U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                  FORM 10-KSB/A
                                  Amendment #1

(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

For the fiscal year ended                    October 31, 1997
                          --------------------------------------------

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

For the transition period from                                     to

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

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

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


     125 Mineola Avenue, Roslyn Heights, NY                            11577
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                              (Zip Code)

Issuer's telephone number (516) 625-0202

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

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

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

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

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes No X

     Check  if  disclosure  of  delinquent  filers  in  response  to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

     State issuer's revenues for its most recent fiscal year (1997): $ 2,790,367

     The aggregate market value of the voting stock held by non-affiliates based
upon the average bid and asked prices of such stock as of September 30, 1999 was
$ 122,689

                         (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
September 30, 1999 was 2,001,980 shares.

                      DOCUMENTS INCORPORATED BY REFERENCE:

                                      None


<PAGE>


                                COMPUFLIGHT, INC.
                               1997 FORM 10-KSB/A
                                   Amendment 1



                                TABLE OF CONTENTS




                                     PART II

Item 7.  Financial Statements

                                    PART III

Item 11. Security Ownership of Certain Beneficial Owners and Management
Item 12. Certain Relationships and Related Transactions

<PAGE>


ITEM 7.  FINANCIAL STATEMENTS


                          INDEX TO FINANCIAL STATEMENTS
                                                                            Page


Report of Independent Certified Public Accountants                           F-2

Financial Statements

        Consolidated Balance Sheet as of October 31, 1997                    F-3

        Consolidated Statements of Operations for the Years Ended
          October 31, 1997 and 1996                                          F-4

        Consolidated Statement of Shareholders' Deficit for the
          Years Ended October 31, 1997 and 1996                              F-5

        Consolidated Statements of Cash Flows for the Years Ended
          October 31, 1997 and 1996                                          F-6

        Notes to Consolidated Financial Statements                   F-7 to F-27




<PAGE>


                         REPORT OF INDEPENDENT CERTIFIED
                               PUBLIC ACCOUNTANTS



Board of Directors and Shareholders
   Compuflight, Inc.

We have audited the accompanying consolidated balance sheet of Compuflight, Inc.
and  Subsidiaries  (the  "Company")  as of  October  31,  1997  and the  related
consolidated statements of operations,  shareholders' deficit and cash flows for
each  of  the  two  years  then  ended.  These  financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Compuflight,  Inc. and  Subsidiaries  as of October 31, 1997, and the results of
its  consolidated  operations  and its cash flows for each of the two years then
ended, in conformity with generally accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern.  As shown in the  financial
statements,  as of October 31,  1997,  the Company has a  deficiency  in working
capital and shareholders  equity of $1,039,201 and $651,535,  respectively,  and
has incurred a net loss of $1,818,652 for the year ended October 31, 1997.  This
factor,  among  others,  as  described in Note B to the  consolidated  financial
statements,  raises substantial doubt about the Company's ability to continue as
a going  concern.  Management's  plans  in  regard  to  these  matters  are also
described in Note B. The  consolidated  financial  statements do not include any
adjustments that might result from the outcome of this uncertainty.


GRANT THORNTON LLP

Melville, New York
August 5, 1999

                                      F-2

<PAGE>
<TABLE>
<S>                                                                                                      <C>


                       Compuflight, Inc. and Subsidiaries

                           CONSOLIDATED BALANCE SHEET

                                October 31, 1997

                                     ASSETS

 CURRENT ASSETS
     Accounts receivable, net of allowance for doubtful accounts
       of $178,997                                                                                              $   250,476
     Prepaid expenses and other                                                                                      18,206
                                                                                                                -----------
         Total current assets                                                                                       268,682
 INVESTMENT TAX CREDITS RECEIVABLE, NET OF ALLOWANCE                                                                490,850
 FIXED ASSETS, NET                                                                                                  403,475
 RESTRICTED CASH                                                                                                     50,000

 OTHER ASSETS                                                                                                        22,120

                                                                                                                 $1,235,127
                                 LIABILITIES AND SHAREHOLDERS' EQUITY

 CURRENT LIABILITIES
     Cash overdraft                                                                                              $   81,996
     Bank revolving demand loans                                                                                     81,615
     Accounts payable                                                                                               473,429
     Accrued and other liabilities                                                                                  442,178
     Due to related parties - current portion                                                                       169,608
     Current portion of long-term debt                                                                               43,627
     Current portion of deferred lease inducements                                                                   15,430
                                                                                                                 ----------
                                                                                                                  1,307,883
 DUE TO RELATED PARTIES                                                                                              76,672
 LONG-TERM DEBT                                                                                                     112,702
 DEFERRED LEASE INDUCEMENTS                                                                                         123,440
 OTHER LIABILITIES                                                                                                   11,751
 MINORITY INTERESTS                                                                                                 254,214
 COMMITMENTS AND CONTINGENCIES
 SHAREHOLDERS' DEFICIENCY
     Common stock, par value $.001 per share; authorized
       2,500,000 shares; issued and outstanding,
       1,701,980 shares                                                                                               1,702
     Additional paid-in capital                                                                                   1,545,745
     Notes receivable - former chairmen                                                                            (278,325)
     Cumulative foreign exchange adjustment                                                                          43,070
     Accumulated deficit                                                                                         (1,963,727)
                                                                                                                 ----------
                                                                                                                   (651,535)
                                                                                                                 $1,235,127
The accompanying notes are an integral part of this statement.

                                      F-3
</TABLE>

<PAGE>
<TABLE>
<S>                                                                            <C>                       <C>


                       Compuflight, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                             Year ended October 31,


                                                                                          1997                      1996
                                                                                       ----------                ----------

Revenue
    Service fees                                                                       $2,665,337                $3,078,084
    Hardware, software and license sales                                                  125,030                   496,505
                                                                                       ----------                ----------

                                                                                        2,790,367                 3,574,589
                                                                                       ----------                ----------

Costs and expenses
    Operating                                                                           2,398,086                 2,023,678
    Research and development, net                                                          35,334                   122,177
    Selling, general and administrative                                                 1,532,665                 1,157,488
    Allowance for reduction in scientific research and
      experimental development credits                                                    296,029
    Restructuring costs                                                                    90,948
    Office relocation costs                                                                67,678
    Depreciation and amortization                                                         162,448                   133,072
                                                                                       ----------                ----------

                                                                                        4,583,188                 3,436,415
                                                                                       ----------                ----------

         Operating (loss) income                                                       (1,792,821)                  138,174

Other income (expense)
    Interest income                                                                        54,590                    59,825
    Interest expense - related parties                                                    (35,680)                  (40,351)
    Interest expense - other                                                              (68,834)                  (46,587)
    Realized foreign exchange loss                                                         (7,690)                     (645)
    Waiver of deferred salaries                                                                                       5,499
    Other                                                                                  30,783                    33,751
                                                                                       -----------               ----------

         NET (LOSS) INCOME                                                            $(1,819,652)              $   149,666
                                                                                       ==========                ==========

Net (loss) income per share                                                                $(1.07)                    $0.09
                                                                                            =====                      ====

Weighted average number of common shares outstanding                                    1,701,980                 1,691,563
                                                                                        =========                 =========



The accompanying notes are an integral part of these statements.

                                   F-4
</TABLE>

<PAGE>
<TABLE>
<S>                                   <C>                <C>               <C>                <C>


                       Compuflight, Inc. and Subsidiaries

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT

                      Years ended October 31, 1997 and 1996

                                                                                   Notes       Cumulative
                                                                 Additional     Receivable -    foreign
                                             Common stock         paid -in        former       translation    Accumulated
                                          Shares      Amount       capital       chairmen      adjustment       deficit      Total
                                       ----------    -------    -----------     -----------   -----------     ------------ --------

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

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


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

Write off of notes receivable -
   former chairman                                                                 599,456                                  599,456
Repayments from RE&A - net                                                          84,727                                   84,727
Foreign translation adjustment                                                                  (22,089)                    (22,089)
Net loss                                                                                                     (1,819,652) (1,819,652)
                                      ----------     -------    -------------  ------------    ---------     ----------   ----------


Balance at October 31, 1997            1,701,980      $1,702     $1,545,745    $  (278,325)     $43,070     $(1,963,727) $ (651,535)
                                       =========       =====      =========      ==========      ======      ==========    =========



The accompanying notes are an integral part of this statement.


                                   F-5
</TABLE>
<PAGE>

<TABLE>
<S>                                                                             <C>                         <C>

                       Compuflight, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                             Year ended October 31,

                                                                                          1997                       1996
                                                                                       ----------                --------
Cash flows from operating activities
   Net (loss) income                                                                  $(1,819,652)                $ 149,666
   Adjustments to reconcile net earnings to net cash provided by operating
   activities
       Depreciation and amortization                                                      162,448                   133,072
       Provision for uncollectible accounts                                               106,731                    68,685
       Allowance for reduction in investment tax credits                                  296,029
       Write off of note receivable - former chairman                                     599,456
       Consulting fees, net                                                                                          71,266
       (Increase) decrease in operating assets
         Accounts receivable                                                              237,336                  (266,390)
         Scientific research and experimental development credits                         (61,827)                 (290,559)
         License fees receivable                                                          104,502                   235,110
         Prepaid expenses and other                                                         9,164                     3,247
       Increase (decrease) in operating liabilities
         Accounts payable and accrued liabilities                                         144,239                       264
                                                                                        ---------                 ---------
         Net cash (used in) provided by operating activities                             (221,574)                  104,361
                                                                                        ---------                 ---------

Cash flows from investing activities
   Purchase of fixed assets                                                              (330,225)                  (27,247)
   Proceeds from lease inducements                                                        141,023
   Payments from RE&A                                                                      66,223                    16,759
                                                                                        ---------                 ---------
         Net cash used in investing activities                                           (122,979)                  (10,488)
                                                                                        ---------                 ---------

Cash flows from financing activities
   Cash overdraft                                                                          81,995
   Proceeds from bank revolving demand loans                                               81,616
   Restricted cash                                                                        (50,000)
   Payment of notes - former affiliate                                                                             (197,337)
   Proceeds from bank loan                                                                158,752
   Proceeds from loan                                                                      13,948
   Proceeds from note                                                                      47,215                    44,753
   Payment of notes                                                                       (40,031)                   (2,943)
                                                                                        ---------                 ---------
         Net cash provided by (used in) financing activities                              293,495                  (155,527)
                                                                                        ---------                 ---------

Effect of foreign translations on cash                                                     13,696                     1,104
                                                                                        ---------                 ---------

         NET DECREASE IN CASH AND CASH EQUIVALENTS
                                                                                          (37,362)                  (60,550)

Cash and cash equivalents at beginning of year                                             37,362                    97,912
                                                                                        ---------                 ---------

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

The accompanying notes are an integral part of these statements.

                                      F-6
</TABLE>

<PAGE>


                       Compuflight, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            October 31, 1997 and 1996



NOTE A - DESCRIPTION OF BUSINESS AND ORGANIZATION

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


NOTE B - LIQUIDITY AND CAPITAL RESOURCES

         The consolidated  financial statements have been prepared assuming that
         the Company will continue as a going  concern.  However,  as of October
         31,  1997,  the  Company  has  a  deficiency  in  working  capital  and
         shareholders' equity of $1,039,201 and $651,535,  respectively, and has
         a net loss of  $1,819,652  for the year ended  October 31,  1997.  This
         raises  substantial  doubt about the Company's ability to continue as a
         going concern. The consolidated financial statements do not include any
         adjustments that may result should the Company be unable to continue in
         existence.

         The  Company  and its  senior  management  group  have  focused on four
         specific   areas  to  address  both   strategic   direction  and  daily
         operational  issues in an effort to  position  the  Company  for future
         profitability as outlined below.

o             The Company has increased its marketing  endeavors with respect to
              its two major software products,  AURORA and COMRAD. This increase
              is also tied to a strategic  redirection  by senior  management to
              focus the Company on the sale of systems  versus the  provision of
              flight  planning on a service  bureau  basis.  These  efforts have
              resulted  in  several  larger  system  sales in  fiscal  1997.  In
              addition,  the Company continues to develop complementary products
              to address marketplace demands.

o             The  Company has added to its senior  management  team in order to
              provide  support  for  the   development,   customer  support  and
              operations  areas  of  the  business.  As  a  result,   management
              believes,  an efficient management structure has been created with
              a  clear  division  between   strategic  and  operational   policy
              development.

o             The Company  devoted time to the realization of its investment tax
              credits  receivable  under the  Canadian  Scientific  Research and
              Experimental Development incentive program.

o             The Company has continued its pursuit of financing.

                                      F-7

<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE B (continued)

         The  Company's  operation is  dependent  upon its ability to obtain new
         customers,  to  maintain  profitable  levels of service and to maintain
         existing financial  arrangements or obtain new financing.  There can be
         no  assurance  that  sufficient  cash  flows will be  generated  by the
         Company  to  avoid  the  further  depletion  of  its  working  capital.
         Additionally,  there can be no assurance that additional debt or equity
         financing will be available,  if and when needed, or that if available,
         such  financing  could be completed on  commercially  favorable  terms.
         Furthermore, no assurances can be given the above plans will enable the
         Company to continue in existence.


NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

     1.  Principles of Consolidation

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

     2.  Fixed Assets

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

     3.  Goodwill

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

                                      F-8
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE C (continued)

     4.  Software Development Costs

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

     5.  Minority Interests

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

         Minority interests at October 31, 1997 consist of 3,600 shares of Class
         B,  nonvoting  shares of  Support.  Such  shares,  issued for  $358,200
         Canadian   ($254,214  U.S.  at  October  31,  1997),  are  entitled  to
         noncumulative  dividends  of $8 per  share  and are  redeemable  at the
         option of the Company for $540,000  Canadian  ($383,238 U.S.). To date,
         no dividends have been declared or paid with respect to such shares.

     6.  Use of Estimates

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

                                      F-9
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE C (continued)

     7.  Income Taxes

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

     8.  Stock-based Compensation

         During fiscal 1997, the Company  adopted SFAS No. 123,  "Accounting for
         Stock-Based  Compensation."  As  permitted  under  this  standard,  the
         Company  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  disclosures  of net income and
         income per common  share for fiscal  1996,  as if the fair  value-based
         method  prescribed  by SFAS  No.  123 had  been  applied  in  measuring
         compensation expense, are presented in Note I.

     9.  Net (Loss) Income Per Share

         Net (loss)  income per share of common stock is based upon the weighted
         average  number of shares  outstanding  during each year.  Common stock
         equivalents  consist of  additional  shares  that would be  outstanding
         assuming the exercise of dilutive outstanding stock options.  Potential
         common stock equivalents from outstanding stock options are excluded in
         computing  net loss per share for fiscal 1997 as their effects would be
         antidilutive.  No common  stock  equivalents  were  included in the net
         income  per  common  share  calculation  during  fiscal  1996 as  their
         inclusion would not be materially dilutive.

                                      F-10

<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE C (continued)

    10.  Revenue Recognition

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

    11.  Cash Flows

         For purposes of the statements of cash flows, the Company considers all
         highly liquid debt instruments  purchased with an original  maturity of
         three months or less to be cash equivalents.  The Company paid interest
         of approximately $57,800 and $47,600 during the years ended October 31,
         1997 and 1996, respectively.

    12.  Accounting Pronouncements Not Yet Adopted

         In February 1997, SFAS No. 128,  "Earnings Per Share" was issued and is
         effective for financial  statements for both interim and annual periods
         ending after  December 15, 1997.  Early adoption of the new standard is
         not permitted.  The new standard  eliminates  primary and fully diluted
         earnings  per  share and  requires  presentation  of basic and  diluted
         earnings  per  share  together  with  disclosure  of how the per  share
         amounts  were  computed.  The  adoption  of this  new  standard  is not
         expected to have a material  impact on the  disclosure  of earnings per
         share in the Company's financial statements.


                                      F-11
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE C (continued)

         In June  1997,  SFAS No.  130,  "Reporting  Comprehensive  Income"  was
         issued. SFAS No. 130 establishes standards for reporting and display of
         comprehensive income and its components (revenues,  expenses, gains and
         losses) in a full set of general-purpose financial statements. SFAS No.
         130 requires  that all items that are required to be  recognized  under
         accounting  standards as components of comprehensive income be reported
         in a financial  statement that is displayed with the same prominence as
         other  financial  statements.  SFAS No. 130 requires that a company (a)
         classify  items of other  comprehensive  income  by their  nature  in a
         financial  statement and (b) display the  accumulated  balance of other
         comprehensive  income  separately from retained earnings and additional
         paid-in  capital in the equity section of the balance  sheet.  SFAS No.
         130 is effective for fiscal years  beginning  after  December 15, 1997.
         Reclassification  of financial  statements for earlier periods provided
         for comparative  purposes is required.  The adoption of SFAS No. 130 is
         not expected to have a material  affect on the  Company's  consolidated
         financial statements.

         In  June  1997,  SFAS  No.  131,  "Disclosures  about  Segments  of  an
         Enterprise  and  Related   Information,"  was  issued.   SFAS  No.  131
         establishes standards for the way that public companies report selected
         information about operating segments in annual financial statements and
         requires  that  those  companies  report  selected   information  about
         segments in interim financial  reports issued to shareholders.  It also
         establishes  standards  for  related  disclosures  about  products  and
         services,  geographic  areas and major  customers.  SFAS No. 131, which
         supersedes SFAS No. 14, "Financial Reporting for Segments of a Business
         Enterprise,"  but retains the requirement to report  information  about
         major  customers,  requires that a public company report  financial and
         descriptive   information  about  its  reportable  operating  segments.
         Operating segments are components of an enterprise about which separate
         financial  information is available that is evaluated  regularly by the
         chief  operating  decision maker in deciding how to allocate  resources
         and in  assessing  performance.  Generally,  financial  information  is
         required  to be reported  on the basis that it is used  internally  for
         evaluating  segment  performance and deciding how to allocate resources
         to  segments.  SFAS No. 131  requires  that a public  company  report a
         measure of segment profit or loss, certain specific revenue and expense
         items, and segment assets.  However, SFAS No. 131 does not require that
         reporting  of  information  that is not  prepared  for  internal use if
         reporting it would be impracticable.  SFAS No. 131 also requires that a
         public company report  descriptive  information  about the way that the
         operating segments were determined,  the products and services provided
         by the operating segments, differences between the measurements used in
         reporting  segment  information  and  those  used  in the  enterprise's
         general-purpose financial statements, and changes in the measurement of
         segment  amounts from period to period.  SFAS No. 131 is effective  for
         financial statements for periods beginning after December 15, 1997. The
         adoption of SFAS No. 131 is not  expected to have a material  affect on
         the Company's segment disclosure.

                                      F-12
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE C (continued)

         In October 1997, the Accounting Standards Executive Committee ("AcSEC")
         of the  American  Institute  of  Certified  Public  Accountants  issued
         Statement of Position ("SOP") 97-2, "Software Revenue Recognition". SOP
         97-2 provides guidance on the timing and amount of revenue  recognition
         when  licensing,  selling,  leasing  or  otherwise  marketing  computer
         software and is effective for  transactions  entered into during fiscal
         years  beginning  after  December  15,  1997.  On March 18,  1998,  the
         Financial Accounting Standards Board issued a new SOP that provides for
         the one-year  deferral of certain  provisions of SOP 97-2 pertaining to
         its requirements for what constitutes  vendor specific  evidence of the
         fair value of  multiple  elements  included  in an  arrangement.  It is
         AcSEC's  intention to immediately  begin a project to consider  whether
         guidance  is needed on any  restrictions  that should be placed on what
         constitutes evidence of fair value and, if so, what the guidance should
         be.  Because of the  uncertainties  with  respect to the outcome of any
         such  project,  the Company  believes  that the impact of the  deferred
         provisions  of SOP  97-2  on  its  financial  position  or  results  of
         operations  upon  expiration  of the  one-year  deferral  period is not
         currently  determinable.  However,  the  Company  believes  that  those
         provisions of SOP 97-2 that have not been  deferred,  and therefore are
         applicable  commencing  January 1, 1998, will not materially affect its
         consolidated financial position or results of operations.

         In February 1998,  AcSEC issued SOP 98-1,  "Accounting for the Costs of
         Computer  Software  Developed or Obtained  for  Internal  Use" which is
         effective  for  years  beginning  after  December  15,  1998.  SOP 98-1
         establishes the accounting for costs of software products  developed or
         purchased  for  internal  use,  including  when  such  costs  should be
         capitalized. The Company does not expect SOP 98-1 to have a significant
         impact on the Company's  consolidated financial condition or results of
         operations.

    13.  Reclassifications

         For  comparative  purposes,   certain  prior  year  amounts  have  been
         reclassified to conform to the current year presentation.

                                      F-13

<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE D - INVESTMENT TAX CREDITS RECEIVABLE

     The  Company  has  filed  claims  for  Canadian   investment   tax  credits
     aggregating  $946,053  for fiscal  years ended  October  31,  1992  through
     October 31, 1997.  These scientific  research and experimental  development
     investment tax credits are available to certain  entities located in Canada
     for  qualified  scientific  research  expenditures.  The rate of credit for
     qualified  research and development  expenditures  varies  according to the
     status of the company  and, in certain  instances,  the  company's  taxable
     income for the prior year. Credits  aggregating  approximately  $64,000 and
     $290,000, in 1998 and 1997, respectively, have been recorded as a reduction
     in research and development expense.

     In September 1998, Revenue Canada, the Canadian taxing authority, issued an
     assessment to the Company with respect to its claims for fiscal years ended
     October  31,  1992  through  October  31,  1995 and an  assessment  for the
     Company's  claim  related to fiscal  1996  followed  in January  1999.  The
     assessments  resulted from the  completion of both financial and scientific
     audits.

     All  of  the  Company's  claims  were  subjected,  by  Revenue  Canada,  to
     reductions  based on Revenue  Canada's  disallowance  of  certain  expenses
     related to projects deemed non-qualifying. In addition, Revenue Canada also
     denied the  Company's  claims for the  enhanced  refundable  credit for the
     fiscal years ended  October 31, 1994 through  October 31, 1996 on the basis
     that  the  Company  did  not  qualify  as  a  Canadian-controlled   private
     corporation ("CCPC").

     The Company  challenged these assessments  through the filing of Notices of
     Objection for each of the claim years.  Accordingly,  after a review of the
     file by Revenue  Canada  Appeals,  CCPC status was conferred on the Company
     and the local appeals officer was ordered to reassess.

     The  Company  continues  to object  to the  reductions  resulting  from the
     scientific  audits. At this time, the Company cannot  reasonably  determine
     the  likelihood of success in appealing the  reductions  resulting from the
     scientific audits and has therefore recorded an allowance in fiscal 1997 of
     $296,029  against its  scientific  research  and  experimental  development
     investment  tax  credits  receivable.   Due  to  continued  delays  in  the
     processing of such appeals at Revenue Canada, it is estimated that a result
     may take  over one  year to  obtain.  To date,  the  Company  has  received
     approximately  $285,000  of  such  credits,  which  have  been  applied  to
     outstanding payroll taxes (see Note J).


                                      F-14

<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE E - FIXED ASSETS

     Fixed assets consist of the following:

                                              Useful
                                              life                    1997

      Computer software                       5-10 years        $  411,328
      Computer equipment                      5-10 years           374,175
      Furniture and fixtures                  5-20 years            46,507
      Leasehold improvements                  5-10 years           142,298
      Office equipment                        5 years               78,086
                                                               -----------

                                                                 1,052,394

      Less accumulated depreciation and amortization              (648,919)
                                                               -----------
                                                                $  403,475
                                                               ===========


     Amortization expense for capitalized software totaled approximately $65,500
     and  $75,000  in 1997  and  1996,  respectively.  Accumulated  amortization
     approximated $362,000 at October 31, 1997.


NOTE F - TRANSACTIONS WITH RELATED PARTIES

     Notes Receivable - Former Chairmen

     1.  The  Company's  former  Chairman's  (through  December  1, 1993)  total
         indebtedness  (the "Note") to the Company of $804,000 as of November 1,
         1993 is payable in equal monthly  installments  over a ten-year  period
         together  with  interest  at 4-1/2% per  annum.  Further,  the  Company
         entered into a ten-year consulting  agreement,  as of November 1, 1993,
         with the former Chairman providing for fees payable  substantially upon
         the same terms of the indebtedness  repayment. As of the fourth quarter
         of fiscal 1997, the Company has written-off the note receivable against
         future  payments  due to  the  former  Chairman  under  the  consulting
         agreement  as the Company no longer  expects to derive any  substantive
         services  from  the  former  Chairman.  Accordingly,  the  Company  has
         recorded a charge  against  earnings of $599,456.

                                      F-15
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE F (continued)

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

         Further,  pursuant to a consulting and marketing agreement between NARI
         and Support,  NARI was to provide  software  marketing  services to the
         Company.  Support  had the right to offset  $3,500  Canadian  per month
         ($2,484  U.S.  at October  31,  1997)  against  compensation  otherwise
         payable to NARI  thereunder  as a payment of amounts due under the NARI
         Note. The consulting and marketing agreement also provided for finder's
         fees and commissions of 2% and 10%, respectively,  for the introduction
         of potential  clients and for the licensing of software.  Further,  the
         Company had the right to apply 10% to 25%, as defined,  of the finder's
         fees and commissions against amounts outstanding on the NARI Note.

         Concurrent with the signing of the NARI Note, NARI also transferred all
         of its common stock of the Company  (802,766  shares) to a Voting Trust
         ("Trust")  under the sole  administration  of Dorothy A. English.  Mrs.
         English is an Executive Vice  President of the Company.  Effective with
         the  succession of REA by NARI during 1998,  Dorothy A. English  became
         the sole  shareholder  of NARI and at such  time the  voting  trust was
         revoked  and the common  stock of the  Company  was placed in escrow as
         collateral for amounts  payable by NARI to the former  chairman under a
         share  transfer  agreement.  Further,  the above  consulting  agreement
         between NARI and Support was terminated.

         The Company has provided  for an  allowance of $300,000  Canadian as of
         October 31,  1997  ($212,910  U.S.  as of October 31,  1997) to reflect
         management's  estimate of the amount ultimately  collectible from NARI.
         Such estimate is based  principally on the estimated net worth of NARI,
         which, in turn, is substantially based upon the estimated fair value of
         the common shares of the Company beneficially owned by NARI.

                                      F-16

<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE F (continued)

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

     Due to Related Parties

         Due to related parties at October 31, 1997 consists of the following:

               Support shareholder demand loans (i)        $  35,485
               Accrued interest (i)                           57,847
               Loans payable - related parties (ii)           68,118
               Note payable - related party (iii)             84,830
                                                            --------

                                                             246,280
               Less current portion                         (169,608)

               Long-term portion                           $  76,672
                                                            ========

               (i)  Support  shareholder  demand loans bear  interest at 15% per
                    annum.  Interest  in the amount of $56,654 is in arrears and
                    is included in accrued interest.

               (ii) Loan payable - related party consists of a chattel  mortgage
                    on specific  computer  equipment in the  original  amount of
                    $120,000 Canadian due to a company owned by the brother of a
                    shareholder of the Company. This note was originally due May
                    10,  1997  and  bears  interest  at 15%  per  annum  payable
                    monthly.  Under an  agreement  dated  August  1,  1998,  the
                    balance of $95,982  Canadian  remaining  at that time,  plus
                    accrued  interest  through July 31, 1998, was payable in six
                    monthly payments of $5,000 Canadian each and then continuing
                    monthly  payments  of  $10,000  Canadian  until the loan and
                    interest have been paid off.

              (iii) Notes payable - related parties includes a note payable to a
                    company  related to a  director  of the  Company  and a note
                    payable to a director of the Company. Interest in the amount
                    of $1,193 on the latter  note is in arrears  and is included
                    in accrued  interest.  The payments on the note payable to a
                    company  related to a director of the Company are not fixed.
                    Amounts due on the note payable to a director of the Company
                    are due at various scheduled dated through March 2000.


                                      F-17
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE F (continued)

     Maturities of related party debts as of October 31, 1997 are as follows:

               October 31,
               1998                                      $ 169,608
               1999                                         61,831
               2000                                         14,841
                                                         ---------

                                                         $ 246,280


NOTE G - BANK REVOLVING DEMAND LOANS AND LONG TERM DEBT

     The Company has a revolving  bank demand loan facility  which  provides for
     borrowings of up to $115,000  Canadian  which are payable on demand.  These
     demand loans bear interest at the bank's prime rate plus 1.25%.

     Long-term debt is as follows as of October 31, 1997:

      Small business bank loan  payable,  interest at the bank's prime rate plus
        1.75%, payable in monthly principal payments of $5,123 Canadian plus
        interest based on a 48 month amortization period              $ 156,329

      Less current portion                                              (43,627)
                                                                        --------
      Long-term portion                                                $ 112,702
                                                                        ========


     Substantially  all of the Company's  assets are pledged as  collateral  for
     revolving  demand  loans and long term debt.  In  addition,  the  revolving
     demand  loans are  hypothecated  by a U.S.  term  deposit  in the amount of
     $50,000 (U.S.) which is presented as "restricted  cash" in the accompanying
     balance sheet.

     Maturities of related party debts as of October 31, 1997 are as follows:

               October 31,
               1998                                       $ 43,627
               1999                                         43,627
               2000                                         43,627
               2001                                         25,448
                                                          --------
                                                         $ 156,329
                                                          ========

                                      F-18

<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE H - INCOME TAXES

     The Company's  fiscal 1997 and 1996 effective  income tax rate differs from
     the statutory U.S. Federal income tax rate as a result of the following:

                                                  1997                    1996
                                                ---------               --------

      Statutory U.S. Federal tax rate            (34.0)%                  34.0%
      Increase in valuation allowance             34.0
      Utilization of NOL carryforward                                    (34.0)
                                                 ------                  ------

                                                   -    %                 -    %
                                                =========              =========

     The  temporary  differences  which  give rise to  deferred  tax  assets and
     liabilities at October 31, 1997 are summarized as follows:

        Deferred tax assets
          Net operating loss carryforwards                      $ 425,000
          Deferred salaries and other compensation                313,000
          Allowance for doubtful accounts                         177,000
          Fixed assets                                             24,000
                                                                ---------

               Total deferred tax assets                          939,000

        Deferred tax liabilities
          License fees receivable                                 (31,000)
          Scientific research and experimental development
             credits, net                                        (203,000)

               Total deferred tax liabilities                    (234,000)

               Net deferred tax assets                          $ 705,000
                                                                 ========

        Valuation allowance                                     $(705,000)
                                                                 ========

     During  fiscal  1997,  the  Company  increased  its  allowance  by $558,000
     principally  due to the  recognition of additional  U.S. net operating loss
     carryforwards.


                                      F-19
<PAGE>



                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE H (continued)


     The Company,  for United  States  purposes,  has available to offset future
     taxable income net operating loss carryforwards  approximating  $478,000 at
     October 31, 1997, which expire through 2017. For Canadian tax purposes, the
     Company has available  net  operating  loss  carryforwards  and  scientific
     research  and  experimental   development   credits  of  $693,000  Canadian
     ($500,000 U.S.) and $61,000 Canadian ($44,000 U.S.), respectively, expiring
     through  2001  and  2006,  respectively.  The  Company  has  established  a
     valuation  allowance  with respect to its net  deferred  tax assets,  as it
     cannot presently assess the utilization of such deferred tax assets as more
     likely than not.


NOTE I - STOCK OPTIONS

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

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

                                      F-20
<PAGE>



                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996


NOTE I (continued)
<TABLE>
<S>                                           <C>                      <C>             <C>                <C>
     Summary information with respect to the stock option plans follows:

                                                      Range of             Outstanding        Weighted          Outstanding
                                                      exercise               options           average            options
                                                       prices                granted        exercise price      exercisable


      Balance at November 1, 1995                   $0.625 - $3.24         1,228,377              0.658          427,877

      Terminated                                     0.625                  (600,000)             0.625
      Granted                                        0.625                    25,000              0.625
      Became exercisable                             0.625 - 3.24                                                225,250
                                                                          ----------                             -------

      Balance at October 31, 1996                    0.625 - 3.24            653,377              0.687          653,127

      Expired                                        0.625 - 3.24            (27,001)             0.77           (26,751)
                                                                          ----------                             -------

      Balance at October 31, 1997                    0.625 -  1.88           626,376              0.684          626,376
                                                                          ==========                             =======
</TABLE>


     The following table summarizes information concerning currently outstanding
and exercisable nonqualified stock options:
<TABLE>
<S>                                                       <C>                    <C>                <C>

                                                                                    Weighted-average
                                                              Number outstanding       remaining       Weighted-average
                                                                     and            contractual life       exercise
                                                                 exercisable            (months)             price
      Range of exercise prices                                ------------------    ----------------   ----------------
                         $0.00 to $0.99                            550,000                 33                $.625
                         $1.00 to $1.88                             76,376                 68                $1.11

</TABLE>

     The  weighted-average  option  fair  value on the grant  date was $0.17 for
options issued during the year ended October 31, 1996.

                                      F-21
<PAGE>



                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE I (continued)

     The  Company  has adopted  the  disclosure  provisions  of SFAS No. 123, it
     applies APB Opinion No. 25 and related  interpretations  in accounting  for
     the plans and does not recognize  compensation  expense for such plans.  If
     the Company had elected to recognize  compensation  expense  based upon the
     fair value at the grant dates for awards under these plans  consistent with
     the  methodology  prescribed  by SFAS No. 123, the  Company's  reported net
     income  and  income  per share  would be  reduced  to the pro forma  amount
     indicated below for the fiscal year ended October 31, 1996:

                                                                           1996
                                                                        --------
      Net income                                                        $149,666
           As reported                                                   145,416
           Pro forma
      Income per common share
           As reported                                                     $0.09
           Pro forma                                                       $0.09

     There were no options issued by the Company in fiscal 1997, therefore there
     is no pro forma effect presented.

     These pro forma  amounts may not be  representative  of future  disclosures
     because they do not take into effect pro forma compensation expense related
     to grants  made before  fiscal  1996.  The fair value of these  options was
     estimated at the date of grant using the Black-Scholes option-pricing model
     with the following  weighted-average  assumptions for the fiscal year ended
     October 31, 1996:  expected  volatility of 30%;  risk-free interest rate of
     5.50%; and expected term of 3 years.

     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
     estimating  the  fair  value  of  traded  options  which  have  no  vesting
     restrictions  and are fully  transferable.  In addition,  option  valuation
     models  require  the use of highly  subjective  assumptions  including  the
     expected  stock price  volatility.  Because the  Company's  employee  stock
     options have characteristics  significantly  different from those of traded
     options,  and because changes in the subjective  assumptions can materially
     affect the fair value estimate in management's opinion, the existing models
     do not  necessarily  provide a reliable single measure of the fair value of
     its employee stock options.



                                      F-22
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE J - COMMITMENTS AND CONTINGENCIES

     1.  Failure to File Timely Reports

         By letter dated March 2, 1998, the  Securities and Exchange  Commission
         (the  "Commission")  advised the Company that it had failed to file its
         Annual  Report on Form  10-KSB for the fiscal  year ended  October  31,
         1997. In such letter, the Company was advised by the Commission that it
         reserved the right to bring an enforcement  action, as appropriate,  at
         any time.

         This  failure to file on a timely  basis  could  expose the  Company to
         enforcement  actions by the Securities and Exchange  Commission,  which
         could include civil penalties against the Company for violations of the
         reporting  requirements of Section 13(a) of the Securities Exchange Act
         of 1934, as amended (the  "Exchange  Act"),  and the rules  thereunder.
         Pursuant  to the  Exchange  Act,  the  amount of the  penalty  shall be
         determined  by the  court  in  light of the  facts  and  circumstances;
         however, for each violation,  the amount of the penalty, with regard to
         a company,  cannot exceed the greater of $50,000 or the gross amount of
         pecuniary  gain  to the  Company  as a  result  of any  violation.  The
         Exchange Act provides for  substantially  greater maximum  penalties in
         the  event the  violation  involved  fraud,  deceit,  manipulation,  or
         deliberate  or reckless  disregard of a regulatory  requirement  and/or
         such violation directly or indirectly resulted in substantial losses or
         created a significant risk of substantial losses to other persons.

         The Company  has also  failed to file its Annual  Report on Form 10-KSB
         for the fiscal year ended  October 31,  1998 and  Quarterly  Reports on
         Form 10-QSB for the fiscal  quarters ended January 31, 1998,  April 30,
         1998,  July 31,  1998,  January 31,  1999,  April 30, 1999 and July 31,
         1999.

         The  Company  intends to file its Annual  Report on Form 10-KSB for the
         fiscal year ended  October 31, 1997;  its Annual  Report on Form 10-KSB
         for the fiscal year ended October 31, 1998;  and its Quarterly  Reports
         on Form 10-QSB for the fiscal  quarters  ended January 31, 1998,  April
         30, 1998, July 31, 1998,  January 31, 1999, April 30, 1999 and July 31,
         1999 all on or before  October 20,  1999.  No  assurances  can be given
         that,  notwithstanding  the  Company's  filing  of  the  aforementioned
         documents on or before the date set forth above,  the  Commission  will
         not seek to recover civil  penalties from the Company.  Any such action
         taken by the  Commission  could have a material  adverse  effect on the
         Company's financial position,  liquidity and results of operations.  As
         the Company cannot presently predict, with any certainty,  the ultimate
         outcome  of this  matter,  no  amounts  have been  provided  for in the
         accompanying consolidated financial statements.

     2.  Operating Lease Commitments

         The Company leases equipment and office space pursuant to various lease
         agreements  which expire through fiscal 2006. The annual rent of office
         space  consists of minimum  rent,  real estate taxes,  maintenance  and
         other expenses. The Company also leases certain computer equipment from
         a company  controlled  by the spouse of an Officer and  Director of the
         Company pursuant to an agreement which expires in fiscal 2000.

                                      F-23
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE J (continued)

<TABLE>
<S>    <C>              <C>               <C>             <C>             <C>              <C>

         Future  minimum  annual  rental  payments  pursuant  to  these  leasing
agreements as of October 31,1997 are summarized as follows:

                                     Related
                              Office                               party
                              space           Equipment          equipment            Total

          1998              $  98,611           $30,084          $14,478             $143,173
          1999                 58,660            26,467           26,827              111,954
          2000                 56,283            22,625           29,665              108,573
          2001                 62,904             9,429                                72,333
          2002                 62,904             7,886                                70,790
                             --------           -------         --------             --------

                             $339,362           $96,491          $70,970             $506,823
                              =======            ======           ======              =======
</TABLE>

         Rental  costs for  fiscal  1997 and 1996 were  $199,207  and  $162,468,
         respectively.  Rental cost incurred in 1997 and 1996 in connection with
         the  equipment  lease with the related  party was $21,049 and  $11,448,
         respectively.

     3.  Employment and Consulting Contracts

         The Company has entered into employment and consulting  agreements with
         its chairman,  Chief Executive Officer,  former Chairmen and a director
         of the Company,  which provide for minimum  monthly  compensation.  The
         Company's  obligations  under such  agreements  expire at various times
         during the period from September 1997 through March 31, 2004.  Further,
         the Company has entered into a retirement  agreement  with its chairman
         dated August 5, 1999,  which  provides  for,  among other  things,  the
         payment  of  96  consecutive  monthly  payments  of  $6,250  commencing
         November  25, 1999 for services  rendered for the period from  November
         1996 through  October 1998. The Company has provided for  approximately
         $300,000  relating to the net present value of the services provided by
         the chairman  during fiscal 1998 and 1997.  Concurrent with the term of
         this retirement agreement, the Company has also agreed to reimburse the
         Chairman for expenses  incurred in the amount of $60,594  (payable over
         the period  August 1999 to May 2000) and to obtain a declining  balance
         life  insurance  policy on the  Chairman  commencing  with  coverage at
         $600,000 and declining at a rate of $150,000 per year.  The proceeds of
         which are payable in full settlement of any remaining obligation at the
         time of the former  Chairman's  demise.  All amounts due by  promissory
         notes  contain  acceleration  provisions,  in the  event,  among  other
         things, default in payment.

                                      F-24

<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE J (continued)

         Approximate  aggregate  minimum  compensation   obligations  under  all
agreements at October 31, 1997 are summarized as follows:

                                 Year              Amount

                                 1998         $   323,000
                                 1999             205,000
                                 2000             188,000
                                 2001             131,000
                                 2002             120,000
                                 Thereafter       170,000
                                                ---------
                                               $1,137,000
                                                =========


     4.  Nonremittance of Payroll Taxes

         During and as of the year ended  October 31, 1997,  the Company has not
         timely remitted to the respective tax collecting  jurisdictions payroll
         taxes  withheld  from  employees'  earnings.  At October 31, 1997,  the
         unremitted balance aggregated approximately $269,000 Canadian ($191,000
         U.S. and included in accrued and other liabilities) which is subject to
         additional penalty and interest charges until paid.

     5.  Legal Proceedings

         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 flow or financial
         position.


NOTE K - FAIR VALUE OF FINANCIAL INSTRUMENTS AND BUSINESS CONCENTRATIONS

         The carrying amounts of cash, accounts  receivable,  and investment tax
         credits  receivable are estimated to approximate their fair values. The
         Company  believes that the carrying amount of its bank revolving demand
         loans and long-term  debt  approximates  the fair value as the variable
         interest rate  approximates the current  prevailing  interest rate. The
         Company  believes that it is not practicable to estimate the fair value
         of its other liabilities due to its current financial condition.

         In fiscal 1997,  two customers  each accounted for 11% of the Company's
         consolidated revenues, and, in 1996, three customers accounted for 13%,
         11% and 10%, respectively, of the Company's consolidated revenues.

                                      F-25
<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE L - OFFICE RELOCATION COSTS AND RESTRUCTURING CHARGES

         During fiscal 1997,  the Company  moved its Canadian  facility to a new
         facility in Waterloo,  Ontario.  Costs  associated with this relocation
         are recorded in the  accompanying  Statements  of Operations as "office
         relocation costs" and aggregated $67,678 during fiscal 1997.

         In addition, as a result of the Company's consolidation of its New York
         facility  into  the new  Waterloo,  Ontario  facility,  which  was also
         completed in fiscal 1997,  the Company has recorded  $90,948 of pre-tax
         restructuring charges. The restructuring charges include costs incurred
         for moving from the New York facility to the recently acquired Canadian
         facility.  As of October 31,  1997,  all  expenses  have been  incurred
         pertaining to the above mentioned charges.



         NOTE M - FOURTH QUARTER ADJUSTMENTS

         During the fourth  quarter of fiscal 1997, the Company wrote off a note
         receivable  from  its  former  Chairman  against  earnings  aggregating
         $599,456,  established an allowance of $296,029  against its investment
         tax  credits  receivable  and  increased  the  allowance  for  doubtful
         accounts by approximately $106,297.


NOTE N - INDUSTRY SEGMENT INFORMATION AND GEOGRAPHIC AREA OPERATIONS

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

         A summary of the Company's operations by geographic area for the fiscal
         years ended October 31, 1997 and 1996 is as follows:

                                      F-26

<PAGE>


                       Compuflight, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1997 and 1996



NOTE N (continued)

                                                1997                    1996
                                            -------------           ------------

      Net sales
          United States                       $2,052,518             $2,970,308
          Canada                                 523,556                368,743
          Other                                  214,293                235,538
                                             -----------             ----------

              Total net sales                $ 2,790,367             $3,574,589
                                             -----------             ==========

      Operating (loss) profit
          United States                      $ 1,165,939)               556,944
          Canada                                (626,882)              (418,770)
                                             -----------              ---------

              Total operating (loss) income  $(1,792,821)              $138,174
                                              ==========              =========

      Identifiable assets
          United States                      $1,040,648              $1,570,299
          Canada                                995,610               1,095,580
          Eliminations                         (851,131)               (850,981)
                                             ----------              ----------

               Total identifiable assets     $1,185,127              $1,814,898
                                              =========               =========


                                      F-27

<PAGE>



ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------------------------

The  total  number  of  Common  Shares  outstanding  as  November  30,  1999 was
2,001,980. The Common Shares are the only class of securities outstanding.  Each
share  is  entitled  to  one  vote.  The  following  table  sets  forth  certain
information regarding the Company's outstanding Common Shares beneficially owned
as of  November  30,  1999 by (i) each person who is known by the Company to own
beneficially or exercise voting or dispositive  control over more than 5% of the
Company's Common Shares, (ii) each present Director,  (iii) each person named in
the Summary  Compensation  Table above,  and (iv) all of the  Company's  present
executive officers and directors as a group: <TABLE> <S> <C> <C>

----------------------------------------------------------------------------------------------------------
                                                                                    Approximate
  Name and Address of Beneficial                                                   Percentage of
              Owner                Number of Shares Beneficially Owned          Outstanding Shares
----------------------------------------------------------------------------------------------------------
Dorothy A. English                           1,007,766(1)(2)                           50.3%
175 Columbia Street West
Waterloo, Ontario,
Canada
----------------------------------------------------------------------------------------------------------
Navtech Applied Research Inc.                 802,766(2)(3)                            40.1%
175 Columbia Street West
Waterloo, Ontario,
Canada
----------------------------------------------------------------------------------------------------------
Kenneth M. Snyder                               350,000(4)                             14.9%
1751 Westwood Drive
Minden, Nevada
----------------------------------------------------------------------------------------------------------
Global Weather Dynamics, Inc                     250,000                               12.5%
2400 Garden Road
Monterey, California
----------------------------------------------------------------------------------------------------------
Innovation Ontario Corporation                   125,000                                6.2%
56 Wellesley Street West
Toronto, Ontario, Canada
----------------------------------------------------------------------------------------------------------
Russell K. Thal                                 93,813(5)                               4.5%
125 Mineola Avenue
Roslyn Heights, New York
----------------------------------------------------------------------------------------------------------
Denis L. Metherell                                6,000                                   *
175 Columbia Street West
Waterloo, Ontario,
Canada
----------------------------------------------------------------------------------------------------------
Duncan Macdonald                                  - (6)                                   *
275 Slater Street
Ottawa, Ontario,
Canada
----------------------------------------------------------------------------------------------------------
All executive officers and
directors as a group (7 persons)            1,457,579(1)(4)(5)                         60.0%
----------------------------------------------------------------------------------------------------------
</TABLE>

(1)      Represents  802,766  shares  beneficially  owned   by  Navtech  Applied
         Research  Inc. ("NARI") (see footnote (3)  below)  and  205,000  shares
         beneficially owned by Ms. English.

(2)      Such persons may be deemed parents of the Company.

(3)      Represents shares beneficially owned by NARI, of which, the Company has
         been advised, Ms. English is the Chairman,  Chief Executive Officer and
         sole shareholder.  Furthermore, the Company has been advised that these
         shares have been pledged to Raymond  English as collateral  for certain
         amounts due to Mr.  English under an agreement  between Mr. English and
         NARI.  NARI has  maintained  voting  control  over  these  shares.  See
         "Certain Relationships and Related Transactions."

(4)      Represents  shares issuable upon exercise of options that are currently
         exercisable.

(5)      Includes  75,938  shares  issuable  pursuant to  currently  exercisable
         options  and 312 shares  owned by Mr.  Thal's  wife.  This shall not be
         deemed an admission that Mr. Thal is the beneficial owner of the shares
         owned by his wife.

(6)       Mr.  Macdonald  has  voluntarily  agreed  not  to  exercise  currently
          exercisable  options  held by him for the  purchase of 200,000  Common
          Shares until such time as the authorized  share capital of the Company
          has been  sufficiently  increased.  In addition,  as  discussed  under
          "Certain  Relationships and Related  Transactions - Duncan Macdonald,"
          in the event of such  increase  in  authorized  share  capital  of the
          Company,  a maximum of 343,546  Common  Shares  will be issuable to an
          entity  controlled  by  Mr.  Macdonald  pursuant  to  the  terms  of a
          convertible loan made by such entity to the Company.

<PAGE>


ITEM 12.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

RELATED PARTIES

1.   Navtech Applied Research Inc.

     General

     Ray English and Associates Inc. ("RE&A") was a corporation  incorporated in
Ontario,  Canada. Until June 29, 1998, RE&A was controlled by Raymond English, a
former  Chairman of the Company.  As of that date,  pursuant to a share transfer
agreement, the ownership of RE&A was transferred to Mr. English's former spouse,
Dorothy A.  English.  Dorothy A.  English is an  Executive  Vice  President  and
Director  of the  Company.  As of July 2,  1998,  RE&A was merged  with  Navtech
Applied Research Inc. ("NARI") and continued operations under the latter name.

     NARI was  incorporated  in Ontario,  Canada on December 31, 1997 and during
all material  times has been wholly owned by Dorothy A.  English,  who serves as
its Chairman and Chief Executive Officer.

     References to RE&A below will pertain strictly to the company as it existed
prior to the merger with NARI.

     Share Ownership

     NARI owns 802,766 Common Shares of the Company.  On or about July 15, 1995,
RE&A had  transferred  all of its  Common  Shares of the  Company  to Dorothy A.
English,  as voting trustee  pursuant to a voting trust agreement  between them.
When control of RE&A was  transferred  to Dorothy A. English as discussed  above
and RE&A and NARI merged,  the voting trust  agreement  was  terminated  and the
shares  returned  to NARI.  At that time,  the share  certificate  was placed in
escrow as security for amounts  payable by NARI to Mr.  English  pursuant to the
share transfer agreement discussed above.

     RE&A/Navtech Transactions

     In 1993,  Navtech  charged  RE&A,  its then parent  company,  a management,
consulting  and  marketing  fee in  connection  with the  management  of certain
software  owned by EAS,  formerly a subsidiary  of RE&A.  Navtech also  advanced
funds to RE&A in order to assist  RE&A in meeting  its  continuing  obligations.
Effective  July 15, 1995,  RE&A  executed and  delivered to Navtech a promissory
note in the principal amount of $750,000  Canadian (the "RE&A Note") to evidence
certain obligations to Navtech as of such date. The RE&A Note is payable on July
15, 2005 (or sooner,  as described  below) and provides for interest at the rate
of 5% per annum payable  annually.  Effective  with the merger of RE&A and NARI,
NARI, by operation of law, assumed the obligation represented by the RE&A Note.

     Further,  pursuant to a consulting and marketing agreement between RE&A and
Navtech,  RE&A agreed to provide  software  marketing  services to the  Company.
Navtech had the right to offset $3,500  Canadian per month against  compensation
otherwise  payable to RE&A  thereunder  as payment of amounts due under the RE&A
Note.  Effective  July 15,  1998,  this  agreement  was  terminated  by NARI and
Navtech.


<PAGE>

2.   Global Weather Dynamics, Inc.

     On July 15, 1998, NARI acquired from Global Weather Dynamics, Inc. ("GWDI")
all  of the  assets  of the  GWDI's  Weather  Services  Division  ("WSD")  for a
consideration  consisting  of $250,000 in cash,  the delivery of 250,000  Common
Shares of the Company to GWDI and the  delivery of 50,000  Common  Shares of the
Company to an  unrelated  third  party as a finder's  fee.  The  primary  assets
acquired included the weather and certain other software that had been developed
by GWDI. In addition, NARI obtained an assignment of the WSD customer contracts.

     Following the WSD acquisition by NARI, NARI and Compuflight  entered into a
non-exclusive,   non-transferable   software  license  agreement  (the  "License
Agreement")  for a term  commencing  August 1, 1998 and  expiring  initially  on
October 31, 1999,  pursuant to which  Compuflight  has been granted the right to
install,  configure,  modify and use in its business  the  software  acquired by
NARI.  Pursuant  to the License  Agreement,  the term  automatically  renews for
additional  one year  periods  unless  either party gives at least 60 days prior
written notice of its desire not to renew. Since no notice was given at least 60
days prior to October 31, 1999,  the current term of the License  Agreement  has
been  extended  to October  31,  2000.  In  addition,  pursuant  to the  License
Agreement,  Compuflight  is obligated to pay royalties in an amount equal to 10%
of certain  revenues  derived from the sale of data processed using the licensed
software.  Concurrently with the execution of the License  Agreement,  NARI also
assigned to Compuflight the rights it had obtained from GWDI with respect to the
WSD customer contracts.

     In order to effect NARI's  acquisition of WSD,  certain  transactions  were
undertaken  between the Company and NARI to provide the  necessary  financing as
follows:

    1.   NARI purchased from Compuflight 300,000 Common Shares of the Company in
         consideration  of $300 in cash and the delivery of a promissory note in
         the amount of $134,700,  payable in 36 monthly installments and bearing
         interest at the rate of 10% per annum.  The note provides that payments
         are to be made by offsetting royalties due under the License Agreement.

    2.   Compuflight  borrowed $210,000 from a Canadian  financial  institution,
         which loan is repayable  over a 28-month  term bearing  interest at the
         rate of 9.18% per annum.  Dorothy A. English personally  guaranteed the
         repayment of this loan.

    3.   The proceeds from the loan were  transferred to Navtech which, in turn,
         loaned $150,000 to NARI. This loan bears interest  commencing  November
         1,  1998 at the rate of 10% per annum and is  repayable  in 36  monthly
         installments commencing November 1, 1999.

    4.   Subsequent  to October 31, 1998,  the Company  advanced an  additional
         $100,000 to NARI. The additional advance is repayable  commencing with
         the  payment  in full of the  promissory  note in Item 1 above.  It is
         repayable at the same monthly rates  outlined  above.  The weather and
         other  software  acquired  by NARI and  licensed to the Company was of
         critical  importance  to the  Company  in order for it to  maintain  a
         competitive   advantage  in  the  delivery  of  its  products  to  the
         marketplace.  The Company had determined that the internal development
         of this software  would require at least 10 man-years to complete at a
         cost estimated to be in excess of $700,000.  Furthermore,  the Company
         was paying  third party  weather  suppliers  approximately  $4,000 per
         month for  weather and related  data it had  determined  was below the
         standards required by the Company's customers.

3.   Russell K. Thal

     Reference is made to "Employment  Contracts;  Termination of Employment and
Change-in-Control  Arrangements"  for  a  discussion  of  a  certain  retirement
agreement entered into between the Company and Mr. Thal.

4.   AVCON Associates Inc. ("AVCON")

     AVCON, an entity of which Denis L.  Metherell,  Secretary and a Director of
the  Company,  is a Vice  President  and a  Director,  leased  certain  computer
equipment to Navtech. Effective January 31, 1996, the leases were terminated. On
October 1, 1996, the Company  entered into two new lease  agreements for certain
computer equipment.  These agreements were replaced on June 1, 1999 with amended
lease agreements.  Under the present agreements, the Company is required to make
varying  payments  until  November  2004.  The Company  believes  that the lease
payments,  which commenced July 1999 at $1,952 Canadian per month, are no higher
than would be payable to a nonaffiliated third party.

<PAGE>


     On  October  31,  1996,  the  Company  executed  and  delivered  to AVCON a
promissory note in the principal  amount of $53,000  Canadian (the "AVCON Note")
to evidence  amounts due under the terminated  lease  agreement  noted above and
outstanding as of such date. On June 1, 1999, the Company  amended the note (the
"Amended AVCON Note") to include  additional arrears that had accumulated on the
two  leases.  The  Amended  AVCON  Note is in the  principal  amount of  $90,000
Canadian,  provides  for interest at the rate of 18% per annum and is payable as
follows:

     1.   interest only of $1,350 Canadian per month from July 1999 to September
          2000;

     2.   interest and principal of $2,400  Canadian per month from October 2000
          to April 2005; and

     3. a residual payment of principal and interest of $1,263 in May 2005.


5.  Duncan Macdonald

     Effective as of June 1, 1996,  Navtech  entered into a two year Key Advisor
Agreement (the "Macdonald Key Advisor Agreement") with Duncan Macdonald pursuant
to which Mr.  Macdonald was retained to serve as Chief Executive  Officer of the
Company.  Pursuant to the Macdonald Key Advisor Agreement, as amended in January
1997,  Mr.  Macdonald  was  entitled  to  receive  a base  weekly  fee of $3,000
Canadian. In addition, a bonus of $5,000 Canadian per fiscal quarter was payable
during the term of the Macdonald Key Advisor Agreement.  Mr. Macdonald agreed to
expend at least 75% of his working time in the  fulfillment  of his duties under
the Macdonald Key Advisor Agreement. Mr. Macdonald has waived his entitlement to
the bonus amounts  related to each of the fiscal  quarters of 1997 and 1998. The
Macdonald  Key  Advisor  Agreement  expired  in  1998,  although  Mr.  Macdonald
continued to serve as Chief Executive Officer until December 1998 under the same
terms.

     Effective  December  1,  1998,  the  Company  entered  into a twenty  month
Employment  Agreement  (the  "Macdonald  Employment   Agreement")  engaging  Mr.
Macdonald as Chief Executive  Officer of the Company.  Mr. Macdonald is entitled
to receive a base  quarterly fee of $1,250  commencing  with the fiscal  quarter
ended January 31, 1999. Mr. Macdonald has agreed to make 30% of his working time
available to the Company.

     Effective  January  1,  1999,  Navtech  entered  into a two  year  Services
Agreement  (the  "Kintyre-Navtech  Agreement")  with  Kintyre & Company  Limited
("Kintyre"),  a  company  owned  by Mr.  Macdonald.  Under  the  Kintyre-Navtech
Agreement,  Kintyre has agreed to provide the services of Mr.  Macdonald and Mr.
Vietze,  as well as other  Kintyre  staff as  needed,  to assist  Navtech  in it
stategic corporate structuring and corporate finance and accounting  activities.
Kintyre is entitled to receive a base monthly fee of $23,250  Canadian,  plus an
annual bonus of $8,700 Canadian.

     In April 1999, St. Andrews Capital Limited  Partnership ("St.  Andrews LP")
advanced  $90,000 to the Company for working  capital  purposes.  Mr.  Macdonald
serves as the  President  of the  general  partner of St.  Andrews LP and is the
controlling stockholder of such general partner. The advance from St. Andrews LP
is repayable, together with interest at the rate of 18% per annum, in 22 monthly
installments.

     On October 1, 1999,  St.  Andrews LP  advanced  $128,830  to the Company to
finance the Company's  acquisition of Skyplan Services (UK) Limited. At the time
of the loan,  the  Company  had  sufficient  working  capital to  undertake  the
transaction,  but determined that it was prudent to obtain outside financing. As
provided for in a term sheet (which calls for the completion of definitive  loan
documents),  the  loan  bears  interest  at the  rate  of 10% per  annum  and is
repayable  in 24 equal  monthly  payments  of  approximately  $5,945  commencing
November 1, 1999. The term sheet provides that the principal  amount of the loan
is convertible into Common Shares of the Company at a conversion price of $0.375
per share  effective on the first day of the month  following the approval of an
increase in the  authorized  share  capital of the Company  sufficient  for such
purpose.

6.  Rainer Vietze

     On November 1, 1998,  Mr.  Vietze  ceased his  employment  with Navtech and
commenced  employment  with  Kintyre.  Effective  December 1, 1998,  the Company
entered  into a  twenty  month  Employment  Agreement  (the  "Vietze  Employment
Agreement")  engaging Mr. Vietze as Chief Financial Officer of the Company.  Mr.
Vietze is entitled to receive a base quarterly fee of $625  commencing  with the
fiscal  quarter ended January 31, 1999. Mr. Vietze has agreed to make 30% of his
working time available to the Company.5.  Duncan Macdonald

     Effective as of June 1, 1996,  Navtech  entered into a two year Key Advisor
Agreement (the "Macdonald Key Advisor Agreement") with Duncan Macdonald pursuant
to which Mr.  Macdonald was retained to serve as Chief Executive  Officer of the
Company.  Pursuant to the Macdonald Key Advisor Agreement, as amended in January
1997,  Mr.  Macdonald  was  entitled  to  receive  a base  weekly  fee of $3,000
Canadian. In addition, a bonus of $5,000 Canadian per fiscal quarter was payable
during the term of the Macdonald Key Advisor Agreement.  Mr. Macdonald agreed to
expend at least 75% of his working time in the  fulfillment  of his duties under
the Macdonald Key Advisor Agreement. Mr. Macdonald has waived his entitlement to
the bonus amounts  related to each of the fiscal  quarters of 1997 and 1998. The
Macdonald  Key  Advisor  Agreement  expired  in  1998,  although  Mr.  Macdonald
continued to serve as Chief Executive Officer until December 1998 under the same
terms.

     Effective  December  1,  1998,  the  Company  entered  into a twenty  month
Employment  Agreement  (the  "Macdonald  Employment   Agreement")  engaging  Mr.
Macdonald as Chief Executive  Officer of the Company.  Mr. Macdonald is entitled
to receive a base  quarterly fee of $1,250  commencing  with the fiscal  quarter
ended January 31, 1999. Mr. Macdonald has agreed to make 30% of his working time
available to the Company.

     Effective  January  1,  1999,  Navtech  entered  into a two  year  Services
Agreement  (the  "Kintyre-Navtech  Agreement")  with  Kintyre & Company  Limited
("Kintyre"),  a  company  owned  by Mr.  Macdonald.  Under  the  Kintyre-Navtech
Agreement,  Kintyre has agreed to provide the services of Mr.  Macdonald and Mr.
Vietze,  as well as other  Kintyre  staff as  needed,  to assist  Navtech  in it
stategic corporate structuring and corporate finance and accounting  activities.
Kintyre is entitled to receive a base monthly fee of $23,250  Canadian,  plus an
annual bonus of $8,700 Canadian.

     In April 1999, St. Andrews Capital Limited  Partnership ("St.  Andrews LP")
advanced  $90,000 to the Company for working  capital  purposes.  Mr.  Macdonald
serves as the  President  of the  general  partner of St.  Andrews LP and is the
controlling stockholder of such general partner. The advance from St. Andrews LP
is repayable, together with interest at the rate of 18% per annum, in 22 monthly
installments.

     On October 1, 1999,  St.  Andrews LP  advanced  $128,830  to the Company to
finance the Company's  acquisition of Skyplan Services (UK) Limited. At the time
of the loan,  the  Company  had  sufficient  working  capital to  undertake  the
transaction,  but determined that it was prudent to obtain outside financing. As
provided for in a term sheet (which calls for the completion of definitive  loan
documents),  the  loan  bears  interest  at the  rate  of 10% per  annum  and is
repayable  in 24 equal  monthly  payments  of  approximately  $5,945  commencing
November 1, 1999. The term sheet provides that the principal  amount of the loan
is convertible into Common Shares of the Company at a conversion price of $0.375
per share  effective on the first day of the month  following the approval of an
increase in the  authorized  share  capital of the Company  sufficient  for such
purpose.

6.  Rainer Vietze

     On November 1, 1998,  Mr.  Vietze  ceased his  employment  with Navtech and
commenced  employment  with  Kintyre.  Effective  December 1, 1998,  the Company
entered  into a  twenty  month  Employment  Agreement  (the  "Vietze  Employment
Agreement")  engaging Mr. Vietze as Chief Financial Officer of the Company.  Mr.
Vietze is entitled to receive a base quarterly fee of $625  commencing  with the
fiscal  quarter ended January 31, 1999. Mr. Vietze has agreed to make 30% of his
working time available to the Company.5.  Duncan Macdonald

     Effective as of June 1, 1996,  Navtech  entered into a two year Key Advisor
Agreement (the "Macdonald Key Advisor Agreement") with Duncan Macdonald pursuant
to which Mr.  Macdonald was retained to serve as Chief Executive  Officer of the
Company.  Pursuant to the Macdonald Key Advisor Agreement, as amended in January
1997,  Mr.  Macdonald  was  entitled  to  receive  a base  weekly  fee of $3,000
Canadian. In addition, a bonus of $5,000 Canadian per fiscal quarter was payable
during the term of the Macdonald Key Advisor Agreement.  Mr. Macdonald agreed to
expend at least 75% of his working time in the  fulfillment  of his duties under
the Macdonald Key Advisor Agreement. Mr. Macdonald has waived his entitlement to
the bonus amounts  related to each of the fiscal  quarters of 1997 and 1998. The
Macdonald  Key  Advisor  Agreement  expired  in  1998,  although  Mr.  Macdonald
continued to serve as Chief Executive Officer until December 1998 under the same
terms.

     Effective  December  1,  1998,  the  Company  entered  into a twenty  month
Employment  Agreement  (the  "Macdonald  Employment   Agreement")  engaging  Mr.
Macdonald as Chief Executive  Officer of the Company.  Mr. Macdonald is entitled
to receive a base  quarterly fee of $1,250  commencing  with the fiscal  quarter
ended January 31, 1999. Mr. Macdonald has agreed to make 30% of his working time
available to the Company.

     Effective  January  1,  1999,  Navtech  entered  into a two  year  Services
Agreement  (the  "Kintyre-Navtech  Agreement")  with  Kintyre & Company  Limited
("Kintyre"),  a  company  owned  by Mr.  Macdonald.  Under  the  Kintyre-Navtech
Agreement,  Kintyre has agreed to provide the services of Mr.  Macdonald and Mr.
Vietze,  as well as other  Kintyre  staff as  needed,  to assist  Navtech  in it
stategic corporate structuring and corporate finance and accounting  activities.
Kintyre is entitled to receive a base monthly fee of $23,250  Canadian,  plus an
annual bonus of $8,700 Canadian.

     In April 1999, St. Andrews Capital Limited  Partnership ("St.  Andrews LP")
advanced  $90,000 to the Company for working  capital  purposes.  Mr.  Macdonald
serves as the  President  of the  general  partner of St.  Andrews LP and is the
controlling stockholder of such general partner. The advance from St. Andrews LP
is repayable, together with interest at the rate of 18% per annum, in 22 monthly
installments.

     On October 1, 1999,  St.  Andrews LP  advanced  $128,830  to the Company to
finance the Company's  acquisition of Skyplan Services (UK) Limited. At the time
of the loan,  the  Company  had  sufficient  working  capital to  undertake  the
transaction,  but determined that it was prudent to obtain outside financing. As
provided for in a term sheet (which calls for the completion of definitive  loan
documents),  the  loan  bears  interest  at the  rate  of 10% per  annum  and is
repayable  in 24 equal  monthly  payments  of  approximately  $5,945  commencing
November 1, 1999. The term sheet provides that the principal  amount of the loan
is convertible into Common Shares of the Company at a conversion price of $0.375
per share  effective on the first day of the month  following the approval of an
increase in the  authorized  share  capital of the Company  sufficient  for such
purpose.

6.  Rainer Vietze

     On November 1, 1998,  Mr.  Vietze  ceased his  employment  with Navtech and
commenced  employment  with  Kintyre.  Effective  December 1, 1998,  the Company
entered  into a  twenty  month  Employment  Agreement  (the  "Vietze  Employment
Agreement")  engaging Mr. Vietze as Chief Financial Officer of the Company.  Mr.
Vietze is entitled to receive a base quarterly fee of $625  commencing  with the
fiscal  quarter ended January 31, 1999. Mr. Vietze has agreed to make 30% of his
working time available to the Company.

<PAGE>


SIGNATURES

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

Dated: December 3, 1999

                                                               COMPUFLIGHT, INC.

                                                        By: /s/ Duncan Macdonald
                                                            --------------------
                                                                Duncan Macdonald
                                                         Chief Executive Officer