widely used consumer and 
business software programs. The Company believes COPERNICUS 
can bring improvements in productivity to systems integration 
comparable to those produced by using a personal computer 
spreadsheet to replace manual calculations.

General - EDI 

Until April 1, 1997, through its wholly owned subsidiary, New 
Paradigm Commerce ("NPC") (formerly New Paradigm Golden 
Link), the Company operated a service bureau business 
providing electronic data interchange ("EDI") services (the 
conveying of business documents electronically). This EDI 
business was not operating profitably, and the Company no 
longer had the resources to invest in its further 
development.  Management therefore concluded that the best 
course of action was to dispose of this business. As of April 
1, 1997, the Company sold its EDI business to Custom 
Information Systems Corp. of New York ("CIS") for $6,000 and 
a note repayable monthly over three years with a face value 
of $355,000 and a present value of approximately $300,000.  
CIS operates a similar EDI service bureau in Manhattan.  To 
date (June 28th 1997), all payments due under the note have 
been received in a timely fashion.

History - COPERNICUS

COPERNICUS was invented by John Brann, a former director and 
former officer of the Company, prior to his employment with 
the Company and prior to his earlier employment with 
Management Technologies, Inc. ("MTI"). Mr. Brann assigned all 
of his right, title and interest in and to COPERNICUS and the 
method of constructing software which it employed (the "New 
Paradigm Architecture") to Lancer Holdings Inc. ("Lancer"), 
formerly called Mark Blundell & Associates, Inc., a New York 
corporation controlled by John Brann and Mark Blundell, who 
is a director and the principal executive officer of the 
Company. Lancer was formed in July 1992. Pursuant to a 
license agreement dated as of January 13, 1993, Lancer 
granted to MTI, where both John Brann and Mark Blundell were 
then employed, a license to distribute software incorporating 
the New Paradigm Architecture to banks on an exclusive basis 
and to distribute such software to other customers on a non-
exclusive basis. MTI funded the development of a prototype of 
COPERNICUS and began conducting several pilot programs in the 
banking industry. 

The Company was organized in July 1993 to further develop 
COPERNICUS and to develop and market products outside the 
banking industry. The Company was initially capitalized by 
MTI.

In connection with the formation of the Company both Lancer 
and MTI transferred their licenses to the Company and the 
Company granted to MTI a non-exclusive license to distribute 
software incorporating the New Paradigm Architecture to 
banks. John Brann and Mark Blundell became executive officers 
of the Company and the infrastructure and the support for the 
New Paradigm Architecture and all software applications 
employing the New Paradigm Architecture ("the New Paradigm 
Applications") were transferred from MTI to the Company. As a 
part of a strategic shift in MTI's operations, MTI determined 
in August 1994 to cease marketing products using the New 
Paradigm Architecture and MTI's remaining license was 
terminated. The Company acquired the New Paradigm 
Architecture and COPERNICUS and related intellectual property 
rights from Lancer as of March 22, 1995. Neither Lancer nor 
MTI retains any rights to the New Paradigm Architecture or 
COPERNICUS. See "Certain Relationships and Related 
Transactions."

Following its initial public offering in August 1995, the 
Company sought to market COPERNICUS to large-scale computer 
users, both directly with its own sales force and indirectly 
through systems integrators and other software vendors. 
Systems integrators marketed COPERNICUS in connection with 
their services, and software companies acted as value-added 
resellers ("VARs") of COPERNICUS by incorporating it into 
their own software products. Royalties from VARs are based on 
sales of their products. COPERNICUS will allow a VAR's 
software and its customers' software to work together. Prior 
to signing the Purchase Agreement, the Company had entered 
into the following agreements to license or distribute 
COPERNICUS:

o License agreements with Marriott International, Inc., 
and its subsidiaries and affiliates (collectively 
"Marriott"), New York Life Insurance Company, 
Transquest Information Solutions ("Transquest"), 
Massachusetts Institute of Technology ("MIT"), Bell 
Atlantic and the Canadian Imperial Bank of Commerce 
("CIBC"). These agreements permit the above named 
entities  to use COPERNICUS. The fees collected from 
these licenses vary depending on the scope of the 
license. 

o An agreement with International Business Machines 
Corporation ("IBM") whereby IBM would seek to 
distribute COPERNICUS with IBM's MQSeries(tm) message-
passing middleware.

o An agreement to distribute COPERNICUS in Canada with 
New Venture Technologies Ltd., a software reseller and 
systems integration consulting company, an agreement 
with EXEL to distribute COPERNICUS in the United 
Kingdom and an agreement with Rivergate Technologies 
to distribute COPERNICUS for the Company worldwide.

o A License with Praxis International, Inc. ("Praxis") 
to incorporate COPERNICUS into its OmniReplicator(tm)
software product, which is designed to permit the 
duplication of databases on different types of 
computer systems. 


These agreements have been assigned to VIE under the VIE 
License.
History - New Paradigm Commerce

Beginning in May 1995, the Company worked to establish a 
presence in the EDI service center business. As of April 1, 
1997, at the time of the sale of this business, NPC had 
connections to two dozen providers of retail goods and 
services to the public ("Trading Partners") and had signed up 
approximately 180 suppliers  ("Suppliers") (41 at March 31, 
1996) to those Trading Partners as customers.

Most Suppliers who used the Company's EDI services did so 
because a Trading Partner  required that all of its Suppliers 
send all invoices for their products electronically if they 
were to do business. These Trading Partners were primarily 
large corporations seeking to have the maximum possible 
number of their suppliers connected to them electronically to 
avoid the expensive handling costs associated with paper 
based systems.  If the Supplier wished to create an EDI 
capability internally, the Supplier would have to buy EDI 
software, install that software on an existing or new 
computer, learn the software, transmit the data generated 
from the software (by modem or email), develop the proper EDI 
format for the Trading Partner selected and test the 
connection with the Trading Partner with which it was 
connected. Many Suppliers were not able, or willing, to spend 
the resources to make the connection to their Trading 
Partners, particularly where they did business with several 
different Trading Partners. As a result they often looked to 
outsource their EDI functions. NPC took the information for 
the EDI transaction via fax, letter or email and reformatted 
that information and transmitted that information in the 
appropriate EDI format.

NPC was not operating profitably, and the Company no longer 
had the resources to invest in its further development, so as 
of April 1, 1997 the business of NPC was sold for cash and a 
note with a face value of $361,000 and a present value of 
approximately $300,000. (see "Description of the Business - 
General - EDI")

History - Netphone

On October 9, 1995 the Company acquired from Electric Magic 
Company the Netphone product, which permits users of 
Macintosh(R) computers to conduct worldwide long distance 
telephone conversations over the Internet. While the 
acquisition of Netphone was not part of the Company's 
strategic goal of broadening the New Paradigm Architecture, 
it represented an opportunity to acquire a functional product 
in the expanding Internet market. The Company subsequently 
received an offer from the Camelot Corporation ("Camelot") to 
acquire these assets from the Company for a package of stock 
and cash comparable to the acquisition price paid by the 
Company and an agreement to pay the Company a royalty for 
each unit sold by Camelot in the future. This allows the 
Company to benefit from any success Netphone may experience 
from the wider distribution of the product through Camelot's 
existing retail marketing channels. To date the Company has 
received no significant revenue from this royalty arrangement 
and there can be no assurance that any such significant 
revenues will arise.

Internet 

Through its wholly owned subsidiary New Paradigm Inter-Link, 
Inc. ("NPIL"), which began operations in December 1995, the 
Company provides Internet services to corporations and other 
organizations. Customers include Novartis and the Association 
of the Bar of the City of New York. The Company intends to 
develop this business by launching new products and services 
connected with the Internet. There is no assurance that the 
Company will be able to develop or acquire such products and 
services or that if it does they will be acceptable to the 
market.  The Internet is a relatively new and rapidly 
expanding market.  Gartner Group ( a leading industry 
analyst) estimates that by 2001, 60% of the US workforce will 
have a justifiable business need for Internet access.  By the 
same date, they estimate that more than 8 million households 
will access the Internet using ISDN lines (digital telephone 
lines offered by principal telephone companies suitable for 
accessing the Internet) and a further 3 million homes will 
access the Internet using cable modems. World-wide Internet 
use is currently estimated at 40 million users.  With 
potential access to such numbers, many corporations are 
seeking to ensure that they have a presence on the Internet.  
Such a presence is established through a collection of text, 
graphics and small programs known as a "Web site" maintained 
on a computer known as a Web server and viewed by users from 
all over the world who are connected to the Internet through 
the use of a Web browser such as Netscape Navigator or 
Microsoft Explorer.  The Company seeks to assist companies 
with creating that Internet presence and also to exploit 
other business opportunities which may arise in servicing the 
Internet community.

Internet - Website services

NPIL provides organizations with the ability to utilize the 
Company's expertise in creating a Web site.  This expertise 
includes assembling an appropriate team of independent design 
consultants and, if necessary, programmers; designing the 
site from both technical and aesthetic perspectives, 
implementing the design, and then providing Web server 
hosting services away from a customer's own internal network 
to ensure security.   NPIL specializes in providing custom 
facilities to enable a customer's presence on the Internet to 
be constantly evolving and interesting without adding to 
their existing workload.  For example, the site for the 
Association of the Bar of the City of New York is remotely 
updated by association staff.  A small software program 
("applet") created by NPIL staff in Java - the most common 
computer programming language for the Internet today - allows 
customers to utilize information in the format in which it 
was created under existing word processor programs such as 
Microsoft Word to automatically update their Web site from 
their own offices.  No translations or transitions are 
required - the customer's staff member simply uses the common 
"cut and paste" technique utilized within many programs to 
move the required document into the NPIL applet.  A typical 
site brings in initial revenues of approximately $20,000 - 
$30,000 on completion with continuing revenues for 
maintenance and changes throughout the year which are 
expected to amount to $1,000- $3,000 per annum.  The Company 
has created 5 Web sites for customers of this service to 
date.  Revenues in fiscal 1997 were $62,420 from 3 such 
sites.


Examples of Web sites created by New Paradigm include: 

o Novartis - site for its "Program" product:  
www.programpet.com
o Association of the Bar of the City of New York: 
www.abcny.org
o Nuway Corporation: Corporate Website, site for 
moistmates product: www.nuwaycorp.com
o Smolin Lupin, accountants: corporate Website: 
www.cpasmolinlupin.com
o Novartis - site for its "Sentinel" product:  
www.petprotect.com
o New Paradigm: corporate Website: www.newparadigm.com
o Proballfan: NFL football site written by fans: 
www.proballfan.com

Website services - marketing and distribution

The Company is marketing its services through a mix of direct 
contact with prospective clients and indirect sales.  One 
member of staff is engaged full time in the direct sales 
activity which accounts for approximately 50% of the current 
customer list .  Indirect sales, which account for the 
remaining 50%, are primarily through advertising agencies 
working on integrated media campaigns who subcontract the 
Internet portion to NPIL.

 Internet - Other products

The Company is also involved in research and development for 
other products and services which can be effectively launched 
and marketed through the Internet.  The nature of the 
Internet market is that the time to market from the formation 
of a concept can be very short.  The Company is currently 
working on three projects which it expects to launch during 
Fiscal 1998.  These products have not been announced as this 
could provide significant commercial advantage to the 
Company's competitors. (The general areas for these three 
projects are (i) intellectual property; (ii) the Internet 
itself and (iii) education.)  In each of two of the projects 
the Company is working with a third party that is providing 
product or market specific information and will be entitled 
to a share of the revenues or a stake in a joint venture 
between the Company and the third party for their efforts.  
In neither case has the arrangement yet been finalized.  The 
Company expects to invest an aggregate of approximately 
$200,000 in the launch of these three products, in addition 
to the research and development work of the Company's staff.  
There can be no assurance that the Company will be able to 
reach satisfactory agreement with the third parties involved, 
or that it will be able to complete the research and 
development work needed to launch the products, or that if 
they are launched such products will achieve any degree of 
market success.


Research and Development

From its inception until the signing of the Purchase 
Agreement, the Company focused its internal development 
efforts on COPERNICUS and the New Paradigm Architecture. In 
addition, the Company has employed independent consultants to 
perform certain development functions. Research and 
development expenses, which include salaries and other 
employee costs of the Company's product development 
personnel, for the fiscal year ended March 31, 1995 were 
$331,821 (17% of total expenditures). Beginning July 1, 1995 
the Company recognized technological feasibility of  
COPERNICUS and began capitalizing the development costs of 
COPERNICUS in accordance with Statement of Accounting 
Standards ("FASB") No. 86, "Accounting for the Cost of 
Computer Software to be Sold, Leased or Otherwise Marketed."
The Company capitalized $218,950 of development costs 
relating to COPERNICUS and expended an additional $60,344 for 
Research and Development expenses during the year ended March 
31, 1996. The Company capitalized $495,696 of development 
costs relating to COPERNICUS during the year ended march 31, 
1997.  There were no research and development expenses for 
that year.  For a discussion of the history of the 
development of COPERNICUS and the New Paradigm Architecture, 
see "Description of Business -- History."

Research and development will remain vital to the Company's 
efforts to remain competitive in the Internet business.  The 
technology in that marketplace is evolving at a very rapid 
pace, and new techniques must be learned constantly.  The 
Company currently has two staff involved in Research and 
Development, and is seeking to recruit a third.  The Company 
is presently significantly dependent on the services of Mr. 
Ali Faraji in this area.  Mr. Faraji is not the subject of an 
employment contract and their can be no assurance that he 
will remain employed by the  Company.  There can also be no 
assurance that the additional engineer can be recruited or if 
any of the current Research and Development staff leave that 
they can be replaced at a cost acceptable to the Company.

Competition

The Internet marketplace, while rapidly expanding, is 
intensively competitive.  There are hundreds or thousands of 
companies competing for the Web-site creation and hosting 
business.  These range from college or even high-school 
students working at low cost from their home, to the largest 
providers of telecommunications services such as AT&T or MCI.  
The Company will seek to compete by offering high quality 
service at reasonable cost and by differentiating itself with 
innovative products and services.  Many of the Company's 
competitors have much greater resources and name recognition 
than the Company.  There can be no assurance that the Company 
will succeed in competing effectively in this marketplace, or 
that if it does succeed in winning business that it will be 
able to continue to do so.

Intellectual Property Rights

On March 23, 1995, the Company acquired the intellectual 
property rights to COPERNICUS and the New Paradigm 
Architecture from Lancer. See "Directors and Executive 
Officers of the Registrant" and "Certain Relationships and 
Related Transactions -- Acquisition of the New Paradigm 
Architecture."  The intellectual property rights acquired 
from Lancer include one application for a United States 
patent relating to COPERNICUS, which application is now 
pending in the USPTO, and corresponding applications (or the 
right to file corresponding applications) in 24 foreign 
countries. Patents have been granted in Pakistan and France.  
While there can be no assurance when or if a United States 
patent will be granted, management believes that COPERNICUS 
is patentable.  These rights will be transferred to VIE on 
the closing of the Purchase Agreement.

In the Internet field, the Company does not believe that any 
of the software which it has developed to date is patentable.

The Company relies upon a combination of trade secret, 
nondisclosure and other contractual arrangements, and patent, 
copyright and trademark laws to protect its rights to 
intellectual property. The Company generally enters into 
confidentiality agreements with its employees, consultants, 
distributors, value-added resellers and potential customers 
and limits access to and distribution of proprietary 
information to licensed users. There can be no assurance that 
the steps taken by the Company will be adequate to deter 
misappropriation of proprietary information, that the Company 
will be able to detect unauthorized use of proprietary 
information or that the Company can afford the high cost 
required to enforce its intellectual property rights. 
Further, no assurance can be given that nondisclosure and 
other contractual arrangements to protect the Company's 
proprietary rights will not be breached, that the Company 
will have adequate remedies for any breach or that trade 
secrets will not otherwise become known to or be 
independently developed by competitors. The failure or 
inability of the Company to protect proprietary information 
could have a material adverse effect on the Company's 
business, operating results and financial condition.

Employees

As of June 15, 1997, the Company employed 9 full-time 
employees. None of the Company's employees is represented by 
a labor union or is subject to a collective bargaining 
agreement. The Company believes that its employee relations 
are satisfactory.  The number of the Company's employees 
declined because the Company released 6 employees in its 
Atlanta office as it withdrew from direct sales, and 10 more 
in New York when staff reductions were made to reduce 
expenses on December 31, 1996.  In addition 6 employees 
transferred to CIS or VIE as they began operating businesses 
previously operated by the Company.

Item 2.  Description of Property

The Company's corporate headquarters is located on the 7th 
floor of 733 Third Avenue, New York, New York (the 
"Premises"). The Premises are currently being sublet from Go 
America Tours, Inc.   Go America's master lease expires on 
August 31, 1999. In view of the reduction in the number of 
the Company's employees from a high of 44 to 9 at present, 
the Company no longer needs the 12,500 square feet of space 
it subleases and is seeking sub-tenants to occupy all or part 
of the space. Based upon its preliminary discussions with 
real estate brokers, the Company believes that it will be 
able to secure such sub-lessees at approximately the same 
rate as in its own sub-lease (presently approximately $23,000 
per month).  The Company anticipates that, in the event that 
it is successful in sub-leasing all of the space it currently 
occupies, it will experience no difficulty in obtaining 
suitable space for the remaining 9 employees.  It is 
estimated the cost of such space would be approximately 
$6,000 per month.



Item 3.  Legal Proceedings

The Company is not involved in any material legal 
proceedings.

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

Not applicable



PART II


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

(a)  Principal Market.

The Registrant's Common Stock and Redeemable Warrants are 
quoted on the Nasdaq Bulletin Board.

(b)  Approximate Number of Holders of Equity.

The number of record holders of the Common Stock was 
approximately 86 and the number of record holders of 
Redeemable Warrants was 46 as of March 31, 1997.

(c)  Frequency and Amount of Dividends.

To date, the Company has not paid any cash dividends. The 
Company does not anticipate paying any dividends in the 
foreseeable future. The Company intends to retain any future 
earnings to finance the growth and development of its 
business. Any future determination as to the payment of 
dividends will be at the discretion of the Board of Directors 
of the Company and will depend on the Company's operating 
results, financial condition, capital requirements and such 
other factors as the Board of Directors may deem relevant.

(d) High and Low Sales Prices of Common Equity and Redeemable 
Warrants

The following table sets forth, for the periods indicated, 
the high and low closing prices for the Common Stock and 
Redeemable Warrants as reported by the NASDAQ SmallCap Market 
through March 3, 1997 and afterwards as reported on the 
Nasdaq Bulletin Board:

<TABLE>
<S>                             <C>                       <C>
                           Common Stock             Redeemable Warrants

1996 Fiscal Quarters     High      Low                High   Low
Second Quarter 
(Commencing August
11, 1995)(1)            $7.50      $5.00            $2.00   $0.75
Third Quarter            6.50       4.50             1.625   0.75
Fourth Quarter           6.125      4.75             1.625   1.125

1997 Fiscal Quarter
First Quarter            6.00       1.875            1.375   0.375
Second Quarter           3.00       1.125            0.875   0.25
Third Quarter            3.125      1.00             0.75    0.25
Fourth Quarter           1.813      0.50             0.25    0.063

<FN>

<F1> (1) The initial public offering of the Common Stock and 
Redeemable Warrants commenced on August 11, 1995. The initial 
public offering prices of the Common Stock and Redeemable 
Warrants were $6.50 per share and $.10 per Redeemable 
Warrant.

</TABLE>

The foregoing prices and quotations reflect inter-dealer 
prices without retail mark-up, mark-down or commissions.  The 
foregoing quotations may not represent actual transactions.

Item 6. Management's Discussion and  Analysis of 
Financial Condition and Results of Operations

The selected financial data of the Company presented below 
for, and as of the end of, the fiscal years ended March 31, 
1996 and 1997 have been derived from the financial statements 
of the Company, which have been audited by BDO Seidman LLP, 
independent certified public accountants. The Company was 
incorporated in July 1993 and commenced operations in 
November 1993. The data set forth below should be read in 
conjunction with the Company's financial statements and 
related notes thereto included elsewhere herein.  The Company 
has entered into agreements to sell two of its major 
businesses - COPERNICUS and the EDI business.  As a result 
the statements of operations for the fiscal years ended March 
31, 1997 and 1996 and the Balance Sheet as at March 31, 1997 
have been prepared to reflect continuing operations.  The 
Loss for discontinued operations is shown in Note 14 to the 
financial statements.

Statement of Operations Data

<TABLE>
<S>                             <C>                               <C>
                      Year Ended March 31, 1997       Year Ended March 31, 1996
Revenues                        $69,976                              $ -
Expenses                      1,627,163                        1,316,332
                             -----------                      -----------
Loss from operations         (1,562,187)                      (1,316,332)
Other income (expense)           25,099                         (302,154)
                             -----------                      -----------
Loss from continuing
operations                   (1,537,088)                      (1,618,486)
Loss from discontinued 
operations                   (1,438,319)                      (1,941,806)
                             -----------                      -----------
Net Loss                    $(2,975,407)                     $(3,560,292)
                             -----------                      -----------
Net Loss per common share
from continuing operations       $(0.63)                          $(0.93)
                             -----------                      -----------
Net Loss per common share 
from discontinued operations      (0.58)                           (1.11)
                             -----------                      -----------
Net Loss per common share (1)    $(1.21)                          ($2.04)
Weighted average common 
shares outstanding (1)        1,743,472                        2,449,428

Balance Sheet Data
                                                            March 31, 1997
                                                            --------------
Total assets                                                 $1,357,703
Total current assets                                            411,267
Assets held for sale                                            691,491
Total current liabilities                                     1,427,817
Long-term debt                                                        0
Current liabilities                                           1,427,817
Redeemable Preferred Stock                                      200,000
Deficit                                                      (9,109,599)
Total capital deficit                                         $(271,114)

<FN>

<F1>

(1) See Notes to Financial Statements for an explanation of
the determination of the number of shares and share 
equivalents used in computing share amounts.
</FN>
</TABLE>

Overview

The Company has entered into agreements to sell two of its 
major businesses - COPERNICUS and the EDI business.  As a 
result the statements of operations for the fiscal years 
ended March 31, 1997 and 1996 and the Balance Sheet as at 
March 31, 1997 have been prepared to reflect continuing 
operations.  The Loss for discontinued operations is shown in 
Note 14 to the financial statements.  The discussion and 
analysis which follows therefore considers separately the 
continuing and discontinued operations.
 
In its continuing operations the Company had net losses of 
$1,537,088 for the year ended March 31, 1997 and $1,618,486 
for the year ended March 31, 1996. The Company's revenues 
from continuing operations for the fiscal years ended March 
31, 1996 and 1997 were nil and $69,976, respectively. The 
Company's subsidiary, NPIL had 3 customers for its Web site 
creation and maintenance services as at March 31, 1997 and 5 
as at June 30, 1997.

In its discontinued operations the Company had net losses of 
$1,438,319 for the year ended March 31, 1997 and $1,941,806 
for the year ended March 31, 1996. The Company's revenues for 
the fiscal years ended March 31, 1997 and 1996 were $622,898 
and $425,953, respectively. These revenues were primarily due 
to the licensing of COPERNICUS in 1996. In 1997, $380,671 was 
derived from COPERNICUS licensing and royalties and $234,048 
was derived from EDI service bureau revenues. The Company's 
subsidiary, NPC, had 41 EDI customers in the year ended March 
31, 1996 and  approximately 180 EDI customers in the year 
ended March 31, 1997.

Following the Company's initial public offering ("IPO") in 
August 1995, the Company significantly expanded its 
operations and particularly its sales activity relating to 
COPERNICUS. Five additional staff members were recruited and 
the sales operation moved to Atlanta. The Company closed its 
sales office in Atlanta in January, 1997.

The Company's revenues and profitability may vary 
significantly both in the case of consecutive quarters and in 
the case of a quarter compared to the corresponding quarter 
of the preceding year. Such variations may result from, among 
other factors, lengthy development time for the Company's 
products and services, timing of new product and service 
introductions by the Company and its competitors, changes in 
levels of the Company's operating expenditures, including the 
Company's expenditures on research and development, the size 
and timing of customer orders, the amount and timing of 
initial fees for creating Web sites, royalty payments and 
license fees by licensees, as well as consulting, training 
and maintenance fees, increased competition, reduced prices, 
the effect of currency exchange rate fluctuations, delays in 
the development of new products and services, the costs 
associated with the introduction of new products and services 
and the general state of national and global economies. The 
Company expects to derive substantially all of its revenues 
from initial fees for creating Web sites, and consulting, 
training, service  and maintenance fees. Accordingly, the 
Company's revenues will vary with the demand for its products 
and services. As a result of such factors, the Company's 
revenues and profitability for any particular quarter are not 
necessarily indicative of any future results. Fluctuations in 
quarterly results may also result in volatility in the price 
of the Company's securities.

Results of Operations

Revenues.  Revenues from continuing operations during the 
fiscal year ended March 31, 1997 increased from $0 to $64,976 
as NPIL made its first sales during fiscal 1997.. These 
revenues primarily consisted of revenue from the initial fees 
for the creation of Web sites.

Revenues from discontinued operations during the fiscal year 
ended March 31, 1997 increased by $196,945 (46%) to $622,898 
over the year ended March 31, 1996. In 1996, these revenues 
primarily consisted of revenue from the licensing of 
COPERNICUS to direct end-users. In 1997, $380,671 was derived 
from COPERNICUS license fees and royalties.  In 1996, $19,421 
of revenues arose in the NPC EDI service bureau business.  In 
1997 this increased by $214,807 (1,106%) to $234,048.  
Expenses.  The Company's expenses primarily comprise salaries 
and related employee costs, research and development costs, 
professional fees, marketing expenses, general and 
administrative expenses, occupancy expenses and depreciation 
and amortization.

Expenses relating to continuing operations during the fiscal 
year ended March 31, 1997 increased by $310,831 (24%) over 
the fiscal year ended March 31, 1996. 

Expenses during the fiscal year ended March 31, 1997 relating 
to discontinued operations decreased by $306,542 (13%) over 
the fiscal year ended March 31, 1996.

For the continuing operations, employee costs increased by 
21% to $630,616 in the fiscal year ended March 31, 1997, 
compared to $520,356 in the fiscal year ended March 31, 1996. 
This was due to the hiring of additional staff members for 
NPIL and an increase in the number of  staff members employed 
by the Company in administrative and corporate positions to 9 
as the overall staff of the corporation increased to 44. 
However by March 31, 1997 the number of staff members 
involved in such tasks had been reduced to 4, and the total 
number of staff members to 9. 

For the discontinued operations, employee costs increased 
marginally by 1% to $1,047,606 in the fiscal year ended March 
31, 1997, compared to $1,008,015 in the fiscal year ended 
March 31, 1996.

The Company did not recognize any research and development 
expenses in the fiscal year ended March 31, 1997, compared to 
$60,344 in the fiscal year ended March 31, 1996. This 
decrease is due to the fact that the Company recognized 
technological feasibility of its COPERNICUS product on July 
1, 1995. According to FASB No. 86, "Accounting for Costs of 
Computer Software to be Sold, Leased, or Otherwise Marketed," 
the Company believes it is now required to capitalize its 
COPERNICUS research and development expenses. Capitalized 
software expenses consist principally of salaries and certain 
other expenses related to development and modifications of 
COPERNICUS capitalized in accordance with the provisions of 
FASB No. 86. Amortization of capitalized software costs is 
provided at the greater of the ratio of current product 
revenue to the total of current and anticipated product 
revenue or on a straight-line basis over the estimated 
economic life of the software, which is not more than five 
years. $218,950 was capitalized during the year ended March 
31, 1996 and $276,746 was capitalized during the year ended 
March 31, 1997.

Professional fees relating to continuing operations decreased 
by 4% to $244,731 in the fiscal year ended March 31, 1997, 
compared to $256,148 in the period ended March 31, 1996. The 
decrease is primarily due to the fact that there were  costs 
related but not directly attributable to the IPO in fiscal 
1996.  No such expenses arose in 1997.

Professional fees relating to the discontinued operations 
deceased by 39% to $223,213 in the fiscal year ended March 
31, 1997, compared to $364,050 in the period ended March 31, 
1996. The decrease is primarily due to the fact that the 
Company incurred legal fees during fiscal 1996 to derive 
standardized licensing and maintenance agreements.  The use 
of these agreements as the basis for negotiations in fiscal 
1997 produced a reduction in related legal fees.

Marketing expenses relating to continuing operations 
increased by 86% to $164,238 in the fiscal year ended March 
31, 1997 compared to $88,461 in the fiscal year ended March 
31, 1996. This is principally due to increased fees from the 
Company's public relations consultants as the Company engaged 
in a marketing and promotional campaign.  A proportion of the 
costs of this campaign were allocated to developing the 
corporate profile.  The campaign was terminated in September 
1996 and the Company no longer employs public relations 
consultants.

Marketing expenses relating to discontinued operations 
decreased by 38% to $323,725  in the fiscal year ended March 
31, 1997 compared to $523,624 in the fiscal year ended March 
31, 1996. This is principally due to the decision to 
concentrate on indirect rather than direct channels and the 
consequent termination of the Company's advertising campaign 
in September 1996.

General and administrative expense relating to continuing 
operations increased by 58% to $340,744  in the fiscal year 
ended March 31, 1997, compared to $215,199 in the fiscal year 
ended March 31, 1996. This was due to an increase in the 
average number of staff employed by the Company in the year 
ended March 31 1997 compared to the previous year.

General and administrative expense relating to discontinued 
operations decreased by 8% to $265,087  in the fiscal year 
ended March 31, 1997, compared to $288,756 in the fiscal year 
ended March 31, 1996. This is principally due to the decision 
to concentrate on indirect rather than direct channels and 
the consequent reduction in the number of staff employed in 
direct sales and other COPERNICUS related activities.

Occupancy costs did not change significantly. 1997 occupancy 
costs for continuing operations were $197,230 and in 1996: 
$198,356.  For discontinued operations 1997 occupancy 
expenses were $20,310 and 1996 occupancy expenses were 
$20,000.

Depreciation and amortization expenses relating to continuing 
operations increased by 31% to $49,604 in the fiscal year 
ended March 31, 1997 compared to $37,803 in the fiscal year 
ended March 31, 1996. Depreciation and amortization increased 
because of an increase in fixed assets relating to continuing 
operations from March 31, 1996 to March 31, 1997.

Depreciation and amortization expenses relating to 
discontinued operations increased by 88% to $181,276 in the 
fiscal year ended March 31, 1997 compared to $96,335 in the 
fiscal year ended March 31, 1996. Depreciation and 
amortization increased because of the amortization on the 
capitalization of the COPERNICUS software product and an 
increase in fixed assets relating to discontinued operations 
from March 31, 1996 to March 31, 1997.

In December 1996, the Company entered into a sublease with 
Go-America Tours in respect of approximately 12,500 square 
feet of space at 733 Third Avenue, New York, New York to be 
the Company's principal place of business.  Payments under 
this lease which runs until August 31, 1999 are expected to 
total $694,000 of which $275,000 is due in fiscal 
1998,$291,000 in fiscal 1999 and $128,000 in fiscal 2000.  
The Company has made no other material capital commitments.

The Company's net operating loss carryforwards and deferred 
tax asset account are approximately as follows:

<TABLE>

<S>                         <C>               <C>                  <C>
Period or Year                            Net operating       Net Deferred
ended March 31,     Year of expiration  loss carryforward       tax asset
---------------------------------------------------------------------------
1994                    2009                  $589,000           $   -
1995                    2010                 1,954,000               -
1996                    2011                 3,542,000               -
1997                    2012                 2,958,000               -
                                             ---------
                                             9,043,000           $   -
</TABLE>

The tax benefit of these losses (approximately $4,140,000 and 
$2,786,000 at March 31, 1997 and 1996 respectively) is 
subject to significant limitations due to the change in 
control for income tax purposes resulting from the Company's 
IPO in August 1995. The tax benefit of these losses has been 
fully reserved by a valuation allowance of the same amount 
due to the uncertainty of its realization.


Foreign Exchange.  The Company currently has no exposure to 
foreign currency exchange rate fluctuations. In the future 
the Company may seek to minimize its exposure to foreign 
currency exchange rate fluctuations by requesting that its 
customers, distributors, including systems integrators, and 
VARs located outside of the United States enter into 
contracts denominated in United States dollars or by entering 
into transactions to attempt to hedge some of the risks of 
foreign currency exchange rate fluctuations.

Liquidity and Capital Resources

The Company has financed its operations to date primarily 
through public and private sales of its debt and equity 
securities. The Company has raised a total of approximately 
$10.6 million from these activities. Of this total, $50,000 
was raised in connection with the initial capitalization of 
the Company, $1,141,000 was raised in a private placement of 
equity securities in October 1993; $450,000 in a private 
placement of equity securities and promissory notes in 
October 1994 (the "1994 Financing"), $1,312,500 in a private 
placement of equity securities and promissory notes in March 
1995 and April 1995 (collectively, the "1995 Financing"), 
$6,891,933 in the Company's IPO and $200,000 in the private 
placement of Series C Redeemable Preferred Stock in March 
1997. Of the funds raised in the 1994 Financing, $130,000 of 
promissory notes were repaid out of the proceeds of the 1995 
Financing, and the remaining principal of and interest on the 
notes issued in the 1994 Financing and the 1995 Financing 
were repaid from the net proceeds of the Company's IPO.  
Additionally on March 19, 1997 the Company borrowed $550,000 
from Level 8 Systems, Inc. by means of a loan secured by 
COPERNICUS and related assets.  Level 8 Systems, Inc. agreed 
to make this advance  as part of negotiations in which it 
sought to acquire COPERNICUS and related assets from the 
Company.  This loan is due to be repaid on July 18th 1997.  
On June 27 1997, the Company was received from VIE a loan of 
$50,000 secured on all the assets of the Company and an 
advance of $13,500 against royalties under the VIE License. 
These amounts are to be deducted from the purchase price due 
on closing of the  transactions contemplated by the Purchase 
Agreement.

In the fiscal years ended March 31, 1994 and March 31, 1995, 
the Company borrowed $466,409 from a shareholder, MTI (MTI is 
no longer a shareholder of the Company), pursuant to a 
subordinated financing agreement. This subordinated debt was 
canceled pursuant to a Settlement Agreement with MTI dated as 
of May 26, 1995.  This amount is not included in the $10.6 
million figure set forth in the preceding paragraph.

Pursuant to a certain Accounts Receivable Purchase and Sale 
Agreement between the Company and MTB Bank dated June 19, 
1995 (the "Factoring Agreement"), the Company sold, 
transferred and assigned all of its right, title and interest 
in certain receivables due to the Company in consideration of 
the payment of approximately $100,000 by MTB Bank to the 
Company. The Company used the proceeds of this factoring 
arrangement for working capital and other general corporate 
purposes. This loan was repaid with interest from the 
proceeds of the IPO.

Accounts payable and accrued expenses increased to $806,690 
at March 31, 1997 from $220,341 at March 31, 1996. Such 
decrease in accounts payable and accrued expenses is 
primarily due to the inability of the Company to pay its 
creditors in a timely manner at March 31, 1997 and a 
consequential significant increase in accounts payable.. At 
March 31, 1997, the Company had a working capital deficit of 
approximately $1,017,000.

Of the proceeds of $2,050,000 due at the closing of the 
Purchase Agreement, the Company expects to utilize $200,000 
to redeem the Series C Redeemable Preferred Stock, $650,000 
to repay the Secured Loan from Level 8 Systems, Inc. and 
approximately $300,000 as immediate payments to be made 
towards accounts payable and in settlement of employee 
termination payments.  A further $63,500 will be used to 
repay the June 27, 1997 advance from VIE.  This will leave a 
balance of approximately $836,500 available for working 
capital.



Based on the Company's current plan of operations, and 
assuming that the Company is successful in securing a sub-
tenant for its space,  it is anticipated that the net 
proceeds from the intended sale of COPERNICUS pursuant to the 
Purchase Agreement and the Company's expected operating 
revenues will provide sufficient working capital until 
approximately March 1998. The Company's total expenses from 
the closing of the transactions contemplated under the 
Purchase Agreement for the remainder of the fiscal year 
ending March 31,1998 are expected to be below $100,000 per 
month.  The Company will need additional financing prior to 
March 1998 and thereafter if demand for the Company's 
products is sufficiently great to require expansion at a 
faster rate than anticipated, or if research and development 
expenditures or the extent of service and customer support 
that the Company is required to provide are greater than 
expected or other opportunities arise which require 
significant investment, or if revenues are significantly 
lower than expected.  Additionally, the Company may require 
significant additional financing to complete any acquisition. 
If financing is required, such financing may be raised 
through additional equity offerings, joint ventures or other 
collaborative relationships, borrowings and other sources. 
There can be no assurance that additional financing will be 
available or, if it is available, that it will be available 
on acceptable terms. If adequate funds are not available to 
satisfy either short or long-term capital requirements, the 
Company may be required to limit its operations significantly 
and may be unable to carry out its plan of operation. See 
Note 1 to the Company's financial statements and "Report of 
Independent Certified Public Accountants on Audited Financial 
Statements."

New Paradigm intends to seek to raise additional capital by 
the issuance of further equity securities. Negotiations are 
currently underway with investment bankers to this end. 
However, there can be no assurances that any such financing 
will be available or, if it is available, that it will be 
available on acceptable terms. If additional funds are raised 
through the issuance of equity securities, the percentage 
ownership of the then current shareholders of the Company 
will be reduced and such equity securities may have rights, 
preferences or privileges senior to those of the holders of 
the Common Stock. Unless the market price of the Company's 
Common Stock increases significantly over its market price on 
June 27, 1997 additional issuances of equity security could 
cause significant dilution to purchasers of Common Stock in 
the IPO.

Plan of Operation

During the fiscal year ending March 31, 1998, the Company 
intends to continue to develop its Internet business, both by 
bringing in new customers for its web-site services business 
and by launching new Internet related products.  (see 
"Internet - other products").  The Internet marketplace, 
while expanding rapidly is intensely competitive.  Through 
March 31, 1997, the Company's NPIL subsidiary had revenues of 
$62,420.

None of these products has been completed and feasibility 
studies in the likely commercial success of such products 
will need to be carried out prior to their launch.  The 
Company will require additional capital resources to 
successfully develop and market these and any other products 
and will consequently seek to conclude additional financing 
arrangements as soon as possible.  Given the uncertainty of 
the Company's financial position until the sale of the 
COPERNICUS assets has been approved, management considers it 
unlikely that any such financing arrangements can be 
concluded prior to the Shareholders Meeting.  

The Company also intends to seek acquisitions of or other 
business combinations with other businesses in related 
fields.  The Company will have very limited financial 
resources to offer to any such prospective partners and 
unless there is a significant improvement in the Company's 
stock price, will not have attractive stock to offer.  The 
Company therefore expects to be essentially opportunistic in 
seeking business combinations which are available to it.  
This means the Company may entertain proposals from 
businesses not directly related to its intended area of 
operations in order to seek the maximum value for 
shareholders.  The Company anticipates that any such 
combination will require additional financing, and therefore 
the attractiveness of any proposed combination to potential 
investors will need to be considered.



Item 7.  Financial Statements and Supplementary Data

Financial statements are included herein following Part IV, 
Item 13.

Item 8.  Disagreements with Accountants on Accounting 
and Financial Disclosure

Not applicable.


PART III

Item 9.  Directors, Executive Officers Promoters and 
Control Persons; Compliance with Section 16(a) of the 
Exchange Act

There are currently three members of the Company's Board of 
Directors. The Company's By-Laws authorize the Board of 
Directors to fix the number of authorized directors. The By-
Laws also authorize the Board of Directors to fill any 
vacancy on the Board of Directors.

The Company has agreed that Mr. Robert S. Trump, an investor 
and the purchaser of the Company's Series C Redeemable 
Preferred Stock in a private placement in March, 1997 may 
nominate for election one person to serve on the Board of 
Directors. Mr. Trump has orally advised the Company that he 
does not currently intend to nominate anyone to serve on the 
Board of Directors.

The following table sets forth the names, ages and positions 
with the Company of the Company's directors, executive 
officers and key employees:

Name                            Age             Position
---------------------------  --------      ----------------
Mark Blundell                   39      Chief Executive Officer, 
                                        President, Chief Financial 
                                        Officer, and Director
Matthew Fludgate                25      Secretary, and Vice 
                                        President
Daniel A. Gordon                57      Chairman of the Board of 
                                        Directors
Michael Taylor                  55      Director


Mark Blundell is the Chief Executive Officer, President, 
Chief Financial Officer and a director of the Company and has 
served in these capacities since the Company's inception. 
From October 1991 until December 1993, Mr. Blundell was 
initially the Chief Executive Officer of MTI's European 
subsidiary and then the Chief Operating Officer and Chief 
Financial Officer of MTI in New York. He was also a director 
of MTI from December 1993 to March 1994. From May 1988 to 
October 1991, Mr. Blundell was the Chief Executive Officer of 
London Fox, the futures and options exchange, where he 
introduced the first international electronic trading system. 
He is also a director and President of Lancer, a company 
initially formed to hold the intellectual property rights 
relating to the New Paradigm Architecture and which currently 
conducts no business. Lancer is a principal shareholder of 
the Company. Mr. Blundell received an M.A. in Politics, 
Philosophy and Economics from Pembroke College, Oxford.

Matthew Fludgate has been the Secretary and Vice President 
of Administration for the Company since May 9, 1997. Prior to 
this he was the Business Manager for the Company since 
November, 1993. From June 1993 through October 1993 Mr. 
Fludgate was an Executive Assistant at Management 
Technologies, Inc. Mr. Fludgate received a B.S. in Business 
Economics from the State University of New York at Oneonta.

Daniel A. Gordon, an attorney, has been a director and 
Chairman of the Board of Directors of the Company since 
November 1993. He has been a principal with Corporate Growth 
Services since 1992. Corporate Growth Services provides 
consulting support services to businesses in the early stages 
of development. From 1989 to 1992, Mr. Gordon served as 
President of COIN Banking Systems, Inc., which had been the 
banking systems division of COIN Financial Systems Inc. Mr. 
Gordon had served as Chairman and Chief Executive Officer of 
COIN Financial Systems Inc. from 1984 to 1989. He received a 
B.A. in English from Dartmouth College and an L.L.B. from 
George Washington University.

Michael Taylor has been a director of the Company since 
April 26, 1996. Since December 3, 1996 he has been a Senior 
Vice President of Gilford Securities.  Prior to that he was a 
Managing Director of Investment Banking at Laidlaw Equities 
from March 1996. He was Associate Director of Investment 
Banking for Josephthal Lyon & Ross from June 1989 to March 
1996. From early 1980 until joining Josephthal, he was 
President of Mostel & Taylor Securities, Inc., a NASD-member 
investment banking and brokerage firm. He has been involved 
in the securities industry since 1966, when he joined Lehman 
Brothers as an analyst. He has been a director of NDE 
Environmental, Inc. since July 1992. He is also Chairman of 
the Board of Jennifer Muller/The Works, a contemporary dance 
company. He attended Amherst College and Columbia University. 
In 1991, the Securities and Exchange Commission entered an 
administrative order finding that, in 1988 and 1989, Mr. 
Taylor aided Mostel & Taylor Securities, Inc. in connection 
with certain violations of the net capital requirements for 
securities broker-dealers imposed by the Securities Exchange 
Act of 1934, and suspended him from associating with a 
broker, dealer, investment company, investment adviser or 
municipal securities dealer in any capacity for 90 days and 
in a proprietary or supervisory capacity for an indefinite 
period with the right to apply for removal of such suspension 
after two years. He has applied to remove the suspension. Mr. 
Taylor consented to the order without admitting or denying 
its findings.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES 
EXCHANGE ACT OF 1934
 
Section 16(a) of the Securities Exchange Act of 1934 
("Section 16(a)") requires the Company's directors, executive 
officers, and persons who own more than 10% of a registered 
class of the Company's equity securities, to file with the 
Securities and Exchange Commission reports on Forms 3, 4 and 
5 concerning their ownership of the Common Stock and other 
equity securities of the Company.
 
Based solely on the Company's review of copies of such 
reports and written representations that no other reports 
were required, the Company believes that all its officers, 
directors and greater than ten percent beneficial owners 
complied with all filing requirements applicable to them with 
respect to transactions during the fiscal year ended March 
31, 1997,
 
Item 10.  Executive Compensation

The following table sets forth information concerning the 
compensation of the Company's chief executive officer and 
each of the other executive officers (the "Named Officers") 
for services rendered in all capacities to the Company. The 
Company has only four executive officers.
 
SUMMARY COMPENSATION TABLE

<TABLE>
<S>                               <C>         <C>     <C>    <C>          <C>         <C>          <C>
                                             Annual Compensation        Long Term Compensation
Name and Principal Position   Fiscal Year   Salary   Bonus  Other      Securities  Restricted   All Other
                                Ended                       Annual     underlying    Stock    Compensation
                              March 31,                   Compensation   options    Awards

Mark Blundell - Chief Exec-    1995       $150,000      $0  $45,000(1)          0        $0       $1,456(2)
utive Officer, Chief Finan-    1996       $150,000 $20,000  $57,000(1)     38,666        $0       $1,100(2)
cial Officer & President       1997       $150,000      $0  $57,000(1)    149,999        $0       $1,100(2)

John Brann -                   1995       $100,000      $0       $0             0        $0           $0
Vice President - Technology(3) 1996        $75,000      $0  $25,000(4)     38,666        $0         $810(2)
                               1997       $100,000      $0       $0       149,999        $0         $810(2)

Philip V. Caltabiano -         1995       $100,000      $0       $0             0      $188(6)        $0
Senior Vice President -        1996       $100,000      $0       $0        33,333      $188(6)        $0
Sales and Marketing (5)        1997        $50,000      $0  $75,000(7)    100,000      $188(6)        $0
                                                                                                       
Nicholas Field                 1995        $70,000      $0       $0             0      $100(9)        $0
Vice President -               1996        $80,000      $0       $0        22,500       $50(9)        $0
Implementation (8)             1997        $80,000      $0       $0        66,000        $0(9)        $0

Matthew Fludgate               1995        $33,000      $0       $0             0        $0           $0
Secretary and Vice President   1996        $35,000  $5,000       $0         8,667        $0           $0
- Administration               1997        $42,000      $0       $0        15,000        $0           $0

<FN>
<F1> (1) Reflects a non-accountable expense allowance of $4,000
per month and a car allowance of $750 per month paid to Mr. 
Blundell.

<F2> (2) Reflects the insurance premium paid by the Company for 
term life insurance for Mr. Blundell and Mr. Brann.

<F3> (3) Resigned effective May 9, 1997.

<F4> (4) Reflects severance pay paid to Mr. Brann when his 
employment terminated on March 18, 1996 upon expiration of 
his visa to work in the United States.  Mr. Brann was 
reemployed by the Company upon being granted a new visa on 
August 1,1996.

<F5> (5) Resigned effective September 25, 1996.

<F6> (6) Upon first joining the Company in 1993, the Company 
awarded Mr. Caltabiano a stock grant of 20,000 shares of 
Common Stock, 15,000 of which have vested. The amounts 
included in the table reflects 5,000 shares of Common Stock 
that vested in each of the fiscal years ended March 31, 1995 
and March 31, 1996. These shares were awarded in connection 
with the organization of the Company and have been valued at 
par value ($.01 per share) before giving effect to a reverse 
split of the Company's Common Stock that was approved by the 
Company's shareholders on April 18, 1995. 

<F7> (7) Reflects payment agreed to be paid in respect of a termination
agreement dated September 27, 1996.

<F8> (8) Resigned effective March 21, 1997.

<F9> (9) Upon first joining the Company in 1993, the Company 
awarded Mr. Field a stock grant of 8,000 shares of Common 
Stock, all of which have vested. The amount included in this 
table reflects 2,667 shares that vested during the year ended 
March 31, 1995 and 1,333 shares that vested during the year 
ended March 31, 1996. These shares were awarded in connection 
with the organization of the Company and have been valued at 
par value ($.01 per share) before giving effect to a reverse 
split of the Company's Common Stock that was approved by the 
Company's shareholders on April 18, 1995. 

</FN>
</TABLE>

OPTION GRANTS IN FISCAL YEAR ENDED MARCH 31, 1997
 
The following table sets forth all grants of stock options 
made during the fiscal year ended March 31, 1997 pursuant to 
the Company's Stock Option Plan to the Named Officers:

                            Individual Grants
<TABLE>
<S>                        <C>             <C>                <C>         <C>
Name                    Number of      % of Total          Average      Expiration
                        Securities   Options Granted      Exercise or    Date
                        Underlying   to Employees in      Base Price
                        Options      Fiscal Year          Per Share
                        Granted      Ended March 31,
                                        1997 (a)

Mark Blundell           149,999         21%                 $1.25       November 2000
John Brann (b)          149,999         21%                 $1.25       November 2000
Philip V. Caltabiano    100,000         14%                 $1.25       November 2000
Nicholas Field (b)       66,000          9%                 $1.25       November 2000
Matthew Fludgate         15,000          2%                 $1.625      November 2000
All Shareholders            N/A         N/A                 N/A         N/A
All Optionees (a)       715,000         N/A                 $1.35       November 2000

<FN>

<F1> (a) Includes 30,000 shares of Common Stock issuable upon
exercise of options granted to outside directors.

<F2> (b) Mr Field resigned on March 21, 1997 and Mr. Brann 
resigned on May 9, 1997.  The terms of the Option Plan 
provide that these options will expire 90 days after the date 
of resignation unless exercised prior to such date.  As at 
June 31, 1997 none of these options have been exercised.

</FN>
</TABLE>

        AGGREGATE OPTION EXERCISES IN FISCAL YEAR ENDED MARCH
                31, 1997 AND YEAR-END OPTION VALUES
 
The following table sets forth information with respect to 
options exercised by each of the Named Officers during the 
fiscal year ended March 31, 1997 and the number and value of 
unexercised options as of March 31, 1997: 

<TABLE>

<S>                  <C>          <C>             <C>         <C>            <C>          <C>
                   Shares       Value           Number of Securities       Value of Unexercised in-
                  Acquired      Realized       Underlying Unexercised       -the-Money Options at
                 on Exercise                      Options at March              March 31, 1997(a)
Name                                                   31, 1997
                                              Exercisable  Unexercisable  Exercisable  Unexercisable
Mark Blundell           0          $0           38,666        149,999           $0          $0
John Brann              0           0           38,666        149,999           $0          $0
Philip V. Caltabiano    0           0                0              0           $0          $0
Nicholas Field          0           0           22,200         66,000           $0          $0
Matthew Fludgate        0           0            8,667         15,000           $0          $0

<FN>

<F1> (a) Based on the closing price of New Paradigm Software Corp.
Common Stock on March 31, 1997 of $0.50 as reported on NASDAQ 
Bulletin Board. 
</FN>
</TABLE>

Employment Contracts

The Company has entered into employment contracts with 
Messrs. Blundell, Brann and Caltabiano. The employment 
contracts of Messrs. Blundell, Brann and Caltabiano contain 
the following principal features.

Mr. Blundell:  Term:  Five years with a remaining term of 
approximately two years (1994-1999); Base Salary: $200,000 
per annum (Mr. Blundell has waived $50,000 per annum of this 
Base Salary (which is not being accrued) until such time as 
the Company would otherwise be able to report a pre-tax 
annual profit in excess of $75,000); Allowances:  Mr. 
Blundell receives a non-accountable expense allowance of 
$4,000 per month and a car allowance of $750 per month.  
Common Stock Award: Mr. Blundell received 26,667 shares of 
Common Stock. If the Company achieves at least $2.5 million 
in sales in any period of twelve consecutive months, Mr. 
Blundell will be paid a bonus of $50,000. Mr. Blundell's 
employment contract provides that if such bonus target is 
achieved and such bonus paid, he and the Company will 
negotiate a new bonus arrangement. Mr. Blundell is entitled 
to receive a death benefit of $1,000,000 payable to a 
beneficiary named by him. The Company has obtained a life 
insurance policy to fund this benefit. Mr. Blundell's 
employment agreement will renew automatically from year to 
year unless Mr. Blundell or the Company gives notice of 
termination to the other on or before May 1 of any year 
beginning in 1999.  In the event that the Company terminates 
the contract other than for cause, or in the event of a 
change of control or a sale of substantially all the assets 
of the Company, Mr Blundell is entitled to receive a payment 
equivalent to two year's benefits under the contract.

Mr. Brann:  Term:  Three years with a remaining term of 
approximately one year(1995-1998); Base Salary: $125,000 per 
annum (Mr. Brann has waived $25,000 per annum of this Base 
Salary (which is not being accrued) until such time as the 
Company would otherwise be able to report a pre-tax annual 
profit in excess of $75,000); Common Stock Award: Mr. Brann 
received 26,667 shares of Common Stock. Mr. Brann is entitled 
to a death benefit of $1,000,000 payable to a beneficiary 
named by him. The Company has obtained a life insurance 
policy to fund this benefit. Mr. Brann's employment agreement 
will renew automatically from year to year unless Mr. Brann 
or the Company gives notice of termination to the other on or 
before May 1 of any year beginning in 1999. Mr. Brann's 
employment as Vice President of Technology was terminated on 
March 21, 1996 when his visa to work in the United States 
expired. On May 13, 1997 the Company entered into an 
agreement with John Brann, the former Secretary and Vice 
President of the Company, to terminate his employment with 
the Company (the "Termination Agreement") pursuant to an 
employment agreement dated June 14, 1993, as amended. 
Termination of Mr. Brann's employment is a condition under 
the purchase agreement with VIE. As consideration for the 
termination under the Termination Agreement the Company 
agreed to pay Mr. Brann a total of $50,000 on the earlier of 
(i) the closing of the purchase agreement between the Company 
and VIE, or (ii) Mr. Brann entering into employment with VIE.  
The Company will receive a $30,000 loan from Mr. Brann to be 
repaid under the following terms (a) 50% of all royalties due 
to the Company under the purchase agreement with VIE up to a 
total of $40,000, or (b) full payment of the principal of the 
loan at any time including interest at 8% per annum.  The 
Company has been verbally informed by VIE that it intends to 
employ Mr. Brann. The Company has also been informed that Mr. 
Brann will be granted certain stock options in VIE in 
connection with such employment.

Mr. Caltabiano:  Term:  Three years (but terminated as set 
forth below); Base Salary: $100,000 per annum plus 
commissions on sales; Common Stock Award: Mr. Caltabiano 
received 20,000 shares of Common Stock, 15,000 of which have 
vested..  On September 25, 1996, Mr. Caltabiano left the 
Company and the employment agreement was terminated for 5,000 
shares of Common Stock, a $50,000 termination fee and a 
$25,000 consulting fee.

The directors of the Company currently receive a retainer of 
$1,000 per quarter and a fee of $1,000  for each meeting of 
the Board of Directors that they attend. They are also 
reimbursed by the Company for their direct costs for 
attending meetings. On December 8, 1993, Mr. Gordon and three 
former directors were each granted, as remuneration for 
service on the Board of Directors, an option ("Directors' 
Options") to acquire, at a price of $5.00 per unit, 10,000 
units, each unit consisting of one share of Common Stock and 
one warrant to purchase one share of Common Stock at an 
exercise price of $6.00 per share ("1993 Warrant"). These 
options will expire on November 1, 1998. On April 26, 1995 
Messrs. Blundell, Brann, Gordon and two former directors were 
granted options under the Company's Stock Option Plan to 
purchase 5,333 shares of Common Stock each at an exercise 
price of $4.50 per share. These options became exercisable on 
April 26, 1996 and expire on April 26, 2005. On November 30, 
1995 Mr. Gordon and two former directors were each granted 
options under the Company's Stock Option Plan to purchase 
10,000 shares of Common Stock  at an exercise price of $5.125 
per share. Messrs. Blundell and  Brann were granted options 
under the Company's Stock Option Plan to purchase 20,000 
shares of Common Stock at the same exercise price. These 
options become exercisable on November 30, 1996 and expire on 
November 30, 2000. On April 24, 1996, Mr. Taylor was granted 
options under the Company's Stock Option Plan to purchase 
10,000 shares of Common Stock at an exercise price of $5.125 
per share. These options become exercisable on April 24, 1997 
and expire on April 24, 2001.

Pursuant to an Underwriting Agreement dated August 11, 1995 
(the "Underwriting Agreement") between the Company and First 
Allied Securities, Inc., as representative (the 
"Representative") of the underwriters in the Company's 
initial public offering, the Company agreed that until 
September 11, 1996 it would not issue any options to any 
director or officer of the Company without the prior written 
consent of the Representative. The Representative agreed to 
the issuance of the options granted in November 1995.

Item 12.  Security Ownership of Certain Beneficial 
Owners And Management

The following table indicates the beneficial ownership of the 
Company's Common Stock as of May 1, 1997, by (1) each of the 
directors, (2) each of the executive officers of the Company, 
(3) all directors, and executive officers of the Company as a 
group and (4) each person or entity which beneficially owned 
in excess of five percent of the Common Stock, based upon 
information supplied by each of the directors, nominees, 
executive officers and five percent beneficial owners:
 
Common Stock
<TABLE>
<S>                               <C>             <C>            <C>             <C>
Name of Beneficial Owner(a)     Right to       Right to      Total Number   Percent of
                              Sole Voting    Shared Voting     of Shares    Common Stock
                              and Investment and Investment  Beneficially   Beneficially
                                 Power           Power          Owned          Owned

Mark Blundell                  220,665(b)       199,999(c)      420,664         16%
John Brann                     219,332(d)       199,999(c)      419,331         16%
Matthew Fludgate                25,508(e)             0          25,508          1%
Daniel Gordon                   35,333(f)             0          35,333          1%
Lancer Holdings                199,999(g)             0         199,999          8%
Midland Associates             619,999(h)             0         619,999         24%
Michael Taylor                  10,000(i)             0          10,000         (j)
Robert Trump                   350,000(k)       619,999(l)      969,999         34%
All Directors and 
Executive 
Officers of the 
Company as a 
group (a total of 
5 persons)                      510,838(m)      199,999(n)      710,837         23%

<FN>

<F1> (a) The shares of Common Stock beneficially owned by each
person or by all directors and executive officers as a group, 
and the shares included in the total number of shares of 
Common Stock outstanding used to determine the percentage of 
shares of Common Stock beneficially owned by each person and 
such group, have been adjusted in accordance with Rule 13d-3 
under the Securities Exchange Act of 1934 to reflect the 
ownership of shares issuable upon exercise of outstanding 
options, warrants or other common stock equivalents which are 
exercisable within 60 days. As provided in such Rule, such 
shares issuable to any holder are deemed outstanding for the 
purpose of calculating such holder's beneficial ownership but 
not any other holder's beneficial ownership.

<F2> (b) Consists of (i) 26,667 shares of Common Stock, (ii) 5,333 
shares of Common Stock issuable upon exercise of warrants 
issued in a 1994 private placement of the Company's 
securities (the "1994 Warrants"), (iii) 38,666 shares of 
Common Stock issuable upon exercise of options granted under 
the Company's Stock option Plan ("SOP") that are currently 
exercisable, and (iv) up to 149,999 shares of Common Stock 
underlying stock options be granted under the  Executive 
Stock Option Plan.  .

<F3> (c) Represents the holdings of Lancer Holdings of which Mr. 
Blundell and Mr. Brann are each 33% owners and directors and 
officers. Consists of 166,666 shares of Common Stock and 
33,333 shares of Common Stock issuable upon exercise of 
warrants held by Lancer (the "MBA Warrants").

<F4> (d) Consists of (i) 26,667 shares of Common Stock, (ii) 4,000 
shares of Common Stock issuable upon exercise of 1994 
Warrants, (iii) 38,666 shares of Common Stock issuable upon 
exercise of options granted under the SOP that are currently 
exercisable and (iv) up to 149,999 shares of Common Stock 
underlying stock options granted under the Executive Stock 
Option Plan.

<F5> (e) Consists of (i)  534 shares of Common Stock, (ii)  1,307 
shares of Common Stock issuable upon exercise of 1994 
Warrants and (iii) 23,667 shares of Common Stock issuable 
upon the exercise of options granted under the SOP

<F6> (f) Consists of (i) 10,000 shares of Common Stock and 10,000 
shares of Common Stock underlying 1993 Warrants issuable upon 
exercise of Directors' Options granted in 1993 to non-
employee directors of the Company and (ii) 15,333 shares of 
Common Stock issuable upon exercise of options granted under 
the SOP that are currently exercisable.

<F7> (g) Consists of 166,666 shares of Common Stock and 33,333 
shares of Common Stock issuable upon exercise of the MBA 
warrants held by Lancer Holdings.

<F8> (h) Consists of 439,999 shares of Common Stock and 180,000 
shares of Common Stock issuable upon exercise of warrants. 
These securities were previously owned by Management 
Technologies, Inc. ("MTI") and transferred to Midland 
Associates in satisfaction of a loan to MTI by Midland 
Associates.

<F9> (i) Consists of 10,000 shares of Common Stock issuable upon 
exercise of options granted under the SOP.

<F10> (j) Less than 1%.

<F11> (k) Consists of (i) 200,000 shares of Common Stock issuable 
upon exercise of 1994 Warrants (ii) 150,000 shares of Common 
Stock issuable upon exercise of warrants having an exercise 
price of $2.00 per share issued by the Company in connection 
with a loan by Mr. Trump that was subsequently canceled as 
partial consideration for issuance of the Series C Redeemable 
Preferred Stock (the "Trump Warrants").

<F12> (l)  Represents the holdings of Midland Associates. Consists 
of the securities listed in note h above.

<F13> (m) Consists of all of the securities in notes b-f above.

<F14> (n) Consists of the securities in note g above.

</FN>
</TABLE>

The following table indicates the beneficial ownership of the 
Company's Preferred Stock as of May 1, 1997, by (1) each of 
the directors, (2) each of the executive officers of the 
Company, (3) all directors, and executive officers of the 
Company as a group and (4) each person or entity which 
beneficially owned in excess of five percent of the Preferred 
Stock, based upon information supplied by each of the 
directors, nominees, executive officers and five percent 
beneficial owners:
 
Series C Redeemable Preferred Stock (a)
<TABLE>
<S>                               <C>             <C>            <C>             <C>
Name of Beneficial Owner(a)     Right to       Right to      Total Number   Percent of
                              Sole Voting    Shared Voting     of Shares    Common Stock
                              and Investment and Investment  Beneficially   Beneficially
                                 Power           Power          Owned          Owned

Mark Blundell                     0                0              0             0%
John Brann                        0                0              0             0%
Matthew Fludgate                  0                0              0             0%
Daniel Gordon                     0                0              0             0%
Lancer Holdings                   0                0              0             0%
Midland Associates                0                0              0             0%
Michael Taylor                    0                0              0             0%
Robert Trump                800,000                0        800,000           100%
All Directors and 
Executive 
Officers of the 
Company as a 
group (a total of 
5 persons)                        0                0              0             0%

<FN>

<F1> (a) The only preferred stock outstanding as at March 31, 1997 
was the Series C Redeemable Preferred Stock. Each Series C 
Redeemable Preferred Share has four (4) votes on any matter 
to be put to a vote of the Company's shareholders.  The 
Series C Redeemable Preferred Shares therefore represent 56% 
of the votes on any matter to be put to a vote of the 
Company's shareholders.

<F2> (b) The shares of Preferred Stock beneficially owned by each 
person or by all directors and executive officers as a group, 
and the shares included in the total number of shares of 
Preferred Stock outstanding used to determine the percentage 
of shares of Preferred Stock beneficially owned by each 
person and such group, have been adjusted in accordance with 
Rule 13d-3 under the Securities Exchange Act of 1934 to 
reflect the ownership of shares issuable upon exercise of 
outstanding options, warrants or other preferred stock 
equivalents which are exercisable within 60 days. As provided 
in such Rule, such shares issuable to any holder are deemed 
outstanding for the purpose of calculating such holder's 
beneficial ownership but not any other holder's beneficial 
ownership.

Item 12.  Certain Relationships and Related Transactions

General

The following is a discussion of certain transactions entered 
into by the Company with officers, directors, security 
holders and affiliates thereof. The Company believes that the 
terms of these transactions were no less favorable to the 
Company than would have been obtained from a non-affiliated 
third party for similar transactions at the time of entering 
into such transactions.

The Company has adopted a policy whereby any future 
transactions, including loans, between the Company and its 
directors, officers, principal shareholders and other 
affiliates, will be on terms no less favorable to the Company 
than could be obtained from unaffiliated third persons on an 
arm's-length basis at the time that the transaction was 
entered into and will be reviewed and approved by a majority 
of the Company's directors, including a majority of the 
Company's independent disinterested directors.

Issuance of Securities to Directors, Executive 
Officers and Their Affiliates

In a private placement of the Company's securities for which 
a closing was held on October 20, 1994 (the "1994 
Financing"), Mr. Blundell purchased for $15,000 a fractional 
unit comprised of (i) a two-year promissory note with an 
increasing interest rate starting at 10% per annum (a "1994 
Note") in the principal amount of $15,000 and (ii) 1994 
Warrants exercisable for 12,000 shares of Common Stock; Mr. 
Brann purchased for $5,000 a fractional unit comprised of (i) 
a 1994 Note in the principal amount of $5,000 and (ii) 1994 
Warrants exercisable for 4,000 shares of Common Stock; Mr. 
Blundell subsequently transferred 1994 Warrants exercisable 
for 6,667 shares of Common Stock. The shares of Common Stock 
issuable upon exercise of the 1994 Warrants purchased in the 
1994 Financing by the foregoing directors and executive 
officers are registered for sale under the Securities Act of 
1933.

On March 22, 1995, 33,333 shares of Common Stock and warrants 
(the "MBA Warrants"), which are exercisable for 33,333 shares 
of Common Stock at an exercise price of $5.63 per share, 
subject to adjustment under certain circumstances, were 
issued to Mark Blundell and Associates (now known as Lancer) 
in connection with the Company's acquisition of the New 
Paradigm Architecture. See "New Paradigm Architecture." The 
MBA Warrants will expire on March 21, 2000 and are not 
redeemable.

See "Executive Compensation - Directors Compensation" and 
"Options Grants in Fiscal Year Ended March 31, 1997" with 
respect to options granted to directors and executive 
officers of the Company during the fiscal year ended March 
31, 1997.

New Paradigm Architecture

The Company acquired the rights to its proprietary approach 
to developing computer programs (the "New Paradigm 
Architecture") used to develop its COPERNICUS software and 
related intellectual property rights from Lancer as of March 
22, 1995 for a consideration equal to 33,333 shares of Common 
Stock and the MBA Warrants. Lancer no longer holds any right, 
title or interest in COPERNICUS or the New Paradigm 
Architecture. Prior to the acquisition of the New Paradigm 
Architecture, the Company held an exclusive, perpetual 
license to use the New Paradigm Architecture from Lancer. The 
Company acquired the license pursuant to a license agreement 
with Lancer dated as of July 20, 1993. Pursuant to the July 
20, 1993 license agreement, the Company made a one-time 
payment of 133,333 shares of Common Stock in 1993 and annual 
license fee payments of $10,000 in 1993 and 1994.

The Company's Chief Executive Officer and President, Mark 
Blundell, and its former director and Vice President of 
Technology, John Brann, collectively own 66% of the voting 
stock of Lancer. Messrs. Blundell and Brann have no direct or 
indirect interest in the remaining 34% of the voting stock of 
Lancer. Messrs. Blundell and Brann are the only directors of 
Lancer Holdings and Mr. Blundell is a director of the 
Company. 

Other Transactions

Mr. Jeff Kahn, a former director, is the President of Kahn 
Communications Group Inc.("KCG"), a division of Ruder Finn. 
Kahn Communications Group provided public relations services 
to the Company from its inception until December 1996 for 
which it received a monthly fixed fee from the Company of 
$5,000. KCG also provided special event related marketing 
services to the Company for which it received additional fees 
on a per engagement basis. In the fiscal year ended March 31, 
1996, KCG received  $88,589 and in the fiscal year ended 
March 31, 1997,  in such fees.  The Company ceased using the 
services of KCG in December 1996 following the termination of 
the Company's marketing program.

On September 1, 1995 the Company entered into a consulting 
contract with Corporate Growth Services, a corporation owned 
by Mr. Gordon, Chairman of the Board of Directors. Corporate 
Growth Services provides small development stage companies 
with management consulting. Under the terms of the contract 
Corporate Growth Services receives a consulting fee of $2,000 
per month over and above any fees Mr. Gordon receives for 
attending meetings of the Board of Directors. In the fiscal 
year ended March 31, 1996 Corporate Growth Services received 
$18,000 in such fees and in the fiscal year ended March 31, 
1997, $24,000..

Effective March 31, 1996, the Company entered into a 
five-year value added reseller agreement with Petra, Inc. 
("Petra"). Petra's president, Mr. Barrington J Fludgate, is a 
consultant to and a former director of the Company. The 
Company granted to Petra the right to license and distribute 
the Company's COPERNICUS software program integrated with 
Petra's products.  Petra never paid the license fee of 
$100,000 due to the Company on September 30, 1996, and 
consequently the Company terminated the agreement.

Loan from Mr. Robert Trump

In early January, 1997, in order to continue operating, the 
Company solicited a $150,000 loan from Mr. Robert Trump which 
was received on January 16, 1997.  The principal terms of 
this loan were as follows:

o Advance:              $150,000.
o Term:                 6 months (to expire July 14th, 1997).
o Interest Rate:        To be paid in warrants, see below.
o Warrants:             150,000 three-year warrants with an 
exercise price of $2.00 per share, in lieu
			of interest.

Other terms:	The 180,000 Midland Warrants, held by Midland 
Associates, an affiliate of Mr. Trump, were amended as 
follows:  The expiration date was changed from August 11, 
1998 to January 16, 2002 and the exercise price reduced from 
$3.75 to $2.00 per share.

Series C Redeemable Preferred Stock

On March 13, 1997, Mr. Robert Trump agreed to advance the 
Company a further $50,000 which the Company urgently required 
in order to continue its operations and meet its payroll 
obligations.  The earlier $150,000 advance and the March 13, 
1997 $50,000 advance were combined into $200,000 to be used 
to subscribe for 800,000 shares of Series C Redeemable 
Preferred Stock, $0.01 par value, with the following 
principal terms:

o Each Series C Redeemable Preferred Share has four (4) votes 
on any matter to be put to a vote of the Company's 
shareholders.
o The Series C Redeemable Preferred Stock can be redeemed at 
the Company's option at any time upon payment of $200,000.
o The Series C Redeemable Preferred Stock can be redeemed at 
the holder's option following any investment in the Company 
or a sale of any of the Company's assets where the proceeds 
are $2,000,000 or more.
o The Series C Redeemable Preferred Stock will have 
preference in the event of any liquidation of the Company 
to the extent of $200,000.

The Company therefore intends to redeem the Series C 
Redeemable Preferred Stock using $200,000 of the proceeds of 
the closing of the transactions contemplated by the Purchase 
Agreement.  At that time, there were no other sources of 
funds actually offered to the Company.  Management believes 
that these terms were the best it could secure at that time, 
and these terms were arrived at through arms-length 
negotiations with Mr. Trump.  The level of four votes per 
share was required by the Mr. Trump in order to give him 
significant influence in the approval of any potential sale 
of COPERNICUS to ensure that the advance was repaid.  The 
Series C Preferred Stock represent 56% of the votes on any 
matter to be put to a vote of the Company's shareholders, and 
increased the proportion of the vote on any such matter 
exercisable by Mr. Trump, and Midland Associates, (with which 
he is affiliated) from 18% to 64%.

Management believes that the Company was able to secure 
improved terms from Level 8 and then from VIE as a result of 
this transaction.  Neither Mr. Trump nor Midland Associates 
is affiliated with either Level 8 or VIE.

PART IV

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

A Exhibits

3.1
Restated Certificate of Incorporation of the Company, as 
amended by a Certificate of Amendment dated August 14, 1995 
and as corrected by a  Certificate of Corrections dated 
August 24, 1995 (incorporated by reference to Exhibit 2 to 
Form 10-QSB for the Quarterly Period ended June 30, 1995 
"the June 1995 Form 10-QSB")) 

3.1.1
Certificate of Designation establishing Series C Redeemable 
Preferred Stock

3.2
By-laws of the Company (incorporated by reference to Exhibit 
3.2 to Amendment No. 1 to the Registration Statement on Form 
SB-2 (File No. 33-92988NY (the "Registration Statement")).

4.1
Form of Warrant Agreement between the Company and 
Continental Stock Transfer & Trust  Company (incorporated by 
reference to Exhibit 4 to the June 1995 Form 10-QSB)

4.2
Form of Representative's Warrant Agreement (incorporated by 
reference to Exhibit 4.2 to Amendment No. 1 to the 
Registration Statement).

4.3
Form of 1993 Warrant (incorporated by reference to Exhibit 
4.3 to Amendment No. 1 to the Registration Statement).

4.4
Letter dated December 8, 1993 from the Company to Barrington 
J. Fludgate granting Directors Options to purchase shares of 
Common Stock and 1993 Warrants. Substantially identical 
grants were made to Anthony J. Cataldo, Daniel A. Gordon and 
Jeff Kahn (incorporated by reference to Exhibit 4.4 
Amendment to No. 1 to the Registration Statement).

4.5
Form of 1994 Warrant (incorporated by reference to Exhibit 
4.5 to Amendment No. 1 to the Registration Statement).

4.6
Form of 1995 Warrant (incorporated by reference to Exhibit 
4.6 to Amendment No. 1 to the Registration Statement).

4.7
Form of Lancer Warrant. (incorporated by reference to 
Exhibit 4.7 to the Registration Statement).

4.8
Form of Financial Advisory and Investment Banking Agreement 
with the Representative (incorporated by reference to 
Exhibit 4.8 to Amendment No. 3 to the Registration 
Statement).

4.9
Form of Midland Warrant (incorporated by reference to 
Exhibit 4.9 to the Registration Statement).

4.10
Form of Agreement between the Company and Josephthal Lyon & 
Ross incorporated regarding termination of certain warrants 
(incorporated by reference to Exhibit 4.10 to Amendment No. 
2 to the Registration Statement).

4.11
Option Agreement dated October 9, 1995 between the Company 
and the Electric Magic Company (incorporated herein by 
reference to Exhibit 4.11 to Form 10-QSB for the Quarterly 
Period ended September 30, 1995 (the "September 1995 Form 
10-QSB")).

4.12
Warrant issued to Omotsu Holdings Limited (incorporated by 
reference to Exhibit 4.12 to the September 1995 Form 10-
QSB).

10.1.1
Blundell Employment Contract, as amended (incorporated by 
reference to Exhibit 10.1.1 to the Registration Statement).

10.1.2
Brann Employment Contract, as amended (incorporated by 
reference to Exhibit 10.1.2 to the Registration Statement).

10.1.3
Caltabiano Employment Contract, as amended (incorporated by 
reference to Exhibit 10.1.3 to the Registration Statement).

10.2
MBA Rights Purchase Agreement dated March 22, 1995 
(incorporated by reference to Exhibit 10.2 to the 
Registration Statement).

10.3
Voting Trust Agreement (incorporated by reference to Exhibit 
10.3 to Amendment No. 1 to the Registration Statement).

10.4
MTI Settlement Agreement dated as of May 26, 1995 
(incorporated by reference to Exhibit 10.4 to the 
Registration Statement).

10.5.1
Paxcell, Inc. Distribution Agreement dated March 31, 1994 
(incorporated by reference to Exhibit 10.5.1 to the 
Registration Statement).

10.5.2
Rivergate Systems, Inc. Distribution Agreement dated June 
23, 1994 (incorporated by reference to Exhibit 10.5.2 to the 
Registration Statement).

10.5.3
New Venture Technologies Distribution Agreement dated 
January  11, 1995 (incorporated by reference to Exhibit 
10.5.3 to Amendment No. 1 to the Registration Statement).

10.6.1
Financial Performance Corporation Value-Added Reseller 
Agreement dated April 29, 1994 (incorporated by reference to 
Exhibit 10.6.1 to the Registration Statement).

10.6.2
Benson Software Systems, Inc. Value-Added Reseller Agreement 
dated October 25, 1994 (incorporated by reference to Exhibit 
10.6.2 to the Registration Statement).

10.6.3
Praxis Value-Added Reseller Agreement dated January 9, 1995 
(incorporated by reference to Exhibit 10.6.3 to the 
Registration Statement).

10.7
Novell Inc. Co-Marketing Letter Agreement dated December 2, 
1994 (incorporated by reference to Exhibit 10.7 to the 
Registration Statement).

10.8
Publicitas Letter Agreement dated January 31, 1995 
(incorporated by reference to Exhibit 10.8 to the 
Registration Statement).

10.9
Stock Option Plan of the Company (incorporated by reference 
to Exhibit 10.9 to the Registration Statement).

10.10
Accounts Receivable Purchase and Sale Agreement between the 
Company and MTB Bank (incorporated by reference to Exhibit 
10.10 to Amendment No. 1 to the Registration Statement).

10.11
Software License Agreement dated May 31, 1995 between the 
Company and Marriott International, Inc. (incorporated by 
reference to Exhibit 10.11 to Amendment No. 1 to the 
Registration Statement).

10.13
Marriott Acceptance Certificate, dated June 8, 1995 
(incorporated by reference to Exhibit 10.13 to Amendment No. 
2 to the Registration Statement).

10.14
Agreement dated October 9, 1995 between the Company and 
Electric Magic Company (incorporated by reference to Exhibit 
10.14 to the September 1995 Form 10-QSB).

10.15
Agreement dated October 31, 1995 between the Company and 
Camelot Corporation (incorporated by reference to Exhibit 
10.15 to the September 1995 Form 10-QSB).

10.16
Note issued by the Company to Mr. Robert Trump dated January 
15, 1997 (incorporated by reference to Form 8-K filed 
January 16, 1997).

10.18
Lease dated October 31, 1997 between the Company and 
GoAmerica Tours, Inc. (incorporated by reference to Exhibit 
10.18 to the December 31, 1996 Form 10-QSB).

10.19
Agreement dated as of April 1, 1997 between the Company and 
Custom Information Systems, Inc. (incorporated by reference 
to Form 8-K filed May 2, 1997)

10.20
Letter Agreement dated March 19, 1997 between the Company 
and Level 8 Systems, Inc.

10.21
Agreements dated as of May 9, 1997 between the Company and 
VIE Systems, Inc. (incorporated by reference to Form 8K 
filed May 16, 1997)

11 Statement re: computation of per share earnings (losses)

24 Power of Attorney.

99 Financial data schedule

B. Reports on Form 8-K

	The following reports have been filed on Form 8-K since 
February 15, 1997.

1) March 17, 1997 New Paradigm Software Corp. Reports 
Delisting from NASDAQ SmallCap Market

2) March 19, 1997 New Paradigm Software Corp. Reports 
Financing - Preferred Stock Issue

3) April 17, 1997 New Paradigm Software Corp. Reports 
Sale of EDI Business for $300,000

4) May 9, 1997 Mr. John Brann Resigns as Director and 
Corporate Secretary of the Company

5) May 23, 1997 New Paradigm Software Corp. Announces 
Sale of COPERNICUS

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, 
the registrant caused this report to be signed on its behalf 
by the undersigned, thereunto duly authorized.

                                      NEW PARADIGM SOFTWARE CORP.
                                           (Registrant)



Date:	June 30, 1997			_/s/ Mark Blundell________________
                                             Mark Blundell
                                             President & Chief Executive 
                                             Officer

In accordance with the Exchange Act, 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/Mark Blundell
    Mark Blundell        Chief Executive Officer  and 
                         President (principal executive 
                         officer, principal financial 
                         officer and principal 
                         accounting officer) and Director       June  30, 1997

     /s/Daniel A. Gordon     
     Daniel A. Gordon
By Arthur M. Mitchell
Attorney in fact        Chairman of the Board of Directors      June 30, 1997

     /s/ Michael Taylor         
     Michael Taylor     Director                                June 30, 1997

<PAGE>

                        AUDITED FINANCIAL STATEMENTS


                NEW PARADIGM SOFTWARE CORP. AND SUBSIDIARIES


                      CONSOLIDATED FINANCIAL STATEMENTS



                     YEARS ENDED MARCH 31, 1997 AND 1996



Report of independent certified public accountants              F-2

Consolidated financial statements:
        Balance sheet                                           F-3
        Statements of operations                                F-4
	Statements of shareholders' equity (capital deficit)	F-5 - F-6
        Statements of cash flows                                F-7
        Notes to consolidated financial statements              F-8 - F-20


Report of Independent Certified Public Accountants

New Paradigm Software Corp.
	and Subsidiaries
New York, New York

We have audited the accompanying consolidated balance sheet
of New Paradigm Software Corp. and Subsidiaries as of 
March 31, 1997, and the related consolidated statements of 
operations, shareholders' equity (capital deficit), and cash 
flows for the two years in the period ended March 31, 1997. These financial 
statements are the responsibility of the Company's 
management. Our responsibility is to express an opinion on 
these financial statements based on our audits.

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

In our opinion, the consolidated financial statements 
referred to above present fairly, in all material respects, 
the financial position of New Paradigm Software Corp. and 
Subsidiaries at March 31, 1997, and the results of their 
operations and their cash flows for the two years in the perios ended
March 31, 1997, in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been 
prepared assuming that the Company will continue as a going 
concern. As disclosed in Note 1, the Company has incurred 
significant losses since its inception and as discussed in 
Note 14, the Company has entered into agreements to dispose 
of its COPERNICUS and EDI businesses.  At March 31, 1997 the 
Company had deficiencies in working capital and equity.  
These conditions raise substantial doubt about the Company's 
ability to continue as a going concern. Management's plans in regard to these
matters are described in Note 1. These consolidated
financial statements do not include any adjustments that 
might result from the outcome of this uncertainty.


BDO Seidman, LLP

New York, New York

June 25, 1997


NEW PARADIGM SOFTWARE CORP. and SUBSIDIARIES


                        Consolidated Balance Sheet

</TABLE>
<TABLE>                         
<S>                                                        <C>
                                                     March 31, 1997
                                
Assets
   Current:
      Cash and cash equivalents                            $328,168
      Accounts receivable                                    50,612
      Other receivables and prepayments                      32,487
                                                            ________
           Total current assets                             411,267

Property and equipment, less accumulated depreciation and 
    amortization (Note 3)                                   168,920
Investment in restricted common stock at market value
    (Note 10)                                                14,759
Assets held for sale (Note 14)                              691,491
Other assets, less accumulated amortization (Note 4)         71,266
                                                       ------------
                                                         $1,357,703
Liabilities and Capital Deficit
   Current:
      Loan payable (Note 5)                                $550,000
      Accounts payable and accrued expenses                 806,690
      Deferred rent payable (Note 7a)                        71,127
                                                       ------------
         Total current liabilities                        1,427,817
      Redeemable Series C shares authorized and outstanding 
      800,000                                               200,000
                                                        ___________
                                                  
Commitments and contingencies (Note 7)
Capital deficit (Notes 2,8 and 10):
   Preferred stock, $.01 par value - shares authorized 
10,000,000:
     Series A shares authorized, 1,000,000; none issued and 
     outstanding                                                  -
     Series B shares authorized 2,000,000; none issued and 
     outstanding                                                  -
     Common stock, $.01 par value - shares authorized
     50,000,000; issued and outstanding 2,451,729            24,517
     Additional paid-in capital                           9,150,209
     Unrealized loss on investment in restricted common
     stock                                                 (335,241)
     Deficit                                             (9,109,599)
                                                       ------------
           Total Capital deficit                           (270,114)
                                                       ------------
                                                         $1,357,703
</TABLE>

        See accompanying notes to consolidated financial statements
<PAGE>

                   NEW PARADIGM SOFTWARE CORP. and SUBSIDIARIES
                      Consolidated Statements of Operations

<TABLE>
<S>                                                <C>              <C>
                                               Year ended        Year ended
                                              March 31, 1997   March 31, 1996

Revenues:
     Consulting                               $   69,976          $     -
                                                _________        __________
                                                  69,976                -
Expenses:
     Employee costs                              630,616           520,356
     General and administrative (Note 12a)       340,744           215,199
     Professional fees                           244,731           256,148
     Marketing (Note 12b)                        164,238            88,461
     Occupancy                                   197,230           198,365
     Depreciation and amortization                49,604            37,803
                                                _________        __________
                                               1,627,163         1,316,332
                                                _________        __________
           Loss from operations               (1,562,187)       (1,316,332)
Other income (expense):
     Interest income                              25,099           112,251
     Gain on sale of assets (Note 10)                  -            24,865
     Interest expense                                  -           (63,724)
     Amortization of debt discount and
       deferred financing costs                        -          (375,546)
                                                _________        __________
                                                  25,099          (302,154)
Loss from continuing operations               (1,537,088)       (1,618,486)
Loss from discontinued operations (Note 14)   (1,438,319)       (1,941,806)
                                                _________        __________
Net Loss                                     $(2,975,407)      $(3,560,292)
                                                _________        __________
Loss per  Common share from continuing
operations                                        $(0.63)           $(0.93)
Loss per Common share from discontinued
operations                                         (0.58)            (1.11)
Loss per Common share                             ($1.21)           ($2.04)
                                                _________        __________
Weighted average common shares
    outstanding                                2,449,428          1,743,472

</TABLE>
        See accompanying notes to consolidated financial statements

                NEW PARADIGM SOFTWARE CORP. and SUBSIDIARIES

       Consolidated Statements of Shareholders' Equity (Capital Deficit)
               Years ended March 31, 1997 and 1996 (Note 8)

<TABLE>
<S>                       <C>       <C>         <C>     <C>     <C>             <C>          <C>        <C>
                        Preferred stock                      Additional     Unrealized                 Total
                        Series A, B and C     Common Stock Paid in Capital on investment   Deficit  Shareholders'                   
                                                                           in restricted            equity (capital
                        Shares    Par Value   Shares Par Value                stock                  deficit)
--------------------------------------------------------------------------------------------------------------------
Balance, April 1, 1995 1,240,500   $12,405   693,323   $6,933  $1,353,650 $        -    $(2,573,900) $(1,200,912)
Issuance of Series B 
preferred stock 
and  warrants in 
private placement, net 
of costs of $11,000, 
April 1995               100,000     1,000         -        -      12,400          -              -       13,400
Conversion of MTI
debt to paid-in
capital, May 1995              -         -         -        -     491,284          -              -      491,284
Vesting of 1,333 
shares issued to 
an employee pursuant
to a restricted 
grant, June 1995               -         -     1,333       13          37          -              -           50
Exercise of 1993 
warrants at an 
exercise price of
$.49 per share pursuant 
to a special exercise
offer, July 1995               -         -    29,250      293      14,040          -              -       14,333
Conversion of Series A 
preferred stock to
common, August 1995 
(Note 8 (a))             (28,000)    (280)    28,000      280           -          -              -            -
Conversion of Series B 
preferred stock to
common, August 1995
(Note 8(a))           (1,312,500) (13,125)   201,916    2,019      11,106          -              -            -
Sale of common 
stock and warrants
in the Company's
initial public
offering, August
1995, @ $6.50 per
share, net of
underwriters' discount, 
underwriters' expense 
allowance and other
expenses of the offering 
(Note 2)                       -        -  1,200,000   12,000   5,813,703          -              -    5,825,703
Issuance of common stock 
upon exercise of the 
underwriters' overallotment 
option, September 1995, 
net of underwriters' 
discount and expenses
(Note 2)                       -        -    180,000    1,800   1,064,430          -              -    1,066,230
Issuance of common stock
for the purchase of Netphone, 
November 1995 @ $3.00 per
share (Note 10)                -        -     80,000      800     239,200          -              -      240,000
Issuance of options for the 
purchase of Netphone,
November 1995 (Note 10)        -        -          -        -         500          -              -          500
Issuance of common stock for 
settlement of legal fees @ 
$5.38 per share, December 
1995 (Note 8(d))               -        -     27,907      279     149,721          -              -      150,000
Vesting of 5,000 shares
issued to an employee pursuant
to a restricted grant,
December 1995                  -        -      5,000       50         138          -              -          188
Unrealized loss on
investment in restricted 
stock(Note 10)                 -        -          -        -           -   (164,457)             -     (164,457)
Net loss for the year          -        -          -        -           -          -     (3,560,292)  (3,560,292)
-----------------------------------------------------------------------------------------------------------------
Balance,March 31, 1996         -        -  2,446,729  $24,467  $9,150,209  $(164,457)   $(6,134,192)  $2,876,027

           See accompanying notes to consolidated financial statement


</TABLE>

        See accompanying notes to consolidated financial statements

                NEW PARADIGM SOFTWARE CORP. and SUBSIDIARIES

       Consolidated Statements of Shareholders' Equity (Capital Deficit)
               Years ended March 31, 1997 and 1996 (Note 8)

<TABLE>
<S>                       <C>       <C>         <C>     <C>     <C>             <C>          <C>        <C>
                        Preferred stock                      Additional     Unrealized                 Total
                        Series A, B and C     Common Stock Paid in Capital on investment   Deficit  Shareholders'                   
                                                                           in restricted            equity (capital
                        Shares    Par Value   Shares Par Value                stock                  deficit)
--------------------------------------------------------------------------------------------------------------------
Balance, March 31, 1996       -    $     -   2,446,729 $24,467 $9,150,209     $(164,457) $(6,134,192) $2,876,027
Issuance of Series C 
redeemable preferred
stock in March 1997
(Note 8a)               800,000      8,000           -       -    192,000             -            -     200,000
Reclassification of 
Series C Redeemable 
Preferred Stock        (800,000)    (8,000)          -       -   (192,000)            -            -    (200,000)
Issuance of Common
Stock to terminated
employee                      -          -       5,000      50          -             -            -          50
Unrealized loss on
investment in restricted
stock (Note 10)               -          -           -       -          -      (170,784)           -           -
Net loss for the year         -          -           -       -          -             -   (2,975,407) (2,975,407)
--------------------------------------------------------------------------------------------------------------------
Balance,
March 31, 1997                -     $    -   2,451,729  $24,517 $9,150,209    $(335,241) $(9,109,599)  $(270,114)

</TABLE>

        See accompanying notes to consolidated financial statements

               NEW PARADIGM SOFTWARE CORP. and SUBSIDIARIES
                 Consolidated Statements of Cash Flows (Note 9)
<TABLE>
<S>                                                  <C>                <C>

                                                 Year ended       Year ended 
                                                 March 31, 1997  March 31, 1996

Cash flows from operating activities:
     Net Loss                                    $(2,975,407)      $(3,560,292)
        Adjustments to reconcile net loss to 
        net cash used in operating activities:
            Depreciation and amortization            230,880           134,138
            Gain on sale of assets                         -           (24,482)
            Deferred rent expense                     71,127                 -
            Issuance of Common Stock to
             terminated employee                          50                 -
            Issuance of common stock to employees 
             pursuant to a restricted grant                -               238
            Amortization of debt discount and 
             deferred financing costs                      -           375,546
            Noncash interest expense                       -             3,110
            Changes in assets and liabilities:
              (Increase) decrease in:
                Accounts receivable                  (22,116)          (78,544)
                Receivable from related party         50,000           (50,000)
                Other receivables and prepayments     76,073          (108,560)
                Other assets                         (61,281)           (5,950)
            Increase (decrease) in:
                Accounts payable and accrued
                 expenses                            589,748          (144,337)
                Deferred revenue                      27,500            17,500
                                                     -------           -------
                Total adjustments                    961,981           118,659
                Net cash used in operating 
                   activities                      2,013,426        (3,441,633)
                                                     -------           -------
Cash flows from investing activities:
     Purchases of property and equipment             (57,747)         (324,940)
     COPERNICUS development costs                   (276,746)         (218,950)
     Sale of property and equipment                        -             3,300
     Purchase of Netphone software                         -          (280,000)
     Sale of Netphone software                             -           193,532
     Patents, trademarks and organization
               costs                                 (91,385)           (5,985)
                                                     -------           -------
      Net cash used in investing activities:        (425,878)         (633,043)
                                                     -------           -------
Cash flows from financing activities:
     Proceeds from sale of Redeemable Preferred
       Class C stock                                 200,000                 -
     Proceeds from note payable                      550,000                 -
     Proceeds from private placements                      -           100,000
     Borrowings from shareholder                           -           107,283
     Repayment of debt                                     -        (1,632,500)
     Proceeds from bank loan                               -           100,000
     Repayment of bank loan                                -          (100,000)
     Repayment of shareholder loans                        -          (175,234)
     Proceeds from exercise of 1993 warrants               -            14,333
     Proceeds from Initial Public Offering of common
              stock and warrants                           -         7,283,973
                                                     -------           -------
        Net cash provided by financing activities    750,000         5,697,855
                                                     -------           -------
Net increase (decrease) in cash and cash 
     equivalents                                  (1,689,304)        1,623,179
Cash and cash equivalents, beginning of period     2,017,472           394,293
Cash and cash equivalents, end of period            $328,168        $2,017,472

</TABLE>
      See accompanying notes to consolidated financial statements


1. Organization and Summary of Accounting Policies

Organization

New Paradigm Software Corp. (the "Company") 
a New York corporation, was founded in July 
1993  and commenced operations on 
November 1, 1993. The Company is engaged in 
the research, development and marketing of 
computer software based upon a software 
architecture acquired from Lancer Holdings, 
Inc. ("Lancer"), a related party (see 
Note 7(c)).

In December 1995, the Company incorporated 
two wholly-owned subsidiaries, New Paradigm 
Commerce (formerly known as New Paradigm 
Golden-Link, Inc.) (See Note 14),consisting 
of its former electronic data interchange 
("EDI") division, and New Paradigm 
Inter-Link, Inc. ("NPIL") a subsidiary 
created to research and develop commercial 
applications for the Internet.

The Company had no significant revenues 
through March 31, 1997 and its activities 
had been limited to finalization of domestic 
and foreign patent agreements, 
organizational and initial capitalization 
activities, research and development of 
computer software products, initial 
marketing activities and pilot projects.

Basis of Presentation

The accompanying consolidated financial 
statements have been prepared on the basis that 
the Company will continue as a going concern, 
which contemplates the realization of assets 
and the satisfaction of liabilities in the 
normal course of business.  At March 31, 
1997 the Company had a deficit in working 
capital approximating $1,017,000, a capital 
deficit of approximately $270,000 and had incurred 
significant losses since inception.  As 
discussed in Note 14, the Company has 
entered into agreements to dispose of its 
COPERNICUS and EDI businesses.  General and 
administrative expenses, employee costs, 
professional fees and occupancy expenses 
from continuing operations will be incurred which, in the
absence of significant income from new operations, will
produce continuing net losses and an increase in 
capital deficit annually.  Although there 
can be no assurance of its success, 
management intends to continue to develop 
its Internet business (through its 
subsidiary NPIL) and also intends to seek 
acquisitions of or other business 
combinations with other businesses in 
related fields.  The consolidated financial 
statements do not include any adjustments 
that might result from the outcome of this 
uncertainty.

Principles of Consolidation

The consolidated financial statements 
include the accounts of the Company and its 
wholly-owned subsidiaries. All material 
intercompany accounts and transactions are 
eliminated.

Cash Equivalents

Cash equivalents are comprised of highly 
liquid debt instruments with original 
maturities of three months or less, 
principally money market accounts.

Investment in Equity Securities

Investment in restricted common stock is 
accounted for in accordance with Statement 
of Financial Accounting Standards No. 115, 
"Accounting for Certain Investments in Debt 
and Equity Securities". Under Statement No. 
115, debt and marketable equity securities 
are required to be classified in one of 
three categories: trading, available-for-
sale or held to maturity. The Company's 
investment in restricted common stock 
qualifies under the provisions of Statement 
No. 115 as available-for-sale. Such 
securities are recorded at fair value, and 
unrealized holding gains and losses, net of 
the related tax effect, are not reflected in 
earnings but are reported as a separate 
component of shareholders' equity until 
realized.

Property, Equipment and Depreciation

Property and equipment are stated at cost. 
Depreciation is computed using accelerated 
methods over the estimated useful lives of 
the assets, ranging from 5-7 years for 
financial and tax reporting purposes.

Intangible Assets

Patents and related trademarks are amortized 
using the straight-line method over 17 
years, which is the estimated useful life of 
the patents.

Software rights are amortized using the 
straight-line method over 5 years.

Copernicus development costs are amortized 
using the straight-line method over 5 years 
(see Product Development).

Organization costs are amortized using the 
straight-line method over 5 years.

Revenue Recognition

Revenue from software products is recognized 
upon delivery to the customer. The Company's 
contracts with its customers provide for 
payment to be made on specified schedules 
which may differ from the timing of 
recognition of revenue. Customer advances 
are recorded as cash payments received in 
advance of delivery.

Maintenance fees are recognized 
proportionately over the term of the 
maintenance agreement. Customer service fees 
represent fees charged to customers for 
installation, configuration and modification 
of standard software to customer 
specifications. Revenue is recorded as work 
is performed under the relevant arrangement.

Use of Estimates

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

Fair Value of Financial Instruments

The carrying amounts of cash, and cash equivalents accounts 
receivable, other receivables, loans accounts payable  and 
redeemable preferred stock approximate fair value because
of the short maturity of these items.

Stock-Based Compensation

In October 1995, the Financial Accounting 
Standards Board issued Statement of 
Financial Accounting Standards No. 123, 
"Accounting for Stock-Based Compensation" 
("SFAS No. 123"). SFAS No. 123 requires 
entities which have arrangements under which 
employees receive shares of stock or other 
equity instruments of the employer or the 
employer incurs liabilities to employees in 
amounts based upon the price of its stock to 
either record the fair value of the 
arrangements or disclose the pro forma 
effects of the fair value of the 
arrangements.  During fiscal year ended 
March 31, 1997, the Company has adopted the 
disclosure method of SFAS No. 123.  The 
adoption of this method did not affect the 
Company's financial position, operating 
results or cash flows.

Product Development

Costs associated with product development 
subsequent to establishment of technological 
feasibility, including enhancements to 
software products, are capitalized and 
amortized as required by Statement of 
Financial Accounting Standards No. 86, 
"Accounting for the Cost of Computer 
Software to Be Sold, Leased, or Otherwise 
Marketed" ("SFAS No. 86"). Costs incurred 
prior to achieving technological feasibility 
are expensed as incurred. On July 1, 1995, 
the Company established technological 
feasibility for its COPERNICUS software 
product and capitalized all enhancement and 
upgrade costs since that date as provided by 
SFAS No. 86.

Income Taxes

Income taxes are computed in accordance with 
the provisions of Statement of Financial 
Accounting Standards No. 109, "Accounting 
for Income Taxes" ("SFAS No. 109"), which 
requires, among other things, a liability 
approach to calculating deferred income 
taxes. SFAS No. 109 requires a company to 
recognize deferred tax liabilities and 
assets for the expected future tax 
consequences of temporary differences 
between the carrying amounts of assets and 
liabilities for financial reporting purposes 
and the amounts used for income tax 
purposes. Deferred tax assets must be 
reduced by a valuation allowance to amounts 
expected to be realized.

Net Loss Per Share

Net loss per share is based on the weighted 
average number of common shares outstanding 
and dilutive common stock equivalents during 
the periods. For the year ended March 31, 
1996 and 1997, common stock options and 
warrants outstanding are not included in the 
calculation of weighted average number of 
common shares outstanding as their effect is 
antidilutive.
A portion of the proceeds from the Company's 
initial public offering ("IPO") of common 
stock and redeemable warrants was used to 
repay long-term debt. If such debt had been 
repaid at the beginning of the fiscal year 
ended March 31, 1996, with a portion of such 
proceeds, the Company's loss per share would 
have been $(1.76).

Recent Accounting Standards

1n 1997, the Financial Accounting Standards 
Board issued Statement of Financial 
Accounting Standards No. 128, "Earnings Per 
Share" ("SFAS No. 128").  SFAS No. 128 
specifies the computation, presentation, and 
disclosure requirements for earnings per 
share.  SFAS No. 128 is effective for 
periods ending after December 15, 1997.  The 
adoption of this statement is not expected 
to have a material effect on the 
consolidated financial statements.

2. Initial Public Offering

The registration statement for the Company's 
IPO became effective on August 11, 1995. The 
Company consummated the IPO on August 16, 
1995 and issued 1,200,000 shares of common 
stock and 1,200,000 redeemable warrants 
("Redeemable Warrants"), each entitling the 
holder to purchase one share of common stock 
at an initial exercise price of $7.80 per 
share. In September 1995, the underwriters 
in the IPO exercised the overallotment 
option granted to them by the Company and 
purchased 180,000 additional shares of 
common stock and 180,000 Redeemable Warrants 
upon the same terms and conditions as listed 
above. The Company raised proceeds of 
$6,891,933, net of underwriters' discount, 
underwriters' expense allowance and other 
expenses of the IPO.
 Each Redeemable Warrant entitles the holder 
to purchase one share of common stock 
(subsequently adjusted to 1.029 common 
shares per Redeemable Warrant) at an 
exercise price of $7.80 per Redeemable 
Warrant (subsequently adjusted to $7.58 per 
Redeemable Warrant) during a four-year 
exercise period commencing on August 11, 
1996, one year after the anniversary of the 
IPO. The Redeemable Warrants may be redeemed 
by the Company upon 30 days' prior written 
notice, at a price of $.10 per warrant, 
provided that the average closing bid 
quotation of the common stock as reported on 
the over-the-counter market or the closing 
sale price, if listed on a national 
securities exchange, during a period of 20 
consecutive trading days ending within 10 
days prior to the date of such notice shall 
be not less than $9.75, subject to 
adjustment in certain circumstances 
(subsequently adjusted to $9.48). The 
Company also issued to the representative of 
the underwriters warrants to purchase 
120,000 shares of common stock (subsequently 
adjusted to 123,480 common shares) at an 
exercise price of $7.80 per share 
(subsequently adjusted to $7.58 per share) 
and 120,000 Redeemable Warrants at an 
exercise price of $.12 per Redeemable 
Warrant.

3. Property and Equipment

Property and equipment consists of the following:

March 31, 1997

Computer equipment              $  225,396
Software                            21,804
Furniture and fixtures              79,343
Telephone system                    37,262
                                   -------
                                   363,805

Less:	Accumulated depreciation and
     amortization
                                   194,885
                                   -------
                                  $168,920

4. Other Assets

Other assets are summarized as follows:

March 31, 1997
Trademarks                      3,792
Organization costs              4,487
Security deposits              67,631
                              -------
                               75,910

Less: Accumulated 
amortization                    4,644
                              -------
                               71,266

5. Loan Payable

On March 20, 1997 a corporation Level 8 
Systems, Inc., interested in purchasing the 
COPERNICUS assets made a formal offer to the 
Company to purchase COPERNICUS.  In 
connection with this offer, Level 8 Systems, 
Inc. advanced the Company a loan for 
$550,000.  This loan matures on July 17, 
1997, bears interest at 10% per annum and is 
collateralized by the COPERNICUS product and 
related assets.  This offer stated that the 
Company was free to negotiate with other 
potential buyers of the COPERNICUS assets; 
however, if the Company was to sell 
COPERNICUS on or before the repayment of the 
loan a break-up fee of $100,000 would be 
payable to Level 8 Systems, Inc..  The 
proposed sale of COPERNICUS to VIE discussed 
in note 14 would represent such a sale and 
the break-up fee would be paid if such sale 
is approved by the shareholders.

6. 
Income Taxes

The Company's net operating loss 
carryforwards and deferred tax asset account 
are approximately as follows:


<TABLE>

<S>                         <C>               <C>                  <C>
Period or Year                            Net operating       Net Deferred
ended March 31,     Year of expiration  loss carryforward       tax asset
---------------------------------------------------------------------------
1994                    2009                  $589,000           $   -
1995                    2010                 1,954,000               -
1996                    2011                 3,542,000               -
1997                    2012                 2,958,000               -
                                             ---------
                                             9,043,000           $   -
</TABLE>

The tax benefit of these losses 
(approximately $4,140,000 at March 31, 1997) is 
subject to significant limitations due to 
the change in control for income tax 
purposes resulting from the Company's IPO in 
August 1995. The tax benefit of these losses 
has been fully reserved by a valuation 
allowance of the same amount due to the 
uncertainty of its realization.

7. Commitments and Contingencies

(a)	Leases

The Company was leasing its New York
sales and office space on a monthly basis 
from Management Technologies, Inc. 
("MTI"). Effective September 1, 1995, the 
arrangement with MTI was terminated and 
the Company leased this space on a month-
to-month basis through December 1996 when 
the Company moved to a new location. The 
Company's Atlanta sales office was leased 
on a month-to-month basis through January 
1997, when this sales office was closed.

The Company currently subleases sales and 
office space from sublessors who have 
entered into non-cancelable operating 
lease obligations with the landlord.  The 
Company and the sublessors intend for the 
Company to occupy the space for the 
entire term of the lease agreement from 
December 1, 1996 through August 31, 1999.
The lease agreement provides for 
scheduled rent increases during the lease 
term and for rental payments commencing 
three months after the initial occupancy.  
When significant, provision has been made 
for the excess of average operating lease 
rentals, computed on a straight-line 
basis over the lease term, over cash 
rentals.  The deferred rent payable 
balance of $71,127 at March 31, 1997 
reflects such a provision.
The future minimum rental payments under 
this sublease agreement are approximately 
as follows:

Year ending March 31,

1998            $275,000
1999             291,000
2000             128,000
                 -------
                $694,000

Rent expense for the years ended 
March 31, 1997 and 1996 amounted to 
approximately $195,000, and $202,000 
respectively.

(b)	Employment Agreements

The Company entered into employment 
agreements with two of its executive 
officers, including Mark Blundell, its 
chief executive officer and John Brann, a 
former director and Vice-President of 
Technology. The agreements provide for 
aggregate annual salaries of $325,000 
through 1999 plus bonuses based on net 
earnings of the Company. The executives 
agreed to waive an aggregate of $75,000 
of their annual base salaries (which is 
not being accrued) until such time as the 
Company is able to report a pre-tax 
annual profit in excess of $75,000. In 
connection with the employment 
agreements, the Company issued certain 
common stock and other options to the 
officers). In addition, the Company has 
agreed to pay death benefits aggregating 
$2,000,000 to the beneficiaries of the 
two officers. The Company has obtained 
life insurance policies to fund these 
death benefits. Further, the Company has 
obtained "key man" insurance policies for 
which it is the beneficiary aggregating 
$2,500,000.

On May 13, 1997, the Company entered into 
an agreement with John Brann, the former 
Secretary/Treasurer and Vice President of 
the Company, to terminate his employment 
agreement with the Company (the 
"Termination Agreement") pursuant to an 
employment agreement dated June 14, 1993, 
as amended.  Termination of Mr. Brann's 
employment is a condition under the 
purchase agreement with VIE Systems, Inc. 
("VIE") (see note 14).  As consideration 
for the termination under the Termination 
Agreement the Company agreed to pay Mr. 
Brann a total of $50,000 on the earlier 
of (i) the closing of the purchase 
agreement between the Company and VIE, or 
(ii) Mr. Brann entering into employment 
with VIE.

The Company has been verbally informed by 
VIE that it intends to employ Mr. Brann.  
The Company has also been informed that 
Mr. Brann will be granted certain stock 
options in VIE in connection with such 
employment.


The Company had entered into an 
employment agreement with another officer 
to serve as Senior Vice President of 
Sales and Marketing. The agreement 
provided for a minimum annual 
compensation of $100,000, plus 
commissions through 1997.  On September 
25, 1996, this officer left the Company 
and the employment agreement was 
terminated for 5,000 shares of Common 
Stock, a $50,000 termination fee and a 
$25,000 consulting fee.  As of March 31, 
1997, $58,000 remained unpaid under the 
terms of the termination agreement and 
has been included in accounts payable and 
accrued expenses.

The Company had entered into an 
employment agreement with another 
officer.  The agreement provided for a 
minimum annual compensation of $100,000, 
plus commission through 1997.  On March 
21, 1997 this officer resigned his 
position with the Company and this 
employment agreement was terminated.

The Company had entered into an 
employment agreement with an officer to 
serve as president of a division of the 
Company. The agreement provided for a 
minimum annual compensation of $85,000 
through 1999 and incentive compensation 
dependent on achievement of gross revenue 
levels for the division. Subsequent to 
March 31, 1996, this officer left the 
Company and the employment agreement was 
terminated and a termination fee of 
$50,000 was paid to this officer.

(c)	License Agreement

In August 1993, the Company entered into 
a licensing agreement with Lancer 
Holdings, Inc. ("Lancer") (formerly known 
as Mark Blundell & Associates), of which 
Mark Blundell, the President and Chief 
Executive Officer and a director, and 
John Brann, a consultant and former 
director and executive officer of the 
Company are controlling shareholders. On 
October 27, 1993, 133,333 shares of 
common stock were issued to Lancer and 
valued at Lancer's basis (nominal value) 
and recorded at the par value of the 
shares issued (500,000 common shares, 
pre-split, at $0.01 per share). Lancer 
was the owner of certain intellectual 
property rights including rights relating 
to certain computer software and 
documentation (the "Lancer rights"). The 
agreement granted the Company the 
exclusive worldwide license to sublicense 
the COPERNICUS software in return for 
royalty payments to the licensor.




In March 1995, the Company acquired the 
Lancer rights for 33,333 shares of common 
stock and 33,333 noncallable, 
transferable warrants to purchase shares 
of common stock, subject to adjustment 
under certain circumstances. The common 
stock was valued at Lancer's basis 
(nominal value) and recorded at the par 
value of the shares issued (125,000 
common shares pre-split, at $0.01 per 
share). Such warrants will expire five 
years after their issue date. These 
warrants include a cashless exercise 
provision which allows Lancer to 
surrender warrants in payment for the 
exercise thereof.

8. Capital Deficit

(a)	Preferred Stock


The Company's Certificate of 
Incorporation authorizes issuance of 
10,000,000 shares of preferred stock. In 
September 1994, the Board of Directors 
subdivided the preferred stock to create 
a Series A preferred stock with 1,000,000 
shares authorized. On October 24, 1994, 
105,000 shares of Series A convertible 
preferred stock ("A Preferred"), each 
convertible into one share of 
common stock, were issued in connection 
with the October 1994 private placement). 
On April 18, 1995, the common 
shareholders and the A Preferred 
shareholders approved a 1-for-3.75 
reverse stock split of the common stock 
and the A Preferred. As a result of this 
reverse stock split, the outstanding 
shares of A Preferred were reduced to 
28,000. Upon completion of the IPO, these 
shares of A Preferred were converted into 
shares of common stock on a one-for-one 
basis and all of the shares of A 
Preferred were retired and restored to 
the status of authorized but unissued 
shares of Preferred Stock.

In February 1995, the Board of Directors 
subdivided the preferred stock to create 
a Series B preferred stock with 2,000,000 
shares authorized. On March 23, 1995, 
1,212,500 shares of Series B preferred 
stock ("B Preferred "), par value $.01 
per share, were issued). On April 13, 
1995, an additional 100,000 shares of 
Series B Preferred were issued. The 
shares of B Preferred were convertible 
into a number of shares of common stock 
equal to the number of shares of B 
Preferred to be converted multiplied by 
$1.00 divided by the price at which 
common stock is sold by the Company in an 
IPO. Upon completion of the IPO, these 
shares of B Preferred were converted into 
shares of common stock on a 1-for-3.75 
basis and all of the shares of B 
Preferred were retired and restored to 
the status of authorized but unissued 
shares of preferred stock.

In March 1997 the Board of Directors 
subdivided the preferred stock to create 
a Series C redeemable preferred stock ("C 
Preferred"), $0.01 par value, with 
800,000 shares authorized with the 
following principal terms:
o Each C Preferred share has four votes 
on any matter to be put to the vote of 
the Company's Shareholders.
o The C Preferred shares can be redeemed 
at the Company's option at any time 
upon payment of $200,000.
o The C Preferred shares can be redeemed 
at the holder's option following any 
investment in the Company or a sale of 
any of the Company's assets where the 
proceeds are $2,000,000 or more.
o The C Preferred shares will have 
preference in the event of any 
liquidation to the extent of $200,000
On January a shareholder loaned the 
Company $150,000 in exchange for a six-
month non interest bearing note.  In 
consideration for the note and interest 
thereon the shareholder was to be paid 
150,000 three-year warrants with an 
exercise price of $2.00 per share and a 
change in the Midland Warrants (see (b) 
below).  The 180,000 Midland warrants, 
held by Midland Associates, an affiliate 
of the shareholder  were amended as 
follows:  the expiration date was changed 
from August 11 1988 to January 16, 2002 
and the exercise price reduced from $3.75 
to $2.00 per share.

On March 15 1997, this shareholder 
advanced the Company an additional 
$50,000 and surrendered the $150,000 note 
which he held.  The combined $200,000 was 
used to subscribe for the 800,000 C 
Preferred shares described above.

(b)	Warrants

At March 31, 1997, the Company has
outstanding warrants as follows:
<TABLE>
<S>                                  <C>                <C>             <C> 

                                  Number of       Exercise Price   Expiration Date
                                common shares       per share 
                                   issuable
                               March 31, 1997
                              --------------------------------------------------
October 1994 private 
placement                       310,668              $3.75       October 1999
March 1995 private placement    149,720              $7.58       August 11, 2000(i)
March 1995 software rights 
acquisition                      33,333              $5.63       March 2000
April 1995 private placement     12,348              $7.58       August 11, 2000(i)
May 1995 settlement 
agreement with MTI ("Midland 
Warrants")                      180,000              $2.00       January 16, 2002(ii)
August 1995 initial public
offering Redeemable Warrants  1,234,000              $7.58       August 11, 2000
August 1995 representative
warrants                        123,480              $7.58       August 11, 2000
August 1995 Redeemable
Warrants issuable upon
exercise of representative's
warrants                        123,480              $7.58       August 11, 2000(iii)
September 1995 exercise of 
underwriters' overallotment 
option for Redeemable 
Warrants                        185,220              $7.58       August 11, 2000
October 1995 Electric Magic
Options                          50,000              $6.00       October 9, 1998
October 1995 Omotsu Warrants     80,000              $7.80       August 11, 2000
January 1997 Shareholder
warrants                        150,000              $2.00       January 16, 2002

(i) Effective upon completion of the
IPO, these warrants were exchanged by 
the holders for Redeemable Warrants 
exercisable for an equal number of 
shares and the warrants will expire upon 
the fifth anniversary of the IPO.

(ii) On January 16, 1997, in connection 
with a loan to the Company by the holder 
of these warrants, the expiration date 
was extended to January 16, 2002 and the 
exercise price was reduced to $2.00 per 
share.

(iii) The representative's warrants 
require payment of an exercise price of 
$.12 per Redeemable Warrant issuable 
upon exercise of the representative's 
warrants.

(c)	Common Stock

On incorporation (July 1993), the
Company granted employees rights to 
stock at par value that would vest based 
on future employment. The total number 
of shares offered under such agreements 
was 87,762, of which 64,201 were issued 
during the period ended March 31, 1994, 
12,228 were issued during the year ended 
March 31, 1995, 6,333 were issued during 
the year ended March 31, 1996 and 5,000 
remain to be issued as of March 31, 
1997.

On April 18, 1995, the shareholders of 
the Company approved a 1-for-3.75 
reverse stock split of the common stock. 
This reverse stock split has been 
retroactively reflected in the 
accompanying consolidated financial 
statements as of inception.

(d)	Issuance of Common Stock for Legal Fees

On November 21, 1995, the Company 
entered into an agreement with its 
corporate counsel, Chadbourne & Parke 
LLP ("C&P"), to settle its then 
outstanding legal fees. The Company 
settled $450,000 of the outstanding 
balance to C&P by payment to C&P of 
$300,000 in cash and 27,907 shares of 
common stock valued at $150,000.

(e)	Stock Option Plan

The Company adopted a stock option plan 
(the "Option Plan"), effective April 8, 
1994, which was approved by the 
shareholders on September 3, 1994. The 
Option Plan provides for the grant of 
options to qualified employees 
(including officers and directors) of 
the Company to purchase up to an 
aggregate of 266,667 shares of common 
stock. The Option Plan is administered 
by a committee (the "Committee") 
appointed by the Board of Directors. The 
Committee may, from time to time, grant 
options under the Option Plan to such 
key employees as the Committee may 
determine, provided, however, that the 
Committee may not grant incentive stock 
options ("Incentive Options") to any key 
employee who is not in the regular 
full-time employment of the Company. 
Options granted under the Option Plan 
may or may not be "incentive stock 
options" as defined in the Internal 
Revenue Code, depending upon the terms 
established by the Committee at the time 
of grant. The exercise price shall not 
be less than the fair market value of 
the Company's common stock as of the 
date of the grant (110% of the fair 
market value if the grant is an 
Incentive Option to an employee who owns 
more than 10% of the total combined 
voting power of all classes of stock of 
the Company). Options granted under the 
Option Plan are subject to a maximum 
term of 10 years.

In April 1995, options to purchase
99,466 shares of common stock at an 
exercise price of $4.50 per share were 
granted and became exercisable in April 
1996.

In November 1995, options to purchase 
124,400 shares of common stock at an 
exercise price of $5.125 per share were 
granted. Such options vested and became 
exercisable on November 30, 1996.

SFAS No. 123 requires the Company to 
provide pro forma information regarding 
net loss and loss per share as if 
compensation cost for the Company's 
stock option plans had been determined 
in accordance with the fair value based  
method prescribed in SFAS No. 123

The accounting provisions of SFAS No. 
123 do not have a material effect on the 
Company's pro forma net loss and loss 
per share and thus have not been 
presented.

(f)     Directors' Stock Options

One current and three former directors 
have received options to purchase 10,000 
units, each at an exercise price of $5 
per unit, each unit consisting of one 
share of common stock and a warrant to 
purchase one share of common stock at an 
exercise price of $6 per share. The 
options are outstanding and exercisable 
at March 31, 1997.

In November 1995, the Company issued to 
each of its outside directors options to 
purchase 10,000 shares of common stock 
at an exercise price of $5.125 per share 
exercisable on or after November 30, 
1996. These options expire on November 
30, 2000.

In April 1996, the Company issued to a 
current director options to purchase 
10,000 shares of common stock at an 
exercise price of $5.125 per share 
exercisable on or after April 24, 1997.

(g)	Stock Options Issued in Connection with 
the Acquisition of 
          Netphone

Pursuant to the terms of the acquisition 
agreement for Netphone, with Electric 
Magic Co. on October 9, 1995. (see Note 
10), the Company issued to Electric 
Magic options to purchase 50,000 shares 
of common stock at an exercise price of 
$6.00 per share, expiring in October 
1998. In addition, the Company issued to 
a third party (Omotsu Holdings Limited), 
in consideration of its surrender of 
rights to acquire Netphone, warrants to 
buy 80,000 shares of common stock at an 
exercise price of $7.80 per share 
expiring August 11, 2000. (See Note 10.)

9.Supplemental Disclosures of Cash Flow Information

                                Year ended March 31,
                                1997           1996
Cash paid during the 
     period for:
       Interest                      -        $60,614
                               =======================
    Income taxes                     -              -   
                               =======================
Supplemental disclosures 
    of noncash investing      
    activities:
    Conversion of MTI 
        debt to paid-in 
         capital                     -        491,284
    Issuance of common
        stock for the
       purchase of Netphone          -        240,000
    Issuance of common 
       stock for legal 
       services                      -        150,000

10. Acquisition of Netphone

On October 9, 1995, the Company acquired 
Netphone, a software package, from Electric 
Magic Co. in exchange for $200,000 in cash 
and options to acquire 50,000 shares of the 
Company's common stock valued at the nominal 
amount of $500. This product allows user of 
Macintosh computers to conduct long distance 
conversations over the Internet for the cost 
of local Internet access. The Company paid a 
third party (Omotsu Holdings Limited) $80,000 
in cash and issued 80,000 shares of 
restricted common stock and warrants to 
acquire 80,000 shares of the Company's common 
stock valued at $240,000 (market value 
$520,000) for surrendering its rights to 
acquire Netphone.

On October 31, 1995, the Company sold 
Netphone to Camelot Corporation ("Camelot") 
for $193,532 in cash, 67,470 shares of 
Camelot's restricted common stock valued at 
the market value of $350,000 and an agreement 
by Camelot to pay the Company a fee for each 
unit sold by Camelot in the future. This 
resulted in a gain of $23,032 included in 
gain on sale of assets in the consolidated 
statements of operations. On March 31, 1997, 
the market value of the Camelot restricted 
stock had decreased to $14,759 resulting in 
an unrealized loss of $335,241, which has 
been reflected in the consolidated statement 
of shareholders' equity (capital deficit).

11. Employee Benefit Plan

Effective February 15, 1996, the Company 
implemented a 401(k) profit sharing plan 
covering substantially all employees. 
Contributions to the plan are at the 
discretion of the Board of Directors. The 
Board did not elect to make a contribution 
for the years ended March 31, 1997 or 1996.

12. Related Party Transactions

(a)	During the years ended March 31, 1997 and 
1996, the Company incurred fees of 
approximately $24,000 and $18,000 to a 
consulting firm owned by the Company's 
Chairman of the Board of Directors.

(b)	During the years ended March 31, 1997 and 
1996, the Company incurred marketing fees 
of approximately $82,000 and $72,000 to 
a firm where a former Company director is 
employed.

13. Major Customers

Revenues from one major customer for the 
year ended March 31, 1997 accounted for 
approximately 37% of the Company's total 
revenues.  There were no receivables due 
from this customer at March 31, 1997.
Revenues from four major customers for the 
year ended March 31, 1996 accounted for 
approximately 64% of the Company's total 
revenues.

14. Assets Held for Sale/ Discontinued operations

(a) Sale of COPERNICUS

As of May 9, 1997 the Company entered into an 
agreement (the "Purchase Agreement") to sell, 
subject to shareholder approval, the rights 
to COPERNICUS and certain related assets to 
VIE Systems Inc., a Delaware corporation 
("VIE") for $2,050,000 in cash and a 5% 
royalty on future COPERNICUS related license 
fees payable commencing after the first 12 
months.  Subject to VIE's approval, the 
Company will have the right to enter into OEM 
agreements with VIE on commercially 
reasonable terms, to incorporate COPERNICUS 
within future products which the Company may 
develop or acquire.  Under the Purchase 
Agreement the Company has appointed VIE as 
its exclusive agent for the operation of all 
aspects of the COPERNICUS related business .  
This agreement will terminate at the earlier 
of the closing of the sale or 180 days from 
may 9, 1997.  VIE has entered into Voting 
Agreements with the holders of 68.1% of the 
voting rights entitled to vote at a meeting 
of Company Shareholders, and the Company 
therefore expects the sale to be approved and 
completed during July 1997.

As of May 9, 1997 the Company entered into a 
license agreement (the "VIE License") to 
license certain rights to its COPERNICUS 
product and to assign certain agreements to 
VIE.  The VIE License gives VIE a five year 
exclusive right to market COPERNICUS to the 
financial services, healthcare, food and 
government industries in the US and Canada.  
It also allows VIE to act as a non-exclusive 
distributor to all other industries within 
the United States and gives VIE worldwide 
non-exclusive distribution rights for all 
industries until termination of the license.  
Under the VIE license the Company receives a 
5% royalty on all license fees received by 
VIE relating to the COPERNICUS product.  The 
license also permits VIE to produce the 
product on additional platforms and enhance 
the product as it sees fit.  The source code 
for the product may not be distributed to 
another party without the prior written 
consent of the Company.  Finally the Company 
has assigned to VIE certain agreements, 
including a distribution agreement with IBM.  
This license will terminate upon the closing 
of the sale under the Purchase Agreement.

Until the closing of the contemplated sale of 
COPERNICUS pursuant to the Purchase 
Agreement, The Company will continue to be 
engaged, through its exclusive agent VIE in 
the development, marketing, licensing and 
support of its COPERNICUS software for large-
scale computer users.  An application for a 
United States patent on COPERNICUS is 
pending.

b) Sale of EDI business

Until April 1, 1997, through its wholly owned 
subsidiary, New Paradigm Commerce ("NPC") 
(formerly New Paradigm Golden Link), the 
Company operated a service bureau business 
providing electronic data interchange ("EDI") 
services (the conveying of business documents 
electronically).  As of April 1, 1997, the 
Company sold its EDI business to Custom 
Information Systems Corp. of New York ("CIS") 
for $6,000 and a note receivable monthly over 
three years with a face value of $355,000 and 
a present value of approximately $300,000.

c) Discontinued Operations

The proposed dispositions of the businesses 
disclosed in (a) and (b) above have been 
presented as discontinued operations and the 
balance sheet at March 31, 1997 and 
statements of operations for the two years 
then ended have been restated to conform to 
this presentation.  The anticipated gain on 
disposal of such businesses will be included 
in the statement of operations for the year 
ended March 31, 1998.  Financial results of 
the businesses included as discontinued 
operations are as follows:

Operating Data for  COPERNICUS  and EDI combined:

</TABLE>
<TABLE>
<S>                                             <C>             <C>
                                        Year ended March   Year ended March
                                            31, 1997           31, 1996

Revenues:
     Software fees, royalties
     and licensing fees                       $380,671          $392,541
     Consulting, maintenance and other fees    242,227            33,412
                                             ----------------------------
                                               622,898           425,953
Expenses:
     Employee costs                          1,047,606         1,008,015
     General and administrative                265,087           288,756
     Professional fees                         223,213           364,050
     Marketing                                 323,725           523,624
     Research and development                        -            66,979
     Occupancy                                  20,310            20,000
     Depreciation and amortization             181,276            96,335
                                             ---------         ---------
                                             2,061,217         2,367,759
Net Loss from discontinued operations       (1,438,319)       (1,941,806)
</TABLE>

Balance Sheet Data

[S]                                        [C]        [C]         [C]
                                        COPERNICUS    EDI        Total
Assets:
     Accounts receivable - net          $15,995     $60,173     $76,168
     COPERNICUS development costs - net 404,863           -     404,863
     Patents and trademarks - net       153,629           -     153,629
     Software - net                      53,949       5,303      59,252
     Computer equipment - net            30,792       9,081      39,873
     Software rights - net                2,706           -       2,706
                                        --------------------------------
                                        661,934      74,557     736,491

Liabilities:
      Deferred revenues                  45,000           -      45,000
                                        --------------------------------
      Net Assets held for sale         $616,934     $74,557    $691,491