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, 1998

_ 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. $195,451

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 15, 1998 was $1,335,060

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__________Not Applicable__X__

APPLICABLE ONLY TO CORPORATE REGISTRANTS
At June 28, 1997 there were an aggregate of 2,701,729 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 Software Corp. (the "Company") was organized
in July 1993 and commenced operations in November 1993. The 
Company completed its initial public offering in August 1995.

The Company is engaged in the Internet business through its 
wholly owned subsidiary New Paradigm Inter-Link, Inc.("NPIL").
NPIL began operations in December 1995, and provides Internet
services to corporations and other organizations. Clients
include Novartis, the National Multiple Sclerosis Society and
the Association of the Bar of the City of New York.  NPIL
provides organizations with the ability to utilize the
Company's expertise to devise strategies for the Internet,
and, where appropriate, to create Web sites.  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 providing Web server hosting services 
independently from a customer's own internal network to 
ensure security. 

The Company intends to market its Internet capabilities
through the strategic relationships which advertising 
agencies have with their clients both by acquiring and by 
forming business alliances with selected advertising agencies.

As of April 1, 1998, the Company acquired certain assets and 
assumed certain liabilities of Kapelus & Cipriano, Inc., 
("K&C") a Westchester-based full-service advertising 
agency, through its wholly owned subsidiary New Paradigm 
Acquisition I Co. Inc. ("NPAC").  NPAC was then renamed 
SKC Advertising, Inc. ("SKC").  The Company intends to 
further develop this business by launching new products and 
services connected with the Internet.

On March 8, 1998 NPIL entered into a "joint venture" with
three New York advertising agencies: Biederman, Kelly & 
Shaffer Inc., Advertising; Emmerling Post Advertising Inc., 
and Warren Kremer/CMP Advertising Inc.  A new corporation 
"Future Paradigm Inc." was formed to provide Website 
creation, Internet and e-commerce applications, Internet 
hosting, and Internet media buying services.  The three 
agencies intend to direct their Internet-related business to 
Future Paradigm and have an equity interest therein.  NPIL 
owns 51% of Future Paradigm.  Future Paradigm is currently 
(as of June 1998) undertaking Internet assignments for 
clients of these agencies including Lands Endr, Cadillacr 
and New York University.

Until May 9, 1997, the Company was primarily engaged in the
development, marketing, licensing and support of its 
COPERNICUS software product. As of May 9, 1997, as approved 
and confirmed by a shareholders meeting on July 23, 1997, 
the Company sold rights to COPERNICUS, New Paradigm 
Architecture and certain related assets to VIE Systems, 
Inc., a Delaware corporation ("VIE") (the "Purchase 
Agreement"), for $2,050,000 in cash and a 5% royalty on 
future COPERNICUS related license fees accruing after the 
first 12 months. Subject to VIE's approval, the Company will 
have the right to enter into Original Equipment Manufacturer 
agreements with VIE on commercially reasonable terms and to 
incorporate COPERNICUS into future products which the 
Company may develop or acquire.

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

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.

On October 9, 1995 the Company acquired from Electric Magic
Company the Netphone product, which permits users of 
Macintosh computers to conduct worldwide long distance 
telephone conversations over the Internet. The Company 
subsequently sold these assets to the Camelot Corporation 
("Camelot") 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 NPIL, the Company
provides Internet services to corporations and other 
organizations. Customers include Novartis, National Multiple 
Sclerosis Society and the Association of the Bar of the City 
of New York.  The Company intends to develop this business 
by working with advertising agencies with appropriate 
strategic relationships with relevant clients.  In addition, 
the Company intends to launch 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 
telecommunications companies suitable for accessing the 
Internet) and a further 3 million homes will access the 
Internet using cable modems. Worldwide 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  
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 independently 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 - a 
common computer programming language for the Internet - 
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 currently brings in initial revenues of 
approximately $20,000 - $30,000 on completion with 
continuing revenues for maintenance and changes throughout 
the year of approximately $1,000- $3,000.  The Company 
believes that the growing complexity and sophistication of 
Web sites will lead to a significant increase in these per-
site fees. The Company has created more than 20 Web sites 
for customers of this service to date.  Revenues in fiscal 
1998 were approximately $195,000, from 10 such sites.
Examples of Web sites created by New Paradigm include:

Novartis - site for its "Program" product: www.programpet.com
Association of the Bar of the City of New York: www.abcny.org
Nuway Corporation: corporate Website: www.nuwaycorp.com
Smolin Lupin, accountants: corporate Website:
  www.cpasmolinlupin.com
Novartis - site for its "Sentinel" product: www.petprotect.com
Josephthal & Co - corporate Website: www.josephthal.com
National Multiple Sclerosis Society - general website:
  www.nmss.org
Proballfan: NFL football site written by fans: www.proballfan.com


Website services - marketing and distribution

The Company is marketing its services through a combination
direct contact with prospective clients and indirect sales.  
One staff member is engaged full time in direct sales 
activity, which accounts for approximately the entire 
current customer list of NPIL.  Indirect sales, which are 
expected to account for a growing proportion of Internet 
related revenues in fiscal 1999, are secured primarily 
through advertising agencies working on integrated media 
campaigns who subcontract the Internet portion to Future 
Paradigm.  In addition, the Company believes that certain 
clients of any advertising agencies that it may acquire are 
likely prospects for the Company's Internet related services.


Internet - Other products

The Company is also involved in research and development for
other products and services that can be effectively launched 
and marketed through the Internet.  The nature of the 
Internet is that the time from the formation of a concept to 
market can be very short.  The Company is currently working 
on three such Internet products.  These products are:

 (i) Internet Trademark and Supermark (internettm.com
     and supermark.com) for the registration of trade names 
     and famous trade names on line.  These sites have not 
     yet been launched and there is no assurance that any 
     such launch will be successful.  The Company is 
     reviewing the likely potential for such a business, and 
     the costs of its launch before proceeding.  These sites 
     are owned 50% by NPIL and 50% by the three intellectual 
     property attorneys who assisted in the concept and 
     development and of the sites. 

 (ii) BuyBanner:  Allows the immediate conclusion of
      transactions from a banner without leaving the site on 
      which the advertising banner is displayed.  The 
      software for this product is proprietary and owned by 
      NPIL.  However, the Company believes that other 
      companies have developed similar products.  The first 
      online implementation of this product began in June 
      1998 with banner advertisements for Lands' End. There 
      has been insufficient time to assess the commercial 
      viability of this product.
 (iii) The Full Page Banner: the Company has devised a 
       method of allowing a text advertisement to be 
       downloaded and displayed while the originally requested 
       graphic page is being downloaded onto the Internet 
       User's computer.  The Company is researching the 
       possibility of patenting this product.  To date no 
       commercial feasibility tests have been conducted.
       There can be no assurance that the Company will be able to 
       complete the development work needed or that it will be able 
       to finance the launch of these products, or that if they are 
       launched, such products will achieve any degree of market 
       penetration or commercial success.


Research and Development

From its inception until their sale, 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 relating to 
COPERNICUS, which include salaries and other employee costs 
of the Company's product development personnel for the 
fiscal year ended March 31, 1997, was $276,746.  There were 
no research and development expenses for the fiscal year 
ended March 31, 1998.  The development costs of COPERNICUS 
had been accounted for in accordance with Statement of 
Accounting Standards ("FASB") No. 86, "Accounting for the 
Cost of Computer Software to be Sold, Leased or otherwise 
marketed".

Research and development are 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 and technology must constantly be 
evaluated and, where appropriate, learned.  The Company 
currently has two staff members involved in Research and 
Development, and is seeking to recruit one more.  The 
Company is presently significantly dependent on the services 
of Mr. Ali Faraji in this area.  There can be no assurance 
that he will remain employed by the Company.  There can also 
be no assurance that additional engineers can be recruited 
or if any of the current Research and Development staff 
terminate their services with NPIL that they can be replaced 
at a cost acceptable to the Company.


Competition

The Internet marketplace, while rapidly expanding, is
intensively competitive.  There are 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

The intellectual property rights to COPERNICUS and New
Paradigm Architecture were sold.

The Company does not believe that any of the software that
it has developed to date in the Internet field is patentable 
with the possible exception of The Full Page Banner.  As of 
June 1998, the Company is researching the patentability of 
this product.

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, 1998, the Company and its subsidiaries
employed 10 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 employees 
increased to 10 when the Company purchased certain assets 
from K&C (see General) and employed 6 former staff of K&C.  
In addition the Company employs several consultants in 
Internet programming and multi-media graphic arts on part 
time or short-term contracts.


Item 2.  Description of Property

The Company's corporate headquarters is located on the 15th
floor of 630 Third Avenue, New York, New York, 10017 (the 
"Premises"). The Premises are leased until April 2001 at a 
cost of approximately $7,000 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)	Market Information.
The Registrant's Common Stock and Redeemable Warrants are 
quoted on the Nasdaq Bulletin Board.
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 31, 1998 and afterwards as reported on 
the Nasdaq Bulletin Board:
<TABLE>
<S>                             <C>                       <C>
                           Common Stock             Redeemable Warrants

1997 Fiscal Quarters     High      Low               High    Low
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

1998 Fiscal Quarter
First Quarter            1.375      0.375            0.03     0.003
Second Quarter           0.875      0.25             0.003    0.003
Third Quarter            0.75       0.25             0.003    0.003
Fourth Quarter           0.25       0.053            0.003    0.003




</TABLE>


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

(b) Approximate Number of Holders of Equity.

The number of record holders of the Common Stock was
approximately 81 and the number of record holders of 
Redeemable Warrants was 46 as of March 31, 1998.

(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.


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, 
1997 and 1998 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 sold its major business - COPERNICUS.  
As a result the statements of operations for the fiscal 
years ended March 31, 1998 and 1997 and the Balance Sheet as 
at March 31, 1998 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 and Balance Sheet Data

Statement of Operations Data

                                        Year Ended              Year Ended 
                                       March 31,1998           March 31,1997
                                      --------------          --------------
Revenues                                 $195,461                 $64,976
Expenses                                1,140,518               1,627,163
                                       -----------            ------------
Loss from operations                     (945,057)             (1,562,187)

Other income (net)                         36,103                  25,099
Gain from reduction of liability          361,999                       -
Realized loss on sale of investment      (340,930)                      -
                                       -----------            ------------
Loss from continuing operations          (887,885)             (1,537,088)

Loss from discontinued operations         (90,712)             (1,438,319)
Gain on sale of assets from
discontinuedoperations                  1,396,737                       -
                                        ----------            ------------
Net income (loss)                        $418,140             $(2,975,407)


Basic and diluted per share data:

Net loss from continuing operations       $(0.36)                  $(0.63)
Net loss from discontinued operations      (0.04)                   (0.58)
Gain on sale of asset                       0.57                        -
                                        ---------               ----------
Net income (loss) per common share (1)     $0.17                   $(1.21)

Weighted average common shares
 outstanding (1)                       2,451,729                2,449,428



Balance Sheet Data

                                                               March 31,1998
                                                               -------------
Total assets                                                     $761,668
Total current assets                                              375,020
Total liabilities                                                 278,401
Long-term debt                                                          0
Current liabilities                                               278,351
Deficit                                                        (8,691,459)
Total Shareholders' Equity                                       $483,267

 (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.


Overview

During the fiscal year ended March 31, 1998, the Company
sold its major business - COPERNICUS.  As a result the 
statements of operations for the fiscal years ended March 
31, 1998 and 1997 and the Balance Sheet as of March 31, 1998 
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 that 
follows therefore considers separately the continuing and 
discontinued operations.

In its continuing operations the Company had a net loss of
$887,885 for the year ended March 31, 1998 and net losses of 
$1,537,088 for the year ended March 31, 1997. The Company's 
revenues from continuing operations for the fiscal years 
ended March 31, 1997 and 1998 were $64,976 and $195,461 
respectively.  The Company's subsidiary, NPIL had 3 
customers for its Web site creation and maintenance services 
as at March 31, 1997 and 10 as at March 31, 1998.

In its discontinued operations the Company had net losses of
$90,712 for the year ended March 31, 1998 and $1,438,319 for 
the year ended March 31, 1997. The Company's revenues from 
discontinued operations for the fiscal years ended March 31, 
1998 and 1997 were  $51,512 and $622,898, respectively. 
These revenues were primarily due to the licensing of 
COPERNICUS in 1998. In 1997, $380,671 was derived from 
COPERNICUS licensing and royalties.

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, 1998 increased from $64,976 to 
$195,461 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.

Expenses.  The Company's expenses primarily comprise
salaries and related employee 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, 1998 decreased by $486,645 (30%) over 
The fiscalm year ended March 31, 1997.
The Company had an outstanding liability of
$461,999 payable to its former corporate 
counsel.  The Company has disputed the 
amount of this balance with such counsel 
and estimates the liability will be settled 
for an amount of approximately $100,000, 
which is included in accounts payable and 
accrued expenses at March 31, 1998.  Accordingly,
the Company has recorded the a gain of $361,999 from
the reduction of this liability in the 
statement of operations for the year ended 
March 31, 1998.

For the continuing operations, employee costs decreased by
9% to $574,172 in the fiscal year ended March 31, 1998, 
compared to $630,616 in the fiscal year ended March 31, 
1997. This was due to the general reduction in staff members 
while the Company reorganized for greater emphasis on its 
Internet business.

The Company did not recognize any research and development
expenses for continuing operations in the fiscal years ended 
March 31, 1997 and 1998.

Professional fees relating to continuing operations
decreased by 56% to $106,796 in the fiscal year ended March 
31, 1998 compared to $244,731 in the period ended March 31, 
1997. The decrease is primarily due to the fact that there 
were greater legal costs in the preparation of SEC filings 
in fiscal 1997 than in 1998.   

Marketing expenses relating to continuing operations
decreased by 50% to $81,736 in the fiscal year ended March 
31, 1998 compared to $164,238 in the fiscal year ended March 
31, 1997. This is principally due to the narrowing focus of 
the operations of the Company providing Internet services.

General and administrative expense relating to continuing
operations decreased by 33% to $227,930 in the fiscal year 
ended March 31, 1998, compared to $340,744 in the fiscal 
year ended March 31, 1997. This was primarily due to a 
decrease in the average number of staff employed by the 
Company in the year ended March 31, 1998, compared to the 
previous year.

Occupancy costs decreased by 58% to $81,971 in the fiscal
year ended March 31, 1998, compared to $197,230 in the 
fiscal year ended March 31, 1997. This was due to the 
termination of the Company's prior lease (approximately 
$23,000 per month) and the signing of a new lease of 
approximately $7,000 per month.

Depreciation and amortization expenses relating to
continuing operations increased by 37% to $67,913 in the 
fiscal year ended March 31, 1998, compared to $49,604 in the 
fiscal year ended March 31, 1997. Depreciation and 
amortization increased because of an increase in fixed 
assets relating to continuing operations from March 31, 1997 
to March 31, 1998.

In March 1998, the Company entered into a lease in respect
of approximately 2,500 square feet of space at 630 Third 
Avenue, New York, New York, 10017 to be the Company's 
principal place of business.  Payments under this lease that 
runs until February 28, 2001 are expected to total $245,000 
of which $84,000 are due in fiscal 1999, $84,000 in fiscal 
2000 and $77,000 in fiscal 2001.  The Company has made no 
other material capital commitments.

The Company's net operating loss carry forwards 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                  $157,000           $   -
1995                    2010                 1,954,000               -
1996                    2011                 3,542,000               -
1997                    2012                 2,958,000               -
                                             ---------           ---------
                                            $8,611,000           $   -
</TABLE>


The tax benefit of these losses (approximately $3,900,000 at 
March 31, 1998) is subject to 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 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.  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.  On June 27 1997, the 
Company 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.

Of the $2,050,000 received at the closing of the sale of
Copernicus, the Company utilized $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 was used to repay the June 27, 1997 
advance from VIE.  This left a balance of approximately 
$836,500 available for working capital.

Accounts payable and accrued expenses decreased to $248,351
at March 31, 1998 from $806,690 at March 31, 1997. 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.  As a result 
of the sale of COPERNICUS the Company was able to repay a 
majority of these creditors.  In addition, the Company reduced
the amount owed to its corporate consel by $361,999.
At March 31, 1998, the Company had working capital of
approximately $97,000.

The Company will need additional financing prior to March
1999 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."

Plan of Operation

During the fiscal year ending March 31, 1999, the Company
intends to continue to acquire advertising agencies with 
strategic relationships with appropriate clients that can be 
acquired for prices which the Company believes are 
acceptable.  The Company further intends 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, 1998, the Company's NPIL 
subsidiary had revenues of $195,461.


Item 7.  Financial Statements and Supplementary Data
Financial statements are included herein on page and are filed
as part of this report.

The Year 2000 issue refers to the potential harm from
computer programs that identify date by the last two
digits. As such, date, after January 1, 2000 could be
misidentified, and such programs could fail. The Company
has examined its computer based systems and believes that
the Year 2000 problem is not present in such systems.
However, the Company is dependent upon computer systems
operated by third parties, such as LEC's, AT&T, AOL and
other vendors. If those systemswere to malfunction due
to the year 2000 problem, the Company's services could
fail, as well. Such failure could have a material adverse
effect upon the Company's business, resultsof operation
and financial condition. The Company is inquiring of such
third parties to determine the effect, if any, of the
Year 2000 problem on the systems upon which the Company
is dependent, and to obtain appropriate assurances that no
such problem exists.

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 five members of the Company's Board of 
Directors. The Company's By-Laws authorizes the Board of 
Directors to fix the number of directors. The By-Laws also 
authorizes the Board of Directors to fill any vacancy on the 
Board of Directors.

The Company 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		40		Chief Executive Officer,
                                        President, Chief Financial
                                        Officer, and Director

Milton Kapelus		61		President, SKC Advertising, 
                                        Inc.

Rocco Cipriano          45              Executive Vice President,
                                        SKC Advertising, Inc., 
                                        and Director 

Daniel A. Gordon        59              Chairman of the Board of 
                                        Directors

Michael Taylor		56		Secretary and Director

Morton Chalek		74		Director

Matthew Fludgate	25		Secretary and Vice President  
Administration                          (resigned May 9, 1998)


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. 

Milton Kapelus served as President of K&C in Harrison New
York from 1992 until 1998.  Upon the Company's acquisition 
of certain assets of K&C as of April 1, 1998 he was 
appointed President of SKC.  He has worked in the 
advertising industry since 1967. He holds a BA from Rhodes 
University, South Africa.

Rocco Cipriano was appointed to the board on June 2, 1998.
He has served as Executive Vice President - Creative, for 
Kaplan and Cipriano Advertising Inc. ("K&C") in Harrison, NY 
since 1992.  Upon the Company's acquisition of certain 
assets of K&C as of April 1, 1998 he was appointed Executive 
Vice President, Creative of SKC. He holds a Professional 
Degree in Communications from Parsons School of Design, New 
York.

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 and was appointed Secretary in May 1998.  
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.

Morton Chalek was elected to the board on December 31, 1997.
He is the President of a consulting firm, Promotion Designs, 
Ltd. He was the chairman and Chief Executive Officer of 
Chalek & Dreyer Advertising Agency, from 1960 to 1980. From 
1980 until 1985 he served as the Executive Vice President of 
Administration for HBM/Cremer, a company which merged with 
Chalek & Dreyer. Mr. Chalek was also Chairman of Ruder/Finn 
& Chalek and teaches a course in advertising agency 
administration at New York University.

Matthew Fludgate was Secretary and Vice President of
Administration for the Company since May 9, 1997 until his 
resignation on May 9, 1998. 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.


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 other representations, including 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, 1998, except as follows: 

        Name                     Not Reported
        -------------------------------------
        Mark Blundell                 1
        Daniel Gordon                 1
        Michael Taylor                1
        Morton Chalek                 1


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-    1996       $150,000 $20,000  $57,000(1)     38,666        $0       $1,100(2)
utive Officer, Chief Finan-    1997       $150,000      $0  $57,000(1)    149,999        $0       $1,100(2)
cial Officer & President       1998       $150,000      $0  $57,000(1)    450,000        $0       $1,100(2)
 
 

</TABLE>

No other Executive or employee received total annual salary 
and bonus in excess of $100,000.

 (1)     Reflects a non-accountable expense allowance of $4,000
         per month and a car allowance of $750 per month.
 (2)     Reflects the insurance premium paid by the Company for 
         term life insurance.


OPTION GRANTS IN FISCAL YEAR ENDED MARCH 31, 1998

The following table sets forth all grants of stock options
made during the fiscal year ended March 31, 1998 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           450,000         90%                 $0.16       November 2000
Matthew Fludgate         15,000         10%                 $0.16       November 2000
All Shareholders            N/A         N/A                 N/A         N/A
All Optionees (a)       500,000         N/A                 $0.16       November 2000

</TABLE> 

    (a) Based on the closing price of New Paradigm 
        Software Corp. Common Stock on March 31, 1998 of 
        $0.31 as reported on NASDAQ Bulletin Board.


Compensation for Directors

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, Gordon and three 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. Mr. Blundell was 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. On October 15, 
1997, Messrs. Taylor and Gordon were each granted 50,000 
options to purchase shares of Common Stock at an exercise 
price of $0.16 per share (the market price on the date of 
issue).  As of January 1, 1998, Mr. Chalek was granted 
50,000 options to purchase shares of Common Stock at an 
exercise price of $0.25 per share (the market price on the 
date of issue).


Employment Contracts

The Company and the Delaware subsidiary, New Paradigm
Acquisition I Co Inc. ("NPAC") has entered into a new 
employment contracts with Mr. Blundell.

Mr. Blundells previous employment contract contained the
following principal features:

Term: Five years with a remaining term of approximately two
years (1994-1999); Base Salary: $200,000 per annum (Mr. 
Blundell 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 received 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 achieved at least $2.5 million 
in sales in any period of twelve consecutive months, Mr. 
Blundell would have been paid a bonus of $50,000. Mr. 
Blundell's employment contracts provided that if such bonus 
target was achieved and such bonus paid, he and the Company 
would negotiate a new bonus arrangement. Mr. Blundell was 
entitled to receive a death benefit of $1,000,000 payable to 
a beneficiary named by him. The Company obtained a life 
insurance policy to fund this benefit. Mr. Blundell's 
employment agreement would have renewed automatically from 
year to year unless Mr. Blundell or the Company gave notice 
of termination to the other on or before May 1 of any year 
beginning in 1999.  In the event that the Company terminated 
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 was entitled to receive a 
payment equivalent to two year's benefits under the 
contract.

Following the sale of Copernicus to VIE Systems Inc., which
represented a transfer of substantially all of the assets of 
the Company, Mr. Blundell, the Company's President and Chief 
Executive Officer, gave formal written notice of his 
intention to exercise the termination right under his 
employment contract.  These termination rights provided for 
the payment to Mr. Blundell of an amount not less than 
$414,000.  As the Company was not in a position to make such 
a payment without seriously depleting the Company's limited 
cash reserves, the compensation committee negotiated with 
Mr. Blundell to produce the following settlement, which was 
entered into on November 13, 1997:

Mr. Blundell waived his entitlement to any payment in
respect of the VIE transaction and entered into new three 
year employment contracts with the Company at the same 
aggregate base salary and a reduced termination benefit of 
24 months compensation in the event that his termination 
right is triggered again by subsequent events.  Mr. Blundell 
has waived $50,000 of base salary for fiscal 1998 and until 
the Company reports a consolidated pre-tax profit of not 
less than $75,000.

In view of the fact the Company is contemplating a number of
acquisitions of companies with revenues in excess of $2.5 million,
the new contract provides that Mr. Blundell will not be entitled
to receive the bonus of $50,000 in the event that the Company's gross
revenues reach $2.5 million provided in his previous contract.

In addition the change of control clause, which gives Mr.
Blundell certain termination rights was amended to apply 
only in the event that 40% of the Company were to be 
acquired rather than 25% as previously provided.  In order 
to retain Mr. Blundell's services in seeking acquisitions 
NPAC entered into an employment agreement (as mentioned 
above) and a loan agreement providing for a loan to Mr. 
Blundell of $114,000 at an interest rate of 6%.   The loan 
will be repaid by applying 60% of (i) any future termination 
payment to Mr. Blundell; (ii) any bonus or incentive 
payments; and (iii) any sales of Common Stock of New 
Paradigm directly or beneficially owned by Mr. Blundell, 
including any Stock acquired through the exercise of 
options.


Item 11.  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, 1998, 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                  670,665(b)       199,999(c)      870,664         27%
John Brann                     219,332(d)       199,999(c)      419,331         16%
Matthew Fludgate                75,508(e)             0          75,508          3%
Daniel Gordon                   45,333(f)             0          45,333          1%
Lancer Holdings                199,999(g)             0         199,999          8%
Midland Associates             619,999(h)             0         619,999         24%
Michael Taylor                  20,000(i)             0          20,000         (j)
Morton Chalek                   10,000(k)             0          10,000         (j)
Robert Trump                   350,000(l)       619,999(m)      969,999         34%
All Directors and 
Executive 
Officers of the 
Company as a 
group (a total of 
5 persons)                      745,998(n)      199,999(m)      945,997         29%

</TABLE>

(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.

(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, (iv) up to 
599,999 shares of Common Stock underlying stock options 
granted under the Executive Stock Option Plan.

(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").

(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.

(e)Consists of (i) 534 shares of Common Stock, (ii) 1,307
shares of Common Stock issuable upon exercise of 1994 
Warrants, (iii) 23,667 shares of Common Stock issuable 
upon the exercise of options granted under the SOP and 
(iv) 50,000 shares of Common Stock underlying stock 
options granted under the Executive Stock Option Plan.

(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) 
25,333 shares of Common Stock issuable upon exercise of 
options granted under the SOP.

(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.

(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.

(i)Consists of 20,000 shares of Common Stock issuable
upon exercise of options granted under the SOP.

(j)Less than 1%.

(k)Consists of 10,000 shares of Common Stock issuable
upon exercise of options granted under the SOP

(l)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 cancelled as partial 
consideration for issuance of the Series C Redeemable 
Preferred Stock (the "Trump Warrants").

(m)Represents the holdings of Midland Associates.
Consists of the securities listed in note (h) above.

(n)Consists of all of the securities in notes (b)-(f)
above.

(o)Consists of the securities in note (g) above.

(p)Consists of 10,000 shares of Common Stock issuable
upon exercise of options granted under the SOP.

The following table indicates the beneficial ownership of 
the Company's Preferred Stock as of May 1, 1998, 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 D 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%
Morton Chalek                     0                0              0             0%
Robert Trump                      0                0              0             0%
Ali Faraji                       25                0             25            50%
Gary Towning                     10                0             10            20%
Victor Gourgue                   10                0             10            20%
Pierre Dumaresq                   5                0              5            10%
All Directors and
Executive 
Officers of the 
Company as a group                 0                0              0             0%

</TABLE>


(a)	The only preferred stock outstanding as at March 31, 
1998 was the Series D Redeemable Preferred Stock.  The 
Series D Preferred has no right to vote on any matter 
requiring the vote of the holders of the Common Stock. 
Holders of Series D Preferred shall have the right to vote 
on any further issue of Series D Preferred recommended by 
the Board of Directors of the Company.  The Series D 
Preferred is not entitled to any dividends or other 
distributions on the Common Stock.  Upon dissolution of the 
Company the holder of each share of Series D Preferred is 
entitled to the same proportion of the outstanding shares of 
Common Stock of NPIL as such shares of Series D Preferred of 
the holder shall represent of the then total outstanding 
shares of Series D Preferred.  At any time following 
December 31, 1998 the holders of the Series D Preferred may 
convert all of the Series D Preferred into shares of the 
Company's Common Stock using the following formula 
N=((V-$200,000)/(Dx2))/P where N is the number of shares of 
the Company's Common Stock acquired by the holder, V is the 
value of NPIL on the conversion date, D is the number of 
shares of Series D Preferred issued and outstanding on the 
conversion date and P is the value of the Common Stock of 
the Company, all as calculated pursuant to the terms of the 
Amended Certificate of Incorporation.  500,000 shares of 
Common Stock of the Company have been reserved for such a 
conversion.  Should no conversion by the holders of the 
Series D Preferred occur by December 31, 2000, the Company 
may redeem all of the shares of the Series D Preferred for 
$1.00 per share.  Upon termination of a holder's employment 
with the Company, the Series D Preferred shall be converted 
pursuant to the above-stated formula, except that in the 
event that the holder voluntarily terminates employment or 
is terminated for cause, the Series D Preferred shall be 
redeemable by the Company for $1.00 per share.

 (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.


Other Transactions

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, 1997 Corporate Growth Services 
received $24,000 in such fees and in the fiscal year ended 
March 31, 1998, $24,000.
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 that 
was received on January 16, 1997.  The principal terms of 
this loan were as follows:
Advance:	$150,000.
Term:		6 months (to expire July 14th, 1997).
Interest Rate:	To be paid in warrants, see below.
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:

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 Stock can be redeemed at
the Company's option at any time upon payment of $200,000.
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.  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 Series C Redeemable Preferred Stock was redeemed by the 
Company from the proceeds of the sale of COPERNICUS.



PART IV

Item 13.  

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")).

3.3
Certificate of Amendment of Certificate of Incorporation
establishing Series D Preferred Stock date January 22, 1998

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).

10.2.3
Blundell Employment Contracts with NPSC and NPAC and
Loan Agreement dated November 13, 1997.

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).

10.5.4
Agreement establishing Future Paradigm, Inc.
(incorporated by reference to exhibit 10.5.4
of Form 8K filed March 13, 1998).

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)

10.22
Agreement dated December 18, 1996 between the Company 
and International Business Machines, Inc. ("IBM") 
(incorporated by reference to Exhibit 10.22 to the March 
31, 1997 Form 10-KSB/A).

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 
    Desisting 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

 6) July 18, 1997 New Paradigm Announces Adjournment of 
    Stockholders' Meeting

 7) March 13, 1998 New Paradigm Announces formation of 
    Future Paradigm Inc.

 8) April 28, 1998 New Paradigm Announces Acquisition of 
    Certain Assets from Kapelus & Cipriano, Inc.

 9) June 5, 1998 New Paradigm Reports Appointment of 
    Rocco Cipriano as Director

10) June 12, 1998 New Paradigm Reports the Audited 
    Financial Statements of Kapelus & Cipriano, Inc. 
    together with pro forma results.



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 29, 1998                   _/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 29, 1998

     /s/Daniel A. Gordon     
     Daniel A. Gordon    Chairman of the Board of Directors     June 29, 1998

     /s/ Morton Chalek         
     Morton Chalek       Director                               June 29, 1998

     /s/ Rocco Cipriano
     Rocco Cipriano      Director                               June 29, 1998

     /s/ Michael Taylor
     Michael Taylor      Secretary and Director                 June 29, 1998

<PAGE>

                         AUDITED FINANCIAL STATEMENTS


                NEW PARADIGM SOFTWARE CORP. AND SUBSIDIARIES


                        CONSOLIDATED FINANCIAL STATEMENTS

        

                        YEARS ENDED MARCH 31, 1998 AND 1997



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 
        Statements of cash flows                                F-6
        Notes to consolidated financial statements              F-7- F-32


                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, 1998, and the related consolidated statements of 
operations, shareholders' equity (capital deficit), and cash 
flows for each of the two years in the period ended March 31,
1998. 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.

Except as discussed in the following paragraph, 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.

At March 31, 1998, the Company had an outstanding liability 
of approximately $462,000 to its former corporate counsel.  
As discussed in Note 3, the Company has disputed the amount 
with such counsel and estimates the liability will be settled 
for approximately $100,000.  Accordingly, the Company recorded
a gain from the liability reduction of approximately $362,000 in 
its statement of operations for the year ended March 31, 
1998.  We have not been able to confirm this liability with 
the former corporate counsel and have not been able to apply 
other procedures to satisfy ourselves as to the amount of the 
ultimate settlement.

In our opinion, except for the effects of such adjustments, if
any, as might have been determined to be necessary relating to
the settlement of the liability to the Companys former counsel
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, 1998, and
the results of their operations and their cash flows for each of
the two years in the period ended March 31, 1998, 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 operating losses since its inception, has an 
accumulated deficit and as discussed in Note 13, the Company 
disposed of its COPERNICUS and EDI businesses.  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 26, 1998


                NEW PARADIGM SOFTWARE CORP. and SUBSIDIARIES


                        Consolidated Balance Sheet

<TABLE>                         
<S>                                                        <C>

                                                        March 31, 1998
                                                        --------------
Assets

Current:
      Cash and cash equivalents                            $202,030
      Restricted cash (Note 9)                                9,065
      Accounts receivable (Note 12)                          45,993
      Notes receivable, current portion (Note 13(b))        105,432
      Other receivables and prepayments                      12,500
                                                          ---------
           Total current assets                             375,020
Property and equipment, less accumulated depreciation 
and amortization (Note 2)                                   127,506
Note receivable from Officer/Shareholder (Note 6(b))        117,135
Note receivable, long-term (Note 13 (b))                    142,007                                                     $761,668
                                                           --------
                                                           $761,668
                                                           ========
Liabilities and Shareholders' Equity
Current:
     Loan payable (Note 4)                                  $30,000
     Accounts payable and accrued expenses (Note 3)         248,351
                                                            -------
        Total current liabilities                           278,351
                                                            -------
Commitments and contingencies (Note 6)
Redeemable Series D preferred stock - authorized and
outstanding -  50 shares, at redemption value (Note 7 (a))       50
                                                            -------
Shareholders' Equity (Notes 7 and 9):
        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                                            -
        Series C shares authorized 800,000; 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
        Deficit                                           (8,691,459)
                                                          ----------
           Total Shareholders' equity                        483,267
                                                          ----------
                                                            $761,668
                                                          ==========


</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, 1998   March 31, 1997
                                              --------------   --------------
Revenues:
    Consulting (Note 12)                         $195,461          $64,976
Expenses:
    Employee costs                                574,172          630,616
    General and administrative (Note 11(a))       227,930          340,744
    Professional fees                             106,796          244,731
    Marketing (Note 11(b))                         81,736          164,238
    Occupancy                                      81,971          197,230
    Depreciation and amortization                  67,913           49,604
                                                ---------       ----------
                                                1,140,518        1,627,163
                                                ---------       ----------
           Loss from operations                  (945,057)      (1,562,187)
                                                ---------       ----------
Other income (expense):
    Interest income                                38,203           25,099
    Interest expense                               (2,100)               -
    Gain from reduction of liability (Note 3)     361,999                -
    Realized loss on sale of investment in 
    restricted common stock (Note 9)             (340,930)               -
                                                 --------           -------
                                                   57,172            25,099
                                                 --------           -------
Loss from continuing operations                  (887,885)       (1,537,088)
Loss from discontinued operations (Note 13)       (90,712)       (1,438,319)
Gain on sale of assets of discontinued
operations (Note 13)                            1,396,737                 -
                                                ---------        ----------
Net income (loss)                                $418,140       $(2,975,407)
                                                =========        ===========
Basic and diluted per share data
     Loss from continuing operations               $(0.36)           $(0.63)
     Loss share from discontinued operations        (0.04)            (0.58)
     Gain on sale of assets                          0.57                 -
                                                   ======            ======
     Net income (loss) per Common share             $0.17            ($1.21)
                                                   ======            ======
     Basic and diluted weighted average common 
     shares Outstanding                         2,451,729          2,449,428
                                                =========          =========

</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, 1998 and 1997 (Note 7)

<TABLE>
<S>                       <C>       <C>         <C>     <C>     <C>             <C>          <C>          <C>
                        Preferred stock                      Additional     Unrealized                   Total
                        Series A, B, C         Common Stock Paid in Capital on investment   Deficit  Shareholders
                            and D                                           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 7(a))              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 9)                 -          -          -        -          -     (170,784)            -     (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)
Issuance of Series D 
Preferred Stock in 
November 1997 (Note 7(a))     50          1          -        -         49            -             -           50
Reclassifaction of Series 
D redeemable preferred 
stock                        (50)        (1)         -        -        (49)           -             -          (50)
Sale of Restricted Stock       -          -          -        -          -      335,241             -      335,241
Net income for the year        -          -          -        -          -            -       418,140      418,140
------------------------------------------------------------------------------------------------------------------
Balance, March 31, 1998        -          -  2,451,729  $24,517 $9,150,209           $-   $(8,691,459)    $483,267
==================================================================================================================
</TABLE>

        See accompanying notes to consolidated financial statements

                       NEW PARADIGM SOFTWARE CORP. and SUBSIDIARIES
                      Consolidated Statements of Cash Flows (Note 8)
<TABLE>
<S>                                                  <C>                <C>

                                                 Year ended       Year ended 
                                               March 31, 1998   March 31, 1997
Cash flows from operating activities:
     Net Income (loss)                               $418,140      $(2,975,407)
     Adjustments to reconcile net loss to net 
     cash used in operating activities:
        Depreciation and amortization                  86,055          230,880
        Gain on sale of assets                     (1,396,737)               -
        Gain from reduction of liability             (361,999)               -
        Loss on sale of investment in restricted 
        common stock                                  340,930                -
        Deferred rent payable                         (71,127)          71,127
        Issuance of Common Stock to terminated 
        employee                                            -               50
        Issuance of Series D redeemable preferred 
        stock to employees pursuant to a 
        restricted grant                                   50                -
        Noncash interest expense                        2,100                -
        Changes in assets and liabilities:
              (Increase) decrease in:
              Accounts receivable                       4,619          (22,116)
              Receivable from related party               -           50,000
              Other receivables and prepayments        19,946           76,073
              Other assets                             71,266          (61,281)
        Increase (decrease) in:
              Accounts payable and accrued expenses  (196,340)         589,748
              Deferred revenue                              -           27,500
    Total adjustments                              (1,501,237)         961,981
    Net cash used in operating activities          (1,083,097)      (2,013,426)
Cash flows from investing activities:
        Purchases of property and equipment           (24,654)         (57,747)
        COPERNICUS development costs                   (8,334)        (276,746)
        Sale of Copernicus and EDI businesses       2,056,000                -
        Fees paid in connection with sale of 
        Copernicus and EDI businesses                (285,361)               -
        Loan to officer/shareholder                  (114,000)               -
        Principal receipts on note receivable          62,373                -
        Patents, trademarks and organization costs          -          (91,385)
    Net cash provided by (used in)
    investing activities:                           1,686,024         (425,878)
Cash flows from financing activities:
        Proceeds from sale of Redeemable Preferred 
        Class C stock                                       -          200,000
        Acquisition of Series C redeemable preferred 
        stock                                        (200,000)               -
        Proceeds from note payable                     30,000          550,000
        Repayment of debt                            (550,000)               -
Net cash provided by (used in) financing 
activities                                           (720,000)         750,000
Net decrease in cash and cash equivalents            (117,073)      (1,689,304)
Cash and cash equivalents, beginning of period        328,168        2,017,472
Cash and cash equivalents, end of period             $211,095         $328,168

</TABLE>
      See accompanying notes to consolidated financial statements


1. Organization and Summary of Accounting Policies


Organization and Business

New Paradigm Software Corp. (the "Company") 
a New York corporation, was founded in July 
1993  and commenced operations on 
November 1, 1993. The Company through its 
wholly owned subsidiary, New Paradigm 
Inter-Link, Inc. ("NPIL"), is engaged in 
the research and development of commercial 
applications for the Internet.


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.  The Company has incurred 
significant operating losses since inception and has 
an accumulated deficit at March 31, 1998.  
As discussed in Note 13, the Company 
disposed 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 accumulated 
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.  Subsequent 
to the year-end the Company acquired the 
advertising business of Kapelus and 
Cipriano, Inc. (see Note 14) and is 
currently negotiating with another 
advertising agency for a possible merger or 
acquisition.  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, NPIL and New 
Paradigm Acquisition I Co., Inc. ("NPAC"). 
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.


Property, Equipment and Depreciation

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


Revenue Recognition

Revenue from Internet 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 ("FASB"), 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.  The Company 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.


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 Income Per Share

During 1997, the FASB issued SFAS No. 128 
("SFAS No. 128"), "Earnings per Share", 
which provides for the calculation of 
"basic" and "diluted" earnings per share.  
This statement is effective for financial 
statements issued for periods ending after 
December 15, 1997.  Basic earnings per 
share includes no dilution and is computed 
by dividing income available to common 
shareholders by the weighted average number 
of common shares outstanding for the 
period.  Diluted earnings per share 
reflect, in periods in which they have a 
dilutive effect, the effect of common 
shares issuable upon the exercise of stock 
options.  As required by this statement, 
all periods presented have been restated to 
comply with the provisions of SFAS No. 128.
The computation of basic and diluted net 
income per share is based on the weighted 
average number of common shares outstanding 
during the period.  Common stock options 
and warrants outstanding during the period 
were anti-dilutive and have not been 
reflected in the diluted net income per 
share calculation.


Recent Accounting Standards

1n June 1997, the FASB issued Statement of 
Financial Accounting Standards No. 130, 
"Reporting Comprehensive Income," ("SFAS 
No. 130") which establishes standards for 
reporting and display of comprehensive 
income, its components and accumulated 
balances.  Comprehensive income is defined 
to include all changes in equity except 
those resulting from investments by owners 
and distributions to owners.  Among other 
disclosures, SFAS No. 130 requires that all 
items that are required to be recognized 
under current accounting standards as 
components of comprehensive income be 
reported in a financial statement that is 
displayed with the same prominence as other 
financial statements.

SFAS No. 130 is effective for financial
statements for periods beginning after 
December 15, 1997 and requires comparative 
information for earlier years to be 
restated.  Because of the recent issuance 
of this standard, management has been 
unable to fully evaluate the impact, if 
any, the standard may have on future 
financial statement disclosures.  Results 
of operations and financial position, 
and disclosure will be unaffected by 
implementation of this standard.
In  June 1997, the FASB issued SFAS No. 
131, "Disclosure about Segments of an 
Enterprise and Related Information" ("SFAS 
No. 131"), which supersedes SFAS No. 14, 
"Financial Reporting for Segments of a 
Business Enterprise".  SFAS No. 131 
establishes standards for the way that 
public companies report information about 
operating segments in annual financial 
statements and requires reporting of 
selected information about operating 
segments in interim financial statements 
issued to the public.  It also establishes 
standards for customers.  SFAS No. 131 
defines operating segments as components of 
a company about which separate financial 
information is available that is evaluated 
regularly by the chief operating decision 
maker in deciding how to allocate resources 
and in assessing performance.
SFAS No. 131 is effective for financial 
statements for periods beginning after 
December 15, 1997 and requires comparative 
information for earlier years to be 
restated.  Because of the recent issuance 
of this standard, management has been 
unable to fully evaluate the impact, if 
any, the standard may have on future 
financial statement disclosures.  Results 
of operations and financial position, 
however, will be unaffected by 
implementation of this standard.


2. Property and Equipment

Property and equipment consists of the 
following:


        March 31, 1998
        Computer equipment                $ 239,332
        Software                             29,132
        Furniture and fixtures               81,043
        Telephone system                     37,262
                                            386,769
        Less: Accumulated depreciation 
        and amortization                    259,263
                                           $127,506


3. Accounts payable/Gain from Reduction 
   of Liability

The Company had an outstanding liability of 
$461,999 payable to its former corporate 
counsel.  The Company has disputed the 
amount of this balance with such counsel 
and estimates the liability will be settled 
for an amount of approximately $100,000, 
which is included in accounts payable and 
accrued expenses at March 31, 1998.  Accordingly,
the Company has recorded the a gain of $361,999 from
the reduction of this liability in the 
statement of operations for the year ended 
March 31, 1998.


4. Loan Payable

The Company received a loan from a former 
officer, Mr. John Brann (see Note 6(b)), in 
the amount of $30,000 pursuant to his 
termination agreement.  The loan will be 
repaid by 50% of any and all royalties due 
to the Company up to $40,000 pursuant to 
the terms of the Copernicus Sale Agreement 
(see Note 13) or the Company may prepay the 
loan at any time plus interest at 8% per 
annum.


5. Income Taxes

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

<TABLE>

<S>                         <C>               <C>              
Period or Year                            Net operating       
ended March 31,     Year of expiration  loss carryforward
---------------------------------------------------------
    1994                    2009             $157,000    
    1995                    2010            1,954,000             
    1996                    2011            3,542,000             
    1997                    2012            2,958,000             
                                           $8,611,000

</TABLE>

The tax benefit of these losses 
(approximately $3,900,000 at March 31, 
1998) is subject to limitations due to the
change in control for income tax purposes
resulting from the Company's Initial
PublicOffering ("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.


6. Commitments and Contingencies

(a)	Leases
The Company leases sales and office 
space under an operating lease which 
commenced on March 1, 1998 and expires 
February 28, 2001.

The future minimum rental payments under 
this sublease agreement are 
approximately as follows:

Year ending March 31,
1999               $84,000
2000                84,000
2001                77,000
                  $245,000

Rent expense for the years ended 
March 31, 1998 and 1997 amounted to 
approximately $66,000, and $195,000 
respectively.


(b)	Employment Agreements

(i)Following the sale of Copernicus to VIE 
Systems Inc. (see Note 13), which 
represented a transfer of substantially 
all the assets of the Company, the 
Company's President and Chief Executive 
Officer gave formal written notice of 
his intention to exercise the 
termination rights under his employment 
contract.  These termination rights 
provided for payment to this officer of 
an amount not less than $414,000.  As 
the Company was not in a position to 
make such a payment without seriously 
depleting the Company's limited cash 
reserves, the compensation committee 
negotiated with the officer to produce 
the following settlement, which was 
entered into on November 13, 1997:

        The officer waived his entitlement to
        any payment for termination benefits 
        arising out of the VIE transaction 
        and entered into new three year 
        employment contracts with the Company 
        and its Delaware subsidiary, NPAC, at 
        the same aggregate base salary which 
        provide a reduced termination benefit 
        of 24 months compensation in the 
        event that his termination right is 
        triggered again.  The officer has 
        waived $50,000 of base salary for 
        fiscal 1998 and until the Company 
        reports a consolidated pre-tax profit 
        of not less than $75,000.  

        The Company is contemplating a number
        of acquisitions of companies with 
        revenues in excess of $2.5 million, 
        the new contract provides that the 
        officer will not be entitled to 
        receive the bonus of $50,000 in the 
        event that the Company's gross 
        revenues reach $2.5 million provided 
        in his previous contract.

        In addition the change of control
        clause, which gives the officer 
        certain termination rights would be 
        amended to apply only in the event 
        that 40% of the Company were to be 
        acquired rather than 25% as at 
        present.

        In order to retain this officer's
        services in seeking acquisitions NPAC 
        entered into an employment agreement 
        (as mentioned above) and a loan
        agreement providing for a loan to Mr. 
        Blundell of $114,000 at an interest 
        rate of 6%.   The loan will be repaid 
        by applying to its outstanding 
        balance 60% of (i) any future 
        termination payment to the officer; 
        (ii) any bonus or incentive payments; 
        and (iii)  any sales of Common Stock 
        of New Paradigm directly or 
        beneficially owned by this officer, 
        including any Stock acquired through 
        the exercise of options.
        
(ii) 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 with the Company (the 
"Termination Agreement") pursuant to an 
employment agreement dated June 14, 
1993, as amended.  Termination of Mr. 
Brann's employment was a condition of 
the sale of the Copernicus asset to VIE 
Systems, Inc. ("VIE") (see Notes 4 and 
13).  As consideration for the 
termination under the termination 
Agreement, the Company paid Mr. Brann a 
total of $50,000.
 
(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.  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.  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.


(d) Joint Venture

In January 1998, through its wholly
owned subsidiary, NPIL, the Company 
entered into a joint venture with three 
New York advertising agencies to provide 
Website creation, Internet and 
electronic commerce applications, 
Internet hosting and Internet media  
buying services.  The joint venture 
resulted in the formation of a new 
corporation, Future Paradigm, Inc. 
("FPI").  The three advertising agencies 
plan to direct their Internet related 
business to FPI and have an equity 
interest therein.  The Company owns 51% 
of FPI.


7. Shareholders Equity

(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:

        Each C Preferred share has four votes
        on any matter to be put to the vote 
        of the Company's Shareholders.

        The C Preferred Stock can be redeemed
        at the Company's option at any time 
        upon payment of $200,000.

        The C 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.

        The C Preferred Stock will have
        preference in the event of any 
        liquidation to the extent of 
        $200,000.

On January 15, 1997 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 
Series C Preferred Redeemable shares 
described above.

On July 23, 1997, the Company redeemed 
its 800,000 Series C Redeemable 
Preferred Stock for $200,000 pursuant to 
the sale of the Copernicus asset (see 
Note 13) in accordance with the terms 
described above.

On October 15, 1997, pursuant to Section 
4(d) of the Restated Certificate of 
Incorporation of the Company, the 
Company agreed to create a Series D 
convertible preferred stock, $0.01 par 
value (the "Series D Preferred").  The 
Company further agreed to issue to 
several of the employees of and a 
consultant to NPIL an aggregate of 50 
shares of Series D Preferred, with the 
following principal terms:

        The Series D Preferred has no right 
        to vote on any matter requiring the 
        vote of the holders of the Common 
        Stock. Holders of Series D Preferred 
        shall have the right to vote on any 
        further issue of Series D Preferred 
        recommended by the Board of 
        Directors of the Company.  

        The Series D Preferred is not
        entitled to any dividends or other 
        distributions on the Common Stock.  

        Upon dissolution of the Company the
        holder of each share of Series D 
        Preferred is entitled to the same 
        proportion of the outstanding shares 
        of Common Stock of NPIL as such 
        shares of Series D Preferred of the 
        holder shall represent of the then 
        total outstanding shares of Series D 
        Preferred.  

        At any time following December 31,
        1998 the holders of the Series D 
        Preferred may convert all of the 
        Series D Preferred into shares of 
        the Company's Common Stock using the 
        following formula N=((V-$200,000)/(Dx2))/P
        where N is the number of shares of the
        Company's Common Stock acquired by the
        holder, V is the value of NPIL on the 
        conversion date, D is the number of 
        shares of Series D Preferred issued 
        and outstanding on the conversion 
        date and P is the value of the 
        Common Stock of the Company, all as 
        calculated pursuant to the terms of 
        the Amended Certificate of Incorporation.
        500,000 shares of Common Stock of the
        Company have been reserved for such a
        conversion.

        Should no conversion by the holders
        of the Series D Preferred occur by 
        December 31, 2000, the Company may 
        redeem all of the shares of the 
        Series D Preferred for $1.00 per 
        share.

        Upon termination of a holder's
        employment with the Company, the 
        Series D Preferred shall be 
        converted pursuant to the above-
        stated formula, except that in the 
        event that the holder voluntarily 
        terminates employment or is 
        terminated for cause, the Series D 
        Preferred shall be redeemable by the 
        Company for $1.00 per share.

                
(b)	Warrants

At March 31, 1998, the Company had 
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 private placement     14,400              $4.88       March 2000 (ii)
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
 
</TABLE>
        
(i) Effective upon completion of the 
Company's initial public offering 
("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) These warrants were exercisable at 
$.75 per warrant for an additional 
14,400 warrants with an exercise price 
of $11.25 per share.  Prior to the IPO, 
they were surrendered by the holder for 
cancellation.

(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)	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.

In October 1997, the Company granted 
450,000 options to its Chief Executive 
Officer, under the Executive Stock 
Option Plan, at an exercise price of 
$0.16 per share (the market price on 
the date of grant), exercisable as 
follows: 150,000 immediately; 150,000 
if the average closing stock price of 
the common stock exceeds 50 cents for 
20 consecutive business days, 150,000 
if the average closing stock price of 
the common stock exceeds $1.00 for 20 
consecutive business days. The Company
will record compensation expense upon
the exercise of the remaining 300,000
options in the amount at the difference
between the stock price at such time and
the exercise price of $0.16

In October 1997, the Company granted to 
its Secretary and Vice President 50,000 
options under the Executive Stock 
Option Plan at an exercise price of 
$0.16 per share (the market price on 
the date of grant).  Subsequent to the 
year-end, this officer terminated his 
employment with the Company.


(d)	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, 1998.

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.

In October 1997, two directors were 
each granted 50,000 options to purchase 
shares of common stock at an exercise 
price of $.16 per share (the market 
price on the date of grant).

As of January 1, 1998, one director was 
granted 50,000 options to purchase 
shares of common stock at an exercise 
price of $.25 per share (the market 
price on the date of grant)


Year ended 
March 31,               1998          1997
Net Income 
(loss):
      As reported     $418,140     $(2,975,407)
      Pro Forma        349,285      (3,214,225)
Basic and diluted
earnings per share:
      As reported        $0.17          $(1.21)
      Pro Forma           0.14           (1.31)

The following tables contain information on
the employee, executive and director
stock options for the two-year period ended 
March 31, 1998:

                    Option    Exercise Price   Weighted Average
                    Shares    Range per Share   Exercise Price
Outstanding, 
March 31, 1996     283,866    $4.50 to $6.00        $5.04
Granted            345,999     1.25 to  5.13         1.54
Exercised                -           -                  -
Canceled                 -           -                  -
Outstanding, 
March 31, 1997     529,865     1.25 to  6.00         3.10
Granted            665,000     0.16 to  0,25         0.16
Exercised                -           -                  -
Canceled          (326,866)    1.25 to  4.50         3.47
Outstanding,
March 31, 1998     967,999    $0.16 to $6.00        $1.96


                    Option    Exercise Price   Weighted Average
                    Shares    Range per Share   Exercise Price

Exercisable at 
year ended 
March 31:
    1997           439,866    $1.25 to $6.00         $3.89
    1998           602,999     0.16 to  6.00          1.49

                                               Weighted Average 
                                                  Fair Value

Options 
granted in:
     1997                                            $0.55
     1998                                             0.09


The following table summarizes information about stock 
options outstanding at March 31, 1998:

                           Range of Exercise Prices
<TABLE>

<S>                          <C>        <C>        <C>
                          $.16-0.25  $1.25-1.63  $4.50-6.00
Outstanding options:
Number outstanding at 
March 31, 1998              665,000     190,999     112,000
Weighted average 
remaining contractual 
life (years)                  4.33        3.67        1.79
Weighted average 
exercise price               $0.16       $1.33       $5.35
Exercisable options:
Number outstanding at 
March 31, 1998              300,000     190,999     112,000
Weighted average 
exercise price               $0.16       $1.33       $5.35
</TABLE>

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 Company estimates the fair value of 
each stock option at the grant date by 
using the Black-Scholes option-pricing 
model with the following weighted 
average assumptions used for grants 
during the years ended March 31, 1998 
and 1997, respectively; no dividends 
paid for all years; expected volatility 
of 46.5% in 1998 and 35% in 1997; 
weighted average risk-free interest 
rates of 5.94% and 6.23% respectively; 
and expected lives of 4.2 to 4.1 years, 
respectively.

Under the accounting provisions of
SFAS No. 123, the Company's net income 
(loss) and earnings (loss) per share 
would have been reduced to the pro 
forma amounts indicated above.


(e) Stock Options Issued in Connection with 
    the Acquisition of Netphoner

Pursuant to the terms of the 
acquisition agreement for Netphoner, 
with Electric Magic Co. on October 9, 
1995 (see Note 9), 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 Netphoner, warrants 
to buy 80,000 shares of common stock at 
an exercise price of $7.80 per share 
expiring August 11, 2000. (See Note 9.)


8. Supplemental Disclosures of 
   Cash Flow Information

                                Year ended March 31,
                                 1998         1997

Cash paid during the 
period for:
    Interest                  $19,000           $-

    Income taxes                   $-           $-

Supplemental disclosures of noncash investing 
activities:
From the sale of its EDI business, in Fiscal 1998
the Company received a note in the amount of $309,812.


9. Loss on Sale of Investment in 
   Restricted Common Stock

As of April 1, 1997, the Company owned 
67,470 shares of Camelot Corporation's 
("Camelot") restricted common stock 
acquired in connection with its sale of the 
Netphoner software package, which were 
originally valued at $350,000.  On April 1, 
1997, the market value of the Camelot stock 
had decreased to $14,759 resulting in an 
unrealized loss of $335,241 which was 
reflected in shareholders' equity.  In 
November 1997, these shares were sold in a 
Rule 144 transaction for $8,426.  This 
transaction resulted in a loss of $340,930.  
The proceeds of this sale are restricted as 
to withdrawal and usage and aggregated 
$9,065 at March 31, 1998.


10. 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, 1998 or 1997.


11. Related Party Transactions

(a)	During the years ended March 31, 1998 
and 1997, the Company incurred fees of 
approximately $24,000 to a consulting 
firm owned by the Company's Chairman of 
the Board of Directors.

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

(c)	During the year ended March 31, 1998, 
the Company incurred consulting fees of 
approximately $11,000 to a current 
director for consulting work in the 
advertising field.  In addition, this 
director is entitled to a 5% finders' 
fee for any acquisitions of advertising 
agencies which he introduces to the Company.


12. Major Customers

Revenues from three major customers for the 
year ended March 31, 1998 accounted for 
approximately 66% of the Company's total 
revenues.  Receivables due from these 
customers at March 31, 1998 were 
approximately $46,000.

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


13. Gain on Sale of Assets/Discontinued 
    Operations

(a) Sale of COPERNICUS

On July 23, 1997, the Company sold the
rights to its 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 twelve 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.  The Company has appointed VIE as 
its exclusive agent for the operation of 
all aspects of the Copernicus related 
business.

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.  The 
balance of this note at March 31, 1998 was 
$247,439

c) Discontinued Operations

The dispositions of the businesses 
disclosed in (a) and (b) above have been 
presented as discontinued operations and 
the balance sheet at March 31, 1998 and 
statements of operations for the two years 
then ended have been restated to conform to 
this presentation.  The gain on disposal of 
such businesses which aggregated $1,396,737 
was 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>
<S>                                             <C>             <C>
                                        Year ended March   Year ended March
                                            31, 1998           31, 1997

Software fees, royalties and licensing fees      $51,512           $380,671
Consulting, maintenance and other fees                 -            242,227
                                                  51,512            622,898
Expenses:
  Employee costs                                  35,217          1,047,606
  General and administrative                      81,223            265,087
  Professional fees                                    -            223,213
  Marketing                                            -            323,725
  Occupancy                                            -             20,310
  Depreciation and amortization                   25,784            181,276
                                                 142,224          2,061,217
Net Loss from discontinued operations           $(90,712)       $(1,438,319)
</TABLE>


14. Subsequent Events

Subsequent to March 31, 1998, the Company 
through its wholly-owned subsidiary NPAC, 
entered into an agreement to purchase 
certain assets subject to certain 
liabilities related to the advertising 
business of Kapelus & Cipriano, Inc. 
trading as Schoen, Kapelus & Cipriano, 
("SKC") in a business combination accounted 
for as a purchase.  The purchase price for 
this acquisition was 250,000 shares of the 
Company's common stock delivered at 
closing, plus a payout over each of the 
next three years in common stock of one-
third of the net book value of assets less 
related liabilities acquired at closing.

In addition, subject to a buyout 
agreement, the Company will be paying to 
the principals of SKC in each of the next 
three years an amount equal to 16.667% of 
the net revenue of SKC (as defined in the 
buyout agreement) commencing on the closing 
date and ending on the third anniversary of 
the closing date, less one sixth of the net 
liabilities (as defined in the closing 
agreement).  Such buyout payment shall be 
made at 8.334% of the net revenue of SKC 
less one sixth of the net liabilities paid 
in cash and 8.333% of the net revenue of 
SKC paid in shares of the Company's common 
stock.