<PAGE>   1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

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

                  For the quarterly period ended March 31, 1999

          [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) 
                     OF THE SECURITIES EXCHANGE ACT OF 1934

         FOR THE TRANSITION PERIOD FROM ____________ TO _______________

                  Commission file number: 333-59889; 333-59903

                               PARK `N VIEW, INC.
             (Exact name of registrant as specified in its charter)


                       DELAWARE                                 65-0612435
             (State or other jurisdiction of                 (I.R.S. Employer
              incorporation or organization)                Identification No.)


             11711 N.W. 39TH STREET, CORAL SPRINGS, FL             33065
             (Address of principal executive offices)            (Zip Code)

       Registrant's telephone number, including area code: (954) 745-7800

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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. [X] Yes [ ] No

         The number of shares outstanding of the registrant's common stock, par
value $0.001 per share, as of May 11, 1999 was 4,318,314.



<PAGE>   2

                               PARK `N VIEW, INC.
                                    FORM 10-Q

                      FOR THE QUARTER ENDED MARCH 31, 1999

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                    PAGE NO.
                                                                                                    --------

<S>          <C>                                                                                    <C> 
PART I.      FINANCIAL INFORMATION                                             

Item 1.      Financial Statements (Unaudited)                                                       3

             Balance Sheets as of June 30, 1998 and March 31, 1999 (Unaudited)                      3

             Statements of Operations for the three and nine months ended March 31,                 
             1998 and 1999 (Unaudited)                                                              4

             Statements of Cash Flows for the nine months ended                
             March 31, 1998 and 1999 (Unaudited)                                                    5         

             Notes to Condensed Financial Statements (Unaudited)                                    6

Item 2.      Management's Discussion and Analysis of Financial Condition       
             and Results of Operations                                                              8     

PART II. OTHER INFORMATION                                                     

Item 1.      Legal Proceedings                                                                      19
Item 2.      Changes in Securities                                                                  19
Item 3.      Defaults Upon Senior Securities                                                        19
Item 4.      Submission of Matters to a Vote of Securities Holders                                  19
Item 5.      Other Information                                                                      19
Item 6.      Exhibits and Reports on Form 8-K                                                       19

Signatures                                                                     
</TABLE>


<PAGE>   3

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                               PARK 'N VIEW, INC.
                                 BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                         JUNE 30,              MARCH 31,     
                                                                                           1998                  1999        
                                                                                       ------------          ------------    
                                                                                                                             
    <S>                                                                                <C>                   <C>             
                                           ASSETS                                                                            
    Current Assets:                                                                                                          
      Cash and cash equivalents ................................................       $ 19,810,656          $  2,942,942    
      Short-term investments ...................................................         32,039,916            18,214,371    
      Restricted investments ...................................................          9,750,000             9,750,000    
      Accounts receivable, net of allowance for doubtful accounts of                                                         
       $5,400 and $10,000 at June 30, 1998 and  March  31, 1999, respectively...            184,180               194,909    
      Inventory ................................................................            362,738               394,906    
      Prepaid expenses and other ...............................................            100,877               375,122    
                                                                                       ------------          ------------    
             Total current assets ..............................................         62,248,367            31,872,250    
                                                                                                                             
    Property and Equipment, Net (Note 2) .......................................         18,448,601            31,253,324    
    Restricted Investments .....................................................          9,513,000             5,487,685    
    Deferred Financing Costs ...................................................          3,744,366             3,850,246    
    Other Assets ...............................................................            623,793               784,106    
                                                                                       ------------          ------------    
             Total .............................................................       $ 94,578,127          $ 73,247,611    
                                                                                       ============          ============    
                                                                                                                             
                            LIABILITIES AND STOCKHOLDERS' DEFICIT                                                            
    Current Liabilities:                                                                                                     
      Accounts payable .........................................................       $  2,067,113          $  1,500,247    
      Accrued expenses .........................................................          1,550,888             1,834,772    
      Accrued interest on senior notes .........................................            920,831             3,683,331    
      Deferred revenue .........................................................            205,853               278,544    
      Current portion of capital lease obligations .............................            330,814               333,143    
      Current portion of long-term debt ........................................             33,727                32,710    
                                                                                       ------------          ------------    
             Total current liabilities .........................................          5,109,226             7,662,747    
                                                                                       ------------          ------------    
    Obligations Under Capital Leases ...........................................            185,174               328,163    
                                                                                       ------------          ------------    
    Long-Term Debt .............................................................         70,419,566            70,734,162    
                                                                                       ------------          ------------    
    Commitments and Contingencies (Note 3)                                                                                   
    Series A Redeemable Preferred Stock and Accrued Dividends -- Par                                                         
      value $.01 per share; 627,630 shares authorized; 388,075 shares                                                        
      issued and outstanding ($10.00 per share liquidation                                                                   
      preference, including accrued dividends of $542,538 and                                                                
      $757,844 as of June 30, 1998 and March 31, 1999, respectively) ...........          4,301,345             4,525,272    
                                                                                       ------------          ------------    
                                                                                                                             
    Series B Redeemable Convertible Preferred Stock and Accrued                                                              
      Dividends -- Par value $.01 per share; 1,372,370 shares                                                                
      authorized, issued and outstanding ($10.93 per share                                                                   
      liquidation preference, including accrued dividends of                                                                 
      $1,712,083 and $2,499,583 as of June 30, 1998 and March 31,                                                            
      1999, respectively) ......................................................         16,316,432            17,131,970    
                                                                                       ------------          ------------    
                                                                                                                             
    Series C Redeemable Convertible Preferred Stock and Accrued Dividends --                                                 
      Par value $.01 per share; 3,750,000 shares authorized, 2,328,543 and                                                  
      2,351,543 issued and outstanding as of June 30, 1998 and                                                              
      March 31, 1999, respectively ($8.00 per share liquidation preference,                
      including accrued dividends of $1,115,631 and $2,093,616 as of                                                        
      June 30, 1998 and March 31, 1999, respectively)...........................         18,516,147            19,795,280
                                                                                       ------------          ------------
    Common Stockholders' Deficit:                                                                                        
      Common stock -- par value $.001 per share; 12,000,000 shares                                                       
         authorized at June 30, 1998 and March 31, 1999; 4,318,182 shares    
         issued and outstanding.................................................              4,318                 4,318
      Additional paid-in capital ...............................................          1,465,923                    --
      Accumulated deficit ......................................................        (21,740,004)          (46,934,301)   
                                                                                       ------------          ------------    
             Total common stockholders' deficit ................................        (20,269,763)          (46,929,983)   
                                                                                       ------------          ------------    
             Total .............................................................       $ 94,578,127          $ 73,247,611    
                                                                                       ============          ============    
</TABLE>


                  See notes to condensed financial statements.

<PAGE>   4

                               PARK 'N VIEW, INC.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED                           NINE MONTHS ENDED
                                                          MARCH 31,                                   MARCH 31,
                                                 1998                  1999                  1998                  1999
                                             ------------          ------------          ------------          ------------

<S>                                          <C>                   <C>                   <C>                   <C> 
Revenues:
  Service revenue ........................   $    840,710          $  2,213,271          $  1,973,687          $  5,833,412
  Equipment sales ........................         19,013                65,956                97,158               139,624
  Other ..................................          8,314                 8,377                35,610                23,767
                                             ------------          ------------          ------------          ------------

          Total revenues .................        868,037             2,287,604             2,106,455             5,996,803
                                             ------------          ------------          ------------          ------------
Cost of Revenues:
  Service cost ...........................        933,687             2,713,624             2,113,783             6,527,381
  Service depreciation ...................        512,311             1,259,697             1,211,849             3,130,303
  Equipment cost .........................        296,251               434,064               771,606             1,380,776
  Advertising ............................         12,651                27,510                31,497                42,234
                                             ------------          ------------          ------------          ------------
          Total cost of revenues .........      1,754,900             4,434,895             4,128,735            11,080,694
                                             ------------          ------------          ------------          ------------
Gross margin .............................       (886,863)           (2,147,291)           (2,022,280)           (5,083,891)

Selling, general and
  administrative expenses ................      2,558,427             4,837,833             6,471,565            13,779,231
                                             ------------          ------------          ------------          ------------
Loss from operations .....................     (3,445,290)           (6,985,124)           (8,493,845)          (18,863,122)
Interest expense .........................          3,014             2,530,756                23,949             7,529,617
Interest income and other ................       (110,999)             (313,638)             (397,442)           (1,617,117)
                                             ------------          ------------          ------------          ------------


          Net loss .......................     (3,337,305)           (9,202,242)           (8,120,352)          (24,775,622)


          Preferred stock dividends
            and amortization of
            preferred stock issuance
            costs ........................       (728,082)            (728, 513)           (1,979,842)           (2,134,600)
                                             ------------          ------------          ------------          ------------
          Net loss attributable to
            common stockholders ..........   $ (4,065,387)         $ (9,930,755)         $(10,100,194)         $(26,910,222)
                                             ------------          ------------          ------------          ------------

          Net loss per share (basic and
            diluted) .....................   $      (0.94)         $      (2.30)         $      (2.34)         $      (6.23)
                                             ------------          ------------          ------------          ------------
</TABLE>



                  See notes to condensed financial statements.


<PAGE>   5

                               PARK 'N VIEW, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                              NINE MONTHS ENDED
                                                                                  MARCH 31,
                                                                     ----------------------------------
                                                                         1998                  1999
                                                                     ------------          ------------

<S>                                                                  <C>                   <C> 
Operating Activities:
  Net loss ....................................................      $ (8,120,352)         $(24,775,622)

  Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation and amortization .............................         1,286,143             3,941,543
    Stock option compensation expense .........................                                 250,000
    Changes in assets and liabilities:
      Accounts receivable .....................................          (148,603)              (10,729)
      Inventory ...............................................          (220,368)              (32,169)
      Prepaid expenses and other ..............................            16,730               (90,255)
      Other assets ............................................          (163,753)             (233,210)
      Accounts payable ........................................           103,008              (566,865)
      Accrued expenses ........................................          (344,791)              283,885
      Accrued interest on senior notes ........................                               2,762,500
      Deferred revenue ........................................           158,952                72,691
                                                                     ------------          ------------
         Net cash used in operating activities ................        (7,433,034)          (18,398,231)
                                                                     ------------          ------------

Investing Activities:
    Decrease in short-term investments ........................                              13,825,545
    Decrease in restricted investments ........................                               4,025,315
    Purchases of property and equipment .......................        (9,822,272)          (15,609,711)
                                                                     ------------          ------------
         Net cash (used in) provided by investing activities...        (9,822,272)            2,241,149
                                                                     ------------          ------------
Financing Activities:
  Proceeds from issuance of common and preferred
     stock ....................................................        18,628,344
  Payment of stock and debt issuance costs and other ..........        (1,081,835)             (361,976)
  Payment of obligation under capital lease ...................          (211,344)             (323,606)
  Notes payable ...............................................           (20,802)              (25,050)
                                                                     ------------          ------------
         Net cash provided by (used in) financing
            activities ........................................        17,314,363              (710,632)
                                                                     ------------          ------------
Net Increase (Decrease)In Cash And Cash
  Equivalents .................................................            59,057           (16,867,714)
                                                                     ------------          ------------
Cash And Cash Equivalents, Beginning Of Period ................         4,717,394            19,810,656
                                                                     ------------          ------------

Cash And Cash Equivalents, End Of Period ......................      $  4,776,451          $  2,942,942
                                                                     ============          ============

Supplemental Cash Flow Information:

  Interest paid ...............................................      $     29,460          $  4,617,601
                                                                     ============          ============

Non-Cash Financing And Investing Activities:

  Capital lease obligations relating to
    acquisition of property and equipment .....................      $    208,518          $    468,927
                                                                     ============          ============


  Issuance of common stock warrants ...........................      $    538,999
                                                                     ============

 Issuance of  Series C Preferred Stock ........................                            $    184,000
                                                                                           ============
</TABLE>

 

                  See notes to condensed financial statements.


<PAGE>   6

                               PARK 'N VIEW, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.       BASIS OF PRESENTATION

         The interim balance sheet as of March 31, 1999, the interim statements
of operations for the three-month and nine-month periods ended March 31, 1998
and 1999 and the interim statement of cash flows for the nine-month periods
ended March 31, 1998 and 1999 are unaudited. In the opinion of management, all
adjustments necessary for a fair presentation of such financial statements have
been included. All adjustments made were of a normal recurring nature. Certain
information and footnote disclosure normally included in the financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. Park 'N View, Inc. (the "Company") believes that
the disclosures included are adequate and provide a fair presentation of interim
period results. Interim financial statements are not necessarily indicative of
financial position or operating results to be expected for the entire year.
These interim financial statements should be read in conjunction with the
audited financial statements of the Company and the notes thereto for the year
ended June 30, 1998.

2.       PROPERTY AND EQUIPMENT

         Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                                    June 30, 1998   March 31, 1999
                                                                    -------------   --------------

         <S>                                                        <C>             <C>
         Site equipment and improvements......................       $16,484,956      $31,662,876

         Construction equipment...............................           150,059          150,059
         Computer equipment...................................           352,643          756,365
         Vehicles.............................................           451,382          980,014
         Furniture, fixtures and other equipment                          65,869           65,868
                                                                     -----------      -----------
              Subtotal........................................        17,504,909       33,615,182
         Less accumulated depreciation........................         2,630,706        5,904,624
                                                                     -----------      -----------
              Subtotal........................................        14,874,203       27,710,558
         Component inventory..................................         3,574,398        3,542,766
                                                                     -----------      -----------
         Property and equipment, net..........................       $18,448,601      $31,253,324
                                                                     ===========      ===========
</TABLE>

         Component inventory represents equipment that is awaiting installation
at a site. Upon installation the cost of the related equipment is transferred to
site equipment and improvements and depreciation commences once the site is
operational. Component inventory is temporarily staged at the Company's
warehouse until all equipment for a site is received, certain assembly
operations are complete and the site is ready to accept the equipment for
installation. The period of time that the component inventory is staged at the
Company's warehouse is approximately 45 days and the construction period at the
site is approximately 30 days. Accordingly the time period between the date of
acquisition of the component inventory and the completion date for the
installation at the site is approximately 75 days. Component inventory is
reclassified to site equipment upon completion of the site on a FIFO basis for
all components.

3.       COMMITMENTS AND CONTINGENCIES

         In July 1998, the Company entered into contracts with AT&T to lease T-1
lines and purchase long distance and local telephone service. The minimum lease
payments for the T-1 lines before discounts is approximately $5.1 million, $7.7
million and $7.7 million per year during the first, second, and third years of
the lease, respectively. The Company's minimum purchase commitment for the long
distance and local telephone service is $480,000 per year for a two year term.

         In August 1998, the Company entered into an operating lease for a wide
area network. The annual minimum rental amount approximates $1.2 million for a
three year term. The leases become effective when the equipment is delivered and
installed. As of March 31, 1999, the routing equipment has been delivered and
installed and the operating leases have become effective.

          In March 1999, the Company entered into an employment agreement with
Robert P. May (the "Employment Agreement"). If the Company terminates Mr. May's
employment without cause during the term of Mr. May's Employment Agreement, Mr.
May will receive six (6) months base salary and premium payments for the split
dollar insurance policy for six (6) months. If a change in


<PAGE>   7

control occurs and the Company terminates Mr. May's employment without cause
during the eighteen (18) month period commencing on the effective date of the
Change in Control, the Company will pay Mr. May eighteen (18) months base salary
and premium payments for the split dollar insurance policy for six (6) months,
as well as an amount equal to the bonus paid to Mr. May in the previous year. If
Mr. May does not execute a general release of the Company and its
representatives from liability relating to his employment or association with
the Company, then Mr. May only will be entitled to a severance payment of one
(1) month of his base salary upon termination.

    In January 1999, the Company entered into a Telecom Service Agreement (the
"Telecom Service Agreement") with TA Operating Corporation ("TA"). The Company
believes that it will cost the Company approximately $6,000 per site to install
the prepaid phone card equipment required under the Telecom Service Agreement
and $8,000 per site for increased telephone switch capacity to accommodate
public access telephone service (coin and coinless pay stations) at each site.
Based on these cost estimates and the installation of such equipment at each of
the approximately 145 truckstops currently owned or operated by TA, the Company
would spend approximately $2,030,000 in the aggregate to install the necessary
equipment. If the Company does not install such equipment at each of the
approximately 145 truckstops or fails to meet the agreed buildout schedule, then
TA may terminate the Telecom Service Agreement.

         A potential problem exists for all companies that rely on computers as
the year 2000 approaches. The "Year 2000" problem is the result of the past
practice in the computer industry of using two digits rather than four to
identify the applicable year. This practice could result in incorrect results
when computers perform arithmetic operations, comparisons or data field sorting
involving years later than 1999. The Company is in the process of conducting a
review of its computer systems to identify the systems that could be affected by
the "Year 2000" issue and is developing a plan to address the issue. The Company
will utilize both internal and, if needed, external resources to reprogram or
replace and test all of its software for Year 2000 compliance, and the Company
expects to complete the project during the second half of 1999. The Company has
a preliminary estimate of $200,000 as the maximum cost of evaluating, testing,
reprogramming, and modifying its software. The estimate is based on the belief
that no major problems will be encountered in becoming Year 2000 compliant.
Based on its preliminary internal review, the Company believes that the
Company-developed software is Year 2000 compliant. However, the Company plans to
do more extensive testing of the PNV Software during the current calendar year
which may require the use of independent consultants to assist in the Company's
evaluation to assure a correct assessment of cost and risk. In addition, the
Company relies on third party vendors which must also become Year 2000
compliant. The Company has a significant reliance on outside vendors such as
telephone companies, satellite system providers, electrical providers and the
wide area network supplier. These services are critical in the Company's ability
to generate revenue. The ability of third parties with which the Company
transacts business to adequately address their Year 2000 issues is outside of
the Company's control. The Company is planning to create a comprehensive list of
all internal and external software programs to assure that a full review of such
software is completed. However, if any necessary modifications to the PNV
Software are not completed in a timely manner or if the Company's vendors are
not Year 2000 compliant, the Year 2000 problem may have a material
adverse-impact on the operations of the Company. The Company has not made any
progress in assessing its non-information technology systems. These types of
systems are more difficult to assess and repair than information technology
systems and the Company may have to replace the non-information technology
systems that cannot be repaired. The Company will begin reviewing its
non-information technology systems in the second half of 1999. The Company
presently has no basis on which to estimate the costs of assessing and repairing
or replacing its non-information technology systems or to determine whether such
costs will have a material adverse effect on the Company's operations or
financial condition.


<PAGE>   8

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

     Cautionary Statement Identifying Important Factors That Could Cause the
                  Company's Actual Results to Differ From Those
                     Projected in Forward Looking Statements

         Pursuant to the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, readers of this report are advised that this
document contains both statements of historical facts and forward-looking
statements. Forward-looking statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
indicated by the forward looking statements. This report contains certain
forward-looking statements under the captions "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and elsewhere,
including statements regarding, among other items, the Company's anticipated
strategies, expansion of the functionality and capacity of the PNV Network,
additional telecommunications and other services to be offered through the PNV
Network, cost savings, expenditures and cash requirements. Such forward-looking
statements involve known and unknown risks, uncertainties and other important
factors that could cause the actual results, performance or achievements of the
Company to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
risks, uncertainties and other factors include, among others: uncertainties
inherent in proposed business strategies and development plans; future financial
performance, including availability, terms and deployment of capital; inability
to increase subscription sales or realize expected cost savings; market demand
for the Company's current and planned telecommunications and entertainment
services and products; technological developments; competitive developments in
the telecommunications, cable and long-haul trucking industry; availability of
qualified personnel; changes in, or the failure or inability to comply with,
government regulation, including, without limitation, regulations of the Federal
Communications Commission, and adverse outcomes from regulatory proceedings;
changes in the nature of key contractual relationships with truckstops and/or
fleet trucking companies; market acceptance of the pricing of the Company's
services and products; and other factors referenced in this report. See "Risk
Factors."


OVERVIEW

         As of March 31, 1999, the PNV Network was available at 212 full-service
truckstops. This compares to 188 as of December 31, 1998 and 118 as of June 30,
1998 and 102 as of March 31, 1998. During March 1999, the Company had over
35,500 subscribers; this compares to approximately 33,000 during December 1998
and 25,000 subscribers during June 1998 and approximately 19,000 during March
1998.

         During March 1999, the Company had approximately 21,500 monthly
subscribers and approximately 14,000 daily subscribers; during December 1998 the
Company had approximately 22,000 monthly subscribers and approximately 11,000
daily subscribers; during March 1998, the Company had approximately 11,700
monthly subscribers and approximately 7,300 daily subscribers. Of the Company's
monthly subscribers during March 1999, 13,594 were under the Company's Power
Plan Program and 3,148 were fleet trucking company subscriptions; during
December 1998, 13,600 were under the Company's Power Plan Program and 2,934 were
fleet trucking company subscribers; during March 1998, 5,400 were under the
Company's Power Plan Program, and 928 were fleet trucking company subscriptions.

         The Company's revenues increased 164% for the quarter ended March 31, 
1999 compared to the quarter ended March 31, 1998 and 15% compared to the
previous quarter ended December 31, 1998. Since October 1998, the Company has
experienced slower membership growth, slower buildup in revenue per subscriber,
and higher costs. As a result, the Company in January 1999 reduced capital
expenditures by slowing the buildout of the PNV Network from a planned 10 to 15
sites per month to 6 to 8 new sites per month to conserve cash and to allow for
continued emphasis on sales, marketing and the development of new services.

         The Company believes that the slower membership growth resulted
principally from the lack of significant new contracts with fleet trucking
companies. The Company continues to market the PNV Network in an effort to
increase market acceptance and recognition of the benefits of the PNV Network by
truck drivers. In connection with the new marketing efforts, since March 1999,
the Company has offered a program pursuant to which fleet trucking companies
either would permit


<PAGE>   9

automatic payroll deductions as a means for the fleet's truck drivers to pay
for their subscriptions to the PNV Network or the fleet trucking company would
subsidize a portion of the subscription rate for their truck drivers.

         The Company believes that the slower  revenue per subscriber buildup is
due primarily to the relatively large number of daily subscribers as compared to
monthly subscribers and to the lower usage by truck drivers of long distance
telephone minutes offered by the Company.

         The Company during the first quarter of fiscal year 2000 will become an
Internet Service Provider (ISP), which will allow the Company to offer access to
the Internet through the PNV Network. In conjunction with the Company becoming
an ISP, the Company will develop a web site and portal, which will provide
access to driver fleets, advertisers, manufacturers, and other business to
business applications in this vertical market. The Company believes that these
services will enhance the attractiveness of the PNV subscriptions, which the
Company believes will increase the ability to penetrate the fleet trucking
companies as well as attract other non subscription based revenue. Costs
associated with this development will be additional to the current expense
levels.

         While the slowed buildout of the PNV Network will reduce the Company's
capital expenditures and will conserve cash, the Company nonetheless continues
to expect to incur a significant net loss and negative cash flow from operations
at least through the fiscal year ending June 30, 1999. As a result, the Company
will be required to raise additional capital to sustain these losses.

         On January 27, 1999, the Company entered into a Telecom Service
Agreement with TA Operating Corporation. TA, itself or through its affiliates,
currently owns or operates (or has entered into franchise agreements with
certain entities entitling them to operate) approximately 145 full-service
truckstops. Pursuant to the Telecom Service Agreement, the Company has the right
to install the equipment to provide prepaid phone cards, fleet
telecommunications services, coin and coinless phones, fleet in-bound 800
calling, and internet access and data transmission at an initial three (3)
truckstops. Unless TA notifies the Company of the termination of the Telecom
Service Agreement within sixty (60) days after the installation of the equipment
at these initial sites, the Company will begin the installation of equipment at
TA's truckstops on a buildout schedule to be mutually agreed upon by the Company
and TA, which will provide for installation at ten (10) truckstops per month on
average. The Company has completed the installation of the equipment at the
three (3) truckstops and a sixty (60) day notification period ends May 27, 1999.
Unless TA notifies the Company of the termination of the Telecom Service
Agreement by May 27, 1999 or the Company fails to perform its obligations under
the Telecom Service Agreement, the Company will have the exclusive right to
provide these telecommunications services at TA's truckstops during the four (4)
year term of the Telecom Service Agreement. The Telecom Service Agreement will
give the Company the ability to capture revenue opportunities inside the truck
stop. This additional revenue is expected to begin in the Quarter ending June
30, 1999.

         The Company believes that it will cost the Company approximately $6,000
per site to install the prepaid phone card equipment required under the Telecom
Service Agreement and $8,000 per site for increased telephone switch capacity to
accommodate public access telephone service (coin and coinless pay stations) at
each site. Based on these cost estimates and the installation of such equipment
at each of the approximately 145 truckstops currently owned or operated by TA,
the Company would spend approximately $2,030,000 in the aggregate to install the
necessary equipment. If the Company does not install such equipment at each of
the approximately 145 truckstops or fails to meet the agreed buildout schedule,
then TA may terminate the Telecom Service Agreement.

Employment Agreement with Robert P. May

         The Company has entered into an employment agreement with Robert P. May
pursuant to which he was employed as the Company's Chief Executive Officer
effective March 1999. The Company may terminate Mr. May's employment pursuant to
this agreement at any time. Under this agreement, Mr. May's base annual
compensation is $275,000 and he is eligible for an incentive bonus. In addition,
the Company has agreed to pay certain specified expenses on Mr. May's behalf.

         In connection with his employment, the Company sold to Mr. May 23,000
shares of the Company's Series C 7% Cumulative Convertible Preferred Stock at
$8.00 per share for an aggregate purchase price of $184,000. Of this purchase
price, $92,000 was paid in the form of a promissory note due in full at the end
of four years and $92,000 is payable in cash pursuant to his employment
agreement over an eight month period during his first year of employment.

         Mr. May also received from the Company a nonqualified stock option to
purchase 567,083 shares of the Company's common stock (the "Option"), under the
Park 'N View, Inc. Stock Option Plan, having an exercise price no greater than
$5.00 per share. The Option vests at the rate of approximately 2.08% monthly,
but becomes exercisable in full upon a change in control of the


<PAGE>   10

Company (as defined in the Employment Agreement) and if Mr. May is employed with
the Company as of the first anniversary of the closing of an underwritten
initial public offering of the Company's Common Stock. The Company also agreed
that, in the event of certain sales of the Company's stock in an aggregate
amount up to $20,000,000 closed prior to February 29, 2000, the Company will
grant to Mr. May additional options to purchase shares of the Company's Common
Stock such that, immediately following any such grant of additional options, Mr.
May will hold options to purchase an aggregate of up to five percent of the
Common Stock (calculated on a fully diluted basis) outstanding after such sale.

         If Mr. May's employment is terminated without cause he will receive six
months base salary and certain additional payments. If a change in control of
the Company occurs and Mr. May's employment is terminated without cause during
the eighteen months following the change in control, the Company will pay Mr.
May eighteen months base salary and certain additional payments. If Mr. May does
not execute a general release of the Company and its representatives from
liability relating to his employment or association with the Company, then Mr.
May only will be entitled to a severance payment of one month of his base salary
upon termination.

RECENT DEVELOPMENTS

         The Company signed an agreement in April 1999 with Volvo Trucks North
America, Inc. pursuant to which the companies have agreed to a partnership to
design the first Internet-ready truck for professional drivers, which will have
special connection ports on the exterior of trucks and interior wiring. The
truck design is part of a comprehensive strategic co-marketing agreement between
the two companies. Under the agreement Volvo may offer PNV Network services as a
feature in some lease packages and as an option in others and will advertise on
the Company's Driver Entertainment Network channel and in the Company's Connect
Magazine. PNV Connect Magazine is a monthly periodical published by the Company
to give drivers a cable-programming guide for the PNV Network. The Company
expects to solicit other advertisers and to include feature articles in this
magazine.

         The Company is in the process of making Connect Magazine full color,
high-gloss and with expanded distribution. The Company is positioning the
magazine as a lifestyle magazine with feature articles on how truck drivers can
make life better on the road. The Company expects that this new format will
attract advertisers to the magazine.

RESULTS OF OPERATIONS

         Three months and nine months ended March 31, 1999 and 1998

         Revenues. The Company's net revenues increased 164% to $2,288,000 for
the three months ended March 31, 1999 from $868,000 for the three months ended
March 31, 1998. The net revenues of $2,288,000 for the three months ended March
31, 1999 increased 15% from $1,985,000 for the pervious quarter ended December
31, 1998. Service revenues increased 163% to $2,213,000 for the three months
ended March 31, 1999 from $841,000 for the three months ended March 31, 1998.
Equipment sales increased to $66,000 for the three months ended March 31, 1999
from $19,000 for the three months ended March 31, 1998. For the nine months
ended March 31, 1999 net revenues increased 185% to $5,997,000 from $2,106,000
for the nine months ended March 31, 1998. Service revenues increased 195% to
$5,833,000 for the nine months ended March 31, 1999 from $1,974,000 for the nine
months ended March 31, 1998. Equipment sales increased 44% to $140,000 for the
nine months ended March 31, 1999 from $97,000 for the nine months ended March
31, 1998. The increase in revenues for the three months and nine months ended
March 31, 1999 was primarily due to additional subscriptions to the PNV Network
and the sale of long distance phone time.

         Cost of Revenues. Cost of revenues, excluding service depreciation,
increased 155% to $3,175,000 for the three months ended March 31, 1999 from
$1,243,000 for the three months ended March 31, 1998. Cost of revenues,
excluding service depreciation, increased to $3,175,000 for the three months
ended March 31, 1999 from $2,891,000 for the previous quarter ended December 31,
1998. For the nine months ended March 31, 1999 cost of revenues, excluding
service depreciation, increased 173% to $7,950,000 for the nine months ended
March 31, 1999 from $2,917,000 for the nine months ended March 31, 1998. The
increase in cost of revenues for the three months and nine months ended March
31, 1999 is principally due to costs associated with the increase in the number
of sites of the PNV Network, the costs associated with the increase in sales
volume, and, with respect to the three months ended March 31, 1999, routing
equipment leases incurred in connection with the upgrading of the PNV Network.
The number of active sites increased 108% to 212 as of March 31, 1999 from 102
active sites as of March 31, 1998. Cost of revenues includes commission payable
to truckstops, cable programming, leased telephone lines and purchased long
distance minutes, equipment, freight, site repairs, and, with respect to the
three months ended March 31, 1999, routing equipment leases incurred in
connection with the upgrading of the PNV Network. In particular, the cost of
phone lines and purchased long distance minutes increased 167% to $1,171,000 for
the three months ended March 31, 1999 from $438,000 for the three months ended
March 31, 1998. For the nine months ended March 31, 1999 the cost of phone lines
and purchased long distance minutes increased 208% to $2,730,000 from $886,000
for the nine months ended March 31, 1998. This increase is due to the increase
in the number of sites, long distance telephone minutes included with
memberships and the addition of T-1 lines, which began to be installed at the
Company's sites in the three month period ended December 31, 1998. Service
depreciation increased $748,000 to $1,260,000 for the three months ended March
31, 1999 from $512,000 for the three months ended March 31, 1998. Service
depreciation increased $1,918,000 to $3,130,000 for the nine months ended March
31, 1999 from $1,212,000 for the nine months ended March 31, 1998. The increase
in service depreciation reflects the additional buildout of the PNV Network.
Fixed costs are a significant portion of cost of revenues and are expected to
increase.
<PAGE>   11

         Gross Margin. The gross margin was a negative amount of $2,147,000 for
the three months ended March 31, 1999 compared to a negative amount of
$1,953,000 for the previous quarter ended December 31, 1998 and to a negative
amount of $887,000 for the three months ended March 31, 1998. For the nine
months ended March 31, 1999 the gross margin was a negative amount of $5,084,000
compared to a negative gross margin of $2,022,000 for the nine months ended
March 31, 1998.

         Selling Expense. Total selling expense increased 61% to $2,242,000 for
the three months ended March 31, 1999 from $1,397,000 for the three months ended
March 31, 1998. The increase was primarily attributable to an increase in
salaries and marketing expenses. Salaries increased 48% to $1,120,000 for the
three months ended March 31, 1999 from $758,000 for the three months ended March
31, 1998. Marketing expenses increased 172% to $765,000 for the three months
ended March 31, 1999 from $281,000 for the three months ended March 31, 1998.
The increase in salary expense reflects the additional sales personnel needed
for new sites and the increase in marketing expenses reflects the additional
marketing efforts to increase PNV subscriptions.

         For the nine months ended March 31, 1999, total selling expense
increased 86% to $6,261,000 from $3,368,000 for the nine months ended March 31,
1998. The increase was primarily attributable to an increase in salaries, travel
and marketing expenses. Salaries increased 71% to $3,046,000 for the nine months
ended March 31, 1999 from $1,778,000 for the nine months ended March 31, 1998.
Travel expenses increased 41% to $1,005,000 for the nine months ended March 31,
1999 from $715,000 for the nine months ended March 31, 1998. Marketing expenses
increased 170% to $2,087,000 for the nine months ended March 31, 1999 from
$774,000 for the nine months ended March 31, 1998. The increase in salaries and
travel reflects the additional sales personnel needed for new sites. The
increase in marketing expenses reflects additional marketing efforts to increase
PNV subscriptions.

         General and administrative expenses. Total general and administrative
expenses increased 123% to $2,595,000 for the three months ended March 31, 1999
from $1,162,000 for the three months ended March 31, 1998. The increase was
primarily attributable to an increase in salaries, travel and professional fees.
Salaries increased 103% to $1,402,000 for the three months ended March 31, 1999
from $690,000 for the three months ended March 31, 1998. Travel expense
increased 99% to $265,000 for the three months ended March 31, 1999 from
$133,000 for the three months ended March 31, 1998. Professional fees increased
131% to $134,000 for the three months ended March 31, 1999 from $58,000 for the
three months ended March 31, 1998. 

         For the nine months ended March 31, 1999, total general and
administrative expenses increased 142% to $7,518,000 from $3,103,000 for the
nine months ended March 31, 1998. The increase was primarily attributable to an
increase in salaries, travel and professional fees. Salaries increased 130% to
$3,814,000 for the nine months ended March 31, 1999 from $1,655,000 for the nine
months ended March 31, 1998. Professional fees increased 162% to $401,000 for
the nine months ended March 31, 1999 from $153,000 for the nine months ended
March 31, 1998. Travel expenses increased 123% to $726,000 for the nine months
ended March 31, 1999 from $326,000 for the nine months ended March 31, 1998.

         Interest Expense (Income) and Other- Net. Interest expense (income) and
other - net increased to $2,217,000 for the three months ended March 31, 1999
from $(108,000) of interest income for the three months ended March 31, 1998.
For the nine months ended March 31, 1999 interest expense (income) and other-net
increased to $5,913,000 from $(373,000) of interest income for the nine months
ended March 31, 1998. The additional net interest expense for the three and nine
months ended March 31, 1999 compared to the three month and nine ended March 31,
1998 is primarily attributable to the interest expense on Series A 13% Senior
Notes due 2008 in the aggregate principal amount of $75,000,000 issued in May
1998 (the "Old Notes"). Pursuant to an exchange offer completed in December
1998, the Company exchanged the Old Notes for Series B 13% Senior Notes due 2008
in the aggregate principal amount of $75,000,000 (the "New Notes"), which are
registered with the Securities and Exchange Commission.

         Net Loss. The Company's net loss increased 176% to $9,202,000 for the
three months ended March 31, 1999 from $3,337,000 for the three months ended
March 31, 1998. The net loss increased 205% to $24,776,000 for the nine months
ended March 31, 1999 from $8,120,000 for the nine months ended March 31, 1998.
The Company expects to incur a significant net loss and negative cash flow from
operations at least through the fiscal year ending June 30, 1999.


<PAGE>   12

LIQUIDITY AND CAPITAL RESOURCES

         Net cash used in operating activities was $18,398,000 and $7,433,000
for the nine months ended March 31, 1999 and 1998, respectively. The $10,965,000
increase in net cash used in operating activities for the nine months ended
March 31, 1999 compared to the nine months ended March 31, 1998 primarily
resulted from an increase in the net loss of $16,656,000 to $24,776,000 for the
nine months ended March 31, 1999 compared to a net loss of $8,120,000 for the
nine months ended March 31, 1998. The net loss was offset by an increase in
non-cash expenditure for depreciation, amortization and stock option
compensation expense of $2,906,000 to $4,192,000 for the nine months ended March
31, 1999 from $1,286,000 for the nine months ended March 31, 1998.

         Net cash provided by (used in) investing activities was $2,241,000 and
$(9,822,000) for the nine months ended March 31, 1999 and 1998, respectively.
The $12,063,000 decrease in net cash used in investing activities for the nine
months ended March 31, 1999 compared to the nine months ended March 31, 1998
resulted from the sale of short term and restricted investments for working
capital requirements in the amount of $17,851,000 for the nine months ended
March 31, 1999. This was offset by an increase in capital expenditures of
$5,788,000 to $15,610,000 for the nine months ended March 31, 1999 from
$9,822,000 for the nine months ended March 31, 1998. The increase in capital
expenditures was the result of the installation of the PNV Network at
approximately 106 truckstops during the nine months ended March 31, 1999
compared to 73 installations completed during the nine months ended March 31,
1998.

         Net cash (used in) provided by financing activities was ($711,000) and
$17,314,000 for the nine months ended March 31, 1999 and 1998, respectively. The
$18,025,000 decrease in net cash provided by financing activities for the nine
months ended March 31, 1999 compared to the nine months ended March 31, 1998
resulted primarily from issuance of Series C Preferred Stock during the nine
months ended March 31, 1998.

         In the nine months ended March 31, 1999, the Company's working capital
decreased $32,930,000 from June 30, 1998. The decrease was primarily
attributable to a decrease in cash and cash equivalents of $16,868,000 and a
decrease in short term investments of $13,826,000 and an increase in accrued
interest of $2,763,000.

         The Company's capital commitments consist primarily of capital leases
and noncancelable operating leases for office space, furnishings, equipment and
T-1 lines. In addition, the Company has entered into a contract for the purchase
of long distance and other telephone services that contain minimum purchase
requirements for a two-year period. Pursuant to the contract for the lease of
T-1 lines, the Company is required to lease approximately (i) 200 T-1 lines
having minimum payments, before available discounts, of $5.1 million during the
first year following the start-up period, and (ii) 300 T-1 lines having a
minimum payments, before available discounts, of $7.7 million during the second
and third years following February 1999. In addition, the Company's contract
with AT&T for long distance and other telephone services requires the Company
for a term of two years to purchase each month, at minimum, services having an
undiscounted price of $40,000 based upon standard AT&T rates. Discounts are
available under each contract. The Company may terminate the contracts with AT&T
at any time, but, upon termination, the Company generally would become obligated
to pay to AT&T the remaining aggregate undiscounted required minimum amounts
under each contract. In addition, the Company has committed to leasing routing
and switching equipment for the wide area network at each truckstop at which the
PNV Network is available estimated at an aggregate expenditure of $3.6 million
($15,000 per site) over a three year lease term. Such installation, together
with the installation of the T-1 lines, will substantially complete the
Company's planned enhancements to the PNV Network. The majority of the routing
equipment has been installed during the three months ending March 31, 1999 and
the operating lease payments have begun during this period.

         The Company believes that it will cost the Company approximately $6,000
to install the prepaid phone card equipment required under the Telecom Service
Agreement and $8,000 per site for increased telephone switch capacity to
accommodate public access telephone service (coin and coinless pay stations) at
each site. Based on these cost estimates and the installation of such equipment
at each of the approximately 145 truckstops currently owned or operated by TA,
the Company would spend approximately $2,030,000 in the aggregate to install the
necessary equipment. If the Company does not install such equipment at each of
the approximately 145 truckstops or fails to meet the agreed buildout schedule,
then TA may terminate the Telecom Service Agreement.

         The Company's cash and short-term investments as of May 10, 1999 was
approximately $17.8 million available for working capital which does not include
restricted investments in which the Company is required to use to pay interest
on Series B 13% Senior Notes due 2008 until May 15, 2000. If the Company does
not raise additional capital the Company could experience


<PAGE>   13

liquidity problems. There can be no assurance that such capital requirements
will be available on terms satisfactory to the Company, if at all. Any inability
to fund its future capital requirements will have a material adverse effect on
the Company's business, financial condition and operating results.


YEAR 2000

         A potential problem exists for all companies that rely on computers as
the year 2000 approaches. The "Year 2000" problem is the result of the past
practice in the computer industry of using two digits rather than four to
identify the applicable year. This practice could result in incorrect results
when computers perform arithmetic operations, comparisons or data field sorting
involving years later than 1999. The Company is in the process of conducting a
review of its computer systems to identify the systems that could be affected by
the "Year 2000" issue and is developing a plan to address the issue. The Company
will utilize both internal and, if needed, external resources to reprogram or
replace and test all of its software for Year 2000 compliance, and the Company
expects to complete the project during the second half of 1999. The Company has
a preliminary estimate of $200,000 as the maximum cost of evaluating, testing,
reprogramming, and modifying its software. The estimate is based on the belief
that no major problems will be encountered in becoming Year 2000 compliant.
Based on its preliminary internal review, the Company believes that the
Company-developed software is Year 2000 compliant. However, the Company plans to
do more extensive testing of the PNV Software during the current calendar year
which may require the use of independent consultants to assist in the Company's
evaluation to assure a correct assessment of cost and risk. In addition, the
Company relies on third party vendors which must also become Year 2000
compliant. The Company has a significant reliance on outside vendors such as
telephone companies, satellite system providers, electrical providers and the
wide area network supplier. These services are critical in the Company's ability
to generate revenue. The ability of third parties with which the Company
transacts business to adequately address their Year 2000 issues is outside of
the Company's control. The Company is planning to create a comprehensive list of
all internal and external software programs to assure that a full review of such
software is completed. However, if any necessary modifications to the PNV
Software are not completed in a timely manner or if the Company's vendors are
not Year 2000 compliant, the Year 2000 problem may have a material
adverse-impact on the operations of the Company. The Company has not made any
progress in assessing its non-information technology systems. These types of
systems are more difficult to assess and repair than information technology
systems and the Company may have to replace the non-information technology
systems that cannot be repaired. The Company will begin reviewing its
non-information technology systems in the second half of 1999. The Company
presently has no basis on which to estimate the costs of assessing and repairing
or replacing its non-information technology systems or to determine whether such
costs will have a material adverse effect on the Company's operations or
financial condition.

RISK FACTORS

Future Capital Requirements; Uncertainty of Additional Funding

         The Company expects that it will have significant capital requirements
in the future to fund the continued expansion of its business, including the
effort to become an ISP, to develop a web site, portal, and for other current
working capital purposes. There can be no assurance that such capital
requirements will be available on terms satisfactory to the Company, if at all.
The Company's capital requirements will depend on numerous factors, including
the growth of the Company's revenues, if any, and the rate of such growth. Once
the Company has used the net proceeds from the sale of the Old Notes, if the
Company's cash flow from operations is not sufficient to provide funds for
working capital and capital expenditures and if equity or debt or other
financing is not available, the Company expects that it may experience
insufficient liquidity which could have a material adverse effect on the
Company's financial condition and results of operations. There can be no
assurance that additional financing will be available when needed, if at all,
or, if available, on terms acceptable to the Company. If adequate funds are not
available on acceptable terms, the Company will be required to delay or limit
any further expansion of its business. Any inability to fund its future capital
requirements would have a material adverse effect on the Company's business,
financial condition and operating results.

Ability to Sustain and Increase Subscription Sales; Retention

         The future success of the Company depends upon its ability to
significantly increase its revenues which, in turn, depends materially upon its
ability to increase the number of subscribers to the PNV Network. During March
1999, the Company had approximately 35,500 active subscribers of whom
approximately 21,500 had subscribed on a monthly basis (including subscription
sales at the Company's vending machines at truckstops, pursuant to a monthly
subscription program referred to as the "Power Plan


<PAGE>   14

Program" and pursuant to the Company's contracts with fleet trucking companies)
and 14,000 were daily subscribers. To date, the Company's average revenue per
subscriber has been lower than expected which the Company believes is due
primarily to the relatively large number of daily subscribers as compared to
monthly subscribers and to lower than anticipated usage by truck drivers of long
distance telephone minutes offered by the Company.

         Even if truck drivers initially subscribe to the PNV Network, there can
be no assurance that they will renew their subscriptions. Of those subscribers
who purchased a subscription in September 1998, Company data indicates that
approximately 70% renewed their subscriptions at least once between that
subscription and March 1999. In October 1997, the Company implemented the Power
Plan Program, which was designed to increase monthly subscription renewals.
Pursuant to this program, a subscriber's monthly subscription is automatically
renewed and the monthly fee is automatically drafted from or charged to the
subscriber's checking account or credit card until the subscriber cancels the
subscription. During March 31, 1999, the Company had 13,594 monthly subscribers
pursuant to the Power Plan Program, which compares to 13,600 during December 31,
1998. Since March 1999 the Company has offered a program pursuant to which fleet
trucking companies either would permit automatic payroll deductions as a means
for the fleet's truck drivers to pay for the truck drivers' subscriptions to the
PNV Network or would subsidize a portion of the subscription rate for their
truck drivers, each of which the Company believes will increase monthly
subscription renewals. There are many factors that could cause a subscriber not
to renew a subscription, including dissatisfaction with the PNV Network and the
services offered or with the number and location of the truckstops at which the
PNV Network is available.

         The Company's ability to increase subscriptions to the PNV Network
depends significantly upon its ability to increase sales to fleets. During the
three month period ended March 31, 1999, the Company did not enter into any
significant contracts with fleet trucking companies. The number of drivers
sponsored by the fleets under contract with the Company was 2,861 during March
1999.

         The ability of the Company to attract and retain subscribers will also
depend in part on the ability of such subscribers to access a stall at a
truckstop served by the PNV Network and, with regard to the use of the Company's
telephone services, to access one of the local telephone lines maintained by the
Company in connection with the telephone service offered. Subscribers may on
occasion be unable to utilize the PNV Network due to a lack of open stalls at
some of the busier truckstops. In addition, truck drivers may find that the
truckstops served by the PNV Network are not conveniently located. If truck
drivers find that the truckstops served by the PNV Network are not conveniently
located, it is unlikely that they will purchase or renew subscriptions. The
Company's inability to attract and retain subscribers and to significantly
increase revenues from sales of subscriptions, including subscription sales to
fleets, for any reason, would have a material adverse effect on the Company's
business, financial condition and results of operations, including its ability
to make payments on the Notes.

Limited History of Operations

         The Company was incorporated in September 1995. Accordingly, there is
limited financial information about the Company upon which to base an evaluation
of the Company's performance. Given the Company's limited operating history,
there is no assurance that it will be able to generate sufficient cash flow to
service its debt obligations or to achieve its objectives.

History of Losses, Negative Cash Flow and Negative Gross Margin

         The Company has experienced a net loss and negative cash flow from
operations in each quarter since it was incorporated. As of March 31, 1999, the
Company had a common stockholders' deficit of $46.9 million. The Company expects
to incur a significant net loss and negative cash flow from operations at least
through the fiscal year ending June 30, 1999. There can be no assurance that the
Company will ever be profitable. From September 1995 to date, the Company's cost
of revenues has been substantially higher than its revenues, leading to a
negative gross margin. There can be no assurance that the Company will generate
significant revenue in the future, and even if it does so, that the Company's
revenues will ever exceed its cost of revenues.


<PAGE>   15

Substantial Leverage; Possible Inability to Service Indebtedness

         As a result of the issuance of the Old Notes, which now have been
exchanged for the New Notes, the Company is highly leveraged. At March 31, 1999,
the Company had total long-term debt of $70.7 million and a common stockholders'
deficit of $46.9 million. The Company's earnings were insufficient to cover its
fixed charges and preferred stock dividend requirements by approximately $26.9
and $10.1 million for the nine months ended March 31, 1999 and 1998,
respectively. The Company is permitted to incur additional indebtedness in the
future under the indenture relating to the New Notes, subject to the
restrictions set forth in such indenture.

         The Company's ability to make scheduled payments of principal of, or to
pay interest or liquidated damages, if any, on its indebtedness will depend on
the Company's future performance which, to a certain extent is subject to
general economic, financial, competitive, legislative, regulatory and other
factors that are beyond its control. There can be no assurance that the
Company's business will generate sufficient cash flow from operations and that
anticipated revenue growth will be realized in an amount sufficient to enable
the Company to service its indebtedness or to continue the installation of the
PNV Network and the payment of the costs associated with the provision of
telecommunications and entertainment services and its operations.

         The degree to which the Company is leveraged could have important
consequences to the Company's future prospects, including the following: (i)
limiting the ability of the Company to obtain any necessary financing in the
future for working capital, capital expenditures, debt service requirements or
other purposes; (ii) the Company's vulnerability to the effects of general
economic downturns or to delays or increases in the costs of installing the PNV
Network or planned subsequent improvements thereto or providing planned
telecommunications services in addition to those currently provided may be
increased; (iii) limiting the flexibility of the Company in planning for, or
reacting to, changes in its business; (iv) leveraging the Company more highly
than some of its potential competitors, which may place it at a competitive
disadvantage; (v) increasing its vulnerability in the event of a downturn in its
business or the economy generally; and (vi) requiring that a substantial portion
of the Company's cash flow from operations be dedicated to the payment of
principal and interest on the New Notes and not be available for other purposes.

         The Company expects to generate significant negative cash flow at least
through the fiscal year ending June 30, 1999. If the Company does not ultimately
generate sufficient cash flow to meet its debt service and capital requirements,
the Company may need to examine alternative strategies that may include actions
such as reducing or delaying capital expenditures, restructuring or refinancing
its indebtedness, the sale of assets or seeking additional equity, debt or other
financing. There can be no assurance that any of these strategies could be
effected on satisfactory terms, if at all. In addition, there can be no
assurance that the Company will be able to effect any such refinancing on
commercially reasonable terms or at all.

Expansion of PNV Network Installation

         The Company's ability to achieve its objectives will depend in large
part on the timely and cost-effective installation of the PNV Network at a
significant number of additional truckstops and the addition of T-1 lines and
certain additional equipment at all the truckstops at which the PNV Network is
available. The success of the Company in installing the PNV Network will depend
on, among other things, timely performance by the third parties of their
contractual obligations. Due to slower membership growth, lower revenue growth
per subscriber, and higher costs, in January 1999 the Company slowed the
buildout of the PNV Network from a planned 10 to 15 new sites per month to 6 to
8 new sites per month to conserve cash and to allow for continued emphasis in
sales, marketing and development of new services. There can be no assurance that
the Company will be able to achieve its buildout rate as planned and any failure
to do so could have a material adverse effect on the Company's business,
financial condition and results of operations.

    To date, the installation of the PNV Network at truckstops by outside
contractors has been completed substantially on the Company's schedule and
within its budget, and the installation services performed by such contractors
have been satisfactory to the Company. Although management believes that there
are a number of contractors that could perform the required installation
services 


<PAGE>   16

or that the Company could employ sufficient persons to perform such services,
there can be no assurance that it will be able to obtain the services of outside
contractors that can install the PNV Network on a timely basis and at a cost
acceptable to the Company.

         In connection with planned enhancements to the PNV Network, the Company
intends to install T-1 lines, in addition to local telephone lines, at each
truckstop served by the PNV Network. The Company has entered into a contract
with AT&T for the lease of T-1 lines. Any delay in the installation of the T-1
lines or adverse weather or other complications could significantly delay the
Company's planned increase in the number of truckstops served by the PNV
Network. Such delay or an increase in the cost associated with the installation
of the PNV Network could adversely affect the Company's planned buildout of the
PNV Network which in turn could adversely affect the Company's ability to create
substantial demand for its services and increase subscription sales and, as a
result, the Company's business, financial condition and results of operations.

Minimum Requirements Contracts

         The Company has entered into contracts with AT&T for the lease of T-1
lines and the purchase of long distance and other telephone services. These
contracts require the Company to pay a specified minimum dollar amount of lease
payments and to purchase a specified minimum dollar amount of long distance
telephone services, each of which amounts is subject to certain discounts based
on the T-1 lines leased and the telephone services purchased. The Company's
ability to achieve its objectives depends in significant part on its ability to
obtain these discounts. Any failure to obtain the available discounts with
regard to its T-1 line lease payments and its long distance telephone service
rates could have a material adverse effect on the Company's business, financial
condition and results of operations.

         In addition, the Company has entered into an operating lease for a wide
area network with an annual minimum rental amount of approximately $1.2 million
for a three year term.

Future Revenue Streams; Cost Savings

         The Company's ability to achieve its objectives depends significantly
on its ability to generate revenues from planned future services and recognize
cost-savings from planned enhancements to the PNV Network. The PNV Network as
currently designed does not have the capacity to provide certain of these
planned future services and the capacity of the proposed PNV Network
architecture to provide such services is untested and the market for such
services is undetermined. Any inability of the Company to generate revenue from
such planned future services or realize anticipated cost-savings could have a
material adverse effect on the Company's business, financial condition and
results of operations.

Potential Unavailability of Equipment

         The Company purchases its satellite equipment, head-end equipment,
telephone and cable switching equipment, computer hardware and cable programming
from outside suppliers. The Company has no purchase agreements with any such
supplier other than its cable programming supplier, Echostar Communications
Corporation ("Echostar"). The Company presently purchases its satellite
equipment and computer hardware from a sole supplier and management believes
that limited alternative sources for such items exist. The Company believes that
its relationships with the suppliers of these items are good. However, if the
Company were required to purchase telephone switching equipment from another
source, it would require reprogramming of certain of the Company's software or
if the Company were required to purchase any alternative equipment from another
source, it would require that the Company modify and redesign the PNV Network in
certain respects which, in each case, could result in service delays and expense
to the Company. In addition, the Company purchases the cable programming offered
through the PNV Network from Echostar. Although management believes that limited
alternative sources for cable programming exist, utilizing an alternative source
could require retrofitting certain equipment at each truckstop site and could
result in an interruption in the Company's ability to offer cable television
services through the PNV Network for a limited period of time. Any failure of
the Company to obtain any of the foregoing equipment, particularly its cable and
telephone switching equipment, or cable programming, could have a material
adverse effect on the Company's ability to expand its business in a timely
fashion and, as a result, on its results of operations and financial condition.


<PAGE>   17

Management of Growth

         The Company has expanded its operations significantly over the past 12
months, placing significant demands on its financial, marketing and sales,
administrative and operational personnel and systems. In connection with its
planned expansion of the PNV Network locations and services, management has been
and in the future will be required to recruit, organize, train and manage
additional personnel to perform, among other things (i) the planning and
engineering activity associated with the installation of the PNV Network at each
truckstop, (ii) the assembly at the Company's headquarters of the electronics
and other equipment comprising the PNV Network and the loading of such equipment
for delivery to each site, (iii) the inspection of each site upon completion of
the installation, (iv) the training of the truckstop employees and (v) the
marketing and promotion of the PNV Network at each site. The Company's success
in managing the expansion of its business will depend to a large extent on the
Company's ability to hire, train and supervise such additional personnel. There
can be no assurance that the Company will be able to attract, train, supervise
and retain an adequate number of such personnel. The failure of the Company to
effectively manage the growth in its business and to develop the additional
personnel, systems, resources, procedures and controls necessary to support that
growth in a timely manner would have a material adverse effect on the Company's
business, financial condition and results of operations.

Competition

         In the voice and data communication and entertainment arenas, the
Company competes with various elements of other providers' offerings based on
ease of access, functionality and cost. These industries are highly competitive
and the Company expects to face strong competition from existing and potential
competitors. These potential competitors comprise a broad range of companies
engaged in telecommunications and entertainment, including but not limited to,
public pay telephone operators, cellular telephone companies, long distance
telephone companies, cable operators, direct broadcast satellite companies, as
well as companies developing new technologies. Certain of these competitors and
potential competitors are well established companies and have significantly
greater financial, marketing and programming resources than the Company.

         The Company's telecommunication services compete with cellular
telephones, pay telephones and providers of long distance cards and prepaid
cards. Cellular service is widely available and, although it is currently more
expensive than the PNV Network, it is becoming more affordable. The Company
believes that drivers currently use pay telephones located at truckstops for a
significant number of the calls they make and there can be no assurance that the
Company will successfully attract customers who predominately use these pay
telephones. The Company understands that one company, HighwayMaster, resells
cellular telephone service to provide both voice and data communication to the
truck cab. The Company's long distance services compete with providers of long
distance cards and pre-paid cards such as AT&T and MCI and with providers of
toll free (800 and 888) numbers that fleets or even individuals use to call
fleet headquarters or home. Qualcomm's OmniTRACS service is used primarily for
mobile vehicle location and two-way text messaging and it addresses the trucking
fleets' need for real-time mobile text communication. Based on publicly
available data, the OmniTRACS service has an installed base of approximately
210,000 units in 32 countries worldwide, of which the Company believes that over
150,000 units are installed in the United States which would compete with
certain of the Company's services. In addition, the Company believes that there
is a company that has begun installing Internet/e-mail kiosks in truckstops.
There can be no assurance that the Company will be able to effectively compete
against these or future telecommunications competitors, many of which have large
customer bases and significantly more resources than the Company.

         With respect to entertainment, the Company's competition currently
consists of entertainment alternatives located outside the truck cab and
primarily in the truckstop. Community television and game rooms inside the
truckstop are the most readily available entertainment alternatives for
long-haul truck drivers. The Company believes that a small number of
professional truck drivers have purchased direct broadcast satellite dishes to
receive television programming in their cab. There can be no assurance that the
Company will be able to compete successfully against the providers of cable and
digital satellite programming services, most of which will have access to
greater resources and provide more programming than the PNV Network.

Substantial Reliance on Key Personnel

         The success of the Company is dependent to a significant extent on the
personal efforts and abilities of its senior management, including the newly
appointed Chief Executive Officer, Robert P. May. Mr. May is the only senior
officer with an employment agreement, but the Company may terminate the
employment agreement at any time. The Company believes that the loss


<PAGE>   18

of services of any member of its senior management could have a material adverse
effect on the Company. The Company maintains key man term life insurance on the
life of Mr. Williams, the Chairman of the Board, in the amount of $1.0 million,
payable to the Company. There can be no assurance that the Company will be able
to retain its senior management or that it will be able to attract or retain
other skilled personnel in the future.

Regulatory Matters

         The FCC and relevant state regulatory authorities ("PSC's") have the
authority to regulate interstate and intrastate telephone rates, respectively,
ownership of transmission facilities and the terms and conditions under which
certain of the Company's telephone service offerings are provided. Federal and
state regulations and regulatory trends have had, and in the future are likely
to have, both positive and negative effects on the Company and its ability to
compete. There can be no assurance that changes in current or future federal or
State regulations or future judicial changes would not have a material adverse
effect on the Company's business, financial condition or results of operations.

         Interstate telecommunications carriers are subject to a number of other
federal regulatory obligations and reporting requirements, including obligations
to contribute to universal service and other subsidy funds, to permit resale of
their services by other carriers, and to take certain steps to protect
consumers. While the Company does not believe the burdens imposed by federal
regulations will be onerous, failure to comply with applicable regulations could
result in fines or other penalties, including loss of authority to provide
interstate service.

         The intrastate operations of the Company are subject to various state
laws and regulations. Most states require the Company to apply for certification
to provide long distance telecommunications services, operator services, pay
phones or competitive local exchange services, or to register or be found exempt
from regulation, before commencing intrastate services. Most states also require
the Company to file and maintain detailed tariffs listing their rates for
intrastate service. Many states also impose various reporting requirements
and/or require prior approval for transfers of control of certified carriers,
assignment of carrier assets, including customer bases, carrier stock offerings,
incurrence by carriers of significant debt obligations and acquisitions of
telecommunications operations. Other regulatory requirements may mandate that
the Company permit resale of its services by other companies, make payments to
intrastate universal service and similar funds, and take certain steps to
protect consumers. Certificates of authority can generally be conditioned,
modified, canceled, terminated and revoked by state regulatory authorities for
failure to comply with state law and/or rules, regulations and policies of the
state regulatory authorities. Fines and other penalties also may be imposed for
such violations. Any delay by the Company in complying with these state laws and
regulations would limit the Company's ability to provide telecommunications
services to the long-haul trucking industry. In addition, if the Company were
not to be in compliance with relevant state laws and regulations, the
appropriate state regulatory body may force the Company to suspend offering its
telecommunications services in such state. Such an event could have a material
adverse effect on the Company's business, financial condition and results of
operations.

         Although the Company has not determined whether all of its current and
anticipated telephone service offerings are subject to regulation by all state
and federal regulatory authorities, the Company is in the process of obtaining
authority, pursuant to regulation, certification, tariffs, notifications, or on
an unregulated basis, to provide intrastate interexchange service in the 48
contiguous states and Hawaii. The Company currently is authorized to provide
such services in all such states except North Carolina in which the application
is pending. The interpretation and enforcement of such laws and regulations in
relation to the Company's current and future service offering may vary, and
there can be no assurance that the Company will be in compliance with all such
laws and regulations at any one point in time.

         Various state and federal regulatory factors may have an impact on the
Company's ability to service customers. Many of the rights and obligations
created by statute and regulation are subject to ongoing regulatory
implementation proceedings and review by the courts, and are subject to change.
Changes to some regulations could benefit the Company, while other changes could
make it more difficult for the Company to compete.

         Cable television companies are subject to extensive governmental
regulation. The Company does not believe that it is subject to such regulations.
However, in the event the Company is required to comply with such regulations,
the expense, potential delay and management distraction potentially resulting
from the compliance process could have a material adverse effect on the
Company's results of operations and financial condition.


<PAGE>   19

                           PART II - OTHER INFORMATION

ITEM 1.        LEGAL PROCEEDINGS.

         The Company is involved in legal proceedings from time to time, none of
which management believes, if decided adversely to the Company, would have a
material adverse effect on the business, financial condition or results of
operations of the Company.

ITEM 2.        CHANGES IN SECURITIES.

         None

ITEM 3.        DEFAULTS UPON SENIOR SECURITIES.

         None

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

         None

ITEM 5.        OTHER INFORMATION.

         None

ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K.

         (a)   Exhibits.

<TABLE>
<CAPTION>
               Exhibit Number            Description of Exhibit

               <S>      <C>  
               10.1+    Telecom Service Agreement, dated as of January 27, 1999, by and between the Company and TA 
                        Operating Corporation.

               10.2     Employment Agreement, dated as of March 1, 1999, by and between the Company and Robert P. May.

               10.3     Nonqualified Stock Option Award  Agreement, dated as of March 3, 1999, by and between the
                        Company and Robert P. May.

               10.4     Joinder to Stock Purchase Agreement and Related Documents, dated as of March 1, 1999, by
                        Robert P. May.

               10.5     Letter Agreement, dated as of March 3, 1999, by and between the Company and Robert P. May.

               10.6+    Warrant, dated as of March 12, 1999.

               27       Financial Data Schedule.

               +        Portions of this Exhibit are omitted and filed separately with the Securities and Exchange Commission 
                        pursuant to a request for confidential treatment.

</TABLE>

         (b)   Reports on Form 8-K (for SEC use only)

               None



<PAGE>   20

                                   SIGNATURES

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

                                     PARK `N VIEW, INC.

Date: May 14, 1999                   /s/  Robert P. May
     ----------------------          -------------------------------------------
                                     Robert P. May, Chief Executive Officer


Date: May 14, 1999                   /s/  R. Michael Brewer
     ----------------------          -------------------------------------------
                                     R. Michael Brewer, Vice President - Finance
                                        and Chief Financial Officer


<PAGE>   21

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit Number               Description of Exhibit
--------------               ----------------------

<S>               <C> 
                                                                                  
     10.1+        Telecom Service Agreement, dated as of January 27, 1999, by     
                  and between the Company and TA Operating Corporation.           
                                                                                  
     10.2         Employment Agreement, dated as of March 1, 1999, by and         
                  between the Company and Robert P. May.                          
                                                                                  
     10.3         Nonqualified Stock Option Award Agreement, dated as of March    
                  3, 1999, by and between the Company and Robert P. May.          
                                                                                  
     10.4         Joinder to Stock Purchase Agreement and Related Documents,      
                  dated as of March 1, 1999, by Robert P. May.                    
                                                                                  
     10.5         Letter Agreement, dated as of March 3, 1999, by and between     
                  the Company and Robert P. May.                                  
                                                                                  
     10.6+        Warrant, dated as of March 12, 1999.                            
                                                                                  
     27           Financial Data Schedule (For SEC use only)                                        

       +          Portions of this Exhibit are omitted and filed separately with  
                  the Securities and Exchange Commission pursuant to a request    
                  for confidential treatment.  

</TABLE>