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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                   ------------------------------------------

                                   FORM 10-KSB

              |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the Fiscal Year Ended October 31, 2001

              |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the Transition Period From _____ to ____


                  ---------------------------------------------

                         Commission File Number 0-15362


                                  NAVTECH, INC.
        (Exact name of small business issuer as specified in its charter)


                 Delaware                                     11-2883366
      (State or other jurisdiction of                      (I.R.S. Employer
      incorporation or organization)                      Identification No.)


        Suite 102, 2340 Garden Road
           Monterey, California                                  93940
  (Address of principal executive office)                     (Zip Code)


       Registrant's telephone number, including area code: (519) 747-9883


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  (2001):  $
     6,341,299

The aggregate market value of the voting stock held by non-affiliates based upon
the closing price of such stock as of December 31, 2001 was $ 595,461

     (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, 2001 was 4,327,285 shares.

                    DOCUMENTS INCORPORATED BY REFERENCE: none
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<PAGE>

                                  NAVTECH, INC.

                                   FORM 10-KSB

                   For the Fiscal Year Ended October 31, 2001

INDEX
<TABLE>
<CAPTION>

PART I                                                                                           PAGE
        <S>         <C>                                                                          <C>
    Item 1.   Description of Business.............................................................3
    Item 2.   Description of Property............................................................11
    Item 3.   Legal Proceedings..................................................................12
    Item 4.   Submission of Matters to a Vote of Security Holders................................13


Part II
     Item 5.  Market for Common Equity and Related Stockholder Matters...........................14
     Item 6.  Management's Discussion and Analysis or Plan of Operation..........................16
     Item 7.  Financial Statements...............................................................22
     Item 8.  Changes In and Disagreements With Accountants on Accounting and
              Financial Disclosure...............................................................23


Part III
     Item 9.  Directors, Executive Officers, Promoters and Control Persons;
              Compliance with Section 16(a) of the Exchange Act..................................24
     Item 10. Executive Compensation.............................................................26
     Item 11. Security Ownership of Certain Beneficial Owners and Management.....................28
     Item 12. Certain Relationships and Related Transactions.....................................31

Part IV
     Item 13. Exhibits, List and Reports on Form 8-K ............................................33

INDEX TO FINANCIAL STATEMENTS....................................................................F-1

SIGNATURES.......................................................................................35

</TABLE>

                                       2
<PAGE>

PART I

Forward Looking Statements

This document contains forward-looking statements as that term is defined in the
federal securities laws. The events described in  forward-looking  statements we
make in this Form 10-KSB may not occur.  Generally  these  statements  relate to
business  plans  or  strategies,  projected  or  anticipated  benefits  or other
consequences of our plans or strategies,  projected or anticipated benefits from
acquisitions  that  may be  made by us,  or  projections  involving  anticipated
revenues,  earnings or other aspects of our operating results.  The words "may,"
"will,"  "expect,"   "believe,"   "anticipate,"   "project,"  "plan,"  "intend,"
"estimate,"  and  "continue,"  and their  opposites and similar  expressions are
intended  to  identify  forward-looking  statements.  We caution  you that these
statements are not guarantees of future performance or events and are subject to
a number of uncertainties,  risks and other influences, many of which are beyond
our  control,  that  may  influence  the  accuracy  of the  statements  and  the
projections upon which the statements are based.

Dollar Amounts

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

ITEM 1.       DESCRIPTION OF BUSINESS

THE COMPANY

Navtech, Inc. (Navtech-US) was originally  incorporated in the State of New York
in 1981 and  then  reincorporated  in the  State of  Delaware  in 1987.  Navtech
Systems Support Inc. (Navtech-Canada),  a wholly-owned subsidiary of Navtech-US,
was  incorporated  in the  Province  of Ontario in 1987.  Navtech  (UK)  Limited
(Navtech-UK),  a wholly-owned subsidiary of Navtech-Canada,  was incorporated in
the United Kingdom in 1994.  Airware  Solutions Inc.  (Airware),  a wholly-owned
subsidiary of Navtech-US,  was  incorporated  in the Province of Quebec in 1986.
When we refer to Navtech, we are speaking of Navtech-US and its subsidiaries.

Our head office is located at 2340 Garden Road, Suite 102,  Monterey,  CA 93940.
We maintain a website at www.navtechinc.com. Our common stock is publicly traded
on the NASD OTC Electronic  Bulletin Board under the symbol "NAVH". For investor
information, we can be reached at (519) 747-1170.

BUSINESS OF THE COMPANY

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

It is our  objective  to become the leading  supplier of  integrated  operations
control  systems  (IOCS) to the mid-sized  airlines of the world.  The mid-sized
carrier  segment  (5 to 100  aircraft)  represents  approximately  600  carriers
worldwide.  These carriers  require the same  sophisticated  systems used by the
larger  carriers  but are  unlikely to have the ability or  resources to support
internal development.

We believe that our success is generally attributable to four factors. First, we
employ  a  highly  skilled  and  experienced  technical  and  flight  operations
workforce  that  combine  knowledge of both  aviation and software  development.
Second, we also employ a highly regarded  technical and operations  support team
that provides  customer service on a  round-the-clock  basis.  Third,  since the
majority of our employees are based in Canada, we enjoy a significant  advantage
in our labor cost when  compared  to our  competitors  which are  located in the
United States and Europe.  Finally,  we have  continued to make an investment in
the  architecture  of our  product  which has  positioned  us ahead of others in
meeting customer requirements.

                                       3
<PAGE>

Industry Overview

The flight operations industry has undergone significant changes in recent years
with a number  of trends  emerging  that  have had a  significant  impact on the
market  place.  These  trends  have  caused  convergence  of  flight  operations
management systems as it relates to airspace management and as it relates to the
different  functions  required to efficiently  manage airlines  operations.  The
major trends are:

o    Significant increases in input costs for labor, fuel, and most recently,
     insurance;
o    Strategic  investments  by airlines in the areas of  operational  planning,
     control,  revenue and network management and customer loyalty;
o    Alliances of major airlines and their associated regional carriers creating
     virtual buying groups and substantial new competitors in market segments in
     which the individual airlines were weak;
o    Increased outsourcing of non-core business activities as a means of
     reducing costs; and
o    An increase in collaborative decision making (CDM) between the different
     airspace users as a means of improving capacity and efficiency. This effort
     is to reduce the estimated worldwide impact of $2 billion annually that
     results from an inefficient air traffic management system.

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

Execution of Strategy

Our objective is to be the premier provider of a complete integrated  operations
control  system  to  the  mid-sized  airlines  in the  world.  To  achieve  this
objective,  our  strategy  consists  of a  concentrated  effort  to build on our
premier  dispatch  product line,  acquire the crew  scheduling  and  maintenance
components for our overall integrated  operations control system, and enter into
strategic  partnerships to fill out the remainder of the product suite including
payload management and navigational data and charting.

To  accomplish  this, we have  identified  two distinct  phases.  In Phase I, we
intend to add the  essential  components  of a  complete  integrated  operations
control system noted above, with emphasis on opportunities that can help develop
a  European  and Asian  customer  base.  In Phase II, we intend to invest in the
integration of all of our current and acquired systems. The timing of each phase
is dependent on the availability of capital.

Acquisition of Airware Solutions Inc.

On February 1, 2001,  Navtech-US  acquired  Airware  Solutions  Inc., a Canadian
company.  Airware's premier products are a Preferential Bidding System (PBS) and
an Internet-based  crew-bidding  program. The PBS is one component of an overall
crew  management  system.  A PBS provides for the matching of pilot  preferences
with airline requirements as a means of reducing costs and improving crew member
quality of life. Airware is one of three world-class providers of PBS systems.

Global Alliance with RM Rocade AB

On October 11,  2001,  Navtech and RM Rocade AB (formerly  Resource  Management)
formally announced a strategic partnership designed to provide both parties with
increased market access. RM Rocade was founded by airline  professionals in 1986
and has  successfully  provided the airline  industry with consulting  services,
support and integrated software utilizing powerful optimization techniques.  The
RM Rocade  solution is an  integrated  system  covering the areas of  commercial
planning,  crew  management,  operations  control and network  intelligence.  It
consists of several systems, which can be purchased individually or as an entire
package.
                                       4
<PAGE>

RM Rocade's customer base spans five continents and 32 countries and consists of
more than 60 airlines,  including cargo,  charter and scheduled airlines and one
railway  company.  RM  Rocade is  headquartered  in  Sweden  and has  affiliated
companies  in London and Paris.  RM Rocade also  operates  businesses  in China,
Taiwan and Hong Kong through the reseller Ekpac International.

Under  the  terms of this  agreement,  Navtech  and RM  Rocade  have  agreed  to
coordinating  marketing  communications  activities,   providing  assistance  in
soliciting  the other party's  customer  base,  promotion of a total  operations
solution to  airlines  and  comprehensive  product  integration.  Navtech and RM
Rocade intend to integrate the Navtech's  DispatchPro and RM Rocade's Operations
Control system, ROC, as well as Navtech's  Preferential  Bidding System,  CLASS,
with the RM Rocade Crew Management suite.  Finally,  under a separate agreement,
Navtech  acquired the right to use the RM Rocade suite of products in support of
its recently expanded  OperationsCentre  outsourced dispatch and crew management
portfolio of services.

Market for Airline Integrated Operations Control System

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

        o        Dispatch
        o        Airline Schedule
        o        Crew Scheduling
        o        Maintenance
        o        Payload
        o        Navigational Data & Charting

As with most mature industries,  airlines typically had functional silos for the
different parts of their operation: crew, dispatch,  maintenance,  and passenger
services/load  control. In these organizations,  decision-making was inefficient
due to a lack of information  or the inability to handle all of the  information
presented.  The early 1990s saw the  emergence of a systems  operations  control
(SOC) philosophy in which the various  functional silos would report to a single
manager for the execution of the daily flight schedule.  The  implementation  of
the SOC  philosophy  has meant changes in physical  location,  reporting  lines,
decision-making authority,  business processes and technology.  Although the SOC
philosophy  was  adopted  in the large  carrier  segment  (over  100  aircraft),
especially in North America and Western Europe,  several  smaller  carriers have
moved  to an  integrated  operations  control  system  as the  next  step in the
development of their operational effectiveness.

September 11, 2001

The  tragic  events of  September  11,  2001  created a  breaking  point for the
worldwide airline industry that had been experiencing a significant  decrease in
demand  for its  product  through  most of 2001  as a  result  of the  impending
worldwide  recession.  Immediately  following September 11, based on the fear of
the  traveling  public and business  leaders,  all airlines  experienced a rapid
decline  of their  forward  bookings  and their cash  flow.  For those  airlines
already experiencing difficulties the results were disastrous. Between September
and November  2001,  many  airlines  went  bankrupt  including  Ansett,  Sabena,
Swissair and Canada 3000. Most major airlines announced  capacity  reductions of
approximately 20% and industry-wide layoffs totaled over 100,000.

However,  changes to  regulations  concerning  carrying  cargo in the "belly" of
passenger  aircraft and the U.S.  military  mobilization in Afghanistan led to a
surge in air cargo  demand in the final  months of 2001.  Low cost and  regional
carriers  were  initially   negatively  impacted  but  most  later  returned  to
pre-September  11 levels as businesses  looked at ways of reducing costs and the
major  airlines  turned to their  regional  affiliates  in an effort to maintain
their network and frequency of service at a lower expense.  One of our customers
ceased operations during this period, while a second is currently restructuring.
                                       5
<PAGE>

For most  airlines,  as it relates to their  operations  department  information
technology (IT) spending,  the lasting results of September 11 and the worldwide
recession  are a  substantial  reduction in capital  budgets and an inability to
effectively  address  opportunities for replacement systems due to the reduction
in staffing.  Cargo demand is expected to decline in the second calendar quarter
of 2002 as the U.S.  military  build up is completed and the economy only starts
to improve.  One exception is the regional airline market, a segment in which we
have started to establish a presence. The continued execution of our strategy is
the key  ingredient to being  successful in this segment due to their demand for
fully integrated systems.

Current Navtech Solutions

Flight Plan Services

o        DispatchPro. DispatchPro 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
         airline performance. The software is designed to operate on the
         powerful, scalable, open source LINUX operating system. DispatchPro is
         available through either an ASP agreement, where Navtech hosts the
         system and provides access, or through the purchase of a license and
         installation at a customer site. The first version of DispatchPro was
         released in March 1998 as AURORA and has since undergone additional
         development to enrich much of its functionality.

o        WebFP. Released in July 2001, WebFP is an Internet based, scaled-down
         version of DispatchPro available to airlines whose fleet size limits
         the requirement for the more sophisticated functionality of our high
         end product or for those customers unable or unwilling to pay the
         higher costs involved with normal communications methods. This product
         is offered through an ASP agreement.

NOTAM and Weather Services

o        DataSource. We have bundled our provision of weather and NOTAMs data,
         including both textual and graphical weather charts and airport
         obstacle data, under the DataSource brand. We have become a primary
         provider of this data to foreign governments, marine service companies
         and airlines that may not necessarily use our flight planning services.
         We make access to this data available through a variety of
         communications or delivery methods so that customers are assured of the
         timely delivery of this critical data.

Aircraft Performance Systems

o        V1Plus. Our V1Plus service is an aircraft performance engineering
         subscription service that is offered to airlines that do not maintain
         in-house engineering departments. Our Aircraft Performance Systems
         group prepares monthly manuals that provide customized updated take-off
         and landing data specific to various aircraft/engine combinations, flap
         settings and runways.

o        V1PlusOnboard. Our V1PlusOnboard product provides the same aircraft
         performance data as V1Plus, but it is deployed on a laptop in the
         cockpit. This has some inherent advantages since a pilot does not need
         to scan chart after chart of manual data and perform complex
         calculations. Using this product, a pilot need only enter the required
         information - the system then calculates the maximum amount of payload.

o        V1PlusIntegrated. Our V1PlusIntegrated product provides the same
         aircraft performance data as V1Plus, but it is deployed through the
         flight papers that are prepared and transmitted to the crew. As well,
         since the product is used at the time of flight plan preparation, the
         dispatcher can automatically consider aircraft performance limitations
         that would affect maximum take-off or

                                       6
<PAGE>

         landing weights. V1PlusIntegrated is designed to reduce paper and
         logistics and to improve accuracy and dispatch reliability.

Outsourced Services

o        OperationsCentre. Our OperationsCentre service provides outsourced
         dispatch and crew management services to airlines around the world. Our
         capabilities include flight planning, overflight and landing permits,
         slot control, ground handling, flight following, crew roster
         construction and daily crewing. This service is targeted at small and
         start up carriers that may not be able to afford in-house dispatch and
         crew management.

Crew Management Systems

o        CLASS and CLASSBid. CLASS allows the user to match available flying to
         an individual crew member's preferences in order to produce and
         optimize a final crew schedule that respects contractual constraints
         and company operating requirements. Today, Northwest pilots use
         CLASSBid to bid their schedules globally via the Internet, which makes
         the process of crew scheduling simple and efficient.

Ancillary Products and Services

o        Customer Support. We offer comprehensive software support and customer
         account management in the United States, Canada, Africa and Europe
         designed to maximize the benefits and utility of the software at the
         customer's location. These services include training and installation
         support, software updates, including new system functionality and
         ongoing enhancements, and telephone hot-line support. We believe that
         quality support services are a critical component of the customer's
         satisfaction level. Our customer support services are provided at our
         two operations centers in Waterloo, Canada and Crawley (Gatwick),
         United Kingdom.

o        Custom Programming Services. Design and programming services are
         provided to customers that require specific custom solutions to their
         flight operations requirements. We believe that there is an increased
         demand in the commercial aviation market for systems integration
         services that link our software to third party vendor applications. We
         also provide consulting services to assist customers in optimizing the
         use of the product functionality within their flight operations
         process.

Customers

Our primary focus is the mid-sized carrier market, which is defined as operators
of modern  aircraft with fleet sizes between 5 and 100 aircraft.  These carriers
increasingly have the same functional  requirements as large carriers but do not
have the information  technology  capabilities to implement and maintain systems
to fulfill their needs. These operators also have shorter sales cycles, are less
likely to be part of an airline  alliance,  and are  generally  more  willing to
switch vendors.

Our primary geographical markets are North America and Europe; those segments of
the airline market are more progressive with respect to information  technology,
outsourcing and cost reduction.  Secondary  markets include the Middle East, the
Pacific and Latin America.

We  currently  have a broad  customer  base of over 110 airlines  worldwide.  No
customer was in excess of 10% of our total revenues for the last fiscal year.

                                       7
<PAGE>

Competition

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

Our main competitors for an IOCS can be divided into four main categories:

o        Major airline information technology spin-offs such as Lufthansa's
         Information Technology Software GmbH, (LIDO), The Sabre Group (a former
         subsidiary of American Airlines), and Atraxis, a Swissair subsidiary
         recently acquired by EDS.
o        Major systems integrators such as IBM, EDS and Unisys.
o        Aviation software vendors such as Jeppesen (recently acquired by
         Boeing), Honeywell, SITA (the European aviation network provider) and
         ARINC (the American aviation network provider).
o        Smaller independent companies with annual revenue of less than US$20
         million that have developed flight operations management solutions for
         commercial aviation such as AIMS, Carmen Systems, AD OPT and David R.
         Bornemann and Associates (recently acquired by Sabre).

We  believe  that  the  larger  corporations  such as  Boeing,  Lufthansa,  EDS,
Honeywell,  SITA and ARINC have an interest in being the driving  forces  behind
not only the  infrastructure  development  (i.e.  onboard  systems,  moving  map
technology,  ground to air  communications)  but also the service delivery (i.e.
outsourcing of air traffic  management  responsibilities).  We also believe that
these  corporations  all require the essential  flight planning  component to be
tightly  integrated with the other elements of an integrated  operations control
system, a validation of our IOCS strategy.

There was  significant  acquisition and  consolidation  activity in our industry
during  fiscal 2001,  primarily  focused on being able to assemble and offer the
IOCS to airlines. Acquisition activity included:

o       Sabre's acquisition of David R. Bornemann & Associates;
o       Boeing adding to its acquisition of Jeppesen by purchasing SBS
        International;
o       SITA increasing its portfolio of airline applications through RPA
        Airline Automation; and
o       Swissair subsidiaries, Atraxis and Swissair Flight Support, being
        acquired by EDS and LIDO, respectively.

Many of our current and potential  competitors have longer  operating  histories
and significantly  greater financial,  technical and marketing  resources,  name
recognition  and installed  product base than us. There can be no assurance that
we will be able to compete effectively with current and future competitors.

Marketing and Distribution

The overall airline  industry decline led to a complete review of our market and
the methods in which we can access the market.

Direct Sales

We employ a direct  sales  force to market our  products  and  services in North
America  and  Europe  through  offices  in Canada  and the  United  Kingdom.  In
addition,  we employ an account  management team that provides support and sells
add-on services to existing customers.

Strategic Alliances

We have been providing  flight  planning  services to the corporate  marketplace
through a licensing  agreement  with  Universal  Weather and  Aviation,  Inc., a
Houston,  Texas-based aviation services producer.

                                       8
<PAGE>

With  Universal  Weather,  we are exploring  opportunities  to offer  additional
products and services directly to their customer base.

Our global  alliance with RM Rocade has  positioned  us to directly  solicit the
installed   customer   base  of  our   partner.   Through   offering   increased
functionality,  competitive  pricing and integration with RM Rocade's  installed
systems,  we are able to greatly reduce our direct sales costs and better target
opportunities.

Navtech is a party to an agency representation agreement with The Republic Group
(Republic)  of  Arlington,  Virginia in which  Republic  promotes  and sells our
products,  on a  contingency  basis,  through  its network of  in-country  sales
representatives in 78 countries around the world.

Product Development

The  airline   operations   software   industry  is  characterized  by  constant
technological   change,  which  requires  ever  increasing   sophistication  and
integration  of end user  systems.  The pace of  change is  accelerating  as the
airlines move to introduce wireless devices into the cockpit.

Most of our  software  products  are  developed  internally.  We  also  purchase
technology  and  license  intellectual  property  rights.  We  have  established
development  methodologies  and procedures that provide structure to our product
development  activities  and  allow  us to  track  the  efforts  of the  Product
Development group. This is especially important given Navtech-Canada's access to
tax credits for qualifying research and development.

We  communicate  with our  customers  through  account  managers  and user group
meetings to determine the latest requirements of the operations department of an
airline.  In this manner,  we are also able to discover  changing usage patterns
and  hardware  advances  that  may  affect  the  direction  of  our  development
activities.

During  fiscal 2000 and 2001,  we spent  approximately  $296,000  and  $420,000,
respectively,  on product  research and  development  activities.  These amounts
represented  approximately  3.8% and 6.6%,  respectively,  of revenue in each of
those  years.  We are  committed to continue  our  expenditures  on research and
product development.

Intellectual Property Rights

We regard all of our software products as proprietary. Our 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.  We also  grant  rights  to third  parties  to market  certain  of our
products under a limited-scope  exclusive right to a particular  market segment.
See "Marketing and Distribution - Strategic Alliances."

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

                                       9
<PAGE>

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

Government Regulations

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

Employees

As of December 31, 2001, we had a total of 71 employees (of which 69 were full
time employees) including the following:

        o        21 in operations,
        o        7 in account management,
        o        30 in research and development, and product maintenance
        o        2 in sales and marketing and
        o        11 in management, finance and administration.

This represents a decrease of 33% from our peak of 106 employees in June 2001.

None of our employees are  represented  by a labor union and we believe that our
employee relations are good. We believe that our success will depend, to a large
degree,  upon our  ability to  attract  and retain  highly  skilled,  technical,
managerial and sales personnel,  and to retain personnel with flight  operations
expertise.  Competition  for such  personnel  is  intense  and  there  can be no
assurance  that we will be successful in attracting  and retaining the personnel
required to develop,  market,  service and support our  products and conduct our
operations successfully.

                                       10
<PAGE>

ITEM 2.       DESCRIPTION OF PROPERTY

We have offices in the following locations:

Monterey, California

Our head office is located at Suite 102, 2340 Garden Road, Monterey, California.
We moved to this location in March 2000 and currently sublet  approximately  750
square feet of office space for $1,200 per month from Global  Weather  Dynamics,
Inc. The lease expires on December 31, 2002.

Waterloo, Ontario

Navtech-Canada  leases approximately 10,000 square feet of office space at Suite
102,  175 Columbia  Street West,  Waterloo,  Ontario.  We use this  location for
flight operations,  software development,  customer support, and administration.
The lease provides for a current monthly rent expense,  inclusive of common area
rent,  of  approximately  $16,500  Canadian   (approximately   $10,500  US)  and
terminates on October 31, 2006.

Montreal, Quebec

Airware  leases  approximately  2,000  square feet of office  space for software
development purposes at Suite 593, 100 Alexis Nihon Blvd., St. Laurent,  Quebec,
a suburb of Montreal,  Ontario.  The lease  expires on April 30,  2004,  and the
current monthly rent expense is  approximately  $2,800  Canadian  (approximately
$1,800 US).

Crawley, West Sussex, UK

Navtech-UK  has a five-year  lease,  expiring  July 31,  2003,  for the premises
located at Durand  House,  Manor Royal,  Crawley,  West Sussex,  UK. This office
encompasses  approximately  1,900  square  feet of space and is used for  flight
operations,  customer  support  and  administration.  The current  monthly  rent
expense is approximately 2,900 Pounds (approximately $4,200 US).

Our total rent expense was approximately $292,000 for the year ended October 31,
2001. We believe that the facilities are adequate for our current needs and that
suitable additional space will be available as required.

                                       11
<PAGE>


ITEM 3.       LEGAL PROCEEDINGS

On September  13, 1999,  we received a demand from the attorneys for the Chapter
11 Creditors Committee for Southern Air Transport, Inc. for alleged preferential
payments of $88,850.09  made to  Navtech-Canada  within 90 days of the filing of
the bankruptcy  petition by Southern Air in the United States  Bankruptcy  Court
for the Southern District of Ohio on October 1, 1998. The complaint was filed on
September 21, 2000; however, a summons appears to have never been purchased.  We
have not been served with a summons and  complaint.  We are of the view that the
payments received were for contemporaneous  consideration and were therefore not
preferential payments.

                                       12
<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, 2001.

                                       13
<PAGE>


PART II


ITEM 5.       MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

Our common stock is traded on the NASD OTC Electronic  Bulletin under the symbol
"NAVH". The high and low closing bid prices of the common stock are listed below
by fiscal quarter.  These prices represent  prices between dealers;  they do not
include retail markup, markdown or commission.  These are bid prices only and do
not represent actual transactions.

                                                High              Low
        ------------------------------------------------------------------
        Year Ended October 31, 2001
               Fourth Quarter                  $ 0.660          $ 0.1500
               Third Quarter                     0.900            0.4700
               Second Quarter                    1.125            0.6700
               First Quarter                     1.620            0.5625
        ------------------------------------------------------------------
        ------------------------------------------------------------------

        Year Ended October 31, 2000
             Fourth Quarter                    $ 1.875         $  0.75
             Third Quarter                       1.75             1.125
             Second Quarter                      1.875            0.3125
             First Quarter                       0.28125          0.125
        --------------------------------------------------------------------
        --------------------------------------------------------------------

Shareholders

Our transfer agent has advised us that the approximate  number of record holders
of common stock at December 31, 2001 was 791.

Dividends

We have paid no cash  dividends  on the  common  stock and we do not  anticipate
paying any cash dividends in the foreseeable future.

Recent Sales of Unregistered Securities

There were no sales of unregistered  shares during the quarter ended October 31,
2001.

                                       14
<PAGE>


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

RESULTS OF OPERATIONS

The following table shows our annual results of operations for fiscal years 2000
and 2001 (in thousands except per share amounts):

<TABLE>
<CAPTION>
                                                 Results of Operations      Percentage of Total Revenue
                                             -------------------------------------------------------------------
                                                For the year ended October 31,    For the year ended October 31,
                                             -------------------------------------------------------------------
                                                      2000        2001            2000            2001
--------------------------------------------------------------------------------------------------------------
<S>                                                 <C>           <C>             <C>             <C>
REVENUE
     Service fees                               $   5,804     $   6,341            83%           100%
     Software license fees                          1,204             -            17              -
--------------------------------------------------------------------------------------------------------------
     Total revenue                                  7,008         6,341           100            100
--------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES
     Cost of services                               3,858         3,914            55             62
     Cost of software license fees                     62             -             1              -
     Research and development                         269           420             4              6
     Selling and marketing                            565         1,216             8             19
     General and administrative                     1,662         1,753            24             28
     Provision  for (recovery of) bad debt -
       related parties                               (904)          402           (13)             6
     Amortization of goodwill                          11            46             -              1
     Goodwill impairment charge                         -           424             -              7
--------------------------------------------------------------------------------------------------------------
     Total costs and expenses                       5,523         8,175            79            129
--------------------------------------------------------------------------------------------------------------
Income (loss) from operations                       1,485        (1,834)           21            (29)
--------------------------------------------------------------------------------------------------------------
Other income (expense)
     Interest expense                                (251)         (153)           (3)            (2)
     Interest revenue                                  64             1             1              -
--------------------------------------------------------------------------------------------------------------
                                                     (187)         (152)           (2)            (2)
--------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes                   1,298        (1,986)           19            (31)
Income taxes                                          194          (138)            3             (2)
--------------------------------------------------------------------------------------------------------------
Net earnings (loss)                                 1,104        (1,848)           16%           (29)%
--------------------------------------------------------------------------------------------------------------
Net earnings (loss) per share
     Basic                                      $     0.43    $    (0.47)
-------------------------------------------------------------------------------
     Diluted                                    $     0.35    $    (0.47)
--------------------------------------------- ------------- --------------
</TABLE>

Overview

In 2001,  we had a net  loss of  approximately  $1,848,000,  total  revenues  of
approximately $6,341,000 and an operating loss of approximately $1,834,000. This
is in comparison to 2000 when we had net earnings of  approximately  $1,104,000,
total revenue of approximately  $7,008,000 and operating income of approximately
$1,485,000. The net loss in 2001 was incurred due to various factors as detailed
below:

o        We changed our sales methodology to eliminate the sale of system
         licenses in order to sell our products as an application service
         provider (ASP). The ASP model is expected to yield long-term benefits
         through the growth of a contracted for long-term recurring revenue
         base; however in the short-term, it has resulted in reduced revenues.

o        We invested heavily in sales and marketing efforts that did not yield
         any substantial return by the end of the year. Sales and marketing
         efforts consisted both of a human investment in additional sales people
         and increased appearances at trade shows in North America and Europe.

                                       15
<PAGE>

o        We acquired Airware Solutions Inc. on February 1, 2001. The acquisition
         was accounted for as a purchase. Airware is an established crew
         management company and was purchased to give us additional products and
         services to sell to our customers and to open new markets. Airware will
         continue to negatively impact our operating results until this sales
         growth materializes (see Note 4 to our consolidated financial
         statements contained in Item 7).

o        In the fourth quarter of 2001, we decided to write-off the remaining
         unamortized goodwill balance of $424,117 resulting from the Airware
         acquisition. The decision to recognize an impairment loss was made in
         light of market conditions present in the airline industry following
         the events of September 11, 2001, our inability to generate significant
         revenues associated with Airware's product offering during the year
         ended October 31, 2001, Airware's operating loss in the nine months
         following the acquisition, and projected negative cash flows associated
         with the Airware assets over the two year period ending October 31,
         2003. We determined the amount of the impairment charge based on
         discounted net cash flows.

o        Financial  difficulties of two related parties,  Easy Flying S.A. and
         Global Weather Dynamics Inc., forced us to provide for approximately
         $402,000 in bad debts (see Item 12 hereof).

o        By way of comparison, the operating income in fiscal 2000 was augmented
         by the recovery of a provision on an amount owing from Navtech Applied
         Research Inc. The recovery was approximately $904,000 (see Item 12
         hereof).


Critical accounting policies

The  following  accounting  policies  are  fundamental  to the  measurement  and
presentation of disclosures  contained in our consolidated  financial statements
(see Note 2 to our consolidated financial statements contained in Item 7).

Basis of presentation

The consolidated financial statements include the accounts of the Navtech-US and
our  wholly-owned  subsidiaries,  Navtech-Canada,  Navtech-UK  and Airware.  All
significant  intercompany  accounts and  transactions  have been eliminated upon
consolidation.  Navtech-US  acquired all of the issued and outstanding shares of
common and preferred stock of Airware on February 1, 2001.

Continuing operations

We incurred  significant  losses in the fiscal  year ended  October 31, 2001 and
have an  accumulated  deficit  of $3.6  million.  Cash at October  31,  2001 was
approximately  $22,000. Cash used in operations in fiscal 2001 was approximately
$398,000.  During this  period,  we incurred  significant  costs  related to the
expansion of our global sales and marketing effort,  the acquisition of Airware,
and the development of new products.  Current cash balances are  insufficient to
fund operations in fiscal 2002. These factors raise  substantial doubt about our
ability to continue as a going concern. The accompanying  consolidated financial
statements do not include any  adjustments  relating to the  recoverability  and
classification  of asset carrying  amounts or the amount and  classification  of
liabilities that might result from the outcome of the uncertainty.

We have developed a plan to address these liquidity  issues.  Such plan includes
raising  capital and  restructuring  operations in the attempt to reduce certain
costs. Such activities are discussed in greater detail in "Plan of Operation" in
this Item.

Foreign currency translation

a)       Translation of foreign subsidiaries' accounts

                                       16
<PAGE>

Assets and  liabilities of our foreign  subsidiaries  are translated  from their
local  currencies  to US dollars at the  exchange  rate in effect at the balance
sheet date.  Revenues  and  expenditures  are  translated  at the  average  rate
prevailing  during the year.  The  adjustments  resulting from  translating  the
financial  statements of foreign  subsidiaries are recorded in accumulated other
comprehensive income as a separate component of stockholders' equity.

b) Translation of foreign currency transactions

Transactions  incurred in  currencies  other than the  functional  currency  are
converted to the functional  currency at the transaction  date.  Monetary assets
and liabilities denominated in a currency other than the functional currency are
converted  to the  functional  currency at the  exchange  rate in effect at each
period end. All foreign currency transaction gains and losses have been included
in earnings.

Asset impairment

We review the carrying value of intangible and other long-lived  assets at least
annually for evidence of impairment.  An impairment  loss is recognized when the
estimate of undiscounted future cash flows generated by such assets is less than
the carrying amount.  Measurement of the impairment loss is based on the present
value of the expected future cash flows.

Research and development costs

We incur costs related to research and development of our software.  To date, we
have  not  capitalized  any  development  costs  under  Statement  of  Financial
Accounting  Standards No. 86,  "Accounting for the Costs of Computer Software to
be Sold,  Leased  or  Otherwise  Marketed"  ("SFAS  86").  We have  defined  the
attainment of  technological  feasibility as completion of a working model.  The
costs incurred between the time of establishment of a working model and the time
when the products are marketed are insignificant.  Consequently,  costs that are
eligible for capitalization are expensed in the period incurred.

Revenue recognition

We record revenues in accordance with the American Institute of Certified Public
Accountants ("AICPA") Statement of Position ("SOP") 97-2, as amended by SOP 98-4
and SOP 98-9.  We  recognize  software  license  revenues  upon  delivery  if no
significant  obligations remain deliverable to the customer,  the sales contract
fee is fixed or determinable,  amounts are due within one year and collection is
probable, and when customer acceptance has occurred.  Customer payments received
in  connection  with license  sales are recorded as deferred  revenue until such
time as all of the above  criteria  are met.  Third-party  costs  incurred by us
which are directly  related to license sales are deferred until such time as the
related revenues are recognized.

Systems  consulting and  implementation  fees are  recognized  upon rendering of
services.  Custom  programming,  communications and database income, and service
bureau and support  revenue are  recognized  ratably  over  applicable  contract
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.

Use of estimates

                                       17
<PAGE>

The  preparation  of the  financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect  the  reported  amounts  of  assets  and  liabilities,
disclosure of contingent  assets and liabilities as of the date of the financial
statements and the reported amounts of revenues and expenses during the reported
periods. Actual results could differ from those estimates or assumptions.

Recently issued accounting pronouncements

The Financial  Accounting Standards Board ("FASB") issued Statement of Financial
Accounting  Standards  ("SFAS") No. 133,  "Accounting  for Derivative  Financial
Instruments and Hedging  Activities"  ("FAS 133") in June 1998. FAS 133 requires
an entity to recognize all  derivatives  and measure those  instruments  at fair
value.  In June 1999, the FASB issued SFAS No. 137,  "Accounting  for Derivative
Instruments  and Hedging  Activities  - Deferral of the  Effective  Date of FASB
Statement No. 133." In June 2000, the FASB issued SFAS No. 138,  "Accounting for
Certain Derivative  Instruments and Certain Hedging Activities," an amendment of
FAS 133. Based on the revised effective date, we adopted FAS 133, as amended, on
November 1, 2000. The adoption of FAS 133, as amended, had no material effect on
our results of operations or financial position.

In March 2000,  the FASB  issued FASB  Interpretation  No. 44,  "Accounting  for
Certain  Transactions  Involving Stock  Compensation - an  Interpretation of APB
Opinion No. 25" ("FIN 44"). FIN 44 clarifies the  application of APB Opinion No.
25 to certain  issues  including:  the definition of an employee for purposes of
applying  APB  Opinion  No.  25; the  criteria  for  determining  whether a plan
qualifies as a  noncompensatory  plan;  the  accounting  consequence  of various
modifications to the terms of previously fixed stock options or awards;  and the
accounting  for  the  exchange  of  stock  compensation  awards  in  a  business
combination. FIN 44 is effective July 1, 2000, but certain conclusions in FIN 44
are applicable  retroactively to specific events occurring after either December
15, 1999 or January 12, 2000. We have  determined that the application of FIN 44
had no material  impact on our  financial  position or results of  operations in
fiscal year 2001.

In September  2000, the FASB issued SFAS No. 140,  "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities - a Replacement
of FASB  Statement  No. 125" ("FAS  140").  FAS 140 revises  the  standards  for
accounting  for  securitizations  and other  transfers of  financial  assets and
collateral.  The accounting standards of FAS 140 are effective for transfers and
servicing of financial assets and extinguishments of liabilities occurring after
March 31, 2001. We have  determined that the adoption of FAS 140 had no material
impact on our financial position or results of operations in fiscal year 2001.

In June 2001, the FASB issued SFAS No. 141,  "Business  Combinations",  and SFAS
No. 142,  "Goodwill and Other Intangible  Assets" ("FAS 141" and "FAS 142"). FAS
141 requires  that the purchase  method of  accounting  be used for all business
combinations  initiated after June 30, 2001. FAS 141 also specifies the criteria
by which intangible assets acquired in a purchase method business combination be
recognized  and reported  separately  from  goodwill.  FAS 142 will require that
goodwill  and  intangible  assets  with  indefinite  useful  lives no  longer be
amortized,  but instead be tested for impairment at least annually. FAS 142 will
also require the intangible  assets with definite useful lives be amortized over
their  respective  estimated  useful  lives,  and  reviewed  for  impairment  in
accordance  with SFAS No. 121,  "Accounting  for the  Impairment  of  Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of".

We are required to adopt the  provisions of FAS 141  effective  July 1, 2001 and
FAS 142 effective  November 1, 2002. We may elect to adopt the provisions of FAS
142 effective  November 1, 2001.  Furthermore,  any goodwill and any  intangible
asset  determined  to have an  indefinite  useful  life that are  acquired  in a
purchase  business  combination  completed  after  June  30,  2001  will  not be
amortized,  but will continue to be evaluated for impairment in accordance  with
previously  existing  accounting  literature.  Goodwill  and  intangible  assets
acquired in a business  combination  completed before July 1, 2001 will continue
to be  amortized  prior to the adoption of FAS 142. We have not yet assessed the
impact the new standards will have on future  financial  statements.  During the
year ended October 31, 2001, the

                                       18
<PAGE>

amortization  expense  associated  with  goodwill  was  $45,587.  The balance of
goodwill at October 31, 2001 was $98,439.

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets"  ("FAS 144")  which  supersedes  SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed  of" ("FAS 121").  FAS 144 also  supersedes  certain  aspects of the
Accounting Principles Board Opinion No. 30 ("APB 30"), "Reporting the Results of
Operations--Reporting  the Effects of Disposal of a Segment,  and Extraordinary,
Unusual and Infrequently  Occurring Events and  Transactions," as related to the
reporting of the effects of a disposal of a segment of a business.  FAS 144 will
require  expected future  operating  losses from  discontinued  operations to be
displayed in  discontinued  operations in the period  incurred rather than as of
the  measurement  date  as  presently  required  by APB 30.  Additionally,  more
dispositions  may  qualify as  discontinued  operations.  Adoption of FAS 144 is
required  for our fiscal year  beginning  on  November 1, 2002.  We have not yet
determined the effect FAS 144 will have on our financial statements.

Revenue

Our revenue has traditionally  been derived from two major sources:  (i) service
fees from the provision of flight planning  services,  runway analysis services,
weather and NOTAMs data, and ongoing customer support and (ii) sales of software
licenses.

Total revenue  decreased  approximately  $700,000,  or  approximately  10%, from
approximately $7.0 million in 2000 to approximately $6.3 million in 2001.

Geographic Analysis

Our products and services are used by airline carriers located  primarily in the
United  States and Canada,  although our  customers  are also located in Europe,
Mexico, Africa, and South America.

The  following  table shows total  revenues on a customer  geographic  basis for
fiscal 2000 and 2001 (in thousands except percentage amounts):

<TABLE>
<CAPTION>

                                                        Total Revenue         Percentage of Total Revenue
                                                -----------------------------------------------------------
                                                     2000           2001           2000          2001
------------------------------------------------ -------------- -------------- ------------- --------------
<S>                                                <C>              <C>             <C>           <C>
United States                                      $   4,893      $   4,282            70%        68%
Canada                                                   893            937            13         15
Europe, Mexico, Africa, South America and other        1,222          1,122            17         17
------------------------------------------------ -------------- -------------- ------------- --------------
                                                   $   7,008      $   6,341           100%       100%
------------------------------------------------ -------------- -------------- ------------- --------------
</TABLE>

United States

In fiscal 2001, we derived  approximately  $4.3 million from sales in the United
States as compared to  approximately  $4.9 million in fiscal 2000. This decrease
is due primarily to:

        o        a decrease in software license fees of approximately $954,000

        o        an increase in fees to existing customers of approximately
                 $249,000

        o        an addition of new customers representing approximately
                 $485,000 in revenue

Customer losses and bankruptcies  accounted for a loss in service fee revenue of
approximately $391,000 during this period.

Canada

Sales in Canada accounted for approximately  $937,000 in fiscal 2001 as compared
to approximately $893,000 in fiscal 2000. This increase is due primarily to:

                                       19
<PAGE>

        o        an increase in fees to existing customers of approximately
                 $119,000

Customer losses and bankruptcies accounted for a loss in service fee revenue of
approximately $75,000 during this period.

Europe/Other

Sales in Europe and other jurisdictions amounted to approximately  $1,122,000 in
fiscal  2001 as  compared  to  approximately  $1,222,000  in fiscal  2000.  This
decrease is due primarily to:

        o        a decrease in software license fees of approximately $250,000

        o        an increase in fees to existing customers of approximately
                 $33,000

        o        an addition of new customers representing approximately
                 $411,000 in revenue

        o        a loss of ad-hoc customers representing approximately $241,000
                 in revenue

Customer   bankruptcies   accounted  for  a  loss  in  service  fee  revenue  of
approximately $53,000 during this period.

Service fees

Revenue  from service  fees was  approximately  $6.3 million in 2001 as compared
with  approximately  $5.8 million in 2000, an increase of  approximately  9%, or
approximately  $537,000. This increase reflects our philosophy of increasing our
long-term  revenue base through  focusing on contracted  for recurring  revenue.
This increase is due to:

o        an increase in fees to existing customers of approximately $401,000,
         resulting mainly from an increase in the use of flight planning
         services as well as additional support fees from customers that
         transitioned to an in-house system

o        an increase of approximately $896,000 from several new ASP customers

These  increases  were  offset by  decreases  from the loss of ad-hoc  customers
aggregating approximately $241,000 and the bankruptcy or non-renewal of services
of customers aggregating approximately $519,000.

Software license fees

There  was no  revenue  from  software  license  fees  in 2001  as  compared  to
approximately  $1,204,000 in 2000.  Software license fees are no longer marketed
as a  primary  sales  model.  We  prefer to  market  our  products  under an ASP
marketing  philosophy.  This model is expected to yield long-term benefits since
monthly  revenues  will be higher  than those under a license  sale  philosophy.
However,  if a customer  requests a proposal  including  an option to purchase a
license, we will make the effort to fulfill our customer's requirements. Further
explanation  regarding our switch to an ASP marketing philosophy can be found in
the "Plan of Operation; Sales Initiatives" section.

Costs and Expenses

Cost of services

Costs of services  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 shows the major components of operating  expenses for fiscal
years 2000 and 2001 (in thousands except percentage amounts):

                                       20
<PAGE>

                                  2000         2001           Percentage Change
--------------------------------------------------------------------------------
Salaries and benefits        $   2,344       $ 2,353                  0%
Communication costs                902           936                  4
Agent costs                        132            37                (72)
Rent                               233           292                 25
Royalties                           99            40                (60)
Depreciation                        73           123                 68
Other                               75           133                 77
--------------------------------------------------------------------------------
                             $   3,858       $ 3,914                  1%
--------------------------------------------------------------------------------

The cost of  services  was  approximately  $3.9  million in 2001  compared  with
approximately  $3.9 million in 2000, an increase of  approximately  $56,000,  or
approximately 1%. The major components of this increase are:

o        a decrease in agent costs of approximately $95,000. In 2000, Navtech-UK
         coordinated a series of three flights, through which the majority of
         the agent costs were incurred; this was a non-recurring transaction and
         costs decreased accordingly in 2001

o        an increase in rents of approximately $59,000 due primarily to the
         addition of a sales office in Denver, Colorado (which was closed in
         August 2001) and the acquisition of Airware which has a facility in
         Montreal, Canada

o        a decrease in  royalties  of  approximately $59,000 due to the purchase
         of weather  assets from  Navtech Applied Research Inc. in October 2000
         (see Item 12 hereof)

o        an increase in depreciation of approximately $50,000 due primarily to a
         full year of depreciation on additions made in the fourth quarter of
         2000; these additions include renovations to new office space in
         Waterloo, Canada and hardware additions for an expanded workforce

In addition, other expenses, including salaries and benefits and communications,
accounted for an increase of approximately $101,000.

Cost of software license fees

Cost of software  license fees, which were  approximately  $62,000 in 2000, were
eliminated  in  2001.  This  change  is  consistent  with our  change  to an ASP
marketing philosophy.

Research and development

Our  research  and  development   activities  are  undertaken  in  Canada.  Both
Navtech-Canada  and Airware  qualify for  scientific  research and  experimental
development   investment  tax  credits  on  eligible  research  and  development
expenditures.  Federal tax credits are  generated at a rate of 20% of qualifying
expenditures  and  provincial  tax  credits  are  generated  at a rate of 10% of
qualifying  expenditures.  These  credits are  available to reduce  income taxes
payable and are  non-refundable.  Since there was no taxable income in Canada in
2001,  investment  tax credits for 2001 are  available to reduce  future  income
taxes in the next seven  years.  Investment  tax  credits for fiscal 2000 in the
amount of $119,000 were netted against the provision for income taxes.

Research and development expenses increased from approximately  $269,000 in 2000
to  approximately  $420,000 in 2001,  representing an increase of  approximately
$151,000,  or  approximately  56%. This is due to the  undertaking  of two major
development  projects  for the full year in 2001 and  continued  development  on
Airware's CLASS product after acquisition.

 Selling and Marketing Expenses

                                       21
<PAGE>

The following table shows the major components of selling and marketing expenses
for fiscal 2000 and 2001 (in thousands except percentage amounts):

                                                            Percentage
                                    2000        2001          Change
--------------------------------------------------------------------------------
Salaries and benefits             $  347     $  785            126%
Marketing and trade shows            112        181             38
Travel                               106        250            136
--------------------------------------------------------------------------
                                  $  565     $1,216            115%
--------------------------------------------------------------------------

Selling  and  marketing  expenses  increased  by  approximately   $651,000,   or
approximately  115%, from  approximately  $565,000 in 2000 to approximately $1.2
million in 2001. This increase can be attributed primarily to:

o        an increase in salaries and benefits of approximately $438,000
         representing an investment in five additional sales people and one
         marketing coordinator, some of which were hired in the third and fourth
         quarters of 2000 (we have subsequently reduced our sales and marketing
         headcount to two people); approximately $43,000 of the increase relates
         to Airware

o        an  increase  in  marketing  and  trade  shows  of  approximately
         $69,000  due  to the  undertaking  of a user-conference in Carmel,
         California in April 2001

o        an increase in travel expenses of approximately $144,000 related to the
         sales activities mentioned above

General and Administrative Expenses

The following  table shows the major  components  of general and  administrative
expenses for fiscal 2000 and 2001 (in thousands except percentage amounts):

                                                         Percentage
                                    2000      2001        Change
--------------------------------------------------------------------
Professional and consulting      $   472    $   284         (40)%
Wages                                388        624          61
Travel                               413        322         (22)
Provision for bad debts               83        160          93
Depreciation                          22         28          27
Other                                284        335          18
--------------------------------------------------------------------
                                 $ 1,662    $ 1,753           5%
--------------------------------------------------------------------

General and  administrative  expenses  increased by  approximately  $91,000,  or
approximately 5%, from  approximately $1.7 million in 2000 to approximately $1.8
million in 2001. This increase can be attributed primarily to:

o        an increase in the provision for bad debts of approximately $77,000

o        an increase in salaries and benefits of approximately $236,000

o        a decrease in professional and consulting fees of approximately
         $188,000

o        a decrease in corporate travel expenses of approximately $91,000

o        an increase in depreciation and other expenses of approximately $57,000

The increase in the  provision  for bad debts was  primarily due to one customer
filing for Chapter 11 protection and another lost to bankruptcy. In fiscal 2000,
only one significant customer was lost to bankruptcy.

                                       22
<PAGE>

The  increase in salaries  and benefits is due to the addition to the payroll of
Duncan  Macdonald as CEO in May 2000 and two full-time  administrative  staff in
Navtech-UK  in the  fourth  quarter of 2000.  Duncan  Macdonald  was  previously
performing  his duties as a consultant  and the related  costs were  included as
professional and consulting fees.

Other  decreases in  professional  and  consulting  fees were due to a decreased
requirement for legal assistance in fiscal 2001, in comparison to the assistance
related to contract  negotiations,  NARI agreements,  and the exchange  offering
made to the Navtech-Canada Class B shareholders during fiscal 2000.

Corporate travel expenses decreased in 2001 mainly due to a concentrated  effort
to reduce corporate travel in the fourth quarter.  Travel to maintain operations
in Monterey, California and Crawley, UK was also reduced as these operations are
now fully integrated.

While,  as at December 31, 2001, we have not incurred any additional  losses due
to bad  debts,  there is the risk of  further  losses due to bad debts in fiscal
year 2002 pursuant to the tragic events of September 11, 2001. Also, the cost of
business  insurance and directors and officers insurance is expected to increase
significantly.

Provision for bad debt - related party

During the fiscal year 2000, we entered into an agreement  with Navtech  Applied
Research Inc. (NARI),  an affiliated  party, to reduce the total debt owed to us
by NARI  transferring  to us  certain  weather  assets  as well as shares of our
common  stock  into our  treasury.  As a  result,  we were  able to  recover  an
allowance  of  approximately  $904,000  provided for in prior years (see Item 12
hereof).

During the fiscal year 2001,  as a condition to a  subscription  agreement  with
third  parties,  we loaned  $200,000 to Easy Flying S.A., a related  party,  and
received  a  promissory  note  in the  amount  of  $200,000.  Easy  Flying  S.A.
subsequently filed for bankruptcy on September 28, 2001. We have provided in our
financial  statements  the  sum of  $170,000  on the  note  of  $200,000  and an
additional $120,665 representing other trade amounts receivable from Easy Flying
S.A at October 31, 2001 (see Item 12 hereof).

Also during the fiscal year 2001,  we performed  consulting  services for Global
Weather  Dynamics  Inc.,  a related  party.  Given  our  knowledge  of  Global's
financial position,  we determined to discontinue services to Global and provide
an allowance of $111,111 on this  receivable  (which  represents one half of the
outstanding amounts for consulting services and related expenses). We will still
continue efforts to collect this amount (see Item 12 hereof).

Amortization of Goodwill

Amortization of goodwill increased approximately $35,000, or approximately 318%,
from approximately  $11,000 in 2000 to $46,000 in 2001. The increase  represents
the  amortization of goodwill  recorded upon the acquisition of Airware prior to
the fourth quarter decision deeming this asset impaired.

Goodwill Impairment Charge

In the fourth quarter of 2001, we decided to write-off the remaining unamortized
goodwill  balance  of  $424,117  resulting  from the  Airware  acquisition.  The
decision to recognize an impairment loss was made in light of market  conditions
present in the airline industry  following the events of September 11, 2001, our
inability to generate  significant  revenues  associated with Airware's  product
offering during the year ended October 31, 2001, Airware's operating loss in the
nine  months  following  the  acquisition,  and  projected  negative  cash flows
associated  with the Airware  assets over the two year period ending October 31,
2003. We determined the amount of the impairment  charge based on discounted net
cash flows.

Other Income (Expense)

                                       23
<PAGE>

Interest Expense

Interest expense decreased  approximately  $98,000,  or approximately  39%, from
approximately  $251,000 in 2000 to approximately $153,000 in 2001. This decrease
is primarily  attributable  to the  termination of receivables  factoring in the
third  quarter of fiscal 2000 and the  decreased  interest  payments on loans as
they near maturity.  We  subsequently  entered into a new  receivable  factoring
arrangement with a new provider in the fourth quarter of fiscal 2001.

Interest Revenue

Interest revenue decreased  approximately  $63,000,  or approximately  98%, from
approximately  $64,000 in 2000 to approximately  $1,000 in 2001. The decrease is
due to the  settlement  of notes  receivable  from NARI in October  2000.  As of
October 31, 2001, we have no further source of recurring interest revenue.

Net Earnings (Loss)

The financial  statements  reflect a net loss of  approximately  $1,848,000  for
fiscal 2001, as compared to net earnings of approximately  $1,104,000 for fiscal
2000.

We  reflected a net  decrease  in revenue of  approximately  $700,000  and a net
increase in costs and expenses of approximately $2.6 million, resulting in a net
decrease in operating  income of  approximately  $3.3 million.  Offsetting  this
decrease  was the  recovery of  approximately  $138,000 of the tax  provision of
approximately $194,000 made in fiscal 2000.


LIQUIDITY AND CAPITAL RESOURCES

As of October 31, 2001, we had available  cash of $22,011 and a working  capital
deficiency  of  $900,377,  compared to  available  cash of $371,639  and working
capital of $214,879 as of October 31, 2000.

In 2001, we financed our operations through share issuances.

Our cash flows from operating  activities  amounted to a net outflow of $398,103
in fiscal 2001 as compared  to a net  outflow of  $456,177 in fiscal  2000.  The
outflow  in  fiscal  2001  was  primarily  due to the net  loss,  offset  by the
adjustment  for   depreciation,   amortization,   and  goodwill   impairment  of
approximately   $647,000,   the   provision   for   uncollectable   accounts  of
approximately $425,000, and the decrease in net operating assets of $389,877.

During the fourth  quarter of 2001,  we entered into a new  accounts  receivable
factoring  arrangement,  with more  favorable  terms than  those  offered by the
previous factoring company. This arrangement replaced a revolving operating line
of credit as the primary means of financing our operations.

Our cash flows  from  investing  activities  amounted  to a net cash  outflow of
$284,156 in fiscal 2001 as compared to a net cash  outflow of $375,858 in fiscal
2000. Our fiscal 2001 net cash outflow was caused by the following:

o        We acquired a 100% interest in Airware  Solutions  Inc. on February 1,
         2001 for Navtech  common shares and approximately $50,000 in cash.
         (see Note 4 to our consolidated financial statements contained in Item
         7)
o        Cash in the amount of $200,000 was loaned to Easy Flying S.A. This
         company subsequently filed bankruptcy (see Item 12 hereof).
o        The remaining note receivable from NARI was collected during the year.
o        We purchased capital assets in the amount of $75,441.

                                       24
<PAGE>

Our cash flows from financing activities amounted to a net inflow of $343,006 in
fiscal 2001 as compared to a net inflow of $1,207,307 in fiscal 2000. Our fiscal
2001 net inflow was caused primarily by the following:

o        During the year we obtained $613,984 in equity financing.
o        We obtained a facility to factor our accounts receivable and  received
         advances of $168,985 by October 31, 2001.
o        We made principal payments of $431,940.
o        The $7,445 spent to redeem Navtech shares was part of an odd-lot
         program designed to reduce the number of shareholders of record by
         redeeming the shares of those shareholders holding less than a full
         lot.

As of October 31, 2001, we had no significant capital  commitments.  However, we
may,  from  time to time,  consider  additional  acquisitions  of  complementary
businesses, products or technologies.

PLAN OF OPERATION

Beginning in the fourth  quarter of 2001, we  implemented  the following plan to
reduce our working capital deficiency:

Salaries and Benefits

We have reduced our global workforce by over 30% from a peak of 106 employees in
June  2001  to  71  employees  at  fiscal  year-end  through  a  combination  of
terminations and resignations. Although reductions occurred at all locations and
across  all  functional  areas,  we  focused  our  reductions  in our  sales and
marketing  and  development  staff.  In  addition  to the staff  reductions,  we
implemented a temporary reduction in salary for remaining employees of between 3
- 5%.

On  November  29,  2001,  we accepted  the  resignation  of our Chief  Executive
Officer, Duncan Macdonald. We have named Chief Financial Officer, David Strucke,
as our President and Chief Executive Officer.

Travel

With the staff  reductions  mentioned  above,  travel  expenses will be reduced,
especially  in  corporate  and  sales  related  travel.  Also,  travel  is being
rationalized for our remaining staff.

Communications

In fiscal 2001 we incurred  communications costs of approximately  $936,000.  We
have  renegotiated  contracts with our largest  communications  supplier that we
expect will result in cost  savings of  approximately  12%. We plan to negotiate
similar  contracts  with our remaining  suppliers.  We are  currently  analyzing
alternative or advanced communications solutions in order to further rationalize
our communications costs.

Marketing

We are  currently  reviewing  the trade shows that we plan to attend in the next
year.  Some of these  shows will be  eliminated  from our budget as we focus our
marketing  efforts on shows that will  provide us the  maximum  exposure  to our
potential  customers.  We are  currently  evaluating  an  option  to host  small
regional   user-conferences  aimed  directly  at  our  current  and  prospective
customers as an alternative to attending large trade shows. Additional marketing
projects have been suspended until our financial position strengthens.

Facilities

                                       25
<PAGE>

We have closed our sales office in Denver, Colorado and our development facility
in Ottawa,  Ontario.  In addition,  we have  reduced the  rentable  space in our
Monterey,  California  office by  approximately  80%,  resulting  in annual rent
savings of approximately  $40,000, and in our Waterloo facility by approximately
10% resulting in annual rent saving of  approximately  $9,500.  We are currently
reviewing  plans to eliminate  or maximize  space in our current  facilities  in
order to further reduce our fixed expenses.

Equity

We  anticipate  that we will need to raise  additional  equity over the next six
months to fund our working capital needs that include  improving the average age
of our accounts payable.

Accounts Receivable Factoring

Navtech-Canada currently has a facility to factor accounts receivable to a limit
of  $350,000  Canadian  at a rate of 0.1% per day and a  minimum  of 1.6%.  This
facility is subject to certain  covenants  and we are in  compliance  with these
covenants.  This is a  temporary  financing  facility  aimed at  giving  us more
flexibility in meeting our accounts payable and short term financing demands. It
is anticipated that the cost savings from the above mentioned plans will give us
the ability to terminate  this facility and consider more  attractive  financing
facilities once our financial  position  improves.  We anticipate that financing
requirements specific to acquisitions of complementary  businesses,  products or
technologies would be dealt with using debt specific to those transactions.

Sales Initiatives

With our product rebranding  complete,  we are now focusing our efforts on a new
marketing program designed to reintroduce our full product offering to the North
American, South American and European marketplaces.

We have historically marketed our products in two ways: (1) the licensing of our
software,  or (2) acting as an application  service  provider  (ASP).  Under the
license sales  philosophy,  we received  one-time revenues for the license sale;
under the ASP philosophy we receive monthly recurring revenue. Our sales efforts
for our rebranded  products are now focused on the ASP philosophy  only. The ASP
model is expected to yield  long-term  benefits  since  monthly  revenue will be
higher than under the license  sale model.  As an ASP, we manage and  distribute
our software-based services and solutions to our customers across a network from
a central data center. We have successfully used the ASP philosophy for over six
years and have extensive  experience in deploying and supporting  software under
this approach.

Other

We have  recently  completed  a  shareholder  oddlot  repurchase  program and an
escheatment  program for  unexchanged  shares.  These  programs were designed to
reduce costs in connection with shareholder communications.


                                       26
<PAGE>


ITEM 7.    FINANCIAL STATEMENTS
The financial statements begin on Page F-1 following Item 13 hereof.

                                       27
<PAGE>


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

On April 25, 2000, we dismissed Grant Thornton LLP as our independent  certified
public accountants. This decision was made by our Board of Directors.

The reports of Grant Thornton LLP on our financial  statements as of October 31,
1998 and 1999 and for the years then ended neither contain an adverse opinion or
a disclaimer of opinion nor are they modified as to uncertainty,  audit scope or
accounting  principles,   except  that  the  opinions  included  an  explanatory
paragraph that there were  conditions  that raised  substantial  doubt about our
ability to continue as a going concern.

During the fiscal  years  ended  October  31,  1998 and 1999 and the period from
November  1, 1999 to April 25,  2000,  there  were no  disagreements  with Grant
Thornton LLP on any matter of  accounting  principles  or  practices,  financial
statement disclosure, or auditing scope or procedure,  which, if not resolved to
the  satisfaction  of such firm,  would have caused it to make  reference to the
subject matter of the disagreement in connection with its report.

Effective  April 27, 2000, we engaged  Deloitte & Touche LLP as our  independent
certified  public  accountants  for the fiscal year ended October 31, 2000.  Our
Board of Directors approved the engagement of Deloitte & Touche LLP.

                                       28
<PAGE>


PART III

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

Executive Officers and Directors

The following table sets forth the positions and offices  presently held by each
of our directors and executive officers and their ages as of December 31, 2001:

<TABLE>
<CAPTION>

Name                         Age       Positions and Offices
============================================================================================
<S>                          <C>                       <C>
David Strucke                33        President, Chief Executive Officer, Chief Financial
                                       Officer, Secretary and Director
--------------------------------------------------------------------------------------------
Derek Dawson                 32        Executive Vice President - Business Development
--------------------------------------------------------------------------------------------
Jason Kleinbub               31        Chief Technology Officer
--------------------------------------------------------------------------------------------
Duncan Macdonald             42        Chairman of the Board
--------------------------------------------------------------------------------------------
Thomas D. Beynon             60        Director
--------------------------------------------------------------------------------------------
Michael Jakobowski           41        Director
--------------------------------------------------------------------------------------------
Michael Ueltzen              56        Director
============================================================================================
</TABLE>

     David  Strucke  has  served  as our  President,  Chief  Executive  Officer,
Secretary and a Director  since  November  2001.  Mr.  Strucke also continues to
serve as our Chief  Financial  Officer,  a position held 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 a
Business  Analyst from January  1999 to October  1999.  Prior to joining us, Mr.
Strucke served as a Financial  Analyst  focusing on mergers and acquisitions 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.  Mr. Strucke has lectured on Introductory  Finance for
the undergraduate business program at Wilfrid Laurier University.

     Derek  Dawson  has  served  as  our  Executive  Vice  President,   Business
Development since January 2001. Mr. Dawson served as our Chief Operating Officer
from January 1999 to January 2001 and our President from January 2000 to January
2001.  From  September 1997 to January 1999, Mr. Dawson was our Vice President -
Operations.  From 1995 to 1997, he 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. Mr. Dawson has been a business  instructor,
on a part-time basis, at Wilfrid Laurier University since 1997.

     Jason Kleinbub has served as our Chief  Technology  Officer since September
2001. Mr. Kleinbub continues to serve as Product Manager - Weather Systems Group
(since January 2000) and as our technical architect (since 1998). Prior to 1998,
Mr.   Kleinbub   worked  in  consulting   roles   specializing  in  mathematical
programming, communications, networking and OS programming.

     Duncan Macdonald has served as our Chairman of the Board since January 2000
and as a  Director  since  December  1999.  Mr.  Macdonald  served  as our Chief
Executive  Officer from March 1996 until his  resignation  in November  2001. He
served as our Chief  Financial  Officer  from July 1995 to January  1999.  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, he has served as

                                       29
<PAGE>

President of St. Andrews Technology Associates, Inc., the general partner of St.
Andrews Capital Limited Partnership, a California-based  investment partnership,
and as President of Navtech Applied Research Inc. until January 2001.

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

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

     Michael  Ueltzen is the  President  and CEO of The Republic  Group (TRG) in
Arlington,  Virginia.  Mr. Ueltzen joined TRG in 1968. TRG is a high-tech export
management firm with representatives in 78 countries, and specializes in systems
integration   and   engineering   projects   with   emphasis  on   international
environmental problems. Mr. Ueltzen and TRG were awarded the Presidential E-Star
Award  for  outstanding  contribution  to the  United  States  Export  Expansion
Program.  Mr. Ueltzen has been a member of the American  Meteorological  Society
since 1985.  Mr. Ueltzen  served as President of Global  Weather  Dynamics,  Inc
until December  2001. Mr. Ueltzen has served as one of our Directors  since July
2001.

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

Section 16(a) Beneficial Ownership Reporting Compliance

     Based  solely on a review of copies of Forms 3, 4 and 5 furnished to us and
written  representations that no other reports were required,  during the fiscal
year ended October 31, 2001, all Section 16(a) filing requirements applicable to
the officers, directors and 10% stockholders were complied with, except that Mr.
Beynon filed his Form 5 late (which form reported one transaction),  and Messrs.
Prashant Gupta,  Martin Hamrogue,  James McGinty,  and Denis  Metherell,  former
directors,  filed their respective Form 5 late (each reporting one transaction).
Also,  Mr.  Kleinbub  filed his Form 3 late,  EasyFlying  S.A.,  formerly  a 10%
stockholder,  did not file a Form 4 with respect to certain  sale  transactions,
and Alain Mallart and his affiliated entities,  Finextern S.A., and Net Mutation
S.A., a 10% stockholder, did not file a Form 3.

                                       30
<PAGE>


ITEM 10.      EXECUTIVE COMPENSATION

(a)  Summary Compensation Table

     During the fiscal  year  ended  October  31,  2001,  none of our  executive
officers other than Duncan  Macdonald,  our then Chief  Executive  Officer,  had
total salary and bonus in excess of  $100,000.  The  following  table sets forth
information  concerning  the  compensation  of Mr.  Macdonald for the last three
fiscal years:

<TABLE>
<CAPTION>

=================================================================================================================
                                  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
-----------------------------------------------------------------------------------------------------------------
<S>              <C>       <C>         <C>         <C>          <C>          <C>            <C>       <C>
Duncan
Macdonald,       2001     $ 141,785    -0-     $   -0-          -0-          -0-         -0-          -0-
Chief            2000     $  81,820    -0-     $  2,500(2)      -0-       $ 50,000       -0-          -0-
Executive        1999     $   5,000  $20,000   $ 28,927(2)      -0-          -0-         -0-          -0-
Officer (1)
==================================================================================================================
</TABLE>

(1)      Mr. Macdonald resigned his position of Chief Executive Officer in
         November 2001.
(2)      Represents amounts paid as an independent advisor to Navtech. Excludes
         amounts paid to Kintyre & Company Limited, an entity controlled by Mr.
         Macdonald, for consulting services rendered to Navtech-Canada.  See
         Item 12.


(b)      Option Grants Table

     There were no stock options granted to Mr. Macdonald during the fiscal year
ended October 31, 2001.

(c)  Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
     Value Table

     The  following  table  sets  forth  the  value as of  October  31,  2001 of
unexercised options held by Mr. Macdonald:

<TABLE>
<CAPTION>

=====================================================================================================
                                        Number of Unexercised              Value of Unexercised
                                              Options at                   In-the-Money Options
                                           October 31, 2001                 at October 31, 2001
-----------------------------------------------------------------------------------------------------
Name                                  Exercisable/Unexercisable          Exercisable/Unexercisable
-----------------------------------------------------------------------------------------------------
<S>                                           <C>                                <C>
Duncan Macdonald                              50,000/-0-                        $4,438/-0-
=====================================================================================================
</TABLE>

     No options  were  exercised by Mr.  Macdonald  during the fiscal year ended
October 31, 2001.

(d)  Compensation of Directors

     Our Directors are entitled to be reimbursed for travel expenses incurred in
attending any meeting of the Board or any of its  committees.  In addition,  our
Directors,  with the exception of salaried  officers,  are entitled to a fee for
attending  Board or  committee  meetings.  On December  11,  2001,  the Board of
Directors approved a Policy on the Compensation of Directors to become effective
February 1, 2002.  The policy states that the  Directors,  with the exception of
salaried officers, are entitled to receive an annual retainer of $6,000 (payable
quarterly in advance) and $500 per Board and/or committee meeting attended.  The
Chairman  of the Board is  entitled  to  receive  an annual  retainer  of $7,200
(payable  quarterly in advance),  and the Chairman of a Committee is entitled to
receive $750 per committee  meeting chaired.  Mr. Macdonald will not be entitled
to any  compensation  as a Director  until the  conclusion of his Settlement

                                       31
<PAGE>

and Release  Agreement (see Item 12). In addition,  on May 11, 2001, each of our
outside Directors received an option for the purchase of 20,000 shares of common
stock at an exercise  price of $0.70 per share.  On December  11,  2001,  Messrs
Jakobowski and Ueltzen,  who had recently joined the Board, were granted options
for the purchase of 25,000 shares each at an exercise  price of $0.37 per share.
Our  By-Laws  also  provide,  to  the  extent  permitted  by  law,  for  certain
indemnification of our Directors.

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

     Reference is made to Item 12 for a discussion on the Settlement and Release
Agreement  entered  into with  Duncan  Macdonald,  our  former  Chief  Executive
Officer.

                                       32
<PAGE>

ITEM 11.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Our common stock is the only class of securities outstanding. Each share is
entitled  to one vote.  The  following  table  sets  forth  certain  information
regarding our  outstanding  common stock  beneficially  owned as of December 31,
2001                                                                         by:

o       each  person  who is known by us to own  beneficially  or  exercise
        voting or dispositive control over more than 5% of our common  stock,
o       each present Director,
o       each person named in the Summary  Compensation Table above,  and
o       all of our present  executive  officers  and  Directors as a group

<TABLE>
<CAPTION>

Name and Address of Beneficial Owner    Number of Shares Beneficially   Approximate Percentage
                                        Owned                           of Outstanding Shares
-------------------------------------------------------------------------------------------------
<S>                                       <C>                            <C>
Robert N. Snyder                          840,000(1)                     19.0%
7200 Wisconsin Avenue, Suite 601
Bethesda, Maryland
-------------------------------------------------------------------------------------------------
Alain Mallart                             658,700(2)                     15.2%
38 avenue des Klauwaerts
1050 Brussels, Belgium
-------------------------------------------------------------------------------------------------
Duncan Macdonald                          496,543(3)                     11.5%
11 Bedford Crescent
Ottawa, Ontario, Canada
-------------------------------------------------------------------------------------------------
Dorothy A. English                        465,000(4)                     10.1%
175 Columbia Street West
Waterloo, Ontario, Canada
-------------------------------------------------------------------------------------------------
St. Andrews Capital Limited Partnership   296,543(5)                      6.9%
11 Bedford Crescent
Ottawa, Ontario, Canada
-------------------------------------------------------------------------------------------------
Republic Electronics Corporation          250,000(6)                      5.8%
5801 Lee Highway
Arlington, Virginia
-------------------------------------------------------------------------------------------------
Michael Ueltzen                           250,000(7)                      5.8%
5801 Lee Highway
Arlington, Virginia
-------------------------------------------------------------------------------------------------
David Strucke                              90,000(8)                      2.1%
1934 Berlett's Road
St. Agatha, Ontario, Canada
-------------------------------------------------------------------------------------------------
Thomas D. Beynon                           40,000(9)                       *
675 Riverbend Drive
Kitchener, Ontario, Canada
-------------------------------------------------------------------------------------------------
Michael Jakobowski                         10,000                          *
7200 Wisconsin Avenue, Suite 601
Bethesda, Maryland
-------------------------------------------------------------------------------------------------
All executive officers and Directors as   962,743(3)(7)(8)(9)(10)        21.5%
a group (7 persons)
-------------------------------------------------------------------------------------------------
</TABLE>

-----------------------------
*    Less than 1%

                                       33
<PAGE>

(1)  Based upon Schedule 13D, as amended, filed with the Securities and Exchange
     Commission. Includes (i) 100,000 shares that are issuable upon the exercise
     of a warrant that is currently exercisable and (ii) 40,000 shares owned by
     Wyoming Investments Limited Partnership, of which Mr. Snyder is a general
     partner.
(2)  Based upon Schedule 13G filed with the Securities and Exchange  Commission.
     We have been advised that amount includes (i) 25,000 shares owned by Euro
     Business Angels S.A., an entity  indirectly  controlled by Mr. Mallart,
     (ii) 157,000 shares owned by Finextern S.A., an entity controlled by Mr.
     Mallart,  and (iii) 476,700 shares owned by Net Mutation S.A., an entity
     indirectly controlled by Mr. Mallart.
(3)  Based upon Schedule 13D, as amended,  filed with the Securities and
     Exchange Commission.  Includes 296,543 shares owned by St. Andrews Capital
     Limited Partnership, an entity controlled by Mr. Macdonald.
(4)  Based upon Schedule 13D, as amended, filed with the Securities and Exchange
     Commission. Includes 260,000 shares that are issuable to Ms. English upon
     exercise of options that are currently exercisable.
(5)  See footnote (3).
(6)  Based upon Schedule 13G, as amended, filed with the Securities and Exchange
     Commission.
(7)  Based upon  Schedule  13G, as amended,  filed with the  Securities  and
     Exchange  Commission.  Represents shares owned by Republic Electronics
     Corporation (see footnote (6)) of which Mr. Ueltzen is the majority
     shareholder, President and Chief Executive Officer.
(8)  Includes 50,000 shares that are issuable upon exercise of options that are
     currently exercisable.
(9)  Represents 40,000 shares that are issuable upon exercise of options that
     are currently exercisable.
(10) Includes 70,000 shares that are issuable to executive officers upon
     exercise  of options  that are currently exercisable.

                                       34
<PAGE>


ITEM 12.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

1.       Dorothy English / Navtech Applied Research Inc.

Dorothy English is currently an employee of Navtech-Canada as well as one of our
principal  stockholders,  and  until  July  2000  was  one of our  officers  and
directors.  She owns all of the stock of Navtech Applied Research Inc. ("NARI").
Duncan Macdonald,  our Chairman of the Board and former Chief Executive Officer,
served as President of NARI until January 15, 2001.

As of October  23,  2000,  NARI was  indebted to us in the  aggregate  amount of
$1,288,724.  This  balance  consisted of several  promissory  notes with varying
terms as well as unsecured advances.  For financial  reporting purposes,  we had
provided for an  allowance of $928,412  against this debt as of October 31, 1999
(see Item 7). The  resulting  net  balance was equal  approximately  to the fair
value of certain weather software assets owned by NARI at that date as discussed
below.

On October  23,  2000,  we entered  into a series of  transactions  with NARI to
recover the amount due from NARI to us as follows:

o        Certain weather assets purchased by NARI in 1998 were transferred to us
         in return for a reduction of debt. We believe that the estimated fair
         value for tax purposes of $147,651 is equivalent to the software's fair
         market value at October 23, 2000, the date of the valuation.
o        NARI returned 502,766 shares of our common stock to treasury in return
         for a further reduction of debt. At the time of the transfer, the
         shares' market value was $942,686.
o        NARI signed two promissory notes in the cumulative amount of $56,400
         Canadian ($36,809 US as at October 31, 2000) that were paid on January
         15, 2001 from the proceeds from the sale of its remaining 150,000
         shares of our common stock.
o        As part of the asset transfer and treasury stock transfer, for
         financial reporting purposes, we reduced our allowance for doubtful
         accounts by $904,102 and recorded this reduction as a reduction to
         operating costs and expenses (see Item 7).

There will be no further amounts due from NARI.

2.       Duncan Macdonald

Effective  January  1, 1999,  Navtech-Canada  entered  into a two year  services
agreement  with  Kintyre  & Company  Limited,  a  company  controlled  by Duncan
Macdonald, our Chairman of the Board and then Chief Executive Officer. Under the
agreement,  Kintyre agreed to provide the services of Mr. Macdonald,  as well as
other  Kintyre  staff  as  needed,  to  assist  us in  our  strategic  corporate
structuring  and  corporate  finance  and  accounting  activities.  Kintyre  was
entitled to receive a base  monthly  fee of $23,250  Canadian,  plus  additional
amounts  upon the  meeting of certain  time  thresholds  and an annual  bonus of
$8,700   Canadian.   Effective   with  the   employment  of  Mr.   Macdonald  by
Navtech-Canada  on May 1, 2000, the base amount was reduced to $11,000  Canadian
per month.  Effective  with our  employment  of the  remaining  Kintyre staff on
January 1, 2001, this agreement was terminated.

During the fiscal years ended October 31, 2000 and 2001,  we paid  approximately
$182,000 and $14,000, respectively, under the agreement with Kintyre.

Effective  November 29, 2001, Mr. Macdonald resigned as Chief Executive Officer.
As part of the resignation, Navtech-Canada entered into a settlement and release
agreement,  entitling Mr. Macdonald to six months salary (totaling approximately
$112,000 Canadian), as well as miscellaneous expenses up to December 31, 2001.

3.       Alain Mallart/Easy Flying S.A.

                                       35
<PAGE>

Alain Mallart is one of our principal  stockholders and, to our knowledge,  is a
principal stockholder of Easy Flying S.A., a company incorporated in France.

In October 2000, Easy Flying S.A.,  purchased  500,000 common shares from us for
proceeds  of  $500,000.  Easy Flying  S.A.  also  purchased a Weather and NOTAMS
system for $250,000,  with $100,000 due upon contract  signing and the remaining
$150,000 due in three installments on April 1, 2001, July 1, 2001 and October 1,
2001.

In June 2001, in an effort to raise additional working capital, two shareholders
of Easy Flying S.A.  (including an entity  controlled by Mr. Mallart)  purchased
from us a total of 400,000  common  shares for  $400,000.  Concurrent  with this
purchase, and as a condition to raising this capital, we loaned Easy Flying S.A.
a total of $200,000. The loan is repayable on December 31, 2002. As security for
the  repayment  of the loan,  Easy  Flying  S.A.  pledged  100,000 of our common
shares.

On September 28, 2001,  Easy Flying S.A. filed for bankruptcy in France.  At the
date of filing,  Easy Flying S.A.  owed us the full amount of the $200,000  note
receivable  in  addition  to  $120,665  relating  to the sale of the Weather and
NOTAMS system and related services. At October 31, 2001, for financial reporting
purposes,  we reserved the sum of $290,665  against the amounts  owing from Easy
Flying S.A. The remaining  $30,000 not provided for represents the estimated net
realizable value of our 100,000 common shares pledged as security.

4.       Global Weather Dynamics, Inc.

Robert  Snyder  is  one  of  our  principal  stockholders  and  is  a  principal
stockholder  of Global  Weather  Dynamics,  Inc.

Michael  Ueltzen is one of our  Directors  and was President of Global until his
resignation  effective  January  1,  2002.  Mr.  Ueltzen  is also  the  majority
shareholder,  President  and Chief  Executive  Officer of  Republic  Electronics
Corporation,  one of our  principal  stockholders.  We have been  advised by Mr.
Ueltzen that The Republic Group,  of which Mr. Ueltzen is the sole  stockholder,
President  and Chief  Executive  Officer,  received  $269,316 from Global during
fiscal  2001 in  consideration  of  services  rendered.

Duncan Macdonald,  our Chairman of the Board and former Chief Executive Officer,
acted as a consultant and advisor to Global during 1999 and 2000. Mr.  Macdonald
has advised us that,  during  fiscal  2001,  he received  payment from Global of
$46,500 for  reimbursement  of expenses.  Subsequent to his  resignation  as our
Chief  Executive  Officer,  Mr.  Macdonald  has been  engaged as an advisor  and
management consultant to Global.

During the year ended  October 31, 2001, a director of Global also served on our
board as a designee of Mr. Snyder.

During fiscal 2001, we performed consulting services for Global and made several
miscellaneous  payments  on  their  behalf.  Given  our  knowledge  of  Global's
financial  position,  we provided an allowance for doubtful accounts of $111,111
(representing  one half of the balance  outstanding  at October 31, 2001).  This
balance consists primarily of outstanding  consulting fees and related expenses.
The remaining balance of $111,112  represents our estimate of the net realizable
value of this receivable.

Global is still an active  company and we continue to pursue  efforts to collect
the outstanding balance.

                                       36
<PAGE>


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

(a) Exhibits

2      Share Purchase  Agreement  dated February 1, 2001 among Navtech,  Inc.,
       Jose Gomide,  Mario Guzzi,  Daniel Vatne, Karin Vatne, James J. Rowan
       and Les Enterprises Ligeti Inc. (8)

3(A)   Certificate of Incorporation, as amended (9)

3(B)   By-Laws (5)

10(A)  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(B)  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(C)  Lease dated October 8, 1996 between Ferdi  Investments  Company  Limited
       and Navtech  Systems  Support Inc. with respect to Waterloo, Ontario
       premises (3)

10(D)  1995 Key Employees and Advisors Stock Option Plan, as amended (2)

10(E)  Retirement Agreement dated as of August 5, 1999, between Russell K. Thal
       and Compuflight, Inc. (4)

10(F)  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 (4)

10(G)  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 (4)

10(H)  Asset  Purchase  Agreement  and Bill of Sale dated as of October 23, 2000
       between  Navtech,  Inc. and Navtech Applied Research Inc. (7)

10(I)  Share  Transfer Agreement  dated as of October 23, 2000 between  Navtech,
       Inc. and Navtech  Applied Research Inc. (7)

10(J)  Lease dated March 20, 2000 between Mahoney-Tancredi Company and  Navtech,
       Inc.  with  respect to Monterey, California premises (7)

10(K)  1999 Stock Option Plan (6)

10(L)  Subscription Agreement dated as of June 15, 2001 between Navtech, Inc.
       and Net Mutation S.A.

10(M)  Subscription Agreement dated as of June 15, 2001 between Navtech, Inc.
       and Kleber Beauvillain

10(N)  Promissory Note dated as of June 29, 2001 from Easy Flying S.A. to
       Navtech, Inc.

10(O)  Pledge Agreement dated as of June 29, 2001 between Navtech, Inc. and Easy
       Flying S.A.

                                       37
<PAGE>

10(P)  Form of Stock Option Agreement for options granted to Michael
       Jakobowski and Michael Ueltzen dated as of Dec 11, 2001 and to
       Thomas Beynon, Prashant Gupta, James McGinty, and Denis Metherell
       dated as of May 11, 2001

10(Q)  Minutes of Settlement and Release dated as of November 29, 2001 between
       Navtech Systems Support Inc. and Duncan Macdonald

21     Subsidiaries

23     Consent of Deloitte & Touche LLP


----------------
(1) We hereby incorporate the footnoted exhibit by reference in accordance with
Rule 12b-32, as such exhibit was originally filed as an exhibit in our Current
Report on Form 8-K for an event dated December 1, 1993.

(2) We hereby incorporate the footnoted exhibit by reference in accordance with
Rule 12b-32, as such exhibit was originally filed as an exhibit in our Annual
Report on Form 10-KSB for the fiscal year ended October 31, 1994.

(3) We hereby incorporate the footnoted exhibit by reference in accordance with
Rule 12b-32, as such exhibit was originally filed as an exhibit in our Annual
Report on Form 10-KSB for the fiscal year ended October 31, 1996.

(4) We hereby incorporate the footnoted exhibit by reference in accordance with
Rule 12b-32, as such exhibit was originally filed as an exhibit in our Annual
Report on Form 10-KSB for the fiscal year ended October 31, 1997.

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

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

(7) We hereby incorporate the footnoted exhibit by reference in accordance with
Rule 12b-32, as such exhibit was originally filed as an exhibit in our Annual
Report on Form 10-KSB for the fiscal year ended October 31, 2000.

(8) We hereby incorporate the footnoted exhibit by reference in accordance with
Rule 12b-32, as such exhibit was originally filed as an exhibit in our Current
Report on Form 8-K for an event dated February 1, 2001.

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

b) Reports on Form 8-K
       We did not file any Current Reports on Form 8-K during the quarter ended
October 31, 2001.



                                       38
<PAGE>
NAVTECH, INC.                                                                F-1

INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of Navtech, Inc.

We have audited the accompanying  consolidated  balance sheets of Navtech,  Inc.
and  subsidiaries  (the  "Company")  as of October  31,  2001 and 2000,  and the
related consolidated statements of operations, stockholders' deficiency and cash
flows  for  the  years  then  ended.   These   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,  the  consolidated  financial  position of the Company as of
October 31, 2001 and 2000,  and the results of its operations and its cash flows
for the years then ended in  conformity  with  accounting  principles  generally
accepted in the United States of America.

The accompanying  consolidated  financial  statements for the year ended October
31, 2001 have been  prepared  assuming that the Company will continue as a going
concern. As discussed in Note 3 to the consolidated  financial  statements,  the
Company's recurring losses from operations, stockholders' deficiency and working
capital  deficiency raise  substantial  doubt about its ability to continue as a
going concern. Management's plans concerning these matters are also described in
Note 3. The  consolidated  financial  statements do not include any  adjustments
that might result from the outcome of this uncertainty.


Deloitte & Touche, LLP
Chartered Accountants
Kitchener, Ontario
January 23, 2002

                                                                            F-1
<PAGE>



CONSOLIDATED STATEMENTS OF OPERATIONS
(In US Dollars)

<TABLE>
<CAPTION>

                                                                                 -----------------------------------
Fiscal Year Ended October 31,                                                                2000          2001
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

REVENUE
<S>                                                                                 <C>              <C>
   Service fees                                                                     $   5,803,962    $   6,341,299
   Software license fees                                                                1,204,162                -
--------------------------------------------------------------------------------------------------------------------
   Total revenue                                                                        7,008,124        6,341,299
--------------------------------------------------------------------------------------------------------------------

COSTS AND EXPENSES
   Cost of services                                                                     3,857,677        3,914,408
   Cost of software license fees                                                           62,186                -
   Research and development                                                               269,132          420,378
   Selling and marketing                                                                  564,820        1,215,522
   General and administrative                                                           1,661,946        1,752,921
   Provision for (recovery of) bad debt - related parties (Note 7)                       (904,102)         401,778
   Amortization of goodwill                                                                11,200           45,587
   Goodwill impairment charge (Note 4)                                                          -          424,177
--------------------------------------------------------------------------------------------------------------------
   Total costs and expenses                                                             5,522,859        8,174,711
--------------------------------------------------------------------------------------------------------------------
Income (loss) from operations                                                           1,485,265       (1,833,412)
--------------------------------------------------------------------------------------------------------------------
Other income (expense)
   Interest expense                                                                      (251,266)        (152,756)
   Interest revenue                                                                        64,042              692
--------------------------------------------------------------------------------------------------------------------
                                                                                         (187,224)        (152,064)
--------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes                                                       1,298,041       (1,985,476)
Provision for (recovery of) income taxes (Note 15)                                        193,787         (137,570)
--------------------------------------------------------------------------------------------------------------------
Net earnings (loss)                                                                 $   1,104,254    $  (1,847,906)
--------------------------------------------------------------------------------------------------------------------
Net earnings (loss) per share (Note 14)
   Basic                                                                            $         0.43   $        (0.47)
--------------------------------------------------------------------------------------------------------------------
   Diluted                                                                          $         0.35   $        (0.47)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

See Notes to the Consolidated Financial Statements


                                                                             F-2
<PAGE>



CONSOLIDATED BALANCE SHEETS
(In US Dollars)

<TABLE>
<CAPTION>

                                                                                  ---------------- -----------------
October 31,                                                                                2000              2001
--------------------------------------------------------------------------------- ---------------- -----------------

ASSETS
Current Assets
<S>                                                                                  <C>              <C>
   Cash                                                                              $    371,639     $     22,011
   Accounts receivable (net of allowance for bad debts
     of $144,025; 2000 - $122,370)                                                        858,626          687,952
   Accounts receivable - related parties (net of allowance for bad debts of
       $231,778; 2000 - nil) (Note 7)                                                      45,710          111,111
   Investment tax credits receivable (Note 5)                                             100,238           22,186
   Prepaid expenses and other                                                              79,681           63,972
--------------------------------------------------------------------------------- ---------------- -----------------
                                                                                        1,455,894          907,232
Capital Assets (Note 6)                                                                   663,802          574,384
Notes Receivable from related parties (net of allowance for bad debts of
$170,000; 2000
      - Nil) (Note 7)                                                                      36,809           30,000
Goodwill (net of accumulated amortization of $66,949; 2000 - $21,362) (Note 4)            109,638           98,439
--------------------------------------------------------------------------------- ---------------- -----------------
                                                                                     $  2,266,143     $  1,610,055
--------------------------------------------------------------------------------- ---------------- -----------------

LIABILITIES
Current Liabilities
   Accounts payable and accrued liabilities                                          $    732,488     $  1,227,956
   Note payable - factoring                                                                     -          165,519
   Income taxes payable                                                                   184,209           34,886
   Due to related parties - current portion (Note 8)                                      133,971          129,748
   Long-term debt - current portion (Note 9)                                              173,626          149,115
   Obligations under capital lease - current portion (Note 9)                               2,525            2,865
   Deferred lease inducements - current portion (Note 10)                                  14,196           13,776
   Deferred revenue                                                                             -           83,744
--------------------------------------------------------------------------------- ---------------- -----------------
                                                                                        1,241,015        1,807,609
Due To Related Parties (Note 8)                                                           310,790          179,631
Long-Term Debt (Note 9)                                                                   175,578           30,198
Obligations Under Capital Lease (Note 9)                                                    5,801            2,755
Deferred Lease Inducements (Note 10)                                                       70,980           55,104
--------------------------------------------------------------------------------- ---------------- -----------------
                                                                                        1,804,164        2,075,297
--------------------------------------------------------------------------------- ---------------- -----------------
Continuing Operations (Note 3)
Commitments And Contingencies (Note 16)

STOCKHOLDERS' EQUITY (DEFICIENCY)
Share capital (Note 11)                                                                     3,917            4,835
Authorized - 20,000,000, Par Value $0.001, Issued - 4,834,906 (2000 - 3,917,523)
Treasury stock (Note 11)                                                                 (942,686)        (950,131)
Additional paid-in capital                                                              3,133,472        4,057,984
Accumulated other comprehensive income                                                     45,766           48,466
Accumulated deficit                                                                    (1,778,490)      (3,626,396)
--------------------------------------------------------------------------------- ---------------- -----------------
                                                                                          461,979         (465,242)
--------------------------------------------------------------------------------- ---------------- -----------------
                                                                                     $  2,266,143     $  1,610,055
--------------------------------------------------------------------------------- ---------------- -----------------
</TABLE>

See Notes to the Consolidated Financial Statements

                                                                            F-3
<PAGE>



NAVTECH, INC.                                                               F-4

<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
(In US Dollars)



                                                              Accumulated                             Total
                                  Share   Capital Additional     Other                             Stockholders'     Total
                                --------- -------  Paid-In   Comprehensive Treasury   Accumulated    Equity/      Comprehensive
                                 Shares   Amount   Capital   Income (Loss)   Stock      Deficit    (Deficiency)   Income (Loss)
------------------------------ ---------- ------  ---------- ------------- ---------- ------------ ------------   -------------

<S>                             <C>       <C>     <C>          <C>         <C>        <C>          <C>            <C>
Balances, October 31, 1999      2,001,980 $2,002  $1,680,445   $51,175     $       -  $(2,882,744) $(1,149,122)
Issuance of shares              1,353,543  1,353   1,244,825                                         1,246,178
Stock options exercised           370,000    370     132,593                                           132,963
Issuance of shares on Navtech
  B exchange                      192,000    192     236,697                                           236,889
Treasury shares                                     (161,088)               (942,686)               (1,103,774)
Translation adjustments                                         (5,409)                                 (5,409)   $    (5,409)
Net earnings                                                                            1,104,254    1,104,254      1,104,254
------------------------------ ---------- ------  ----------   --------    ---------- ------------ ------------   -----------
Balances, October 31, 2000      3,917,523 $3,917  $3,133,472   $45,766     $(942,686) $(1,778,490) $   461,979    $ 1,098,845
------------------------------ ---------- ------  ----------   --------    ---------- ------------ ------------   ------------
Issuance of shares (Note 11)      759,883    760     811,594                                           812,354
Stock options exercised           157,500    158      63,827                                            63,985
Issuance of warrants upon
  Acquisition of Airware
  Solutions Inc. (Note 4)                             49,091                                            49,091
Treasury shares (Note 11)                                                     (7,445)                   (7,445)
Translation adjustments                                          2,700                                   2,700    $     2,700
Net loss                                                                               (1,847,906)  (1,847,906)    (1,847,906)
------------------------------ ---------- ------  ----------   --------    ---------- ------------ ------------   ------------
Balances, October 31, 2001      4,834,906 $4,835  $4,057,984   $48,466     $(950,131) $(3,626,396) $  (465,242)   $(1,845,206)
------------------------------ ---------- ------  ----------   --------    ---------- ------------ ------------   ------------
</TABLE>

See Notes to the Consolidated Financial Statements



                                                                            F-4
<PAGE>



NAVTECH, INC.

<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In US Dollars)

                                                                                  ---------------- -----------------
Fiscal Year Ending October 31,                                                           2000              2001
--------------------------------------------------------------------------------- ---------------- -----------------

OPERATING ACTIVITIES
<S>                                                                                  <C>           <C>
Net earnings (loss)                                                                  $  1,104,254  $    (1,847,906)
Adjustments to reconcile net earnings (loss) to net
   cash provided by operating activities:
   Depreciation                                                                           112,680          177,780
   Amortization of goodwill                                                                11,200           45,587
   Goodwill impairment charge                                                                   -          424,117
   Provision for uncollectible accounts                                                   (61,976)          23,650
   Provision for (recovery of) bad debt - related parties                                (904,102)         401,778
   Loss on sale of assets                                                                   1,218            1,079
   Deferred lease inducements                                                             (14,741)         (14,065)
Changes in operating assets and liabilities, net of the effect of acquisition:
   Accounts receivable                                                                    (18,105)        (134,182)
   Prepaid expenses and other                                                             (58,640)          30,590
   Investment tax credits receivable                                                      212,841          152,796
   Accounts payable, accrued liabilities and other liabilities                           (709,079)         402,060
   Deferred revenue                                                                      (325,694)          85,498
   Income taxes payable                                                                   193,787         (146,885)
--------------------------------------------------------------------------------- ---------------- -----------------
                                                                                         (456,177)        (398,103)
--------------------------------------------------------------------------------- ---------------- -----------------

INVESTING ACTIVITIES
Acquisition of Airware Solutions Inc., net of cash acquired of $1,874                           -          (49,864)
Note receivable advanced to related party                                                       -         (200,000)
Proceeds on sale of capital assets                                                            500            3,985
Advances to former parent company, net                                                    (68,858)          37,164
Purchase of capital assets                                                               (307,500)         (75,441)
--------------------------------------------------------------------------------- ---------------- -----------------
                                                                                         (375,858)        (284,156)
--------------------------------------------------------------------------------- ---------------- -----------------

FINANCING ACTIVITIES
Redemption of shares                                                                            -           (7,445)
Advances from factored receivables                                                              -          168,985
Proceeds from (repayment of) bank loan                                                     53,733          (83,840)
Repayment of loans                                                                        (94,800)        (117,099)
Repayment of notes to related parties                                                    (247,285)        (231,579)
Proceeds of loans                                                                         227,720                -
Issuance of common shares                                                               1,267,939          613,984
--------------------------------------------------------------------------------- ---------------- -----------------
                                                                                        1,207,307          343,006
--------------------------------------------------------------------------------- ---------------- -----------------

EFFECT OF FOREIGN EXCHANGE RATES ON CASH                                                   (8,137)         (10,375)
--------------------------------------------------------------------------------- ---------------- -----------------
Net cash flow                                                                             367,135         (349,628)
Cash, beginning of year                                                                     4,504          371,639
--------------------------------------------------------------------------------- ---------------- -----------------
Cash, end of year                                                                    $    371,639  $        22,011
--------------------------------------------------------------------------------- ---------------- -----------------
Supplemental disclosure of cash flow information:
   Cash paid during the year for interest                                            $    231,500  $       114,270
   Cash paid during the year for income taxes                                        $          -  $             -
--------------------------------------------------------------------------------- ---------------- -----------------
See Notes to Consolidated Financial Statements
</TABLE>

                                                                            F-5
<PAGE>



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In US Dollars)


1.   DESCRIPTION OF THE BUSINESS

Navtech,  Inc.  ("Navtech-US")  was originally  incorporated in the State of New
York in 1981 and then  reincorporated in the State of Delaware in 1987.  Navtech
Systems   Support  Inc.   ("Navtech-Canada"),   a  wholly-owned   subsidiary  of
Navtech-US,  was  incorporated in the Province of Ontario in 1987.  Navtech (UK)
Limited  ("Navtech-UK"),  a  wholly-owned  subsidiary  of  Navtech-Canada,   was
incorporated in the United Kingdom in 1994. Airware Solutions Inc.  ("Airware"),
a wholly-owned  subsidiary of Navtech-US,  was  incorporated  in the Province of
Quebec in 1986.

The Company develops, markets and supports flight operations management systems
for the commercial aviation industry. The Company's systems are designed to
assist commercial passenger and cargo air carriers in the dynamic environment of
their daily flight operations.


2.   SIGNIFICANT ACCOUNTING POLICIES

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

Basis of presentation

The consolidated  financial  statements  include the accounts of the Company and
its  wholly-owned  subsidiaries,  Navtech-Canada,  Navtech-UK  and Airware.  All
significant  intercompany  accounts and  transactions  have been eliminated upon
consolidation.  Navtech-US  acquired all of the issued and outstanding shares of
common and preferred stock of Airware on February 1, 2001. See Note 4.

Foreign currency translation

a)   Translation of foreign subsidiaries' accounts

Assets and liabilities of the Company's foreign subsidiaries are translated from
their  local  currencies  to US  dollars at the  exchange  rate in effect at the
balance sheet date. Revenues and expenditures are translated at the average rate
prevailing  during the year.  The  adjustments  resulting from  translating  the
financial  statements of foreign  subsidiaries are recorded in accumulated other
comprehensive income as a separate component of stockholders' equity.

b)   Translation of foreign currency transactions

Transactions  incurred in  currencies  other than the  functional  currency  are
converted to the functional  currency at the transaction  date.  Monetary assets
and liabilities denominated in a currency other than the functional currency are
converted  to the  functional  currency at the  exchange  rate in effect at each
period end. All foreign currency transaction gains and losses have been included
in earnings.

Capital assets

Capital assets are recorded at cost. Depreciation of capital assets is recorded
at the following rates:

  Purchased computer software   20 - 40%    Declining balance and straight line
  Computer equipment            20 - 30%    Declining balance and straight line
  Furniture and fixtures             20%    Declining balance and straight line
  Office furniture under
       capital lease                 20%    Declining balance
  Office equipment                   20%    Declining balance and straight line
  Leasehold improvements     Term of lease  Straight line

                                                                            F-6
<PAGE>
Goodwill

Goodwill  is  recorded at cost.  Amortization  is computed on the  straight-line
method over ten years.  See Asset  impairment  and  Recently  issued  accounting
pronouncements.


Asset impairment

The Company reviews the carrying value of intangible and other long-lived assets
at least annually for evidence of impairment.  An impairment  loss is recognized
when the estimate of undiscounted  future cash flows generated by such assets is
less than the carrying  amount.  Measurement of the impairment  loss is based on
the present value of the expected future cash flows. See Note 4.

Income taxes

The Company  accounts for income taxes in accordance with Statement of Financial
Accounting  Standards No. 109,  "Accounting for Income Taxes" ("SFAS 109"). SFAS
109 requires the  determination of deferred tax assets and liabilities  based on
the differences  between the financial  statement and income tax bases of assets
and  liabilities,  using  enacted  tax rates in effect for the year in which the
differences are expected to reverse.  The measurement of a deferred tax asset is
adjusted by a valuation allowance,  if necessary, to recognize tax benefits only
to the extent that, based on available evidence, it is more likely than not that
they will be realized.

Research and development costs

The Company incurs costs related to research and development of its software. To
date, the Company has not capitalized  any development  costs under Statement of
Financial  Accounting  Standards No. 86,  "Accounting  for the Costs of Computer
Software to be Sold, Leased or Otherwise  Marketed" ("SFAS 86"). The Company has
defined the attainment of  technological  feasibility as completion of a working
model.  The costs incurred  between the time of establishment of a working model
and the time when the products are  marketed  are  insignificant.  Consequently,
costs that are eligible for capitalization are expensed in the period incurred.

Investment tax credits

Investment tax credits are recorded as a reduction of income tax expense.

Revenue recognition

The Company  records  revenues in  accordance  with the  American  Institute  of
Certified Public  Accountants  ("AICPA")  Statement of Position ("SOP") 97-2, as
amended  by SOP 98-4 and SOP  98-9.  The  Company  recognizes  software  license
revenues upon delivery if no significant  obligations  remain deliverable to the
customer;  the sales  contract  fee is fixed or  determinable;  amounts  are due
within one year and  collection is probable;  and when customer  acceptance  has
occurred.  Customer  payments  received in connection  with  licenset  sales are
recorded as deferred  revenue  until such time as all of the above  criteria are
met..  Third-party  costs incurred by the Company which are directly  related to
license  sales  are  deferred  until  such  time  as the  related  revenues  are
recognized.

Systems  consulting and  implementation  fees are  recognized  upon rendering of
services.  Custom  programming,  communications and database income, and service
bureau and support  revenue are  recognized  ratably  over  applicable  contract
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-7
<PAGE>
Use of estimates

The  preparation  of the  financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect  the  reported  amounts  of  assets  and  liabilities,
disclosure of contingent  assets and liabilities as of the date of the financial
statements and the reported amounts of revenues and expenses during the reported
periods. Actual results could differ from those estimates or assumptions.

Recently issued accounting pronouncements


The Financial  Accounting Standards Board ("FASB") issued Statement of Financial
Accounting  Standards  ("SFAS") No. 133,  "Accounting  for Derivative  Financial
Instruments and Hedging  Activities"  ("FAS 133") in June 1998. FAS 133 requires
an entity to recognize all  derivatives  and measure those  instruments  at fair
value.  In June 1999, the FASB issued SFAS No. 137,  "Accounting  for Derivative
Instruments  and Hedging  Activities  - Deferral of the  Effective  Date of FASB
Statement No. 133." In June 2000, the FASB issued SFAS No. 138,  "Accounting for
Certain Derivative  Instruments and Certain Hedging Activities," an amendment of
FAS 133. Based on the revised  effective  date, the Company  adopted FAS 133, as
amended,  on November  1, 2000.  The  adoption  of FAS 133,  as amended,  had no
material effect on the Company's results of operations or financial position.

In March 2000,  the FASB  issued FASB  Interpretation  No. 44,  "Accounting  for
Certain  Transactions  Involving Stock  Compensation - an  Interpretation of APB
Opinion No. 25" ("FIN 44"). FIN 44 clarifies the  application of APB Opinion No.
25 to certain  issues  including:  the definition of an employee for purposes of
applying  APB  Opinion  No.  25; the  criteria  for  determining  whether a plan
qualifies as a  noncompensatory  plan;  the  accounting  consequence  of various
modifications to the terms of previously fixed stock options or awards;  and the
accounting  for  the  exchange  of  stock  compensation  awards  in  a  business
combination. FIN 44 is effective July 1, 2000, but certain conclusions in FIN 44
are applicable  retroactively to specific events occurring after either December
15, 1999 or January 12, 2000. The Company has determined that the application of
FIN 44 had no material impact on its financial position or results of operations
in this fiscal year.

In September  2000, the FASB issued SFAS No. 140,  "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities - a Replacement
of FASB  Statement  No. 125" ("FAS  140").  FAS 140 revises  the  standards  for
accounting  for  securitizations  and other  transfers of  financial  assets and
collateral.  The accounting standards of FAS 140 are effective for transfers and
servicing of financial assets and extinguishments of liabilities occurring after
March 31, 2001. The Company has  determined  that the adoption of FAS 140 had no
material  impact on its  financial  position  or results of  operations  in this
fiscal year.

In June 2001, the FASB issued SFAS No. 141,  "Business  Combinations",  and SFAS
No. 142,  "Goodwill and Other Intangible  Assets" ("FAS 141" and "FAS 142"). FAS
141 requires  that the purchase  method of  accounting  be used for all business
combinations  initiated after June 30, 2001. FAS 141 also specifies the criteria
by which intangible assets acquired in a purchase method business combination be
recognized  and reported  separately  from  goodwill.  FAS 142 will require that
goodwill  and  intangible  assets  with  indefinite  useful  lives no  longer be
amortized,  but instead be tested for impairment at least annually. FAS 142 will
also require the intangible  assets with definite useful lives be amortized over
their  respective  estimated  useful  lives,  and  reviewed  for  impairment  in
accordance  with SFAS No. 121,  "Accounting  for the  Impairment  of  Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of".

The Company is required to adopt the  provisions  of FAS 141  effective  July 1,
2001  and FAS 142  effective  November  1,  2002.  It may  elect  to  adopt  the
provisions of FAS 142 effective November 1, 2001. Furthermore,  any goodwill and
any  intangible  asset  determined  to have an  indefinite  useful life that are
acquired in a purchase business  combination  completed after June 30, 2001 will
not be amortized, but will continue to be evaluated for impairment in accordance
with previously existing accounting  literature.  Goodwill and intangible assets
acquired in a business  combination  completed before July 1, 2001 will continue
to be  amortized  prior to the  adoption  of FAS 142.  The  Company  has not yet
assessed the impact the new standards will have on future financial  statements.
During the year ended October 31, 2001, the amortization expense associated with
goodwill was $45,587. The balance of goodwill at October 31, 2001 was $98,439.

                                                                             F-8
<PAGE>

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets"  ("FAS 144")  which  supersedes  SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed  of" ("FAS 121").  FAS 144 also  supersedes  certain  aspects of the
Accounting Principles Board Opinion No. 30 ("APB 30"), "Reporting the Results of
Operations--Reporting  the Effects of Disposal of a Segment,  and Extraordinary,
Unusual and Infrequently  Occurring Events and  Transactions," as related to the
reporting of the effects of a disposal of a segment of a business.  FAS 144 will
require  expected future  operating  losses from  discontinued  operations to be
displayed in  discontinued  operations in the period  incurred rather than as of
the  measurement  date  as  presently  required  by APB 30.  Additionally,  more
dispositions  may  qualify as  discontinued  operations.  Adoption of FAS 144 is
required  for the  Company's  fiscal year  beginning  on  November 1, 2002.  The
Company  has not yet  determined  the effect FAS 144 will have on its  financial
statements.


3.   CONTINUING OPERATIONS

The Company has incurred significant losses in the fiscal year ended October 31,
2001 and has an accumulated deficit of $3.6 million. Cash at October 31, 2001 is
approximately  $22,000.  Cash  used  in  operations  in 2001  was  approximately
$398,000.  During this period, the Company incurred significant costs related to
the  expansion of its global sales and  marketing  effort,  the  acquisition  of
Airware  Solutions  Inc.  and the  development  of new  products.  Current  cash
balances are  insufficient  to fund  operations  in 2002.  These  factors  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
The  accompanying   consolidated   financial   statements  do  not  include  any
adjustments  relating to the recoverability and classification of asset carrying
amounts or the amount and  classification  of liabilities that might result from
the outcome of the uncertainty.

The Company has developed a plan to address these  liquidity  issues.  Such plan
includes raising capital and  restructuring  operations in the attempt to reduce
certain costs. The actions taken by the Company thus far are as follows:

Reduction in workforce

During  the third and fourth  quarters  of the 2001  fiscal  year,  the  Company
reduced its global  workforce by approximately  30% and temporarily  reduced the
salary of remaining employees by 3 - 5%.

Rationalization of expenses

The Company has focused its sales and marketing efforts in 2002 and has targeted
its research and development efforts on those projects with a tangible return in
2002.  In addition,  the Company has  negotiated a new contract with its largest
communications  supplier and plans to achieve further expense  reductions in the
first and second quarters of 2002.

Closure of facilities

During the third and fourth  quarter of the 2001 fiscal year, the Company closed
its  sales  office  in  Denver,  Colorado  and  initiated  the  closure  of  its
development  facility  in Ottawa,  Ontario.  The  Company  has also  reduced the
occupied space of its Monterey, California and Waterloo, Canada offices.

Financing

The Company has the ability to factor up to $350,000 Canadian  ($222,000 USD) of
its accounts  receivable  at a rate of 0.1% per day and a minimum of 1.6%.  This
facility is subject to certain covenants and at October 31, 2001 the Company was
in  compliance  with these  covenants.  At October  31,  2001,  the  Company had
factored approximately $261,000 Canadian ($166,000 USD).

Management believes that the Company's restructuring  activities will enable the
Company to meet its financial  obligations through 2002. Failure to sufficiently
reduce certain  operating costs and to meet expected sales targets in 2002 would
have a material  adverse effect on the Company's  ability to continue as a going
concern.

                                                                             F-9
<PAGE>

4.   ACQUISITIONS

On February  1, 2001,  the Company  acquired  all of the issued and  outstanding
shares of common and preferred  stock of Airware.  Airware  develops  scheduling
systems for the global airline  industry.  The consideration the Company paid to
the common  stockholders of Airware  consisted of an aggregate of 133,560 common
shares  valued at $1.25 per share,  the closing  price of the  Company's  common
stock on February 1, 2001,  and 56,000  warrants to acquire 56,000 common shares
at an exercise  price of $1.25 per share which  expire  Jaunary  31,  2002.  The
warrants were valued at $49,091 as determined by their  estimated  fair value as
of  February  1, 2001 using the  Black-Scholes  option  pricing  model using the
following assumptions:

Assumption
--------------------------------------------------------------------------------
Volatility factor of expected market price of the Company's stock           204%
Dividend yield                                                                0%
Risk-free rate                                                                6%
Weighted average expected life of warrants (years)                         1.00
--------------------------------------------------------------------------------

The Company paid the preferred shareholders of Airware a cash payment of $50,000
Canadian  (approximately  $33,500  US).  Concurrently  with the  closing  of the
acquisition,  the Company settled  certain  obligations of Airware by issuing an
aggregate of 76,323  common shares and making cash  payments  totaling  $112,000
Canadian (approximately $75,000 US). The acquisition was accounted for using the
purchase method as follows:

-------------------------------------------- -------------
Purchase price including acquisition costs      $466,514
-------------------------------------------- -------------

Purchase price allocation:
         Tangible net assets acquired           $  8,009
         Goodwill                                458,505
-------------------------------------------- -------------
                                                $466,514
-------------------------------------------- -------------

The following  table presents  unaudited pro forma revenue,  net earnings (loss)
and net  earnings  (loss)  per  share as if the  Company  had  acquired  Airware
effective November 1, 2000 and November 1, 1999:

                                           ------------------------------------
Fiscal Year Ended October 31,                      2000               2001
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

   Total revenue                              $   7,139,952     $   6,370,246
   Net earnings (loss)                              988,734        (1,741,114)
   Net earnings (loss) per share, basic       $        0.36     $       (0.44)
   Net earnings (loss) per share, diluted     $        0.30     $       (0.44)
-------------------------------------------------------------------------------

The  preceding  unaudited  pro forma  amounts do not purport to be indicative of
what  actual  revenues  and  results  of  operations  might  have  been  if  the
acquisition had occurred at the beginning of each of the periods presented above
or revenues and results of operations which may occur in future periods.

In the fourth  quarter of 2001,  the Company  decided to write-off the remaining
unamortized goodwill balance of $424,117 resulting from the Airware acquisition.
The  decision  to  recognize  an  impairment  loss was  made in light of  market
conditions present in the airline industry following the events of September 11,
2001; the inability of the Company to generate  significant  revenues associated
with  Airware's  product  offering  during  the year  ended  October  31,  2001;
Airware's  operating  loss in the nine months  following  the  acquisition;  and
projected  negative cash flows  associated  with the Airware assets over the two
year period ending  October 31, 2003.  The Company  determined the amount of the
impairment charge based on discounted net cash flows.

                                                                            F-10
<PAGE>

5.   INVESTMENT TAX CREDITS RECEIVABLE

Navtech-Canada  has filed claims for  Investment  Tax Credits for its scientific
research and experimental  development activities for fiscal years ended October
31,  1992  through  October  31,  2000.  Scientific  research  and  experimental
Investment  Tax Credits  ("ITCs") are available to certain  entities  located in
Canada carrying out 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  the  Canada  Customs  and  Revenue  Agency  ("CCRA"),  the  Canadian  taxing
authority.  Based on its technical audit,  the CCRA disallowed  certain expenses
related to projects deemed  non-qualifying,  and accordingly,  reduced the final
assessed  claim.  Further,  the CCRA has  rejected  Navtech-Canada's  Notices of
Objections to these assessments. Navtech-Canada is currently in discussions with
the  District  Chief of Appeals  concerning  their  assessments,  and should the
results  of those  discussions  be  unsatisfactory,  it would need to appeal the
assessments to the Tax Court of Canada. The amounts in dispute  (translated into
US dollars at the appropriate spot rate) are as follows:

                                                          Year ended
                                                         October 31,
                             -------------------- -------------------
                                            2000                2001
---------------------------- -------------------- -------------------
Taxation year ended:
   March 31, 1992               $        25,776      $        25,776
   March 31, 1993                        97,288               97,288
   March 31, 1994                        39,507               39,507
   October 31, 1995                      76,096               76,096
---------------------------- -------------------- -------------------
                                        238,667              238,667
Less: Allowance                         238,667              238,667
---------------------------- -------------------- -------------------
                                $             -      $             -
---------------------------- -------------------- -------------------

At this time, the Company cannot reasonably  determine the likelihood of success
in either its discussions with the District Chief of Appeals or, if required, in
appealing the reductions  resulting from the technical  audits and has therefore
continued to provide an allowance against its ITC receivable.

Claims 2000

During fiscal 2000,  Navtech-Canada applied for ITCs of approximately  $119,000.
These investment tax credits have been used to reduce income taxes payable,  and
accordingly, are not reflected in receivables.

Investment Tax Credits Receivable

Investment tax credits receivable (translated into US dollars at the appropriate
spot rate) consist of the following amounts:

                                                                            F-11
<PAGE>



<TABLE>
<CAPTION>
                                                                                    Year ended
                                                                                   October 31,
                                                       -------------------- -------------------
                                                                      2000                2001
------------------------------------------------------ -------------------- -------------------
Taxation year ended:
<S>                                                       <C>               <C>
   March 31, 1992 through October 31, 1995 (disputed)     $       238,667   $          238,667
   October 31, 1998 (assessed)                                     50,613                    -
   October 31, 1999 (assessed)                                     49,625                    -
   January 31, 2001 (unassessed)                                        -               22,186
------------------------------------------------------ -------------------- -------------------
                                                                  338,905              260,853
Less: Allowance                                                   238,667              238,667
------------------------------------------------------ -------------------- -------------------
                                                          $       100,238   $           22,186
------------------------------------------------------ -------------------- -------------------
</TABLE>


6.   CAPITAL ASSETS

                                                                    October 31,
                                            -------------------- ---------------
                                                  2000                2001
---------------------------------------------------------------- ---------------
Cost
   Purchased computer software               $       597,905   $    601,914
   Computer equipment                                564,529        640,894
   Furniture and fixtures                             90,533        106,204
   Office furniture under capital lease                8,709          8,451
   Office equipment                                  155,307        161,872
   Leasehold improvements                            203,856        198,203
-------------------------------------------- ----------------- -------------
                                                   1,620,839      1,717,538
-------------------------------------------- ----------------- -------------
Accumulated depreciation
   Purchased computer software                       420,086        460,149
   Computer equipment                                372,034        459,462
   Furniture and fixtures                             44,193         54,397
   Office furniture under capital lease                  291          1,916
   Office equipment                                   62,822         85,897
   Leasehold improvements                             57,611         81,333
-------------------------------------------- ----------------- -------------
                                                     957,037      1,143,154
-------------------------------------------- ----------------- -------------
                                             $       663,802   $    574,384
-------------------------------------------- ----------------- -------------

7.   DUE FROM RELATED PARTIES


October 31, 2001

On June 20, 2001, as a condition to a subscription agreement with third parties,
the  Company  loaned  $200,000  to  Easy  Flying  S.A.,  a  Navtech  shareholder
incorporated  in  France  and  owned in part by two  Navtech  shareholders,  and
received  a  promissory  note  in the  amount  of  $200,000.  Easy  Flying  S.A.
subsequently  filed for  bankruptcy in France on September 28, 2001.  Payment of
the  promissory  note is secured by the pledge of 100,000  common  shares of the
Company. At October 31, 2001, these shares had an estimated net realizable value
of $30,000.

Subsequent  to the Easy Flying S.A.  bankruptcy,  the  Company  provided  for an
allowance of $170,000 of the $200,000 note plus an additional  $120,665 in other
trade amounts receivable from Easy Flying.

                                                                            F-12
<PAGE>

During fiscal 2001, the Company performed consulting services for Global Weather
Dynamics,  Inc., a company  affiliated with Robert Snyder,  a principal  Navtech
shareholder. Given the Company's knowledge of Global Weather Dynamics' financial
position and the current market  conditions,  the Company has provided for, as a
doubtful account,  one half of the full balance  outstanding at October 31, 2001
amounting  to  $111,111.  The  remaining  balance  of  $111,112  represents  the
estimated  net  realizable  value of this  receivable.  The balance  consists of
outstanding fees for consulting services and related expenses.

October 31, 2000

Navtech  Applied  Research  Inc.  ("NARI") is the former  parent  company of the
Company  and is owned by a  shareholder  and  employee of the  Company,  Dorothy
English.  On October 23, 2000,  total  amounts due from NARI to both the Company
and  Navtech-Canada  amounted to $1,288,724.  Further,  Navtech-Canada had taken
allowances in prior periods totaling  $928,412.  Effective October 23, 2000, the
Company entered into a series of transactions to reduce the receivable from NARI
to both the Company and Navtech-Canada as follows:

o    Software  assets with an estimated  fair value of $147,651 for tax purposes
     were  transferred  to the  Company in return for a reduction  of debt.  The
     Company  believes  that  the  estimated  fair  value  for tax  purposes  is
     equivalent  to the  software's  fair market value at October 23, 2000,  the
     date of the valuation.

o    NARI  returned  502,766  shares of the common  stock of the  Company to the
     Company's treasury in return for a further reduction of debt (see Note 11).

o    NARI  signed  two  promissory  notes in the  cumulative  amount of  $56,400
     Canadian  ($36,809 as at October 31, 2000),  which were paid to the Company
     on January 15, 2001 from the proceeds  NARI  received  from the sale of its
     remaining 150,000 shares of the common stock of the Company.

o    As part of the asset  transfer  and  transfer of stock into  treasury,  the
     Company reduced its allowance by $904,102.

There will be no further amounts due from NARI.


                                                                            F-13
<PAGE>


8.   DUE TO RELATED PARTIES

Due to related parties as of October 31, 2000 and 2001 is as follows:
<TABLE>
<CAPTION>

                                                                                                         October 31,
                                                                              -------------------- -------------------
                                                                                        2000                2001
----------------------------------------------------------------------------- -------------------- -------------------
----------------------------------------------------------------------------- -------------------- -------------------
<S>                                                                               <C>               <C>
Note payable # 1,  interest at 5%,  payable in monthly  payments                 $        26,747   $                -
     of principal and interest of $5,950 Canadian ($3,770 USD) through May 2001,
     due to a trust related to a shareholder of the Company, Mark Lee

Note payable # 2, interest at 18%, payable in blended weekly payments of $900
     Canadian ($570 USD) through March 2005, due to a company related to a
     former officer and director
     of the Company, Denis Metherell                                                      56,986               46,235

Note payable # 3, non-interest bearing note with an original face value of
     $600,000 payable in 96 semi-monthly payments through November 2003, due to
     a shareholder and former chairman of the Company, Russell K. Thal. The note
     has been recorded at its net present value using a discount
     rate of 7.5%.                                                                       361,028              263,144

----------------------------------------------------------------------------- -------------------- -------------------
                                                                                         444,761              309,379
Less: Current portion                                                                    133,971              129,748
----------------------------------------------------------------------------- -------------------- -------------------
Long-term portion                                                                $       310,790   $          179,631
----------------------------------------------------------------------------- -------------------- -------------------

Maturities of related party debt as of October 31, 2001 are as follow:

----------------------------------------------------------------------------- -------------------- -------------------
2002                                                                                                  $       129,748
2003                                                                                                          151,807
2004                                                                                                           21,819
2005                                                                                                            6,005
2006 and thereafter                                                                                                 -
----------------------------------------------------------------------------- -------------------- -------------------
                                                                                                      $       309,379
----------------------------------------------------------------------------- -------------------- -------------------
</TABLE>



                                                                           F-14
<PAGE>


9.       LONG-TERM DEBT


<TABLE>
<CAPTION>
Long-term debt as of October 31, 2000 and 2001 is as follows:

                                                                                                          October 31,
                                                                              -------------------- -------------------
                                                                                             2000                2001
----------------------------------------------------------------------------- -------------------- -------------------
<S>                                                                              <C>               <C>
Small  business  bank loan  payable # 1,  interest at the bank's                 $        23,414   $                -
     prime  rate  plus  1.75%,   payable  in  monthly  principal
     payments  of $5,123  Canadian  ($3,246  USD) plus  interest
     based on a 48 month amortization period.

Small business bank loan payable # 2, interest at the bank's prime rate (4.00%
     at October 31, 2001) plus 3.00%, payable in monthly principal payments of
     $4,250 Canadian ($2,693 USD) plus interest based on a 36 month amortization
     period. This loan is secured against all capital assets
     of Navtech-Canada except real property.                                              91,577               56,552

Term loan # 1,  interest at 9.18%,  payable in monthly  payments
     of principal and interest of $7,295 through November 2000.                            7,295                    -

Term loan # 2, interest at 10.5%, payable in monthly payments of principal and
     interest of $10,190 through September 2002. This loan is secured against a
     current customer
     contract.                                                                           211,188              106,358

Equipment  note,  payable in monthly  payments of principal  and
     interest  of  $598  through  August  2003.   This  note  is
     secured against a telephone system in Monterey, California.                          15,730               11,334

Term  loan #3, no  interest,  payable  in  monthly  payments  of
     $1,000 Canadian ($634 USD) through June 2002.                                             -                5,069
----------------------------------------------------------------------------- -------------------- -------------------
                                                                                         349,204              179,313
Less: Current portion                                                                    173,626              149,115
----------------------------------------------------------------------------- -------------------- -------------------
Long-term portion                                                                $       175,578   $           30,198
----------------------------------------------------------------------------- -------------------- -------------------


Maturities of long-term debt as of October 31, 2001 are as follow:

----------------------------------------------------------------------------- -------------------- -------------------
2002                                                                                                  $       149,115
2003                                                                                                           30,198
2004 and thereafter                                                                                                 -
----------------------------------------------------------------------------- -------------------- -------------------
                                                                                                      $       179,313
----------------------------------------------------------------------------- -------------------- -------------------
</TABLE>


                                                                           F-15
<PAGE>


The Company is committed under capital leases for telephone and office equipment
with terms expiring at various dates through 2003. The future minimum lease
payments under the lease agreements along with the present balance of the
obligation under the capital leases are as follow:


Minimum lease payments for year ended October 31,
   2002                                                       $         3,564
   2003                                                                 2,970
---------------------------------------------------------- --------------------
---------------------------------------------------------- --------------------
                                                                        6,534
Less: Amounts representing interest                                       900
---------------------------------------------------------- --------------------
---------------------------------------------------------- --------------------
Balance of obligation                                                   5,634
Less: Current portion                                                   2,865
---------------------------------------------------------- --------------------
---------------------------------------------------------- --------------------
Long-term portion                                             $         2,769
---------------------------------------------------------- --------------------

10.      DEFERRED LEASE INDUCEMENTS

Navtech-Canada  entered into a lease for its  premises in Waterloo,  Canada that
provided for certain lease  inducements,  including the provision of a leasehold
improvement  allowance  and a period of free rent.  The Company has deferred the
recognition  of these  inducements  and is amortizing the  inducements  over the
initial term of the lease set to expire  October 2006.  Annual  amortization  is
charged against rent expense.  Deferred lease inducements as of October 31, 2000
and 2001 are as follow:

                                                                 October 31,
                                     -------------------- -------------------
                                                    2000                2001
------------------------------------ -------------------- -------------------
Deferred lease inducements              $       141,964   $          137,762
Less: Accumulated amortization                   56,788               68,882
------------------------------------ -------------------- -------------------
                                                 85,176               68,880
Less: Current portion                            14,196               13,776
------------------------------------ -------------------- -------------------
                                        $        70,980   $           55,105
------------------------------------ -------------------- -------------------

11.  SHARE CAPITAL

The  authorized  share  capital of the  Company  consists of  20,000,000  common
shares,  par value $0.001,  and 2,000,000  preferred shares, par value $0.10. At
October 31, 2001, there were 4,834,906 common shares issued and fully paid (2000
- 3,917,523) and no preferred shares issued.

Year ended October 31, 2001

On February 1, 2001, the Company issued 133,560 common shares valued at $166,950
to the shareholders of Airware in conjunction with the acquisition.

On February 1, 2001,  the Company  issued 76,323 common shares valued at $95,404
in settlement of an obligation of Airware in conjunction with the acquisition.

On March 2, 2001,  the Company issued an aggregate of 100,000 common shares in a
private  offering to three  individuals  at a price of $1.00 per share for total
proceeds of $100,000.

On April 30, 2001, the Company issued 50,000 common shares in a private offering
at a price of $1.00 per share for proceeds of $50,000.

                                                                            F-16
<PAGE>
On June 15, 2001,  the Company issued an aggregate of 400,000 common shares in a
private  offering  to two  individuals  at a price of $1.00  per share for total
proceeds of $400,000. (See Note 7)

During the year,  the Company  issued  67,500 common shares upon the exercise of
options under the 1999 Stock Option Plan for total proceeds of $18,985.

During the year,  the Company  issued  90,000 common shares upon the exercise of
options under the 1995 Key  Employees  and Advisors  Stock Option Plan for total
proceeds of $45,000.

Treasury Stock

During the year, the Company  completed an odd lot program to repurchase  common
shares from  shareholders  holding  less than a complete  lot of common  shares.
4,963 common shares were  repurchased at a price of $1.50 per common share for a
total of $7,445.

Year ended October 31, 2000

On January 12, 2000, the Company issued 25,000 common shares in settlement of an
account payable in the amount of $9,375.

On March 16, 2000, the Company issued 150,000 common shares upon the exercise of
options for proceeds of $93,750.

On March  31,  2000,  the  Company  issued  500,000  common  shares in a private
offering  at a price of $1.00  per  share for total  proceeds  of  $500,000.  In
conjunction  with this  offering,  the  Company  also  issued  warrants  for the
purchase of 125,000 common shares at an exercise price of $1.875 per share which
expire March 31, 2005.

On August 9, 2000, the Company issued 200,000 common shares upon the exercise of
options for proceeds of $125,000.

On August 22, 2000, the Company issued 10,000 common shares upon the exercise of
options for proceeds of $2,813.

On October 4, 2000, the Company issued 10,000 common shares upon the exercise of
options for proceeds of $5,000.

On October 27, 2000, the Company  issued 192,000 common shares,  valued at $1.29
per share, for all of the outstanding  Class B special shares of  Navtech-Canada
under a private  offering  memorandum.  In addition,  the Company  issued 32,000
common shares as part of the private offering for proceeds of $32,000.

On October 30,  2000,  the Company  issued  500,000  common  shares in a private
offering at a price of $1.00 per share for total proceeds of $500,000.

On  October  31,  2000,  the  Company  issued  296,543  common  shares  upon the
conversion of a convertible debt.

Treasury Stock

On October 23, 2000,  Navtech Applied Research Inc.  surrendered  502,766 common
shares of the Company to the Company with a fair value of $942,686 in return for
a reduction in the debt owed to the Company in the same amount.


                                                                           F-17
<PAGE>



12.      STOCK OPTION PLANS

In 1995,  the Company  adopted the 1995 Key Employees and Advisors  Stock Option
Plan (the "1995 Plan"),  which provides for the granting of  nonqualified  stock
options for the purchase of a maximum,  as amended in 1996, of 700,000 shares of
the Company's  common stock to key employees and advisors of the Company.  Under
the terms of the 1995 Plan,  the  options,  which expire no later that 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. At October 31, 2001, no further options were exercisable or were eligible
to be granted.

Further,  in 1999,  the Company  adopted  the 1999 Stock  Option Plan (the "1999
Stock Option Plan"),  as approved by the shareholders on January 14, 2000, which
provided for the granting of incentive  stock  options and  non-statutory  stock
options  for the  purchase  of a maximum of  1,500,000  shares of the  Company's
common stock to directors,  employees,  consultants and advisors of the Company.
On March 29,  2001,  the  shareholders  approved an  amendment to the 1999 Stock
Option Plan to increase the maximum  options to be granted to  3,000,000.  Under
the terms of the 1999 Stock Option Plan, the options, which expire no later than
ten years after grant,  are  exercisable at a price no less than the fair market
value  of the  Company's  common  stock  at the  date of the  grant  and  become
exercisable in accordance with terms established at the time of the grant.

A summary of the activity in the Option Plans is set forth below:

                                  -------------------- --------------------
                                            Number of     Weighted Average
                                               Shares       Exercise Price
--------------------------------- -------------------- --------------------
Balance at October 31, 1999                  726,376                  0.66
     Granted                               1,276,015                  0.57
     Canceled and expired                   (455,376)                 0.69
     Exercised                              (370,000)                 0.61
--------------------------------- -------------------- --------------------
Balance at October 31, 2000                1,177,015        $         0.56
     Granted                                 207,000                  0.90
     Canceled and expired                   (161,500)                 0.86
     Exercised                              (157,500)                 0.41
--------------------------------- -------------------- --------------------
Balance at October 31, 2001                1,065,015        $         0.62
--------------------------------- -------------------- --------------------
Exercisable at October 31, 1999              726,376
Exercisable at October 31, 2000              420,265
Exercisable at October 31, 2001              909,015
--------------------------------- -------------------- --------------------

The following table summarizes  information  concerning  outstanding  options at
October 31, 2001:
<TABLE>
<CAPTION>

                          ------------------ -----------------  ----------------- ------------------ -----------------
                                             Weighted Average
                          Number of Options    Remaining        Weighted Average  Number of Options  Weighted Average
Range of Exercise Prices     Outstanding     Contractual Life    Exercise Price       Exercisable    Exercise Price
------------------------- ------------------ -----------------  ----------------- ------------------ -----------------
<C>                                <C>         <C>                  <C>                   <C>            <C>
$0.28125                           432,500     3.24 years           $      0.28           432,500        $      0.28
$0.375 - $0.75                     415,515     6.67 years           $      0.64           317,515        $      0.61
$0.90 - $1.1875                    192,000     5.68 years           $      1.13           159,000        $      1.17
$1.46875                            25,000     4.25 years           $      1.47                 -        $      1.47
------------------------- ------------------ ----------------- ----------------- ------------------ -----------------
                                 1,065,015     5.04 years           $      0.60           909,015        $      0.55
------------------------- ------------------ ----------------- ----------------- ------------------ -----------------
</TABLE>


                                                                            F-18
<PAGE>



13.  STOCK BASED COMPENSATION

The Company has 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  information  regarding net income and earnings per
share is  required  by SFAS  123,  and has  been  determined  as if the  Company
accounted  for its employee  stock  options  under the fair value method of that
Statement.  The fair value for these  options was estimated at the date of grant
using the Black-Scholes option pricing model with the following weighted average
assumptions:
<TABLE>
<CAPTION>

                                                                                                         Year ended
                                                                                                        October 31,
                                                                                ------------------------------------
Assumption                                                                                  2000              2001
--------------------------------------------------------------------------------------------------------------------
<S>                                                                                          <C>               <C>
Volatility factor of expected market price of the Company's stock                            212%              204%
Dividend yield                                                                                 0%                0%
Risk-free rate                                                                                 6%                3%
Weighted average expected life of stock options (years)                                     3.00              2.00
--------------------------------------------------------------------------------------------------------------------

SFAS 123 requires that, for the pro forma disclosure, the compensation cost
based on the fair values of the options at the grant date be amortized over the
vesting period. If compensation cost for stock options had been determined based
on the fair value at the grant dates consistent with the method described by
SFAS 123, the Company's net earnings and earnings per share would have been
adjusted to the pro forma amounts indicated below.

                                                                                                         Year ended
                                                                                                        October 31,
                                                                                ------------------------------------
                                                                                            2000              2001
--------------------------------------------------------------------------------------------------------------------
Net earnings (loss)
   As per reported                                                                 $   1,104,254     $  (1,847,906)
   Pro forma                                                                       $     775,185     $  (2,006,803)
Earnings (loss) per share, basic
   As per reported                                                                 $       0.43      $      (0.47)
   Pro forma                                                                       $       0.30      $      (0.51)
Earnings (loss) per share, diluted
   As per reported                                                                 $       0.35      $      (0.47)
   Pro forma                                                                       $       0.25      $      (0.51)
--------------------------------------------------------------------------------------------------------------------

The weighted average grant date fair value for stock options granted during the
fiscal year ended October 31, 2001 was $0.77.
</TABLE>


                                                                            F-19
<PAGE>



14.  EARNINGS PER SHARE

Basic and diluted earnings per share are calculated as follows:

<TABLE>
<CAPTION>
                                                                                                         Year ended
                                                                                                        October 31,
                                                                                ------------------------------------
                                                                                            2000              2001
--------------------------------------------------------------------------------------------------------------------
Numerator:
<S>                                                                                <C>               <C>
   Net earnings (loss) (A)                                                         $   1,104,254     $  (1,847,906)
--------------------------------------------------------------------------------------------------------------------
Denominator:
   Denominator for basic earnings (loss) per share - weighted average
     number of common shares outstanding (B)                                           2,552,628         3,925,265
   Effect of dilutive securities:
     Employee stock options                                                              582,178                 -
--------------------------------------------------------------------------------------------------------------------
   Denominator for diluted earnings (loss) per share - adjusted weighted
     average number of common shares outstanding  (C)                                  3,134,806         3,925,265
--------------------------------------------------------------------------------------------------------------------
Earnings (loss) per share - basic (A)/(B)                                          $        0.43     $       (0.47)
--------------------------------------------------------------------------------------------------------------------
Earnings (loss) per share - diluted (A)/(C)                                        $        0.35     $       (0.47)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

Dilutive  securities  consist of employee  stock options and warrants.  Specific
employee   stock   options  and   warrants  are  excluded  if  their  effect  is
antidilutive.


15.  INCOME TAXES

The components of the provision for income taxes are as follows:

<TABLE>
<CAPTION>
                                                                                                         Year ended
                                                                                                        October 31,
                                                                                ------------------------------------
                                                                                            2000              2001
--------------------------------------------------------------------------------------------------------------------
Current:
<S>                                                                                <C>               <C>
   United States                                                                   $           -     $           -
   Canada                                                                                193,787          (137,570)
   United Kingdom                                                                              -                 -
--------------------------------------------------------------------------------------------------------------------
                                                                                         193,787          (137,570)
--------------------------------------------------------------------------------------------------------------------
Deferred:
   United States                                                                               -                 -
   Canada                                                                                      -                 -
   United Kingdom                                                                              -                 -
--------------------------------------------------------------------------------------------------------------------
                                                                                               -                 -
--------------------------------------------------------------------------------------------------------------------
                                                                                   $     193,787     $    (137,570)
--------------------------------------------------------------------------------------------------------------------
</TABLE>


                                                                           F-20
<PAGE>


The components of the net deferred tax asset (liability) are as follows:
<TABLE>
<CAPTION>

                                                                                                         Year ended
                                                                                                        October 31,
                                                                                ------------------------------------
                                                                                            2000              2001
--------------------------------------------------------------------------------------------------------------------
Deferred income tax assets:
<S>                                                                                <C>               <C>
   Net operating losses carried forward                                            $     530,000     $     819,000
   Deferred salaries and other compensation                                              258,000           109,000
   Allowance for doubtful accounts                                                        32,000           161,000
--------------------------------------------------------------------------------------------------------------------
                                                                                         820,000         1,089,000
--------------------------------------------------------------------------------------------------------------------
Deferred income tax liabilities
   Investment tax credits                                                                  2,000                 -
   Depreciation                                                                           93,000            92,000
--------------------------------------------------------------------------------------------------------------------
                                                                                          95,000            92,000
--------------------------------------------------------------------------------------------------------------------
   Net deferred tax asset                                                                725,000           997,000
   Valuation allowance                                                                  (725,000)         (997,000)
--------------------------------------------------------------------------------------------------------------------
Deferred tax asset, net of valuation allowance                                     $           -     $           -
--------------------------------------------------------------------------------------------------------------------

The provision for income taxes varies from the expected provision at the
statutory rates for the following reasons:

                                                                                                         Year ended
                                                                                                        October 31,
                                                                                ------------------------------------
                                                                                            2000              2001
--------------------------------------------------------------------------------------------------------------------
Combined basic statutory rate                                                                 40%               40%
--------------------------------------------------------------------------------------------------------------------
Provision for (recovery of) income taxes based on the basic statutory rate         $     519,000     $    (669,000)
Increase (decrease) in income taxes resulting from the following:
   Effects of differing statutory rates in other countries                                53,000           (20,000)
   Non-deductible expenses, including amortization and impairment of goodwill             13,000           188,000
   Non-recognition of tax credits and losses available for carry-forward                  69,797           363,430
   Investment tax credits applied to reduce taxes payable                               (115,000)                -
   Reversal of related party debt allowance not previously deducted for tax             (346,000)                -
--------------------------------------------------------------------------------------------------------------------
                                                                                   $     193,797     $    (137,570)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

The Company and its subsidiaries have combined income tax loss carryforwards of
approximately $2,124,000 which expire as follow:
<TABLE>
<CAPTION>

Expiry Year                                 Canada         United States       United Kingdom         Total
------------------------------ -------------------- --------------------- -------------------- ---------------------
<C>                                        <C>                   <C>                  <C>                <C>
2002                                             -                $6,000                    -                $6,000
2005                           $            54,000                     -                    -                54,000
2008                                       386,000               162,000                    -               548,000
2009                                             -                62,000                    -                62,000
2012                                             -               381,000                    -               381,000
2018                                             -               318,000                    -               318,000
2019                                             -               228,000                    -               228,000
2020                                             -               118,000                    -               118,000
2021                                             -               136,000                                    136,000
Indefinite                                       -                     -              273,000               273,000
------------------------------ -------------------- --------------------- -------------------- ---------------------
                               $           440,000  $          1,411,000  $           273,000  $          2,124,000
------------------------------ -------------------- --------------------- -------------------- ---------------------
</TABLE>
                                                                            F-21
<PAGE>

No recognition has been given to the potential benefit of this item when
preparing these financial statements.

16.  COMMITMENTS AND CONTINGENCIES

Commitments

The Company is committed  under  non-cancellable  operating  leases for business
premises and computer  equipment  with terms  expiring at various  dates through
2006.  The  Company  also  leases  certain  computer  equipment  from a  company
controlled  by the  spouse  of a former  officer  and  director  of the  Company
pursuant  to an  agreement  which  expires in fiscal  2004.  The future  minimum
amounts payable under the lease agreements are as follows:

-----------------------------------------------------------------------
2002                                                   $       276,068
2003                                                           234,907
2004                                                           157,840
2005                                                           135,511
2006 and thereafter                                            131,869
-----------------------------------------------------------------------
                                                       $       936,195
-----------------------------------------------------------------------

Rent expense for the fiscal  years ended  October 31, 2001 and 2000 was $292,000
and $233,000, respectively.

Contingencies

On September 13, 1999, the Company  received a demand from the attorneys for the
Chapter 11 Creditors  Committee  for Southern  Air  Transport,  Inc. for alleged
preferential payments of $88,850.09 made to Navtech-Canada within 90 days of the
filing  of  the  bankruptcy  petition  by  Southern  Air in  the  United  States
Bankruptcy  Court for the  Southern  District  of Ohio on October  1, 1998.  The
complaint was filed on September 21, 2000;  however,  a summons  appears to have
never  been  purchased.  The  Company  has not been  served  with a summons  and
complaint.  The  Company  is of the view  that the  payments  received  were for
contemporaneous  consideration and were therefore not preferential  payments. No
amount has been disclosed for the contingency disclosed.

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.


17.  FINANCIAL INSTRUMENTS

Financial  instruments  are  comprised of cash,  accounts  receivable,  accounts
payable and accrued liabilities.

Fair value of financial instruments

At  October  31,  2000  and  2001,  the  estimated  fair  value of cash and cash
equivalents,  accounts receivable,  accounts payable and accrued liabilities and
bank  indebtedness was equal to the book value given the short-term  maturity of
the items.

Foreign exchange risk

Foreign  exchange risk is the risk that exchange rates will affect the Company's
operating  results.  The  Company is exposed  to foreign  exchange  risk in that
approximately  85% of the  Company's  sales  contracts  are  denominated  in the
currency (US dollar) while  approximately 70% of the Company's  expenditures are
denominated  in currencies  other than the  currency.  The Company is exposed to
foreign  exchange  risk  with  respect  to net  financial  liabilities  totaling
$394,673,  which  are  denominated  in  currencies  other  than  the  functional
currency.

                                                                           F-22
<PAGE>

Credit risk

The Company is exposed to credit risk through cash and accounts receivable.  The
Company holds its cash positions with reputable financial institutions. Accounts
receivable  credit risk is mitigated by the Company's  large  customer  base, as
well as the use of export receivable insurance by Navtech-Canada,  the source of
a substantial amount of the Company's revenue billings.


18.  SEGMENTED INFORMATION

The Company operates in three geographic segments which are set out below:
<TABLE>
<CAPTION>

Year ended October 31, 2001     United States        Canada         Europe and      Inter-segment     Consolidated
                                                                       Other         adjustments
------------------------------ ----------------- ---------------- ---------------- ---------------- ------------------
<S>                              <C>                <C>              <C>              <C>              <C>
Revenue                          $   2,076,451      $ 3,792,108      $   951,911      $  (479,171)     $ 6,341,299
Costs and expenses (other
     than depreciation
     and amortization)               2,208,326        4,731,510        1,055,917         (468,526)       7,527,227
------------------------------ ----------------- ---------------- ---------------- ---------------- ------------------
                                      (131,875)        (939,402)        (104,006)         (10,645)      (1,185,928)
Depreciation                           155,661          100,886           13,233          (92,000)         177,780
------------------------------ ----------------- ---------------- ---------------- ---------------- ------------------
Segment loss                          (287,536)      (1,040,288)        (117,239)          81,355       (1,363,708)
------------------------------ ----------------- ---------------- ---------------- ---------------- ------------------
Amortization of goodwill                                                                                    45,857
Goodwill impairment charge                                                                                 424,177
                                                                                                    ------------------
Loss from operations                                                                                    (1,833,412)
Interest expense                                                                                          (152,756)
Interest revenue                                                                                               692
                                                                                                    ------------------
Net loss before taxes                                                                                   (1,985,476)
Income taxes                                                                                              (137,570)
Net loss                                                                                               $(1,847,906)
============================== ================= ================ ================ ================ ==================
Total assets                     $   2,143,107      $ 1,568,922      $   260,917      $(2,362,891)     $ 1,610,055
------------------------------ ----------------- ---------------- ---------------- ---------------- ------------------
Capital expenditures             $       4,137      $    58,010      $    13,294      $         -      $    75,441
------------------------------ ----------------- ---------------- ---------------- ---------------- ------------------


Year ended October 31, 2000     United States        Canada         Europe and      Inter-segment     Consolidated
                                                                       Other         adjustments
------------------------------ ----------------- ---------------- ---------------- ---------------- ------------------
Revenue                          $   1,994,850      $ 4,296,863      $   716,411      $         -      $ 7,008,124
Costs and expenses (other
     than depreciation
     and amortization)               1,705,144        2,966,974          726,681                -        5,398,799
------------------------------ ----------------- ---------------- ---------------- ---------------- ------------------
                                       289,706        1,329,889          (10,270)               -        1,609,325
Depreciation                            29,529           71,901           11,430                -          112,860
------------------------------ ----------------- ---------------- ---------------- ---------------- ------------------
Segment income (loss)                  260,177        1,257,988          (21,700)               -        1,496,465
------------------------------ ----------------- ---------------- ---------------- ---------------- ------------------
Amortization of goodwill                                                                                    11,200
                                                                                                    ------------------
Income from operations                                                                                   1,485,265
Interest expense                                                                                          (251,266)
Interest revenue                                                                                             64042
                                                                                                    ------------------
Net earnings before taxes                                                                                1,298,041
Income taxes                                                                                               193,787
Net earnings                                                                                           $ 1,104,254
============================== ================= ================ ================ ================ ==================
Total assets                     $   2,433,666      $ 2,004,811      $   277,997      $(2,450,331)     $ 2,266,143
------------------------------ ----------------- ---------------- ---------------- ---------------- ------------------
Capital expenditures             $     480,888      $   204,384      $    19,879      $  (250,000)     $   455,151
------------------------------ ----------------- ---------------- ---------------- ---------------- ------------------
</TABLE>

19.  COMPARATIVE FIGURES

Certain  accounts for the comparative  period have been  reclassified to conform
with the presentation adopted in the current year.

                                                                            F-23

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 28, 2002                    NAVTECH, INC.


                                           By: /s/ David Strucke
                                              ------------------------------
                                               David Strucke,
                                               Chief Executive Officer


         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>
<CAPTION>

         Signatures                 Capacity                                    Date
        <S>                         <C>                                 <C>


/s/ David Strucke                   President, Chief Executive Officer,         January 28, 2002
---------------------------         Chief Financial Officer, Secretary,
David Strucke                       and Director
                                    (Principal Executive Officer,
                                    Principal Financial Officer, and
                                    Principal Accounting Officer)


/s/ Duncan Macdonald                Chairman of the Board                       January 28, 2002
---------------------------
Duncan Macdonald

/s/ Thomas D. Beynon                Director                                    January 28, 2002
---------------------------
Thomas D. Beynon

/s/ Michael Jakobowski              Director                                    January 28, 2002
---------------------------
Michael Jakobowski

/s/ Michael Ueltzen                 Director                                    January 28, 2002
---------------------------
Michael Ueltzen

</TABLE>


<PAGE>