UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                   FORM 10-KSB

(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, 1999
                          --------------------------------------------

[ ]  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
                          --------------------------------------------

                                  NAVTECH, 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)


            2400 Garden Road, Monterey, CA                              93940
--------------------------------------------------------------------------------
     (Address of Principal Executive Offices)                         (Zip Code)

Issuer's telephone number:  (519) 747-9883

 COMPUFLIGHT, INC.                   125 Mineola Ave., Roslyn Heights, NY  11577
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

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

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

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

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

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

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

     State issuer's revenues for its most recent fiscal year (1999): $ 5,253,576
                                                                     -----------

     The aggregate market value of the voting stock held by non-affiliates based
upon the average bid and asked  prices of such stock as of December 31, 1999 was
$ 379,039

                         (ISSUERS INVOLVED IN BANKRUPTCY
                     PROCEEDINGS DURING THE PAST FIVE YEARS)

     Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes No

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     The  number of shares  outstanding  of the  issuer's  common  stock,  as of
December 31, 1999, was 2,001,980 shares.

                      DOCUMENTS INCORPORATED BY REFERENCE:

                                      None

<PAGE>


                                  NAVTECH, INC.
                         1999 FORM 10-KSB ANNUAL REPORT

                                TABLE OF CONTENTS



                                                   PART I                   PAGE

Item 1.       Description of Business..........................................4
Item 2.       Description of Property.........................................13
Item 3.       Legal Proceedings...............................................14
Item 4.       Submission of Matters to a Vote of Security Holders.............15


                                                   PART II

Item 5.       Market for Common Equity and Related Stockholder Matters........16
Item 6.       Management's Discussion and Analysis or Plan of Operation.......17
Item 7.       Financial Statements............................................27
Item 8.       Changes In and Disagreements With Accountants on Accounting and
              Financial Disclosure............................................28


                                                   PART III

Item 9.       Directors, Executive Officers, Promoters and Control Persons;
                Compliance  with Section  16(a) of the Exchange Act...........29
Item 10.      Executive Compensation..........................................31
Item 11.      Security Ownership of Certain Beneficial Owners and Management..33
Item 12.      Certain Relationships and Related Transactions..................35


                                                   PART IV

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

              INDEX TO EXHIBITS...............................................39

              INDEX TO FINANCIAL STATEMENTS (F-1)

              SIGNATURES......................................................42




<PAGE>



                                GLOSSARY OF TERMS


AFTN  (Aeronautical Fixed Telecommunications Network)
An international telecommunications network used for the transmission of NOTAMs,
aircraft movement messages, and other relevant data.

ARINC  (Aeronautical Radio, Inc.)
A vendor of a variety of communications services to the aviation industry.

Flight Dispatcher, Dispatcher
An  airline  employee   responsible  for  pre-flight   planning  and  continuous
communication and monitoring of a flight from start to finish.

Flight Plan
A  plan  required  by  federal  regulations  to be  filed  by an  aircraft  that
identifies  the  routing,   alternate  routing,  altitude,  enroute  time,  fuel
consumption, and other information.  This data is calculated by factoring, among
other  things,   the  aircraft   manufacturer's   performance   data,   aircraft
specifications, forecasted upper air winds, and estimated payload.

FANS (Future Air Navigation System)
An international  initiative by air traffic control providers and aviation users
to provide  aircraft with the  capability of using any flight path,  altitude or
speed in order to obtain the maximum efficiency. Frequently referred to as "Free
Flight".

GUI
Graphical User Interface.

IATA
International  Air Transport  Association,  a trade association of the worldwide
scheduled  international  airline  industry  with a membership  of more that 220
airlines.

LINUX
Linux is a robust,  high quality  implementation  of UNIX.  It is a  multi-user,
multi-tasking  operating  system that runs on many platforms,  including  Intel,
Motorola, MC68K and Alphas.

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

NOTAM (Notice to Airmen)
A notice  containing  information  concerning  the  establishment,  condition or
change in any aeronautical  facility,  service  procedure or hazard,  the timely
knowledge of which is essential to personnel concerned with flight operations.

SITA (Societe  Internationale  de  Telecommunication  Aeronautique)  A vendor of
aviation communication services.

Page 3
<PAGE>


                                     PART I

Forward Looking Statements

When used herein, the words "believe,"  "anticipate,"  "think," "intend," "may,"
"could,"  "will be,"  "expect,"  "estimate,"  and similar  expressions  identify
forward-looking   statements  within  the  meaning  of  the  Private  Securities
Litigation  Reform Act of 1995.  Such  statements  are not  guarantees of future
results and involve  certain risks and  uncertainties  discussed  herein,  which
could   cause   actual   results  to  differ   materially   from  those  in  the
forward-looking statements. Readers are cautioned not to place undue reliance on
the forward-looking  statements which speak only as of the date hereof.  Readers
are also urged to carefully review and consider the various  disclosures made by
Navtech,  Inc. which attempt to advise  interested  parties of the factors which
affect it, including, without limitation, the disclosures made under the caption
"Management's Discussion and Analysis or Plan of Operation" in Item 6 hereof.

ITEM 1.       DESCRIPTION OF BUSINESS

GENERAL

Navtech, Inc. ("Navtech"), formerly known as Compuflight, Inc, and subsidiaries,
Navtech  Systems Support Inc.  ("Navtech-Canada"),  Navtech Systems (UK) Limited
("Navtech-UK")  and Efficient  Aviation Systems Inc. ("EAS") (herein referred to
collectively  as the  "Company"),  are engaged in the  business  of  developing,
marketing,  licensing,  and supporting computerized flight operations management
systems to the commercial aviation industry. Navtech was originally incorporated
in the  State  of New  York in 1981  and  then  reincorporated  in the  State of
Delaware  in 1987.  The  Company  changed  its name from  Compuflight,  Inc.  to
Navtech, Inc on January 14, 2000. (see "Recent Developments").

Navtech-Canada   was   incorporated   in  1987  in  the   Province  of  Ontario.
Navtech-Canada's   Waterloo,  Ontario  facility  houses  the  Company's  primary
operations  center along with the research and  development,  customer  support,
sales,  and the  accounting  departments  (see Item 2 hereof).  Navtech-Canada's
early  development  work was undertaken for the  installation of flight planning
systems at Wardair and Pan American Airways (PanAm).

The Weather  Services  Division of Navtech  provides  weather data  software and
services and other related data services  primarily to the  commercial  aviation
community.  The  Monterey  data  center  (see  Item  2  hereof)  processes  data
describing  or  predicting  the state of the  atmosphere on a 24 hour, 7 day per
week basis from sources  including  the U.S.  National  Weather  Service and the
Federal Aviation Administration circuits as well as a number of other countries'
data circuits.  Customers access Navtech's  weather services through  land-based
communications    networks   employing   the   latest   distributed   processing
technologies.

Navtech  (UK)  Limited  was  incorporated  in 1994 in the  United  Kingdom.  The
facility, located near the London Gatwick Airport (see Item 2 hereof), houses an
operations and dispatch  center,  which provides  flight planning and overflight
billing  assistance  to European,  African and Middle  Eastern  customers.  This
office will also provide the support  services for the  Company's  international
marketing efforts.

The Company develops and markets software under both the Compuflight and Navtech
names that is designed to assist commercial  passenger and cargo air carriers in
the dynamic  environment  of their daily flight  operations.  Specifically,  the
Company's  software  provides on-line and query-based  solutions in the areas of
Flight  Planning,  Route of Flight  Analysis and  Optimization,  Hi-level Winds,
Weather  and  NOTAM  (Notice  to  Airmen)  information,  Communications,  Runway
Analysis, and various aspects of Performance Engineering. The Company's software
is licensed for use on UNIX and LINUX open system, client server platforms.  The
Company utilizes two primary delivery  mechanisms to address its target markets:
Service Bureau Operations and Product Licensing and Integration.

The Company's success is based upon its highly skilled and experienced technical
and flight  operations  personnel  who develop and maintain the  Company's  core
technology.  The  Company  is  focused  on growing  the  Product  Licensing  and
Integration  business  to  exceed  revenue  generated  from its  Service  Bureau
Operations.

Page 4
<PAGE>


Navtech is publicly  traded on the NASD OTC Electronic  Bulletin Board under the
symbol  NAVH.  The  Company's  principal  executive  offices are located at 2400
Garden Road, Monterey, CA, 93940; telephone number: (519) 747-9883.

Recent Developments

Annual Meeting of Stockholders

On January  14,  2000,  at an annual  meeting  of  stockholders  of Navtech  the
following proposals were approved:

o to change the name of the Company to "Navtech,  Inc." o to increase the number
of authorized Common Shares from 2,500,000 to
   10,000,000.
o  to decrease the number of  authorized  Preferred  Shares from  10,000,000  to
   2,000,000.
o to adopt the Company's 1999 Stock Option Plan.
o  to require unanimous,  rather than majority,  written consent of shareholders
   in lieu of a meeting under certain circumstances.
o to adopt amended and restated By-Laws for the Company.

Following such stockholder  approval,  the Company changed its trading symbol to
"NAVH".

Acquisition of Skyplan Services (UK) Limited

On October 1, 1999,  Navtech-Canada  purchased all of the outstanding  shares of
Skyplan Services (UK) Limited ("Skyplan") from Skyplan Services Ltd. The name of
Skyplan  was   subsequently   changed  to  Navtech  (UK)  Limited.   Navtech-UK,
incorporated  in the United  Kingdom,  provides  flight  planning and overflight
permit  assistance  through an operations  center located near Gatwick  Airport.
Currently,  there are eight full-time  staff members  employed at this location.
Navtech-UK's  customer base is primarily located throughout  Europe,  Africa and
the Middle East.

The Company  accounted for the  acquisition  as a purchase and as such, the fair
values of the assets acquired and liabilities  assumed have been recorded on the
date of the  acquisition  and the  results of  operations  are  included  in the
Company's consolidated  statements of operations since the acquisition date. The
excess of the  consideration  paid and the related costs of acquisition over the
estimated fair value of the net assets  acquired,  totaling  $108,000,  has been
recorded as goodwill and is being  amortized on a  straight-line  basis over ten
years.

In consideration  for the shares of Navtech-UK,  Navtech-Canada  paid to Skyplan
Services Ltd. $180,000  Canadian in two  installments.  The first installment of
$125,000 was paid upon closing.  The second installment of $55,000 was paid upon
the  successful  transfer of services and systems to  Navtech-Canada  during the
transition  period from  October 1, 1999 to October 22,  1999.  No shares of the
Common Stock of the Company were issued.

The Navtech-UK  facility  provides the needed support services for the Company's
international marketing plan. This activity is being focused specifically on the
European,  African,  and  Middle  Eastern  geographic  segments  with the  Asian
marketplace  being  serviced  by the  Waterloo  operation  (see  "Marketing  and
Sales").

Page 5
<PAGE>

INDUSTRY BACKGROUND

Commercial Aviation

The  commercial   airline  industry  enters  the  new  millennium  with  experts
predicting  record  profits  of US $10.5  billion in 2000,  compared  with US $9
billion  in  1999  (Air  Transport  World,  January  2000),  but  split  on  the
vulnerability  of  airlines to a recession  in the major world  economies.  Cost
increases  are  outpacing  revenue  growth and the  average  margin of 3% offers
little ability to financially  manage an industry crisis.  Leading the increased
costs  is the  sharp  rise in the  spot  prices  for  jet  fuel,  which  climbed
approximately 23% between August and November, 1999 (Reuters Benchmark).

Deregulation  began in the early 1990's throughout Europe and parts of Asia. The
number of scheduled  airlines in these regions has risen at rates  comparable to
the United States in the 1970's, when it underwent deregulation.  In 1997 Europe
had 189 scheduled service airlines compared to 127 in 1987.  Similar numbers for
Asia-Pacific were 189 and 111 respectively.  Comparatively,  North America saw a
decline  over the  same  period  from  247 to 187  (OAG,  September  1999).  The
expansion in the number of carriers creates short-term  opportunities for growth
for  service  providers  but  long-term  growth  opportunities  diminish as many
start-ups fail or are assumed by established operations.

Airline Classification

There are over 1,500 commercial airlines providing service around the globe, and
they are  typically  defined  by  either  the type of  service  offered,  annual
revenues or by the type of aircraft they utilize. Major Airlines are categorized
as earning annual  revenues in excess of $1billion or more in scheduled  service
and generally  providing  countries  with  nationwide  service and in some cases
worldwide  service.  There  are  approximately  40  carriers  in this  category.
National  carriers are either scheduled  service or charter airlines with annual
revenues  between $100 million and $1 billion,  and typically  serve  particular
regions of North  America or Europe or serve as foreign  country flag  carriers.
The nationals also provide long haul and even international  service.  There are
approximately  400  airlines in this  category.  Regional  airlines are carriers
whose service is limited to a single region of a country and tend to have annual
revenue of $20 million to $100  million.  Their  operations  tend to either feed
passengers to the larger airline's centers,  or operate in under-served  markets
(World Aviation Directory).

Geographic Trends

Economic forces are expected to continue driving  consolidation to a point where
major airline  alliances,  such as the One World Alliance and the Star Alliance,
occur.  These  alliances  will  face  competition  from a large  number of niche
airlines, including the Nationals, that differentiate themselves by geography or
market  segmentation.  Smaller  regional  carriers  seeking to protect or expand
their share of  particular  geographical  markets or business  segments  will be
forced to compete with these global alliances.

Flight Operations Software Market Outlook

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

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

Page 6
<PAGE>

PRODUCTS AND SERVICES

Navtech's product strategy is to offer an integrated flight management system to
national,  charter, regional and cargo carriers,  start-ups, and small specialty
carriers.  In 1998, the Company  integrated  flight planning,  flight following,
weather and NOTAMs into an Operations  Control System product called AURORA. The
AURORA product is installed at the customer's  operations facility.  In addition
to AURORA,  the Company offers  COMPASS(TM) 2000, an easy to use flight dispatch
software product  designed for start-ups and small airlines.  COMPASS TM 2000 is
anticipated to be offered as a web-based  product in the second quarter of 2000.
To complement  AURORA and COMPASS TM 2000, the Company also provides  COMRAD,  a
Windows-based  runway analysis solution for use in an aircraft cockpit or in the
airlines operations center.

In addition to the Company's  software  products,  the customer is also provided
with a range of data services delivered from the Company's hosted systems,  such
as weather  related data like  high-level  winds,  text weather and NOTAMs.  The
Company  also  provides a  subscription  service for the  provision  of aircraft
performance data to be used in the calculation of take-off and landing settings.

Operations Control System - AURORA

In March,  1998,  the Company  released its new core Flight  Operations  Control
System, AURORA. The product provides real-time mission critical decision support
to the  dispatcher  or airline  operations  manager in the  creation of a flight
release and the subsequent tracking and reporting of the airline's performance.

The AURORA system was designed to operate on the powerful, scalable, open source
LINUX operating system.  LINUX provides an alternative to traditional UNIX based
systems and its PC  counterpart,  Windows NT, at a  significant  improvement  in
price and performance.

Through the  Company's  Value Added  Reseller  ("VAR")  agreement  with IBM, the
required hardware components are configured, tested and fully certified prior to
delivery  to the  customer.  As  part of the  Company's  services,  the  project
management group takes  responsibility  for all aspects of the system deployment
including communications circuits,  installation of all hardware, and testing at
the customer's site.

The AURORA  product  has been  targeted at cargo and  passenger  airlines in the
Company's  "mid-sized" airline market niche.  However, in 1999, the Company also
had sales of the AURORA  System to  aviation  companies  in the  "large"  market
niche.

Flight Planning

The Company also markets a scaled-down version of its AURORA product to airlines
whose fleet size limits the requirement for an in-house system installation.  In
addition,  the Company  also  markets  its text based  flight  planning  system,
COMPASS TM 2000, to the regionals and to the aircraft operators with less than 5
planes.  COMPASS TM 2000 is designed to fill the need to provide a basic  flight
plan and to  position  the  Company to develop a  relationship,  as the  carrier
grows.

It is anticipated  that during the second quarter,  COMPASS TM 2000 will also be
offered as a web-based  product,  such that  customers can directly  access this
product utilizing the Company's website.

Runway Analysis - COMRAD

The Civil Aviation  Authority for each country  outlines the  regulations  under
which  an  aircraft   operator   must  conduct  its  flying   operations.   Most
jurisdictions  require the operator of a passenger or cargo carrying aircraft to
complete  a  take-off  and  landing  runway  assessment  before  each  flight to
ascertain  the  feasibility  and  limitations  of  operating  the  aircraft on a
particular runway given specific meteorological conditions.

Page 7
<PAGE>

Traditionally,  this function is carried out in two places, the flight operation
dispatch  department  and the aircraft  cockpit.  The source of data required to
complete the runway  analysis  function has been a series of manuals  containing
hundreds of aircraft  performance tables,  which are either generated internally
or by a third party. It is a very cumbersome and time consuming exercise to sort
through  these  tables and gather the  information  necessary  to  complete  the
calculation.

The Company has  responded  by  developing  COMRAD,  a  PC/Windows  based runway
analysis solution which completely automates the calculation of take-off/landing
speeds and maximum payload values. The major benefits of COMRAD include:

      o  accuracy and consistency of output
      o  timeliness/accessibility of information
      o  ease of use

All of these benefits result in the aircraft being able to transport the maximum
amount of payload, and therefore, generate the maximum yield for the flight.

To accelerate the growth of this market segment, in 1998, Navtech-Canada entered
into a long-term  software  licensing  agreement  with  Operational  Performance
Systems ("OPS") of Lake Forest,  CA, a provider of aircraft  engine  calculation
software.  OPS has an extensive library of aircraft engine calculation  software
and has  agreed to allow  Navtech-Canada  to  incorporate  these into its COMRAD
product on a royalty basis.

V1 Plus Performance Engineering Services

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

The V1PLUS Manual  provides the airline  customer with  customized  take-off and
landing data specific to various aircraft/engine combinations, flap settings and
runways  and is  available  on a 24 hours per day,  7 days per week  basis  from
Navtech-Canada's Waterloo operations center.

Weather Services

With the establishment of the Company's Weather Services  Division,  the Company
began providing weather-related products and services to an established customer
base  complimentary  in nature  to its  existing  products  and  customers.  The
Company's  weather-related products include high level winds and raw data feeds,
text weather systems, and NOTAMs.

The Company,  through  proprietary  access to certain data  circuits of the U.S.
National Weather Service,  has become a primary provider of this data to foreign
governments,  marine service companies and airlines.  Additionally,  the Company
has been able to differentiate  itself by offering redundant sources and methods
of delivery,  thereby assuring customers of the timely delivery of this critical
data.

Text Weather Solutions

Weather  data is  available by  utilizing a  distributed  client-server  system,
FCSII,   querying  the  Company's  servers  via  internet,  or  by  licensing  a
distributed  system which  receives its data via  satellite.  Additionally,  the
customer  can use  templates  and timed  messaging  utilities  to  automate  the
scheduling and delivery of critical flight information.

NOTAMs

NOTAMs (Notice to Airmen) are notices published by each country's Civil Aviation
Authority ("CAA"), the FAA in the United States, to provide notice of restricted
areas, meteorological changes, runway conditions and other pertinent information
required by a pilot for safe flight.

Page 8
<PAGE>

The  Weather  Services  Division  processes,  decodes  and  translates  the data
transmissions  from  eighty  percent of the CAAs  around  the world.  The NOTAMs
database  can then be queried by the airline  customer  to provide the  relevant
NOTAMs for the origin,  destination  and alternate  airports  along the route of
flight.

Customer Support Services

The  Company  offers   comprehensive   software  support  and  customer  account
management in the United States, Canada, Africa, and Europe which is designed to
maximize the benefits  and utility of the software at the  customer's  location.
These services  include  training and installation  support,  software  updates,
including  new systems  functionality  and ongoing  enhancements,  and telephone
hot-line support.  Due to the significant value of the customer's  investment in
the  licensing of the  Company's  software,  the Company  believes  that quality
support services are a critical component of the customer's  satisfaction level.
The Company's  customer support services are provided at its Waterloo,  Ontario,
Monterey, California, and London, Gatwick, UK facilities, operating 24 hours per
day, 7 days per week.

Custom Programming Services

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

MARKETING AND SALES

During  1999,  the  Company  continued  to focus its  marketing  effort in North
America.  The intended target markets were airlines seeking to internalize their
flight operations  function by utilizing the Company's software and those of its
existing  customers  seeking  to  upgrade to  AURORA.  The  marketing  and sales
program, as managed by the Vice-President of Sales & Marketing, seeks to present
selected product and service options to current and potential customers based on
the Company's  ability to provide a solution to fulfill a defined  business need
in the flight operations department.

International Marketing Strategy

Although the full potential of the North American market has yet to be realized,
the Company believes that future operational  results will depend in part on its
ability to increase sales in the international marketplace, specifically Europe,
Africa,  South America,  and Asia/Pacific.  The Company's marketing plans in the
fiscal  2000  involve  the  implementation  of  a  dual  strategy  of  a  direct
international  sales  initiative  supported from the  Navtech-UK  office and the
establishment  of an  international  agency agreement with a major US technology
marketing  firm.  Such a strategy may result in increased  expense,  which could
have a short-term adverse effect on the results of operations.

The Navtech-UK  facility provides the needed  infrastructure  from which a large
portion of the Company's  international marketing strategy is being implemented.
This activity is being focused specifically on the European, African, and Middle
Eastern  marketplace  and is focused on the same  airline  market niche that has
driven the  Company's  sales growth in North  America.  The  web-based  products
currently being developed and marketed by the Company form an excellent  synergy
with  marketing  efforts in these  regions due to the low cost of  communication
that this access method offers.

To facilitate  the process of  introducing  the Company's  core products and new
web-based  products  to new  market  regions,  such as  South  America,  Central
America,  Asia and areas of the Middle East and Europe not currently targeted by
the Navtech-UK  facility,  the Company has established an agency  agreement with
The Republic  Group,  an  Arlington,  Virginia  based  international  technology
marketing  company,  which  has an  established  worldwide  network  of  over 50
in-country agents.

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<PAGE>

Competition

The applications  software market for airline  operations  management systems is
intensely  competitive  and subject to rapid change.  The principal  competitive
factors in this market include product functionality and quality,  total cost of
solution, support infrastructure,  relationships, underlying technology, product
architecture, and the financial stability of the vendor.

The Company  competes or may compete  directly or indirectly with i) development
by the major airlines  Information  Technology ("IT") departments,  ii) aviation
software  vendors  that may expand their  product  offerings  by  developing  or
acquiring flight operations  systems,  and iii) independent  companies that have
developed flight operations management solutions for commercial aviation.

A number of major  airlines  have formed  independent  companies or divisions to
develop,  market and install  flight  operations  solutions.  American  Airlines
("AMR") created The Sabre Group Holdings, Inc. in June 1996 to consolidate AMR's
information technology solutions,  including reservations and flight operations,
into a separate  company.  Sabre currently  focuses on providing  outsourcing to
AMR,  Canadian  Airlines,  U.S. Airways and other  customers.  Other examples of
major airline IT spinoffs  include British Airway's  Speedwing  Technologies and
Lufthansa's Informationstechnik & Software GMBH.

In addition to the major  airlines'  direct  involvement in the  development and
marketing  of  systems  and  services,  a  number  of  commercial  carriers  are
utilizing,  as partners,  the large systems  integrators,  such as EDS,  Unisys,
KPMG,  Andersen,  and IBM Global  Transportation  Group. The system  integrators
promote  complete end to end solutions  through  partnering  with companies that
have  expertise in each facet of an airline's  operation and then  providing the
project management, integration and support services required by the airline.

The large aviation  software  vendors have a variety of  backgrounds.  Jeppesen,
recognized as the industry leader in the provision of aviation charts,  has been
the dominant entrant in the provision of flight operations software and services
to the major  airlines  in North  America  and to many of the  smaller  airlines
around the world. In Europe and Africa,  SITA,  which started out as an aviation
industry backed telecommunication  organization,  has branched out into a number
of airline automation services, including flight operations.

The  independent  competitors  to the Company tend to be relatively  small firms
with  customer  bases  of less  than 100 air  carriers  that  have not  realized
significant  gains in either sales or expanded  product  lines or  consolidation
with competitors.

Many of the Company's competitors have greater financial,  technical, marketing,
and other  resources and a larger  installed  base of customers.  In order to be
successful in the market,  the Company must respond  quickly and  effectively to
changes in customer  requirements,  and be innovative and  cutting-edge in areas
such as  Web-based  product  development  and the  utilization  of  newer,  less
expensive, and more reliable operating systems including the LINUX technology.

Research and Development

The Company invested resources during fiscal 1999 and fiscal 1998 to develop new
software  functionality  and to enhance  its  existing  software.  Research  and
development expenses were approximately $72,000 and $77,000 for the years ending
October 31, 1999 and 1998, respectively. See Item 6 hereof.

The research and development plans for the Year 2000 are based on a study of the
customer requirements and assessments of the marketing group regarding long-term
market.  The  Company's  research and  development  resources are also allowed a
certain latitude to experiment with the newest technologies in order to maintain
the Company's market position. It is because of this philosophy that the Company
adopted  the LINUX  operating  system as it core  operating  systems as early as
1998. The key research and development activities are detailed below.

Page 10
<PAGE>

Internet-based Product Development

The Company is committed to the  development of new Web-based  technologies  and
the  integration  of existing  products to a "web  architecture".  This not only
includes the development of products such as the web-based version of COMPASS TM
2000, but the utilization of the internet as a communication  alternative to the
more traditional vehicles such as frame relay technology.

New Functional Requirements

Other research and development  activities  include the requirement to introduce
new  subject  matter  expertise  to  lead  the  design  and  development  of new
functional  requirements.   As  the  sales  activities  in  the  North  American
marketplace begin to mature, the integration of other required  functionality to
the Company's core products should form the basis for a renewed sales cycle.

The adoption of a new design modeling  framework to aid in rapid prototyping and
testing of new  technologies is another research and development  initiative.  A
detailed product strategy plan and resultant research and development  statement
of work to  achieve  the  goals of the plan  has led to  development  activities
including the Integration of Runway Analysis, Increased Text Weather
Capabilities, and Overflight Billing.

Intellectual Property Rights

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

GOVERNMENT REGULATION

The  Company is not subject to any  government  regulation  with  respect to the
flight planning operations of its business. It is an airline's responsibility to
ensure that the flight plan meets all local civil aviation authority regulations
and requirements.

Page 11
<PAGE>

Employees

As of December  31, 1999,  the Company had a total of 74 employees  (of which 70
were full time employees)  including 22 in operations,  5 in account management,
25 in  research  and product  development,  7 in sales and  marketing  and 15 in
management,  finance and  administration.  None of the  Company's  employees are
represented  by a labor  union  and  the  Company  believes  that  its  employee
relations  are good.  The Company  believes  that its success will depend,  to a
large degree,  upon its ability to attract and retain highly skilled  technical,
managerial  and sales and  marketing  personnel,  and to retain  personnel  with
flight  operations  expertise.  Competition  for such personnel is intense,  and
there can be no assurance  that the Company will be successful in attracting and
retaining the personnel required to develop,  market,  service,  and support its
products and conduct its operations successfully.

Page 12
<PAGE>


ITEM 2.       DESCRIPTION OF PROPERTY

The Company maintains offices in the following locations:

Monterey, California

Effective as of July 31, 1998, Navtech subleased approximately 5,400 square feet
of office space at 2400 Garden Road,  Monterey,  California  on a month to month
basis  for  the  establishment  of  the  Company's  Weather  Services  Division.
Effective  January 1, 2000 the Company  relocated its executive  offices to this
location.  The monthly rent expense as of December 31, 1999 was $6,150. The main
tenant's lease expires December 31, 2001.

Waterloo, Ontario

Navtech-Canada  leases  approximately  9,300  square feet of office space at 175
Columbia Street West,  Waterloo,  Ontario,  which is used for flight operations,
software  development,  customer support, and administration.  This lease became
effective  November 1, 1996 and  terminates  October 31, 2006.  The monthly rent
expense,  inclusive of common area rent, is approximately $14,930 Canadian as of
December 31, 1999. The lease calls for additional increases on each anniversary.

Ottawa, Ontario

As of  September  1, 1998,  Navtech-Canada  subleased  office space as corporate
offices  located  at 275  Slater  Street,  Ottawa,  Ontario.  The  sublease  for
approximately  1,000 square feet expires on September 30, 2000,  and the monthly
rent expense as of December 31, 1999 was approximately $1,790 Canadian.

Nepean, Ontario

As  of  October  1,  1999,  Navtech-Canada  leased  office  space  for  software
development  purposes located at Unit 209, 21 Antares Dr., Nepean,  Ontario. The
lease for approximately 1,100 square feet expires on September 30, 2000, and the
monthly rent expense as of December 31, 1999 was approximately $1,425 Canadian.

Crawley, West Sussex, UK

Navtech-UK has a five year lease,  expiring  February 28, 2003, for the premises
located at Durand  House,  Manor Royal,  Crawley,  West Sussex,  UK. This office
encompasses  approximately  1,870  square  feet of space  being  used for flight
operations, customer support and administration.  The monthly rent expense as of
December 31, 1999 is approximately 1,867 Pounds.

The Company's total rent expenses were approximately $242,210 for the year ended
October 31, 1999. The Company  believes that its facilities are adequate for its
current needs and that suitable additional space will be available as required.

Page 13
<PAGE>


ITEM 3.       LEGAL PROCEEDINGS

On September 13, 1999, the Company  received a demand from the attorneys for the
Chapter 11  Creditors  Committee  of Southern  Air  Transport,  Inc. for alleged
preferential  payments of $88,850 made to  Navtech-Canada  within 90 days of the
filing of the bankruptcy  petition of the Debtor in the United States Bankruptcy
Court for the  Southern  District of Ohio on October 1, 1998.  The Company is of
the view that the payments received were for  contemporaneous  consideration and
were therefore not  preferential  payments.  The Company has further  determined
that the matter is still under  review and no  adversary  proceedings  have been
launched as of December 31, 1999. At this time no  determination of the eventual
outcome of potential loss has been made.


Page 14
<PAGE>


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

There were no matters submitted to a vote of security holders during the quarter
ended October 31, 1999.


Page 15
<PAGE>


                                     PART II


ITEM 5.       MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS


The Company's  common stock is traded on the NASD OTC Electronic  Bulletin under
the symbol "NAVH". The high and low bid prices of the common stock, as furnished
by the National Quotation Bureau, Incorporated, are shown for the fiscal periods
indicated.  Such prices represent prices between dealers,  do not include retail
markup, markdown or commission and do not represent actual transactions.




Fiscal Year Ended                   Bid Price
October 31, 1999              High           Low

First Quarter                $.5625         $.3125

Second Quarter                .5625          .13

Third Quarter                 .13            .13

Fourth Quarter                .13            .0625




Fiscal Year Ended                   Bid Price
October 31, 1998              High           Low

First Quarter                $.5625         $.45

Second Quarter                .45            .45

Third Quarter                 .50            .45

Fourth Quarter                .50            .375



      (b)Approximate Number of Record Holders


      Management has been advised by its transfer agent (North American Transfer
      Co.) that the approximate number of record holders of the Company's common
      stock at December 31, 1999 was 820.

      (c)Payment of Cash Dividends

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

Page 16

<PAGE>


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

FORWARD-LOOKING STATEMENTS

This  section  and  other  parts of this  Form  10-KSB  contain  forward-looking
statements that involve risks and  uncertainties.  The Company's  actual results
may differ  significantly  from the  results  discussed  in the  forward-looking
statements.  The following  discussion  should be read in  conjunction  with the
consolidated  financial  statements and notes thereto included in Item 7 of this
Form 10-KSB. All information is based on the Company's fiscal calendar.

RESULTS OF OPERATIONS

The following  table sets forth annual  results of  operations  for fiscal years
1999 and 1998 (in thousands except per share amounts):
<TABLE>
<S>                                          <C>            <C>               <C>         <C>

      ------------------------------------------- -------------------------- -------------------------
                                                    Results of Operations      Percentage of Total
                                                                                     Revenue
                                                              For the year ended October 31,
                                                     1999          1998         1999         1998
      ------------------------------------------- ------------ ------------- ------------ ------------
      Revenue
        Service fees                               $  4,649     $  3,340            88%          87%
        Hardware, software and license sales            605          510            12           13
                                                   --------     --------         -----        -----
                                                      5,254        3,850           100          100
                                                    -------      -------          ----         ----

      Costs and expenses
        Operating                                     3,860        2,759            73           72
        Research and development, net                    31           24             1            1
        Selling, general and administration           1,071          927            20           24
        Depreciation and amortization                    87          134             2            3
                                                  ---------     --------        ------       ------
                                                      5,049        3,844            96          100
                                                    -------      -------         -----         ----

      Operating income                                  205            6             4            -

      Other income (expense)
        Interest income                                 104           53             2            1
        Interest expense                               (350)        (201)           (7)          (5)
        Realized foreign exchange loss                  (27)          (2)            -            -
        Provision for bad debt - related party         (316)        (395)           (6)         (10)
                                                    -------      -------         -----       ------

      Net loss before taxes                            (384)        (539)           (7)         (14)

      Income tax benefit                                  4            -             -            -
                                                       ----      -------          ----         ----

      Net loss                                    $     (380)  $     (539)          (7)%        (14)%
                                                     =======      =======        =====       ======

      Net loss per share - basic and diluted      $   (0.19)   $    (0.30)
                                                     ======       =======
      ------------------------------------------- ------------ ------------- ------------ ------------
</TABLE>

Overview

During 1999, the Company improved its operating income and reduced its net loss.
The change in operating  income was achieved for several major  reasons.  First,
the  Company  continued  an  internal   restructuring  plan  that  involved  the
centralization  of all North  American  flight  planning  activities  within the
Company's  Canadian  facility,  the  downsizing  of the New York  office and the
placing in service of the Company's  Monterey  facility.  Second,  the Company's
focus on the sale of flight  operations  control system  licenses  generated two
more sales during the year,  as well as one more sale which was completed in the
first quarter of 2000.  Flight  operations  control system license sales,  while
generating one time income of approximately $250,000 per license, also result in
longer term  revenue  from the  provision of  maintenance  and support  services
included  as  separate  components  in  the  customer's  contract.   Third,  the
substantial costs of developing the Company's premier flight operations  control
system, AURORA, have been expensed in prior periods so that the costs associated
with each new system license sale have been limited to the  development  cost of
any customer specific enhancements,  as well as the implementation costs of each
system.  Fourth,  the Company  expanded its operations  with the  acquisition of
Navtech (UK) Limited by Navtech  Systems  Support Inc. in October 1999.  Navtech
(UK) Limited provides flight planning and overflight  management services within
the  European,  Middle  Eastern  and  African  marketplace.  Synergy  from  this
acquisition is expected in a short time since  Navtech-UK was already  utilizing
an earlier non-GUI version of the Company's flight planning software.

Page 17
<PAGE>

Despite the increase in operating income, the Company continues to reflect a net
loss after taxes. This loss is primarily due to the increased costs of financing
that the Company has faced based on its prior financial results.  The Company is
moving to reduce the cost of financing over the next four quarters, and although
Company's  management has not yet adopted any specific  plans, it may consider a
refinancing  of its  current  debt or the  issuance  of new share  capital.  The
Company  has also taken a write  down of  advances  made to its parent  company,
Navtech Applied Research Inc. ("NARI"),  in each of the last two years. See Item
12 hereof and Note H to the consolidated financial statements. Revenue

The Company's  revenue is derived from two major  sources:  (i) service fees for
the provision of flight planning services, runway analysis services, weather and
NOTAMs  data,  and  ongoing  customer  support  and (ii) sales of  hardware  and
licenses of software.  Revenue from license fees is  recognized  at the later of
delivery of the software master copy or, if applicable, fulfillment of all other
significant obligations under terms of a license agreement. For those agreements
where there is uncertainty as to ultimate  collection,  revenue is recognized as
cash is received. Systems consulting and implementation fees are recognized upon
rendering of  services.  Custom  software  development,  communication  charges,
aviation  database  income and service bureau and support revenue are recognized
ratably over applicable contractual periods or as services are performed.

Total revenue increased  approximately $1.4 million,  or approximately 36%, from
approximately $3.9 million in 1998 to approximately $5.3 million in 1999.

During the quarter ended October 31, 1999, the Company commenced installation of
a  flight   planning   system,   along   with   the   development   of   certain
customer-requested  enhancements,  for Universal  Weather and Aviation,  Inc., a
major aviation  services  provider based in the United States.  The installation
and customer acceptance were completed within two weeks of the completion of the
year end; however, in accordance with generally accepted accounting  principles,
such revenue  cannot be reflected in the  financial  results for 1999 until such
time as the software has been  accepted by the customer.  Accordingly,  deferred
revenue includes  approximately  $326,000 representing amounts received from the
customer  prior  to the  year  end,  as  offset  by  costs  associated  with the
installation and development work up to year end. This contract provides for the
payment of approximately  $1.1 million over a three-year  period.  Approximately
$535,000  of this will be  reflected  as revenue in the first  quarter of fiscal
2000.  All amounts  payable by the  customer for the delivery of the system were
received by the end of November 1999.

Geographic Analysis

The following  sets forth total  revenues on a geographic  basis for fiscal 1999
and 1998 (in thousands except percentage amounts):
<TABLE>
<S>                         <C>              <C>                 <C>            <C>

    -------------------------- --------------------------------- ----------------------------------
                                        Total   Revenue   Percentage   of  Total
                                Revenue  For the year ended  October 31, For the
                                year ended October 31,
                                    1999             1998             1999             1998
    -------------------------- ---------------- ---------------- --------------- ------------------

    United States              $    4,145       $    3,092               79%             80%
    Canada                            668              528               13              14
    Other                             441              230                8               6
                                ---------        ---------           ------          ------
                               $    5,254       $    3,850              100%            100%
                                 ========         ========             ====            ====
    -------------------------- ---------------- ---------------- --------------- ------------------
</TABLE>
Page 18
<PAGE>

The Company's  products and services are used by airline  carriers  primarily in
the United States and Canada, although its customers are also located in Europe,
Mexico,  Africa,  and  South  America.  In  fiscal  1999,  the  Company  derived
approximately  $4.1  million  from sales in the  United  States as  compared  to
approximately  $3.1 million in fiscal 1998.  This increase is due primarily to a
net increase in fees to existing customers of approximately  $656,000, a loss of
revenue of approximately $264,000 related to lost contracts and bankruptcies and
the addition of new  customers  representing  approximately  $586,000 in further
revenues,  mainly from weather and NOTAMs  customers.  Also, gross systems sales
revenue increased approximately $95,000, mainly through the bundling of hardware
with the two  systems  sales in  fiscal  1999.  Sales in  Canada  accounted  for
approximately  $668,000 in fiscal 1999 as compared to approximately  $528,000 in
fiscal 1998. This increase is due primarily to an increase in Canadian  customer
billings  and  customer  base.   Sales  in  other   jurisdictions   amounted  to
approximately  $441,000 in fiscal 1999 as compared to approximately  $230,000 in
fiscal  1998,  which  represents  an  increase  of  approximately  $211,000,  or
approximately   92%.   This  increase  is  due  primarily  to  the  increase  of
approximately  $111,000  from the inclusion of a full year of weather and NOTAMs
fees, an increase in net fees to existing customers of approximately $62,000 and
the  addition  of  revenue  from the UK  operations  of  approximately  $40,000,
reflecting operations from the October 1, 1999 acquisition of Skyplan UK.

Service Fees

Revenue  from service  fees was  approximately  $4.6 million in 1999 as compared
with  approximately  $3.3 million in 1998, an increase of approximately  39%, or
approximately  $1.3  million.  The increase is primarily  attributable  to a net
increase  in  fees to  existing  customers  of  approximately  $839,000,  mainly
resulting from an increase in the demand for flight planning services as well as
additional  support fees from  customers  that  switched to an in-house  system.
Furthermore,  the  Company  has signed  several  new  service  bureau  customers
resulting in an increase of approximately  $106,000.  The Company's  weather and
NOTAMs  operations,  which commenced in July 1998, now reflect a full year worth
of revenue.  Accordingly,  net revenues  from weather and NOTAMs have  increased
approximately $679,000.  Service fees also include approximately $40,000 related
to one month of revenue from the  Company's  operations  in the United  Kingdom,
which were acquired  October 1, 1999.  These  increases were offset by decreases
from  both the loss of  customers  aggregating  approximately  $174,000  and the
bankruptcy or  non-renewal  of services of customers  aggregating  approximately
$181,000.

Hardware, Software, and License Sales

Revenue from  hardware,  software,  and license  sales  increased  approximately
$95,000,   or  approximately  19%,  from  approximately   $510,000  in  1998  to
approximately  $605,000 in 1999. During both 1998 and 1999, the Company sold two
AURORA  systems  licenses,  each for an  average  sales  price of  approximately
$250,000. In 1999, the Company also bundled hardware with each sale resulting in
additional revenue.  Each such sale provides for the provision of add-on support
and  maintenance  services,  which are reflected in the increase in Service Fees
noted above.

Costs and Expenses

Operating Expenses

Operating  expenses  consist mainly of personnel and other  expenses  related to
providing product support, service bureau operation and custom development. Also
included in operating  expenses are the communication  costs associated with the
provision  of in-house  flight  planning  services  and  customer  support.  The
following table sets forth the major components of operating expenses for fiscal
years 1999 and 1998 (in thousands except percentage amounts):
<TABLE>
<S><C>                                 <C>             <C>              <C>
      ---------------------------------- ------------------------------- ---------------
                                               Operating Expenses
                                         For the year ended October 31,    Percentage
                                              1999            1998           Change
      ---------------------------------- --------------- --------------- ---------------
      Salaries and benefits                $  2,632         $  1,983              33%
      Communication costs                       859              534              39%
      Rent                                      204              157              30%
      Royalty fees                               91               29             215%
      Other operating expenses                   74               56              33%
                                          ---------        ---------
      Total operating expenses             $  3,860         $  2,759              40%
                                            =======          =======
      ---------------------------------- --------------- --------------- ---------------
</TABLE>
Page 19
<PAGE>

Operating  expenses  were  approximately  $3.9  million  in 1999  compared  with
approximately  $2.8 million in 1998, an increase of approximately  $1.1 million,
or approximately 40%. This increase is primarily  attributable to an increase in
salaries and benefits of  approximately  $649,000,  an increase in communication
costs of approximately  $325,000,  an increase in rent of approximately  $47,000
and an increase in other expenses of approximately $18,000.

Furthermore,  the impact of the royalty  agreement  between the Company and NARI
resulted in an increase of approximately  $62,000.  This agreement is more fully
discussed  under  Item 12.  The  royalties  commenced  with the  opening  of the
Monterey facility in July 1998.

Of the increases noted above,  approximately  $834,000  reflect the inclusion of
twelve  months of  expenses  related  to the  weather  and NOTAMs  operation  in
Monterey, California, which commenced operations in July 1998. The remainder can
be  attributed  to  increased  staff levels and  communications  costs that have
resulted from an increase in the customer base and associated work effort.

Research and Development Expenses

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

Net Research and Development  expenses increased from  approximately  $24,000 in
1998 to approximately $31,000 in 1999, representing an increase of approximately
$6,000,  or  approximately  27%.  During  fiscal  1998,  the Company  turned its
attention  to the sale of the  AURORA  system.  Development  personnel  are used
extensively in this process both for installation  activities and  customization
of the program for the end user. These activities are usually  reimbursed by the
customer and do not fall explicitly within Research and Development  activities.
Furthermore,  development  staff also focused more efforts on the improvement of
the existing systems.  As a result,  the Company has submitted lower claims than
those  in  prior  years.  The  Company  has  claimed  scientific   research  and
experimental development investment tax credits of approximately $51,000 for the
year ended October 31, 1999 as compared to a claim of approximately  $53,000 for
the same period in 1998.

 Selling, General, and Administrative Expenses

The  following  table sets for the major  components  of  selling,  general  and
administrative expenses for fiscal 1999 and 1998 (in thousands except percentage
amounts):
<TABLE>
<S>                                     <C>            <C>              <C>
      ---------------------------------- ------------------------------- ---------------
                                               Operating Expenses
                                         For the year ended October 31,    Percentage
                                              1999            1998           Change
      ---------------------------------- --------------- --------------- ---------------
      Professional and consulting         $     435        $     334              30%
      Travel                                    349              206              69%
      Marketing                                  26               14              79%
      NARI marketing fees                                         46            (100)%
      Bad debt                                   59              137             (57)%
      Other SG&A expenses                       202              190               6%
                                           --------         --------
      Total SG&A expenses                  $  1,071        $     927              16%
                                            =======         ========
      ---------------------------------- --------------- --------------- ---------------
</TABLE>

Selling,   general,  and  administrative  expenses  increased  by  approximately
$144,000,  or  approximately  16%,  from  approximately   $927,000  in  1998  to
approximately $1.1 million in 1999. This increase can be attributed primarily to
an increase in professional  and consulting fees of approximately  $101,000,  an
increase in travel costs of approximately  $143,000 and an increase in marketing
costs of approximately $12,000. The increase in professional and consulting fees
relates  to,  among other  things,  the effort  required to bring the  Company's
regulatory  filings current as well as fees related to contract  negotiations on
systems license sales.  Increased travel costs are primarily attributable to the
maintenance of operations in Monterey, California and Waterloo, Ontario.

Page 20
<PAGE>

The termination of the NARI consulting and marketing  agreement on July 15, 1998
(see Item 12 hereof) has  resulted in a decrease of  approximately  $46,000 over
the 1998 fiscal year. Furthermore,  there was a decrease in bad debt expenses of
approximately  $78,000 as the Company  instituted  better credit  policies.  Net
other expenses increased by approximately $12,000

Other Income (Expense)

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

Interest Expense

Interest expense increased  approximately  $149,000,  or approximately 74%, from
approximately  $201,000 in 1998 to approximately $350,000 in 1999. This increase
is  primarily  attributable  to the  increased  interest  costs  related  to the
factoring of the Company's receivables, the inclusion of interest from new loans
and the penalties and interest associated with the Company's  delinquent payroll
tax remittances.

Provision for bad debt - related party

During the year, the Company  recorded an additional  provision of approximately
$316,000 on amounts due from its parent  company,  NARI. The total  allowance of
$943,219 as at October 31, 1999  against a total  receivable  of  $1,253,491  is
based  principally  on the  estimated  net worth of the parent  company  and the
historical  cost of the software assets owned by the parent company (see Item 12
hereof).

Net Loss

The financial statements reflect a net loss of approximately $380,000 for fiscal
1999, as compared to a net loss of approximately  $539,000 for fiscal 1998. This
represents a decrease in the net loss of approximately $159,000.

The Company  reflected a net increase in revenue of approximately  $1.4 million,
as offset by a net increase in costs and expenses of approximately $1.2 million,
resulting  in a net  increase in  operating  profit of  approximately  $198,000.
Offsetting  this gain was the  increase  of  approximately  $149,000 in interest
expense.  Furthermore,  the Company recorded a provision against a related party
debt in 1998 of approximately  $394,000 and a further provision of approximately
$316,000 in 1999.

LIQUIDITY AND CAPITAL RESOURCES

As of October 31, 1999,  the Company's  available  funds  consisted of $4,504 in
cash and the Company's working capital deficiency was $1,333,728.

In 1999,  the Company  financed a  significant  part of its  operations  through
amounts  received from systems  license  sales,  as well as through loans from a
related  party (see Item 12 hereof).  In addition,  the Company has continued to
enter into longer term repayment agreements with its suppliers.

Cash flows from  operations  amounted  to a net  inflow of  $352,760  in 1999 as
compared to a net inflow of $166,302 in 1998.  Cash  generated by operations was
primarily  from the refund of a portion of the Company's  investment  tax credit
claims,  the  receipt of funds  from a customer  before  year end  reflected  as
deferred revenue,  an increase in payables,  and proceeds from factoring.  These
were  partially  offset by an increase in accounts  receivable and the impact of
the net loss for the year.

Page 21
<PAGE>

In addition to the purchase of fixed assets of approximately  $77,000,  net cash
used by investing activities included approximately $103,000 for the purchase of
the Company's  investment in Navtech (UK) Limited and  approximately  $52,000 in
net advances to the Company's parent company.

Cash flows from  financing  activities  amounted  to a net inflow of $147,020 in
1998,  as  compared  to a net  outflow  of  $120,817  in 1999.  This  outflow is
attributable  primarily to the repayment of the  Company's  overdraft as well as
other loan repayments, and is offset by proceeds from loans from related parties

As of October 31,  1999,  the Company had no  significant  capital  commitments.
However, the Company may, from time to time, consider additional acquisitions of
complementary businesses, products or technologies.

PLAN OF OPERATION

The Company's  liquidity at October 31, 1999 was  insufficient to meet operating
requirements. The Company has therefore undertaken the following initiatives and
actions and  adopted  the  following  strategies  to reduce its working  capital
deficiency,   alleviate   cash  flow   demands  and  position  the  Company  for
profitability:

Management Team Development and Structure

The Company has continued to strengthen its management  team.  While the Company
has always had  significant  strength  in the areas of product  development  and
technical and  operational  support,  the  recruitment  focus has been on senior
managers  that bring  experience in the area of resource  management,  including
cost control, budgeting and project planning. The result of these activities has
been realized with the  introduction of  comprehensive  product plans,  software
development programs, detailed resource management, and more rigid internal cost
controls and procedures.

Trade Creditors

The Company's objective is to be current with all of its trade creditors.  As an
interim step,  the Company has  renegotiated  payment terms with several  larger
trade creditors  including its key suppliers of communication  services and with
federal tax authorities. The Company is continuing to actively pursue additional
concessions with its creditors.

Expanded Marketing Efforts to Existing Customers

The  Company's  products  and  services  are  used  by more  than  70  customers
worldwide.  By leveraging its solid market  reputation,  the Company has focused
its efforts on  expanding  current  customer  revenues by  providing  additional
products  and  services  including  Web-based  product  offerings,  by licensing
additional  users, and by upgrading  customers to higher level products as their
needs arise.  The  introduction of the Company's  account  management  group has
given the Company the ability to more readily  identify these potential  revenue
opportunities,  and to be  proactive in  supplementing  the efforts of the sales
group. The addition of weather and NOTAMs, and the related  integration of these
systems into the Company's  products,  has provided another key component in the
Company's  plans to  become  the  premier  aviation  flight  operations  systems
supplier in the mid-range market.  Finally, the addition of a base of operations
in the United Kingdom and the related  customers has provided  another source of
ongoing  revenue and the ability to fully implement an  international  marketing
strategy.

Integration of Navtech (UK) Limited

The Company has focused its initial integration efforts on updating the software
used by the UK operation and establishing  dedicated  communications  lines with
the Waterloo  operations  center.  In undertaking  the update,  the Company took
steps to ensure a  successful  and problem free  migration of the customer  base
onto the new systems.

Growth

In carrying out its future  growth  strategy,  the Company will also continue to
investigate  possible  business  combinations  aimed at improving  the operating
efficiencies of the Company, and complementary  product lines or market regions,
and ultimately  enhancing  shareholder  value.  These business  combinations may
include  mergers and  acquisitions  of  businesses or  technologies,  as well as
strategic technology and marketing alliances.

Page 22
<PAGE>

International Marketing Strategy

The Company is in the implementation phase of its international  marketing plan.
The newly acquired Navtech-UK  facility provides the needed  infrastructure from
which the European,  African and Middle  Eastern  markets will be supported.  To
facilitate  this process of  introducing  the  Company's  core  products and new
web-based  products to these new market regions,  the Company is employing local
in-country agents through The Republic Group. The Company anticipates that these
efforts will drive sales growth in the future.

Financing Initiatives

The Company  will  require  additional  funding to achieve its stated  plans and
objective.  As  such,  various  financing  sources,  including  debt  or  equity
offerings,  will be investigated  when and if such financing is available to the
Company.  No  assurances  can be  given  that  any  required  financing  will be
available  with  commercially  reasonable  terms or otherwise.  In addition,  no
assurances can be given that the Company's activities,  as set forth above, will
be successful whether due to lack of required financing or otherwise.

YEAR 2000 COMPLIANCE

The  information  presented  below  related  to Year  2000  compliance  contains
forward-looking  statements  that are  subject to risks and  uncertainties.  The
Company's  actual results may differ  significantly  from the results  discussed
below and elsewhere in this Form 10-KSB regarding Year 2000 compliance.

Year 2000

The Year 2000 (Y2K) issue is the result of certain computer hardware,  operating
system  software and software  application  programs having been developed using
two  digits  rather  than four to define a year.  For  example,  some  operating
systems may recognize a date using "00" as the year 1900 rather than 2000.  This
type of outcome could result in the failure of major systems or miscalculations,
which could have a material impact on companies through business interruption or
shutdown,  financial  loss,  damage to reputation,  and legal liability to third
parties.

Preparations for Date Change

In 1998, the Company  implemented a Year 2000 Project  Management  Plan in which
the Company  adopted a phased-in  approach in preparing its internal  operations
for the year 2000 date change. These phases are identified as follows: Awareness
and Strategy Phase - the process of defining project  objectives and methodology
while setting key milestones; Inventory Assessment and Business Impact Phase the
process  of  taking  inventory  of all core  business  processes  and  assessing
business and customer  risks  associated  with  non-compliance;  Renovation  and
Conversion Phase - the process of systematically  diagnosing and replacing known
systems identified to have year 2000 date issues; Validation Phase - the process
of testing  replaced  systems and ensuring  compliance,  and the  Implementation
Phase - the process of executing  and  monitoring  action plans and  contingency
planning.

The Company's operations were segregated into six core systems areas as follows:
Commercial  Software  Systems,  Financial  Systems,  Facilities and  Operations,
Information Systems, Data Exchange and Communications  Interchange.  Within each
business  process,  categorizations  of high,  medium  and low  priorities  were
assigned to each  inventoried  item covering all facets of operations  including
hardware and software systems through to power generators and security systems.

The Company substantially  completed Year 2000 readiness  preparations as of the
end of September 1999. The remaining testing of Data Exchange and Communications
Interchange  systems  was  completed  by October  31,  1999.  Extensive  testing
continued throughout 1999.

The Company  also  instituted  a  moratorium  on all  software  development  and
enhancement work commencing  December 22, 1999 and ending January 10, 2000. This
was done to allow all  developers  to focus on any problems that may have arisen
within the Company's systems or the Company's client-based installations.

Page 23
<PAGE>

Third Party Relationships

Specific  areas  identified as having high priority to the continued  day-to-day
operation of the Company include  electrical power and other  utilities.  It was
determined that should such vendors suffer a business interruption from the Year
2000 date  change,  that  could  also  cause the  Company  to suffer a  business
interruption. The Company asked these vendors to certify the year 2000 readiness
of the  products  and/or  services  they  supply,  as well as their own internal
compliance  programs.  The majority of the vendors furnished such certification.
Those remaining vendors with a product or service determined not to be compliant
or too cost excessive for replacement  were isolated and  alternative  solutions
implemented.

As part of the Year 2000 Project  Management  Plan,  the Company also  addressed
third-party  telecommunications  vendors. The Company's business is dependent on
the ability to transmit data via telecommunication service providers,  including
AT&T, SITA, ARINC and MCI Worldcom.  Some or all of these service  providers may
rely  on  other  communication  service  providers  who  may  have  insufficient
resources  to address  Year 2000  compliance.  A failure  within any part of the
telecommunications  network  could  disrupt  the  Company's  ability  to provide
services to its customers and depending on the severity of the interruption,  it
could have a material  adverse  effect on the Company's  business and results of
operations.  The Company asked the four above-named  vendors to certify the Year
2000 readiness of the products and/or services they supply, as well as their own
internal compliance programs, and received certification from all of them.

Costs of Year 2000 Project

The Company has incurred  hardware,  software and labor costs,  as well as other
related expense, in its Year 2000 Project. The Company's total estimated cost of
the project is  approximately  $300,000,  of which  approximately  $250,000  was
incurred as of October 31, 1999. Costs of the Year 2000 Project will be expensed
as  incurred  and will be paid from  operating  cash  flows.  The Company is not
separately  identifying Y2K costs incurred that are the result of utilization of
existing internal resources. Also, this estimate does not include the costs that
could be incurred by the Company if one or more of its  significant  third party
service providers fails to achieve Y2K compliance.

Page 24
<PAGE>

Risks of Year 2000 Non-Compliance

The Company has designed and tested the most current  versions of its Commercial
Software and confirmed them to be Year 2000 compliant.  However, there can be no
assurances that the Company's  current  customer  systems,  internal systems and
third party systems do not contain yet  undetected  Year 2000 defects.  The most
reasonably  likely worst case  scenario is that such a defect would  include the
partial  failure  of a  system  that is of  mission-critical  importance  to the
Company.  Such a scenario could expose the Company to litigation that could have
a material adverse impact on the Company.

Contingency Planning

From the  onset of the  original  Project  Management  Plan,  and to the  extent
practical,  contingency  plans have been developed to address failures caused by
the Year 2000 date change.  Contingency  planning  addressed a variety of issues
including access to alternative third party vendors for any services,  software,
and hardware systems.  The Company  addressed  potential and expected effects of
the Year 2000 date change,  such as increased  customer support in December 1999
and early January 2000, with significant  resources  provided for the cross-over
period. The plans also include  calculating flight plans and processes manually.
The  contingency  planning will continue to be refined until the  transition has
been completed.

The aviation  industry may be adversely  affected by risks  associated with Year
2000.  The  Company's  business and results of  operations  could be  materially
adversely  affected if internal  or  third-party  data,  software  and  hardware
products  are not Year 2000  compliant in time.  Notwithstanding  that Year 2000
crossover  has occurred,  there can be no  assurances  that the Company will not
experience serious  unanticipated  negative consequences by undetected Year 2000
defects in its internal systems,  including third party provided data,  software
or hardware products.

Although the Company is not aware of any claims related to Year 2000 compliance,
the Company may be subjected to litigation.  Such  litigation,  depending on the
outcome, could have a material adverse effect on the Company.

Year 2000 Rollover Experience

Summary

The culmination of 18 months of planning and  preparation  took place during the
rollover  period  between  December  31,  1999  and  January  1,  2000  with  no
interruptions to business operations.

The final  elements of Phase 5  Implementation,  as  documented in the Year 2000
Project Management Plan and Methodology  Document,  were in preparing sufficient
resources and emergency contingency plans surrounding mission critical points of
failure.  In the event  that an issue  arose  which was not  caught  during  the
analysis and testing  phases,  the Company was ready to act upon its contingency
plans.  In  addition,  Phase  5 also  included  the  enforcement  of a  software
moratorium on all  commercial  software  systems  between  December 22, 1999 and
January 10, 2000.

Due to the fact that the Company has customers  throughout  the world  utilizing
its Weather,  NOTAMS and Flight Planning products, the "Year 2000 Watch" started
early  in  the  Eastern   Hemisphere  and  continued  until  all  countries  had
experienced the date rollover. With the airline industry utilizing the Universal
Time Clock  (U.T.C.),  the height of the rollover  period occurred at 7:00pm EST
(00  U.T.C.)  December  31,  1999 and  during  this time  elements  of each Core
Business  Process  identified as being mission  critical were placed under close
observation.

Each and every system  identified as mission critical  remained  operational and
continues  to do so at the  time of this  filing.  The  success  of  maintaining
business  operations has been due in large part to the  thoroughness of the Year
2000 Committee in ensuring that each and every element of day-to-day  operations
came under scrutiny.

With the minimal impact of the Year 2000  rollover,  the Company made a software
release to its entire  customer base  effective  January 12, 2000.  This release
incorporated bugs and enhancements  completed during the time the moratorium was
in place.

Page 25
<PAGE>

Continuance of Service

As of this filing the  Company  continues  to operate  under  normal  day-to-day
operations and although scaling back on the resources  assigned to the Year 2000
watch, will continue to observe and monitor all systems in place.


Page 26
<PAGE>



ITEM 7.         FINANCIAL STATEMENTS
The financial statements,  under Item 13 hereof, begin on Page F-1 following the
main body of this document.

Page 27
<PAGE>


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

Not applicable.


Page 28
<PAGE>


                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT

         The following table sets forth the positions and offices presently held
with the Company and  Navtech-Canada  by each  present  Director  and  executive
officer, and his or her age as of January 14, 2000:

         Executive Officers and Directors
<TABLE>
<S>                                     <C>         <C>

=========================================== ---------- =============================================

                                               Age      Positions and Offices Presently Held With
                   Name                                       the Company and Navtech-Canada
=========================================== ---------- =============================================

Duncan Macdonald                               40      Chairman of the Board and Chief Executive
                                                       Officer
=========================================== ---------- =============================================

Derek Dawson                                   30      President and Chief Operating Officer
=========================================== ---------- =============================================

David Strucke                                  31      Chief Financial Officer
=========================================== ---------- =============================================

Dorothy A. English                             57      Executive Vice President and Director of
                                                       the Company and Managing Director of
                                                       Navtech-Canada
=========================================== ---------- =============================================

Denis L. Metherell                             67      Secretary and Director
=========================================== ---------- =============================================

Kenneth M. Snyder                              51      Director
=========================================== ========== =============================================

Russell K. Thal                                65      Director
=========================================== ========== =============================================
</TABLE>

                  Duncan Macdonald has served as Chief Executive  Officer of the
Company  since March 1996,  Chairman of the Board of the Company  since  January
2000,  and a Director of the Company  since  December  1999.  He served as Chief
Financial  Officer of the Company from July 1995 to January 1999. From July 1994
to July 1995,  Mr.  Macdonald  provided  management  consulting  services to the
Company and  Navtech-Canada in a non-officer  capacity.  Since January 1992, Mr.
Macdonald has also served as managing  partner of Kintyre & Company  Limited,  a
management consulting firm based in Ottawa, Ontario. In addition, since December
1998,  Mr.  Macdonald  has  served  as  President  of  St.  Andrews   Technology
Associates,   Inc.,  the  general   partner  of  St.  Andrews   Capital  Limited
Partnership, a California-based investment partnership (see Item 12 hereof).

                  Derek  Dawson  has  served as Chief  Operating  Officer of the
Company since January 1999 and President of the Company since January 2000.  Mr.
Dawson has been a business instructor,  on a part-time basis, at Wilfrid Laurier
University  since 1997. From September 1997 to January 1999, Mr. Dawson was Vice
President - Operations of the Company.  From 1995 to 1997,  Mr. Dawson served as
Manager for Corporate Development for a large industrial  contracting firm. From
1991 to 1995,  Mr.  Dawson  was an air  navigator  with the  Canadian  Air Force
involved in strategic and tactical airlifts as well as training duties.

                  David  Strucke  has served as Chief  Financial  Officer  since
January  2000.  Mr.  Strucke  served as Vice  President  Finance & Accounting of
Navtech-Canada  from October 1999 to January 2000 and as its Director of Finance
and Accounting and Business  Analyst from January 1999 to October 1999. Prior to
joining  Navtech-Canada,  Mr. Strucke served as a Financial  Analyst focusing on
mergers and acquisitions for an automotive  capital equipment  manufacturer from
1997 to 1998. From 1996 to 1997, Mr. Strucke performed  financial and accounting
consulting  work for  manufacturing  companies.  In 1995 he served as a Business
Analyst for a publicly traded sheet metal manufacturer.

Page 29
<PAGE>

                  Dorothy A. English has served as Executive  Vice  President of
the Company since July 1995 and a Director of the Company since  February  1994.
Mrs. English also served as the Company's Chief Operating  Officer from December
1993 to July 1994 and Chief  Executive  Officer from July 1994 to July 1995. She
co-founded  Navtech-Canada,  and has served as its Managing Director since March
1996, its Treasurer since February 1992 and a Director since 1987. Mrs.  English
also served as Vice  President  and  Secretary  of  Navtech-Canada  from 1987 to
February  1992,  President  from  February  1992 to October 1993 as well as from
October 1995 to March 1996,  and Chief  Operating  Officer from February 1992 to
October 1993.

                  Denis L.  Metherell  has served as  Secretary  of the  Company
since October 1994 and a Director of the Company since July 1994. Mr.  Metherell
also served as  Treasurer of the Company  from  November  1994 to March 1996 and
Chief  Financial  Officer  from  November  1994 to July 1995.  He served as Vice
President of Navtech-Canada  from June 1993 to July 1995 and also serves as Vice
President and a Director of AVCON  Associates  Inc.,  which leases  computers to
Navtech-Canada (see Item 12 hereof).  From 1976 to 1992, Mr. Metherell served as
a technical consultant to Northwest Airlines.

                  Kenneth M.  Snyder has  served as a  Director  of the  Company
since  February  1994.  Since  October  1995, he has also served as a management
consultant  to entities  in the  aviation  industry  and,  since such date,  has
provided  certain  consulting,  advisory and corporate  finance  services to the
Company (see Item 12 hereof).  Mr. Snyder served as Vice President and Treasurer
of the Company from October 1993 to November  1994 and Chief  Operating  Officer
from November 1994 to July 1995. From October 1993 to October 1995, he served as
President and Chief Operating Officer of Navtech-Canada.  Prior thereto and from
1984, Mr. Snyder served as Vice President of American  AirLease  Corporation,  a
company engaged in the leasing and financing of aircraft.

                  Russell K. Thal,  a founder  of the  Company,  has served as a
Director of the Company since its formation in 1981and served as Chairman of the
Board of the Company from October 1994 to January 2000.  Mr. Thal also served as
the Company's  President from 1981 to July 1995,  Chief  Executive  Officer from
July 1995 to March 1996,  Executive  Vice  President  from March 1996 to October
1999 and Treasurer  from 1981 to December  1993.  Prior to founding the Company,
Mr. Thal served as Director - Stations  for New York Air from  December  1980 to
June 1981.  From 1978 to  December  1980,  he was  Director  of  Operations  for
Seaboard World Airlines, and Senior Director-Military and Charter Operations for
Flying Tigers,  where he was responsible  for day-to-day  control of operations,
charter and military operations, and fuel purchasing (see Item 10(e) hereof).

                  Each Director  will hold office until the next Annual  Meeting
of  Stockholders  or until his or her successor is elected and  qualified.  Each
executive  officer will hold office until the next regular  meeting of the Board
of Directors  following the next Annual Meeting of  Stockholders or until his or
her successor is elected or appointed and qualified.

                  To the Company's knowledge, based solely on a review of copies
of Forms 3, 4 and 5 furnished to the Company and written representations that no
other reports were required,  during the fiscal year ended October 31, 1999, all
Section  16(a)  filing  requirements   applicable  to  the  Company's  officers,
Directors and 10% stockholders  were complied with,  except that Messrs.  Dawson
and Strucke,  and Rainer Vietze,  a former  officer of the Company,  filed their
respective Form 3 late.

Page 30
<PAGE>


ITEM 10.      EXECUTIVE COMPENSATION

     (a)  Summary Compensation Table

         The  following  table sets forth  certain  information  concerning  the
compensation of all executive officers of the Company as of October 31, 1999 who
had a total  salary  and bonus for such  year in excess of  $100,000  as well as
Duncan  Macdonald,  the Chief Executive Officer of the Company during the fiscal
year ended October 31, 1999:
<TABLE>
<S>          <C>   <C>        <C>       <C>            <C>            <C>       <C>        <C>
=============== ----- ==================================== ================================== =============

                              Annual Compensation               Long-Term Compensation
=============== ----- ----------- --------- -------------- ------------------------ --------- =============

                                                                   Awards           Payouts
=============== ----- ----------- --------- -------------- ------------ ----------- --------- =============

                                                                          Common
   Name and                                                Restricted     Stock
  Principal                                 Other Annual      Stock     Underlying    LTIP     All Other
   Position     Year    Salary     Bonus    Compensation     Award(s)    Options    Payouts   Compensation
--------------- ----- ----------- --------- -------------- ------------ ----------- --------- =============
    Duncan
  Macdonald,    1999    $5,000    $20,000   $ 28,927(1)        -0-         -0-        -0-         -0-
    Chief       1998     -0-        -0-     $106,486(1)        -0-         -0-        -0-         -0-
  Executive     1997     -0-        -0-     $118,826(1)        -0-         -0-        -0-         -0-
   Officer
--------------- ----- ----------- --------- -------------- ------------ ----------- --------- =============

  Russell K.    1999  $148,780      -0-     $ 14,800(2)(3)     -0-         -0-        -0-         -0-
    Thal,       1998  $143,683      -0-     $ 14,800(2)(3)     -0-         -0-        -0-         -0-
   Chairman     1997  $139,526      -0-     $ 14,800(2)(3)     -0-         -0-        -0-         -0-

=============== ===== =========== ========= ============== ============ =========== ========= =============
</TABLE>

(1)      Represents  amounts  paid as an  independent  advisor  to the  Company.
         Excludes  amounts  paid to  Kintyre  and  Company  Limited,  an  entity
         controlled  by Mr.  Macdonald,  for  consulting  services  rendered  to
         Navtech-Canada. See Item 12 hereof.
(2)  Includes  $12,000  paid by the  Company  as an  automobile  allowance.  (3)
Includes $2,800 paid by the Company as an allowance for the purchase of
         disability insurance.


     (b) Option Grants Table

         The following table sets forth certain  information  with regard to the
grants of stock  options  during the fiscal  year ended  October 31, 1999 to the
persons named in Item 10(a) hereof:
<TABLE>
<S>               <C>                   <C>                           <C>              <C>
--------------------------------------------------------------------------------------=====================
                      Shares of              Percent of
                     Common Stock            Total Options
                     Underlying               Granted to                  Exercise
                     Options                 Employees in                  Price/          Expiration
         Name        Granted                  Fiscal Year                  Share              Date
--------------------------------------------------------------------------------------=====================
--------------------------------------------------------------------------------------=====================
  Duncan Macdonald            -0-                      -0-                  N/A               N/A
--------------------------------------------------------------------------------------=====================
--------------------------------------------------------------------------------------=====================
  Russell K. Thal             -0-                      -0-                  N/A               N/A
--------------------------------------------------------------------------------------=====================
</TABLE>

     (c)  Fiscal Year-End Option Value Table

     The following table sets forth certain information  concerning the value as
of October 31, 1999 of  unexercised  options  held by the persons  named in Item
10(a) hereof:
<TABLE>
<S>                           <C>                                <C>
================================= ---------------------------------- ======================================
                                        Number of Unexercised                Value of Unexercised
                                             Options at                      In-the-Money Options
                                          October 31, 1999                    at October 31, 1999
================================= ---------------------------------- ======================================

              Name                    Exercisable/Unexercisable            Exercisable/Unexercisable
================================= ---------------------------------- ======================================
        Duncan Macdonald                    -0-/ 200,000                            -0-/-0-
================================= ================================== ======================================
        Russell K. Thal                      75,938/-0-                             -0-/-0-
================================= ================================== ======================================
</TABLE>
Page 31
<PAGE>

No options were  exercised by either of the named persons during the fiscal year
ended October 31, 1999.

     (d)  Compensation of Directors

         The By-Laws of the Company  provide that Directors  shall be reimbursed
for  travel  expenses  incurred  in  attending  any  meeting of the Board or any
committee  thereof and each Director,  except salaried  officers of the Company,
shall  be paid a fee  for  attending  each  meeting  of the  Board  or any  such
committee  as may be fixed by the Board from time to time.  No  Directors'  fees
have been paid to date.  The By-Laws of the Company also provide,  to the extent
permitted by law, for certain indemnification of its Directors.

     (e)  Employment Contracts, Termination of Employment and Change-in-Control
          Arrangements

        See Item 12 hereof for a discussion of a certain Employment Agreement
between the Company and Mr. Macdonald.

         Mr.  Thal  was  employed  by  the  Company  pursuant  to an  employment
agreement, as amended (the "Thal Employment  Agreement"),  which expired on July
31, 1999 (the  "Expiration  Date") and provided for a minimum  annual  salary of
$125,000  effective  December 1, 1993,  with  annual  cost of living  increases.
Effective  August 25,  1999,  with a  commencement  date of August 5, 1999,  the
Company entered into a retirement  agreement (the  "Retirement  Agreement") with
Mr. Thal. The Retirement  Agreement  replaces the Thal Employment  Agreement and
calls for, among other things, the continued  employment of Mr. Thal at the then
existing  salary rate until Mr. Thal's  retirement  date of October 31, 1999. In
addition,  the Company  has agreed to the payment of $600,000 in 96  semimonthly
payments commencing after Mr. Thal's retirement.

         Pursuant  to the  Retirement  Agreement,  the  Company  also  agreed to
reimburse Mr. Thal for expenses  incurred in the amount of $60,594 (payable over
the  period  August  1999 to May  2000)  and  obtain a  declining  balance  life
insurance  policy on Mr. Thal commencing with coverage of $600,000 and declining
at the rate of $150,000  per year.  Any  proceeds  received  will be used by the
Company to prepay to Mr.  Thal's  estate any  remaining  portion of the $600,000
due.  All  amounts due by the Company are  evidenced  by  promissory  notes that
contain  acceleration  provisions in the event of, among other things, a default
in payment.

Page 32
<PAGE>


ITEM 11.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


     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
January  14,  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)(3)                        50.3%
175 Columbia Street West
Waterloo, Ontario,
Canada
----------------------------------------------------------------------------------------------------------
Duncan Macdonald                                504,251(4)                             20.1%
275 Slater Street
Ottawa, Ontario,
Canada
----------------------------------------------------------------------------------------------------------
Kenneth M. Snyder                               350,000(5)                             14.9%
1751 Westwood Drive
Minden, Nevada
----------------------------------------------------------------------------------------------------------
St. Andrews Capital Limited Partnership         304,251(4)                             13.2%
2400 Garden Road
Monterey, California
----------------------------------------------------------------------------------------------------------
Global Weather Dynamics, Inc                     250,000                               12.5%
2400 Garden Road
Monterey, California
----------------------------------------------------------------------------------------------------------
Ontario Development Corporation                  125,000                                6.2%
56 Wellesley Street West
Toronto, Ontario, Canada
----------------------------------------------------------------------------------------------------------
Russell K. Thal                                 93,813(6)                               4.5%
125 Mineola Avenue
Roslyn Heights, New York
----------------------------------------------------------------------------------------------------------
Denis L. Metherell                                6,000                                   *
175 Columbia Street West
Waterloo, Ontario,
Canada
----------------------------------------------------------------------------------------------------------
All executive officers and
directors as a group (7 persons)            1,961,831(1)(4)(5)(6)                         66.9%
----------------------------------------------------------------------------------------------------------
</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 person may be deemed a parent of the Company.

Page 33
<PAGE>

(3)  The  Company  has been  advised  that Ms.  English is the  Chairman,  Chief
     Executive  Officer and sole shareholder of NARI.  Furthermore,  the Company
     has been advised that the 802,766 shares owned by NARI 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 Item 12 hereof.

(4)  Represents  200,000  Common Shares that are issuable to Mr.  Macdonald upon
     exercise of options  that are  currently  exercisable  and, as discussed in
     Item 12 hereof,  a maximum of 304,251 Common Shares issuable to St. Andrews
     Capital  Limited  Partnership,  an  entity  controlled  by  Mr.  Macdonald,
     pursuant  to the terms of a  convertible  loan  made by such  entity to the
     Company.

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

(6)  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.

Page 34
<PAGE>


ITEM 12.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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. As a condition of the share transfer  agreement,  NARI
agreed to place the shares in escrow as security for amounts  payable by NARI to
Mr. English, as evidenced by a promissory note. Pursuant to the promissory note,
NARI is obligated make 120 consecutive monthly payments of $6,000 Canadian,  and
should the  payments  go into  default,  Mr.  English has the option to sell the
requisite number of shares held in escrow to remedy the default.

         RE&A/Navtech-Canada Transactions

     In  1993,   Navtech-Canada   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-Canada
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-Canada  a promissory note in the principal  amount of $750,000  Canadian
(the RE&A Note") to evidence certain  obligations to  Navtech-Canada  as of such
date. The RE&A Note is payable on July 15, 200 (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-Canada,  RE&A  agreed to  provide  software  marketing  services  to the
Company.  Navtech-Canada  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-Canada.

         Advances

     During the fiscal year ending October 31, 1999, the Company made additional
advances to NARI aggregating  approximately  $263,000,  which carry no repayment
terms.

2.  Global Weather Dynamics, Inc.

     On July 15, 1998, NARI acquired from Global Weather Dynamics, Inc. ("GWDI")
all  of  the  assets  of  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.

Page 35
<PAGE>


     Following  the WSD  acquisition  by NARI,  NARI and Navtech  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  Navtech  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,  Navtech 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.  During the fiscal year ended  October 31,  1999,  $92,000 was payable
pursuant to the License  Agreement.  Such amount was deducted from amounts owing
to the  Company as  discussed  below.  Concurrently  with the  execution  of the
License Agreement, NARI also assigned to Navtech 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  Navtech  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 may be made
     by offsetting royalties due under the License Agreement.  As of October 31,
     1999, the principal amount of the promissory note was $25,379.

2.   Navtech 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-Canada  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. The note provides that royalties
     payable to NARI under the License  Agreement may be used to offset  amounts
     payable to the extent they have not already been used to repay the $134,700
     note referred to above.

4.   Subsequent to October 31, 1998, the Company advanced an additional $112,000
     to NARI. The additional advance is repayable commencing with the payment in
     full of the promissory  note in Item 3 above.  The note bears interest at a
     rate of 10% per annum and is repayable in 22 monthly installments. The note
     provides that royalties  payable to NARI under the License Agreement may be
     used to offset  amounts  payable to the extent they have not  already  been
     used to repay the $150,000 note referred to above.

         The  payment of each of the above NARI notes is secured by the grant of
a security  interest in the weather  and NOTAMs  software  acquired by NARI from
GWDI.

         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 Item 10(e) 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 and of which Mr. Metherell's
wife is the  controlling  shareholder,  leased  certain  computer  equipment  to
Navtech-Canada.  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 36
<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-Canada  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. 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.  Other  services  are  rendered by Mr.  Macdonald as
provided    for   in  the  following  paragraph.

     Effective January 1, 1999,  Navtech-Canada entered into a two year Services
Agreement  (the  "Kintyre -  Navtech-Canada  Agreement")  with Kintyre & Company
Limited  ("Kintyre"),  a company controlled by Mr. Macdonald.  Under the Kintyre
-Navtech-Canada  Agreement,  Kintyre has agreed to provide  the  services of Mr.
Macdonald, as well as other Kintyre staff as needed, to assist Navtech-Canada in
its  strategic  corporate  structuring  and  corporate  finance  and  accounting
activities.  Kintyre  is  entitled  to  receive a base  monthly  fee of  $13,000
Canadian, plus an annual bonus of $8,700 Canadian.

         During the fiscal year ended  October  31,  1999,  Navtech-Canada  paid
approximately  $78,000 and $64,000 to Kintyre for the services of Mr.  Macdonald
and Mr. Vietze (then Chief Financial Officer of the Company), respectively.

     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 19.562% per annum,  in 22
monthly installments. The repayment of the loan is to be secured by the grant of
a security  interest  in  substantially  all of the assets of  Navtech-UK  and a
pledge of the Navtech-UK shares held by Navtech-Canada.

     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 and the  repayment of the loan is to be secured by the grant of
a security  interest  in  substantially  all of the assets of  Navtech-UK  and a
pledge of the Navtech-UK stock held by  Navtech-Canada.  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.  The Company held an annual meeting
of  shareholders on January 14, 2000 at which meeting a proposal to increase the
authorized share capital of the Company was approved,  thus providing sufficient
share capital to permit such conversion.

Page 37
<PAGE>

         As of January 14, 2000, the outstanding  principal  balance of the loan
was $114,094.  Accordingly,  such  principal  amount is  convertible,  effective
February 1, 2000,  into 304,251 Common Shares of the Company.  Since the loan is
to be repaid in monthly  installments,  as described  above, as installments are
paid, the number of shares issuable upon conversion of the principal amount will
be reduced.

Page 38
<PAGE>


ITEM 13.      EXHIBITS, LIST AND REPORTS ON FORM 8-K

(a) Exhibits

     3(A) Certificate of Amendment of the Certificate of Incorporation providing
          for the elimination of the Series A Convertible  Cumulative  Preferred
          Stock

     3(B) Certificate  of  Amendment  of  the   Certificate   of   Incorporation
          containing  items amended  following the January 14, 2000 Annual
          Meeting of Stockholders

     3(C) Certificate  of  Incorporation   and  amendments   thereto   including
          Certificate  of Ownership  and Merger  prior to filing the  amendments
          above (5)

     3(D) By-Laws

     10(A)Employment  Agreement dated as of December 1, 1993 between the Company
          and Russell K. Thal (4) Amendment #1 thereto dated March 14, 1996 (5),
          and amendment thereto dated January 8, 1997 (7)

     10(B) Incentive Stock Option Plan (3)

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

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

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

     10(F)Lease dated October 8, 1996 between Ferdi Investments  Company Limited
          and Navtech  Systems  Support Inc.  with respect to Waterloo,  Ontario
          premises (7)

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

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

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

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

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

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

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

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

     10(O)Retirement  Agreement  dated as of August 5, 1999,  between Russell K.
          Thal and Compuflight, Inc. (8)

     10(P)Promissory  Note dated as of August 5, 1999  payable  by  Compuflight,
          Inc.,  to the  order of  Russell  K. Thal in the  principal  amount of
          $600,000. (8)

     10(Q)Promissory  Note dated as of August 5, 1999  payable  by  Compuflight,
          Inc.,  to the  order of  Russell  K. Thal in the  principal  amount of
          $60,594. (8)

Page 39
<PAGE>

     10(R)Sale Purchase  Agreement  dated as of October 1, 1999 between  Navtech
          Systems Support,  Inc., and Skyplan Services Limited for the shares of
          Skyplan Services (UK) Limited. (8)

     10(S)Forbearance  and Continued  Service  Agreement  dated as of October 1,
          1999 between Navtech Systems Support and Skyplan Services Limited. (8)

     10(T)Software License  Agreement dated as of August 1, 1998 between Navtech
          Applied Research Inc. and Compuflight, Inc. (8)

     10(U)Promissory  Note dated as of July 15, 1998 payable by Navtech  Applied
          Research  Inc.,  to the order of  Compuflight,  Inc., in the principal
          amount of $134,700. (8)

     10(V)Promissory  Note dated as of July 15, 1998 payable by Navtech  Applied
          Research  Inc.,  to the order of  Compuflight,  Inc., in the principal
          amount of $150,000. (8)

     10(W)Employment  Agreement  dated as of  December  1, 1998  between  Duncan
          Macdonald and Compuflight, Inc. (9)

     10(X)Employment  Agreement  dated as of  December  1, 1998  between  Rainer
          Vietze and Compuflight, Inc. (9)

     10(Y)Contract for Services  Agreement  between Navtech Systems Support Inc.
          and Kintyre and Company Limited dated as of January 1, 1999. (9)

     21   Subsidiaries(4)

27       Financial Data Schedules

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

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

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

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

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

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

Page 40
<PAGE>


 (7) The Company  hereby  incorporates  the  footnoted  Exhibit by  reference in
accordance with Rule 12b-32,  as such Exhibit was originally filed as an Exhibit
to the Company's  Annual Report on Form 10-KSB for the fiscal year ended October
31, 1996.

(8) The Company  hereby  incorporates  the  footnoted  Exhibit by  reference  in
accordance with Rule 12b-32,  as such Exhibit was originally filed as an Exhibit
to the Company's  Annual Report on Form 10-KSB for the fiscal year ended October
31, 1997.

(9) The Company  hereby  incorporates  the  footnoted  Exhibit by  reference  in
accordance with Rule 12b-32,  as such Exhibit was originally filed as an Exhibit
to the  Company's  Amended  Annual  Report on Form  10-KSB/A for the fiscal year
ended October 31, 1998.

b)  Reports on Form 8-K
       The  Company  did not file any  Current  Reports  on Form 8-K  during the
quarter ended October 31, 1999.


Page 41
<PAGE>
                          INDEX TO FINANCIAL STATEMENTS


                                                                          Page


Report of Independent Certified Public Accountants                         F-2

Financial Statements

        Consolidated Balance Sheet as of October 31, 1999                  F-3

        Consolidated Statements of Operations for the Years Ended
          October 31, 1999 and 1998                                        F-4

        Consolidated Statement of Shareholders' Deficit for the
          Years Ended October 31, 1999 and 1998                            F-5

        Consolidated Statements of Cash Flows for the Years Ended
          October 31, 1999 and 1998                                        F-6

        Notes to Consolidated Financial Statements                    F-7 - F-28



                                      F-1
<PAGE>

                         REPORT OF INDEPENDENT CERTIFIED
                               PUBLIC ACCOUNTANTS


Board of Directors and Shareholders
   Navtech, Inc.

We have audited the accompanying  consolidated  balance sheet of Navtech,  Inc.,
formerly  Compuflight,  Inc., and Subsidiaries (the "Company") as of October 31,
1999  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
Navtech,  Inc. and  Subsidiaries  as of October 31, 1999, 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,  1999,  the Company has a  deficiency  in working
capital and shareholders equity of $1,333,728 and $1,149,122,  respectively, and
has incurred a net loss of $380,244 for the year ended  October 31, 1999.  These
factors,  among  others,  as described in Note B to the  consolidated  financial
statements, raise 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 December 10, 1999, except for Note A as to which the date is
January 14, 2000

                                      F-2
<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

                           CONSOLIDATED BALANCE SHEET

                                October 31, 1999

                                     ASSETS

<TABLE>
<S>                                                                                                         <C>
 CURRENT ASSETS
     Cash and cash equivalents                                                                                 $      4,504
     Accounts receivable, net of allowance for doubtful accounts
       of $189,329                                                                                                  853,876
     Prepaid expenses and other                                                                                      21,156
         Total current assets                                                                                       879,536
 INVESTMENT TAX CREDITS RECEIVABLE, NET OF ALLOWANCE                                                                314,603
 FIXED ASSETS, NET                                                                                                  340,488
 DUE FROM RELATED PARTY                                                                                             318,760

 OTHER ASSETS                                                                                                       123,468
                                                                                                                $ 1,976,855

                                 LIABILITIES AND SHAREHOLDERS' EQUITY

 CURRENT LIABILITIES
     Accounts payable, accrued and other liabilities                                                            $ 1,286,923
     Deferred revenue                                                                                               326,193
     Note payable - factoring                                                                                       191,016
     Due to related parties - current portion                                                                       265,696
     Current portion of long-term debt                                                                              128,672
     Current portion of deferred lease inducements                                                                   14,764
                                                                                                                -----------
         Total current liabilities                                                                                2,213,264
 DUE TO RELATED PARTIES                                                                                             533,843
 LONG-TERM DEBT                                                                                                      47,043
 DEFERRED LEASE INDUCEMENTS                                                                                          88,584
 MINORITY INTERESTS                                                                                                 243,243
 COMMITMENTS AND CONTINGENCIES
 SHAREHOLDERS' DEFICIENCY
     Common stock, par value $.001 per share; authorized
       10,000,000 shares; issued and outstanding, 2,001,980 shares                                                    2,002
     Additional paid-in capital                                                                                   1,680,445
     Accumulated other comprehensive income                                                                          51,175
     Accumulated deficit                                                                                         (2,882,744)
                                                                                                                 ----------
                                                                                                                 (1,149,122)
                                                                                                                $ 1,976,855
</TABLE>
The accompanying notes are an integral part of this statement.

                                      F-3
<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                             Year ended October 31,


<TABLE>
<S>                                                                             <C>                       <C>
                                                                                        1999                      1998
                                                                                    -------------              ------------

Revenue
    Service fees                                                                     $  4,648,483              $  3,339,818
    Hardware, software and license sales                                                  605,093                   509,928
                                                                                     ------------              ------------

                                                                                        5,253,576                 3,849,746
                                                                                      -----------               -----------

Costs and expenses
    Operating                                                                           3,860,240                 2,758,518
    Research and development, net                                                          30,906                    24,413
    Selling, general and administrative                                                 1,070,655                   926,761
    Depreciation and amortization                                                          87,120                   133,833
                                                                                     ------------              ------------

                                                                                        5,048,921                 3,843,525
                                                                                      -----------               -----------

Operating income                                                                          204,655                     6,221

Other income (expense)
    Interest income                                                                       104,347                    52,501
    Interest expense - related parties                                                    (52,312)                  (46,126)
    Interest expense - other                                                             (297,980)                 (155,121)
    Realized foreign exchange loss                                                        (26,904)                   (1,795)
    Provision for bad debt - related party                                               (316,453)                 (394,453)
                                                                                      -----------               -----------

Net loss before income taxes                                                             (384,647)                 (538,773)

Income tax benefit                                                                          4,403

NET LOSS                                                                            $    (380,244)             $   (538,773)
                                                                                     ============               ===========


Net loss per share - basic and diluted                                                     $(0.19)                   $(0.30)
                                                                                            =====                     =====

Weighted average number of common shares outstanding                                    2,001,980                 1,801,980
                                                                                        =========                 =========
</TABLE>


The accompanying notes are an integral part of these statements.

                                      F-4

<PAGE>

<TABLE>
           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

               CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIENCY

                      Years ended October 31, 1999 and 1998


<S>                         <C>           <C>       <C>          <C>          <C>            <C>          <C>       <C>
                                                                       Notes       Accumulated
                                                        Additional   Receivable      Other
                                    Common stock         Paid -in     Former     Comprehensive  Accumulated            Comprehensive
                                 Shares      Amount      Capital     Chairmen        Income       deficit      Total       loss
                                 ------      ------      -------     --------        ------       -------      -----       ----

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

Issuance of shares to NARI       300,000        300       134,700                                              135,000
Reclassification - NARI note                                          278,325                                  278,325
receivable
Foreign translation adjustment                                                       14,380                     14,380     $14,380
Net loss                                                                                           (538,773)  (538,773)   (538,773)
                               ---------     ------    ----------    ---------     ---------     ----------   --------    --------


Comprehensive loss                                                                                                       $(524,393)
                                                                                                                           =======

Balance at October 31, 1998    2,001,980      2,002     1,680,445         -          57,450     (2,502,500)   (762,603)


Foreign translation adjustment                                                       (6,275)                    (6,275)   $ (6,275)
Net loss                                                                                          (380,244)   (380,244)   (380,244)
                               ---------     ------     ---------    ---------    ----------     -----------  ---------   ---------


Comprehensive loss                                                                                                       $(386,519)
                                                                                                                          =========

Balance at October 31, 1999    2,001,980     $2,002    $1,680,445   $     -        $ 51,175    $(2,882,744) $(1,149,122)
                               =========      =====     =========    =========      =======     ==========    ==========


</TABLE>
The accompanying notes are an integral part of this statement.

                                      F-5
<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                             Year ended October 31,
<TABLE>
<S>                                                                                <C>                       <C>

                                                                                          1999                      1998
                                                                                       ----------                 ----------
Cash flows from operating activities
   Net loss                                                                           $  (380,244)                $(538,773)
   Adjustments to reconcile net loss to net cash provided by operating
   activities
       Depreciation and amortization                                                       87,120                   133,833
       Provision for uncollectible accounts                                                59,423                   147,064
       Write off of note receivable - former chairmen                                                               394,453
       Other                                                                              (14,521)                  (14,841)
       (Increase) decrease in operating assets
         Accounts receivable                                                             (246,489)                 (398,404)
         Scientific research and experimental development     credits
                                                                                          143,065                     7,262
         Prepaid expenses and other                                                         9,174                    (4,720)
       Increase (decrease) in operating liabilities
         Accounts payable and accrued liabilities                                         183,407                   440,428
         Deferred revenue                                                                 320,809
         Note payable - factoring                                                         191,016
                                                                                       ----------

Net cash provided by operating activities                                                 352,760                   166,302
                                                                                       ----------                ----------

Cash flows from investing activities
   Purchase of Navtech-UK, net                                                           (103,166)
   Purchase of fixed assets                                                               (76,910)                  (62,477)
   Advances to parent company, net                                                        (51,600)                 (279,151)
                                                                                      -----------                 ---------

         Net cash used in investing activities                                           (231,676)                 (341,628)
                                                                                       ----------                 ---------

Cash flows from financing activities
   Repayment of cash overdraft                                                           (136,858)
   Restricted cash                                                                         50,000
   Proceeds from issuance of common shares                                                                              300
   Repayment on bank loan, net                                                            (41,055)                  (41,961)
   Proceeds from loans                                                                    252,830                   180,087
   Proceeds from note                                                                                                26,905
   Repayment of loans                                                                    (168,819)
   Payment of notes                                                                       (76,915)                  (18,311)
                                                                                      -----------                 ---------

Net cash (used in) provided by financing activities                                      (120,817)                  147,020
                                                                                       ----------                  --------

Effect of foreign translations on cash                                                      4,237                    28,306
                                                                                     ------------                  --------

         Net increase in cash and cash equivalents                                          4,504

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year                                             $      4,504           $
                                                                                      ===========             =============
</TABLE>

The accompanying notes are an integral part of these statements.

                                      F-6

<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            October 31, 1999 and 1998



NOTE A - DESCRIPTION OF BUSINESS AND ORGANIZATION

     Navtech,   Inc.   ("Navtech"),   formerly   Compuflight,   Inc.,   and  its
     Subsidiaries,  Navtech  Systems  Support Inc.  ("Navtech-Canada"),  Navtech
     Systems (UK) Limited  ("Navtech-UK")  and Efficient  Aviation  Systems Inc.
     ("EAS")  (herein  referred to collectively as the "Company") are engaged in
     the business of (1) providing  computerized flight pla nning,  weather, and
     services to all  segments of the  aviation  industry,  but  principally  to
     commercial   airlines  and  corporate  aircraft  users  and  (2)  licensing
     customized  versions  of their  proprietary  software  to end users  mainly
     throughout North America, Europe and Africa.

     On January 14, 2000 the Company's  shareholders  approved the change of the
     Company's  name to Navtech,  Inc. and to increase the number of  authorized
     common shares to 10,000,000.


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, 1999,
     the Company has a deficiency in working capital and shareholders' equity of
     $1,333,728  and  $1,149,122,  respectively,  and has incurred a net loss of
     $380,244 for the year ended October 31, 1999. This raises substantial doubt
     about  the  Company's   ability  to  continue  as  a  going  concern.   The
     consolidated  financial  statements do not include any adjustments that may
     result should the Company be unable to continue in existence.

     The Company and its senior  management group have focused on three specific
     areas to  address  both the  strategic  direction  required  and the  daily
     operational  issues to position the Company for  profitability.  First, the
     Company has  continued  to increase its  marketing  endeavors to obtain new
     customers  and will be  introducing a number of  complementary  products to
     address  marketplace  demands.  Secondly,  the Company believes it has been
     building  an  effective  management  structure.  Thirdly,  the  Company has
     continued its pursuit of financing.

     The  Company's  operation  is  dependent  upon its  ability  to obtain  new
     customers,  to  maintain  profitable  levels  of  service  and to  maintain
     existing  financial  arrangements or obtain new financing.  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.


                                      F-7
<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



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 Navtech
         and its subsidiaries,  Navtech-Canada, Navtech-UK 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   and
         comprehensive income.

     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. An evaluation to determine the amount of goodwill impairment, if
         any,  would be measured on the basis of estimated  future  undiscounted
         cash flows associated with the asset. The estimated future undiscounted
         cash flows would be compared to the asset's carrying value to determine
         whether a write-down is required.

     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.

                                      F-8

<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE C (continued)

     5.  Minority Interests

         Effective  November 24, 1995,  the Company issued 125,000 shares of its
         common stock in exchange for 500,000  shares of  Navtech-Canada,  which
         represented  the  common  shares  of  Navtech-Canada  held  by the  one
         remaining  common  shareholder of  Navtech-Canada,  Innovation  Ontario
         Corporation,  a provincial  government agency,  and,  accordingly,  the
         Company   now  owns   100%  of  the   outstanding   common   shares  of
         Navtech-Canada.  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, 1999 consist of 3,600 shares of Class
         B, nonvoting shares of Navtech-Canada. Such shares, issued for $358,200
         Canadian   ($243,243  U.S.  at  October  31,  1999),  are  entitled  to
         noncumulative  dividends  of $8 per  share  and are  redeemable  at the
         option of  Navtech-Canada  for $540,000  Canadian  ($366,698  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.

     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.

                                      F-9
<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE C (continued)

     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 K.

     9.  Net Loss Per Share

         In fiscal 1998,  the Company  adopted the  provisions  of SFAS No. 128,
         "Earnings Per Share." SFAS No. 128 replaces the  calculation of primary
         and fully  diluted  earnings per share with basic and diluted  earnings
         per share.  Unlike primary earnings per share, basic earnings per share
         excludes any  dilutive  effects of options,  warrants  and  convertible
         securities. Diluted earning per share is very similar to the previously
         reported  fully  diluted  earnings  per share.  Potential  common stock
         equivalents  from  outstanding  stock options are excluded in computing
         net loss per share for fiscal 1999 and 1998 as their  effects  would be
         antidilutive.

    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 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.

                                      F-10

<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE C (continued)

    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 $320,000 and $219,000 during
         the years ended  October 31,  1999 and 1998,  respectively.  During the
         year ended October 31, 1999, the Company issued a non-interest  bearing
         promissory note to its Chairman for amounts previously accrued pursuant
         to a retirement  agreement.  During fiscal 1998, non-cash investing and
         financing activities consisted of the issuance of 300,000 shares of the
         Company's common stock in exchange for a promissory note of $134,700.

    12.  Comprehensive Income

         In  fiscal  1998,  the  Company   adopted  SFAS  No.  130,   "Reporting
         Comprehensive  Income."  SFAS No.  130  establishes  new  rules for the
         reporting  and  display of  comprehensive  income  and its  components;
         however,  the  adoption of SFAS No. 130 had no impact on the  Company's
         net loss or  stockholders'  deficit.  SFAS No. 130 requires  cumulative
         translation   adjustments,   which  prior  to  adoption  were  reported
         separately  in  stockholders'  deficit,  to be included in  accumulated
         other comprehensive income (loss). Prior year financial statements have
         been  reclassified to conform to the  requirements of SFAS No. 130. The
         cumulative  foreign  currency  translation  adjustment  was $51,175 and
         $57,450 as of October 31, 1999 and 1998, respectively.

    13.  Accounting Pronouncements Not Yet Adopted

         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 AcSEC
         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.  On December 22, 1998, the AcSEC
         issued SOP 98-4,  which provides  further  guidance on what constitutes
         vendor  specific  evidence  of the  fair  value  of  multiple  elements
         included in a software  arrangement.  The Company  believes  that those
         provisions  of SOP 97-2 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.


                                      F-11
<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE D - INVESTMENT TAX CREDITS RECEIVABLE

     Navtech-Canada   has  filed  claims  for  Investment  Tax  Credits  on  its
     scientific  research and  experimental  development  activities  for fiscal
     years ended October 31, 1992 through October 31, 1999.  Scientific research
     and experimental  development Investment Tax Credits ("ITCs") are available
     to certain  entities  located in Canada for the  prosecution  of  qualified
     research and  development.  Further,  these credits,  since 1995, have been
     available at both the federal and provincial level.

     Claims: 1992 - 1995

         All of  Navtech-Canada's  claims for the fiscal years ended October 31,
         1992  through  October 31, 1995 were  subjected to both  financial  and
         technical  audits by Revenue  Canada,  the Canadian  taxing  authority.
         Based  on  its  technical  audit,  Revenue  Canada  disallowed  certain
         expenses  related to projects deemed  non-qualifying,  and accordingly,
         reduced the final assessed claim.  Navtech-Canada  has filed Notices of
         Objection to these assessments. The amounts in dispute are as follows:

               Taxation year ended:
               March 31, 1992                                        $  26,807
               March 31, 1993                                          101,179
               March 31, 1994                                           41,087
               October 31, 1995                                         79,139
                                                                      --------

                                                                       248,212
               Less Allowance                                         (248,212)

                                                                     $       -
                                                                      ========


         At this time, the Company cannot reasonably determine the likelihood of
         success in  appealing  the  reductions  resulting  from the  scientific
         audits and has therefore  continued to provide an allowance against its
         ITC  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.

         Navtech-Canada  has received  approximately  $211,000 on its  1992-1995
         claims (at the federal  level),  which has been applied to  outstanding
         payroll taxes and other government liabilities. Included in this amount
         was interest of approximately  $44,000.  Additional  amounts  remaining
         receivable at year end are identified below.


                                      F-12
<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE D (continued)

     Claims: 1996 - 1997

         Navtech-Canada's  1996  and 1997  submissions  were  subjected  only to
         financial audits. As a result, the 1996 claim has been assessed both at
         the federal and  provincial  level and the 1997 claim has been assessed
         at the  federal  level.  The  financial  audit for 1996  resulted  in a
         reduction  in the  total  claim  due to the  disallowance  of one staff
         member.  Navtech-Canada  does not intend to object to this  assessment.
         The  financial  audit for 1997 resulted in no  disqualifications  and a
         marginal  increase  in the total  claim,  pending  the  receipt  of the
         assessment from the Ontario Ministry of Finance.

         Navtech-Canada has received  approximately $104,000 on its 1996 claims,
         which  has  been  applied  to  outstanding   payroll  taxes  and  other
         government liabilities. Additional amounts remaining receivable at year
         end are identified below.

     Claims: 1998 - 1999

         During  fiscal  1999 and 1998,  Navtech-Canada  has applied for ITCs of
         approximately $51,000 and $53,000,  respectively.  These ITCs have been
         recorded as a reduction of research and development expenses.

     Investment Tax Credits Receivable

         Investment Tax Credits Receivable consists of the following amounts:

               Disputed Claims 1992 - 1995                           $ 248,212
               Assessed Claims 1992 - 1995                              16,825
               Assessed Claims 1996                                    137,334
               Assessed Claims 1997                                     47,187
               Unassessed Claims 1997                                    9,010
               Unassessed Claims 1998                                   52,637
               Unassessed Claims 1999                                   51,610
                                                                      --------

                                                                       562,815
               Less Allowance                                         (248,212)

                                                                     $ 314,603

                                      F-13
<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE E - FIXED ASSETS

     Fixed assets consist of the following:

                                          Useful
                                           life                    1999

      Computer software                  5-10 years           $  439,071
      Computer equipment                 5-10 years              465,580
      Furniture and fixtures             5-20 years               63,224
      Leasehold improvements             5-10 years              150,205
      Office equipment                   5 years                 104,702
                                                                --------

                                                               1,222,782

      Less accumulated depreciation and amortization            (882,294)

                                                              $  340,488



     Amortization expense for capitalized software totaled  approximately $8,700
     and  $52,100  in 1999  and  1998,  respectively.  Accumulated  amortization
     approximated $477,000 at October 31, 1999.


NOTE F - DEFERRED REVENUE

     During  the  quarter  ended  October  31,  1999,   the  Company   commenced
     installation  of a flight  planning  system,  along with the development of
     certain customer-requested  enhancements,  for a significant customer based
     in the  United  States.  The  installation  and  customer  acceptance  were
     completed  within  two weeks of the  completion  of the year end;  however,
     based on generally  accepted  accounting  principles and the interpretation
     afforded such  principles by the  Accounting  Staff of the  Securities  and
     Exchange  Commission,  such revenue  cannot be  reflected in the  financial
     results for 1999 due to the  uncertainty of completion  that existed at the
     year end.  Accordingly,  deferred revenue includes  approximately  $326,000
     representing  amounts  received from the customer prior to the year end, as
     offset by costs associated with the installation and development work up to
     year end. The gross  revenue from this contract of  approximately  $580,000
     will be shown in the first  quarter of 2000.  All  amounts  payable for the
     delivery of the system were received by the end of November 1999.

                                      F-14

<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE G - ACQUISITION OF SUBSIDIARY


     On October 1, 1999,  the Company,  though its  subsidiary,  Navtech-Canada,
     acquired all of the outstanding shares of Skyplan Services (UK) Limited for
     an aggregate cost of $150,000.  The purchase agreement contained a covenant
     not to solicit the former employees or customers for a period of two years.

     The Company  accounted for the  acquisition  as a purchase and as such, the
     fair  values of the  assets  acquired  and  liabilities  assumed  have been
     recorded on the date of the  acquisition  and the results of operations are
     included in the Company's  consolidated  statements of operations since the
     acquisition  date.  The excess of the  consideration  paid and the  related
     costs  of  acquisition  over the  estimated  fair  value of the net  assets
     acquired,  totaling  $108,000,  has been  recorded as goodwill and is being
     amortized on a  straight-line  basis over ten years.  Pro forma  historical
     results of  operations  are not  presented,  as such  results  would not be
     materially different from the historical results of the Company.

     A summary of the assets and liabilities acquired follows:


               Current Assets                              $  256,000
               Other Assets                                    27,000
               Liabilities Assumed                           (241,000)
                                                              -------

               Acquisition Costs                              150,000

               Goodwill                                     $ 108,000
                                                              =======


NOTE H - TRANSACTIONS WITH RELATED PARTIES

     Notes Receivable - Parent Company

         Navtech  Applied  Research  Inc.  ("NARI"),  the parent  company of the
         Company,  is the  continuing  Canadian  corporation  resulting from the
         merger  of Ray  English  and  Associates  Inc.  ("RE&A")  and NARI (the
         "Merger"). NARI is owned by an executive vice-president and director of
         the  Company.  Prior to the  Merger,  RE&A  had been  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.

         The  balance  owing from NARI as at October 31, 1999 is composed of the
following amounts:

               Promissory Note # 1                                  $  509,303
               Promissory Note # 2                                      25,379
               Promissory Note # 3                                     165,935
               Promissory Note # 4                                     118,685
               Intercompany advances receivable                        434,189
                                                                     ---------

                                                                     1,253,491
               Less: Allowance                                        (934,731)

                                                                    $  318,760

                                      F-15
<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE H (continued)

         Promissory Note # 1 ("Note # 1")

         In 1993,  Navtech-Canada  charged  its then  parent  company,  RE&A,  a
         management  and  marketing  fee in  connection  with the  management of
         certain software owned by EAS, formerly a subsidiary of RE&A. Effective
         July  15,  1995,  RE&A  executed  and  delivered  to  Navtech-Canada  a
         promissory  note  in the  principal  amount  of  $750,000  Canadian  to
         evidence certain  obligations to Navtech-Canada as of such date. Note #
         1 is payable on July 15, 2005 and  provides for interest at the rate of
         5% per annum payable annually.

         Promissory Note # 2 ("Note # 2")

         In  July  1998,  NARI  purchased  300,000  shares  of  the  Company  in
         consideration  for $300  cash and a  promissory  note in the  principal
         amount  of  $134,700.  Note  # 2 is  payable  in  forty  eight  monthly
         installments  of  principal  and interest of $4,375 and provides for an
         interest  rate of 10% per annum.  Additional  payments of principal are
         permitted  based on amounts  due to NARI under a royalty  agreement  as
         discussed below.  Note # 2 is secured by the certain weather and NOTAMs
         software owned by NARI

         Effective  July 15, 1998,  NARI and the Company  entered into a royalty
         agreement  (the "Royalty  Agreement")  that provides the Company with a
         non-exclusive  license to use the weather and NOTAMs  software owned by
         NARI.  The  royalty is  calculated  as 10% of a Gross  Revenue  Base as
         defined in the Royalty  Agreement.  NARI is applying  the excess of the
         monthly  royalty  amount  over  its  required  payments  on Note # 2 as
         additional  payments  of  principal.  Further,  once  Note # 2 has been
         repaid,  amounts  due  under  the  Royalty  Agreement  may be  used  to
         accelerate repayment of Note # 3 and then Note #4.

         Promissory Note # 3 ("Note # 3")

         In July 1998, NARI borrowed  $150,000 from  Navtech-Canada as evidenced
         by Note # 3. Note # 3 is payable in thirty six monthly  installments of
         principal  and interest of $5,854.  Interest at a rate of 10% per annum
         commenced November 1998. Additional payments of principal are permitted
         based on amounts due to NARI under the Royalty  Agreement  as discussed
         above.  Note # 3 is secured by the certain  weather and NOTAMs software
         owned by NARI.


                                      F-16
<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE H (continued)

         Promissory Note # 4 ("Note # 4")

         Commencing December 1998 and concluding July 1999, the Company advanced
         approximately $112,000 to NARI required to complete the purchase of the
         above noted weather and NOTAMs software.  Note # 4 is payable in twenty
         two monthly installments of principal and interest of $7,854 commencing
         with the repayment of Note # 3.

         Note # 4 bears interest at a rate of 10% per annum. Additional payments
         of  principal  are  permitted  based on  amounts  due to NARI under the
         Royalty  Agreement  as  discussed  above.  Note # 4 is  secured  by the
         certain weather and NOTAMs software owned by NARI.

         Intercompany Advances Receivable

         The  Company  has  made  additional  advances  to  its  parent  company
         aggregating approximately $263,000, which carry no repayment terms.

         Allowance

         NARI has used the common  stock  purchased  and the  advances  received
         under  promissory  notes # 3 and # 4 to purchase the weather and NOTAMs
         software licensed to the Company. As a result of the above transactions
         by and  amongst  NARI  and the  Company,  management  has  revised  its
         estimate of the ultimate  amount  presently  collectible  from NARI and
         provided  for an  additional  allowance  of  $316,453,  increasing  the
         allowance  to  $943,731.  Such  estimate  is based  principally  on the
         estimated  net worth of NARI and the  historical  cost of the  software
         assets owned by NARI.



                                      F-17
<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE H (continued)

     Due to Related Parties

         Due to related parties at October 31, 1999 consists of the following:

               Demand loans - related party (i)                      $    1,191
               Loan payable - related party (ii)                          1,925
               Other notes payable - related parties (iii)              149,616
               Loans payable - related party (iv)                       196,487
               Note payable - Chairman (v)                              450,320
                                                                       --------

                                                                        799,539
               Less current portion                                    (265,696)

               Long-term portion                                     $  533,843
                                                                       ========

               (i)  The  demand   loans  bear   interest  at  9.18%  per  annum,
                    compounded   monthly.   The  amount  is  due  to  a  company
                    controlled by an officer of the Company

              (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.  The loan 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) Other notes payable - related  parties bear interest from 5%
                    - 18% and require monthly payments of interest and principal
                    through May 2005.

              (iv)  Loans payable - related party consist of two loans made by a
                    limited  partnership  related to a director of the  Company.
                    Loan # 1, in the principal amount of $90,000, bears interest
                    at  19.562%  and is payable in  twenty-two  blended  monthly
                    installments of $4,845. Loan # 2, in the principal amount of
                    $128,830,  bears interest at 10% per annum and is payable in
                    twenty-four blended monthly  installments of $5,945. Each of
                    the  loans  is to be  secured  by  substantially  all of the
                    assets of Navtech-UK  and the shares of  Navtech-UK  held by
                    Navtech-Canada. In addition, the balance of Loan # 2 will be
                    convertible  into common  shares of the Company at a rate of
                    $0.375 per share at the lender's discretion on the first day
                    of the month following  shareholder  approval of an increase
                    in  authorized  share  capital   sufficient  to  permit  the
                    conversion.


                                      F-18
<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE H (continued)

              (v)   Note payable - Chairman  consists of a non-interest  bearing
                    promissory  note in the  principal  amount  of  $600,000  as
                    further  described  in Note L. The Company has  recorded the
                    liability,  payable in 96 consecutive semi-monthly payments,
                    at its net present value as at October 31, 1999.

     Maturities of related party debts as of October 31, 1999 are as follows:

                          October 31,
                          2000                                      $ 265,696
                          2001                                        219,733
                          2002                                        130,176
                          2003                                        151,534
                          2004                                         22,342
                          Beyond                                       10,058
                                                                     --------

                                                                    $ 799,539


NOTE I - BANK REVOLVING AND OTHER DEMAND LOANS AND LONG-TERM DEBT

     The Company has a revolving  bank demand loan facility  which  provides for
     borrowings  of up to $40,000  Canadian  which are payable on demand.  These
     demand loans bear interest at the bank's prime rate plus 1.25%.
<TABLE>
<S>                                                                                       <C>

     Long-term debt is as follows as of October 31, 1999:

      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
                                                                                                $ 66,094

      Term loan,  interest at 9.18%,  payable in monthly  payments of  principal
        and interest of $7,351 through September 30, 2000                                         90,562

      Equipment note,  payable in monthly  payments of principal and interest of
        $598 through August 2003                                                                  19,059
                                                                                                  ------

                                                                                                 175,715
      Less current portion                                                                      (128,672)

      Long-term portion                                                                       $   47,043
                                                                                               =========
</TABLE>
                                      F-19


<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE I (continued)

     Substantially  all of the Company's  assets are pledged as  collateral  for
     revolving demand loans and long term debt.

     As of October 31,  1999,  both  Navtech  and  Navtech-Canada  had  factored
     certain trade  receivables  with full recourse if not paid within 120 days.
     Under  the  factoring  agreements,  the  Company  is  required  to  pay  an
     administration  charge of 0.4% on the initial  factored amount, a factoring
     commission of 3.2%, which covers the first thirty days of the advance,  and
     a daily charge of 0.108% on receivables  outstanding more than thirty days.
     As of October 31, 1999 borrowings amounted to approximately $191,000.

     Maturities of long-term debt as of October 31, 1999 are as follows:

                                  October 31,
                                            2000                   $ 128,672
                                            2002                      36,117
                                            2003                       5,462
                                            2004                       5,464
                                                            ----       -----
                                                                   $ 175,715


NOTE J - INCOME TAXES

     The Company's  fiscal 1999 and 1998 effective  income tax rate differs from
     the statutory U.S. Federal income tax rate as a result of the following:

                                                 1999                    1998
                                                ---------               ------

      Statutory U.S. Federal tax rate            (34.0)%                 (34.0)%
      Increase in valuation allowance             34.0                    34.0
                                                  ----                    ----
                                                   -    %                  -   %
                                                 ======                  ======

                                      F-20

<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE J (continued)

     The  temporary  differences  which  give rise to  deferred  tax  assets and
liabilities at October 31, 1999 are summarized as follows:
<TABLE>
<S>                                                                                  <C>

      Deferred tax assets
          Net operating loss carryforwards                                                  $ 413,000
          Deferred salaries and other compensation                                            380,000
          Allowance for doubtful accounts                                                     456,000
          Other                                                                               156,000
                                                                                             --------

               Total deferred tax assets                                                    1,405,000

      Deferred tax liabilities
          License fees receivable                                                             (35,000)
          Scientific research and experimental development
               credits, net                                                                  (122,000)
          Fixed Assets                                                                        (26,000)

               Total deferred tax liabilities                                                (183,000)
                                                                                             ---------

               Net deferred tax assets                                                    $ 1,222,000
                                                                                           ==========

      Valuation allowance                                                                 $(1,222,000)
                                                                                           ===========


</TABLE>
     During  fiscal  1999,  the  Company  increased  its  allowance  by $347,000
     principally due to an increase in the Company's deferred tax assets.

     The Company,  for United  States  purposes,  has available to offset future
     taxable income net operating loss carryforwards approximating $1,008,000 at
     October 31, 1999, which expire through 2019. For Canadian tax purposes, the
     Company has fully utilized its available net operating loss  carryforwards.
     The Company has available scientific research and experimental  development
     credits of $46,000  Canadian  ($31,000 U.S.). 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.


                                      F-21

<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE K - 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,
     Navtech-Canada,  has outstanding  options to purchase 300,000 shares of its
     common  stock at exercise  prices  ranging  from $.20 to $.50  Canadian per
     share.

     In 1995,  the Company  adopted the 1995 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.

     Further, in 1999, the Company adopted, subject to shareholder approval, the
     1999 Stock Option Plan (the "1999 Stock Option  Plan"),  which provides for
     the  granting to  directors,  employees,  consultants  and  advisors of the
     Company of incentive stock options and non-statutory  stock options for the
     purchase of a maximum of 1,500,000  shares of the  Company's  common stock.
     Under the terms of the 1999 Stock Option Plan, the options, which expire no
     later than ten years after grant,  are  exercisable at a price no less than
     fair market  value of the  Company's  common stock at the date of grant and
     become  exercisable in accordance with terms established at the time of the
     grant.

     Summary information with respect to the stock option plans follows:
<TABLE>
<S>                                          <C>                 <C>               <C>           <C>


                                                                                       Weighted
                                                   Range of         Outstanding        Average        Outstanding
                                                   Exercise           Options          Exercise         Options
                                                    Prices            Granted            Price        Exercisable

      Balance at October 31, 1997                0.625 - 1.88           626,376           0.684         626,376
                                                                     ==========                         =======

      Balance at October 31, 1998                0.625 - 1.88           626,376           0.684         626,376
                                                                     ==========                         =======

      Balance at October 31, 1999                0.625 - 1.88           626,376           0.684         626,376
                                                                     ==========                         =======
</TABLE>

     During  fiscal 1999,  no options were  granted or  terminated.  On July 15,
     1998, an option holder  agreed to not exercise  200,000  options until such
     time as the Company's authorized capital has been increased.

                                      F-22

<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE K (continued)

     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               21               $.625
                     $1.00 to $1.88                        76,376               56               $1.11
</TABLE>

There were no options  issued by the Company in fiscal 1999 or 1998;  therefore,
there is no pro forma effect presented.


NOTE L - 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.


                                      F-23
<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE L (continued)

         The Company had also failed to file on a timely basis 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  filed 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  21,   1999.   No   assurances   can  be  given  that,
         notwithstanding  the Company's filing of the aforementioned  documents,
         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 2004.

         Future  minimum  annual  rental  payments  pursuant  to  these  leasing
         agreements as of October 31, 1999 are summarized as follows:
<TABLE>
<S>   <C>                                  <C>               <C>               <C>                <C>

                                                                                     Related
                                               Office                                 Party
                                                Space            Equipment          Equipment           Total

          2000                                 $ 104,540          $  47,869        $   7,936           $ 160,345
          2001                                    75,403             33,579            5,606             114,588
          2002                                    75,403              8,623            6,704              90,730
          2003                                    65,260              1,766            8,014              75,040
          2004                                    66,525               -               9,582              76,107
                                                --------        -----------         --------            --------

                                               $ 387,131          $  91,837         $ 37,842           $ 516,810
                                                ========           ========          =======            ========
</TABLE>

                                      F-24

<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE L (continued)

          Rental  costs for fiscal  1999 and 1998 were  $240,111  and  $205,668,
          respectively. Rental cost incurred in 1999 and 1998 in connection with
          the  equipment  lease with the  related  party was $7,386 and  $4,310,
          respectively.

     3.  Compensation Agreements

         The Company has entered into various  compensation  agreements with its
         Chairman,  its Chief Executive Officer, its Chief Financial Officer and
         a company controlled by its Chief Executive Officer as more fully
         described below.

         The Company has entered into a retirement  agreement  (the  "Retirement
         Agreement") with its Chairman dated August 5, 1999, which provides for,
         among other things, the payment of 96 consecutive semi-monthly payments
         of $6,250 (as evidenced by a non-interest bearing note in the amount of
         $600,000  (see  Note H))  commencing  November  25,  1999 for  services
         rendered for the period from  November 1996 through  October 1999.  The
         Company has provided  for  approximately  $450,000  relating to the net
         present  value of the services  provided by the Chairman  during fiscal
         1999, 1998 and 1997. Pursuant to the 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 to be used to prepay to
         the Chairman's estate any remaining portion of the $600,000  originally
         due.  All amounts due are  evidenced by  promissory  notes that contain
         acceleration  provisions,  in the event of, among other things, default
         in payment.

          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  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.

                                      F-25

<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE L (continued)

         Effective  January  1,  1999,  Navtech-Canada  entered  into a two year
         Services  Agreement (the  "Kintyre-Navtech  Agreement")  with Kintyre &
         Company Limited ("Kintyre"), a company controlled by Mr. Macdonald, the
         Company's Chief Executive Officer. 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-Canada  in its strategic  corporate  structuring  and corporate
         finance  and  accounting  activities.  Kintyre is entitled to receive a
         base  monthly fee of $23,250  Canadian,  plus as annual bonus of $8,750
         Canadian.

         Approximate aggregate minimum compensation  obligations under the above
         agreements at October 31, 1999 are summarized as follows:

                                 Year                            Amount

                                 2000                         $   344,777
                                 2001                             187,519
                                 2002                             150,000
                                 2003                             150,000
                                 2004                               6,250
                                                              ------------

                                                              $   838,546
                                                                  =======



     4.  Nonremittance of Payroll Taxes

         During and as of the year ended  October 31, 1999,  the Company has not
         timely remitted to the respective tax collecting  jurisdictions payroll
         taxes  withheld  from  employees'  earnings.  At October 31, 1999,  the
         unremitted  balance  aggregated  approximately  $190,000  (included  in
         accrued and other  liabilities)  which is subject to additional penalty
         and interest charges until paid.

                                      F-26

<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE L (continued)

     5.  Legal Proceedings

         On September 13, 1999, the Company received a demand from the attorneys
         for the Chapter 11 Creditors Committee of Southern Air Transport,  Inc.
         for alleged  preferential  payments of $88,850  made to  Navtech-Canada
         within 90 days of the filing of the  bankruptcy  petition of the Debtor
         in the United States Bankruptcy Court for the Southern District of Ohio
         on  October  1,  1998.  The  Company  is of the view that the  payments
         received were for contemporaneous  consideration and were therefore not
         preferential  payments.  The Company has  further  determined  that the
         matter is still under  review and no  adversary  proceedings  have been
         launched as of December 31, 1999. At this time no  determination of the
         eventual outcome of potential loss has been made.

         The Company is subject to various other 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 M - 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  1999,   one  customer   accounted  for  11%  of  the  Company's
     consolidated revenues,  and, in 1998, one customer accounted for 10% of the
     Company's consolidated revenues.


NOTE N - FOURTH QUARTER ADJUSTMENTS

     During the fourth  quarter of fiscal 1999,  the Company took an  additional
     allowance  against  amounts  owed by NARI in the  amount  of  $316,453  and
     recorded  additional amounts owing to a related party of $61,406,  portions
     of which amounts  should have been provided for during each of the quarters
     in fiscal 1999.


                                      F-27

<PAGE>


           Navtech, Inc., formerly Compuflight, Inc., and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                            October 31, 1999 and 1998



NOTE O - 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, 1999 and 1998 is as follows:

<TABLE>
<S>                                                                    <C>                     <C>
                                                                              1999                    1998
                                                                          -------------           -------------
      Net sales by customer location
          United States                                                     $ 4,144,983             $ 3,092,291
          Canada                                                                667,609                 527,706
          Other                                                                 440,984                 229,749
                                                                             ----------             -----------

              Total net sales                                               $ 5,253,576             $ 3,849,746
                                                                             ----------              ----------

      Operating profit (loss) by Company office location
          United States                                                     $   (32,342)            $   (20,660)
          Canada                                                                253,742                  26,881
          United Kingdom                                                        (16,745)
                                                                             ----------

               Total operating income (loss)                                $   204,655              $    6,221
                                                                             ==========               =========

      Identifiable assets by Company office location
          United States                                                     $ 1,401,436             $ 1,274,007
          Canada                                                              1,282,687               1,350,778
          United Kingdom                                                        256,692
          Eliminations                                                       (1,154,976)             (1,047,131)
                                                                             ----------              ----------

               Total identifiable assets                                    $ 1,785,839             $ 1,577,654
                                                                             ==========              ==========

</TABLE>
                                      F-28



<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: January 26, 2000                                NAVTECH, INC.


                            By: /s/ Duncan Macdonald
                                Duncan Macdonald,
                                                       Chairman of the
                               Board of Directors


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

<TABLE>
<S>                           <C>                                          <C>
         Signatures                 Capacity                                    Date
         ----------                 --------                                    ----

                                    Chairman of the Board and
/s/ Duncan Macdonald                Chief Executive Officer and Director        January 26, 2000
---------------------------         (Principal Executive Officer)
Duncan Macdonald

/s/ Dorothy A. English              Executive Vice President and Director       January 26, 2000
---------------------------
Dorothy A. English

/s/ Denis L. Metherell              Secretary and Director                      January 26, 2000
---------------------------
Denis L. Metherell

/s/ Kenneth M. Snyder               Director                                    January 26, 2000
---------------------------
Kenneth M. Snyder

/s/ Russell K. Thal                 Director                                    January 26, 2000
---------------------------
Russell K. Thal

/s/ David Strucke                   Chief Financial Officer                     January 26, 2000
---------------------------         (Principal Financial Officer and
David Strucke                       Principal Accounting Officer)
</TABLE>

Page 42
<PAGE>
EXHIBIT 3(A)

                                COMPUFLIGHT, INC.

            Certificate Providing for the Elimination of the Series A
                     Convertible Cumulative Preferred Stock

     Compuflight, Inc. (the "Corporation"), a corporation organized and existing
under the General  Corporation Law of the State of Delaware,  in accordance with
the provisions of Section 151 thereof, DOES HEREBY CERTIFY:

         FIRST: No shares of Series A Convertible  Cumulative Preferred Stock of
the Corporation are issued or outstanding as of the date hereof and none will be
issued  subject  to  the   Certificate  of  Amendment  of  the   Certificate  of
Incorporation previously filed with respect thereto.

         SECOND: Pursuant to the authority conferred upon the Board of Directors
by Section 151 of the General  Corporation  Law of the State of  Delaware,  said
Board of  Directors,  at a meeting  thereof held on the date  hereof,  adopted a
resolution providing for the elimination of the Series A Convertible  Cumulative
Preferred Stock of the Corporation, which resolution is as follows:

                  RESOLVED,   that  the  Company   amend  its   Certificate   of
                  Incorporation to eliminate the Series A Convertible Cumulative
                  Preferred Stock therefrom.

     THIRD:  Accordingly,  Article FOURTH of the Certificate of Incorporation of
the Corporation is amended to delete Paragraph 3 therefrom.

     IN WITNESS  WHEREOF,  the  Corporation  has caused this  Certificate  to be
signed on its behalf this 11th day of January, 2000.


COMPUFLIGHT, INC.

By: /s/Dorothy English
    -------------------
      Dorothy English
      Executive Vice President

<PAGE>

EXHIBIT 3(B)

                            CERTIFICATE OF AMENDMENT

                                     OF THE

                          CERTIFICATE OF INCORPORATION

                                       OF

                                COMPUFLIGHT, INC.


                         (Pursuant to Section 242 of the
                      General Corporation Law of Delaware)

     Compuflight,  Inc., a corporation organized and existing under the Delaware
General Corporation Law (the "Corporation"), DOES HEREBY CERTIFY:

     FIRST:  The  Certificate  of  Incorporation  of the  Corporation  is hereby
amended to change the name of the Corporation,  to increase the number of Common
Shares that the Corporation shall be authorized to issue, to decrease the number
of Preferred  Shares that the  Corporation  shall be  authorized to issue and to
require  that,  under  certain   circumstances,   action  to  be  taken  by  the
stockholders of the Corporation without a meeting be taken only with the written
consent of the holders of all of the shares of capital stock of the  Corporation
entitled to vote on such action.

     SECOND:   Article  FIRST  of  the  Certificate  of   Incorporation  of  the
Corporation is hereby amended to read in its entirety as follows:

                    "FIRST: The name of the corporation  (hereinafter called the
                    "corporation") is Navtech, Inc."

     THIRD:  Paragraphs  1  and  2 of  Article  FOURTH  of  the  Certificate  of
Incorporation of the Corporation are hereby amended to read as follows:

                  "FOURTH:  1. The  aggregate  number of shares of capital stock
                  which the  corporation  shall have the  authority  to issue is
                  TWELVE  MILLION  (12,000,000)  shares,  of which  TEN  MILLION
                  (10,000,000)  shares shall be Common Stock with a par value of
                  $.001 per share and TWO MILLION  (2,000,000)  shares  shall be
                  Preferred Stock with a par vale of $.01 per share.

                  2. The  2,000,000  shares of Preferred  Stock may be issued in
                  series. The Board of Directors is vested with the authority to
                  establish  and designate  series,  to fix the number of shares
                  therein,  and to fix the  variations  in the relative  rights,
                  preferences and limitations as between series."

     FOURTH:  A new  Article  TWELFTH  is  hereby  added to the  Certificate  of
Incorporation, to read in its entirety as follows:

                  "TWELFTH:  If action is to be taken by the stockholders of the
                  corporation without a meeting, then the written consent of the
                  holders of all of the shares of capital stock entitled to vote
                  on such action shall be required to take such  action,  unless
                  the action has been  authorized  by the Board of  Directors of
                  the  corporation,  in which  case the  written  consent of the
                  holders of not less than a  majority  of the shares of capital
                  stock  entitled  to vote on such  action  shall be required to
                  take such action."

     FIFTH:  The foregoing  amendments  were duly adopted in accordance with the
provisions  of  Section  242 of the  General  Corporation  Law of the  State  of
Delaware.

     IN WITNESS  WHEREOF,  the Executive Vice President of the  Corporation  has
hereunto set her hand to this Certificate this 14th day of January, 2000.


COMPUFLIGHT, INC.

By: /s/Dorothy English
    -------------------
      Dorothy English
      Executive Vice President


<PAGE>
EXHIBIT 3(D)

                                COMPUFLIGHT, INC.

                                     BY-LAWS

                                    ARTICLE I

                                     OFFICES

         Section  1. The  principal  office of the  corporation  in the State of
Delaware shall be in the City of Wilmington, County of New Castle.

         Section 2. The  corporation  may also have offices at such other places
both within and without the State of Delaware as the board of directors may from
time to time determine or the business of the corporation may require.

                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS

         Section 1. All meetings of the stockholders  shall be held at such time
and place as may be fixed  from time to time by the  board of  directors  of the
corporation.

         Section  2.  Annual  meetings  of  stockholders  shall  be held for the
election  of  directors  of  the  corporation.   At  such  annual  meeting,  the
stockholders  shall elect a board of directors by a plurality  vote (as provided
in Section 10 of this Article II), and shall transact such other business as may
properly be brought before the meeting.  To be properly brought before an annual
meeting,  business  must be (a)  specified  in the  notice  of  meeting  (or any
supplement  thereto) given by, at the direction of or upon authority  granted by
the board of  directors,  (b)  otherwise  brought  before the meeting by, at the
direction of or upon authority granted by the board of directors, or (c) subject
to  Section 12  hereof,  otherwise  properly  brought  before  the  meeting by a
stockholder.  For business to be properly  brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing to
the secretary of the corporation.  To be timely, a stockholder's  notice must be
received at the principal  executive offices of the corporation not less than 60
days nor more than 90 days  prior to the date which is one year from the date of
the mailing of the  corporation's  Proxy  Statement  for the prior year's annual
meeting of  stockholders.  If during the prior year the corporation did not hold
an annual meeting, or if the date of the meeting for which a stockholder intends
to submit a proposal  has changed more than 30 days from the date of the meeting
in the prior year,  then such notice must be received a  reasonable  time before
the corporation mails the Proxy Statement for the current year.



<PAGE>


                  A  stockholder's  notice to the secretary must set forth as to
each matter the  stockholder  proposes to bring before the annual  meeting (a) a
brief  description  of the  business  desired  to be  brought  before the annual
meeting, and the reasons for conducting such business at the annual meeting, (b)
the  name  and  address,  as they  appear  on the  corporation's  books,  of the
stockholder  proposing such business,  (c) the class and number of shares of the
corporation  which  are  beneficially  owned  by the  stockholder,  and  (d) any
material interest of the stockholder in such business.  Notwithstanding anything
in the By-Laws to the  contrary,  but subject to Section 12 hereof,  no business
shall be conducted at an annual meeting except in accordance with the procedures
set forth in this Section 2. The  chairman of an annual  meeting  shall,  if the
facts  warrant,  determine  and declare to the  meeting  that  business  was not
properly  brought  before the meeting in accordance  with the provisions of this
Section 2, and, if he should so  determine,  he shall so declare to the meeting,
and any such  business  not  properly  brought  before the meeting  shall not be
transacted.

         Section 3. Written  notice of the annual meeting shall be given to each
stockholder  entitled  to vote  thereat  not less than ten nor more than 60 days
before the date of the meeting.

         Section  4. The  officer  who has  charge  of the  stock  ledger of the
corporation  shall prepare and make, at least ten days before every  election of
directors,  a  complete  list  of the  stockholders  entitled  to  vote  at said
election,  arranged  in  alphabetical  order,  showing the address and number of
shares  registered in the name of each  stockholder.  Such list shall be open to
the examination of any stockholder, during ordinary business hours, for a period
of at least ten days prior to the  election,  either at a place within the city,
town or  village  where  the  election  is to be held and which  place  shall be
specified in the notice of the meeting, or, if not specified, at the place where
said meeting is to be held,  and the list shall be produced and kept at the time
and place of  election  during  the  whole  time  thereof,  and  subject  to the
inspection of any stockholder who may be present.

         Section 5.  Special  meetings of the  stockholders,  for any purpose or
purposes,  unless  otherwise  prescribed  by  statute or by the  certificate  of
incorporation,  shall be  called  by the  secretary  of the  corporation  at the
request in writing of a majority of the entire board of directors.  Such request
shall state the purpose or purposes of the proposed meeting.

         Section 6. Written notice of a special meeting of stockholders, stating
the  time,  place  and  purposes  thereof,  shall be  given to each  stockholder
entitled  to vote  thereat,  not less ten nor more than 60 days  before the date
fixed for the meeting.

         Section 7. Business  transacted at any special  meeting of stockholders
shall be limited to the purposes stated in the notice.



<PAGE>



         Section  8.  The  holders  of  a  majority  of  the  stock  issued  and
outstanding  and entitled to vote thereat,  present in person or  represented by
proxy,  shall  constitute a quorum at all meetings of the  stockholders  for the
transaction  of  business  except as  otherwise  provided  by  statute or by the
certificate of incorporation.  If, however,  such quorum shall not be present or
represented at any meeting of the  stockholders,  the  stockholders  entitled to
vote thereat,  present in person or  represented  by proxy,  shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting,  until a quorum shall be present or represented.  At such adjourned
meeting at which a quorum shall be present or  represented,  any business may be
transacted  which  might  have been  transacted  at the  meeting  as  originally
notified.

         Section  9. When a quorum is present  at any  meeting,  the vote of the
holders of a majority  of the stock  having  voting  power  present in person or
represented  by proxy shall decide any  question  brought  before such  meeting,
unless the question is one upon which,  by express  provision of a statute,  the
by-laws or the  certificate  of  incorporation,  a different vote is required in
which case such express  provision shall govern and control the decision of such
question.

         Section 10.  Except as provided in the  certificate  of  incorporation,
each  stockholder  shall at every meeting of the stockholders be entitled to one
vote in person or by proxy for each share of the  capital  stock  having  voting
power held by such stockholder, but no proxy shall be voted on after three years
from its date, unless the proxy provides for a longer period.

         Section 11.  Whenever the vote of  stockholders at a meeting thereof is
required or permitted to be taken in connection with any corporate action by any
provisions of the statutes or of the certificate of  incorporation,  the meeting
and vote of  stockholders  may be dispensed  with, if all the  stockholders  who
would have been entitled to vote upon the action if such meeting were held shall
consent in writing to such  corporate  action being taken unless such action has
been  authorized  by the board of  directors,  in which event such action may be
taken by the  written  consent of the holders of not less than a majority of the
shares of capital stock entitled to vote upon such action.

         Section  12. Only  persons who are  nominated  in  accordance  with the
procedures  set forth in this  Section 12 shall be  qualified  for  election  as
directors.  Nominations of persons for election to the board of directors of the
corporation  may be made at a meeting of  stockholders by or at the direction of
the board of directors or by any stockholder of the corporation entitled to vote
for the election of directors  at the meeting who complies  with the  procedures
set forth in this  Section  12. In order for persons  nominated  to the board of
directors,  other than those  persons  nominated  by or at the  direction of the
board of  directors,  to be qualified to serve on the board of  directors,  such
nomination  shall be made  pursuant to timely notice in writing to the secretary
of the corporation. To be timely, a stockholder's notice must be received at the
principal  executive  offices of the  corporation not less than 60 days nor more
than 90 days prior to the meeting;  provided,  however,  that, in the event that
less than 70 days'  notice of the date of the  meeting is given to  stockholders
and public  disclosure  of the meeting  date,  pursuant to a press  release,  is
either not made or is made less than 70 days  prior to the  meeting  date,  then
notice by the  stockholder  to be timely must be so received  not later than the
close of business on the tenth day following the earlier of (a) the day on which
such notice of the date of the meeting was mailed to stockholders or (b) the day
on which such public disclosure was made.



<PAGE>



                  A stockholder's  notice to the secretary must set forth (a) as
to each  person  whom the  stockholder  proposes  to  nominate  for  election or
re-election  as a director (i) the name,  age,  business  address and  residence
address of such person,  (ii) the  principal  occupation  or  employment of such
person,  (iii)  the class and  number  of  shares of the  corporation  which are
beneficially  owned by such  person and (iv) any other  information  relating to
such  person that is required to be  disclosed  in  solicitation  of proxies for
election  of  directors,  or is  otherwise  required,  in each case  pursuant to
Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended
from time to time  (including,  without  limitation,  such  documentation  as is
required by Regulation  14A to confirm that such person is a bona fide nominee);
and (b) as to the  stockholder  giving the notice (i) the name and  address,  as
they appear on the  corporation's  books, of such stockholder and (ii) the class
and number of shares of the  corporation  which are  beneficially  owned by such
stockholder.  At the request of the board of directors,  any person nominated by
the board of directors for election as a director shall furnish to the secretary
of the corporation that information  required to be set forth in a stockholder's
notice of nomination which pertains to the nominee. No person shall be qualified
for election as a director of the  corporation  unless  nominated in  accordance
with the  procedures  set forth in this  Section 12. The chairman of the meeting
shall,  if the facts  warrant,  determine  and  declare  to the  meeting  that a
nomination was not made in accordance with procedures prescribed by the By-Laws,
and,  if he should so  determine,  he shall so declare to the  meeting,  and the
defective nomination shall be disregarded.

                                   ARTICLE III

                                    DIRECTORS

         Section 1. The number of  directors  which shall  constitute  the whole
board  shall  be  fixed  from  time to time by the  board  of  directors  of the
corporation.  The  directors  shall be  elected  at the  annual  meeting  of the
stockholders, except as provided in Section 2 of this Article, and each director
elected  shall  hold  office  until his  successor  is  elected  and  qualified.
Directors need not be stockholders.

         Section 2. Vacancies and newly created directorships resulting from any
increase in the  authorized  number of directors  may be filled by a majority of
the directors  then in office,  though less than a quorum,  and the directors so
chosen  shall  hold  office  until the next  annual  election  and  until  their
successors are duly elected and shall qualify, unless sooner displaced.

         Section  3. The  business  of the  corporation  shall be managed by its
board of directors  which may exercise all such powers of the corporation and do
all such lawful acts and things as are not by statute or by the  certificate  of
incorporation  or by these by-laws  directed or required to be exercised or done
by the stockholders.

                       MEETINGS OF THE BOARD OF DIRECTORS

         Section 4. The board of directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware.



<PAGE>



         Section 5. The first  meeting of each newly  elected board of directors
shall  be  held  immediately  following  the  close  of the  annual  meeting  of
stockholders  at the place of the holding of said annual  meeting.  No notice of
any such  meeting  shall be necessary  to the newly  elected  directors in order
legally to constitute  the meeting,  provided a quorum shall be present.  In the
event such  meeting is not held at such time and place,  the meeting may be held
at such time and place as shall be specified  in a notice  given as  hereinafter
provided  for  special  meetings  of the  board  of  directors,  or as  shall be
specified in a written waiver signed by all of the directors.

         Section  6.  Regular  meetings  of the board of  directors  may be held
without  notice  at such  time and at such  place as shall  from time to time be
determined by the board.

         Section 7. Special  meetings of the board of directors may be called by
the chairman of the board,  the chief executive  officer or the president on one
(1) day's notice to each  director,  either  personally,  by overnight  mail, by
telegram,  by  telecopier or by telephone.  For purposes  hereof,  one (1) day's
notice  shall be satisfied by the delivery of such notice as shall result in the
director  receiving  notice  by  5:00  p.m.,  New  York  City  time,  on the day
immediately  preceding  the date of the meeting  (provided  that the time of the
meeting is no earlier than 8:00 a.m., New York City time).

         Section 8. At all  meetings of the board,  a majority of the  directors
shall  constitute  a quorum for the  transaction  of  business  and the act of a
majority  of the  directors  present at any  meeting at which  there is a quorum
shall be the act of the board of directors.  If a quorum shall not be present at
any meeting of the board of directors, the directors present thereat may adjourn
the meeting from time to time,  without  notice other than  announcement  at the
meeting, until a quorum shall be present.

         Section  9.  Unless   otherwise   restricted  by  the   certificate  of
incorporation or these by-laws,  any action required or permitted to be taken at
any meeting of the board of directors or of any  committee  thereof may be taken
without a meeting,  if prior to such action a written  consent thereto is signed
by all  members  of the board or such  committee,  as the case may be,  and such
written  consent  is filed  with the  minutes  of  proceedings  of the  board or
committee.

                             COMMITTEES OF DIRECTORS

         Section 10. The board of directors, by resolution adopted by a majority
of the entire board, may designate from among its members an executive committee
and other committees,  which committees shall serve at the pleasure of the board
of directors.  The board of directors  may  designate  one or more  directors as
alternate  members of any such  committee,  who may replace any absent member or
members of such committee.  The board of directors,  by resolution  adopted by a
majority of the entire board,  may remove a member of any such committee with or
without  cause.  To the extent  provided  in said  resolution  and to the extent
permitted by the laws of the State of Delaware,  each such committee  shall have
and may exercise the powers of the board of directors.
         Section 11. Each committee  shall keep regular  minutes of its meetings
and report the same to the board of directors when required.





<PAGE>



                            COMPENSATION OF DIRECTORS

         Section  12. The  directors  may be paid  their  expenses,  if any,  of
attendance at each meeting of the board of directors and may be paid a fixed sum
for  attendance  at each  meeting of the board of  directors  and such salary or
other  compensation as directors,  as the board by resolution may determine.  No
such payment  shall  preclude any director from serving the  corporation  in any
other  capacity  and  receiving  compensation  therefor.  Members  of special or
standing  committees may be allowed like  compensation  for attending  committee
meetings.

                                   ARTICLE IV

                                     NOTICES

         Section 1. Except as  provided  for herein,  notices to  directors  and
stockholders  shall be in  writing  and  delivered  personally  or mailed to the
directors  or  stockholders  at their  addresses  appearing  on the books of the
corporation.

         Section  2.  Whenever  any  notice is  required  to be given  under the
provisions of the statutes or of the  certificate of  incorporation  or of these
by-laws,  a waiver thereof in writing,  signed by the person or persons entitled
to said notice,  whether before or after the time stated herein, shall be deemed
equivalent thereto.

                                    ARTICLE V

                                    OFFICERS

         Section 1. The officers of the corporation shall be chosen by the board
of directors and shall be a chairman of the board, a chief executive  officer, a
president and chief operating officer, a secretary and a treasurer. The board of
directors may also choose a chief financial officer, a chief technology officer,
and  one  or  more   executive   vice-presidents,   vice-presidents,   assistant
secretaries  and  assistant  treasurers.  Two or more offices may be held by the
same person.

         Section  2. The board of  directors,  at its first  meeting  after each
annual  meeting of  stockholders,  shall choose a chairman of the board, a chief
executive  officer,  a president and chief operating  officer, a secretary and a
treasurer, none of whom need be a member of the board.

         Section 3. The board of directors  may appoint such other  officers and
agents as it shall deem  necessary  who shall hold their  offices for such terms
and shall  exercise  such powers and perform such duties as shall be  determined
from time to time by the board.

         Section 4. The  salaries of all  officers of the  corporation  shall be
fixed by the board of directors.



<PAGE>



         Section 5. The  officers of the  corporation  shall hold  office  until
their successors are chosen and qualify. Any officer elected or appointed by the
board of  directors  may be removed at any time by the board of  directors.  Any
vacancy  occurring in any office of the corporation shall be filled by the board
of directors.

                              CHAIRMAN OF THE BOARD

         Section 6. The chairman of the board of directors  shall preside at all
meetings of the board of  directors  and  stockholders;  shall be  ex-officio  a
member of all standing  committees;  and shall perform such other duties as from
time to time may be assigned to him by the board of directors.

                             CHIEF EXECUTIVE OFFICER

         Section 7. The chief executive  officer shall have general  supervision
and control  over the  business,  management  and  finances of the  corporation,
subject to the control of the board of directors,  and shall see that all orders
and resolutions of the board are carried into effect.

                      PRESIDENT AND CHIEF OPERATING OFFICER

         Section 8. The president and chief operating officer shall have general
supervision  and control  over the  day-to-day  business and  management  of the
corporation, subject to the control of the chief executive officer and the board
of  directors,  and shall see that all orders and  resolutions  of the board are
carried into effect.

                            EXECUTIVE VICE-PRESIDENTS

         Section 9. The  executive  vice-president,  or, if there  shall be more
than one, the executive  vice-presidents in the order determined by the board of
directors,  shall generally assist the president and chief operating  officer in
the management of the day-to-day business and affairs of the corporation and, in
the absence or disability of the president and chief  operating  officer,  shall
perform the duties and exercise the powers of the president and chief  operating
officer,  and shall  perform such other duties and have such other powers as the
board of directors may from time to time prescribe.

                                 VICE-PRESIDENTS

         Section 10. The vice-president, or if there shall be more than one, the
vice-presidents in the order determined by the board of directors, shall, in the
absence or disability of the  executive  vice-president,  perform the duties and
exercise the powers of the  executive  vice-presidents,  and shall  perform such
other duties and have such other powers as the board of directors  may from time
to time prescribe.





<PAGE>



                             CHIEF FINANCIAL OFFICER

         Section 11. The chief financial officer shall have general  supervision
and control  over the  day-to-day  finances of the  corporation,  subject to the
control of the chief executive officer and the board of directors, and shall see
that all orders and resolutions of the board are carried into effect.

                            CHIEF TECHNOLOGY OFFICER

         Section 12. The chief technology officer shall have general supervision
and control over the business and management of the corporation  with respect to
technology  matters,  subject to the control of the president or chief operating
officer  and the  board  of  directors,  and  shall  see  that  all  orders  and
resolutions of the board are carried into effect.

                       SECRETARY AND ASSISTANT SECRETARIES

         Section 13. The  secretary  shall  attend all  meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the  meetings of the  corporation  and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing  committees
when  required.  He shall give, or cause to be given,  notice of all meetings of
the  stockholders  and  special  meetings of the board of  directors,  and shall
perform such other duties as may be prescribed by the board of directors,  under
whose  supervision  he shall be. He shall keep in safe  custody  the seal of the
corporation  and, when  authorized by the board of directors,  affix the same to
any  instrument  requiring it and, when so affixed,  it shall be attested by his
signature or by the signature of an assistant secretary.

         Section 14. The assistant secretary,  or if there be more than one, the
assistant secretaries in the order determined by the board of directors,  shall,
in the absence or disability of the  secretary,  perform the duties and exercise
the powers of the  secretary  and shall  perform such other duties and have such
other powers as the board of directors may from time to time prescribe.

                       TREASURER AND ASSISTANT TREASURERS

         Section 15. The treasurer shall have the custody of the corporate funds
and  securities  and shall  keep full and  accurate  accounts  of  receipts  and
disbursements  in books and belongings to the  corporation and shall deposit all
moneys  and  other  valuable  effects  in the  name  and to  the  credit  of the
corporation in such depositories as may be designated by the board of directors.

         Section 16. He shall  disburse the funds of the  corporation  as may be
ordered  by  the  board  of   directors,   taking   proper   vouchers  for  such
disbursements,  and shall render to the chief executive  officer,  the president
and chief  operating  officer,  the chief  financial  officer,  and the board of
directors,  at its regular meetings, or when the board of directors so requires,
an account of all his  transactions as treasurer and of the financial  condition
of the corporation.



<PAGE>



         Section 17. If required  by the board of  directors,  he shall give the
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be  satisfactory  to the board of directors for
the faithful  performance of the duties of his office and for the restoration to
the corporation,  in case of his death, resignation,  retirement or removal from
office,  of all books,  papers,  vouchers,  money and other property of whatever
kind in his possession or under his control belonging to the corporation.

         Section  18. The  assistant  treasurer,  or if there shall be more than
one, the assistant treasurers in the order determined by the board of directors,
shall,  in the absence or  disability of the  treasurer,  perform the duties and
exercise  the powers of the  treasurer  and shall  perform such other duties and
have  such  other  powers  as the  board  of  directors  may  from  time to time
prescribe.

                                   ARTICLE VI

                              CERTIFICATE OF STOCK

         Section 1. Every holder of stock in the  corporation  shall be entitled
to have a  certificate,  signed  by, or in the name of the  corporation  by, the
chairman  of  the  board,  the  president,  an  executive  vice-president  or  a
vice-president and by the treasurer or an assistant treasurer,  or the secretary
or an assistant  secretary of the  corporation,  certifying the number of shares
owned by him in the corporation.

         Section 2. Where a certificate  is signed (a) by a transfer agent or an
assistant  transfer  agent or (b) by a  transfer  clerk  acting on behalf of the
corporation  and a registrar,  the  signature of any such chairman of the board,
president,  executive  vice-president,   vice-president,   treasurer,  assistant
treasurer,  secretary  or  assistant  secretary  may be  facsimile.  In case any
officer or officers who have signed, or whose facsimile  signature or signatures
have been used on, any such  certificate or certificates  shall cease to be such
officer or officers of the corporation, whether because of death, resignation or
otherwise,  before such  certificate or certificates  have been delivered by the
corporation, such certificate or certificates may nevertheless be adopted by the
corporation  and be issued and  delivered  as though  the person or persons  who
signed  such  certificate  or  certificates  or  whose  facsimile  signature  or
signatures  have been used thereon had not ceased to be such officer or officers
of the corporation.

                                LOST CERTIFICATES



<PAGE>



         Section  3. The board of  directors  may  direct a new  certificate  or
certificates   to  be  issued  in  place  of  any  certificate  or  certificates
theretofore  issued by the  corporation  alleged to have been lost or destroyed,
upon  the  making  of an  affidavit  of that  fact by the  person  claiming  the
certificate of stock to be lost or destroyed.  When  authorizing such issue of a
new certificate or  certificates,  the board of directors may, in its discretion
and as a condition precedent to the issuance thereof,  require the owner of such
lost or destroyed certificate or certificates,  or his legal representative,  to
advertise  the  same in such  manner  as it  shall  require  and/or  to give the
corporation  a bond in such sum as it may direct as indemnity  against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost or destroyed.

                               TRANSFERS OF STOCK

         Section 4. Upon  surrender to the  corporation or the transfer agent of
the  corporation  of a certificate  for shares duly endorsed or  accompanied  by
proper evidence of succession,  assignment or authority to transfer, it shall be
the duty of the  corporation to issue a new  certificate to the person  entitled
thereto, cancel the old certificate and record the transaction upon its books.

                     CLOSING OF TRANSFER BOOKS; RECORD DATE

         Section 5. The board of directors may close the stock transfer books of
the  corporation  for a period not  exceeding 60 days  preceding the date of any
meeting of  stockholders or the date for payment of any dividend or the date for
the allotment of rights or the date when any change or conversion or exchange of
capital  stock shall go into effect or for a period of not  exceeding 60 days in
connection with obtaining the consent of stockholders  for any purpose.  In lieu
of closing the stock transfer books as aforesaid, the board of directors may fix
in  advance a date,  which date shall not be more than 60 nor less than ten days
preceding the date of any meeting of  stockholders,  or the date for the payment
of any dividend,  or the date for the allotment of rights,  or the date when any
change or  conversion  or exchange of capital  stock shall go into effect,  or a
date in  connection  with  obtaining  such  consent,  as a  record  date for the
determination  of the  stockholders  entitled  to notice of, and to vote at, any
such meeting, and any adjournment thereof, or entitled to receive payment of any
such dividend,  or to any such allotment of rights, or to exercise the rights in
respect of any such change,  conversion or exchange of capital stock, or to give
such consent,  and in such case such  stockholders and only such stockholders as
shall be  stockholders  of record on the date so fixed shall be entitled to such
notice of, and to vote at,  such  meeting  and any  adjournment  thereof,  or to
receive payment of such dividend,  or to receive such allotment of rights, or to
exercise  such  rights,   or  to  give  such  consent,   as  the  case  may  be,
notwithstanding  any transfer of any stock on the books of the corporation after
any such record date fixed as aforesaid.

                             REGISTERED STOCKHOLDERS

         Section 6. The corporation shall be entitled to recognize the exclusive
right of a person  registered  on its books as the  owner of  shares to  receive
dividends,  and to  vote  as  such  owner,  and to hold  liable  for  calls  and
assessments a person  registered on its books as the owner of shares,  and shall
not be bound to  recognize  any  equitable or other claim to or interest in such
share or shares on the part of any other  person,  whether  or not it shall have
express or other notice  thereof,  except as  otherwise  provided by the laws of
Delaware.






<PAGE>



                                   ARTICLE VII

                                FINANCIAL MATTERS

                                    CONTRACTS

         Section 1. The Board of Directors,  except as these  By-Laws  otherwise
provide, may authorize any officer or officers,  agent or agents, to execute and
deliver any contract on behalf of the  corporation,  and such  authority  may be
general or confined to specific instances.

                                      LOANS

         Section 2. Any two of the officers of the  corporation as may from time
to time be  designated  for such purpose by the Board of  Directors,  or any two
officers of the  corporation  duly  authorized  by the Board of  Directors  with
respect to a particular loan or advance,  acting together,  may effect loans and
advances at any time for the corporation  from any bank,  trust company or other
institution, or from any firm or individual, and for such loans and advances may
make,  execute and deliver  promissory notes and other evidences of indebtedness
of the corporation.  No property whatever owned or held by the corporation shall
be pledged,  hypothecated  or  transferred  as security  for loans and  advances
except by two officers of the corporation,  acting together, who shall have been
designated  for such purpose by the Board of  Directors,  or by any two officers
thereunto duly authorized by the Board of Directors with respect to a particular
loan or advance.

                               CHECKS AND DRAFTING

         Section 3. All checks,  drafts,  orders for the payment of money, bills
of  lading,  warehouse  receipts,  obligations,  bills  of  exchange,  insurance
certificates and all endorsements  (except  endorsements for collections for the
account of the corporation or for deposit to its credit) shall be signed by such
officer or officers,  employee or employees,  of the corporation or by facsimile
signature of such officer or officers, employee or employees, of the corporation
as  shall  from  time  to time be  determined  by  resolution  of the  Board  of
Directors.

                                    DEPOSITS

         Section 4. All funds of the corporation,  unless  otherwise  authorized
and directed by a  resolution  of the Board of  Directors  duly  recorded in the
minutes of the meetings of the Board of Directors,  shall be deposited from time
to time to the credit of the corporation in such banks, trust companies or other
depositories  as the Board of  Directors  may elect or as may be selected by any
officer or officers,  agent or agents, of the corporation to whom such power may
from time to time be delegated by the Board of Directors; and for the purpose of
such  deposit,  checks,  drafts and other  orders for payment of money which are
payable to the order of the corporation may be endorsed,  assigned and delivered
by the chief executive  officer,  president and chief operating  officer,  or an
executive vice-president,  or a vice-president, or the treasurer or an assistant
treasurer,  or the  secretary  or an  assistant  secretary,  or by any  agent or
employee of the  corporation  to whom any of said officers,  in writing,  or the
Board of Directors, by resolution, shall have delegated such power.

                                  BANK ACCOUNTS

         Section 5. The Board of Directors  may from time to time  authorize the
opening and keeping with such banks,  trust  companies or other  depositories as
the Board may select of general and specific  bank  accounts,  and may make such
special rules and resolutions  with respect thereto,  not inconsistent  with the
provisions of these By-Laws, as it may deem expedient.

                                    DIVIDENDS

         Section 6. Dividends upon the capital stock of the corporation, subject
to the provisions of the certificate of  incorporation,  if any, may be declared
by the board of  directors at any regular or special  meeting,  pursuant to law.
Dividends may be paid in cash, in property,  or in shares of the capital  stock,
subject to the provisions of the certificate of incorporation.

         Section 7. Before  payment of any dividend,  there may be set aside out
of any funds of the corporation  available for dividends such sum or sums as the
directors  from time to time, in their  absolute  discretion,  think proper as a
reserve or reserves to meet contingencies,  or for equalizing dividends,  or for
repairing  or  maintaining  any property of the  corporation,  or for such other
purpose  as  the  directors  shall  think  conducive  to  the  interest  of  the
corporation,  and the  directors  may modify or abolish any such  reserve in the
manner in which it was created.

                                ANNUAL STATEMENT

         Section 8. The board of directors shall present at each annual meeting,
and at any special  meeting of the  stockholders  when called for by vote of the
stockholders,  a full and clear  statement of the business and  condition of the
corporation.

                                   FISCAL YEAR

         Section  9.  The  fiscal  year of the  corporation  shall  be  fixed by
resolution of the board of directors.



<PAGE>



                                  ARTICLE VIII

                               GENERAL PROVISIONS

                                      SEAL

         Section 1. The corporate seal shall have inscribed  thereon the name of
the  corporation,  the year of its  organization  and the words "Corporate Seal,
Delaware".  The seal may be used by  causing  it or a  facsimile  thereof  to be
impressed or affixed or reproduced or otherwise.

                                 INDEMNIFICATION

         Section  2.  The  corporation  shall to the full  extent  permitted  by
Section 145 of the  Delaware  General  Corporation  Law, as amended from time to
time,  indemnify  all  persons  whom  it may  indemnify  pursuant  thereto.  The
indemnifications  authorized  hereby shall not be deemed  exclusive of any other
rights to which those seeking  indemnification  may be entitled under or through
any agreement,  vote of  stockholders or  disinterested  directors or otherwise,
both as to action in the official capacity of those seeking  indemnification and
as to action in another  capacity while holding such office,  and shall continue
as to a person who has ceased to be a director,  officer,  employee or agent and
shall inure to the benefit of the heirs,  executors and  administrators  of such
persons.  The corporation  may purchase and maintain  insurance on behalf of any
person who is or was a director,  officer, employee or agent of the corporation,
or is or was serving at the request of another corporation,  partnership,  joint
venture,  trust or other enterprise  against any liability  asserted against him
and incurred by him in any such capacity,  or arising out of his status as such,
whether or not the  corporation  would have the power to  indemnify  him against
such liability under the provisions of Section 145.

                                   ARTICLE IX

                                   AMENDMENTS

         Section 1. These  by-laws may be altered or repealed (a) at any regular
meeting of the  stockholders  or of the board of  directors,  (b) at any special
meeting  of the  stockholders  or of the  board of  directors  if notice of such
alteration  or repeal be contained in the notice of such special  meeting or (c)
by unanimous written consent of the stockholders or board of directors.