China Huaren Organic Products, Inc. – ‘10KSB’ for 12/31/96

As of:  Friday, 3/28/97   ·   For:  12/31/96   ·   Accession #:  931947-97-2   ·   File #:  0-25380

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Annual Report — Small Business   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Annual Report -- Small Business                       43±   197K 
 2: EX-10       Material Contract                                      1      5K 
 3: EX-27       Financial Data Schedule (Pre-XBRL)                     1      5K 

10KSB   —   Annual Report — Small Business
Document Table of Contents

      SECURITIES AND EXCHANGE COMMISSION
    Washington, D.C.   20549
     FORM 10-KSB
      Annual Report Pursuant to Section 13 or 15(d) of
   the Securities Exchange Act of 1934

(  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
(    )  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:   33-85218C                                             

 ULTRADATA SYSTEMS, INCORPORATED
(Name of small business issuer in its charter)
Delaware                                                              43-1401158

(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)                                                

9375 Dielman Industrial Drive, St. Louis, MO.                              63132
(Address of principal executive office)                               (Zip code)

Issuer's telephone number, including area code: (314) 997-2250

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

Common Stock, $.01 Par Value  
(Title of Class)    

Check whether the Issuer (1) has filed all reports required to be filed by      
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for       
such shorter period that the Registrant was required to file such reports)      
and (2) has been subject to such filing requirements for the past 90 days.      
                Yes  X                                                    No____
Check if there is no disclosure of delinquent filers in response to Item 405    
of Regulation S-B contained in this form, and no disclosure will be contained,  
to the best of registrant's knowledge, in definitive proxy or information       
statements incorporated by reference in Part III of this Form 10-KSB or any     
amendment to the Form 10-KSB.                                                   

State the issuer's revenues for its most recent fiscal year:   $9,092,920 

The aggregate market value at March 21, 1997, of the voting stock held by non-  
affiliates, based on the closing price as reported by NASDAQ National Market    
System (NMS), was approximately $16,614,727.  The aggregate market value as     
been computed by reference to a share price of  $6.75  (The price at which      
stock was sold, or the average bid or asked prices of such stock on March 21,   
1997).  All directors and more than five percent stockholders of the Registrant 
have been deemed "affiliates" for the purpose of calculating such aggregate     
market value.                                                                   

The number of shares outstanding of the issuer's common stock, as of March 21,  
1997, was 3,403,493.                                                            

Transitional Small Business Disclosure Format:          Yes             No  X   

DOCUMENTS INCORPORATED BY REFERENCE:      None                                  

PART I                                                                          

Item 1. BUSINESS                                                                

GENERAL DEVELOPMENT OF BUSINESS                                                 

   Ultradata Systems, Incorporated ("The Company") is engaged in the manufacture
and marketing  of a line of handheld data retrieval devices that employ the     
Company's proprietary data compression technology.  During 1987, the Company    
identified this area of its business as having the greatest strategic value     
for its stockholders.  The Company, therefore, elected to reduce its initial    
focus on  research and development activities leading to the manufacture of     
laser communication systems and target electronic data retrieval devices as its 
core growth path for the future.        To better reflect this business         
reorientation, the Company changed its name, in November 1994, from Laser Data  
Technology, Inc. to Ultradata Systems, Incorporated.                            

        The Company's primary focus today remains the research, development, and
marketing of electronic consumer travel products which utilize the Company's    
proprietary data compression technology for storing large quantities of         
information on, and retrieving it rapidly from a microprocessor memory chip.    
Each of the Company's consumer products is designed for the consumer to gain    
easy and immediate access to practical information stored in convenient hand-   
held units.  The Company's products generally sell at retail prices between     
$29.95 to $129.95 a unit.                                                       

PRODUCTS                                                                        

CONSUMER PRODUCTS                                                               

   The Company's Consumer Products Division primarily develops and markets hand-
held travel computers, the majority of which bear the ROAD WHIZ registered      
trademark.  Various models contain custom developed data to provide the traveler
with directions and information regarding the travel services available along   
the U.S. Interstate Highway System.  Some versions add in city information as   
well.  The travel database contained  in  most of the models offered by the     
Company is proprietary and contained on a memory chip built into each unit.     
The travel database contains over 100,000 services.  This service information   
includes destination, mileage, gas stations, hotels, motels, hospitals, 24-hour 
restaurants, and highway patrol emergency numbers along the United States       
Interstate Highway System.  ROAD WHIZ owners can update their unit by           
purchasing memory updates or upgrades as offered by the Company.                

 The hand-held travel computers made by the Company provide routing and services
similar to software products in the market. Such products include PC compatible 
travel programs and other "shrink-wrap"  formats. The Company's database of     
100,000 services, however, is proprietary to the Company's travel computer. The 
Company sells its products through independent sales representatives, catalog   
companies, department stores, office supply stores, direct mail promotion,      
luggage stores and The QVC Network (hereafter "QVC"), a leading television      
shopping channel.  During 1996, the Company made a breakthrough in marketing    
custom products to the private  label market.  The private label market is      
viewed as an important strategic growth  opportunity for the Company.           

ROAD WHIZ                                                                       

      ROAD WHIZ was introduced during 1990. Since 1990, the Company has released
numerous  versions of the ROAD WHIZ, including ROAD WHIZ PLUS, ROAD WHIZ        
ULTRA and ROAD WHIZ COMPANION,  ROAD & CITY and ULTRAFINDER and more recently,  
TOWN and COUNTRY and KIDS ROAD WHIZ. The Company's growth strategy has been to  
expand its line of travel computers to include additional features and          
functions at generally lower retail prices.  In 1996, R & D increased to also   
emphasize other hand-held information products and also expand vertically with  
products tied more directly to the PC market and the auto market.               

CURRENT PRODUCT OFFERINGS:                                                      

ROAD WHIZ PLUS                                                                  
   ROAD WHIZ PLUS was the second model travel computer introduced by the Company
in 1992.  It offered new features including  detailed directions to 90 cities   
and additional travel data such as shopping malls.                              

ROAD WHIZ ULTRA                                                                 

       ROAD WHIZ ULTRA was introduced in April, 1994.  It contains all of  the
features and data offered by ROAD WHIZ and ROAD WHIZ PLUS, plus additional data 
of over 3,000 small towns and shopping outlet malls.  It also provides          
complete routing information for over 250 cities giving distances, driving time 
and detailed directions to cities. ROAD WHIZ ULTRA contains over 60,000 services
and has double the memory capacity of the ROAD WHIZ PLUS or the ROAD WHIZ       
COMPANION.  ROAD WHIZ ULTRA is marketed in upscale retail outlets, through mass 
mailings primarily to oil company credit card customers, and magazine ads.      

ROAD WHIZ COMPANION                                                             

ROAD WHIZ COMPANION was introduced by QVC in the summer of 1994.  ROAD WHIZ   
COMPANION includes the low price advantage of the ROAD WHIZ PLUS  blended       
with several advanced features and services of the ROAD WHIZ  ULTRA.            

OTIS-THE RV NAVIGATOR                                                           

   OTIS - The ("RV NAVIGATOR") was developed for owners of recreational vehicles
(RV's).  This unit functions as both an RV campground guide and an interstate   
travel guide.  The RV NAVIGATOR  database includes a location and feature       
directory of over 13,000 campgrounds and RV repair and service providers        
throughout the U.S.  The RV NAVIGATOR contains over 40,000 attractions and      
directions, including gas and diesel fuel stations, interstate mile markers,    
restaurants, hospitals, and rest stops.  RV NAVIGATOR features an updatable     
plug-in memory card and long life batteries.  The Company purchased exclusive   
rights to this campground database from Trailer Life Enterprises for an initial 
fee of $10,000 and a royalty of one dollar ($1.00) for each unit sold over the  
first 5,000 units.  The Company's right to exclusive use of the database will   
terminate, unless renegotiated, after 20,000 units are sold.  The licensing     
agreement itself may be terminated by either party on twelve (12) months notice.
If Trailer Life Enterprises were to terminate the licensing agreement, the      
Company would be required to find an alternate source, or discontinue the       
product.                                                                        

ULTRAFINDER                                                                     

     ULTRAFINDER was introduced in 1995. It is the most powerful handheld travel
unit marketed by the Company. It contains over 60,000 services  and specific    
routes to over 500 cities, giving distance and driving time.   ULTRAFINDER      
features a two-line display and an updatable plug-in memory module. It is priced
to sell at $99.95 at retail.  During 1996 the Company received a $4.0 million   
custom order, with follow-on rights for additional quantities.                  

GREENSFINDER                                                                    

      GREENSFINDER is the Company's one entry into the sports leisure and travel
market. Introduced in December 1994, GREENSFINDER is a handheld data retrieval  
device which contains information on over 10,000 U.S. golf courses, including   
greens fees, restaurant facilities, phone numbers, types of terrain, travel     
directions to the course, availability of carts, caddies, clubs, and other      
course features.  GREENSFINDER also contains a four-player scorekeeper with     
player name entry and records individual player's scores.  The Company acquired 
the software database for this product from a third party. The Company is       
required to pay a royalty of 10% based on sales and 20% for upgrades to the     
software developer.                                                             

TOWN and COUNTRY                                                                

      The TOWN and COUNTRY introduced in 1996 provides 60,000 services along the
nation's highways, parkways and toll roads and directions to over 7,000 towns   
on Interstates & US Highways.  This product was introduced on QVC in September, 
1996.                                                                           

KIDS ROAD WHIZ                                                                  

   The KIDS ROAD WHIZ introduced in December 1996 is a travel computer providing
directions to amusement parks, water parks and other entertainment sites for    
children traveling with parents.  It also includes word games.                  

LASER SYSTEMS CONTRACTS                                                         

 The business of the Company when it was initially founded was primarily focused
on the fulfillment of research and development contracts leading to the         
manufacture of laser communications systems.  The Company submits bids for laser
system research and development contracts and production contracts from         
government and government-related agencies, typically under cost plus or fixed- 
fee contracts. Most of the Company's research and development laser systems     
contracts are beyond one year in scope.  Upon the award of a R&D contract, the  
Company realizes revenues from progress payments received during the course of  
such contracts.  Any required capital equipment is generally supplied to the    
Company by the customer. The technology developed during the Company's          
performance of a research and development contract becomes the exclusive        
property of the contracting party.                                              

      During 1994, the Company engaged in a research and development contract to
develop modifications and upgrades to U.S. Army Laser Pointing and Tracking     
Systems (PATS).  This contract was  completed in early 1995.  In 1995, the      
Company  received an $1.7 million production contract from the Yuma Proving     
Ground to manufacture their PATS design. For the two years ended December 31,   
1996 and 1995, the Company realized revenues of $810,484 and $675,465,          
respectively,  against this contract.  At December 31, 1996, there remains      
approximately $120,915 in progress billings to complete the contract.  The      
original contract provided for an override clause, which the customer exercised 
in February, 1997. To date, this override portion totaled $337,888.  The        
government retains the right to order additional units within the terms of the  
original contract.                                                              

MANUFACTURING                                                                   

     The Company does not manufacture any of its consumer products, has no
manufacturing capacity and is entirely dependent upon third parties to          
manufacture and assemble the components comprising its products.  Since 1988 to 
1994, Siemens Manufacturing Co. of Freeburg, Illinois ("Siemens") had been the  
exclusive manufacturing source of travel computers for the Company.  A alternate
foreign manufacturer was established late in 1995. This manufacturer supplied   
approximately 20% of the production requirements during 1996.  The Company      
generally receives annual pricing from each of its manufacturers based upon     
estimated annual quantities.  Thereafter, the Company releases individual       
purchase orders for production.  The Company's arrangements with each           
manufacturer are terminable at will by either party.  If  either or both        
arrangements were to be terminated, the Company believes that  alternate sources
are readily available. The sudden loss of one of the manufacturers or           
unanticipated interruptions or delays from  present manufacturers would likely  
result in a temporary interruption to the Company's planned operations.  The    
Company intends to maintain its practice of engaging subcontractors to meet its 
manufacturing requirements for the forseeable future.                           

    Raw materials used by the Company include hardware, keypads, computer memory
chips, microprocessors, and other discrete electronic parts used in building    
circuit boards.   Most of these are standard stock items that are  generally    
available from several vendors.  To date, the Company has been able to obtain   
adequate and timely supplies of raw materials. The Company presently has two    
sole sourced components.  The supplier for these items is a major microcircuit  
vendor with whom the Company has enjoyed a solid relationship for years.  The   
inability to obtain timely or sufficient deliveries of these sole-source        
components would materially disrupt production until an alternative vendor      
could be located, qualified and begin production.  The Company has alternate    
vendors for all of its other raw materials.                                     

BACKLOG                                                                         

    As of December 31, 1996, the Company's consumer products backlog was
approximately $6.8 million versus a comparable backlog of $75,000 on December   
31, 1995. Included in the 1996 backlog were two orders for private label        
products valued at approximately $6.5 million.  One of the two private label    
orders  is financed by  an irrevocable Letter of Credit.  At December 31, 1996, 
there was $3,492,000 remaining to be shipped against the Letter of Credit.      
Generally, orders for standard products are subject to cancellation without     
penalty.  The Company has occasionally experienced cancellations or             
postponements in its delivery of orders.                                        

SALES AND MARKETING                                                             

    The Company's primary sales and marketing objective is to remain the leading
supplier for low-cost travel computers.  To support this objective, the Company 
believes it must offer a growing line of affordable standard and custom travel  
computers.                                                                      

      The Company identifies its prospective customers and markets through a
combination of direct mail, telemarketing, media advertising, tradeshow         
participation, and periodic appearances on QVC. The Company advertises in       
magazines and trade journals and periodically  distributes promotional materials
to increase market awareness of its products.  To date, the Company has focused 
its primary marketing efforts on establishing customer relationships with local 
and regional retailers and upscale retail outlets.                              

  The Company's products are marketed through independent sales representatives,
mail order catalogs, and office supply stores.  In 1996, the Company spent      
$1,773,373 on advertising, promotion, and marketing programs, as compared to    
$942,402 and $778,750 in 1995 and 1994, respectively. The Company spent $206,500
during 1996 to advertise monthly in SkyMall magazine, the popular airline buying
guide. During the fourth quarter of the year, the Company committed to a        
national direct mail program with Roy Thomas, Inc., a sales and marketing firm. 
The diredct mail program included approximately 23 million advertising inserts  
packaged with oil credit card statements.  It is expected that customer orders  
from these mailings will carry over into the forthcoming year.                  

       To further extend its market position, the Company entered into a joint
product agreement with a leading developer of trip planning software, TravRoute,
Inc., to integrate their software and database into a new product called        
TripLink.  The Company also acquired an exclusive U.S. and European license for 
Time Tracker, a product which attaches to cellular phones and enables users to  
track phone call costs on a continuous basis.  These type of arrangements are   
an extension of the Company's strategy of fostering alliances and other         
marketing arrangements in order to maintain its objective of remaining the      
leading supplier of hand-held travel devices.                                   

DEPENDENCE ON CUSTOMER                                                          

  During 1996, Roy Thomas, Inc. (See Sales And Marketing) accounted for 20.8% of
consumer sales.  This customer had sales of $1,723,185 in 1996 compared to      
$90,976 during 1995.  Prior to 1996, QVC had been the largest customer of the   
Company.  For the two years ended December 31, 1996 and 1995, QVC sales totaled 
$4,455,035 and $1,989,182, respectively, representing approximately 47% and 33% 
of consumer sales.  During 1996 QVC sales totaled $617,443 or $7.5% of consumer 
sales.                                                                          

COMPETITION                                                                     

   Competition in the electronics industry is intense. The Company believes that
the primary competitive factors necessary to maintain its market leadership in  
the hand-held travel market include product features such as performance,       
product reliability, functionality, ease of use, product reputation, price,     
timeliness of product upgrades, and quality of customer support and service. The
Company believes that price is a significant factor in determining future sales 
and  which the Company carefully monitors.  Mass merchandise discounters        
regard $29.95 as an important retail consumer price for the Company's products  
to be successful in the mass market.                                            

      The segment of the electronics industry in which the Company is engaged is
populated by  competitors with substantially greater financial resources than   
the Company.  The consumer industry in which the Company competes is            
characterized by rapid and significant technological advances, which often      
result in rapid partial or total obsolescence of products.  The Company is not  
aware of any competitor selling affordable hand-held travel computers.  Although
the Company attempts to protect its technology and patents wherever possible, it
is unable to provide any assurances that its patents and trade secrets will not 
be circumvented in the future.  The Company faces competition from developers   
of travel software products currently marketed as "shrink-wrap" products.  To   
protect the Company's dominant market position in affordable travel computers,  
the Company invested $1,001,646, or approximately 11% of its 1996 revenues  in  
research and product development.  There can be no assurance, however, that the 
Company will be able to develop or acquire new products or increase market      
channels at a rate sufficient to keep the Company competitive.  The Company also
cannot guarantee that new products or product updates will ultimately achieve   
market acceptance.                                                              

RELATED PARTY - POIS, INC.                                                      

        In September of 1993, the Company purchased an 81% ownership interest in
POIS, Inc. with the goal of developing "personal onboard information systems"   
("POIS") for use in the Original Equipment Manufacturer (OEM) market and        
automobile aftermarket.  Such systems are to be installed in a vehicle          
utilizing the 12-volt electrical system in the vehicle.  Since inception, POIS  
has realized sales  of  $511,650 in 1996, and $299,196 in 1995.  POIS sales for 
custom hand-held units that incorporated the ROAD WHIZ database along with      
individual customer requirements and special information such as dealers names, 
phone numbers, and locations around the country.  POIS, Inc. has not yet        
realized any sales for on-board information systems.                            

    POIS, Inc.'s primary strategy is with the development of on-board navigation
and travel information products.  The Company contemplates that its POIS on-    
board products will  be primarily marketed as an automobile aftermarket         
accessory product sold to automobile dealers and auto supply stores.            

There is no recognized market leader at the present time.  POIS, Inc. will,   
however, face strong competition from substantially larger companies that are   
already in the market.  For that reason, the Company's product development      
strategy is to design its hardware products to provide maximum flexibility to   
accommodate new features in additional to  standard GPS functions.  The POIS    
design approach to in-car navigation enables a substantially lower cost product 
and is different from existing products which are very expensive.  POIS products
are targeted for the so-called "Road Warrior" segment of the automotive public  
whose livelihood depends on the frequent and efficient use of their vehicles.   
The typical POIS purchaser is believed to be a mobile professional who purchases
or leases an upscale automobile with factory installed accessory electronic data
and navigation systems.  It is anticipated that the first POIS units would be   
priced under $500.  As aleased option, POIS would add approximately $10 per     
month to the lease payments.  Existing on-board products are currently priced   
at $2,000 or more as original equipment options.                                

DATABASE RESEARCH AND UPDATE ORDERS                                             

   The Company believes that an accurate and updated proprietary database is one
of the most important factors for the future success and development of the     
Company.  The potential for additional net sales, as well as the need to        
preserve the Company's reputation for accuracy and reliability, requires that   
the Company continuously validate and update its database.  The Company uses    
various means to update its ROAD WHIZ database, including publicly available    
geographic and demographic data.  The majority of the ROAD WHIZ database is     
compiled by "Road Helpers."  Road Helpers are generally retirees and others     
that travel extensively.  Many of the Road Helpers are former customers of the  
Company.  Generally, the Road Helpers are compensated at a nominal amount by the
Company.                                                                        

   The Company maintains a full time staff of researchers who review and augment
the data gathered by the Road Helpers.  In addition to the Road Helpers, the    
research staff contacts travel services and Chambers of Commerce across the     
country to gather other information.                                            

   The Company's Research and Development Group includes five full-time software
engineers and one hardware design engineer and one project consultant. In 1996, 
the Company employed various subcontractors in order to augment its internal    
research and development resources.  Research and development expenses in 1996, 
1995, and 1994 were $1,001,646, $556,213 and  $290,996, respectively.           

PATENTS AND TRADEMARKS                                                          

        The Company's files patent applications, when applicable, to protect its
technology, inventions and improvements.  The Company owns two patents.  One    
patent covers its method of compressing data relating to travel information.    
This compression technology permits the Company's travel products to included   
more data on smaller and less expensive memory devices.                         

     The Company has a second patent on the methodology which enables its travel
devices to account for changes which occur when the traveler crosses a state    
border. The Company believes that in order to manufacture a similar product, a  
competitor would have to develop a substantially different methodology, at      
considerable time and expense.                                                  

       The Company's majority-owned subsidiary, POIS, Inc., has filed two patent
applications.  One application covers the software which converts a Personal    
Data Attendant (PDA) touch screen to display large characters, facilitating     
visual contact while driving.  The other application includes a base unit of    
electronics with additional memory and application slots which can communicate  
with the PDA via the infrared ("IR") transceiver in the PDA.  If either of these
patents were to be granted by the Office of Patents and Trademarks, the Company 
believes that it would afford them a significant competitive advantage for      
personal on-board information systems.  The Company cannot predict, however, as 
to whether either application will result in a patent or what the breadth of    
such a patent might be.                                                         

  In addition to its patents, the Company attempts to further restrict access to
its proprietary technologies and processes.   Key employees of the Company are  
covered by an employment contract with restrictive covenants.  These covenants  
require such employees, as a condition of their employment to hold all          
proprietary information confidential. They are prohibited from  disclosing any  
trade secrets to outside parties. The Company also restricts customers and      
visitors site access to confidential information.  There can be no assurance    
that the Company can be successful in its efforts to protect either its patents 
or its proprietary technologies and processes.                                  

EMPLOYEES                                                                       

     The Company currently has 34 full-time employees, including 6 officers. The
Company employs 8 people for shipping, order entry and customer service, 9      
people in product and database research, 5 people in administration, 3 people   
devoted to government contract work, 3 people in product development, 1 person  
in inventory management, and 4 people in sales and marketing and the President  
and Chief Executive Officer.  None of the Company's employees belong to a       
collective bargaining union.  The Company has never experienced a work stoppage 
and believes that its employee relations are good.                              

Item 2. PROPERTIES                                                              

    The Company's headquarters and principal administrative offices and research
and development  facilities are located in approximately 10,000 square feet of  
leased office space in an industrial building located at 9375 Dielman Industrial
Drive, St. Louis, Missouri.    The Company maintains no manufacturing operations
on site and employs outside contractors to perform all of its  manufacturing    
requirements.                                                                   

    POIS, Inc. leases approximately 1,092 square feet of office space in
Southfield, Michigan.                                                           

Aggregate rental expense for both locations totaled $117,139 for the current  
year.                                                                           

       The Company believes that its facilities are adequate for the Company's
present and foreseeable         requirements.                                   

Item 3. LEGAL PROCEEDINGS                                                       

There are no pending legal proceedings against the Company.     

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

Not applicable.                                                 

PART II                                                                         

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

(a) Market Information                                          

        The following table sets forth the prices for the Company's Common Stock
(NASDAQ: ULTR) as quoted on the NASDAQ SmallCap Market from  February 1, 1995   
through December 27, 1995 and in the NASDAQ National Market from December 28,   
1995 to December 31, 1996.                                                      

                             Bid                       Asked
Quarter Ending           High        Low        High        Low                 

March 31, 1995          $ 7.18          $ 5.90      $ 9.00      $       5.97    
June 30, 1995           $       6.75            $ 5.75          $    7.00 $ 6.06
September 30, 1995      $ 7.75          $       6.12            $    7.87 $ 6.37
December 31, 1995       $12.00          $       6.25            $12.38    $ 6.63

March 31, 1996          $11.88          $       8.87            $12.38    $ 9.37
June 30, 1996           $       9.88            $       6.88       $10.13 $ 7.13
September 30, 199            $ 9.63     $ 6.75          $ 9.88          $   7.00
December 31, 1996      $ 9.25     $ 6.62      $ 9.63     $ 6.75                 

(b) Holders                                                     
       At March 26, 1997, there were 163 stockholders of record of the Company's
Common Stock.  Based upon information from nominee holders, the Company believes
the number of beneficial owners of its Common Stock exceeds 1,100 owners.       

(c) Dividends                                                   
   The Company has never paid or declared any cash dividends on its Common Stock
and does not  contemplate doing so in the foreseeable future.  The Company      
intends to retain its earnings for the future operation and expansion of the    
business.  Any decision as to future payment of dividends will depend on the    
available earnings, the capital requirements of the Company, its general        
financial condition  and other  factors deemed pertinent by the Board of        
Directors.                                                                      

(d) Other                                                                     
During 1996, the Company issued 1,051,987 additional shares of common stock   
pursuant to a warrant redemption and exchange program.                          

Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND       
FINANCIAL CONDITION                                             

OVERVIEW                                                                        

    The Company's net sales are derived from two business segments: (1) consumer
products, marketed through retailers, catalog companies, and direct mail or     
other marketing agencies or groups as employed by the Company, and (2) laser    
system contract revenues, derived from research and development and production  
contracts awarded by government agencies.  During 1995, the Company received its
first production contract valued at $1.7 million.  This contract was a  system  
previously designed by the Company in 1994 to fulfill a research and development
contract.                                                                       

The following table summarizes the contributions of consumer products and     
development contracts, respectively, to total net sales of the Company for each 
of the last three years ended December 31, 1996.  The table should be read in   
conjunction with the audited financial statements for the periods indicated and 
the related notes incorporated herein.                                          

NET SALES   
FOR THE THREE YEARS ENDED DECEMBER 31   
(in Thousands)  
                1996        %         1995        %        1994        %

Consumer                                                                        
Products                $       8,283           91.1   $ 9,437 93.3 $ 6,064 94.8
Development                                                                     
Contracts                       810             8.9              676 6.7 334 5.2

Total                   $       9,093          100.0 $10,113 100.0 $ 6,398 100.0

Year Ended December 31, 1996, vs. Year Ended December 31, 1995.                 

 During 1996 sales of consumer products decreased by $1,154,803 or approximately
12.2% from $9,437,239 to $8,282,436 in 1996.  The decrease in sales was related 
primarily to (a) lower sales to a key customer (QVC)  and (b)  product          
development delays resulting in three new products planned for 1996 sales being 
carried into 1997.  During 1995, QVC accounted for $4,455,035 or 47% of consumer
product sales as compared to $617,443 or 7.5% of consumer product sales  during 
1996.  The $3,837,592 drop in QVC sales was attributed to the combined  result  
of decreased demand from QVC viewers and fewer appearances on QVC in 1996 versus
1995.  Management believes that QVC sales will not return to sales levels of    
over $4 million as seen in 1995 with its current product offerings.  In 1997    
there are three new products, ROAD WHIZ EXPRESS, TOWN & COUNTRY, and HOME &     
GARDEN planned for QVC appearances.  Additional retail customers were           
established during 1996, especially in direct mail through greater uses of oil  
company credit card mailings.  Exclusive of POIS sales, custom travel computer  
sales increased by approximately $484,000 to $502,000 in 1996 compared to       
$18,000 in 1995.  The Company realized $511,650 in revenues from its POIS, Inc. 
subsidiary in 1996 compared to $299,196 in 1995.                                

       The majority of the Company's consumer product sales are highly seasonal.
The fourth quarter of 1996 was the highest quarter in the history of the        
Company, posting $4,949,531 or 59.7% of the consumer product revenues.  For the 
comparable quarter ended December 31, 1995, the Company realized $4,143,530 in  
revenues, or 43.9% of consumer product revenues.  The Company has embarked on   
a strategy to realize a more even distribution of its revenues throughout the   
year.  Accordingly, it allocated a greater portion of its resources, including  
the hiring of a full time marketing executive, to locate and develop new        
markets, and specifically new vertical markets.  Many of these markets, such as 
private label and premium, are of a non-seasonal nature.                        

       Contract sales for 1996 totaled $810,484 compared to $675,465 for 1995.
Contract sales for 1996 were  derived from progress billing against a government
contract that was received during August, 1995. This contract was originally    
valued at $1.7 million and designed to provide time/space/position data during  
tracking of aircraft and ground troops. At December 31, 1996, there was $120,915
remaining on this contract.  During February, 1997 the customer exercised the   
override clause in the original contract by ordering two additional units valued
at $337,888.                                                                    

 Gross profit for the consumer product group totaled $4,786,221 or 57.8% for the
year ended December 31, 1996, compared to $4,777,333 or 50.6% of sales for the  
prior year.  The 7.2% improvement in gross profit is the primarily the result   
of cost savings in the form of lower cost units received from the foreign       
manufacturer and an improved product mix.                                       

     Gross profit for contract sales totaled $430,277 or 53.1% of sales versus a
gross profit of $358,893 or 53.1% of sales last year.                           

    Selling General and Administrative expenses (SG&A) for the year increased to
$4,023,026 from $2,480,576 for the prior year, representing an increase of      
62.2%  The increased expenses resulted from staff additions, increased          
consulting and professional fees, and increased sales and marketing activities. 
The Company has been more aggressive in promoting and advertising its products  
in 1996 compared to 1995.  SG&A will continue to increase in the future, but at 
a slower rate.  It also expects that such spending will diminish in the future  
as a percentage of total revenues.                                              

       Research and Development expenses (R&D) for the year totaled $1,001,646
compared to $556,213 for the prior year, representing an increase of $445,433   
or 80.1%.  The increase in R&D was the result of higher prototype development   
charges and design fees and expenses incurred in product development.  During   
the year the Company spent $509,956 in research and development for  POIS       
products.                                                                       

       Other income totaled $113,320 for 1996, as compared to $118,711 for the
year ended December 31, 1995.                                                   

    The Company's effective tax rate for the year was 31.8% as compared to 37.7%
for the year ended December 31, 1995.  The Company's lower tax rate attributable
to unused federal income tax research and development credits.                  

     As a result of the foregoing, the Company's net income declined to $208,137
or $0.08 per share, as compared to net income of $1,381,901 or $0.49 per share  
for the prior year.  There were 2,773,245 and 2,872,207 common and equivalent   
shares, respectively,  used in calculating earnings per share for the two years 
ended December 31, 1996 and 1995, representing a decrease of 3.3% in the shares 
used in the calculation.                                                        

Year Ended December 31, 1995, vs. Year Ended December 31, 1994                  

      The Company's net sales are derived from two primary sources: (1) consumer
products, marketed through retailers, catalogs, and direct mail or other        
marketing agencies employed by the Company, and (2) contract revenues, derived  
from research and development contracts in the laser communications systems     
field for government agencies.  During 1995, the Company received its first     
production contract a $1.7 million production order for one of its prototype    
designs.                                                                        

   During 1995 sales of consumer products rose by 56% from $6,064,331 in 1994 to
$9,437,239 in 1995.  The reason for the growth in consumer product sales in 1995
compared to 1994 was due to increased demand for ROAD WHIZ products, expanded   
channels of distribution and new products.  The Company realized $4,455,035 in  
net sales (47% of total consumer sales) to its key customer, the QVC Network in 
fiscal 1995, as compared to $1,989,182 (33% of total consumer sales) in 1994.   
Additional sales to other customers occurred as a result of the Company's       
success in developing niche versions of the ROAD WHIZ products to specific      
audiences, selling the ROAD WHIZ PLUS in stores geared to the retail market such
as Service Merchandise, Best Buy, and Office Max, while selling the ROAD WHIZ   
ULTRA in upscale retail stores and catalogs, such as The Sharper Image,         
Brookstone and Rand McNally.                                                    

    The Company introduced three new consumer products in 1995, including ROAD &
CITY, a highway and city guide exclusive to QVC, and METRO & ULTRAFINDER.       
ULTRAFINDER, which was introduced in September of 1995, is the most             
sophisticated unit offered by the Company, containing over 100,000 highway and  
city services and directions and driving time between cities.                   

     Contract sales from laser systems totaled $675,465 for 1995, as compared to
$333,883 during 1994.  These sales were primarily attributable to the Company's 
ongoing contract with the U.S. Army.  On December 31, 1994, the Company         
completed a contract for the EC III, a private contractor, to produce a         
prototype laser system to provide time/space/position data during tracking of   
aircraft and ground troops.  The Company received a production contract for its 
prototype design on August 9, 1995.  The production contract is valued at       
approximately $1.7 million over 12 months.                                      

     The Company's consumer product sales are highly seasonal. Historically, the
fourth quarter which ended December 31, 1995 has been the highest quarter for   
sales.  The Company realized record consumer product sales in the fourth quarter
of $4,143,530 compared to the fourth quarter of 1994, which totaled $2,593,807. 

      Gross profit for the consumer product group totaled $4,777,833 or 50.6% of
sales for the year ended December 31, 1995, compared to $3,412,939 or 56.3% of  
sales for the prior year.  The decrease in gross margin in the year is due to   
several factors, mainly product mix  and lower margins from Special Value Day   
sales made to QVC in the first and fourth quarter of fiscal 1995.  The Company  
recognizes that growth in certain channels, such as television shopping,        
typically yields lower margins.  Management believes that TV exposure is in-    
valuable in increasing consumer awareness of its products which helps to attract
national retail customers and other merchants.  The introduction of lower cost  
versions of the Company's products during the fourth quarter and a second low-  
cost manufacturer which was established during the second half of 1995 should   
help margins in the future.  The Company also intends to continue its           
development efforts with respect to continuing design improvements to expand    
features and functionality and to reduce manufacturing and material costs.      

    Selling, general and administrative expenses (SG & A) for the year increased
to $2,480,576, from $1,918,948 for the prior year, representing an increase of  
29.3%.  The increased expenses resulted from higher levels of revenue as well   
as the expansion of the channels of distribution for the Company's products.    
These events required a larger infrastructure, including additional marketing   
and administrative support services.  The Company expects that selling, general 
and administrative spending will continue to increase in 1996 as compared to    
such spending in 1995, although SG&A will decrease as a percentage of total     
revenue.                                                                        

     Research and development expenses for the year totaled $556,213 compared to
$290,996 for the prior year, an increase of $265,217, or 91.1%.  The increased  
expenditures is the result of the Company's strategic decision to boost its     
investment in product development, including $197,178 in such expenses for the  
Company's joint venture with POIS, Inc.                                         

   Net interest income totaled $128,616 for 1995, as compared to $16,428 for the
year ended December 31,1994.  The increase was the result of additional interest
income from marketable securities of approximately $1.5 million.  These         
securities were purchased primarily with funds derived from the initial public  
offering.                                                                       

    The Company's effective tax rate for the year was 38% as compared to 28% for
the year ended December 31, 1994.  The Company incurred a reduced tax liability 
in 1994 due to a net operating loss carry-forward available from prior years    
and unused research and development credits for federal income tax purposes.    

LIQUIDITY AND CAPITAL RESOURCES                                                 

        Since inception, the Company financed its business by supplementing cash
generated from operations with periodic borrowings from banks, equity raised    
from private and  public sources, and more recently from funds received from    
a warrant redemption and exchange program. On August 6, 1996, the Company called
for redemption and exchange all of its outstanding  purchase warrants.  The     
warrant redemption and exchange program was completed during September, 1996,   
with the Company receiving $6,172,493 in additional capital.                    

     The Company recorded a net loss of $485,049 during the first nine months of
1996. This net loss was a result of lower than expected sales and  delays in    
the development and market introduction of new products. The strong fourth      
quarter performance helped narrow the sales deficit and turned a nine month net 
loss into net income.  Sales and net income for 1996 were below the prior year  
by 10.1% and 84.9%, respectively.  The Company sustained a net outflow of       
$2,212,269 in cash from operations for the year.  Cash flows from investing     
activities provided $459,718 for the year, net of capital expenditures that     
totaled $340,282.  Net cash provided by financing activities totaled $5,724,493,
including $6,172,493 received from the sale of common stock.  Total cash and    
marketable securities increased from $815,065 at December 31, 1995 to           
$3,960,577 at December 31, 1996.                                                

   The Company relies on outside vendors for all of its manufacturing.
Consequently,  the Company's operations do not require substantial capital      
outlays other than for the periodic purchase of tooling, test equipment, and    
fixtures.  During 1996, the Company spent  $340,282 for capital expenditures.   
The Company will require capital expenditures for its POIS subsidiary and other 
new consumer products in 1997. Total capital expenditures are not expected to   
be significant based on the current business outlook.                           

       The Company's credit facility includes a $2.0 million unsecured revolving
bank line of credit with $500,000 for letters of credit facility.  The bank's   
line of credit is subject to renewal or cancellation at the end of every 12     
month period from the date it was initiated.  The Company pays interest monthly 
on its outstanding loan balance at the Bank's Corporate Base (Prime) Rate, which
was 8.25% at December 31, 1996.  On December 31, 1996, the Company's outstanding
loan balance  was zero.                                                         

 At December 31, 1996, the Company had a working capital surplus of $10,761,352,
as compared to a working capital surplus of $4,638,639 at December 31, 1995.    
Included in working capital was $3,960,577 in cash and cash equivalents.        
Inventories increased by $1,334,869 during the year as a result of a decision to
increase inventory levels to shorten customer delivery times and a small        
increase in manufacturing lead times.  Accounts receivable rose by $1,814,032   
to $4,608,285.  The increase in accounts receivable results from the record     
shipments posted for the foutrth quarter including Roy Thomas, Inc. receivbles  
which totaled $1,657,571.  The Company anticipates a substantial decrease in    
accounts receivable during the first quarter.  However, the business is         
undergoing a significant expansion into 1997, which may require additional      
investments from time to time in accounts receivable and inventory.             

       The Company's management is currently working toward a strategy that will
minimize the seasonality  in their traditional business.  Management believes   
that the continued placement of orders for private label products will help to  
minimize quarterly swings in financial performance and corresponding changes in 
cash and liquidity. There can be no assurance that such efforts will be         
successful, which may place periodic peak seasonal demands on the liquidity     
position of the Company.                                                        

The Company expects that its existing working capital, future net sales and   
bank borrowings will be sufficient to fund ongoing operations for the next      
twelve months.                                                                  

FORWARD-LOOKING INFORMATION                                                     

Except for the historical information, the information set forth herein     
includes forward looking statements that are dependent on certain risks and     
uncertainties.  Important factors that could cause the actual results to differ 
materially from the anticipated results include, but are not limited to, the    
positioning, release dates and consumer acceptance of new products; quarterly   
fluctuations and seasonality; the competitive environment and technology        
change and obsolescence factors in the Company's primary markets; and           
dependence on distribution channels and key personnel, all of which are         
difficult to predict and many of which are beyond the control of the Company.   

Item 7. CONSOLIDATED FINANCIAL STSTEMENTS                                       

The consolidated financial statements of Ultradata Systems, Incorporated,     
together with notes and the Independent Auditors' Report, are set forth         
immediately following Item 13 of this Form 10-KSB.                              

Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND         
FINANCIAL DISCLOSURE                                            

Not Applicable                                                  

PART III                                                                        

Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT                          

   The following table sets forth certain information regarding the officers and
directors of the Company as of March 21, 1997:                                  

NAME                    AGE                             POSITION                

Monte Ross               64        President & Chief Executive Officer, Director
Mark L. Peterson        39       Vice President-Engineering, Secretary, Director
Ernest Clarke           56        Vice President - Government Programs, Director
Leonard Missler         50              Vice President - Software Development   
Duane Crofts        60         Vice President - Advanced Products               
Daniel Muehlemann   33         Vice President - Sales                           
Steve H. Akre, Esq. 44         Director                                         
Bruce L. Miller         54              Director                                
John J. Clancy          59                      Director                        

Directors hold office until the annual meeting of the Company's stockholders  
and the election and qualification of their successors.  Officers hold office,  
subject to removal at any time by the Board, until the meeting of directors     
immediately following the annual meeting of stockholders and until their        
successors are appointed and qualified.                                         

BACKGROUND OF DIRECTORS AND EXECUTIVE OFFICERS                                  

      Monte Ross founded the Company in 1986 and has served as its President and
Chief executive Officer since inception.  For over 20 years prior to founding   
the Company, Mr. Ross was employed by McDonnell Douglas Corporation in a variety
of positions.  When he left McDonnell Douglas, Mr. Ross was  Director of Laser  
Systems, responsible for the group of approximately 400 employees which         
developed the first laser space communication system and first space laser      
radar.  Mr. Ross is a Fellow of the Institute of Electrical and Electronic      
Engineers and the past President of the International Laser Communication       
Society.                                                                        

Mr. Ross was awarded a Master of Science degree in Electrical Engineering by    
Northwestern University in 1962.  He is the father-in-law of Mark L. Peterson,  
the Company's Vice President-Engineering.                                       

Mark L. Peterson has been a Director of the Company since it was founded in     
1986.  He  has served as the Company's Vice President of Engineering since 1988.
He is responsible for the design of the Company's handheld products.  During the
four years prior to joining the Company, Mr. Peterson was employed by McDonnell 
Douglas Corporation as an electronics engineer for fiber optic products and     
satellite laser crosslink programs.  Mr. Peterson was awarded a Master of       
Science degree in Electrical Engineering by Washington University in 1980.  He  
is the son-in-law of Monte Ross.                                                

Ernest Clarke has been employed as the Company's Vice President - Government  
Programs since 1990.   His primary responsibility has been the development of   
custom test systems for organizations involved in government laser systems      
programs.  For over 20 years prior to joining Ultradata, Mr. Clarke was employed
by McDonnell Douglas Corporation in a variety of positions.  When he left       
McDonnell Douglas, Mr. Clarke was its Laser Product Development Manager with    
responsibility to supervise over 40 engineers.  Mr. Clarke was awarded a Master 
of Science degree in Electrical Engineering by Stanford University in 1966.     

Steven Akre has served as a member of the Board of Directors and as the       
corporate counsel for the Company since it was founded.  Mr. Akre is an         
attorney-at-law, whose specialization is in taxation and corporate mergers and  
acquisitions.                                                                   

Bruce L. Miller has been a Director of the Company since 1989.  Since 1992 he 
has been employed as Chairman of the Board of CoreSource, Inc., located in      
Chicago, Illinois, which is engaged in the business of organizing and managing  
health care programs for employees and providers.  From 1989 until 1992, Mr.    
Miller was the President of Crabtree Capital Corp., a firm engaged in financial 
services.  Mr. Miller is presently a Director of Harris Bank Glencoe, which     
is a subsidiary of Harris Bank Corp. of Chicago.                                

Leonard Missler has served as Vice President - Software Development for the   
Company since 1990.  His primary responsibility has been the development of     
software for the Company's handheld products.  For over 20 years prior to       
joining Ultradata, Mr. Missler was employed in software and electronics         
development and management by Microterm, Inc., Magpower, Magnavox, and Interface
Technology.  At Microterm, his most recent employer before joining the Company, 
Mr. Missler was the Director of Operations.  Mr. Missler was awarded a Master   
of Science degree in Electrical Engineering by Washington University in 1970.   

  Duane Crofts joined the Company as Vice President - Advanced Products in 1994.
Prior to joining the Company, Mr. Crofts served for over five years as a Program
Director with McDonnell Douglas Corporation.  In that role he was responsible   
for engineering management, production management, subcontract management, and  
program management.  Mr. Crofts most recently was manager of a multimillion     
dollar electro-optic development program.  Mr. Crofts was awarded a Bachelor of 
Science degree in Mechanical Engineering by the University of Missouri at Rolla.

Daniel B. Muehlemann joined the Company in October, 1996 as Vise President -  
Sales.  Prior to joining the Company Mr. Muehlemann served for five years as    
Senior Accounts Manager for Maxim Technologies, Inc.  In that position he       
developed and implemented key sales and marketing strategies to increase Maxim  
Technology's national client base.  Mr. Muehlemann holds a Bachelor's degree    
in Communications from Southwest Missouri State University.                     

John J. Clancy joined the Company in 1995 to serve as a member of the Board   
of Directors.  Mr. Clancy has served on the Board of Directors at Cimplex       
Corporation, Inc. in San Jose, and Engineering Software Research & Development, 
Inc. in St. Louis.  Mr. Clancy was employed by McDonnell Douglas in a variety   
of positions progressing from Programmer, Salesman to Divisional President.     
Mr. Clancy was awarded a Bachelor of Science, Chemical Engineering: University  
of Illinois,  Master of Science: The John Hopkins University, Master of Business
Administration: Washington University St. Louis, Master of Liberal Arts:        
Washington University, Candidate of Doctor of Philosophy in History and         
Business: Washington University St. Louis.                                      

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT                               

None of the directors, officers or beneficial owners of more than 10% of the  
Company's common stock failed to file on a timely basis reports required during 
1996 by Section 16 (a) of the Exchange Act, except as follows: each of the      
Company's five officers was late in filing a report on Form 4, each report      
containing one transaction.                                                     

Item 10. EXECUTIVE COMPENSATION                                                 

Executive Compensation                                                          

       The following table sets forth all compensation awarded to, earned by, or
paid by the Company to the following persons for services rendered in all       
capacities to the Company during each of the fiscal years ended December 31,    
1996, 1995, and 1994:  (1) the Registrant's Chief Executive Officer, and (2)    
each of the other executive officers whose total salary and bonus for the fiscal
year ended December 31, 1996 exceeded $100,000.                                 

Summary Compensation Table                                              

       Annual Compensation           Long-Term Comp.

Name and                                                                        
Position       Year           Salary          Bonus    Other(1)    Options      

Monte Ross,    1996         $114,404        $14,000    $  3,000        (2)      
President      1995             $105,000        $ 2,000         $ 15,000     (3)
                    1994                $100,000        $          0 $22,200 (4)

(1) Includes five annual payments beginning in 1991, of $12,800 to a Rabbi trust
for the benefit of Mr. Ross.  The trust was established in 1991 as deferred     
compensation for services rendered prior to 1991, for which he received $50,000 
less than his base salary.                                                      

Also included are premiums of $6,400 per year which the Company pays to     
maintain a $1 million term life insurance policy on Mr. Ross.  The Company had  
agreed with Mr. Ross that in the event of his death, the Company would place the
proceeds of the policy in an investment fund for ten years make annual payments 
to Mr. Ross's designee totalling the greater of $50,000 or the income earned    
from the fund.  On September 30, 1994, that arrangement was terminated and      
replaced by a $250,000 Company-paid life insurance policy purchased on October  
18, 1994, for the benefit of Mr. Ross's beneficiaries.  The Company is now the  
sole beneficiary of the $1 million life insurance policy.                       

Also included are contributions of $3,000 per year which the  Company makes to
its Pension Plan for the benefit of Mr. Ross.                                   

(2)   During 1996 the Board's Stock Option Committee awarded Mr. Ross options to
purchase an additional 15,000 shares of Common Stock at an exercise price of    
$7.39.  None of the options have been exercised.                                

(3)   During 1995 the Board's Stock Option Committee awarded Mr. Ross options to
purchase a total of 15,000 shares of Common Stock at an average price per share 
of $5.25.  None of the options have been exercised.                             

(4)    In March 1994 Mr. Ross was awarded as a bonus an option to purchase up to
4,159 shares of common stock at a price of $1.20 for a period expiring in March 
1999.  Mr. Ross exercised the option on   August 31, 1994.                      

STOCK OPTION AWARDS                                                             

The following table sets forth certain information regarding the stock options
or warrants acquired by the Company's Chief Executive Officer during the year   
ended December 31, 1996 and those options or warrants held by him on December   
31, 1996.                                                                       

     OPTION GRANTS IN LAST FISCAL YEAR

Individual Grants                               

                           Percent                          Potential Realizable
                       of Total                         Value At Assumed
                      Options                          Annual Rates of
     Number of    Granted                          Stock Price
      Securities   To                               Appreciation
         Underlying   Employees   Exercise             For Option Term
Option       In Fiscal   Price     Expiration       
Name          Granted (#)  Year        ($/SH)    Date       5%  ($)   10%  ($)  

Monte Ross      15,000        29%       $7.39    12/14/01   $30,630   $67,680   

  AGGREGATED FISCAL YEAR OPTION VALUES

                    Number of Securities Underlying     Value of Unexercised in-
                Unexercised Options at Fiscal       the-Money Options at
Name                Year-End (#)                        Fiscal Year-End  ($)    

Monte Ross              45,000                               $30,000            

EMPLOYMENT AGREEMENTS; ROYALTY AGREEMENT                                        

Messrs. Ross, Peterson and Clarke have individual employment agreements with  
the Company beginning September 1, 1994.  Except as noted herein, the terms of  
the employment agreements are substantially identical.  The agreements terminate
on October 31, 1997, unless  terminated by the Company for cause.  The          
agreements provide for base salaries, which are adjusted annually by the Board  
of Directors.  If the majority of the Board cannot agree as to a level of salary
adjustment, the salary will increase by 10% for Mr. Clark and Peterson,         
respectively,  and 5% for Mr. Ross.  The employment agreements restrict each    
officer from competing with the Company for one year after the termination of   
his employment unless that employee establishes that his employment by a        
competitor will not involve the use of any information which is considered      
confidential by the Company.                                                    

     Leonard Missler, Vice President - Software Development, has a Royalty
Agreement with the Company dated September 14, 1989.  The Agreement terminates  
on September 13, 2009.  Mr. Missler covenants in the Agreement that he will keep
confidential all of the Company's information regarding its technology and      
products.  In exchange, the Agreement provides that the Company will pay Mr.    
Missler a royalty equal to 1% of net sales of the Company's ROAD WHIZ products  
and 1/2% of net sales of other products incorporating the ROAD WHIZ database.   
During the three years ended December 31, 1996, royalty expense totalling       
$55,540, $66,477, and $56,235, respectively, was recognized.                    

STOCK OPTION PLAN                                                               

THE 1994 STOCK OPTION PLAN                                                    

    On September 28, 1994, the Board of Directors of the Company adopted and the
shareholders approved the Ultradata Systems, Inc. 1994 Stock Option Plan (the   
"Option Plan").  The Option Plan is designed to permit the Company to grant     
either incentive stock options under Section 422A of the Internal Revenue Code  
(the "Code") or nonqualified stock options.  Under the Option Plan, a Stock     
Option Committee (the "Option Committee") of the Board is authorized to grant   
options to purchase up to 175,000 shares of stock to key employees, officers,   
directors, and consultants of the Company.  The Option Committee administers    
the Option Plan and designates the optionees, the type of options to be granted 
(i.e., nonqualified or incentive stock options), the number of shares subject   
to the options, and the terms and conditions of each option.  The terms and     
conditions include the exercise price, date of grant, and date of exercise of   
each option.  An employee may, at the discretion of the Option Committee, be    
permitted to exercise an option and make payment by giving a personal note.     

     Incentive stock options may only be granted to employees of the Company and
not to directors or consultants who are not so employed.  The exercise price for
incentive stock options must be at least one hundred percent (100%) of the fair 
market value of the Common Stock as determined by the Option Committee on the   
date of grant.  All incentive stock options under the Option Plan must be       
granted within ten (10) years from the date of adoption of the Option Plan and  
each option must be exercised, if at all, within ten (10) years of the date of  
the grant.  In no event may an employee given incentive stock options whereby   
more than $100,000 of options become exercisable for the first time in a single 
calendar year.  All incentive stock options must be exercised by an optionee    
within thirty (30) days after termination of optionees employment, unless such  
termination is as a result of death, disability, or retirement.  In the event   
an optionees employment is terminated as a result of death or disability, such  
optionee or his designated beneficiary shall be entitled to exercise any and all
options for a period of six (6) months after such termination.  If an optionees 
employment is terminated as a result of retirement, the optionee shall be       
entitled to exercise his options for a period of three (3) months following     
such termination.                                                               

   Nonqualified stock options under the Option Plan are generally subject to the
same rules as discussed above.  Nonqualified stock options may, however, also   
be granted to directors and consultants, whether or not such individuals are    
employees of the Company.  The exercise price for nonqualified stock options    
may not be granted at less than eighty-five percent (85%) of the fair market    
value of the shares on the date of grant.                                       

THE 1996 STOCK OPTION PLAN                                                    

 The 1996 Plan is designed to permit the Company to grant either incentive stock
options under Section 422A of the Internal Revenue Code (the "Code") or         
nonqualified stock options.  Under the 1996 Plan, a Stock Option Committee (the 
Option Committee") of the Board is authorized to grant options to purchase up to
175,000 shares of stock to key employees, officers, directors and consultants of
the Company.  The Option Committee administers the 1996 plan and designates the 
optionees, the type of options to be granted (i.e., nonqualified or incentive   
stock options), the number of shares subject to the options, and the terms and  
conditions of each option.  The terms and conditions include the exercise price,
date of grant, and date of exercise of each option.  An employee may, at the    
discretion of the Option Committee, be permitted to exercise an option and make 
payment by giving a personal note.                                              

 Incentive stock options may only be granted to employees of the Company and not
to directors or consultants who are not employed.  The exercise price for       
incentive stock options must be at least one hundred percent (100%) of the fair 
market value of the Common Stock as determined by the Option Committee on the   
date of grant.  All incentive stock options under the 1996 Plan must be granted 
within ten (10) years from the date of adoption of the Option Plan and each must
be exercised, if at all, within ten (10) years of the date of grant.  In no     
event may any employee be given incentive stock options whereby more than       
$100,000 of options become exercisable for the first time in a single calendar  
year.  All incentive stock options must be exercised by an optionee within      
thirty (30) days after termination of optionee's employment, unless such term-  
ination is the result of death or disability, such optionee or his designated   
beneficiary shall be entitled to exercise any and all options for a period of   
six (6) months after such termination.  If an optionee's employment is term-    
inated as a result of retirement, the optionee shall be entitled to exercise his
options for a period of three (3) months following such termination.            

Nonqualified stock options under the 1996 Plan are generally subject to the   
same rules as discussed above.  Nonqualified stock options may, however, also   
be granted to directors and consultants, whether or not such individuals are    
employees of the Company.  The exercise price for nonqualified stock options may
not be granted at less than eighty-five percent (85%) of the fair market value  
of the shares on the date of grant.                                             

     During 1996 the Company issued incentive stock options for 51,500 shares of
Common Stock.  The average exercise price of the options is $7.39.  The         
following officers were recipients of options:                                  
             Number of           Average
    Officer                           Shares              Exercise Price

Monte Ross                       15,000                 7.39    
Mark Peterson                     7,500                 7.39    
Ernest Clarke                  7,500                 7.39       
Leonard Missler                  2,000                 7.39     
Duane Crofts                   2,000                 7.39       

REMUNERATION OF DIRECTORS                                                       

      Prior to April 21, 1994 the Directors of the Company who were not officers
received 208 shares of Common Stock per meeting as compensation for their       
services.  That policy was terminated on April 21, 1994.  Outside Directors now 
receive $250 per meeting and are reimbursed for out-of-pocket expenses incurred 
on the Company's behalf.                                                        

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT         

   The following table sets forth the beneficial ownership of outstanding shares
of Common Stock of the Company as of March 21, 1997 by any person who, to the   
knowledge of the Company, owns beneficially more than 5% of the outstanding     
Common Stock, by all directors of the Company, and by the directors and officers
of the Company as a group.  None of the persons identified below owns any       
securities of the Company other than the Common Stock listed below:             

Name and                         Amount and                                     
Address of                       Nature of                      Percentage      
Beneficial                          Beneficial          of Outstanding          
Owner (1)                           Ownership                   Shares (6)      

Monte Ross(2)            679,000                        19.95%                  
shares of       
record                        

Mark L. Peterson(3)      171,705                           5.05%                
shares of                 
record                    

Ernest Clarke(4)           152,632                         4.49%                
shares of   
record      

Steven Akre(5)           3,496                       0.10%                      
shares of                 
record                    

Bruce Miller                    2,872                        0.08%              
shares of   
record      

John Clancy                         3,692                            0.11%      
                     shares of
                  record

All officers and                 1,038,244                      30.51%          
directors as a              shares of                                           
group (7 persons)        record                                                 

(1)     The address of each of these shareholders is c/o Ultradata Systems,     
Incorporated, 9375 Dielman Industrial Drive, St. Louis, Missouri 63132          

(2)   Includes 630,000 shares owned by the Monte Ross and Harriet J. Ross Living
Trust.  Mr. Ross and his wife share investment control over the trust; they may 
revoke it or amend it at will; and they receive all income from the trust during
the life of either of them.                                                     

(3)     Includes 134,387 shares owned by the Mark L. Peterson and Ryia Peterson 
Living Trust and 8,318 owned by Ryia Peterson.  Mr. Peterson and his wife share 
investment control over the trust; they may revoke it or amend it at will; and  
they receive all income from the trust during the life of either of them.       

(4) Includes 130,852 shares owned jointly by Mr. Clarke with his wife.  Also    
includes 2,080 shares owned by children residing with Mr. Clarke.               

(5)     Includes 2,080 shares owned by the G. Akre Irrevocable Trust, over which
Mr. Akre's wife has investment control.                                         

(6)     In determining the percentage of outstanding shares, all presently      
exercisable options owned by the shareholder or the group are treated as having 
been exercised.                                                                 

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                         

 On May 8, 1987, the Monte Ross and Harriet Ross Living Trust (the "Ross Trust")
sold 93,582 shares of common stock to the Company for $100,000.  The Company    
paid for the shares by issuing to Monte Ross, the Company's President, a        
promissory note in the principal amount of $100,000.  The note bore interest at 
8% per annum and was payable in five equal installments of $20,000 plus accrued 
interest, commencing January 1, 1990.  Mr. Ross had the option on each          
installment date to convert the annual installment and accrued interest into    
31,588 shares.  He did not exercise that option on any of the five installment  
dates, nor did the Company make payments to him on the note.  On February 22,   
1994, the Board of Directors offered payment of the total principal and accrued 
interest by issuing 157,941 shares of Common Stock.  Mr. Ross accepted the      
offer.  The Company has allocated these shares on its consolidated financial    
statements among the five years in which the options were exercisable.          

  On September 17, 1994, the Board of Directors of the Company approved the sale
of 150,000 shares of Common Stock to the Company's three officers/directors as  
follows:                                                                        

Monte Ross                        100,000 shares                
Mark L. Peterson                        25,000 shares           
Ernest Clarke                   25,000 shares                   

  The purchase price for the shares was $1.875 per share, which was paid by each
officer/director in the form of a promissory note bearing interest at 6% per    
annum.  The principal amount of each note, plus accrued interest, is payable on 
July 1, 1997.                                                                   

    In August and September of 1994 nine employees of the Company, including all
five of its officers, exercised incentive stock options and paid the purchase   
price of $1.20 per share by delivering to the Company promissory notes.  The    
promissory notes bear interest at 6% per year and are payable upon the earlier  
of the date on which the employee's employment by the Company is terminated or  
the date on which the employee sells the shares.  The number of shares so       
purchased and the principal amount of the notes given were as follows:          

Employee                       Shares                    Note   
        Monte Ross                               55,734                 $ 66,500
 Mark Peterson                   13,725                  $  16,750
        Ernest Clarke                          13,725                   $ 16,750
Leonard Missler                17,676                $  21,250  
 Duane Crofts                     2,080                  $   2,500
        Other Employees                        6,862                    $  8,250

TOTAL                         109,802                  $ 132,000              

       The Company has an agreement with Leonard Missler, its Vice President -
Software Development, under which, through September 13, 2009, it pays Mr.      
Missler a 1% royalty on all net sales of ROAD WHIZ products and 1/2% on net     
sales of other products incorporating the ROAD WHIZ database.  During the years 
ended December 31, 1996, 1995, and 1994, the Company paid royalties to Mr.      
Missler of $55,540, $66,477, and $56,235, respectively.                         

      Steven H. Akre, Esquire, a member of the Company's Board of Directors, has
performed legal services as general counsel for the Company since its inception.
During 1996, 1995 and 1994, Mr. Akre was paid $20,219, $21,453 and $24,423,     
respectively, for legal services.                                               

Item 13. EXHIBITS, LIST, AND REPORTS                                            

(a) Consolidated Financial Statements                                           
List of Consolidated Financial Statements Under Item 7 of this  
Report:                                                         

Report of Independent Auditors.                                                 

Consolidated Balance Sheets as of December 31, 1996 and 1995.                   

Consolidated Statements of Operations for each of the years in the three-       
year period ended December 31, 1996.                                            

Consolidated Statements of Stockholders' Equity for each of the years in        
the three-year period ended December 31, 1996.                                  

Consolidated Statements of Cash Flows for each of the years in the three-       
year period ended December 31, 1996.                                            

Notes to Consolidated Financial Statements for the years ended  December 31,    
1996.                                                                           

FINANCIAL STATEMENT SCHEDULE                                                    

(b)      EXHIBITS INDEX AND REPORTS ON FORM 8-K                               
Regulation S-B                                              

Exhibit Number                                              

3-a.            Articles of Incorporation, and 1989 amendment. (1)              

3-a.(1)         Amendment to Articles of Incorporation dated March 4, 1991,     
March 22, 1994, and November 18, 1994. (1)      

3-a.(2)         Certification of Correction of Articles of Incorporation. (1)   

3-b.            By-laws. (1)                                                    

4-a.            Specimen of Common Stock Certificate. (1)                       

4-b.            Form of Warrant Agreement. (1)                                  

4-b.(1)         Specimen of Class A Warrant. (1)                                

10-a.           Lease dated May 23, 1990, as amended on November 31, 1993, for  
      premises at 9375 Dielman Industrial Drive, St. Louis, Missouri.(1)

10-a.(1)     Lease Addendum dated October 17, 1995, for premises at 9375 Dielman
Industrial Drive, St. Louis, Missouri.(1)                   

10-b.           1994 Stock Option Plan.(1)                                      

10-c.           Employment Agreement with Monte Ross.(1)                        

10-d.           Employment Agreement with Mark L. Peterson.(1)                  

10-e.           Employment Agreement with Ernest Clarke.(1)                     

10-f.        Royalty Agreement dated September 14, 1989, between the Company and
Leonard Missler.(1)                                         

10-f.(1)     Modification Agreement dated November 4, 1995, to Royalty Agreement
          dated September 14,   1989,   between the Company and Leonard Missler.
(1)                                                         

10-g.        Promissory Note and Security Agreement dated March 4, 1994, between
 the Company and The Boatman's National Bank of  St. Louis.(1)

10-h.          Letter of Agreement dated March 16, 1992, between the Company and
Trailer Life Enterprises.(1)                                

10-i.         Agreements dated March 18, 1994, April 25, 1994, and May 23, 1994,
among the Company, Howard Kenig, and POIS, Inc.(1)          

10-j.        Promissory Note and Security Agreement dated April 1, 1995, between
        the Company and the   Boatmen's National Bank of St. Louis Missouri.
(1)                                                         

10-k          Licensing Agreement between Kiniticom, Inc., and the Company dated
March 15, 1996 (3)                                          

10-l       Credit Agreement-Between Boatmen's National Bank of St. Louis and the
Company, dated May 1,         1996. (3)                     

10-m      Call for Redemption of Class A Warrants on Form 8-K, dated August 6,  
1996. (3)                                                   

10-n      Letter of Agreement dated September 17, 1996 between the Company and  
TravRoute Software. (2)                                     

11.             Computation of per share earnings.(2)                           

12.             Subsidiaries - POIS, Inc.                                       

(1) Previously filed as an exhibit to the Company's Registration    
  Statement on Form SB-2 (33-85218 C) and incorporated herein by
reference.                                                  

(2) Included herewith.                                              

(3) Previously filed.                                               

(c)             Reports on Form 8-K                                             
None during the fourth quarter.               

ULTRADATA SYSTEMS, INCORPORATED AND SUBSIDIARY                                  
Consolidated Balance Sheets                                                     
December 31, 1996 and 1995                                                      

               Assets                          1996                   1995

Current assets:                                                                 
Cash and cash equivalents                  $ 3,960,577             $   15,065   
Marketable securities                                -                800,000   
Trade accounts receivable, net of                                               
allowance for doubtful accounts of                                          
$16,644 and $15,000 at December 31,                                         
1996 and 1995, respectively                4,608,285              2,794,254 
Costs and estimated earnings on                                                 
long-term contracts                          438,670                612,317 
Inventories                                  3,289,453              1,954,584   
Deferred tax assets                             62,600                 49,515   
Prepaid expenses and other current assets      641,376                122,852   

Total current assets                        13,000,961              6,348,587   

Property and equipment, net                    642,245                403,023   
Deferred compensation trust                     91,689                 83,164   
Other assets                                    43,968                 17,538   

Total assets                               $13,778,863             $6,852,312   

Liabilities and Stockholders' Equity                      

Current liabilities:                                                            
Note payable to bank                                -                 448,000   
Accounts payable                            1,374,346                 673,216   
Accrued expenses and other liabilities        865,263                 588,732   

Total current liabilities                   2,239,609               1,709,948   

Deferred rent                                   8,708                   1,244   
Deferred compensation liability                91,689                  83,164   
Deferred tax liabilities                       23,330                  23,060   

Total liabilities                           2,363,336               1,817,416   

Commitments and contingencies                                                   
Minority interest                                   -                       -   

Stockholders' equity:                                                           
Common stock, $.01 par value;                                                   
10,000,000 shares authorized;                                                 
3,403,493 and 2,351,171 shares                                                
issued and outstanding at December 31,                                        
1996 and 1995, respectively                   34,035                  23,512  
Additional paid-in capital                  9,763,001               3,601,030   
Retained earnings                           2,028,991               1,820,854   
Notes receivable issued for purchase                                            
of common stock                             (410,500)               (410,500) 

Total stockholders' equity                 11,415,527               5,034,896   

Total liabilities and stockholders'                                             
equity                                   $13,778,863              $6,852,312  

See accompanying notes to consolidated financial statements.                    

ULTRADATA SYSTEMS, INCORPORATED AND SUBSIDIARY                                  
Consolidated Statements of Operations                                           
Years ended December 31, 1996, 1995, and 1994                                   

                              1996              1995              1994
Net sales:                                                                      
Consumer products          $ 8,282,436       $ 9,437,239       $ 6,064,331    
Contract                       810,484           675,465           333,883    

Total net sales               9,092,920        10,112,704         6,398,214     

Cost of sales:                                                                  
Consumer products            3,496,215         4,659,406         2,651,392    
Contract                       380,207           316,572           192,022    

Total cost of sales           3,876,422         4,975,978         2,843,414     

Gross profit                  5,216,498         5,136,726         3,554,800     

Selling, general, and                                                           
administrative expenses      4,023,027         2,480,576         1,918,948    
Research and development                                                        
expense                      1,001,646           556,213           290,996    

Operating profit                191,825         2,099,937         1,344,856     

Other income (expense):                                                         
Interest expense                (3,428)          (13,743)          (14,302)   
Interest income                120,693           142,359            30,730    
Royalty income                     503               114                 -    
Loss on marketable securities        -              (104)          (17,537)   
Other, net                      (4,448)           (9,915)          (19,676)   

Total other income                                                              
(expense), net                 113,320           118,711           (20,785)   

Income before income                                                            
tax expense                    305,145         2,218,648         1,324,071    

Income tax expense               97,008           836,746           367,158     

Net income                   $  208,137       $ 1,381,902        $  956,913     

Earnings per share:                                                             
Primary                     $     0.08       $      0.52        $     0.50    
Fully diluted               $     0.08       $      0.49        $     0.50    

See accompanying notes to consolidated financial statements.                    

ULTRADATA SYSTEMS, INCORPORATED AND SUBSIDIARY                                  
Consolidated Statements of Cash Flows                                           
Years ended December 31, 1996, 1995 and 1994                                    

                                    1996            1995            1994
Cash flows from operating                                                       
activities:                                                                   
Net income                       $   208,137      $ 1,381,902     $  956,913    
Adjustments to reconcile                                                        
net income to net cash                                                        
(used in) provided by                                                         
operating activities:                                                         
Depreciation and amortization        101,060           62,841         42,231    
Deferred income tax provision        (12,815)          14,545        (41,000)   
Discount accretion                         -          (53,064)             -    
Loss on marketable securities              -              104         17,537    
Increase (decrease) in cash due                                                 
to changes in operating assets                                                
and liabilities:                                                              
Trade accounts receivable, net    (1,814,031)      (1,741,044)      (509,152)   
Costs and estimated earnings on                                                 
long-term contracts                 173,647         (612,317)             -   
Inventories                       (1,334,869)        (514,411)      (793,631)   
Prepaid expenses and other                                                      
current assets                     (518,524)         (91,843)       (15,322)  
Other assets                         (26,430)          10,740        (20,524)   
Accounts payable                     701,130         (156,631)       489,840    
Accrued expenses and                                                            
other liabilities                   276,531           32,829        408,332   
Deferred rent                          7,464           (6,137)        (1,950)   

Net cash (used in) provided                                                     
by operating activities          (2,238,700)      (1,672,486)       533,274   

Cash flows from investing activities:                                           
Purchase of marketable securities          -       (2,498,189)      (100,000)   
Sale of marketable securities        800,000        1,852,917        212,143    
Capital expenditures                (340,282)        (274,809)      (114,889)   

Net cash provided by (used in)                                                  
investing activities                459,718         (920,081)        (2,746)  

Cash flows from financing activities:                                           
Proceeds from line of credit               -          765,500        350,000    
(Repayments of) proceeds from                                                   
bridge loan financing                     -         (135,000)       135,000   
Principal payments on line                                                      
of credit                          (448,000)        (317,500)      (350,000)  
Proceeds from sale of stock        6,172,494                -        109,875    
Repurchase of stock                        -          (12,500)             -    
Net proceeds from initial                                                       
public offering                           -        1,492,572              -   
Decrease (increase) in deferred                                                 
offering costs                            -          183,208       (183,208)  
Proceeds from repayment of                                                      
notes receivable to                                                           
purchase common stock                     -            2,750              -   
Increase in deferred                                                            
compensation trust                   (8,525)         (28,997)       (12,387)  
Increase in deferred                                                            
compensation liability                8,525           21,049          3,645   

Net cash provided by                                                            
financing activities              5,724,494        1,971,082         52,925   

Net increase (decrease) in                                                      
cash and cash equivalents         3,945,512         (621,485)       583,453   

Cash and cash equivalents at                                                    
beginning of year                    15,065          636,550         53,097   

Cash and cash equivalents at                                                    
end of year                     $ 3,960,577       $   15,065    $   636,550   

Supplemental disclosure of cash flow information:                               
Cash paid during the year                                                       
for interest                    $     5,440       $   15,761    $    10,263   
Cash paid during the year                                                       
for taxes                           341,389          635,998        199,000   

Supplemental disclosure of noncash financing activities:                        

Conversion of notes payable,                                                    
including accrued interest,                                                   
to stock                        $        -       $        -     $    21,600   
Shares issued for investment                                                    
in POIS, Inc.                            -                -          25,000   
Notes receivable issued for                                                     
purchase of common stock                 -                -        (413,250)  
Change in unrealized loss                                                       
on marketable securities                 -              104           6,725   
Director's compensation                   -                -           4,250    
Officer's stock bonus                     -                -          10,000    
Warrant expense                           -                -          22,500    

See accompanying notes to consolidated financial statements.                    

ULTRADATA SYSTEMS, INCORPORATED AND SUBSIDIARY                                  
Consolidated Statements of Stockholders' Equity                                 
Years ended December 31, 1996, 1995 and 1994                                    

                                       Notes
                                      receivable
          Unrealized                  issued
            Additional    loss on      Retained   for purchase       Total
      Common    paid-in     marketable    earnings    of common    stockholders'
    stock     capital     securities    (deficit)      stock          equity

Balance at December 31, 1993                                                    
$   16,075   1,583,670     (6,829)      (517,961)           -      1,074,955
Note payable conversion                                                         
for 31,589 shares                                                               
       316      21,284          -              -            -         21,600
Director's compensation                                                         
of 3,535 shares                                                                 
        35       4,215          -              -            -          4,250
Exercise of stock options                                                       
for 124,880 shares                                                              
     1,249     148,876          -              -     (132,000)        18,125
Sale of 33,274 shares of                                                        
common stock                                                                    
       333      39,667          -              -            -         40,000
Officer's stock bonus of                                                        
8,318 shares                                                                    
        83       9,917          -              -            -         10,000
Sale of 150,000 shares to                                                       
key executives                                                                  
     1,500     279,750          -              -     (281,250)             -
Sale of Class A warrants in connection                                          
with bridge loan financing                                                      
         -      37,500          -              -            -         37,500
Net income                                                                      
         -           -          -        956,913            -        956,913
Decrease in unrealized loss on                                                  
marketable securities                                                           
         -           -      6,725              -            -          6,725
Balance at December 31, 1994                                                    
    19,591   2,124,879       (104)       438,952     (413,250)     2,170,068

Repurchase of 10,400 shares                                                     
of common stock                                                                 
       (104)    (12,396)         -              -            -        (12,500)
Net proceeds of initial public offering                                         
of 402,500 shares                                                               
     4,025   1,488,547          -              -            -      1,492,572
Net income                                                                      
         -           -          -      1,381,902            -      1,381,902
Decrease in unrealized loss on                                                  
marketable securities                                                           
         -           -        104              -            -            104
Repayment of notes receivable                                                   
issued for purchase of common stock                                             
         -           -          -              -        2,750          2,750

Balance at December 31, 1995                                                    
    23,512   3,601,030          -      1,820,854     (410,500)     5,034,896

Exercise of warrants for                                                        
1,051,987 shares options                                                        
    10,520   6,160,099          -              -            -      6,170,619
Exercise of stock options                                                       
for 300 shares                                                                  
         3         872          -              -            -          1,875
Net income                                                                      
         -           -          -        208,137            -        208,137

Balance at December 31, 1996                                                    
 $  34,035   9,763,001          -      2,028,991     (410,500)    11,415,527

See accompanying notes to consolidated financial statements.                    

Independent Auditors' Report        

The Board of Directors and Stockholders                                         
Ultradata Systems, Incorporated:                                                

We have audited the accompanying consolidated balance sheets of Ultradata       
Systems, Incorporated and subsidiary (the Company) as of December 31, 1996 and  
1995, and the related consolidated statements of operations, stockholders'      
equity, and cash flows for each of the years in the three-year period ended     
December 31, 1996.  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 ou     
opinion.                                                                        

In our opinion, the consolidated financial statements referred to above present 
fairly, in all material respects, the financial position of Ultradata Systems,  
Incorporated and subsidiary as of December 31, 1996 and 1995, and the results   
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1996, in conformity with generally accepted accounting
principles.                                                                     

March 7, 1997                                                                   

(1) Summary of Significant Accounting Policies                                  

(a)     Description of Business                                 

       The principal business activity of Ultradata Systems, Incorporated (the
Company) is the design, manufacture, and sale of hand-held electronic           
information products.  In addition, the Company performs laser system           
development work and manufacturing under certain contracts with the United      
States government.                                                              

(b)     Basis of Presentation                                   

   The consolidated financial statements include the accounts of the Company and
its majority-owned subsidiary, POIS, Inc. (POIS).  As a result of operating     
losses incurred by POIS, the consolidated financial statements include 100% of  
the POIS accounts, as the minority interest does not currently have the ability 
to absorb these losses.  All significant intercompany balances and transactions 
have been eliminated in consolidation.                                          

(c)     Use of Estimates                                        

        Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of       
contingent assets and liabilities to prepare these financial statements in      
conformity with generally accepted accounting principles.  Actual results could 
differ from these estimates.                                                    

(d)     Cash and Cash Equivalents                               

        For financial statement presentation purposes, cash and cash equivalents
include deposits with initial maturities of less than three months, including   
money market accounts with investments in marketable securities.                

(e)     Marketable Securities                                   

  Marketable securities represent investments in Federal Home Loan Bank discount
notes at December 31, 1995.  The securities were available for sale and were    
carried at market value.  At December 31, 1995, the cost of the Federal Home    
Loan Bank discount notes approximated market.  There were no marketable         
securities outstanding at December 31, 1996.                                    

(f)     Accounting for Long-term Contracts                      

  Revenue under the Company's long-term contract is recognized on the percentage
of completion method based upon incurred costs compared to total estimated costs
under the contract.  Revisions to assumptions and estimates, primarily in       
contract value and estimated costs, used for recording sales and earnings are   
reflected in the accounting period in which the facts become known.             

      Costs and estimated earnings on long-term contracts represent unbilled
revenues, including accrued profits on long-term contracts accounted for under  
the percentage-of-completion method.                                            

(g)     Inventories                                             

       Inventories are valued at the lower of cost or market. Cost is determined
using the first-in, first-out (FIFO) method.                                    

(h)     Property and Equipment                                  

       Property and equipment are stated at cost.  Maintenance and repairs are
expensed as incurred.  Major improvements which materially extend useful lives  
are capitalized.  Depreciation is provided on the straight-line basis over the  
estimated useful lives of the assets, generally five years.  Leasehold          
improvements are amortized over the shorter of the term of the related lease or 
its useful life.                                                                

(i)     Operating Lease                                         

      Lease expense on the corporate facilities is recognized on a straight-line
basis over the primary term of the lease.  The lease provides for accelerating  
rent over the lease term.  Accordingly, deferred rent has been recorded in the  
Company's consolidated balance sheet.                                           

(j)     Deferred Compensation Trust                             

   Deferred compensation trust represents contributions made by the Company to a
Rabbi trust plus the related dividend and interest income earned on investments 
(see note 7).  The amounts are restricted from use for operation purposes and   
investment decisions are made by the trust beneficiary.  The deferred           
compensation trust is recorded at its fair value.                               

(k)     Revenue Recognition                                     

     Revenue is recognized upon shipment of consumer products.  Revenue is
recognized on the percentage-of-completion method for contracts.  Cost of sales 
includes the material and other related costs.                                  

(l)     Research and Development Expense                        

   Research and development costs related to product development and enhancement
are expensed currently.                                                         

(m)     Royalty Expense                                         

    Royalty expense is recognized on a pro rata basis as units are sold.

(n)     Income Taxes                                            

     Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement        
carrying amounts of existing assets and liabilities and their respective tax    
bases and operating loss and tax credit carryforwards.  Deferred tax assets and 
liabilities are measured using enacted tax rates expected to apply to taxable   
income in the years in which those temporary differences are expected to be     
recovered or settled.  The effect on deferred tax assets and liabilities of a   
change in tax rates is recognized in income in the period that includes the     
enactment date.                                                                 

(o)     Earnings Per Share                                      

 For the third and fourth quarters of 1996 and the year ended December 31, 1996,
earnings per common and common equivalent share are based on the weighted       
average number of common shares outstanding plus shares issuable upon the       
assumed exercise of dilutive common share options and warrants by using the     
treasury stock method.  For the first and second quarters of 1996 and in 1995,  
the modified treasury stock method was used in the calculation of earnings per  
common and common equivalent share.  For 1994, earnings per common and common   
equivalentshare are based on the average shares outstanding including the       
dilutive (or antidilutive) effect of all stock issued during 1994 for           
consideration below the initial public offering price.  For the years ended     
December 31, 1996, 1995, and 1994, earnings per common and common equivalent    
share for fully diluted and primary earnings are computed using 2,773,245,      
2,872,207, and 1,924,265 common and common share equivalents outstanding,       
respectively.                                                                   

(p)     Fair Value of Financial Instruments                     

    The Company discloses estimated fair values for its financial instruments. A
financial instrument is defined as cash or a contract that imposes on one       
entity a contractual obligation to deliver cash or another financial instrument 
to a second entity, and conveys to that second entity a contractual right to    
receive cash or another financial instrument from the first entity.             

(q)     Stock-Based Compensation                                

      Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for
Stock-Based Compensation, encourages, but does not require companies to record  
compensation costs for stock-based employee compensation at fair value.  The    
Company has chosen to continue to account for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees.                                       

(r)     Reclassifications                                       

  Certain 1995 and 1994 balances have been reclassified to conform with the 1996
presentation.                                                                   

(2)     Advertising                                                             

       The Company expenses the production costs of advertising the first time
advertising takes place, except for direct response advertising, which is       
capitalized and amortized over its expected period of future benefits.          

 At December 31, 1996 and 1995, $510,521 and $19,517 of advertising was reported
as assets.  Included in the 1996 assets is $437,333 which represents capitalized
costs of direct-response advertising.  Direct-response advertising consists     
primarily of credit-card inserts that include order coupons for the Company's   
products.  The capitalized costs of the advertising are amortized on a declining
basis over the five-month period following the mailings.  Advertising expense   
totaled $1,773,373, $942,402, and $778,750 for fiscal years 1996, 1995, and     
1994, respectively.                                                             

(3)     Inventories                                                             

   Inventories at December 31, 1996 and 1995 consist of the following:

                                                        1996                1995

        Raw materials                           $       1,783,741    $ 1,218,200
       Work in process                         130,876                 161,219
       Finished goods                          1,374,836               575,165

 Total                                  $       3,289,453        $     1,954,584

(4)     Property and Equipment                                                  

  Property and equipment at December 31, 1996 and 1995 consist of the following:

                                            1996                    1995

        Research and development equipment      $       127,144        $ 120,300
        Production equipment                            44,501            41,534
        Tooling and test equipment                      398,389          186,414
       Office furniture and equipment          212,344                 140,214
        Sales displays                                  59,548            31,932
        Tooling in process                              57,569            47,800
        Leasehold improvements                          84,941            75,960

                Subtotal                                984,436          644,154
Less accumulated depreciation                                   
        and amortization                                342,191          241,131

 Total                                          $       642,245        $ 403,023

    Depreciation and amortization expense for the years ended December 31, 1996,
1995, and 1994 totaled $101,060, $62,841, and $42,231, respectively.            

(5)     Leases                                                                  

  The Company revised and expanded its corporate facilities lease as of November
1, 1995.  The lease is an operating lease which expires October 31, 2001.  The  
lease is cancelable after October 1998.  The Company pays monthly rent plus 31% 
of all building expenses.  Rental expense totaled approximately $117,300,       
$49,300, and $37,700 for the years ended December 31, 1996, 1995, and 1994,     
respectively.                                                                   

     Future minimum lease payments and the related totals expensed for financial
reporting under the operating lease consist of the following:                   

                                                                            Rent
                                                Cash               expense to be
                                                payment               recognized

Year ending December 31:                                        
      1997                                  $ 92,056                $ 99,520
      1998                                    94,544                  99,520
        1999                                    106,984                   99,520
        2000                                    106,984                   99,520
        2001                                            89,153            82,933

                                       $       489,721               $ 481,013

(6) Accrued Expenses and Other Liabilities                                      

    Accrued expenses and other liabilities at December 31, 1996 and 1995 consist
of the following:                                                               

                                                                1996        1995

        Accrued sales commissions and royalties                $ 95,119 $ 95,049
        Accrued advertising                                     433,811        -
        Income taxes payable                                    173,637  405,203
        Other                                                   162,696   88,480

                                                        $      865,263 $ 588,732
(7) Deferred Compensation                                                       

    Deferred compensation represents the market value of investments made by the
Company in conjunction with a deferred compensation arrangement with the        
Company's President for services provided prior to 1991.  Five annual payments  
of $12,800 were paid through December 31, 1995 to a Rabbi trust for the benefit 
of the Company's President (see note 1).                                        

(8)     Line of Credit                                                          

    On March 4, 1994, the Company entered into a revolving line of credit with a
commercial bank which requires monthly interest payments at the prime rate      
(8.25% and 8.5% at December 31, 1996 and 1995, respectively) on outstanding     
borrowings.  The line of credit totaled $2,500,000 and $1,000,000 at December   
31, 1996 and 1995, respectively.  There were no outstanding borrowings at       
December 31, 1996.  The outstanding borrowings at December 31, 1995 were        
$448,000, and there were no outstanding borrowings at December 31, 1994.  The   
line of credit is unsecured and expires May 1, 1997.  Management anticipates    
renewing the line of credit prior to that time.                                 

(9)     Initial Public Offering and Subsequent Warrant Conversion               

 Effective on February 7, 1995, the Company completed an initial public offering
of securities.  The proceeds, net of underwriting fees and offering expenses,   
from the aggregate sale of 402,500 shares of common stock and 402,500 redeemable
Class A warrants were $1,492,572.  Each Class A warrant permitted the holder to 
purchase one share of common stock for between $6.00 and $6.18 from January 31, 
1996 through January 30, 1988.  An additional 600,000 Class A warrants were sold
to the public by certain selling security holders at that time.                 

       During 1996, the Class A warrants were converted into 1,051,987 shares of
common stock, including 1,022,887 shares which were converted in the fourth     
quarter as a result of the Company calling for the redemption of all of its     
outstanding warrants, including underwriters' warrants, at a redemption value   
of $0.05 per warrant.  Net proceeds totaled $6,172,494 after deducting expenses 
totaling $135,603.                                                              

(10)    Notes Receivable Issued for Purchase of Common Stock                    

        Notes receivable issued for purchase of common stock represent unsecured
advances made by the Company to various employees for stock options exercised.  
The notes bear interest at 6% per annum and are due, together with accrued      
interest, on demand on either the termination of employment or the sale of      
underlying stock, whichever comes first.                                        

(11)    Income Taxes                                                            

   Income tax expense (benefit) for the years ended December 31, 1996, 1995, and
1994 consists of:                                                               

                                                    1996
                                     Current         Deferred        Total

                Federal                         $     90,784 $ (11,466) $ 79,318
                State                                   19,039    (1,349) 17,690

                                                   $ 109,823 $ (12,815) $ 97,008

                                                    1995
                                              Current       Deferred       Total

                Federal                         $     755,277 $ 13,340 $ 768,617
                State                                   66,924      1,205 68,129

                                                    $ 822,201 $ 14,545 $ 836,746

                                    1994
                                     Current         Deferred        Total

                Federal                         $   373,658 $ (36,700) $ 336,958
                State                                   34,500    (4,300) 30,200

                                                  $ 408,158 $ (41,000) $ 367,158

        Income tax expense for the years ended December 31, 1996, 1995, and 1994
differed from the amounts computed by applying the statutory U.S. federal       
corporate income tax rate of 34% to income before income tax expense as a result
of the following:                                                               

                                                1996              1995      1994

        Expected income tax expense             $    103,749 $ 754,340 $ 450,184
Increase (decrease) in income                                   
taxes resulting from:                                                         
Change in the beginning-of-year                 
balance of the valuation                                                    
  allowance for deferred tax assets                     -             - (99,318)
State income taxes, net of                      
  federal benefit                               11,675          44,966    19,932
Nondeductible expenses for                      
  federal income tax purposes                   15,100          65,195         -
                Research and experimental credits            (33,147) (27,755) -
                Other, net                                       (369) - (3,640)

                                                    $ 97,008 $ 836,746 $ 367,158

 The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and liabilities at December 31, 1996 and 1995 are as 
follows:                                                                        

                                                                1996        1995

Deferred tax assets:                                            
                Capital loss carryforwards                       $ 6,664 $ 6,664
Accounts receivable, principally due to         
                        accrual for financial reporting purposes    16,450 5,561
Inventories, principally due to additional      
  costs inventoried for tax purposes
                        pursuant to the Tax Reform Act of 1986     31,316 29,944
                Other                                                8,170 7,346

        Total deferred tax assets                               62,600    49,515

Deferred tax liabilities:                                       
Property, plant and equipment, principally      
                      due to differences in depreciation basis (23,330) (21,107)
                Other                                                  - (1,953)

        Total deferred tax liabilities                         (23,330) (23,060)

        Net deferred tax assets                         $       39,270  $ 26,455

     Management of the Company believes the deferred tax assets will more likely
than not be realized and, therefore, no valuation allowance has been recorded   
at December 31, 1996 and 1995.                                                  

(12)    Employee Benefit Plans                                                  

(a)     Simplified Employee Pension Plan                        

     The Company maintains a simplified employee pension plan covering all full-
time employees.  Subject to approval by the Board of Directors, the Company     
matches employee contributions up to 3% of the compensation paid to             
participating employees, as defined by the plan.  Employees may contribute up to
12% of their compensation.  Expense attributable to Company contributions       
totaled $27,546, $17,848, and $13,513, during the years ended December 31, 1996,
1995, and 1994, respectively.                                                   

(b) Incentive Stock Option Plans                                        

   At December 31, 1996, the Company has two fixed stock option plans, which are
described below.  The Company applies APB Opinion No. 25 and related            
interpretations in accounting for its plans.  Accordingly, no compensation cost 
has been recognized for its fixed stock option plans.  Had compensation cost    
for the Company's two fixed stock option plans been determined consistent with  
SFAS No. 123, the Company's net income and earnings per share would have been   
reduced to the pro forma amounts indicated below:                               

                                                        1996                1995

        Net income              As reported             $ 208,137    $ 1,381,902
                                Pro forma                 $ 109,993  $ 1,179,853

        Primary earnings        As reported                 $0.08          $0.52
  per share             Pro forma                     $0.04                $0.45

Fully diluted                                                   
  earnings             As reported              $0.08                      $0.49
         per share            Pro forma               $0.04                $0.42

     Under the 1994 Incentive Stock Option Plan, the Company may grant incentive
stock options to its employees, officers, directors, and consultants of the     
Company to purchase up to 175,000 shares of common stock.  Under the 1996       
Incentive Stock Option Plan the Company may grant incentive stock options to its
employees, officers, directors, and consultants of the Company to purchase up   
to 175,000 shares of common stock.  Under both plans, the exercise price of each
option equals the market price of the Company's stock on the date of the grant, 
the options maximum term is five years.  Options are granted at various times   
and are exercisable immediately.                                                

     The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted average      
assumptions used for grants in 1996 and 1995, respectively;  dividend yield of  
zero for both years; expected volatility of 58.6% and 47.3%; risk-free interest 
rates of 6.42% and 6.00%; expected lives of five years for both plans.          

     A summary of the status of the Company's two fixed stock option plans as of
December 31, 1996 and 1995 and changes during the years then ended is presented 
below:                                                                          

                                                1996                        1995

                                                        Weighted        Weighted
                                                                average  average
                                                        exercise        exercise
        Fixed options                        Shares           price Shares price

Outstanding at beginning                                        
 of year                        162,492        $5.91                    -      -
        Granted                       51,500            $7.39      162,992 $5.91
        Exercised                             (300)           $6.25          - -
        Forfeited                                -              -    (500) $5.00
Outstanding at end                                              
 of year                             213,692            $6.27      162,492 $5.91

Options exercisable                                             
at year end                    213,692                                 162,492

Weighted average fair value of                                  
options granted to employees                                    
        during the year                $3.88                               $2.91

    The following table summarizes information about fixed stock options
outstanding at December 31, 1996:                                               

                                   Options outstanding and exercisable

                                Number          Weighted average
        Range of              outstanding at          remaining Weighted average
        exercise prices        December 31, 1996 contractual life exercise price

 $5.00 - $5.99                  69,000             3.2 years               $5.35
 $6.00 - $6.99              93,192              3.8 years                  $6.31
 $7.00 - $7.99                    51,500                   4.8 years       $7.39
 $5.00 - $7.99                  213,692                 3.9 years          $6.27

(13)    Commitments and Contingencies                                           

  On September 14, 1989, the Company entered a royalty agreement relating to its
Road Whiz product.  After 20,000 Road Whiz units are sold, the agreement        
provides for a 1% royalty payment on net sales of the Road Whiz product and 1/2%
on the Company's other products which incorporate the Road Whiz database.       
Royalty payments are made quarterly until September 13, 2009.  During the years 
ended December 31, 1996, 1995, and 1994, royalty expense totaled $55,540,       
$66,477, and $56,235, respectively.                                             

  On March 16, 1992, the Company entered into a royalty agreement for the use of
a database for its RV Navigator product.  The agreement provides for an initial 
payment of $10,000, representing the royalty payment for the first 5,000 RV     
Navigator units sold.  After 5,000 units are sold, the royalty fee will be $1   
per unit sold.  The agreement, which is cancelable with 12 months' written      
notice by either party, is valid until the earlier of March 15, 1997 or the     
sale of 20,000 RV Navigator units is achieved.  Management intends to renew the 
agreement during 1997.  The Company is amortizing the initial payment using     
the straight-line method over the 5,000 units sold, not to exceed five years.   
During the years ended December 31, 1996, 1995, and 1994, royalty expense       
totaling $2,508, $6,108, and $3,476, respectively, was recognized.              

   On October 17, 1994, the Company entered into a royalty agreement for the use
of a database for its Greensfinder product.  The agreement provides for an      
initial payment of $24,000, representing the royalty payment for the first 6,000
Greensfinder units sold.  After 6,000 units are sold, the royalty fee will be   
10% of the net sales price as defined in the agreement.  In addition, the       
Company will pay a royalty fee of 20% of the net sales price as defined in the  
agreement for Greensfinder upgrades.  The agreement is valid for five years. The
Company is amortizing the initial payment on a pro rata basis over 60,000 units 
sold, not to exceed five years.  During the years ended December 31, 1996, 1995 
and 1994, royalty expense totaling $9,317, $16,352 and $3,388, respectively, was
recognized.                                                                     

   On September 1, 1994, the Company entered into employment agreements with its
President and two of its key officers.  The agreements provide for salaries for 
1994 ranging from $68,920 to $100,000, which are to be adjusted annually by the 
Board of Directors.  Salaries for 1995 range from $74,110 to $105,000.  Salaries
for 1996 range from $78,040 to $114,404.  If the majority of the Board of       
Directors cannot agree as to the level of salary adjustment, the salary will    
increase by 10% (5% for the President).  The agreements restrict each officer   
from competing with the Company for one year after employment termination,      
unless the officer establishes that the employment by a competitor will not     
involve the use of any information which is confidential to the Company.  The   
agreements terminate on the earlier of October 31, 1997 or employment           
termination.                                                                    

(14)    Related-Party Transactions                                              

    On May 23, 1994, the POIS joint venture agreement was modified, resulting in
an 81% ownership for the Company.  In connection with the agreement, the Company
issued 20,796 shares of its common stock to Howard Kenig, its joint venture     
partner.  The agreement between the Company and Mr. Kenig provides that if net  
sales of POIS exceed $5 million in any single fiscal year after 1996, Mr. Kenig 
has a right to return the 20,796 of the Company's shares in exchange for an     
additional 13.4% interest in POIS, thereby increasing the minority interest to  
33% and reducing the Company's 67%.  If the net sales of POIS exceeds           
$10 million in any fiscal year after 1996, Mr. Kenig need only return 14,557    
of the Company's shares to obtain the 13.4% increase in POIS's ownership.  In   
addition to his salary, Mr. Kenig will receive a commission from POIS equal to  
5% of the first $1 million of POIS's net sales, 2% of its next $9 million of    
net sales, and 4% of its net earnings in excess of $250,000.  Commissions of    
$14,073 were paid to Mr. Kenig during 1996.  No commisssions were paid to Mr.   
Kenig during 1995 or 1994.                                                      

(15)    Significant Customer                                                    

    For the year ended December 31, 1996, the Company relied on one customer for
approximately 21% of consumer product sales.  Accounts receivable from that     
customer totaled $1,657,571 at December 31, 1996.                               

       For the year ended December 31, 1995, the Company relied on a different
customer for approximately 47% of consumer product sales.  Accounts receivable  
from that customer totaled $2,007,388 at December 31, 1995.                     

(16)    Disclosure About the Fair Value of Financial Instruments                

    For cash and cash equivalents, marketable securities, trade accounts
receivable, costs and estimated earnings on long-term contracts, prepaid        
expenses and other current assets, accounts payable, and accrued expenses and   
other liabilities, the carrying amount approximates fair value because of the   
short-term maturity of these instruments.                                       

   Notes payable and long-term obligations carry variable interest rates and the
respective carrying amounts approximate fair value.                             

(17)    Subsequent Event                                                        

   In February 1997, the Company received two additional delivery orders related
to a project with the U.S. government totaling $337,888.                        

(18)   Quarterly Financial Information (Unaudited)                            

                                First           Second          Third     Fourth
                                   quarter      quarter         quarter  quarter

(Dollars in thousands, except per share amount)                                 
1996:                                                           
                Net sales                   $   859     $  1,747 $ 1,451 $ 5,036
                      Gross profit                      470        946 784 3,016
                Net income (loss)               (294)           (73)   (118) 693

Earnings (loss) per                                             
share primary and                                               
        fully diluted                   (.09)           (.03)          (.04) .20

1995:                                                           
                Net sales           $   2,293     $     1,190    $ 1,924 $ 4,706
                      Gross profit                      1,166    623 1,016 2,332
                Net income (loss)               360             (20)     272 770

Earnings (loss) per                                             
share:                                                          
                        Primary                 .14             (.01)    .10 .27
                               Fully diluted                   .14 (.01) .10 .26

SIGNATURES                                                                      

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

Ultradata Systems, Incorporated                                                 
By:                                             

/s/ Monte Ross                                  
__________________________________________Monte Ross, President, Chief          
Executive Officer and Chairman                  
of the Board                                    

In accordance with the Exchange Act, this report has been signed below by the   
following persons, on behalf of the registrant and in the capacities and on     
the dates indicated.                                                            

March 24, 1997                                                                  

/s/ Monte Ross                                                  
________________________________________   Monte Ross, President, Chief         
                                                  Executive Officer and Chairman
                                            of the Board

March 24, 1997                                                                  

/s/ Mark L. Peterson                            
________________________________________   Mark L. Peterson, Vice President     
                                                   of Engineering, Secretary and
              Director

March 24, 1997                                                                  
/s/Ernest Clarke                                
________________________________________   Ernest Clarke, Vice President of     
                                   Government Programs, Director

March 24, 1997                                                                  
/s/ Steven H. Akre                              
________________________________________   Steven H. Akre, Director             

March 24, 1997                                                                  
/s/ Bruce L. Miller                             
________________________________________   Bruce L. Miller, Director            

March 24, 1997                                                                  
/s/ John J. Clancy                              
________________________________________   John J. Clancy, Director             

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