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

                                   FORM 10-KSB

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
                    For the fiscal year ended April 30, 1999

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
                    For the transition period from         to

                         Commission file number 2-87778A

                      THE FLIGHT INTERNATIONAL GROUP, INC.
                 (Name of small business issuer in its charter)

                Georgia                                   58-1476225
      (State or other jurisdiction                      (I.R.S. employer
           or organization)                         identification number)

       Newport News/Williamsburg
        International Airport                               23602
(Address of principal executive offices)                 (Zip Code)

                                 (757) 886-5500
                           (Issuer's telephone number)

             Securities registered pursuant to Section 12(b) of the
              Exchange Act: None Securities registered pursuant to
                       Section 12(g) of the Exchange Act:
                   New Common Stock, par value $.01 per share
                                (Title of class)

         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 X No


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

         The issuer's revenues for the year ending April 30, 1999 were
$25,313,924. As of the date hereof, there is no public market for the issuer's
securities.

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

         As of July 15, 1999, there were 1,013,976 shares of the issuer's New
Common Stock, par value $.01 per share, issued and outstanding.

         Documents Incorporated by Reference: Portions of the Registrant's
definitive proxy statement for the 1999 Annual Meeting, which will be filed
within 120 days of April 30, 1999 are incorporated by reference into Part III.

         Transitional Small Business Disclosure Format [check one]: Yes ; No X

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<PAGE>
                                     PART I

ITEM 1.   DESCRIPTION OF BUSINESS

General

Introduction

         The Flight International Group, Inc. (the "Company") was incorporated
in Georgia on May 7, 1982. The Company is an aviation services company
performing military training services using specially modified commercial
aircraft, principally under contract with the United States Department of
Defense, other government agencies and foreign countries, operating through its
direct and indirect subsidiaries described in the next paragraph. In addition,
with the use of these aircraft, the Company has established a market for
training and testing in the aerospace industry. The Company also operates a
fixed base operation ("FBO") at the Newport News/Williamsburg International
Airport ("NN/W Airport").

         Flight International, Inc., a Georgia corporation ("FII"), Flight
International Aviation, Inc., a Georgia corporation ("FIA") and FI Sales and
Leasing, Inc., a Delaware corporation are wholly-owned subsidiaries of the
Company. Flight International of Florida Inc., a Florida corporation ("FIF") is
a wholly-owned subsidiary of FII.

CAS-MOS Contract

         In August 1996, the Company was awarded a major contract. The
Commercial Air Services Military Operations Support (CAS-MOS) contract is a
derivative of the original government contract won by the Company in 1980 and
operated until September 1993. The new contract began on October 1, 1996 and has
completed two base years, is currently in its second option year and two
additional years remain. Annual revenues from this contract have been $15.2
million and $13.9 million for the fiscal years ended April 30, 1999 and 1998,
respectively. This contract currently constitutes a substantial portion of the
Company's revenues. There can be no assurance that the Government will exercise
its remaining options on the CAS-MOS contract.

         The Company's consolidated operations are concentrated principally into
flight operations and fixed base operations.

Flight Operations

         As of July 1, 1999 the Company operated 23 aircraft, including 13
Learjets, five Fairchild Metro IIIs, three Casas and two other prop aircraft.
These aircraft are used in the conduct of flight operations for the U.S.
Government and commercial customers. In addition, the Company owns and operates
electronic warfare equipment used in conjunction with its flight operations
contracts. The Company also maintains an inventory of spare aircraft parts used
in support of the Company's fleet as well as third party aircraft.

                                        2


<PAGE>



Contract Flight Services

         The Company performs contract flight services for the United States
Department of Defense ("DOD"), other government agencies and commercial
customers. The Company utilizes specially modified business jets and propjets in
connection with the training of military aircrews, radar operators and weapons
controllers in the techniques of airborne target identification and intercept.

         Under the contracts with the DOD, the Company's aircraft simulate
aggressor aircraft, tow airborne targets for air-to-air and surface-to-air
missile and gunnery live firing exercises and use airborne electronic
countermeasures equipment and techniques to disrupt ship, aircraft and land
based communications and radar. Contracts with the DOD generally provide for
compensation based on flight hours of usage. Flight crews are required to hold
United States government security clearances in connection with certain
classified aspects of the services provided.

         In addition to its contracts with the DOD, a small portion of the
Company's revenues from flight operations is generated from customers in the
aerospace industry, which use specially configured aircraft for training and
testing. Typically, customers utilize aircraft and flight crews in connection
with product development. Many of these services are provided pursuant to
purchase orders, rather than long-term contracts.

         Seasonality is a significant factor in contract flight operations
(historically representing a majority of the Company's revenues) which affects
revenue and cash flow. Revenues are lower during midsummer and early winter
months.

         In addition to offering contract flight services, the Company offers
its aircraft and equipment for lease or rental to DOD and other government
customers. During the fiscal year ended April 30, 1999, this part of the
business remained strong, due principally to continuing the Company's contract
with the U.S. Navy/Naval Weapons Center in China Lake, California, to provide
Metro III aircraft necessary to accomplish naval training. This portion of the
business, while strong, represents a smaller percentage of the Company's overall
revenues than in previous years, due principally to the revenues from the
CAS-MOS contract.

Government Contracts

         United States Federal government contract awards are made through
sealed competitive bids, unless an exemption from full and open competition
under the Federal procurement laws is applicable. Under the regulations
governing sealed bidding, the qualified bidder with the lowest price and the
price related factors most advantageous to the government, is generally awarded
the contract.

         Under negotiated procurements, other evaluation factors such as
experience, quality of technical approach and management capability, may weigh
more heavily than price in the selection process.

                                        3


<PAGE>

         The Company's DOD contracts were awarded competitively pursuant to
procedures under the relevant Federal procurement laws or are annual contracts
having additional one year option periods that
may be exercised by the DOD.

         For each year of a contract, including the base year and any option
year that the government has elected to take, all contract revenues are
contingent upon the availability of adequate funding. For the fiscal year ended
April 30, 1999, revenue from contracts with the United States government
represented approximately 77% of the Company's total revenues.

         Payments received under government contracts normally are based upon
flight hours at the price per flight hour established in the contract. Flight
hours are measured from the time aircraft and personnel depart for a
predesignated location defined in the contract to perform the assigned training
or support mission, until the completion of the mission and the return of the
aircraft to the predetermined station. Under most contracts it is necessary to
attain a predetermined mission success rate or other contract performance
standard.

         Minimum guaranteed contract payments under most contracts are based on
an established number of flight hours that the government is required to order
during each current year of the contract and during any subsequent contract year
for which the government affirmatively exercises an option. The Company's price
for "guaranteed" flight hours is fixed in the contract. The government may order
more flight hours than specified in the contract. Such "excess" hours are paid
for at an established contract price for excess hours.

         For each contract year, the Company receives payment from the
government for the established number of guaranteed flight hours specified in
the contract at the applicable contract rate, regardless of whether or not the
government actually uses all such flight hours for the contract year. However,
payment to the Company for a shortfall, if any, between the number of hours
actually used by the government and the level specified in the contract will not
be received until the end of the contract year.

         The Company's DOD contracts generally are firm, fixed-price contracts
under which the Company bears the risk that the prices paid by the government
will be sufficient to cover actual costs incurred in performing under the
contract, plus the amount of profit expected in pricing its bid or proposal. The
Company may, however, file claims for certain uncontrollable cost overruns such
as jet fuel cost increases.

         The Defense Contract Audit Agency has the right to audit the Company's
books and records as a result of these contractual relationships. Because of the
fixed-price nature of the contracts, however, prices are not normally subject to
renegotiation or retroactive adjustment.

Competition

         The markets in which the Company conducts flight operations are highly
competitive. Price usually is a significant factor considered in awarding
contracts. Many firms, ranging in size from companies having substantially
smaller operations than the Company to affiliates of major corporations having
substantially greater resources than the Company, compete directly with the
Company for contracts awarded by the United States Government and the other
flight operations customers and potential customers of the Company.

                                        4


<PAGE>



         Competitive factors other than price which affect the award of flight
operations contracts include the number of employees (for example, certain
contracts are available only to businesses with fewer than 1,500 employees),
experience in the field of aviation services and adequacy of resources,
including maintenance personnel, aircrews, repair facilities and aircraft.

         Competition is an even greater factor in the commercial segment of the
flight operations market where barriers to entry are lower than in the
government sector. This is due in part to the fact that aircraft may not require
unique modifications in order to perform the desired services. In the commercial
market, the Company competes with numerous companies, some of which also compete
in the market for military contracts. Price also can be a significant factor
where, on occasion, competitors are single aircraft operators engaged in the
business on a part-time basis.

         Financial condition and fiscal stability also are significant
competitive factors affecting the award of contracts in both the government and
commercial sectors of flight operations. The Company's results of operations
prior to, during and immediately following the bankruptcy had adversely affected
its ability to compete for certain contracts. Following three profitable years
and successful performance on contracts, management believes it has, to a large
extent, rebuilt confidence with the Company's customers and potential customers
in order to be a long-term player in the industry. See "Management's Discussion
and Analysis or Plan of Operation."

Fixed Base Operation

         FIA operates a FBO at the NN/W Airport pursuant to an agreement with
the Peninsula Airport Commission which terminates in January 2004. The FBO
currently serves the line service and fuel requirements of Company aircraft in
support of the Company's flight operations. The Company also offers a full range
of aviation services customarily provided by such a facility to third parties.
These services include aircraft fueling, maintenance services (including
inspections and engine and airframe repairs), aircraft modifications, avionics
installation and replacement, charter, flight instruction, pilot services and
aircraft storage and hangaring.

         The competitive market for FBO services may be local, regional or
national, depending upon the particular type of service considered. Competition
with respect to fuel and maintenance generally arises from other FBOs located at
the same airport or within the vicinity of such airport. The Company controls
substantially all the fueling business at the NN/W Airport. For major
maintenance, the Company's facilities compete with other facilities nationwide.

         The availability of storage hangars for aircraft also is an important
competitive factor. Generally, pilots with aircraft hangared at a facility will
purchase fuel and a substantial portion of their maintenance and avionics
requirements at that facility. The Company maintains three hangars at its
Newport News FBO which are used for its fleet of aircraft as well as third-party
aircraft. Management does not believe that revenues from its FBO are seasonal or
dependent on a single customer.

                                        5


<PAGE>


         The FBO comprises approximately 39,000 square feet of hangar space and
43,000 square feet of maintenance and office space, of which approximately
10,000 square feet is occupied by the Company's headquarters.

Regulation

         The Company's business is subject to regulation by the U.S. Federal
Aviation Administration ("FAA") and the Department of Transportation ("DOT")
under the provisions of the Federal Aviation Act of 1958, as amended (the
"Aviation Act"). The DOT is responsible, inter alia, for evaluating and
determining the fitness of individuals and organizations to function as air
carriers and maintains jurisdiction over consolidations, mergers or acquisitions
of air carriers.

         The FAA regulates aircraft and air carrier operations, including
personnel employed, equipment used, ground facilities, maintenance,
communications and other matters. More specifically, the FAA regulates the
operation of aircraft in commercial operations under Federal Aviation Regulation
Part 135 and repair facilities (repair stations), including those operated by
the FBO, under Federal Aviation Regulation Part 145.

         The FAA has the authority to suspend or revoke the approval of air
carriers, commercial operators, repair stations and pilot schools or their
licensed personnel for failure to comply with any FAA regulation and can
"ground" aircraft if questions arise concerning their airworthiness. Management
believes the Company holds all operating, airworthiness and other FAA
certificates required for the conduct of its business, although these
certificates may be suspended or revoked for cause.

         The FAA also has authority under the Noise Control Act of 1972, as
amended, to monitor and regulate aircraft engine noise. Management believes that
the aircraft operated by the Company are in compliance with regulations
promulgated by the FAA and that such aircraft also comply with standards for
aircraft exhaust regulations promulgated by the Environmental Protection Agency
pursuant to the Clean Air Act of 1979, as amended. In addition, the Company's
operations may be subject to local regulation with respect to noise control.
Such authorities and ordinances could restrict the Company's use of older
Learjets, which produce greater engine noise than newer models.

         Because of the extensive use of radio and other communication
facilities in its aircraft operations, the Company is subject to the Federal
Communications Commission Act of 1934, as amended (the "FCC Act") and regulation
thereunder by the Federal Communications Commission ("FCC"). The Company
believes it is in compliance with all material requirements of the FCC Act and
the FCC.

         The Company maintains a fuel storage area at its FBO and handles
materials which are subject to federal, state and local regulations. The Company
believes it is in compliance with all such regulations and does not currently
anticipate that maintaining compliance will have a material effect on the
capital expenditures, earnings or competitive position of the Company. The
Company believes the costs and effects of compliance with such regulations are
minor.

                                        6


<PAGE>

         Compliance with the regulatory requirements applicable to the Company's
business imposes material burdens on the Company, including license
requirements, maintenance, training, record keeping and reporting obligations
and limitations on the manner in which the Company may operate its aircraft.
Further, the cost of compliance with these requirements is significant.
Management believes, however, that the regulatory requirements applicable to the
Company generally are no more burdensome to the Company than to other businesses
operating in the aviation services industry.

Employees

         As of April 30, 1999, the Company had 185 employees, including 130
full-time employees. None of the Company's employees is covered by a collective
bargaining agreement.

1994 Bankruptcy Proceedings

          On December 28, 1994, the Company and several affiliates emerged from
bankruptcy pursuant to a Joint Plan of Reorganization (the "Plan"). The Plan
restructured and satisfied the claims of the creditors of these entities and the
interests of shareholders of the Company.

         As part of the Plan, a new class of stock, New Common Stock, par value
$.01 per share ("New Common Stock") was created (with 1,000,000 shares
authorized, which amount was increased to 10,000,000 shares, by approval of the
shareholders, on December 10, 1996) and all previous classes of stock were
canceled. Certain preexisting secured lenders' indebtness also was restructured
as part of the Plan.

ITEM 2.  DESCRIPTION OF PROPERTY

         The Company's leasehold interests at the NN/W Airport represent
approximately 9% of the total assets of the Company. These leasehold interests
consist of three hangars totaling 39,000 square feet and approximately 43,000
square feet of maintenance shop and office space. The leasehold improvements are
amortized on a straight-line basis over the term of the land lease, which runs
through January 2004. There are no plans for additional improvement of the
property, and, in the opinion of the management, the property is adequately
insured.

         The Company presently operates a small fleet of 23 aircraft, of which
three are owned and 20 are leased. The Company also owns, subject to a Deed of
Trust and Security Interest Lien to Bank Philadelphia, certain buildings,
hangars and maintenance facilities at its FBO and leases the land at its
headquarters from the Peninsula Airport Commission. A majority of the Company's
assets are pledged as collateral on its debt and capital lease obligations.

                                        7


<PAGE>

         As of April 30, 1999, the indebtedness to Bank Philadelphia was
approximately $1,482,633. The indebtedness to Bank Philadelphia provides for
complete amortization thereof through graduated payments through November 2003,
at which time the entire obligation will be satisfied.

         The Company leases the land underlying its headquarters building and
hangars through the year 2004 pursuant to a lease agreement with the Peninsula
Airport Commission of Newport News, Virginia.

         The Company's executive offices and corporate headquarters are located
at One Lear Drive, Newport News, Virginia 23602, where the Company has
approximately 10,000 square feet of office space.

ITEM 3.  LEGAL PROCEEDINGS

         There are no material pending legal proceedings to which the Company is
a party or to which any of its properties are subject.

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

         No matters were submitted to a vote of security holders of the Company
during the fiscal quarter ended April 30, 1999.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company became a reporting company under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") in 1984, at the time of its initial
public offering of securities. Thereafter it filed reports pursuant to the
requirements of Sections 13 and 15(d) of the Exchange Act. It has filed all
required filings reflective of all periods from and after February 1, 1995.

          The shares of New Common Stock of the Company currently trade in the
"pink sheets," since the Old Common Stock, which had been listed on the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
Additional List, was delisted in 1992. There can be no assurance that the
Company will qualify for relisting on NASDAQ. If qualification occurs, the
Company will then determine if it is in the Company's best interest to become
re-listed.

         The Company believes that since April 30, 1993, virtually no trading
has taken place with respect to the Old Common Stock and New Common Stock,
respectively. There is no established public trading market currently for the
New Common Stock, and, therefore, no bid information is available.

                                        8


<PAGE>

         The approximate number of holders of record of New Common Stock as of
July 1, 1999 is 1,500. The Company has no other class of securities authorized.
On December 10, 1996, the shareholders of the Company approved an amendment to
the Company's Amended Certificate of Incorporation to increase the number of
authorized shares of New Common Stock from 1,000,000 shares to 10,000,000
shares.

         No cash dividends were declared on the New Common Stock during the
fiscal years ended April 30, 1999, April 30, 1998 and April 30, 1997.

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

Results of Operations

Year Ended April 30, 1999 Compared to the Year Ended April 30, 1998

Revenues

          For the year ended April 30, 1999, revenues totaled $25,313,924. This
represents an increase of 15% over the prior year. Company revenue is generated
from three sources. Flight operations of owned or leased aircraft accounts for
82% of total revenue, followed by the maintenance and repair facility at 11% and
the FBO at 7% of total revenue.

         While flight operations and the FBO showed substantial increases, the
maintenance and repair facility revenue increased to a greater extent, as
displayed below (in thousands):

                          12 Months Ended      12 Months Ended
                          April 30, 1999       April 30, 1998        % Increase
                          --------------       --------------        ----------

Flight Operations             $20,875              $18,585               12%
Maintenance Facility          $ 2,667              $ 1,853               44%
Newport News FBO              $ 1,772              $ 1,622                9%

         The increase in flight operations is primarily due to a 10% increase in
revenues from the CAS-MOS contract. Other contract flying also increased by more
than 20%. Maintenance revenue increased due to a large mid year project
involving the rebuilding of a damaged Learjet. FBO revenues increased following
a pattern of increased traffic through the NN/W Airport.

Costs of Services

         Costs of services include the direct operating expenses of aircraft
owned and leased by the Company. Types of expenses incurred include the
following: lease, fuel, insurance, maintenance, pilots and equipment. Also
included are the costs of operating the FBO at the NN/W Airport. The costs for
the aircraft repair facility are also included in costs of services.

                                        9


<PAGE>

          For the year ending April 30, 1999 there was a 17% increase in costs
of services. The major factor contributing to the increase in costs of services
was expenses related to the CAS-MOS contract. The overall gross margin declined
to 16% from 18% in the prior year.

Depreciation and Amortization

         Aircraft and engines are depreciated as follows: aircraft are
depreciated on a straight-line basis over 12 years. Engines are depreciated
based on hours flown down to a core value. In addition, a reserve is recorded to
cover the cost of major periodic inspections on engines. Electronic warfare
equipment is depreciated on a straight line basis over five years. All other
property and equipment is depreciated over its estimated useful life or lease
term, if applicable.

         Depreciation and amortization of $600,658 for the fiscal year ended
April 30, 1999 reflects an increase of 5% compared to fiscal year 1998. This
change is primarily due to an engine purchase completed during the year.

General, Corporate and Administrative

         General, corporate and administrative expenses consist principally of
facility costs associated with the three hangars and corporate headquarters
building, and labor costs associated with the administrative and sales staff.
General, corporate and administrative expenses aggregated $2,320,463 for the
year ended April 30, 1999, an increase of 7% over the prior twelve month period.
The increase is not due to one particular event but more of an overall increase
in all aspects of general and administrative costs.

Interest Expense

         Interest expense decreased to $331,049 from $365,540 for the prior
twelve month period, or 9%. The decrease in interest expense is principally due
to the pay down of long term debt as well as more favorable rates of interest on
the line of credit with Crestar Bank. (See "Liquidity and Capital Resources"
below.)

Income Tax Expense

         Income tax expense varies from statutory tax rates principally because
of the utilization of net operating loss carry forwards. For further discussion
see Note 6 to the Consolidated Financial Statements included herein.

Net Income

         The consolidated net profit for the year ended April 30, 1999 was
$809,411, a profit of $.80 per share compared to a net profit of $725,883, or
$.72 per share, for the year ended April 30, 1998. The weighted average number
of shares was 1,013,976 for both years.

                                       10


<PAGE>

Year Ended April 30, 1998 Compared to the Year Ended April 30, 1997

Revenues

          For the year ended April 30, 1998, revenues totaled $22,060,399. This
represents an increase of 16% over the prior year. Company revenue is generated
from three sources. Flight operations accounts for 84% of total revenue,
followed by maintenance and repair facility at 8%, and the FBO at 7% of total
revenue.

         While flight operations and the FBO showed substantial increases, the
maintenance and repair facility revenue decreased, as displayed below (in
thousands):

                             12 Months Ended     12 Months Ended
                             April 30, 1998      April 30, 1997      % Increase
                             --------------      --------------      ----------

Flight Operations               $18,585              $14,904             25%
Maintenance Facility            $ 1,853              $ 2,671            -31%
Newport News FBO                $ 1,622              $ 1,460             11%


         The increase in flight operations is due to revenues resulting from the
CAS-MOS contract, which was in place for the full fiscal year ended April 30,
1998 but only for seven months during the fiscal year ended April 30, 1997.
Maintenance revenue was down due to the completion of a special one time
aircraft modification project during the first quarter of the fiscal year ended
April 30, 1997. FBO revenues increased following a pattern of increased traffic
through the NN/W Airport.

Costs of Services

         Costs of services include the direct operating expenses of aircraft
owned and leased by the Company. Types of expenses incurred include the
following: lease, fuel, insurance, maintenance, pilots and equipment. Also
included are the costs of operating the FBO at the NN/W Airport. The costs for
the aircraft repair facility are also included in costs of services.

          For the year ending April 30, 1998 there was a 20% increase in costs
of services. The major factor contributing to the increase in costs of services
was expenses related to the CAS-MOS contract. The overall gross margin declined
to 18% from 20% in the prior year. The decline in gross margin is principally
due to a high margin aircraft modification project performed in the fiscal year
ended April 30, 1997 which did not recur in the fiscal year ended April 30,
1998.

                                       11


<PAGE>

Depreciation and Amortization

         Aircraft and engines are depreciated as follows: aircraft are
depreciated on a straight-line basis over 12 years. Engines are depreciated
based on hours flown down to a core value. In addition, a reserve is recorded to
cover the cost of major periodic inspections on engines. Electronic warfare
equipment is depreciated on a straight-line basis over five years. All other
property and equipment is depreciated over its estimated useful life or lease
term, if applicable.

         Depreciation and amortization of $571,141 for the fiscal year ended
April 30, 1998 reflects a decrease of 3% compared to fiscal year 1997. This
relatively minor change is a result of no significant asset purchases during the
year.

General, Corporate and Administrative

         General, corporate and administrative expenses consist principally of
facility costs associated with the three hangars and corporate headquarters
building, and labor costs associated with the administrative and sales staff.
General, corporate and administrative expenses aggregated $2,167,575 for the
year ended April 30, 1998, a decrease of 2% over the prior twelve month period.
The decrease is a result of a decrease in bad debt write-offs during the fiscal
year ended April 30, 1998.

Interest Expense

         Interest expense decreased to $365,540 from $376,558 for the prior
twelve month period, or 3% . The decrease in interest expense is principally due
to the pay down of long term debt as well as more favorable rates of interest on
the line of credit with Crestar Bank. (See "Liquidity and Capital Resources,"
below).

Income Tax Expense

         Income tax expense varies from statutory tax rates principally because
of the utilization of net operating loss carry forwards. For further discussion
see Note 6 to the Consolidated Financial Statements included herein.

Net Income

         The consolidated net profit for the year ended April 30, 1998 was
$725,883, a profit of $.72 per share compared to a net profit of $664,890 or
$.66 per share, for the year ended April 30, 1997. The weighted average number
of shares was 1,013,976 and 1,003,976 respectively.

Liquidity and Capital Resources

         The Company has funded its operations primarily through cash flows from
operations and short term borrowings. The Company's operating activities
provided cash of $810,336 for the fiscal year ending April 30, 1999, while
providing $60,251 in the comparable prior year period.

                                       12


<PAGE>

         On August 26, 1998 the Company purchased two engines for $390,300. A
loan of $495,000 was provided by a local bank with the balance of the proceeds
used to pay off a loan on the airframe. The loan is secured by the airframe and
engines and is payable in 41 monthly installments of $13,602 at a rate of
interest of $8.22%.

         In addition, on January 15, 1998 the Company refinanced a loan secured
by two aircraft. The loan is for $1,338,750 payable over 84 months at a fixed
rate of 9.25%. Monthly payments are $15,938. Proceeds were used to pay off the
existing loan ($956,690) with the remaining balance used to meet working capital
requirements.

         On February 25, 1998, the Company entered into a line of credit with
Crestar Bank ("Crestar") for all short term financing needs. The new agreement
provides for up to $2,000,000 in credit. The loan is represented by a demand
note which may be payable at any time upon the demand of Crestar. The Company
will be obligated to pay Crestar interest at prime rate plus one-half percent of
the average balance outstanding. The line is secured by the Company's accounts
receivable and an assignment of the CAS-MOS contract.

         The Company believes that its ability to obtain traditional bank
financing represents an important step in its efforts to enhance third-party
confidence in the Company's performance and its prospects. The arrangement also
has reduced the Company's overall borrowing costs.

         The Company operates in a capital intensive industry. Typically, major
expenses are incurred in connection with the initiation of a new contract. These
costs can consist of acquisition of additional aircraft, equipment and training.
These costs can be reduced through leasing arrangements and advance payments
from customers, if these are obtainable. The Company believes that it will be
able to arrange through available means the financing of these initial contract
costs when necessary, although no assurance can be given. See Notes 4, 5 and 7
to the Consolidated Financial Statements included herein for a discussion of
debt and lease commitments.

New Accounting Standards

            Statements of Financial Accounting Standards No. 132 (SFAS 132),
"Employers' Disclosures about Pensions and Other Postretirement Benefits",
effective for periods beginning after December 15, 1997, revises employers'
disclosures about pension and other postretirement benefit plans. It does not
change the measurement or recognition of those plans. This statement does not
impact the financial statements of the Company.

                In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments," (SFAS 133), effective for fiscal years beginning after June 15,
2000. SFAS 133 requires that an entity recognize all derivatives as either
assets or liabilities and measure those instruments at fair market value. Under
certain circumstances, a portion of the derivative's gain or loss is initially
reported as a component of other comprehensive income and subsequently
reclassified into income when the transaction affects earnings. For a derivative
not designated as a hedging instrument, the gain or loss is recognized in income
in the period of change. This statement is not expected to impact the financial
statements of the Company.

                                       13


<PAGE>

Year 2000 Planning and Preparation

         The Company continues to evaluate and prepare for the potential impact
of the "Year 2000" problem on its systems and operations. The Company's Year
2000 evaluation and remediation plan is dual faceted focusing both on
information technology "IT" systems as well as imbedded, non IT systems that are
integral to specific operating and support functions. The Company's Year 2000
efforts began in 1996 with IT systems with long lead time dates. Remediation of
the Company's IT systems is expected to be substantially complete by October,
1999. While the total cost of the new IT systems will be substantial ($400,000
based on current estimates) the vast majority of the new system costs will go
towards enhancing and upgrading existing capability, not the specific Year 2000
issue. The actual costs of the Year 2000 reparations is not expected to be
material on future earnings. Non IT systems are being evaluated and corrected or
replaced as identified. The costs of ensuring compliance in non IT systems is
not anticipated to have a material impact on earnings. All non compliant non IT
systems are expected to be replaced or corrected by December, 1999.
Notwithstanding this, the Year 2000 readiness of the Company's suppliers and
customers (including the DOD) may vary, and the Company cannot determine whether
or to what extent the Company may be affected thereby.

                                       14

<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>
                                                                                   April 30,
                                                                         --------------------------
                                                                         1999                  1998
                                                                         ----                  ----
<S>                                                                  <C>                    <C>
Current assets
  Cash                                                               $    79,292            $   104,008
  Accounts receivable, net (Notes 1 and 4)                             3,517,018              3,989,073
  Inventories (Notes 2 and 5)                                          2,886,665              2,087,700
  Prepaid expenses and other                                             138,286                510,785
  Deposits                                                               681,799                983,774
--------------------------------------------------------------------------------------------------------

Total current assets                                                   7,303,060              7,675,340
--------------------------------------------------------------------------------------------------------

Property and equipment, net (Notes 3 and 5)                            4,600,619              4,096,017
--------------------------------------------------------------------------------------------------------

Other assets                                                              11,703                 22,262
--------------------------------------------------------------------------------------------------------

     Total assets                                                    $11,915,382            $11,793,619
--------------------------------------------------------------------------------------------------------


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
  Accounts payable                                                   $   555,609            $   450,403
  Deferred revenue                                                       727,586                950,802
  Accrued fuel expense                                                   923,715                828,858
  Accrued expenses and other liabilities (Note 8)                      1,644,703              1,533,384
  Note payable (Note 4)                                                1,080,505                451,097
  Long-term debt due currently (Note 5)                                  750,950                652,238
  Income tax payable (Note 6)                                                -                   20,000
--------------------------------------------------------------------------------------------------------

Total current liabilities                                              5,683,068              4,886,982

Deferred revenue                                                             -                  727,586
Accrued engine reserves                                                  448,469                744,647
Long-term debt, less current maturities (Note 5)                       2,570,261              3,030,231
--------------------------------------------------------------------------------------------------------

Total liabilities                                                      8,701,798              9,389,446
--------------------------------------------------------------------------------------------------------

Commitments and contingencies (Notes 7 and 8)
--------------------------------------------------------------------------------------------------------

Stockholders' equity
  Common stock, $.01 par value, 10,000,000 shares
    authorized; 1,013,976 issued and outstanding (Note 13)                10,140                 10,140
  Additional paid-in capital                                           1,007,617              1,007,617
  Retained earnings                                                    2,195,827              1,386,416
--------------------------------------------------------------------------------------------------------

Total stockholders' equity                                             3,213,584              2,404,173
--------------------------------------------------------------------------------------------------------

     Total liabilities and stockholders' equity                      $11,915,382            $11,793,619
--------------------------------------------------------------------------------------------------------
</TABLE>



                 See accompanying summary of accounting policies
                 and notes to consolidated financial statements.

                                       15

<PAGE>

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                             Year Ended April 30,
                                                                         ----------------------------
                                                                         1999                    1998
                                                                         ----                    ----
<S>                                                                  <C>                     <C>
Revenues (Note 10)                                                   $25,313,924             $22,060,399
---------------------------------------------------------------------------------------------------------

Operating costs and expenses
  Costs of services                                                   21,322,103              18,272,492
  Gain on disposal of assets (Note 11)                                   (69,760)                (75,232)
  Depreciation and amortization                                          600,658                 571,141
  General, corporate and administrative                                2,320,463               2,167,575
---------------------------------------------------------------------------------------------------------

Total operating costs and expenses                                    24,173,464              20,935,976
---------------------------------------------------------------------------------------------------------

Operating income                                                       1,140,460               1,124,423
---------------------------------------------------------------------------------------------------------

Other (income) expenses
  Interest expense                                                       331,049                 365,540
---------------------------------------------------------------------------------------------------------

Total other (income) expenses                                            331,049                 365,540
---------------------------------------------------------------------------------------------------------

Income before taxes                                                      809,411                 758,883
Income tax expense (Note 6)                                                  -                    33,000
---------------------------------------------------------------------------------------------------------

Net income                                                           $   809,411             $   725,883
---------------------------------------------------------------------------------------------------------

Earnings per share data:
  Basic and diluted earnings per share                               $       .80           $         .72
  Weighted average number of shares                                    1,013,976               1,013,976
---------------------------------------------------------------------------------------------------------
</TABLE>


                 See accompanying summary of accounting policies
                 and notes to consolidated financial statements.

                                       16


<PAGE>
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                             Additional
                                            Common Stock
                                      ------------------------            Paid-in            Retained
                                      Shares            Amount            Capital            Earnings
-------------------------------------------------------------------------------------------------------

<S>                                 <C>                <C>              <C>                 <C>
Balance, April 30, 1997             1,013,976          $10,140          $1,007,617          $  660,533

Net income                                -                -                   -               725,883
-------------------------------------------------------------------------------------------------------

Balance, April 30, 1998             1,013,976           10,140           1,007,617           1,386,416

Net income                                -                -                   -               809,411
-------------------------------------------------------------------------------------------------------

Balance, April 30, 1999             1,013,976          $10,140          $1,007,617          $2,195,827
-------------------------------------------------------------------------------------------------------
</TABLE>



                 See accompanying summary of accounting policies
                 and notes to consolidated financial statements.

                                       17


<PAGE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                             Year ended April 30,
                                                                         ----------------------------
                                                                         1999                    1998
                                                                         ----                    ----
<S>                                                                   <C>                     <C>
Operating activities
  Net income                                                          $  809,411              $  725,883
  Adjustments to reconcile net income
    to net cash provided by operating
    activities
      Depreciation and amortization                                      600,659                 571,141
      Engine reserve                                                    (296,178)                344,105
      Gain on sale of assets                                             (69,760)                (75,232)
      Net cash provided (absorbed) by
        Accounts receivable                                              472,055              (1,758,703)
        Inventories                                                     (798,965)               (296,810)
        Prepaid expenses and other assets                                682,974                 (74,481)
        Accounts payable                                                 105,206                 123,997
        Accrued expenses and other liabilities                           275,736                 661,702
        Deferred revenue                                                (950,802)               (181,351)
        Income taxes payable                                             (20,000)                 20,000
---------------------------------------------------------------------------------------------------------

Net cash provided by operating activities                                810,336                  60,251
---------------------------------------------------------------------------------------------------------

Investing activities
  Purchase of property and equipment                                  (1,103,201)               (398,501)
---------------------------------------------------------------------------------------------------------

Net cash absorbed by investing activities                             (1,103,201)               (398,501)
---------------------------------------------------------------------------------------------------------

Financing activities
  Proceeds from credit line, net                                         629,409                 451,097
  Repayment of long-term debt                                           (856,260)             (1,596,750)
  Proceeds from long-term debt                                           495,000               1,356,800
---------------------------------------------------------------------------------------------------------

Net cash provided by financing activities                                268,149                 211,147
---------------------------------------------------------------------------------------------------------

Net decrease in cash and
  cash equivalents                                                       (24,716)               (127,103)

Cash and cash equivalents,
  beginning of year                                                      104,008                 231,111
---------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of year                                $   79,292              $  104,008
---------------------------------------------------------------------------------------------------------
</TABLE>


                 See accompanying summary of accounting policies
                 and notes to consolidated financial statements.

                                       18


<PAGE>

                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Nature of Business - The Flight International Group, Inc. and Subsidiaries
(the "Company") is an aviation services company that performs military training
services using specially modified commercial aircraft, principally under
contracts with the United States Department of Defense, other government
agencies and foreign countries. In addition, the Company has established a
market for training and testing in the aerospace industry. The Company also
operates a fixed base operation ("FBO") at the Newport News/Williamsburg
International Airport.

     Principles of Consolidation - The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiaries. All significant
intercompany transactions and balances have been eliminated.

     Inventories - Aircraft parts - Aircraft parts include rotables, repairable
and expendable aircraft components. Rotables and repairables are recorded using
the specific identification method and are valued at the lower of cost or
market. Expendables are recorded at the lower of average cost or market.

     Targets and cable - Targets and cable are special equipment required to
perform target tow missions and are recorded at the lower of average cost or
market.

     Fuel - Fuel includes Jet A and Avgas, both of which are consumed in the
performance of contracts and sold commercially. Fuel is recorded at the lower of
average cost or market.

     Property and Equipment - Property and equipment are recorded at cost. The
cost of improvements are capitalized, while the cost of replacements,
maintenance and repairs which do not improve or extend the life of the
respective assets are expensed.

     Depreciation and amortization of property and equipment are provided, for
financial reporting purposes, as follows:

     Aircraft and Engines - Aircraft are depreciated on a straight-line basis
over 12 years. Engines are depreciated based on hours flown down to a core
value.

     The U.S. Federal Aviation Administration mandates the performance of a
Major Periodic Inspection (MPI) on engines every 1,500 flight hours. In order to
properly account for the cost of this inspection over the time the engine is in
service, the Company records a reserve based on hours between inspections for
each engine. The reserve is relieved when the service work is performed on the
engine.

     Electronic Warfare Equipment - Substantially all electronic warfare
equipment and related aircraft modifications are utilized to train military
aircrews, radar operators and weapons controllers in the techniques of airborne
target identification and intercept. Such equipment and related aircraft
modifications are carried at the lower of cost or market value and are
depreciated on a straight-line basis over 5 years.

     Other equipment - All other property and equipment is depreciated on a
straight-line basis over its estimated useful life or lease term, as applicable.
Estimated useful lives are as follows: leasehold interests and improvements,
primarily in the airport buildings - 73 months (remaining lease term);
equipment, office furniture, and fixtures - 5 years.

                                       19


<PAGE>
                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                                   (continued)

     Asset Impairments and Disposals - Under the provisions of FASB Statement
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of", the Company reviews the carrying values of its
long-lived and identifiable intangible assets for possible impairment whenever
events or changes in circumstances indicate that the carrying amount of the
assets may not be recoverable. Any long-lived assets held for disposal are
reported at their net realizable value.

     Revenue Recognition - Contract Revenue - The Company recognizes contract
revenue as hours are flown, at the average rate per flight hour, over the term
of each contract. Certain contracts provide for a guaranteed minimum number of
flight hours per contract year. Contract revenue for such guaranteed but unflown
hours, if any, is recognized at the end of the contract year. Certain contracts
provide for cash payments in excess of the average rate per hour in the early
years of a contract; such excess is recorded as deferred revenue and recognized
as revenue as hours are flown over the contract term, which may exceed one year.

     Income Taxes - Income taxes are accounted for under FASB Statement No. 109,
"Accounting for Income Taxes" ("SFAS No. 109), the asset and liability method.
Under the asset and liability method, deferred income taxes are recognized for
the tax consequences of "temporary differences" by applying enacted statutory
tax rates applicable to future years to differences between the financial
statement carrying amounts and the tax bases of existing assets and liabilities.
Under SFAS No. 109, the effect on deferred taxes of a change in tax rates is
recognized in income in the period that includes the enactment date.

     Stock Based Compensation - Stock based compensation is accounted for under
the provisions of FASB Statement No. 123 (SFAS 123), "Accounting for Stock Based
Compensation." SFAS 123 allows companies to continue to account for their stock
option plans in accordance with APB Opinion 25 but encourages the adoption of a
new accounting method based on the estimated fair value of employee stock
options. Companies electing not to follow the new fair value based method are
required to provide expanded footnote disclosures, including proforma net income
and earnings per share, determined as if the company had applied the new method.

     The Company measures stock based compensation cost as the excess of the
market value of the Company's common stock at the grant date over any amount the
employee pays for the stock. The Company has elected to account for their stock
option plan in accordance with APB Opinion 25 and provide the necessary proforma
disclosures under SFAS 123.

     Statement of Cash Flows - For purposes of the statement of cash flows, the
Company considers all highly-liquid instruments purchased with a maturity of
three months or less to be cash equivalents.

                                       20


<PAGE>
                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                                   (continued)

     Earnings Per Share - For the year ended April 30, 1998, the Company adopted
Statement of Financial Accounting Standards No. 128 (SFAS 128), "Earnings Per
Share," SFAS 128 is effective for financial statements issued for periods ending
after December 15, 1997. SFAS 128 provides for the calculation of basic and
diluted earnings per share. Basic earnings per share is computed by dividing
income available to common shareholders by the weighted average number of common
shares outstanding for the period. Diluted earnings per share reflects the
potential dilutive effect of securities that could share in earnings of an
entity. Diluted earnings per share are the same as basic earnings per share
since the effect of the assumed exercise of stock options is anti-dilutive.

     Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

     Recent Accounting Pronouncements - Statements of Financial Accounting
Standards No. 132 (SFAS 132), "Employers' Disclosures about Pensions and Other
Postretirement Benefits", effective for periods beginning after December 15,
1997, revises employers' disclosures about pension and other postretirement
benefit plans. It does not change the measurement or recognition of those plans.
This statement does not impact the financial statements of the Company.

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments,"
(SFAS 133), effective for fiscal years beginning after June 15, 2000. SFAS 133
requires that an entity recognize all derivatives as either assets or
liabilities and measure those instruments at fair market value. Under certain
circumstances, a portion of the derivative's gain or loss is initially reported
as a component of other comprehensive income and subsequently reclassified into
income when the transaction affects earnings. For a derivative not designated as
a hedging instrument, the gain or loss is recognized in income in the period of
change. This statement is not expected to impact the financial statements of the
Company.

                                       21


<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Accounts Receivable - The balance of accounts receivable is comprised
of the following:

                                                           April 30,
                                                -------------------------------
                                                   1999                 1998
                                                ----------           ----------
     Flight operations contracts
      and programs                              $3,400,216           $3,865,805
     Trade                                         133,483              140,558
     Other receivables                              54,805              181,126
                                                ----------           ----------
                                                 3,588,504            4,187,489
     Less:  allowance for
      doubtful accounts                            (71,486)            (198,416)
                                                ----------           ----------
                                                $3,517,018           $3,989,073
                                                ----------           ----------

Accounts receivable from flight operations contracts and programs consist of the
following:

                                                           April 30,
                                                -------------------------------
                                                   1999                 1998
                                                ----------           ----------
     U.S. Government
      Amounts billed                            $2,222,312           $2,981,540
      Services provided,
       not billed                                  613,143              536,686
                                                ----------           ----------
                                                 2,835,455            3,518,226
                                                ----------           ----------
     Commercial Customers
      Amounts billed                               564,761              334,821
      Services provided,
       not billed                                      -                 12,758

                                                   564,761              347,579
                                                ----------           ----------
     Total flight operations
      contracts and programs                    $3,400,216           $3,865,805
                                                ----------           ----------

     Accounts receivable are billed in accordance with the terms of the
contracts under which they arise. Amounts not billed represent services
performed between the last billing date and year end.

                                       22


<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

Note 2 - Inventories - Inventories are compromised of:

                                                           April 30,
                                                -------------------------------
                                                   1999                 1998
                                                ----------           ----------
     Aircraft parts                             $2,715,722           $1,922,921
     Targets and cable                             156,830              143,341
     Fuel                                           14,113               21,438
                                                ----------           ----------
                                                $2,886,665           $2,087,700
                                                ----------           ----------

Note 3 - Property and Equipment - Property and equipment consist of the
following:

                                                           April 30,
                                                -------------------------------
                                                   1999                 1998
                                                ----------           ----------
     Aircraft and engines                       $2,830,884           $2,440,583
     Electronic warfare equipment                  519,147              519,147
     Leasehold interests                         1,999,791            1,999,791
     Office furniture and fixtures                 138,185               85,707
     Other equipment                             1,498,572              838,150
                                                ----------           ----------
                                                 6,986,579            5,883,378
     Accumulated depreciation
      and amortization                          (2,385,960)          (1,787,361)
                                                ----------           ----------
     Property and equipment, net                $4,600,619           $4,096,017
                                                ----------           ----------


Note 4 - Note Payable - During the year ended April 30, 1998 the Company entered
into a $2,000,000 asset based borrowing agreement with a bank in Newport News,
Virginia. Under the terms of the agreement, the Company may obtain advances up
to 85% of amounts billed by the Company on government contracts. The Company
must pay interest at prime plus .50% on outstanding advances. Under the
agreement, the Company must maintain certain net worth ratios. The Company was
in compliance with these ratios at April 30, 1999. Outstanding advances at April
30, 1999 and 1998 were $1,080,505 and $451,097, respectively.

                                       23


<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

Note 5 - Long-Term Debt - Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                                              April 30,
                                                                                     ---------------------------
                                                                                        1999             1998
                                                                                     ----------       ----------
<S>                                                                                  <C>              <C>
Note payable to bank with interest payable at 8.5%, due in graduated monthly
  installments of principal and interest, beginning at $19,000 and ending at
  $37,000, through November 1, 2003, secured by a first mortgage deed of trust
  on leasehold improvements and assignment of leases on certain real property
  located in Newport News, Virginia.                                                 $1,482,633       $1,692,653

Note payable to bank with interest payable at 9.25%, due in equal monthly
  principal installments of $15,938 plus interest through January 15, 2005,
  secured by aircraft.                                                                1,099,688        1,290,938

Note payable to bank with interest payable at 8.22%, due in equal monthly
  installments of principal and interest of $13,602
  through February 2002, secured by certain property and equipment.                     411,312              -

Note payable to bank with interest payable at 7% through December 8, 1999, and
  at the five-year U.S. Treasury Bill rate plus 2.10% through December 8, 2001,
  due in monthly installments of principal and interest of approximately $15,333
  through December 8, 2001, secured by inventory.                                       312,935          547,202

Note payable to bank with interest payable at 8.9%, due in equal monthly
  installments of principal and interest of $376 maturing on March 1, 2003,
  secured by a vehicle.                                                                  14,643           17,808

Note payable to finance company with interest payable at 8%, due in equal
  monthly installments of principal and interest of $7,800 through August 30,
  1999, and a final payment of principal and unpaid interest of approximately
  $17,768 due September 30, 1999, secured by certain property and equipment.
  Loan was paid off in August 1998, with additional financing.                              -            133,868
                                                                                     ----------       ----------
                                                                                      3,321,211        3,682,469
  Current maturities                                                                    750,950          652,238
                                                                                     ----------       ----------

  Long-term debt, net                                                                $2,570,261       $3,030,231
                                                                                     ----------       ----------
</TABLE>

                                       24


<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

Note 5 - Long-Term Debt (continued) -

At April 30, 1999, aggregate principal payments due for long-term debt for the
next five fiscal years and thereafter were as follows:

             2000                                         $  750,950
             2001                                            750,303
             2002                                            667,333
             2003                                            591,304
             2004                                            396,351
             Thereafter                                      164,970
                                                          ----------
                                                          $3,321,211
                                                          ----------

Note 6 - Income Taxes - Deferred income taxes reflect the net tax effects of
temporary differences between the carrying amount of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes.

The sources of temporary differences and their effect on net deferred tax asset
are as follows:

                                                           April 30,
                                                -------------------------------
                                                   1999                 1998
                                                ----------           ----------
     Deferred revenue                           $  276,000           $  638,000
     Engine reserve                                197,000              308,000
     Allowance for bad debts                        26,000               75,000
     Vacation expense                               67,000               46,000
     Installment sale                                  -                 27,000
     Net operating loss carryforwards            3,163,000            2,991,000
     Basis difference of property and equipment   (232,000)            (262,000)
                                                ----------           ----------
     Net deferred tax asset                      3,497,000            3,823,000
     Valuation allowance                        (3,497,000)          (3,823,000)
                                                ----------           ----------
                                                $      -             $      -
                                                ----------           ----------


                                       25


<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

Note 6 - Income Taxes (continued) - The provision for income taxes differs from
the amount determined by applying federal statutory tax rates to pre-tax income
as a result of the utilization of net operating loss carryforwards. Income tax
expense is comprised of federal alternative minimum tax and state taxes in the
prior year.

The Company has not recorded a valuation allowance for the deferred tax asset
due to the uncertainty of it's realization, due in part, to the short term
nature of the Company's major contracts.

As of April 30, 1999, the cumulative net operating loss available for federal
income tax purposes was approximately $8,325,000, which will expire primarily
during years ended 2006 - 2011 and 2019, subject to certain limitations due to
reorganization, if not previously utilized.

Note 7 - Operating Lease Commitments - The Company leases various aircraft and
engines under operating leases for use on government contracts. Total lease
expense for these aircraft was $7,272,029 and $6,306,363 for the years ended
April 30, 1999 and 1998, respectively. Such lease expenses included
approximately $4,160,000 and $3,485,000 for the years ended April 30, 1999 and
1998, respectively, for contingent rentals based on hours flown.

The Company leases various office facilities and airport property under lease
arrangements with terms expiring through May 2004. Other operating leases are
for office machines and aircraft maintenance equipment. The lease expense for
these operating leases was $369,000 and $343,000 for the years ended April 30,
1999 and 1998, respectively. Such lease expenses included approximately $102,000
and $94,000 for the years ended April 30, 1999 and 1998, respectively, for
contingent rentals based on revenue.

At April 30, 1999, future minimum lease payments on operating leases for each of
the next five fiscal years were as follows:

            2000                                         $2,142,000
            2001                                            722,000
            2002                                            316,000
            2003                                            112,000
            2004                                             86,000
                                                         ----------
                                                         $3,378,000
                                                         ----------

                                       26


<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

Note 8 - Claims, Contingencies, and Commitments - On February 4, 1994, the
Company filed voluntary petitions in the United States Bankruptcy Court for the
Eastern District of Virginia (the "Bankruptcy Court") for reorganization under
Chapter 11 of the United States Bankruptcy Code (the "Code"). On December 8,
1994, the Bankruptcy Court entered an order confirming the Company's joint plan
of reorganization (the "Plan"), and the Plan became effective on December 28,
1994 (the "Effective Date"). For accounting purposes, the effective date was
deemed to be December 31, 1994.

Pursuant to the Plan, a total of 1,000,000 shares of new common stock were
authorized and 998,976 shares were issued. The 9,899,713 shares of common stock
previously outstanding were retired. Of the new shares of common stock issued,
51,000 shares are being held by the Company to satisfy the remaining claims of
the unsecured creditors. The Company anticipates that a final distribution of
the remaining shares based on the final valuation of all general unsecured
claims will be completed by April 30, 2000.

Priority tax claims, which arose from the plan, are being paid over a period of
six years together with interest thereon. Unpaid claims amounted to
approximately $82,600 and $154,000 at April 30, 1999 and 1998, respectively, and
are included in accrued expenses and other liabilities.

Note 9 - Employee Benefit Plans - The Company sponsors a defined contribution
pension plan covering all eligible employees. Employees become eligible to
participate upon completing one year of service in a job classification not
subject to a collective bargaining agreement. One year of service is defined as
any consecutive 12 month period in which the employee works 1,000 hours.
Participants may elect to have 1% to 15% of their compensation contributed to
the Plan, up to the maximum allowed by law. Contributions to the Plan are
matched by the Company at the rate of 50% of the first 6% of employees'
contributions. All employee contributions, rollover contributions, and earnings
thereon are 100% vested. Company contributions vest at a rate of 20% per year.
The participant may designate his contribution and employer matching
contributions to be invested in any combination of seven money market, stock or
bond funds maintained by the Trustee. After a participant dies or retires, the
participant or his beneficiary is entitled to receive the entire vested balance
of his account.

The Company reserves the right to amend or terminate the Plan at any time. If
the Plan is terminated, each participant is then vested with the amount in their
account. The Company contributed $59,103 and $45,785 to the plan for the years
ended April 30, 1999 and 1998, respectively.

Note 10 - Transactions With Major Customer - Revenues from all U.S. government
contracts included in Flight operations are as follows:

                                                                   Percent
                                                    Amount      Total Revenue
                                                 -----------    -------------
     Fiscal year ended April 30, 1999            $19,444,000         77%
     Fiscal year ended April 30, 1998            $17,174,000         78%



                                       27


<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

Note 11 - Related Parties - The Company has entered into lease agreements with
Maritime Sales and Leasing ("MSL") for certain aircraft which require future
minimum lease payments of approximately $1.4 million through October, 1999.
David Sandlin, President and CEO of the Company, is also an officer of MSL.

During 1996, the Company entered into a lease with the Aviation Company. David
Sandlin has an ownership interest in the Aviation Company. The single aircraft
lease calls for payments of $500 per hour flown. Approximately $67,000 and
$24,000 of lease expense was incurred for the years ended April 30, 1999 and
1998, respectively.

On April 15, 1996, the Company sold three planes to MSL for $2.9 million. The
Company leased the planes back from MSL for a three year period. Proceeds from
the sale were distributed as follows: $1.85 million to payoff bank debt;
$106,000 to MSL for lease deposits; and the remainder to the Company. The
Company realized a $218,000 gain related to the sale/leaseback which was
deferred over the lease term, and a $313,793 extraordinary gain related to the
early extinguishment of related bank debt. The remainder of the deferred gain
was recognized during the year ended April 30, 1999.

Total rent expense on all related party leases were approximately as follows:

     Fiscal year ended April 30, 1999                           $3,085,000
     Fiscal year ended April 30, 1998                           $2,696,000

Note 12 - Fair Value of Financial Instruments - Financial instruments which
potentially subject the Company to concentrations of credit risk consist
principally of cash and cash equivalents, and trade receivables. The Company
places its cash and cash equivalents with high credit qualified financial
institutions.

The following details the fair values of financial instruments for which it is
practicable to estimate the value:

Cash and cash equivalents - The carrying amounts approximate fair value because
of the short maturity of these instruments.

Debt - The aggregate fair value of the Company's long-term debt obligations,
which is based upon quoted market prices and rates currently available to the
Company for debt with similar terms and maturities, approximates the carrying
amount.

                                       28


<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

Note 13 - Stockholders' Equity - In August 1998, the Company implemented a stock
option plan to provide incentive to employees, directors, and consultants. The
initial term of the plan is 10 years and a total of 500,000 shares are available
for grant. Under the new plan, 38,000 options previously issued to an officer of
the Company at an exercise price of $2.00 were replaced by 45,000 options at
$3.12. The following table summarizes all option activity:

<TABLE>
<CAPTION>
Year Ended April 30,                             1999                                         1998
-------------------------------------------------------------------------------------------------------------------
                                                          Weighted-                                    Weighted-
                                                           average                                      average
                                                          exercise                                     exercise
                                        Shares              price                   Shares               price
-------------------------------------------------------------------------------------------------------------------

<S>                                      <C>                <C>                                         <C>
Options outstanding at
  beginning of year                      38,000             $2.00                       -               $  -
Options granted                          74,650              3.07                    38,000               2.00
Options exercised                           -                 -                         -                  -
Options forfeited (cancelled)           (38,000)             2.00                       -                  -
-------------------------------------------------------------------------------------------------------------------

Options outstanding at
  end of year                            74,650             $3.07                    38,000              $2.00
-------------------------------------------------------------------------------------------------------------------
</TABLE>

As of April 30, 1999, 54,883 options are vested and exercisable at a weighted
average price per share of $3.10. The weighted average remaining life of options
outstanding is approximately eight years. The Company applies APB Opinion 25 and
related interpretations in accounting for stock options. Accordingly, no
compensation cost has been recognized. The weighted average fair value of
options granted during the year ended April 30, 1999 is $1.68. Proforma net
income and basic earnings per share under the provisions of SFAS 123 for the
effect of options granted and outstanding for the year ended April 30, 1999 are
$715,575 and $.71, respectively. For the purposes of computing the proforma
amounts, the fair value of each option on the date of grant is estimated using
the Black-Scholes option pricing model with the following assumptions: no
dividend yield, 45% expected volatility, risk-free interest rate of 5.09% and
expected life of eight years.

                                       29


<PAGE>
                     REPORT OF INDEPENDENT CERTIFIED PUBLIC
                                   ACCOUNTANTS

To the Board of Directors and Stockholders of
The Flight International Group, Inc.

We have audited the accompanying consolidated balance sheets of The Flight
International Group, Inc. and subsidiaries as of April 30, 1999 and 1998, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for the years then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Flight
International Group, Inc. and subsidiaries as of April 30, 1999 and 1998, and
the results of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.

Richmond, Virginia                                  BDO Seidman, LLP
July 7, 1999

                                       30


<PAGE>

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

         Not Applicable.

                                    PART III

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

Identification of Directors and Executive Officers

         The current officers and directors will serve for terms of one year or
until their respective successors are elected and qualified. The current
officers and directors are:

<TABLE>
<CAPTION>
Name                                       Age  Date of Election       Position
----                                       ---  ----------------       --------
<S>                                        <C>  <C>                    <C>
David E. Sandlin                           55   March 30, 1994         Chairman, President,
                                                                         Director

Wayne M. Richmon                           42   February 13, 1995      Executive Vice President,
                                                                         Treasurer, Chief Financial
                                                                         Officer, Director

David R. Sharp                             59   October 1, 1996        Vice President, Chief
                                                                         Operating Officer

Ann P. Campbell                            60   April 13, 1993         Secretary

C. Lofton Fouts, Jr.                       67   February 13, 1995      Director

John R. Bone                               48   February 13, 1995      Director

Vice Admiral Richard M. Dunleavy (Ret.)    66   May 24, 1995           Director
</TABLE>

         The Plan requires that the Company's Board of Directors remain at six
(6) members until changed by vote of shareholders. The members of the Board of
Directors need not be shareholders of the Company. Further, the Plan requires
that three members of the Board of Directors may be, but are not required to be,
officers, employees, consultants or independent contractors engaged, employed or
retained by the Company or its subsidiaries and/or affiliates. Messrs. Sandlin,
Richmon and Bone represent these three directors. The remaining three directors
shall consist of individuals who are not directly or indirectly engaged,
employed or retained by the Company or its subsidiaries and/or affiliates.
Messrs. Fouts and Dunleavy represent two of these three directors. James N.
Lingan was the third of these "independent" directors until his death in March
of 1998. The Board of Directors has attempted to seek a replacement for
Mr. Lingan.


                                       31


<PAGE>

         Each director and executive officer's business experience during the
past five years is described below:

         David E. Sandlin. Mr. Sandlin has been Chairman, President and a
Director of the Company and its subsidiaries since March 30, 1994, and was
formerly President of Flight International's Sales and Leasing Division. Mr.
Sandlin has been involved in aircraft marketing and management since 1978. He
has worked in various capacities for Cessna and Dassault and has extensive
experience with Learjets. In 1990 he founded DESCO Aviation Consultants
International ("DESCO") and is an officer, director and 50% shareholder of
Maritime Sales & Leasing, Inc. ("Maritime"), a major lessor of turbine aircraft.
Maritime has leased a total of 16 aircraft to FII. Mr. Sandlin also is a
one-third owner of The Aviation Company ("TAC"), which has leased one aircraft
to the Company. See Item 12, "Certain Relationships and Related Transactions."

         Wayne M. Richmon. Mr. Richmon, Executive Vice President, Treasurer,
Chief Financial Officer and Director, joined the Company in 1992, and is
responsible for finance, corporate administration, human resources, management
information services and contract administration. Prior to joining the Company,
he served previously as Chief Financial Officer for American Systems Engineering
Company and held management positions at two national "big six" accounting
firms, specializing in government contract and consulting services. Mr. Richmon
is a CPA registered in the State of Virginia.

         David R. Sharp. Mr. Sharp, Vice President and Chief Operating Officer,
joined the Company in 1987 after 26 years as a U.S. Navy officer, retiring with
the rank of Captain. He was Director of Navy Programs for the Company until
October 1992, when he resigned to pursue other interests. Prior to returning to
the Company in May 1995 as Director of Government Marketing he served as a
consultant and held positions in marketing and program management. He is
currently responsible for all commercial and government operations of the
Company.

         Ann P. Campbell. Ms. Campbell, Corporate Secretary, joined the Company
in 1987 as Secretary to the Chief Financial Officer of the Company. Since that
time, she has served as Executive Secretary to the Chief Operating Officer and
President, and Assistant to the Chairman. Ms. Campbell has over fifteen years
experience as a legal secretary and currently serves as Executive Secretary to
the Chairman and to the Chief Financial Officer.

         C. Lofton Fouts, Jr. Mr. Fouts, Director, has been involved in the
aviation industry for 29 years. He wrote the original Piper Flite Center
training syllabus, the first standardized flight program used nationwide in the
general aviation industry. In 1988, Mr. Fouts formed Lofton Fouts & Associates,
Inc., a general aviation consulting business specializing in sales, acquisitions
and mergers of fixed base operations and related aviation businesses.

         John R. Bone. Mr. Bone, Director, is President of Global Jet, a
corporate aircraft sales and brokerage firm, and is an officer, director and 50%
shareholder of Maritime. Mr. Bone studied aeronautical engineering at Northrup
University. He is an A&P mechanic, has worked as Chief Pilot for major U.S.
companies and currently is a pilot with a major United States airline. Global
Jet, with Mr. Bone, has been instrumental in developing the fleet of Learjets
for Phoenix Air Group, a competitor of FII. See Item 12, "Certain Relationships
and Related Transactions."


                                       32


<PAGE>

         Vice Admiral Richard M. Dunleavy (Ret.). Admiral Dunleavy, Director,
was formerly Assistant Chief of Naval Operations (Air Warfare). Admiral Dunleavy
joined the Staff of the Chief of Naval Operations in 1976. From 1978 to 1979 he
was Commanding Officer of the USS Ponchatoula and assumed command of the USS
Coral Sea in 1979. In 1981 he was selected as Commander of U.S. Naval Forces in
the Philippines and later became Commander, Carrier Group FOUR/Commander
Striking Force Atlantic. From 1986 to 1989 he was Commander, Naval Air Force,
U.S. Atlantic Fleet. Admiral Dunleavy's military awards include a Distinguished
Service Medal, three Legions of Merit, eight Air Medals and four Navy
Commendation Medals.

Compliance With Section 16(a) of the Exchange Act

         The Company believes that all required Forms 3 and 4 were furnished to
the Registrant during the fiscal year ended April 30, 1999.

ITEM 10. EXECUTIVE COMPENSATION

         The response to this item will be included in a definitive proxy
statement filed within 120 days after the end of the Company's fiscal year,
which proxy statement is incorporated herein by this reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT

         The response to this item will be included in a definitive proxy
statement filed within 120 days after the end of the Company's fiscal year,
which proxy statement is incorporated herein by this reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The response to this item will be included in a definitive proxy
statement filed within 120 days after the end of the Company's fiscal year,
which proxy statement is incorporated herein by this reference.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         1. The exhibits required to be filed as part of this Annual Report on
Form 10-KSB are listed in the attached Exhibit Index.

         2. During the quarter ended April 30, 1999, the Company filed no
Current Reports on Form 8-K.

                                       33


<PAGE>

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Dated: July 29, 1999                    THE FLIGHT INTERNATIONAL GROUP, INC.


                                           By:  /s/ David E. Sandlin
                                                -------------------------------
                                                David E. Sandlin
                                                Principal Executive Officer


                                           By:  /s/ Wayne M. Richmon
                                                -------------------------------
                                                Wayne M. Richmon
                                                Principal Financial Officer

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

Signature                                Title                    Date
---------                                -----                    ----

/s/ David E. Sandlin                     Director and             July 29, 1999
-------------------------------          Principal Executive
David E. Sandlin                         Officer


/s/ Wayne M. Richmon                     Director and             July 29, 1999
-------------------------------          Principal Financial
Wayne M. Richmon                         Officer


/s/ C. Lofton Fouts, Jr.                 Director                 July 29, 1999
-------------------------------
C. Lofton Fouts, Jr.


/s/ John R. Bone                         Director                 July 29, 1999
-------------------------------
John R. Bone


/s/ Vice Admiral
Richard M. Dunleavy (Ret.)              Director                  July 29, 1999
-------------------------------
Vice Admiral
Richard M. Dunleavy (Ret.)

                                       34


<PAGE>

                                  EXHIBIT INDEX

Exhibit
Number    Page    Description
-------   ----    -----------
  3(a)            Amended and Restated Articles of Incorporation of the Company
                  (incorporated by reference to the Company's Report on Form
                  10-KSB for the fiscal year ended April 30, 1996).

  3(b)            Bylaws of the Company (incorporated by reference to the
                  Company's Report on Form 10-KSB for the fiscal year ended
                  April 30, 1996).

  10(a)           Lease Agreement dated November 8, 1984 between the Peninsula
                  Airport Commission and Flight International Aviation, Inc., as
                  amended. (incorporated by reference to Exhibit 10(n) to the
                  Company's Report on Form 10-K for the fiscal year ended April
                  30, 1988).

  10(b)           Award/Contract No. N00421-92-C-0134 dated September 15, 1992,
                  issued by the United States Naval Weapons Center, Patuxent
                  River, MD to Flight International, Inc. (incorporated by
                  reference to the Company's Report on Form 10-KSB for the
                  fiscal year ended April 30, 1996).

  10(c)           Award/Contract No. N68936-94-C-0086 dated November 21, 1994,
                  issued by the United States Naval Weapons Center, China Lake,
                  CA to Flight International, Inc. (incorporated by reference to
                  the Company's Report on Form 10-KSB for the fiscal year ended
                  April 30, 1996).

  10(d)           Collateral Retention and Adequate Protection Agreement dated
                  July 25, 1994 among Flight International Inc., Flight
                  International of Florida, Inc. and First Tennessee Equipment
                  Finance Corporation (incorporated by reference to Exhibit 2 to
                  the Company's Current Report on Form 8-K dated December 20,
                  1994).

  10(e)           Collateral Retention and Adequate Protection Agreement dated
                  July 29, 1994 among Flight International Inc., Flight
                  International of Florida, Inc., the Company and Michigan
                  National Bank (incorporated by reference to Exhibit 2 to the
                  Company's Current Report on Form 8-K dated December 20, 1994).

                                       35


<PAGE>

  10(f)           Amended Secured Promissory Note between Signet Bank/Virginia
                  and Flight International Aviation, Inc. dated October 13, 1994
                  (incorporated by reference to Exhibit 2 to the Company's
                  Current Report on Form 8-K dated December 20, 1994).

  10(g)           Stipulation Regarding Adequate Protection of Interest of
                  Nations Financial Capital Corporation in Certain Aircraft
                  Owned By Debtor dated December 14, 1994 between Flight
                  International of Florida, Inc. and Nations Financial Capital
                  Corporation (incorporated by reference to Exhibit 2 to the
                  Company's Current Report on Form 8- K dated December 20,
                  1994).

  10(h)           Agreement on Use of Cash Collateral and for Loan Restructure
                  dated December 14, 1994 between Flight International, Inc. and
                  SouthTrust Bank of Alabama, N. A. (incorporated by reference
                  to Exhibit 2 to the Company's Current Report on Form 8-K dated
                  December 20, 1994).

  10(i)           Collateral Retention and Adequate Protection Agreement dated
                  December 14, 1994 among Flight International Inc., Flight
                  International of Florida, Inc., the Company and Lease Plan
                  U.S.A. (incorporated by reference to Exhibit 2 to the
                  Company's Current Report on Form 8-K dated December 20, 1994).

  10(j)           Employment Agreement dated January 3, 1995 between the Company
                  and David E. Sandlin (incorporated by reference to the
                  Company's Report on Form 10-KSB for the fiscal year ended
                  April 30, 1995).

  10(k)           Employment Agreement dated January 3, 1995 between the Company
                  and Wayne M. Richmon (incorporated by reference to the
                  Company's Report on Form 10-KSB for the fiscal year ended
                  April 30, 1995).

  10(l)           Award/Contract No. N00019 dated August 30, 1996, issued by the
                  United States Naval Air Systems Command, AIR-2.5.3, Patuxent
                  River, MD to Flight International, Inc. ("CAS-MOS"
                  Contract)(incorporated by reference to the Company's Report on
                  Form 10-KSB/A for the fiscal year ended April 30, 1996).
                  Certain portions of this Exhibit have been omitted based upon
                  a request for confidential treatment with the Securities and
                  Exchange Commission (the "Commission"). The confidential
                  portions have been filed with the Commission.

                                       36


<PAGE>

  10(m)           Intentionally omitted.

  10(n)           Intentionally omitted.

  10(o)           Fourth Modification Agreement, dated as of April 30, 1996, by
                  and between Flight International Aviation, Inc., Steven D.
                  Delaney, Otto W. Konrad and Signet Bank (incorporated by
                  reference to the Company's Report on Form 10-KSB for the
                  fiscal year ended April 30, 1996).

  10(p)           Amended and Restated Deed of Trust Note, dated April 30, 1996,
                  from Flight International Aviation, Inc., as maker, to Signet
                  Bank (incorporated by reference to the Company's Report on
                  Form 10-KSB for the fiscal year ended April 30, 1996).

  10(q)           Documents Relating to Crestar Bank Loan (incorporated by
                  reference to the Company's Report on form 10-QSB for the
                  quarter ended January 31, 1998).

  10(r)           Documents Relating to Wachovia Bank Refinancing (incorporated
                  by reference to the Company's Report on Form 10-QSB for the
                  quarter ended January 31, 1998).

  10(s)           Option Agreement between David E. Sandlin and the Company
                  dated March 9, 1998 (incorporated by reference to the
                  Company's Report on Form 10-KSB for the year ended April 30,
                  1998).

  22              Subsidiaries of the Company (incorporated by reference to the
                  Company's Report on Form 10-KSB for the fiscal year ended
                  April 30, 1995).

  27              Financial Data Schedule.

                                       37