<PAGE>

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

                                     FORM 10-QSB

[xx]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the quarterly period ended     June 30, 1998
                               -------------------------------------------------

                                          or

[  ]  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:                 33-2205-D
                        --------------------------------------------------------

                                   NeuroCorp., Ltd.
--------------------------------------------------------------------------------
                (Exact name of registrant as specified in its charter)

          Nevada                                  87-0446395
-----------------------------------     ----------------------------------------
(State or other jurisdiction of                (I.R.S. Employer
incorporation or organization)               Identification No.)

150 White Plains Road, Tarrytown, New York                                 10591
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip Code)

                                    (914) 631-3315
--------------------------------------------------------------------------------
                 (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
                 (Former name, former address and former fiscal year,
                            if changed since last report)

Check whether the issuer (1) has 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 [xx]  No [  ]
             APPLICABLE ONLY TO CORPORATE ISSUERS INVOLVED IN BANKRUPTCY
                     PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant 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 ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: 11,213,806 shares as of June 30, 1998


<PAGE>

                           NEUROCORP, LTD. AND SUBSIDIARIES
                      INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



PART 1 -  FINANCIAL INFORMATION:

  ITEM I - FINANCIAL STATEMENTS                                           Page  
                                                                         number 
                                                                         ------ 

          Consolidated balance sheets at June 30, 1998 (unaudited)
           and December 31, 1997                                            1

          Consolidated statements of operations (unaudited)
           for the three months ended June 30, 1998 and 1997                 2

          Consolidated statements of operations (unaudited)
           for the six months ended June 30, 1998 and 1997                   3

          Consolidated statement of stockholders' equity (unaudited)
           for the six months ended June 30, 1998                           4

          Consolidated statements of cash flows (unaudited)
           for the six months ended June 30, 1998 and 1997                   5

          Notes to consolidated financial statements                      6 - 13

ITEM 2 -  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS                          14  - 22

PART II - OTHER INFORMATION                                                 23


<PAGE>

                           NEUROCORP, LTD. AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS

                                        ASSETS

<TABLE>
<CAPTION>
 
                                                                                    (Unaudited)
                                                                                   June 30, 1998     December 31, 1997
                                                                                   -------------     -----------------
<S>                                                                                <C>                 <C>
Current assets:
   Cash                                                                             $   368,596         $ 1,597,825
   Accounts receivable, net of allowance for doubtful accounts of
    $5,547 at June 30, 1998 and $40,777 at December 31, 1997                            697,409             650,505
   Inventory                                                                            134,241             132,727
   Prepaid expenses and taxes                                                           100,362             152,979
   Other current assets                                                                  77,781              61,629
                                                                                    -----------         -----------
        Total current assets                                                          1,378,389           2,595,665
                                                                                    -----------         -----------

Equipment and fixtures, net                                                             566,777             236,002
                                                                                    -----------         -----------

Other assets:
   Database development costs, net                                                    1,173,099           1,228,189
   Computer system product development costs, net                                       309,555             371,888
   Other                                                                                150,805             178,266
                                                                                    -----------         -----------
        Total other assets                                                            1,633,459           1,778,343
                                                                                    -----------         -----------

Total assets                                                                        $ 3,578,625         $ 4,610,010
                                                                                    ===========         ===========

                            LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                                 $   585,273         $   271,129
   Accrued expenses                                                                     116,004             215,252
   Stockholder notes and loans payable                                                  385,985             386,332
                                                                                    -----------         -----------
        Total current liabilities                                                     1,087,262             872,713
                                                                                    -----------         -----------

Long-term liabilities:
   Deferred income taxes                                                                240,000             240,000
                                                                                    -----------         -----------

Commitments and contingencies (Note 4)                                                                           - 

Stockholders' equity:
   Preferred stock, authorized 5,000,000 shares, issued as follows:
    Cumulative Preferred stock, class B, series 1, no par value, issued and
     outstanding 150,000 shares, full liquidation value  $150,000                       150,000             150,000
   Common stock, $.001 par value, 100,000,000 shares authorized,  
    11,213,806 & 10,813,806 issued and outstanding                                       21,914              21,514
   Additional paid-in capital                                                         7,151,497           6,751,897
   Accumulated deficit                                                               (5,072,048)         (3,426,114)
                                                                                    -----------         -----------
   Total stockholders' equity                                                         2,251,363           3,497,297
                                                                                    -----------         -----------

Total liabilities and stockholders' equity                                          $ 3,578,625         $ 4,610,010
                                                                                    ===========         ===========

</TABLE>

 
       See accompanying notes to consolidated financial statements (unaudited).

                                          1

<PAGE>

                           NEUROCORP, LTD. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                         FOR THE THREE MONTHS ENDED JUNE 30, 
                                     (UNAUDITED)

<TABLE>
<CAPTION>

                                                               1998           1997
                                                           -----------     ----------
<S>                                                       <C>             <C>
Net sales                                                  $    43,914     $  311,513

Cost of sales, including amortization expense
 of $66,847 and $67,207, respectively                           92,479        123,220
                                                           -----------     ----------
Gross (loss) profit                                            (48,565)       188,293
                                                           -----------     ----------

Expenses:
  General and administrative expenses                          805,041        524,718
  Research and development                                          -          34,653
                                                           -----------     ----------
    Total expenses                                             805,041        559,371
                                                           -----------     ----------

Loss from operations before other income (expense)
 and income tax expense                                       (853,606)      (371,078)
                                                           -----------     ----------

Other income (expense):
  Interest income                                                1,221         10,292
  Interest expense                                              (9,826)       (30,659)
                                                           -----------     ----------
    Total other income (expense)                                (8,605)       (20,367)
                                                           -----------     ----------

Loss before income tax expense                                (862,211)      (391,445)

Income tax expense (benefit)                                     1,625         (1,300)
                                                           -----------     ----------

Net loss                                                   $  (863,836)    $ (390,145)
                                                           ===========     ==========

Net loss applicable to common shares                       $  (867,586)    $ (393,895)
                                                           ===========     ==========

Loss per common equivalent share:
  Basic:
  Net loss                                                 $      (.08)    $     (.05)
                                                           ===========     ==========

  Net loss applicable to common shares                     $      (.08)    $     (.05)
                                                           ===========     ==========

Weighted average number of shares outstanding               10,880,473      8,015,486
                                                           ===========     ==========

</TABLE>
 

       See accompanying notes to consolidated financial statements (unaudited).

                                          2

<PAGE>

                           NEUROCORP, LTD. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                          FOR THE SIX MONTHS ENDED JUNE 30,
                                     (UNAUDITED)

<TABLE>
<CAPTION>
 

                                                               1998           1997
                                                           -----------     ----------
<S>                                                       <C>             <C>
Net sales                                                  $   209,328     $  587,000

Cost of sales, including amortization expense
 of $134,220 and $135,802, respectively                        217,818        293,063
                                                           -----------     ----------
Gross (loss) profit                                             (8,490)       293,937
                                                           -----------     ----------

Expenses:
  General and administrative expenses                        1,614,993        844,765
  Research and development                                           -         52,128
                                                           -----------     ----------
    Total expenses                                           1,614,993        896,893
                                                           -----------     ----------

Loss from operations before other income (expense)
 and income tax expense                                     (1,623,483)      (602,956)
                                                           -----------     ----------

Other income (expense):
  Interest income                                                7,201         21,708
  Interest expense                                             (20,527)       (77,975)
                                                           -----------     ----------
     Total other income (expense)                              (13,326)       (56,267)
                                                           -----------     ----------

Loss before income tax expense                              (1,636,809)      (659,223)

Provision for income tax                                         1,625              -
                                                           -----------     ----------
Net (loss)                                                 $(1,638,434)    $ (659,223)
                                                           ===========     ==========

Net loss applicable to common shares                       $(1,645,934)    $ (666,723)
                                                           ===========     ==========

Loss per share:
  Basic:
    Net loss                                               $      (.15)    $     (.08)
                                                           ===========     ==========

    Net loss applicable to common shares                   $      (.15)    $     (.08)
                                                           ===========     ==========
Weighted average number of shares outstanding               10,847,139      8,015,486
                                                           ===========     ==========

</TABLE>
 

       See accompanying notes to consolidated financial statements (unaudited).

                                          3

<PAGE>

                           NEUROCORP, LTD. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                        FOR THE SIX MONTHS ENDED JUNE 30, 1998
                                     (UNAUDITED)


<TABLE>
<CAPTION>

                                    Preferred Stock                                       Additional                      Total
                                   Class B, Series 1                Common Stock            Paid-in    (Accumulated   Stockholders'
                                  Shares        Amount        Shares           Amount       Capital       Deficit)        Equity
                                 -------       --------     ----------        -------     ----------    -----------    -----------
<S>                             <C>           <C>          <C>               <C>         <C>           <C>            <C>
Balances at December 31, 1997    150,000       $150,000     10,813,806        $21,514     $6,751,897    $(3,426,114)   $ 3,497,297

Exercise of 400,000 warrants         -              -          400,000            400        399,600            -          400,000

Preferred stock dividend             -              -              -              -              -           (7,500)        (7,500)

Net loss for the six months
 ended June 30, 1998                 -              -              -              -              -       (1,638,434)    (1,638,434)
                                 -------       --------     ----------        -------     ----------    -----------    -----------

Balances at June 30, 1998        150,000       $150,000     11,213,806        $21,914     $7,151,497    $(5,072,048)   $ 2,251,363
                                 =======       ========     ==========        =======     ==========    ===========    ===========

</TABLE>
 

       See accompanying notes to consolidated financial statements (unaudited).

                                          4

<PAGE>

                           NEUROCORP, LTD. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                          FOR THE SIX MONTHS ENDED JUNE 30,
                                     (UNAUDITED)


<TABLE>
<CAPTION>
 
                                                                                        1998           1997
                                                                                    -----------     ----------
<S>                                                                                <C>             <C>
Cash flows for operating activities:
  Net loss from operations                                                          $(1,638,434)    $ (659,223)
 Adjustments to reconcile net loss to net cash 
  used for operating activities:
  Depreciation and amortization                                                         183,879        169,225
  Amortization of deferred financing costs                                               26,188         53,516
  Bad debt recovery                                                                     (35,230)           -  
 Decrease (increase) in:
  Accounts receivable                                                                   (11,674)        30,170
  Due from affiliates                                                                   (14,584)           -  
  Inventory                                                                              (1,514)         6,762
  Prepaid expenses and taxes                                                             52,617        (50,233)
  Other current assets                                                                      -          (47,816)
 Increase (decrease) in:
  Accounts payable                                                                      312,519        (94,177)
  Accrued expenses                                                                      (99,248)        (1,988)
  Income taxes payable                                                                    1,625         (4,384)
  Billings in excess of costs and estimated earnings on uncompleted contracts               -         (191,972)
                                                                                    -----------     ----------
Net cash flows used for operating activities                                         (1,223,856)      (790,120)
                                                                                    -----------     ----------

Cash flows for investing activities:
  Purchase of equipment and fixtures                                                   (381,605)       (65,975)
  Database development costs capitalized                                                (14,353)       (75,359)
  Other assets                                                                              -         (101,027)
  Proceeds from sale of automobile                                                          -            1,660
                                                                                    -----------     ----------
Net cash flows used for investing activities                                           (395,958)      (240,701)
                                                                                    -----------     ----------

Cash flows from financing activities:
  Repayment of stockholder loans                                                        (22,434)      (102,007)
  Principal payments on long-term debt                                                      -          (54,217)
  Registration costs incurred                                                               -         (114,035)
  Proceeds from exercise of warrants and sale of common stock                           400,000        600,000
  Proceeds from stockholder loan                                                         13,019            -  
                                                                                    -----------     ----------
Net cash flows provided by financing activities                                         390,585        329,741
                                                                                    -----------     ----------

Net (decrease) increase in cash                                                      (1,229,229)      (701,080)

Cash at beginning of period                                                           1,597,825      1,851,114
                                                                                    -----------     ----------

Cash at end of period                                                               $   368,596     $1,150,034
                                                                                    ===========     ==========

Supplemental disclosures of cash flow information:
  Cash paid during the period for:
  Interest                                                                          $     7,201     $    3,770
                                                                                    ===========     ==========
  Income taxes                                                                      $     1,625     $      -  
                                                                                    ===========     ==========

Schedule of non-cash investing and financing activities:

  Accrued dividends on Series 1 preferred stock                                     $     7,500     $    7,500
                                                                                    ===========     ==========

  Bank note liquidated in exchange for automobile                                   $       -       $   22,703
                                                                                    ===========     ==========

</TABLE>
 

       See accompanying notes to consolidated financial statements (unaudited).

                                          5

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


NOTE 1    -    GENERAL

               NeuroCorp, Ltd. (the "Company") was incorporated in the State of
               Nevada on March 18, 1987.  On November 23, 1994 the Company
               entered into an agreement and a plan of reorganization with HZI
               Research Center, Inc. ("HZI").

               The Company is primarily involved in two business.  Through its
               wholly-owned subsidiary, HZI, the Company sub-contracts clinical
               research and performs data analysis for health agencies, research
               organizations and pharmaceutical companies.  In addition, as an
               outgrowth of its research activities, the Company also designs
               diagnostic testing software and equipment for neuropsychiatric
               applications and performs neurological testing services for
               hospital and physicians.  Through its wholly-owned subsidiary
               Memory Centers of America, Inc.  ("MCAI") a Delaware corporation,
               the Company provides non-medical management of facilities as well
               as education and consultation services to individuals who suffer
               from memory complaints.  Revenues from this wholly-owned
               subsidiary were immaterial for the three and six months ended
               June 30, 1998 and 1997.

               HZI assigns certain clinical research contracts to the New York
               Institute for Medical Research, Inc. ("NYI"), a not-for-profit
               private foundation that is controlled by board members that also
               control the Company.  TeleMap, Inc., is a wholly-owned subsidiary
               of HZI and has no material business operations.

               The Company conducts its operations in Tarrytown, New York.  The
               Company's revenues consist of a concentration of significant
               long-term contracts, thus leading to a limited number of
               customers comprising a significant percentage of revenues.

               The unaudited interim financial statements for the three and six
               months ended June 30, 1998 and 1997 included herein have been
               prepared by the Company, without audit, pursuant to the rules and
               regulations of the Securities and Exchange Commission and, in the
               opinion of the Company, reflect all adjustments (consisting only
               of normal recurring adjustments) and disclosures which are
               necessary for a fair presentation.  The results of operations for
               the three months ended are not necessarily indicative of the
               results for the full year.  For further information, refer to the
               Company's audited financial statements and footnotes thereto at
               December 31, 1997, included in Form 10-KSB filed with the
               Securities and Exchange Commission.

NOTE 2    -    GOING CONCERN

               The accompanying consolidated financial statements have been
               prepared assuming that the Company will continue as a going
               concern.  For the years ended December 31, 1997 and 1996, the
               Company incurred losses of $2,423,602 and $1,634,675. 
               Additionally, the Company generated negative cash flows from
               operations of $2,568,380 and $897,382 for the years ended
               December 1997 and 1996, respectively.  The Company's ability to
               continue as a going concern is currently dependent on its ability
               to successfully attain profitability and positive cash flows from
               operations as well as obtain capital or other financing to fund
               future losses and intended expansion.  These factors raise
               substantial doubt about the Company's ability to continue as a
               going concern.  The financial statements do not include
               adjustments relating to the recoverability and realization of
               assets and classification of liabilities that might be necessary
               should the Company be unable to continue in operation.

                                          6

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


NOTE 2    -    GOING CONCERN (Cont'd)

               Managements plans to mitigate the Company's financial problems
               are outlined below.

               On April 7, 1998, the Company signed a Letter of Intent with
               Pioneer Ventures Associates Limited Partnership ("Pioneer")
               whereby the Company would receive a minimum of $2,000,000 to a
               maximum of $4,500,000 in exchange for issuing cumulative
               preferred stock convertible into common stock at $3 per share
               with an 8% dividend.  Prior to the Company receiving the full
               amount of any funds, Pioneer is performing a due diligence which,
               if completed to its satisfaction, will result in the Company
               receiving an initial $2,000,000.  Pioneer has imposed certain
               other conditions which has resulted in the Company bringing in a
               new chief executive officer and the election of two (2) Pioneer
               representatives to the Board of Directors.

               The Company received an initial investment of $1,000,000 from
               Pioneer on July 31, 1998 for which it issued 333,333 shares of a
               new class of Series C Senior Convertible Preferred Stock.  During
               the due diligence process, Pioneer is evaluating the capital
               requirements of MCAI and HZI's contract research division and
               will invest up to a total of $4,500,000 based on terms and
               conditions to be agreed upon.  The Company is also exploring
               additional options to obtain capital or financing.

               Regarding current operations, in order to maintain its liquidity
               and economic viability in the interim, the Company is continuing
               its ongoing marketing efforts to obtain contracts for its
               contract research division and has implemented several measures
               including payroll and expense reductions and aggressive
               collection efforts on its receivables.

NOTE 3    -    STOCKHOLDERS' EQUITY

          a)   ISSUANCE OF WARRANTS

               Pursuant to the plan of reorganization on November 23, 1994 with
               HZI, the Board of Directors of the Company authorized the
               issuance of Class B and Class C Warrants to all stockholders of
               the Company of record as of November 1, 1994.  The Warrants were
               distributed on a 1 Warrant for 1 share of common stock basis and
               comprised in the aggregate 800,000 Class B and 800,000 Class C
               Warrants, each of which was exercisable into one share of Common
               Stock of the Company.  The Class B Warrants were exercisable at
               $2.25 per share and the Class C Warrants are exercisable at $2.75
               per share, and were to expire September 30, 1996.  The shares of
               Common Stock underlying the Warrants must be registered with the
               Securities and Exchange Commission ("SEC") prior to the Warrants
               becoming exercisable.  The exercise price of the Warrants, may be
               adjusted downward or upward at any time by the Company's Board of
               Directors.  Further, the Warrants are redeemable by the Company
               at any time upon thirty days written notice, at a price of $.001
               per Warrant.

               During January 1996, the Company's Board of Directors reduced the
               exercise price of the  Class B and Class C warrants from $2.25 to
               $1.00 per share and from $2.75 to $2.00 per share, respectively
               and during the last quarter of 1997, the expiration dates were
               extended to March 31, 1998.  Lastly, on March 31, 1998, an
               additional extension to September 30, 1998 for the exercise of
               such warrants was approved by the Board of Directors.

                                          7

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


NOTE 3    -    STOCKHOLDERS' EQUITY (Cont'd)

          a)   ISSUANCE OF WARRANTS (Cont'd)

               On March 12, 1997, two (2) shareholders exercised in the
               aggregate 200,000 Class B Warrants and 200,000 Class C Warrants,
               which resulted in the Company receiving proceeds of $600,000 and
               issuing 400,000 shares of common stock.

          b)   SENIOR MANAGEMENT INCENTIVE PLAN

               On November 23, 1994, the Company adopted an incentive stock
               option plan that provides for the granting of options to purchase
               up to 1,500,000 shares of the Company's common stock that are
               intended to qualify either as statutory stock options or
               non-statutory stock options.   Options to purchase shares may be
               granted under the incentive stock option plan to persons who are
               employees or officers of the Company.

               On September 19, 1995, December 15, 1995 and December 18, 1996,
               the Company granted  250,000, 50,000 and 500,000 options
               respectively to purchase shares of common stock pursuant to the
               Company's Incentive Plan.  250,000 options were granted to the
               former President of the Company, 50,000 to a consultant, and
               500,000 options were granted to the former President of MCAI. 
               The exercise price of the options was fixed at $.10, $.01 and the
               lower of $7.00 or fair market value per share respectively.  Such
               options expire between September 2002 and January 2007.

          c)   ISSUANCE OF COMMON STOCK AS CONSIDERATION FOR LOANS

               On May 24, 1996, the Company entered into an agreement with a
               shareholder to borrow $200,000.  The loan is non-interest bearing
               and is payable within one (1) year or is payable out of the first
               proceeds resulting from any exercise of outstanding Class B and
               Class C warrants, whichever comes first.  As additional
               consideration the Company issued 66,665 shares of restrictive
               common stock.  The Company has valued the common stock at
               $133,333 or fifty percent (50%) of the fair market value on May
               24, 1996, the date of the transaction.  The Company recorded
               deferred financing cost and increased stockholders' equity by
               $133,333, respectively for this transaction.  The deferred
               financing cost were amortized over one year, which is the maximum
               term of the loan. During  June 1997 the original maturity date of
               May 24, 1997 was extended to December 15, 1998.  Accordingly, as
               of June 30, 1998, and December 31, 1997 such loans have been
               classified as short term.

          d)   PREFERRED STOCK

               During December 1994, the Company issued two classes of preferred
               stock for total consideration of $400,000.  The first class of
               150,000 shares of cumulative non-convertible preferred stock
               class B, series 1, no par value has a liquidation preference of
               $1 per share.  Dividends accrue on such stock commencing January
               1, 1996 at a rate of 10% of the liquidation value and are payable
               semi-annually in cash or stock.  At June 30, 1998 and December
               31, 1997, the Company had accrued dividends of $8,750 and $1,250,
               respectively, related to this preferred stock after a payment of
               $28,750 in the form of common stock during December 1997.

                                          8

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


NOTE 3    -    STOCKHOLDERS' EQUITY (Cont'd)

          d)   PREFERRED STOCK (Cont'd)

               The second class of 250,000 shares of convertible, no par value,
               preferred stock, Class B, Series 2, were converted into common
               stock during November 1997.

          e)   REGISTRATION OF COMMON STOCK
               
               During February, 1996, the Company commenced registering common
               shares and warrants pursuant to certain registration rights, and
               other contractual obligations incurred by the Company in
               connection with the issuance of such common shares and warrants
               pursuant to the HZI acquisition agreement signed in November 1994
               and the sale of common shares in December 1995.  The Company will
               not receive any of the proceeds from the sale of the common
               shares or warrants since all respective shares are being offered
               by the selling stockholders.  The Company has also agreed to pay
               for such costs related to the registration. 

          f)   EXERCISE OF WARRANTS

               On December 31, 1997, the Company issued 1,100,000 shares of
               common stock for $1,100,000 in connection with the exercise of
               1,100,000 warrants.  Simultaneously with such  exercise, the
               Company also sold to the same investor for $400,000, 400,000
               units comprising of 400,000 shares of common stock and 400,000
               warrants to purchase one share of common stock at $5 per share
               which expire on December 31, 1998.  The exercise price of the
               warrants was subsequently reduced by the Board of Directors to $1
               per share and such warrants were exercised June 30, 1998
               resulting in the issuance of 400,000 shares of common stock for
               $400,000.

NOTE 4    -    COMMITMENTS AND CONTINGENCIES

          a)   OPERATING LEASES

               The Company and its subsidiaries have entered into lease
               agreements for administrative offices and certain equipment under
               noncancellable operating leases expiring in various dates through
               December 2002.  The administrative office leases contain a
               provision for additional rent which is equal to the Company's pro
               rated share of future real estate taxes.

               A schedule of future minimum rental payments at June 30, 1998 is
               as follows:

<TABLE>
<CAPTION>

               Year Ended December 31,
               -----------------------
<S>                                                        <C>
                      1998                                  $ 85,758
                      1999                                   122,002
                      2000                                   115,572
                      2001                                   115,000
                      2002                                   115,000
                                                            --------
                                                            $553,332
                                                            ========

</TABLE>

               Rent expense under all operating leases for the six months ended
               June 30, 1998 and 1997 was $76,403 and $56,657, respectively.

                                          9

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


NOTE 4    -    COMMITMENTS AND CONTINGENCIES (Cont'd)

          b)   CONCENTRATION OF CREDIT RISK

          For the six months ended June 30, 1998 and 1997, approximately 69% and
          80%, respectively, of net sales were derived from three and two
          unrelated customers, respectively  who are in the pharmaceutical and
          psychiatric industries.  As of June 30, 1998 and December 31, 1997,
          approximately 64% and 90% respectively, of accounts receivable are due
          from four unrelated customers.

          c)   EMPLOYMENT AGREEMENTS

               i)   On September 20, 1995, the Company's Chairman of the Board
                    entered into an employment agreement providing for a base
                    salary of $250,000 per year.  The agreement is for an
                    initial term of 10 years and is renewable on a month to
                    month basis thereafter.  Further, the agreement provides for
                    a term life insurance policy amounting to $1,000,000 payable
                    to the Chairman's designated beneficiary and also provides
                    for transportation arrangements funded by the Company. 
                    Through December 31, 1996, the Company's Chairman waived his
                    right to receive the term               life insurance as
                                                            provided for in the
                                                            employment
                                                            agreement.  For the
                                                            six months ended
                                                            June 30, 1998 and
                                                            1997 premiums paid
                                                            on such policy
                                                            amounted to $13,754
                                                            and $9,506,
                                                            respectively.

                    On May 7, 1998, pursuant to a board meeting, the Chairman of
                    the Board resigned as President and CEO effective May 15,
                    1998.  Accordingly, a director of the Company was elected as
                    the interim Chief Executive Officer and President.

               ii)  On December 7, 1994, the Company entered into an employment
                    agreement with an Executive Vice President providing for a
                    base salary of $100,000 per year.  The agreement expires on
                    January 1, 2000 and is renewable on a year to year basis
                    thereafter.  The agreement provides that on January 1 of
                    each year the Executive Vice President shall be entitled to
                    a 10% salary increase and an annual bonus equal to at least
                    fifty percent (50%) of his base salary subject to the Board
                    of Directors approval.  During the three months ended June
                    30, 1998, a bonus of $60,500 was paid.  Such amount had not
                    been accrued at December 31, 1997 as the Board of Directors
                    had not approved the bonus until May 1998. If the employee
                    is terminated within the contract period due to a change in
                    control of the Company as defined in the Securities Exchange
                    Act of 1934, under Sections 13(d) and 14(d), said Executive
                    Vice President shall be entitled to a lump sum payment equal
                    to five (5) times his gross annual compensation, in effect
                    at date of termination.  Additionally, for the three year
                    period after the date of termination, the Company is
                    obligated to provide the employee with life and health
                    insurance benefits substantially similar to those which the
                    Executive Vice President was receiving prior to the date of
                    termination.

               iii) On December 31, 1996, the Company entered into an employment
                    agreement with its then Chief Financial Officer ("CFO")
                    providing for a base salary of $85,000 per year.  The
                    agreement expires on January 1, 2000 and is renewable on a
                    year to year basis thereafter.  This agreement was later
                    amended to document that her official title and duties were
                    changed from CFO to Vice President, Administration, and
                    Special Assistant to the Chairman.

                                          10

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


NOTE 4    -    COMMITMENTS AND CONTINGENCIES (Cont'd)

          c)   EMPLOYMENT AGREEMENTS (Cont'd)

               iv)  On December 18, 1996, the Company and MCAI entered into an
                    employment agreement with the CEO and President of MCAI who
                    was also an Executive Vice President of the Company
                    providing for a base salary of $150,000 in year one,
                    $225,000 in year two and increasing by the Consumer Price
                    Index ("CPI") change each year thereafter.  The agreement
                    expires on January 1, 2000 and is renewable on a year to
                    year basis thereafter.  The agreement provides for 500,000
                    qualified stock options for purchase of common stock
                    exercisable at the lower of $7.00 per share or fair market
                    value.  The options are exercisable upon vesting and expire
                    January 6, 2007.  On January 6, 1997, 200,000 of such
                    options vested and 150,000 options each vest on January 6,
                    1998 and 1999.  During March 1998, such individual resigned
                    from the Company and accordingly, lost the right to the
                    options which would have vested January 6, 1999.

               v)   On July 1, 1997, the Company entered into an employment
                    agreement with the Vice President of Technical Operations,
                    providing for a base salary of $80,000 per year with annual
                    increases.  This agreement expires on July 1, 2000 and is
                    renewable for successive one-year terms thereafter.

               vi)  On July 1, 1997 MCAI and the Company entered into an
                    employment agreement with the Managing Director of MCAI. 
                    This agreement provides for a base salary of $75,000 per
                    year with annual increases, expiring on July 1, 1999 and is
                    renewable on a year to year basis thereafter.

          d)   CONSULTING AGREEMENT

               On July 1, 1995, the Company entered into a five (5) year
               consulting agreement with an entity controlled by the Company's
               former President and Vice Chairman.  Said agreement provided for
               a fee of $75,000 per annum.  The agreement was amended on July
               12, 1996 to provide for a reduced fee of $30,000 per annum. 
               During March 1998, such individual became the acting Chief
               Executive Officer of MCAI and his compensation was increased to
               $10,000 per month pursuant to a verbal agreement with the
               Company.

          e)   LETTER OF INTENT
               On April 7, 1998, the Company signed a Letter of Intent with
               Pioneer Ventures Associates Limited Partnership ("Pioneer")
               whereby the Company would receive a minimum of $2,000,000 to a
               maximum of $4,500,000 in exchange for issuing cumulative
               preferred stock convertible into common stock at $3 per share
               with an 8% dividend.  Prior to the Company receiving the full
               amount of any funds, Pioneer is performing a due diligence which,
               if completed to its satisfaction, will result in the Company
               receiving an initial $2,000,000.  Pioneer has imposed certain
               other conditions which has resulted in  the Company bringing in a
               new chief executive officer and the election of two (2) Pioneer
               representatives to the Board of Directors.

               The Company received an initial investment of $1,000,000 from
               Pioneer on July 31, 1998 for which it issued 333,333 shares of a
               new class of Series C Senior Convertible Preferred Stock.  During
               the due diligence process, Pioneer is evaluating the capital
               requirements of MCAI and HZI's contract research division and
               will invest up to a total of $4,500,000 based on terms and
               conditions to be agreed upon.

                                          11

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


NOTE 5    -    RELATED PARTY TRANSACTIONS

          a)   REVENUES FROM AFFILIATES

               Manhattan Westchester Medical Services, P.C. ("Manhattan
               Westchester") reimburses the Company for the use of certain
               employees as well as office and laboratory space (administration
               services) of the Company.  The Company and Manhattan Westchester
               also operate under an oral agreement whereby the Company is paid
               $1,000 per month for each of the Memory Centers operated by
               Manhattan Westchester.  Manhattan Westchester is 100% owned by 
               the Company's Chairman.  Net revenues from Manhattan Westchester 
               for the six months ended June 30, 1998 and 1997 approximated 
               $15,675 and $23,708, respectively.  Effective March 1, 1998, such
               oral agreement was terminated with Manhattan Westchester.  The 
               Company is undergoing negotiations with an unrelated physician to
               provide medical services relating to the Memory Centers.

          b)   STOCKHOLDER NOTES AND LOANS PAYABLE

          Stockholder notes and loans payable consisted of the following at:

<TABLE>
<CAPTION>

                                                              June
                                                            30, 1998    December
                                                          (Unaudited)   31, 1997
            --------------------------------------------------------------------
<S>                                                        <C>         <C>
            Non-interest bearing loans and payables,
             (See (i) below)                                $ 85,985    $ 86,332

            Notes payable bearing an interest of
             5% to 9% (See below)                            300,000     300,000
                                                            --------    --------

                                                            $385,985    $386,332
                                                            ========    ========

</TABLE>

               i)   Stockholder loans payable relates to advances made to HZI
                    and NYI by its former Chairman of the Board which are due on
                    demand.  

               ii)  On May 24, 1996, the Company entered into an agreement with
                    a shareholder to borrow $200,000.  The note is non-interest
                    bearing and was payable within one (1) year or is payable
                    out of the first proceeds resulting from any exercise of
                    outstanding Class B and Class C warrants, whichever comes
                    first.  As consideration for such loan, the Company issued
                    66,666 shares of restricted common stock.  During June 1997,
                    the original maturity date of May 24, 1997 was extended to
                    December 15, 1998.  Lastly, the Company agreed to include
                    said shares in its pending Registration Statement.

               iii) On July 16, 1996, the Company entered into two loan
                    agreements amounting to $200,000 with two unrelated
                    shareholders.  Each note was for $100,000, bears interest at
                    9% per annum and was due at the earlier of one (1) year or
                    payable from any of the proceeds of a sale of the Company's
                    securities including the exercise of Class B and C Warrants.
                    On April 30, 1997, the Company liquidated one note amounting
                    to $100,000 and extended the second note's maturity date to
                    December 15, 1998.

               At June 30, 1998 and December 31, 1997, accrued interest related
               to such notes and loans amounted to $21,809 and $17,309,
               respectively, and is included in accrued expenses.

                                          12

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


NOTE 5    -    RELATED PARTY TRANSACTIONS (Cont'd)

          c)   CONSULTING AGREEMENT

               On July 1, 1995, the Company entered into a five (5) year
               consulting agreement with an entity controlled by the Company's
               former President and Vice Chairman.  Said agreement provided for
               a fee of $75,000 per annum.  The agreement was amended on July
               12, 1996 to provide for a reduced fee of $30,000 per annum. 
               During March 1998, such individual became the acting Chief
               Executive Officer of MCAI and his compensation was increased to
               $10,000 per month pursuant to a verbal agreement with the
               Company.

          d)   DUE FROM AFFILIATES

               Manhattan Westchester reimburses the Company for the use of
               certain employees as well as office and laboratory space of the
               Company.  The Company and Manhattan Westchester also operate
               under an oral agreement whereby the Company is paid $1,000 per
               month for each of the Memory Centers controlled Manhattan
               Westchester.  Manhattan Westchester is 100% owned by the 
               Company's Chairman.  At June 30, 1998 and December 31, 1997, any 
               estimated amounts due from Manhattan Westchester, principally for
               management and administrative services have been  included in
               other current assets.  Effective March 1, 1998, such oral
               agreement was terminated with Manhattan Westchester.  The Company
               is undergoing negotiations with an unrelated physician to provide
               medical services relating to the Memory Centers.

                                          13

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


ITEM 6    -    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               RESULTS OF OPERATIONS         

               The Company was incorporated in the State of Nevada on March 18,
               1987 with the name Tamarac Ventures, Ltd.  On November 23, 1994,
               in connection with the reverse acquisition of HZI Research
               Center, Inc.  ("HZI"), the Company amended its Certificate of
               Incorporation to change its name to NeuroCorp, Ltd. and to reduce
               its authorized common stock from 200,000,000 shares to
               100,000,000 shares and to authorize 5,000,000 shares of preferred
               stock.

               The Company is primarily involved in two businesses:  (i) it
               sub-contracts clinical research and performs data analysis for
               health agencies, research organizations and pharmaceutical
               companies, and (ii) it manages a group of facilities that
               diagnose and treat memory disorders.  In addition, as an
               outgrowth of its research activities, the Company also designs
               diagnostic testing software and equipment for neuropsychiatric
               applications and the Company performs neurological testing
               services for hospitals and physicians.  The Company conducts
               these activities through two wholly owned subsidiaries, HZI and
               Memory Centers-TM- of America, Inc.  ("MCAI"), a Delaware
               Corporation.  In November 1994, the Company acquired all of the
               issued and outstanding shares of HZI.  HZI conducts contract
               research, designs diagnostic software and equipment and performs
               neurological testing services.  In March 1996, the Company
               established MCAI to provide non-medical management, educational,
               consultation and marketing services to licensed physicians and
               entities controlled by them.  These physicians offer professional
               diagnostic, preventive and treatment services, through pilot
               facilities, Memory Centers-TM-, to persons who suffer from memory
               complaints.  MCAI, through affiliated corporations, also supplies
               the medical equipment used in Memory Centers-TM-.  There are
               currently three Memory Centers-TM-, one located in New York City
               (Manhattan) one in Tarrytown, New York, and one in Bakersfield,
               California.  These Memory Centers-TM- are operated under
               management agreements with physicians.  During January 1998, the
               Company commenced the construction of a signature Memory Center
               in Manhattan, New York.  The Company expects such Memory Center
               to be completed by the late summer.  Under the terms of these
               management agreements, MCAI supplies equipment, management,
               marketing, data handling and personnel services for physicians,
               and the physicians provide all medical services and employ all
               clinical staff.  MCAI is compensated through fixed management
               fees for its managerial services, and it is compensated for its
               billing services and variable expenses, such as supplies, as they
               occur.  These agreements are for a fixed period of time,
               generally not less than one year.   MCAI began full operation of
               the pilot program at the end of the second quarter of 1996.  Each
               facility is estimated to cost between $70,000 to $250,000 for
               equipment, leasehold improvements and working capital which
               includes administration costs.  Revenues from this wholly-owned
               subsidiary were $25,070 and $16,000 for the six months ended June
               30, 1998 and 1997, respectively.

               During the second quarter of 1997, the Company created a new
               division within NeuroCorp Ltd., called Tel-Neuro Psychiatry
               ("TNP").  The TNP division is responsible for marketing
               Tele-Neuro Psychiatric systems which are based on the Company's
               proprietary software and hardware equipment.  The TNP system
               provides data communication with off-site experts.  Furthermore,
               the Company believes the new TNP system is useful for enhancing
               quality controls in research programs.  The Company is currently
               utilizing TNP systems in the four (4) MCAI centers.  In September
               1997, Drs. Itil and Le Bars and Mr. Eralp received a patent for
               certain data collection, analysis and transmission procedures
               that the TNP system relies upon.  This patent has been assigned
               to the Company.

                                          14

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


ITEM 6    -    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               RESULTS OF OPERATIONS (Cont'd)

               The Company recognizes revenue and costs from its contracts under
               the percentage of completion method.  Cost of revenues include
               all direct material and labor costs and those  indirect costs
               related to contract performance.  General and administrative
               expenses are accounted for as period costs and are, therefore,
               not included in the calculation of the estimates to complete
               contracts in progress. Changes in each contracts's performance,
               conditions and estimated profitability including those arising
               from contract penalty provisions, and final contract settlements
               may result in revisions to costs and income and are recognized in
               the period in which the revisions are determined.  In addition,
               losses are recognized in full when determinable.

               Revenue from computer system sales, which include BFM Systems,
               are recognized upon the shipment of the turnkey systems.  Service
               revenues are recognized as they are rendered on the accrual basis
               of accounting.

               THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS
               ENDED JUNE 30, 1997 

               The Company reported a net loss of $863,836 for the three months
               ended June 30, 1998 as compared to a net loss of $390,145 for the
               three months ended June 30, 1997.

               Revenues for the three months ended June 30, 1998 and 1997
               amounted to $43,914 and $311,513, respectively.  Revenues
               decreased by $267,599 or 86% for the three months ended June 30,
               1998 as compared to the three months ended June 30, 1997.  Gross
               (loss) profit for the three months ended June 30, 1998 and 1997
               amounted to $(48,565) and $188,293, respectively or a net
               decrease of $236,858.  Gross (loss) profit percentages for the
               three months ended June 30, 1998 and 1997, were (111%) and 60%,
               respectively, or a net decrease of 171%.  The Company includes in
               the cost of sales amortization of its database and computer
               system product development costs.  Commencing, January 1, 1996
               the Company revised its estimate of the useful life of the
               software development cost from 17 years to 7 years.  This change
               was made to better reflect the estimated period during which the
               assets will remain in service.  For the three months ended June
               30, 1998 and 1997 amortization charges amounted to $66,847 and
               $68,604, respectively.  The decrease in gross profit is a result
               of no sales of BFM equipment during the three months ended June
               30, 1998 while amortization charges related to BFM continue to be
               made.

               Furthermore, the decrease in sales and gross profit during the
               three months ended June 30, 1998 as compared to the three months
               ended June 30, 1997 is attributable to the following:

          1.   The Company has not entered into any major multi-million dollar
               new long-term contracts since December 31, 1993 and major
               contracts recorded prior to this period were substantially
               completed during the December 31, 1995 and 1994 year end.  For
               the years ended December 31, 1997 and 1996, the Company received
               $405,700 and $759,000, respectively, of new contracts.  Revenues
               from contracts for the three months ended June 30, 1998 as
               compared to the three months ended June 30, 1997 amounted to
               $24,193 and $311,513, respectively, or a net decrease of
               $287,320.  The contract division's low revenues for the June 30,
               1998 and 1997 quarters is attributable to the Company's lack of
               major new contracts.  Management believes that the drug research
               industry has been temporarily negatively impacted due to
               consolidation in the pharmaceutical industry, which has resulted
               in the reduction of the available pool to new research contracts.
               The Company believes that demand for more effective central
               nervous system drugs with fewer negative side effects will
               continue to stimulate the demand for contract research on central
               nervous system drugs.

                                          15

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


ITEM 6    -    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               RESULTS OF OPERATIONS (Cont'd)

               THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS
               ENDED JUNE 30, 1997  (Cont'd)

               The gross (loss) profit percentage from contracts for the three
               months ended June 30, 1998 is (139)% as compared to the June 30,
               1997 which was 60%.  The decrease in gross profit for the three
               months ended June 30, 1998, as compared to the three months ended
               June 30, 1997, is primarily  a result of amortization charges
               related to contract research and the reduced revenues of the
               contract research division.

          2.   Net sales of BFM Systems-Registered Trademark- for the three
               months ended June 30, 1998 and 1997 amounted to $0 and $28,884,
               respectively.  Gross (loss) profit amounts for the three months
               ended June 30, 1998 amounted to $(26,196) whereas for the three
               months ended June 30, 1997, the gross (loss) profit amounted to
               $(3,686) or a net decrease of $22,510.  Amortization expense
               related to BFM Systems for three months ended June 30, 1998 and
               1997 amounted to $26,196  and $25,043, respectively.  The Company
               management is revising its marketing strategy and believes the
               lack of sales is temporary.

          3.   Revenues of the TeleMap-Registered Trademark- division for the
               three months ended June 30, 1998 and 1997 amounted to $10,651 and
               $25,928, respectively.  Gross profit percentage for the three
               months ended June 30, 1998 and 1997 amounted to 34% and 45%,
               respectively due to a decrease in labor costs.

          4.   Memory Center-TM- management fees for the three months ended June
               30, 1998 and 1997 amounted to $9,070 and $6,000, respectively. $0
               and $6,000 of this revenue for the three months ended June 30,
               1998 and June 30, 1997 was derived from Manhattan Westchester
               Medical Services, P.C. ("Manhattan Westchester") through a
               program conducted under the management of MCAI and $8,000 of the
               revenue for the three months ended June 30, 1998 was from the
               Bakersfield Memory Center.  Manhattan Westchester is a medical
               practice that is controlled by the Company Chairman.  While MCAI
               does not receive any direct insurance reimbursements, it does
               receive a management fee from Manhattan Westchester.  Insurance
               reimbursements are received by the medical practice conducting
               the program based on rates established by third party payors
               which are in turn based on the number of visits and type of
               service performed.  Effective March 1, 1998, Manhattan
               Westchester will not be providing such medical services to MCAI. 
               The Company is undergoing negotiations with unrelated physicians
               to provide medical services to MCAI.

               General and administration expenses include overhead,
               administration salaries, selling and consulting costs.  Further,
               the Company classifies the costs of planning, designing and
               establishing the technological feasibility of its computer system
               products as research and development costs and charges those
               costs to expense when incurred.  After technological feasibility
               has been established, costs of producing a marketable product and
               its prototype are capitalized.  Capitalized database and computer
               system development costs are composed mainly of payroll and other
               direct employee costs.  Costs associated with the above, which
               are not capitalized during the period, are charged to either
               general and administrative or research and development expense.

               General and administrative expenses for the three months ended
               June 30, 1998 were $805,041 as compared to the three months ended
               June 30, 1997 of $524,718 or an increase of $280,323 or 53%.  The
               increase in general and administrative expenses for the three
               months ended June 30, 1998 is primarily due to the Company
               increasing its development costs for its subsidiary, MCAI.

                                          16

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


ITEM 6    -    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               RESULTS OF OPERATIONS (Cont'd)

               THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE THREE MONTHS
               ENDED JUNE 30, 1997  (Cont'd)

               Research and development costs ("R&D") for the three months ended
               June 30, 1998 were $0 as compared to the three months ended June
               30, 1997 of $34,653 or a decrease of $34,653.  The decrease in
               R&D costs is principally due to a concentration by the Company on
               its contract research and the development of Memory Centers.
               
               During November and December 1997, the Company liquidated several
               loans which were convertible into common stock.  As a result of
               these conversions, interest expense for the three months ended
               June 30, 1998 as compared to the three months ended June 30, 1997
               decreased by $20,833.

               SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS
               ENDED JUNE 30, 1997  

               Revenues for the six months ended June 30, 1998 and 1997 amounted
               to $209,328 and $587,000, respectively.  Revenues decreased by
               $377,672 or 64% for the six months ended June 30, 1998 as
               compared to the six months ended June 30, 1997.  Gross (loss)
               profit for the six months ended June 30, 1998 and 1997 amounted
               to $(8,490) and $293,947, respectively or a net decrease of
               $302,437.  Gross (loss) profit percentages for the six months
               ended June 30, 1998 and 1997, were (4)% and 50%, respectively, or
               a net decrease of 54%.  The Company includes in the cost of sales
               amortization of its database and computer system product
               development costs.  Commencing, January 1, 1996 the Company
               revised its estimate of the useful life of the software
               development cost from 17 years to 7 years.  This change was made
               to better reflect the estimated period during which the assets
               will remain in service.  For the six months ended June 30, 1998
               and 1997 amortization charges amounted to $134,220 and $135,805,
               respectively.  The decrease in gross profit is a result of an
               overall decrease in revenues during the six months ended June 30,
               1998 while amortization charges continue to be made.

               Furthermore, the decrease in sales and gross profit during the
               six months ended June 30, 1998 as compared to the six months
               ended June 30, 1997 is attributable to the following:

          1.   The Company has not entered into any major multi-million dollar
               new long-term contracts since December 31, 1993 and major
               contracts recorded prior to this period were substantially
               completed during the December 31, 1995 and 1994 year end.  For
               the years ended December 31, 1997 and 1996, the Company received
               $405,700 and $759,000, respectively, of new contracts.  Revenues
               from contracts for the six months ended June 30, 1998 as compared
               to the six months ended June 30, 1997 amounted to $155,408 and
               $393,100, respectively, or a net decrease of $237,692.  The
               contract division's low revenues for the June 30, 1998 and 1997
               quarters  is attributable to the Company's lack of major new
               contracts.  Management believes that the drug research industry
               has been temporarily negatively impacted due to consolidation in
               the pharmaceutical industry, which has resulted in the reduction
               of the available pool to new research contracts.  The Company
               believes that demand for more effective central nervous system
               drugs with fewer negative side effects will continue to stimulate
               the demand for contract research on central nervous system drugs.

                                          17

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


ITEM  6   -    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               RESULTS OF OPERATIONS (Cont'd)

               SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE SIX MONTHS
               ENDED JUNE 30, 1997  (Cont'd)

               The gross profit percentage from contracts for the six months
               ended June 30, 1998 is 2% as compared to the June 30, 1997 which
               was 50%.  The decrease in gross profit for the six months ended
               June 30, 1998, as compared to the six months ended June 30, 1997,
               is primarily  a result of amortization charges related to
               contract research and the reduced revenues of the contract
               research division.

               As of June 30, 1998, the Company's contract research division had
               a backlog of approximately $0 from uncompleted contracts.

               The contract research division during 1997 and 1996 performed
               significant work for a major foreign customer, resulting in a
               large increase in their accounts receivable.  As of June 30, 1998
               the receivable amount from this foreign customer amounted to
               approximately $80,515, all of which is expected to be collected
               during 1998.

          2.   Net sales of BFM Systems-Registered Trademark- for the six months
               ended June 30, 1998 and 1997 amounted to $0 and $53,278,
               respectively.  Gross (loss) profit amounts for the six months
               ended June 30, 1998 amounted to $(51,273) whereas for the six
               months ended June 30, 1997 the gross profit amounted to $(50,194)
               or a net decrease of $1,079.  Amortization expense related to BFM
               Systems for six months ended June 30, 1998 and 1997 amounted to
               $53,146 and $70,617, respectively.  The Company management is
               revising its marketing strategy and believes the lack of sales is
               temporary.

          3.   Revenues of the TeleMap-Registered Trademark- division for the
               six months ended June 30, 1998 and 1997 amounted to $28,850 and
               $50,520, respectively.  Gross profit percentage for the six
               months ended June 30, 1998 and 1997 amounted to 74% and 48%,
               respectively due to a decrease in labor costs.

          4.   Memory Center-TM- management fees for the six months ended June
               30, 1998 and 1997 amounted to $25,070 and $20,629, respectively.
               $6,000 and $16,000 of this revenue for the six months ended June
               30, 1998 and 1997 was derived from Manhattan Westchester through
               a pilot program conducted under the management of MCAI and
               $18,000 of the revenue for the six months ended June 30, 1998 was
               from the Bakersfield Memory Center.

               General and administrative expenses for the six months ended June
               30, 1998 were $1,614,993 as compared to the six months ended June
               30, 1997 of $844,765 or an increase of $770,228 or 91%.  The
               increase in general and administrative expenses for the six
               months ended June 30, 1998 is primarily due to the Company
               increasing its development costs for its subsidiary, MCAI, by
               $485,316 as compared to the six months ended June 30, 1997.

               Research and development costs ("R&D") for the six months ended
               June 30, 1998 were $0 as compared to the six months ended June
               30, 1997 of $52,128 or an decrease of $52,128.  The decrease in
               R&D costs is principally due to a concentration by the Company on
               its contract research and the development of Memory Centers.

               During November and December 1997, the Company liquidated several
               loans which were convertible into common stock.  As a result of
               these conversions, interest expense for the six months ended June
               30, 1998 as compared to the six months ended June 30, 1997
               decreased by $20,527.

                                          18

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


ITEM 6    -    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               RESULTS OF OPERATIONS (Cont'd)

               LIQUIDITY AND CAPITAL RESOURCES

               At June 30, 1998 and December 31, 1997, the Company had working
               capital of $291,127 and $1,464,877, respectively.  The Company's
               cash balance at June 30, 1998 amounting to approximately $368,596
               is primarily made up of an influx of $400,000 of capital on June
               30, 1998.  The Company's net accounts receivable amounted to
               $697,409 at June 30, 1998.  As of June 30, 1998, of the Company
               current liabilities amounting to $1,087,262, $300,000 represents
               stockholder loans which are not due until December 31, 1998.  The
               Company expects to repay the remaining debt from internally
               generated funds or additional public or private sales of its
               securities.

               For the six months ended June 30, 1998 and 1997, the Company used
               cash for operations of $1,223,856 and $790,120, respectively,
               resulting in increased use of cash for operations by $433,736. 
               The net increase for the six months ended June 30, 1998 is the
               result of loss from operations amounting to $1,638,434 compared
               to the loss from operations for the six months ended June 30,
               1997 of $659,223.

               For the six months ended June 30, 1998 and 1997 cash used by
               investing activities amounted to $395,958 and $240,701,
               respectively, or a net decrease in use of cash of $155,257.  The
               increase use in cash for investing activities for the six months
               ended June 30, 1998 as compared to the six months ended June 30,
               1997 was attributable to the following: (i) purchase of equipment
               and fixtures amounting to $381,605 and $52,517 for the six months
               ended June 30, 1998 and 1997 (ii) capitalized database
               development costs of $14,353 and $75,359 for the six months ended
               June 30, 1998 and 1997 (iii) decrease in purchases of other
               assets to $0 for June 30, 1998 from $101,027 for the six months
               ended June 30, 1997.  The decrease in the database development
               costs was the result of a large amount of EEG studies inputted
               into the database.  The Company during the six months ended June
               30, 1998 purchased equipment amounting to approximately $190,000,
               principally for its subsidiary MCAI.

               For the six months ended June 30, 1998 and 1997 cash provided by
               financing activities amounted to $390,585 and $329,741,
               respectively.  For the six months ended June 30, 1998, 400,000
               shares were issued in connection with exercise of 400,000
               warrants. For the six months ended June 30, 1997, the Company
               received $600,000 in connection with the exercise of 200,000
               Class B and 200,000 Class C warrants, which resulted in the
               Company issuing 400,000 shares of common stock.  The Company
               incurred registration costs for the six months ended June 30,
               1998 and 1997 amounting to $0 and $114,035, respectively, in
               connection with registering shares of common stock and warrants
               pursuant to contractual obligations with certain stockholders. 
               At June 30, 1998 and 1997, the Company accrued $7,500 and $7,500
               of dividends for Series 1 preferred stock as required under the
               terms of the preferred stock.

                                          19

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


ITEM 6    -    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               RESULTS OF OPERATIONS (Cont'd)

               MANAGEMENTS'S PLAN 

               The intended development of Memory Centers-TM- requires
               substantial amounts of capital without any assurance that they
               will be successful.  Depending on size and location, the Company
               estimates that each facility would require between $70,000 and
               $250,000 for equipment, leasehold improvements, and working
               capital, including corporate overhead 
               attributable to operating the Memory Centers-TM-.  Therefore, the
               Company estimated that its short term capital requirements for 30
               fully functioning Memory Centers-TM- will be in the range of
               $4,000,000 to $5,000,000.

               The Company intends to set up 240 centers within the next 4 years
               if additional capital can be raised.  Long term capital
               requirements for these centers based on the same assumptions as
               set forth above, could range from $15,000,000 to $20,000,000. 
               The  Company intends to raise such capital through public and
               private sale of its securities as well as by debt financing. 
               Additionally the Company is exploring joint ventures and
               strategic alliances with other companies.  No assurance can be
               given that such capital will be raised or that strategic
               alliances or joint ventures will be formed. 

               As a result of a successful research project, the Company's
               largest customer has made new commitments to the Company.   In
               this connection the Company received from this customer, as of
               December 31, 1996, $100,000 to support the efforts of an Advisory
               Committee of a prominent international health organization to
               develop an Alzheimer's Study protocol, as well as commitments for
               $285,000 to continue its work on the plant extract product.   The
               Company, during the fourth quarter of 1996, also obtained a new
               contract ($140,000) from  a U.S. pharmaceutical company to
               conduct a QPEEG-Registered Trademark- study.  In September 1997,
               the Company obtained another contract in the amount of $230,708
               pursuant to which a U.S. pharmaceutical company will use
               QPEEG-Registered Trademark- in their multi-center drug trial. 
               QPEEG-Registered Trademark- is a proprietary method developed by
               HZI that evaluates a drug's effect on the central nervous system
               using computer analyzed EEG, ("CEEG-Registered Trademark-").  HZI
               statistically analyzes the before and after effects of a drug and
               correlates the changes with information in HZI's psychotropic
               drug data base to determine the optimal time or dosage window to
               yield particular central nervous system effects.  

               In January, 1995, the Company entered into a joint venture
               arrangement with Tena, Ltd. in Istanbul, Turkey, for the purpose
               of further research and development of the Company's products and
               the marketing and sales of its products in the Mid-East, former
               U.S.S.R. countries and in other geographical area in which the
               Company has no distribution.  Each project assigned to the joint
               venture requires a statement of work to be completed, and a
               budget with funding responsibility to be decided by the
               respective parties.  The Company entered into this joint venture
               anticipating that certain of its products could be developed by
               the joint venture at a cost below that attainable in the United
               States.  While no development work has been assigned to Tena to
               date, Tena is involved in marketing the Company's products. 
               Accordingly, there are at present no capital or other funding
               requirements anticipated with respect to this venture.  However,
               during the second quarter of 1997, Tena ordered a TNP system,
               including a full BFM system, in order to set up a Memory Center
               in Istanbul, Turkey.  A letter of intent in connection with this
               joint venture was signed in September 1997 by Tena for two
               systems.  However, this has subsequently been reduced to one
               system.

                                          20

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


ITEM 6    -    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               RESULTS OF OPERATIONS (Cont'd)

               MANAGEMENTS'S PLAN (Cont'd)
          
               On September 4, 1997, the Company signed an agreement with the
               CoreCare Corporation, a regional provider of mental health care
               services, to form a joint venture.  The joint venture, which, if
               consummated, will be 50% owned by the Company, will be located at
               Kirkbride Center, a large medical complex being developed in
               Philadelphia.  Within the Kirkbride Hospital complex, the
               agreement contemplates that the joint venture will establish a
               Memory Center-TM- and Tele-Neuro psychiatric diagnostic
               laboratory.    In September 1997, CoreCare ordered two TNP
               systems in order to set up a Memory Center (each at $95,800), and
               a TNP diagnostic laboratory.  The various aspects of the joint
               venture will require additional development and capital. 
               Accordingly, there can be no assurance that any aspect of the
               joint venture can be developed within a reasonable amount of time
               or that any of these will be successful, or that capital will be
               found to develop any of these ventures.

               The Company successfully obtained 510K approval for its EEG/EP
               amplifier and is currently preparing its 510K application to the
               FDA with respect to its HZI Electrode Headset and Digital EEG
               System Software.  Two of the products require improved prototypes
               and the software product is in the final testing stage.  The
               aggregate cost for finishing the products and completing the 510K
               applications is estimated at $90,000, which funds will be derived
               from currently available working capital.    A patent for a
               proprietary telephonic Test Dose-Registered Trademark- system is
               being prepared and then a pre-marketing approval will be sought.

               The Company does not presently have any long term capital
               commitments for its HZI and general corporate operations and does
               not expect to have major capital expenditures for these
               activities.

               The Company's financial statements have been prepared assuming
               that the Company will continue as a going concern. At December
               31, 1997, the Company has an accumulated deficit of $3,426,114. 
               For the years ended December 31, 1997 and 1996, the Company
               reported net losses of $2,423,602 and $1,634,675, respectively. 
               Additionally, the Company generated negative cash flows from
               operations of $2,568,380 and $897,382 for the years ended
               December 31, 1997 and 1996, respectively.  Lastly, for the six
               months ended June 30, 1998, the Company generated a net loss of
               $1,638,434 and negative cash flows from operations amounting to
               $1,223,856.

               The Company's ability to continue as a going concern is currently
               dependent on its ability to obtain an immediate influx of cash. 
               The company is currently negotiating with  Pioneer Ventures
               Associates Limited Partnership ("Pioneer") for Pioneer to invest
               up to $4,500,000 pursuant to a letter of intent dated April 7,
               1998 as discussed below.

                                          21

<PAGE>

                          NEUROCORP  LTD.  AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (UNAUDITED)


ITEM 6    -    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               RESULTS OF OPERATIONS (Cont'd)

               MANAGEMENTS'S PLAN (Cont'd)

               On April 7, 1998, the Company entered into a letter of intent
               "(LOI") with Pioneer Ventures Associates Limited Partnership
               ("Pioneer"), whereby Pioneer would invest up to $4,500,000 in the
               Company in return for cumulative convertible preferred stock, 8%
               dividend, convertible at $3.00 per share into common stock.  Upon
               execution of the final contract, Pioneer invested $1,000,000. 
               The remaining $3,500,000 investment is subject to the
               satisfactory completion by the Company of certain conditions as
               well as agreed to milestones to be achieved.  In connection with
               the transaction, a new Chief Executive Officer has been  named
               and, in addition, a marketing and financial team will be
               assembled for the Company, and two seats on the Board of
               Directors are held by Pioneer representatives.  The Company
               incurred costs of approximately $120,000 to complete this
               transaction.  The Company completed the first phase of this
               transaction on July 31, 1998. In consideration for the initial
               investment of $1,000,000, the Company issued 333,333 shares of a
               new class of Series C Senior Convertible Preferred Stock.

               CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

               The Private Securities Litigation Reform Act of 1995 provides a
               safe harbor for forward-looking information made on behalf of the
               Company.  All statements, other than statements of historical
               facts, which address the Company's expectations of sources of
               capital or which express the Company's expectation for the future
               with respect to financial performance or operating strategies can
               be identified as forward-looking statements.  Forward-looking
               Statements made by the Company are based on knowledge of the
               environmental in which it operates, but because of the factors
               previously listed, as well as the factors beyond the control of
               the Company, actual results may differ materially from the
               expectations expressed in the forward-looking statements.

                                          22

<PAGE>

                             PART II - OTHER INFORMATION


ITEM 1 - Legal Proceedings:

       None

ITEM 2 - Changes in Securities:

       None

ITEM 3 - Defaults Upon Senior Securities:

       None

ITEM 4 - Submission of Matters to a Vote of Security Holders:

       None

ITEM 5 - Other Information:

       Effective July 16, 1998, Vernon Wells  was appointed as Acting Chief
       Executive Officer of the Company.

ITEM 6 - Exhibits and Reports on Form 8-K:

          a)   Exhibits

               None

          b)   Reports on Form 8-K

               None

                                          23

<PAGE>

                                      SIGNATURE



Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                             NeuroCorp., Ltd.

Date:   August 19, 1998                      By: /s/ Kurt Z. Itil
      -----------------------------              -------------------------------
                                                  Kurt Z. Itil
                                                  Executive Vice President