UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10QSB

/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
                               -------------------------------------------------


/ /      TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the transition period from                       to
                              -----------------------  -------------------------

Commission File Number: 333-41007
                       ---------------------------------------------------------

  
                         EAST/WEST COMMUNICATIONS, INC.
                         ------------------------------
             (exact name of registrant as specified in its charter)

DELAWARE                                               13-3964837
--------                                               ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)
350 STUYVESANT AVENUE, NEW YORK, NEW YORK                10580
-----------------------------------------                -----
(Address of principle executive offices)                (Zip Code)

                                 (914) 921-6300
                                 --------------
              (Registrant's telephone number, including area code)


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

As of October 1, 1998, there were 1,772,198  shares of the Registrant's  Class A
Common Stock outstanding and 1,779,301 shares of the Registrant's Class B Common
Stock outstanding.



<PAGE>
                         EAST/WEST COMMUNICATIONS, INC.

                              FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998



                                      INDEX
                                      -----

                                                                            PAGE
                                                                            ----

Accountants' Compilation Report                                               1

Balance Sheets                                                                2

Statements of Operations                                                      3

Statements of Cash Flows                                                      4

Notes to Financial Statements                                              5-12



<PAGE>
                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                                 BALANCE SHEETS
<TABLE>
<CAPTION>

FOR THE PERIOD ENDED:                                                                        09/30/98            12/31/97
                                                                                          ----------------------------------
                                                                                           (Unaudited)              (A)
<S>                                                                                       <C>                   <C>         
ASSETS
Current Assets
      Cash and cash equivalents                                                           $    198,102          $    254,427
      Deposit with FCC                                                                               0                     0
                                                                                          ----------------------------------
Total current assets                                                                           198,102               254,427

PCS Licenses                                                                                18,957,721            18,957,721
Capitalized costs                                                                            1,970,000             1,240,434
                                                                                          ----------------------------------
Total assets                                                                              $ 21,125,823          $ 20,452,582
                                                                                          ==================================
                                                                                                                ============

LIABILITIES AND SHAREHOLDER'S EQUITY Current liabilities:
      Accrued liabilities                                                                 $  1,343,026          $    654,853

Long-term debt:
      Loan from FCC                                                                         15,166,177            15,166,177
Deferred income taxes                                                                          500,000               500,000

Redeemable preferred stock,  $1,000 par value; 5% cumulative  dividends,                        16,000
      shares authorized, 7,800 issued and
      outstanding (liquidation value - $7,800,000)                                           3,864,198             3,389,487

Shareholder's equity:
Common stock, Class A, $.0001 par value, 3,600,000 shares
      authorized, 1,772,198 shares issued and outstanding                                          177                   177
Common stock, Class B, $.0001 par value, 16,000,000 shares
      authorized, 1,779,301 shares issued and outstanding                                          178                   178
Additional paid-in capital                                                                   4,949,645             4,949,645
Shareholder's deficit accumulated during development stage                                  (4,697,578)           (4,207,935

Total shareholder's equity accumulated during the
      development stage                                                                        252,422               742,065
                                                                                          ----------------------------------
Total liabilities and shareholder's equity                                                $ 21,125,823          $ 20,452,582
                                                                                          ==================================
</TABLE>

(A) The Balance  Sheet at December  31, 1997 has been  derived  from the Audited
Financial  Statements at that date, but does not include all of the  information
and footnotes required by generally accepted accounting  principles for complete
financial statements.

See Accountants' Compilation Report and accompanying notes.

<PAGE>

                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>


                                                                 JANUARY 1            JANUARY 1        JULY 26, 1996
                                                                TO SEPT 30,          TO SEPT 30,      (INCEPTION) TO
                                                                    1998                1997           SEPT 30, 1998
                                                             --------------------------------------------------------
                                                               (Unaudited)

<S>                                                                <C>                       <C>               <C>  
Investment income                                                  8,266                     0                 9,010

Interest expense including commitment fees                             0            (1,720,076)           (3,566,062)
Deferred income tax expense                                            0                     0              (500,000)
Other expenses                                                   (23,198)              (27,430)             (111,549)
                                                              -------------------------------------------------------
          Net loss                                               (14,932)           (1,747,506)           (4,168,601)

Dividend requirement on preferred stock                         (474,711)                    0              (528,977)
                                                              -------------------------------------------------------
Loss applicable to common shares                                (489,643)           (1,747,506)           (4,697,578)
                                                              =======================================================

Basic and diluted loss per share:
          Net loss                                                (0.138)                   
                                                              ================

Number of shares used in computation                           3,551,499                    
                                                              ================

Net loss allocated to general partner (1%)                                             (17,475)
                                                                                  ================

Net loss allocated to limited partner (99%)                                         (1,730,031)
                                                                                  ================

</TABLE>



See Accountants' Compilation Report and accompanying notes.
<PAGE>

                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                                        JULY 26, 1996
                                                                   JANUARY 1          JANUARY 1        (INCEPTION) TO
                                                                  TO SEPT 30,        TO SEPT 30,          SEPT 30,
                                                                      1998               1997               1998
                                                               ------------------------------------------------------
                                                                 (Unaudited)
<S>                                                            <C>                  <C>                  <C>          
Cash Flows from Operating Activities:
      Net Loss                                                 $    (14,932)        $ (1,747,506)        $ (4,168,601)
      Adjustments to reconcile net income to net
            cash used by operating activities:
            Deferred  income  taxes                                                                           500,000
            Changes  in  operating  assets and
            liabilities:
                 Increase (decrease) in accrued expenses            (41,393)                   0               19,526
                 Increase in accrued interest                                          1,720,076            3,566,064
                                                               ------------------------------------------------------
Net Cash Provided (Used) by Operating Activities                    (56,325)             (27,430)             (83,011)

Cash Flows from Investing Activities:
      Deposits with FCC                                                               10,104,228           (1,895,772)
      Purchase of PCS licenses                                                        (1,895,772)          (1,895,772)
      Other                                                                              (15,300)             (11,617)
                                                               ------------------------------------------------------
Net Cash Provided (Used) by Investing Activities                          0            8,193,156           (3,803,161)

Cash Flows from Financing Activities:
      Proceeds from the issuance of loans from the                        0
            Limited Partner                                                            1,938,502           13,738,502
      Repayment of loans from the Limited Partner                                    (10,104,228)         (10,104,228)
      Capital contributions                                               0                    0              450,000
                                                               ------------------------------------------------------
Net Cash Provided (Used) by Financing Activities                          0           (8,165,726)           4,084,274

Increase (Decrease) in Cash                                         (56,325)                   0              198,102

Cash, beginning of period                                           254,427                    0                    0
                                                               ------------------------------------------------------

Cash, end of period                                            $    198,102         $          0         $    198,102
                                                               ======================================================

</TABLE>



See Accountants' Compilation Report and accompanying notes.



<PAGE>

                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998


NOTE 1     ACCOUNTING POLICIES:

           DESCRIPTION OF BUSINESS:

           East/West  Communications,  Inc. ("the Company") was  incorporated on
           August 13,  1997,  to succeed  to the rights and  obligations  of Aer
           Force Communications B, L.P. ("the Partnership"). The Partnership was
           formed in July  1996,  to bid for  personal  communications  services
           ("PCS") licenses in the Federal  Communications  Commission's ("FCC")
           F-Block auction.  PCS is a second generation digital wireless service
           utilizing  voice,   video  or  data  devices  that  allow  people  to
           communicate  at anytime and virtually  anywhere.  Over the past three
           years,  the FCC  auctioned  off PCS  licenses,  a total of 120 MHZ of
           spectrum,  falling  within six separate  frequency  blocks  labeled A
           through F.  Frequency  blocks C and F were  designated  by the FCC as
           "entrepreneurial   blocks."   Certain   qualifying  small  businesses
           including  the  Partnership  were  afforded  bidding  credits  in the
           auctions as well as  government  financing of the licenses  acquired.
           The  Partnership  won  five  licenses  in  1997 to  provide  personal
           communications  services  over 10Mhz of spectrum to a  population  of
           approximately 21 million, including Los Angeles and Washington,  D.C.
           Aer  Force  Communications,  Inc.  was  the  General  Partner  of the
           Partnership  with a 50.1% equity  interest.  Lynch FCS  Corporation F
           ("Lynch  PCS F"),  a  wholly-owned  subsidiary  of Lynch  Corporation
           ("Lynch"),  a publicly held company,  was the Limited  Partner of the
           Partnership with a 49.9% equity interest.

           On  December  4,  1997,  the  Company  succeeded  to the  assets  and
           liabilities of the Partnership under a plan where the General Partner
           received  50.1% of the Common  Stock of the  Company  (in the form of
           100% of the Company's  Class B Common Stock) and Lynch PCS F received
           49.9% of the Common  Stock of the Company (in the form of 100% of the
           Company's Class A Common Stock).  Just prior to the  succession,  the
           Partners made cash contributions  totaling $250,000 (in proportion to
           their respective equity interests) to the Partnership and the Limited
           Partner  contributed  $4.5  million  of its  outstanding  loan to the
           Partnership's capital.
<PAGE>

                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998


NOTE 1     DESCRIPTION OF BUSINESS (CON'T):

           Immediately  thereafter,  Lynch PCS F dividended  39.9% of the Common
           Stock  of the  Company  to Lynch  which,  in  turn,  dividended  this
           interest to its  shareholders.  In addition,  Lynch PCS F transferred
           the  remaining  10% of  Common  Stock  of the  Company  held by it to
           Gabelli  Funds,  Inc., an affiliate of the Chairman and CEO of Lynch,
           in satisfaction  of a previously  incurred  obligation.  Also at that
           time,  Lynch PCS F converted  the remaining  principal  amount of its
           loan to the Partnership of $3,335,221 (after the capital contribution
           of $4,500,000) into a redeemable  preferred stock of the Company (see
           Note 5).  Under the terms of this  conversion  the Limited  Partner's
           prior  obligation  to  make  further  loans  to the  Partnership  was
           terminated.

           BASIS OF PRESENTATION:
           The financial  statements  are prepared in conformity  with generally
           accepted  accounting  principles  applicable to a  development  stage
           enterprise.

           The  Company's  financial  statements  have been  prepared on a going
           concern basis which  contemplates  the  realization of assets and the
           satisfaction  of  liabilities in the normal course of business and do
           not include any adjustments to reflect the possible future effects on
           the  recoverability  and  classification of assets and the amount and
           classification  of  liabilities  that may  result  from the  possible
           inability of the Company to continue as a going concern.

           The  Company   believes  that  its  PCS  licenses  have   substantial
           potential.  However,  the Company has not yet adopted a business plan
           or determined how to finance its operations  because of uncertainties
           relating  to PCS.  Therefore,  the  Company  has  not yet  determined
           whether to develop its PCS licenses on its own, to joint  venture its
           licenses with other PCS or wireless telephone licensees or operators,
           or to sell  some  or all of its  licenses.  The  Company  expects  to
           continually evaluate these factors and adopt a business plan once the
           financing,  regulatory  and  market  aspects  of  the  PCS  are  less
           uncertain.

           The Company has  incurred  losses  since  inception  and will need to
           obtain capital in order to fund its interest payment  obligations and
           for working capital and general corporate  purposes.  There can be no
           assurance that the Company can raise  sufficient  capital to fund its
           obligations   and  finance   the   construction   of  its   networks.
           Accordingly,  the lack of funding creates substantial doubt about the
           Company's   ability  to  continue  as  a  going  concern.   

<PAGE>
                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998


NOTE 1     CASH AND CASH EQUIVALENTS:

           Cash and cash equivalents for which the carrying amount  approximates
           fair value include highly liquid investments with a maturity of three
           months or less at the time of purchase.

           ADMINISTRATIVE SERVICES:
           The Company  and the  Partnership  has never had any paid  employees.
           Lynch PCS F provided the  Partnership,  at its request,  with certain
           services  in  connection  with  the  Partnership's  bidding  for  PCS
           licenses in the FCC auction in late 1996  through  early 1997.  Aside
           from  that  matter,  neither  the  General  Partner  nor  Lynch PCS F
           provided the Partnership or the Company with a substantial  amount of
           services.  Neither partner charged the Partnership or the Company for
           the services provided, as such amounts are not significant.

           USE OF ESTIMATES:
           The preparation of financial  statements in conformity with generally
           accepted accounting  principles requires management to make estimates
           and  assumptions  that  affect  the  carrying  amounts  of assets and
           liabilities and  disclosures at the date of the financial  statements
           and the reported  amounts of expenses  during the  reporting  period.
           Actual results could differ from those estimates.

           CAPITALIZED COSTS:
           Interest  charges  including  commitment  fees incurred  prior to the
           granting  of the  licenses  have  been  expensed.  Subsequent  to the
           license  grant dates,  and until  operations  commence,  all interest
           charges and  commitment  fees on  outstanding  loan  balances will be
           capitalized.  These costs  amounting to $1,969,770  will be amortized
           over the  remaining  life of the  respective  loan  when the  Company
           commences  operations.  The capitalized costs included  $1,626,831 of
           capitalized interest and late fee penalty of $20,600 at September 30,
           1998.  Total  interest  charges  amounted to  $729,567,  $221,845 and
           $2,546,843 respectively, for the nine months ended September 30, 1998
           and  1997  and for the  period  from  July 26,  1996  (inception)  to
           September 30, 1998.

           The PCS licenses will be amortized over a period, consistent with the
           industry  standard,  not to exceed 40 years,  which  will  begin when
           operations commence.

<PAGE>
                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998


NOTE 1     CAPITALIZED COSTS (CON'T):

           Pursuant to FCC regulations, license holders are required to commence
           providing  service to one-third or the population  within the license
           area within five years from the date of award and  two-thirds  of the
           population within ten years from the date of award.

           LOSS PER SHARE:
           In 1997,  the Financial  Accounting  Standards  Board issued SFAS No.
           128,  "Earnings  per Share," which was adopted by the Company in 1997
           upon the  issuance  of its  common  stock.  Basic  loss per  share is
           calculated  by dividing  net loss by the weighted  average  number of
           Class A and Class B common shares  outstanding during the period. The
           Basic and diluted loss per share for the year ended December 31, 1997
           give effect to the  issuance of the common stock of the Company as if
           the issuance  occurred on January 1, 1997,  and there is no change in
           the number of shares at September 30, 1998.

           INCOME TAXES:
           Prior to December 4, 1997,  no provision for income taxes was made in
           the  financial  statements  as the partners  were  required to report
           their respective  share of income or loss on their respective  income
           tax returns.  Beginning  December 4, 1997,  the Company  accounts for
           income taxes pursuant to the provisions of SFAS No. 109,  "Accounting
           for Income  Taxes."  Under SFAS No. 109,  deferred  taxes result from
           temporary differences in the recognition of revenues and expenses for
           income tax and financial  reporting  purposes.  At December 31, 1997,
           and at September 30, 1998 defined tax  liabilities  represent the tax
           effect of taxable  temporary  differences  (pertaining to capitalized
           costs)  which  existed  at the date the  Partnership  converted  to a
           C-Corporation.

NOTE 2     RELATED PARTIES:
           Due to Limited Partner represents amounts due for interest, including
           commitment  fees,  on the loan  outstanding  which  was to be  repaid
           according to the terms of the loan (See Note 4).

NOTE 3     PARTNERSHIP AGREEMENT:
           The  Partnership  was formed in July 1996 to bid for PCS  licenses in
           the "F-Block"  auction.  The General Partner  originally  contributed
           $100,200  to the  Partnership  for a 50.1%  equity  interest  and the
           Limited  Partner  contributed  $99,800 to the Partnership for a 49.9%
           equity interest. 

<PAGE>
                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998


NOTE 3     PARTNERSHIP AGREEMENT (CON'T):
           Under the terms of the  Partnership  Agreement  all  deductions  with
           respect to interest expense and commitment fees were allocated 99% to
           the Limited Partner and 1% to the General Partner. All profits of the
           Partnership  were allocated 99% to the Limited  Partner and 1% to the
           General  Partner  until  all  the  aggregate  amount  of all  profits
           allocated  to the  Limited  Partner  and  General  Partner  equal the
           deductions  with  respect to interest  expense and  commitment  fees.
           Subsequently,  all  profits and losses  were to be  allocated  to the
           Limited Partner and General Partner in proportion to their respective
           interests,  49.9% and 50.1%,  respectively.  On December 4, 1997, the
           Partnership was terminated.

NOTE 4     LONG TERM DEBT:

           Long  term  debt as of  September  30,  1998 and  December  31,  1997
           consists of :

           PCC financing of PCS licenses awarded in the following  markets
           and maturing in 2007:
                  Los Angeles, CA                          $   3,579,000
                  Washington, D.C.                             7,068,000
                  Sarasota, FL                                 1,322,400
                  Reno, NV                                     1,429,800
                  Santa Barbara, CA                            1,766,977
                                                            ------------
                                                             $15,166,177

           In  connection  with the PCS  "F-Block"  auction,  $12.0  million was
           deposited with the FCC of which $11.8 million was borrowed from Lynch
           PCS F under a line of credit which was due and payable in five years.
           The interest rate on the  outstanding  borrowings  under the line was
           fixed at 15%;  additionally,  a  commitment  fee of 20% per annum was
           charged on the total line of credit. On December 4, 1997, the balance
           of  such  loan  was  $7,835,221,   including   accrued  interest  and
           commitment  fees. On such date,  $4.5 million was  contributed to the
           equity of the Partnership and the remaining balance of $3,335,221 was
           converted into 7,800 shares of redeemable  preferred  stock (see note
           6). At that time, the line of credit was terminated.

           All of the FCC financing bears interest at 6.25% per annum. Quarterly
           interest  payments of $236,972  were required for the first two years
           of the license

<PAGE>

                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998


NOTE 4     LONG TERM DEBT (CON'T):
           (1997 and 1998) and  quarterly  payments of principle and interest of
           $605,879 are required over the  remaining  eight years of the license
           term. These loans are secured by the licenses granted. In April 1997,
           the FCC suspended the interest payments on the debt through March 31,
           1998.  On March  24,  1998,  the FCC  indicated  that  such  interest
           payments  will be resumed  not  earlier  that 90 days  subsequent  to
           publication in the Federal Register of its "Order on  Reconsideration
           of the Second Report and Order." Such order was published on April 8,
           1998, requiring the suspended payments  (aggregating  $805,490) to be
           made in eight quarterly  installments  of $100,686  beginning in July
           1998, plus regular interest payments for the period of March 31, 1998
           to July 31, 1998, of $311,324.  Payment was made on October 28, 1998,
           within the 90-day  non-delinquency  period, in the amount of $432,611
           comprising accrued interest of $412,010 and a 5% penalty of $20,600.

           There  was no  cash  payments  for  interest  for the  periods  ended
           September 30, 1998 and December 31, 1997.

           Aggregate principle maturities of long-term debt for each of the next
           five years are as follows:  1998--$0 million,  1999--$0.743  million,
           2000--$1.558 million, 2001--$1.658 million and 2002--$1.764 million.

NOTE 5     COMMON STOCK :
           The  Company  has two  classes or Common  Stock  authorized:  Class A
           Common Stock and Class B Common Stock.  The authorized  capital stock
           of the Company  consists of 3,600,000  shares of Class A Common Stock
           and 16,000,000  shares of Class B Common Stock. The holders of Common
           Stock are entitled to receive ratably such dividends,  if any, as may
           be declared  from time to time by the Board of Directors out of funds
           legally  available  therefor.   In  the  event  of  the  liquidation,
           dissolution or winding up of the Company, the holders of Common Stock
           are entitled to share ratably in all assets  remaining  after payment
           of liabilities, if any, then outstanding.

           Collectively,  the shares of Class A Common Stock  represent not more
           than 49.9% of the Company's voting interest, with each share of Class
           A Common  Stock issued and  outstanding  having one vote per share on
           all matters except the election of directors or as otherwise provided
           by law.  The  holders of the Class A Common  Stock as a class will be
           entitled to elect members to the 

<PAGE>

                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998


NOTE 5     COMMON STOCK (CON'T):
           Company's Board of Directors who  collectively  will represent two of
           the five votes of the Company's Board of Directors.

           Collectively,  the shares of Class B Common Stock  represent at least
           50.1% of the Company's voting  interest,  with each shares of Class B
           Common Stock issued and  outstanding  having 5 votes per share on all
           matters except the election of directors or as otherwise  provided by
           law.  With respect to the election of  directors,  the Class B Common
           Stock,  voting together as a class,  may elect up to three members of
           the Company's Board of Directors.

NOTE 6     REDEEMABLE PREFERRED STOCK :
           The Company is authorized  to issue 16,000 shares of Preferred  Stock
           and at December  31, 1997 has  outstanding  7,800 shares of Preferred
           Stock,  par  value  $1,000  per  share.  The  Preferred  Stock (I) is
           entitled to preferred  dividends at an annual rate of five (5) shares
           of  additional  Preferred  Stock  for  each  one  hundred  shares  of
           Preferred  Stock  outstanding,  (ii) has no voting  rights  except as
           provided  by law,  and (iii) is entitled to be redeemed at $1,000 per
           share  (plus  accrued  and unpaid  dividends)  on the  earlier of (i)
           October  1,  2009,  (ii) upon a change of  control  of the Class A or
           Class B  Common  Stock  or  (iii)  upon  the  sale of one or more PCS
           licenses for cash or a non-cash sale under certain circumstances. The
           difference between the book value of such shares (which  approximates
           fair value) and the  redemption  price is being  amortized  using the
           effective  interest method to November 1, 2009. Accrued dividends and
           accretion on the preferred  stock are included in the preferred stock
           accounts in the balance sheet.

NOTE 7     LEGAL MATTERS :
           The  United   States   Department   of  Justice  has   initiated   an
           investigation  to  determine  whether  there has been bid rigging and
           market  allocation  for  licenses  auctioned  by the FCC for PCS. The
           Company, together with various other bidders in the PCS auctions, has
           received a civil  investigative  demand ("CID") requesting  documents
           and  information  relating to bidding,  and in May 1997,  the Company
           complied  with the CID.  The  Company  is not  aware of what  further
           action, if any, the Justice Department or the FCC may take and cannot
           estimate its exposure, if any, at this time.


<PAGE>

                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998


NOTE 8     YEAR 2000 (UNAUDITED):
           The Company  believes its information  systems are in compliance with
           year 2000 information technology requirements.

NOTE 9     SUBSEQUENT EVENTS:
           Management  has elected to defer  payment of interest  due on loan to
           payable to FCC due on  October  31,  1998 in the amount of  $337,658.
           Payments  issued  within 90 days of due date will be  subject to a 5%
           penalty and 15% penalty if paid within 90 to 180 days of due date.

           On October 22, 1998, the Board of Directors of the Company authorized
           the Company to borrow up to $300,000  from  certain  directors of the
           Company. The loans are evidenced by promissory notes (the "Notes") in
           the amount of  $150,000  each to Mario J.  Gabelli and T. Gibbs Kane,
           Jr.,  which  bear  interest  at a rate of 5.00% per  year,  and which
           become due and  payable on the  earlier of I) October 22, 1999 or ii)
           upon the receipt of proceeds  from an offering of rights (the "Rights
           Offering") to purchase shares of Class A Common Stock,  sufficient to
           pay the full amount of principal and interest then owed on the Notes.
           The  Company  plans to offer  rights in  connection  with such Rights
           Offering to existing  shareholders  of the  Company's  Class A Common
           Stock during late 1998 or early 1999.
<PAGE>
Item 2.   Management's Discussion and Analysis

            The  Company is a  development  stage  company  with no  significant
results of  operations  to date.  The Company  holds five 10 megahertz  personal
communications  services ("PCS") licenses to serve a population of approximately
21 million,  including  two of the top ten markets,  Los Angeles and  Washington
D.C., plus Sarasota,  Florida, Reno, Nevada and Santa Barbara,  California.  The
total cost of these licenses was approximately $19 million,  after a 25% bidding
credit provided by the Federal  Communications  Commission  ("FCC").  80% of the
cost of the licenses (or $15.2  million) was financed over ten years by the U.S.
government (the "Government  Financing"),  with only payments of interest during
the first two years after award of the licenses.

            The  Company   believes  that  its  PCS  licenses  have  substantial
potential.  However,  the  Company  has  not  yet  adopted  a  business  plan or
determined how to finance its operations  because of  uncertainties  relating to
PCS, which makes evaluation difficult,  including without limitation the newness
of PCS, financing,  affiliation and technology issues and the financial problems
of certain C-Block licensees.  Therefore, Company has not yet determined whether
to develop its PCS licenses on its own,  joint  venture its licenses  with other
PCS or wireless  telephone licenses holders or operators or others, or sell some
or all of its  licenses.  The  Company  expects to  continually  evaluate  these
factors and to adopt a plan or plans once the  financing,  regulatory and market
aspects of PCS are less uncertain.  The Company's  principal expense to date has
been interest (including commitment fees) plus minor administrative expenses.

            Unless the Company sells its PCS business or joint  ventures its PCS
licenses with an entity that has the capacity to provide  substantial funds, the
Company will need to raise substantial capital to fund its installment  payments
to the  U.S.  Government  and the  build  out of its  PCS  licenses.  Under  the
originally agreed to Government  Financing,  the Company has to make payments of
approximately  $948,000  in each of the  first  two  years  after  award  of the
licenses,  and  $2,424,000  in each of years three  through  ten.  The  interest
payments have been  suspended,  however,  until July 31, 1998, at which time the
Company will be required to make suspended  interest payments in eight quarterly
installments,  in addition to regular  interest  payments.  The Company does not
have a reliable  estimate  of the cost to build out its PCS  licenses  but it is
likely to be substantial.

            The  Company  will  have to  raise  funds  shortly  in order to make
interest  payments  on the  Government  Financing  and for  working  capital and
general corporate  purposes.  The report of the Company's  independent  auditors
with respect to the  financial  statements of the Company as of and for the year
ended December 31, 1997,  the period from July 26, 1996  (inception) to December
31,  1996 and the period  from July 26, 1996  (inception)  to December  31, 1997
contains a paragraph as to the Company's ability to continue as a going concern.
Among the factors cited by the auditors as raising  substantial  doubt as to the
Company's  ability to continue as a going  concern is that,  with respect to the
periods covered, the Company has incurred losses since inception and has not yet
adopted a business plan or  determined  how to finance its  operations  and will
need to obtain capital in order to fund its interest payment obligations and for
working capital and general corporate purposes.

<PAGE>

Liquidity and Capital Resources

            The  principal  amount  of  debt  (excluding  accrued  interest)  on
December 31, 1997 was $15,166,177,  compared to shareholders equity of $588,924.
During the period from July 26, 1996  (inception)  to September  30,  1998,  the
Company had no revenues or operating profits and cannot predict when it may have
any revenues or operating profits.

            The debt of the Company to the Limited  Partner  (including  accrued
interest and commitment fees) was $7,835,221 at December 4, 1997. Of that amount
$4,500,000  was  contributed  as equity  to the  partnership  and the  remaining
$3,335,221  was  converted  into  7,800  shares of $1,000  par value  redeemable
preferred  stock of the  Registrant.  The  redeemable  preferred  stock  accrues
payment  in-kind  dividends at 5% per annum and is  redeemable at par value plus
including  accrued  dividends  on  November  1,  2009 or  earlier  upon  certain
circumstances.

            In April 1997, the FCC suspended interest payments on the government
financing through March 31, 1998. On March 24, 1998, the FCC indicated that such
interest will be resumed not earlier than 90 days  subsequent to the publication
in the Federal  Register of the Order on  Reconsideration.  Such publication was
made on April 8, 1998 requiring  cumulative  suspended  interest  payments to be
made in eight  quarterly  installments  of $100,686  each  beginning on July 31,
1998,  also on that date,  the accrued  interest  of $311,324  from the date the
interest suspension ended, March 31, 1998, until July 31, 1998. Payment was made
on October 28, 1998, within the 90-day non-delinquency  period, in the amount of
$432,611  comprising  accrued  interest of $412,010 and a 5% penalty of $20,600.
Accordingly,  during the remainder of 1998, the  Registrant  will be required to
issue an  additional  interest  payment of $236,972 plus  suspended  interest of
$100,686.  Total interest  payments  required for year 1998 amounts to $770,269.
Interest  payments  for  1999,  are  projected  to be  $944,810  plus  quarterly
suspended interest of $402,744 for the year.

            Management  has elected to defer  payment of interest due on loan to
payable  to FCC due on October  31,  1998 in the  amount of  $337,658.  Payments
issued  within  90 days of due date  will be  subject  to a 5%  penalty  and 15%
penalty if paid within 90 to 180 days of due date.

            On  October  22,  1998,  the  Board  of  Directors  of  the  Company
authorized  the Company to borrow up to $300,000  from certain  directors of the
Company. The loans are evidenced by promissory notes (the "Notes") in the amount
of $150,000 each to Mario J. Gabelli and T. Gibbs Kane, Jr., which bear interest
at a rate of 5.00% per year,  and which become due and payable on the earlier of
I) October  22,  1999 or ii) upon the  receipt of  proceeds  from an offering of
rights  (the  "Rights  Offering")  to purchase  shares of Class A Common  Stock,
sufficient  to pay the full amount of principal  and  interest  then owed on the
Notes. The Company plans to offer rights in connection with such Rights Offering
to existing  shareholders of the Company's Class A Common Stock during late 1998
or early 1999.


<PAGE>

Year 2000 Compliance
The Company  believes its  information  systems are in compliance with year 2000
information technology requirements.

Seasonality
The Company  believes  that its  operations  are not  significantly  effected by
seasonality.

Risk Factors: Forward Looking Statements

            The management  discussion and analysis and the information provided
elsewhere in this Form 10-QSB contain forward looking  statements  regarding the
Company's future plans,  objectives and expected  performance.  Those statements
are based on  assumptions  that the Company  believes  are  reasonable,  but are
subject  to a wide  range of risks and  uncertainties,  and a number of  factors
could  cause the  Company's  actual  results  to differ  materially  from  those
expressed in the forward looking statements referred to above.

Government Regulation

            The   spectrum   licensing,   construction,   operation,   sale  and
interconnection  arrangements of wireless  communications networks are regulated
to varying degrees by state regulatory agencies,  the FCC, Congress,  the courts
and  other  governmental  bodies.  There can be no  assurance  that any of these
governmental  bodies  having  jurisdiction  over the  Company  will not adopt or
change  regulations  or take  other  actions  that  would  adversely  affect the
Company's business,  financial condition or results of operations.  Although the
FCC has issued rules  regarding the F-Block  Auction and numerous other matters,
not  all  of  them  have  been  subject  to  FCC  or  judicial   interpretation.
Accordingly,  for  certain  matters  (such  as the  structure  of its  Board  of
Directors and management), the Company is relying on public and private informal
interpretation  of the rules from the staff of the FCC.  The FCC is not bound by
such informal interpretation of FCC staff and there can be no assurance that the
FCC or the  courts  will agree with the  staff's  interpretation.  Many of these
rules  also  require  ongoing  compliance  that the  Company  may not be able to
satisfy  despite  diligent  efforts.  A failure to comply  with FCC rules  could
subject the Company to serious penalties and have a material adverse effect upon
the Company's  business,  results of  operations  and  financial  condition.  In
addition, although the Company's PCS licenses are renewable after the expiration
of their 10-year terms,  there can be no assurance  that the Company's  licenses
will be renewed.

            The  Telecommunications  Act  of  1996  (the  "1996  Act")  mandates
significant  changes in existing regulation of the  telecommunications  industry
that are intended by Congress to promote competitive  development of new service
offerings,  to expand public availability of telecommunications  services and to
streamline   regulation  of  the  industry.   Included  in  these  mandates  are
requirements  that local  exchange  carriers  ("LECs")  must:  (i) permit  other
competitive carriers,  which may include PCS licensees, to interconnect to their
networks;  (ii) establish  reciprocal  compensation  agreements with competitive
carriers to terminate traffic on each other's networks and (iii) offer resale of
their telecommunications  services. In addition,  incumbent LECs are required to
offer  interconnection  and access to unbundled  network  elements at cost-based
rates (plus a 




<PAGE>

reasonable profit), as well as significant resale discounts.  The implementation
of these mandates by the FCC and state authorities potentially involves numerous
changes  in  established  rules and  policies  that could  adversely  affect the
Company's business, financial condition and results of operations.

            In March 1997, CAI Wireless Systems, Inc. (and certain subsidiaries)
("CAI") filed petitions to deny various D, E and F-Block PCS licenses, including
the  Company's  license  for  Washington,  D.C.,  because  it  feared  that  PCS
operations might cause  interference with petitioners'  wireless cable services.
In June 1997 the FCC  dismissed  all of those  petitions on the grounds that CAI
failed  to  establish  standing  because  it failed  to  allege  specific  facts
supported  by  affidavit   demonstrating   that   applicants   would  cause  CAI
interference  if their  applications  were granted.  It is possible that CAI, or
others similarly situated, might attempt to raise this issue at a later date.

            The FCC  has  proceedings  in  process  that  could  open  up  other
frequency bands for wireless telecommunications and PCS-like services. There can
be no assurance that these proceedings will not adversely affect the Company and
the Company's ability to offer a full range of PCS services.

Personal Communications Services ("PCS")

            Victoria G. Kane, a director of the Company and the sole shareholder
of the Class B Common Stock,  is the majority  stockholder of Fortunet  Wireless
Communications Corporation,  which is the General Partner and 50.1% equity owner
in Fortunet Communications, L.P. ("Fortunet"). Fortunet is the successor to five
partnerships that won 30 megahertz personal  communications services licenses in
the FCC's C-Block  auction  (restricted  to small  businesses  and certain other
qualifying  bidders),  which  concluded in 1996.  Fortunet won 31 licenses in 17
states covering a population of approximately 7 million people. The licenses had
an aggregate purchase price of $216 million after a 25% bidding credit.

F-Block License Requirements

            When the FCC  allocated  spectrum  to  public  auction  for PCS,  it
designated the F-Block as an  "Entrepreneurs'  Block." FCC rules require F-Block
applicants  and  licensees  (collectively,   "Entrepreneurs")  to  meet  various
qualifications.

            The FCC has  determined  that  Entrepreneurs  that qualify as a Very
Small Business and win PCS licenses are eligible to receive a loan from the U.S.
Government  for 80% of the dollar  amount of their  winning  bids in the F-Block
Auction (a "F-Block Loan"). The Government  Financing provided to the Company is
F-Block Loans. In order to ensure  continued  compliance with the FCC rules, the
FCC has  announced  its  intention to conduct  random  audits during the initial
10-year PCS  license  terms.  There can be no  assurance  that the Company  will
continue to satisfy any of the F-Block license requirements,  and the failure to
do so would have a material adverse effect on the Company.
<PAGE>

            Entrepreneurs  Requirements.  In order to hold a F-Block license, an
entity  must  have:   (i)  less  than  $125  million  in  gross   revenues  (the
"Entrepreneurs Revenues Limit") for the two years preceding the auction and (ii)
less than $500 million in total assets (excluding the value of C-Block licenses)
(the "Entrepreneurs  Asset Limit" and, together with the Entrepreneurs  Revenues
Limit, the "Entrepreneurs Requirements"). To qualify for the F-Block Auction, an
entity  had to have met the  Entrepreneurs  Revenues  Limit  for each of the two
years  prior to the  auction  and the  Entrepreneurs  Asset Limit at the time it
filed its  application  to qualify for the F-Block  Auction on FCC Form 175 (the
"Short Form").  For at least five years after  obtaining an F-Block  license,  a
licensee  must  continue  to meet  the  Entrepreneurs  Requirements,  which  are
modified for such five-year  period to exclude  certain assets and revenues from
being  counted  toward  the  Entrepreneurs  Asset  Limit  and the  Entrepreneurs
Revenues Limit,  respectively.  Additional  amounts are excluded if the licensee
maintains  an   organizational   structure  that  satisfies  the  Control  Group
Requirements  described  below.  In calculating a licensee's  gross revenues for
purposes of the Entrepreneurs Requirements,  the FCC includes the gross revenues
of the licensee's  affiliates,  those persons or entities that hold interests in
the licensee, and the affiliates of such persons or entities.

            By claiming status as an Entrepreneur, the Company qualified for the
F-Block  Auction.  If the FCC were to determine that the Company did not satisfy
the  Entrepreneurs  Requirements  at the  time it  participated  in the  F-Block
Auction  or  that  the  Company   fails  to  meet  the   ongoing   Entrepreneurs
Requirements,  the FCC could revoke the Company's PCS licenses, fine the Company
or take other  enforcement  actions,  including  imposing the Unjust  Enrichment
Penalties  described  below.  Although  the  Company  believes  it has  met  the
Entrepreneurs  Requirements,  there can be no assurance that it will continue to
meet  such  requirements  or  that,  if  it  fails  to  continue  to  meet  such
requirements,  the FCC will not take  action  against the  Company,  which could
include revocation of its PCS licenses.

            Very  Small  Business   Requirements.   An  entity  that  meets  the
Entrepreneurs  Requirements  may also  apply  to  receive  certain  preferential
financing terms if it meets certain  requirements to qualify as a Small Business
or a Very Small  Business  (the  "Small  Business  Requirements"  or "Very Small
Business  Requirements").  The  preferential  financing  terms  for  Very  Small
Businesses,  include a 25% bidding credit (the "Bidding Credit") and the ability
to make quarterly  interest-only  payments on its F-Block Loan for the first two
years of the  license  term.  To meet the Very Small  Business  Requirements,  a
licensee  must  have had  annual  average  gross  revenues  of not more than $15
million for the three calendar years preceding the date it filed its Short Form.
In  calculating  a  licensee's  gross  revenues  for  purposes of the Very Small
Business  Requirements,  the FCC includes the gross  revenues of the  licensee's
affiliates,  those persons or entities that hold interests in the licensee,  and
the affiliates of such persons or entities.

            By claiming status as a Very Small Business,  the Company  qualified
for the 25% Bidding Credit and the most favorable  installment payment terms. If
the FCC were to  determine  that the  Company  does not  qualify as a Very Small
Business, the Company could, at a minimum, be forced to give up any benefits for
which it was not  eligible.  Further,  the FCC could  revoke the  Company's  PCS
licenses, fine the Company or take 



<PAGE>

other enforcement actions,  including imposing the Unjust Enrichment  Penalties.
Although  the  Company  has  structured  itself to meet the Very Small  Business
Requirements,  there can be no assurance that it will remain in compliance  with
these  requirements or that, if it fails to continue to meet such  requirements,
the FCC will not take action against the Company, which could include revocation
of its PCS licenses.

            Control  Group  Requirements.  If an F-Block  licensee  maintains an
organizational  structure  in which at least 25% of its total  equity on a fully
diluted  basis is held by a control  group  (the  "Control  Group")  that  meets
certain  requirements  (the  "Control  Group  Requirements"),  the FCC  excludes
certain  assets and revenues  from such  licensee's  total  revenues and assets,
thereby making it easier for the licensee to meet the Entrepreneurs Requirements
and the Very Small Business Requirements. The Control Group Requirements mandate
that the Control Group,  among other things,  have both actual and legal control
of the licensee. Further, the FCC permits licensees to qualify under the Control
Group Requirements pursuant to an alternative structural option (the "Qualifying
Investor  Option"),  in which:  (i) an  established  group of investors  meeting
certain financial  qualifications (the "Qualifying Investors") that own at least
15% of the  equity  interest  on a fully  diluted  basis and 50.1% of the voting
power in the F-Block licensee and (ii) additional members  ("Additional  Control
Group  Members") that hold at least 10%, on a fully diluted basis, of the equity
interest in the F-Block  licensee.  Additional  Control  Group  Members  must be
either:  (a) the same Qualifying  Investors of the Control Group, (b) members of
the  licensee's  management  or  (c)  non-controlling  institutional  investors,
including  venture  capital  firms.  To take  advantage of the FCC's  Qualifying
Investor Option, a F-Block licensee must have met the Qualifying Investor Option
requirements  at the time it filed its Short Form and must  continue to meet the
Qualifying  Investor Option  requirements  for three years following the License
Grant Date.  Commencing  the fourth year of the license term,  the FCC rules (i)
eliminate the requirement that the Additional Control Group Members meet certain
qualifications and (ii) allow the licensee to reduce the minimum required equity
interest held by the Control Group's Qualifying Investors from 15% to 10%.

            In order to meet  the  Control  Group  Requirements,  the  Company's
Certificate of  Incorporation  provides that the Company's Class B Common Stock,
as a class, must constitute 50.1% of the voting power of the Company.  There can
be no  assurance  that the Company  will remain in  compliance  with the Control
Group Requirements or, if it fails to continue to meet such  requirements,  that
the FCC will not take action against the Company, which could include revocation
of its PCS  licenses.  Although  the  Company has taken these and other steps to
meet the Control Group Requirements,  there can be no assurance that the Company
has or will continue to meet the Control Group Requirements,  and the failure to
meet such requirements would have a material adverse effect on the Company.

            Asset and  Revenue  Calculation.  In  determining  whether an entity
qualifies as an Entrepreneur and/or as a Very Small Business, the FCC counts the
gross  revenues and assets of the  entity's  "financial  affiliates"  toward the
entity's total gross revenues and total assets.  Financial affiliation can arise
from  common  investments,   familial  or  spousal  relationships,   contractual
relationships,  voting trusts, joint venture agreements,  stock 


<PAGE>

ownership,  stock  options,  convertible  debentures  and  agreements  to merge.
Affiliates of  noncontrolling  investors  with  ownership  interests that do not
exceed the applicable FCC nonattributable  investor ownership thresholds are not
attributed  to F-Block  licensees  for  purposes  of  determining  whether  such
licensees  financially  qualify for the applicable F-Block Auction  preferences.
The Entrepreneurs  Requirements and the Very Small Business Requirements provide
that, to qualify as a nonattributable  investor, an entity may not own more than
25% of the  Company's  total equity on a fully  diluted  basis.  There can be no
assurance  that the Company will not exceed  these  passive  investor  limits or
otherwise violate the Entrepreneur  Requirements  and/or the Very Small Business
Requirements.

            In  addition,  if an  entity  makes  bona  fide  loans to a  F-Block
licensee, the assets and revenues of the creditor would not be attributed to the
licensee  unless the creditor is otherwise  deemed an affiliate of the licensee,
or the loan (including the redeemable  Preferred Stock) is treated by the FCC as
an equity  investment and such treatment  would cause the  creditor/investor  to
exceed the applicable  ownership  interest  thresholds (for purposes of both the
financial  affiliation and foreign ownership rules).  Although the FCC permits a
creditor/investor  to use standard  terms to protect its  investment  in F-Block
licensees, such as covenants,  rights of first refusal and super-majority voting
rights on  specified  extraordinary  issues,  the FCC has stated that it will be
guided,  but not bound,  by criteria  used by the  Internal  Revenue  Service to
determine  whether a debt investment is bona fide debt. The FCC's application of
its  financial  affiliation  rules  is  largely  untested  and  there  can be no
assurance  that the FCC or the courts  will not treat  certain of the  company's
lenders or investors as financial affiliates of the Company.

            Transfer  Restrictions.  In  addition,  the  FCC  prohibits  F-Block
licensees  from  assigning  or  transferring  control  of any of  their  F-Block
licenses for a period of at least five years from the License  Grant Date to any
entity that fails to satisfy the Entrepreneurs  Requirements during such period.
After the fifth year, all transfers and assignments remain subject to the Unjust
Enrichment Penalties.  The effect of this prohibition will likely deter or delay
unsolicited changes in control of the Company.

            The Company (i) believes  that it has  structured  itself to satisfy
the Entrepreneurs  Requirements,  (ii) intends to diligently pursue and maintain
its  qualification as a Very Small Business and (iii) has structured the Class A
and Class B Common  Stock in a manner  intended  to ensure  compliance  with the
applicable FCC Rules. The Company has relied on representations of its investors
to  determine  its  compliance  with  the  FCC's  rules  applicable  to  F-Block
licensees.  There can be no assurance,  however, that the Company's investors or
the Company itself will continue to satisfy these  requirements  during the term
of any PCS license  granted to the  Company or that the Company  will be able to
successfully implement divestiture or other mechanisms included in the Company's
Certificate of  Incorporation  which are designed to ensure  compliance with FCC
rules.  Any  non-compliance  with FCC rules could subject the Company to serious
penalties, including revocation of its PCS licenses.

            FCC rules impose build-out  requirements  that require PCS licensees
to provide  adequate  service to at least  one-third  of the  population  in the
licensed area within five 



<PAGE>

years from the date of grant and  two-thirds  within ten years.  The Company has
not begun any build out of its licenses. There are also substantial restrictions
on the transfer of control of C and F Block PCS licenses.

            There  are  many  risks  relating  to PCS  communications  including
without  limitation,  the high cost of PCS  licenses,  the fact that it involves
start-up  businesses,  raising  the  substantial  funds  required to pay for the
licenses and the buildout,  determining the best way to develop the licenses and
which  technology to utilize,  the small size and limited  resources the Company
compared  to other  potential  competitors,  existing  and  changing  regulatory
requirements,  additional auctions of wireless  telecommunications  spectrum and
actually  building  out and  operating  new  businesses  profitably  in a highly
competitive   environment  (including  already  established  cellular  telephone
operators  and five  new PCS  licensees).  There  can be no  assurance  that any
licenses  granted  to the  Company  can be  successfully  sold  or  financed  or
developed.
<PAGE>
                                   SIGNATURES


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

                                          EAST/WEST COMMUNICATIONS, INC.

                                          By:/s/ Victoria Kane
                                            ------------------------------------
                                            Victoria Kane
                                            Chairman of the Board
                                            (Chief Executive Officer and Chief
                                              Financial Officer)

Dated:  November 13, 1998