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

                                    FORM 10-K

              [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                  For the fiscal year ended: December 31, 1996
                                       OR
            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                        For the transition period from to

                        COMMISSION FILE NUMBER: 0-21823

                                 FIBERCORE, INC.
             (Exact name of registrant as specified in its charter)
           Nevada                                                 87-0445729
(State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization)                               Identification No.)

                        174 Charlton Road, P. O. Box 206
                              Sturbridge, MA 01566
              (Address and Zip Code of principal executive offices)

                                 (508) 347-7744
              (Registrant's telephone number, including area code)

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

Securities registered pursuant to Section 12(g) of the Act:

                                         Common Stock, par value $.001 per share
                                         ---------------------------------------
                                                        (Title of Class)
Indicate by check mark whether the registrant:

(1) has filed all  reports  required  to be filed by  Section 13 or 15(d) of the
Securities  Exchange  Act of 1934  during the  preceding  12 months (or for such
shorter period that the registrant was required to file such reports),

                              Yes X          No
                                 ---            ---

and

(2) has been subject to such filing requirements for the past 90 days.

                              Yes            No X
                                 ---            ---

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

The  aggregate  market  value of  voting  stock  held by  non-affiliates  of the
registrant as of February 28, 1997: $19,328,375.

Number of shares outstanding as of February 28, 1997:  35,316,676.

                       DOCUMENTS INCORPORATED BY REFERENCE
None


<PAGE>




                                                    FIBERCORE, INC.
                                                   TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                                    Page

<S>                                                                                                                   <C>
PART I .............................................................................................................  3
         ITEM 1.           BUSINESS ................................................................................  3
         ITEM 2.           PROPERTIES .............................................................................. 16
         ITEM 3.           LEGAL PROCEEDINGS ....................................................................... 16
         ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                           HOLDERS ................................................................................. 16

PART II ............................................................................................................ 17
         ITEM 5.           MARKET FOR REGISTRANT'S COMMON EQUITY AND
                           RELATED STOCKHOLDER MATTERS ............................................................. 17
         ITEM 6.           SELECTED FINANCIAL DATA ................................................................. 18
         ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                           CONDITION AND RESULTS OF OPERATIONS ..................................................... 20
         ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ............................................. 26
         ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                           ACCOUNTING AND FINANCIAL DISCLOSURE ..................................................... 56

PART III ........................................................................................................... 57
         ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE
                           REGISTRANT .............................................................................. 57
         ITEM 11.          EXECUTIVE COMPENSATION .................................................................. 59
         ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                           AND MANAGEMENT .......................................................................... 62
         ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS .......................................... 64

PART IV ............................................................................................................ 66
         ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
                           ON FORM 8-K ............................................................................. 66

SIGNATURES ......................................................................................................... 69

                                                           2
</TABLE>

<PAGE>



                                     PART I

ITEM 1.           BUSINESS

GENERAL

   FiberCore,  Inc. ("FiberCore" or the "Company") is engaged in the business of
developing,  manufacturing,  and marketing  single-mode  and multi-mode  optical
fiber  and  optical  fiber   preforms  for  the   telecommunications   and  data
communications industry.

   The Company's  products include  single-mode and multi-mode optical fiber and
optical  fiber  preforms.  Preforms are the basic  component  from which optical
fiber is drawn and  subsequently  cabled.  The Company has  developed a patented
preform production  process which management  believes to be more cost effective
than existing  production  methods in use. Through its wholly owned  subsidiary,
Automated Light Technologies,  Inc. ("ALT"), the Company  manufactures  patented
cable monitoring systems, a patented long range fault locator,  cable protection
devices, and electro-optical talk sets.

   In June 1994,  the  Company  formed a wholly  owned  subsidiary  in  Germany,
FiberCore Glasfaser Jena GmbH ("FCJ"),  which leased a manufacturing facility in
Jena,  Germany  ("the Jena  Facility")  for a fixed  monthly  sum,  and acquired
certain  equipment  located in that facility from SICO  Quarzschmelze  Jena GmbH
("SICO").  Until the year 2001,  the  Company's  ownership  of the  equipment is
subject to the right of the German  government,  from which SICO  purchased  the
equipment,   to  repossess  the  equipment  in  the  event  the  Company  ceases
production.  The agreement  pursuant to which the Company acquired the equipment
provides  for the  issuance  of  2,221,141  shares  of  Common  Stock to SICO in
exchange for the equipment.  The Jena Facility is an existing 26,500 square foot
optical fiber manufacturing plant which has been in operation since 1986.

   On July 18, 1995,  FiberCore,  Incorporated,  the  predecessor  to FiberCore,
Inc.,  incorporated  under the laws of the State of  Nevada  in  November  1993,
merged into Venturecap, Inc. ("Venturecap"), an inactive corporation,  organized
under the laws of the State of Nevada in 1987. Venturecap issued 3.671307 shares
in exchange for each  outstanding  share of  FiberCore,  Incorporated  and, as a
result,  Venturecap  issued  a  total  of  24,617,133  shares  for  all  of  the
outstanding  shares of  FiberCore,  Incorporated.  After the merger,  Venturecap
changed its name to FiberCore, Inc.

   On September 18, 1995, the Company  acquired  Automated  Light  Technologies,
Inc. ("ALT").  ALT, a Delaware corporation  organized in 1986 and engaged in the
business of  manufacturing  equipment  which monitors and  identifies  faults in
fiber optic cables, cable protection devices, and electro-optical talk sets.

    In  January  1996,   the  Company   established   a  subsidiary,   InfoGlass
Incorporated  ("InfoGlass"),  through which it intends eventually to conduct its
North  American  fiber optic  business.  The Company is  currently  planning the
construction  of a U.S.  manufacturing  facility to be  operated  by  Infoglass,
although  there can be no assurance  that the Company will obtain the  financing
necessary to construct this facility.


                                        3

<PAGE>



    The   following  is  an   organizational   chart   depicting  the  principal
subsidiaries  of the  Company,  all of which are  wholly-owned  by the  Company,
except Fiber Optic Industries  (Pvt.) Ltd. ("FOI") (30%) and Middle East Optical
Fiber Cable Co. ("MEFC") (15%):

<TABLE>
<CAPTION>

                                              COMPANY CORPORATE STRUCTURE
                                                    FiberCore, Inc.
                                                     Headquarters
                                                         (USA)
-----------------------------------------------------------------------------------------------------------------------------------
<S>                  <C>                                    <C>                   <C>                          <C>
FOI (Pvt) Ltd.       FiberCore Glasfaser Jena GmbH          InfoGlass, Inc.       FiberCore Mideast Ltd.           ALT, Inc.
 (Pakistan)                   (Germany)                         (USA)                   (Asia)                      (USA)
30% Owned by FCI          100% Owned by FCI                 100% Owned by FCI      100% Owned by FCI            100% owned by
                                                                                         MEFC                        FCI
                                                                                      15% Owned
</TABLE>


 Company and ALT sales by product group for the last three years were as follows
(includes sales of ALT prior to its acquisition by the Company):

                                            (dollars in thousands)

                                                  YEARS ENDED
                                                  DECEMBER 31
                                      --------------------------------------

                                       1994            1995        1996
                                       ----            ----        ----

Optical Fiber and
Preform...........................   $   231      $   3,009      $   7,907

ALT Products......................       476            246            189
                                     -------      ---------      ---------

                      Total.......   $   707      $   3,255      $   8,096
                                     =======      =========      =========


RECENT DEVELOPMENTS

   In April 1995,  the Company issued a note to AMP,  Incorporated  ("AMP") (the
"AMP Note").  The AMP Note is a ten year  $5,000,000  convertible  note.  AMP, a
company listed on the New York Stock Exchange, with worldwide sales in excess of
$5.0 billion in 1995, is a  manufacturer  of electrical  and optical  connection
devices, systems and other equipment including fiber optic cable. Principal plus
accrued  interest  on the AMP Note at a rate of LIBOR  plus one  percent  may be
converted  into Common Stock through April 17, 2005.  Until April 17, 2000,  the
conversion price is $1.16 per share; thereafter the conversion price is equal to
the price per share paid by a third party investor in the private sale of Common
Stock  immediately  prior to such conversion.  The AMP Note is collateralized by
the  Company's  patents,  patent  applications,  licenses,  rights and royalties
arising from such  patents.  The AMP Note is subject to  prepayment on demand in
the event the  Company is the  issuer of  securities  to be sold by the  Company
under an effective  registration  statement.  On November 27, 1996 AMP converted
$3,000,000 of principal plus $540,985 of accrued  interest into 3,058,833 shares
of Common Stock of the Company.

   In July 1996,  AMP entered  into a five year supply  contract  (renewable  at
AMP's option for an  additional  five year period) with the Company  whereby AMP
has  undertaken  to purchase from the Company at least 50% of AMP's future glass
optical fiber needs. On November 27, 1996, the Company

                                        4

<PAGE>



obtained an  additional  $3,000,000  loan at an interest  rate of prime plus 1%,
adjustable on the first business day of each calendar quarter,  from AMP to fund
the expansion of the Jena Facility.  In exchange AMP received a 10 year note and
common stock purchase warrants  exercisable for up to 1,382,648 shares of Common
Stock at $1.45 per share and expiring on November 27, 2001. In  connection  with
the new AMP loan and the  expansion of the Jena  Facility,  the Company has been
awarded a grant from the German  Government of approximately  $2,700,000 and has
received a loan from Berliner Bank of approximately  $5,100,000,  which has been
funded  contemporaneously  with the new  $3,000,000  AMP loan.  The Company also
agreed to issue AMP additional shares of Common Stock in the event the Company's
share price does not exceed  $2.17 for 30  consecutive  trading days by November
27, 1998. The issuance of additional  shares under the new AMP Loan would have a
dilutive effect on the Company's other  shareholders  and could adversely affect
the market price of the Common Stock.  As part of the new  $3,000,000  loan from
AMP,  Mohd A.  Aslami,  Charles  DeLuca,  M. Mahmud Awan and AMP entered  into a
Voting Agreement pursuant to which they agreed to vote together to elect a slate
of directors to the Board of  Directors  of the Company.  The proposed  slate of
directors  initially  consists  of Mohd A.  Aslami,  Charles  DeLuca,  Hans F.W.
Moeller,  one nominee of AMP and three outside directors,  one of whom is Dr. M.
Mahmud Awan.  The Voting  Agreement  also  requires a classified  and three year
staggered Board of Directors. Such Voting Agreement would remain in effect until
the  earlier  of (i)  termination  of the new  AMP  loan  agreement,  or (ii) an
underwritten public offering by the Company which generates at least $5,000,000.

   Since October 1995, Middle East Specialized Cables Co. ("MESC") has purchased
734,262  shares of Common Stock for an aggregate  purchase  price of $1,000,000.
MESC will  also be issued  312,061  shares of Common  Stock and will be  granted
Warrants  to purchase  550,696  shares of Common  Stock at an exercise  price of
$1.63 per share  through April 13, 1997,  upon  delivery of a supply  agreement,
valued at $33 million  between the Company and MEFC, a joint venture between the
Company,  MESC and  others.  On exercise of the  Warrants  MESC will  receive an
additional 238,635 shares of Common Stock.

    On November 1, 1995, the Company entered into an  International  Distributor
Agreement with Techman  International Corp.  ("Techman").  Under such agreement,
Techman will be issued  Warrants  for the exercise of up to 1,000,000  shares of
Common Stock.  The Warrants will be exercised and the applicable  shares will be
issued  ratably by the Company as  commissions  on Company  sales  generated  by
Techman up to  $200,000,000.  Dr. M. Mahmud Awan, a director of the Company,  is
president and sole shareholder of Techman.

   On January 11, 1996, pursuant to a Share Purchase  Agreement,  Techman agreed
to  purchase  for  $1,000,000  a total of 734,260  shares of Common  Stock,  and
Warrants  exercisable  at $1.63 per share into  550,696  shares of Common  Stock
expiring on January 11,  1998.  Additionally,  Techman  would be issued  312,061
shares of Common Stock upon the delivery of a supply  agreement  between FOI and
the Company.  FOI is a joint venture  between the Company and Techman.  In 1996,
the 734,260  shares and the  312,061  shares,  above,  were issued to Techman in
exchange for the payment of  $1,000,000  and the delivery by Techman of a twenty
year supply  agreement  between the Company and FOI, which  management  believes
could  generate  revenues of up to  approximately  $93 million  over five years,
although there can be no assurance  such revenues will be received.  The Company
used $450,000 of the proceeds as an additional capital  contribution in FOI. The
Company maintains a 30% ownership interest in FOI.

                                        5

<PAGE>



   On July 31, 1996, the Company  borrowed  $500,000  under two loan  agreements
with the spouses of the Chairman and Chief  Executive  Officer and the Executive
Vice  President  of the Company.  The loans are in the amount of $250,000  each,
bear interest at the prime rate plus one percent  (currently  9.25%) and are due
on June 30, 1999. In conjunction with the loans,  each lender received  Warrants
to purchase  115,220  shares of Common Stock at a price of $1.81 per share.  The
Warrants expire on July 31, 2001.

FIBER OPTIC PREFORM MANUFACTURING TECHNOLOGIES

   Optical  fibers are solid strands of hair-thin,  high quality glass which are
usually  combined to form cables for  transmitting  information via light pulses
from one point to another.  The fibers  consist of a core of  high-purity  glass
which  transmits light encased within a covering layer designed to reduce signal
loss  through  the side walls of the  fibers.  Information  transmitted  through
optical fibers is converted from electrical impulses into light waves by a laser
or light emitting  diode.  At point of reception,  the light waves are converted
back into electrical impulses by a photo-detector.

   Communication  by means of light waves guided  through  glass fibers offers a
number of advantages over conventional means of transmitting information.  Glass
fibers carry significantly more information than metallic conductors and, unlike
metallic  conductors,  are not  subject to  electromagnetic  or radio  frequency
interference.  Signals of equal  strength  can be  transmitted  over much longer
distances  through optical fibers than through  metallic  conductors and require
the use of  fewer  repeaters  (devices  which  strengthen  a  signal).  Further,
fiber-optic cables,  which typically consists of numerous optical fibers encased
in one or more  plastic  sheaths,  are  substantially  smaller and lighter  than
metallic  conductor  cables of the same capacity,  so they can be less expensive
and more easily installed, particularly in limited conduit or duct spaces.

   There are two basic types of communication  optical fibers:  multi-mode fiber
and single- mode fiber.  Multi-mode  fiber has a larger core (the area where the
light  travels)  than  single-mode  fiber,  carries less  bandwidth  and is more
expensive.  It is  generally  used over  relatively  short  distances  in wiring
buildings and groups of buildings.  The electronics and the connectors  required
to work with multi-mode fiber are less costly than the electronics  required for
single  mode-fiber.  For example,  the light source for multi-mode  fiber can be
light emitting  diodes,  while  single-mode  fiber requires laser light sources.
Single-mode  fiber is used in long-distance  trunk lines (cables between cities)
and  fiber-to-the-curb  (cable from a central  office to the curb in front of an
office building or home).

   The three  basic  technologies  widely  used to  manufacture  multi-mode  and
single-mode optical fiber are:

1.   Outside Vapor Deposition ("OVD"), otherwise known as the "Corning process."

2.   Inside Vapor Deposition  ("IVD"),  which is also known as Modified Chemical
     Vapor Deposition ("MCVD") or the "AT&T process". Due to its flexibility and
     relative ease of operation, this process is the most widely used around the
     world by independent manufacturers.

3.   Axial Vapor Deposition ("AVD"), also known as the "Japanese process".  This
     process is similar to the Corning process.

                                        6

<PAGE>



   The basic production unit from which fiber "is drawn" is a preform. A preform
is a  cylindrical  high  purity  glass rod with a high  refractive  index  glass
material in the central part of the rod (the "core") and a low refractive  index
glass  material in the outer part of the rod (the  "clad").  The rod can be less
than one inch to several inches in diameter and one to several meters in length.
From one such  preform many  thousands of meters of optical  fiber can be drawn.
The OVD and AVD processes both manufacture 100% of the glass composing the final
preform and are comparable in terms of machine speeds that manufacture glass per
unit of time.  These  speeds  are  significantly  higher  than  those of the IVD
process. In contrast,  the IVD process  manufactures only about one-third of the
total glass required in the  manufacture  of a preform,  with the balance of the
glass being  purchased in the form of a tube at costs  significantly  lower than
that of either OVD or AVD, thus balancing the overall expense.

   Optical  fiber cable is produced  from  optical  fiber by first  coloring the
coated fiber and then encasing the fiber in a protective jacket.

PROPRIETARY MANUFACTURING PROCESS AND PRODUCTS

   The Company  manufactures both multi-mode and single-mode preforms and fiber,
but does not  manufacture  optical  fiber  cable,  although  MEFC,  in which the
Company has an interest,  intends to draw fiber from preforms and to manufacture
fiber optic cable.

   The Company's  patented  technology can be best described as a "rod-and-tube"
process,  or as a hybrid of the OVD, IVD and the AVD  processes.  The  Company's
process  takes  advantage of available  high quality  doped(1) and undoped fused
silica  rods  and  tubes  during  the  manufacturing  process  to  produce  more
efficiently  single-mode  optical  fiber  preform  and  single-mode  fiber  at a
substantially reduced cost than the alternative processes.

   Specifically,  the Company's  process  places a high-purity  "core" glass rod
inside a high-purity  glass tube or "clad",  which has a lower  refractive index
than the  core,  and  collapses  the tube  over the rod to form an  intermediate
preform. The Company purchases the glass tubes and manufactures the "core" glass
inside of the  purchased  glass tube.  The  composite  material is  subsequently
converted  to  a  glass  rod  referred  to  as  an  intermediate  preform.  Such
intermediate  preform  can also be  manufactured  by any of the  other  existing
processes. This intermediate preform is placed inside another purchased tube and
collapsed  together  to form a final  preform,  which  has the  proper  ratio of
core-to-outside-diameter-glass. The preform is then drawn into finished fiber by
placing  it  inside a "draw  furnace",  heated  to  approximately  2000  degrees
Celsius, and "stretched" into tens of thousands of meters of hair-thin, flexible
glass  fiber.   The  Company   believes   that  its  patented   process   offers
manufacturing-cost   and   capital-investment   advantages  over  the  processes
currently in use by competitors  for the  manufacture of optical fiber,  because
(i) the machine time necessary to produce a given size preform is  significantly
less,  thereby  allowing the Company to produce  more  preforms in the same time
period;  and (ii) the  Company  purchases  the tube while  manufacturing  a much
smaller portion of the clad and all of the core which accounts for approximately
5% of the preform, while the OVD process, for example,  manufactures 100% of the
preform, requiring substantially more capital investment.


--------
(1)  Doping means adding other glass materials, such as germanium dioxide to the
     silica glass.

                                        7

<PAGE>



   Prior  to its  acquisition  by the  Company,  the Jena  Facility  was used to
manufacture  multi-mode fiber and preform for the Eastern  European market.  The
Company's lease of the Jena Facility provides a potentially efficient, low-cost,
existing manufacturing operation. Management believes the time and cost required
to achieve  manufacturing  efficiencies  at the Jena Facility can potentially be
minimized  as a  result  of  management's  knowledge  and  experience  in  fiber
production and machine design.

ALT PRODUCTS

   The Company's ALT subsidiary has four  principal  products,  all of which are
manufactured  at  the  Company's  Sturbridge,  Massachusetts  facility  and  are
marketed by independent sales representatives.

   ALT's  Fiber  Optic  Cable  Montitoring  Systems  ("FOCMS")   facilitate  the
continuous  monitoring  of fiber optic and copper  cables.  The FOCMS consist of
sensors housed in a protective cover placed at cable splice points and connected
to a central  monitoring  system.  ALT holds two United States patents  covering
this  technology.  ALT purchased  one of these patents and know-how  relating to
fiber optic cable  monitoring  systems on September  7, 1986,  from  Norscan,  a
Canadian company. Norscan retained the right to use the technology in Canada and
the  rights to a Canadian  reissuance  of the  purchased  patent and has had the
technology in operation on the Trans Canada fiber optic network since 1988.  ALT
intends to make the technology widespread in other regions worldwide.  A dispute
exists between ALT and Norscan with respect to Norscan  selling FOCMS  products,
in  competition  with ALT  products,  that  utilize  technology  other  than the
technology assigned to ALT pursuant to its agreement with Norscan.  ALT contends
that, in so doing, Norscan is violating a non-competition provision of Norscan's
agreement  with ALT.  Failure by ALT and Norscan to resolve this  dispute  could
materially adversely affect the future sales of ALT products.

   ALT also manufactures patented long range fault locators, which are generally
used in pairs.  Typically,  each  device is applied at a point on a fiber  optic
cable,  less than 100 miles from the other  unit.  These  devices can detect and
locate cable faults between the units.

   In addition,  ALT manufactures cable protection devices, which are applied at
cable  splice  joints  prior to cables  entering a building  to protect  against
hazardous  electrical  currents that could otherwise be carried by metal sheaths
encasing optical fibers, and electro-optical  talksets,  which are used by field
personnel  to  communicate  over  optical  fiber,  twisted  pair-cable  (regular
telephone cable), and metal sheaths encasing optical fibers and copper cables.

   Customers  for the  FOCMS  and other ALT  Products  have  included  telephone
companies worldwide,  including MCI  Telecommunications  Corp., AT&T and Pacific
Telesis.

   ALT also has developed flood and leak detection  devices for the home. ALT is
not actively  marketing  these  products  because of lack of resources,  but may
attempt to market such products in the future.

RESEARCH AND DEVELOPMENT

   The Company conducts research and development activities at its Jena Facility
and  Sturbridge  offices.  The  Company's  research and  development  activities
consist primarily of optical fiber

                                        8

<PAGE>



manufacturing  process improvements and fault locating technology  improvements,
as well as the development for sale of new fault locating products.  The Company
is  currently  conducting  research in Germany  under two grants from the German
government totaling approximately $107,000.

   The Company incurred costs of $420,000,  $75,000 and $90,000 for research and
process  development  for the fiscal years ended  December 31, 1996,  1995,  and
1994, respectively. The principal purpose of the research activity is to improve
the  production   process  for  the   manufacturing  of  fiber  preforms,   with
concentration on reducing production time and reducing raw material  consumption
per unit of product.  ALT's expenditures are principally for product development
and enhancements of its products.

   Three of the  Company's  employees  devote  over 90% of their  time,  and two
employees  devote  over 50% of their time to  research  and  development,  which
includes process and product development.

SALES AND MARKETING

   The Company's initial  marketing efforts are being primarily  targeted at the
overseas    markets,    particularly    toward    developing    nations    whose
telecommunications  infrastructure is in the early stages of evolution and where
competition  is not well  established.  The Company is initially  targeting  the
large fiber optic cable  manufacturing  companies in Asia,  the Middle East, the
Pacific Rim, and certain European and Eastern European markets.

   The  Company's  sales  and  marketing  objective  is  to  develop  long-term,
strategic  relationship/supply  contracts for both preform and fiber products as
rapidly as practical,  emphasizing the cost advantages of the Company's patented
technology.

JOINT MARKETING ARRANGEMENTS

   Pursuant to an agreement  executed in June 1994 and  subsequently  amended on
June 17, 1995 (the "Royle Cooperation  Agreement"),  which expires in June 1999,
the Company has been making joint proposals to sell fiber and preforms with John
Royle and Sons,  Inc.  ("Royle"),  a  manufacturer,  distributor and value added
installer of cable  manufacturing  systems  with  customers  and sales  channels
worldwide. Gregory Perry, a shareholder and a former director of the Company, is
Director of Fiber Technology at Royle.

   The Company is attempting to enter into joint ventures with potential foreign
and domestic partners, including cable manufacturers, to build modern plants for
producing  optical  fiber and optical  fiber  cable.  Most of these  plants will
require preform as "raw material".  In 1995, Royle and the Company, each through
subsidiaries,  entered into such an agreement (the "Mideast JV Agreement")  with
Middle East Fiber Optic Manufacturing Company Limited ("MEOFC"), a Saudi Arabian
company.  Pursuant  to the  agreement,  the parties  jointly  own MEFC,  a Saudi
Arabian joint venture  company.  MEFC will engage in the manufacture and sale of
optical  fiber and optical  fiber cable both inside and outside of Saudi Arabia.
The Company and Royle each contributed  $500,000 to the venture and each holds a
15% interest in MEFC.  MEOFC  contributed  $2,330,000  and holds a 70% interest.
MEFC has placed a $5,500,000 purchase order with Royle for fiber optic cable

                                        9

<PAGE>



manufacturing  equipment,  and intends to purchase  fiber and preforms  from the
Company. The Company and MEFC have entered into a long-term supply agreement for
MEFC to  purchase  and  the  Company  to  supply  fiber  and  preforms  totaling
approximately  $33,000,000  over the  next  five  years.  Shipments  under  this
agreement  are  expected to commence in 1997.  The Company may not  transfer its
interest in MEFC to any entity other than Royle or MEOFC without the  permission
of such parties.

   In connection with the Company's  participation  in MEFC, on October 5, 1995,
MESC,  a Saudi  Arabian  Company in which the owners of MEOFC have an  interest,
purchased  367,131 shares of Common Stock at an aggregate price of $500,000.  In
November  1996,  MESC purchased a second block of 367,131 shares of Common Stock
for an additional $500,000. The proceeds of this sale ($500,000) was used as the
Company's capital contribution to MEFC, described above.

   The  Company is seeking  to  increase  market  penetration  in optical  fiber
markets through  strategic  alliances  and/or joint ventures similar to the MEFC
joint venture.  Currently,  negotiations are underway with several potential new
joint venture  partners.  These  relationships  are being structured so that the
Company  provides the preforms and the related  technology  requirements and the
partner provides the financing, operating and local marketing expertise. In this
way, it may be possible  for the Company to rapidly  obtain  market  penetration
with little,  if any, capital  investment.  Discussions  regarding similar joint
ventures  and/or  strategic  alliances are underway in India,  China and several
other countries,  although there can be no assurances that such discussions will
lead to the consummation of any transactions.

CUSTOMERS, INVENTORY, BACKLOG AND ADVERTISING

   A key element of the Company's  marketing strategy is to maintain  sufficient
raw  material  and  finished  goods  inventories  to enable the  Company to fill
customer orders promptly. This strategy requires a substantial amount of working
capital  to  maintain  inventories  at a level  sufficient  to meet  anticipated
demand.


                                       10

<PAGE>



CUSTOMERS REPRESENTING OVER 10% OF SALES

   The following table is based on the combined sales of the Company and ALT for
all periods presented.
<TABLE>
<CAPTION>

                                           Optical Fiber and
                                            Preform Business           ALT           Combined
                                            ----------------           ---           --------
<S>                                             <C>                    <C>            <C>
1996
  Leonische Drahtwerker AG                      57%                    --              56%
  Pinacl                                        15%                    --              15%
  Deats Construction Co., Inc.                  --                     48%             Less than 10%
  Henkle E. McCoy                               --                     19%             Less than 10%
  MCI                                           --                     16%             Less than 10%
1995
  Leonische Drahtwerker AG                      62%                    --              57%
  Deats Construction Co., Inc.                  --                     11%             Less than 10%
  Henkle E. McCoy                               --                     --              Less than 10%
  MCI                                           --                     11%             Less than 10%
  Sterilite                                     11%                    --              10%
  Condumer, Inc.                                10%                    --              Less than 10%
1994
  Leonische Drahtwerker AG                      28%                    --              9%
  Deats Construction Co., Inc.                  --                     --              --
  Henkle E. McCoy                               --                     --              --
  MCI                                           --                     36%             24%
  Sterilite                                     --                     --              --
  Condumer, Inc.                                --                     --              --
  AT&T                                          --                     10%             Less than 10%
  Traylor Brothers                              --                     19%             13%
  SICO                                          72%                    --              23%
</TABLE>


   The  Company  believes  that only the loss of  Leonische  Drahtwerker  AG and
Pinacl would have a material adverse effect on the Company.

                                       11

<PAGE>



   The Company currently has a backlog of orders approximating $18.6 million and
supply agreements, which, in management's opinion, are sufficient to consume the
Company's current  production  capacity and the current expansion of capacity at
the Jena  Facility.  Accordingly,  sales of optical fiber and preforms are being
made by only one full-time  salaried  employee who is engaged in sales as only a
portion of his  duties.  The  Company,  however,  plans to  commence  the use of
independent local sales  representatives  in some  international  markets during
1997  to  coincide  with  the  Company's  planned  additional  expansion  of the
Company's  production  facilities  beyond  the  current  expansion  of the  Jena
Facility. Assisted by local representatives, management intends to host seminars
in key  countries  to identify  the best  possible  sales  opportunities  and to
establish potential relationships with key managers of local cable and telephone
companies.  In addition,  other management executives are engaged in negotiating
long-term supply agreements with current and potential  customers.  Sales of ALT
products  are  made  by  one  salaried   full-time  Company  employee  based  in
Massachusetts,  who is engaged in sales as only a portion of his duties, as well
as by a number of independent sales agents.

    The Company does not currently engage in extensive  advertising.  Commencing
in 1997, and in  conjunction  with the use of local sales  representatives,  the
Company  intends to advertise in trade  journals.  The  advertising  effort will
focus on developing an overall  corporate  image as well as name  recognition of
the product and awareness of its  competitive  advantages.  Advertisements  will
also include reader response cards to generate sales leads for direct follow-up.
In addition, the Company intends to exhibit at selected industry trade shows.

COMPETITION

FIBER PREFORM

   Management believes that there is limited competition in the sale of preforms
to cable  manufacturers who draw their own fiber. Such competition,  however, is
expected to grow. At present,  the  competition  for  single-mode  preforms on a
world-wide  basis  is  limited  to two  United  States  manufacturers,  SpecTran
Specialty  Optics  ("SpecTran"),   formerly  Ensign  Bickford   Optics/Lightwave
Technologies,  Inc., and Alcatel U.S.A.  SpecTran's product sales are for unique
fiber applications. Alcatel U.S.A. is marketing single mode preforms and has the
capability  to market  multi-mode  preforms  now and in the  future.  In Europe,
Lycom,  Alcatel  and  Nokia,  Shin-Etsu  from  Japan and  DaiWoo  from Korea are
marketing single mode preforms.

   The predominant  practice of most fiber  manufacturers is to make fiber optic
preform only for their internal use and not to sell preform to other fiber-optic
manufacturers.  Management  believes  these large  companies  will not enter the
preform  market  since  demand  for fiber  currently  exceeds  supply  and fiber
manufacturers  have an  inherent  disincentive  in selling  preforms;  they have
already invested heavily in plant,  equipment and technology to convert preforms
into  fiber  and/or  cable,  and by  selling  preforms  they  would be giving up
value-added margins. The disadvantages associated with selling preforms to third
parties  for  companies  like  Corning  and AT&T do not  apply  to the  Company,
because,  unlike those  companies,  the Company's  customers are not  vertically
integrated, and require preforms which are in limited supply.



                                       12

<PAGE>



   Due to  the  current  high  demand  for  fiber,  the  Company  has  initially
concentrated on manufacturing  and selling fiber and currently plans to increase
its fiber  manufacturing  capability.  Because  competition in the production of
preforms  is  somewhat   limited,   the  Company   plans  to  focus  its  future
manufacturing and marketing efforts on the preform segment of the market.

FIBER

   The   competition   in  multi-mode   fiber  products  is  limited  to  a  few
manufacturers in North America and Europe.  They include Corning,  AT&T, Alcatel
and  SpecTran  in the  United  States and Plasma  Optical  Fiber and  Alcatel in
Europe. Management believes that Corning, AT&T, and Alcatel generally supply the
bulk of their production to their own cablers or joint venture partners.

   The competition in the  single-mode  fiber market is much more extensive than
in the preform market or the multi-mode  fiber market.  Most of the  competition
for fiber comes from Corning and AT&T.  Both Corning and AT&T have several joint
ventures throughout the world, but, it is believed by management, generally play
significantly smaller roles than their partners. Competition in the fiber market
is primarily  based on  availability  and  quality.  With some  exceptions,  the
Company's fiber is generally priced at comparable  levels to fiber  manufactured
by the larger producers.

ALT PRODUCTS

   The Company's  management  believes there is limited or no direct competition
for its FOCMS product line except Norscan. Most other competing technologies and
products are more  complementary to the Company's products than true competitors
because  these  products and the  Company's  products are both needed to perform
short range and long range fault locating.

   Numerous  companies   manufacture  cable  protection  devices.   The  Company
believes, however, that it has the only product approved by U/L Laboratories, an
internationally recognized certifying organization.

    Numerous  companies  manufacture  field  talksets  that enable  personnel to
communicate over either twisted pair, metal sheath or optical fiber. The Company
knows of no other company that  manufactures a product that enables personnel to
communicate  over all three media,  although many  companies have or can acquire
the technology to create such a device.

PRODUCT WARRANTIES

   Customers  may obtain  refunds  for any  defective  fiber and fiber  preforms
shipped by the Company within 90 days of delivery.  The Company extends one year
warranties on ALT Products.

PATENTS

    The Company is the registered  owner in the United States of U.S. Patent No.
4,596,589  relating to optical fiber fabrication.  The patent,  which expires in
2003,  was acquired in 1993 from Gregory  Perry, a co-founder of the Company and
currently a consultant to the Company on an as needed basis. The existing patent
provides a more  efficient  method for  fabricating a single-mode  optical fiber
preform

                                       13

<PAGE>



by substantially reducing the time and cost required to produce the preform. The
patent also provides an efficient method of attaching cladding material around a
single-mode  fiber  core.  The Company  has filed an  application  in the United
States and European  Common  Market  improving  upon the process  covered by the
above  patent,  and intends to file in other foreign  jurisdictions,  as well as
filing further improvement patents for its process.

   In addition,  in conjunction with its acquisition of equipment located at the
Jena Facility,  the Company acquired the right and title to all SICO patents and
expertise  developed or owned by SICO relating to fiber optics. In the event the
Company were to default on its obligations to SICO, the Company's title to these
patents  could revert to SICO.  Without the use of SICO patents and  technology,
the Company's expense in manufacturing  optical fiber and optical fiber preforms
could increase substantially.

   The Company is the  registered  owner in the United  States of three  patents
covering its cable monitoring  systems and fault locating  methods.  The Company
acquired the first such U.S. patent,  Patent No.  4,480,251,  which covers cable
monitoring  systems and expires in 2001,  from  Norscan.  A patent issued by the
United  Kingdom for the same  technology  was also  acquired by the Company from
Norscan. The Company has filed international  patent applications  covering this
technology in various other countries  around the world,  although none have yet
been granted.  Pursuant to the Company's agreement with Norscan, Norscan has the
right to a Canadian  patent  reissuance  and may otherwise use the technology in
Canada.  The Company has  improved  upon  Norscan's  technology  and  obtained a
European patent and United States patent, Patent No. 5,077,526, which expires in
2008 covering the  improvements.  The Company also owns a United States  patent,
Patent No.  4,947,469  expiring in 2007, and a European  patent covering a cable
fault  location  method.  In addition,  the Company owns a United  States patent
covering the provision of backup power to optical communications systems.

   The Company's  ability to compete  effectively  will depend,  in part, on its
ability to protect its patents.  There can be no assurance  that the steps taken
by the Company to protect its intellectual  property will be adequate to prevent
misappropriation  or that others will not develop  competitive  technologies  or
products.   Furthermore,  there  can  be  no  assurance  that  others  will  not
independently  develop  products  that are similar or superior to the  Company's
products or technologies, duplicate any of the Company's technologies, or design
around  the  patents  issued to the  Company.  In  addition,  the  validity  and
enforceability  of a patent  can be  challenged  after its  issuance.  While the
Company  does not believe  that its patents  infringe  upon the patents or other
proprietary  rights  of any  other  party  and is  unaware  of any claim of such
infringement,  other  parties may claim that the  Company's  systems do infringe
upon such patents or other  proprietary  rights.  There can be no assurance that
the  Company  would  be  successful  in  defending   against  such  a  claim  of
infringement.  Moreover,  the expense of defending against such a claim could be
substantial.

INTERNATIONAL OPERATIONS

   The   Company   is  subject   to  all  the  risks  of   conducting   business
internationally.  These  risks  include  unexpected  changes in  legislative  or
regulatory  requirements  and  fluctuations  in the United States dollar and the
German mark,  and other  currencies in which the Company is doing  business from
time to time. The Company has limited foreign currency  fluctuation exposure and
does not currently engage in foreign

                                       14

<PAGE>



currency  hedging  transactions.  The business and  operations  of the Company's
Germany  subsidiary,  FCJ,  are subject to the changing  economic and  political
conditions prevailing from time to time in Germany. Labor costs, corporate taxes
and  employee  benefit  expenses are high and weekly  working  hours are shorter
compared to the rest of the European  Union,  the United  States and Japan.  The
Company's  participation  in MEFC and its  investment  in FOI are subject to the
risks of doing  business  in Saudi  Arabia,  and in the Middle  East in general.
These risks include, but are not limited to, the threat of regional conflict. In
1996, 1995 and 1994, FCJ accounted for 98%, 90% and 100% of the Company's sales,
respectively.

TRADEMARKS

   FCJ is the owner of the  registered  trademark  Infoglass(R)  under  which it
markets its optical fiber products. ALT is the owner of the registered trademark
Floodhound(R)  which is used in the sale of the Company's  water leak  detection
devices. These products are not currently marketed by the Company.

SEASONALITY

   The Company's  business does not have strong  seasonal  fluctuations  and the
Company does not expect material seasonal variations to revenue.

RAW MATERIALS

   The Company presently can purchase all its raw material  requirements for its
optical fiber and preform  business.  The major component of a preform is silica
glass tubing which is available in various sizes. Various high purity gases such
as oxygen,  nitrogen,  argon,  helium,  chlorine and  chemicals  such as silicon
tetrachloride,  silicon tetra fluoride and germanium  tetrachloride  are used in
the  process of  manufacturing  preform.  During  the years  1994 and 1995,  the
Company's optical fiber and preform business purchased  approximately 90% of its
key glass tubing raw material  from one supplier.  This  supplier  accounted for
over 46% of the  Company's  glass  tube  requirements  in 1996.  If the  Company
becomes unable to continue to purchase raw materials  from this supplier,  there
can be no assurance that the Company will not face difficulties in obtaining raw
materials on commercially  acceptable terms, which could have a material adverse
effect on the Company.  To limit future shortages of key materials,  the Company
successfully  identified other suppliers of this material. The Jena Facility has
the capability to manufacture the high-purity synthetic core glass using a first
purchased  cladding tube, as well as adding additional  purchased cladding tubes
using the Company's patented production process.

   The  Company's  ALT  subsidiary  uses raw  materials  widely  available  from
numerous suppliers.

EMPLOYEES

   At  December  31,  1996,  the  Company  employed  66  persons,  of whom 4 are
executives, 7 are engaged in administration, 50 are engaged in manufacturing and
5 are  engaged  principally  in  research  and  development;  of  the  Company's
employees  57 are  located  in Jena,  Germany.  The  Company is not party to any
collective  bargaining  agreements  and the Company  does not maintain a pension
plan. The Company  considers its relations with employees to be satisfactory and
believes that its employee turnover does not exceed the industry average.

                                       15

<PAGE>



ITEM 2.           PROPERTIES

   The Company  subleases 5,000 square feet of office space as its  headquarters
in Sturbridge,  Massachusetts. The Company is currently planning to relocate its
headquarters in the Sturbridge area although no site has, as yet, been acquired.

    The Company's optical fiber and preform manufacturing facility is located in
Jena,  Germany.  The  facility  is leased from SICO.  It occupies  approximately
26,500 sq.  ft.,  including  17,200 sq. ft. of clean room  manufacturing  space,
6,100 sq. ft. of office and  storage  space and an  additional  3,200 sq. ft. of
outside  facilities  for gas storage  tanks.  The Company owns all machinery and
equipment at the facility, subject to certain restrictions. The lease expires in
2000 and is renewable for additional  terms  aggregating  25 years.  The Company
maintains  casualty and liability  insurance on the Jena  Facility.  There is no
assurance that in the event of a loss, policy limits will not be exceeded.

ITEM 3.           LEGAL PROCEEDINGS

   The Company's  FiberCore  Jena  subsidiary,  SICO and SICO's  president,  Mr.
Walter Nadrag (who was previously the Managing  Director of FiberCore  Jena) are
defendants in a lawsuit in Germany  brought  against them by COIA GmbH, a former
customer,  claiming  damages of  approximately  $200,000  arising from FiberCore
Jena's alleged failure to comply with a sales contract.  The Company believes no
sales contract existed and is aggressively defending this action. In addition to
the above,  the Company is subject to various claims which arise in the ordinary
course of business.  The Company  believes such claims,  individually  or in the
aggregate,  will not have a  material  adverse  affect  on the  business  of the
Company.

The Company's ALT subsidiary is in a dispute with Norscan,  a Canadian  company,
with respect to Norscan selling FOCMS products, in competition with ALT products
and in  violation  of a  non-competition  agreement  between  ALT  and  Norscan.
Although no litigation  has commenced as of the date of this report with respect
to this dispute,  ALT would be the claimant in any lawsuit brought in connection
with this matter.  Failure by ALT and Norscan to resolve this dispute could have
a material adverse affect on the future sales of ALT Products.

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

   None


                                       16

<PAGE>



                                     PART II


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

   The Company's  stock is traded on the Over the Counter (OTC) Bulletin  Board.
There were 230 holders of record and 389 beneficial owners of Common Stock as of
February 28, 1997. The public market for the Common Stock on the Bulletin Board,
where the stock trades under the symbol  FBCE,  is limited.  Set forth below for
the periods  indicated are the high and low closing  prices for the Common Stock
as reported on the Bulletin Board. The prices prior to July 18, 1995 reflect the
price of Venturecap, a predecessor to the Company, which traded under the symbol
VTUR.

STOCK PRICE AND DIVIDEND POLICY

<TABLE>
<CAPTION>

                 Period                                  High Bid                                 Low Bid
                 ------                                  --------                                 -------
<S>                                                       <C>                                       <C>  
1995
   1st quarter                                      No Reported Trades                       No Reported Trades
   2nd quarter (first reported
      bid on May 11, 1995)                                $4.94                                    $2.55
   3rd quarter                                            $4.45                                    $2.75
   4th quarter                                            $3.25                                    $2.37
1996
   1st quarter                                            $3.12                                    $2.00
   2nd quarter                                            $7.25                                    $1.75
   3rd quarter                                            $7.44                                    $3.00
   4th quarter                                            $4.13                                    $2.63
1997
   1st quarter
   to March 14, 1997                                      $6.25                                     $1.06
</TABLE>

   The payment of dividends,  if any, in the future is within the  discretion of
the Board of Directors  and will depend on the Company's  earnings,  its capital
requirements,  financial condition, contractual and legal restrictions and other
relevant factors. The Company does not expect to declare or pay any dividends in
the  foreseeable  future.  In  addition,  the ability of the Company to pay cash
dividends in the future will be subject to its ability to meet certain  other of
its obligations.

                                       17

<PAGE>



ITEM 6.           SELECTED FINANCIAL DATA

SELECTED CONSOLIDATED FINANCIAL DATA

    The following  selected  financial data of the Company for each of the years
1996,  1995,  1994,  1993, and 1992 has been derived from the audited  financial
statements  and  notes  thereto  of  the  Company  and  its  predecessors.   The
information  set forth below is qualified by reference to, and should be read in
conjunction with the consolidated financial statements and related notes thereto
and "Management's  Discussion and Analysis of Financial Condition and Results of
Operations."

<TABLE>
<CAPTION>
                                              Years Ended December 31,

                                      (Dollars in thousands except share data)
-----------------------------------------------------------------------------------------------------------------------------------

                                                    1996           1995(1)        1994(2)(3)        1993(2)(3)         1992(4)
                                                    ----           -------        ----------        ----------         -------
<S>                                        <C>               <C>               <C>               <C>                <C>    
Operating Data:
  Net sales                                      $8,096             $3,094              $231                --              --
                                                 -------            ------          --------
  Costs and expenses:
  Cost of sales                                    7,200             4,509             1,064                --              --
  Research and development                           420                75                90                --              --
  Selling, general, and administrative             4,324             2,100               700               $ 1              --
  Interest expense, net                              387               368                 7                --              --
  Other expense (income), net                       (102)               51                (5)               --              --
                                                 -------           -------          --------            ------          ------
  Income (loss) before
    provision for income taxes                    (4,133)           (4,009)           (1,625)               (1)             --
  Provision for income taxes                          --                --                --                --              --
  Net income (loss)                               (4,133)           (4,009)           (1,625)               (1)             --
Primary earnings (loss) per
   share                                           (0.13)            (0.15)            (0.07)                --             --
Weighted average shares
  outstanding                                 31,695,693        26,584,630        22,873,322        21,309,323         955,450
Balance Sheet Data:
  Working capital (deficit)                          150              (277)             (519)              403               5
  Total assets                                    17,642            14,783             4,270               645               5
  Long-term debt                                   4,545             5,000               456                --              --
  Total liabilities                                7,617             8,415             1,687                 4              --
  Accumulated deficit                             (9,771)           (5,638)           (1,628)               (3)             (2)
  Stockholders' equity                            10,025             6,368             2,583               641               5
</TABLE>


                                       18

<PAGE>



                                 FIBERCORE, INC.
                        NOTES TO SELECTED FINANCIAL DATA

1.   Includes the results of ALT from  September  18, 1995 through  December 31,
     1995.

2.   Does not include the results of ALT.

3.   Reflects the Venturecap merger as of the beginning of the period.

4.   The year 1992 reflects the financial position of Venturecap, Inc. which was
     a  development   stage  company,   prior  to  the  merger  with  FiberCore,
     Incorporated  in 1995.  Venturecap had no  significant  activities in those
     years. FiberCore, Incorporated was formed in November 1993.


                                       19

<PAGE>



ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS
                    (Dollars and Deutsche Marks in Thousands)

BACKGROUND

   This  Annual   Report  on  Form  10-K  contains   certain   statements  of  a
forward-looking  nature  relating  to  future  events  or the  future  financial
performance of the Company.  Such statements are only predictions and the actual
events or results  may differ  materially  from the  results  discusssed  in the
forward-looking  statements.  Factors  that could  cause or  contribute  to such
differences  include those  discussed  below as well as those discussed in other
filings made by the Company with the Securities and Exchange Commission.

   FiberCore,  Incorporated, the predecessor to the Company, was organized under
the laws of the State of Nevada on  November  5, 1993.  Venturecap,  Inc.  was a
development stage  enterprise,  with no significant  operations,  no significant
assets  or  liabilities  and  was  inactive  from  1990  until  the  time of the
Venturecap  Merger with  FiberCore,  Incorporated  on July 18, 1995.  Venturecap
issued 24,617,133 common shares for all of the outstanding  shares of FiberCore,
Incorporated.  The  Venturecap  Merger  has been  accounted  for as a pooling of
interests.  Subsequent to the Venturecap Merger,  Venturecap changed its name to
FiberCore, Inc. (hereinafter "FiberCore" or the "Company").

   The Company operates  primarily  through its FiberCore Jena  subsidiary.  The
Company maintains a headquarters in Sturbridge,  Massachusetts  which is staffed
by  executive,   engineering,   accounting  and  administrative  personnel.  The
following  discussion  and analysis of the results of operations is based on the
Company's  audited  financial  statements for the years ended December 31, 1996,
1995 and 1994.

RESULTS OF OPERATIONS

   Year Ended December 31, 1996

   Total revenues for the year ended December 31, 1996 were $8,096 compared with
revenues of $3,094 for the year ended  December 31,  1995,  an increase of 162%.
This  increase  in  revenues  was  attributable  to the  Company's  increase  of
production  capacity  resulting  from an upgrade of the Jena  Facility,  and the
Company's  sales  and  marketing  efforts  resulting  in  the  addition  of  new
customers.

   Gross profit for the year ended December 31, 1996 was $896 compared to a loss
of $1,415 for the year ended December 31, 1995. This difference was attributable
to the higher  volume of production  and the upgrade of the Jena Facility  since
its  acquisition  in July 1994. The  improvement  and upgrading of machinery and
equipment  and  production   process   technology  changes  resulted  in  better
production yields and lower per unit production costs.

   Selling,  general and administrative  expenses were $4,324 for the year ended
December 31, 1996  compared to $2,100 for the year ended  December 31, 1995,  an
increase of 106%.  This  increase  was due  primarily  to non-cash  compensation
expense of $846 incurred in connection with the grant to employees and others of
options  to  acquire  382,184  shares  of  common  stock  of  the  Company,  the
acquisition of ALT in September,  1995, which accounted for $704 of the increase
and approximately $421 of legal,

                                       20

<PAGE>



                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

accounting,   and  other  costs  incurred  in  connection   with  the  Company's
registering  its  common  stock with the  Securities  and  Exchange  Commission.
Additionally, the commencement of increased production at the Jena Facility, the
Company's increased sales and marketing efforts and the addition of personnel in
Germany, added to this increase in costs.

   Interest  expense for the year ended  December 31, 1996 was $393  compared to
$516, a decrease of 24% from the year earlier comparable  period.  This decrease
was due to the  repayment  in 1995 of a working  capital line of credit that was
outstanding for most of 1995, offset by the interest on the AMP Note.

   Interest  income was $6 for the year ended December 31, 1996 compared to $148
in 1995. The decrease of $142 was  principally due to the interest earned on the
short-term investment of the $5,000 AMP loan in 1995. The AMP loan proceeds were
used in 1995 to repay a line of credit and investments in the Jena Facility.

   Other income, net of other expense,  was $102 for the year ended December 31,
1996  compared to net expense of $51 in 1995.  The  increase in other  income in
1996 was principally due to the receipt of research grants of $109 in Germany.

   The net loss for the year ended December 31, 1996 was $4,133,  an increase of
$124  (3%)  from the loss of $4,009  in the  corresponding  period in 1995.  The
primary cause of the increase was the  improvement  in sales and gross profit at
the Jena Facility  offset by the changes in  administrative  and interest income
and expense as described above.

   Year Ended December 31, 1995

   Total revenues for the year ended  December 31, 1995 were $3,094  compared to
$231 for the prior  year,  an  increase  of $2,863  (1,239%).  This  increase in
revenues was due to the  acquisition of the Jena Facility by the Company in July
1994,  with  sales  commencing  primarily  in the last  quarter  of the year and
expansion and upgrade of the Jena Facility  since its  acquisition.  The results
for 1995  reflect a full year of  operations  and the related  increase in sales
volume to new customers.

   Selling, general and administrative costs increased by $1,400 in 1995, a 200%
increase over 1994.  This increase is principally  attributable to the full year
of  operation at the Jena  Facility  compared to only six months of operation in
1994.  In  addition,  the  acquisition  of ALT in  September  1995 added $223 to
administrative costs in 1995.

   Interest expense was $516 in 1995 compared to $22 in 1994, a 2,245% increase.
This increase was caused by a working capital loan that was  outstanding  during
1995 and interest on the AMP Note that was closed in April 1995.

    Interest  income was $148 in 1995  compared  to $15 in 1994,  an increase of
$133 (887%). This

                                       21

<PAGE>



                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

increase resulted  principally from the short term investment of the proceeds of
the AMP Note.

   The net loss for the year  ended  December  31,  1995 of $4,009 was $2,384 or
147% greater than the loss of $1,625 for the year ended  December 31, 1994.  The
increase in loss is  principally  related to the  increase in costs as described
above and the full  year of  operations  of the Jena  Facility  resulting  in an
increase in the gross loss on sales of $582 or 70%.  The cost of goods sold as a
percent of sales decreased from 461% in 1994 to 146% in 1995. This is typical of
the nature of a capital  intensive  production  operation  wherein  capacity and
through-put increases result in a significant improvement in per unit production
costs, as fixed costs are spread over a higher production volume.

   Year Ended December 31, 1994

   Total  revenues for the year ended  December  31, 1994 were $231  compared to
$-0- for the prior period in 1993.  This was due to the  acquisition of the Jena
Facility by the Company in July 1994, with shipments commencing primarily in the
last quarter of the year.  The  predecessor to the Company was  incorporated  in
November 1993 and had no production or revenues during the two months of 1993.

   The operating  loss for the year ended December 31, 1994 of $1,625 was due to
startup and production inefficiencies at the Jena Facility, selling, general and
administrative  expenses of $700, and research and development  expenses of $90.
For the period ended December 31, 1993, the Company had no comparable expenses.

   For the year ended December 31, 1994, the Company had net interest expense of
$7,  primarily  attributable  to its capitalized  lease  obligations of the Jena
Facility.

LIQUIDITY AND CAPITAL RESOURCES

   Year Ended December 31, 1996

   During  the year  ended  December  31,  1996,  the  Company  used  $1,972 for
operating  activities,  principally  resulting  from the loss for the  period of
$4,133  reduced  by  depreciation   and  amortization  of  $1,226  and  non-cash
compensation  expense of $846. Inventory increased $514 due to the higher volume
of  production  during the year.  Accounts  payable was  reduced by $159,  while
accrued  expenses  increased  by $871.  The  increase  in  accrued  expenses  is
principally  attributable  to an increase in accrued  salaries,  legal and audit
fees.  Certain  officers  deferred  payment of their salaries during the year to
improve the Company's cash available for other purposes. Also, during the period
the Company  utilized cash in investing  activities of $1,150,  principally  for
equipment  ($1,161) and investments in joint ventures ($950),  reduced by grants
from the German  government  ($960) used to acquire  equipment.  Cash  generated
through  financing  totaled $2,479,  principally from the sale of stock ($1,500)
and new  borrowings  ($3,700),  reduced by collateral for a bank loan to finance
investments in the Jena Facility ($2,498), and repayment of a note ($200).

   The proceeds  from the sale of stock noted above were  received  from Techman
under the Techman

                                       22

<PAGE>



                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

 Share Purchase  Agreement  entered into in January 1996.  Under that Agreement,
Techman  subscribed to purchase  734,260  shares of the Company for $1,000.  The
payment  of $1,000  resulted  in an  increase  in equity and was used as working
capital, improving the Company's ability to meet its current obligations, and as
a capital  contribution  for the FOI joint venture ($450).  The sale of stock to
MESC ($500) was used as a capital contribution to the MEFC joint venture.

   The Company expects to continue to incur operating  losses until such time as
the Jena Facility's  production  equipment is expanded and fully  upgraded,  and
manufacturing  inefficiencies are substantially eliminated. The Company has and,
with  additional  capital,  will  continue to transfer  its more  efficient  and
productive  technology  to its Jena Facility with  management's  expectation  of
improved  operating  results.  The  expansion  of the Jena  Facility,  currently
underway,  will result in improved  production  yields thus lowering  production
costs per unit of preform and fiber.  Additionally,  the expansion will increase
throughput  resulting in increased  production  volume.  The Company has already
received  commitments  from  current  customers  to  purchase  this  increase in
production  volume.  Management  anticipates that these increased sales combined
with lower per unit  production  costs will lead to  profitability.  The Company
will require an estimated $7,800 in capital investment for the Jena Facility. Of
this amount  approximately  $2,000 will be for building expansion and $5,800 for
equipment upgrades and new equipment.

   The Company,  therefore,  has sought additional financing from one or more of
the  following  sources:  (i) issuance of  convertible  instruments  or stock in
private or public  offerings;  (ii)  financing for the Jena  Facility  through a
combination of German bank loans,  German federal and state  government  grants,
loan guarantees, and equity investments generated in all or part from (i) above;
(iii)  exercise of stock  Options and  Warrants;  and (iv) loans from  officers,
directors,  and principal  stockholders of the Company.  Funds for such loans to
the Company  from  officers,  directors,  and  principal  stockholders  would be
derived,  in part,  from sales or pledges (to obtain  loans) of Common  Stock by
such individuals.

   The  Company  believes  that its  success  in raising  additional  capital is
dependent on investors' beliefs in the Company's technology, its position in the
fiber optics industry, and its strategic business plan. Achieving  profitability
is  dependent,  in part,  on  raising  additional  funds to  invest  in  capital
expenditures.  In this regard,  the Company has received a grant from the German
government of 4,000 Deutsche Marks (DM)  (approximately  $2,700) and a loan from
the  Berliner  Bank of 7,700 DM  (approximately  $5,100).  These funds  totaling
$7,800,  are  committed  to the  upgrade  and  expansion  of the  Jena  Facility
described  above. On November 27, 1996, AMP loaned the Company  $3,000,  part of
which has been used as collateral for the Berliner Bank Loan. As part of the new
AMP loan, AMP also  converted  $3,000 of principal plus interest on the existing
$5,000 loan into 3,058,833 shares of Common Stock.

   The Company is not relying on the  conversion of Warrants and Options to fund
the upgrade and  expansion of the Jena  Facility;  however,  if the Warrants and
Options are  exercised,  the total  proceeds that the Company would receive upon
the  exercise  is  approximately  $6,242.  To the extent that the  Warrants  and
Options are exercised, the Company intends to use the proceeds from the exercise
of such

                                       23

<PAGE>




                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)


Warrants  and Options for  working  capital  purposes,  including  debt  service
(approximately  $80 per quarter  beginning  January 1997 through December 2001).
There are long payment deferral periods on a substantial amount of the Company's
outstanding  loans.  Under the AMP Note,  the remaining  $2,000 in principal and
accrued interest are due and payable at maturity in April 2005. Similarly, under
the new $3,000 AMP loan,  payments of interest  are  deferred for the first five
years.  Thereafter,  accrued  and  unpaid  interest  is payable  quarterly.  The
principal and any remaining  accrued interest is payable at maturity on November
27, 2006. As for the German loan, principal is also due and payable at the tenth
anniversary of closing; however, interest at 6.25% is due and payable quarterly.
The  Company   does  not  foresee  any   inability  to  meet  its  current  debt
requirements.

   The  Company  currently  has a backlog  of orders  aggregating  approximately
$18,600  which is  scheduled  to be  shipped  in 1997 and 1998.  The  backlog at
December  31,  1995 was  approximately  $4,800.  Additionally,  the  Company has
entered into, or is  negotiating,  long-term  supply  agreements  which,  in the
opinion of management,  could generate sales of up to approximately  $251,000 in
the  aggregate,  although  there  can  be no  assurance.  These  include  supply
agreements with MEFC, AMP, FOI and others. Pursuant to the supply agreement with
AMP, which provides for an initial term of five years and for an additional five
year term at AMP's  option,  AMP has  undertaken to purchase at least 50% of its
global fiber  requirements  from the Company.  The Company  estimates  that this
could amount to over  $60,000 in sales over the five year period,  significantly
improving  the  Company's  cash  flow  and  profits,  although  there  can be no
assurance that actual sales will reach this amount.

   The  Company's  ALT  subsidiary  is in a dispute  with  Norscan,  a  Canadian
company, with respect to Norscan selling FOCMS products, in competition with ALT
products  and in  violation  of a  non-competition  agreement  between  ALT  and
Norscan.  Although no litigation has commenced in this dispute, ALT would be the
claimant in any lawsuit brought in connection  with this matter.  Failure by ALT
and Norscan to resolve this dispute could have a material  adverse affect on the
future  sales of ALT  Products.  ALT sales for the year ended  December 31, 1996
were $189. The possible impact on sales of ALT resulting from failure to resolve
the Norscan dispute is not determinable.

   Year Ended December 31, 1995

   At December  31,  1995,  the Company  had cash of $833 and  non-cash  current
assets of $2,305. During 1995, the Company used $3,232 for operating activities.
This  cash  was  used  principally  to fund the  loss of  $4,009,  adjusted  for
depreciation  and  amortization of $747.  Accounts  payable and accrued expenses
increased  $1,652 and receivables  and inventory  increased  $1,675,  due to the
increases in sales, production and material costs and other operating costs.

    Cash used in investing activities was $1,647 principally for the purchase of
equipment  ($1,817).  In  addition,  the  Company  acquired  ALT  in a  non-cash
transaction for Common Stock valued at $7,000.


                                       24

<PAGE>



                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

   During  the year the  Company  received  $5,454  from  financing  activities,
principally  through the sale of common stock ($500) and the issuance of the AMP
Note for  $5,000.  These  funds  were used to  finance  operations  and  acquire
equipment as noted above.

   Year Ended December 31, 1994

   At December  31,  1994,  the Company  had cash of $258 and  non-cash  current
assets of $453.  During the year, the Company used $831 in operating  activities
principally from the loss for the year of $1,625,  adjusted for depreciation and
amortization of $289 and reduced by an increase in accounts payable.

   Cash used in investing  activities was $597,  principally due to the purchase
of equipment ($593).  The Company also acquired equipment from SICO of $2,996 in
exchange for shares valued at $2,420 and a capital lease agreement of $576.

   Cash from financing  activities was $1,284 resulting  primarily from the sale
of Common  Stock  ($1,549),  issuance of a note ($200) and  repurchase  of stock
($500).  The proceeds from the sale of stock were used to fund  operating  costs
and purchase equipment as noted above.

   ALT

   ALT  was  acquired  by  the  Company  as  of  September  18,  1995.  ALT  has
historically  operated  at a  loss,  has  cumulative  losses  from  its  date of
inception,  and requires  additional capital to operate.  The Company intends to
raise additional funds for ALT,  however,  there is no assurance that such funds
will be available. ALT has received an order from Pakistan Telecom in the amount
of $152, for a test installation of the fiber optic cable monitoring  system. If
the test  installation  is  successful,  the Company  anticipates  that Pakistan
Telecom will place an order for additional  installations estimated to be valued
at approximately $1,660, although there can be no assurance that such sales will
be realized.  This increase in revenues,  if realized,  would provide sufficient
cash  flow  to  sustain  operations  and  improve  the  profitability  of  ALT's
operations.




                                       25

<PAGE>



ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                                                         PAGE
                    
<S>                                                                                                   <C> 
Independent Auditors' Reports .........................................................................27-28
Consolidated Balance Sheets at December 31, 1996 and 1995 ................................................29
Consolidated Statements of Operations for the Years Ended
     December 31, 1996, 1995 and 1994 ....................................................................30
Consolidated Statements of Changes in Stockholders' Equity for the Years
     Ended December 31, 1996, 1995 and 1994 ..............................................................31
Consolidated Statements of Cash Flows for the Years Ended
     December 31, 1996, 1995 and 1994 ....................................................................34
Notes to Consolidated Financial Statements for the Years Ended
     December 31, 1996, 1995 and 1994 ....................................................................35
</TABLE>


                                       26

<PAGE>



INDEPENDENT AUDITORS' REPORT

The Boards of Directors and Stockholders
FiberCore, Inc.
Sturbridge, Massachusetts

We have audited the accompanying  consolidated balance sheet of FiberCore,  Inc.
and  subsidiaries  as  of  December  31,  1996,  and  the  related  consolidated
statements of operations, changes in stockholders' equity and cash flows for the
year then  ended.  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 audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material respects, the financial position of FiberCore, Inc. and subsidiaries as
of December 31, 1996, and the results of their operations and cash flows for the
year then ended in conformity with generally accepted accounting principles.

/s/  DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP

Hartford, Connecticut
March 20, 1997

                                       27

<PAGE>



                LETTERHEAD OF MOTTLE MCGRATH BRANEY & FLYNN, P.C.

                          INDEPENDENT AUDITORS' REPORT


The Boards of Directors and Stockholders
FiberCore, Inc. and Subsidiaries

We have audited the accompanying  consolidated balance sheet of FiberCore,  Inc.
and Subsidiaries as of December 31, 1995 and the related consolidated statements
of  operations,  changes  in  stockholders'  equity and cash flows for the years
ended December 31, 1995 and 1994. These  consolidated  financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of FiberCore,  Inc. and
Subsidiaries  as of December  31, 1995 and the results of their  operations  and
their cash flows for the years ended  December  31, 1995 and 1994 in  conformity
with generally accepted accounting principles.

                                        /s/ MOTTLE McGRATH BRANEY & FLYNN, P.C.
                                            MOTTLE McGRATH BRANEY & FLYNN, P.C.

Worcester, Massachusetts
July 29, 1996


                                       28

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           December 31, 1996 and 1995
<TABLE>
<CAPTION>

(Dollars in thousands except share data)                                                 1996            1995
                                                                                         ----            ----
<S>                                                                                     <C>         <C>     
                                            ASSETS
Current assets:
     Cash ...........................................................................   $    190       $    833 
     Accounts receivable, less allowance for doubtful accounts of $36 in 1996 and                               
       $39 in 1995 ..................................................................        675            583 
     Other receivables ..............................................................        418            286 
     Inventories ....................................................................      1,921          1,407 
     Prepaid and other current assets ...............................................         18             29 
                                                                                        --------       -------- 
         Total current assets .......................................................      3,222          3,138 
                                                                                        --------       -------- 
                                                                                                                
Property and equipment ..............................................................      5,244          5,044 
Less accumulated depreciation .......................................................      1,473            925 
                                                                                        --------       -------- 
         Property - net .............................................................      3,771          4,119 
                                                                                        --------       -------- 
Other assets:                                                                                                   
     Restricted cash ................................................................      2,498             -- 
     Patents, less accumulated amortization of $861 in 1996 and $203 in 1995 ........      6,648          7,400 
     Investments in joint ventures ..................................................      1,375             54 
     Other ..........................................................................        128             72 
                                                                                        --------       -------- 
         Total other assets .........................................................     10,649          7,526 
                                                                                        --------       -------- 
         Total assets ...............................................................   $ 17,642       $ 14,783 
                                                                                        ========       ======== 
                      LIABILITIES AND STOCKHOLDERS' EQUITY                                                      
Current liabilities:                                                                                            
     Notes payable ..................................................................   $    200       $    609 
     Accounts payable ...............................................................      1,652          1,811 
     Accrued expenses ...............................................................      1,220            995 
                                                                                        --------       -------- 
         Total current liabilities ..................................................      3,072          3,415 
                                                                                                                
Long-term debt ......................................................................      4,545          5,000 
                                                                                        --------       -------- 
         Total liabilities ..........................................................      7,617          8,415 
                                                                                        --------       -------- 
                                                                                                                
Commitments and contingencies (Note 9)                                                                          
                                                                                                                
Stockholders' equity:                                                                                           
     Preferred stock, $.001 par value, authorized 10,000,000 shares; no shares issued                           
     and outstanding ................................................................       --             --   
     Common stock, $.001 par value, authorized  100,000,000 shares; shares issued and                           
     outstanding: 35,233,250 in 1996 and 30,506,963 in 1995 .........................         35             30 
     Paid in capital ................................................................     19,545         11,761 
     Accumulated deficit ............................................................     (9,771)        (5,638)
     Accumulated translation adjustment .............................................        216            215 
                                                                                        --------       -------- 
         Total stockholders' equity .................................................     10,025          6,368 
                                                                                        --------       -------- 
         Total liabilities and stockholders' equity .................................   $ 17,642       $ 14,783 
                                                                                        ========       ======== 
                                                                                                    
          See accompanying notes to consolidated financial statements.

                                       29
</TABLE>
<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  Years Ended December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>
(Dollars in thousands except share data)
                                                     1996            1995           1994
                                                     ----            ----           ----

<S>                                              <C>             <C>             <C>         
Net sales ....................................   $      8,096    $      3,094    $        231
Cost of sales ................................          7,200           4,509           1,064
                                                 ------------    ------------    ------------

     Gross profit (loss) .....................            896          (1,415)           (833)

Operating expenses:
  Selling, general and administrative expenses          4,324           2,100             700
  Research and development ...................            420              75              90
                                                 ------------    ------------    ------------

     Loss from operations ....................         (3,848)         (3,590)         (1,623)

Interest income ..............................              6             148              15
Interest expense .............................           (393)           (516)            (22)
Other income (expense) .......................            102             (51)              5
                                                 ------------    ------------    ------------

     Net loss ................................   $     (4,133)   $     (4,009)   $     (1,625)
                                                 ============    ============    ============

Loss per share of common stock ...............   $       (.13)   $       (.15)   $       (.07)
                                                 ============    ============    ============

Weighted average shares outstanding ..........     31,695,693      26,584,630      22,873,322
                                                 ============    ============    ============
</TABLE>


          See accompanying notes to consolidated financial statements.


                                       30

<PAGE>
                        FIBERCORE, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  Years Ended December 31, 1996, 1995 and 1994

(Dollars in thousands except share data)
<TABLE>
<CAPTION>

                                                 COMMON STOCK                                                  ACCUMULATED
                                                          $.001 PAR      PAID-IN   SUBSCRIPTION   ACCUMULATED  TRANSLATION   
                                               SHARES        VALUE       CAPITAL    RECEIVABLE      DEFICIT     ADJUSTMENT   
                                             ----------   ----------   ----------   ----------    ----------    ----------   

<S>                                          <C>          <C>          <C>          <C>           <C>           <C>          
Balance, December 31, 1993                   21,309,323   $       21   $      703   $      (80)   $       (4)   $       --   

Issuance of stock in exchange
   for equipment                              2,221,141            2        2,418           --            --            --   

Issuance of stock for cash                    1,421,714            2        1,547           --            --            --   

Proceeds received                                    --           --           --           80            --            --   

Issuance of stock for services                    7,390           --            8           --            --            --   

Proceeds from capital contribution                   --           --            1           --            --            --   

Purchase of treasury stock,
  (458,916 shares)                                   --           --           --           --            --            --   

Currency translation adjustment                      --           --           --           --            --            10   

Net loss                                             --           --           --           --        (1,625)           --   
                                             ----------   ----------   ----------   ----------    ----------    ----------   

Balance, December 31, 1994                   24,959,568   $       25   $    4,677   $       --    $   (1,629)   $       10
                                             ----------   ----------   ----------   ----------    ----------    ----------   
</TABLE>

                                        
                                          TREASURY
                                           STOCK           TOTAL
                                         ----------    ----------

Balance, December 31, 1993                 $     --      $      640

Issuance of stock in exchange
   for equipment                                 --           2,420

Issuance of stock for cash                       --           1,549

Proceeds received                                --              80

Issuance of stock for services                   --               8

Proceeds from capital contribution               --               1

Purchase of treasury stock,
  (458,916 shares)                             (500)           (500)

Currency translation adjustment                  --              10

Net loss                                         --          (1,625)
                                         ----------      ----------

Balance, December 31, 1994               $     (500)     $    2,583
                                         ----------      ----------

          See accompanying notes to consolidated financial statements.

                                       31

<PAGE>

                        FIBERCORE, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  Years Ended December 31, 1996, 1995 and 1994

(Dollars in thousands except share data)
<TABLE>
<CAPTION>

                                      COMMON STOCK                                             ACCUMULATED
                                              $.001 PAR    PAID-IN  SUBSCRIPTION  ACCUMULATED  TRANSLATION    TREASURY
                                  SHARES        VALUE      CAPITAL   RECEIVABLE     DEFICIT    ADJUSTMENT      STOCK        TOTAL
                                -----------  -----------  ---------   -----------  ---------   -----------   ----------- -----------

<S>                              <C>         <C>         <C>          <C>        <C>           <C>         <C>           <C>      
Balance, December 31, 1994       24,959,568  $     25    $  4,677     $    --    $  (1,629)    $    10     $    (500)    $   2,583
                                                                                                          
Issuance of stock for services       40,434        --          44          --           --          --            --            44
                                                                                                           
Reissuance of treasury                                                                                     
   stock as loan incentive               --        --        (455)         --           --          --           500            45
                                                                                                           
Issuance of stock for                                                                                      
   acquisition of ALT             8,811,137         9       6,991          --           --          --            --         7,000
                                                                                                           
Issuance of stock for                                                                                      
   cash                             367,131        --         500          --           --          --            --           500
                                                                                                           
Retirement of shares                                                                                       
   held by ALT                   (3,671,307)       (4)          4          --           --          --            --            --
                                                                                                           
Currency translation                                                                                       
    adjustment                           --        --          --          --           --         205            --           205
                                                                                                           
Net loss                                 --        --          --          --       (4,009)         --            --        (4,009)
                                -----------  --------   ---------  ------------  ---------   ---------   -------------   ---------
                                                                                                           
Balance, December 31, 1995       30,506,963  $     30   $  11,761     $    --    $  (5,638)    $   215     $      --     $   6,368
                                -----------  --------   ---------  ------------  ---------   ---------   -------------   ---------
                                                                                                         
           See accompanying notes to consolidated financial statements.
</TABLE>

                                       32

<PAGE>






                        FIBERCORE, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  Years Ended December 31, 1996, 1995 and 1994

(Dollars in thousands except share data)
<TABLE>
<CAPTION>

                                        COMMON STOCK                                                  ACCUMULATED
                                                   $.001 PAR      PAID-IN   SUBSCRIPTION ACCUMULATED  TRANSLATION     TREASURY
                                        SHARES       VALUE        CAPITAL    RECEIVABLE    DEFICIT     ADJUSTMENT       STOCK     
                                      -----------  ----------   ----------    --------   ----------    ----------    ----------   
<S>                                   <C>          <C>          <C>           <C>        <C>           <C>           <C>          
Balance, December 31, 1995            30,506,963   $       30   $   11,761    $    --    $   (5,638)   $      215    $       --   
                                                                                   
Issuance of stock in exchange                                                      
 for debt and accrued interest         3,312,835            3        4,052         --            --            --            --   
                                                                                   
Issuance of stock for cash                                                         
   to Techman International              734,260            1          999         --            --            --            --   
                                                                                   
                                                                                   
Issuance of stock for cash               367,131            1          499         --            --            --            --   
                                                                                   
Issuance of stock for investment                                                   
   in joint venture of FOI               312,061           --          425         --            --            --            --   
                                                                                   
Compensation cost recognized                                                       
   on options issued to employees             --           --          846         --            --            --            --   
                                                                                   
Discount on AMP note from                                                          
   issuance of warrants                       --           --          963         --            --            --            --   
                                                                                   
Currency translation adjustment               --           --           --         --            --             1            --   
                                                                                   
Net loss                                      --           --           --         --        (4,133)           --   
                                      -----------  ----------   ----------    --------   ----------    ----------    ----------   
Balance, December 31, 1996            35,233,250   $       35   $   19,545    $    --    $   (9,771)   $      216    $       --
                                      ===========  ==========   ==========    ========   ==========    ==========    ==========   
</TABLE>
                                   
                                   
                                        TOTAL
                                     ----------
Balance, December 31, 1995           $    6,368
                                   
Issuance of stock in exchange      
 for debt and accrued interest            4,055
                                   
Issuance of stock for cash         
   to Techman International               1,000
                                   
                                   
Issuance of stock for cash                  500
                                   
Issuance of stock for investment   
   in joint venture of FOI                  425
                                   
Compensation cost recognized       
   on options issued to employees           846
                                   
Discount on AMP note from          
   issuance of warrants                     963
                                   
Currency translation adjustment               1
                                   
Net loss                                 (4,133)
                                     ----------
Balance, December 31, 1996           $   10,025
                                     ==========
 
           See accompanying notes to consolidated financial statements.

                                       33

<PAGE>
                        FIBERCORE, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Years Ended December 31, 1996, 1995, and 1994
<TABLE>
<CAPTION>

(Dollars in thousands except share data)                                       1996         1995          1994
                                                                               ----         ----          ----
<S>                                                                           <C>          <C>        <C>     
Cash flows from operating activities:
Net loss ..................................................................   $(4,133)     $(4,009)   $(1,625)
Adjustments to reconcile net loss to net cash used in operating activities:
   Depreciation and amortization ..........................................     1,226          747        289
   Bad debt expense .......................................................         1           28         --
   Compensation cost for stock options ....................................       846           --         --
   Other ..................................................................       104           45         --
Changes in assets and liabilities:
   Accounts receivable ....................................................       (93)        (555)      (189)
   Other receivables ......................................................      (132)          11       (122)
   Inventories ............................................................      (514)      (1,131)      (134)
   Prepaid and other current assets .......................................        11          (20)        (3)
   Accounts payable .......................................................      (159)         853        866
   Accrued expenses .......................................................       871          799         87
                                                                              -------      -------    -------
       Net cash used in operating activities ..............................    (1,972)      (3,232)      (831)
                                                                              -------      -------    -------
Cash flows from investing activities:
   Purchase of property and equipment .....................................    (1,161)      (1,817)      (593)
   Reimbursement from government grant ....................................       960           --         --
   Investments in joint ventures ..........................................      (950)         (54)        --
   Other ..................................................................         1          224         (4)
                                                                              -------      -------    -------
       Net cash used in investing activities ..............................    (1,150)      (1,647)      (597)
                                                                              -------      -------    -------
Cash flows from financing activities:
   Proceeds from sale of common stock .....................................     1,500          500      1,549
   Proceeds from long-term debt ...........................................     3,500        5,000         --
   Restricted long-term cash deposits .....................................    (2,498)          --         --
   Proceeds from notes payable ............................................       200           --        200
   Repayment of notes payable .............................................      (200)          (7)        --
   Purchase of treasury stock .............................................        --           --       (500)
   Other ..................................................................       (23)         (39)        35
                                                                              -------      -------    -------
        Net cash provided by financing activities .........................     2,479        5,454      1,284
                                                                              -------      -------    -------
  (Decrease) increase in cash .............................................      (643)         575       (144)
   Cash, beginning of year ................................................       833          258        402
                                                                              -------      -------    -------
   Cash, end of year ......................................................   $   190      $   833    $   258
                                                                              =======      =======    =======

Supplemental disclosure:
   Cash paid during the year for interest                                     $    18      $   183    $     1
   Reduction of property and equipment book value due to cancellation of
     obligation under capitalized lease                                            --          499         --
   Equipment acquired in exchange for common stock and capital lease               --           --      2,996
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       34

<PAGE>

                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(1)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)     Incorporation and nature of operations

FiberCore,  Inc.  (the  "Company")  is  involved in the  research,  development,
production  and  sales of  optical  fiber and  optical  fiber  preforms  for the
telecommunications   industry.   FiberCore  Glasfaser  Jena  GmbH  ("FCJ"),  the
Company's  principal  operating  subsidiary  located  in  Germany,  manufactures
optical fiber and optical fiber  preforms.  Automated Light  Technologies,  Inc.
("ALT"),  a  wholly-owned  subsidiary  of the  Company,  is a  manufacturer  and
distributor of fiber optic cable  monitoring and fault locating  systems for the
telecommunications industry.

FiberCore Incorporated,  the predecessor to FiberCore,  Inc. was organized under
the laws of the State of Nevada on November 5, 1993. On July 18, 1995, FiberCore
Incorporated merged with Venturecap,  Inc., ("Venturecap"),  an inactive company
organized  in the State of Nevada in 1987.  Approximately  24,600,000  shares of
Venturecap  common stock were  exchanged  for all of the  outstanding  shares of
FiberCore  Incorporated.  Following  the merger  Venturecap  changed its name to
FiberCore,  Inc.  The per share merger  consideration  states that each share of
FiberCore  Incorporated  stock  shall be  converted  into  3.6713070  shares  of
Venturecap  stock.  The merger was accounted for as a pooling of interests  and,
accordingly,  the Company's consolidated financial statements have been restated
for all prior  periods as if the  merger  took  place at the  beginning  of such
periods.

(b)     Use of estimates in the preparation of financial statements

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  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.

(c)     Principles of consolidation

The consolidated  financial  statements  include the accounts of the Company and
its  wholly-owned   subsidiaries.   All  material   intercompany   balances  and
transactions have been eliminated in consolidation.

                                       35

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(1)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(d)     Restricted Cash

In connection  with the expansion of the FCJ  facility,  the Company  obtained a
loan from the Berliner Bank in Germany.  Cash in the amount of $2,498,  has been
deposited with this institution as collateral for this loan.

(e)     Inventories

Inventories  are  valued  at the lower of cost or  market  using  the  first-in,
first-out method.

(f)     Property and equipment

Property and equipment is stated at cost, net of grants  received  applicable to
acquisitions.  The cost of  maintenance  and  repairs  is  charged to expense as
incurred.  Expenditures  for significant  renewals or improvements to properties
and equipment are added to the basis of the asset.

In 1996,  the Company began  receiving  grants from the German  government to be
used in the expansion of the FCJ facility. All grant proceeds received have been
netted against the cost of the assets acquired.

Property and equipment is depreciated  using the  straight-line  method over the
estimated useful lives of the assets.

(g)     Patents

Patents are amortized on a straight-line basis over seventeen years. The Company
evaluates the recoverability of patents from expected future cash flows.

(h)     Investments in joint ventures

The Company has a 30% ownership  interest in Fiber Optic Industries  (Pvt.) Ltd.
("FOI"), which is accounted for using the equity method of accounting.

The  Company's  15%  ownership  interest in Middle East Optical  Fiber Cable Co.
("MEFC") is carried at cost.

                                       36

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                    (Dollars in thousands except share data)

(1)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(i)     Fair value of financial instruments

The  Company  has  financial  instruments,  which  consist  of cash,  short-term
receivables,  accounts  payable and a note  payable,  for which  their  carrying
amounts approximate fair value due to the short maturity of those instruments.

The carrying amount of the investments in joint ventures approximates fair value
as no significant  operations  have occurred in either joint venture in 1996 and
management  believes that the carrying amounts were not impaired at December 31,
1996 and therefore reflect the corresponding fair values.

The principal amount of the long-term debt  approximates  fair value because the
interest rates on these instruments change with market interest rates.

(j)     Translation of foreign currencies

The translation of foreign  subsidiaries  financial statements into U.S. dollars
is performed for balance sheet accounts  using current  exchange rates in effect
at the balance sheet date and for revenue and expense  accounts using an average
exchange  rate  for the  period.  Unrealized  gains  or  losses  resulting  from
translation are included in stockholders' equity.

(k)     Income taxes

The Company  accounts for income taxes in accordance with Statement of Financial
Accounting Standard No. 109,  "Accounting for Income Taxes".  Deferred taxes are
recognized based on the differences between the book and tax basis of assets and
liabilities.

(l)     Loss per share of common stock

Primary loss per share of common stock is computed based on the weighted average
shares  outstanding  during  the year.  The stock  purchase  warrants  and stock
options  have not been  included in the  computation  of primary  loss per share
since the effect would be anti-dilutive.

                                       37

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(1)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(m)     Stock Based Compensation

FASB Statement No. 123 "Accounting for Stock-Based  Compensation" defines a fair
value based method of accounting  for an employee stock option or similar equity
instrument.  However, the Company will continue to measure compensation cost for
employee stock compensation  transactions using the intrinsic value based method
of accounting  prescribed by APB Opinion No. 25 "Accounting  for Stock Issued to
Employees".

(n)     Reclassifications

Certain amounts in the prior year financial statements have been reclassified to
conform to the 1996 presentation.

(2)     ACQUISITIONS AND STRATEGIC INVESTMENTS

On September 18, 1995, the Company  acquired all the  outstanding  stock of ALT.
The purchase  method of  accounting  for  business  combinations  was used.  The
operating  results  of ALT have  been  included  in the  Company's  consolidated
results of operations from the date of acquisition.  The acquisition,  valued at
approximately  $7,000,  was made  with  the  issuance  of  8,811,137  shares  of
restricted common stock of the Company valued at approximately  $0.80 per share.
The  fair  value  of  assets  acquired  was   approximately   $7,700,  of  which
approximately  $7,500 is  attributable  to patents  developed or acquired by ALT
over the years. ALT now operates as a wholly-owned subsidiary of the Company.

The following proforma unaudited  consolidated  operating results of the Company
for the years ended  December 31, 1995 and 1994,  assuming the  acquisition  had
been made as of January 1, 1995 and 1994, are summarized below:

                                                         1995            1994
                                                         ----            ----

Net sales ...................................         $  3,255         $    707
Net loss .....................................          (4,625)          (2,359)
Loss per share............................            $ (  .15)        $ (  .08)


                                       38

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(2)     ACQUISITIONS AND STRATEGIC INVESTMENTS (continued)

In April 1995, the Board of Directors ratified actions by FiberCore Incorporated
to enter  into a joint  venture  with  John  Royle & Sons Co.  and  Middle  East
Specialized  Cables  Company ("MESC") for a  period  of  15 years to be known as
Middle East Fiber  Cables Co. ("MEFC").  As part of the  agreement  the  Company
issued to MESC 734,262 shares of common stock for $1,000,  (approximately  $1.36
per share). The agreement also provides that MESC will receive 312,061 shares of
common stock and warrants to purchase  550,696  shares upon the  completion  and
execution of a product supply  contract  between the Company and MEFC. MESC must
exercise  the  warrants  to purchase  shares of the  Company's  common  stock at
approximately $1.63 per share, within a two year period to receive an additional
238,635 shares.  The Company  invested $500 of the $1,000 purchase price in MEFC
as a capital  contribution  to the joint venture,  as required by the agreement,
and in the process  acquired a 15% interest in MEFC.  There were no  significant
operations  which  occurred  in 1996 for  MEFC.  MEFC is  expected  to  commence
operations in 1997.

On  January  11,  1996,  as part  of a share  purchase  agreement  with  Techman
International  Corporation  (Techman),  a related  party,  a joint  venture  was
established between the Company and Techman. The joint venture,  FOI, is located
in  Pakistan.  The Company  has a 30%  ownership  interest  in FOI.  The Company
acquired its interest in FOI by making a $450 capital  contribution to the joint
venture and issuing  312,061 shares of Company common stock to Techman valued at
approximately  $1.36 per share, ($425).  In addition to the ownership  interest,
the Company concluded a long term agreement to supply fiber and preforms to FOI.
FOI was  formed  in 1996  and had no  significant  operations  in  1996.  FOI is
expected to commence operations in 1997.

(3)     RECEIVABLES

Activity in the allowance for doubtful  accounts  consisted of the following for
the years ended December 31:
                                                    1996        1995       1994
                                                    ----        ----       ----

Balance at beginning of period...............        $39        $--        $--
Additions charged to expense.................          1         28         --
Additions - Other............................         --         11         --
Deductions...................................          4         --         --
                                                     ---        ---        ---

Balance at end of period                             $36        $39        $--
                                                     ===        ===        ===




                                       39

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(3)     RECEIVABLES (continued)

Other receivables consist of the following at December 31:

                                                1996          1995
                                                ----          ----

Value added tax ......................          $181          $189
SICO .................................            --            69
MEFC .................................           219            25
Other ................................            18             3
                                                ----          ----
           Total .....................          $418          $286
                                                ====          ====

The value added tax receivable is comprised  principally of advance  payments to
the German tax authorities that are to be refunded to FCJ.

(4)     INVENTORIES

Inventories consist of the following at December 31:

                                                        1996              1995
                                                        ----              ----

Raw materials ............................             $  841            $  736
Work-in-process ..........................                403                17
Finished goods ...........................                677               654
                                                       ------            ------
        Total ............................             $1,921            $1,407
                                                       ======            ======


                                       40

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS)
                    (Dollars in thousands except share data)

(5)     PROPERTY AND EQUIPMENT

Property and equipment consist of the following at December 31:
<TABLE>
<CAPTION>
                                     ESTIMATED
                                    USEFUL LIVES         1996            1995
                                    ------------         ----            ----

<S>                                 <C>                <C>             <C>    
Office equipment .................  2 - 5 years         $   156         $   109
Machinery and equipment ..........  2 - 12 years          5,068           4,809
Furniture and fixtures ...........  5 - 7 years              18              18
Leasehold improvements ...........  3 - 10 years              7               5
Construction in progress..........                          955             103
                                                        -------         -------
                                                          6,204           5,044
Less grant proceeds received..                             (960)             --
                                                        -------         -------
        Total.............................              $ 5,244         $ 5,044
                                                        =======         =======
</TABLE>

Depreciation on property and equipment charged to expense was $548 in 1996, $523
in 1995 and $254 in 1994.

Included  above are grants  received from the German  government  for use by the
Company as part of the  expansion  of the FCJ  facility.  The  Company  received
grants of $960 in 1996 which have been  applied  against  costs  incurred by the
Company as part of the expansion of the FCJ facility.

(6)     ACCRUED EXPENSES

Accrued expenses consist of the following at December 31:

                                                                    1996    1995
                                                                    ----    ----

Accrued interest ...............................................  $   72    $351
Accrued wages, benefits & taxes ................................     568     323
Accrued legal and audit ........................................     170      86
Other ..........................................................     410     235
                                                                  ------    ----
        Total...................................................  $1,220    $995
                                                                  ======    ====


                                       41

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)


(7)     NOTES PAYABLE

Notes payable consist of the following at December 31:
<TABLE>
<CAPTION>
                                                                                         1996              1995
                                                                                         ----              ----
<S>                                                                                      <C>               <C> 
Convertible note payable to a director of ALT,  interest at 8.5%, with principal
and interest due April 1, 1997,  all  principal  and accrued  interest,  if any,
convertible into common stock of the Company at approximately $1.36 per share.           $200              $ --

Note payable to Connecticut Innovations, Inc., ("CII").                                    --               210

Note payable to Connecticut Development Authority, ("CDA").                                --               199

Note payable to Harkerside Trust, interest at 10.5%, payable semi-
annually, due December 6, 1995.                                                            --               200
                                                                                         ----              ----
                                                                                         $200              $609
                                                                                         ====              ====
</TABLE>

The note payable to CII with interest at 8.5% payable  monthly,  was issued with
detachable stock warrants to purchase shares of common stock of ALT at $1.50 per
share.  On July 10,  1996,  CII agreed to exchange  the balance of the note plus
accrued interest and the warrants for 111,462 shares of the Company.


The note payable to CDA with  interest at 12% payable  monthly,  was issued with
detachable  stock warrants to purchase  100,000 shares of common stock of ALT at
$1.50 per share.  In August  1996,  the Company  and CDA agreed to exchange  the
balance of the note plus accrued interest and the warrants for 142,540 shares of
the Company.



                                       42

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)


(8)     LONG-TERM DEBT

Long-term debt consists of the following at December 31:
<TABLE>
<CAPTION>
                                                                                           1996           1995
                                                                                          ------          -----
<S>                                                                                       <C>             <C>
Convertible note payable to AMP Incorporated ("AMP"), interest at 3-month London
Interbank Offered Rate plus one percent (6.5625% at December 31, 1996),
due April 17, 2005.                                                                       $2,000          $5,000

Note payable to AMP, interest at prime plus one percent
(9.25% at December 31, 1996), due November 27, 2006.                                          3,000              --
     
Discount attributable to warrants issued in conjunction
with the $3,000 note above.                                                                 (955)             --

Notes payable to the spouses of officers of the Company,  with interest at prime
plus one percent (9.25% at December
31, 1996), due July 31, 1999.                                                                500              --
                                                                                          ------          ------
                                                                                          $4,545          $5,000
                                                                                          ======          ======
</TABLE>

The AMP notes are collateralized by the Company's patents,  patent applications,
licenses,  rights and royalties resulting from such patents and the equipment of
FCJ.

In  April  1995,  FiberCore   Incorporated  issued  to  AMP,  a  floating  rate,
collateralized,  ten year debenture in the amount of $5,000, due April 17, 2005,
with interest,  at an annualized rate adjusted  quarterly,  equal to the 3-month
London  Interbank  Offered  Rate plus 1%,  (6.5625% at December  31,  1996).  No
interest is due until the earlier of: AMP  conversion of debt to stock, a public
financing by the Company and AMP elects to call the loan,  or maturity.  AMP has
the option to convert the  outstanding  loan plus accrued  interest  into common
stock of the  Company at  approximately  $1.16 per share in years 1-5 or the per
share price  provided for in the last third party  private  equity  financing in
years 6-10.

On November  27, 1996,  AMP  converted  $3,000 of principal  and $541 of accrued
interest  relating to the  original  $5,000 ten year  debenture,  into shares of
common  stock  of the  Company  at the rate of  approximately  $1.16  per  share
(3,058,833 shares) and entered into a multi-year supply



                                       43

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(8)     LONG-TERM DEBT (continued)

agreement.  The remaining principal balance remained subject to the terms of the
original  debenture   agreement.   The  conversion  agreement  contains  certain
valuation  guarantees of the market value of the Company's common stock.  Unless
the closing price of the Company's  common shares equals or exceeds  $1.7364 for
30 consecutive trading days during the first two (2) years following the closing
at a time when AMP was not restricted  from selling such shares,  then effective
on the second  anniversary  of the closing,  an  additional  number of shares of
Company  common stock shall be issued to AMP and an adjustment  shall be made in
the conversion rate for the  outstanding  balance of the debenture such that the
total  number of shares held and  convertible  by AMP would have a market  value
(based on the average  closing price of Company's  shares during the last thirty
(30) trading days  preceding  the second  anniversary  of the closing)  equal to
$7,500;  provided,  however, that not more than 6,478,810 Company shares will be
issued or issuable to AMP as a result of the conversion of the $5,000  debenture
and this guarantee.

In the  alternative,  the  Company  may  satisfy  this  guarantee  on the second
anniversary of the closing by offering or arranging for its designee to offer to
purchase  from AMP the  converted  shares  and the  outstanding  balance  of the
debenture,  including  accrued  interest,  for $7,500  reduced  prorata  for any
intervening  sales of shares by AMP.  Such offer to  purchase  shall be for cash
only in immediately available funds.

As an additional part of this agreement, on November 27, 1996, AMP issued to the
Company $3,000 under a ten-year note, secured by equipment owned by the Company,
with interest at prime plus one percent,  (9.25% at December 31, 1996). Terms of
the debenture state that interest shall be accrued,  but not paid, for the first
five years of the loan and a portion of the  proceeds are required to be used as
collateral  for the German  bank loan of  approximately  $5,100 for the  planned
expansion of its FCJ facility. The principal will become due before the maturity
date if the major  financing  is repaid or the  collateral  is  released  by the
German financial institution.

In  conjunction  with the loan  agreement,  AMP was issued five year warrants to
acquire  1,382,648  shares  of the  Company's  stock  at an  exercise  price  of
approximately  $1.45 per share.  The Company has  guaranteed the market value of
their stock.  Unless the closing price of the Company's  common shares equals or
exceeds $2.1697 for a period of thirty (30) consecutive  trading days during the
first two (2) years  following the closing at a time when AMP was not restricted
from  selling  such shares,  then the  exercise  price of the warrants  shall be
adjusted  effective as of the second  anniversary  of the closing by multiplying
$1.4465  per share by a fraction  the  denominator  of which is $2.1697  and the
numerator of which is the average  closing  price of the shares  during the last
thirty (30)  trading  days  preceding  the second  anniversary  of the  closing;
provided,  however,  that the  adjusted  exercise  price  shall not be less than
$0.7232  per share (50% of  $1.4465).  In the  alternative,  the  Company or its
designee  may offer to purchase the  warrants on the second  anniversary  of the
closing for an amount equal to $1,000;  provided,  however,  that AMP shall have
the right not to sell, in which case the guarantee will no longer be available.


                                       44

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(8)     LONG-TERM DEBT (continued)

In connection  with the new AMP loan and the expansion of the FCJ facility,  the
Company has been  awarded a grant from the German  government  of  approximately
$2,700 and has received a loan from Berliner Bank of approximately  $5,100.  The
loan from  Berliner Bank bears  interest at 6.25% per year.  Interest is payable
quarterly and the principal is due in a lump sum on September 30, 2006. The loan
is collateralized by a deposit with the bank of $2,498. At December 31, 1996 and
1995 there were no amounts outstanding on this loan.

Scheduled principal maturities of long-term debt are as follows:

        1999 ...............................................       $   500
        2005................................................         2,000
        2006................................................         3,000
                                                                   -------
                                    Total................          $ 5,500
                                                                   =======

(9)     COMMITMENTS AND CONTINGENCIES

The Company and its subsidiaries have entered into various leases for its office
and production space. The Company's office lease expired on January 31, 1997. On
February 1, 1997, the Company agreed to sub-lease the same office space from the
new lessee, on a month to month basis.

FCJ conducts its  operations  from premises  under an operating  lease with SICO
Quarzschmelze Jena GmbH ("SICO").  The lease expires in June, 2000, and contains
various renewal options. The rental payments for the facility is fixed per month
through June 30, 2000. On July 1, 1995, the lease rental was changed from $21 to
$30 per month.

Future  minimum  lease  payments  under  noncancellable  operating  leases (with
minimum or remaining lease terms in excess of one year) are as follows:

        FISCAL YEAR ENDING DECEMBER 31,                           AMOUNT

        1997 ..................................................  $    374
        1998 ..................................................       356
        1999 ..................................................       356
        2000 ..................................................       178
                                                                ---------
                                    Total ................       $  1,264
                                                                 ========



                                       45

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(9)     COMMITMENTS AND CONTINGENCIES (continued)

Included in the  statements of operations for the years ended December 31, 1996,
1995  and  1994  is  rent  expense  of  $456,   $413  and  $169,   respectively.
Substantially, all lease payments are to a related party, SICO.

FCJ is a defendant  in a case brought  against it by a German  firm,  COIA GmbH.
COIA is suing FCJ,  SICO and  SICO's  president,  Mr.  Walter  Nadrag,  (who was
previously the managing  director of FCJ) (the  "Defendants")  for approximately
$200  (reduced  from the  earlier  claim  of $1.5  million),  alleging  that the
Defendants failed to comply with a sales contract.  The Company believes no such
sales  contract  existed  because  COIA failed to provide the  required end user
certificate  which the Company believes was required under United States law and
COIA failed to pay FCJ for previous sales to COIA.  The Company is  aggressively
defending  this action.  In addition,  the Company is subject to various  claims
which arise in the ordinary course of business.  The Company believes that these
claims and legal  actions,  individually  or in the  aggregate,  will not have a
material  adverse  affect on the financial  position or results of operations of
the Company.

ALT is contingently  liable for debt of a former  subsidiary,  Allied  Controls,
Inc. ("Allied"), approximating $900, details of which are described below.

ALT and two of its key  officers  have issued the  following  guarantees  and/or
security  interests  with  respect  to  certain  loans  of its  spun-off  former
subsidiary  Allied.  In a $250 financing of Allied from the State of Connecticut
acting  through the  Department  of Economic  Development  ("DED"),  dated as of
October 9, 1992,  DED  received a  guarantee  and  security  interest in certain
assets from ALT. In a $250  financing  of Allied from the State of  Connecticut,
acting  through CDA, dated as of June 9, 1992, CDA received a guarantee from two
key officers of ALT.

Under a plan of reorganization, on May 14, 1991, the present Allied acquired the
assets and  assumed  certain  liabilities  of a  corporation  that had filed for
voluntary  protection  under Chapter 11 of the U.S.  Bankruptcy Code. One of the
assumed  liabilities was a $650 SBA loan dated May 29, 1989,  (originally in the
amount of $1,000) from American  National Bank, now Lafayette  American National
Bank  ("Lafayette").  As a condition of the loan  assumption  on March 21, 1991,
Lafayette  obtained  the  guarantees  of ALT and two key  officers  of ALT which
guarantees were in addition to the initial loan guarantees Lafayette already had
from other  persons.  Before  commencing  proceedings  to enforce the guarantees
first against ALT and second against the two key officers,  Lafayette must first
take all reasonable  steps to realize upon the assets of Allied and the security
provided by the initial guarantors. In the event of a deficiency,  Lafayette may
enforce its guarantee  against ALT, provided that at all times it simultaneously
and  diligently  pursues  actions to enforce  its  guarantees  from the  initial
individual loan guarantors.

                                       46

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(9)     COMMITMENTS AND CONTINGENCIES (continued)

Allied is now current with its  payments  under this loan.  In addition,  Allied
management  has been in  discussions  with  several  potential  buyers of Allied
which, if successful,  would eliminate the  aforementioned  guarantees that have
been provided by ALT.

(10)    STOCKHOLDERS' EQUITY

The  following  stock options were granted  during the years ended  December 31,
1996, 1995 and 1994:

<TABLE>
<CAPTION>

Stock options     $.003      $0.68     $1.09     $1.16     $1.36     $1.43     $1.45     $1.50     $1.51     $2.00
-------------     -----      -----     -----     -----     -----     -----     -----     -----     -----     -----
<S>               <C>        <C>       <C>       <C>       <C>       <C>      <C>        <C>      <C>        <C>   
Granted in 1994   220,278      --        --        --        --        --        --        --        --        --
                  -------   -------   -------   -------   -------   -------   -------   -------   -------   -------
Balance,
Dec. 31, 1994     220,278      --        --        --        --        --        --        --        --        --

Granted in 1995    36,713      --      33,042      --        --        --        --        --        --        --

Granted in 1995
in connection
with the ALT
acquisition          --        --        --        --        --      67,188      --      41,993   178,679      --
                  -------   -------   -------   -------   -------   -------   -------   -------   -------   -------
Balance,
Dec. 31, 1995     256,991      --      33,042      --        --      67,188      --      41,993   178,679      --

Granted in 1996    18,357    64,248      --      87,492    55,193      --     148,709      --        --      26,542
                  -------   -------   -------   -------   -------   -------   -------   -------   -------   -------
Balance,
Dec. 31, 1996     275,348    64,248    33,042    87,492    55,193    67,188   148,709    41,993   178,679    26,542
                  =======   =======   =======   =======   =======   =======   =======   =======   =======   =======
Options
exercisable       201,922    64,248    33,042    87,492    55,193    67,188   148,709    41,993   178,679    26,542
                  =======   =======   =======   =======   =======   =======   =======   =======   =======   =======
</TABLE>

Options  vest at rates stated in each  employees  contract,  principally  at the
grant date or the  anniversary  date of the employee's date of hire. The options
have no expiration dates and no options were exercised in 1996, 1995, and 1994.


                                       47

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(10)    STOCKHOLDERS' EQUITY (continued)

A summary of the status of the  Company's  stock  options and  weighted  average
prices are as follows:
<TABLE>
<CAPTION>

                                         1996                              1995                               1994
                               --------------------------      ----------------------------         --------------------------

                                                 WEIGHTED                          WEIGHTED                           WEIGHTED
                                                 AVERAGE                            AVERAGE                            AVERAGE
                                                 EXERCISE                          EXERCISE                           EXERCISE
                               OPTIONS            PRICE        OPTIONS               PRICE           OPTIONS            PRICE
                               -------            -----        -------               -----           -------            -----
<S>                            <C>                <C>             <C>                <C>              <C>              <C>   
Balance
beginning of year              577,893            $ .81           220,278            $.003              --             $   --
Granted                        400,541            $1.22           357,615            $1.30           220,278           $ .003
                               -------                            -------                            -------
Balance
end of year                    978,434            $ .98           577,893            $ .81           220,278           $ .003
                               =======                            =======                            =======

Exercisable at
end of year                    905,008            $1.06           456,740            $1.02            51,398           $ .003
                               =======                            =======                            =======
</TABLE>

<TABLE>
<CAPTION>

                                    Weighted                                    Weighted
                                     Average                                    Average
Range of              Options       Exercise     Remaining         Options      Exercise
Price Exercise      Outstanding       Price       Years (1)      Exercisable     Price
--------------      -----------       -----       ---------      -----------     -----
      
<C>                  <C>             <C>            <C>           <C>           <C>  
$.003                275,348         $.003           --           201,922       $.003
$0.68 - $1.36        239,975         $1.07           --           239,975       $1.07
$1.43 - $2.00        463,111         $1.51           --           463,111       $1.51
                     -------         -----           --           -------       -----
$.003 - $2.00        978,434         $0.98           --           905,008       $1.06
                     =======                                      =======
</TABLE>

(1)      Options granted and exercisable have no expiration date.

                                       48

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(10)     STOCKHOLDERS' EQUITY (continued)

The  Company  applies APB Opinion 25 in  accounting  for its stock  compensation
plans.  Compensation  cost  charged to  operations  was $846 in 1996  related to
options granted at an exercise price less than the market price of the shares at
the dates of the grants.  Had compensation  cost been determined on the basis of
fair value pursuant to FASB Statement No. 123, net loss and loss per share would
have been as follows:

                                        1996                     1995
                                        ----                     ----

Net loss
--------
 As reported                          $(4,133)                  $(4,009)
                                      ========                  ========

 Pro forma                            $(4,295)                  $(4,535)
                                      ========                  ========


Primary loss per share
----------------------
 As reported                          $  (.13)                $    (.15)
                                      ==========                =========

 Pro forma                            $  (.14)                $    (.17)
                                      ==========                =========

The  weighted  average  fair value of options  granted  during 1996 and 1995 was
$2.52 and $1.48 per share, respectively.

The fair value of each option  granted is  estimated on the grant date using the
Black-Scholes  model.  The following  assumptions  were made in estimating  fair
value:

                                                      Stock
                  Assumptions                         Plan
                  -----------                         ----

        Dividend yield                                --
        Risk-free interest rate                       5.5%
        Expected life                                 2 years
        Expected volatility                           40 %


                                       49

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(10)    STOCKHOLDERS' EQUITY (continued)

The  following  warrants to purchase  common  stock have been issued  during the
years ended December 31, 1996, 1995, and 1994:

<TABLE>
<CAPTION>

Warrants                    $0.95       $1.31       $1.36      $1.43         $1.45      $1.63       $1.81
--------                    -----       -----       -----      -----         -----      -----       -----
<S>                          <C>        <C>         <C>           <C>     <C>         <C>           <C>    
Issued in 1994                   --     479,565          --          --          --          --          --
                          ---------   ---------   ---------   ---------   ---------   ---------   ---------

Balance, Dec. 31, 1994           --     479,565          --          --          --          --          --

Issued in 1995                   --     118,858          --          --          --     550,696          --

Issued in 1995 in
connection with the ALT
acquisition                  83,985          --          --       5,511          --          --          --
                          ---------   ---------   ---------   ---------   ---------   ---------   ---------
Balance
December 31, 1995            83,985     598,423          --       5,511          --     550,696          --

Issued in 1996                   --          --     146,850          --   1,382,648     550,696     230,440
                          ---------   ---------   ---------   ---------   ---------   ---------   ---------
Balance Dec. 31, 1996        83,985     598,423     146,850       5,511   1,382,648   1,101,392     230,440
                          =========   =========   =========   =========   =========   =========   =========
</TABLE>

The  weighted  average fair value of warrants  granted  during 1996 and 1995 was
$1.05 and $1.63 based on total  warrants  of  2,310,634  and 759,050  granted in
1996 and 1995,  respectively.  The warrants are exercisable from the date of the
grant.

(11)    INCOME TAXES

The significant components of the net deferred tax asset as of December 31, 1996
and 1995 were as follows:

                                                          1996            1995
                                                          ----            ----

Net operating loss carry forwards                       $ 2,738         $ 1,717
Accrued expenses                                             75            --
Less valuation allowance                                 (2,813)         (1,717)
                                                        -------         -------
Net deferred tax asset                                  $  --           $  --
                                                        =======         =======

The  liability  method of  accounting  for  deferred  income  taxes  requires  a
valuation  allowance  against  deferred  tax assets  if,  based on the weight of
available evidence,  it is more likely than not that some or all of the deferred
tax assets will not be realized.

                                       50

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(11)     INCOME TAXES (continued)

The Company has net operating  loss carry  forwards  available of  approximately
$3,822, at December 31, 1996 for federal and state tax purposes. The majority of
the net operating loss carry forward expires in the years 2009 through 2011.

FCJ has net operating loss carry forwards at December 31, 1996 of  approximately
$2,686 for  corporation  tax and trade income tax  purposes  available to offset
future taxable  income.  Under German tax law the losses can be carried  forward
indefinitely.

Because  future  profitability  is  uncertain,  such  benefits  have been  fully
reserved.

In addition, ALT has pre-acquisition net operating loss carry forwards available
of  approximately  $4,278,  at  December  31,  1996 for  federal  and  state tax
purposes. The loss carry forwards expire between the years 2001 through 2011.

(12) MAJOR CUSTOMERS AND SUPPLIERS

The major  customers  listed below  accounted  for  approximately  the following
amounts and related  percentages of the trade accounts receivable balance of the
Company at December 31:

CUSTOMER                                1996                        1995
--------------               -----------------------      --------------------

                              AMOUNT           %           AMOUNT         %
                             --------        ----         ---------      ----
    A                        $    167          23          $    233        40
    B                             211          30                 -         -
    C                             109          15                 -         -
    D                               -           -               134        23
    E                               -           -               132        23


                                       51

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(12) MAJOR CUSTOMERS AND SUPPLIERS (continued)

The  approximate net product sales by the Company to its major customers and the
related percentages are as follows:

CUSTOMER                1996                 1995                     1994
--------------------------------------------------------------------------------
                AMOUNT        %        AMOUNT       %          AMOUNT        %
               --------    -------    --------    ------    ----------    ------
        A       $ 4,524       56       $1,855        60     $      65       28
        B         1,217       15           --        --            --       --
        D            --       --          319        10            --       --
        F            --       --           --        --           166       72

The major supplier listed below accounted for approximately the following amount
and related  percentage of the trade accounts  payable balance of the Company at
December 31:

  Supplier                  1996                        1995
  --------          ----------------------------------------------
                     AMOUNT         %            AMOUNT     %
                    ---------    --------      ---------   -------
      A             $  355         22              -        -

The approximate net product purchases by the Company from its major supplier and
the related percentage is as follows:

                        1996                 1995                     1994
--------------------------------------------------------------------------------
                AMOUNT        %        AMOUNT       %          AMOUNT        %
               --------    -------    --------    ------    ----------    ------

      A       $  2,404      33           -           -           -           -

(13)     RELATED PARTY TRANSACTIONS

On August 19,  1995 and  amended  in January  1996,  a capital  lease  agreement
between SICO and FCJ was revised.  It was agreed that SICO would keep  2,221,141
shares,  originally  held  as  collateral,  of the  Company  as  payment  for an
obligation  under a capital  lease.  The  outstanding  lease  obligation,  which
amounted to $499 on August 19, 1995,  was  canceled.  As a result,  the net book
value of the assets was reduced by $499.

The  managing  director  of FCJ was the  controlling  shareholder  of  SICO.  In
November 1995, this officer resigned from his position with FCJ.

                                       52

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(13)     RELATED PARTY TRANSACTIONS (continued)

Transactions  with SICO during the years ended December 31, 1996,  1995 and 1994
consist of the following:
<TABLE>
<CAPTION>

                                                                        1996           1995             1994
                                                                        ----           ----             ----

<S>                                                                   <C>             <C>             <C>   
Property and equipment under capital lease .........                  $   --          $   --          $2,996
Purchase price reduction of property and
   equipment under capital lease ...........................              --             499              --
Rent of premises ..................................................      356             315             127
Purchase of services and utilities.........................              611             874             407
Purchase of materials ..........................................          --             351              69
Interest .............................................................    --              26              --
Other expenses ....................................................       --              22              --
Sales of fibers ......................................................   176             131             166
</TABLE>


In 1994,  SICO was  FCJ's  main  supplier  of  materials  and its main  customer
accounting  for  approximately  72% of its sales.  In 1996 and 1995,  SICO is no
longer a principal customer or the main supplier of materials.

In January 1996, the Company reached an agreement with Techman,  whereby Techman
purchased 734,260 shares for $1 million ($1.36 per share).  Techman is a related
party as the  president  and sole  shareholder  of Techman is a director  of the
Company.  Upon acceptance of the offer and delivery of the 734,260  shares,  the
Company  delivered to Techman  warrants,  granting Techman the right to purchase
550,696 shares of the Company at $1.63 per share exercisable in whole or in part
within a 2 year period.  The Company also issued an additional 312,061 shares to
Techman upon all partners of FOI completing all documents  required to form FOI,
and FOI and the Company  executing an exclusive  supply  agreement  for sales of
preforms to FOI.

The Company  maintains a consulting  agreement  with Techman under which Techman
provides administration, marketing, technical and personnel advisory services to
the  Company.  The  agreement  is on a month to month  basis at a monthly fee of
$3,000  and is  terminable  at any  time by the  Company.  For the  years  ended
December 31, 1996 and 1995, Techman was paid $36,000 and $21,000,  respectively,
for such services.

For the years ended December 31, 1996 and 1995, Mr.  Phillips,  a director,  was
paid a consulting fee of $64,950, and $25,875, respectively.

                                       53

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(14)     FOREIGN OPERATIONS

The Company has operations in two principal  geographic areas: the United States
(Company and ALT) and Germany  (FCJ).  Following is a summary of  information by
area for the years ended December 31, 1996, 1995 and 1994:


                                                     1996       1995       1994
                                                  -------    -------    -------
Net sales to customers:
  United States ...............................   $   196    $   305    $  --
  Germany .....................................     7,900      2,789        231
                                                  -------    -------    -------

  Net sales as reported in the accompanying
     consolidated statements of operations ....   $ 8,096    $ 3,094    $   231
                                                  =======    =======    =======

           Income (loss) from operations:
   United States ..............................   $(3,893)   $(1,757)   $  (644)
   Germany ....................................        45     (1,833)      (979)
                                                  -------    -------    -------
                                                   (3,848)    (3,590)    (1,623)
Interest income ...............................         6        148         15
Interest expense ..............................      (393)      (516)       (22)
Other income (expense) ........................       102        (51)         5
                                                  -------    -------    -------

   Net loss as reported in the accompanying
       consolidated statements of operations ..   $(4,133)   $(4,009)   $(1,625)
                                                  =======    =======    =======

Identifiable assets:
   United States ..............................   $ 8,441    $ 8,488
   Germany ....................................     9,201      6,295
                                                  -------    -------    

  Total assets as reported in the accompanying
     consolidated balance sheets ..............   $17,642    $14,783
                                                 ========    =======

Inter-company  sales are eliminated in  consolidation  and are excluded from net
sales  reported  in the  accompanying  consolidated  statements  of  operations.
Identifiable  assets are those that are  identifiable  with  operations  in each
geographic area.

                                       54

<PAGE>



                        FIBERCORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (Dollars in thousands except share data)

(15)     SUBSEQUENT EVENTS

On January  14, 1997 the Company was  notified by the  Securities  and  Exchange
Commission  ("SEC") that the  Company's  registration  statement on Form S-1 and
Form 8-A were  declared  effective.  Accordingly,  the Company is subject to the
filing  requirements  of the Securities  Exchange Act of 1934. The  registration
statement registered then currently outstanding  securities and, therefore,  the
Company did not receive any proceeds as a result thereof.

                                       55

<PAGE>



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

     The Board of Directors of the Company  approved the  replacement  of Mottle
McGrath  Braney & Flynn,  P. C.  (the  "Former  Accountants")  as the  Company's
independent  outside  accountants  and the selection of Deloitte & Touche LLP as
the Company's new independent outside accountants.

     The report of the Former  Accountants  on the  financial  statements of the
Company for the fiscal year ended December 31, 1995 contained no adverse opinion
or disclaimer  of opinion and was not  qualified or modified as to  uncertainty,
audit scope or accounting principles.  The report on the financial statements of
the Company for the fiscal year ended  December  31, 1994  contained  no adverse
opinion or  disclaimer  of opinion and was not qualified or modified as to audit
scope or  accounting  principles.  The report was  qualified as to the Company's
ability to continue as a going concern.

     During the  Company's  fiscal  years ended  December  31, 1995 and 1994 and
through the date of this  report,  there were no  disagreements  with the Former
Accountants  on any matter of  accounting  principles  or  practices,  financial
statement disclosure,  or auditing scope or procedure,  which disagreements,  if
not  resolved to their  satisfaction  would have  caused them to make  reference
thereto in their report on the financial  statements for such years.  During the
fiscal  years  ended  December  31,  1995 and 1994 and  through the date of this
report,  the Former  Accountants  did not advise the Company with respect to the
matters  described  in  paragraphs  (a)(1)(v)(A)  through  (D)  of  Item  304 of
Regulation S-K.

     The  Company  engaged   Deloitte  &  Touche  LLP  as  its  new  independent
accountants  effective  January 16, 1997.  During the two fiscal years preceding
its appointment and through the date hereof,  the Company had not consulted with
Deloitte & Touche LLP on items regarding:

     (i)       The application of accounting principles to a  specific completed
or contemplated transaction, or the type of audit opinion that might be rendered
on the  Company's  financial  statements;  there was no written  or oral  advice
provided  that  was  an  important  factor  in  reaching  a  decision  as to any
accounting, auditing or financial reporting issue; or

     (ii)      Any matter that was the subject of a disagreement or a reportable
event required to be identified  pursuant to paragraph  (a)(1)(v) of Item 304 of
Regulation S-K.

     The  Company  has  provided  the  Former  Accountants  with a  copy  of the
foregoing  disclosures and has requested in writing that the Former  Accountants
furnish it with a letter  addressed to the  Securities  and Exchange  Commission
(the "SEC") stating  whether or not it agrees with such  disclosures.  A copy of
such letter is filed as an exhibit to this report in accordance with Item 601 of
Regulation S-K.

                                       56

<PAGE>



                                    PART III

ITEM 10.        DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

EXECUTIVE OFFICERS AND DIRECTORS

     The  following  tables set forth certain  information  with respect to each
person who was an  executive  officer or  director of the Company as of December
31, 1996.
<TABLE>
<CAPTION>

        NAME               AGE              POSITION

<S>                        <C>      <C>                                      
Dr. Mohd A. Aslami         50       Chairman Of The Board Of Directors, Chief
                                    Executive Officer, President and Director
Charles DeLuca             59       Executive Vice President, Secretary and Director
                                      of the Company and General Manager of the Company's
                                    ALT subsidiary
Michael J. Beecher         52       Chief Financial Officer and Treasurer
Hans F.W. Moeller          67       Managing Director of the Company's FiberCore
                                     Jena subsidiary
Zaid Siddig                59       Director
Steven Phillips            51       Director
Dr. M. Mahmud Awan         45       Director
</TABLE>

    Dr.  Aslami is a  co-founder,  Chairman of the Board of Directors  and Chief
Executive  Officer of the Company.  Dr.  Aslami has served as Chairman and Chief
Executive  Officer of FiberCore Jena, the Company's  wholly-owned  subsidiary in
Germany,  since 1994.  Dr. Aslami also  co-founded and became  President,  Chief
Executive  Officer and a director of ALT in 1986. Dr. Aslami received a Ph.D. in
chemical engineering from the University of Cincinnati (1974).

    Mr.  DeLuca is a  co-founder,  Executive  Vice  President,  Secretary  and a
director of the Company. Mr. DeLuca also co-founded and became an Executive Vice
President and director of ALT in 1986. Mr. DeLuca  received his MBA in marketing
and business management from St. Johns University in 1974.

    Mr. Beecher became Chief Financial Officer of the Company in April 1996. Mr.
Beecher  was the Vice  President/Treasurer  and Chief  Financial  Officer at the
University of  Bridgeport  from 1989 through  1995.  Mr.  Beecher is a Certified
Public Accountant and is a member of the American  Institute of Certified Public
Accountants.

     Mr.  Moeller  became  Managing  Director  of  FiberCore  Jena in the fourth
quarter  of 1995 on a part time  basis.  He served as a  director  of  FiberCore
Incorporated  from 1994 through March 1996. As part of a  reorganization  of the
Company,  he  resigned  his  position  as a  director  and  agreed to serve as a
director of the Company's newly formed subsidiary InfoGlass.  From 1993 to 1994,
he

                                       57

<PAGE>



served  as Vice  Chairman  of Schott  Corporation  ("Schott"),  a United  States
subsidiary  of Schott A.G., a corporation  specializing  in the  production  of,
among other things,  optical glass. From 1989 to 1993, he served as President of
Schott.  Mr.  Moeller was a member of the Board of Directors of Schott from 1989
to 1994.

    Mr.  Siddig  became a director of the  Company in 1994.  He also serves as a
consultant to the Board of Directors of FiberCore  Jena.  Since 1991, Mr. Siddig
has  been  active  as a  private  investor  and  has  occasionally  served  as a
consultant to ALT. Mr. Siddig is the uncle of Dr. Aslami's wife.

    Mr.  Phillips  became a  director  of the  Company  in May 1995 and became a
director of ALT in 1989.  Since  co-founding the Winstar  Government  Securities
Company L. P., a registered  government  securities  dealer which specializes in
odd-lot  securities  transactions,  Mr.  Phillips has served as Chief  Financial
Officer,  Secretary,  and a Director. Since August 1987, Mr. Phillips has served
as a director,  Secretary and Chief Financial Officer of James Money Management,
Inc., a private investment company.  Since June 1987, Mr. Phillips has served as
director  and  President  of  One  Financial  Group  Incorporated,  a  financial
consulting company of which he is the majority stockholder.

     Dr. Awan is the founder and President of Techman International Corporation,
a  Massachusetts  company engaged in providing  technical,  sales and management
consulting  services to various  industrial  companies in the United  States and
abroad.  Dr. Awan has been  responsible for the development of several high tech
companies  in  Massachusetts  over the past 10 years and  serves on the Board of
Directors of a number of professional  organizations as well as these companies.
He  is  an  active   investor  in  the  Pakistani   market  and  has  maintained
manufacturing  and  distribution  operations in Karachi,  Islamabad,  and Lahore
since 1982. Dr. Awan has been instrumental in promoting  satellite  networks for
Pakistan.  His company was  licensed  in 1994 by the  Government  of Pakistan to
operate a  national  and  international  satellite  data  communication  network
throughout  Pakistan.  Dr.  Awan  received  a  Ph.D.  in  economics  from  Clark
University (1974).



                                       58

<PAGE>



ITEM 11.        EXECUTIVE COMPENSATION

Following is a summary of the  compensation  earned and/or paid to the Company's
Chief Executive Officer and its most highly  compensated  executive officers for
the last three years.
<TABLE>
<CAPTION>

                                            SUMMARY COMPENSATION TABLE
------------------------------------------------------------------------------------------------------------------------------------
                                                         ANNUAL COMPENSATION                                 AWARDS
------------------------------------------------------------------------------------------------------------------------------------
Name and Principal Position         Fiscal       Salary          Bonus              Other            Restricted      Securities
                                     Year          $               $                Annual             Stock         Underlying
                                                                                   Compen-           Award(s)         Options/
                                                                                    sation               $              SARs(#)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>        <C>            <C>                <C>                                <C>   
Dr. Mohd Aslami                         1996       146,500         --                 --                 --             60,913
   Chairman, Chief Executive            1995       146,500         --                 --                 --                 --
   Officer & President                  1994       178,729         --                 --                 --                 --
------------------------------------------------------------------------------------------------------------------------------------
Charles DeLuca (1)                      1996        98,398         --                 --                 --             46,050
   Executive Vice President             1995        28,699         --                 --                 --                 --
   & Secretary                          1994            --         --                 --                 --                 --
------------------------------------------------------------------------------------------------------------------------------------
Michael J. Beecher (2)                  1996        53,708         --                 --                 --              64,248
   Chief Financial Officer              1995            --         --                 --                 --                 --
   & Treasurer                          1994            --         --                 --                 --                 --
------------------------------------------------------------------------------------------------------------------------------------
Hans Moeller (3)                        1996        98,596         --                 --                 --             55,193
   Managing Director,                   1995         7,227         --                 --                 --             33,042
   FiberCore Glasfaser Jena             1994            --         --                 --                 --                 --
   GmbH
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) From September 18, 1995 with the acquistion of ALT.

(2) Started employment on April 15, 1996

(3) Started employment on October 1, 1995

                                       59

<PAGE>

OPTION/SAR GRANTS IN LAST FISCAL YEAR

The following table lists the options  granted to the executive  officers during
the year ended December 31, 1996.
<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
                                                            INDIVIDUAL GRANTS
------------------------------------------------------------------------------------------------------------------------------------
           Name            Number of         % of Total      Exercise      Exp.       Value at        Potential       Potential
           ----
                           Securities         Options/        or base      Date      Grant Date        realized        realized
                                                                           ----
                           Underlying           SARs           price                   Market         values at       values at
                           Options/          Granted to      ($/Share)                 Price           assumed         assumed
                                                             ---------
                           SARs              Employees                                 0% ($)        annual rates       annual
                                                                                       ------
                           Granted           in Fiscal                                                 of stock        rates of
                           (#)                  Year                                                    price        stock price
                           ---                  ----
                                                                                                     apprec. For       apprec.
                                                                                                     option term      For option
                                                                                                        5%($)            term
                                                                                                                       10% ($)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>                <C>          <C>         <C>        <C>              <C>            <C>     
Dr. Mohd Aslami (a,                60,913             25%          $1.45       --         $289,337         $230,670       $261,774
b)
------------------------------------------------------------------------------------------------------------------------------------
Charles DeLuca (a ,b)              46,050             19%          $1.45       --         $218,738         $174,386       $197,900
------------------------------------------------------------------------------------------------------------------------------------
Michael Beecher (a, c)             64,248             26%          $0.68       --         $152,589         $124,479       $140,882
------------------------------------------------------------------------------------------------------------------------------------
Hans Moeller (a, b)                55,193             23%          $1.36       --         $262,167         $213,976       $242,159
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Table

a.   The term of options used in the potential realized value calculation is two
     years

b.   The market value per share at the date of grant was $4.75

c.   The market value per share at the date of grant was $2.375

                                       60

<PAGE>


COMPENSATION OF DIRECTORS

     The Company does not maintain any  standard  compensation  arrangements  or
plans for directors.

     The Company,  however,  maintains a consulting agreement with Techman under
which  Techman  provides  administration,  marketing,  technical  and  personnel
advisory services to the Company. Dr. M. Mahmud Awan, a director of the Company,
is the President and sole shareholder of Techman. The agreement is on a month to
month  basis at a monthly  fee of $3,000  and is  terminable  at any time by the
Company. For the year ended December 31, 1996, Techman was paid $36,000 for such
services.

     Mr.  Phillips,  a director of the Company,  continues to be a consultant to
ALT and the Company without a formal agreement, but the Company and Mr. Phillips
intend  to enter  into  such an  agreement.  The  Company  anticipates  that the
agreement  will  provide  that Mr.  Phillips  will  serve as a senior  financial
advisor to the Company for a term of one year, renewable at the Company's option
and Mr. Phillips'  consent.  Mr. Phillips will be paid a retainer of $60,000 per
year payable in monthly  installments of $5,000, based on an hourly rate of $185
per hour.  The  retainer  will be adjusted  quarterly  based on actual  hours of
service. For the year ended December 31, 1996, Mr. Phillips' fee was $64,950.

                                       61

<PAGE>



ITEM 12.        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                MANAGEMENT

PRINCIPAL SECURITYHOLDERS

     The following table sets forth certain information  regarding the ownership
of the Common  Stock as of February  28,  1997,  with respect to (i) each person
known by the Company to own beneficially more than 5% of the outstanding  shares
of Common Stock, (ii) each executive officer named in the Executive Compensation
Table,  (iii)  each  director  of the  Company  and (iv) all the  directors  and
executive officers of the Company as a group. Unless otherwise  indicated,  each
of the  shareholders  has sole voting and  investment  power with respect to the
shares beneficially owned.

<TABLE>
<CAPTION>
                      NAME
                       AND                                     SHARES                        %
                    ADDRESS(1)                                 OWNED                       OWNED

<S>                                                            <C>                         <C> 
Mohd Aslami...........................................         7,593,329  (2), (11)        17.6
Charles DeLuca........................................         4,576,276  (3), (11)        10.6
Gregory A. Perry......................................         3,572,881  (4)               8.3
Steven Phillips.......................................           845,399  (5)               2.0
Zaid Siddig...........................................           591,735  (6)               1.4
M. Mahmud Awan........................................         2,597,017  (7), (11)         6.0
Hans F.W. Moeller.....................................            88,235  (8)               0.2
AMP Incorporated .....................................         6,169,154  (9), (11)        14.3
SICO Quarzschemelze Jena GmbH.........................         2,040,891                    4.7
Michael J. Beecher....................................            54,248  (10)              0.1
All directors and executive officers as a group
  (7  persons)............................................    16,346,239                   37.9%
</TABLE>
-------------------------------
(1)  The  addresses  of the  persons  and  entities  named in this  table are as
     follows:  Messrs. Aslami, DeLuca, Perry, Siddig, Beecher,  Moeller, Ramsey,
     Awan, and the Ariana Trust c/o FiberCore, Inc., P. O. Box 206, 174 Charlton
     Road,  Sturbridge,  MA  01566;  AMP  Incorporated,   470  Friendship  Road,
     Harrisburg,  PA 17105; and Sico Quarzchemelze Jena GmbH, Goscheweitzer Str.
     20 07745, Jena, Germany.

(2)  Includes 157,473 shares and Warrants to purchase 115,220 shares held by Dr.
     Aslami's wife, 425,085 shares held by Dr. Aslami's children,  1,998,589 and
     608,914  shares  held  respectively  by the  Ariana  Trust  and  the  Kabul
     Foundation,  trusts of which Dr.  Aslami's wife is trustee and of which Dr.
     Aslami's  children are  beneficiaries,  and 284,860 shares held by the Raja
     Foundation,  a trust of which Dr.  Aslami's  wife and Mr DeLuca's  wife are
     trustees  and  of  which  various  organizations  and  family  members  are
     beneficiaries.  Dr.  Aslami  disclaims  beneficial  ownership  of all  such
     shares. Also includes 60,913 currently exercisable options.

                                       62

<PAGE>



(3)  Includes  1,395,097  shares and Warrants to purchase 115,220 shares held by
     Elizabeth  DeLuca,  Mr. DeLuca's wife,  347,715 shares held by Mr. DeLuca's
     children, 608,914 shares held by the Dawn Foundation, a trust of which Mrs.
     DeLuca is trustee and of which Mr. DeLuca's children are beneficiaries, and
     174,053 shares held by the Raja  Foundation,  a trust of which Dr. Aslami's
     wife and Mr. DeLuca's wife are trustees and of which various  organizations
     and family  members are  beneficiaries.  Mr.  DeLuca  disclaims  beneficial
     ownership  of  all  shares.  Also  includes  46,050  currently  exercisable
     options.

(4)  Includes 1,358,384 shares held by Beth Perry, Mr. Perry's wife, and 146,852
     shares  held  by Mr.  Perry's  children.  Mr.  Perry  disclaims  beneficial
     ownership of all such shares.

(5)  Include 41,746 currently  exercisable options issued to One Financial Group
     Incorporated.

(6)  Mr. Siddig is the uncle of Dr. Aslami's wife.

(7)  Includes  shares  issuable  to Techman or its  designee  upon  exercise  of
     Warrants  (550,696),  and  shares  (1,000,000)  to  be  issued  ratably  as
     commissions on Company sales up to $200 million.

(8)  Includes 88,235 currently exercisable options.

(9)  Includes  shares into which the AMP Note is  convertible at $1.16 per share
     and Warrants to purchase 1,382,648 shares.

(10) Includes 54,248 currently exercisable options.

(11) Under the AMP loan, the Company, Mohd A. Aslami,  Charles DeLuca, M. Mahmud
     Awan and AMP entered into a Voting Agreement  pursuant to which they agreed
     to vote together to elect a slate of directors to the Board of Directors of
     the Company.  Such slate of directors initially consists of Mohd A. Aslami,
     Charles  DeLuca,  Hans  Moeller,  one  nominee  of AMP  and  three  outside
     directors, one of whom is Dr. Awan.

                                       63

<PAGE>



ITEM 13.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

DEALINGS WITH SICO

     Since June  1994,  FiberCore  Jena has leased its office and  manufacturing
facility in Germany from SICO Quarzschmelze Jena GmbH ("SICO").  At February 28,
1997 SICO owned  2,040,891  shares of Common  Stock  (approximately  4.7% of the
Company).  The lease  payment is fixed for the initial  term of the lease (which
expires on June 30, 2000) at DM 51,376 per month (approximately  $33,327).  SICO
is also a reseller customer of the Company. In 1995 and 1996, SICO accounted for
approximately 10% and less than 1%, respectively, of Company total sales.

DEALINGS WITH TECHMAN

    Since 1995, the Company has maintained a working  relationship with Techman,
a technology  management company  headquartered in Massachusetts since 1982. Dr.
M. Mahmud Awan, the President and sole shareholder of Techman,  is a director of
the  Company.   Techman  specializes  in  sales  of  fiber  optic  products  and
telecommunication systems.

     On November 1, 1995, the Company entered into an International  Distributor
Agreement  with  Techman to market the  Company's  products  worldwide.  Techman
agreed  to  receive   customary  sales  commissions  in  the  form  of  Warrants
exercisable  into  1,000,000  shares of Common Stock to be issued to Techman for
sales of the Company's  products up to $200,000,000.  Such shares will be issued
upon receipt of the proceeds of any such sales.

     Pursuant to the Techman Share  Purchase  Agreement  dated January 11, 1996,
Techman purchased  734,260 shares of Common Stock for $1,000,000  (approximately
$1.36 per share) and was granted  Warrants  exercisable  into 550,696  shares of
Common Stock at $1.63 per share. Additionally,  the Company issued an additional
312,061  shares of Common Stock to Techman on (i) the  formation of FOI (a joint
venture),  in which the Company  holds a 30%  ownership  interest,  and (ii) the
completion  of a  supply  agreement  between  FOI and  the  Company.  Under  the
agreement,  $450,000 of the  $1,000,000  share  purchase  price was  invested by
Techman for the Company in FOI as an additional capital contribution.

     FOI, a company  incorporated in Islamabad  under the laws of Pakistan,  was
formed to manufacture optical fiber products in Pakistan,  and is in the process
of raising capital to fund the construction of a manufacturing  facility.  Since
its inception in June 1995,  FOI has been funded  primarily by Techman.  FOI has
contracted  with First  Capital  Securities  Corporation  Limited to arrange for
listing of FOI on the Karachi Stock Exchange.

     The Company  maintains a  consulting  agreement  with  Techman  under which
Techman provides  administration,  marketing,  technical and personnel  advisory
services to the Company. The agreement is on a month to month basis at a monthly
fee of $3,000 and is terminable at any time by the Company.  For the years ended
December 31, 1996 and 1995, Techman was paid $36,000 and $21,000,  respectively,
for such services.

                                       64

<PAGE>



DEALINGS WITH AMP

     In  April  1995,  the  Company  issued  the AMP  Note,  which is a ten year
$5,000,000 convertible note, to AMP,  Incorporated,  a company listed on the New
York Stock  Exchange and a  manufacturer  of electrical  and optical  connection
devices,  systems and other equipment including fiber optic cable.  Principal of
the AMP Note plus  accrued  interest  at a rate of LIBOR plus one percent may be
converted  into Common Stock through April 17, 2005.  Until April 17, 2000,  the
conversion price is $1.16 per share; thereafter the conversion price is equal to
the price per share paid by a third party investor in the private sale of Common
Stock  immediately  prior  to such  conversion.  The  AMP  Note  is  subject  to
prepayment  on demand in the event the Company is the issuer of securities to be
sold by the Company under an effective registration statement.

     In July 1996,  AMP entered into a five year supply  contract  (renewable at
AMP's option for an  additional  five year period) with the Company  whereby the
Company will supply AMP with at least 50% of AMP's future  glass  optical  fiber
needs. On November 27, 1996 the Company  obtained an additional  $3,000,000 loan
at an interest rate of prime plus 1%,  adjustable  on the first  business day of
each calendar quarter,  from AMP to fund the expansion of the Jena Facility,  in
exchange for a ten year note and  $2,000,000 of common stock  purchase  warrants
exercisable for up to 1,382,648  shares of Common Stock at $1.45 and expiring on
November 27, 2001. AMP also  converted  $3,000,000 of principal plus $540,985 of
accrued  interest  on the AMP Note into  3,058,833  shares of Common  Stock.  In
connection  with the new  loan  from  AMP,  the  Company  agreed  to  issue  AMP
additional  shares of Common Stock in the event the  Company's  share price does
not exceed $2.17 for 30  consecutive  trading  days by November  27,  1998.  The
issuance  of  additional  shares  under the new AMP loan  would  have a dilutive
effect on the Company's other shareholders and could adversely affect the market
price of the Common Stock.

LOANS

     On July 31, 1996, the Company  borrowed  $500,000 under two loan agreements
from the spouses of Dr.  Aslami and Mr.  DeLuca.  The loans are in the amount of
$250,000  each and bear  interest at the prime rate plus one percent  (currently
9.25%),  and are due on July 31, 1999. In conjunction with the loans each lender
received  warrants to  purchase  115,220  shares of Common  Stock at the rate of
$1.81 per share. The warrants expire on July 31, 2001.

CONSULTING

     Mr.  Phillips,  a director of the Company,  continues to be a consultant to
ALT and the Company without a formal agreement, but the Company and Mr. Phillips
intend  to enter  into  such an  agreement.  The  Company  anticipates  that the
agreement  will  provide  that Mr.  Phillips  will  serve as a senior  financial
advisor to the Company for a term of one year, renewable at the Company's option
and Mr. Phillips'  consent.  Mr. Phillips will be paid a retainer of $60,000 per
year payable in monthly  installments of $5,000, based on an hourly rate of $185
per hour.  The  retainer  will be adjusted  quarterly  based on actual  hours of
service.  For the years ended December 31, 1996 and 1995, Mr.  Phillips' fee was
$64,950, and $25,875, respectively.

                                       65

<PAGE>



                                     PART IV

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

         (a)    1.  FINANCIAL STATEMENTS
                      See Item 8 of this Report

                2.  FINANCIAL STATEMENT SCHEDULES

                      The required disclosures are included  in the footnotes to
                      the Financial Statements

                3.  EXHIBITS
                      (+ denotes filed herewith)

                EXHIBIT
                NUMBER

+2.1      Agreement And Plan Of Reorganization dated as of July 18, 1995 between
          Venturecap, Inc. and FiberCore Incorporated.
+2.2      Agreement of Merger dated as of July 18, 1995 between Venturecap, Inc.
          and FiberCore Incorporated.
+2.3      Agreement  and Plan of  Reorganization  dated as of September 18, 1995
          between the  FiberCore,  Inc.  Alt Merger  Co.,  and  Automated  Light
          Technologies, Inc. ("ALT").
+2.4      Agreement dated February 13, 1987 between Norscan Instruments Ltd. and
          ALT.
+3.1      Certificate of Incorporation of FiberCore, Inc.
+3.2      By-Laws of FiberCore, Inc.
+10.1     Loan  Agreement  dated  August 2,  1990  between  ALT and  Connecticut
          Innovations, Inc. ("CII").
+10.2     Promissory Note issued by ALT to CII.
+10.3     Security Agreement dated as of August 1990 between ALT and CII.
+10.4     Subordination  executed  August 2, 1990 between CII, Mohd Aslami,  and
          Charles DeLuca.
+10.5     Collateral  Assignment  and  Security  Agreement  dated August 2, 1990
          between ALT and CII.
+10.6     Loan Agreement  dated December 5, 1990 between ALT and the Connecticut
          Development Authority ("CDA").
+10.7     Promissory Note dated December 5, 1990 issued by ALT to CDA.
+10.8     Guaranty  dated  December  5, 1990  issued to CDA by Mohd  Aslami  and
          Charles DeLuca.
+10.9     Collateral  Assignment and Security  Agreement  dated December 5, 1990
          between ALT and CDA.
+10.10    Security Agreement dated as of December 5, 1990 between ALT and CDA.
+10.11    Subordination  dated  November 5, 1990  between  CDA,  Mohd Aslami and
          Charles DeLuca.
+10.12    Form of Warrant issued by ALT to CDA
+10.13    Form  of  Warrant  issued  by  Agreement  between  ALT to  Connecticut
          Innovations Incorporated.
+10.14    Form of Warrant issued by ALT.
+10.15    Form of FiberCore Incorporated Warrant.
+10.16    Assignment  dated  November  8,  1993 by  Gregory  Perry to  FiberCore
          Incorporated of U.S. Patent No. 4,596,589.
+10.17    Lease executed January 31, 1994 between Cobra Realty Trust,  FiberCore
          Incorporated, Mohd Aslami and Charles DeLuca.
+10.18    Agreement  dated June 7, 1994 between SICO  Quarzschmelze  Jena,  GmbH
          ("SICO")and  FiberCore  Inc.,  to lease  building and equipment and to
          manufacture optical fiber and optical fiber preform.
+10.19    Agreement  dated August 19, 1995 between SICO and FiberCore  Glasfaser
          Jena GmbH, with supplemental agreement by Walter Nadrag.

                                       66

<PAGE>

+10.20    Cooperation  Agreement  dated  December  19,  1995  between  SICO  and
          FiberCore, Inc.
+10.21    Lease dated August 19, 1995 between SICO and FiberCore  Glasfaser Jena
          GmbH.
+10.22    Agreement dated January 25, 1996 between  FiberCore,  Inc.,  FiberCore
          Glasfaser, Jena and SICO.
+10.23    Share  Purchase  Agreement  dated January 11, 1996 between  FiberCore,
          Inc. and Techman International, Corp. ("Techman").
+10.24    Escrow  Agreement  dated  as  of  April  13,  1995  between  FiberCore
          Incorporated,  Middle East Specialized Cables Co. ("MESC") and Shawmut
          Bank, N.A.
+10.25    Escrow Amending  Agreement dated September 15, 1995 between FiberCore,
          Inc.,  Middle East  Specialized  Cables Co. ("MESC") and Shawmut Bank,
          N.A.
+10.26    Share Purchase  Agreement dated as of April 13, 1995 between FiberCore
          Incorporated and MESC.
+10.27    Share Purchase Amending Agreement dated September 15, 1995 between the
          Registrant and MESC.
+10.28    Convertible  Debenture  Purchase  Agreement  effective as of April 17,
          1995 between AMP Incorporated and FiberCore Incorporated, with form of
          Convertible Debenture Attached, as Exhibit A.
+10.29    Cooperation  Agreement  dated June 17, 1994  between John Royle & Sons
          and FiberCore Incorporated,  with Amendment No. 1 executed on the same
          date.
+10.30    Warrant issued by FiberCore, Inc. to Techman to purchase up to 550,696
          shares of Common Stock.
+10.31    Agreement  dated  July 1,  1994  between  FiberCore  Incorporated  and
          FiberCore Glasfaser Jena GmbH.
+10.32    Joint Venture  Agreement  dated  January 31, 1996 between  Middle East
          Optic Fiber Company  ("MEOFC"),  Royle Mid East Ltd. and FiberCore Mid
          East Ltd.
+10.33    Convertible  Note Purchase  Agreement and Convertible  Promissory Note
          between  FiberCore,  Inc.  and  Hedayat  Amin-Arsala  in the amount of
          $200,000, each dated March 15, 1996.
+10.34    Joint  Venture  Agreement  dated May 21,  1995  between  the  Company,
          Techman and the other parties named therein.
+10.35    International  Distributor  Agreement between Techman and the Company,
          dated November 1, 1995.
+10.36    Term Loan Agreement by and between FiberCore, Inc. as borrower and AMP
          Incorporated a lender dated November 27, 1996.
+10.37    Term  Promissory Note in the original  principal  amount of $3 million
          dated November 27, 1996.
+10.38    Amendment No. 1 to Convertible  Debenture  Purchase  Agreement between
          FiberCore,  Inc.,  as borrower  and AMP  Incorporated  as Lender dated
          November 27, 1996.
+10.39    Subsidiary  Guarantee  between  FiberCore  Glasfaser Jena GmbH and AMP
          Incorporated dated November 27, 1996.
+10.40    Security Interest Agreement between FiberCore  Glasfaser Jena GmbH and
          AMP Incorporated dated November 27, 1996.
+10.41    Patent Security Agreement between FiberCore, Inc. and AMP Incorporated
          dated November 27, 1996.
+10.42    Warrant issued to AMP  Incorporated to purchase shares of Common Stock
          of FiberCore, Inc. dated November 27, 1996.
+10.43    Amended and Restated Convertible Debenture dated April 17, 1995.
+10.44    Voting  Agreement  between  FiberCore,  Inc., AMP  Incorporated,  Mohd
          Aslami, Charles DeLuca and Dr. M. Mahmud Awan dated November 27, 1996.
+10.46    Supply contract  between AMP  Incorporated  and FiberCore,  Inc. dated
          July 29, 1996.
+10.47    Loan Agreement  between  FiberCore,  Inc. and Berliner Bank AG for the
          amount of DM 7,700,000 dated September 6, 1996.
+10.48    Grants  Agreements  between  FiberCore  Glasfaser  Jena  GmbH  and the
          Ministry of Economics and Infrastructure in the amount of DM 2,300,000
          dated June 12, 1996 and December 30, 1995.
+10.49    Intercompany  Loan  Agreement  between  FiberCore,  Inc. and FiberCore
          Glasfaser Jena GmbH in connection  with the loan from Berliner Bank AG
          dated July 10, 1996.
+10.50    Form of Warrant issued by FiberCore, Inc. to Techman to exercise up to
          1,000,000  shares  of  Common  Stock  pursuant  to  the  International
          Distributor Agreement dated November 1, 1995.


                                       67

<PAGE>



+10.51    Note  Purchase  and Warrant  Agreement  between  FiberCore,  Inc.  and
          Bereshkai S. Aslami in the amount of $250,000 and granting Warrants to
          purchase up to 115,220 shares of Common Stock.
+10.52    Note  Purchase  and Warrant  Agreement  between  FiberCore,  Inc.  and
          Elizabeth  DeLuca in the amount of $250,000 and  granting  Warrants to
          purchase up to 115,220 shares of Common Stock.
+10.53    Forbearance  Agreement  between ALT and CDA  Authority and granting of
          Warrants dated August 27, 1996.
+10.54    Forbearance  Agreement  between  ALT and CII and  granting of Warrants
          dated July 31, 1996.
+10.55    Long Term Preform Supply Agreement between  FiberCore,  Inc. and Fiber
          Optic Industries (Pvt.) Limited dated July 25, 1996.
+10.56    Long-term supply  agreement  between  FiberCore,  Inc. and Middle East
          Optical Fiber Cable Co. (MEFC) dated November 1, 1996.
+14.0     Copy of patents purchased from SICO.
+16.0     Letter re: change in certifying accountant.
+22       List of subsidiaries of FiberCore, Inc.
+27       Financial Data Schedule.

         (b)    Reports on Form 8-K

                On January 17,  1997,  the  Company  filed a report on Form 8-K,
                reporting the change in the principal accountants.


                                       68

<PAGE>


                                   SIGNATURES


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

                                 FIBERCORE, INC.
                                  (Registrant)


            By: /s/ Mohd A. Aslami                            March 26, 1997
               --------------------------------------        
                    Dr. Mohd A. Aslami
                    Chairman, Chief Executive Officer
                             And President

            By: /s/ Michael J. Beecher                        March 26, 1997
               -----------------------------------------     
                    Michael J. Beecher
                    Chief Financial Officer and Treasurer
                    (Principal Financial Officer and
                     Principal Accounting Officer)


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

<TABLE>
<CAPTION>
<S>                            <C>                                <C>
 /s/ Mohd A. Aslami            Chairman of the Board,             March 26, 1997
 ------------------            President                      
Dr. Mohd A. Aslami             Chief Executive Officer,       
                               Director                       
                               (Principal Executive Officer)  
                              

/s/ Charles DeLuca             Executive Vice President           March 26, 1997
------------------             Secretary and Director
Charles DeLuca                 

/s/ Steven Phillips            Director                           March 26, 1997
-------------------                                                             
Steven Phillips                                                                 
                                                                                
/s/ Zaid Siddig                Director                           March 26, 1997
---------------                                                                 
Zaid Siddig                                                                     
                                                                                
/s/ M. Mahmud Awan             Director                           March 26, 1997
------------------             
Dr. M. Mahmud Awan             
</TABLE>


                                       69