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                       KURZWEIL APPLIED INTELLIGENCE, INC.
                            STATEMENTS OF OPERATIONS
                                    Unaudited
                  (in thousands, except for per share amounts)



                                            Three Months Ended April 30,
                                      -----------------------------------------
                                            1996                 1995
                                      ------------------   ------------------
Revenues:
  Product and license revenue                    $1,238               $2,325
  Maintenance revenue                               472                  382
                                      ------------------   ------------------
Total revenues                                    1,710                2,707
                                      ------------------   ------------------
Operating costs and expenses:
  Cost of product, license and
   maintenance revenue                              880                1,295
  Sales and marketing                               950                  929
  Research and development                          678                  478
  General and administrative                        532                  329
                                      ------------------   ------------------
Total operating costs and expenses                3,040                3,031
                                      ------------------   ------------------
Operating loss                                   (1,330)                (324)
Interest expense                                                           2
Interest income                                      30                   59
Other (expense) income, net                           6                   30
                                      ------------------   ------------------
Net loss                                        ($1,294)               ($237)
                                      ==================   ==================
  Net loss per common share                      ($0.19)              ($0.04)
                                      ==================   ==================
  Weighted average number of common
    shares outstanding                        6,774,430            6,731,833
                                      ==================   ==================