SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

  Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act
                                     of 1934

Date of Report (Date of Earliest Event Reported):  DECEMBER 31, 1998

                           ENCORE COMPUTER CORPORATION
                           ---------------------------
             (Exact name of registrant as specified in its charter)

                                    DELAWARE
                    (State of incorporation or organization)

        0-13576                                          04-2789167
(Commission File Number)                    (I.R.S. Employer Identification No.)

                    7786 WILES ROAD, CORAL SPRINGS, FL 33067
               (Address of Principal Executive Office) (Zip Code)

Registrant's telephone number, including area code:  (954) 757-0166

                                       1

<PAGE>

Item 2.  ACQUISITION OR DISPOSITION OF ASSETS

         As of December 31, 1998 (the "Closing"), pursuant to an Asset Purchase
Agreement dated as of June 1, 1998, as amended, (the "Agreement") by and among
the registrant, Encore Computer U.S., Inc., a Delaware corporation and a
wholly-owned subsidiary of the registrant ("Encore US"), Encore Computer
International, Inc., a Delaware corporation and a wholly-owned subsidiary of the
registrant ("Encore International") and, collectively with the registrant and
Encore US, ("Encore"), Gould Electronics Inc., an Ohio corporation ("Gould") and
Encore Acquisition Corp., a Delaware corporation and a subsidiary of Connection
Machines, Inc. one of the Gores Technology Group of companies ("Acquisition"
and, collectively with the registrant, and Encore US, Encore International and
Gould, the "Parties"), Encore sold substantially all of the assets and
liabilities associated with its real-time computer system and processing
business (the "Business") to Acquisition (the "Gores Transaction") for
$3,000,000 in cash (the "Purchase Price"). Pursuant to Amendment Number One to
Asset Purchase Agreement dated October 27, 1998, the Parties agreed to extend
the termination date of the Agreement to November 30, 1998. The Parties later
entered into Amendment Number Two to Asset Purchase Agreement dated as of
December 31, 1998 ("Amendment Two") and a reconciliation Agreement dated as of
December 31, 1998 (the "Reconciliation Agreement"). Amendment Two modified the
Gores Transaction so that Acquisition purchased the stock rather than the assets
of certain of the registrant's foreign subsidiaries and extended the termination
date of the Agreement to December 31, 1998. In addition, pursuant to the
Reconciliation Agreement, the Parties agreed to set-off $250,000 against the
Purchase Price in order to resolve a dispute under the Agreement relating to a
claim for breach of product warranty. The Parties also agreed to resolve certain
other open or disputed items in connection with the Gores Transaction shortly
after the Closing, including payment obligations under a Management Agreement
dated June 1, 1998 and a Revolving Loan Agreement dated June 1, 1998, certain
obligations relating to the expenses of the Business and other amounts payable
or receivable with respect to the Business, and the accuracy of certain
representations and warranties set forth in the Agreement. The purchase price
for the Gores Transaction was determined as a result of arms-length negotiations
between Encore and Gores.

         Gores Technology Group ("Gores") consists of ten interrelated but
autonomous computer-related companies focused on hardware and/or software
development, distribution and support services. Much of Gores' growth in the
1990's to its current size of approximately $200 million in annual revenues has
been the result of acquiring and then expanding companies and technologies.
Gores in headquartered in Los Angeles, California.

         The Agreement, the Amendments and the Reconciliation Agreement are
attached hereto as Exhibits and are incorporated herein by reference. The
foregoing description of the Gores Transaction is subject to, and qualified in
its entirety by reference to such Exhibits.

                                       2
<PAGE>

Item 7.  Financial Statements and Exhibits

(a)      Pro Forma Financial Information

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited Pro Forma Consolidated Financial Statements for the year
ended December 31, 1997 and the nine months ended September 27, 1998 give effect
to the terms of an agreement between the Company and Gould which was entered
into in connection with the sale of the Company's storage products business to
Sun Microsystems, Inc. for $185 million in 1997 (the "Sun Transaction"), payment
by the registrant to Gould for (I) the aggregate amount of outstanding principal
amount of indebtedness, and accrued interest thereon, owed by the registrant to
Gould and (II) the redemption of the registrant's outstanding preferred stock,
all of which was then owned by Gould and by its affiliate, EFI International
Inc.(collectively the "Gould Agreement"), and the Gores Transaction. The pro
forma adjustments are based on available information and upon certain
assumptions that the Company's management believes are reasonable under the
circumstances. The unaudited pro forma financial information should be read in
conjunction with the December 31, 1997 audited Consolidated Financial Statements
and the September 27, 1998 unaudited Consolidated Financial Statements of the
Company incorporated herein by reference.

The unaudited Pro Forma Consolidated Balance Sheet and Pro Forma Consolidated
Statements of Operations are necessarily based upon allocation, assumptions and
approximations and, therefore, do not reflect in precise numerical terms the
impact of the transaction on the historical financial statements. In addition,
such pro forma statements should not be used as a basis for forecasting the
future operation of the Company.

The pro forma adjustments made in the preparation of the unaudited Pro Forma
Consolidated Balance Sheet assume that the Gores Transaction had been
consummated on September 27, 1998. The pro forma adjustments related to the
unaudited Pro Forma Consolidated Statement of Operations assume that the Sun
Transaction, the Gould Agreement and the Gores Transaction had been consummated
as of January 1, 1997.

                                       3
<PAGE>

<TABLE>
<CAPTION>
                 UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
                            AS OF SEPTEMBER 27, 1998

                                              PRO FORMA ADJUSTMENTS
                                               INCREASE (DECREASE)
                                             -------------------------
                                                GORES          OTHER          PRO
                                 HISTORICAL  TRANSACTION      CHARGES        FORMA
                                 ----------  -----------    ----------     ---------
<S>                              <C>         <C>            <C>            <C>
ASSETS
Current assets
 Cash and cash equivalents       $   13,240  $    2,750 (A) $              $  15,990
 Restricted cash                      1,285                     (1,000)(B)       285
Accounts receivable,
   less allowance                     6,514      (6,514)(A)                        0
 Due from Gores                         466        (466)(A)                        0
 Inventories                            823        (823)(A)                        0
Prepaid expenses
 and other current assets               854        (668)(A)                      186
                                 ----------  ----------     ----------     ---------
  Total current assets               23,182      (5,721)        (1,000)       16,461

 Property and equipment, net            670        (670)(A)                        0
 Other assets                           470        (470)(A)                        0
                                 ----------  ----------     ----------     ---------
    Total assets                 $   24,322  $   (6,861)    $   (1,000)    $  16,461
                                 ==========  ==========     ==========     =========
LIABILITIES AND SHAREHOLDERS'
 EQUITY (CAPITAL DEFICIENCY)
Current liabilities 
Accounts payable and
 accrued liabilities             $   13,024  $   (6,307)(A) $    1,000 (B) $  12,817
                                                                 5,100 (C)          
 Due to Gould Electronics             9,692                                    9,692
                                 ----------  ----------     ----------     ---------
  Total current liabilities          22,716      (6,307)         6,100        22,509

Shareholders' Equity
 (capital deficiency):
 Preferred stock, $.01 par
  value; authorized 10,000,000
  shares:
  6% Cumulative Series B
    Convertible Preferred,
    issued 64,905 in 1998 with
    an aggregate liquidation
    preference of $6,490,500              1                                        1
  6% Cumulative Series D
    Convertible Preferred,
    issued 104,190 in 1998 with
    an aggregate liquidation
    preference of $10,419,000             1                                        1
  6% Cumulative Series E
    Convertible Preferred,
    issued 106,501 in 1998 with
    an aggregate liquidation
    preference of $10,650,100             1                                        1
  6% Cumulative Series F
    Convertible Preferred,
    issued 49,832 in 1998 with
    an aggregate liquidation
    preference of $4,983,200              -                                        -
  6% Cumulative Series G
    Convertible Preferred,
    issued 53,474 in 1998 with
    an aggregate liquidation
    preference of $5,347,400              1                                        1
  6% Cumulative Series H
    Convertible Preferred,
    issued 32,702 in 1998 with
    an aggregate liquidation
    preference of $3,270,200              -                                        -
  6% Cumulative Series I
    Convertible Preferred,
    issued 15,180 in 1998 with
    an aggregate liquidation
    preference of $1,518,000              -                                        -
 Common stock, $.01 par value;
   authorized 200,000,000
   shares; issued 67,450,907            674                                      674
 Additional paid-in capital         427,008                                  427,008
 Accumulated deficit               (426,080)       (554)(A)     (7,100)(C)  (433,734)
                                 ----------  ----------     ----------     ---------
  Total shareholders' equity
   (capital deficiency)               1,606        (222)        (6,100)       (4,716)
                                 ----------  ----------     ----------     ---------
  Total liabilities and
   shareholders' equity
   (capital deficiency)          $   24,322  $   (6,861)    $      -0-     $  17,461
                                 ==========  ==========     ==========     =========
</TABLE>

See accompanying notes to Unaudited Pro Forma Consolidated Balance Sheet

                                       4
<PAGE>

<TABLE>
<CAPTION>
            UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                          YEAR ENDED DECEMBER 31, 1997
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                               PRO FORMA ADJUSTMENTS
                                                INCREASE (DECREASE)
                                            ----------------------------
                                            SUN TRANSACTION/    GORES         PRO
                                 HISTORICAL GOULD AGREEMENT  TRANSACTION     FORMA
                                 ---------- ---------------- -----------    --------
<S>                              <C>         <C>             <C>            <C>
Net sales:
 Equipment                       $   14,163  $   (4,764)(a)  $  (9,399)(j)  $      0
 Service                             15,323                    (15,323)(j)         0
                                 ----------  ----------      ---------      --------
  Total                              29,486      (4,764)       (24,722)            0
                                 ----------  ----------      ---------      --------
Costs and expenses:
 Cost of equipment sales             21,411     (12,683)(a)     (8,728)(j)         0
 Cost of service sales               15,921      (5,965)(a)     (9,956)(j)         0
 Research and development            23,953     (16,288)(b)     (3,070)(k)     4,595
 Sales, general and 
   administrative                    27,044      (9,124)(b)    (12,881)(k)     5,039
 Termination charge                  17,685     (17,685)(c)                        0
                                 ----------  ----------      ---------      --------
  Total                             106,014     (61,745)       (34,635)        9,634
                                 ----------  ----------      ---------      --------
Operating loss                      (76,528)     56,981          9,913        (9,634)

 Interest expense, related
   parties                           (6,109)      6,109 (d)                        0
 Interest expense-
  mortgages                             (58)         58 (e)                        0
 Interest expense-
  other                                 (51)                                     (51)
 Interest income                        335                                      335
 Other expense, net                  (1,412)                     1,412 (m)         0
 Gain on Sun Transaction            119,890    (119,890)(f)                        0
                                 ----------  ----------      ---------      --------
Income (loss) before income
 taxes                               36,067     (56,742)        11,325        (9,350)

Provision for income taxes            1,903      (1,500)(g)       (403)(o)         0
                                 ----------  ----------      ---------      --------
Net income (loss)                $   34,164  $  (55,242)     $  11,728      $ (9,350)
                                 ==========  ==========      =========      ======== 
Net income (loss) per
 common share:
 Net income (loss)               $   34,164  $  (55,242)     $  11,728      $ (9,350)
 Preferred stock dividends          (29,580)     29,580 (h)                         
                                 ----------  ----------      ---------      --------
Net income (loss) attributable
 to common shareholders          $    4,584  $  (25,662)     $  11,728      $ (9,350)
                                 ==========  ==========      =========      ======== 
Basic and diluted income
  (loss) per common share        $     0.11                                 $  (0.14)
                                 ==========                                 ======== 
Weighted average shares
 of common stock                     40,568      26,879 (i)                   67,447
                                 ==========  ==========                     ======== 
</TABLE>

See accompanying notes to Unaudited Pro Forma Consolidated Statement of
Operations

                                       5
<PAGE>

<TABLE>
<CAPTION>
            UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                      NINE MONTHS ENDED SEPTEMBER 27, 1998
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                               PRO FORMA ADJUSTMENTS
                                                INCREASE (DECREASE)
                                            ----------------------------
                                            SUN TRANSACTION/    GORES         PRO
                                 HISTORICAL GOULD AGREEMENT  TRANSACTION     FORMA
                                 ---------- ---------------- -----------    --------
<S>                              <C>         <C>             <C>            <C>
Net sales:
 Equipment                       $    5,690  $               $  (5,690)(j)  $      0
 Service                              8,886                     (8,886)(j)         0
                                 ----------  ----------      ---------      --------
  Total                              14,576           0        (14,576)            0
                                 ----------  ----------      ---------      --------
Costs and expenses:
 Cost of equipment sales              3,697                     (3,697)(j)         0
 Cost of service sales                5,961                     (5,961)(j)         0
 Research and development               969                       (969)(k)         0
 Sales, general and
  administrative                      6,557                     (3,646)(k)     2,911
 Termination charge                   1,570                       (744)(l)       826
                                 ----------  ----------      ---------      --------
  Total                              18,754           0        (15,017)        3,737
                                 ----------  ----------      ---------      --------
Operating loss                       (4,178)          0            441        (3,737)

 Interest expense                      (154)                                    (154)
 Interest income                        675                                      675
 Other expense, net                      89                        (89)(m)         0
 Gain on Sun Transaction             25,308     (25,308)(n)                        0
                                 ----------  ----------      ---------      --------
Loss before income taxes             21,740     (25,308)           352        (3,216)

Provision for income taxes              488                       (488)(o)         0
                                 ----------  ----------      ---------      --------
Net loss                         $   21,252  $  (25,308)           840      $ (3,216)
                                 ==========  ==========      =========      ======== 
Net loss per common share:

Net loss attributable to common
 shareholders                    $   21,252  $  (25,308)     $     840      $ (3,216)
                                 ==========  ==========      =========      ======== 
Basic and diluted loss
  per common share               $     0.32  $    (0.38)     $    0.01      $  (0.05)
                                 ==========  ==========      =========      ======== 
Weighted average shares
 of common stock                     67,449      67,449         67,449        67,449
                                 ==========  ==========      =========      ======== 
</TABLE>

See accompanying notes to Unaudited Pro Forma Consolidated Statement of
Operations.

Note:  The results of operations for the nine months of Fiscal 1998 are not
necessarily indicative of the results to be expected for the full year.

                                       6
<PAGE>

         NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

                  NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET

(A)      Represents $2,750,000 cash payment from, Gores (purchase price net of
         set off for customer dispute) at the date of closing for substantially
         all of the net assets associated with the real-time business, excluding
         the following:

         Cash                                                        $   15,990
         Restricted cash                                                  1,285
         Prepaid rent for leases not assigned to Gores                      186
                                                                     ----------
                                                                         17,461
                                                                     ----------
         Less:
         Restructuring accrual                                            5,926
         Interest on Sun set off                                            129
         Payroll and vacation accrual for continuing employees              330
         Due to Gould                                                     9,692
                                                                     ----------
                                                                         16,077
                                                                     ----------
         Net excluded assets                                         $    1,384
                                                                     ==========

(B)      Represents $1,000,000 contingency reserve.

(C)      Represents an accrual for the total estimated wind-down costs to be
         incurred by the Company as follows:

         Salaries and benefits, including severance for those
          employees not offered employment by Gores                  $    1,258
         Employee retention bonuses                                         300
         Domestic services, professional fees and other
          miscellaneous costs                                             2,234
         International services, professional fees and other
          miscellaneous costs                                             1,308
                                                                     ----------
                                                                     $    5,100
                                                                     ==========

       NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(a)      Represents the reversal of storage product revenue and all cost of
         sales associated with the storage product including customer service
         support which was provided to the customer at no charge under warranty
         contracts.

(b)      Represents the estimated portion of operating expenses incurred for the
         development and sale of the storage product line, based on the number
         of employees transferred to Sun. Sun hired or contracted 147
         development employees, or 68% of those employed by the Company, as well
         as 65 storage product sales and marketing personnel, or 45% of those
         employed by the Company. Development spending and sales and marketing
         spending were reduced by these percentages. No amounts have been
         deducted for general and administrative expenses as none relate
         directly to the assets sold.

(c)      Represents termination charge in conjunction with the Sun Transaction
         and subsequent reorganization of the Company related to: (I) severance
         and benefit pay

                                       7
<PAGE>

         of $6,323,000 as a result of a 542 person reduction in workforce,
         including severance for employees contracted by Sun, as the Company
         agreed to pay the difference between the completion bonus offered to
         contractors by Sun at the end of their contract and the amount of
         severance they were entitled to had they been terminated by the
         Company, (ii) $4,722,000 of retention payments pursuant to agreements
         between the Company and each of approximately 49 employees, (iii)
         $1,000,000 of incentive bonuses to certain key employees, (iv)
         $3,390,000 relating to the termination of European facility and
         automobile leases, and $350,000 relating to a domestic equipment lease,
         (v) an estimated $500,000 for leasehold improvements to be made at the
         Company's Fort Lauderdale facility which is leased from Sun, (vi)
         $1,150,000 in estimated legal and other fees associated with the Sun
         Transaction, and (vii) $250,000 accrued for legal fees in connection
         with the shareholders suit.

(d)      Represents interest expense on the Gould Debt which was retired as part
         of the Gould Agreement.

(e)      Represents interest expense on mortgages which were retired as part of
         the Sun Transaction.

(f)      Represents $151,168,000 cash payment from Sun at the date of closing in
         consideration for substantially all of the assets associated with the
         Storage Products business.

(g)      Represents estimated Alternative Minimum Tax payable relating to the
         Sun Transaction.

(h)      Represents the reversal of dividends on preferred stock retired or
         converted to common stock as part of the Gould Agreement.

(i)      Represents the weighted average shares of common stock issued in the
         conversion of Series A and B preferred stock as part of the Gould
         Agreement.

(j)      Represents real-time revenue and all cost of sales associated with the
         real-time business.

(k)      Represents the estimated portion of operating expenses incurred for
         development and selling activities of the real-time product line, based
         partially on the estimated number of employees to be transferred to
         Gores as well as an estimate of spending and expenses relating to the
         remaining Encore employees.

(l)      Represents a termination charge of $743,000 related to severance and
         benefit pay as a result of a 13 person reduction in workforce
         associated with the Board of Directors decision not to pursue and NT
         opportunity.

(m)      Represents losses on disposals of fixed assets and foreign exchange
         losses incurred by Encore which would have been incurred by Gores if it
         owned all plant, property and equipment and all assets and liabilities
         of the foreign subsidiaries.

(n)      Represents $35,000,000 cash payment from Sun at July 1, 1998 net of
         $9,692,000 set off.

(o)      Represents taxes incurred by certain profitable foreign subsidiaries.

                                       8
<PAGE>

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

/bullet/ the Company's Proxy Statement for Special Meeting in Lieu of Annual
         Meeting of Stockholders to be held on September 11, 1998.

(b)      Exhibits

Exhibit 1         Asset Purchase Agreement dated as of June 1, 1998 among the
                  registrant, Encore Computer U.S., Inc., Encore Computer
                  International, Inc., Gould Electronics Inc. and Encore
                  Acquisition Corp. (incorporated herein by reference to the
                  Company's Proxy Statement dated August 10, 1998).

Exhibit 2         Amendment Number One to Asset Purchase Agreement dated October
                  27, 1998 among the registrant, Encore Computer U.S., Inc.,
                  Encore Computer International, Inc., Gould Electronics Inc.
                  and Encore Acquisition Corp.

Exhibit 3         Amendment Number Two to Asset Purchase Agreement dated as of
                  December 31, 1998 among the registrant, Encore Computer U.S.,
                  Inc., Encore Computer International, Inc., Gould Electronics
                  Inc. and Encore Acquisition Corp.

Exhibit 4         Reconciliation Agreement dated as of December 31, 1998 among
                  the registrant, Encore Computer U.S., Inc., Encore Computer
                  International, Inc., Gould Electronics Inc. and Encore
                  Acquisition Corp.

                                       9
<PAGE>

                                    SIGNATURE

                  Pursuant to the requirements of the Securities Exchange Act of
                  1934, the registrant has duly caused this report to be signed
                  on its behalf by the undersigned hereunto duly authorized.

Date:  January 19, 1999                     By:      MARY MACOMER
                                                      President
                                                      Chief Executive Officer

                                       10
<PAGE>

                                 EXHIBIT INDEX

EXHIBIT           DESCRIPTION
-------           -----------
Exhibit 2         Amendment Number One to Asset Purchase Agreement dated October
                  27, 1998 among the registrant, Encore Computer U.S., Inc.,
                  Encore Computer International, Inc., Gould Electronics Inc.
                  and Encore Acquisition Corp.

Exhibit 3         Amendment Number Two to Asset Purchase Agreement dated as of
                  December 31, 1998 among the registrant, Encore Computer U.S.,
                  Inc., Encore Computer International, Inc., Gould Electronics
                  Inc. and Encore Acquisition Corp.

Exhibit 4         Reconciliation Agreement dated as of December 31, 1998 among
                  the registrant, Encore Computer U.S., Inc., Encore Computer
                  International, Inc., Gould Electronics Inc. and Encore
                  Acquisition Corp.
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SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

  Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act
                                     of 1934

Date of Report (Date of Earliest Event Reported):  DECEMBER 31, 1998

                           ENCORE COMPUTER CORPORATION
                           ---------------------------
             (Exact name of registrant as specified in its charter)

                                    DELAWARE
                    (State of incorporation or organization)

        0-13576                                          04-2789167
(Commission File Number)                    (I.R.S. Employer Identification No.)

                    7786 WILES ROAD, CORAL SPRINGS, FL 33067
               (Address of Principal Executive Office) (Zip Code)

Registrant's telephone number, including area code:  (954) 757-0166

                                       1
Item 2.  ACQUISITION OR DISPOSITION OF ASSETS

         As of December 31, 1998 (the "Closing"), pursuant to an Asset Purchase
Agreement dated as of June 1, 1998, as amended, (the "Agreement") by and among
the registrant, Encore Computer U.S., Inc., a Delaware corporation and a
wholly-owned subsidiary of the registrant ("Encore US"), Encore Computer
International, Inc., a Delaware corporation and a wholly-owned subsidiary of the
registrant ("Encore International") and, collectively with the registrant and
Encore US, ("Encore"), Gould Electronics Inc., an Ohio corporation ("Gould") and
Encore Acquisition Corp., a Delaware corporation and a subsidiary of Connection
Machines, Inc. one of the Gores Technology Group of companies ("Acquisition"
and, collectively with the registrant, and Encore US, Encore International and
Gould, the "Parties"), Encore sold substantially all of the assets and
liabilities associated with its real-time computer system and processing
business (the "Business") to Acquisition (the "Gores Transaction") for
$3,000,000 in cash (the "Purchase Price"). Pursuant to Amendment Number One to
Asset Purchase Agreement dated October 27, 1998, the Parties agreed to extend
the termination date of the Agreement to November 30, 1998. The Parties later
entered into Amendment Number Two to Asset Purchase Agreement dated as of
December 31, 1998 ("Amendment Two") and a reconciliation Agreement dated as of
December 31, 1998 (the "Reconciliation Agreement"). Amendment Two modified the
Gores Transaction so that Acquisition purchased the stock rather than the assets
of certain of the registrant's foreign subsidiaries and extended the termination
date of the Agreement to December 31, 1998. In addition, pursuant to the
Reconciliation Agreement, the Parties agreed to set-off $250,000 against the
Purchase Price in order to resolve a dispute under the Agreement relating to a
claim for breach of product warranty. The Parties also agreed to resolve certain
other open or disputed items in connection with the Gores Transaction shortly
after the Closing, including payment obligations under a Management Agreement
dated June 1, 1998 and a Revolving Loan Agreement dated June 1, 1998, certain
obligations relating to the expenses of the Business and other amounts payable
or receivable with respect to the Business, and the accuracy of certain
representations and warranties set forth in the Agreement. The purchase price
for the Gores Transaction was determined as a result of arms-length negotiations
between Encore and Gores.

         Gores Technology Group ("Gores") consists of ten interrelated but
autonomous computer-related companies focused on hardware and/or software
development, distribution and support services. Much of Gores' growth in the
1990's to its current size of approximately $200 million in annual revenues has
been the result of acquiring and then expanding companies and technologies.
Gores in headquartered in Los Angeles, California.

         The Agreement, the Amendments and the Reconciliation Agreement are
attached hereto as Exhibits and are incorporated herein by reference. The
foregoing description of the Gores Transaction is subject to, and qualified in
its entirety by reference to such Exhibits.

                                       2
Item 7.  Financial Statements and Exhibits

(a)      Pro Forma Financial Information

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited Pro Forma Consolidated Financial Statements for the year
ended December 31, 1997 and the nine months ended September 27, 1998 give effect
to the terms of an agreement between the Company and Gould which was entered
into in connection with the sale of the Company's storage products business to
Sun Microsystems, Inc. for $185 million in 1997 (the "Sun Transaction"), payment
by the registrant to Gould for (I) the aggregate amount of outstanding principal
amount of indebtedness, and accrued interest thereon, owed by the registrant to
Gould and (II) the redemption of the registrant's outstanding preferred stock,
all of which was then owned by Gould and by its affiliate, EFI International
Inc.(collectively the "Gould Agreement"), and the Gores Transaction. The pro
forma adjustments are based on available information and upon certain
assumptions that the Company's management believes are reasonable under the
circumstances. The unaudited pro forma financial information should be read in
conjunction with the December 31, 1997 audited Consolidated Financial Statements
and the September 27, 1998 unaudited Consolidated Financial Statements of the
Company incorporated herein by reference.

The unaudited Pro Forma Consolidated Balance Sheet and Pro Forma Consolidated
Statements of Operations are necessarily based upon allocation, assumptions and
approximations and, therefore, do not reflect in precise numerical terms the
impact of the transaction on the historical financial statements. In addition,
such pro forma statements should not be used as a basis for forecasting the
future operation of the Company.

The pro forma adjustments made in the preparation of the unaudited Pro Forma
Consolidated Balance Sheet assume that the Gores Transaction had been
consummated on September 27, 1998. The pro forma adjustments related to the
unaudited Pro Forma Consolidated Statement of Operations assume that the Sun
Transaction, the Gould Agreement and the Gores Transaction had been consummated
as of January 1, 1997.

                                       3
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
                            AS OF SEPTEMBER 27, 1998

                                              PRO FORMA ADJUSTMENTS
                                               INCREASE (DECREASE)
                                             -------------------------
                                                GORES          OTHER          PRO
                                 HISTORICAL  TRANSACTION      CHARGES        FORMA
                                 ----------  -----------    ----------     ---------
ASSETS
Current assets
 Cash and cash equivalents       $   13,240  $    2,750 (A) $              $  15,990
 Restricted cash                      1,285                     (1,000)(B)       285
Accounts receivable,
   less allowance                     6,514      (6,514)(A)                        0
 Due from Gores                         466        (466)(A)                        0
 Inventories                            823        (823)(A)                        0
Prepaid expenses
 and other current assets               854        (668)(A)                      186
                                 ----------  ----------     ----------     ---------
  Total current assets               23,182      (5,721)        (1,000)       16,461

 Property and equipment, net            670        (670)(A)                        0
 Other assets                           470        (470)(A)                        0
                                 ----------  ----------     ----------     ---------
    Total assets                 $   24,322  $   (6,861)    $   (1,000)    $  16,461
                                 ==========  ==========     ==========     =========
LIABILITIES AND SHAREHOLDERS'
 EQUITY (CAPITAL DEFICIENCY)
Current liabilities 
Accounts payable and
 accrued liabilities             $   13,024  $   (6,307)(A) $    1,000 (B) $  12,817
                                                                 5,100 (C)          
 Due to Gould Electronics             9,692                                    9,692
                                 ----------  ----------     ----------     ---------
  Total current liabilities          22,716      (6,307)         6,100        22,509

Shareholders' Equity
 (capital deficiency):
 Preferred stock, $.01 par
  value; authorized 10,000,000
  shares:
  6% Cumulative Series B
    Convertible Preferred,
    issued 64,905 in 1998 with
    an aggregate liquidation
    preference of $6,490,500              1                                        1
  6% Cumulative Series D
    Convertible Preferred,
    issued 104,190 in 1998 with
    an aggregate liquidation
    preference of $10,419,000             1                                        1
  6% Cumulative Series E
    Convertible Preferred,
    issued 106,501 in 1998 with
    an aggregate liquidation
    preference of $10,650,100             1                                        1
  6% Cumulative Series F
    Convertible Preferred,
    issued 49,832 in 1998 with
    an aggregate liquidation
    preference of $4,983,200              -                                        -
  6% Cumulative Series G
    Convertible Preferred,
    issued 53,474 in 1998 with
    an aggregate liquidation
    preference of $5,347,400              1                                        1
  6% Cumulative Series H
    Convertible Preferred,
    issued 32,702 in 1998 with
    an aggregate liquidation
    preference of $3,270,200              -                                        -
  6% Cumulative Series I
    Convertible Preferred,
    issued 15,180 in 1998 with
    an aggregate liquidation
    preference of $1,518,000              -                                        -
 Common stock, $.01 par value;
   authorized 200,000,000
   shares; issued 67,450,907            674                                      674
 Additional paid-in capital         427,008                                  427,008
 Accumulated deficit               (426,080)       (554)(A)     (7,100)(C)  (433,734)
                                 ----------  ----------     ----------     ---------
  Total shareholders' equity
   (capital deficiency)               1,606        (222)        (6,100)       (4,716)
                                 ----------  ----------     ----------     ---------
  Total liabilities and
   shareholders' equity
   (capital deficiency)          $   24,322  $   (6,861)    $      -0-     $  17,461
                                 ==========  ==========     ==========     =========
See accompanying notes to Unaudited Pro Forma Consolidated Balance Sheet

                                       4
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                          YEAR ENDED DECEMBER 31, 1997
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                               PRO FORMA ADJUSTMENTS
                                                INCREASE (DECREASE)
                                            ----------------------------
                                            SUN TRANSACTION/    GORES         PRO
                                 HISTORICAL GOULD AGREEMENT  TRANSACTION     FORMA
                                 ---------- ---------------- -----------    --------
Net sales:
 Equipment                       $   14,163  $   (4,764)(a)  $  (9,399)(j)  $      0
 Service                             15,323                    (15,323)(j)         0
                                 ----------  ----------      ---------      --------
  Total                              29,486      (4,764)       (24,722)            0
                                 ----------  ----------      ---------      --------
Costs and expenses:
 Cost of equipment sales             21,411     (12,683)(a)     (8,728)(j)         0
 Cost of service sales               15,921      (5,965)(a)     (9,956)(j)         0
 Research and development            23,953     (16,288)(b)     (3,070)(k)     4,595
 Sales, general and 
   administrative                    27,044      (9,124)(b)    (12,881)(k)     5,039
 Termination charge                  17,685     (17,685)(c)                        0
                                 ----------  ----------      ---------      --------
  Total                             106,014     (61,745)       (34,635)        9,634
                                 ----------  ----------      ---------      --------
Operating loss                      (76,528)     56,981          9,913        (9,634)

 Interest expense, related
   parties                           (6,109)      6,109 (d)                        0
 Interest expense-
  mortgages                             (58)         58 (e)                        0
 Interest expense-
  other                                 (51)                                     (51)
 Interest income                        335                                      335
 Other expense, net                  (1,412)                     1,412 (m)         0
 Gain on Sun Transaction            119,890    (119,890)(f)                        0
                                 ----------  ----------      ---------      --------
Income (loss) before income
 taxes                               36,067     (56,742)        11,325        (9,350)

Provision for income taxes            1,903      (1,500)(g)       (403)(o)         0
                                 ----------  ----------      ---------      --------
Net income (loss)                $   34,164  $  (55,242)     $  11,728      $ (9,350)
                                 ==========  ==========      =========      ======== 
Net income (loss) per
 common share:
 Net income (loss)               $   34,164  $  (55,242)     $  11,728      $ (9,350)
 Preferred stock dividends          (29,580)     29,580 (h)                         
                                 ----------  ----------      ---------      --------
Net income (loss) attributable
 to common shareholders          $    4,584  $  (25,662)     $  11,728      $ (9,350)
                                 ==========  ==========      =========      ======== 
Basic and diluted income
  (loss) per common share        $     0.11                                 $  (0.14)
                                 ==========                                 ======== 
Weighted average shares
 of common stock                     40,568      26,879 (i)                   67,447
                                 ==========  ==========                     ========
See accompanying notes to Unaudited Pro Forma Consolidated Statement of
Operations

                                       5
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                      NINE MONTHS ENDED SEPTEMBER 27, 1998
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                               PRO FORMA ADJUSTMENTS
                                                INCREASE (DECREASE)
                                            ----------------------------
                                            SUN TRANSACTION/    GORES         PRO
                                 HISTORICAL GOULD AGREEMENT  TRANSACTION     FORMA
                                 ---------- ---------------- -----------    --------
Net sales:
 Equipment                       $    5,690  $               $  (5,690)(j)  $      0
 Service                              8,886                     (8,886)(j)         0
                                 ----------  ----------      ---------      --------
  Total                              14,576           0        (14,576)            0
                                 ----------  ----------      ---------      --------
Costs and expenses:
 Cost of equipment sales              3,697                     (3,697)(j)         0
 Cost of service sales                5,961                     (5,961)(j)         0
 Research and development               969                       (969)(k)         0
 Sales, general and
  administrative                      6,557                     (3,646)(k)     2,911
 Termination charge                   1,570                       (744)(l)       826
                                 ----------  ----------      ---------      --------
  Total                              18,754           0        (15,017)        3,737
                                 ----------  ----------      ---------      --------
Operating loss                       (4,178)          0            441        (3,737)

 Interest expense                      (154)                                    (154)
 Interest income                        675                                      675
 Other expense, net                      89                        (89)(m)         0
 Gain on Sun Transaction             25,308     (25,308)(n)                        0
                                 ----------  ----------      ---------      --------
Loss before income taxes             21,740     (25,308)           352        (3,216)

Provision for income taxes              488                       (488)(o)         0
                                 ----------  ----------      ---------      --------
Net loss                         $   21,252  $  (25,308)           840      $ (3,216)
                                 ==========  ==========      =========      ======== 
Net loss per common share:

Net loss attributable to common
 shareholders                    $   21,252  $  (25,308)     $     840      $ (3,216)
                                 ==========  ==========      =========      ======== 
Basic and diluted loss
  per common share               $     0.32  $    (0.38)     $    0.01      $  (0.05)
                                 ==========  ==========      =========      ======== 
Weighted average shares
 of common stock                     67,449      67,449         67,449        67,449
                                 ==========  ==========      =========      ========
See accompanying notes to Unaudited Pro Forma Consolidated Statement of
Operations.

Note:  The results of operations for the nine months of Fiscal 1998 are not
necessarily indicative of the results to be expected for the full year.

                                       6
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

                  NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET

(A)      Represents $2,750,000 cash payment from, Gores (purchase price net of
         set off for customer dispute) at the date of closing for substantially
         all of the net assets associated with the real-time business, excluding
         the following:

         Cash                                                        $   15,990
         Restricted cash                                                  1,285
         Prepaid rent for leases not assigned to Gores                      186
                                                                     ----------
                                                                         17,461
                                                                     ----------
         Less:
         Restructuring accrual                                            5,926
         Interest on Sun set off                                            129
         Payroll and vacation accrual for continuing employees              330
         Due to Gould                                                     9,692
                                                                     ----------
                                                                         16,077
                                                                     ----------
         Net excluded assets                                         $    1,384
                                                                     ==========

(B)      Represents $1,000,000 contingency reserve.

(C)      Represents an accrual for the total estimated wind-down costs to be
         incurred by the Company as follows:

         Salaries and benefits, including severance for those
          employees not offered employment by Gores                  $    1,258
         Employee retention bonuses                                         300
         Domestic services, professional fees and other
          miscellaneous costs                                             2,234
         International services, professional fees and other
          miscellaneous costs                                             1,308
                                                                     ----------
                                                                     $    5,100
                                                                     ==========

       NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(a)      Represents the reversal of storage product revenue and all cost of
         sales associated with the storage product including customer service
         support which was provided to the customer at no charge under warranty
         contracts.

(b)      Represents the estimated portion of operating expenses incurred for the
         development and sale of the storage product line, based on the number
         of employees transferred to Sun. Sun hired or contracted 147
         development employees, or 68% of those employed by the Company, as well
         as 65 storage product sales and marketing personnel, or 45% of those
         employed by the Company. Development spending and sales and marketing
         spending were reduced by these percentages. No amounts have been
         deducted for general and administrative expenses as none relate
         directly to the assets sold.

(c)      Represents termination charge in conjunction with the Sun Transaction
         and subsequent reorganization of the Company related to: (I) severance
         and benefit pay

                                       7
of $6,323,000 as a result of a 542 person reduction in workforce,
         including severance for employees contracted by Sun, as the Company
         agreed to pay the difference between the completion bonus offered to
         contractors by Sun at the end of their contract and the amount of
         severance they were entitled to had they been terminated by the
         Company, (ii) $4,722,000 of retention payments pursuant to agreements
         between the Company and each of approximately 49 employees, (iii)
         $1,000,000 of incentive bonuses to certain key employees, (iv)
         $3,390,000 relating to the termination of European facility and
         automobile leases, and $350,000 relating to a domestic equipment lease,
         (v) an estimated $500,000 for leasehold improvements to be made at the
         Company's Fort Lauderdale facility which is leased from Sun, (vi)
         $1,150,000 in estimated legal and other fees associated with the Sun
         Transaction, and (vii) $250,000 accrued for legal fees in connection
         with the shareholders suit.

(d)      Represents interest expense on the Gould Debt which was retired as part
         of the Gould Agreement.

(e)      Represents interest expense on mortgages which were retired as part of
         the Sun Transaction.

(f)      Represents $151,168,000 cash payment from Sun at the date of closing in
         consideration for substantially all of the assets associated with the
         Storage Products business.

(g)      Represents estimated Alternative Minimum Tax payable relating to the
         Sun Transaction.

(h)      Represents the reversal of dividends on preferred stock retired or
         converted to common stock as part of the Gould Agreement.

(i)      Represents the weighted average shares of common stock issued in the
         conversion of Series A and B preferred stock as part of the Gould
         Agreement.

(j)      Represents real-time revenue and all cost of sales associated with the
         real-time business.

(k)      Represents the estimated portion of operating expenses incurred for
         development and selling activities of the real-time product line, based
         partially on the estimated number of employees to be transferred to
         Gores as well as an estimate of spending and expenses relating to the
         remaining Encore employees.

(l)      Represents a termination charge of $743,000 related to severance and
         benefit pay as a result of a 13 person reduction in workforce
         associated with the Board of Directors decision not to pursue and NT
         opportunity.

(m)      Represents losses on disposals of fixed assets and foreign exchange
         losses incurred by Encore which would have been incurred by Gores if it
         owned all plant, property and equipment and all assets and liabilities
         of the foreign subsidiaries.

(n)      Represents $35,000,000 cash payment from Sun at July 1, 1998 net of
         $9,692,000 set off.

(o)      Represents taxes incurred by certain profitable foreign subsidiaries.

                                       8
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

/bullet/ the Company's Proxy Statement for Special Meeting in Lieu of Annual
         Meeting of Stockholders to be held on September 11, 1998.

(b)      Exhibits

Exhibit 1         Asset Purchase Agreement dated as of June 1, 1998 among the
                  registrant, Encore Computer U.S., Inc., Encore Computer
                  International, Inc., Gould Electronics Inc. and Encore
                  Acquisition Corp. (incorporated herein by reference to the
                  Company's Proxy Statement dated August 10, 1998).

Exhibit 2         Amendment Number One to Asset Purchase Agreement dated October
                  27, 1998 among the registrant, Encore Computer U.S., Inc.,
                  Encore Computer International, Inc., Gould Electronics Inc.
                  and Encore Acquisition Corp.

Exhibit 3         Amendment Number Two to Asset Purchase Agreement dated as of
                  December 31, 1998 among the registrant, Encore Computer U.S.,
                  Inc., Encore Computer International, Inc., Gould Electronics
                  Inc. and Encore Acquisition Corp.

Exhibit 4         Reconciliation Agreement dated as of December 31, 1998 among
                  the registrant, Encore Computer U.S., Inc., Encore Computer
                  International, Inc., Gould Electronics Inc. and Encore
                  Acquisition Corp.

                                       9
SIGNATURE

                  Pursuant to the requirements of the Securities Exchange Act of
                  1934, the registrant has duly caused this report to be signed
                  on its behalf by the undersigned hereunto duly authorized.

Date:  January 19, 1999                     By:      MARY MACOMER
                                                      President
                                                      Chief Executive Officer

                                       10
EXHIBIT INDEX

EXHIBIT           DESCRIPTION
-------           -----------
Exhibit 2         Amendment Number One to Asset Purchase Agreement dated October
                  27, 1998 among the registrant, Encore Computer U.S., Inc.,
                  Encore Computer International, Inc., Gould Electronics Inc.
                  and Encore Acquisition Corp.

Exhibit 3         Amendment Number Two to Asset Purchase Agreement dated as of
                  December 31, 1998 among the registrant, Encore Computer U.S.,
                  Inc., Encore Computer International, Inc., Gould Electronics
                  Inc. and Encore Acquisition Corp.

Exhibit 4         Reconciliation Agreement dated as of December 31, 1998 among
                  the registrant, Encore Computer U.S., Inc., Encore Computer
                  International, Inc., Gould Electronics Inc. and Encore
                  Acquisition Corp.