<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, 1997
                               --------------------------------------
                                          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
--------------------------------------------------------------------------------
(Address of principal executive offices)

                                   (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: 8,173,806 Shares as of June 30, 1997. 

<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, 1997 (unaudited)
          and December 31, 1996                                      F-1

         Consolidated statements of operations (unaudited)
          for the three months ended June 30, 1997 and 1996          F-2

         Consolidate statements of operations (unaudited)
           for the six months ended June 30, 1997 and 1996           F-3

         Consolidated statement of stockholders' equity (unaudited)
          for the six months ended June 30, 1997                     F-4

         Consolidated statements of cash flows (unaudited)
          for the six months ended June 30, 1997 and 1996         F-5 - F-6

         Notes to consolidated financial statements               F-7 - F-17

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS                    F-18 - F-28

PART II - OTHER INFORMATION                                         F-29

<PAGE>

<TABLE>
<CAPTION>


                                         NEUROCORP, LTD. AND SUBSIDIARIES
                                           CONSOLIDATED BALANCE SHEETS
    
                                                      ASSETS
                                                                            (Unaudited)
                                                                            JUNE 30, 1997     DECEMBER 31, 1996
                                                                          -----------------   -----------------
Current assets:
<S>                                                                       <C>                 <C>
    Cash                                                                  $    1,150,034        $  1,851,114
    Accounts receivable, net of allowance for 
     doubtful accounts of $468,000 at December 31, 1996                          519,993             550,163
    Inventory                                                                     22,594              29,356
    Prepaid expenses and taxes                                                    87,215              36,982
    Deferred financing costs                                                          -               53,516
    Other current assets                                                         132,261              84,445
                                                                          --------------        ------------
         Total current assets                                                  1,912,097           2,605,576
                                                                          --------------        ------------

Equipment and fixtures, net                                                      126,125              83,549
                                                                          --------------        ------------

Other assets:
    Database development costs, net                                            1,265,886           1,264,018
    Computer system product development costs, net                               434,204             496,518
    Deferred registration costs                                                  114,035                -  
    Other                                                                        220,549             130,703
                                                                          --------------        ------------
         Total other assets                                                    2,034,674           1,891,239
                                                                          --------------        ------------

Total assets                                                              $    4,072,896        $  4,580,364
                                                                          --------------        ------------
                                                                          --------------        ------------

                                       LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable                                                      $      72,055    $         166,232
    Accrued expenses                                                            182,015              176,503
    Stockholder notes and loans payable                                         106,680              858,687
    Income taxes payable                                                          2,016                6,400
    Current portion of long-term debt                                               -                 38,715
    Billings in excess of costs and estimated earnings                    
     on uncompleted contracts                                                    84,454              276,426
                                                                          --------------        ------------
         Total current liabilities                                              447,220            1,522,963
                                                                          --------------        ------------

Long-term liabilities:
    Stockholder notes and loans payable                                         650,000                 -  
    Long-term debt                                                                 -                  15,502
    Deferred income taxes                                                       264,000              264,000
                                                                          --------------        ------------
         Total liabilities                                                    1,361,220            1,802,465
                                                                          --------------        ------------

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
      Convertible Preferred stock, class B, series 2, no par value, issued and
       outstanding 250,000 shares, full liquidation value $250,000              250,000              250,000
    Common stock, $.001 par value, 100,000,000 shares authorized 8,173,806
     and 7,723,806 issued and outstanding, respectively                          47,374               46,924
    Less: discount on common stock                                              (28,500)             (28,500)
    Additional paid-in capital                                                3,847,037            3,246,987
    Contributed capital                                                         100,000              100,000
    Accumulated deficit                                                      (1,654,235)            (987,512)
                                                                          --------------        ------------
         Total stockholders' equity                                           2,711,676            2,777,899
                                                                          --------------        ------------

Total liabilities and stockholders' equity                                $   4,072,896         $  4,580,364
                                                                          --------------        ------------
                                                                          --------------        ------------

</TABLE>

        See accompanying notes to consolidated financial statements (unaudited).

                                           F-1


<PAGE>

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

<TABLE>
<CAPTION>


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

<S>                                                   <C>            <C>
Net sales                                             $    311,513   $    408,674
         
Cost of sales, including amortization expense
    of $68,604 and $59,752, respectively                   123,220        181,508
                                                      ------------   ------------
                        
Gross profit                                               188,293        227,166
         
Expenses:
  General and administrative expenses                      524,718        307,554
  Research and development                                  34,653         17,218
                                                      ------------   ------------
    Total expenses                                         559,371        324,772
                                                      ------------   ------------

Loss from operations before other income (expense)
 and income tax expense                                   (371,078)       (97,606)
         
Other income (expense):
  Interest income                                           10,292          2,251
  Interest expense                                         (30,659)       (23,673)
                                                      ------------   ------------
         
Loss before income tax benefit                            (391,445)      (119,028)
         
Income tax (benefit)                                        (1,300)            -  
                                                      ------------   -------------
         
Net loss                                              $   (390,145)  $   (119,028)
                                                      ------------   ------------
                                                      ------------   ------------

Net loss applicable to common shares                  $   (393,895)  $   (122,778)
                                                      ------------   ------------
                                                      ------------   ------------
Loss per common equivalent share:
 Primary:          
  Loss before income tax benefit                      $       (.05)  $       (.02)
  Income tax benefit                                            -              -  
                                                      ------------   ------------
  Net loss                                            $       (.05)  $       (.02)
                                                      ------------   ------------
                                                      ------------   ------------

Net loss applicable to common shares                  $       (.05)  $       (.02)
                                                      ------------   ------------
                                                      ------------   ------------
         
Weighted average number of shares outstanding            8,173,806      7,151,563
                                                      ------------   ------------
                                                      ------------   ------------

</TABLE>

        See accompanying notes to consolidated financial statements (unaudited).


                                           F-2


<PAGE>

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

                                                      1997           1996 
                                                 ------------   ------------
Net sales                                        $    587,000   $    791,122
         
Cost of sales, including amortization expense
    of $135,805 and $128,800, respectively            293,063        382,894
                                                 ------------   ------------

Gross profit                                          293,937        408,228
         
Expenses:
  General and administrative expenses                 844,765        521,650
  Research and development                             52,128         45,184
                                                 ------------   ------------
    Total expenses                                    896,893        566,834
                                                 ------------   ------------

Loss from operations before other income (expense)
 and income tax expense                              (602,956)      (158,606)
         
Other income (expense):
 Cumulative effect of change of accounting estimate       -         (125,745)
  Interest income                                      21,708          5,940
  Interest expense                                    (77,975)       (34,656)
                                                 ------------   ------------

Loss before income tax expense                       (659,223)      (313,067)

Income tax expense                                        -              -  
                                                 ------------   ------------

Net loss                                         $   (659,223)  $   (313,067)
                                                 ------------   ------------
                                                 ------------   ------------

Net loss applicable to common shares             $   (666,723)  $   (320,567)
                                                 ------------   ------------
                                                 ------------   ------------

Loss per common equivalent share:
 Primary:          
  Loss before income tax expense                 $       (.08)  $       (.05)
  Income tax expense                                       -              -  
                                                 ------------   ------------

  Net loss                                       $       (.08)  $       (.05)
                                                 ------------   ------------
                                                 ------------   ------------

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

Weighted average number of shares outstanding       8,015,486      6,784,920
                                                 ------------   ------------
                                                 ------------   ------------

        See accompanying notes to consolidated financial statements (unaudited).

                                           F-3


<PAGE>

<TABLE>
<CAPTION>

                                                 NEUROCORP, LTD. AND SUBSIDIARIES
                                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                              FOR THE SIX MONTHS ENDED JUNE 30, 1997
                                                            (UNAUDITED)

                                                             PREFERRED STOCK CLASS B
                                                   SERIES 1                        SERIES 2                 COMMON STOCK
                                            SHARES          AMOUNT          SHARES           AMOUNT            SHARES  
                                          ---------       ---------       ----------       ----------       ------------
                                                                                                             
<S>                                     <C>               <C>             <C>             <C>                 <C>
Balances at
 December 31, 1996                         150,000      $  150,000          250,000       $   250,000        7,723,806
                                                                                                                      
Accrued preferred stock                                                                                               
 dividend                                       -               -              -                  -                 - 
                                                                                                                      
Issuance of common stock                                                                                              
 in connection with exercise                                                                                          
 of warrants                                                                                                   400,000
                                                                                                                      
Issuance of common stock                                                                                              
 in connection with exercise                                                                                          
 of stock option                                -               -              -                  -             50,000
                                                                                                                      
Net loss for the six months                                                                                           
 ended June 30, 1997                            -               -              -                  -                 - 
                                       ------------    ------------    ------------    --------------     ------------
                                                                                                                      
Balances at June 30, 1997                  150,000      $  150,000          250,000       $   250,000        8,173,806
                                       ===========     ===========     ============    ==============     ============
                                                                                                            

<CAPTION>

                                                      ADDITIONAL                                       TOTAL     
                                      COMMON STOCK     PAID-IN       CONTRIBUTED  (ACCUMULATED     STOCKHOLDERS' 
                                         AMOUNT        CAPITAL         CAPITAL       DEFICIT)         EQUITY     
                                       ---------     -----------     -----------  ------------    --------------

<S>                                <C>            <C>            <C>            <C>            <C>
Balances at                 
 December 31, 1996                    $ 18,424      $3,246,987     $ 100,000   $  (987,512)     $  2,777,899
                                                                                                              
Accrued preferred stock                                                                                       
 dividend                                   -             -               -         (7,500)           (7,500) 
                                                                                                              
Issuance of common stock                                                                                      
 in connection with exercise                                                                                  
 of warrants                               400         599,600            -            -             600,000  
                                                                                                              
Issuance of common stock                                                                                      
 in connection with exercise                                                                                  
 of stock option                            50             450            -            -                 500  
                                                                                                              
Net loss for the six months                                                                                   
 ended June 30, 1997                        -             -               -        (659,223)        (659,223) 
                                  ------------   -------------   -----------  --------------  --------------- 
                                                                                                              
Balances at June 30, 1997             $ 18,874      $3,847,037     $ 100,000   $ (1,654,235)     $ 2,711,676  
                                  ============   =============   ===========  ==============  =============== 

</TABLE>


        See accompanying notes to consolidated financial statements (unaudited).

                                           F-4

<PAGE>



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

<TABLE>
<CAPTION>

                                                                     1997           1996 
                                                                -------------  -------------
<S>                                                            <C>              <C>
Cash flows for operating activities:
    Net loss from operations                                    $    (659,223) $    (313,067)
  Adjustments to reconcile net loss to net cash 
   used for operating activities:
    Depreciation and amortization                                     169,225        143,582
    Amortization of deferred financing costs                           53,516         13,152
    Cumulative effect of change in accounting estimate                    -          125,745
  Decrease (increase) in:
    Accounts receivable                                                30,170       (447,399)
    Inventory                                                           6,762         (4,898)
    Prepaid expenses and taxes                                        (50,233)        18,204
    Other current assets                                              (47,816)        17,057
  Increase (decrease) in:
    Accounts payable                                                  (94,177)        69,547
    Accrued expenses                                                   (1,988)       (28,586)
    Income taxes payable                                               (4,384)        (6,997)
    Billings in excess of costs and estimated earnings on 
         uncompleted contracts                                       (191,972)       (31,657)
                                                                -------------  -------------
Net cash flows used for operating activities                         (790,120)      (445,317)
                                                                -------------  -------------
                   
Cash flows for investing activities:
    Purchase of equipment and fixtures                                (65,975)       (13,458)
    Database development costs capitalized                            (75,359)       (57,703)
    Patent cost capitalized                                               -           (2,150)
    Computer system development costs capitalized                         -           (2,277)
    Other assets                                                     (101,027)           -  
    Proceeds from sale of automobile                                    1,660            -  
                                                                -------------  --------------
Net cash flows used for investing activities                         (240,701)       (75,588)
                                                                -------------  --------------

Cash flows from financing activities:
    Repayments of demand note - line of credit                            -          (50,000)
    Repayment of stockholders loans                                  (102,007)      (137,370)
    Proceeds from stockholders loans                                      -          365,000
    Principal payments on long-term debt                              (54,217)       (36,052)
    Registration costs incurred                                      (114,035)       (25,046)
    Proceeds from exercise of warrants and sale of common stock       600,000        400,000
                                                                -------------  --------------
Net cash flows provided by financing activities                       329,741        516,532
                                                                -------------  --------------

Net decrease in cash                                                 (701,080)        (4,373)

Cash at beginning of period                                         1,851,114        140,519
                                                                -------------  --------------
Cash at end of period                                           $   1,150,034     $  136,146
                                                                -------------  --------------
                                                                -------------  --------------
</TABLE>


        See accompanying notes to consolidated financial statements (unaudited).

                                           F-5

<PAGE>

<TABLE>
<CAPTION>


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


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

Supplemental disclosures of cash flow information:
    Cash paid for the six months for:
<S>                                                             <C>            <C>
         Interest                                               $     3,770    $    8,880
                                                                -----------    ----------
                                                                -----------    ----------

         Income taxes                                           $       -      $      -  
                                                                -----------    ----------
                                                                -----------    ----------

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

Issuance of restricted 66,000 shares of common stock
 for deferred financing cost associated with a loan             $       -      $  133,000
                                                                -----------    ----------
                                                                -----------    ----------
</TABLE>


        See accompanying notes to consolidated financial statements (unaudited).


                                           F-6


<PAGE>

                            NEUROCORP, LTD. AND SUBSIDIARIES
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                       (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") to exchange 100% of HZI's outstanding common
         stock for 4,600,000 post-split $.001 par value common shares of the
         Company.  Simultaneously, the Company effectuated a 1 for 50 reverse
         stock split thereby reducing its outstanding common shares from
         40,000,000 to 800,000.  The financial statements give effect to the
         reverse stock split.  This transaction has been accounted for as a
         reverse acquisition of HZI, whereby its assets and liabilities have
         been recorded at their historical costs.  Prior to this transaction
         the Company had no significant assets, liabilities or operations. 
         Accordingly, the financial statements at June 30, 1997 and December
         31, 1996 represent the assets and liabilities of HZI and it's
         affiliates and the results of their operations and cash flows.  All
         costs incurred in connection with the reverse acquisition have been
         charged to additional paid-in capital at the completion of the
         transaction.  On the closing date, the Company's Board of Directors
         were replaced by directors designated by HZI and the Company changed
         its name from Tamarac Ventures, Ltd. to NeuroCorp, Ltd.

         The Company, through one of its wholly-owed subsidiaries, HZI, is
         primarily involved in three inter-related businesses all of which
         involve the interaction or utilization of the Company's proprietary
         software, databases and medical devices for the diagnosis and
         treatment of brain-related disorders.  The three businesses are as
         follows: (i) performing contract medical research services
         (principally conducting clinical trials which include "special"
         proprietary quantitative Pharmaco-electroencephalogram
         (QPEEG-Registered Trademark- studies) for health agencies, other
         contract research organizations and pharmaceutical companies (ii)
         designing and subcontracting the manufacturing of proprietary
         neuropsychiatric diagnostic testing software and equipment, which
         currently is their Brain Function Monitoring Systems-Registered
         Trademark- (BFM) and selling these to physicians, researchers and
         hospitals and (iii) providing telephonic neurological diagnostic
         testing services, including electroencephalogram ("EEG") and Dynamic
         Brain Mapping-Registered Trademark-  to physicians and hospitals known
         as TeleMap-Registered Trademark-.

         In January 1996, the Company created a new wholly-owed subsidiary
         known as Memory Centers of America, Inc. ("MC Inc.").  MC Inc. will
         provide therapeutic services to people who suffer from memory
         impairment.  MC Inc. began full operations of the pilot program at the
         end of the second quarter of 1996.

         During the second quarter, the Company created a new division within
         Neuro Corp. Ltd., called Tele-Neuro Pyschiatry ("TNP").  The TNP
         division will be responsible for marketing Tele-Neuro Psychiatric
         systems which are based on the Company's proprietary software and
         hardware equipment.  The TNP system will provide data communication
         with off-site experts.  Furthermore, the Company believes the new TNP
         system will be useful for enhancing quality controls in research
         programs.  The Company is currently utilizing TNP systems at two MC
         Inc. pilot centers.

         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.  See Note 4(b) for additional
         information.

                                           F-7


<PAGE>

                            NEUROCORP, LTD. AND SUBSIDIARIES
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                       (UNAUDITED)

NOTE 1 - GENERAL (Cont'd)

         The unaudited interim financial statements for the three and six
         months ended June 30, 1997 and 1996 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 and six 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, 1996, included in
         Form 10-KSB filed with the Securities and Exchange Commission.

NOTE 2 - LONG-TERM DEBT

         Long-term debt consists of the following at:

                                            (Unaudited)
                                              June 30,          December 31
                                                1997                1996 
                                            -----------         -----------

          Note payable due in thirty-six 
          (36) monthly installments of 
           $6,175 including interest at 
           prime plus 1% per annum 
           due May 1997.  The note is 
           collateralized by equipment,
           receivables and general 
           intangible assets and has been
           personally guaranteed by certain
           officers.                        $      -            $    31,289

         Note payable due in forty-eight 
          (48) monthly installments
          of $768 including interest at 9.5% 
          per annum due November 1999.  The 
          note is collateralized by a company
          vehicle.                                 -                 22,928

         Less: current portion                     -                (38,715)
                                            ----------          -----------

         Long-term portion                  $      -            $    15,502
                                            ----------          -----------
                                            ----------          -----------

         Long-term debt matures as follows:
                                                                Year ended
                                                                December 31,
                                                                ------------
                             1997                               $    38,715
                             1998                                     8,134
                             1999                                     7,368
                                                                -----------
                                                                $    54,217
                                                                -----------
                                                                -----------

NOTE 3 - STOCKHOLDERS' EQUITY

    a)   ISSUANCE OF WARRANTS

         As part of the acquisition, the Board of Directors of the Company have
         authorized the issuance of Class B and Class C Warrants to all
         stockholders of the Company who were stockholders of record as of
         November 1, 1994.  The Warrants were distributed on a 1 Warrant for 1
         share of common stock basis (post reverse stock split) and comprised
         in 

                                           F-8
<PAGE>

                            NEUROCORP, LTD. AND SUBSIDIARIES
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                       (UNAUDITED)



         the aggregate 800,000 Class B and 800,000 Class C Warrants, each of
         which is exercisable into one share of Common Stock of the Company. 
         The Class B Warrants are exercisable at $2.25 

NOTE 3 - STOCKHOLDERS' EQUITY (Cont'd)

    a)   ISSUANCE OF WARRANTS (Cont'd)

         per share and the Class C Warrants are exercisable at $2.75 per share,
         and were to expire June 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 Company may, at its sole discretion, undertake to
         file a registration statement with the SEC wherein the Company will
         register the Warrants and the shares of Common Stock underlying the
         Warrants.  However, until such time as said registration statement is
         filed and becomes effective, the Warrants will not be exercisable. 
         The number of shares underlying the Warrants, and 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.

         In 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 the
         expiration dates were extended to June 30, 1997.  During June 1997 the
         Company's Board of Directors extended the June 30, 1997 expiration to
         December 31, 1997.  As described in Note 3(e), in February 1996, the
         Company filed a registration statement in order to register such
         warrants.  

         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)   STOCK OPTION PLAN TRANSACTIONS

         On November 23, 1994, the Company adopted an incentive stock option
         plan that will provide 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 incentive stock options within the meaning of
         Section 422 of the Internal Revenue Code or a non-statutory stock
         option plan.  Options to purchase shares may be granted under the
         statutory stock option plan to persons who are employees or officers
         of the Company.  If the Company adopts a non-statutory stock option
         plan, options shall be granted to, employees, officers, non-employee
         directors, and consultants to the Company.

         The stock option plan provides for its administration by a committee
         chosen by the Board of Directors.  The committee shall have full
         discretionary authority to determine the number of shares to be
         granted, the grantees receiving the options, the exercise period, and
         the exercise price for which options will be granted.  In the case of
         statutory stock option plans, the committee's authority to establish
         the terms and conditions of such options, including, but not limited
         to their exercise price, shall be subject to restrictions imposed by
         Section 422 of the Internal Revenue Code.

                                           F-9


<PAGE>

                            NEUROCORP, LTD. AND SUBSIDIARIES
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                       (UNAUDITED)


NOTE 3 - STOCKHOLDERS' EQUITY (Cont'd)

    b)   STOCK OPTION PLAN TRANSACTIONS (Cont'd)

         On September 19, 1995, the Company granted to its President and Vice
         Chairman a stock option to purchase 250,000 shares of common stock at
         an exercised price of $.10 per share.  This option expires seven (7)
         years from the date of grant and the underlying common shares related
         to the stock option are restricted.  At the date of grant the Company
         recorded compensation expense of $50,000 based upon the fair value of
         the stock option at that date.

         On December 15, 1995, the Company granted orally a consultant a
         non-qualified stock option to purchase 50,000 shares of common stock
         at $.01 per share.  The underlying common shares related to the stock
         option are restricted.  At the date of grant the Company recorded a
         consulting fee of $16,875 based upon the fair value of the stock
         option on that date.  On March 26, 1997, the consultant exercised the
         stock option and, the Company issued 50,000 shares of restricted
         common stock pursuant to the terms of the oral stock option agreement
         granted to a consultant on December 15, 1995.

         On December 18, 1996, the Company granted qualified stock options to
         MC Inc.'s CEO and President, and an Executive Vice-President of the
         Company for the purchase of total of 500,000 shares of common stock
         exercisable at the lower of $7.00 per share or the fair market value. 
         The options are exercisable upon vesting and expire on January 6,
         2007.  On January 6, 1997, 200,000 of such options vested, and the
         remaining 300,000 options vest 50% on January 6, 1998 and 50% on
         January 6, 1999.

    c)   ISSUANCE OF COMMON STOCK AS CONSIDERATION FOR LOANS

         (i)  On July 19, September 14, October 12, 1995 and February 26, 1996,
              the Company and the Chairman of the Board entered into a letter
              agreement with TAC to borrow $100,000, $40,000, $60,000 and
              $75,000, respectively.  The $100,000 and $60,000 loans have an
              interest rate of 9% per annum, respectively, and were due in six
              months from the date of issuance including accrued interest,
              respectively.  The $40,000 and $75,000 loans have an interest
              rate of 10% and are due within 90 days and six months,
              respectively, from the date of issuance including accrued
              interest. TAC and the Company have agreed to extend the due dates
              of the above loans to June 30, 1997 or the date the Class B and C
              warrants are exercised in their entirety prior to June 30, 1997.
              As additional consideration for the $100,000 loan, the Company
              agreed to issue 49,998 shares of restricted common stock to TAC. 
              The Company has recorded the additional consideration as interest
              expense, with a cost of $14,061, which is based upon fifty
              percent (50%) of the fair value of the common stock issued on
              July 19, 1995, the date of the agreement.  Further, the letter
              agreements give TAC the option to convert said loans into 550,000
              shares of common stock.


                                          F-10


<PAGE>

                            NEUROCORP, LTD. AND SUBSIDIARIES
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                       (UNAUDITED)


              On September 13, 1996 the Company borrowed from TAC $50,000,
              which is payable from any future private placement proceeds. 
              Said loan bears interest at 9.5% per annum.  Further the loan
              agreement gives TAC the option to convert each $4.00 of debt into
              one (1) unit.  Each unit will consist of one (1) share of Common
              Stock of the Company and two (2) Stock Purchase Warrants.  Each
              Warrant is exercisable into one (1) share of Common Stock of the
              Company at $8.00 per share until August 31, 1997, thereafter
              $10.00 per share.  The Stock Purchase Warrants expire on August
              31, 1998.

NOTE 3 - STOCKHOLDERS' EQUITY (Cont'd)

    c)   ISSUANCE OF COMMON STOCK AS CONSIDERATION FOR LOANS (Cont'd)

         (i)  (Cont'd)  

              Subsequent to year end, the above loans were extended to December
              31, 1998 with a revised interest rate of 5% per annum. 
              Accordingly, as of June 30, 1997, such loans have been classified
              as long term.

         (ii) 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 (See Note 10(f)), 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 is being amortized over one year, which
              is the maximum term of the loan, or will be charged to operations
              if paid prior to May 24, 1997.  During  June 1997 the original
              maturity date of May 24, 1997 was extended to December 15, 1998. 
              Accordingly, as of June 30, 1997, such loans have been classified
              as long term.

    d)   SALE OF COMMON STOCK AND CAPITAL CONTRIBUTION

         In December 1995, the Company sold 1,000,000 post-split shares of .001
         par value common stock to four investors unrelated to the Company for
         $250,000.  As a condition of the sale the Company's Chairman agreed to
         contribute 400,000 shares of the Company's common stock owned by him
         to the Company and to then have them canceled by the Company.  The
         Company has accounted for this as a $100,000 contribution of capital
         based upon the fair market value of the stock at the date of
         contribution.  The Company agreed to file a registration statement in
         February 1996 as one of the conditions of the sale, as described
         below.

    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 

                                          F-11


<PAGE>

                            NEUROCORP, LTD. AND SUBSIDIARIES
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                       (UNAUDITED)


         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.  Said costs have been deferred and will be charged to
         additional paid in capital upon the successful completion of the
         registration.



NOTE 3 - STOCKHOLDERS' EQUITY (Cont'd)

    f)   SALE OF COMMON STOCK

         During December 1996, the Company sold 550,000 units for $2,001,068
         pursuant to a private placement memorandum to three unrelated parties. 
         Each unit is comprised of one (1) share of common stock and two (2)
         stock purchase warrants.  Each warrant entitles the holder to purchase
         one (1) share of common stock at $8.00 per share until August 31,
         1997, thereafter $10 per share.  The warrants expire August 31, 1998.

NOTE 4 - COMMITMENTS AND CONTINGENCIES

    a)   OPERATING LEASES

         The Company leases its office facilities under a noncancellable
         operating lease expiring during 1998.  The lease contains a provision
         for additional rent which is equal to the Company's pro rated share of
         future real estate taxes.  In addition, the Company has a
         noncancellable operating lease for office equipment expiring in 1997.

         A schedule of future minimum rental payments at December 31, 1996 is
         as follows:

         YEAR ENDED DECEMBER 31,
         -----------------------
         1997                                    $     92,557
         1998                                          77,868
                                                 ------------
                                                 $    170,425
                                                 ------------
                                                 ------------

         Rent expense under all operating leases for the six months ended June
         30, 1997 and 1996 was $62,111 and $56,657, respectively.

    b)   CONCENTRATION OF CREDIT RISK

         For the six months ended June 30, 1997 and 1996, approximately 80% and
         60%, respectively, of net sales were derived from four and two
         unrelated customers, respectively, who are in the pharmaceutical and
         psychiatric industries.  As of June 30, 1997 and December 31, 1996,
         approximately 75% and 61% respectively, of accounts receivable are due
         from three and two unrelated customers, respectively.

    c)   EMPLOYMENT AGREEMENTS

                                          F-12


<PAGE>

                            NEUROCORP, LTD. AND SUBSIDIARIES
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                       (UNAUDITED)



    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.  The agreement
         provides that on each anniversary date the Chairman's salary shall be
         increased in good faith subject to negotiations between the Chairman
         and the Company.  The Company agreed to review the services rendered
         by the Chairman at least annually and, at the discretion of the Board
         of Directors award a cash bonus or make a contribution to a deferred
         compensation plan.  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 a vehicle and driver
         funded by the Company.  For the six months ended June 30, 1996, the
         Company's Chairman waived his right to receive 


NOTE 4 - COMMITMENTS AND CONTINGENCIES (Cont'd)

    c)   EMPLOYMENT AGREEMENTS (Cont'd)

         i)   (Cont'd)

              the term life insurance as provided for in the employment
              agreement.  Effective February 1, 1997, the Company has purchased
              life insurance in accordance with the September 20, 1995
              employment agreement.  The Company has estimated the annual cost
              for the initial policy year to be $20,000.

         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.  If the
              employee is terminated within the contract period due to the
              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) time 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 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.

         iv)  On December 18, 1996, the Company and MC Inc. entered into an
              employment agreement with the CEO and President of MC Inc. and 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 

                                          F-13


<PAGE>

                            NEUROCORP, LTD. AND SUBSIDIARIES
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                       (UNAUDITED)



              year basis thereafter.  The agreement granted a qualified stock
              options for a total purchase of 500,000 shares of  common stock
              exercisable at the lower of $7.00 per share or the fair market
              value.  The options are exercisable upon vesting and expire
              January 6, 2007.  On January 6, 1997, 200,000 of such options
              vest and 150,000 options each vest on January 6, 1998 and 1999.

    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.

NOTE 5 - RELATED PARTY TRANSACTIONS

    a)   REVENUES FROM AFFILIATES

         The Company charges NYI, as well as Manhattan Westchester Medical
         Services, P.C. ("Manhattan Westchester") for the use of certain
         employees and office and laboratory space (administration services) of
         the Company.  Manhattan Westchester is also under the common control
         of the Company's Chairman.  Net revenues from these affiliates for the
         six months ended June 30, 1997 and 1996 amounted to $23,708 and
         $24,361, respectively.

         The above transactions between HZI and NYI have been eliminated in the
         consolidated financial statements.

    b)   SERVICES PROVIDED BY AFFILIATES

         During 1994 HZI and Manhattan Westchester entered into an arrangement
         whereby Manhattan Westchester would provide medical consulting
         services to HZI's TeleMap business.  This arrangement was suspended
         during 1995 and reactivated during 1996.  No services were provided by
         Manhattan Westchester to HZI for the six months ended June 30, 1997
         and 1996.

    c)   STOCKHOLDER NOTES AND LOANS PAYABLE

    Stockholder notes and loans payable consisted of the following at:

                                                 JUNE
                                               30, 1997         DECEMBER  
                                              (UNAUDITED)       31, 1996  
                                             ------------      ---------
         Non-interest bearing loans and 
          payables, except for $20,000 which 
          bears interest at 10% per annum 
          (See (i) below)                   $    106,680   $    108,687

         Notes payable bearing an interest 
         of 5% to 9% (See (ii) and (iii) 
          below)                                 450,000        550,000

                                          F-14


<PAGE>

                            NEUROCORP, LTD. AND SUBSIDIARIES
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                       (UNAUDITED)


         Non-interest bearing loan payable
          (See (iv) below)                       200,000        200,000
                                            ------------   ------------
                                            $    756,680   $    858,687
                                            ------------   ------------
                                            ------------   ------------

         i)   Stockholder loans payable relates to advances made to HZI and NYI
              by its Chairman of the Board which are due on demand. 
              Furthermore, pursuant to the terms of a note dated January 30,
              1996 amounting to $20,000, said note can be converted into 40,000
              shares of common stock.
NOTE 5 - RELATED PARTY TRANSACTIONS (Cont'd)

    c)   STOCKHOLDER NOTES AND LOANS PAYABLE (Cont'd)

         ii)  On July 19, September 14, October 12, 1995 and February 26, 1996,
              the Company and the Chairman of the Board entered into a letter
              agreement with TAC to borrow $100,000, $40,000, $60,000 and
              $75,000, respectively.  The $100,000 and $60,000 loans have an
              interest rate of 9% per annum, respectively, and were due in six
              months from the date of issuance including accrued interest,
              respectively.  The $40,000 and $75,000 loans have an interest
              rate of 10% and are due within 90 days and six months,
              respectively, from the date of issuance including accrued
              interest. TAC and the Company have agreed to extend the due dates
              of the above loans to September 30, 1997 or the date the Class B
              and C warrants are exercised in their entirety if prior to
              September 30, 1997. As additional consideration for the $100,000
              loan, the Company agreed to issue 49,998 shares of restricted
              common stock to TAC.  The Company has recorded the additional
              consideration as interest expense, with a cost of $14,061, which
              is based upon fifty percent (50%) of the fair value of the common
              stock issued on July 19, 1995, the date of the agreement. 
              Further, the letter agreements give TAC the option to convert
              said loans into 550,000 shares of common stock.

              On November 16, 1995, the Company entered into a letter agreement
              with SRS  Partners, a partnership that is affiliated with TAC to
              borrow $25,000.  The loan bears interest at a rate of 9% and is
              due within six months or out of the proceeds of the first funding
              of a Reg. "S" transaction.  (See below for amended maturity
              date).

              On September 13, 1996 the Company borrowed from TAC $50,000,
              which is payable from any future private placement proceeds. 
              Said loan bears interest at 9.5% per annum.  Further the loan
              agreement gives TAC the option to convert each $4.00 of debt into
              one (1) unit.  TAC and the Company have agreed to extend the due
              dates of the above loans to September 30, 1997 or the date the
              Class B and C Warrants are exercised in their entirety.

              Each unit will consist of one (1) share of Common Stock of the
              Company and two (2) Stock Purchase Warrants.  Each Warrant is
              exercisable into one (1) share of Common Stock of the Company at
              $8.00 per share until August 31, 1997, thereafter $10.00 per
              share.  The Stock Purchase Warrants expire on August 31, 1998.

              Subsequent to year end, the maturity dates on the above notes
              were extended to December 31, 1998 with a revised interest rate
              of 5% per annum.  Accordingly, as of June 30, 1997, such amounts
              have been classified as long term.

                                          F-15


<PAGE>

                            NEUROCORP, LTD. AND SUBSIDIARIES
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                       (UNAUDITED)


         iii) On July 16, 1996 the Company entered into two loan agreements
              amounting to $200,000 with two unrelated shareholders.  Each loan
              was for $100,000 and bear interest at 9% per annum and is due
              within one (1) year, or from the proceeds of the Company's
              securities including the exercise of Class B and C Warrants.  On
              April 30, 1997 the Company liquidated one loan obligation
              amounting to $100,000 and extended the second loan maturity date
              to December 15, 1998.
NOTE 5 - RELATED PARTY TRANSACTIONS (Cont'd)

    c)   STOCKHOLDER NOTES AND LOANS PAYABLE (Cont'd)

         iv)  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 on the earlier of  one (1) year from May 24, 1996
              or 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 66,666 shares of
              restricted common stock.  The Company issued and has valued the
              common stock at $133,333 or fifty percent (50%) of the fair 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 are being amortized over one year, which
              is the maximum term of the loan, or will be charged to operations
              if paid prior to May 24, 1997.   Subsequent to year end, the
              original maturity date of May 24, 1997 was extended to December
              15, 1998.  Accordingly, as of June 30, 1997 such loans have been
              classified as long term.  For the six months ended June 30,1997
              and 1996, amortization expense amounted to $53,515 and $13,152,
              respectively.  Further, the Company agreed to register said
              shares  (See Note 3(e)). 

         v)   At June 30, 1997 and December 31, 1996, accrued interest related
              to such notes and loans amounted to $54,985 and $36,376,
              respectively, and is included in accrued expenses.

    d)   SHAREHOLDER TRANSACTIONS

         On September 19, 1995 the Company granted to its Vice Chairman a
         non-qualified stock option to purchase 250,000 shares of common stock
         at an exercised price of $.10 per share.  This option expires seven
         (7) years from the date of grant and the underlying common shares
         related to the option are restricted.  At the date of grant the
         Company recorded compensation expense of $50,000 based upon the fair
         value of the stock option at that date.  As of March 31, 1997 such
         options have not been exercised.

    e)   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.

    f)   CAPITAL CONTRIBUTION

         In December 1995, the Company sold 1,000,000 shares of common stock to
         four 

                                          F-16


<PAGE>

                            NEUROCORP, LTD. AND SUBSIDIARIES
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                       (UNAUDITED)


         unrelated investors for $250,000.  As a condition of the sale the
         Company's Chairman agreed to contribute 400,000 shares of the
         Company's common stock owned by him to the Company and to then have
         them canceled by the Company.  The Company has accounted for this as a
         $100,000 contribution of capital based upon the fair value of the
         stock at the date of contribution.  The Company agreed to file a
         registration statement in February, 1996 as one of the conditions of
         the sale.  (See Note 3(e)).
NOTE 5 - RELATED PARTY TRANSACTIONS (Cont'd)

    g)   DUE FROM AFFILIATES

         The Company charges Manhattan Westchester for the use of certain
         employees, laboratory space and management fees related to MC Inc.'s
         services.  Manhattan Westchester is under the common control of the
         Company's Chairman.  For the six months ended June 30, 1997 and 1996
         such charges amounted to $38,803 and $11,144,  respectively.  At June
         30, 1997 and December 31, 1996, amounts due from Manhattan Westchester
         principally for management and administrative services amounted to
         $73,238 and $33,495, respectively, which has been  included in other
         current assets.

                                          F-17


<PAGE>

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

         NeuroCorp., Ltd. ("the Company") was incorporated in the State of
         Nevada on March 18, 1987.  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
         from Tamarac Ventures, Ltd. to NeuroCorp., Ltd.  Further, the Company
         reduced its authorized common stock from 200,000,000 shares to
         100,000,000 shares and authorized 5,000,000 shares of preferred stock.

         The Company, through one of its wholly-owned subsidiaries, HZI, is
         primarily involved in three inter-related businesses all of which
         involve the interaction or utilization of the Company's proprietary
         software, databases and medical devices for the diagnosis and
         treatment of brain-related disorders.  The three businesses are as
         follows: (i) performing contract medical research services
         (principally conducting clinical trials which include "special"
         proprietary quantitative Pharmaco-electroencephalogram
         (QPEEG-Registered Trademark- studies) for health agencies, other
         contract research organizations and pharmaceutical companies (ii)
         designing and subcontracting the manufacturing of proprietary
         neuropsychiatric diagnostic testing software and equipment, which
         currently is their Brain Function Monitoring Systems-Registered
         Trademark- ("BFM Systems") and selling these to physicians,
         researchers and hospitals and (iii) providing telephonic neurological
         diagnostic testing services, including electroencephalogram ("EEG")
         and Dynamic Brain Mapping-Registered Trademark-  to physicians and
         hospitals known as TeleMap-Registered Trademark-.

         In January 1996, the Company created a new wholly-owned subsidiary,
         Memory Centers of America, Inc. ("MC Inc.") to provide therapeutic
         services to people who suffer from memory impairment.  MC Inc. began
         full operations of the pilot program at the end of the second quarter
         of 1996.  Each facility is estimated to cost between $150,000 to
         $200,000 for equipment, leasehold improvements and working capital
         which includes administration costs.  Revenues from this wholly owned
         subsidiary are considered insignificant for the three and six months
         ended June 30, 1997.

         During the second quarter, the Company created a new division within
         Neuro Corp. Ltd., called Tele-Neuro Pyschiatry ("TNP").  The TNP
         division will be responsible for marketing Tele-Neuro Psychiatric
         systems which are based on the Company's proprietary software and
         hardware equipment.  The TNP system will provide data communication
         with off-site experts.  Furthermore, the Company believes the new TNP
         system will be useful for enhancing quality controls in research
         programs.  The Company is currently utilizing TNP systems at two MC
         Inc. pilot centers.

         THREE MONTHS JUNE 30, 1997 AS COMPARED TO THE THREE MONTHS ENDED JUNE
         30, 1996

         The Company recognized 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.  The
         liability, "Billings in excess of contract revenues on uncompleted
         contracts", represent billings in excess of revenues recognized.

         Revenue from computer system sales, which include BFM Systems, are
         recognized upon the shipment of the turnkey systems.  Service revenues
         such as TeleMap, are recognized 

                                          F-18


<PAGE>

         as they are rendered.

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

         THREE MONTHS ENDED JUNE 30, 1997 AS COMPARED TO THE THREE MONTHS ENDED
         JUNE 30, 1996 (Cont'd)

         The Company reported a net loss of $390,145 for the three months ended
         June 30, 1997 as compared to a net loss of $119,028 for the three
         months ended June 30, 1996.

         Revenues for the three months ended June 30, 1997 and 1996 amounted to
         $311,513  and $408,674, respectively.  Revenues decreased by $97,161
         or 24% for the three months ended June 30, 1997 as compared to the
         three months ended June 30, 1996.  Gross profit for the three months
         ended June 30, 1997 and 1996 amounted to $188,293 and $227,166
         respectively or a net decrease of $38,873.  The gross profit
         percentages for three months ended June 30, 1997 and 1996 amounted to
         60% and 56%, respectively, or a net increase of 4%.  The Company
         includes in the cost of sale 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, 1997 and 1996
         amortization charges amounted to $68,604 and $59,752, respectively,
         resulting in a reduction of the Company's overall gross profit
         percentage by 22% and 15%, respectively. 

         Furthermore, the net reduction of sales and gross profit during the
         three months ended June 30, 1997 as compared to the three months ended
         June 30, 1996 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 have been substantially
              completed during the December 31, 1995 and 1994 year end.  For
              the years ended December 31, 1996 and 1995 the Company received
              $759,000 and $516,000, respectively, or $1,275,000 of new
              contracts.  Revenues from contracts for the three months ended
              June 30, 1997 as compared to the three months ended June 30, 1996
              amounted to $181,228 and $271,103, respectively, or a net
              decrease of $89,875.  The contract division's low revenues for
              the June 30, 1997 and 1996 quarters  is attributable to the
              Company's lack of major new contracts during the last three
              years.  Management believes that the drug research industry has
              temporarily been negatively impacted due to consolidation in the
              pharmaceutical industry, which has resulted in the reduction of
              the available pool of new research contracts.  The Company
              believes that demand for more effective drugs with fewer negative
              side effects, in the area of the Company's expertise will
              continue to stimulate research activity in the long term.

              The gross profit percentage from contracts for the three months
              ended June 30, 1997 is 69% as compared to June 30, 1996 which was
              59%.  The increase in gross profit for the three months ended
              March 31, 1997 as compared to the three months ended March 31,
              1996, is a result of efficiencies introduced within the contract
              division.

              As of June 30, 1997 the Company contract division had a backlog
              of approximately $355,000 from uncompleted contracts.  The
              Company expects to realize a minimum of $220,000 through the
              remainder of 1997 from said contracts.

                                          F-19


<PAGE>


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

         THREE MONTHS ENDED JUNE 30, 1997 AS COMPARED TO THE THREE MONTHS ENDED
         JUNE 30, 1996 (CONT'D)

         1.   (Cont'd)

              The contract research division during the December 31, 1996 year
              end performed significant work for a major foreign customer,
              resulting in a large increase in their accounts receivable.  
              During the fourth quarter of the 1996 calendar year, the Company
              completed the statistical report for the foreign customer and
              collected the remaining portion of the outstanding receivable
              from September 30, 1996 which amounted to $50,000.  As of June
              30, 1997, the receivable amounts from this foreign customer for a
              second contract amounted to $220,700 and is expected to be
              collected during the fourth quarter.  The foreign customer has
              amended the second contract to include additional patients, which
              has resulted in a change of the estimated completion date from
              December 1996 to during the fourth quarter 1997.

         2.   Net sales of BFM Systems for the three months ended June 30, 1997
              and 1996 amounted to $28,884 and $82,085, respectively or a net
              decrease of $53,201.  Gross profit amounts for the three months
              ended June 30, 1997 amounted to a negative $3,686 whereas for the
              three months ended June 30, 1996, the gross profit amounted to
              $59,922 or a net decrease of $63,608.  As noted previously, the
              Company changed its amortization of software development costs,
              resulting in an increased charge to the BFM Systems division. 
              Amortization expense for three months ended June 30, 1997 and
              1996 amounted to $25,043 and $18,462, respectively. During the
              last twelve months for the period ended June 30, 1997, the
              Company has not sold any major BFM Systems.  The Company
              management is revising its marketing strategy and believes the
              lack of sales is temporary.

         3.   Revenues of the TeleMap division for the three months ended June
              30, 1997 and 1996 amounted to $25,928 and $30,459, respectively. 
              Gross profit percentage for the three months ended June 30, 1997
              and 1996 amounted to 45% and 69%, respectively due to an increase
              in labor costs.

         4.   Pilot memory center management fees and other revenues for the
              three months ended June 30, 1997 amounted to $6,000.  However,
              the Company, during the second quarter, reduced certain excess
              revenue accruals recorded during the first quarter and thus
              reduced second quarter revenues by $5,629 to $371.  This revenue
              was derived entirely from Manhattan Westchester Medical Services,
              P.C. ("Manhattan Westchester") through a pilot program conducted
              under the management of MC Inc..  Manhattan Westchester is a
              medical practice that is controlled by the Company Chairman. 
              While MC Inc.  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.

         5.   The TNP division completed its first sale amounting to $75,102
              during the second quarter ended June 30, 1997.  Costs in
              connection with this sale, principally amortization of software
              development costs allocated to the TNP division from the BFM
              Systems division amounted to $21,093.  Gross profit on this sale
              amounted to $54,009 or 72%.

                                          F-20


<PAGE>


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

         THREE MONTHS ENDED JUNE 30, 1997 AS COMPARED TO THE THREE MONTHS ENDED
         JUNE 30, 1996 (CONT'D)

         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 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, 1997 were $524,718 as compared to the three months ended June 30,
         1996 of $307,554 or an increase of $217,164 or 71%.  The increase in
         general and administrative expenses for the three months ended June
         30, 1997 is due to the Company increasing its development costs for
         its new subsidiary, MC Inc. by $249,678 as compared to the three
         months ended June 30, 1996.  The intended business of MC Inc. is to
         manage and distribute through professional medical practitioners a
         program that will evaluate and treat mild memory disturbances.  

         Research and development costs ("R&D") for the three months ended June
         30, 1997 were $34,653 as compared to the three months ended June 30,
         1996 of $17,218 or an increase of $17,435.  The increase in R&D costs
         is principally payroll allocated to R&D for new drug development.
         
         Commencing July 19, 1995 through September 13, 1996, the Company
         borrowed approximately $700,000 net of repayments from their
         shareholders and their affiliates.  These loans were used principally
         to finance losses from operations.  As a result of these additional
         borrowings, interest expense for the three months ended June 30, 1997
         as compared to the three months ended June 30, 1996 increased by
         $6,984.

         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 consideration for such loan the
         company issued 66,665 shares of restricted common stock.  The Company
         has valued the common stock at $133,333 or fifty percent (50%) of the
         fair value on May 24, 1996, the date of the transaction.  The Company
         recorded deferred financing costs and increased stockholders' equity
         by $133,333 for this transaction.  The deferred financing costs are
         being amortized over one year, which was the maximum term of the loan,
         or will be charged to operations if paid prior to May 24, 1997.   The
         implicit rate of interest for this loan is 67% per year before any
         extensions.  At the time of the loan from such stockholder, the
         Company was unable to borrow at lower interest  rates due to its
         financial condition and the size of the loan.  Accordingly, management
         considered the importance to the Company of obtaining such funding
         which in its opinion outweighed the cost, particularly since the costs
         of issuing its securities did not impair the Company's cash flows
         since such costs did not involve the outlay of Company funds.  The
         Company, during the second quarter ended June 30, 1997 negotiated an
         extension of this loan to December 15, 1998.

                                          F-21


<PAGE>

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

         SIX MONTHS JUNE 30, 1997 AS COMPARED TO THE SIX MONTHS ENDED JUNE 30,
         1996

         The Company recognized 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.  The
         liability, "Billings in excess of contract revenues on uncompleted
         contracts", represent billings in excess of revenues recognized.

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

         The Company reported a net loss of $659,223 for the six months ended
         June 30, 1997 as compared to a net loss of $313,067 for the six months
         ended June 30, 1996.

         Revenues for the six months ended June 30, 1997 and 1996 amounted to
         $587,000 and $791,122, respectively.  Revenues decreased by $204,122
         or 26% for the six months ended June 30, 1997 as compared to the six
         months ended June 30, 1996.  Gross profit for the six months ended
         June 30, 1997 and 1996 amounted to $293,937 and $408,228, respectively
         or a net decrease of $114,291.  Gross profit percentage for six months
         ended June 30, 1997 and 1996 amounted to 50% and 52%, respectively, or
         a net decrease of 2%.  The Company includes in the cost of sale
         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, 1997 and 1996 amortization charges amounted to $135,805
         and $128,800, respectively, resulting in a reduction of the Company's
         overall gross profit percentage by 23% and 16%, respectively. 

         Furthermore, the net reduction of sales and gross profit during the
         six months ended June 30, 1997 as compared to the six months ended
         June 30, 1996 is attributable to the following:

         1.   The Company has not entered into any major new long-term (over
              two years) contracts since December 31, 1993 and major contracts
              recorded prior to this period have been substantially completed
              during the December 31, 1995 and 1994 year end.  For the years
              ended December 31, 1996 and 1995 the Company received $759,000
              and $516,000, respectively, or $1,275,000 of new contracts. 
              Revenues from contracts for the six months ended June 30, 1997 as
              compared to the six months ended June 30, 1996 amounted to
              $393,100 and $476,964, respectively, or a net decrease of
              $83,864.  The contract division's low revenues for the June 30,
              1997 and 1996 period is attributable to the Company's lack of
              major new contracts during the last six years.  Management
              believes that the drug research industry has temporarily been
              negatively impacted due to consolidation in the pharmaceutical
              industry, which has resulted in the reduction of the available
              pool of new research contracts.  The Company believes that demand
              for more effective drugs with fewer negative side effects, in the
              area of the Company's expertise will continue to stimulate
              research 

                                          F-22


<PAGE>

              activity in the long term.

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

         SIX MONTHS JUNE 30, 1997 AS COMPARED TO THE SIX MONTHS ENDED JUNE 30,
         1996 (Cont'd)

         1.   (Cont'd)

              The gross profit percentage from contracts for the six months
              ended June 30, 1997 is    64% as compared to June 30, 1996 which
              was 47%.  The increase in gross profit for the six months ended
              March 31, 1997 as compared to the six months ended June 30, 1996,
              is a result of efficiencies introduced within the contract
              division.

         2.   Net sales of BFM Systems for the six months ended June 30, 1997
              and 1996 amounted to $53,278 and $232,685, respectively or a net
              decrease of $179,407.  Gross profit amounts for the six months
              ended June 30, 1997 amounted to a negative $50,194 whereby for
              the six months ended June 30, 1996, the gross profit amounted to
              $140,967 or a net decrease of $191,161. As noted previously, the
              Company changed its amortization of software development costs,
              resulting in an increased charge to the BFM Systems division. 
              Amortization expense for six months ended June 30, 1997 and 1996
              amounted to $70,617 and $89,200, respectively. During the last
              twelve months for the period ended June 30, 1997, the Company has
              not sold any major BFM systems.  The Company management is
              revising its marketing strategy and believes the lack of sales is
              temporary.

         3.   Revenues of the TeleMap division for the six months ended June
              30, 1997 and 1996 amounted to $50,520 and $56,446, respectively. 
              Gross profit percentage for the six months ended June 30, 1997
              and 1996 amounted to 48% and 54%, respectively due to a slight
              increase in labor costs.

         4.   Pilot memory centers revenue for the six months ended June 30,
              1997 amounted to $15,000.  This revenue was derived entirely from
              Manhattan Westchester through a pilot program conducted under the
              management of MC Inc..  Manhattan Westchester is a medical
              practice that is controlled by the Company's Chairman.  While MC
              Inc.  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.

              The TNP division completed its first sale amounting to $75,102
              during the second quarter ended June 30, 1997.  Costs in
              connection with this sale, principally amortization of software
              development costs allocated to the TNP division from the BFM
              Systems division amounted to $21,093.  Gross profit on this sale
              amounted to $54,009 or 72%.

         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 above, which are not capitalized during the period are
         charged to either general and administrative or research and
         development expense.

                                          F-23


<PAGE>

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

         SIX MONTHS ENDED JUNE 30, 1997 AS COMPARED TO THE SIX MONTHS ENDED
         JUNE 30, 1996 (Cont'd)

         General and administrative expenses for the six months ended June 30,
         1997 were $844,765 as compared to the six months ended June 30, 1996
         of $521,650 or an increase of $323,115 or 62%.  The increase in
         general and administrative expenses for the six months ended June 30,
         1997 is due to the Company increasing its development costs for its
         new subsidiary, Memory Centers of America, Inc. ("MC Inc.") by
         $294,033 as compared to the six months ended June 30, 1996.  The
         intended business of MC Inc. is to manage and distribute through
         professional medical practitioners a program that will evaluate and
         treat mild memory disturbances.  

         Research and development costs ("R&D") for the six months ended June
         30, 1997 were $52,128 as compared to the six months ended June 30,
         1996 of $45,184 or an increase of $6,944.
         
         Commencing July 19, 1995 through September 13, 1996, the Company
         borrowed approximately $700,000 net of repayments from their
         shareholders and their affiliates.  These loans were used principally
         to finance losses from operations.  As a result of these additional
         borrowings, interest expense for the six months ended June 30, 1997 as
         compared to the six months ended June 30, 1996 increased by $43,319.

         LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 1997 and December 31, 1996, the Company had working
         capital of $1,464,877 and $1,082,613, respectively.  The $382,264 net
         increase in working capital for the six months ended June 30, 1997 as
         compared to the year ending December 31, 1996 is the result of the
         Company raising $600,000 from the exercise of warrants during March
         1997.  These funds were used to supplement the Company's working
         capital.  Furthermore, the Company, during the quarter ended June 30,
         1997 obtained agreements to extend $650,000 of stockholder loans to
         December 15, 1998, thereby increasing the Company's working capital by
         said amount.

         For the six months ended June 30, 1997 and 1996, the Company used cash
         for operations of $790,120 and $445,317, respectively, resulting in
         increased use of cash for operations by $344,803.  The net increase
         for the six months ended June 30, 1997 is the result of loss from
         operations amounting to $659,223 as compared to the loss from
         operations for the six months ended June 30, 1996 of $313,067.  As
         noted previously, the Company's sales for the six months ended June
         30, 1997 were $204,122 less than the June 30, 1996 period, principally
         from the BFM Systems division.  Additionally, the Company changed its
         amortization policy for computer system product development costs
         effective January 1, 1996 resulting in an additional non-cash charge
         to operation of $125,745  for the six months ended June 30, 1996. 

                                          F-24


<PAGE>

                            NEUROCORP, LTD. AND SUBSIDIARIES
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                       (UNAUDITED)


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

         LIQUIDITY AND CAPITAL RESOURCES (Cont'd)

         The Company increased its development costs expenditures by $294,033
         for its new subsidiary, MC Inc. for the six months ended June 30, 1997
         as compared to the six months ended June 30, 1996.  The effect of
         these items, excluding the non-cash charge to the June 30, 1996
         operations for additional amortization resulting from the change in
         the Company's amortization policy, increased the loss from operations
         by $498,155.

         For the six months ended June 30, 1997 and  1996 cash used by
         investing activities amounted to $240,701 and $75,588, respectively,
         or a net increase in use of cash of $165,138.  The increased use in
         cash for investing activities for the six months ended June 30, 1997
         as compared to the six months ended June 30, 1996 was attributable to
         the following: (i) purchase of equipment and fixtures amounting to
         $52,517, (ii) $17,656 increase in database development costs and (iii)
         costs incurred in organizing memory centers amounting to approximately
         $100,000.  The increase 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, 1997 purchased
         equipment and incurred organization costs amounting to approximately
         $165,975 principally for its new subsidiary MC Inc.  The organization
         costs expenditures were in connection with future operating sites,
         legal documentation etc.

         For the six months ended June 30, 1997 and 1996 cash provided by
         financing activities amounted to $329,741 and $516,532, respectively. 
         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.  During March 1996 the Company sold 1,000,000 shares of
         common stock for $400,000 to foreign investors utilizing regulations
         "S" guidelines.  Furthermore, during the six months ended June 30,
         1996 the Company repaid a line of credit which amounted to $50,000 and
         borrowed from shareholder $227,630 net of repayments.  On April 30,
         1997 the Company repaid a shareholder loan amounting to $100,000.  The
         Company incurred registration costs for the six months ended June 30,
         1997 and 1996 amounting to $114,035 and $25,046, respectively, in
         connection with registering shares of common stock and warrants
         pursuant to contractual obligations with certain stockholders.  At
         June 30, 1997 and 1996, the Company accrued $7,500 of dividends for
         Series 1 preferred stock as required under terms of the preferred
         stock.

         At June 30, 1997 the Company's outstanding debt with respect to
         borrowings amounted to $756,680.  The Company expects to repay, and in
         some cases is obligated to repay, such debt from the first proceeds
         received upon the exercise of the Class B and C Warrants.  If such
         proceeds are insufficient, the Company expects to be able to make
         repayments from internally generated funds or additional public or
         private sales of its securities.

                                          F-25


<PAGE>

                            NEUROCORP, LTD. AND SUBSIDIARIES
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                       (UNAUDITED)


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

         MANAGEMENTS'S PLAN

         Since 1974, the Company has conducted a series of research programs
         and studies on memory-enhancing drugs.  In these programs, a series of
         tests have been used which may assist in the establishment of the
         cause and degree of memory disturbances.  Furthermore, the Company
         provides telephonic services to assist in diagnosis of brain
         disorders.  These services were enhanced with new hardware and
         software.  The Company has been developing tele-neuropsychiatry
         systems to be applied in multinational clinical trials.  The existing
         hardware/software for these systems was also modified to assist in the
         diagnosis of memory disturbances.  The Company also has databases that
         contain data from patients in several diagnostic categories and from
         the computer-analyzed EEG (CEEG-Registered Trademark-) profiles of
         numerous neuropsychiatric medications.  The databases related to
         memory disturbances (e.g., age-associated memory disturbance and
         different types of dementia, such as Alzheimer's) and to memory drugs
         (e.g., cognitive activators, psychostimulants, anti-Alzheimers' drugs)
         were prepared to assist doctors in the diagnosis and treatment of
         memory disturbances.

         All of this work set the stage to form a wholly-owned subsidiary, MC
         Inc.   To test the validity and reliability of the Company's
         proprietary hardware and software in day to day practice and to
         provide multi-disciplinary diagnostic and therapeutic help for people
         who suffer from memory impairment, the Company has established three
         "Memory Centers -TM- " in collaboration with Manhattan Westchester, in
         New York City (Manhattan and Brooklyn) and Tarrytown, New York as
         pilot centers.  The Company intends to have 5 to 10 Memory Centers
         opened by the calendar year end 1997.  These centers are to be
         operated under expert medical supervision which will include
         up-to-date diagnostic tools so as to provide the best available
         treatment.  In January 1997, the Company hired an experienced
         executive as President and CEO of MC Inc.

         The intended development of these 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 $150,000 and $200,000 for
         equipment, leasehold improvements, and working capital, including
         corporate overhead attributable to operating the Memory Centers.  
         Therefore, the Company estimates that its short term capital
         requirements for 10 fully functioning Memory Centers will be in the
         range of $1,500,000 to $2,000,000.

         During December 1996, the Company completed a private placement of its
         securities which provided $2,001,618.  Approximately 60% of the
         proceeds of this private placement are intended to be used for the
         initial development and expansion of Memory Centers-TM- , including
         advertising, working capital and new management.  The Company intends
         to set up 100 centers within the next 5 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 

                                          F-26


<PAGE>

                            NEUROCORP, LTD. AND SUBSIDIARIES
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                       (UNAUDITED)

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

         MANAGEMENTS'S PLAN (Cont'd)

         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.

         The Company demonstrated and reported in a scientific periodical that
         a double dose of a plant extract product sold by the Company's largest
         customer has more CNS effects and thus, should be more therapeutically
         effective than that of the current marketed dose.  This 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.  Management believes that this recent
         significant support by the Company's largest customer will have a
         positive effect on future business.  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 study.

         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 areas 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.

         The Company intends to submit 510(k) applications to the FDA between
         the latter part of 1997 and mid 1998 with respect its EEG/EP
         Amplifier, 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 510(k) applications is estimated at
         $70,000, which funds will be derived from currently available working
         capital raised in a recent private offering.

         The Company will meet its future cash requirements for its general
         corporate overhead for at least the next twelve months through cash
         flow from operations based on its current contract backlog amounting
         to $355,000 at June 30, 1997, future contracts currently under
         negotiation and the balance of the $2,601,618 received during December
         1996 and March 1997 as a result of selling units in a private
         placement and the exercise of warrants as previously discussed.

                                          F-27


<PAGE>

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

         MANAGEMENTS'S PLAN (Cont'd)

         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.

         CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

         The Private Securities Litigation Reform Act of 1995 ("Act") 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 environment 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.


                                          F-28


<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:

    None

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

    a)   Exhibits

         None

    b)   Reports on Form 8-K

         None

                                          F-29


<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 18, 1997                  By: /s/ Joseph J. DioGuardi
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                                            Joseph J. DioGuardi
                                            Chief Financial Officer