<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 September 30, 1998

             [ ] 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. [ ] Yes [ X] No

         The number of shares outstanding of the registrant's common stock, par
value $0.001 per share, as of November 19, 1998, was 4,318,182.


<PAGE>   2

                               PARK `N VIEW, INC.
                                    FORM 10-Q

                    For the Quarter Ended September 30, 1998


                                      INDEX

<TABLE>
<CAPTION>

                                                                                              Page No.
                                                                                              --------
<S>                                                                                           <C>
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

          Consolidated Balance Sheets at September 30, 1998 (unaudited) and                      1
          June 30, 1998

          Consolidated Statements of Operations for the three months ended                       2
          September 30, 1998 and September 30, 1997 (unaudited)

          Consolidated Statements of Cash Flows for the three months ended                       3
          September 30, 1998 and September 30, 1997 (unaudited)

          Notes to Consolidated Financial Statements (unaudited)                                 4

Item 2.   Management's Discussion and Analysis of Financial Condition                            6
          and Results of Operations


PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings                                                                       18
Item 2.  Changes in Securities                                                                   18
Item 3.  Defaults Upon Senior Securities                                                         18
Item 4.  Submission of Matters to a Vote of Securities Holders                                   18
Item 5.  Other Information                                                                       18
Item 6.  Exhibits and Reports on Form 8-K                                                        18

Signatures                                                                                       19
</TABLE>



<PAGE>   3


                         PART I - FINANCIAL INFORMATION

Item 1.           Financial Statements.

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

<TABLE>
<CAPTION>
                                                                           June 30,        September 30,
                                                                             1998               1998
                                                                         ------------       ------------
<S>                                                                      <C>                <C>         
                                     ASSETS
Current Assets:
  Cash and cash equivalents .......................................      $ 19,810,656       $ 11,183,520       
  Short-term investments ..........................................        32,039,916         32,420,154        
  Restricted investments ..........................................         9,750,000          9,750,000          
  Accounts receivable, net of allowance for doubtful accounts of
    $5,400 at June 30, 1998 and September 30, 1998 ................           184,180            262,575            
  Inventory .......................................................           362,738            540,243           
  Prepaid expenses and other ......................................           100,877             96,786            
                                                                         ------------       ------------
         Total current assets .....................................        62,248,367         54,253,278         

Property and Equipment, Net (Note 2) ..............................        18,448,601         25,163,471         
Restricted Investments ............................................         9,513,000          9,706,273          
Deferred Financing Costs ..........................................         3,744,366          3,783,357          
Other Assets ......................................................           623,793            629,196            
                                                                         ------------       ------------
         Total ....................................................      $ 94,578,127       $ 93,535,575
                                                                         ============       ============

                        LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
  Accounts payable ................................................      $  2,067,113       $  4,441,552
  Accrued expenses ................................................         2,471,719          5,354,968          
  Deferred revenue ................................................           205,853            220,477            
  Current portion of capital lease obligations ....................           330,814            345,977           
  Current portion of long-term debt ...............................            33,727             34,627           
                                                                         ------------       ------------
         Total current liabilities ................................         5,109,226         10,397,601          
                                                                         ------------       ------------
Obligations Under Capital Leases ..................................           185,174            232,262            
                                                                         ------------       ------------
Long-Term Debt ....................................................        70,419,566         70,523,235         
                                                                         ------------       ------------
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
  $598,757 as of June 30, 1998 and September 30, 1998, respectively)        4,301,345          4,360,488          
                                                                         ------------       ------------
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 $1,974,583 as of June 30, 1998 and
  September 30, 1998, respectively) ...............................        16,316,432         16,588,443         
                                                                         ------------       ------------
Series C Redeemable Convertible Preferred Stock and Accrued
  Dividends -- Par value $.01 per share; 3,750,000 shares
  authorized, 2,328,543 issued and outstanding ($8.00 per share
  liquidation preference, including accrued dividends of
  $1,115,631 and $1,441,626 as of June 30, 1998         
  and September 30, 1998, respectively) ...........................        18,516,147         18,876,698         
                                                                         ------------       ------------
Common Stockholders' Deficit:
  Common stock -- par value $.001 per share; 7,000,000 and
    12,000,000 shares authorized at June 30, 1998 and September
    30, 1998, respectively; 4,318,182 shares issued and outstanding             4,318              4,318              
  Additional paid-in capital ......................................         1,465,923            774,219          
  Accumulated deficit .............................................       (21,740,004)       (28,221,689)       
                                                                         ------------       ------------
         Total common stockholders' deficit .......................       (20,269,763)       (27,443,152)       
                                                                         ------------       ------------

Total .............................................................      $ 94,578,127       $ 93,535,575
                                                                         ============       ============
</TABLE>

                  See notes to condensed financial statements.

                                       1
<PAGE>   4

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

<TABLE>
<CAPTION>
                                              Three months ended
                                                 September 30,
                                         -----------------------------
                                            1997               1998
                                         -----------       -----------
<S>                                      <C>               <C>        
Revenues:
  Service revenue .................      $   513,121       $ 1,683,149  
  Equipment sales .................           49,805            32,943            
  Other ...........................            6,016             7,695             
                                         -----------       -----------
          Total revenues ..........          568,942         1,723,787           
                                         -----------       -----------
Cost of Revenues:
  Service cost ....................          496,142         1,513,006           
  Service depreciation ............          303,096           822,652           
  Equipment cost ..................          221,410           367,241           
  Advertising .....................            3,256             4,399             
                                         -----------       -----------
          Total cost of revenues ..        1,023,904         2,707,298         
                                         -----------       -----------
Gross margin ......................         (454,962)         (983,511)         
Selling, general and
  administrative expenses .........        1,716,695         3,602,680         
Loss from operations ..............       (2,171,657)       (4,586,191)       
Interest expense ..................            9,709         2,644,737             
Interest income and other .........         (126,272)         (749,246)         
                                         -----------       -----------


          Net loss ................       (2,055,094)       (6,481,682)
       
          Preferred stock dividends
            and amortization of
            preferred stock
            issuance costs ........         (531,418)         (691,704)         
                                         -----------       -----------
           Net loss attributable to
            common stockholders ...      ($2,586,512)      ($7,173,386)      
                                         -----------       -----------
          Basic loss per share ....      ($     0.60)      ($     1.66)
                                         ===========       ===========
</TABLE>

                  See notes to condensed financial statements.

                                       2
<PAGE>   5

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


<TABLE>
<CAPTION>
                                                                Three months ended
                                                                   September 30,
                                                          -------------------------------
                                                              1997               1998
                                                          ------------       ------------
<S>                                                       <C>                <C>          
Operating Activities:
  Net loss .........................................      $ (2,055,094)      $ (6,481,682)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation and amortization ..................           325,583          1,050,768           
    Changes in assets and liabilities:
      Accounts receivable ..........................            (2,054)           (77,699)           
      Inventory ....................................          (122,863)          (177,506)          
      Prepaid expenses and other ...................            72,757           (118,650)            
      Other assets .................................           (26,670)             3,387            
      Accounts payable .............................           (94,751)         2,374,440            
      Accrued expenses .............................          (377,351)         2,883,250           
      Deferred revenue .............................           (31,929)            14,624            
                                                          ------------       ------------
         Net cash used in operating activities .....        (2,312,372)          (529,068)        
                                                          ------------       ------------
Investing Activities:
    Purchase of short-term investments .............                             (380,238)
    Purchase of restricted investments .............                             (193,273)
    Purchases of property and equipment ............        (2,732,313)        (7,420,077)        
                                                          ------------       ------------
         Net cash used in investing activities .....        (2,732,313)        (7,993,588)        
                                                          ------------       ------------
Financing Activities:

  Proceeds from issuance of common and preferred
     stock .........................................        18,628,344
  Payment of stock and debt issuance costs and other        (1,075,847)

  Payment of obligation under capital lease ........           (49,611)           (96,354)           
  Notes payable ....................................            (7,730)            (8,126)            
                                                          ------------       ------------
         Net cash provided by (used in) financing
            activities .............................        17,495,156           (104,480)        
                                                          ------------       ------------
Net Increase (Decrease) In Cash And Cash
  Equivalents ......................................        12,450,471         (8,627,136)        
                                                          ------------       ------------
Cash And Cash Equivalents, Beginning Of Period .....         4,717,394         19,810,656          
                                                          ------------       ------------
Cash And Cash Equivalents, End Of Period ...........      $ 17,167,865       $ 11,183,520
                                                          ============       ============
Supplemental Cash Flow Information:
  Interest paid ....................................      $     10,062       $     15,461 
                                                          ============       ============
Non-Cash Financing And Investing Activities:

  Capital lease obligations relating to
    acquisition of property and equipment ..........      $     18,766       $    158,605    
                                                          ============       ============

  Issuance of common stock warrants ................      $    100,399
                                                          ============
</TABLE>

                  See notes to condensed financial statements.

                                       3
<PAGE>   6

                               PARK 'N VIEW, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.      BASIS OF PRESENTATION

        The interim financial statements of Park' N View, Inc. (the "Company")
as of September 30, 1998 and for the three months ended September 30, 1997 and
1998 are unaudited. In the opinion of management, these interim financial
statements include all adjustments necessary to present fairly the Company's
financial position as of September 30, 1997 and its results of operations and
cash flows for the three months ended September 30, 1997 and 1998. 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. 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    September 30, 1998
                                                 -------------    ------------------
<S>                                              <C>              <C>        
    Site equipment and improvements .......      $16,484,956      $21,449,313
    Construction equipment ................          150,059          150,059
    Computer equipment ....................          352,643          453,968
    Vehicles ..............................          451,382          529,388
    Furniture, fixtures and other equipment           65,869           65,869
                                                 -----------      -----------
              Subtotal ....................       17,504,909       22,648,597
    Less accumulated depreciation .........        2,630,706        3,494,521
                                                 -----------      -----------
              Subtotal ....................       14,874,203       19,154,076
    Component inventory ...................        3,574,398        6,009,395
                                                 -----------      -----------
    Property and equipment, net ...........      $18,448,601      $25,163,471
                                                 ===========      ===========
</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.


                                       4
<PAGE>   7

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 approximate $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 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 September 30, 1998 some routing equipment had been delivered
but not installed and no operating leases have become effective. It is
anticipated that the majority of the equipment will be installed by the quarter
ended December 31,1998, at which time the leases will become effective.

         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 system 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 $300,000 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 next 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 2000 issue 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.

4.       SUBSEQUENT EVENTS

         Pursuant to the Registration Rights Agreement, dated as of May 27,
1998, entered into at the time of the sale of the Units consisting of Series A
13% Senior Notes due 2008 for an aggregate principal amount of $75,000,000 (the
"Old Notes") and 75,000 Warrants to purchase shares of the Company's Common
Stock, the Company filed a registration statement with regard to the Old Notes
which was declared effective by the Securities and Exchange Commission (the
"SEC") on November 12, 1998. Upon effectiveness of the registration statement,
the Company immediately commenced an exchange offer 



                                       5
<PAGE>   8

whereby the Company will issue $1,000 principal amount Series B 13% Senior Notes
due 2008 ("New Notes") which are registered with the SEC for each originally
issued $1,000 principal amount Old Notes (the "Exchange Offer"). The New Notes
are being offered in exchange for up to $75,000,000 principal amount of Old
Notes (the Old Notes and the New Notes collectively referred to herein as the
"Notes"). The Exchange Offer will expire at 5:00 p.m., New York City time, on
December 11, 1998, or such time to which it is extended by the Company.

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. Examples of forward looking
statements include but are not limited to (i) projections of revenues, income or
loss, earnings per share, capital expenditures, dividends, capital structure and
other financial items, (ii) statements of the plans and objectives of the
Company or its management or Board of Directors, including product enhancements,
or estimates or predictions of actions by customers, suppliers or competitors,
or regulatory authorities, (iii) statements of future economic performance, and
(iv) statements of assumptions underlying other statements and statements about
the Company and its business.

         This report also identifies important factors which could cause actual
results to differ materially from those indicated by the forward looking
statements. These risks and uncertainties include the Company's ability to
complete the development and installation of the PNV Network, gain a larger
customer base, and to obtain capital to fund the continued expansion of the
Company's business, service indebtedness, obtain discounts for long distance and
other telephone services, obtain equipment from suppliers, and to compete
successfully against the providers of cable and digital satellite programming
services. See "Risk Factors" below.

Overview

         As of September 30, 1998, the PNV Network was available at 141
full-service truckstops. This compares to 118 as of June 30, 1998 and 48 as of
September 30, 1997. During September 1998, the Company had over 28,000
subscribers (including approximately 2,500 drivers sponsored by five fleets
under contracts with the Company); this compares to approximately 25,000
subscribers during June 1998 and approximately 10,900 during September 1997.

         During September 1998, the Company had approximately 19,200 monthly
subscribers and approximately 8,800 daily subscribers; during September 1997,
the Company had approximately 5,600 monthly subscribers and approximately 5,300
daily subscribers. Of the Company's monthly subscribers during September 1998,
11,700 were under the Company's Power Plan Program and 2,900 were fleet trucking
company subscriptions; during September 1997, 300 of the Company's monthly
subscriptions were fleet trucking company subscriptions. The Company implemented
the Power Plan Program in October 1997.



                                       6
<PAGE>   9

Results of Operations

         Three months ended September 30, 1998 and 1997.

         Revenues. The Company's net revenues increased 203% to $1,724,000 for
the three months ended September 30, 1998 from $569,000 for the three months
ended September 30, 1997. The amount of service revenue increased 228% to
$1,683,000 for the three months ended September 30, 1998 from $513,000 for the
three months ended September 30, 1997. Equipment sales decreased 34% to $33,000
for the three months ended September 30, 1998 from $50,000 for the three months
ended September 30, 1997. The increase in service revenues was primarily due to
additional subscription memberships to the PNV Network.

         Cost of revenues. Cost of revenues, excluding service depreciation,
increased 161% to $1,885,000 for the three months ended September 30, 1998 from
$721,000 for the three months ended September 30, 1997 principally due to costs
associated with the buildout of the PNV Network and increased sales volume. The
number of active sites increased 194% to 141 as of September 30, 1998 from 48
active sites as of September 30, 1997. Cost of revenues includes commissions
payable to truckstops, cable programming, leased telephone lines, equipment,
freight and site repairs. In particular, the cost of phone lines increased 249%
to $614,000 for the three months ended September 30, 1998 compared to $176,000
for the three months ended September 30, 1997. Service depreciation increased
172% to $823,000 for the three months ended September 30, 1998 from $303,0000
for the three months ended September 30, 1997. This increase in service
depreciation resulted primarily from the Company's increased buildout of the PNV
Network. Total cost of revenues increased 164% to $2,707,000 for the three
months ended September 30, 1998 from $1,024,000 for the three months ended
September 30, 1997. As the Company increases the number of truckstops at which
the Company installs the PNV Network and the aggregate number of truckstop
stalls, the Company believes that cost of revenues will increase significantly.

         Gross margin. The gross margin was a negative amount of $984,000 for
the three months ended September 30, 1998 compared to a negative gross margin in
the amount of $455,000 for the three months ended September 30, 1997. This
represents an increase in the negative gross margin of 116%.

         Selling Expenses. Total selling expenses increased 101% to $1,717,000
for the three months ended September 30, 1998 from $855,000 for the three months
ended September 30, 1997. The increase was primarily attributable to an increase
in salaries, travel and marketing expenses. Salaries increased 128% to $945,000
for the three months ended September 30, 1998 from $415,000 for the three months
ended September 30, 1997. Travel expenses increased 123% to $390,000 for the
three months ended September 30, 1998 from $175,000 for the three months ended
September 30, 1997. Marketing expenses increased 39% to $302,000 for the three
months ended September 30, 1998 from $218,000 for the three months ended
September 30, 1997. The increase in salaries, travel, and marketing expenses
reflects additional sales personnel and marketing efforts for the new sites. The
Company anticipates that these expenses will continue to increase significantly.

         General and Administrative Expenses. Total general and administrative
expenses increased 119% to $1,886,000 for the three months ended September 30,
1998 from $862,000 for the three months ended September 30, 1997. The increase
was attributable to an increase in salaries, travel, professional fees and rent.
Salaries increased 133% to $992,000 for the three months ended September 30,
1998 from $426,000 for the three months ended September 30, 1997. Travel expense
increased 10% to $118,000 for the three months ended September 30, 1998 from
$107,000 for the three months ended September 30, 1997. Professional fees
increased 753% to $128,000 for the three months ended September 30, 1998 from
$15,000 for the three months ended September 30, 1997 primarily due to the
Company's need for legal and accounting assistance. Building rent expense
increased 31% to $68,000 for the three months ended September 30, 1998 from
$52,000 for the three months ended September 30, 1997 primarily due to the move
of the Company's headquarters and the lease of additional administrative and
warehouse space.



                                       7
<PAGE>   10

         Interest Expense (Income) and Other-Net. Interest expense (income) and
other-net increased to $1,896,000 for the three months ended September 30, 1998
from $117,000 of interest income for the three months ended September 30, 1997.
The additional net interest expense is primarily attributable to the issuance of
the Old Notes in May 1998.

         Net Loss. The Company's net loss increased 215% to $6,482,000 for the
three months ended September 30, 1998 from $2,055,000 for the three months ended
September 30, 1997 primarily due to the foregoing factors. The Company expects
to incur a significant net loss and negative cash flow from operations in the
fiscal year ending June 30, 1999.

Liquidity and Capital Resources

         Net cash used in operating activities was $529,000 and $2,312,000 for
the three months ended September 30, 1998 and 1997, respectively. The $1,783,000
decrease in net cash used in operating activities for the three months ended
September 30, 1998 as compared to the three months ended September 30, 1997
primarily resulted from an increase in accounts payable and accrued expenses
which delayed the actual cash expenditures. In the three months ended September
30 1998, accounts payable and accrued expenses increased by $5,258,000 as
compared to a decrease of $472,000 for the three months ended September 30, 1997
due to the buildout of the PNV Network.

         Net cash used in investing activities was $7,994,000 and $2,732,000 for
the three months ended September 30, 1998 and 1997, respectively. The $5,262,000
increase in net cash used in investing activities for the three months ended
September 30, 1998 compared to the three months ended September 30, 1997
resulted primarily from the increase in the build-out of the PNV Network.

         Net cash provided by (used in) financing activities was ($104,000) and
$17,495,000 for the three months ended September 30, 1998 and 1997,
respectively. The $17,600,000 decrease in net cash provided by financing
activities for the three months ended September 30, 1998 compared to the three
months ended September 30, 1997 resulted primarily from issuance of Series C
Preferred Stock during the three months ended September 30, 1997.

         In the three months ended September 30, 1998, the Company's working
capital decreased by $13,283,000 from June 30, 1998. This decrease was primarily
attributable to a decrease of cash and cash equivalents of $8,627,000, and an
increase in accounts payable and accrued expenses of $5,258,000.

         The Company completed the installation of the PNV Network at
approximately 23 truckstops during the three months ended September 30, 1998.
This compares to 19 completed installations for the three months ended September
30, 1997. The Company had a significant buildup in component inventory as the
number of sites under construction increased. Component inventory increased from
$3,574,000 as of June 30, 1998 to approximately $6,009,000 as September 30, 1998
which reflects the increase in the number of sites under construction. 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. The level of component inventory at any point of time
will be dependent upon the anticipated number of truckstops at which the PNV
Network will be installed during the next 75 days. An increase in component
inventory will adversely affect the Company's liquidity by the amount of such
increase.

         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 



                                       8
<PAGE>   11

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 the start-up period. The start-up
period ends in February 1999 or such earlier date as to which the Company gives
AT&T notice. 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. At September 30, 1998, the Company's minimum commitments under
contracts relating to the lease of T-1 lines and the purchase of long distance
and other telephone services, totaled $692,913, $422,639, $316,541, $188,637 and
$28,962 for the five years ending June 30, 1999 through 2003, respectively. See
Note 3 to the condensed financial statements. In addition, the Company has
committed to leasing routing and switching equipment at each truckstop at which
the PNV Network is available estimated at an aggregate expenditure of $3.8
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 Company anticipates that
a majority of the routing equipment will be installed during the three months
ending December 31, 1998 and the operating lease payments will begin during this
period.

         The Company expects that it will have significant capital requirements
in the future to fund the continued expansion of its business and for working
capital purposes, and 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. Thereafter, if the
Company's cash flow from operations is not sufficient to provide funds for
working capital and capital expenditures and if equity, debt or other financing
is not available, the Company expects that it may experience insufficient
liquidity which could have a material adverse affect 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 could 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 system 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 $300,000 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 next 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 



                                       9
<PAGE>   12

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 2000 issue 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

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 September 30, 1998,
the Company had a common stockholders' deficit of $27.4 million. The Company
expects to incur a significant net loss and negative cash flow from operations
in 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.

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 and for working
capital purposes, and 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 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.


                                       10
<PAGE>   13

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
September 1998, the Company had approximately 28,000 active subscribers of whom
approximately 19,200 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 Program" and pursuant to the
Company's contracts with fleet trucking companies) and 8,900 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 a larger
number of daily subscribers as compared to monthly subscribers. Market research
and the Company's experience indicate that, in order to provide a benefit to
truck drivers sufficient to justify the monthly subscription fee, the PNV
Network must be available nationally at a minimum threshold number of sites so
that truck drivers can rely on access to the PNV Network as they travel their
routes. The Company believes that this number of sites ranges between 200 and
250, depending on site location, size and other factors. As of September 30,
1998, the PNV Network was installed and operating at 141 truckstops.

         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 April 1998, Company data indicates that
approximately 70% renewed their subscriptions at least once between such
subscription and July 1998. 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. As of September 30, 1998, the Company had 11,700 monthly
subscribers pursuant to the Power Plan Program, however, there can be no
assurance that the number of such subscribers will continue to grow. 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. As of
September 30, 1998, the Company had entered into contracts with five fleet
trucking companies for a minimum of 2,329 subscriptions for terms ranging from
one to three years, subject to certain earlier termination rights by the fleet
trucking companies. There can be no assurance, however, that the fleets having
earlier termination rights will not terminate their contracts prior to the
expiration of their stated terms, existing contracts will be renewed or the
Company will be able to increase its subscription sales to fleets.

         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, users of the PNV Network's telephone
service at a particular truckstop cannot exceed the number of local lines
available. The Company presently maintains an average of 12 local telephone
lines at each truckstop served by the PNV Network. In connection with the
proposed enhancements to the PNV Network to increase its capacity and
functionality to allow the Company to offer additional telecommunications
services, the Company intends, among other things, to install and maintain a T-1
line, and to reduce the number of local lines, at each truckstop. Although this
installation will increase the number of users that may access the PNV Network's
telecommunications services simultaneously, this number will still be limited.
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 



                                       11
<PAGE>   14

Company's business, financial condition and results of operations, including its
ability to make payments on the Notes.

Substantial Leverage; Possible Inability to Service Indebtedness

         As a result of the issuance of the Notes, the Company is highly
leveraged. At September 30, 1998, the Company had total long-term debt of $70.5
million and a common stockholders' deficit of $27.4 million. The Company's
earnings were insufficient to cover its fixed charges and preferred stock
dividend requirements by approximately $7.2 and $2.6 million for the three
months ended September 30, 1998 and 1997, respectively. The Company will be
permitted to incur additional indebtedness in the future under the indenture
relating to the 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 Notes and not be available for other purposes.

         The Company expects to generate significant negative cash flow over the
next several years. 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. There can be no assurance that the Company will be able
to achieve its build-out 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.

         The Company is presently utilizing the services of four contractors,
three of which the Company believes operate on a national basis and one of which
the Company believes operates on a regional basis. 



                                       12
<PAGE>   15

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 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 build-out 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.

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 alternative 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 



                                       13
<PAGE>   16

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.

Dependence on Contractual Relationships with Truckstops

         All of the Company's current revenues are generated from its operation
of the PNV Network at truckstops. The Company expects that the provision of
telecommunications and entertainment services, including planned future
services, through the PNV Network will continue to be the sole source of the
Company's revenues for the foreseeable future. The Company is dependent on its
ability to continue to install the PNV Network for its future expansion.

         The Company has contracted with truckstop chains and independent
truckstop owners located throughout the United States. While most independent
truckstop owners who own a single truckstop execute a standard contract, the
contracts executed by truckstop chains that operate multiple truckstops vary
significantly. The contracts generally provide that the truckstop chains and
independent truckstop owners may terminate the contract, and the Company's
exclusive rights under the contract, if the Company fails in any material
respect to perform any of its obligations under the contract and fails to remedy
the breach within 30 days after the Company receives notice of the breach. For
example, if the Company fails to install the PNV Network in accordance with the
build-out schedule in certain of its contracts, truckstop owners owning over
one-third of the Company's proposed truckstop locations may terminate the
exclusivity provisions contained in such contracts. Any failure by the Company
to meet its contractual obligations that results in the termination of
contracts, including the loss of the Company's exclusive rights under such
contracts, would have a material adverse effect on the Company's financial
condition and results of operations.

         In addition, as of September 30, 1998, the Company had contracts to
install the PNV Network at approximately 338 truckstops through trucking
associations whose members consist of smaller truckstop chains generally having
fewer than 10 truckstops. These associations act as purchasing agents for their
members. The Company entered into contracts with these associations as an
efficient manner in which to gain access to and establish a relationship with
numerous small to medium size truckstops. These associations do not have
authority to legally bind their members. Therefore, while each association has
granted the Company the exclusive right to provide cable television and
telephone services to its members, this contractual right is not binding on each
member. Prior to installation of the PNV Network at an association member's
truckstop, the Company enters into a contract with the association member
granting the Company the exclusive right to install the PNV Network at the
member's truckstops. Accordingly, there can be no assurance that the Company's
contracts with truckstop associations will result in the Company installing the
PNV Network at additional truckstop locations.

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. The Company has also
experienced rapid growth in its management and staff, including the addition of
three executive officers during the past 12 months. As of September 30, 1998,
the number of the Company's full-time employees had increased to 184 from 174 as
of June 30, 1998. The growth in the size and scope of the Company's business
activities have placed, and are expected to continue to place, a strain on the
Company's management and operations. 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 



                                       14
<PAGE>   17

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. The Company's 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, another competitor, 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. Cable providers to such users as
residential apartment buildings could seek to compete by offering programming to
truckstops. 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.


                                       15
<PAGE>   18

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. The Company has no
employment agreement with any members of its senior management. The Company
believes that the loss 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 Chief Executive Officer, 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 may be 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 its current and
anticipated telephone service offerings are subject to regulation by all state
and federal regulatory authorities, the Company is currently 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 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.



                                       16
<PAGE>   19

         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.

Trucking Industry; Target Market

         The Company's business is dependent upon the trucking industry in
general and upon long-haul trucking activity in particular. In turn, the
trucking industry is dependent on economic factors, such as the level of
domestic economic activity and interest rates, as well as operating factors such
as fuel prices and fuel taxes over which the Company has no control and which
could contribute to a decline in truck travel. The long-haul trucking business
is also a mature industry that has grown slowly in recent years and has, in the
past, been susceptible to recessionary downturns.

         The current target market for the PNV Network is comprised primarily of
the long-haul truck drivers in the United States (including Canadian drivers
crossing the U.S.-Canadian border to deliver and/or pick up loads) that spend
material amounts of time in truckstops. There is no consensus as to the number
of long-haul truck drivers that comprise the Company's target market, and there
can be no assurance that the Company's estimate of the size of its target market
is accurate. Although a number of sources, including government agencies, trade
associations, industry publications and the Company's own independently retained
market research consulting firm have published estimates based on one or more of
the following: freight taxes, diesel fuel usage, number of trucks, number of
truck drivers, commercial drivers licenses or other data relating to the
trucking industry, these estimates vary widely. Accordingly, there can be no
assurance that the Company's estimate of its target market is not materially
inaccurate, which could increase the penetration level that the Company must
achieve in order to successfully implement its business plan.

Rapid Technological Changes

         The telecommunications and cable industries are subject to rapid and
significant changes in technology. While the Company believes that for the
foreseeable future these changes will neither materially affect the continued
use of the Company's technology or the current or planned design, functionality
or capacity of the PNV Network or the telecommunications and cable services
offered nor materially hinder the Company's ability to acquire necessary
technologies, the effect of technological changes on the business of the Company
cannot be predicted. Thus, there can be no assurance that technological
developments will not have a material adverse effect on the Company.

Proprietary Rights

         The Company believes that recognition of its products and services is
an important competitive factor in its industry. Accordingly, it promotes (or
intends to promote) the following in connection with its marketing activities
and holds or has filed an application for a United States trademark registration
for the following: "PARK 'N VIEW," "INCAB PNV," "PNV USA," "YOUR CAB. YOUR
CABLE. YOUR CALL.," "PARK 'N VIEW" (with design), "DEN" (with design), and
"WHERE SMART DRIVERS STAY CONNECTED."



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<PAGE>   20

         The Company also regards the software developed by the Company (the
"PNV Software") as proprietary and attempts to protect it as a trade secret. The
Company holds no patents or copyrights on its software technology. If the
Company decides to seek either a copyright or a patent for the PNV Software,
there can be no assurance that the Company will be able to obtain such a
copyright or a patent. The intellectual property protections employed by the
Company, however, may not afford complete protection and there can be no
assurance that third parties will not independently develop such know-how or
obtain access to its know-how, ideas, concepts and documentation.

                           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.

                  27       Financial Data Schedule.

         (a)      Reports on Form 8-K.

                  None



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<PAGE>   21

                                   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: November 24, 1998           /s/      Ian Williams 
                                  ----------------------------------------------
                                  Ian Williams, Chairman of the Board and
                                  Chief Executive Officer

Date: November 24, 1998           /s/      R. Michael Brewer          
                                  ----------------------------------------------
                                  R. Michael Brewer, Vice President - Finance
                                  and Chief Financial Officer




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