**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**




**FORM
          10-KSB/A**
 **AMENDMENT
          NO. 1**





**[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**





**For
      the Fiscal Year Ended October 31, 2006**





**[__] 
      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**





**For
      the Transition Period From _____ to ____**







Commission
      File Number 0-15362





**NAVTECH,
      INC.**


(Exact
      name of small business issuer in its charter)




**Delaware**
              **11-2883366**(State
                  or other jurisdiction of incorporation or organization)
              (I.R.S.
                  Employer Identification No.)**Navtech
                  Systems Suppport, Inc.**
                **Suite
                  200, 295 Hagey
                  Blvd.**
                **Waterloo,
                  Ontario,
                  Canada**
              N2L
                  6R5(Address
                  of principal executive offices)
              (Zip
                  Code)Issuer’s
                  telephone number, including area code:**(519)
                  747-1170**Securities
                  registered under Section 12(b) of the Exchange Act:Title
                  of Each Class
              Name
                  of Each Exchange
                on
                  Which RegisteredNone
              _______Securities
                  registered under Section 12(g) of the Exchange Act:Common
                  Stock, $.001 par value
                (Title
                  of class)


Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act.  [__]





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
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant's knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. [ ]





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes 
      [__]  No 
      [X]




State
      issuer's revenues for its most recent fiscal year: **$36,823,000**




The
      aggregate market value of the common stock held by non-affiliates, based upon
      the closing price of such stock as of December 31, 2006, was **$4,163,118**




**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 the issuer's common stock as of December 31,
      2006 was **4,333,450** shares.




Transitional
      Small Business Disclosure Format.  Yes  [__]  No 
      [X]




**DOCUMENTS
      INCORPORATED BY REFERENCE:  none**














**EXPLANATORY
            NOTE**
 
 This
            Amendment No.1 to Navtech, Inc.'s 10-KSB for the fiscal year ended October
            31,
            2006 is being filed solely to correct a calculation error made with regard
            to
            the "Value of Unexercised In-the-Money Options at October 31, 2006" set
            forth in
            the "Aggregated Option Exercises in Fiscal Year Ended October 31, 2006
            and
            Fiscal Year-End Option Values" table of Item
            10.




**Navtech,
            Inc.** **Page**
 **2006
            10-KSB**
 **2**


**NAVTECH,
      INC.**




**FORM
      10-KSB**




**For
      the Fiscal Year Ended October 31, 2006**




**INDEX**


**Part
                    I**Item
                    1.
                
                Description
                    of Business
                4Item
                    2.
                
                Description
                    of Property
                12Item
                    3.
                
                Legal
                    Proceedings
                13Item
                    4.
                
                Submission
                    of Matters to a Vote of Security Holders
                14**Part
                    II**Item
                    5.
                
                Market
                    for Common Equity, Related Stockholder Matters and Small
                  Business
                    Issuer Purchases of Equity Securities
                15Item
                    6.
                
                Management’s
                    Discussion and Analysis or Plan of Operation
                16Item
                    7.
                
                Financial
                    Statements
                27Item
                    8.
                
                Changes
                    in and Disagreements With Accountants on Accounting and
                  Financial
                    Disclosure
                28Item
                    8A.
                
                Controls
                    and Procedures
                29Item
                    8B.
                
                Other
                    Information
                30**Part
                    III**Item
                    9.
                
                Directors,
                    Executive Officers, Promoters and Control Persons; Compliance
                  With
                    Section 16(a) of the Exchange Act
                31Item
                    10.
                
                Executive
                    Compensation
                34Item
                    11.
                
                Security
                    Ownership of Certain Beneficial Owners and Management
                  and
                    Related Stockholder Matters
                37Item
                    12.
                
                Certain
                    Relationships and Related Transactions
                41Item
                    13.
                
                Exhibits
                43Item
                    14.
                
                Principal
                    Accountant Fees and Services
                46INDEX
                    TO FINANCIAL STATEMENTS
                F-1SIGNATURES
                47













**Navtech,
            Inc.** **Page**
 **2006
            10-KSB**
 **3**





**PART
      I**




**Forward-Looking
      Statements**




This
      document contains forward-looking statements as that term is defined in the
      federal securities laws. The events described in forward-looking statements
      we
      make in this Form 10-KSB may not occur. Generally these statements relate to
      business plans or strategies, projected or anticipated benefits or other
      consequences of our plans or strategies, projected or anticipated benefits
      from
      acquisitions that have been or may be made by us, or projections involving
      anticipated revenues, earnings or other aspects of our operating results. The
      words "may," "will," "expect," "believe," "anticipate," "project," "plan,"
      "intend," "estimate," and "continue," and their opposites and similar
      expressions are intended to identify forward-looking statements. We caution
      you
      that these statements are not guarantees of future performance or events and
      are
      subject to a number of uncertainties, risks and other influences (including
      those discussed under “Other Considerations” in Item 6 below), many of which are
      beyond our control, that may influence the accuracy of the statements and the
      projections upon which the statements are based. Our actual results, performance
      and achievements could differ materially from those expressed or implied in
      these forward-looking statements. We undertake no obligation to publicly update
      or revise any forward-looking statements, whether from new information, future
      events or otherwise.




**Dollar
      Amounts**




Whenever
      we state dollar amounts in this document, we mean United States dollars (unless
      we specifically indicate otherwise).




**Item
      1. Description of Business**





**THE
      COMPANY**





Navtech,
      Inc. (“Navtech-US”) was originally incorporated in the State of New York in 1981
      and then reincorporated in the State of Delaware in 1987. Navtech Systems
      Support Inc. (“Navtech-Canada”), a wholly-owned subsidiary of Navtech-US, was
      incorporated in the Province of Ontario in 1987. Navtech (UK) Limited
      (“Navtech-UK”), a wholly-owned subsidiary of Navtech-Canada, was incorporated in
      the United Kingdom in 1994. Navtech, LLC, a wholly-owned subsidiary of
      Navtech-Canada, was formed in the State of Delaware in 2005. Navtech (Sweden)
      AB, a wholly-owned subsidiary of Navtech-Canada, was incorporated in Sweden
      in
      2005. European Aeronautical Group AB (“EAG”), a wholly-owned subsidiary of
      Navtech (Sweden) AB, was incorporated in Sweden in 1986. European Aeronautical
      Group (UK) Limited (“EAG UK”), a wholly-owned subsidiary of EAG, was
      incorporated in the United Kingdom in 2002. When we refer to Navtech, we are
      speaking of Navtech, Inc. and its subsidiaries.





Our
      principal operations are based at Suite 200, 295 Hagey Blvd., Waterloo, Ontario,
      Canada, N2L 6R5. We maintain a website at www.navtechinc.com. Our common stock
      is publicly traded on the OTC Bulletin Board under the symbol “NAVH”. For
      investor information, we can be reached at (519) 747-1170.





**Navtech,
            Inc.** **Page**
 **2006
            10-KSB**
 **4**


**RECENT
        DEVELOPMENTS**
 
 **Acquisition
        of European Aeronautical Group AB**
  On
        November 22, 2005, we acquired all of the issued and outstanding shares of
        European Aeronautical Group AB (“EAG”) from SAS Group AB. The purchase
        price for the EAG shares was SEK (Swedish Krona) 156 million (approximately
        $19.3 million USD) in cash and possible future cash payments to a maximum
        of SEK
        27 million (approximately $3.7 million USD) conditional on the achievement
        of
        certain business performance measures through
        July 31, 2008. As at October 31, 2006, we met the criteria under SFAS 141
        for
        recognition of a portion of the contingent payments related to performance
        measures to October 31, 2006. Consequently, a liability of SEK 2.3 million
        (approximately $311,000 USD) was recorded as goodwill and acquisition
        consideration payable which is due within the next fiscal year. As the outcome
        of future performance measures become determinable beyond a reasonable doubt,
        the amount of the acquisition consideration payable could increase to the
        maximum of SEK 27 million (approximately $3,676,000 USD). Of the total SEK
        27
        million contingency payments, a maximum of SEK 13.5 million is due during
        the
        fiscal year ending October 31, 2007 and the remaining maximum amount of SEK
        13.5
        million is due during the fiscal year ending October 31, 2008. The
        share
        purchase agreement provided for an adjustment to the purchase price based
        on
        finalization of the working capital of EAG at closing, which was completed
        during the fiscal year ended October 31, 2006. The resulting reduction in
        the
        purchase price of SEK 9.3 million (approximately $1,158,000 USD) is reflected
        in
        the cash figure of SEK 156 million above, and was received in cash from SAS
        Group AB in August 2006. The acquisition was financed with the preferred
        stock
        offering and the private placement described below. EAG provides aeronautical
        documentation and systems to the aviation industry including aeronautical
        charts
        and navigation data**.**


**Preferred
      Stock Offering**




On
      November 22, 2005, we issued 1,600,000 shares of Series A Convertible
      Participating Preferred Stock (the ‘Series A Preferred Stock’), and warrants to
      acquire 100,000 shares of our Common Stock with an exercise price of $3.00,
      for
      $4,000,000 cash consideration. The proceeds were used to consummate the EAG
      acquisition. The terms of the Series A Preferred Stock and warrants are
      summarized in Item 12 of this Annual Report.





**Private
      Placement**




On
      November 22, 2005, Navtech-Canada entered into a Note Purchase Agreement whereby
      Navtech-Canada agreed to sell (i) $6,000,000 Senior Subordinated Notes, with
      an
      interest rate of 9.0% and due 2011 and (ii) $15,000,000 Senior Subordinated
      Notes, with an interest rate of 12.5% and due 2011. In connection with the
      sale
      of the Senior Subordinated Notes, we also issued to the purchaser warrants
      to
      purchase 312,176 shares of Common Stock with an exercise price of $0.01. The
      proceeds received by Navtech-Canada in connection with the private placement
      were used to consummate the EAG acquisition.





**BUSINESS
      OF THE COMPANY**





We
      develop, market and support flight operations management systems for the
      commercial aviation industry. Our systems are designed to assist commercial
      passenger and cargo air carriers in the management of their daily flight
      operations.





We
      believe that our success is generally attributable to four factors. First,
      we
      offer best of breed solutions through our retention of a highly skilled and
      experienced technical and flight operations workforce that combine knowledge
      of
      both aviation and software development. Second, we employ a highly regarded
      technical and operations support team that provides customer service on a
      round-the-clock basis. Third, we have a broad customer base that includes small,
      medium and large airlines, and they consist of charter, cargo, and scheduled
      passenger carriers that operate in all geographic regions of the world. Finally,
      we have a reputation as an entrepreneurial organization capable of partnering
      and meeting the ever-changing needs of our customers to allow them to
      effectively compete in their marketplace.





**Navtech,
            Inc.** **Page**
 **2006
            10-KSB**
 **5**




**Strategy**
 
 Our
        objective is to be the premier provider of a complete and integrated flight
        operations management system to the airlines of the world. We will achieve
        this
        objective with a concentrated effort on continued product development and
        geographic expansion. We intend to continue to enhance our premiere flight
        planning, aircraft performance, and crew planning product lines; introduce
        our
        newly acquired aeronautical charts and FMS data into new geographic markets
        and
        build, license or acquire the required functionality to complete our overall
        integrated flight operations management system.
 
 **Industry
        Overview**
 
 The
        flight operations industry has undergone significant changes in recent years
        with a number of trends emerging that have had a significant impact on the
        marketplace. These trends have caused convergence of flight operations
        management systems as it relates to airspace management and the different
        functions required to efficiently manage airlines operations. The major trends
        are:
  ·
              Significant
                    increases in operating costs including labor, insurance and,
                    most
                    recently, security and
                    fuel;


·
            Rationalization
                of routes by the major network carriers in response to the general
                economic conditions and the increased competition from low fare
                carriers;


·
            Strategic
                investments by airlines in the areas of operational planning, control,
                revenue and network management and customer
                loyalty;


·
            Increased
                outsourcing of non-core business activities as a means of reducing
                costs.




The
      effects of convergence and the development of hardware technology, operating
      systems and wireless technology should continue the trend toward the creation
      of
      a real-time integrated operations control system wherein the air traffic control
      authorities, airline operations centers and pilots all have the same information
      available to make decisions and can seamlessly communicate and implement those
      decisions throughout their networks.





Airline
      passenger traffic during our last fiscal year continued to recover after the
      tragic events of September 11, 2001 and the viral epidemic Severe Acute
      Respiratory Syndrome (SARS) early in 2003. However, the lingering effects of
      these events continue to depress the industry. Traffic has recovered, but ticket
      prices and yields have remained depressed due to the continued penetration
      of
      low cost carriers and the overcapacity of seats.





Volatility
      in the industry has resulted in airlines carefully managing their capital and
      operating expenditures, which has had a corresponding effect on our market.
      This
      has also resulted in an increased length of sales cycle and, at times, a
      reduction of the resources that prospective customers can apply to evaluating
      and improving internal systems. Finally, there have been new entrants in most
      segments of the crew scheduling and dispatch markets in recent years. These
      factors have combined to lead to price declines in certain product-market
      segments.





The
      more
      recent recovery and industry restructuring among airlines in North America
      and
      Europe, and the drive for increased operational efficiency within the airlines,
      has led to a significant increase in interest for certain products and services
      that we offer. As well, the continuing deregulation of the airline industry
      in
      Asia (excluding China and India) is leading to a record number of new start-up
      airlines, a phenomenon similar to the previous North American and more recent
      European industry cycles.







**Navtech,
            Inc.** **Page**
  **2006
              10-KSB**
 **6**


**Market
      Trends**




Trends
        in
        the airline industry have created a market for firms capable of creating
        a fully
        integrated operations management system that interfaces with legacy systems
        and
        performs all of the following required functions in an integrated
        fashion:




·
              Flight
                  Planning
 ·
              Aircraft
                  Performance
 ·
              Aeronautical
                  Charts
 ·
              FMS
                  Data
 ·
              Airline
                  Schedule and Commercial Planning
 ·
              Crew
                  Scheduling
 ·
              Aircraft
                  Maintenance
 ·
              Ground
                  Operations
 ·
              Reservations
  The
          flight support business is facing a technical paradigm shift, gradually
          moving
          from paper products to electronic solutions. Changes in customer requirements
          regarding functionality and interactivity are resulting in the combination
          of
          aeronautical data and software, in “paperless” operational use.
 
 This
          will
          change the business model for providers of flight operations solutions
          and we
          think will result in further industry consolidation.


**Current
      Solutions**





*Flight
      Plan Services*





·
            **Dispatch*****Pro******TM*****&
                RODOS*****TM******.***These
                flight planning systems provide real-time mission critical decision
                support to the dispatcher or airline operations manager in the creation
                of
                a flight release and the subsequent tracking and reporting of airline
                performance. The systems bring together the requirements of flight
                planning, weather, Notices to Airmen (NOTAMs), communications, flight
                schedule maintenance, mapping, runway analysis, aviation communications,
                third-party integration and management reporting. Dispatch*Pro**TM*and/or RODOS***TM***are currently used by customers in North America, Europe, and the
                Asia-Pacific region.





·
            **Web*****FP******TM***.
                Web*FP**TM*is
                an Internet-based version of Dispatch*Pro**TM***available
                to airlines with smaller fleet sizes that may reduce their requirements
                for the more sophisticated functionality of our Dispatch*Pro**TM*product.





·
            **Dispatch*****Express******TM***-
                Dispatch*Express**TM*is
                a web-based crew briefing system. With Dispatch*Express****TM***airlines can streamline and standardize the process of providing
                necessary
                flight paperwork to crew members, allow crew members to request up
                to the
                minute weather and other operational updates, and reduce the costs
                typically associated with the distribution of this data by by-passing
                proprietary third-party networks.





*Aeronautical
      Charting*





·
            **Route
                Manual*****TM*****&
                Aerad*****TM*****.**Route Manual*TM*and Aerad*TM*products provide international Aerodrome and Enroute charts, and
                are
                available as paper-based or electronic products. Aerodrome charts
                provide
                standard arrival and departure routes/procedures, approach procedures
                and
                aerodrome layout diagrams for international airports. Enroute charts
                provide the navigational and operational information for a required
                flight
                path.





**Navtech,
            Inc.** **Page**
 **2006
              10-KSB**
 **7**


**Navigation
      Database Services**


·
              **Navigation
                  Database Services.**Our FMS data service supports navigation databases for most major
                  flight
                  management systems. Databases are updated for each AIRAC cycle
                  and
                  tailored to an airline’s requirement, optimizing the use of its flight
                  management system and minimizing processing
                  costs.
 
 *Aircraft
        Performance Systems*
 
 ·
              **V1*****Plus******TM***.
                  Our V1*Plus**TM*service is an aircraft performance engineering subscription service
                  that
                  is offered to airlines that do not maintain in-house engineering
                  departments to provide regulatory approved aircraft take-off and
                  landing
                  performance calculations. Our Aircraft Performance Systems group
                  prepares
                  monthly manuals or CD-ROMs that provide customized updated take-off
                  and
                  landing data specific to various aircraft/engine combinations,
                  flap
                  settings and runways for thousands of airports around the world.
                  V1*Plus**TM*is
                  also available in an onboard solution and as an integrated module
                  to
                  Dispatch*Pro**TM*.
 
 ·
              **ToDc*****TM***.
                  ToDc*TM*software allows the customer to perform aircraft take-off and landing
                  performance calculations internally. With an integrated airport
                  database
                  and an interface to aircraft performance data provided by the aircraft
                  manufacturer, the system enables the customer to produce the required
                  take-off and landing data in a format specified by the
                  user.
 
 ·
              **C.G.
                  Pro*****TM***.
                  Our aircraft weight and balance system, C.G. Pro*TM*,
                  incorporates aircraft first principles and technology to improve
                  flight
                  release processes and on-time effectiveness. The system is available
                  for
                  use on a stand-alone basis or across a network, and in both wide
                  and
                  narrow body aircraft, in passenger, freight or combination
                  configurations.


*Outsourced
      Services*





·
            **Operations*****Centre******TM***.
                Our Operations*Centre**TM*service provides outsourced dispatch services to airlines around
                the
                world. Our capabilities include flight planning, overflight and landing
                permits, slot control, ground handling, and flight following. This
                service
                is targeted at small and start up carriers that may not be able to
                afford
                in-house dispatch or those that have seasonal flight operations and
                do not
                want to deal with annual hiring, training and dismissing to meet their
                changing requirements.





*Crew
      Management Systems*





·
            **CLASS*****TM***.
                CLASS*TM*,
                a
                preferential bidding system, allows the user to match available flying
                to
                an individual crew member’s preferences in order to produce and optimize a
                final crew schedule that respects contractual constraints and airline
                specific operating requirements. Today, our customers’ pilots and flight
                attendants use CLASS*TM*to
                bid their scheduling preferences globally via the Internet, which
                makes
                the process of crew planning simple and efficient. The system is
                a true
                win-win for the airline and its crew members and demonstrates extremely
                high overall crew satisfaction, and a reduction in crew-related expenses
                and crew planner work.





·
            **CygnusTM**.
                In August 2003, we acquired the source code rights to a premium crew
                pairing optimizer, CygnusTM, in use by some of the world’s premiere
                airlines. A crew pairing optimizer is the primary tool available
                to
                airlines and crew planners in minimizing crew costs and ensuring
                operational effectiveness once the contract and marketing schedule
                are
                set.




·
            **Crew*Bid**TM***.
                  Crew*Bid**TM*is
                  our suite of applications for crew members to state or bid for
                  preferences
                  for training, vacation assignments or trading of duties. Our system
                  is
                  accessible worldwide via the Internet and greatly reduces the costs
                  associated with gathering and sorting through this information
                  from crew
                  members as there are, usually, contractual penalties for the airline
                  for
                  improper processing. Crew members benefit through standardization
                  of
                  processes and accessibility to features and functions associated
                  with the
                  work schedule that otherwise would not be available through the
                  use of
                  manual systems.


**Navtech,
              Inc.** **Page**
 **2006
                10-KSB**
 **8**


*Ancillary
        Products and Services*
 
 ·
              **Customer
                  Support**.
                  We offer comprehensive software support and customer account management
                  in
                  the United States, Canada, Africa, Europe, and the Asia Pacific
                  region
                  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 system functionality and
                  ongoing
                  enhancements, and 24/7 telephone hot-line support. We believe that
                  quality
                  support services are a critical component of the customer’s satisfaction
                  level. Our customer support services are provided from centers
                  in Canada,
                  the United Kingdom and Sweden.
 
 ·
              **Custom
                  Programming Services**.
                  Design and programming services are provided to customers that
                  require
                  specific custom solutions to their flight operations requirements.
                  We
                  believe that there is an increased demand in the commercial aviation
                  market for systems integration services that link our software
                  to third
                  party vendor applications. We also provide consulting services
                  to assist
                  customers in optimizing the use of the product functionality within
                  their
                  flight operations process.
 
 **Customers**
 
 We
        have a
        broad customer base that consists of all types of airlines carriers including
        leading international carriers, national airlines, large business jet operators,
        scheduled passenger, low cost airlines, charter, specialty cargo, commuter
        airlines, and recent start-up airlines. Our core market by number of aircraft
        has been small to medium sized air carriers that operate modern aircraft
        with
        fleet sizes of 5 - 100 aircraft; however, our customer base includes customers
        with one aircraft up to the largest carriers in the world. Our primary
        geographical markets are North America, Europe, India/Middle East, and the
        Asia
        Pacific region. With the acquisition of EAG in November 2005, we have broadened
        our customer base from approximately 120 airlines to more than 250 worldwide.
        Approximately 26% of our revenue is from customers based in Europe (excluding
        the United Kingdom and Sweden), 24% in the United Kingdom, 23% in Sweden,
        22% in
        North America, and the remainder in other regions including Asia Pacific,
        Africa, the Middle East, Mexico and South America.


**Industry
      Competition**





The
      market for the flight support services and systems is intensely competitive
      and
      subject to rapid change. We expect competition to increase in the future as
      new
      market entrants and products come to market and consolidation of vendors
      continues. We believe that the principal competitive factors include product
      functionality, total cost of solution, support infrastructure, and underlying
      technology.





Our
      main
      competitors can be divided into three main categories:





·
            Major
                airline information technology spin-offs such as Lufthansa’s Information
                Technology Software GmbH (Lufthansa Systems), The Sabre Group (a
                former
                subsidiary of American Airlines), and
                EDS;


·
            Large
                aviation software vendors such as Jeppesen (owned by Boeing), Honeywell,
                SITA (the European aviation network provider), ARINC (the American
                aviation network provider), and Kronos (providers of work-force management
                systems); and


·
            Smaller
                independent companies with annual revenue of less than $20 million
                that
                have developed flight operations management solutions for commercial
                aviation, such as AIMS, Carmen Systems, Air Data, FWZ, and
                AOS.





We
      believe that competitors that lack a full product portfolio will require a
      close
      cooperation or partnership with major suppliers in order to survive. This has
      resulted in a number of consolidation transactions of the smaller independent
      companies in our industry during the last few years.


**Navtech,
              Inc.** **Page**
 **2006
                10-KSB**
 **9**


**Marketing
        and Distribution**
 
 We
        employ
        a direct sales force to market our products and services in North America,
        Europe, the Asia Pacific region and Australia through offices in Canada,
        the
        United Kingdom, Singapore and Sweden. In addition, we employ an account
        management team that provides customer and sales support and sells add-on
        services to existing customers. The further development of this team in fiscal
        2006 and the acquisition of EAG will continue to enhance our ability to
        distribute new products to new and existing customers, expand our customer
        base
        into new geographical areas, and target different types and sizes of air
        carriers.
 
 We
        have
        chosen to use direct sales as our primary means of distribution since (i)
        the
        nature of our sales transactions typically represent smaller recurring revenue
        streams; (ii) the number of potential customers is small; and (iii) the primary
        markets that we are currently targeting include modern industrial nations.
        However, we do employ sales agents to represent us in specific markets where
        local representation is required, or where language/cultural support is needed.
        The sales approach is revisited periodically and additional distribution
        partners may be secured if appropriate.
 
 **Product
        Development**
 
 Prior
        to
        the acquisition of EAG, most of our software products were developed internally.
        EAG has historically used third parties to assist in the development of software
        products and production tools. We plan to continue utilizing both our internal
        development resources and external development partners, depending on the
        nature
        of the development required for our products. We also purchase technology
        and
        license intellectual property rights.
  We
        have
        established development methodologies and procedures that provide structure
        to
        our product development activities and allow us to track the efforts of the
        internal product development group. Development through third-party resources
        is
        also tracked by a quality management system and subject to ISO 9001-2000
        certification in EAG’s United Kingdom and Swedish offices.
  We
        communicate with our customers through account managers and user group meetings
        to determine the latest requirements of the operations department of an airline.
        The product management function within our business coordinates requirements
        and
        manages the life-cycle and positioning of our products.


During
      fiscal 2006 and 2005 (prior to the acquisition of EAG), we spent approximately
      $1,433,000 and $989,000, respectively, on product research and development
      activities. These amounts represented approximately 4% and 9%, respectively,
      of
      revenue in each of those years. These amounts exclude capitalized costs
      associated with the development of software for internal use of $652,000 in
      fiscal 2006 and nil in fiscal 2005. We are committed to continuing our
      expenditures on research and product development.





**Intellectual
      Property Rights**





We
      regard
      all of our software products as proprietary. Access to our software products
      is
      provided under service agreements or software licenses that generally restrict
      the use of the software to the customer’s operations or third parties affiliated
      with the customer.





**Government
      Regulations**





We
      are
      not subject to any government regulations with respect to the operations of
      our
      business, with the exception of the navigational database services which
      requires certification from the European Aviation Safety Agency.










**Navtech,
              Inc.** **Page**
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Employees


As
        of
        December 31, 2006, we had a total of 261 employees (of which 255 were full
        time
        employees) located in the following countries:
 
 ·
              89
                  in Canada
 ·
              6
                  in the United States
 ·
              3
                  in Asia Pacific
 ·
              79
                  in the United Kingdom
 ·
              84
                  in Sweden
 
 We
        are
        bound by collective bargaining agreements for our salaried staff in the Swedish
        office. These agreements are applicable to salaried employees of companies
        associated with the Swedish Air Transport Industry. We believe that our employee
        relations in each country where we maintain an office are good. We believe
        that our success will depend, to a large degree, upon our ability to attract
        and
        retain highly skilled, technical, managerial and sales personnel, and to
        retain
        personnel with flight operations expertise.
 
 Navtech,
              Inc. Page
 2006
                10-KSB
 11


**Item
      2. Description of Property**





We
      have
      offices in the following locations:





**Waterloo,
      Ontario, Canada**





In
      order
      to support growth in the North American market, Navtech-Canada relocated on
      October 30, 2006 to a larger facility, located at Suite 200, 295 Hagey Blvd.
      Waterloo, Ontario. This office encompasses approximately 20,000 square feet
      of
      space and is used for flight operations, software development, customer support,
      sales, account management and administration. The lease provides for a current
      monthly rent expense, inclusive of common area rent, of approximately $50,000
      Canadian (approximately $44,500 US) and terminates on October 31,
      2015.





**Crawley,
      West Sussex, UK**





In
      May
      2006, we merged our Crawley, West Sussex, UK office into our Hersham, Surrey,
      UK
      office. The Crawley lease provides for a current monthly rent expense, inclusive
      of common area rent, of approximately £4,000 (approximately $7,600 US) and
      expires in May 2008. We have entered into an arrangement with a third party
      to
      sublet our Crawley location premises until the expiry of our lease.





**Hersham,
      Surrey, UK**





EAG
      UK
      leases approximately 12,600 square feet at Hersham House, Lyon Road,
      Walton-on-Thames, Surrey, UK. This location supports the Aerad charting and
      Navdata product lines including production, sales, customer support and
      administration. The monthly rent is approximately £19,000 (approximately $36,100
      US) and the lease expires in June 2010. The lease includes a provision which
      allows us to terminate with three months notice.




**Northolt,
      Middlesex, UK**





EAG
      UK
      also leases approximately 7,000 of square feet at Building 106 RAF Northolt,
      Middlesex, UK, which is on an English Ministry of Defence site near Heathrow
      Airport. The premises are used for storage, packing and distribution of
      aeronautical charts. The monthly rental is £10,100 (approximately $19,200 US).
      The lease expires at the end of July 2009.





**Häggvik,
      Sollentuna - Stockholm, Sweden**





EAG
      leases approximately 21,000 square feet of office space at Hammarbacken 12
      in
      Sollentuna, Stockholm, Sweden. The monthly rent is SEK 301,000 (approximately
      $41,500 US) pursuant
      to a sublease that expires in December 2008.





Our
      total
      rent expense was approximately $1,416,000 for the year ended October 31, 2006.
      We believe that the facilities are adequate for our current needs and that
      suitable additional space will be available as required.


**Navtech,
              Inc.** **Page**
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**Item
      3. Legal Proceedings**





There
      are
      no significant outstanding legal proceedings.




**Navtech,
              Inc.** **Page**
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 **13**





**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, 2006.


**Navtech,
              Inc.** **Page**
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**PART
      II**





**Item
      5.**  **Market
      for Common Equity, Related Stockholder Matters and Small Business Issuer
      Purchases of Equity Securities**





**Market
      Information**





Our
      Common Stock is traded on the OTC Bulletin Board under the symbol “NAVH”. The
      high and low closing prices of the Common Stock are listed below by fiscal
      quarter. These prices represent prices between dealers; they do not include
      retail markup, markdown or commission.





High
            
            
            LowYear
                Ended October 31, 2006Fourth
                Quarter
            
            $
            3.25
            
            $
            2.65Third
                Quarter
            
            
            3.36
            
            
            2.85Second
                Quarter
            
            
            3.90
            
            
            2.45First
                Quarter
            
            
            3.20
            
            
            1.95Year
                Ended October 31, 2005Fourth
                Quarter
            
            $
            3.10
            
            $
            2.20Third
                Quarter
            
            
            4.75
            
            
            1.98Second
                Quarter
            
            
            2.40
            
            
            1.70First
                Quarter
            
            
            1.70
            
            
            1.06





**Shareholders**





Our
      transfer agent has advised that the approximate number of record holders of
      Common Stock at December 31, 2006 was 299.





**Dividends**





We
      have
      paid no cash dividends on the Common Stock and we do not anticipate paying
      any
      cash dividends on the Common Stock in the foreseeable future. The note purchase
      agreement referred to in Item 1 of this Annual Report contains restrictions
      on
      dividend payments.




Subsequent
      to the year-end, we declared and paid a dividend of $200,000 on the Series
      A
      Preferred Stock. A description of the terms of the Series A Preferred Stock
      is
      contained in Item 12 of this Annual Report.




**Recent
      Sales of Unregistered Securities**





There
      were no sales of unregistered shares during the quarter ended October 31, 2006.




**Navtech,
                Inc.** **Page**
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                  10-KSB**
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**Item
      6. Management’s Discussion and Analysis**








**FACTORS
      AFFECTING OPERATING RESULTS**





***Acquisition
      of European Aeronautical Group (AB)***




On
      November 22, 2005, we acquired all of the issued and outstanding shares of
      European Aeronautical Group AB (“EAG”) from SAS Group AB (“SAS”). The results of
      operations of EAG from November 22, 2005 to October 31, 2006 (approximately
      11-1/3 months) are included in the results of operations for the year ended
      October 31, 2006.




The
      acquisition has had a significant impact on the majority of our financial
      comparatives including revenue, operating costs and expenses and assets and
      liabilities. EAG’s revenue and expenses have historically been considerably more
      than twice that of our revenue and expenses prior to the acquisition.




The
      acquisition of EAG has enhanced our position as a provider of integrated flight
      operations solutions to airlines on a global basis. With EAG as part of our
      operations, we have expanded our product suite to include aeronautical charting
      and navigational data services and significantly increased our European customer
      base. We now provide flight operations software and services to over 250
      airlines globally.




***Common
      Stock Repurchase***




On
      March
      28, 2006, we signed an agreement to repurchase 620,690 shares of our Common
      Stock for $1,800,000 (or $2.90 per share) in a private sale transaction. The
      shares were delivered and the transaction closed during April 2006. The
      repurchase represented 12.7% of our Common Stock outstanding at that time,
      or
      8.1% on a diluted basis (after giving effect to all potentially dilutive
      securities).




**Navtech,
                Inc.** **Page**
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**RESULTS
      OF OPERATIONS**




***Overview***




For
      fiscal 2006, our revenues increased approximately $25,680,000 (230%) while
      costs
      and expenses increased approximately $23,725,000 (225%), resulting in an
      increase in Income from operations of $1,955,000 as compared to fiscal 2005.
      (See “Revenue” and “Costs and Expenses” for more detail.). Interest expense
      increased $2,452,000 as a result of the debt incurred to finance the acquisition
      of EAG. A tax recovery of $351,000 was recorded in 2006 mainly as a result
      of
      the recognition of certain tax assets.




*Year
                Ended October 31,*
              *In
                thousands of dollars*
            
            
            **2006**
            
            
            **2005**
            
            
            **Percentage**
              **Change**Revenue
            
            **$**
            **36,823**
            
            $
            11,143
            
            
            230
            %Costs
                and expenses
            
            
            **34,255**
            
            
            10,530
            
            
            225
            %*Income
                from operations*
            
            
            **2,568**
            
            
            613
            
            
            319
            %Interest
                expense
            
            
            **2,481**
            
            
            29
            
            
            -*Earnings
                before income taxes*
            
            
            **87**
            
            
            584
            
            
            (85
            %)*Recovery
                of income taxes*
            
            
            **351**
            
            
            89
            
            
            294
            %*Net
                earnings*
            
            
            **438**
            
            
            673
            
            
            (35
            %)





***Critical
      Accounting Policies***





The
      preparation of this report requires us to make estimates and assumptions that
      affect the reported amount of assets and liabilities at the date of our
      financial statements, and the reported amounts of revenue and expenses during
      the reporting period. On an ongoing basis, management evaluates its estimates
      and judgments, including those related to revenue recognition. Management bases
      its estimates and judgments on historical experience and on various other
      factors that are believed to be reasonable under the circumstances. The
      application of accounting policies that are reflective of significant estimates
      could result in materially different results under different assumptions and
      conditions, and actual results may differ from the estimates used.





We
      consider accounting policies to be critical when there is significant complexity
      or judgment involved in their application. We have identified the policies
      below
      as critical to the understanding of our results of operations.





All
      significant accounting policies are disclosed in Note 2 to the consolidated
      financial statements contained in Item 7.





*Revenue
      recognition*





We
      generate revenue from the following primary sources: (i) monthly subscription
      fees which may include monthly software license fees, hosting services, and
      customer support and data services; (ii) professional services consisting of
      software configuration and custom programming; and (iii) the sale of computer
      hardware.





To
      determine the appropriate revenue recognition, we consider the terms of the
      contracts, taken as a whole, under which services are to be provided. Depending
      on the terms of these contracts, we recognize revenue under American Institute
      of Certified Public Accountants Statement of Position (“SOP”) 81-1, “Accounting
      for Performance of Construction-Type and Certain Production-Type Contracts”
(“SOP 81-1”), SOP 97-2, “Software Revenue Recognition” (“SOP 97-2”), or SEC
      Staff Accounting Bulletin (“SAB”) 104, “Revenue Recognition” (“SAB 104”), which
      was preceded by SAB 101, “Revenue Recognition in Financial Statements” (“SAB
      101”). The application of these requirements may involve significant judgment in
      terms of estimates and assumptions.




**Navtech,
              Inc.** **Page**
 **2006
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 For
          certain contracts, we also apply the Financial Accounting Standards Board
          (“FASB”) Emerging Issues Task Force (“EITF”) Issue No. 00-21, “Revenue
          Arrangements with Multiple Deliverables”, which requires us to evaluate each
          deliverable to determine whether it represents a separate unit of accounting
          based on certain criteria. Based on that assessment, each identified unit
          of
          accounting is accounted for under the applicable revenue recognition
          guidance.
  We
        have
        classified our products and service revenue under the following categories
        and
        revenue recognition policies:





a)
            Service
                fees





Service
      fees revenue consists of monthly subscription fees which may include monthly
      software license fees, hosting services, and customer support and data services.
      We recognize subscription fee revenue as the services are provided on a monthly
      basis.





We
      recognize revenues related to a hosting arrangement under SOP 97-2 only if
      the
      customer has the contractual right to take possession of the software at any
      time during the hosting period without significant penalty and it is feasible
      for the customer to either run the software on its own hardware or contract
      with
      another party unrelated to the vendor to host the software. Hosting arrangements
      that do not give the customer such an option are service contracts for which
      we
      recognize the revenue in accordance with SAB 104.





b)
            Professional
                fees





Professional
      services revenue consists of software configuration and custom programming.
      When
      customer contracts relate to customized software development and the customer
      has the right to, or has ownership of the software, we recognize revenue under
      SOP 81-1 using the percentage-of-completion method. In using the
      percentage-of-completion method, we recognize revenue based on a measure of
      the
      percentage of costs incurred to date on a contract relative to the estimated
      total expected contract costs. We evaluate profit estimates on long-term
      contracts on a regular basis and revise if necessary based on changes in
      circumstances. Any losses on contracts are recognized in the period that such
      losses become known.





c)
            Hardware
                revenue





Sales
      of
      hardware include arrangements where we provide hosting equipment to our
      customers. In circumstances where we provide specific computer equipment to
      fulfill obligations under hosting arrangements, we recognize revenue under
      EITF
      Issue No. 01-8, “Determining whether an Arrangement Contains a Lease.” We record
      a sale of hardware under a capital lease arrangement if the conditions meet
      the
      definition of a sales-type lease as defined in Statement of Financial Accounting
      Standards (“SFAS”) 13.




*Income
      taxes*





We
      account for income taxes in accordance with FASB SFAS No. 109, “Accounting for
      Income Taxes” (“SFAS 109”). SFAS 109 requires the determination of deferred tax
      assets and liabilities based on the differences between the financial statement
      and income tax bases of assets and liabilities, using estimated tax rates in
      effect for the year in which the differences are expected to
      reverse.





The
      majority of our deferred tax assets relate to losses and income tax credits
      from
      prior years available to reduce income taxes payable in future years in certain
      jurisdictions. The measurement of our deferred tax asset involves judgment
      as to
      whether it is more likely than not that the benefit of the losses and credits
      will be realized. We reduce our deferred tax asset by a valuation allowance
      in
      circumstances we believe appropriate.





Also
      see
      our accounting policy related to income taxes in Note 2 to the consolidated
      financial statements contained in Item 7.





**Navtech,
                Inc.** **Page**
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                  10-KSB**
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***Recently
      Issued Accounting Pronouncements***





*Stock-based
      compensation*





In
      December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based
      Payment” ("SFAS 123R"), which is a revision of SFAS 123, as amended by SFAS 148.
      SFAS 123R supersedes Accounting Principles Board Opinion 25, “Accounting for
      Stock Issued to Employees” and amends certain provisions of SFAS No. 95,
“Statement of Cash Flows”. SFAS No. 123R requires all share-based payments to
      employees, including grants of employee stock options to be measured at fair
      value. In addition, SFAS 123R will cause unrecognized expense (based on the
      amounts in our pro forma footnote disclosure) related to options vesting after
      the date of initial adoption to be recognized as a charge to operations over
      the
      remaining vesting period. We are required to adopt SFAS 123R effective November
      1, 2006. Under SFAS 123R, we must determine the appropriate fair value model
      to
      be used for valuing share-based payments, the amortization method for
      compensation cost and the transition method to be used at the date of adoption.
      The transition alternatives include prospective and retroactive adoption
      methods. Under the retroactive method, prior periods may be restated either
      as
      of the beginning of the year of adoption or for all periods presented. The
      prospective method requires that compensation expense be recorded for all
      unvested stock options and share awards at the beginning of the first quarter
      of
      adoption of SFAS 123R, while the retroactive method would record compensation
      expense for all unvested stock options and share awards beginning with the
      first
      period restated.





In
      March
      2005, the SEC issued SAB No. 107 (“SAB 107”) regarding the SEC’s interpretation
      of SFAS 123R and the valuation of share-based payments for public
      companies.





For
      the
      year ending October 31, 2007, the impact of adopting SFAS 123R using the
      modified prospective method will be a decrease in consolidated earnings of
      approximately $90,000 and a decrease
      in diluted earnings per share of $0.01.





*Accounting
      for uncertainty in income taxes*





In
      June
      2006, the FASB issued FIN No. 48, ‘‘Accounting for Uncertainty in Income Taxes,
      an interpretation of FASB Statement No. 109’’ (‘‘FIN 48’’). FIN 48 clarifies the
      accounting for uncertainty in income taxes recognized in an enterprise’s
      financial statements in accordance with SFAS 109. The interpretation prescribes
      a recognition threshold and measurement attribute for the financial statement
      recognition and measurement of a tax position taken or expected to be taken
      in a
      tax return. FIN 48 also provides accounting guidance on derecognition,
      classification, interest and penalties, accounting in interim periods,
      disclosure and transition. FIN 48 is effective for fiscal years beginning after
      December 15, 2006. We will adopt the provisions of FIN 48 on November 1, 2007.
      We are currently in the process of assessing the impact of FIN 48 on our results
      of operations and financial condition.





*Fair
      value measurements*





In
      September 2006, the FASB issued SFAS No. 157 ‘‘Fair Value Measurements’’ (‘‘SFAS
      157’’). SFAS 157 provides accounting guidance on the definition of fair value
      and establishes a framework for measuring fair value in U.S. GAAP and expands
      disclosures about fair value measurements. SFAS 157 is effective for financial
      statements issued for fiscal years beginning after November 15, 2007. We plan
      to
      adopt the provisions of SFAS 157 on November 1, 2008. The implementation of
      SFAS
      157 is not expected to have a material impact on our results of operations
      or
      financial condition.




**Navtech,
                Inc.** **Page**
 **2006
                  10-KSB**
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*Quantifying
      and evaluating the materiality of unrecorded misstatements.*





In
      September 2006, the SEC issued SAB No. 108 (‘‘SAB 108’’), which addresses the
      process for considering the effects of prior year misstatements when quantifying
      misstatements in current year financial statements. SAB 108 expresses the SEC
      Staff’s views regarding the process of quantifying financial statement
      misstatements. The interpretations in SAB 108 are intended to address diversity
      in practice in quantifying financial statement misstatements and the potential
      under current practice for the build-up of improper balance sheet amounts.
      The
      application of SAB 108 is effective for financial statements issued for an
      interim period of the first fiscal year ending after November 15, 2006. We
      will
      adopt the interpretations of SAB 108 on November 1, 2006. The
      implementation of SAB 108 is not expected to have a material impact on our
      results of operations or financial condition.




***Revenue***





Revenue
      is derived from the following sources:


i)
            Service
                fees from the provision of flight planning systems and services,
                aeronautical chart services, navigational data services, runway analysis
                services, crew management systems and services, and ongoing customer
                support;


ii)
            Professional
                services associated with customer specific software or product
                configuration or customized software development; and


iii)
            Hardware
                sales in conjunction with the initiation of services for a new
                customer.





Total
      revenue for fiscal 2006 increased 231% to $36,823,000 compared to $11,143,000
      in
      fiscal 2005, broken down as follows: ****





*Year
                Ended October 31,*
              *In
                thousands of dollars*
            
            
            2006
            
            
            2005
            
            
            Percentage
              ChangeService
                fees
            
            **$**
            **34,328**
            
            $
            8,108
            
            
            323
            %Professional
                services
            
            
            **2,396**
            
            
            1,750
            
            
            37
            %Hardware
                revenue
            
            
            **99**
            
            
            1,285
            
            
            (92
            %)Total
                revenue
            
            **$**
            **36,823**
            
            $
            11,143
            
            
            230
            %





*Service
      fees* -
      Service fees increased 323% primarily as a result of the acquisition of EAG,
      as
      EAG’s revenues have historically been considerably more than twice our revenues
      prior to the acquisition, and have consisted primarily of service fees.





*Professional
      services* -
      Professional services are predominantly a result of the configuration and custom
      programming services. Since EAG’s revenues consist primarily of service fees,
      the acquisition has resulted in lower professional services revenue as a
      percentage of total revenue.





*Hardware
      revenue* -
      Hardware sales have decreased compared to fiscal 2005 as a result of hardware
      sold in conjunction with the large professional services projects from fiscal
      2005 which have not recurred in 2006.





*Geographic
      Analysis*





Our
      products and services are used by airline carriers located primarily in the
      United Kingdom, Sweden, and other parts of Europe, although we also have
      customers located in the United States, Canada, Mexico, Africa, South America,
      the Middle East and the Asia Pacific region.








**Navtech,
            Inc.**  **Page**
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            10-KSB**
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The
      following table shows total revenues on a customer geographic basis for fiscal
      2006 and 2005 (in thousands):





*Year
                Ended October 31,*
            
            **Total
                Revenue***In
                thousands of dollars*
            
            
            **2006**
            
            
            2005Europe
                (excluding Sweden and UK)
            
            **$**
            **9,451**
            
            $
            815United
                Kingdom
            
            
            **8,893**
            
            
            385Sweden
            
            
            **8,256**
            
            
            56United
                States, Mexico, South America and Carribean
            
            
            **6,805**
            
            
            6,984Canada
            
            
            **1,650**
            
            
            2,541Africa,
                Middle East and Asia Pacific
            
            
            **1,768**
            
            
            362**$**
            **36,823**
            
            $
            11,143




***Costs
      and Expenses***





As
      EAG’s
      operating expenses have historically been more than twice our operating expenses
      prior to the acquisition, costs and expenses for fiscal 2006 are significantly
      higher than fiscal 2005. Total costs and expenses for fiscal 2006 increased
      225%
      to $34,255,000, compared to $10,530,000 for fiscal 2005.





*Year
                Ended October 31*
              *In
                thousands of dollars*
            
            
            2006
            
            
            2005
            
            
            Percentage
              ChangeCost
                of services
            
            **$**
            **20,916**
            
            $
            4,819
            
            
            334
            %Cost
                of hardware revenue
            
            
            **116**
            
            
            1,063
            
            
            (89
            %)Research
                and development
            
            
            **1,433**
            
            
            989
            
            
            45
            %Selling
                and marketing
            
            
            **3,079**
            
            
            1,588
            
            
            94
            %General
                and administrative
            
            
            **6,312**
            
            
            1,834
            
            
            244
            %Depreciation
            
            
            **1,426**
            
            
            237
            
            
            502
            %Amortization
                of acquisition-related intangible assets
            
            
            **973**
            
            
            -
            
            
            -Total
                costs and expenses
            
            **$**
            **34,255**
            
            $
            10,530
            
            
            225
            %





*Cost
      of services* - Cost
      of services are the direct costs associated with service fee and professional
      services revenue and are comprised primarily of personnel costs, data or data
      management costs, and aeronautical chart production and distribution costs.
      As
      we invest in our ability to provide the newly-acquired products on a global
      basis, we expect the cost of services to increase in the short-term. At the
      same
      time, we are continuing to examine more efficient and/or automated methods
      of
      service delivery in order to reduce the cost of services as a percentage of
      revenue over the longer-term.





*Cost
      of hardware revenue* -
      The
      reduction in cost of hardware is primarily a result of unusually large sales
      of
      hardware to two new customers of crew management services in 2005 which did
      not
      recur in 2006.





*Research
      and development* -
      Research and development costs are related to activities undertaken to improve
      the functionality of our products or improve the production and delivery methods
      of our services and consist primarily of wages and benefits for staff directly
      involved in research and development activities. These expenses increased
      approximately $440,000 in fiscal 2006, or 45%, primarily as a result of the
      acquisition of EAG and our continued concentration on new development aimed
      at
      improving the competitiveness of our products and expanding our product suite.
      These amounts exclude capitalized costs associated with the development of
      software for internal use of $652,000 in fiscal 2006 and nil in fiscal 2005.
      We
      anticipate research and development will continue to be an area of focus in
      fiscal 2007.







**Navtech,
              Inc.**  **Page**
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              10-KSB**
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Prior
        to
        the acquisition of EAG, all research and development activities had been
        undertaken in Canada. Navtech-Canada qualifies for scientific research and
        experimental development investment tax credits on eligible research and
        development expenditures. Federal tax credits are generated at a rate of
        20% of
        qualifying expenditures and provincial refundable tax credits are generated
        at a
        rate of 10% of qualifying expenditures. The Federal tax credits are available
        to
        reduce future income taxes payable. The provincial credits may not be available
        in the future due to increases in our Canadian taxable income. In accordance
        with GAAP, these credits are recorded as a reduction of our provision for
        income
        taxes. We expect to continue research and development activities in Canada;
        however, research and development related to the products acquired through
        the
        EAG acquisition may take place in other jurisdictions.




*Selling
      and marketing* -
      Selling and marketing expenses consist mainly of the wages and benefits of
      staff
      directly involved in the sales of our products, the travel costs of these staff,
      and costs associated with marketing activities. These expenses increased
      $1,491,000, or 94%, compared to fiscal 2005 primarily as a result of the
      acquisition of EAG.





*General
      and administrative* -
      General and administrative expenses consist mainly of the salaries and benefits
      of staff in the corporate and administrative areas of the business, professional
      fees, insurance, telephone, facilities, and other expenses. The $4,478,000,
      or
      244%, increase is primarily a result of the acquisition of EAG.





*Depreciation* -
      Depreciation increased 502% as compared to fiscal 2005 primarily due to the
      value of capital assets acquired as a result of the acquisition of EAG. These
      capital assets are primarily computer hardware and software.





*Amortization
      of acquisition-related intangible assets* -
      Amortization of intangible assets relates to the amortization of identifiable
      intangible assets acquired as a result of the acquisition of EAG (total of
      $8,298,000). The intangible assets are comprised of contractual relationships
      ($4,830,000), and a library of aeronautical charts ($3,468,000). The assets
      are
      amortized over their economic useful lives estimated at 7 and 10 years,
      respectively.





***Interest
      Expense***





Interest
      expense for fiscal 2006 increased to approximately $2,481,000 from $29,000
      in
      fiscal 2005. The increase is a direct result of $21,000,000 of notes payable
      issued to finance the acquisition of EAG, and capital leases entered into in
      late fiscal 2005. Interest expense for fiscal 2006 and 2005 is comprised of
      the
      following:




*Year
                  ended October 31,*
                *In
                  thousands of US dollars*
              
              
              **2006**
              
              
              2005Note
                  payable interest
              
              **$**
              **2,262**
              
              $
              -Amortization
                  of deferred financing costs
              
              
              **105**
              
              
              -Amortization
                  of Note Payable Warrants
              
              
              **144**
              
              
              -Other
                  interest (income) expense
              
              
              **(30**
              **)**
              
              29**$**
              **2,481**
              
              $
              29


***Income
      Taxes***





We
      calculate our income tax provision for each of the geographic jurisdictions
      in
      which we conduct business. Our overall tax rate is therefore affected by the
      relative profitability of our operations in various geographic regions and
      the
      likelihood of realizing the future benefit of tax losses available in certain
      jurisdictions. The income tax provision for fiscal 2006 was a recovery of
      $351,000 as compared to a recovery of $89,000 for 2005 due to the recognition
      of
      certain tax assets. The income tax recovery in 2006 includes the recognition
      of
      approximately $646,000 in tax benefits resulting from losses and tax credits
      available in the Canadian jurisdiction.







**Navtech,
              Inc.**  **Page**
 **2006
              10-KSB**
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The
        measurement of a deferred tax asset is adjusted by a valuation allowance,
        if
        necessary, to recognize tax benefits only to the extent that, based on available
        evidence, it is more likely than not that they will be realized. In determining
        the valuation allowance, we consider factors by taxing jurisdiction such
        as
        estimated taxable income, the history of losses for tax purposes and tax
        planning strategies, among others. A change to these factors could impact
        the
        estimated valuation allowance and income tax expense Based on our assessment
        of
        the recoverability of our deferred tax assets, a valuation allowance of
        $1,536,000 was recorded during 2006.


**LIQUIDITY
      AND CAPITAL RESOURCES**





As
      of
      October 31, 2006, our available funds consisted of $6,769,000 in cash. In
      addition, we had lease credit facilities in the amount of CAD $549,000 to
      finance the acquisition of computer servers and computer equipment and software.
      The full amount of the lease credit facilities was drawn upon as at October
      31,
      2006 (2005 - CAD $839,000).





***Cash
      flows from operating activities*** for
      the
      year ended October, 31 2006 accounted for a net inflow of $3,941,000 ($4,000
      in
      2005) based on the net earnings of $438,000 for the year, which gave effect
      to
      $2,816,000 of non-cash expenses, and an increase in operating assets and
      liabilities of $687,000.





***Cash
      flows from investing activities*** for the
      year ended October, 31 2006 represent a net outflow of $20,135,000, which
      includes $18,352,000 cash outflow for the EAG purchase price and acquisition
      costs net of cash acquired. Purchase of capital assets represented an outflow
      of
      $1,783,000.





***Cash
      flows from financing activities*** **** for
      the
      year ended October, 31 2006 represent a net inflow of $22,280,000 due to the
      issuance of notes payable of $21,000,000 and issuance of Series A Preferred
      Stock of $4,000,000, partially offset by financing costs of $796,000 and the
      Common Stock repurchase of $1,800,000.




In
        connection with our November 2005 acquisition of EAG, we borrowed $21,000,000,
        issuing $6,000,000 Senior Subordinated Notes and $15,000,000 Senior
        Subordinated Notes. The principal amounts of the notes are payable on
        November 22, 2011. Interest on the $6,000,000 notes is payable at the rate
        of 9% per annum through November 22, 2007 (payable quarterly) and thereafter
        at
        the rate of 12.5% per annum. Effective November 22, 2007, we are required
        to pay only one-half of  the interest amount due on the $6,000,000 notes
        (payable semi-annually), with any unpaid interest being added to the
        principal amounts of the notes. Interest on the $15,000,000 notes is
        payable at the rate of  12.5% per annum (payable semi-annually). We
        are required to pay only one-half of  the interest amount due on the
        $15,000,000 notes, with any unpaid interest being added to the principal
        amounts of the notes. We have the option to pay quarterly any interest
        amounts in excess of the amounts we are required to pay.  Furthermore,
        certain financial covenants have been stipulated in the debt agreements which
        requireusnot
        to
        exceed annual and quarterly leverage ratios as defined therein. As at October
        31, 2006,we
        werein
        compliance with these covenants. We are currently in discussions with the
        lenders regarding possible strategic investments and the impact of those
        investments on the financial covenants.
 
 In
        connection with the EAG acquisition, we also issued 1,600,000 shares of Series
        A
        Preferred Stock for consideration
        of $4,000,000. The holders of the shares of Series A Preferred Stock,
        in preference to the holders of shares of Common Stock, are entitled to receive,
        out of  legally available funds, when and if declared by the Board of
        Directors, annual dividends at the rate per annum of $0.125 per share (a
        total
        of $200,000). Subsequent to fiscal 2006 year-end, we declared and paid a
        dividend of $200,000 on the Series A Preferred Stock.


At
      October 31, 2006 we had no significant capital commitments.




**OFF-BALANCE
      SHEET ARRANGEMENTS**





None









**Navtech,
            Inc.**  **Page**
 **2006
            10-KSB**
 23





**OTHER
      CONSIDERATIONS**




**Uncertainty
        of Future Operating Results; Industry volatility**




While
      our operating results were positive during
      fiscal 2006 and fiscal 2005, future operating results may vary significantly
      due
      to the volatility of our industry. The airline industry has been subject to
      significant change in recent years due to factors including the tragic events
      of
      September 11, 2001, the viral epidemic Severe Acute Respiratory Syndrome (SARS),
      and the recent volatility of fuel costs. As a result of volatility in the
      industry, several large carriers have filed for bankruptcy over the past five
      years. The continued impact of these factors or the impact of future events
      cannot be predicted. The bankruptcy of one or more significant customers can
      have a material adverse effect on future results of operations and financial
      condition.




Global
      Economic and Political
      Conditions




Our
        operating results may vary significantly based upon the impact of changes
        in
        global economic and political conditions on our customers. The unpredictability
        of future military action and other responses associated with a global war
        on
        terrorism has resulted in economic uncertainty that could negatively impact
        the
        financial health of several of our customers. In fiscal 2006, only 2% of
        our
        revenues was derived from customers with significant operations in Africa
        or the
        Middle East, thus mitigating this risk.




**Competition**
 
 Competition
        in our industry has increased in recent years as competitors attempt to acquire
        market share in segments where we have significant customers. In addition,
        many
        of these competitors have larger financial, technical and marketing resources
        than us giving rise to the risk that we may not be able to compete with these
        companies in the long-term. In order to maintain our market share, we must
        rely
        on our ability to develop and market innovative products according to our
        strategic plan. However, there is no assurance that our competitors will
        not
        attempt to develop and market similar products.


**Ability
        to Service Debt** **and Meet the Related Financial Covenants**
 
 In
        conjunction with the acquisition of EAG, we incurred a significant amount
        of
        debt in the form of senior subordinated notes.  We
        are
        dependent on the future cash flows of the acquired business and our financial
        condition ,
        in
        general, to be able to fulfill our interest and principal payment obligations
        and the financial covenants stipulated under this debt.  If
        the
        financial performance of the combined business fails to meet our objectives
        we
        may have difficulty fulfilling the obligations under the debt, including
        remaining in compliance with the financial covenants thereunder.  Failure
        to fulfill the obligations under our debt could adversely effect our results
        of
        operations and financial condition.




**Risk
      of Exchange Rate Fluctuations**





Our
      cash
      inflows from sales contracts are denominated in various currencies. The relative
      proportion of these currencies is different from the proportion of currencies
      required for payment of our operating expenses. Adverse fluctuations in exchange
      rates of the currencies of sales contracts relative to currencies of operating
      expenses, or fluctuations in the exchange rates of the currencies of sales
      contracts or operating expenses relative to our reporting currency, may have
      an
      adverse effect on future reported results of operations and financial condition.
      In addition, cash flows from operations are comprised of various currencies
      while the recently issued senior subordinated debt is denominated in US dollars.
      Adverse fluctuations in exchange rates of the currencies providing operating
      cash flows relative to the US dollar may impact our ability to finance our
      debt.
      We are continuing to monitor and evaluate possible currency hedging
      strategies.




**Navtech,
              Inc.**  **Page**
 **2006
              10-KSB**
 24




**Uncertain
      Protection of Intellectual Property Rights**





Our
      success depends significantly on our proprietary technology. We rely on a
      combination of copyright, trademark and trade secret laws, non-disclosure
      agreements and other contractual provisions to establish and maintain our
      proprietary rights. We have not sought patent protection for our products.
      Enforcement of our intellectual property rights may be difficult, particularly
      in some countries outside of the United States and Canada, in which we market
      our products. In the past, we have been required to provide limited confidential
      disclosure of portions of our source code for our products or to place such
      source code into escrow as a condition of a license agreement. Despite the
      precautions taken by us, it may be possible for unauthorized third parties
      to
      copy certain portions of our products or to reverse engineer or obtain or use
      information that we consider proprietary. Also, there can be no assurance that
      our competitors will not independently develop technologies that are perceived
      to be substantially equivalent or superior to our technologies. Further, no
      assurance can be given that we will have the financial resources to engage
      in
      litigation against parties who may infringe on our intellectual property rights.
      While we realize that our competitive position may be affected by our ability
      to
      legally protect our software, we believe the impact of this protection is less
      significant to our commercial success than factors such as the level of
      experience of our personnel, name recognition, and increased investment in
      new
      product development.





There
      can
      be no assurances that third parties will not assert infringement claims against
      us in the future, or that any such assertion will not result in litigation,
      which may be costly, or require that we obtain a license for the intellectual
      property rights of others. There can be no assurance that such licenses will
      be
      available on reasonable terms or at all.





**Retention
      of Key Customers**





During
      fiscal 2006, there was
      one
      customer that accounted for 14% of total revenue and a number of affiliates
      to
      that customer, under separate operational control, that accounted for an
      additional 10%of total revenue (2005 - two customers
      accounted for 22% of total revenue). Our customer base changed significantly
      with the acquisition of EAG; however, it is expected that in the future certain
      customers will account for a significant portion of our revenue. The loss of
      any
      customer that accounts for a significant portion of our revenue would have
      an
      adverse effect on future reported results of operations and financial
      condition.





**Attraction
      and Retention of Key Personnel**





Execution
      of our strategic plan requires us to attract and retain talented and qualified
      employees. Our success is highly dependent on our ability to identify, hire,
      train and retain highly qualified technical and sales and marketing personnel
      with flight operations experience. Competition for such personnel is always
      strong, and there can be no assurance that we will be successful in our efforts.
      This may have a material adverse effect on future reported results of operations
      and financial condition.




**Navtech,
              Inc.**  **Page**
 **2006
              10-KSB**
 25


**Integration
      of Acquired Companies or Assets**





In
      2006,
      we completed the acquisition of a company (EAG) of significant size in relation
      to us, and expect that we may in the future acquire additional complementary
      companies, products, services or technologies. The risks we may encounter
      include: the acquired company or assets do not further improve our financial
      and
      strategic position as planned; difficulty integrating the operations and
      personnel of the acquired business; difficulty retaining the technical skills
      needed to provide services on the acquired products; difficulty incorporating
      the acquired technologies or products with our existing product lines; product
      liability, customer liability or intellectual property liability associated
      with
      the sale of the acquired company’s products; our ongoing business may be
      disrupted by transition or integration issues; our management’s attention may be
      diverted from other business concerns; difficulty maintaining uniform standards,
      controls, procedures and policies; our relationships with current and new
      employees, customers and distributors could be impaired; increased litigation
      risk including litigation from terminated employees or third parties; and our
      due diligence process may fail to identify significant issues with the target
      company’s product quality, financial disclosures, accounting practices, internal
      control deficiencies, including material weaknesses, product architecture,
      legal
      contingencies and other matters. These factors could have a material adverse
      effect on future reported results of operations and financial condition,
      particularly in the case of a large acquisition or number of acquisitions.
      To
      the extent we issue shares of stock or other rights to purchase stock, including
      options, to pay for acquisitions, existing stockholders’ interests may be
      diluted and earnings per share may decrease.





**Ability
      to Adapt to Technological Change**





We
      operate in a competitive industry in which technological change, evolving
      industry standards, changes in customer requirements and the potential of new
      product introductions and enhancements play a significant role. Our ability
      to
      compete effectively is dependant on our ability to keep pace with these changes,
      and a failure to do so would have an adverse impact on future reported results
      of operations and financial condition.





**Ability
      to Produce Quality Products**





The
      software and services we offer are inherently complex. Despite testing and
      quality control, we cannot be certain that errors will not be found in current
      versions, new versions, or enhancements of our products once in use by
      customers. If new or existing customers have difficulty deploying our products
      or require significant amounts of customer support, future reported results
      of
      operations and financial condition could be adversely affected. Moreover, we
      could face possible claims and higher development costs if our software contains
      undetected errors or if we fail to meet our customers’ expectations.




**Acquisition
      of Companies / Completion of Development to Meet Strategic
      Objectives**





In
      order
      to provide an integrated product offering, we need to either acquire companies
      that possess required technologies, or develop these technologies internally.
      If
      there are no suitable companies available to acquire or if we do not secure
      the
      funding required to complete such an acquisition or complete internal
      development, this may impede our ability to maintain or increase our market
      share.





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            Inc.**  **Page**
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            10-KSB**
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**Item
      7. FINANCIAL STATEMENTS**





The
      financial statements begin on Page F-1 following Item 14 hereof.















**Navtech,
            Inc.**  **Page**
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            10-KSB**
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**Item
      8. Changes In And Disagreements With Accountants On Accounting and Financial
      Disclosure**





None.








**Navtech,
            Inc.**  **Page**
 **2006
            10-KSB**
 28





**Item** **8a** **.
      Controls And Procedures**





Our
      Chief
      Executive Officer and Chief Financial Officer conducted an evaluation of the
      effectiveness of our disclosure controls and procedures. Based on this
      evaluation, the Chief Executive Officer and Chief Financial Officer concluded
      that our disclosure controls and procedures were effective as of October 31,
      2006 in alerting them in a timely manner to material information required to
      be
      included in our SEC reports. In addition, no change in our internal control
      over
      financial reporting occurred during the fiscal quarter ended October 31, 2006
      that has materially affected, or is reasonably likely to materially affect,
      our
      internal control over financial reporting.








**Navtech,
            Inc.**  **Page**
 **2006
            10-KSB**
 29





**Item
      8b. Other Information**





None.








**Navtech,
            Inc.**  **Page**
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            10-KSB**
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**PART
      III**





**Item
      9. DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;**


**COMPLIANCE
      WITH SECTION 16(A) OF THE EXCHANGE ACT**





**Executive
      Officers and Directors**





The
      following table sets forth the positions and offices presently held by each
      of
      our current directors and executive officers and their ages:




**Name**
              **Age**
              **Positions
                  and Offices**David
                  Strucke
              38
              President,
                  Chief Executive Officer, Secretary and DirectorGordon
                  Heard
              38
              Chief
                  Financial OfficerBritt
                  Bowra
              46
              Vice
                  President, Sales and Business DevelopmentMichael
                  Neudoerffer
              42
              Vice
                  President, Software DevelopmentJohan
                  Holmqvist
              40
              Vice
                  President, OperationsThomas
                  D. Beynon
              65
              DirectorMichael
                  Jakobowski
              47
              DirectorJohn
                  Hunt
              41
              DirectorAndrew
                  M. Snyder
              36
              DirectorFrançoise
                  Macq
              42
              Director


*David
      Strucke* has
      served as our President, Chief Executive Officer, Secretary and a director
      since
      November 2001. Mr. Strucke also served as our Chief Financial Officer from
      January 2000 to November 2003. Mr. Strucke served as Vice President, Finance
      & Accounting of Navtech-Canada from October 1999 to January 2000 and as its
      Director of Finance and Accounting and a Business Analyst from January 1999
      to
      October 1999. Prior to joining us, Mr. Strucke served as a Financial Analyst
      focusing on mergers and acquisitions and performed financial and accounting
      consulting work from 1996 to 1998. Mr. Strucke obtained a Masters of Business
      Administration from Wilfrid Laurier University and is a graduate of the
      University of Waterloo with a Bachelor’s degree in Science in Engineering. Mr.
      Strucke has lectured on Introductory Finance for the undergraduate business
      program at Wilfrid Laurier University.





*Gordon
      Heard* joined
      Navtech as Chief Financial Officer in November 2003. Mr. Heard is a Chartered
      Accountant and a graduate of Wilfrid Laurier University with a Bachelor's degree
      in Business Administration. Prior to joining Navtech, Mr. Heard served as
      Corporate Controller at Descartes Systems Group from 2002 to 2003, and as Vice
      President, Controller at AMEC E&C Services from 2000 to 2002. Mr. Heard
      served in progressive financial positions at Wajax Limited from 1995 to 1999
      ending as Corporate Controller, and worked in assurance services with KPMG
      from
      1990 to 1995.





*Britt
      Bowra* joined
      Navtech in 1996 and has held a variety of progressive management positions
      primarily in the areas of sales, marketing, and product management before being
      named Vice President, Sales and Business Development in 2006. Mr. Bowra is
      a
      graduate of the University of Western Ontario with an Honours degree in Business
      Administration. Prior to joining Navtech, Mr. Bowra held a number of sales
      management, marketing and finance positions at AT&T Canada, NCR and Noranda
      Inc.





**Navtech,
              Inc.**  **Page**
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              10-KSB**
 31




*Michael
        Neudoerffer* joined
        Navtech as Vice President, Software Development in April 2006. Mr. Neudoerffer
        is a professional engineer and a graduate of the University of Waterloo with
        a
        Bachelor's degree in Electrical Engineering. Prior to joining Navtech, Mr.
        Neudoerffer served as Chief Technology Officer at CipherPass Corp., Vice
        President, Operations and Development at HotButton Solutions Inc., Vice
        President, Technical Operations at NE2 and Vice President, Engineering at
        Wireless Matrix Corporation. Prior to these positions, he served in software
        development positions with progressive responsibility in factory automation,
        digital satellite communications, digital security, oil and gas production
        monitoring.


*Johan
      Holmqvist* joined
      Navtech as Vice President, Operations in November 2005 as part of Navtech's
      acquisition of EAG. Prior to his current appointment, Mr. Holmqvist held a
      variety of management positions in EAG since 1990 including Vice President
      of
      Product and Business Development, Chief Information Officer, and the Director,
      Product Route Manual for Scandinavian Airlines (SAS). Mr. Holmqvist is a
      graduate of Thorildspans Gymnasium with a degree in mechanical engineering.
      Mr .
      Holmqvist also holds a certificate in marketing from the Institute for Hogre
      Marhuads-forings studier and a certificate in navigation from SAS Flight
      Operations.





*Thomas
      D. Beynon* is a
      partner in the Waterloo, Ontario law firm of McCarter Grespan Beynon LLP and
      a
      member of the Law Society of Upper Canada. He has been with the firm since
      March
      1996. Prior to this, Mr. Beynon spent six years with the law firm, Sims Clement
      Eastman, from 1991 to 1996. Mr. Beynon serves as Corporate Secretary of Virtek
      Vision International Inc., a public company, and is a director of a number
      of
      private companies. Mr. Beynon has served as one of our directors since July
      2000.





*Michael
      Jakobowski* has
      served as Chief Financial Officer of Cambridge Information Group since September
      1999. Prior to joining Cambridge, Mr. Jakobowski was the Vice President of
      Accounting for Thomson Financial Database Group from August 1997 to September
      1999, and the Corporate Controller for Kline Group from June 1994 to August
      1997. Prior to 1994, Mr. Jakobowski spent over 11 years in public accounting
      with Price Waterhouse, Coopers & Lybrand, and Johnson Lambert and Co. Mr.
      Jakobowski is a member of the American Institute of Certified Public
      Accountants. Mr. Jakobowski has served as one of our directors since November
      2001.





*John
      Hunt* is
      a
      partner at ABRY Partners, LLC (ABRY). Mr. Hunt joined ABRY in 2004. ABRY,
      headquartered in Boston, is a private equity firm focused on the media and
      communications industry. Mr. Hunt is also co-head of ABRY Mezzanine Partners,
      LP. From 1990 until May 2004, Mr. Hunt was a general partner at Boston Ventures
      Management, Inc., a media and communications focused private equity fund. Mr.
      Hunt serves on the board of SoftBrands, Inc. and on the boards of a number
      of
      private companies. Mr. Hunt has served as one of our directors since November
      2005.





*Andrew
      M. Snyder* is the
      President of Cambridge Information Group (CIG), a
      privately-owned group of information services, publishing, and education
      companies. Mr.
      Snyder has been with CIG since 2003, and is also Chairman of CIG’s subsidiary,
      RR Bowker. Prior to joining CIG, Mr. Snyder spent seven years at the
      Goldman Sachs Group, most recently as Vice President in the Principal Investment
      Area. He also spent one year as the Assistant to the Chairman. Mr. Snyder
      graduated from the Wharton School at the University of Pennsylvania, and earned
      a J.D. from Georgetown University Law Center. He is a member of the Bar of
      the
      State of New York. Mr. Snyder has served as one of our directors since
      November 2005.




*Françoise
      Macq* is the
      CEO of Externalis, a privately-owned holding company based in Brussels, Belgium.
      Prior to joining Externalis, Mrs. Macq spent nine years as an Investment Manager
      for Société Régionale d’Investissement de Bruxelles. Mrs. Macq began her career
      in the Corporate Finance Department of Morgan Stanley in London and subsequently
      worked as a Research Analyst specializing in oil companies in the Equity
      Research Department. Mrs. Macq graduated as a lawyer from Université Catholique
      de Louvain. Mrs. Macq has served as one of our directors since June
      2006.





Each
      director will hold office until the next Annual Meeting of Stockholders or
      until
      his successor is elected and qualified. 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 successor is elected or appointed
      and qualified.




**Navtech,
              Inc.**  **Page**
 **2006
              10-KSB**
 32




**Audit
      Committee Financial Expert**





Our
      Board
      of Directors has determined that Mr. Jakobowski, a member of the Audit Committee
      of the Board, is an “audit committee financial expert,” as that term is defined
      in Item 401(e)(2) of Regulation S-B. Mr. Jakobowski is not an “independent
      director” based on the definition of independence in Rule 4200(a)(15) of the
      listing standards of the National Association of Securities
      Dealers.





**Section
      16(a) Beneficial Ownership Reporting Compliance**





Based
      solely on a review of copies of Forms 3, 4 and 5, and amendments thereto,
      furnished to us and written representations that no other reports were required,
      during the fiscal year ended October 31, 2006, all officers, directors and
      10%
      stockholders were in compliance with Section 16(a) filing requirements, except
      that ABRY Mezzanine Partners LP filed its Form 3 late, Cambridge Information
      Group Inc. filed a Form 4 late (reporting one transaction), Alain Mallart and
      Finextern SA filed a Form 4 late (reporting one transaction) and John Bethanis
      filed a Form 5 late (reporting a correction to his Form 3 filed in July
      2004).




**Code
      of Ethics for Senior Financial Officers**





Our
      Board
      of Directors has adopted a Code of Ethics for our principal executive officer,
      principal financial officer, principal accounting officer or controller, or
      persons performing similar functions. A copy of the Code of Ethics is filed
      as
      an exhibit to our Annual Report on Form 10-KSB for the year ended October 31,
      2003.





We
      intend
      to disclose any amendments to or waivers of our Code of Ethics on our corporate
      website www.navtechinc.com.











**Navtech,
            Inc.**  **Page**
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            10-KSB**
 33





**Item
      10. EXECUTIVE COMPENSATION**





**Summary
      Compensation Table**





The
      following table sets forth information concerning the compensation for the
      last
      three fiscal years of all of our executive officers as of October 31, 2006
      who
      had a total salary and bonus for such year in excess of $100,000.




**Annual
                  Compensation**
              
              **Long-Term
                  Compensation Awards****Name
                  and Principal Position**
              
              **Year**
              
              **Salary**
              
              **Bonus**
              
              **Common**
                **Stock**
                **Underlying**
                **Options**David
                  Strucke, Chief Executive Officer
              
              
              2006
                2005
                2004
              
              $
                $
                $
              232,697
                156,215
                130,807
              
              $
                $
                $
              72,998
                65,876
                32,417
              
              
              112,500
                -0-
                50,000Gordon
                  Heard, Chief Financial Officer
              
              
              2006
                2005
                2004
              
              $
                $
                $
              162,449
                117,460
                98,664
              
              $
                $
                $
              26,343
                -0-
                -0-
              
              
              87,500
                -0-
                50,000Britt
                  Bowra, Vice President, Sales and Business Development
              
              
              2006
                2005
                2004
              
              $
                $
                $
              140,541
                113,179
                94,631
              
              $
                $
                $
              26,343
                -0-
                -0-
              
              
              32,000
                -0-
                -0-Johan
                  Holmqvist, Vice President, Operations(1)
              
              
              2006
                2005
                2004
              
              $
                $
                $
              106,568
                -0-
                -0-
              
              $
                $
                $
              21,314
                -0-
                -0-
              
              
              32,000
                -0-
                -0-




(1)
              Mr.
                  Holmqvist joined Navtech as Vice President, Operations in November
                  2005.


**Option
        Tables**
 
 **OPTION
        GRANTS IN FISCAL YEAR ENDED OCTOBER 31, 2006**
  **Name**
                **Number
                    of Shares of****Common
                    Stock****Underlying
                    Options Granted**
                **Percent
                    of Total Options Granted to Employees in Fiscal
                    Year**
                **Exercise
                    Price/Share**
                **Expiration
                    Date**David
                    Strucke
                112,500
                38%
                $2.76
                January
                    17, 2016Gordon
                    Heard
                87,500
                29%
                $2.76
                January
                    17, 2016Britt
                    Bowra
                32,000
                11%
                $2.77
                February
                    15, 2011Johan
                    Holmqvist
                32,000
                11%
                $2.77
                February
                    7, 2011







**Navtech,
            Inc.**  **Page**
 **2006
            10-KSB**
 34







**AGGREGATED
      OPTION EXERCISES IN FISCAL YEAR ENDED OCTOBER 31, 2006 AND FISCAL YEAR-END
      OPTION VALUES**




**Name**
                **Shares
                    Acquired on Exercise**
                **Value
                    Realized**
                **Number
                    of Shares of Common Stock Underlying Unexercised****Options
                    at****October
                    31, 2006**
                **Value
                    of Unexercised****In-the-Money
                    Options**
                  **at
                    October 31, 2006****Exercisable/Unexercisable**
                **Exercisable/Unexercisable**David
                    Strucke
                -0-
                -0-
                150,000/112,500
                $389,500/$32,625Gordon
                    Heard
                -0-
                -0-
                43,750/93,750
                $92,875/$39,750Britt
                    Bowra
                -0-
                -0-
                -0-/32,000
                -0-/$8,960Johan
                    Holmqvist
                -0-
                -0-
                -0-/32,000
                -0-/$8,960




**Long-Term
      Incentive Plan Awards**





No
      awards
      were made to Messrs. Strucke, Heard, Bowra, or Holmqvist during the fiscal
      year
      ended October 31, 2006 under any long-term incentive plan.





**Compensation
      of Directors**





Our
      directors, with the exception of salaried officers, are entitled to receive
      an
      annual retainer of $6,000 (payable quarterly in advance). The Chairman of
      the Board is entitled to receive an annual retainer of $10,000 (payable
      quarterly in advance).




The
      Chairman of the Audit Committee is entitled to receive an annual retainer of
      $8,000 (payable quarterly in advance). Members of the Audit Committee
      receive an annual retainer of $5,000 (payable quarterly in
      advance).




The
        Chairman of the Human Resources and Compensation Committee receives an annual
        retainer of $5,000 (payable quarterly in advance). Members of the Human
        Resources and Compensation Committee receive an annual retainer of $3,000
        (payable quarterly in advance).
 
 The
        Chairman of the Corporate Governance Committee is entitled to receive an
        annual
        retainer of $5,000 (payable quarterly in advance). Members of the Corporate
        Governance Committee receive an annual retainer of $3,000 (payable
        quarterly in advance).
  In
        addition, our directors are entitled to be reimbursed for travel expenses
        incurred in attending any meeting of the Board or any of its committees.
        Our
        By-Laws also provide, to the extent permitted by law, for certain
        indemnification of our directors.




**Navtech,
              Inc.**  **Page**
 **2006
              10-KSB**
 35




**Employment
      Contracts, Termination of Employment and Change-In-Control
      Arrangements**





We
      have
      entered into an employment agreement with Mr. Strucke that provides for an
      annual base salary of $265,000 (CDN) ($236,000 USD). In addition, Mr. Strucke
      is
      eligible for an annual performance bonus of $132,500 (CDN) ($118,000 USD) based
      upon the achievement of specific performance objectives established by our
      Board’s Human Resources and Compensation Committee. In the event we terminate
      Mr. Strucke’s employment without cause, he would be entitled to receive an
      amount equal to 12 months base salary, and an additional month base salary
      for
      every year of service after November 1, 2005 to a maximum entitlement of 18
      months.





We
      have
      entered into an employment agreement with Mr. Heard that provides for an annual
      base salary of $185,000 (CDN) ($165,000 USD). In addition, Mr. Heard is eligible
      for an annual performance bonus of $37,000 (CDN) ($33,000 USD) based upon the
      achievement of specific performance objectives established by our Board’s Human
      Resources and Compensation Committee. In the event we terminate Mr. Heard’s
      employment without cause, he would be entitled to receive an amount equal to
      six
      months base salary.





We
      have
      entered into an employment agreement with Mr. Bowra that provides for an annual
      base salary of $135,000 (CDN) ($120,000 USD). In addition, Mr. Bowra is eligible
      to receive commissions and an annual performance bonus of $75,000 (CDN) ($67,000
      USD) based upon the achievement of specific performance objectives established
      by our Board’s Human Resources and Compensation Committee. In the event we
      terminate Mr. Bowra’s employment without cause, he would be entitled to receive
      an amount equal to nine months base salary, and an additional month base salary
      for every year of service after February 1, 2006 to a maximum entitlement of
      12
      months.





We
      have
      entered into an employment agreement with Mr. Holmqvist that provides for an
      annual base salary of SEK $1,000,000 ($138,100 USD).  In the event we
      terminate Mr. Holmqvist’s employment without cause, he would be entitled to
      receive an amount equal to twelve months base salary.







**Navtech,
            Inc.**  **Page**
 **2006
            10-KSB**
 36







**ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS**





**Security
      Ownership**





At
      December 31, 2006, we had two classes of stock outstanding: Common Stock and
      Series A Convertible Participating Preferred Stock. We refer to the Series
      A
      Convertible Participating Preferred Stock as the “Series A Preferred Stock.” We
      refer to the common stock and the Series A Preferred Stock together as “Capital
      Stock.” On December 31, 2006, there were outstanding 4,333,450 shares of Common
      Stock and 1,600,000 shares of Series A Preferred Stock. Each share of Common
      Stock entitles the holder to one vote on each matter submitted to stockholders.
      Each share of Series A Preferred Stock is convertible, at the holder’s option,
      into one share of Common Stock, and entitles the holder to one vote on each
      matter submitted to stockholders. We refer to the number of votes the holder
      of
      a share of Capital Stock is entitled to cast as the share’s “voting power” and
      the aggregate of all votes entitled to be cast by a holder of Capital Stock
      as
      that holder’s “total voting power.” In calculating the number of votes to which
      a holder of Series A Preferred Stock is entitled, any shares issuable upon
      the
      conversion of accrued but unpaid dividends are disregarded.





The
      following table sets forth certain information regarding our outstanding Common
      Stock and Series A Preferred Stock beneficially owned as of December
      31 ,
      2006 by:





·
            each
                person who is known by us to own beneficially or exercise voting
                or
                dispositive control over more than 5% of our Common Stock and Series
                A
                Preferred Stock,


·
            each
                present director,


·
            each
                person named in the Summary Compensation Table above,
                and


·
            all
                of our present executive officers and directors as a
                group




**Navtech,
              Inc.**  **Page**
 **2006
              10-KSB**
 37


**Name
                  and Address**
                **of
                  Beneficial Owner**
              **Common
                  Stock**
              **Series
                  A Preferred Stock**
              **Percent
                  of Total Voting Power****Number
                  of Shares Beneficially Owned**
              **Approximate
                  Percentage of Class**
              **Number
                  of Shares Beneficially Owned**
              **Approximate
                  Percentage of Class**Robert
                  N. Snyder (1)
              2,725,633
                  (2)(3)
              48.6%
              1,200,000(4)
              75%
              45.4%Alain
                  Mallart
                38
                  avenue des Klauwaerts
                1050
                  Brussels, Belgium
              1,258,670
                  (3)(5)
              26.5%
              400,000(6)
              25%
              21.1%John
                  Hunt
                111
                  Huntington Avenue
                Boston,
                  Massachusetts
              378,843
                  (7)
              8.1%
              -
              -
              6.1%Dorothy
                  English (8)
              328,958
              7.6%
              -
              -
              5.5%David
                  Strucke (8)
              268,125 (9)
              5.9%
              -
              -
              4.4%Andrew
                  M. Snyder (1)
              92,316
                  (3)(10)
              2.1%
              -
              -
              1.6%Michael
                  Jakobowski (1)
              88,500
                  (11)
              2.0%
              -
              -
              1.5%Thomas
                  D. Beynon
                675
                  Riverbend Drive
                Kitchener,
                  Ontario,
                Canada
              70,000
                  (12)
              1.6%
              -
              -
              1.2%Gordon
                  Heard (8)
              67,708
                  (13)
              1.5%
              -
              -
              1.1%Britt
                  Bowra (8)
              28,000
                  (14)
              *
              -
              -
              *Johan
                  Holmqvist
                Hammerbacken
                  12,
                Sollentuna,
                  Stockholm
                Sweden
              8,000
                  (13)
              *
              -
              -
              *All
                  executive officers and
                directors
                  as a group
                (9
                  persons)
              1,001,492
                (3)(7)(9)(10)(11)
                (12)(13)(14)
              20.0%
              -
              -
              15.2%
 
 *
        Less
        than 1%





(1)
            Address
                is 7200 Wisconsin Avenue, Bethesda,
                Maryland


(2)
            Based
                upon Schedule 13D, as amended, filed with the Securities and Exchange
                Commission and other publicly available information.Includes
                (i) 1,260,633 shares owned by Cambridge Information Group, Inc.
                (“Cambridge”), of which Robert N. Snyder is the controlling shareholder,
                (ii) 1,200,000 shares that are issuable upon the conversion of Series
                A
                Preferred Stock held by Cambridge, (iii) 75,000 shares that are issuable
                upon the exercise of warrants held by Cambridge that are currently
                exercisable, and (iv) 40,000 shares owned by Wyoming Investments
                Limited
                Partnership, of which Robert N. Snyder is a general partner. Robert
                N.
                Snyder shares voting and dispositive control over the shares beneficially
                owned by Cambridge. Excludes shares that are issuable upon the conversion
                of accrued and unpaid dividends on the Series A Preferred
                Stock.







**Navtech,
                Inc.**  **Page**
 **2006
                10-KSB**
 38
 (3)
                Based
                    upon Schedule 13D, as amended, filed with the Securities and
                    Exchange
                    Commission. Robert N. Snyder, Andrew M. Snyder, Republic
                    ElectronicsCorporation (of which Michael Ueltzen, one of our former directors,
                    is the
                    majority shareholder, President and Chief Executive Officer),
                    Externalis
                    S.A. (formerly known as Finextern S.A.) (of which Alain Mallart
                    is the
                    controlling shareholder), and Dorothy English, among others,
                    are parties
                    to a Shareholders Agreement, dated as of March 4, 2005, relating
                    to the
                    2,525,868 shares of Common Stock collectively beneficially owned by
                    them at such time. Except as indicated in the footnotes hereto, each
                    party to the Shareholders Agreement has the sole power to vote
                    or direct
                    the vote, and the sole power to dispose or direct the disposition
                    of, its
                    respective shares. Pursuant to the Shareholders Agreement, the
                    parties have agreed, among other things, and subject to limited
                    exception,
                    to vote in favor of the election to our Board of those persons
                    nominated to serve as directors by our Board. The term of the
                    Shareholders Agreement is five years, or less under certain
                    circumstances.


(4)
            Represents
                shares owned by Cambridge, of which Robert N. Snyder is the controlling
                shareholder. Robert N. Snyder shares voting and dispositive control
                over
                the shares beneficially owned by Cambridge.


(5)
            Based
                upon Schedule 13D, as amended, filed with the Securities and Exchange
                Commission.Represents
                (i) 833,670 shares held by Externalis S.A., (ii) 400,000 shares that
                are
                issuable upon the conversion of Series A Preferred Stock held by
                Externalis S.A. and (iii) 25,000 shares that are issuable upon the
                exercise of warrants held by Externalis S.A. that are currently
                exercisable. Mr. Mallart is the controlling shareholder of Externalis
                S.A.
                and shares with Externalis S.A. the voting and dispositive control
                over
                the shares beneficially owned by it. Excludes shares that are issuable
                upon the conversion of accrued and unpaid dividends on the Series
                A
                Preferred Stock.


(6)
            Represents
                shares owned by Externalis S.A. of which Alain Mallart is a controlling
                shareholder. Mr. Mallart shares voting and dispositive control over
                the
                shares beneficially owned by Externalis
                S.A.


(7)
            Based
                upon Schedule 13D filed with the Securities and Exchange Commission.Represents
                (i) 66,667 shares held by ABRY Mezzanine Partners, L.P., and (ii)
                312,176
                shares that are issuable upon the exercise of warrants held by ABRY
                Mezzanine Partners, L.P. that are currently exercisable. The general
                partner of ABRY Mezzanine Partners, L.P. is ABRY Mezzanine Investors,
                L.P.
                ABRY Mezzanine Investors, L.P.’s general partner is ABRY Mezzanine
                Holdings LLC. Mr. Hunt is a Vice President of ABRY Mezzanine Holdings
                LLC. An Investment Committee of ABRY Mezzanine Holdings LLC exercises
                exclusive decision making authority with respect to investments by
                ABRY
                Mezzanine Partners, L.P.


(8)
            Address
                is Suite 200, 295 Hagey Blvd., Waterloo, Ontario,
                Canada.


(9)
            Includes
                178,125 shares that are issuable upon the exercise of options that
                are
                exercisable currently or within 60
                days.


(10)
            Does
                not include (i) 750,000 shares owned by Cambridge, of which Andrew
                M.
                Snyder is President and a shareholder, (ii) 1,200,000 shares that
                are
                issuable upon the conversion of Series A Preferred Stock held by
                Cambridge
                and (iii) 75,000 shares that are issuable upon the exercise of warrants
                held by Cambridge that are currently
                exercisable.


(11)
            Includes
                50,000 shares that are issuable upon the exercise of options that
                are
                currently exercisable.


(12)
            Includes
                45,000 shares that are issuable upon the exercise of options that
                are
                currently exercisable.


(13)
            Represents
                shares that are issuable upon the exercise of options that are exercisable
                currently or within 60 days.


(14)
            Includes
                8,000 shares that are issuable upon the exercise of options that
                are
                exercisable currently or within 60
                days.

















**Navtech,
            Inc.**  **Page**
 **2006
            10-KSB**
 39





**Securities
      Authorized for Issuance Under Equity Compensation Plans**





The
      following table sets forth information as of October 31, 2006 with respect
      to
      compensation plans (including individual compensation arrangements) under which
      our Common Stock is authorized for issuance, aggregated as follows:





·
            All
                compensation plans previously approved by security holders;
                and


·
            All
                compensation plans not previously approved by security
                holders.




**EQUITY
      COMPENSATION PLAN INFORMATION**




**Number
                  of securities to be issued upon exercise of outstanding options,
                  warrants
                  and rights**
                **(column
                  (a))**
              **Weighted
                  average exercise price of outstanding options, warrants and rights**
              **Number
                  of securities remaining available for future issuance under equity
                  compensation plans (excluding securities reflected in column (a))**Equity
                  compensation plans approved by security holders
              675,000
              $1.61
              1,524,078Equity
                  compensation plans not approved by security holders
              -0-
              -0-
              -0-Total
              675,000
              $1.61
              1,524,078













**Navtech,
            Inc.**  **Page**
 **2006
            10-KSB**
 40





**Item
      12. Certain Relationships And Related Transactions**





On
      November 22, 2005, we entered into a Series A Convertible Participating
      Preferred Stock and Warrant Purchase Agreement with Cambridge Information Group,
      Inc. (“Cambridge”) and Externalis S.A. (“Externalis”, and together with
      Cambridge, the “Investors”) (the “Series A Purchase Agreement”) whereby the
      Investors purchased 1,600,000 shares of our Series A Preferred Stock (1,200,000
      by Cambridge and 400,000 by Externalis) and warrants (the “Warrants”) evidencing
      the right to acquire an aggregate of 100,000 shares of our Common Stock (75,000
      by Cambridge and 25,000 by Externalis), for an aggregate purchase price of
      $4,000,000 (the “Preferred Stock Offering”). Pursuant to the terms of the
      Series A Purchase Agreement, we granted to the Investors preemptive rights
      in
      connection with issuances by us of certain of our shares of capital stock that
      in any way rank senior to the Common Stock. The proceeds received by us in
      connection with the Preferred Stock Offering were used to consummate the
      acquisition of EAG discussed in Items 1 and 6 of this Annual Report. Each of
      the
      Investors was, prior to the execution of the Series A Purchase Agreement, and
      currently is, one of our principal stockholders. See Item 11 of this Annual
      Report.




The
      Series A Preferred Stock is senior in rights, preferences and privileges to
      the
      Common Stock as more fully described in the Certificate of Designation creating
      the Series A Preferred Stock.




The
      Series A Preferred Stock has the following material terms:




**Dividends** .
      The
      holders (each a “Holder” and, collectively, the “Holders”) of the Series A
      Preferred Stock are entitled to receive, if and when declared by our Board
      of
      Directors and paid by us, in preference to the holders of the shares of Common
      Stock and our other capital stock ranking junior to the Series A Preferred
      Stock
      as to the payment of dividends, annual dividends at the rate per annum of $0.125
      per share. Such dividends will accrue on a daily basis, whether or not
      earned or declared, and will be compounded annually (to the extent such accruing
      dividends remain unpaid) on each anniversary of the issuance of the Series
      A
      Preferred Stock. In addition to the dividend described above, the Holders
      are entitled to participate ratably on any dividends paid with respect to the
      Common Stock. In the case of any such dividend, each Holder shall be
      entitled to receive an amount as of the record date for such dividend that
      would
      be payable on the largest number of whole shares of Common Stock into which
      such
      shares of Series A Preferred Stock held by such Holder could be converted
      pursuant to the terms of the Certificate of Designation. Subsequent to the
      2006
      fiscal year-end, we declared and paid a dividend of $200,000 on the Series
      A
      Preferred Stock.




**Convertibility** .
      The
      Series A Preferred Stock is convertible at the option of the Holder, at any
      time
      after the date of issuance and without payment of additional consideration,
      into
      that number of fully paid and nonassessable shares of Common Stock as is
      determined by dividing the Series A Liquidation Preference (as defined below)
      per share of Series A Preferred Stock by the Series A Conversion Price (as
      defined below), in each case as in effect at the time of conversion. The
“Series A Conversion Price” at which shares of Common Stock shall be deliverable
      upon conversion of Series A Preferred Stock shall initially be $2.50 per share.
      The “Series A Liquidation Preference” shall be $2.50 per share of Series A
      Preferred Stock (subject to equitable adjustment in the event of any stock
      dividend, stock split, combination, reorganization, recapitalization,
      reclassification, or other similar event affecting such shares), plus all
      accrued but unpaid dividends on the Series A Preferred Stock. Such initial
      Series A Conversion Price shall be subject to anti-dilution adjustment (in
      order
      to adjust the number of shares of Common Stock into which the Series A Preferred
      Stock is convertible) as provided in the Certificate of Designation. At our
      option, we may elect to convert not less than all of the outstanding shares
      of
      Series A Preferred Stock at the then effective Series A Liquidation Preference
      (i) at any time on or after November 22, 2006, if the 30-trading day trailing
      average of the Common Stock (as reported on *Yahoo
      Finance* (www.yahoo.com)) exceeds 250% of the then effective conversion price (the
“Trigger Date”, and each a “Trigger Date”), provided that we must exercise such
      conversion right within 60 days after the applicable Trigger Date, or (ii)
      upon
      the closing of an underwritten, firm commitment public offering pursuant to
      an
      effective registration statement under the Securities Act of 1933, in which
      the
      price to the public per share of Common Stock exceeds 200% of the then effective
      Series A Conversion Price.




**Navtech,
              Inc.**  **Page**
 **2006
              10-KSB**
 41


**Voting
        Rights** .
        Subject
        to certain limitations, the Holders are entitled to vote with the holders
        of
        Common Stock, voting together as one class, on all matters submitted to a
        vote
        of the holders of Common Stock, and each share of Series A Preferred Stock
        is
        entitled to a number of votes equal to the number of shares of Common Stock
        into
        which each such share is convertible as of the record date for the applicable
        vote. In addition, we may not, without the consent of the Holders of a
        majority of the shares of the Series A Preferred Stock then outstanding,
        take
        certain actions, including, without limitation, (i) create a new class or
        series
        of capital stock that are, with respect to the payment of dividends or upon
        liquidation, senior to or *pari
        passu* with the
        Series A Preferred Stock, (ii) alter, amend or repeal the rights, preferences
        and privileges of the Series A Preferred Stock or (iii) amend, alter or repeal
        any provision of the Certificate of Designation.




**Liquidation.** Upon the
      liquidation, dissolution, change of control or winding-up of Navtech, the
      Holders will be entitled to receive an amount equal to the greater of (i) $2.50
      per share of Series A Preferred Stock (subject to anti-dilution adjustments) plus accrued
      and unpaid dividends or (ii) the amount that they would have received if they
      had converted their shares of Series A Preferred Stock into Common Stock on
      the
      day prior to the liquidation, dissolution, change of control or
      winding-up.




The
      Warrants have an exercise price of $3.00 (subject to adjustment as set forth
      in
      the Warrants), are exercisable at any time from the date of issuance until
      the
      tenth anniversary of the date of issuance and have weighted average
      anti-dilution protection provisions as set forth in the Warrants.




In
      connection with the Series A Purchase Agreement, we entered into a registration
      rights agreement dated November 22, 2005 with, among others, the Investors
      (the “Registration Rights Agreement”). The Registration Rights Agreement
      obligates us to file a registration statement covering, among other shares,
      (i)
      the shares of Common Stock issuable upon conversion of the Series A Preferred
      Stock, (ii) the shares of Common Stock issuable upon the exercise of the
      Warrants and (iii) any shares of Common Stock previously held by the Investors
      or acquired after the date of the Registration Rights Agreement by the
      Investors. Pursuant to the terms of the Registration Rights Agreement, the
      Investors are entitled to two demand registration rights and unlimited
      piggy-back registration rights.




In
      connection with the Series A Purchase Agreement, we entered into a letter
      agreement dated November 22, 2005 with Cambridge (the “Letter Agreement”),
      whereby we granted Cambridge the right to designate two members to serve on
      our
      Board of Directors so long as Cambridge holds 22% of our Common Stock on a
      fully-diluted and as converted basis. The Letter Agreement further provides
      that Cambridge shall have the right to designate one member to serve on our
      Board of Directors so long as Cambridge holds 10% of our Common Stock on a
      fully-diluted and as converted basis. Subject to the requirements of
      applicable law and any other rules or regulations that apply to us, the persons
      designated by Cambridge to serve as directors pursuant to the terms of the
      Letter Agreement shall also be entitled to serve on all committees of the Board
      of Directors established by the Board. Effective upon the closing of the
      Preferred Stock Offering and pursuant to and in accordance with the terms of
      the
      Letter Agreement, Andrew M. Snyder, a designee of Cambridge, was appointed
      to
      fill one existing vacancy on our Board of Directors by the sitting members
      of
      our Board.




The
      foregoing descriptions of the Series A Purchase Agreement, the Warrants, the
      Certificate of Designation, the Registration Rights Agreement and the Letter
      Agreement do not purport to be complete and are qualified in their entirety
      by
      reference to the Series A Purchase Agreement, the Warrants, the Certificate
      of
      Designation, the Registration Rights Agreement and the Letter Agreement, which
      are exhibits to this Annual Report.












**Navtech,
            Inc.**  **Page**
 **2006
            10-KSB**
 42





**Item
      13. Exhibits**





(a) **Exhibits**





3(A)
            Certificate
                of Incorporation, as amended (4)





3(B)
            Certificate
                of Designation filed with the Delaware Secretary of State on November
                21,
                2005 (6)




3(C)
            By-Laws
                (1)




10(A)
            1999
                Stock Option Plan (2)




10(B)
            Form
                of Stock Option Agreement for options granted to Michael Jakobowski,
                Michael Ueltzen, Thomas Beynon and David Strucke dated as of September
                9,
                2004 (5)




10(C)
            Securities
                Purchase Agreement dated November 22, 2005 by and among Navtech,
                Inc.,
                Navtech (Sweden) AB and SAS AB (6)





10(D)
            Series
                A Convertible Participating Preferred Stock and Warrant Purchase
                Agreement
                dated November 22, 2005 by and among Navtech, Inc., Cambridge Information
                Group, Inc. and Externalis S.A. (6)





10(E)
            Warrant
                dated November 22, 2005 issued by Navtech, Inc. to Cambridge Information
                Group, Inc. (6)





10(F)
            Warrant
                dated November 22, 2005 issued by Navtech, Inc. to Externalis S.A.
                (6)





10(G)
            Registration
                Rights Agreement dated November 22, 2005 by and among Navtech, Inc.,
                Cambridge Information Group, Inc., Externalis S.A., ABRY Mezzanine
                Partners, L.P. and ABRY Investment Partnership, L.P.
                (6)





10(H)
            Letter
                Agreement dated November 22, 2005 by and between Navtech, Inc. and
                Cambridge Information Group, Inc.
                (6)





10(I)
            Note
                Purchase Agreement dated November 22, 2005 by and among Navtech Systems
                Support Inc., ABRY Mezzanine Partners, L.P. and ABRY Investment
                Partnership, L.P. (6)





10(J)
            Tranche
                A Notes dated November 22, 2005 issued by Navtech Systems Support
                Inc.
                (6)





10(K)
            Tranche
                B Notes dated November 22, 2005 issued by Navtech Systems Support
                Inc.
                (6)





10(L)
            Parent
                Guaranty dated November 22, 2005 by and among Navtech, Inc., ABRY
                Mezzanine Partners, L.P. and ABRY Investment Partnership, L.P.
                (6)





10(M)
            Warrant
                Agreement dated November 22, 2005 by and among Navtech, Inc., ABRY
                Mezzanine Partners, L.P. and ABRY Investment Partnership, L.P.
                (6)





10(N)
            Warrant
                dated November 22, 2005 issued by Navtech, Inc. to ABRY Mezzanine
                Partners, L.P. (6)





10(O)
            Warrant
                dated November 22, 2005 issued by Navtech, Inc. to ABRY Investment
                Partnership, L.P. (6)




10(P)
              Employment
                  agreement dated January 30, 2006 between Navtech Systems Support,
                  Inc. and
                  David Strucke (7)






**Navtech,
              Inc.**  **Page**
 **2006
              10-KSB**
 43







10(Q)
            Employment
                agreement dated January 30, 2006 between Navtech Systems Support,
                Inc. and
                Gordon Heard (7)





10(R)
              Form
                  of Stock Option Agreement for options granted to David Strucke,
                  Gordon
                  Heard, Britt Bowra, Johan Holmqvist and Michael Neudoerffer dated
                  as of
                  January 17, 2007, January 17, 2007, February 15, 2007, February
                  7, 2007
                  and March 20, 2007,
                  respectively.*






10(S)
              Employment
                  agreement dated February 1, 2006 between Navtech Systems Support,
                  Inc. and
                  Britt Bowra*




















10(T)
              Contract
                    of employment dated February 1, 2006 between European Aeronautical
                    Group
                    AB and Johan Holmqvist*
















10(U)
              Amendment
                    dated November 1, 2006 to Contract of Employment between European
                    Aeronautical Group AB and Johan
                    Holmqvist*





10(V)
              Stock
                  Purchase Agreement dated as of March 24, 2006 between Navtech,
                  Inc. and
                  John Bethanis*





14
            Code
                of Ethics (3)






21
              Subsidiaries*






















23
              Consent
                  of Deloitte & Touche LLP*










31(A)
            Rule
                13a-14(a)/15d-14(a) Certification of Chief Executive Officer, as
                adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002




31(B)
            Rule
                13a-14(a)/15d-14(a) Certification of Chief Financial Officer, as
                adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002





32
            Certification
                of Chief Executive Officer and Chief Financial Officer Pursuant to
                18
                U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.







































*
        Previously filed
























(1)
      We
      hereby incorporate the footnoted exhibit by reference in accordance with Rule
      12b-32, as such exhibit was originally filed as an exhibit in our Annual Report
      on Form 10-KSB for the fiscal year ended October 31, 1999.





(2)
      We
      hereby incorporate the footnoted exhibit by reference in accordance with Rule
      12b-32, as such exhibit was originally filed as an exhibit in our Registration
      Statement on Form S-8 (File No. 333-32656)





(3)
      We
      hereby incorporate the footnoted exhibit by reference in accordance with Rule
      12b-32, as such exhibit was originally filed as an exhibit in our Annual Report
      on Form 10-KSB for the fiscal year ended October 31, 2003.





(4)
      We
      hereby incorporate the footnoted exhibit by reference in accordance with Rule
      12b-32, as such exhibit was originally filed as an exhibit in our Quarterly
      Report on Form 10-QSB for the quarter ended April 30, 2001.





(5)
      We
      hereby incorporate the footnoted exhibit by reference in accordance with Rule
      12b-32, as such exhibit was originally filed as an exhibit in our Annual Report
      on Form 10-KSB for the fiscal year ended October 31, 2004.







**Navtech,
            Inc.**  **Page**
 **2006
            10-KSB**
 44





(6)
        We
        hereby incorporate the footnoted exhibit by reference in accordance with
        Rule
        12b-32, as such exhibit was originally filed as an exhibit in our Current
        Report
        on Form 8-K for an event dated November 21, 2005.
  (7)
          We
          hereby incorporate the footnoted exhibit by reference in accordance with
          Rule
          12b-32, as such exhibit was originally filed as an exhibit in our Annual
          Report
          on Form 10-KSB for the fiscal year ended October 31,
          2005.


**Navtech,
              Inc.**  **Page**
 **2006
              10-KSB**
 45




**Item
      14. Principal Accountant Fees and Services**





The
      following is a summary of the fees billed to us by Deloitte & Touche, LLP,
      our independent auditors, for professional services rendered for the fiscal
      years ended October 31, 2006 and 2005:





**Fee
                Category**
            
            
            **Fiscal
                2006 Fees**
            
            
            **Fiscal
                2005 Fees**Audit
                Fees (1)
            
            $
            214,323
            
            $
            53,391Audit-Related
                Fees (2)
            
            
            26,102
            
            
            8,214Tax
                Fees (3)
            
            
            19,933
            
            
            49,991All
                Other Fees (4)
            
            
            430,242
            
            
            -Total
            
            $
            690,600
            
            $
            111,596





(1)
            Audit
                Fees consist of aggregate fees billed for professional services rendered
                for the audit of our annual financial statements and review of the
                interim
                financial statements included in the quarterly reports of services
                that
                are normally provided by the independent auditors in connection with
                the
                statutory and regulatory filings or engagements for the fiscal years
                ended
                October 31, 2006 and October 31, 2005,
                respectively.




(2)
            For
                assurance and related services that are reasonably related to the
                performance of the audit and are not reported with Audit Fees, including
                accounting consultations.




(3)
            For
                tax compliance, advice, planning and return preparation and for services
                related to the submission and receipt of investment tax credits earned
                from Canadian Scientific Research and Experimental Development (SR&ED)
                qualified expenditures.




(4)
              For
                  services related to due diligence and regulatory filings associated
                  with
                  the acquisition of EAG.




The
      Audit
      Committee is responsible for the appointment, compensation and oversight of
      the
      work of the independent auditors and approves in advance any services to be
      performed by the independent auditors, whether audit-related or not. The Audit
      Committee reviews each proposed engagement to determine whether the provision
      of
      services is compatible with maintaining the independence of the independent
      auditors. All of the fees shown above were pre-approved by the Audit
      Committee.











**Navtech,
            Inc.**  **Page**
 **2006
            10-KSB**
 46





REPORT
        OF
        INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS




To
        the
        Board of Directors and Stockholders of Navtech, Inc.
 
 We
        have
        audited the consolidated balance sheets of Navtech, Inc. and subsidiaries
        (the
“Company”) as of October 31, 2006 and 2005, and the consolidated statements of
        operations, stockholders’ equity and cash flows for the 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 Canadian generally accepted auditing
        standards and the standards of the Public Company Accounting Oversight Board
        (United States). These standards require that we plan and perform an audit
        to
        obtain reasonable assurance 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, such consolidated financial statements present fairly, in all material
        respects, the financial position of the Company as of October 31, 2006 and
        2005,
        and the results of its operations and its cash flows for each of the years
        then
        ended in accordance with accounting principles generally accepted in the
        United
        States of America.
 
 The
        Company is not required to have, nor were we engaged to perform, an audit
        of its
        internal control over financial reporting. Our audits included consideration
        of
        internal control over financial reporting as a basis for designing audit
        procedures that are appropriate in the circumstances, but not for the purpose
        of
        expressing an opinion on the effectiveness of the Company’s internal control
        over financial reporting. Accordingly, we express no such opinion.
 
 
 /s/
        Deloitte & Touche LLP
  Independent
        Registered Chartered Accountants
 Kitchener,
        Ontario
 January
        22, 2007






NAVTECH,
            INC.
 F-1




**CONSOLIDATED
        STATEMENTS OF OPERATIONS**
 **(In
        thousands of US Dollars, except per share amounts)**
  *Year
                  Ended October 31,*
              
              
              **2006**
              
              
              2005**REVENUE**Service
                  fees
              
              **$**
              **34,328**
              
              $
              8,108Professional
                  services
              
              
              **2,396**
              
              
              1,750Hardware
                  revenue
              
              
              **99**
              
              
              1,285Total
                  revenue
              
              
              **36,823**
              
              
              11,143**COSTS
                  AND EXPENSES**Cost
                  of services
              
              
              **20,916**
              
              
              4,819Cost
                  of hardware revenue
              
              
              **116**
              
              
              1,063Research
                  and development
              
              
              **1,433**
              
              
              989Selling
                  and marketing
              
              
              **3,079**
              
              
              1,588General
                  and administrative
              
              
              **6,312**
              
              
              1,834Depreciation
              
              
              **1,426**
              
              
              237Amortization
                  of acquisition-related intangible assets
              
              
              **973**
              
              
              -Total
                  costs and expenses
              
              
              **34,255**
              
              
              10,530***Income
                  from operations***
              
              
              **2,568**
              
              
              613***Other
                  expense***Interest
                  expense (Note 17)
              
              
              **2,481**
              
              
              29***Earnings
                  before income taxes***
              
              
              **87**
              
              
              584***Recovery
                  of income taxes***(Note
                  19)
              
              
              **351**
              
              
              89***Net
                  earnings***
              
              **$**
              **438**
              
              $
              673***Net
                  (loss) earnings per share*******(Note
                  18)Basic
              
              **$**
              **(0.15**
              **)**
              $
              0.14Diluted
              
              **$**
              **(0.15**
              **)**
              $
              0.13***Weighted
                  average common shares outstanding***(Note
                  18)Basic
              
              
              **4,562,326**
              
              
              4,683,869Diluted
              
              
              **4,562,326**
              
              
              5,114,869
 
 See
        Notes
        to the Consolidated Financial Statements
 
  NAVTECH,
              INC.
 F-2
 **CONSOLIDATED
          BALANCE SHEETS**
 **(In
          thousands of US Dollars)**
  *October
                    31,*
                
                
                **2006**
                
                
                2005**ASSETS***Current
                    Assets*Cash
                
                **$**
                **6,769**
                
                $
                444Accounts
                    receivable (net of allowance for bad debtsof**$395**;
                    2005 - $247)
                
                
                **5,796**
                
                
                1,616Other
                    receivable (Note 12)
                
                
                **308**
                
                
                -Lease
                    receivable - current portion (Note 6)
                
                
                **140**
                
                
                187Inventory
                
                
                **374**
                
                
                -Prepaid
                    expenses and other (Note 8)
                
                
                **1,348**
                
                
                1,425**14,735**
                
                
                3,672*Lease
                    receivable*(Note
                    6)
                
                
                **482**
                
                
                561*Deferred
                    taxes*(Note
                    19)
                
                
                **2,761**
                
                
                477*Deferred
                    financing costs*(Note
                    3)
                
                
                **565**
                
                
                -*Capital
                    assets*(Note
                    9)
                
                
                **4,410**
                
                
                582*Intangible
                    assets*(Note
                    10)
                
                
                **7,325**
                
                
                -*Goodwill
                    (Note 5)*
                
                
                **11,878**
                
                
                -**$**
                **42,156**
                
                $
                5,292**LIABILITIES***Current
                    Liabilities*Accounts
                    payable
                
                **$**
                **4,442**
                
                $
                681Accrued
                    liabilities
                
                
                **4,319**
                
                
                923Acquisition
                    consideration payable (Note 5)
                
                
                **311**
                
                
                -Deferred
                    revenue
                
                
                **3,732**
                
                
                826Obligation
                    under capital leases - current portion (Note 11)
                
                
                **276**
                
                
                242Lease
                    incentive payable - current portion (Note 12)
                
                
                **44**
                
                
                -**13,124**
                
                
                2,672*Obligation
                    under capital leases*(Note 11)
                
                
                **274**
                
                
                465*Lease
                    incentive payable*(Note 12)
                
                
                **400**
                
                
                -*Deferred
                    taxes*(Note
                    19)
                
                
                **2,410**
                
                
                -*Notes
                    payable*(Note 3)
                
                
                **20,214**
                
                
                -**36,422**
                
                
                3,137*Commitments
                    and Contingencies*(Note 13)**STOCKHOLDERS’
                    EQUITY**Common
                    stock (Note 14)
                
                
                **6**
                
                
                6Authorized
                    - 20,000,000, Par value $0.001, Issued -**5,683,328**
                  (2005
                    - 5,635,328)Treasury
                    stock -**1,353,878**(2005 - 733,188)
                
                
                **(1**
                **)**
                
                (1
                )Convertible
                    preferred stock (Note 4) Authorized - 2,000,000, Par value $0.01,
                    Issued -**1,600,000**(2005
                    - nil)
                
                
                **3,706**
                
                
                -Additional
                    paid-in capital
                
                
                **3,742**
                
                
                3,462Accumulated
                    other comprehensive income
                
                
                **236**
                
                
                134Accumulated
                    deficit
                
                
                **(1,955**
                **)**
                
                (1,446
                )**5,734**
                
                
                2,155**$**
                **42,156**
                
                $
                5,292
 
 See
          Notes
          to the Consolidated Financial Statements


NAVTECH,
            INC.
 F-3


**CONSOLIDATED
        STATEMENTS OF STOCKHOLDERS’ EQUITY**
 **(In
        thousands of US Dollars; shares in thousands)**
  Common
                    Stock
                
                
                Stock
                    Amount
                
                
                Preferred
                    Shares
                
                
                Stock
                  Amount
                
                
                Additional
                  Paid-In
                  Capital
                
                
                Accumulated
                  Other
                  Comprehensive
                  Income
                
                
                Treasury
                  Stock
                
                
                Accumulated
                  Deficit
                
                
                Total
                    Stockholders'
                  Equity
                
                
                Total
                  Comprehensive
                    IncomeBalances,
                    October 31, 2004
                
                
                4,884
                
                $
                5
                
                
                -
                
                $
                -
                
                $
                3,094
                
                $
                131
                
                $
                (1
                )
                $
                (2,118
                )
                $
                1,111Stock
                    options exercised
                
                
                626
                
                
                1
                
                
                
                
                
                
                
                
                336
                
                
                
                
                
                
                
                
                
                
                
                336Warrants
                    exercised
                
                
                125
                
                
                
                
                
                
                
                
                
                
                
                234
                
                
                
                
                
                
                
                
                
                
                
                234Treasury
                    stock
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (202
                )
                
                
                
                
                
                
                
                
                
                
                (202
                )Translation
                    adjustments
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                3
                
                
                
                
                
                
                
                
                3
                
                
                3Net
                    earnings
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                673
                
                
                673
                
                
                673Balances,
                    October 31, 2005(1)
                
                
                5,635
                
                $
                6
                
                
                -
                
                $
                -
                
                $
                3,462
                
                $
                134
                
                $
                (1
                )
                $
                (1,446
                )
                $
                2,155
                
                $
                676Stock
                    options exercised
                
                
                48
                
                
                
                
                
                
                
                
                -
                
                
                32
                
                
                
                
                
                
                
                
                
                
                
                32Preferred
                    shares
                
                
                
                
                
                
                
                
                1,600
                
                
                3,706
                
                
                2,047
                
                
                
                
                
                
                
                
                
                
                
                5,753Treasury
                    stock (Note 14)
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (1,799
                )
                
                
                
                
                
                
                
                
                
                
                (1,799
                )Translation
                    adjustments
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                102
                
                
                
                
                
                
                
                
                102
                
                
                72Preferred
                    stock deemed dividend (Note 4)
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (947
                )
                
                (947
                )Net
                    earnings
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                438
                
                
                438
                
                
                301Balances,
                    October 31, 2006(1)
                
                
                5,683
                
                $
                6
                
                
                1,600
                
                $
                3,706
                
                $
                3,742
                
                $
                236
                
                $
                (1
                )
                $
                (1,955
                )
                $
                5,734
                
                $
                (373
                )
  See
        Notes
        to the Consolidated Financial Statements
 
 (1) Issued
        shares at October 31, 2006 include **1,353,878** (2005 -
        733,188) shares held in treasury. Total outstanding shares at October 31,
        2006
        were **4,329,450** (2005 -
        4,902,140).




NAVTECH,
            INC.
 F-4


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(In
        thousands of US Dollars)**
 
 *Year
                  Ending October 31,*
              
              
              **2006**
              
              
              2005**OPERATING
                  ACTIVITIES**Net
                  earnings
              
              **$**
              **438**
              
              $
              673Adjustments
                  to reconcile net earnings to netcash
                  provided by operating activities:Depreciation
              
              
              **1,426**
              
              
              237Amortization
                  of acquisition-related intangible assets
              
              
              **973**
              
              
              -Amortization
                  of deferred financing costs and note payable warrants (Note
                  3)
              
              
              **249**
              
              
              -Provision
                  for uncollectible accounts
              
              
              **314**
              
              
              184Deferred
                  taxes
              
              
              **(146**
              **)**
              
              (25
              )Changes
                  in operating assets and liabilities:Accounts
                  receivable
              
              
              **(1,203**
              **)**
              
              (655
              )Other
                  receivable
              
              
              **(308**
              **)**
              
              -Lease
                  receivable
              
              
              **125**
              
              
              -Inventory
              
              
              **(374**
              **)**
              
              -Prepaid
                  expenses and other current assets
              
              
              **808**
              
              
              (1,166
              )Accounts
                  payable
              
              
              **1,550**
              
              
              2Accrued
                  liabilities
              
              
              **284**
              
              
              565Lease
                  incentive (Note 12)
              
              
              **444**
              
              
              -Deferred
                  revenue
              
              
              **(278**
              **)**
              
              189Income
                  taxes payable
              
              
              **(361**
              **)**
              
              -Net
                  cash flows from operating activities
              
              
              **3,941**
              
              
              4**INVESTING
                  ACTIVITY**Acquisition
                  of European Aeronautical Group AB (Note 5)
              
              
              **(19,311**
              **)**
              
              -Acquisition
                  costs
              
              
              **(1,357**
              **)**
              
              -Cash
                  acquired
              
              
              **2,316**
              
              
              -Purchase
                  of capital assets
              
              
              **(1,783**
              **)**
              
              (263
              )Net
                  cash flows from investing activities
              
              
              **(20,135**
              **)**
              
              (263
              )**FINANCING
                  ACTIVITIES**Repayment
                  of capital leases
              
              
              **(157**
              **)**
              
              (76
              )Issue
                  of notes payable (Note 3)
              
              
              **21,000**
              
              
              -Debt
                  financing costs (Note 3)
              
              
              **(670**
              **)**
              
              -Issue
                  of convertible preferred stock (Note 4)
              
              
              **4,000**
              
              
              -Equity
                  issue costs (Note 4)
              
              
              **(126**
              **)**
              
              -Share
                  repurchase (Note 14)
              
              
              **(1,800**
              **)**
              
              -Exercises
                  under stock option plan (Note 14)
              
              
              **33**
              
              
              134Exercise
                  of warrants (Note 14)
              
              
              **-**
              
              
              234Net
                  cash flows from financing activities
              
              
              **22,280**
              
              
              292**EFFECT
                  OF FOREIGN EXCHANGE RATES ON CASH**
              
              
              **239**
              
              
              (34
              )*Net
                  cash flow*
              
              
              **6,325**
              
              
              (1
              )*Cash,
                  beginning of year*
              
              
              **444**
              
              
              445*Cash,
                  end of year*
              
              **$**
              **6,769**
              
              $
              444Supplemental
                  disclosure of cash flow information:Cash
                  paid during the year for interest
              
              **$**
              **(1,616**
              **)**
              $
              (29
              )Cash
                  (paid) received during the year for income taxes
              
              **$**
              **(144**
              **)**
              $
              97Non-cash
                  preferred stock deemed dividend
              
              **$**
              **947**
              
              $
              -Accrued
                  preferred stock dividend
              
              **$**
              **188**
              
              $
              -Assets
                  acquired through capital leases
              
              **$**
              **66**
              
              $
              711
  See
        Notes
        to the Consolidated Financial Statements


NAVTECH,
            INC.
 F-5


**NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **(In
        thousands of US Dollars, except per share amounts)**


1.  DESCRIPTION
        OF THE BUSINESS
  Navtech,
        Inc. (“Navtech”) was originally incorporated in the State of New York in 1981
        and then reincorporated in the State of Delaware in 1987. Navtech Systems
        Support Inc. (“Navtech-Canada”), a wholly-owned subsidiary of Navtech, was
        incorporated in the Province of Ontario in 1987. Navtech (UK) Limited
        (“Navtech-UK”), a wholly-owned subsidiary of Navtech-Canada, was incorporated in
        the United Kingdom in 1994. Navtech, LLC, a wholly -owned subsidiary of
        Navtech-Canada was formed in the State of Delaware in 2005. Navtech (Sweden)
        AB,
        a wholly -owned subsidiary of Navtech-Canada, was incorporated in Sweden
        in
        2005. European Aeronautical Group AB (“EAG”), a wholly-owned subsidiary of
        Navtech (Sweden) AB, was incorporated in Sweden in 1986. European Aeronautical
        Group (UK) (“EAG UK”), a wholly-owned subsidiary of EAG, was incorporated in the
        United Kingdom in 2002. When we refer to Navtech, we are speaking of Navtech,
        Inc. and its subsidiaries.
 
 The
        Company develops, markets and supports flight operations and crew management
        systems for the commercial aviation industry. The Company’s systems are designed
        to assist commercial passenger and cargo air carriers in the dynamic environment
        of their daily flight operations.
 
 2.  SIGNIFICANT
        ACCOUNTING POLICIES
  These
        financial statements are prepared in accordance with Generally Accepted
        Accounting Principles in the United States of America. A summary of significant
        accounting policies consistently applied in the preparation of the consolidated
        financial statements follows:
 
 *Basis
        of presentation*
  The
        consolidated financial statements include the accounts of the Company and
        its
        wholly-owned subsidiaries, Navtech-Canada, Navtech-UK, Navtech, LLC, Navtech
        (Sweden) AB, EAG, and EAG UK. All significant intercompany accounts and
        transactions have been eliminated upon consolidation.
 
 *Foreign
        currency translation*
  The
        determination of the functional currency for our foreign subsidiaries is
        made
        based on the relevant economic factors and relationships with the parent.
        For
        most foreign operations, the local currencies are generally considered to
        be the
        functional currencies. During the quarter ended January 31, 2006 the functional
        currency of Navtech-Canada, one of Navtech, Inc.’s wholly owned subsidiaries,
        changed from the Canadian dollar (its local currency) to the U.S. dollar
        as a
        result of fundamental changes in the economic environment in which
        Navtech-Canada operates. As a result of this change in functional currency,
        exchange rate gains and losses are recognized on all transactions in currencies
        other than the U.S. dollar and included in income for the period in which
        the
        exchange rates changed. The books and records of Navtech-Canada are maintained
        in Canadian dollars and are re-measured into the functional currency prior
        to
        the translation process.
  For
        foreign subsidiary financial statements, balance sheet accounts are translated
        at current exchange rates, and statements of operations are translated at
        average exchange rates for the period. Translation gains and losses are recorded
        as a separate component of accumulated other comprehensive income in
        stockholders’ equity. Transactions incurred in currencies other than the
        functional currency are converted to the functional currency at the transaction
        date. All foreign currency transaction gains and losses are included in net
        income.




NAVTECH,
            INC.
 F-6


**NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **(In
        thousands of US Dollars, except per share amounts)**
 *Acquisitions*
 The
          Company accounts for acquisitions of businesses using the purchase method.
          This
          involves allocating the purchase price paid for a business to the assets
          acquired, including identifiable intangible assets, and the liabilities
          assumed,
          based on their fair values at the date of acquisition. Any excess is then
          recorded as goodwill. On November 22, 2005, the Company acquired all of
          the
          issued and outstanding shares of EAG from SAS Group AB. See Note 5.
 
 *Goodwill
          and intangible assets*
 
 When
          the
          Company acquires a business, the fair value of the net tangible and intangible
          assets acquired are determined and compared to the amount paid for the
          business.
          Any excess of the amount paid over the fair value of those net assets is
          considered to be goodwill. Goodwill is tested at least annually and at
          any other
          time if any event occurs or circumstances change that would more likely
          than not
          reduce the fair market value below the carrying amount. Any excess of carrying
          value over fair value is charged to income in the period in which an impairment
          is determined.
 
 In
          accordance with the pronouncement of Statement of Financial Accounting
          Standards
          (“SFAS”) 142, “ *Goodwill
          and Other Intangible Assets* ,”
          goodwill is not amortized but is subject to an annual impairment test.
          The
          Company has designated July 31st as the date for the annual impairment
          test. The
          Company performed the required impairment tests of goodwill as of July
          31st
          using the discounted cash flow method. The results of these tests indicated
          no
          impairment to the carrying value of goodwill.
 
 Intangible
          assets related to acquisitions are recorded at their fair value at the
          acquisition date. Intangible assets with a finite life are amortized to
          income
          over their useful lives. The Company writes down intangible assets with
          a finite
          life to estimated fair value when the related undiscounted cash flows are
          not
          expected to allow for recovery of the carrying value. The estimated fair
          value
          of intangibles is generally determined by discounting the expected related
          future cash flows.
 
 Intangible
          assets with an indefinite life are not subject to amortization; they are
          tested
          at least annually for impairment to ensure that their fair value is greater
          than
          or equal to the carrying value. Any excess is charged to income in the
          period in
          which impairment is determined. Other than goodwill, the Company had no
          intangible assets with an indefinite life for any of the fiscal periods
          reported.
 
 *Inventories*
 
 Finished
          goods inventories consisting of aeronautical charts are stated at the lower
          of
          cost and market. The balance as at October 31, 2006 was $374 (2005 - $NIL).
          No
          provision for excess and obsolete inventory was required for October 31,
          2006
          and 2005.


NAVTECH,
              INC.
 F-7


**NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **(In
        thousands of US Dollars, except per share amounts)**
 *Capital
          assets*
 
 Capital
          assets are recorded at cost. Depreciation of capital assets is recorded
          at the
          following rates:
  Purchased computer software
                40%
                Declining balanceInternally developed computer
                  software
                3-5 years
                Straight
                    lineComputer equipment
                30%
                Declining balanceFurniture and fixtures
                20%
                Declining balanceOffice equipment
                20%
                Declining balanceComputer equipment under capital
                  lease
                30%
                Declining balance and straight
                  lineLeasehold improvements
                Term of lease
                Straight
                  line
 
 Costs
          to
          develop, acquire or modify software solely for the Company’s internal use are
          capitalized pursuant to American Institute of Certified Public Accountants
          Statement of Position (“SOP”) No. 98-1, ‘‘Accounting for Costs of Computer
          Software Developed or Obtained for Internal Use’’ (‘‘SOP 98-1’’). SOP 98-1
          requires qualified internal and external costs (related to such software)
          incurred during the application development stage to be capitalized and
          any
          preliminary project costs and post-implementation costs (related to such
          software) to be expensed as incurred.
 
 *Accounting
          for rent and lease incentives*
 The
          Company recognizes rent expense ratably over the lease period based upon
          the
          aggregate lease payments. The lease period is determined as the original
          lease
          term without renewals, unless and until the exercise of lease renewal options
          is
          reasonably assured, and also includes any period provided by the landlord
          as a
“free rent” period. Aggregate lease payments include all rental payments
          specified in the contract, including contractual rent increases, and are
          reduced
          by any lease incentives received from the landlord.
 
 Lease
          incentives represent upfront payments received from the landlord to fund
          tenant
          improvements and the value of rent-free periods. As payments are made to
          the
          landlord under the lease, a portion of those payments is recorded as repayments
          of the lease incentives. Lease incentives are amortized on a straight-line
          basis
          over the periods of the leases and the amortization is recorded as a reduction
          of rent expense.
 
 *Asset
          impairment*
 The
          Company evaluates the carrying value of intangible and other long-lived
          assets
          whenever events or changes in circumstances indicate the carrying value
          of an
          asset may not be recoverable. An impairment loss is recognized when the
          estimate
          of undiscounted future cash flows generated by such assets is less than
          the
          carrying amount. Measurement of the impairment loss is based on the present
          value of the expected future cash flows.
 
 *Income
          taxes*
 The
          Company accounts for income taxes in accordance with SFAS No. 109, “Accounting
          for Income Taxes” (“SFAS 109”). SFAS 109 requires the determination of deferred
          tax assets and liabilities based on the differences between the financial
          statement and income tax bases of assets and liabilities, using estimated
          tax
          rates in effect for the year in which the differences are expected to reverse.
          The measurement of a deferred tax asset is adjusted by a valuation allowance,
          if
          necessary, to recognize tax benefits only to the extent that, based on
          available
          evidence, it is more likely than not that they will be realized. In determining
          the valuation allowance, the Company considers factors such as the reversal
          of
          deferred income tax liabilities, projected taxable income and the character
          of
          income tax assets and tax planning strategies. A change to these factors
          could
          impact the estimated valuation allowance and income tax expense.
  NAVTECH,
                    INC.
 F-8
 **NOTES
              TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **(In
              thousands of US Dollars, except per share amounts)**
 The
          Company is subject to audits by taxation authorities of the jurisdictions
          in
          which it operates in the normal course of operations. The Company regularly
          assesses the status of these examinations and the potential for adverse
          outcomes
          to determine the adequacy of the provision for income and other taxes.
 
 *Research
          and development costs*
 To
          date,
          the Company has not capitalized any development costs under SFAS No. 86,
          “Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise
          Marketed” (“SFAS 86”). The Company has defined the attainment of technological
          feasibility as completion of a working model. The costs incurred between
          the
          time of establishment of a working model and the time when the products
          are
          marketed are insignificant. Consequently, costs that are eligible for
          capitalization are expensed in the period incurred.
 
 *Investment
          tax credits*
 Navtech-Canada
          qualifies for scientific research and experimental development investment
          tax
          credits on eligible scientific research and development expenditures. Investment
          tax credits are recorded as a reduction of income tax expense when it is
          more
          likely than not that the credits will be realized. Investment tax credits
          not
          utilized in the current year can be used to offset income taxes in future
          years.
 
 *Revenue
          recognition*
 The
          Company’s products and services are generally sold as part of a contract and the
          terms of the contracts, taken as a whole, determine the appropriate revenue
          recognition methods. Depending upon the terms of the contract and types
          of
          products and services sold, the Company recognizes revenue under SOP 81-1,
          “Accounting for Performance of Construction-Type and Certain Production-Type
          Contracts” (“SOP 81-1”), SOP 97-2, “Software Revenue Recognition” (“SOP 97-2”),
          and SEC Staff Accounting Bulletin (“SAB”) 104, “Revenue Recognition” (“SAB
          104”), which was preceded by SAB 101, “Revenue Recognition in Financial
          Statements” (“SAB 101”). Revenue is recognized net of cash discounts and
          allowances.
 
 Effective
          August 1, 2003, for contracts involving multiple deliverables, where the
          deliverables are governed by more than one authoritative accounting standard,
          the Company generally applies the Financial Accounting Standards Board
          (“FASB”)
          Emerging Issues Task Force (“EITF”) Issue No. 00-21, “Revenue Arrangements with
          Multiple Deliverables”, and evaluates each deliverable to determine whether it
          represents a separate unit of accounting based on the following criteria:
          (a)
          whether the delivered item has value to the customer on a standalone basis,
          (b)
          whether there is objective and reliable evidence of the fair value of the
          undelivered item(s), and (c) if the contract includes a general right of
          return
          relative to the delivered item, delivery or performance of the undelivered
          item(s) is considered probable and substantially in the control of the
          Company.
          If objective and reliable evidence of fair value exists for all units of
          accounting in the contract, revenue is allocated to each unit of accounting
          or
          element based on relative fair values. In situations where there is objective
          and reliable evidence of fair value for all undelivered elements, but not
          for
          delivered elements, the residual method is used to allocate the contract
          consideration. Under the residual method, the amount of revenue allocated
          to
          delivered elements equals the total arrangement consideration less the
          aggregate
          fair value of any undelivered elements. Each unit of accounting is then
          accounted for under the applicable revenue recognition guidance.
 
 Under
          SAB
          104 or SOP 97-2, if evidence of fair value does not exist for any undelivered
          element, revenue is not recognized until the earlier of (i) the undelivered
          element is delivered or (ii) evidence of fair value of the undelivered
          element
          exists, unless the undelivered element is a service, in which case revenue
          is
          recognized as the service is performed once the service is the only undelivered
          element.








NAVTECH,
              INC.
 F-9


**NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **(In
        thousands of US Dollars, except per share amounts)**
 The
          Company has classified its products and service revenue under the following
          categories and revenue recognition policies:
 
 a)
              Service
                  fees 
 Service
          fees revenue consists of monthly subscription fees which may include monthly
          software license fees, hosting services, and customer
          support and data services.
 
 Substantially
          all of the Company’s customers that purchase software rights from the Company
          enter into software arrangements where customers pay monthly fees that
          bundle
          software, customer support and data service fees. Under such arrangements,
          the
          software is either implemented at the customer site, or implemented on
          a
          computer environment maintained by the Company.
 
 The
          Company recognizes subscription fee revenue as the services are provided
          on a
          monthly basis.
 
 Revenues
          related to a hosting arrangement are recognized under SOP 97-2 only if
          the
          customer has the contractual right to take possession of the software at
          any
          time during the hosting period without significant penalty and it is feasible
          for the customer to either run the software on its own hardware or contract
          with
          another party unrelated to the vendor to host the software. Hosting arrangements
          that do not give the customer such an option are service contracts and
          are
          outside the scope of SOP 97-2 and accordingly, revenue is recognized in
          accordance with SAB 104.
 
 b)
              Professional
                  services 
 Professional
          service revenue consists of software configuration and custom
          programming.
 
 For
          customer contracts related to customized software development, where the
          customer has the right to, or has possession of the software, revenues
          are
          recognized under SOP 81-1 using the percentage-of-completion method. In
          using
          the percentage-of-completion method, revenues are recorded based on a measure
          of
          the percentage of costs incurred to date on a contract relative to the
          estimated
          total expected contract costs. Profit estimates on long-term contracts
          are
          revised periodically based on changes in circumstances and any losses on
          contracts are recognized in the period that such losses become known. Generally,
          the terms of long-term contracts provide for progress billing based on
          completion of certain phases of work. Contract revenues recognized in excess
          of
          billings are accumulated in deferred expenses included in prepaid expenses.
          Billings in excess of revenues recognized to date on long-term contracts
          are
          recorded as deferred revenue.
 
 c)
              Hardware
                  revenue 
 Hardware
          revenue includes arrangements where the Company provides hosting equipment
          to
          its customers.
 
 In
          hosting arrangements that contain specified equipment in which the Company
          owns
          or leases specific assets with which to fulfill the obligation and it is
          not
          economically feasible or practicable for the Company to perform its obligation
          through the use of alternative property, plant, or equipment, revenue is
          recognized under EITF Issue No. 01-8, “Determining whether an Arrangement
          Contains a Lease” (“EITF 01-8”). A sale is recorded under a capital lease
          arrangement when the conditions meet the definition of a sales-type lease
          as
          defined in SFAS 13 and based on guidance in EITF 01-8 and a lease receivable
          is
          recognized at the time of the sale. Finance revenue is recognized using
          the
          effective interest method.


NAVTECH,
              INC.
 F-10


**NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **(In
        thousands of US Dollars, except per share amounts)**
 *Stock-based
          compensation*
 
 Stock-based
          compensation arising from the Company’s stock option plan is accounted for by
          the intrinsic value method under Accounting Principles Board ("APB") Opinion
          25,
          "Accounting for Stock Issued to Employees" (“APB 25”). SFAS No. 123, "Accounting
          for Stock-Based Compensation" (“SFAS 123”) encourages, but does not require, the
          cost of stock-based compensation arrangements with employees to be measured
          based on the fair value of the equity instrument awarded. As permitted
          by SFAS
          123, the Company applies APB 25 and related interpretations in accounting
          for
          stock-based compensation awards to employees under its stock option plan
          (Note
          15).
 
 In
          December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based
          Compensation - Transition and Disclosure, an amendment to FASB Statement
          No.
          123” (“SFAS 148”). SFAS 148 requires expanded and more prominent presentation of
          the pro forma disclosures previously required by SFAS 123.
 
 *Employee
          Benefit Plans*
 
 The
          Company has defined contribution plans in Sweden and the United Kingdom.
          The
          Company makes contributions dependant on the level of each employee’s optional
          contribution to the plan. For the year ended October 31, 2006, the Company
          made
          contributions of SEK (Swedish Krona) 3.0 million (approximately $412 USD)
          and
          GBP (British Pounds) 107,000 (approximately $193 USD). There were no
          contributions made during the year ended October 31, 2005.
 
 *Use
          of estimates*
 
 The
          preparation of the financial statements in conformity with generally accepted
          accounting principles requires management to make estimates and assumptions,
          which are evaluated on an ongoing basis, that affect the reported amounts
          of
          assets and liabilities, disclosure of contingent assets and liabilities
          as of
          the date of the financial statements and the reported amounts of revenues
          and
          expenses during the reported periods. Management bases its estimates on
          historical experience and on various other assumptions that it believes
          are
          reasonable at that time, the results of which form the basis for making
          judgments about the carrying values of assets and liabilities that are
          not
          readily apparent from other sources. In particular, critical estimates
          and
          assumptions include those related to revenue recognition, the allowance
          for
          doubtful accounts, the valuation of long-lived assets, assumptions embodied
          in
          the valuation of assets for impairment testing, amortization of intangible
          assets, the recognition of contingencies, realization of investment tax
          credits,
          and the valuation allowance relating to the Company’s deferred tax assets.
          Actual results could differ from those estimates or
          assumptions.


NAVTECH,
              INC.
 F-11


**NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **(In
        thousands of US Dollars, except per share amounts)**


*Recently
        issued accounting pronouncements*
 
 *Employers’
        Accounting for Defined Benefit Pension and Other Postretirement
        Plans*
 In
        September 2006, the FASB issued SFAS No. 158 ‘‘Employers’ Accounting for Defined
        Benefit Pension and Other Postretirement Plans — An Amendment of FASB Statements
        No. 87, 88, 106, and 132(R)’’ (‘‘SFAS 158’’). SFAS 158 requires an employer to
        recognize the overfunded or underfunded status of a defined benefit pension
        and
        post-retirement plan (other than a multiemployer plan) as an asset or liability
        in its statement of financial position and to recognize changes in that funded
        status in the year in which the changes occur through comprehensive income
        of a
        business entity or changes in unrestricted net assets of a not-for-profit
        organization. SFAS 158 also requires an employer to measure the funded status
        of
        a plan as of the date of its year-end statement of financial position, with
        limited exceptions. SFAS 158 is effective as of the end of fiscal years ending
        after December 15, 2006. The Company plans to adopt the provisions of SFAS
        158
        on November 1, 2006. As the Company does not have any defined benefit pension
        and post-retirement plans, the implementation of SFAS 157 is not expected
        to
        have a material impact on the Company’s results of operations or financial
        condition.
 
 *Stock-based
        compensation*
 In
        December 2004, FASB issued SFAS 123 (revised 2004), “Share-Based Payment” ("SFAS
        123R"). SFAS 123R requires all share-based payments to employees, including
        grants of employee stock options, to be measured at fair value. In addition,
        SFAS 123R will cause unrecognized expense (based on the amounts in the Company’s
        pro forma footnote disclosure) related to options vesting after the date
        of
        initial adoption to be recognized as a charge to operations over the remaining
        vesting period. The Company is required to adopt SFAS 123R effective November
        1,
        2006. Under SFAS 123R, the Company must determine the appropriate fair value
        model to be used for valuing share-based payments, the amortization method
        for
        compensation cost and the transition method to be used at the date of adoption.
        The transition alternatives include prospective and retroactive adoption
        methods. Under the retroactive method, prior periods may be restated either
        as
        of the beginning of the year of adoption or for all periods presented. The
        prospective method requires that compensation expense be recorded for all
        unvested stock options and share awards at the beginning of the first quarter
        of
        adoption of SFAS No. 123R, while the retroactive method would record
        compensation expense for all unvested stock options and share awards beginning
        with the first period restated.
 
 In
        March
        2005, the SEC issued SAB No. 107 (“SAB 107”) regarding the SEC’s interpretation
        of SFAS 123R and the valuation of share-based payments for public
        companies.
 
 For
        the
        year ended October 31, 2007, the impact of adopting SFAS 123R using the modified
        prospective method will be a decrease in consolidated earnings of approximately
        $90 and a decrease in diluted earnings per share of approximately
        $0.01.
 
 *Accounting
        for uncertainty in income taxes*
 In
        June
        2006, the FASB issued FIN No. 48, ‘‘Accounting for Uncertainty in Income Taxes,
        an interpretation of FASB
        Statement No. 109’’ (‘‘FIN 48’’). FIN 48 clarifies the accounting for
        uncertainty in income taxes recognized in
        an
        enterprise’s financial statements in SFAS 109. The interpretation prescribes a
        recognition threshold and measurement attribute for the financial statement
        recognition and measurement of a tax position taken or expected to be taken
        in a
        tax return. FIN 48 also provides accounting guidance on derecognition,
        classification, interest and penalties, accounting in interim periods,
        disclosure and transition. FIN 48 is effective for fiscal years beginning
        after
        December 15, 2006. The Company will adopt the provisions of FIN 48 on November
        1, 2007. The Company is currently in the process of assessing the impact
        of FIN
        48 on the results of operations and financial condition.


NAVTECH,
              INC.
 F-12


**NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **(In
        thousands of US Dollars, except per share amounts)**


*Fair
        value measurements*
 In
        September 2006, the FASB issued SFAS No. 157 ‘‘Fair Value Measurements’’ (‘‘SFAS
        157’’). SFAS 157 provides accounting guidance on the definition of fair value
        and establishes a framework for measuring fair value in U.S. GAAP and expands
        disclosures about fair value measurements. SFAS 157 is effective for financial
        statements issued for fiscal years beginning after November 15, 2007. The
        Company plans to adopt the provisions of SFAS 157 on November 1, 2008. The
        implementation of SFAS 157 is not expected to have a material impact on the
        Company’s results of operations and financial condition.
 
 *Quantifying
        and evaluating the materiality of unrecorded misstatements.*
 In
        September 2006, the SEC issued SAB No. 108 (‘‘SAB 108’’), which addresses the
        process for considering the effects of prior year misstatements when quantifying
        misstatements in current year financial statements. SAB 108 expresses the
        SEC
        Staff’s views regarding the process of quantifying financial statement
        misstatements. The interpretations in SAB 108 are intended to address diversity
        in practice in quantifying financial statement misstatements and the potential
        under current practice for the build-up of improper balance sheet amounts.
        The
        application of SAB 108 is effective for financial statements issued for an
        interim period of the first fiscal year ending after November 15, 2006. The
        Company will adopt the interpretations of SAB 108 on November 1, 2006. The
        implementation of SAB 108 is not expected to have a material impact on the
        Company’s results of operations and financial condition.
 
 
 3.
        NOTES
        PAYABLE
 
 On
        November 22, 2005, Navtech-Canada entered into a Note Purchase Agreement
        pursuant to which it issued (i) $6,000 Senior Subordinated Notes, with an
        interest rate of 9.0% per
        annum
        through November 22, 2007 and thereafter at the rate of 12.5% per annumand due 2011 and (ii) $15,000 Senior Subordinated Notes, with an interest
        rate of 12.5% per
        annum
        and due 2011 (“Senior Subordinated Notes”). In connection with the
        issuance of the Senior Subordinated Notes, Navtech, Inc. also issued to the
        purchaser warrants to purchase 312,176 shares of Common Stock with an exercise
        price of $0.01 per share (“Notes Payable Warrants”). The proceeds received by
        Navtech-Canada in connection with the Senior Subordinated Notes were used
        to
        consummate the EAG acquisition (Note 5). The Senior Subordinated Notes are
        guaranteed by certain other wholly-owned subsidiaries. The
        Senior Subordinated Notes contain certain covenants with which the Company
        was
        in compliance as at October 31, 2006.Interest expense on the
        Senior Subordinated Notes for the year ended October 31, 2006 amounted to
        $2,262.
 
 Costs
        of
        $670 directly related to the issue of the Senior Subordinated Notes have
        been
        deferred. The deferred financing costs will be amortized to interest expense
        over the term of the debt on a straight line basis, which approximates the
        effective interest method. Amortization of deferred financing costs for the
        year
        ended October 31, 2006 amounted to $105 and was recorded in interest
        expense.
 
 The
        Company estimated the fair market value of the Notes Payable Warrants to
        be
        approximately $930 at inception. The estimated fair market value of the Notes
        Payable Warrants has been recorded as additional paid in capital and a reduction
        to the recorded amount of the Senior Subordinated Notes. The amount will
        be
        amortized to interest expense over the life of the debt, accreting the recorded
        amount of the Senior Subordinated Notes to the original face value, on a
        straight line basis, which approximates the effective interest method.
        Amortization of the Notes Payable Warrants for the year ended October 31,
        2006
        amounted to $144 and was recorded in interest expense.
  NAVTECH,
              INC.
 F-13




**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS** **(In
        thousands of US Dollars, except per share amounts)**
  4.
          PREFERRED STOCK OFFERING
 
 On
          November 22, 2005, the Company issued 1,600,000 shares of Series A Convertible
          Participating Preferred Stock (“Series A Convertible Preferred Stock”), and
          warrants to acquire 100,000 shares of the Company’s Common Stock (“Preferred
          Stock Warrants”) with an exercise price of $3.00 per share, for $4,000 cash
          consideration. The proceeds were used to consummate the EAG acquisition.
          See
          Note 5.
 
 The
          holders of the Series A Convertible Preferred Stock shall be entitled to
          receive, if and when declared by the Company’s Board of Directors and paid by
          the Company, in preference to the holders of the shares of Common Stock
          and any
          other of the Company’s capital stock ranking junior to the Series A Convertible
          Preferred Stock as to the payment of dividends, annual dividends at the
          rate per
          annum of $0.125 per share. The dividends accrue on a daily basis, whether
          or not
          earned or declared, and are compounded annually to the extent dividends
          remain
          unpaid. Subsequent to the fiscal 2006 year-end, the Company declared and
          paid a
          dividend of $200 on the Series A Convertible Preferred Stock.
 
 The
          Series A Convertible Preferred Stock is convertible into an equivalent
          number of
          shares of Common Stock, subject to anti-dilution provisions. The number
          of
          shares of Common Stock issuable upon conversion is increased by any accrued
          but
          unpaid dividends, at a conversion price of $2.50 per share. Conversion
          of the
          Series A Convertible Preferred Stock is at the option of the holder, or
          at the
          Company’s option if the market price of the Company’s Common Stock reaches
          certain minimum levels. No shares of Series A Convertible Preferred Stock
          had
          been converted into Common Stock as at October 31, 2006.
 
 Costs
          incurred in connection with the issuance of the Series A Convertible Preferred
          Stock in the amount of $126 representing professional fees were recorded
          as a
          reduction in the value of the Series A Convertible Preferred Stock.
 
 In
          accordance with EITF Issue No. 98-5, ‘ *Accounting
          for Convertible Securities with Beneficial Conversion Features or Contingently
          Adjustable Conversion Ratios’ (“EITF 98-5”)* ,
          and No.
          00-27, ‘ *Application
          of Issue No. 98-5 to Certain Convertible Instruments* ’
(“EITF
          00-27”), the Company recorded $947 as a non-cash deemed dividend representing
          a
          calculated beneficial conversion feature in the Series A Convertible Preferred
          Stock. This non-cash one-time preferred stock deemed dividend was calculated
          as
          the difference between the closing price of the Company’s Common Stock of $2.99
          per share on the date of acquisition (the commitment date) and the calculated
          effective conversion price of the Series A Convertible Preferred Stock.
          The
          effective conversion price of the Series A Convertible Preferred Stock
          was
          determined with reference to the relative fair value allocation of proceeds
          between the Preferred Stock Warrants and Series A Convertible Preferred
          Stock
          issued. In the future, the Company will not record any additional non-cash
          preferred stock deemed dividend as part of the Series A Convertible Preferred
          Stock issuance. The non-cash preferred stock deemed dividend did not have
          an
          effect on net earnings or cash flows for the year ended October 31, 2006
          or have
          an impact on total stockholders’ equity as of that date. The estimated fair
          market value of the Preferred Stock Warrants of $168 at inception has been
          recorded as additional paid-in capital and a reduction to the recorded
          amount of
          the Series A Convertible Preferred Stock.
 NAVTECH,
              INC.
 F-14




**NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **(In
        thousands of US Dollars, except per share amounts)**




5.
        ACQUISITION OF EUROPEAN AERONAUTICAL GROUP AB
 
 On
        November 22, 2005, the Company acquired all of the issued and outstanding
        shares
        of EAG from SAS Group AB.  The acquisition enhanced the Company’s position
        as a provider of integrated flight operations solutions to airlines on a
        global
        basis. The acquisition expanded the Company’s product suite to include
        aeronautical charting and navigational data services and significantly increased
        the Company’s European customer base. The purchase price was determined
        primarily with reference to the revenue and cash flows of EAG.
 
 The
        acquisition of EAG was accounted for using the purchase method of accounting
        in
        accordance with SFAS No. 141, ‘ *Business
        Combinations’* (“SFAS
        141”).
 
 The
        purchase price for the EAG acquisition is SEK (Swedish Krona) 156 million
        (approximately $19,311 USD) in cash and possible future cash payments to
        a
        maximum of SEK 27 million (approximately $3,676 USD) conditional on the
        achievement of certain business performance measures through July 31, 2008.
        As
        at October 31, 2006, the Company met the criteria under SFAS 141 for recognition
        of a portion of the contingent payments related to performance measures to
        October 31, 2006. Consequently, a liability of SEK 2.3 million (approximately
        $311 USD) was recorded as goodwill and acquisition consideration payable
        which
        is due during the year ending October 31, 2007. As the outcome of future
        performance measures become determinable beyond a reasonable doubt, the amount
        of the acquisition consideration payable could increase to the maximum of
        SEK 27
        million (approximately $3,676 USD). Of the total SEK 27 million contingency
        payments, a maximum of SEK 13.5 million is due during the fiscal year ending
        October 31, 2007 and the remaining maximum amount of SEK 13.5 million is
        due
        during the fiscal year ending October 31, 2008. The share purchase agreement
        provided for an adjustment to the purchase price based on finalization of
        the
        working capital of EAG at closing, which was completed during the year ended
        October 31, 2006. The resulting reduction in the purchase price of SEK 9.3
        million (approximately $1,158 USD) is reflected in the cash figure of SEK
        156
        million above, and was received in cash from SAS Group AB in August 2006.
        Direct
        costs associated with the acquisition were approximately $1,437, consisting
        primarily of professional fees related to the due diligence and negotiation
        of
        the acquisition agreement, and have been included as part of the purchase
        price
        in the table below.
 
 Of
        the
        estimated purchase price for EAG, $8,298 was allocated to intangible assets,
        which are considered to have finite lives and therefore subject to amortization.
        Of this amount, $4,830 was allocated to contractual relationships, and $3,468
        was allocated to the library of aeronautical charts. The fair values of the
        contractual relationships were determined using the discounted cash flow
        method,
        and the amortization period is seven years. The library of aeronautical charts
        was valued based on the estimated cost to develop the library internally,
        and
        the amortization period is ten years. The amortization periods were determined
        using the estimated economic useful life of the asset.




NAVTECH,
            INC.
 F-15




**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(In
      thousands of US Dollars, except per share amounts)**




In
        the
        allocation of the purchase price, $11,878 has been assigned to goodwill.
        This
        represents the excess of the aggregate purchase price over the fair value
        of the
        net tangible and identifiable intangible assets acquired. Goodwill will not
        be
        amortized but will be subject to annual impairment testing in accordance
        with
        our accounting policy. In accordance with SFAS 141, the total consideration
        paid
        for this acquisition was allocated to the assets and liabilities based upon
        their estimated fair value at the date of acquisition, as noted below:
 
 Net
                  assets acquired:Net
                  working capital
              
              $
              (1,010
              )Capital
                  assets
              
              
              2,210Deferred
                  taxes(1)
              
              
              (258
              )Deferred
                  lease inducements
              
              
              (59
              )Intangible
                  assets
              
              
              8,2989,181Goodwill
              
              
              11,878Purchase
                  Price
              
              $
              21,059Purchase
                  Price consideration:Cash(2)
              
              $
              19,311Acquisition
                  costs
              
              
              1,437Acquisition
                  consideration payable(3)
              
              
              311$
              21,059
 (1)   Represents
        the net of $2,323 of deferred tax liabilities and $2,065 of deferred tax
        assets
        related to the business acquired.
 (2)   Represents
        cash paid on acquisition and additional non-contingent payments made to the
        seller, net of the subsequent purchase price reduction received due to
        finalization of the working capital on closing.
 (3)    Represents
        estimated future contingent cash payments conditional on the achievement
        of
        certain business performance measures. See Note 13.
 
 The
        following unaudited pro forma information assumes that the acquisition of
        EAG
        and the related financing transactions occurred on the first day of the twelve
        months ended October 31, 2006.
 
 *October
                  31,***2006**Revenue
              
              **$**
              **38,189**Net
                  earnings
              
              
              **498**Accrued
                  convertible preferred stock dividend
              
              
              **(200**
              **)**Deemed
                  convertible preferred stock dividend
              
              
              **(947**
              **)**Net
                  earnings applicable to common stock holders
              
              
              **(649**
              **)**Basic
                  and Diluted net loss per share
              
              **$**
              **(0.14**
              **)**Weighted
                  Average Number of Shares
              
              
              **4,562,326**
 
 This
        pro
        forma information is for information purposes only and does not purport to
        represent what the Company’s financial results of operations for the period
        presented would have been had the acquisition occurred at the beginning of
        the
        period indicated, or to project the Company’s financial results of operations
        for any future period.




NAVTECH,
            INC.
 F-16




**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(In
      thousands of US Dollars, except per share amounts)**




6.  LEASE
      RECEIVABLE





As
      disclosed in Note 2, the Company’s service arrangements may include a lease
      based on the guidance in EITF 01-8.  One arrangement during fiscal 2005
      included a sales-type lease based on the criteria found in SFAS 13 resulting
      in
      a lease receivable recognized at the time of the sale.





Remaining
                minimum lease payments to be received are as follows:2007
            
            **$**
            **187**2008
            
            
            **187**2009
            
            
            **187**2010
            
            
            **171****732**Less:
                Amounts representing interest
            
            
            **110**Balance
                of lease receivable
            
            
            **622**Less:
                Current portion
            
            
            **140**Long-term
                portion
            
            **$**
            **482**





For
      the
      year ended October 31, 2006, lease revenue amounted to nil (2005 - $854,
      presented as hardware revenue).




This
      lease transaction was a non-cash transaction and therefore has not been
      reflected in the consolidated statement of cash flows.








8.  PREPAID
      EXPENSES AND OTHER CURRENT ASSETS





*October
                31,***2006**
            
            
            2005Prepaid
                expenses
            
            **$**
            **523**
            
            $
            205Deferred
                acquisition costs (Note 5)
            
            
            **-**
            
            
            695Deferred
                expenses
            
            
            **825**
            
            
            525**$**
            **1,348**
            
            $
            1,425





As
      disclosed in Note 2, revenues for certain customer contracts related to
      customized software development are recognized under SOP 81-1 using the
      percentage-of-completion method. Costs incurred towards the completion of the
      project that are unbilled are accumulated in deferred expenses included with
      prepaid expenses and other current assets.




NAVTECH,
            INC.
 F-17


**NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **(In
        thousands of US Dollars, except per share amounts)**




9.  CAPITAL
        ASSETS
 
 *October
                  31,***2006**
              
              2005CostPurchased
                  computer software
              
              **$****1,286**
              
              $419Computer
                  equipment
              
              **1,424**
              
              998Computer
                  and office equipment under capital lease
              
              **116**
              
              138Furniture
                  and fixtures
              
              **836**
              
              129Office
                  equipment
              
              **108**
              
              232Leasehold
                  improvements
              
              **823**
              
              304Internally
                  developed software
              
              **2,216**
              
              -**6,809**
              
              2,220Accumulated
                  depreciationPurchased
                  computer software
              
              **966**
              
              362Computer
                  equipment
              
              **389**
              
              672Computer
                  and office equipment under capital lease
              
              **91**
              
              96Furniture
                  and fixtures
              
              **110**
              
              88Office
                  equipment
              
              **58**
              
              171Leasehold
                  improvements
              
              **30**
              
              249Internally
                  developed software
              
              **755**
              
              -**2,399**
              
              1,638**$**
              **4,410**
              
              $
              582
 
 For
        the
        year ended October 31, 2006, fixed assets with a cost of $2,649 (2005 - NIL)
        were not amortized as these assets were not yet put into use as at October
        31,
        2006. These items are included in computer equipment, furniture and fixtures,
        office equipment, leasehold improvements, and internally developed
        software.
  For
        the
        year ended October 31, 2006, the Company capitalized internally developed
        software costs in the amount of $592 (2005 - NIL).
  10.  INTANGIBLE
        ASSETS
 
 *October
                  31,***2006**
              
              
              2005CostContractual
                  relationships
              
              **$**
              **4,830**
              
              $
              -Library
                  of aeronautical charts
              
              
              **3,468**
              
              
              -**8,298**
              
              
              -Accumulated
                  amortizationContractual
                  relationships
              
              
              **648**
              
              
              -Library
                  of aeronautical charts
              
              
              **325**
              
              
              -**973**
              
              
              -**$**
              **7,325**
              
              $
              -
 
  NAVTECH,
              INC.
 F-18





**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(In
      thousands of US Dollars, except per share amounts)**




11.  OBLIGATION
        UNDER CAPITAL LEASES
  The
        Company is committed under capital leases for computer and office equipment
        with
        terms expiring at various dates in 2008 and 2010. The future minimum lease
        payments under the lease agreements along with the present balance of the
        obligation under the capital leases are as follows:
 
 Minimum
                  lease payments for year ended October 31,2007
              
              **$**
              **300**2008
              
              
              **253**2009
              
              
              **19**2010
              
              
              **12****584**Less:
                  Amounts representing interest
              
              
              **34**Balance
                  of obligation
              
              
              **550**Less:
                  Current portion
              
              
              **276**Long-term
                  portion
              
              **$**
              **274**
 
 12.  OTHER
        RECEIVABLE AND LEASE INCENTIVE PAYABLE
  On
        June
        8, 2006, the Company entered into a sublease agreement for premises located
        in
        Waterloo, Ontario, Canada. The term of the sublease is ten years, commencing
        on
November 1, 2006. The sublease includes two options to extend the initial
        lease. Each option extends the term by five years, for a total potential
        extension of ten years.
  As
        part
        of the sublease agreement, the landlord provided a lease incentive allowance
        of
        $444 to fund tenant improvements, of which $136 was received as at October
        31,
        2006 and the remaining balance of $308 was received subsequent to year end
        and
        recorded as other receivable as at October 31, 2006. As payments are made
        to the
        landlord under the lease, a portion of the payments is recorded as repayments
        of
        the lease incentive allowance.
  13.  COMMITMENTS
        AND CONTINGENCIES
  *Commitments*
 The
        Company is committed under non-cancellable operating leases for business
        premises and office equipment with terms expiring at various dates in 2007
        through 2016. The future minimum amounts payable under the lease agreements
        are as follows:
 
 2007
              
              **$**
              **1,478**2008
              
              
              **1,193**2009
              
              
              **678**2010
              
              
              **537**2011
              
              
              **536**Thereafter
              
              
              **2,750****$**
              **7,172**
 
 Rent
        expense for the fiscal years ended October 31, 2006 and 2005 was $1,416 and
        $330, respectively.




NAVTECH,
            INC.
 F-19





**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(In
      thousands of US Dollars, except per share amounts)**


*Contingencies*
 
 The
        purchase price for the EAG acquisition included contingent future cash payments
        to SAS to a maximum of SEK 27 million (approximately $3,676 USD) conditional
        on
        the achievement of certain business performance measures through July 31,
        2008.
        As at October 31, 2006, the Company met the criteria under SFAS 141 for
        recognition of a portion of the contingent payments related to performance
        measures to October 31, 2006. Consequently, a liability of SEK 2.3 million
        (approximately $311 USD) was recorded as goodwill and acquisition consideration
        payable which is due during the year ending October 31, 2007. As the outcome
        of
        future performance measures become determinable beyond a reasonable doubt,
        the
        amount of the acquisition consideration payable could increase to the maximum
        of
        SEK 27 million (approximately $3,676 USD). Of the total SEK 27 million
        contingency payments, a maximum of SEK 13.5 million is due during the fiscal
        year ending October 31, 2007 and the remaining maximum amount of SEK 13.5
        million is due during the year ending October 31, 2008.
  The
        Company is subject to various legal proceedings, claims and liabilities,
        which
        arise in the ordinary course of its business. In the opinion of management,
        the
        amount of any ultimate liability with respect to these actions will not have
        a
        material adverse effect on the Company’s consolidated results of operations,
        cash flows or financial position.
  14.  SHARE
        CAPITAL
  The
        authorized share capital of the Company consists of 20,000,000 shares of
        Common
        Stock with a par value of $0.001, and 2,000,000 shares of Preferred Stock
        with a
        par value of $0.01. At October 31, 2006, there were 5,683,328 shares of Common
        Stock issued and fully paid (2005 - 5,635,328) and 1,600,000 shares of Preferred
        Stock issued (2005 - nil). See Note 4.  Issued
        shares at October 31, 2006 include**1,353,878**(2005 -
        733,188) shares held in treasury. Total outstanding shares at October 31,
        2006
        were 4,329,450 (2005 - 4,902,140).
  During
        the year ended October 31, 2006, the Company issued Preferred Stock Warrants
        to
        acquire 100,000 shares of Common Stock with an exercise price of $3.00 per
        share
        (see Note 4) and Notes Payable Warrants to purchase 312,176 shares of Common
        Stock with an exercise price of $0.01 per share (see Note 3). During the
        year
        ended October 31, 2006, there were no Common Stock purchase warrants exercised.
        For the year ended October 31, 2005, 125,000 Common Stock purchase warrants
        were
        exercised at an exercise price of $1.875 per share for total proceeds of
        $234.
  *Year
        ended October 31, 2006*
  During
        the year, the Company issued 48,000 shares of Common Stock upon the exercise
        of
        options under the 1999 Stock Option Plan for total proceeds of $33.
  Treasury
        stock
  During
        the year, the Company repurchased 620,690 of its Common Stock for $1,800
        in a
        single transaction. At October 31, 2006, the number of shares of Common Stock
        in
        treasury amounted to 1,353,878 (2005 - 733,188).
 
 *Year
        ended October 31, 2005*
  During
        the year, the Company issued 626,057 shares of Common Stock upon the exercise
        of
        options under the 1999 Stock Option Plan for total proceeds of $336.
  Treasury
        stock
  During
        the year, the Company increased the number of shares of Common Stock in treasury
        by 125,459. The shares were received by the Company as consideration in lieu
        of
        cash for the exercise price on the exercise of stock options. The value assigned
        to the treasury stock was based on the market price at the date of exercise.
        At
        October 31, 2005, the number of shares of Common Stock in treasury amounted
        to
        733,188.




NAVTECH,
            INC.
 F-20





**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(In
      thousands of US Dollars, except per share amounts)**




15.  STOCK
        OPTION PLAN
  In
        1999
        the Company adopted the 1999 Stock Option Plan, as approved by the shareholders
        on January 14, 2000, which provided for the granting of incentive stock options
        and non-statutory stock options for the purchase of a maximum of 1,500,000
        shares of the Company’s Common Stock to directors, employees, consultants and
        advisors of the Company. On March 29, 2001, the shareholders approved an
        amendment to the 1999 Stock Option Plan to increase the maximum number of
        options to be granted to 3,000,000. Under the terms of the 1999 Stock Option
        Plan, the options, which expire no later than ten years after grant, are
        exercisable at a price no less than the fair market value of the Company’s
        Common Stock at the date of the grant and become exercisable in accordance
        with
        terms established at the time of the grant.
  A
        summary
        of the activity in the Option Plan is set forth below:
 
 Numberof
                Shares
              
              
              Weighted
                  Average
                Exercise
                  PriceBalance
                  outstanding at October 31, 2004
              
              
              1,144,525
              
              $
              0.64Granted
              
              
              -
              
              
              -Canceled
                  and expired
              
              
              (87,468
              )
              
              0.98Exercised
              
              
              (626,057
              )
              
              0.54Balance
                  outstanding at October 31, 2005
              
              
              431,000
              
              $
              0.67Granted
              
              
              299,000
              
              
              2.80Canceled
                  and expired
              
              
              (7,000
              )
              
              1.33Exercised
              
              
              (48,000
              )
              
              0.69**Balance
                  outstanding at October 31, 2006**
              
              
              **675,000**
              
              **$**
              **1.61**Exercisable
                  at October 31, 2005
              
              
              415,688
              
              $
              0.67**Exercisable
                  at October 31, 2006**
              
              
              **369,750**
              
              **$**
              **1.85**
 
 The
        following table summarizes information concerning outstanding options at
        October
        31, 2006:
 
 Range
                  of Exercise Prices
              
              
              Number
                  of Options
                Outstanding
              
              
              Weighted
                  Average
                Remaining
                Contractual
                  Life
              
              
              Weighted
                  Average
                Exercise
                  Price
              
              
              Number
                  of Options
                Exercisable
              
              
              Weighted
                  Average
                Exercise
                  Price of Exercisable Options$0.15
              
              
              100,000
              
              
              5.27years
              
              $
              0.15
              
              
              100,000
              
              $
              0.15$0.37
                  - $0.75
              
              
              130,500
              
              
              4.89years
              
              $
              0.62
              
              
              127,375
              
              $
              0.63$0.90
                  - $1.1875
              
              
              145,500
              
              
              3.30years
              
              $
              1.05
              
              
              142,375
              
              $
              1.07$2.76
                  - $3.70
              
              
              299,000
              
              
              8.04years
              
              $
              2.80
              
              
              -
              
              $
              -675,000
              
              
              6.00years
              
              $
              1.61
              
              
              369,750
              
              $
              0.66




NAVTECH,
            INC.
 F-21





**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(In
      thousands of US Dollars, except per share amounts)**




16.
        STOCK-BASED COMPENSATION
  The
        Company has adopted SFAS No. 123, ’ *Accounting
        for Stock-Based Compensation* ‘.
        As
        permitted under this standard, the Company has elected to continue to account
        for stock-based compensation using the intrinsic value method prescribed
        in
        Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to
        Employees,” and related interpretations. Accordingly, compensation expense for
        stock options is measured as the excess, if any, of the fair value of the
        Company’s stock at the date of grant over the amount an employee must pay to
        acquire the stock. Pro forma information regarding net earnings (loss) and
        earnings (loss) per share is required by SFAS 123, and has been determined
        as if
        the Company accounted for its employee stock options under the fair value
        method
        of that Statement. The fair value for these options was estimated at the
        date of
        grant using the Black-Scholes option pricing model with the following weighted
        average assumptions:
  *October
                  31,*Assumption
              
              
              **2006**
              
              
              2005Volatility
                  factor of expected market price of Navtech, Inc.’s stock
              
              
              **68**
              **%**
              
              naDividend
                  yield
              
              
              **0**
              **%**
              
              naRisk-free
                  rate
              
              
              **4**
              **%**
              
              naWeighted
                  average expected life of stock options (years)
              
              
              **3.4**
              
              
              na
 
 There
        are
        no assumptions for 2005 as there were no options issued during that year.
  SFAS
        123
        requires that, for the pro forma disclosure, the compensation cost based
        on the
        fair values of the options at the grant date be amortized over the vesting
        period. If compensation cost for stock options had been determined based
        on the
        fair value at the grant dates consistent with the method described by SFAS
        123,
        the Company’s net (loss) earnings applicable to Common Stock holders and (loss)
        earnings per share would have been adjusted to the pro forma amounts indicated
        below.
  *Year
                  Ended*
                *October
                  31,***2006**
              
              
              2005Net
                  (loss) earnings applicable to common stock holders - reported**(1)**
              
              **$**
              **(697**
              **)**
              $
              673Pro
                  forma stock-based compensation
              
              
              **(115**
              **)**
              
              (69
              )Net
                  (loss) earnings applicable to common stock holders- pro
                  forma
              
              **$**
              **(812**
              **)**
              $
              604Basic
                  (loss) earnings per share - reported
              
              **$**
              **(0.15**
              **)**
              $
              0.14Diluted
                  (loss) earnings per share - reported
              
              
              **(0.15**
              **)**
              
              0.13Pro
                  forma stock-based compensation per share
              
              
              **(0.03**
              **)**
              
              (0.01
              )Basic
                  (loss) earnings per share - pro forma
              
              **$**
              **(0.18**
              **)**
              $
              0.13Diluted
                  (loss) earnings per share - pro forma
              
              **$**
              **(0.18**
              **)**
              $
              0.12
 **(1)** After
        giving effect to deemed and accrued preferred stock dividend. See Notes 4
        and
        18.






NAVTECH,
            INC.
 F-22





**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(In
      thousands of US Dollars, except per share amounts)**




17.  INTEREST
        EXPENSE
  The
        components of interest expense are as follows:
  *Year
                  Ended*
                *October
                  31,***2006**
              
              
              2005Notes
                  payable
              
              **$**
              **2,262**
              
              $
              -Amortization
                  of deferred financing costs
              
              
              **105**
              
              
              -Amortization
                  of notes payable warrants
              
              
              **144**
              
              
              -Other
                  interest (income) expense
              
              
              **(30**
              **)**
              
              29**$**
              **2,481**
              
              $
              29
 
 
 18.  EARNINGS
        PER SHARE
  Basic
        and
        diluted (loss) earnings per share are calculated as follows:
  *Year
                  Ended*
                *October
                  31,***2006**
              
              
              2005Numerator:Net
                  earnings
              
              **$**
              **438**
              
              $
              673Accrued
                  convertible preferred stock dividend
              
              
              **(188**
              **)**
              
              -Deemed
                  dividend on issuance of convertible preferred stock**(1)**
              
              
              **(947**
              **)**
              
              -Net
                  (loss) earnings applicable to common stock holders (A)
              
              
              **(697**
              **)**
              
              673Denominator:Denominator
                  for basic (loss) earnings per share - weighted averagenumber
                  of common shares outstanding (B)
              
              
              **4,562,326**
              
              
              4,683,869Effect
                  of dilutive securities:**(2)**
              
              
              **-**
              
              
              431,000Denominator
                  for diluted (loss) earnings per share - adjusted weightedadjusted
                  weightedaverage
                  number of common shares outstanding (C)
              
              
              **4,562,326**
              
              
              5,114,869(Loss)
                  earnings per share - basic (A)/(B)
              
              
              **(0.15**
              **)**
              
              0.14(Loss)
                  earnings per share - diluted (A)/(C)
              
              
              **(0.15**
              **)**
              
              0.13
 
 EITF
        Issue No. 03-6, “ *Participating
        Securities and the Two-Class Method under FASB Statement No.
        128”* (“EITF
        03-6) requires companies with participating securities to calculate earnings
        per
        share using the two-class method. The Company’s shares of Series A
        Convertible Preferred Stock are considered to be participating securities
        as
        these securities are entitled to dividends declared on the Company’s Common
        Stock; therefore, EITF 03-6 requires the allocation of a portion of
        undistributed earnings to the Series A Convertible Preferred Stock in the
        calculation of basic earnings per share.


NAVTECH,
              INC.
 F-23


**NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **(In
        thousands of US Dollars, except per share amounts)**


**(1)** In
          accordance with EITF 98-5, and EITF 00-27, the Company recorded $947 million
          as
          a non-cash deemed dividend in the year ended October 31, 2006 representing
          a
          calculated beneficial conversion feature in the Series A Convertible Preferred
          Stock. This non-cash one-time preferred stock deemed dividend was calculated
          as
          the difference between the closing price of our Common Stock of $2.99 per
          share
          on the date of acquisition and the calculated effective conversion price
          of the
          Series A Convertible Preferred Stock. The effective conversion price of
          the
          Series A Convertible Preferred Stock was determined with reference to the
          fair
          value allocation of proceeds between the Preferred Stock Warrants and Series
          A
          Convertible Preferred Stock issued. In the future, the Company will not
          record
          any additional non-cash preferred stock deemed dividend as part of the
          Series A
          Convertible Preferred Stock issuance. The non-cash preferred stock deemed
          dividend did not have an effect on net earnings or cash flows for the year
          ended
          October 31, 2006 or have an impact on total stockholders’ equity as of that
          date. The estimated fair market value of $168 of the Preferred Stock Warrants
          has been recorded as additional paid-in capital and a reduction to the
          recorded
          amount of the Series A Preferred Stock.
 **(2)** The
          effect of dilutive securities in the table above is calculated using the
          treasury stock method. Dilutive securities consist of employee stock options,
          warrants and the Series A Convertible Preferred Stock. Securities are excluded
          from diluted earnings per share calculations if their effect is anti-dilutive.
          As a result of the negative earnings per share for the year ended October
          31,
          2006, potentially dilutive securities are excluded from the diluted earnings
          per
          share calculation as their effect is anti-dilutive. Potentially dilutive
          securities based on their maximum issuable amounts as of October 31, 2006
          are as
          follows:
 
 Common
                    Stock issuableEmployee
                    stock options
                
                
                675,000Preferred
                    Stock Warrants (Note 4)
                
                
                100,000Notes
                    Payable Warrants (Note 3)
                
                
                312,176Series
                    A Convertible Preferred Stock (Note 4)
                
                
                1,600,0002,687,176
 NAVTECH,
              INC.
 F-24


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(In
      thousands of US Dollars, except per share amounts)**




19.  INCOME
        TAXES
  The
        components of the recovery of income taxes are as follows:
 
 *Year
                  ended October 31,***2006**
              
              
              2005Current:United
                  States
              
              **$**
              **-**
              
              $
              -Canada
              
              
              **(18**
              **)**
              
              4Sweden
              
              
              **-**
              
              
              -United
                  Kingdom
              
              
              **(15**
              **)**
              
              -**$**
              **(33**
              **)**
              $
              4Deferred:United
                  States
              
              **$**
              **-**
              
              $
              -Canada
              
              
              **665**
              
              
              85Sweden
              
              
              **(64**
              **)**
              
              -United
                  Kingdom
              
              
              **(217**
              **)**
              
              -**384**
              
              
              85**$**
              **351**
              
              $
              89
 
 The
        components of the deferred tax assets and liabilities are as
        follows:
  *October
                  31,***2006**
              
              
              2005Deferred
                  income tax assets:Net
                  operating losses carried forward
              
              **$**
              **2,391**
              
              $
              349Unused
                  income tax credits
              
              
              **598**
              
              
              573Tax
                  costs in excess of book value
              
              
              **1,308**
              
              
              35Valuation
                  allowance
              
              
              **(1,536**
              **)**
              
              (480
              )**2,761**
              
              
              477Deferred
                  income tax liabilitiesBook
                  value in excess of tax costs
              
              
              **2,130**
              
              
              -Unrealized
                  foreign exchange
              
              
              **280**
              
              
              -**2,410**
              
              
              -Net
                  deferred income taxes
              
              **$**
              **351**
              
              $
              477




NAVTECH,
              INC.
 F-25


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**(In
      thousands of US Dollars, except per share amounts)**




The
        provision for income taxes varies from the expected provision at the statutory
        rates for the following reasons:
  *Year
                  ended October 31,***2006**
              
              
              2005Combined
                  basic statutory rate
              
              
              **35**
              **%**
              
              40
              %Provision
                  for (recovery of) income taxes based on the basic statutory
                  rate
              
              **$**
              **29**
              
              $
              233Increase
                  (decrease) in income taxes resulting from the following:Effects
                  of differing statutory rates in other countries
              
              
              **(3**
              **)**
              
              (22
              )Permanent
                  differences
              
              
              **(814**
              **)**
              
              9Recognition
                  of tax credits and losses from current and prior years
              
              
              **-**
              
              
              (424
              )Valuation
                  allowance against current year losses incurred
              
              
              **536**
              
              
              69Other
              
              
              **(99**
              )
              
              46**$**
              **(351**
              **)**
              $
              (89
              )
 
 The
        Company and its subsidiaries have income tax losses available for carry forward
        that expire as follows:
  Canada
              United
                  States
              
              United
              
              
              SwedenExpiry
                  Year
              
              
              Federal
              
              
              Provincial
              
              
              Federal
              
              
              State
              
              
              Kingdom2019
              
              
              -
              
              
              -
              
              **$**
              213
              
              
              
              
              $
              -
              
              $
              -2020
              
              
              
              
              
              
              
              
              2282021
              
              
              -
              
              
              -
              
              
              24
              
              
              -
              
              
              -
              
              
              -2023
              
              
              -
              
              
              -
              
              
              149
              
              
              82
              
              
              -
              
              
              -2025
              
              
              -
              
              
              -
              
              
              45
              
              
              45
              
              
              -2026
              
              
              1,851
              
              
              1,851
              
              
              283
              
              
              268
              
              
              -Indefinite
              
              
              1,511
              
              
              421
              
              
              -
              
              
              -
              
              
              3,184
              
              
              122$
              3,362
              
              $
              2,272
              
              $
              942
              
              $
              395
              
              $
              3,184
              
              $
              122
 
 Some
        of
        the United Kingdom losses originated prior to the Company’s acquisition of
        control of the entity that generated the losses and their utilization may
        be
        subject to limitations.
 
 The
        Company also has $521 of tax credits available in Canada that expire between
        2014 and 2016.
  20.  FINANCIAL
        INSTRUMENTS
  Financial
        instruments are comprised of cash and cash equivalents, accounts receivable,
        other receivable, accounts payable, acquisition consideration payable, accrued
        liabilities and other liabilities.
  *Credit
        Facilities*
  In
        February 2006, the Company renewed a banking facility with the Royal Bank
        of
        Canada for an operating line of credit of CAD$1.0 million or its USD equivalent.
        There was no balance outstanding on the facility at October 31, 2006. The
        facility was secured by the assets of Navtech-Canada. Effective November
        1,
        2006, the Company discontinued the operating line of credit.
  The
        Company has lease credit facilities in the amount of CAD $0.5 million to
        finance
        the acquisition of computer servers and computer equipment and software.
        The
        full amount of the facilities were drawn upon as at October 31, 2006 (2005
        - CAD
        $0.8 million). The lease facilities are secured by the assets of
        Navtech-Canada.


NAVTECH,
            INC.
 F-26




**NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **(In
          thousands of US Dollars, except per share amounts)**
  *Fair
            value of financial instruments*
  At
            October 31, 2006 and 2005, the estimated fair value of cash and cash
            equivalents, accounts receivable, other receivable, accounts payable,
            acquisition consideration payable, accrued liabilities and other liabilities
            was
            equal to the book value given the short-term maturity of the items.
  The
            table
            below shows the fair value and the book value of other financial instruments
            as
            at October 31, 2006 and 2005. Since estimates must be used to determine
            fair
            value, they must not be interpreted as being realizable in the event
            of an
            immediate settlement of the instruments.
   2006
                  2005Fair
                      Value
                  
                  
                  Book
                      Value
                  
                  
                  Fair
                      Value
                  
                  
                  Book
                      ValueNotes
                      payable
                  
                  
                  20,066
                  
                  
                  20,214
                  
                  
                  n/a
                  
                  
                  n/a
 
 *Foreign
            exchange risk*
  International
            sales are primarily sourced in their respective countries and are primarily
            denominated in their local currencies. The Company’s subsidiaries incur most of
            their expenses in the local currency. Accordingly, all foreign subsidiaries
            use
            the local currency as their functional currency, with the exception of
            Navtech-Canada and Navtech (Sweden) AB, see Note 2. The Company’s international
            business is subject to risks typical of an international business, including,
            but not limited to, differing economic conditions, changes in political
            climate,
            differing tax structures, other regulations and restrictions, and foreign
            exchange rate volatility. Accordingly, the Company’s future results could be
            materially adversely affected by changes in these or other factors. The
            Company
            is also
            exposed to foreign exchange rate fluctuations as the financial results
            of
            foreign subsidiaries are translated into U.S. dollars in consolidation.
            The
            primary currencies in which the Company transacts business are the US
            Dollar,
            Swedish Krona, British Pound, Canadian Dollar, and the Euro. The impact
            of a
            significant appreciation or depreciation in any of these currencies from
            October
            31, 2006 market rates could have a material effect on our net loss.
  *Credit
            risk*
  The
            Company is exposed to credit risk through cash and accounts receivable.
            The
            Company holds its cash positions with well-established financial institutions.
            Accounts receivable credit risk is mitigated by the fact that the Company
            is a
            supplier of essential services to its customers and through its policy
            of
            invoicing for services one month in advance. Through close monitoring
            of
            accounts receivable on a regular basis, the Company limits the potential
            exposure. Bad debt expense for the year ended October 31, 2006 amounted
            to $285
            on revenues of $36,823 **** (2005
            -
            $184 on revenues of $11,143).  During fiscal 2006, there was one customer
            that accounted for 14% of total revenue and a number of affiliates to
            that
            customer, under separate operational control, that accounted for an additional
            10% of total revenue (2005 - two customers accounted for 22% of total
            revenue).
  *Interest
            rate risk*
  As
            disclosed in Note 3, the Company’s Notes Payable are at fixed interest rates and
            therefore the Company is not exposed to interest rate
            fluctuations.
 NAVTECH,
              INC.
 F-27


**NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **(In
        thousands of US Dollars, except per share amounts)**


21.  SEGMENTED
        INFORMATION
  The
        Company reviews operating results, assesses performance, makes decisions
        about
        resources, and generates discrete financial information at the single enterprise
        level. Accordingly, the Company has identified only one reportable segment
        under
        SFAS No.131, “Disclosures about Segments of an Enterprise and Related
        Information”.
  Information
        about geographic operations is as follows:
 Total
                  RevenueYear
                  Ended October 31,**2006**
              
              
              2005Europe
                  (excluding Sweden and UK)
              
              **$**
              **9,451**
              
              $
              815United
                  Kingdom
              
              
              **8,893**
              
              
              385Sweden
              
              
              **8,256**
              
              
              56United
                  States, Mexico, South America and Caribbean
              
              
              **6,805**
              
              
              6,984Canada
              
              
              **1,650**
              
              
              2,541Africa,
                  Middle East and Asia Pacific
              
              
              **1,768**
              
              
              362**$**
              **36,823**
              
              $
              11,143
 Revenue
        by geographic locations is determined based on the location of the
        customer.
  Long-Lived
                  AssetsOctober
                  31,**2006**
              
              
              2005United
                  States
              
              **$**
              **30**
              
              $
              73Sweden
              
              
              **19,483**
              
              
              -United
                  Kingdom
              
              
              **1,834**
              
              
              77Canada
              
              
              **2,265**
              
              
              432**$**
              **23,612**
              
              $
              582
 
 Deferred
                  Tax AssetsOctober
                  31,**2006**
              
              
              2005United
                  States
              
              **$**
              **-**
              
              $
              -Sweden
              
              
              **32**
              
              
              -United
                  Kingdom
              
              
              **1,308**
              
              
              -Canada
              
              
              **1,421**
              
              
              477**$**
              **2,761**
              
              $
              477


NAVTECH,
              INC.
 F-28




**Signatures**
 
 In
          accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
          the
          registrant caused this amendment to be signed on its behalf by the
          undersigned, thereunto duly authorized.
 
 
 **NAVTECH,
                  INC.**Date: February
                  12, 2007
                By:
                /s/ Gordon
                  HeardGordon
                  Heard,Chief Financial
                  Officer
 47