<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION


                              Washington, DC 20549

                                   FORM 10-KSB
                [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended          October 31, 1996
                          -----------------------------------

                 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________ to ____________________

Commission File Number                     0-15362
                      --------------------------------------------

                               COMPUFLIGHT, INC.
--------------------------------------------------------------------------------
                 (Name of small business issuer in its charter)

           Delaware                                      11-2883366
-------------------------------                   -----------------------------
(State or other jurisdiction of                   (I.R.S.Employer Identification
incorporation or organization)                     Number)


99 Seaview Boulevard, Port Washington, NY                   11050
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                  (Zip Code)

Issuer's telephone number,                             516-625-0202
                                    --------------------------------------------

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

      Title of each class                              Name of each exchange on
                                                          which registered
             None
--------------------------------            ------------------------------------
--------------------------------            ------------------------------------

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

                         Common Stock, $.001 par value
--------------------------------------------------------------------------------
                                (Title of Class)

Check  whether the issuer (1) 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 disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not 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
this Form 10-KSB. [X]

     State issuer's revenues for its most recent fiscal year (1996): $ 3,574,589
                                                                     -----------
     The aggregate market value of the voting stock held by non-affiliates based
upon the average bid and asked  prices of such stock as of December 31, 1996 was
$ 332,712.
---------
     ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS
     Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities  under  a plan  confirmed  by a  court.  Yes___  No___

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS
     The number of shares  outstanding  of common  stock as of December 31, 1996
was 1,701,980 shares.
                       DOCUMENTS INCORPORATED BY REFERENCE
          Proxy Statement for Annual Meeting of Stockholders (Part III)

<PAGE>



                                COMPUFLIGHT, INC.
                         1996 FORM 10-KSB ANNUAL REPORT


                                TABLE OF CONTENTS

                                     PART I
                                                                           PAGE

Item 1.  Description of Business.............................................4
Item 2.  Description of Property............................................14
Item 3.  Legal Proceedings..................................................15
Item 4.  Submission of Matters to a Vote of Security Holders................16

                                    PART II

Item 5.  Market for Common Equity and Related Stockholder Matters...........17
Item 6.  Management's Discussion and Analysis or Plan of Operation..........18
Item 7.  Financial Statements...............................................24
Item 8.  Changes In and Disagreements With Accountants on Accounting and
         Financial Disclosure...............................................25

                                    PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance With Section 16(a) of the Exchange Act..................26
Item 10. Executive Compensation.............................................28
Item 11. Security Ownership of Certain Beneficial Owners and Management.....29
Item 12. Certain Relationships and Related Transactions.....................30

                                     PART IV

Item 13. Exhibits, List and Reports on Form 8-K

         INDEX TO EXHIBITS..................................................31

         INDEX TO FINANCIAL STATEMENTS (F-1)................................33

         SIGNATURES.........................................................53


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                                GLOSSARY OF TERMS


Definitions of certain terms used in this Form 10-KSB are as follows:

Fix
---
The radio beacon which defines the location of an airport or an enroute position
in latitude and longitude.

Flight Plan
-----------
Routing,  alternate routing,  altitude and fuel consumption information provided
to aircraft operators,  and calculations which are based on, among other things,
the  aircraft   manufacturer's   performance  data,   aircraft   specifications,
forecasted upper air winds and estimated payload.

IATA
----
International Air Transport Association

ICAO
----
International Civil Aviation Organization

Navigational Data
-----------------
Worldwide  navigational flight information data which provides name and location
of navigational aids. The data is updated every 28 days and checked against data
provider charts every 56 days.

NOTAMs
------
NOTAMs  consist of significant  notices to airmen and special  notices which can
affect a pilot's  decision to enter and use areas of  domestic or  international
airspace.

Optimum Random Tracks
---------------------
Where permitted by Air Traffic Control ("ATC"), aircraft may fly a route between
fixes which has not been previously defined.

Payload
-------
The weight of passenger and cargo carried on the aircraft.

PIREPs
------
Pilot reports denoting flight  conditions.  PIREPs serve as a source of valuable
weather information.

Reclear Option
--------------
Use of a reclear option permits a reduction of Federal Air  Regulations  ("FAR")
10% fuel reserve  requirements on  international  flights,  thereby allowing for
increased payload, reduced fuel reserves or both.

RPK
--- 
Revenue passenger-kilometers.  An RPK is defined as one revenue paying passenger
transported one kilometer in revenue service.  Revenue  passenger-kilometers are
computed by adding the products of the revenue aircraft kilometers flown on each
inter-airport hop multiplied by the number of revenue passengers carried on that
hop.

                                                                          Page 3
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                                     PART I

ITEM 1    DESCRIPTION OF BUSINESS

Compuflight,   Inc.  (the  "Company"),   directly  or  indirectly   through  its
wholly-owned Canadian subsidiaries, Navtech Systems Support Inc. ("Support") and
Efficient  Aviation  Systems  Inc.  ("EAS"),  is  engaged  in  the  business  of
developing,  marketing,  licensing,  and supporting computerized flight planning
and aircraft performance engineering services for the aviation industry.

During fiscal 1996,  the Company's Port  Washington  facility  concentrated  its
efforts  on the  development  of the  COMRAD  runway  analysis  product  and the
provision  of its V1PLUS  performance  engineering  subscription  service to its
commercial  aviation  customer base, as more fully described  below:

    *The COMRAD  product  utilizes a portable  computer  for use in the aircraft
     cockpit.  This product provides the commercial airline customer with runway
     analysis data previously  delivered solely by ground-based  runway analysis
     and weight and balance systems.

    *The V1PLUS Performance  Engineering  Service is offered to airlines that do
     not  maintain  in-house  engineering  departments  or that wish to  augment
     existing  capabilities.

Support's  facility,  based in Waterloo,  Ontario,  focused its resources on the
development,  delivery,  and support of the Company's  flight planning  software
products and services during fiscal 1996, as more fully described below:

    *A  service  bureau  product   offering   marketed  under  the   COMPASS(TM)
     trade-mark,  which provides the flight operations  department of commercial
     and corporate  airlines with an easy to use 'single  screen' format for the
     timely dispatching of flights.

    *A service bureau solution for total flight operations  management  marketed
     under the FOMS  trade-name  which,  in  addition  to the  functionality  of
     COMPASS(TM),  provides the Flight Operations department of carriers with an
     overall analysis of the flight plan and supplies  extensive  information on
     crew, weather,  NOTAMs, and other factors impacting  decision-making.  FOMS
     also offers the  airline  client the option of  utilizing  the system on an
     in-house  basis.  This  approach  provides an airline with the advantage of
     transitioning  from  service  bureau usage to an in-house  capability  with
     minimal impact on staff or operational  procedures.  The ability to provide
     this option gives the Company a competitive  advantage  when  marketing its
     products  and  services to an airline that is growing in terms of number of
     aircraft and complexity of route structure  (international  or transoceanic
     routings). In addition to system functionality, FOMS, which is a UNIX-based
     client server software application,  offers the client a migration strategy
     for replacing costly legacy systems built during the 1970s.

The Company's  product and service  solutions are based on proprietary  software
developed by the Company.

In seeking to maintain a competitive  advantage in the marketplace,  the Company
also  maintains a  full-time  Research  and  Development  Group at the  Waterloo

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location, which designs and develops new software technology.

The  Company's  products  and  services  are used by over 50  airline  customers
worldwide.  These  customers  represent  all  facets of the  aviation  industry,
including  national  and  international  airlines,  regional  airlines,  freight
carriers,  and  corporate  aircraft  operators.  Included in this broad array of
industry representation are Delta Airlines, Emery Worldwide,  Allied Signal, and
American Transair.

The Company was  originally  incorporated  in the State of New York in 1981.  In
1987,  the  Company  reincorporated  in the  State of  Delaware.  The  Company's
principal   executive  offices  are  located  at  99  Seaview  Boulevard,   Port
Washington, New York.

ACQUISITION OF EFFICIENT AVIATION SYSTEMS INC. AND NAVTECH SYSTEMS SUPPORT INC.

On December 1, 1993,  the Company and its former  Chairman  consummated  a Stock
Purchase  Agreement,  dated  as of  October  31,  1993,  with  Ray  English  and
Associates Inc.  ("RE&A"),  formerly  Navtech  Systems  Consulting  Inc.,  among
others.  Pursuant to the agreement,  the Company issued  1,239,644 shares of the
Company's  common  stock  (valued at $0.56 per share)  and  assumed an  $800,000
obligation of RE&A to the Company's  former  Chairman for all of the outstanding
common stock of EAS (a  wholly-owned  subsidiary of RE&A) and Support (a company
controlled by RE&A and its principal shareholders).

Contemporaneously  with the  Stock  Purchase  Agreement,  the  Company's  former
Chairman and his  immediate  family sold their  238,872  shares of the Company's
common stock to RE&A in exchange for an $800,000  note payable to the  Company's
former  Chairman.  In  connection  with the  Company's  acquisition  of EAS, the
Company  assumed RE&A's note payable to the Company's  former Chairman and, as a
result,  the  former  Chairman's  indebtedness  to the  Company  was  reduced to
$804,000.  Such  indebtedness is payable in equal monthly  installments over the
ten year period ending October 2003, together with interest at 4 1/2% per annum.
Further,  the Company  entered  into a ten year  Consulting  Agreement  with its
former Chairman providing for fees payable  substantially upon the same terms as
the indebtedness repayment.

INDUSTRY BACKGROUND

The commercial airline industry continued to realize positive results throughout
1996, having increased traffic and sales levels over 1995. The principal impetus
for this  turnaround is the ongoing  restructuring  that airlines were forced to
undertake in 1993 due to a severe recession that lasted from 1990 to 1993. IATA-
registered  carriers sustained reported cumulative losses of approximately $15.6
billion on  international  scheduled  services in that period.  It was not until
1994 that the industry  began to  experience a gradual  increase in fare levels.
These fare levels,  together  with planned  restructuring,  led most airlines to
more  efficient  operations  and  increased  capacity.  In 1995,  these  factors
resulted  in  record-setting  sales  revenues  for a  majority  of the  major US
airlines.

According  to IATA,  1996 set new  profitability  records for the world  airline
industry,  with  forecasted  net profit for members  rising to $5.5 billion,  an


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increase of $300 million over 1995. ICAO, the civil aviation  governing body, is
forecasting  a buoyant  outlook  for the global  airline  industry  in 1997 with
anticipated increases in revenue of 9.7% for the world's airlines, despite their
concerns regarding infrastructure charges, taxes, and higher fuel prices.

GEOGRAPHIC TRENDS

Political and economic forces are expected to continue driving  consolidation to
a point where major airline  alliances  occur,  such as the code share agreement
between  British  Airways  and  American  Airlines.  These  alliances  will face
competition from a large number of niche airlines that differentiate  themselves
by  geography or market  segmentation.  Smaller  regional  groupings of carriers
seeking to protect or expand their share of particular  geographical  markets or
business segments will be forced to compete with these global alliances.

The  following  table,  produced  by Boeing  Aircraft  Corporation's  Commercial
Airplane Group,  forecasts projected  international air traffic passenger growth
by geographic region for the years 1994-2013:

                     Projected Air Travel Growth 1994 - 2013

-----------------------------------   ------------------------------------------
        Geographic Region                Projected Average Annual Percentage 
                                                        Change
-----------------------------------   ------------------------------------------
Asia-Europe                                              7.2% 
Intra Asia Pacific                                       6.8% 
Trans Pacific                                            6.8%
Intra Latin America                                      5.6% 
North and Latin America                                  5.5%  
Europe-Latin America                                     4.8% 
North Atlantic                                           4.4% 
Intra Europe                                             4.4%  
Europe-Africa                                            4.3% 
North America                                            4.0%
----------------------------------- --------------------------------------------
(Source: Boeing Commercial Airplane Group)

In addition to Boeing's  projections,  IATA's short term forecast anticipates an
annual average growth rate of 6.6% in international  scheduled passenger traffic
between 1994 and 1998.  This trend will result in 437.3 million  passengers  per
year at the end of that period.

NORTH AMERICA

Airlines in the United States enjoyed a year of positive  financial results with
the 10 major U.S.  passenger carriers posting combined operating profits of $5.1
billion,  despite only moderate  increases in traffic levels.  U.S. airline RPKs
rose only 4% during 1995, of which  domestic  travel only increased by about 3%.
The  increase in operating  revenue is  indicative  of an industry  trend toward
properly managed costs that increase yields and decrease operational overheads.

The two major carriers in Canada did not experience  this same positive  traffic
growth and increased  revenue.  Although the U.S./Canadian  Open Skies agreement
led to  significant  increases in capacity,  traffic  growth  remained flat. The
Canadian  carriers  are  facing  significant  competition  from  their  American
counterparts,  and must  therefore  direct their focus to improving  operational
efficiency.

In 1996, the provision of air flight services by low-cost  regional airlines was
viewed  as a  potential  viable  alternative  to the  higher  fare  full-service
airlines.  However,  this projected market shift did not materialize as a result

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of the crash of a ValuJet  aircraft in the Florida  Everglades  in the summer of
1996.  Consequently,  safety  concerns  dominated  the FAA's  (Federal  Aviation
Administration)  report  determining  that the cost savings realized by low-fare
carriers were in some part related to the  reduction in compliance  with respect
to air safety  regulations.  It is anticipated  that the potential impact of new
safety  regulations  expected  to be  introduced  by the FAA in 1997 may have an
adverse impact on the profitability of low-cost carriers.

EUROPE
Financial  results  in  Europe  benefited  those  airlines  that  implemented  a
restructuring  approach similar to their U.S.  counterparts.  This is evident in
the contrast between the positive  financial  results posted by British Airways,
KLM,  Lufthansa,  and SAS relative to the poor results reported by such airlines
as Air France,  Iberia,  Alitalia,  Olympic,  and TAP-Air Portugal,  who are now
seeking public funds to finance their  operations.  If international  traffic in
Europe continues to grow (growth rate of 7%-9% in 1996),  European carriers will
be forced to continue forming alliances with North American carriers in order to
remain  competitive.  The trend toward alliances will also result in a reduction
in levels of government ownership and subsidies. Though these efforts will allow
for some airlines to return to profitability, others will continue to experience
severe financial difficulties.

ASIA/PACIFIC
Asia/Pacific  is the fastest  growing  region in the  aviation  world;  however,
financial performance is on a decline.  Airline members of the Oriental Airlines
Association  (OAA),  are  beginning  to  experience  the  effects of  "maturity"
(labor/management  relations;  air/ground  congestion;  safety/security  issues;
etc.) that have afflicted  airlines in the United States and Europe.  Management
skills can no longer  provide the assurance of success in the areas of growth or
high  yield.  New  economic  realities  in Japan  dictate  that  consumers,  who
traditionally paid full fares, are currently looking for bargains.


FLIGHT OPERATIONS SOFTWARE MARKET OUTLOOK

With commercial airlines  scrutinizing  operating  expenditures,  including once
sacrosanct  costs such as travel agency fees,  the ability to fly a route faster
and burn  less  fuel  without  altering  aircraft  equipment  configurations  is
spurring  the  industry to focus its  efforts in the area of flight  operations.
According to an extensive study undertaken by Collins,  the avionics division of
Rockwell  International,  the U.S.  airline industry lost nearly $300 million in
1993 alone due to delays, en route losses, and cruise inefficiencies.

While there are  significant  savings to be achieved by the major U.S.  carriers
within domestic flight operations,  the most dramatic savings in fuel and flight
time are to be realized on international  routes. With the shifts in air traffic
management,  particularly the easing of overflight restrictions in China and the
former Soviet  republics,  international  air carriers can  literally  chart new
territory,  saving upwards of two hours per flight. This improvement is a result
of integrating  the  international  development  referred to as FANS (Future Air
Navigation System), which provides an air traffic management infrastructure that


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relies  largely on the use of GPS (Global  Positioning  System)  satellite-based
navigation, with the carrier's flight operations system.

To address the  requirements  of FANS,  airlines are now seeking new  technology
solutions to assist in the  development  of cost  effective  flight  operations,
including flight planning, weather management, crew scheduling, runway analysis,
and chart management.

Air Transport World, a recognized trade  publication in the commercial  aviation
industry,  reported  in May 1995  that,  based on a study of  flight  operations
software vendors and commercial airline  requirements,  they expected the flight
operations  software  market to have a growth  rate of  between  15% and 25% per
annum for the remainder of the decade.

PRODUCTS AND SERVICES

The  Company  provides  four  comprehensive   software  and  service  solutions,
COMPASS(TM),  FOMS,  COMRAD and  V1PLUS,  for  managing  the  flight  operations
department of an airline and specifically,  in the case of COMPASS(TM) and FOMS,
for the  creation  and  filing  of a flight  plan.  

Under FAA regulations,  all aircraft  operators,  whether private,  corporate or
commercial,  are required to file flight plans with air traffic  control centers
prior to each  flight.  Flight  plans  consist of  information  relating  to the
planned  flight,  including  routing,   alternate  routing,  altitude  and  fuel
consumption  information.  The calculations needed to determine this information
are based on, among other things,  aircraft  performance data,  forecasted upper
air wind data, the route of flight and the take off weight of the aircraft.  For
safety  reasons,  government  regulations  mandate the preparation and filing of
basic flight plans. Computerized flight plans provide more accurate and detailed
information to enable  aircraft  operators to determine the optimum  payload and
routing for maximum fuel conservation and reduction of other related expenses.

COMPASS(TM).  The  Company's  COMPASS(TM)  flight  planning  software,  which is
provided  on  a  service  bureau  basis,  is  designed  to  improve  operational
efficiency by providing the flight operations department of a commercial airline
with an easy-to-use  'single  screen' format for timely  dispatching of flights.
Further,  the system  provides  commercial  and  corporate  aircraft  pilots and
dispatchers  with  information  regarding  upper  air wind  variations  enroute,
revised airway availability,  late changes in payload, aircraft performance data
and use of a "reclear option" on international  flights.  The Company's database
contains  information  with respect to more than 4,300 airports,  30,000 routes,
50,000 fixes, 100,000 airway segments, and 190 aircraft types.

The system  operates  in a user  friendly  format and has the ability to respond
quickly to changing situations so that fuel, flight time, alternate routing, and
payload information can be readily modified.

FLIGHT    OPERATIONS    MANAGEMENT    SYSTEM    ("FOMS").    FOMS,    a   flight
operations/management  system provided on a service bureau basis, is designed to
allow dispatchers to perform a large number of tasks simultaneously with ease of
use and  speed of  response.  FOMS  specifically  targets  the  areas of  flight
planning,  route  management,  fuel  management,   winds  and  weather,  NOTAMs,
communications,  and  operations/management  reporting. In addition to providing


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the airline  dispatcher with flight planning  functionality,  FOMS also provides
the flight  operations  department of an airline with an overall analysis of the
flight plan by supplying  extensive  information on crew,  weather,  NOTAMs, and
other factors that impact the  decision-making  ability of the flight operations
department.

FOMS can also be implemented on an in-house basis. As an in-house  system,  FOMS
is marketed  to larger  airlines  that have a need for a system to support  high
volume  flight plan  processing  and can also be  customized  to integrate  with
specific operational requirements,  such as reservations,  crew scheduling,  and
operations control.

COMRAD  (Compuflight's  Runway Analysis Delivery System).  Comrad is a Microsoft
Windows(TM)  based software  product that delivers  runway  analysis data to the
flight crew via a portable  personal  computer.  This approach provides the crew
with  an  ability  to   optimize   aircraft   performance   based  on   aircraft
manufacturer's  data, current aircraft  configuration,  runway data, and current
environmental  conditions  in real time as compared to the previous  paper-based
manual  method of look-up  tables.  COMRAD  also  allows  the pilot to  maximize
payload,  thereby providing  potential  economic returns to the airline.  During
1997, the Company's software development  department is planning to increase the
aircraft  types  currently   available  in  the  system  and  to  integrate  the
information with the FOMS and COMPASS systems.

V1PLUS  PERFORMANCE  ENGINEERING  SERVICE.  V1PLUS  is an  aircraft  performance
engineering  subscription  service  that  is  offered  to  airlines  that do not
maintain in-house engineering departments or that wish to augment their existing
in-house database.

The V1PLUS Manual  provides the airline  customer with  customized  take-off and
landing data specific to various aircraft/engine combinations, flap settings and
runways.  Commercial  pilots are  required by law to have in their  possession a
current runway  analysis for each flap setting of their aircraft for each end of
each runway for each airport from/to which they depart/land.


CLIENT SUPPORT SERVICES

The Company offers comprehensive  software support throughout the United States,
Canada,  Mexico,  Africa,  and Europe which is designed to maximize the benefits
and utility of the software at the customer's  location.  These services include
training and  installation  support,  software  updates,  including  new systems
functionality and ongoing  enhancements,  and telephone hot-line support. Due to
the  significant  value of the  customer's  investment  in the  licensing of the
Company's  software,  the Company  believes that quality support  services are a
critical component of the customer's satisfaction level.

The  Company's  Flight  Operations  Support  group is located  in its  Waterloo,
Ontario facility, operating 24 hours per day, 7 days per week. The Support Group
is staffed by  qualified  aviation  and systems  professionals  who provide full
operations and technical support to the customer.

The software update and maintenance service consists of periodic releases of new
systems functionality and ongoing enhancements to current  functionality.  These


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services are provided to customers through an annual agreement.


DESIGN AND PROGRAMMING SERVICES

Design and programming  services are provided to customers that require specific
custom solutions to their flight operations requirements. Fees are based on time
and material usage as determined through customer specifications and quotations.
The  Company  perceives  that  there is an  increased  demand in the  commercial
aviation  market for  systems  integration  services  which  link the  Company's
software  with  third  party  vendors'  applications  such as  Crew  Scheduling,
Maintenance,  Flight  Following,  and  Reservations.  The Company also  provides
consulting  services to assist  customers in  optimizing  the use of the product
functionality within their flight operations process.

In 1997,  the Company will seek to introduce new  integration  solutions to meet
the aviation  industry's  need to operate with  maximum  efficiency  in the FANS
environment.

MARKETING AND SALES

The Company  maintained its global marketing  strategy  throughout 1996,  either
through its own sales force or through agency  agreements.  The intended  target
markets were airlines  seeking  service bureau  options and carriers  seeking to
internalize  their  flight  operations   function  by  utilizing  the  Company's
software.

Due to  resource  constraints,  the  Company  continued  to  focus  its  primary
marketing  effort in North America,  with  additional  success being achieved in
South and Central American markets.  The marketing and sales program, as managed
by the  Vice-President of Business  Development,  seeks to present all available
product and service options to current and potential customers.

Historically,  the Company's  marketing  and sales program has involved  product
demonstrations to the flight operations  department of a specific airline. In an
effort to improve  resource  efficiency and gain maximum client  exposure to its
products and services, the Company has introduced a symposium series designed to
target North American carriers on a regional basis. This may result in increased
expenses which could have an adverse impact on the results of operations.

The Company's resource constraints have also limited its ability to successfully
market  itself  outside  the  Americas.  In order to remain  visible  in foreign
markets,  the Company has pursued and obtained  agency  agreements to distribute
COMPASS(TM) and V1PLUS  services.  These  agreements have resulted in an initial
penetration of the European and African marketplaces.

Although the full potential of the North American market has yet to be realized,
the Company believes that future operational  results will depend in part on its
ability to increase sales in the international marketplace, specifically Europe,
Africa,  and  Asia/Pacific.  The Company's  marketing plans therefore  include a
strategy to supplement  its agency  agreements  with direct  marketing  efforts,
although  such a strategy  may result in increased  expense  which could have an
adverse effect on the results of operations.

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COMPETITION

The applications  software market for airline  operations  management systems is
intensely  competitive  and subject to rapid change.  The principal  competitive
factors in this market include product functionality and quality,  total cost of
solution, support infrastructure,  underlying technology,  product architecture,
and the financial stability of the vendor. The Company believes that it competes
effectively  with respect to these factors,  although it may be at a competitive
disadvantage  against companies with greater financial and marketing  resources.

The two primary  competitors  to the  Company's  FOMS product in the  commercial
airline  in-house systems market are Jeppesen  Sanderson  ("Jeppesen") and Sabre
Decision Technologies Inc. ("Sabre").

    *Jeppesen,  based in Denver,  Colorado, is the recognized leader in aviation
     related  charts  and maps,  as well as  computerized  flight  planning  and
     aviation weather mapping services.  Jeppesen also provides an in-depth line
     of pilot and instructor training courses and videos. It has been a dominant
     information  provider in the aviation  industry  since the  combination  of
     Jeppesen & Company with  Sanderson  Films in 1974.  As a subsidiary  of the
     Times  Mirror  Corporation,  it clearly has  organizational  and  financial
     resources superior to those of the Company.

    *Sabre acquired the PC-based flight planning  technology  developed by David
     Bornemann &  Associates,  a leading  provider of crew  scheduling  software
     solutions to airlines. Sabre is porting the Bornemann technology to UNIX in
     an effort to address the complex multi-tasking and multi-user  requirements
     of large in-house installations at major air carriers.

The  primary  competitors  for  COMPASS(TM)  and  FOMS  in  the  service  bureau
marketplace are Jeppesen, EDS Services("EDS"), and SITA.

    *Jeppesen's  service bureau offering,  Dataplan,  was acquired from Lockheed
     Corporation, which had originally designed the system for the United States
     Air  Force.  Jeppesen  bundles  the  flight  plan  services  with its other
     products, such as navigational charts and performance engineering services,
     and markets it on a price competitive basis.

    *EDS has particular  strengths with the  integration of its flight  planning
     services with a  reservations  system  originally  developed by Continental
     Airlines.

    *SITA,  which has the largest  market  share in Europe and Africa,  provides
     flight planning  services as part of a suite of programs  including weather
     and  reservations.  The key  feature  of SITA's  systems  is its  worldwide
     aviation  communications  network  which  provides an advantage  over other
     competitors who, in the developing nations,  must utilize SITA or ARINC due
     to the poor quality of their telecommunications  systems. This advantage is
     quickly eroding due to the advent of low cost, high quality  communications
     alternatives in both Eastern Europe,  Russia, and the developing  countries
     in Asia and Africa.

The three  competitors  listed  above have  greater  financial,  technical,  and
marketing  resources  than the Company and, as a result,  may be able to respond

                                                                         Page 11
<PAGE>

more  effectively  to  changes in  customer  requirements  or to devote  greater
resources to technological development.

RESEARCH AND DEVELOPMENT

The Company  invested  significant  resources  during fiscal 1996 to develop new
software  functionality  and to enhance  its  existing  software.  Research  and
development expenses were $412,524 and $223,224 for the years ending October 31,
1996 and 1995, respectively. See Item 6 hereof.

The Company  plans to continue  enhancing its existing  software  products in an
effort to respond to the increasing  demands of its customers and to improve the
ease of use of the software.  The Company's 1997  Development  Plan includes the
creation  of a four  dimensional  flight  path  computation  module,  capable of
integrating  all operating costs and producing a flight path solution that meets
a wide range of an airline's mission requirements. The solution will analyze the
costs of maintenance,  crew staffing needs, fuel requirements,  etc., to produce
flight  plans that  achieve a desired  or  required  flying  time for the lowest
possible operating cost. A major part of creating this capability centers on the
incorporation of a Variable Cost Index (VCI) into the profile  computation.  The
VCI Plan technology is a proprietary  product developed by Applied  Aeronautical
Systems Inc. and provided to the Company under a marketing agreement.

In addition to the work  undertaken on the integration of VCI Plan, the Company,
under  contract  with  Unisys  Corporation,  implemented  an  integrated  flight
planning and graphical situation display during the fourth quarter of 1996. FOMS
aircraft position data is interfaced with real time map data from  Skyvision(TM)
(a proprietary  product developed by Unisys  Corporation) which is then overlaid
with a  weather  composite  picture.  This  combined  system  will  provide  the
dispatcher  with the ability to visualize the effect of weather on a flight,  or
to  forecast  the  delays  at an  airport  hours  before  they  occur.  With the
completion of the initial phase, the Company is now in the process of defining a
business  relationship  with  Unisys  with  respect to further  development  and
marketing of this product.

INTELLECTUAL PROPERTY RIGHTS

The Company regards all of its software  products as proprietary.  The Company's
software products are generally  licensed to end-users on a "right to use" basis
pursuant to a perpetual  non-transferable  license that generally  restricts the
use of the software to the  customer's  operations or third  parties  affiliated
with the customer. The Company relies on a combination of copyright,  trademark,
and trade secret laws, as well as  non-disclosure  agreements,  to establish and
maintain its  proprietary  rights.  The Company has not filed for patents due to
the lack of effective patent  protection for software.  In the past, the Company
and Support have licensed certain versions of source code to a limited number of
customers for specific uses.  Also, there can be no assurance that the Company's
competitors  will not  independently  develop software that is equivalent to the
Company's.  Further,  no  assurance  can be given that the Company will have the
financial resources to engage in litigation against parties who may infringe its
intellectual  property  rights.  While the Company realizes that its competitive
position  may be affected by its ability to legally  protect its  software,  the
Company  believes  the  impact of this  protection  is less  significant  to its

                                                                         Page 12
<PAGE>

commercial success than factors such as the level of experience of the Company's
personnel,   name  recognition,   and  increased   investment  in  research  and
development of new products.

EMPLOYEES

As of December 31, 1996, the Company had a total of 40 employees including 14 in
operations and client  services,  13 in research and product  development,  2 in
sales and marketing, and 11 in finance and administration. None of the Company's
employees  are  represented  by a labor union and the Company  believes that its
employee  relations are good. The Company believes that its success will depend,
to a large  degree,  upon its  ability to  attract  and  retain  highly  skilled
technical, managerial and sales and marketing personnel, and to retain personnel
with  flight  operations   expertise.   The  Company  has  experienced   intense
competition  for technical staff thereby  encountering  difficulties in hiring a
sufficient  number to meet custom software design and programming order backlog.
There can be no assurance  that the Company will be successful in attracting and
retaining the personnel required to develop,  market,  service,  and support its
products and conduct its operations successfully.



                                                                         Page 13
<PAGE>


ITEM 2.   DESCRIPTION OF PROPERTY

The Company maintains offices in Port Washington,  New York; Waterloo,  Ontario;
and Ottawa, Ontario.

Compuflight leases approximately 2,700 square feet of office space at 99 Seaview
Boulevard, Port Washington,  New York, for its executive offices and for product
marketing and aircraft performance  engineering.  The monthly rent expense as of
December 31, 1996 was $4,160 and increased to $4,326  effective  January 1, 1997
1997. The lease terminates on December 31, 1998.

Support leases  approximately  9,300 square feet of office space at 175 Columbia
Street West, Waterloo,  Ontario,  which is used for flight operations,  software
development,  customer support, and administration.  This lease became effective
November 1, 1996 and  terminates  October 31, 2006.  The monthly  rent  expense,
inclusive of common area rent, is approximately $8,900 Canadian. The lease calls
for additional increases on each anniversary.

Prior to October 31, 1996,  Support  leased  approximately  4,200 square feet of
office space at 550 Parkside Drive, Waterloo,  Ontario which was used for flight
operations,  software  development,  customer support,  and administration.  The
monthly rent expense,  inclusive of common area rent, was $3,352 Canadian.  This
lease  terminated  December 14,  1996.  The rent for the period of November 1 to
December 14 was assumed by the landlord of the new premises.

Support's  leased premises in Ottawa,  Ontario  function as the marketing office
for Federal Systems Sales efforts.  The space  encompasses  approximately  1,000
square feet at 50 O'Connor Street,  Ottawa, Ontario with a monthly rent expense,
inclusive of common area rent, of $1,355  Canadian as of December 31, 1996.  The
lease is terminable by either party with 60 days notice.

The Company's total rent expense was  approximately  $94,000 in fiscal 1996. The
Company believes that its facilities are adequate for its current needs and that
suitable additional space will be available as required.

                                                                         Page 14
<PAGE>


ITEM 3.   LEGAL PROCEEDINGS


Not applicable.

                                                                         Page 15
<PAGE>


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

There were no matters submitted to a vote of security holders during the quarter
ended October 31, 1996.


                                                                         Page 16
<PAGE>


                                     PART II


ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a)  MARKET INFORMATION

The Company's  common stock is traded in the  over-the-counter  market under the
symbol "CMFL".  The high and low bid prices of the common stock, as furnished by
the National  Quotation Bureau,  Incorporated,  are shown for the fiscal periods
indicated.  Such prices represent prices between dealers,  do not include retail
markup, markdown or commission and do not represent actual transactions.

    
Fiscal Year Ended              Bid Price
October 31, 1996           High        Low
------------------        ------      ------
First Quarter              $5/8        $5/8
Second Quarter               1          1/2
Third Quarter               1/2         1/2  
Fourth Quarter              1/2         1/2    

Fiscal Year Ended
October 31, 1995
-------------------
First Quarter              $1/2        $1/4
Second Quarter              5/8         1/4
Third Quarter               5/8         1/2
Fourth Quarter              5/8         1/2


(b) APPROXIMATE NUMBER OF RECORD HOLDERS

Management has been advised by its transfer agent (North American  Transfer Co.)
that the approximate  number of record holders of the Company's  common stock at
December 31, 1996 was 845.

(c)  PAYMENT OF CASH DIVIDENDS

No cash  dividends have been paid by the Company on its common stock and no cash
dividends are anticipated in the foreseeable future.


                                                                         Page 17
<PAGE>


ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

The following  table sets forth the  percentage of total revenue  represented by
certain items in the Company's  consolidated statement of earnings for the years
indicated:

                                                   Percentage of Total Revenue
                                                       Year ended October 31
                                                        1996           1995
                                                    ---------------------------
Revenue
   Service fees                                          86%            98%
   Hardware, software and license sales                  14              2
                                                    -------------  ------------
     Total revenue                                      100            100
                                                    -------------  ------------

Costs and expenses
   Operating                                             57             63
   Research and development                              12              7
   Selling, general and administrative                   31             28
   Depreciation and amortization                          4              4
                                                    -------------  ------------
     Total operating expenses                           104            102
                                                    -------------  ------------

Loss from operations                                     (4)            (2)
Other income                                              8              7
                                                    -------------  ------------

Net earnings                                              4%             5%
                                                    =============  ============


REVENUE

The  Company's  revenue is derived  from two major  sources:  (i)  service  fees
derived  from  the  provision  of  flight  planning  services,  runway  analysis
services,  and ongoing  customer support and (ii) sales of hardware and licenses
of software. Revenue from license fees is recognized at the later of delivery of
the software master copy or, if applicable, fulfillment of all other significant
obligations under terms of a license agreement. For those agreements where there
is  uncertainty  as to ultimate  collection,  revenue is  recognized  as cash is
received.  The face value of a long term  licensing  agreement is  discounted to
give an  effective  rate of return of 15% over the life of the contract to cover
financing  costs.  Systems  consulting  and  implementation  fees  and  hardware
commissions  are  recognized   upon  rendering  of  services.   Custom  software
development,  communication  charges,  and aviation  database income and service
bureau and support revenue are recognized  ratably over  applicable  contractual
periods or as services are performed.

Total revenue increased to approximately $3.6 million in 1996 from approximately
$3.2 million in 1995.

GEOGRAPHIC ANALYSIS

                            Total Revenue (in $'000)         % of Total Revenue
--------------------------------------------------------------------------------
                                          For the year ended October 31
                                      1996      1995           1996      1995
                                    --------  --------       --------  --------
United States                       $  2,970  $  2,620          83%       83%
Canada                                   369       371          10%       12%
Other Jurisdictions                      236       174           7%        5%
                                    --------  --------       --------  --------
                                    $  3,575  $  3,165         100%      100%
                                    ========  ========       ========  ========

                                                                         Page 18
<PAGE>

The Company's  products and services are used by airline  carriers  primarily in
the United States and Canada, although its customers are also located in Europe,
Mexico,  Africa,  and  South  America.  In  fiscal  1996,  the  Company  derived
approximately  $3.0  million  from sales in the  United  States as  compared  to
approximately $2.6 million in fiscal 1995. This increase is due primarily to the
inclusion of a one-time settlement from Harris Corporation ("Harris") related to
a software  development  contract in a prior year, for which the Company had not
previously  included any income as the ultimate  settlement was not  measurable.
Sales in Canada accounted for approximately  $369,000 in fiscal 1996 as compared
to approximately $371,000 in fiscal 1995. This small decline is due primarily to
a reduction in Canadian  customer  billings and  customer  base.  Sales in other
jurisdictions  amounted to approximately  $236,000 in fiscal 1996 as compared to
approximately  $174,000 in fiscal 1995.  This  increase is due  primarily to the
Company's continued efforts to expand its markets.


SERVICE FEES

Revenue from service fees was approximately  $3.08 million in 1996 compared with
approximately $3.10 million in 1995, a decrease of 1% or approximately $25,000.
The  decrease in service  fees is  attributed  primarily  to declines in ongoing
customer  billings.  The majority of the decline  relates to the expiration of a
joint software development contract with a large airline customer.

HARDWARE, SOFTWARE, AND LICENSE SALES

Revenue from  hardware,  software,  and license  sales  increased  approximately
$435,000,  from approximately $62,000 in 1995 to approximately $497,000 in 1996.
This  increase  is  primarily  attributable  to  the  inclusion  of  the  Harris
settlement  of $450,000.

COSTS AND EXPENSES

OPERATING EXPENSES

Operating  expenses  consist mainly of personnel and other  expenses  related to
providing product support, service bureau operation and custom development. Also
included in the operating  expenses are the communication  costs associated with
the provision of in-house flight planning services and customer support.

Operating  expenses  were  approximately  $2.05  million in 1996  compared  with
approximately  $2.00 million in 1995, an increase of approximately  $48,000,  or
2%.  This  increase is  primarily  attributable  to an increase in salaries  and
benefits of approximately  $245,000 from the addition of several senior staff in
sales,  as well as additional  operations  and support  staff.  Furthermore,  an
increase in computer  maintenance and lease costs of approximately  $21,000,  an
increase in long distance charges of approximately  $19,000,  and an increase in
subcontractor  charges of approximately $22,000 added to the overall increase in
operating  expenses.  These increases were offset by a decline in  communication
costs of approximately $265,000.

                                                                         Page 19
<PAGE>

RESEARCH AND DEVELOPMENT EXPENSES

The Company's  Research and  Development  activities  are  undertaken in Canada.
Support qualifies for certain Scientific  Research and Experimental  Development
(SR&ED)  investment  tax credits  under the Income Tax Act  (Canada) on eligible
research and development expenditures. Refundable tax credits have been recorded
at a rate of 35% and  non-refundable  tax  credits,  which can be used to offset
Canadian federal income taxes otherwise payable,  will be recognized at 20% when
such taxes become payable.

Research and Development expenses increased from approximately  $223,000 in 1995
to  approximately  $413,000 in 1996,  representing an increase of  approximately
$190,000,  or  85%.  This  increase  is  primarily   attributable  to  increased
activities in the research and  development  of new products.  While the Company
maintains its  commitment to utilizing  in-house  personnel and  expertise,  the
Company retained contract services for the delivery of two development  projects
due to aggressive delivery schedules.  Approximately $53,000 of the net increase
above is due to the inclusion of these contract services.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

Selling,   general,  and  administrative  expenses  increased  by  approximately
$227,000,  or 25%, from  approximately  $900,000 in 1995 to  approximately  $1.1
million in 1996.  This increase can be attributed  primarily to increases in bad
debt expense of  approximately  $59,000 and in consulting fees of  approximately
$55,000 due mainly to the Company's  entering into a Key Advisor  Agreement with
Kenneth M. Snyder,  a director of the Company.  This Agreement will terminate in
September,  1997 unless  extended by the Company.  Furthermore,  travel expenses
increased  approximately $105,000 as a result of frequent movement of management
between the two  locations as well as the  Company's  increase in marketing  and
sales  activities  targeted  at  increasing  revenues  from  current  customers.
Specific  expenses related to a product release  introducing  COMRAD to the U.S.
market resulted in a net increase of approximately $7,000 in marketing and sales
expenses.  These  increases,  coupled  with an increase in other  administrative
expenses of approximately  $110,000  (including  $27,000 in costs related to the
first  time  filing  of the  Company's  regulatory  submissions  using the Edgar
electronic  filing system),  were offset by a decrease in  professional  fees of
approximately $113,000.

OTHER INCOME (EXPENSE)

Other income (expense) consists of interest income and expense, realized foreign
exchange gains and losses and certain other items as more fully discussed below.

Interest expense decreased  approximately  $30,000,  or 26%, from  approximately
$117,000 in 1995 to approximately $87,000 in 1996 due to a reduction in balances
due to certain creditors and a decline in interest rates over the period.

Scientific  research  and  experimental   development   investment  tax  credits
increased approximately $131,000, or 82%, from approximately $159,000 in 1995 to
approximately  $290,000 in 1996.  This increase  corresponds  to the increase in
eligible expenditures shown above.

                                                                         Page 20
<PAGE>

EARNINGS OF MINORITY INTEREST

Earnings  of  minority  interest,  for 1995 only,  reflect the share of earnings
attributable  to the  12%  minority  shareholder  of the  Company's  subsidiary,
Support.

During fiscal 1996, the remaining minority  shareholder in Support exercised its
option to  exchange  its 500,000  shares of common  stock in Support for 125,000
shares  of  common  stock of  Compuflight.  Accordingly,  as of the date of this
exchange, the Company became the owner of all of the outstanding common stock of
Support.


NET EARNINGS

The  financial  statements  reflect net earnings of $149,666 for fiscal 1996, as
compared to $154,207 for fiscal 1995. This represents a decline of $4,541.


LIQUIDITY AND CAPITAL RESOURCES

In 1996, the Company financed a considerable part of its operations  through the
early  payment of a license  fee  receivable,  a modest  increase in revenue and
effective  cost cutting  measures  that  maintained  certain  expenses at levels
similar to 1995. The principal use of these funds has been the retirement of the
amount due to Sandata, Inc. ("Sandata"),  a former affiliate of the Company, and
the financing of the Company's software development activities.

The Company's  financial position in 1996 declined somewhat as cash decreased by
$60,550.  However the deficiency in working capital  decreased by  approximately
$222,355  from $463,003 in 1995 to $240,648 in 1996.  The financial  position of
the  Company  is  expected  to  improve  substantially  following  the  eventual
completion of the Revenue Canada audit of the Company's  scientific research and
experimental  development investment tax credit claims, which is scheduled to be
performed  by the end of March  1997,  and the  subsequent  collection  of these
amounts.

Cash flows from operations  decreased  approximately  $345,000 to  approximately
$104,000 in 1996  primarily  due to the increase in  receivables  from Harris of
$375,000 at year end,  which amount was paid in its entirety after the year end.
Cash flows from investing  activities amounted to a net outflow of approximately
$10,000 as  compared  to a net  outflow of  approximately  $56,000 in 1995.  The
change is primarily  attributable to decreased  purchases of fixed assets.  Cash
flows from  financing  activities  amounted  to a net  outflow of  approximately
$455,000 in 1995,  as compared  to a net  outflow of  approximately  $155,000 in
1996. This outflow is attributable  primarily to the repayment of amounts due to
Sandata.  As a result of these  activities  and the resulting  effect of foreign
currency  transactions,  the Company  recorded a net cash  outflow of $60,550 in
1996 as compared to a net cash outflow of $42,039 in 1995.

                                                                         Page 21
<PAGE>

The Company currently has no significant  capital commitments but may, from time
to  time,  consider  acquisitions  of  complementary  businesses,   products  or
technologies;  it has no present understandings,  commitments or agreements with
respect to any such acquisitions.

As of October 31, 1996, the Company's  available  funds  consisted of $37,362 in
cash.


COMMITMENTS AND CONTINGENCIES

SUPPORT CLASS B SPECIAL SHAREHOLDERS REDEMPTION

In 1987 and 1989,  Support  issued a total of 3,600  Class B special  shares for
$358,200  Canadian.  These  shares are  non-voting,  entitled to  non-cumulative
dividends of $8 Canadian per share and are  redeemable  at the option of Support
for an  aggregate  amount of  $540,000  Canadian.  As at October  31,  1996,  no
dividends had been paid or declared on these shares.

EMPLOYMENT AND CONSULTING AGREEMENTS

Reference is made to Note I-2 to the Company's consolidated financial statements
included herein as Item 7 for a discussion of certain  employment and consulting
agreements   entered  into  by  the  Company  or  Support  and  certain  minimum
compensation obligations thereunder.


PLAN OF OPERATION

The Company's  liquidity at October 31, 1996 was  insufficient to meet operating
requirements. The Company has therefore undertaken the following initiatives and
actions  to reduce  its  working  capital  deficiency  and  alleviate  cash flow
demands:

TRADE CREDITORS

In the past, the Company has successfully  negotiated  extended  repayment terms
with several large trade  creditors.  Although the Company's  objective is to be
current with all its  creditors,  these  extensions  have ensured the  continued
viability  of  the  Company.  The  Company  is  continuing  to  actively  pursue
additional extensions with its creditors.

INCREASE REVENUES FROM EXISTING CUSTOMERS

The  Company's  products  and  services  are  used  by more  than  50  customers
worldwide.  The  Company is seeking to expand its current  customer  revenues by
providing additional products and services, by licensing additional users and by
upgrading  customers  from its  COMPASS(TM)  service  bureau to its FOMS service
bureau  offering.  To assist in this  effort,  the Company has  reorganized  its
development  group into teams and tasked these teams with the development of new
functionality based on customer-based market research.

                                                                         Page 22
<PAGE>

EXPAND SALES EFFORTS

In 1996, the Company  introduced  COMRAD to the marketplace and had successfully
sold this offering to two airlines  prior to October 31, 1996.  The Company also
realized the need for more  representation  in the North American market.  It is
the Company's  intention to seek such  representation  in the near future and to
provide for continued effective management of the sales and marketing group.

MANAGEMENT STRUCTURE

The Company,  through recruitment,  has continued to strengthen the capabilities
of the management  team.  Specifically,  the  appointment  of a Chief  Operating
Officer  during the year (see Item 9 hereof)  has  resulted  in a more  cohesive
operating plan for the Port Washington and Waterloo offices for 1997.

SUMMARY

Management is committed to implementing and enhancing the above noted plan on an
ongoing basis. While these plans have resulted in some immediate  benefits,  the
Company will require additional funding to achieve its objectives and intends to
seek such from various  sources,  including debt or equity offerings when and if
such financing is available to the Company.  No assurances can be given that any
required  financing  will be  available  on  commercially  reasonable  terms  or
otherwise.  In addition,  no assurances  can be given that the Company's Plan of
Operation  as set  forth  above  will be  successful  (whether  due to a lack of
required financing or otherwise).

In carrying out its future  growth  strategy,  the Company will also continue to
investigate  possible  business  combinations  aimed at improving  the operating
efficiencies  of the Company and enhancing  stockholder  value.  These  business
combinations   may  include  mergers  and  acquisitions  as  well  as  strategic
technology and marketing alliances.

                                                                         Page 23
<PAGE>


ITEM 7.   FINANCIAL STATEMENTS

The financial statements,  under Item 13 hereof, begin on Page F-1 following the
main body of this document.


                                                                         Page 24
<PAGE>


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

Not applicable.



                                                                         Page 25
<PAGE>


                                    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 the positions and offices presently held with the
Company  and  Support by each  executive  officer  who is not a Director  of the
Company, as well as by each significant employee of the Company and Support, and
his or her age as of December 31, 1996:


                    EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
                    ----------------------------------------
               
                                            Positions and Offices Presently Held
            Name                     Age        With the Company and Support
--------------------------------- --------- ------------------------------------

     Duncan Macdonald                 37       Chief Executive Officer and 
                                               Chief Financial Officer

     William Bowra                    36       Chief Operating Officer and 
                                               Vice President of Business 
                                               Development
================================================================================

                             SIGNIFICANT EMPLOYEES
                             ---------------------
                                            Positions and Offices Presently Held
            Name                      Age      With the Company and Support
---------------------------------- -------- ------------------------------------

     Kahal de Haan                    33        Director of Functional 
                                                Architecture for Support

     Robert Dowding                   29        Director of Systems Development 
                                                for Support

     Eric Johnson                     54        Vice President Technical of 
                                                Support

     Robert Sosnowski                 31        Director of Technical
                                                Architecture for Support

     Michael Taylor                   55        Director of Flight Operations 
                                                for Support

     Rainer Vietze                    30        Director of Finance
================================================================================

                                                                         Page 26
<PAGE>


     DUNCAN MACDONALD has served as Chief Executive Officer of the Company since
March 1996 and Chief Financial  Officer of the Company since July 1995 (see Item
12  hereof).  From July 1994 to July 1995,  Mr.  Macdonald  provided  management
consulting services to the Company and Support in a non-officer capacity.  Since
January  1992,  Mr.  Macdonald  has also served as managing  partner of Decision
Strategies Inc., a management consulting firm based in Ottawa, Ontario.

     WILLIAM BOWRA has served as Vice  President  of Business  Development  for
Support  since  March  1996.  Furthermore,  he has served as  Vice President  of
Business  Development and Chief  Operating  Officer of the Company since October
1996. From 1993 to 1996, Mr. Bowra served as the Regional Sales Manager for AT&T
Canada, a Canadian  telecommunications  service provider. From 1988 to 1993, Mr.
Bowra served as a Corporate Account Manager for AT&T/NCR.

     KAHAL DE HAAN has served as the  Director of  Functional  Architecture  for
Support since September 1995. Prior thereto and from 1990, Mr. de Haan served as
a software engineer for Support.

     ROBERT  DOWDING  has  served as the  Director  of Systems  Development  for
Support since September 1995. Prior thereto and from 1992, Mr. Dowding served as
a software  engineer for Support.  From 1990 to 1992, Mr. Dowding was a software
engineer with Navtel, Inc., a Canadian telecommunications firm.

     ERIC JOHNSON has held the position of Vice  President  Technical of Support
since 1987.  From 1982 to 1987,  Mr.  Johnson owned Hangar  Books,  a publishing
company that  specialized  in the aviation  field.  Mr. Johnson also has fifteen
years experience as a navigator in the Royal Canadian Air Force.

     ROBERT  SOSNOWSKI has served as the Director of Technical  Architecture for
Support since September 1995.  Prior thereto and from 1989, Mr. Sosnowski served
as a software engineer for Support.

     MICHAEL TAYLOR has served as the Director of Flight  Operations for Support
since  1991.  Prior to  joining  Support,  Mr.  Taylor  spent  seven  years with
Worldways Canada where he served as training captain and check pilot. Mr. Taylor
was also a pilot for the Royal Canadian Air Force for 28 years.

     RAINER VIETZE, C.A., joined the Company in November 1995 as the Director of
Finance.  Prior to joining the Company, Mr. Vietze worked as a manager for Doane
Raymond  Chartered  Accountants  (the  Canadian  member  firm of Grant  Thornton
International) for the period from 1990 to 1995.

     Each executive  officer will hold office until the next regular  meeting of
the Board of Directors  following  the next Annual  Meeting of  Stockholders  or
until his or her successor is elected or appointed and qualified.
     
     Certain other information called for hereunder has been omitted pursuant to
Paragraph E(3) of the General  Instructions  inasmuch as the Company  intends to
file definitive proxy materials  containing such information with the Securities
and Exchange  Commission  not later than 120 days after the end of the Company's
fiscal year ended October 31, 1996.

                                                                         Page 27
<PAGE>


ITEM 10.  EXECUTIVE COMPENSATION

The information called for hereunder has been omitted pursuant to Paragraph E(3)
of the General  Instructions  inasmuch as the Company intends to file definitive
proxy  materials  containing such  information  with the Securities and Exchange
Commission  not later than 120 days after the end of the  Company's  fiscal year
ended October 31, 1996.


                                                                         Page 28
<PAGE>


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information called for hereunder has been omitted pursuant to Paragraph E(3)
of the General  Instructions  inasmuch as the Company intends to file definitive
proxy  materials  containing such  information  with the Securities and Exchange
Commission  not later than 120 days after the end of the  Company's  fiscal year
ended October 31, 1996.


                                                                         Page 29
<PAGE>


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information called for hereunder has been omitted pursuant to Paragraph E(3)
of the General  Instructions  inasmuch as the Company intends to file definitive
proxy  materials  containing such  information  with the Securities and Exchange
Commission  not later than 120 days after the end of the  Company's  fiscal year
ended October 31, 1996.


                                                                         Page 30
<PAGE>


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

     2(A) Stock  Purchase  Agreement  dated as of October 31, 1993 among Bert E.
Brodsky, Muriel Brodsky, Navtech Systems Consulting Inc. (now called Ray English
and Associates Inc.), Ray English and Dorothy English (1)


     2(B)  Stock  Purchase   Agreement  dated  as  of  October  31,  1993  among
Compuflight,  Inc., Bert E. Brodsky,  Navtech Systems Consulting Inc.(now called
Ray English and Associates Inc.), Ray English and Dorothy English (1)


     3(A)  Certificate  of  Incorporation   and  amendments   thereto  including
Certificate of Ownership and Merger (5)

     3(B) By-Laws (3)


     9    Voting Trust Agreement dated as of July 15, 1995 among Ray English and
Associates  Inc.,  Dorothy A. English and Dorothy A. English,  as voting trustee
(5)

     10(A) Employment Agreement dated as of December 1, 1993 between the Company
and Russell K. Thal (4)  Amendment  #1 thereto  dated  March 14,  1996 (5),  and
amendment thereto dated January 8, 1997

     10(B) Incentive Stock Option Plan (3)

     10(C) Non-Qualified Stock Option Plan (2)

     10(D)   Consulting   Agreement   dated  as  of  November  1,  1993  between
Compuflight,  Inc. and Bert E. Brodsky,  together with  amendment  thereto dated
December 2, 1993 (1)

     10(E)  Promissory  Note  dated as of  November  1, 1993  payable by Bert E.
Brodsky to the order of  Compuflight,  Inc. in the principal  amount of $804,000
(1)

     10(F) Letter  agreement  dated November 1, 1993 between  Sandata,  Inc. and
Compuflight, Inc. (5)

     10(G) Lease  dated  March 31, 1994  between  Seagull  Associates  Inc.  and
Compuflight,  Inc.,  as  amended,  with  respect  to Port  Washington,  New York
premises (5)

     10(H) Lease dated October 8, 1996 between Ferdi Investments Company Limited
and Navtech Systems Support Inc. with respect to Waterloo, Ontario premises

     10(I) 1995 Key Employees and Advisors Stock Option Plan as amended (5)

     10(J) Consulting  and  Marketing  Agreement  dated as of  January  1, 1995
between Navtech Systems Support Inc. and Ray English and Associates Inc. (5)

                                                                         Page 31
<PAGE>

     10(K)  Promissory Note dated as of July 15, 1995 payable by Ray English and
Associates Inc. in the principal amount of $750,000 (5)

     10(L)  Amendment  to  the  Promissory  Note  payable  by  Ray  English  and
Associates Inc. in the principal amount of $750,000 dated as of June 12, 1996
(6)

     10(M)  Key  Advisor   Agreement   dated  as  of  October  1,  1995  between
Compuflight, Inc. and Kenneth M. Snyder (5)

     10(N)  Amended and Restated  Stock Option  Agreement  dated as of August 9,
1995 between Compuflight, Inc. and Kenneth M. Snyder (5)

     10(O)  Stock  Option   Agreement   dated  as  of  August  9,  1995  between
Compuflight, Inc. and Duncan Macdonald (5)

     10(P)  Key  Advisor  Agreement  dated as of June 1,  1996  between  Navtech
Systems Support Inc. and Duncan Macdonald (6)

     21 Subsidiaries(4)

     27 Financial Data Schedules


(1)  The Company  hereby  incorporates  the  footnoted  Exhibit by  reference in
accordance with Rule 12b-32,  as such Exhibit was originally filed as an Exhibit
to the Company's Current Report on Form 8-K for an event dated December 1, 1993.

(2)  The Company  hereby  incorporates  the  footnoted  Exhibit by  reference in
accordance with Rule 12b-32,  as such Exhibit was originally filed as an Exhibit
to the Company's  Annual Report on Form 10-KSB for the fiscal year ended October
31, 1992.

(3)  The Company  hereby  incorporates  the  footnoted  Exhibit by  reference in
accordance with Rule 12b-32,  as such Exhibit was originally filed as an Exhibit
to the Company's Registration Statement on Form S-18 as Registration No.
2-93714-NY.

(4)  The Company  hereby  incorporates  the  footnoted  Exhibit by  reference in
accordance with Rule 12b-32,  as such Exhibit was originally filed as an Exhibit
to the Company's  Annual Report on Form 10-KSB for the fiscal year ended October
31, 1993.

(5)  The Company  hereby  incorporates  the  footnoted  Exhibit by  reference in
accordance with Rule 12b-32,  as such Exhibit was originally filed as an Exhibit
to the Company's  Annual Report on Form 10-KSB for the fiscal year ended October
31, 1994.

(6)  The Company  hereby  incorporates  the  footnoted  Exhibit by  reference in
accordance with Rule 12b-32,  as such Exhibit was originally filed as an Exhibit
to the Company's  Annual Report on Form 10-KSB for the fiscal year ended October
31, 1995.


(b)  Reports on Form 8-K

     The Company did not file any Current Reports on Form 8-K during the quarter
ended October 31, 1996.

                                                                         Page 32
<PAGE>


 

                         INDEX TO FINANCIAL STATEMENTS

                                                                           Page
                                                                           ----
                                                                           
Report of  Independent  Certified Public  Accountants                      F-2

Financial  Statements  
     Consolidated  Balance Sheet as of October 31, 1996                    F-3  

     Consolidated  Statements  of Earnings  for the Years Ended
     October 31, 1996 and 1995                                             F-4 

     Consolidated Statement of Shareholders' Equity for
     the Years Ended  October 31, 1996 and 1995                            F-5  

     Consolidated  Statements of Cash Flows for the Years Ended  
     October 31, 1996 and 1995                                             F-6 

     Notes to  Consolidated Financial Statements                     F-7 - F-20

                                   F-1

<PAGE>





                         REPORT OF INDEPENDENT CERTIFIED
                               PUBLIC ACCOUNTANTS


Board of Directors and Shareholders
   Compuflight, Inc.

We have audited the accompanying consolidated balance sheet of Compuflight, Inc.
and  Subsidiaries  (the  "Company")  as of  October  31,  1996  and the  related
consolidated  statements  of earnings,  shareholders'  equity and cash flows for
each  of  the  two  years  then  ended.  These  financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Compuflight,  Inc. and  Subsidiaries  as of October 31, 1996, and the results of
its  consolidated  operations  and its cash flows for each of the two years then
ended, in conformity with generally accepted accounting principles.

The  consolidated  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern. As shown in the financial  statements,
the Company has a deficiency in working capital of $240,648.  This factor, among
others, as described in Note B to the consolidated financial statements,  raises
substantial  doubt about the Company's  ability to continue as a going  concern.
Management's  plans in regard to these matters are also described in Note B. The
consolidated  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.




/s/Grant Thornton LLP
GRANT THORNTON LLP


Melville, New York
January 21, 1997


                                      F-2
<PAGE>


                       Compuflight, Inc. and Subsidiaries

                           CONSOLIDATED BALANCE SHEET

                                October 31, 1996


                                     ASSETS

CURRENT ASSETS
    Cash and cash equivalents                                       $   37,362  
    Accounts receivable, net of allowance for doubtful accounts               
      of $72,700                                                       601,075  
    License fee receivable                                             108,750  
    Prepaid expenses and other                                          22,500  
                                                                    ----------  
        Total current assets                                           769,687  

INVESTMENT TAX CREDITS RECEIVABLE                                      762,331  

FIXED ASSETS, NET                                                      253,044  

OTHER ASSETS                                                            29,836  
                                                                    ----------  
                                                                               
                                                                    $1,814,898  
                                                                    ----------  
                                                                    ----------

                      LIABILITIES AND SHAREHOLDERS' EQUITY

 CURRENT LIABILITIES
     Accounts payable and accrued liabilities                       $  765,162  
     Deferred salaries                                                   8,155  
     Due to related parties - current portion                          237,018  
                                                                    ----------  
                                                                     1,010,335  

 DUE TO RELATED PARTIES                                                 39,750  

 MINORITY INTERESTS                                                    258,790  

 COMMITMENTS                                                  

 SHAREHOLDERS' EQUITY                                                           
     Common stock, par value $.001 per share; authorized                        
       2,500,000 shares; issued and outstanding,                                
       1,701,980 shares                                                  1,702  
     Additional paid-in capital                                      1,545,745  
     Notes receivable - former chairmen                               (962,508) 
     Cumulative foreign exchange adjustment                             65,159  
     Accumulated deficit                                              (144,075) 
                                                                    ----------  
                                                                       506,023  
                                                                    ----------  
                                                                    $1,814,898  
                                                                    ----------
                                                                    ----------  
                                                                    
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT.


                                      F-3
<PAGE>


                       Compuflight, Inc. and Subsidiaries

                       CONSOLIDATED STATEMENTS OF EARNINGS

                             Year ended October 31,

                                                  1996                  1995    
                                               -----------           ---------- 
                                                                                
Revenue                                                                         
    Service fees                               $3,078,084            $3,102,667 
    Hardware, software and license sales          496,505                62,101 
                                               ----------            ---------- 
                                                                                
                                                3,574,589             3,164,768 
                                               ----------            ---------- 
                                                                                
Costs and expenses                                                              
    Operating                                   2,048,957             2,001,449 
    Research and development                      412,524               223,224 
    Selling, general and administrative         1,123,920               896,759 
    Depreciation and amortization                 133,072               132,874 
                                               ----------            ---------- 
                                                                                
                                                3,718,473             3,254,306 
                                               ----------            ---------- 
                                                                                
         Operating loss                          (143,884)              (89,538)
                                                                                
Other income (expense)                                                          
    Interest income                                59,825                42,983 
    Interest expense - related parties            (40,351)              (75,858)
    Interest expense - other                      (46,587)              (41,520)
    Realized foreign exchange loss                   (645)              (20,919)
    Scientific research and experimental                                        
     development credits                          290,347               159,395 
    Waiver of deferred salaries                     5,499               174,759 
    Other                                          25,462                13,140 
                                               ----------            ---------- 
                                                                                
Earnings before minority interests                149,666               162,442 
                                                                                
Earnings of minority interests                                           (8,235)
                                               ----------            ---------- 
         NET EARNINGS                          $  149,666            $  154,207 
                                               ==========            ========== 
                                                                                
Net earnings per share                              $0.09                 $0.10 
                                                     ====                  ==== 
                                                                                
Weighted average number of common shares
outstanding                                     1,691,563             1,576,980 
                                                =========             ========= 
                                                 


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.

                                      F-4
<PAGE>



<TABLE>
<CAPTION>
                       Compuflight, Inc. and Subsidiaries


                        STATEMENT OF SHAREHOLDERS' EQUITY

                      Years ended October 31, 1996 and 1995




                                                                                Notes        Cumulative
                                                               Additional    receivable -      foreign
                                          Common stock          paid -in       former        translation    Accumulated
                                        Shares      Amount       capital       chairmen       adjustment      deficit       Total
                                      ----------   ---------   -----------   ------------    -----------   -------------  ---------
<S>                                    <C>         <C>           <C>         <C>             <C>           <C>            <C>

Balance at November 1, 1994            1,576,980   $   1,577   $ 1,444,308   $ (1,149,780)   $    37,528   $    (447,948) $(114,315)

Amortization of notes receivable -
   former chairman                                                                 68,136                                    68,136
Repayments from RE&A - net                                                         31,111                                    31,111
Foreign translation adjustment                                                                    16,506                     16,506
Net earnings                                                                                                     154,207    154,207
                                       ---------   ---------   -----------   ------------    -----------   -------------  ---------

Balance at October 31, 1995            1,576,980       1,577     1,444,308     (1,050,533)        54,034        (293,741)   155,645

Issuance of common stock                 125,000         125       101,437                                                  101,562
Amortization of notes receivable -
   former chairman                                                                 71,266                                    71,266
Repayments from RE&A - net                                                         16,759                                    16,759
Foreign translation adjustment                                                                   11,125                      11,125
Net earnings                                                                                                     149,666    149,666
                                     -----------   ---------   -----------   -----------    -----------    -------------  ---------

Balance at October 31, 1996            1,701,980   $   1,702   $ 1,545,745   $  (962,508)   $    65,159   $  (144,075)   $  506,023
                                     ===========   =========   ===========   ===========    ===========   ===========    ===========


</TABLE>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT.


                                      F-5
<PAGE>

<TABLE>
<CAPTION>
                       Compuflight, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                             Year ended October 31,


                                                                                       1996             1995
                                                                                 ------------     ------------
<S>                                                                              <C>              <C>
   
Cash flows from operating activities
   Net earnings                                                                  $    149,666        $ 154,207
   Adjustments to reconcile net earnings to net cash provided
     by operating activities
       Depreciation and amortization                                                  133,072          132,874
       Provision for uncollectible accounts                                            68,685            9,892
       Minority interests                                                                                8,235
       Consulting fees, net                                                            71,266           68,136
       (Increase) decrease in operating assets
         Accounts receivable                                                         (266,390)         (54,047)
         Scientific research and experimental development credits                    (290,559)        (160,106)
         License fees receivable                                                      235,110          296,727
         Prepaid expenses and other                                                     3,247             (607)
       Increase (decrease) in operating liabilities
         Accounts payable and accrued liabilities                                       5,763          271,140
         Deferred salaries                                                             (5,499)        (174,759)
         Due to related parties                                                                       (102,815)
                                                                                    ---------        ---------

         Net cash provided by operating activities                                    104,361          448,877
                                                                                    ---------        ---------

Cash flows from investing activities
   Purchase of fixed assets                                                           (27,247)         (87,284)
   Payments from RE&A                                                                  16,759           31,111
                                                                                    ---------        ---------

         Net cash used in investing activities                                        (10,488)         (56,173)
                                                                                    ---------        ---------

Cash flows from financing activities
   Payment of notes - former affiliate                                               (197,337)        (240,000)
   Payment of demand loan                                                                             (203,789)
   Proceeds from notes                                                                 44,753           17,578
   Payment of notes                                                                    (2,943)         (29,063)
                                                                                    ---------        ---------

         Net cash used in financing activities                                       (155,527)        (455,274)
                                                                                    ---------        ---------

Effect of foreign translations on cash                                                 (1,104)          20,531
                                                                                    ---------        ---------


         NET DECREASE IN CASH AND CASH EQUIVALENTS                                    (60,550)         (42,039)

Cash and cash equivalents at beginning of year                                         97,912          139,951
                                                                                    ---------        ---------

Cash and cash equivalents at end of year                                            $  37,362        $  97,912
                                                                                    =========        =========

</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.

                                      F-6
<PAGE>


                       Compuflight, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            October 31, 1996 and 1995



NOTE A - DESCRIPTION OF BUSINESS AND ORGANIZATION

     Compuflight, Inc. ("Compuflight") and Subsidiaries, Navtech Systems Support
     Inc.  ("Support")  and  Efficient  Aviation  Systems Inc.  ("EAS")  (herein
     referred to  collectively  as the "Company") are engaged in the business of
     (1) providing  computerized  flight planning service to all segments of the
     aviation  industry,  but  principally to commercial  airlines and corporate
     aircraft  users and (2) selling  customized  versions of their  proprietary
     software to end users mainly throughout the United States and Canada.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     A summary of significant  accounting policies  consistently  applied in the
     preparation of the consolidated financial statements follows:

     1.  BASIS OF PRESENTATION

          The consolidated financial statements have been prepared assuming that
          the Company will continue as a going concern.  However,  as of October
          31, 1996, the Company has a deficiency in working  capital of $240,648
          and has incurred losses from operations. This raises substantial doubt
          about the  Company's  ability  to  continue  as a going  concern.  The
          consolidated  financial statements do not include any adjustments that
          may result should the Company be unable to continue in existence.



         The  Company  and its senior  management  group  have  focused on three
         specific areas to address both the strategic direction required and the
         daily  operational  issues to position  the Company for  profitability.
         First,  the Company has continued to increase its marketing  endeavours
         to  obtain  new  customers   and  will  be   introducing  a  number  of
         complementary  products to address marketplace demands.  Secondly,  the
         Company has been building an effective management  structure.  Thirdly,
         the  Company has  continued  its pursuit of  financing.  The  Company's
         operation is  dependent  upon its ability to obtain new  customers,  to
         maintain  profitable  levels  of  service,  and  to  maintain  existing
         financial arrangements or obtain new financing.  However, no assurances
         can be  given  that  the  Company  will be able  to  obtain  additional
         financing  or that the above  plans will enable the Company to continue
         in existence.



                                      F-7
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1996 and 1995



NOTE B (continued)

     2.  PRINCIPLES OF CONSOLIDATION

         The  consolidated   financial   statements   include  the  accounts  of
         Compuflight  and its  100%-owned  subsidiaries,  Support  and EAS.  All
         material  intercompany  balances and transactions have been eliminated.
         In accordance with Statement of Financial  Accounting Standards No. 52,
         "Foreign  Currency  Translations,"  assets and  liabilities  of foreign
         operations are  translated at current rates of exchange,  while results
         of operations are translated at average rates in effect for the period.
         Unrealized  translation  gains  or  losses  are  shown  as  a  separate
         component of stockholder's equity.

     3.  FIXED ASSETS

         Fixed assets are recorded at cost.  Depreciation  is provided using the
         straight-line  and declining  balance methods over the estimated useful
         lives of the related assets.

     4.  GOODWILL

          Goodwill is  recorded at cost and is included as a component  of other
          assets.  Amortization is computed on the straight-line method over ten
          years.

     5.  SOFTWARE COSTS

         The Company  capitalizes  expenditures  incurred for the development of
         existing software which has already reached  technological  feasibility
         and  expenses  all  other  costs.   Amortization  is  computed  by  the
         straight-line method over the estimated useful life of the software.

     6.  MINORITY INTERESTS

         Effective  November 24, 1995,  the Company issued 125,000 shares of its
         common  stock  in  exchange  for  500,000  shares  of  Support,   which
         represented  the  common  shares of Support  held by the one  remaining
         common  shareholder  of  Support,  Innovation  Ontario  Corporation,  a
         provincial  government agency, and,  accordingly,  the Company now owns
         100% of the  outstanding  common  shares of Support.  The excess of the
         fair  market  value of the  Company's  common  stock on the date of the
         exchange  ($101,563) over the Company's minority interest ($78,411) has
         been   recorded  as  goodwill   (included  in  other   assets)  in  the
         accompanying consolidated balance sheet.


                                      F-8
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1996 and 1995



NOTE B (continued)

         Minority interests at October 31, 1996 consist of 3,600 shares of Class
         B,  nonvoting  shares of  Support.  Such  shares,  issued for  $358,200
         Canadian   ($258,790  U.S.  at  October  31,  1996),  are  entitled  to
         noncumulative  dividends  of $8 per  share  and are  redeemable  at the
         option of the Company for $540,000  Canadian  ($405,000 U.S.). To date,
         no dividends have been declared or paid with respect to such shares.

     7.  USE OF ESTIMATES

         In preparing financial statements in conformity with generally accepted
         accounting  principles,  management  is required to make  estimates and
         assumptions  that affect the reported amounts of assets and liabilities
         and the disclosure of contingent  assets and liabilities at the date of
         the financial statements and revenues and expenses during the reporting
         period. Actual results could differ from those estimates.

     8.  INCOME TAXES

         Deferred  income  taxes  are  recognized  for the tax  consequences  of
         temporary   differences  by  employing   enacted  statutory  tax  rates
         applicable  to  future  years  to  differences  between  the  financial
         statement  carrying  amounts and the tax bases of  existing  assets and
         liabilities.  The effect on deferred  taxes of a change in tax rates is
         recognized in income in the period that includes the enactment  date. A
         valuation  allowance  has been  established  to offset the deferred tax
         assets as it is more likely than not that such deferred tax assets will
         not be realized.

     9.  NET EARNINGS PER SHARE

         Net  earnings  per share of common  stock are based  upon the  weighted
         average  number of shares  outstanding  during each year.  Common stock
         equivalents  consist of  additional  shares  that would be  outstanding
         assuming the exercise of dilutive  outstanding  stock options and stock
         warrants. No common stock equivalents were included in the earnings per
         share calculation  during fiscal 1996 and 1995 as their inclusion would
         not be materially dilutive.


                                      F-9
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1996 and 1995



NOTE B (continued)

    10.  REVENUE RECOGNITION

         Revenue  from license  fees is  recognized  at the later of delivery of
         software  master  copy or,  if  applicable,  fulfillment  of all  other
         significant obligations under terms of license agreements.  The Company
         has no  significant  expenditures  relating  either  to  warranties  or
         post-contract  customer  support  bundled  with the initial sale of the
         license and,  therefore,  no provision is included in the  consolidated
         financial  statements.  For those agreements where there is uncertainty
         as to  ultimate  collection,  revenue  is  recognized  only  as cash is
         received (see Note J). Systems consulting and  implementation  fees and
         hardware commissions are recognized upon rendering of services.  Custom
         programming,  communication and database income, and service bureau and
         support  revenue are  recognized  ratably over  applicable  contractual
         periods or as services are performed. Amounts billed but not yet earned
         and payments received prior to the earnings of the revenue are recorded
         as deferred revenue.

    11.  CASH FLOWS

         For purposes of the statements of cash flows, the Company considers all
         highly liquid debt instruments  purchased with an original  maturity of
         three months or less to be cash equivalents.  The Company paid interest
         of  approximately  $47,600  for the year  ended  October  31,  1996 and
         approximately $69,300 for the year ended October 31, 1995.

    12.  ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

          Statement of Financial  Accounting  Standards No.123 ("SFAS No. 123"),
          "Accounting   for  Stock-Based   Compensation,"   is  required  to  be
          implemented  in fiscal 1997 and  introduces  a choice in the method of
          accounting used for employee  stock-based  compensation.  Entities may
          use  the  "intrinsic  value"  method  currently  based  on  Accounting
          Principles  Board No. 25 ("APB No. 25"),  "Accounting for Stock Issued
          to Employees" or the new "fair value" method contained in SFAS No.123.
          The  Company  intends  to  implement  SFAS No.  123 in fiscal  1997 by
          continuing to account for employee stock-based  compensation under APB
          No. 25. As  required  by SFAS No.  123,  the pro forma  effects on net
          income  and  earnings  per  share  will  be   determined   as  if  the
          fair-value-based method had been applied and disclosed in the notes to
          the  consolidated  financial  statements.  The Company  will apply the
          provisions of SFAS No. 123 in accounting  for stock options  issued to
          nonemployees.


                                      F-10
 <PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1996 and 1995



NOTE C - LICENSE FEE RECEIVABLE

     The Company has entered into license agreements granting end user licensees
     a  nonexclusive  perpetual  right  to  use  the  Company's  flight-planning
     software.  Historically,  the Company has  offered its  licensees  extended
     payment  terms.  In those  instances,  the related  license  fees have been
     discounted to reflect  financing costs of 15% per annum.  Revenue from such
     agreements  is  recorded  upon the later of the  delivery  of the  software
     master  copy  or,  if  applicable,  fulfillment  of all  other  significant
     obligations  under the contract.  For agreements where there is uncertainty
     as to ultimate collection,  revenue is recognized only as cash is received.
     The license fee receivable at October 31, 1996 is due from one licensee.


NOTE D - INVESTMENT TAX CREDITS RECEIVABLE

     The  Company  has  filed  claims  for  Canadian   investment   tax  credits
     aggregating  $762,331  for fiscal  years ended  October  31,  1992  through
     October 31, 1996.  These scientific  research and experimental  development
     investment tax credits are available to certain  entities located in Canada
     for  qualified  scientific  research  expenditures.  The rate of credit for
     qualified  research and development  expenditures  varies  according to the
     status of the company  and, in certain  instances,  the  company's  taxable
     income for the prior year.

     In order for a company to receive  their  refunds,  the claims must undergo
     both a  financial  audit and a  scientific  audit by  Revenue  Canada,  the
     Canadian taxing authority.  Due to administrative delays by Revenue Canada,
     the scientific research and experimental development investment tax credits
     audit process has been slowed. As a result,  all claims made by the Company
     remain outstanding. The Company's claims filed for fiscal 1996 must undergo
     both a financial  and a scientific  audit.  A financial  audit of all other
     claims filed by the Company has been  completed.  These other claims remain
     subject to the scientific  audit,  which is expected to be completed during
     March 1997. The actual amount and ultimate  collection of these  investment
     tax  credits is  dependent  upon the results of the  Revenue  Canada  audit
     process and,  accordingly,  actual collections may be materially  different
     from the amounts provided for by the Company.

                                      F-11
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1996 and 1995



NOTE E - FIXED ASSETS

     Fixed assets consist of the following:
                                                   Useful                       
                                                    life                1996  
                                                 ----------          ---------- 
                                                                                
        Computer software                        5-10 years          $ 411,319  
        Computer equipment                       5-10 years            307,408  
        Furniture and fixtures                   5-20 years             26,218  
        Leasehold improvements                      5 years              9,778  
                                                                     ---------  
                                                                                
                                                                       754,723  
        Less accumulated depreciation and amortization                          
                                                                       501,679  
                                                                                
                                                                     $ 253,044  
                                                                     ========= 
 



     Amortization expense for capitalized software totaled approximately $75,000
     and  $85,000  in 1996  and  1995,  respectively.  Accumulated  amortization
     approximated   $299,000   and  $224,000  at  October  31,  1996  and  1995,
     respectively.


NOTE F - TRANSACTIONS WITH RELATED PARTIES

     NOTES RECEIVABLE - FORMER CHAIRMEN

     1.  The  Company's  former  Chairman's  (through  December  1, 1993)  total
         indebtedness  (the "Note") to the Company of $804,000 as of November 1,
         1993 is payable in equal monthly  installments  over a ten-year  period
         together  with  interest  at 4-1/2% per  annum.  Further,  the  Company
         entered into a ten-year consulting  agreement,  as of November 1, 1993,
         with the former Chairman providing for fees payable  substantially upon
         the same terms of the  indebtedness  repayment.  As the  balance of the
         Note will be recovered by the Company  through the  utilization  of the
         former Chairman's consulting services, the Note has been presented as a
         separate component of shareholders' equity.


                                      F-12
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1996 and 1995



NOTE F (continued)

     2.   In 1993, Support charged its parent company,  Ray English & Associates
          ("RE&A"),  a  management  and  marketing  fee in  connection  with the
          management of certain software owned by EAS,  formerly a subsidiary of
          RE&A.  Support also advanced  funds to RE&A in order to assist RE&A in
          meeting  its  obligations.  RE&A is owned by a former  chairman of the
          Company  (for the period  from  December 1, 1993  through  October 31,
          1994) who resigned from that  position on October 31, 1994.  Effective
          July 15, 1995,  RE&A  executed  and  delivered to Support a promissory
          note in the principal amount of $750,000 Canadian (the "RE&A Note") to
          evidence certain obligations to Support as of such date. The RE&A Note
          is  payable  on July 15,  2005 (or  sooner,  as  described  below) and
          provides for interest at the rate of 5% per annum payable annually.

         Further,  pursuant to a consulting and marketing agreement between RE&A
         and  Support,  RE&A will  provide  software  marketing  services to the
         Company.  Support  shall have the right to offset  $3,500  Canadian per
         month ($2,625 U.S. at October 31, 1996) against compensation  otherwise
         payable to RE&A  thereunder  as a payment of amounts due under the RE&A
         Note. The consulting and marketing agreement also provides for finder's
         fees and commissions of 2% and 10%, respectively,  for the introduction
         of potential clients and for the licensing of software. The Company has
         the right to apply 10% to 25%, as  defined,  of the  finder's  fees and
         commissions against amounts outstanding on the RE&A Note.

         Concurrent with the signing of the RE&A Note, RE&A also transferred all
         of its common  stock of the Company to a Voting Trust  ("Trust")  under
         the sole  administration  of Dorothy  A.  English.  Mrs.  English is an
         Executive  Vice  President  of the Company and the spouse of Raymond F.
         English, chairman and chief financial officer of RE&A. RE&A may recover
         its stock from the Trust upon the full payment of the RE&A Note and all
         accrued interest. Furthermore, while the RE&A Note remains outstanding,
         all  dividends,  if any,  accruing to RE&A's  common  stock held in the
         Trust will be applied against the balance owing on the RE&A Note.

         The Company has provided  for an  allowance of $300,000  Canadian as of
         October 31,  1996  ($225,000  U.S.  as of October 31,  1996) to reflect
         management's  estimate of the amount ultimately  collectible from RE&A.
         Such estimate is based  principally on the estimated net worth of RE&A,
         which, in turn, is substantially based upon the estimated fair value of
         the common shares of the Company beneficially owned by RE&A.


                                      F-13
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1996 and 1995



NOTE F (continued)

          Since the amount due from RE&A is in all likelihood  recoverable  only
          from  amounts  payable  by the  Company  to RE&A or from the  proceeds
          derived from RE&A's sale of the Company's common stock, the amount due
          from  RE&A,  net of  allowance,  has  been  classified  as a  separate
          component of shareholders' equity.


     DUE TO RELATED PARTIES

         Due to related parties at October 31, 1996 consists of the following:

             Accounts payable - former affiliate               $   26,002       
             Support shareholder demand loans (i)                  55,829       
             Accrued interest (i)                                  59,158       
             Loans payable - related parties (ii)                  90,000       
             Note payable - related party (iii)                    45,779       
                                                                  -------      
                                                               $  276,768       
                                                                  =======

          (i) Support  shareholder  demand loans bear interest at 15% per annum.
          Interest  in the amount of $59,158 is in arrears  and is  included  in
          accrued  interest.  

          (ii) Loans payable - related  parties  includes a chattel  mortgage on
          specific  computer  equipment  in  the  amount  of  $120,000  Canadian
          ($90,000  U.S.  at  October  31,  1996) due to a company  owned by the
          brother of a shareholder  of the Company.  The mortgage is due May 10,
          1997 and bears interest at 15% per annum payable monthly.


          (iii) Note payable - related  party  consists  of a note  payable to a
          company related to a director of the Company.


     WAIVER OF DEFERRED SALARIES

     During fiscal 1996 and 1995,  certain  employees waived salaries accrued in
     prior years, and, accordingly, the Company has presented the effect of such
     waivers as a component  of other  income in the  accompanying  consolidated
     statements of earnings.



                                      F-14
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1996 and 1995



NOTE G - INCOME TAXES

     The Company's  fiscal 1996 and 1995 effective  income tax rate differs from
     the statutory U.S. Federal income tax rate as a result of the following:
                                                  1996                    1995
                                                --------                -------

        Statutory U.S. Federal tax rate           34.0%                   34.0%
        Utilization of NOL carryforward          (34.0)                  (34.0)
                                                -------                 -------
                                                   -  %                    -  %
                                                =======                 =======

     The  temporary  differences  which  give rise to  deferred  tax  assets and
     liabilities at October 31, 1996 are summarized as follows:

        Deferred tax assets                                       
            Net operating loss carryforwards                     $ 306,000      
            Deferred salaries                                        6,000      
            Allowance for doubtful accounts                        127,000      
            Fixed assets                                            16,000      
                                                                  --------      
                                                                              
                 Total deferred tax assets                         455,000      
                                                                  --------      
                                                                              
        Deferred tax liabilities                                              
            License fees receivable                             $  (48,000)
            Scientific research and experimental development                  
               credits, net                                       (260,000)
                                                                  --------      
                 Total deferred tax liabilities                   (308,000)
                                                                  --------      
                 Net deferred tax assets                        $  147,000      
                                                                 =========      
                                                                              
        Valuation allowance                                     $ (147,000)
                                                                 =========      
                                                               
          During fiscal 1996, the Company  increased its valuation  allowance by
          $23,000  principally  due to the  recognition  of additional  U.S. net
          operating loss carryforwards.


                                      F-15
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1996 and 1995



NOTE G (continued)

     The Company,  for United  States  purposes,  has available to offset future
     taxable income net operating loss carryforwards approximating $1,309,000 at
     October 31, 1996, which expire through 2010.  However, due to the change in
     the Company's  ownership,  utilization  of the Company's net operating loss
     carryforwards is limited, pursuant to Internal Revenue Code Section 382, to
     an annual amount of approximately $13,000.  Therefore, of the $1,309,000 in
     net operating loss carryforwards,  the Company will only be able to utilize
     approximately  $349,000 of these net operating loss carryforwards to offset
     future taxable income.  Further, for Canadian tax purposes, the Company has
     available net operating  loss  carryforwards  and  scientific  research and
     experimental  development  credits of $631,000 Canadian ($470,000 U.S.) and
     $77,000 Canadian  ($57,226 U.S.),  respectively,  expiring through 2000 and
     2004, respectively.  The Company has established a valuation allowance with
     respect to its net deferred tax assets,  as it cannot  presently assess the
     utilization of such deferred tax assets as more likely than not.


NOTE H - STOCK OPTIONS

     The Company has adopted an incentive  stock option plan which,  as amended,
     reserved  125,000  unissued  shares of common stock for the plan.  The plan
     requires  that all options be granted at exercise  prices not less than the
     fair market value of the stock on the date of grant. In September 1987, the
     Company  adopted a  nonqualified  stock option plan which  reserved  62,500
     unissued  shares of common stock for the plan.  The  Company's  subsidiary,
     Support,  has outstanding  options to purchase 300,000 shares of its common
     stock at exercise prices ranging from $.20 to $.50 Canadian per share.

     In 1995,  the Company  adopted the 1995 Stock Option Plan (the "1995 Plan")
     which was subject to shareholder approval within a one-year period from its
     adoption by the Board of Directors.  As no such approval was obtained,  the
     1995  Plan,  and the  options  previously  granted  thereunder,  have  been
     terminated.

     Further,  in 1995,  the Company  adopted the 1995 Key Advisor  Stock Option
     Plan (the "1995  Advisor  Plan"),  which  provides  for the granting to key
     employees and advisors of the Company of nonqualified stock options for the
     purchase  of a  maximum,  as  amended  in 1996,  of  700,000  shares of the
     Company's  common stock.  Under the terms of the plan,  the options,  which
     expire no later than ten years  after  grant,  are  exercisable  at a price
     determined by the Board of Directors,  and become exercisable in accordance
     with terms established at the time of the grant.


                                      F-16
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1996 and 1995



NOTE H (continued)

     Summary information with respect to the stock option plans follows:

                                                                  
                                                                  
                                       Range of       Outstanding   Outstanding 
                                       exercise         options       options 
      Balance at November 1, 1994       prices          granted     exercisable 
                                     -------------    -----------   ----------- 
      Granted                        $1.00 - $3.24       78,377         77,627  
      Became exercisable                                                        
                                      0.625           1,150,000                 
                                      0.625 -  3.24                    350,250
                                                      ---------        -------  
                                                                                
      Balance at October 31, 1995     0.625 -  3.24   1,228,377        427,877  
                                                                                
      Terminated                      0.625            (600,000)                
      Granted                         0.625              25,000                 
      Became exercisable              0.625 -  3.24                    225,250
                                                      ---------        -------  
                                                                                
      Balance at October 31, 1996     0.625 -  3.24     653,377        653,127
                                                      =========        =======


NOTE I - COMMITMENTS                           
                                             
     1.   OPERATING LEASE COMMITMENTS         

          The Company  leases  equipment  and office  space  pursuant to various
          lease  agreements which expire through fiscal 1999. The annual rent of
          office space consists of minimum rent, real estate taxes,  maintenance
          and other expenses. The Company also leases certain computer equipment
          from a company  controlled by the spouse of an Officer and Director of
          the Company pursuant to an agreement which expires in fiscal 1998.


                                      F-17
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1996 and 1995



NOTE I (continued)

     Future minimum annual rental payments pursuant to these leasing  agreements
     as of October 31, 1996 are summarized as follows:

                                                     Related                    
                        Office                        party                     
                        space       Equipment       equipment         Total     
                      --------      ---------       ---------       ---------
                                                                                
            1997      $ 77,866      $ 32,332        $ 41,005        $ 151,203   
            1998        99,131        28,611          28,215          155,957   
            1999        61,480        23,532                           85,012   
            2000        59,479        14,349                           73,828   
            2001        66,476         1,073                           67,549   
                       -------       -------         -------          -------   
                                                                                
                      $364,432      $ 99,897        $ 69,220        $ 533,549   
                       =======       =======         =======          =======   
                         

     Rental  costs  for  fiscal  1996  and  1995  were  $162,468  and  $173,543,
     respectively.  Rental cost incurred in 1996 and 1995 in connection with the
     equipment   lease  with  the  related   party  was  $11,448  and   $32,485,
     respectively.


     2.   EMPLOYMENT AND CONSULTING CONTRACTS

          The Company has entered into employment and consulting agreements with
          its chairman,  chief executive officer, former chairmen and a director
          of the Company,  which provide for minimum monthly  compensation.  The
          Company's  obligations  under such agreements  expire at various times
          during the period from September 1997 through March 31, 2004. Further,
          the  employment  agreement  with the Company's  chairman,  as amended,
          provides for the obtaining of an annuity and/or insurance policy under
          which 60 consecutive monthly payments of $10,000 would be payable upon
          termination  of his  employment and $600,000 would be payable upon his
          death through March 31, 2004 (which amount  decreases to the extent of
          the $10,000 payments).



                                      F-18
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1996 and 1995



NOTE I (continued)

     Approximate aggregate minimum compensation obligations under all agreements
     at October 31, 1996 are summarized as follows:

                Year                                          Amount

                1997                                       $   416,500
                1998                                           313,300
                1999                                           231,500
                2000                                           219,000
                2001                                           136,500
                Thereafter                                     290,000
                                                             ---------
                                                            $1,606,800
                                                             =========

NOTE J - FAIR VALUE OF FINANCIAL INSTRUMENTS AND BUSINESS CONCENTRATIONS

     The carrying  amounts of cash,  accounts  receivable,  and  investment  tax
     credits  receivable  are estimated to  approximate  their fair values.  The
     Company  believes that it is not  practicable to estimate the fair value of
     its liabilities due to its current financial condition.

     During fiscal 1996,  the Company  settled a contract claim against a former
     customer for additional  work performed by the Company through fiscal 1993.
     Under the terms of the final settlement,  the Company received $450,000, of
     which $375,000 is included in accounts  receivable at October 31, 1996, and
     has included the settlement  proceeds as a component of hardware,  software
     and license sales revenue for the fiscal year ended October 31, 1996.

     In fiscal 1996,  three customers,  including the former customer  discussed
     above,  accounted  for 13%,  11% and 10%,  respectively,  of the  Company's
     consolidated  revenues,  and, in 1995, two customers  accounted for 15% and
     14%, respectively, of the Company's consolidated revenues.


                                      F-19
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1996 and 1995



NOTE J (continued)

     The Company has a significant  concentration in credit risk with respect to
     its license fee receivable,  in that the remaining unpaid fee receivable is
     due from a single customer in the commercial air  transportation  business.
     Generally,  the Company does not obtain other collateral in addition to its
     software license.


NOTE K - INDUSTRY SEGMENT INFORMATION AND GEOGRAPHIC AREA OPERATIONS

     The Company operates in one business segment, providing computerized flight
     planning  services  and  software  to  commercial  airlines  and  corporate
     aircraft users in the aviation industry.

     A summary of the Company's  operations  by  geographic  area for the fiscal
     years ended October 31, 1996 and 1995 is as follows:

                                                      1996               1995   
                                                   ----------         --------- 
                                                                                
        Net sales                                                               
            United States                       $  2,970,308        $ 2,620,421 
            Canada                                   368,743            370,766 
            Other                                    235,538            173,581 
                                                   ---------          --------- 
                                                                                
                Total net sales                 $  3,574,589        $ 3,164,768 
                                                   =========          ========= 
                                                                                
        Operating profit (loss)                                                 
            United States                       $    178,834        $    91,461 
            Canada                                  (322,718)          (180,999)
                                                   ---------          --------- 
                                                                                
                Total operating profit (loss)   $   (143,884)       $   (89,538)
                                                   =========          ========= 
                                                                                
        Identifiable assets                                                     
            United States                       $  1,570,299        $ 1,261,846 
            Canada                                 1,095,580          1,186,761 
            Eliminations                            (850,981)          (749,568)
                                                   ---------          --------- 
                                                                                
                Total identifiable assets       $  1,814,898        $ 1,699,039 
                                                   =========          ========= 

                                      F-20
<PAGE>





                                   SIGNATURES
                                   
         In accordance  with Section 13 or 15(d) of the Securities  Exchange Act
of 1934,  the  registrant  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated: February 11, 1997                     COMPUFLIGHT, INC.


                                                    By: /s/ RUSSELL K. THAL     
                                                    -----------------------
                                                    Russell K. Thal, Chairman 
                                                    of the Board of Directors


         In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following  persons on behalf of the  registrant  and in
the capacities and on the dates indicated.

         SIGNATURES                 CAPACITY                            DATE

                               Chairman of the Board
                               of Directors, Executive
                               Vice President and
/s/ Russell K. Thal            Director                        February 11, 1997
--------------------------
Russell K. Thal

                               Chief Executive Officer
                               and Chief Financial
                               Officer (Principal
                               Executive Officer and
                               Principal Financial
/s/ Duncan Macdonald           Officer)                        February 11, 1997
--------------------------
Duncan Macdonald

                               Executive Vice President
/s/ Dorothy A. English         and Director                    February 11, 1997
--------------------------
Dorothy A. English


/s/ Denis L. Metherell         Secretary and Director          February 11, 1997
--------------------------
Denis L. Metherell


/s/ Kenneth M. Snyder          Director                        February 11, 1997
--------------------------
Kenneth M. Snyder


                               Director of Finance
                               (Principal Accounting
/s/ Rainer Vietze              Officer)                        February 11, 1997
--------------------------
Rainer Vietze             
                                                                         
                                                                         Page 53