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

                                  FORM 10-QSB/A

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

For the quarterly period ended  September 30, 1996

                                       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: 33-14042-NY

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

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

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

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


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

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

           APPLICABLE ONLY TO CORPORATE ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: 7,173,807 Shares as of September 30,
1996.

<PAGE>

This filing on Form 10-QSB/A No. 1 amends the Quarterly Report on Form 10-QSB
for the 3 months ended September 30, 1996, of NeuroCorp, Ltd. (the "Company").
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its report on Form 10-QSB for the
three months ended September 30, 1996, (the "Form 10-QSB"), as set forth below:

The following items are hereby amended and restated to read in their entirety as
they appear in this amendment.

PART 1 - FINANCIAL INFORMATION

     ITEM 1 - FINANCIAL STATEMENTS

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

Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.


Date:  February 10, 1997                By: /s/ Aileen A. Kunitz
                                            ----------------------------------
                                            Vice President and
                                            Chief Financial Officer

<PAGE>

                        NEUROCORP, LTD. AND SUBSIDIARIES
                        (Formerly Tamarac Ventures, Ltd.)
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PART 1 - FINANCIAL INFORMATION:

   ITEM 1 - FINANCIAL STATEMENTS
                                                                        Page
                                                                       number
                                                                       ------

     Consolidated balance sheets (Unaudited) at September 30, 
          1996 and December 31, 1995                                     F-1

     Consolidated statements of operations (Unaudited) for the 
          three months ended September 30, 1996 and 1995                 F-2

     Consolidated statements of operations (Unaudited) for the 
          nine months ended September 30, 1996 and 1995                  F-3

     Consolidated statements of stockholders' equity (Unaudited) 
          for the nine months ended September 30, 1996                   F-4

     Consolidated statements of cash flows (Unaudited) for the 
          nine months ended September 30, 1996 and 1995                  F-5

     Notes to consolidated financial statements                       F-6 - F-19

   ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS                      F-20 - F-28
<PAGE>

                        NEUROCORP, LTD. AND SUBSIDIARIES
                        (Formerly Tamarac Ventures, Ltd.)
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                              (Unaudited)
                                                                              September 30,  December 31,
                                                                                  1996          1995
                                                                               -----------   -----------
<S>                                                                            <C>           <C>        
                                     ASSETS
Current assets:
   Cash                                                                        $   118,490   $   140,519
   Accounts receivable, net of allowance for
    doubtful accounts of $57,556 and $39,920, respectively                       1,187,659       716,650
   Inventory                                                                        34,883        29,985
   Due from affiliates                                                              99,650        88,943
   Prepaid expenses and taxes                                                       34,028        53,314
   Deferred financing cost                                                          86,848          --
   Costs in excess of billings on uncompleted contracts                              1,757        28,833
                                                                               -----------   -----------
      Total current assets                                                       1,563,315     1,058,244
                                                                               -----------   -----------

Equipment and fixtures, net                                                         86,970        81,066
                                                                               -----------   -----------

Other assets:
   Database development costs, net                                               1,285,028     1,312,346
   Computer system product development costs, net                                  527,678       744,536
                                                                               -----------   -----------
   Other                                                                           136,220       133,220
                                                                               -----------   -----------
      Total other assets                                                         1,948,926     2,190,102
                                                                               -----------   -----------

Total assets                                                                   $ 3,599,211   $ 3,329,412
                                                                               ===========   ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      
Current liabilities:
   Demand note - line of credit                                                $      --     $    50,000
   Accounts payable                                                                207,315       152,465
   Accrued expenses                                                                198,969       182,310
   Stockholder notes and loans payable                                             858,861       380,381
   Income taxes payable                                                              1,296         8,293
   Current portion of long-term debt                                                55,840        90,227
   Billings in excess of contract revenues
    on uncompleted contracts                                                       174,373       201,333
                                                                               -----------   -----------
      Total current liabilities                                                  1,496,654     1,065,009
                                                                               -----------   -----------

Long-term liabilities:
   Long-term debt                                                                   18,053        37,734
   Deferred income taxes                                                           309,000       309,000
                                                                               -----------   -----------
      Total liabilities                                                          1,823,707     1,411,743
                                                                               -----------   -----------

Commitments and contingencies (Note 5)                                                --            --

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 of $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
    7,173,807 and 6,107,141 issued and outstanding, respectively                    46,374        45,307
   Less: discount on common stock                                                  (28,500)      (28,500)
   Additional paid-in capital                                                    1,245,919       738,699
   Contributed capital                                                             100,000       100,000
   Retained earnings                                                                11,711       662,163
                                                                               -----------   -----------
      Total stockholders' equity                                                 1,775,504     1,917,669
                                                                               -----------   -----------

Total liabilities and stockholders' equity                                     $ 3,599,211   $ 3,329,412
                                                                               ===========   ===========
</TABLE>

    See accompanying notes to consolidated financial statements (Unaudited).


                                       F-1
<PAGE>

                        NEUROCORP, LTD. AND SUBSIDIARIES
                        (Formerly Tamarac Ventures, Ltd.)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                   (UNAUDITED)

                                                          1996         1995
                                                      ------------   --------


Net sales                                           $   194,593   $   396,759

Cost of sales, including amortization expense
    of $45,300 and $46,110, respectively                143,939       185,187
                                                    -----------   -----------

Gross profit                                             50,654       211,572

Expenses:
  General and administrative expenses                   289,753       245,632
  Research and development                               26,051        61,872
  Cumulative effect of change in estimate (Note 1)      182,235          --
                                                    -----------   -----------

         Total expenses                                 498,039       307,504
                                                    -----------   -----------

Loss from operations                                   (447,385)      (95,932)

Other income (expense):
  Interest income                                         2,587         3,224
  Interest expense                                      (45,282)       (4,083)
                                                    -----------   -----------

Loss before provision (credit) for income taxes        (490,080)      (96,791)

Provision (credit) for income taxes                        --         (16,684)
                                                    -----------   -----------

Net loss                                            $  (490,080)  $   (80,107)
                                                    ===========   ===========

Net loss applicable to common shares                $  (493,830)  $   (80,107)
                                                    ===========   ===========

Loss per common equivalent share:
 Primary:
  Loss before provision for taxes                   $      (.07)  $      (.01)
  Provision (credit) for income taxes                      --           (Nil)
                                                    -----------   -----------
  Net income (loss)                                 $      (.07)  $      (.01)
                                                    ===========   ===========

Net loss applicable to common shares                $      (.07)  $      (.01)
                                                    ===========   ===========

Weighted average number of shares outstanding         7,173,807     5,457,143
                                                    ===========   ===========

    See accompanying notes to consolidated financial statements (Unaudited).


                                       F-2
<PAGE>

                        NEUROCORP, LTD. AND SUBSIDIARIES
                        (Formerly Tamarac Ventures, Ltd.)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                   (UNAUDITED)

                                                       1996           1995
                                                    -----------   -----------
Net sales                                           $   985,715   $ 1,130,085
                                                                  -----------

Cost of sales, including amortization expense
    of $135,900 and $136,131, respectively              488,633       393,178
                                                    -----------   -----------

Gross profit                                            497,082       736,907
                                                                  -----------

Expenses:
  General and administrative expenses                   811,403       673,097
                                                                  -----------
  Research and development                               71,235       136,134
  Cumulative effect of change in estimate (Note 1)      182,235          --
                                                    -----------   -----------

         Total expenses                               1,064,873       809,231
                                                    -----------   -----------

Loss from operations                                   (567,791)      (72,324)

Other income (expense):
         Gain on disposal of vehicle                       --          31,280
         Interest income                                  8,527        11,037
         Interest expense                               (79,938)      (12,257)
                                                    -----------   -----------

Loss before provision for income taxes                 (639,202)      (42,264)

Provision for income taxes                                 --          25,720
                                                    -----------   -----------

Net loss                                            $  (639,202)  $   (67,984)
                                                    ===========   ===========

Net loss applicable to common shares                $  (650,452)  $   (67,984)
                                                    ===========   ===========

Loss per common equivalent share:
 Primary:
         Loss before provision for taxes            $      (.09)  $      (.01)
         Provision for income taxes                        --             Nil
                                                    -----------   -----------
         Net loss                                   $      (.09)  $      (.01
                                                    ===========   ===========

Net loss applicable to common shares                $      (.10)  $      (.01)
                                                    ===========   ===========

Weighted average number of shares outstanding         6,924,548     5,434,920
                                                    ===========   ===========

    See accompanying notes to consolidated financial statements (Unaudited).


                                       F-3
<PAGE>

                        NEUROCORP, LTD. AND SUBSIDIARIES
                        (Formerly Tamarac Ventures, Ltd.)
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                           Preferred Stock Class B                             Additional                      
                                       Series 1           Series 2          Common Stock         Paid-in   Contributed   Retained  
                                   Shares    Amount   Shares    Amount    Shares     Amount      Capital     Capital     Earnings  
                                   -------  --------  -------  --------  ----------  --------   ----------  ---------   ---------   
Balance at
<S>                                <C>      <C>       <C>      <C>        <C>        <C>        <C>         <C>         <C>         
 December 31, 1995                 150,000  $150,000  250,000  $250,000   6,107,141  $ 16,807   $  738,699  $ 100,000   $ 662,163   

Sale of common stock                  --        --       --        --     1,000,000     1,000      399,000       --          --     

Cost associated with the
registration for selling
shareholders and warrantholders       --        --       --        --          --     (25,046)        --         --       (25,046)

Issuance of 66,666 shares
of common stock in lieu of
deferred financing cost
for a loan                            --        --       --        --        66,666        67      133,266       --          --     

Accrued preferred stock
 dividend                             --        --       --        --          --        --           --         --       (11,250)  

Net loss for the nine months
 ended September 30, 1996             --        --       --        --          --        --           --     (639,202)   (639,202)
                                   -------  --------  -------  --------  ----------  --------   ----------  ---------   ---------   

Balance at September 30, 1996      150,000  $150,000  250,000  $250,000  $7,173,807  $ 17,847   $1,245,919  $ 100,000   $  11,711   
                                   =======  ========  ========  ========  =========   ========  ==========   =========   ==========
</TABLE>

                                        Total
                                    Stockholders'
                                        Equity
                                    -------------
Balance at
 December 31, 1995                   $ 1,917,669

Sale of common stock                     400,000

Cost associated with the
registration for selling
shareholders and warrantholders)

Issuance of 66,666 shares
of common stock in lieu of
deferred financing cost
for a loan                               133,333

Accrued preferred stock
 dividend                               (11,250)

Net loss for the nine months
 ended September 30, 1996 -     
                                     -----------

Balance at September 30, 1996        $ 1,775,504
                                     ===========


    See accompanying notes to consolidated financial statements (Unaudited).


                                       F-4

<PAGE>

                              NEUROCORP, LTD. AND SUBSIDIARIES
                              (Formerly Tamarac Ventures, Ltd.)
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                           FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                         (UNAUDITED)

                                                            1996        1995
                                                          ---------   ---------
Cash flows for operating activities:
   Loss from operations                                   $(639,202)  $ (67,984)
  Adjustments to reconcile net (loss) to net cash
    provided by (used for) operating activities:
   Depreciation and amortization                            160,311     171,327
   Cumulative effect of change in estimate                  182,235        --
   Amortization of deferred financing costs                  46,485        --
   Deferred income taxes                                       --        40,000
   Gain on disposal of vehicle                                 --       (31,280)
   Reclassification of net equipment to operations             --         9,193
  Changes in operating assets and liabilities:
   Accounts receivable                                     (471,009)   (180,158)
   Inventory                                                 (4,898)     (8,613)
   Due from affiliates                                      (10,707)    (35,907)
   Prepaid expenses and taxes                                19,286       1,725
   Cost in excess of billings on uncompleted contracts       27,076     103,278
   Accounts payable                                          54,850      66,689
   Accrued expenses                                           5,409     169,178
   Income taxes payable                                      (6,997)    (34,383)
   Customer deposits                                           --
   Billings in excess of contract revenues
     on uncompleted contracts                               (26,960)   (443,013)
                                                          ---------   ---------

Net cash flows used for operating activities               (664,121)   (239,948)
                                                          ---------   ---------

Cash flows from investing activities:
   Purchase of equipment and fixtures                       (28,365)    (13,695)
   Database development costs capitalized                   (71,682)   (198,157)
   Patent cost capitalized                                   (2,150)       --
   Computer system development costs capitalized             (2,277)   (146,235)
   Proceeds from insurance on vehicle                          --        34,271
                                                          ---------   ---------

Net cash flows used for investing activities               (104,474)   (323,816)
                                                          ---------   ---------

Cash flows from financing activities:
   Employee loans and advances                               (2,800)       --
   (Repayments to) proceeds from demand note
     - line of credit                                       (50,000)     50,000
   Repayment of stockholders loans                          (96,520)       --
   Proceed from stockholders loans                          575,000     140,225
   Principal payments on long-term debt                     (54,068)    (54,618)
   Offering costs incurred                                  (25,046)       --
   Proceeds from sale of common stock                       400,000     100,000
                                                          ---------   ---------

Net cash flows provided by financing activities             746,566     235,607
                                                          ---------   ---------

Net decrease in cash                                        (22,029)   (328,157)

Cash at beginning of period                                 140,519     336,505
                                                          ---------   ---------

Cash at end of period                                     $ 118,490   $   8,348
                                                          =========   =========

Supplemental disclosures of cash flow information:
  Cash paid during the year for:
     Interest                                             $  11,691   $   9,336
                                                          =========   =========
     Income taxes                                         $   8,526   $   4,353
                                                          =========   =========

Schedule of non-cash investing and financing activities:
   Issuance of restricted 66,666 shares of common stock
    for deferred financing cost associated with a loan    $ 133,333   $    --
                                                          =========   =========
   Accrued dividends on Series 1 Preferred Stock          $  11,250   $    --
                                                          =========   =========

See accompanying notes to consolidated financial statements (Unaudited).


                                       F-5

<PAGE>

                       NEUROCORP, LTD. AND SUBSIDIARIES
                       (Formerly Tamarac Ventures, Ltd.)
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 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 September 30, 1996 and
            December 31, 1995 represent the assets and liabilities of HZI and
            it's affiliates and the results of their operations and cash flows
            for the nine months ended September 30, 1996 and 1995. 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 its wholly-owned subsidiary, 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 long-term contract services for medical research for
            major domestic and international pharmaceutical firms (ii) designing
            and producing proprietary neuropsychiatric diagnostic testing
            equipment, currently known as Brain Function Monitoring (BFM) system
            (iii) providing interactive diagnostic testing services and analysis
            to physicians and hospitals via the telephone, through HZI's
            subsidiary, TeleMap, Inc. ("TeleMap").

            In January 1996, the Company created a new wholly-owned subsidiary
            Memory Centers of America, Inc. ("MC Inc."). MC Inc. will provide
            therapeutic services to people who suffer from memory impairment. MC
            Inc. began its pilot operation's at the end of the second quarter of
            1996.

            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 5(b) for
            additional information.

            The unaudited interim financial statements for the nine months ended
            September 30, 1996 and 1995 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 nine
            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, 1995,
            included in Form 10- KSB filed with the Securities and Exchange
            Commission.


                                     F-6
<PAGE>

                       NEUROCORP, LTD. AND SUBSIDIARIES
                       (Formerly Tamarac Ventures, Ltd.)
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                  (UNAUDITED)

NOTE 1 - GENERAL (Cont'd)

            On September 30, 1996, the Company revised its estimated useful life
            for computer system product development costs from 17 years to 7
            years. This change was made to better reflect the estimated period
            during which such assets will remain in service. The cumulative
            effect of this change in estimate amounting to $182,235 or $.03 per
            share, was a charge to operations during the third quarter 1996.

NOTE 2 - DEMAND NOTE - LINE OF CREDIT

            The $50,000 balance outstanding at December 31, 1995 represents
            borrowings by HZI under a $100,000 secured line of credit agreement
            with a bank. The agreement entered into on April 26, 1995 requires
            HZI to pay interest monthly at one percent (1%) above the prime rate
            and said principal balance is due on demand. The demand note is
            secured by equipment, receivables and general intangibles. The
            outstanding balance was repaid in full during March 1996.

NOTE 3 - LONG-TERM DEBT

            Long-term debt consists of the following at:

                                                     September 30,  December 31,
                                                         1996           1995
                                                     ------------   ------------
            Note payable due in thirty-six (36)
             monthly installments of $6,175
             including interest at prime plus 1%
             per annum due April 1997. The note is
             collateralized by equipment,
             receivables and general intangible
             assets and has been personally
             guaranteed by certain officers.             $48,636     $ 97,715

            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.         25,257       30,246
                                                       ---------    ---------
                                                          73,893      127,961

             Less: current portion                        55,840       90,227
                                                       ---------    ---------

             Long-term portion                         $  18,053    $  37,734
                                                       =========    =========

            Long-term debt matures as follows:
                                                                    Year ended
                                                                   December 31,
                                                                       1995
                                                                   ------------
                             1996                                   $  90,227
                             1997                                      21,587
                             1998                                       8,073
                             1999                                       8,074
                                                                    ---------
                                                                    $ 127,961


                                     F-7
<PAGE>

                       NEUROCORP, LTD. AND SUBSIDIARIES
                       (Formerly Tamarac Ventures, Ltd.)
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                  (UNAUDITED)

NOTE 4 - STOCKHOLDERS' EQUITY

        a)  Amendment to Certificate of Incorporation

            In connection with the reverse acquisition of HZI (See Note 4g), on
            November 23, 1994, 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 of which 400,000 of the
            5,000,000 shares of the preferred stock has been deemed to be Class
            B, Series 1 and Series 2. Accordingly, the financial statements give
            effect to these items.

        b)  Discount on common stock

            On April 30, 1987, 600,000 shares (30,000,000 shares pre-split) of
            common stock, par value $.001, were issued at $.00005 per share for
            total consideration of $1,500, or a discount of $28,500. According
            to Nevada counsel, the laws of the State of Nevada provide for a
            discount on original issue capital stock whether or not that stock
            carries a par value so long as the action is ratified by the Board
            of Directors and is otherwise in compliance with applicable laws.
            These shares are deemed to be fully paid and non-assessable, even
            though issued below par.

        c)  Initial public offering

            On September 28, 1987, the Company completed its public offering of
            80,000 units (4,000,000 units pre-split) at $.05 per unit resulting
            in net proceeds of $178,509. Each unit consisted of one (1) share of
            common stock, $.001 par, and one (1) common stock purchase warrant.
            The warrants expired unexercised thirty-nine months after the
            effective date of the offering.

        d)  Options to officers

            In 1985 and 1991, four (4) employees of HZI were granted an option
            to buy a total of twenty (20) shares or then ten (10)% of the stock
            of HZI at a price of $10 per share. Such options were available to
            the respective individuals as long as they remained employees of
            HZI.

            In November 1992, all four (4) employees exercised their option to
            buy HZI's common stock. These new shareholders simultaneously
            transferred their shares to the voting trust, per Note 4e below.


                                     F-8
<PAGE>

                       NEUROCORP, LTD. AND SUBSIDIARIES
                       (Formerly Tamarac Ventures, Ltd.)
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                  (UNAUDITED)

NOTE 4 - STOCKHOLDERS' EQUITY (Cont'd)

        e)  Voting trust agreement

            In January 1992, the shareholders of HZI entered into an agreement
            whereby all shares of HZI were transferred into a voting trust. The
            trust was created for the purpose of granting the trustee the
            exclusive right to vote upon the shares contained in the trust. The
            trust has a life of twenty (20) years and for the first ten (10)
            years the Company's current chairman is the trustee. Thereafter,
            HZI's president who is the son of the Company's chairman becomes the
            trustee. The trustee has the exclusive right to vote all such shares
            subject to any limitations in the HZI Certificate of Incorporation.
            Commencing with the reverse acquisition as discussed in Note 4g, the
            original members of the voting trust transferred their newly issued
            shares in the Company to the voting trust.

        f)  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 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 per share and
            the Class C Warrants are exercisable at $2.75 per share, and expire
            on September 30, 1996. The shares of Common Stock underlying the
            Warrants must be registered with the Securities and Exchange
            Commission (SEC) prior to the Warrants becoming exercisable. The
            Company may, at its sole discretion, undertake to file a
            registration statement with the Securities and Exchange Commission
            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. As described in
            Note 4(m), in February 1996 the Company filed with the SEC to
            register these warrants.


                                     F-9

<PAGE>


                       NEUROCORP, LTD. AND SUBSIDIARIES
                       (Formerly Tamarac Ventures, Ltd.)
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                  (UNAUDITED)

NOTE 4 - STOCKHOLDERS' EQUITY (Cont'd)

        g)  Reverse acquisition of subsidiary

            On November 23, 1994, the Company entered into an agreement and a
            plan of reorganization with HZI to exchange 100% of HZI's
            outstanding common stock for 4,600,000 post-split $.001 par value
            common shares of the Company. Such transaction superseded the Letter
            of Intent entered into between the parties on March 18, 1994.
            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 have been restated to give
            effect to the reverse stock split.

            All costs incurred in connection with the 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.

            Pursuant to the March 18, 1994 Letter of Intent, between the Company
            and HZI, the Company agreed, with the assistance of others, to
            arrange for certain financing for HZI within a specified time
            period. On March 24, 1994, a bridge loan was made for $75,000 by
            Trinity American Corporation ("TAC") a stockholder of the Company,
            to HZI, pursuant to the agreement. The financing that was to be
            arranged for HZI was not timely arranged, based upon the terms of
            the agreement HZI was not responsible for the repayment of the
            bridge loan. This transaction has been recorded as a forgiveness of
            debt in the year ended December 31, 1994.

            On November 23, 1994 TAC contributed $400,000 to the Company's
            capital account with no further issuance of common stock. In
            December 1994, the Company and TAC reached an agreement whereby in
            consideration for the $400,000 paid on November 23, 1994 two classes
            of preferred stock were issued to TAC. The first class of 150,000
            shares of cumulative non-convertible preferred stock class B, series
            1, no par value has a liquidation preference of $1 per share.
            Dividends accrue on such stock commencing January 1, 1996 at a rate
            of 10% of the liquidation value and are payable semi-annually in
            cash or stock. The number of shares of stock to be issued when
            dividends are paid in stock is based on the average closing bid
            price of the stock 30 consecutive days prior to the date the
            dividend becomes payable. At September 30, 1996, the Company has
            accrued a dividend of $11,250 related to this preferred stock based
            upon an anticipated cash payment in the future. Further, the Company
            may redeem such shares at any time for $3 per share.

            The second class of 250,000 shares of convertible no par value
            preferred stock, class B series 2, can be converted into common
            stock and does not provide for dividend payments. The conversion
            feature provides that between January 1, through June 30, 1996 that
            one (1) share of preferred stock can be converted into two (2)
            shares of common stock. After June 30, 1996 the conversion feature
            is reduced to five (5) shares of preferred stock to one (1) share of
            common stock. Further, the Company can at its option force a
            conversion of such stock if the closing bid price for the Company's
            common stock is at least 2 5/8 for thirty (30) consecutive trading
            days. At September 30, 1996, neither TAC nor the Company have
            exercised these conversion features.


                                     F-10
<PAGE>

                       NEUROCORP, LTD. AND SUBSIDIARIES
                       (Formerly Tamarac Ventures, Ltd.)
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                  (UNAUDITED)

NOTE 4 - STOCKHOLDERS' EQUITY (Cont'd)

        h)  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.

            On September 19, 1995, the Company granted to its President and 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 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.

            In December 1995, the Company granted 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 November 6, 1996 the Company cancelled the option agreement
            granted to the consultant, and issued 50,000 shares of the Company's
            common stock.

        i)  Sale of shares by former principal shareholder

            Pursuant to a Stock Purchase Agreement dated October 25, 1994, the
            then principal shareholder and President of the Company agreed to
            sell 556,000 of his post-split shares of the Company's common stock
            to TAC, for a purchase price of $40,000. Such shares were
            transferred to TAC immediately upon the completion of the Company's
            acquisition of HZI. Further, TAC has the right to transfer a portion
            of the shares purchased to other nonaffiliated persons through a
            sale of all or a part of the shares to offshore investors pursuant
            to Regulation S of the Securities Act of 1933, as amended.

            TAC has the right, on one occasion, to demand that the Company file
            a registration statement, at TAC's expense, as to all of the shares
            of the Company's common stock held by TAC.


                                     F-11
<PAGE>

                       NEUROCORP, LTD. AND SUBSIDIARIES
                       (Formerly Tamarac Ventures, Ltd.)
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                  (UNAUDITED)

NOTE 4 - STOCKHOLDERS' EQUITY (Cont'd)

        j)  Sale of common stock

            On April 14, 1995, March 2, 1996 and March 25, 1996, the Company
            sold 57,143, 333,333 and 666,667 shares of common stock for
            $100,000, $133,333 and $266,667, respectively, to foreign investors
            utilizing Regulation "S" guidelines. Said shares have not been
            registered under the Securities Act of 1933 (the "Act"), hence the
            shares cannot be sold, transferred, assigned or hypothecated unless
            they are either registered under the Act or sold pursuant to an
            applicable exemption from registration.

        k)  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.

                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.


                                     F-12
<PAGE>

                       NEUROCORP, LTD. AND SUBSIDIARIES
                       (Formerly Tamarac Ventures, Ltd.)
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                  (UNAUDITED)

NOTE 4 - STOCKHOLDERS' EQUITY (Cont'd)

        k)  Issuance of common stock as consideration for loans (Cont'd)

            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 4f), whichever comes first. As
                additional consideration the Company issued 66,666 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 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. See Note 6c. Further,
                the Company has agreed to register said shares. See Note 4m.

        l)  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 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 cancelled 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, as described
            below.

        m)  Registration of common stock

            During February, 1996, the Company commenced registering common
            shares and warrants pursuant to certain registration rights, and
            other contractual obligations incurred by the Company in connection
            with the issuance of such common shares and warrants pursuant to the
            HZI acquisition agreement signed in November 1994 and the sale of
            common shares in December 1995. The Company will not receive any of
            the proceeds from the sale of the common shares or warrants since
            all respective shares are being offered by the selling stockholders.
            The Company has also agreed to pay $25,046 of cost related to the
            registration.

        n)  Chairman's capital contribution

            As discussed in Note 5(c)(1) the Company's Chairman waived $146,347
            of his base annual salary for the year ended December 31, 1995. Said
            amount has been recorded as an administrative expense and as an
            increase to additional paid-in-capital for the year ended December
            31, 1995.


                                     F-13

<PAGE>

                       NEUROCORP, LTD. AND SUBSIDIARIES
                       (Formerly Tamarac Ventures, Ltd.)
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                  (UNAUDITED)

NOTE 5 - COMMITMENTS AND CONTINGENCIES

        a)  Operating leases

            The Company leases its office facilities under a noncancellable
            operating lease expiring in 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, 1995 is
            as follows:

            Year ended December 31,

            1996                                       $ 110,490
            1997                                          92,557
            1998                                          77,868
                                                       ---------
                                                       $ 280,915

            Rent expense under all operating leases for the nine months ended
            September 30, 1996 and 1995 was $91,811 and $117,537, respectively.

        b)  Concentration of credit risk

            For the nine months ended September 30, 1996 and 1995,
            approximately 62% and 44%, respectively, of net sales were derived
            from two and one unrelated customer, who are in the pharmaceutical
            industry. As of September 30, 1996 and December 31, 1995,
            approximately 60% and 54% of accounts receivable is due from two
            unrelated customers.

        c)  Employment Agreements

            1)  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 has 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 nine months ended September 30, 1996, the
                Company's Chairman waived his right to receive the term life
                insurance as provided for in the employment agreement.


                                     F-14

<PAGE>


                       NEUROCORP, LTD. AND SUBSIDIARIES
                       (Formerly Tamarac Ventures, Ltd.)
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                  (UNAUDITED)

NOTE 5 - COMMITMENTS AND CONTINGENCIES (cont')

        c)  Employment Agreements (Cont'd)

            1) (Cont'd)

                For the year ended December 31, 1995 the Company's Chairman
                waived $146,347, of his base annual salary. Said salary amount
                was recorded as an administrative expense and as an increase to
                additional paid-in-capital. Additionally, the Company's Chairman
                waived his right to receive the term life insurance as provided
                for in the employment agreement for said year. See Note 4(n)

            2)  On December 7, 1994, the Company entered into an employment
                agreement with its 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.

        d)  Consulting agreement

            On July 1, 1995, the Company entered into a five (5) year consulting
            agreement with a Corporation controlled by the Company's President
            and Vice Chairman. Said agreement provides for a fee of $75,000 per
            annum.

NOTE 6 - RELATED PARTY TRANSACTIONS

        a)  Revenues from affiliates

            The Company charges NYI, as well as Manhattan Westchester Medical
            Services, P.C. ("Manhattan West") for the use of certain employees
            and office and laboratory space of the Company. Manhattan West is
            also under the common control of the Company's Chairman. Net
            revenues from these affiliates for the nine months ended September
            30, 1996 and 1995 amounted to $24,361 and $156,002, respectively.

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


                                     F-15

<PAGE>

                       NEUROCORP, LTD. AND SUBSIDIARIES
                       (Formerly Tamarac Ventures, Ltd.)
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                  (UNAUDITED)

NOTE 6 - RELATED PARTY TRANSACTIONS (Cont'd)

        b)  Services provided by affiliates

            HZI subcontracts to NYI, a not-for-profit entity under the control
            of the Company's shareholder's, a material amount of its patient
            testing performed in connection with its long term contracts. NYI is
            treated as a subsidiary of the Company and is included in the
            consolidation. Expenses incurred with NYI for the nine months ended
            September 30, 1996 and 1995 were $0 and $40,715, respectively. The
            net payable due NYI at September 30, 1996 and at December 31, 1995
            amounted to $0 and $37,583, respectively. The above transactions
            between HZI and NYI have been eliminated in the consolidated
            financial statements.

            During 1994 HZI and Manhattan West entered into an arrangement
            whereby Manhattan West would provide medical consulting services to
            HZI's TeleMap business. This arrangement was discontinued during
            1995 and is now being performed by the Company's personnel. Services
            provided by Manhattan West to HZI for the nine months ended
            September 30, 1995 amounted to approximately $5,000.

        c)  Stockholder notes and loans
                                                     September 30,  December 31,
                                                         1996          1995
                                                      ---------     ---------
             Non-interest bearing loans and payables               
              (See i below)                            $108,861     $ 155,381
                                                                   
             Notes payable bearing an interest of                  
              7.5% to 10% (See ii below)                550,000       225,000
                                                                   
             Non-interest bearing loan payable                     
              (See iii below)                           200,000          --
                                                      ---------     ---------
                                                      $ 858,861     $ 380,381
                                                      =========     =========
                                                                  
            i)  Stockholder notes and loans payable relates to advances made to
                HZI and NYI by its Chairman of the Board which are due on
                demand.


                                     F-16

<PAGE>

                       NEUROCORP, LTD. AND SUBSIDIARIES
                       (Formerly Tamarac Ventures, Ltd.)
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                  (UNAUDITED)

NOTE 6 - RELATED PARTY TRANSACTIONS (Cont'd)

            c)  Stockholder notes and loans (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 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 February 5, 1996, the Company borrowed from TAC an additional
                $50,000 which is due on demand. Said loan has an interest of 10%
                and was repaid during April, 1996.

                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.

                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.

                On July 16, 1996 the Company entered into two loan agreements
                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.

                At September 30, 1996 and December 31, 1995, accrued interest
                related to such notes and loans amounted to $26,643 and $6,598,
                respectively, and is included in accrued expenses.


                                     F-17

<PAGE>

                       NEUROCORP, LTD. AND SUBSIDIARIES
                       (Formerly Tamarac Ventures, Ltd.)
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                  (UNAUDITED)

NOTE 6 - RELATED PARTY TRANSACTIONS (Cont'd)

           c)   Stockholder notes and loans (Cont'd)

           iii) 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, (Note 4f) whichever comes first. As
                additional consideration the Company issued 66,666 shares of
                restrictive common stock. The Company issued and 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 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. Further, the Company
                has agreed to register said shares. See Note 4(m).

        d)  Due from affiliates

            Due from affiliates represent amounts due to HZI which are unsecured
            demand obligations amounting to the following:

                                                September 30,       December 31,
                                                    1996               1995
                                                 ---------          ---------
            Due from Manhattan West              $  78,356          $  68,855
            Academia                                21,294             20,088
                                                 ---------          ---------
                                                                    
                                                 $  99,650          $  88,943
                                                 =========          =========
                                                              
            Academia Medicine Psychiatric Foundation, Inc. ("Academia") is a
            not-for-profit entity. One of the Company's majority stockholders is
            one of nine Directors of the Board.

        e)  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.

        f)  Consulting agreement

            On July 1, 1995, the Company entered into a five (5) year consulting
            agreement with a Corporation controlled by the Company's President
            and Vice Chairman. Said agreement provides for a fee of $75,000 per
            annum.


                                     F-18

<PAGE>

                       NEUROCORP, LTD. AND SUBSIDIARIES
                       (Formerly Tamarac Ventures, Ltd.)
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
                                  (UNAUDITED)

NOTE 6 - RELATED PARTY TRANSACTIONS (Cont'd)

        g)  Capital contribution

            In December 1995, the Company sold 1,000,000 shares of common stock
            to four 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 cancelled 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 4(m).

        h)  Due from affiliates

            The Company charges NYI and Manhattan West for the use of certain
            employees and laboratory space. NYI and Manhattan West are under the
            common control of the Company's Chairman. At September 30, 1996 and
            December 31, 1995, amounts due from Manhattan West for these
            services amounted to $73,238 and $68,855, respectively.

        i)  Chairman's capital contribution

            As discussed in Note 5(c)(1) the Company's Chairman waived $146,347
            of his base annual salary for the year ended December 31, 1995. Said
            amount has been recorded as an administrative expense and as a
            capital contribution for the year ended December 31, 1995 with an
            increase to additional paid-in-capital.


                                     F-19

<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. and Subsidiary
             ("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 its wholly-owed subsidiary, 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)
             the contract division performs contract medical research services
             (principally conducting clinical trials which included Phase I
             proprietary quantitative electroencephalogram ("EEG") studies) for
             health agencies, 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(R) and (BFM) and (iii) providing interactive diagnostic
             testing services and analysis to physicians and hospitals via the
             telephone, the service is known as TeleMap (R).

             In January 1996, the Company created a new wholly-owned
             subsidiary Memory Centers of America, Inc. ("MC Inc."). MC Inc.
             will provide therapeutic services to people who suffer from
             memory impairment. MC Inc. began full operation's of the pilot
             program at the end of the second quarter of 1996, and is
             currently not a significant business segment of the Company.

             On November 23, 1994, in connection with its acquisition of HZI,
             the Company changed its fiscal year end from September 30 to
             December 31 so as to conform with HZI's fiscal year end of December
             31.

             RESULTS OF OPERATIONS

             Three months ended September 30, 1996 as compared to the three
             months ended September 30, 1995

             Long-term contract revenues are recognized on the percentage of
             completion method by multiplying total estimated contract revenue
             by the percentage of completion. Changes in each contracts
             performance, conditions and estimated profitability including those
             arising from contract penalty provisions, and final contract
             settlements may result in revisions to costs and income and are
             recognized in the period in which the revisions are determined. In
             addition, losses are recognized in full when determinable.

             Revenue from computer system sales, which include BFM, are
             recognized upon the delivery of the software or turnkey systems.
             Service revenues such as TeleMap and MCA, are recognized as they
             are rendered.

             Revenues for the three months ended September 30, 1996 and 1995
             amounted to $194,593 and $396,759, respectively. The gross profits
             for the three months ended September 30, 1996 and 1995 amounted to
             $50,654 and $211,572, respectively or a net decrease of $160,918.
             The gross profit percentages for the three months ended September
             30, 1996 and 1995 amounted to 26% and 53%, respectively, or a net
             decrease of 27%.


                                     F-20

<PAGE>

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

             Three months ended September 30, 1996 as compared to the three
             months ended September 30, 1995 (Cont'd)

             The net reduction of gross profit during the three months ended
             September 30, 1996 as compared to the three months ended September
             30, 1995 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 year ended December 31, 1994. At the end of
                1995 and during the nine months ended September 30, 1996 the
                Company received $941,000 of new contracts which should be
                completed during 1996. Revenues from contracts for the three
                months ended September 30, 1996 as compared to the three months
                ended September 30, 1995 amounted to $133,984 and $193,337,
                respectively, or a net decrease of $59,353. The decrease in
                revenues from contracts for the three months ended September 30,
                1996 is attributable to the Company commencing work on new
                contracts entered into during 1996. During the three months
                ended September 30, 1996 the Company just started work on two
                new contracts and the majority of the third quarter revenues was
                from a major contract started in 1994 that is still ongoing.
                Gross profit from contracts for the three months ended September
                30, 1996 as compared to the three months ended September 30,
                1995 amounted to $66,213 and $40,272, respectively or a net
                increase of $25,941. The gross profit percentage from contracts
                for the three months ended September 30, 1996 is 49% as compared
                to September 30, 1995 which was 32%. The decrease in the gross
                profit is attributable to a low gross profit contract that
                dominated the third quarter 1995 contract research division
                revenues. Of the $193,337 revenues earned during the third
                quarter 1995, $132,098 is attributable to this low gross profit
                contract.

                As of September 30, 1996 the Company had a backlog to perform
                approximately $730,000 of contracts. The Company expects to
                recognize a minimum of $350,000 of revenues from the backlog
                during the remaining portion of 1996.

             2. Net sales of BFM Systems for the third quarter of 1996 and 1995
                amounted to none and $147,934, respectively, or a net decrease
                in sales of $147,934. The third quarter of 1995 was the initial
                start of a new generation of BFM Systems of which the Company
                believes was well received. Gross profit amounts for the three
                months ended September 30, 1996 and 1995 were negative $35,856
                and $103,554, respectively, or net decrease of $139,410. The
                negative gross profit for the three months ended September 30,
                1996 represents fixed overhead costs of the BFM division. The
                Company's management believes the lack of sales for the third
                quarter of 1996 is temporary.

             3. Revenues of the TeleMap division for the three months ended
                September 30, 1996 and 1995 amounted to $34,933 and $55,488,
                respectively, or net decrease of $20,555. The gross profit
                percentages for the three months ended September 30, 1996 and
                1995 amounted to 34% and 58%, respectively. The decrease in
                gross profit for the three months ended September 30, 1996 as
                compared to the three months ended September 30, 1995 is
                attributable to the Company absorbing more fixed overhead costs
                on less sales and increase in labor costs resulting from the
                Company assigning additional internal staff to further improve
                the quality control division.


                                     F-21

<PAGE>

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

             Three months ended September 30, 1996 as compared to the three
             months ended September 30, 1995 (Cont'd)

             4. Pilot memory centers revenues for the three months ended
                September 30, 1996 amounted to $25,676. These revenues were
                derived from patients participating in the Company's pilot
                program.

             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
             product 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 of 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
             September 30, 1996 were $289,753 as compared to the three months
             ended September 30, 1995 of $245,632 or an increase of $44,121 or
             18%. The increase in general and administrative expenses for the
             three months ended September 30, 1996 is due to the Company
             incurring in excess of approximately $38,000 of initial costs for
             its new subsidiary, Memory Centers of America, Inc. ("MC Inc.").
             Further, during the three months ended September 30, 1996 as
             compared to the three months ended September 30, 1995, the Company
             reduced its administration billings to Manhattan Westchester
             Medical Services, P.C., a medical practice that is controlled by
             the Company's Chairman. ("Manhattan Westchester") by $8,503
             resulting in the Company absorbing more payroll costs during the
             September 30, 1996 quarter. The reduction in administration
             billings to Manhattan Westchester is the result of Manhattan
             Westchester decline in operations, therefore, service provided by
             HZI personnel were not required. The Company elected to maintain
             some personnel that were formally billed to Manhattan Westchester
             to be utilized in other parts of the Company's operations.

             Research and development costs ("R&D") for the three months ended
             September 30, 1996 were $26,051 as compared to the three months
             ended September 30, 1995 of $61,872 or a decrease of $35,872. The
             decrease in R&D costs is due to reductions in fixed cost for the
             R&D department. At the end of 1995, Management relocated its
             research facility to its main operating division at HZI. The
             Company relocated its research facility in order to enhance
             communications between operational and research personnel and to
             lower fixed costs, such as rent, depreciation and other associated
             fixed costs. Management believes this will have a positive impact
             in the future. The Company plans on maintaining the same level of
             Research and Development, however, with a lower fixed costs
             associated therewith.

             Interest and deferred financing expenses for the three months ended
             September 30, 1996 were $45,282 as compared to the three months
             ended September 30, 1995 of $4,083 or an increase of $41,199. The
             increase is attributable to the Company charging operations during
             the second quarter of 1996 for $33,333 for amortization of deferred
             financing cost resulting from a $200,000 shareholder loan discussed
             in the liquidity and capital resources section. Additionally, the
             Company has increased its debt from shareholders which has resulted
             in increased interest expense of approximately $6,900 during the
             second and third quarter 1996 as compared to the 1995 period.


                                     F-22

<PAGE>

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

            Three months ended September 30, 1996 as compared to the three
            months ended September 30, 1995 (Cont'd)

            At September 30, 1996 the Company revised its estimate of the useful
            life of the software development cots from 17 years to 7 years. This
            change was made to better reflect the estimated period during which
            such assets will remain in service. The resulting effect was a one
            time, non-cash charge to operations amounting to $182,235.

            The Company's loss for the three months ended September 30, 1996,
            amounting to $490,080, is not representative of what is expected in
            the future. See table on page F- 25.

            Nine months ended September 30, 1996 as compared to the nine months
            ended September 30, 1995

            Revenues for the nine months ended September 30, 1996 and 1995
            amounted to $985,715 and $1,130,085, respectively. The gross profits
            for the nine months ended September 30, 1996 and 1995 amounted to
            $497,082 and $736,907, respectively or a net decrease of $239,825.
            The gross profit percentages for the nine months ended September 30,
            1996 and 1995 amounted to 50% and 65%, respectively, or a net
            decrease of 15%.

            The net reduction of gross profit during the nine months ended
            September 30, 1996 as compared to the nine months ended September
            30, 1995 is attributable to the following:

            1. Revenues from contracts for the nine months ended September 30,
               1996 as compared to the nine months ended September 30, 1995
               amounted to $611,698 and $622,018, respectively, or a net
               decrease of $10,320. The decrease in revenues from contracts for
               the nine months ended September 30, 1996 is attributable to the
               Company commencing work on new contracts entered into during 1995
               and of which work started in the latter part of 1996. Gross
               profit from contracts for the nine months ended September 30,
               1996 as compared to the nine months ended September 30, 1995
               amounted to $292,419 and $309,729, respectively or a net decrease
               of $17,310. The gross profit percentage from contracts for the
               nine months ended September 30, 1996 is 48% as compared to
               September 30, 1995 which was 50%. The decrease in the gross
               profit is attributable to a lower gross profit on contracts in
               progress during nine months ended September 30, 1996 as compared
               to the nine months ended September 30, 1995. During the first
               quarter of 1995 the contract research division was working on a
               major high gross profit contract, which impacted positively on
               the nine months ended September 30, 1995.

            2. Net sales of BFM Systems for the nine months ended 1996 and 1995
               amounted to $232,685 and $388,489, respectively, or a net
               decrease of $155,804. The gross profit percentage on these sales
               for the nine months ended September 30, 1996 and 1995 amounted to
               61% and 82%, respectively or net decrease of 21%. The second
               quarter of 1995 started the initial sales of the Company's new
               generation of BFM Systems. The majority of these 1995 sales were
               to Beta sites who are utilizing the new systems in worldwide
               studies being supervised by the contract research division. The
               Beta site equipment had a cost basis which had been reduced by
               depreciation in connection with contract revenues of the previous
               years. This resulted in higher than normal gross profits for the
               sales of BFM Systems in 1995 due to the cost basis being less
               than the standard cost basis.


                                     F-23

<PAGE>

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

            Nine months ended September 30, 1996 as compared to the nine months
            ended September 30, 1995 (Cont'd)

            3. Revenues of the TeleMap division for the nine months ended
               September 30, 1996 and 1995 amounted to $91,379 and $119,578,
               respectively, or net decrease of $28,199. The gross profit
               percentages for the nine months ended September 30, 1996 and 1995
               amounted to 47% and 78%, respectively. The decrease in sales for
               the nine months ended September 30, 1996 as compared to the nine
               months ended September 30, 1995 is attributable to the Company
               discontinuing business with customers who were previously
               delinquent in their payments. The gross profit decrease for the
               nine months ended September 30, 1996 as compared to the nine
               months ended September 30, 1995, is partially the result of the
               Company absorbing more fixed overhead costs allocated to cost of
               revenues on less sales and increase in labor costs resulting from
               the Company's assigning additional personnel in further
               improvement of its quality controls.

            4. Pilot Memory Centers revenues for the nine months ended September
               30, 1996 amounted to $49,952. These revenues were derived from
               patients participating in the Company's pilot program.

            General and administrative expenses for the nine months ended
            September 30, 1996 were $811,403 as compared to the nine months
            ended September 30, 1995 of $673,097 or an increase of $138,306 or
            21%. The increase in general and administrative expenses for the
            nine months ended September 30, 1996 is due to the Company incurring
            in excess of approximately $150,000 of initial costs for its new
            subsidiary, Memory Centers of America, Inc. ("MC Inc."). Further
            during the nine months ended September 30, 1996 as compared to the
            nine months ended September 30, 1995, the Company reduced its
            administration billings to Manhattan Westchester Medical Services,
            P.C., a medical practice that is controlled by the Company's
            Chairman. ("Manhattan Westchester") by $44,408 resulting in the
            Company absorbing more payroll costs during the September 30, 1996
            period.The reduction in administration billings to Manhattan
            Westchester is the result of Manhattan Westchester decline in
            operations, therefore, service provided by HZI personnel were not
            required. The Company elected to maintain some personnel that were
            formally billed to Manhattan Westchester to be utilized in other
            parts of the company's operations.

            Research and development costs ("R&D") for the nine months ended
            September 30, 1996 were $71,235 as compared to the nine months ended
            September 30, 1995 of $136,134 or a decrease of $64,899. The
            decrease in R&D costs is due to reductions in fixed cost for the R&D
            department. At the end of 1995, Management relocated its research
            facility to its main operating division at HZI. The Company
            relocated its research facility in order to enhance communications
            between operational and research personnel and to lower fixed costs,
            such as rent, depreciation and other associated fixed costs.
            Management believes this will have a positive impact in the future.
            The Company plans on maintaining the same level of Research and
            Development, however, with a lower fixed costs associated therewith.

            Commencing July 19, 1995 and through September 30, 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 nine months ended September 30,
            1996 as compared to the nine months ended September 30, 1995
            increased by $67,681.


                                     F-24

<PAGE>

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

            Nine months ended September 30, 1996 as compared to the nine months
            ended September 30, 1995 (Cont'd)

            At September 30, 1996 the company revised its estimate of the useful
            life of the software development costs from 17 years to 7 years.
            This change was made to better reflect the estimated period during
            which such assets will remain in service. The resulting effect was a
            one time, non-cash charge to operations amounting to $182,235.

            The Company's loss at September 30, 1996, amounting to $639,202, is
            not representative of what is expected i the future. The following
            factors should be taken into account in computing the company's net
            loss at such date:

              Net loss at as of September 30, 1996                    $(639,202)

              Add back:  Cumulative effect in change in estimate        182,235
              Add back:  Research and development costs
                          (discretionary costs)                          71,235
              Add back:  Development stage cost for Memory Centers
                          of America                                    150,000
                                                                      --------- 
              Adjusted loss without future increase in sales          $(155,794)
                                                                      ========= 

              LIQUIDITY AND CAPITAL RESOURCES

              Nine months ended September 30, 1996 as compared to the nine
              months ended September 30, 1995

              At September 30, 1996 and December 31, 1995, the Company had
              working capital of $66,661 and a working capital deficiency of
              $6,765, respectively. The $73,426 net increase in working capital
              for the nine months ended September 30, 1996 is attributable to
              accounts receivable and deferred financing cost increasing by
              $557,857. Offsetting this increase in working capital for the nine
              months ended September 30, 1996 as compared to the year ending
              December 31, 1995 are increases in stockholders loans of $478,480.
              The increase in accounts receivable is the result of the contract
              research division earned revenues exceeding amounts billed.
              Deferred financing cost of $86,848 is the result of the Company
              borrowing from a shareholder, a $200,000 interest free loan and as
              additional consideration, issuing 66,666 shares of restricted
              common stock, which was valued at 50% of the fair market value on
              the date of the loan. During February and July 1996 the Company
              borrowed from Trinity American Corporation ("TAC") $175,000 to
              supplement its working capital position. During early April 1996
              the Company repaid TAC $50,000. Further, the Company borrowed from
              stockholders during July 1996 an additional $200,000.


                                     F-25

<PAGE>

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

              LIQUIDITY AND CAPITAL RESOURCES (Cont'd)

              Nine months ended September 30, 1996 as compared to the nine
              months ended September 30, 1995 (Cont'd)

              For the nine months ended September 30, 1996 net cash decreased by
              $22,029. For the nine months ended September 30, 1996 and 1995,
              the Company used cash for operations of $664,121 and $239,948,
              respectively, resulting in increased cash used in operations of
              $424,173. The net increase for the nine months ended September 30,
              1996 is the result of accounts receivables increasing by $290,851
              from slow collections of the contract research division receivable
              and loss from operations increased by $388,983 net of the
              cumulative effect of the change in estimate of the useful lives of
              the software development costs amounting to $182,235, previously
              discussed, at September 30, 1996 as compared to the nine months
              ended September 30, 1995. The net decrease in long-term contract
              accounts (cost in excess of billings on uncompleted contracts and
              billings in excess of contract revenues on uncompleted contracts)
              of $339,619 is the result of the Company reducing its backlog of
              large contracts during the March 31, 1995 quarter. As of September
              30, 1996 the Company had a backlog to perform approximately
              $730,000 of contracts. The contract research division during the
              current year has performed significant work for a major foreign
              customer, resulting in a large increase in their accounts
              receivable. In accordance with the contract, a significant portion
              of the receivable will be paid by this customer upon completion of
              the statistical report. The Company intends to complete this
              report prior to year end which will result in collections of the
              September 1996 receivables of approximately $300,000. The Company
              has not replaced these significant high gross profit contracts
              which has resulted in the Company showing a net loss of $639,202
              inclusive of a cumulative effect of change in estimate amounting
              to $182,235 for the nine months ended September 30, 1996 as
              compared to net loss of $67,984 for the nine months ended
              September 30, 1995.

              For the nine months ended September 30, 1996 and 1995 cash used by
              investing activities mainly in connection with cost incurred for
              the development of databases and computer system products,
              amounted to $104,474 and $323,816, respectively, or a net decrease
              in the use of cash of $219,342. The Company during the three
              months ended March 31, 1995 received a $34,271 payment from its
              insurance carrier on an automobile that was destroyed in an
              accident. During 1996 the Company reduced its payments by $270,433
              for database and computer system product development costs as
              compared to 1995. As noted in the December 31, 1995 Management
              Discussions and Analysis, future capitalization of computer system
              product development costs primarily in connection with the BFM
              system will be substantially reduced during the 1996 period, as
              compared to 1995 due to the Company completing at the end of 1995
              the final programming of its BFM Systems.


                                     F-26

<PAGE>

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

              LIQUIDITY AND CAPITAL RESOURCES (Cont'd)

              Nine months ended September 30, 1996 as compared to the nine
              months ended September 30, 1995 (Cont'd)

              For the nine months ended September 30, 1996 and 1995 cash
              provided by financing activities amounted to $746,566 and
              $235,607, respectively. For the nine months ended September 30,
              1996 the Company received $400,000 in connection with the sale of
              1,000,000 shares of common stock to investors and borrowed from
              shareholders approximately $478,000 net of repayments.
              Furthermore, during the nine months ended September 30, 1996 the
              Company repaid a line of credit which amounted to $50,000. As
              discussed in Note 4(m) of the September 30, 1996 financial
              statements, the Company expended $25,046 to register shares of
              common stock and warrants pursuant to previous contractual
              obligations with certain stockholders. At September 30, 1996, the
              Company accrued $11,250 of dividends for Series 1 preferred stock
              as required under the agreement.

              MANAGEMENT'S PLANS

              Since 1974, the Company has conducted a series of research
              programs on memory-enhancing drugs. Since 1991 Company was
              planning to develop Memory Centers with the Company's customer
              whose "anti-dementia" product was tested by the Company in recent
              years. The data of these studies have now been analyzed and
              publications are in process. The data from these studies
              demonstrated the usefulness and the power of the Company's
              proprietary method (Quantitative Pharmaco-EEG) for dementia drugs.
              This method, which was developed by the Chairman of the company,
              helps to assess the pharmacological effects of drugs on the human
              central nervous system (CNS), thus helping to establish the
              bioavailability of a CNS drug and its CNS-effective dose. It
              predicts the clinical-therapeutic dose of a compound and its
              possible therapeutic use in different clinical diagnostic
              conditions. The Company showed and reported in a scientific
              periodical that a double doe of the herbal product of this
              customer has more CNS effects, thus, shall be more therapeutically
              effective than that of the marketed dose. This has resulted in the
              company's largest customer renewing interest in this study and
              continuing to work with the Company. The Company received a new
              contract valued at $780,000 from this customer to further analyze
              the previous data as well as the data of the ongoing depression
              research. The Company believes that the new and successful
              developments in conjuction with the company's largest customer
              will not only bring new contracts providing additional cash and
              revenues, but will also open new doors for substantial
              revenue-bring long-term contracts. This customer has also promised
              to offer 1-2 CNS-effective drugs for further development and
              license for marketing. The Memory Centers (TM) should also have a
              positive impact on the company's cash flow in the future. 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 to establish a side-effect-free dose. Negotiations
              suggest that large collaborative studies may be initiated in the
              near future. Because of this and because of the new private
              investors' interest, the Company decided to develop Memory Centers
              (TM) by itself. The company has started a new wholly-owed
              subsidiary, Memory Centers of America, Inc. (TM). A pilot project
              was initiated during the first quarter of 1996 in collaboration
              with Manhattan-Westchester Medical Services, P.C., a corporation
              which is controlled by the Company's Chairman and also has the
              required equipment, space, staff, and professional expertise.


                                     F-27

<PAGE>

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

              MANAGEMENT'S PLANS (Cont'd)

              MC, Inc. commenced full operations of the pilot program during the
              latter part of the second quarter of 1996. The revenue of those
              operations are not yet a significant part of the company's
              operations at September 30, 1996; however, the pilot centers have
              demonstrated the need for such services. Payments from third
              parties for such services have confirmed the acceptance of the
              Company's Memory Center services. The majority of the
              Tele-Neuro-Psychiatry (TM) System required for each of the Memory
              Centers, which includes: (i) Clinical tele-neuro-psychiatry
              software programs; (ii) neuropsychological and cognitive
              rehabilitation testing and reporting software packages; (iii)
              digital EEG and Evoked Potential transmission software and
              hardware systems. The development of prototype systems has been
              completed during 1996. These software and hardware systems are an
              integral part of the Memory Centers (TM) and because of these
              proprietary systems, Memory Centers are expected to generate
              significant revenues.

              The company has developed protocols for an Alzheimer's research
              program and a Teleneuropsychiatry developmental program to be
              conducted worldwide under the sponsorship of an international
              health agency. The Company has been negotiating with several major
              pharmaceutical manufacturers to support this program. The budget
              for this program will be $4 to $8 million, and the Company expects
              to monitor this program. The Company also invested in a
              feasibility study to develop an Alzheimer's drug (oxiracetam). As
              a result, the Company is negotiating for a license to develop and
              market oxiracetam.

              The Company is trying to obtain a contract pursuant to the Company
              preparing data and analysis of previous studies which will be the
              basis for a U.S. Alzheimer's research program. If the contract is
              obtained, it is projected that $500,000 of revenue will be
              realized during the first half of 1997.

              The Company obtained a $140,000 QPEEG contract from a U.S.
              pharmaceutical company. If this project can provide a dose range
              which has clinically expected effects, without side effects, the
              Company anticipated further contracts from this organization.

              The Company has developed its own Web Site page on the World Wide
              Web and intends to offer and provide data base services to
              interested parties for psychotropic drug research and development.

              The funds obtained from the sale of stock in the first nine months
              of 1996 were invested in development of programs which are
              expected to generate immediate revenues, such as the Memory Center
              project and a program for advertising the telephonic services.

              The Company projects another five (5) BFM system software sales
              through its Turkish distributor valued at $75,000 within the next
              six months. An additional 3-6 systems (estimated at approximately
              $180,000) may be sold to centers who may develop the Alzheimer's
              program sponsored by an international health care organization
              during 1997.


                                     F-28

<PAGE>

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

              MANAGEMENT'S PLANS (Cont'd)

              The Company intends to meet its future cash requirements through
              earnings from operations based on its current backlog amounting to
              $730,000 at September 30, 1996, potential future contracts,
              currently under negotiations and the $2,000,000 received during
              December 1996 as a result of selling 550,020 units in a private
              placement. Each unit consisted of one share of Common Stock, and
              two warrants, each entitling the holder to purchase one additional
              share of Common Stock.


                                     F-29