SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 ---------------
                                    FORM 10-K
         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 1998       Commission file number 0-9974


                      United States Aircraft Corporation
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Delaware                                               95-3518487
-------------------------------                               ----------------
(State or other jurisdiction of                               (I.R.S. employer
 incorporation or organization)                              identification no.)

           3121 East Greenway Road, Suite 201, Phoenix, Arizona 85032
           ----------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

               Registrant's telephone number, including area code:
                                 (602) 765-0500

           Securities registered pursuant to Section 12(b) of the Act:

                                      None
                              ---------------------
                              (Title of each Class)

          Securities registered pursuant to Section 12(g) of the Act:

                              Class A Common Stock
                              --------------------
                                (Title of class)

     Indicate  by check  mark  whether  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  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes [X]  No [ ]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     As of January 5, 1999,  the  aggregate  market  value of the Class A voting
Common Stock held by non-affiliates of the registrant,  computed by reference to
the closing sales price of such stock as of such date on the NASDAQ OTC Bulletin
Board,  was  $352,160.  Shares of Common Stock held by each officer and director
and by each person who owned 10% or more of the  outstanding  Common  Stock have
been  excluded  in that  such  persons  may be  deemed  to be  affiliates.  This
determination  of affiliate  status is not  necessarily  conclusive  and may not
apply for other purposes.  The registrant  also has  outstanding  Class B voting
Common Stock, although there is no public market for such stock.

     As of January 5, 1999,  there  were  9,927,504  shares of the  registrant's
Class A Common Stock outstanding and 4,962,801 shares of the registrant's  Class
B Common Stock outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE:

                                      NONE
<PAGE>
                                TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----
                                     PART I

ITEM 1.   BUSINESS..........................................................   1
ITEM 2.   PROPERTIES........................................................  26
ITEM 3.   LEGAL PROCEEDINGS.................................................  26
ITEM 4.   SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.................  26

                                    PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS...............................................  27
ITEM 6.   SELECTED CONSOLIDATED FINANCIAL DATA..............................  27
ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS.........................................  30
ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.......................  36
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURE..........................................  36

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT....................  37
ITEM 11.  EXECUTIVE COMPENSATION............................................  38
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT....  40
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS....................  41

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K...  42

SIGNATURES..................................................................  43

Financial Statements........................................................ F-1


                                       -i-
<PAGE>
                                     PART I

ITEM 1. BUSINESS

                                  INTRODUCTION

     Prior to the acquisition of Neo Vision, Inc. ("Neo Vision"),  United States
Aircraft  Corporation  (the  "Company")  was  engaged in the adult  real  estate
education  industry,  the travel  service  industry,  and the  ownership of real
estate. See, "BUSINESS OF UNITED STATES AIRCRAFT CORPORATION." On June 30, 1998,
the Company  entered into an Exchange  Agreement dated as of June 30, 1998 among
all of the former shareholders of Neo Vision, Inc., an Arizona corporation ("Neo
Vision")  and the Company  pursuant  to which the  Company has issued  2,000,000
shares of Class A Common Stock to all of the former  shareholders  of Neo Vision
in exchange  for all of the capital  stock of Neo Vision  (the  "Exchange")  and
pursuant to which Neo Vision has become a wholly owned subsidiary of the Company
and  additional  shares  of a new class of  common  stock  will be issued to the
former shareholders of Neo Vision.  Consistent with the Exchange Agreement,  the
Company's  stockholders will be asked to approve a proposal to amend and restate
the   Company's   Certificate   of   Incorporation,    authorizing:    (i)   the
reclassification  of the Company's Class A Common Stock and Class B Common Stock
into a single new class of common  stock ("New  Common  Stock")  pursuant to the
following  ratios:  shares of Class A Common  Stock  will be  reclassified  into
shares of New  Common  Stock on the  basis of 10 shares of Class A Common  Stock
into one share of New Common  Stock and  shares of Class B Common  Stock will be
reclassified  into New Common  Stock on the basis of 13 shares of Class B Common
Stock into one share of New Common Stock; (ii) the issuance of up to 100,000,000
shares of New Common  Stock;  (iii) the issuance of up to  75,000,000  shares of
preferred  stock;  (iv) the change of name of the  Company  from  United  States
Aircraft Corporation to Neo Vision Systems, Inc.; and (v) make certain technical
amendments   set  forth  in  the  Company's   First   Restated   Certificate  of
Incorporation. Neo Vision provides advertising,  programming, and information to
remote  audiences using computer,  video,  and signal  transmission  technology,
accomplished  by showing  mixed-media  programming  and  advertising  onto video
screen  walls  in  regional   shopping  malls  or  airports  through   satellite
transmission from Neo Vision's  production  facility in Phoenix,  Arizona.  See,
"BUSINESS OF NEO VISION, INC."

                          BUSINESS OF NEO VISION, INC.

INTRODUCTION

     Neo Vision,  Inc. ("Neo Vision")  provides  advertising,  programming,  and
information to remote audiences using computer,  video, and signal  transmission
technology.   This  is  accomplished  by  showing  mixed-media  programming  and
advertising  onto video screen walls ("video walls") in regional  shopping malls
or airports through satellite transmission from Neo Vision's production facility
in Phoenix, Arizona.

     Neo Vision's video walls are highly visible and can range from 6-12 feet in
height to 10-30 feet in width,  depending upon the particular  configuration  of
each mall or airport site. The sound system  accompanying the screen is designed
to make it the center of attraction and highly  audible.  The audio sound system
is programmed  to adjust its volume  according to the traffic in the mall at any
given time. The visual image is greater than that of a television.

                                       1
<PAGE>
     Neo Vision was  incorporated  in Arizona on June 29,  1997,  and until June
1998 was a  development  stage  company.  Neo Vision has a 75% interest in NV-1,
LLC, an Arizona limited  liability company formed in August 1997. NV-1, LLC owns
and operates the first video wall using Neo Vision's  technology that is located
at Meadows Mall in Las Vegas,  Nevada.  References to Neo Vision herein  include
NV-1, LLC, unless the context indicates otherwise.

CONCEPT

     Neo Vision was conceived as a means to deliver  cost-effective  advertising
to large shopping audiences.  Neo Vision sells advertisements  (showings) in the
form of  30-second  units to  national,  regional,  and local  companies.  These
showings are put on Neo Vision video walls twice during a 90-minute time period.
During this same 90-minute  period,  Neo Vision  integrates  music,  video,  and
public  service  showings.  In  general,  Neo  Vision  will show each  30-second
advertising spot  approximately 440 times monthly,  depending upon the season of
the year and operating hours.

     Neo Vision seeks to persuade potential  customers to use its services as an
alternative or supplemental  advertisement  placement  strategy because the cost
per thousand of potential  customers  reached by an  advertiser  on a Neo Vision
video wall is much less than competing advertisement placement strategies.

MARKET

     Malls with 8 to 12 million  customers  visited  annually  are Neo  Vision's
primary  target,  with a secondary  emphasis  on major  airport  terminals.  Neo
Vision's video walls advertising methods not only offer advertisers  significant
advantages over other forms of advertising, but can also help direct the impulse
purchases of each mall visitor.

     Neo Vision's video walls allow  advertisers to send a direct message to the
potential customers who are shopping in a mall. This substantially increases the
likelihood of increasing sales by providing messages that motivate the customers
to seek out immediately  available products and services to meet their needs and
impulse buying decisions.

     Moreover,  malls are seeking an  atmosphere  to assist  them in  increasing
repeat visits to the mall and increasing  the length of the  customers'  visits.
One strategy malls may seek to employ is to provide  exciting visual effects and
entertainment.  In addition,  advertisers at airports seek to attract  travelers
arriving in a city to their products and services.  Neo Vision meets these needs
by offering high-impact  programming combining multi-media effects, music, news,
current events, and advertising in a visually charged atmosphere.

     Further,  Neo  Vision  believes  that  advertisers  will seek to employ Neo
Vision's video walls as an alternative or supplemental  placement  strategy that
is more  cost  effective  than  competing  advertisement  placement  strategies.
Traditional  advertising  is becoming  more  expensive  and  agencies  are being
directed to cut costs.  Up to now,  their focus has been on reducing  management
layers and  cutting  internal  costs.  Neo Vision  offers a way to reduce  their
client's expenditures without reducing their own payroll or profitability.

                                       2
<PAGE>
MARKETING STRATEGY

     Neo  Vision's  marketing  strategy  is based on  securing  specific  target
locations to establish its video walls.  The plan is designed to be  implemented
with  strategic  partners  that will  enhance Neo Vision's  presence  within the
marketplace.

     Neo Vision intends to seek to sell a maximum of 50 to 60 ads per screen per
month. To accomplish this in each major market,  Neo Vision intends to employ an
in-house sales force, but also will develop a relationship with local sellers of
mall and street  advertising.  The size of each sales unit will  depend upon the
number of malls serviced in each market area and the overall size of the market.
Additionally,  Neo Vision intends to enter into strategic partner  relationships
with  national  advertising  agencies to fill the ad spots within the  90-minute
periods employed in its marketing strategy.  This also will determine the number
of in-house sales personnel required.

     Ads will be sold on a contractual  basis with standard  industry  discounts
offered  for  six  and  twelve  month  contracts.   Because  advertising  is  so
time-sensitive, a small premium will be charged for ad changes, when made weekly
by the advertising companies and their agencies.

     Neo Vision will advertise in trade publications and attend trade shows on a
regular basis.  Standard public  relations,  media events,  and other strategies
will be staged at the  opening of each new  market.  Neo Vision  will expand its
markets by targeting locations with high patron traffic counts such as airports,
trade  shows,   convention  centers,   and  sports  arenas,  both  national  and
international.

PRODUCTION AND TRANSMISSION

     Neo Vision  does not design or  produce  advertisements  shown on its video
walls.  Instead,  production of  advertisements  is  undertaken  by  advertising
agencies or their  agents that  specialize  in  creating  advertising  for their
clients. The Neo Vision system operates in the following manner:

     1.   The 30-second  commercials are sent to Neo Vision's  Phoenix,  Arizona
          headquarters  where  each  beta  or  analog  tape  is  converted  to a
          world-wide   standard  digital  video/audio  format  known  as  MPEG-2
          compression technology.

     2.   These  digital  files  are   transferred   by  satellite  or  internet
          connections  to the malls or other  customer  locations,  and then are
          stored on a computer designed to Neo Vision's specifications.

     3.   At a preprogrammed  time, the computer converts the MPEG-2 format back
          to  analog  video  for  transmission  and  playback  through  a  video
          projector located at the specified site onto a video wall.

                                       3
<PAGE>
     The result is an  audio/visual  product  presented  to shoppers in regional
shopping malls or travelers arriving at airports.

     Neo Vision's system  technology is administered  internally by a Neo Vision
computer specialist.

DEVELOPMENT

     Neo Vision has  constructed  three  video  walls in Las Vegas,  Nevada at a
total cost of $471,546 and has purchased  approximately $91,477 in equipment for
its main  transmission  facilities of its Phoenix,  Arizona  office.  During its
development phase, Neo Vision invested approximately $362,000 in the development
of its video wall system,  consisting  primarily of consulting fees to technical
personnel.  All of these  development  costs have been included in the operating
costs for Neo Vision during the year ended September 30, 1998.

LAS VEGAS VIDEO WALLS

     The first Neo Vision video wall was installed in Meadows  Mall,  Las Vegas,
Nevada in April 1998. Two additional  video walls were installed in June 1998 in
the recently opened "D" concourse in the McCarran  International  airport in Las
Vegas, Nevada.

     Neo Vision  leases wall space for its video  walls at McCarran  Airport and
Meadows Mall in Las Vegas,  Nevada under  operating lease  agreements,  expiring
June 2003 and  September  2002,  respectively.  The base rent under the McCarran
lease is  increased  annually by the greater of 5% or 20% of the gross  billings
for advertising on the video walls. The Meadows Mall agreement  provides for the
payment  of  rent  at a rate  of 15% of the  gross  consideration  received  for
advertising on the video wall. Rent expense under these lease agreements for the
year ended September 30, 1998 was $60,000.

FUTURE SITES

     Subject to the  availability  of  sufficient  capital,  Neo Vision plans to
rapidly  expand its video  wall  concept in malls and  airports  throughout  the
United States.  Neo Vision currently is in negotiations  for establishing  video
wall systems at two airport sites and six mall sites.

PRICING

     Each showing consists of a 30 second spot appearing approximately 440 times
monthly.  Neo Vision's  current monthly  pricing for a showing is  approximately
$2,950 in malls and $3,950 in  airports.  Neo Vision  believes  this  pricing is
substantially less than radio, television,  and newspaper advertising costs on a
per customer basis in the comparable markets.

                                       4
<PAGE>
TECHNOLOGY

     Neo Vision does not hold any patents on any of its technologies relating to
its video wall system.  Neo Vision does not believe that its  technology  can be
patented.  Thus,  Neo Vision  relies on  proprietary  know-how and  confidential
information  and  employs  confidentiality  agreements  with its  employees  and
contractors to protect the processes,  concepts,  and  documentation  associated
with its  proprietary  rights.  However,  such  methods do not  afford  complete
protection and there can be no assurance that competitors will not independently
develop technology similar to Neo Vision's video wall system.

SUPPLIERS

     Neo Vision's video walls are  constructed to  specification  by third party
contractors.  The average cost of  developing a new video wall is  approximately
$250,000, subject to variation based upon size and configuration of a video wall
in a particular  location.  A video wall system generally  consists of a screen,
projector  audio system,  and computer  controls that are all readily  available
from various manufacturers. The installation of a video wall system is completed
by general contractors under the supervision of Neo Vision staff and is expected
to be  completed  and  operating  approximately  four to six  weeks  after  site
approval.

COMPETITION

     Neo Vision is not aware of any advertising  systems similar to Neo Vision's
current  video wall  system.  Neo  Vision's  competition  in airports  currently
consists  of fixed  advertising  (primarily  static  boards)  and other  similar
structures.  There is at least  one  company  offering  an  advertising  service
consisting of a series of three  monitors  attached to their booth in the center
of a mall aisle. This format provides low visual impact and, because of the size
of the screen, the sound and picture have limited visibility.

     However,  because  of the  proprietary  nature of Neo  Vision's  video wall
system,  competitors could seek to duplicate Neo Vision's technology.  Thus, Neo
Vision  will seek  sufficient  capital  for Neo  Vision to deploy its video wall
system in order to create brand name recognition and economies of scale.

EMPLOYEES

     At  September  30,  1998,  Neo Vision had six  employees,  two of which are
managerial, two of which are technical, one of which is involved with sales, and
one of which is  administrative.  Further,  Neo Vision employs five  independent
contractors,  three of whom provide technical services to Neo Vision, and two of
whom are sales representatives in Las Vegas, Nevada.

                                       5
<PAGE>
                 BUSINESS OF UNITED STATES AIRCRAFT CORPORATION

INTRODUCTION

     Prior to the  acquisition  of Neo  Vision,  the  Company was engaged in the
adult real estate  education  industry,  the travel services  industry,  and the
ownership  of real estate  related to the planned  development  of a chain of RV
Parks. The Company intends to continue in these businesses;  however the RV Park
operation is in the planning phase and the  acquisition and development of parks
will  not be  launched  until  the  project  is  capitalized.  The  Company  was
previously active in the modification of the DC-3/C-47  aircraft and real estate
property   management  both  of  which  were   discontinued  in  1984  and  1997
respectively.

     The  Company  owns  plans  and  specifications  for the  turbo-prop  engine
conversion for the DC-3/C-47 aircraft, and has investigated methods of realizing
this  investment.  Possible  methods to realize the Company's  investment in the
plans and specifications  include a new licensing  agreement,  sale of the plans
and specifications,  acquisition or by obtaining financing and successful future
development.  As of September  30, 1996,  the Company was unable to identify any
cash flows from its investment in the plans and specifications.  Accordingly, an
impairment  loss of $649,999,  that represents the excess of the carrying amount
over the present value of the  identifiable  net cash flow, has been included in
operations for the year ended September 30, 1996.

     The  Company  was  incorporated  in  Delaware  on October 6, 1978 and began
operations  in April 1980.  The principal  executive  offices of the Company are
located at 3121 East Greenway Rd., Suite 201, Phoenix, Arizona 85032, telephone
number (602) 765-0500.

ADULT EDUCATION

     GENERAL

     The Company's  adult  education  operation is conducted by its wholly owned
subsidiaries Ford Schools, Inc. and Western College, Inc.

     Ford  Schools,  Inc.  is  an  Arizona  real  estate  training  organization
providing  the  required   training  to   individuals   seeking  a  real  estate
salesperson's  or  broker's  license,  and  continuing  education  for  licensed
salespersons and brokers.

     Effective  January 1, 1996, the Company acquired  Western  College,  Inc. a
real  estate  training  organization  providing  the same  courses of study.  On
January 1, 1996, the operations of Ford and Western were combined at the Western
campus and operated as a single  school  under the name of Western  College/Ford
Schools.

     Effective May 1, 1998, the Company adopted the name Westford College,  Inc.
for its adult  education  operation.  The  school  and its  courses of study are
approved by the Arizona Department of Real Estate.

                                       6
<PAGE>
     In 1998, the State of Arizona required the following real estate training:

                                           Courses and Hours
                                           -----------------
Real Estate Salesperson License     Principles of Real Estate - 90 hours
Real Estate Brokers License         Principles of Real Estate - 90 hours
Renewal of License                  Various courses approved by Real Estate
                                    Department generally 3 to 6 hours in length.
                                    Total 24 hours every two years.

     Currently,  the required training must be completed in a classroom setting.
The Arizona Department of Real Estate is currently reviewing this requirement in
order to consider the  establishment  of policies and procedures for "out of the
classroom" or "distance" learning.  Under consideration are, among other methods
of distance  learning,  computer-aided  classroom  settings,  compact disc-based
program that can be studied at home, the Internet,  and satellite TV and videos.
The Company  intends to develop course  materials to present  distance  learning
courses when such policies and procedures are adopted by the Arizona  Department
of Real Estate.

     During the three years ended  September 30, 1998,  student  enrollments and
tuition revenues were as follows:

                             Average
                             Students          Revenue          Tuition
                             --------          -------          -------
     Sales Licensing
        1998                  1,249           $294,715          $235.96
        1997                  1,049           $261,099          $248.90
        1996                    937           $204,453          $218.19

     Broker Licensing
        1998                     38           $ 13,340          $351.05
        1997                     34           $ 14,840          $436.47
        1996 (1)                 41           $ 18,507          $451.39

     Renewal
        1998                 10,896           $152,977           $14.04
        1997                  9,835           $134,206           $13.64
        1996 (1)              7,252           $106,908           $14.74

----------
(1)  Represents  the  combined  operations  of Western  College,  Inc.  and Ford
     Schools,  Inc. since January 1, 1996.  Statistics  prior to January 1, 1996
     represent Ford Schools, Inc. only.

     There are approximately 50,000 licensed real estate salesperson and brokers
in Arizona.  The number of  individuals  taking the licensing  examination  each
month  varies,  generally  increasing  as real  estate  activity  increases  and
decreasing  when real estate  activity  decreases.  In the fiscal year 1998, the
number  taking the State of Arizona sales  licensing  tests that were given each
month ranged from  approximately  300 to 450. Even though there are  significant
numbers taking the licensing exam each month,  the number of licensed  personnel
remains  relatively  constant as a significant number of licensees choose to let
their licenses lapse.

                                       7
<PAGE>
     Western  College/Ford  Schools has continued its planned  expansion program
with the opening of a second campus in northeast  Phoenix,  Arizona.  Currently,
the two campuses, each with three class rooms, are located as follows:

              West Campus          4425 West Olive, Suite #128
                                   Glendale, Arizona

              Northeast Campus     3121 East Greenway Rd., Suite #201
                                   Phoenix, Arizona

STRATEGY

     The Company  advertises its real estate  programs in  metropolitan  Phoenix
telephone  directories  plus  through  direct mail to its referral  sources.  In
October 1996, the Company began  publishing the Renewal News, a monthly magazine
for real estate  licensees  with a  circulation  of  approximately  15,000.  The
magazine  includes the class  schedule for both  locations  along with  relevant
articles and paid  advertising  revenue in the year ended September 30, 1998 was
$24,679. The Company has launched a program to increase the circulation, and the
advertising  revenue plus expand the editorial  content.  Utilizing its existing
base in adult real estate  education,  the Company  intends to expand and profit
from the adult  career  education  field.  Subject  to the  availability  of any
necessary financing, the Company intends to expand into other geographic markets
and to expand its curriculum to include training for other professionals such as
travel and insurance agents,  accountants and home inspectors.  The expansion is
expected to include the offering of home study  courses which in some cases will
use computer networks,  video conferencing,  and interactive multimedia courses,
all of which provide  enhanced  education and training that is not bound by time
or  location.  The Company may seek to acquire  other adult  education  schools,
although the Company has not identified any particular acquisition candidates.

COMPETITION

     At September 30, 1998, there were  approximately  four proprietary  schools
for real estate  training in the Phoenix  metropolitan  area that  offered  both
license  and  license  renewal  education.  The Company  believes  that  another
metropolitan  Phoenix  based  school has the  largest  market  share in Arizona,
although the Company does not know its total market  share.  While small schools
will continue to be formed,  management believes the trend will be toward larger
schools, providing high quality instruction and a variety of programs.

TRAVEL SERVICES

GENERAL

     The Company, through acquisitions, implemented its travel services division
on July 1, 1997.  Effective July 1, 1997 the Company purchased certain assets of
Travel  Easy,  Inc. and in August 1997 the assets of  FirsTravel,  both of which
were full service  travel  agencies.  The Travel Easy agency has been closed and
its  approximately  175  independent  contractor Home Based Travel Agents became
affiliated with the Company's travel agency operated as FirsTravel.

                                       8
<PAGE>
     FirsTravel  is a full service  travel  agency  registered  with the Airline
Reporting Corporation. It serves the retail market from its office at 4700 North
Central  Avenue,  Phoenix Arizona and serves its  approximately  175 independent
contractor Home Based Travel Agents located throughout the country by processing
the tickets and reservations for such agents.

     Sales for the travel agency  segment for the year ended  September 30, 1998
and the  three  months  from  acquisition  through  September  30,  1997 were as
follows:

                                       1998              1997
                                       ----              ----

         Airline tickets             $682,955          $339,217
         Hotels                       117,116            81,861
         Automobiles                   31,934            26,255
         Cruises                      247,822           116,508
         Tours                        189,905           161,362
         Other                         11,957            51,341
                                   ----------          --------
             Total Sales           $1,281,689          $776,544
                                   ==========          ========

STRATEGY

     In October 1997, the major airlines changed their commission rate to travel
agencies from 10% to 8%.  Accordingly,  in January 1998  FirsTravel  adopted the
policy of generally  charging  its  customers a $10 service fee for each airline
ticket generated. Further, the Company intends to continue its policy to promote
leisure travel, such as tours and cruises, where the commissions generally range
from 10% to 13%.  Management  believes that the travel services operation can be
expanded  through the  acquisition  of other travel  service  companies and that
FirsTravel  can be expanded  through the  recruitment  of new Home Based  Travel
Agents.  Additionally,  the Company is in the process of  implementing  a travel
education program for individuals desiring to enter the travel services industry
and continuing education for active travel agents. The education program will be
presented by the Company's adult education division.

COMPETITION

     The Company's travel services  business competes with large national travel
agencies,  including  American  Express  and Thomas  Cook,  as well as with many
smaller local travel agencies.

REAL ESTATE PROPERTY MANAGEMENT

     Hansen &  Associates,  Inc.  dba  Property  Masters is a  Phoenix,  Arizona
residential  real estate  brokerage  that  specializes  in  management of single
family residential homes. In August 1997 the Company decided to discontinue this
line of business and sold the stock in Hansen & Associates Inc. to the president
of the  subsidiary  in a  transaction  that was effective on September 30, 1997,
with a resulting gain on the sale of $53,796.

                                       9
<PAGE>
EMPLOYEES

     Immediately prior to the Exchange,  the Company had 15 employees.  Further,
the Company had  approximately  175  independent  contractor  home based  travel
agents and fifteen to twenty  independent  contractor  instructors  for the real
estate training school.

                                  THE EXCHANGE

BACKGROUND OF AND REASONS FOR THE EXCHANGE

     During  the past three  years,  the  Company  was  considering  a number of
alternatives to grow its business.  The Company  determined that the acquisition
of  compatible  businesses  would offer  stockholders  an  opportunity  to own a
business which would have  expanding  growth  opportunities.  The Company during
this  period  explored  a number  of  business  opportunities  for  growing  its
business,  and concluded that expansion into the travel  industry was compatible
with the Company's adult real estate educational  activities.  Thus, the Company
acquired two travel  agencies  during 1997. The Company  continued to seek other
alternatives  for expansion and entered into a number of discussions with owners
of other  potential  businesses,  none of which  the  Company  determined  would
benefit the Company's stockholders.

     On April 9, 1998,  the Company had its first  substantive  meeting with Neo
Vision.  This  meeting  was  initiated  by the  Company.  At this  meeting,  Mr.
Eastlick, then the Chief Executive Officer of the Company, and Mr. Al Lundstrom,
then the Chief  Executive  Officer  of Neo  Vision,  met to  discuss a  possible
transaction.  They  discussed  possible  terms of a  combination  as well as the
structure  of  the  proposed  combined  entity  and  the  advantages  of  such a
combination. Meetings continued through April 1998. At these meeting information
was  exchanged  about both  companies and a tentative  agreement was  developed.
Management of the Company  determined  that Neo Vision was in a high growth area
and that the  experience of the Company in the service  business was  compatible
with Neo Vision's video wall advertising business,  which involved a significant
service component.  In addition,  Neo Vision did not have the in-house financial
management  which the Company was able to offer,  and the Company  believed that
the  management of the two  companies  would provide a good overlap of expertise
and  experience.  On May 1, 1998,  a tentative  agreement  was  presented to the
Company's  Board of  Directors,  who  approved  the concept and  authorized  Mr.
Eastlick to continue negotiations with Neo Vision. The parties' valuation of Neo
Vision  was based  largely on the  growth  potential  of Neo Vision and the cost
savings and growth  potential of a combined  entity.  After numerous  additional
negotiating sessions and the completion of due diligence, the Exchange Agreement
was approved and closed on June 30, 1998.

     The  Company  determined  to enter into the  Exchange  Agreement  and issue
2,000,000 shares of Class A Common Stock, with an additional 4,577,000 shares of
New Common Stock upon approval of the  stockholders of the Company.  The Company
and Neo Vision believed that the immediate acquisition of Neo Vision pursuant to
the Exchange  Agreement would allow the former  management of Neo Vision and the
management of the Company to begin working  together  immediately  to accomplish
the Company's business objectives.

                                       10
<PAGE>
     In accordance with the Exchange Agreement,  Anthony Christopher, the former
principal  shareholder  of Neo  Vision,  was  elected a director  and  executive
officer of the Company.  Mr. Christopher  subsequently  resigned his position as
both a director  and as an employee on November 9, 1998.  Mr.  Christopher,  the
Company,  and Neo Vision  entered  into a  separation  agreement on December 17,
1998.  The  separation   agreement  provides  that  the  Company  will  pay  Mr.
Christopher  $41,250 in accrued  compensation.  Payments will be $2000 per month
commencing  February 1, 1999, and increase to $5000 per month  commencing May 1,
1999,  continuing  at that rate until the entire  $41,250 has been paid.  If the
Company fails to pay this accrued  compensation within the specified  timeframe,
the  agreement  provides  that Mr.  Christopher  is entitled to treble  damages.
However,  if the  stockholders  do not  approve the  reclassification,  then Mr.
Christopher  is not  entitled  to any payment of accrued  compensation  from the
Company.  Under the  agreement,  Mr.  Christopher  waived  his rights to receive
600,000  of New  Common  Stock to  which  he was  entitled  under  the  Exchange
Agreement. Of these shares, 400,000 are to be issued to the debenture holders of
Neo  Vision on a pro rata  basis  and  200,000  are to be issued to a  financial
consultant to Neo Vision for past services rendered to Neo Vision.  Further, Mr.
Christopher  may not compete  with Neo Vision in the video wall  business  until
December 17, 1999. If Neo Vision has twelve video walls in operation by December
17, 1999, then Mr.  Christopher  cannot compete for another one year period. The
separation agreement provides that Mr. Christopher will consult with the Company
and Neo  Vision  on an  informal  basis  at his  discretion.  In  addition,  the
agreement  provides that Mr. Christopher will vote in favor of the amendment and
restatement of the Company's  certificate of incorporation.  Finally, each party
to the separation  agreement  released each other party from all past or present
claims and obligations.

     The Company  believes that the period  between  initial  issuance of shares
under the Exchange  Agreement and the  submission  of the proposals  pursuant to
this Proxy Statement to  stockholders of the Company has confirmed  management's
belief that the transactions  pursuant to the Exchange  Agreement will be to the
benefit of the stockholders of the Company.

     The  Company's  Board  believes the Exchange  Agreement and the exchange of
shares  thereunder (the "Exchange") are fair to and in the best interests of the
Company's  stockholders for, without limitation,  the following reasons: (i) the
Company's current  operations have limited growth potential,  operating in small
growth rate  industries;  (ii) Neo Vision's video wall  advertising  service has
significant growth potential,  operating in an expanding industry where start-up
companies  can  potentially  achieve  market  penetration;  (iii) the video wall
advertising  line of business  offers the Company an  opportunity  for long-term
growth;  (iv) the Company's  resources and Neo Vision's  video wall  advertising
service offer the Company the potential for increased  revenues from operations,
greater  access  to  financial  resources,  and  the  opportunity  for  improved
liquidity for the Company's stockholders.

     The  Company  also  considered   certain   potentially   negative  factors,
including: (a) the possibility of an initial increase in losses; (b) the loss of
control by the Company's  stockholders;  (c) and Neo Vision's limited  operating
history, which exposes the Company to risks associated with start-up companies.

     The Company determined not to obtain an independent  fairness opinion as to
the financial terms of the Exchange  Agreement because the Company believes that
the cost of obtaining such an opinion was  prohibitive in light of the Company's

                                       11
<PAGE>
financial  situation.  In addition,  the valuation of the Company and Neo Vision
was  negotiated  by the  respective  managements  of  the  two  companies  in an
arms-length transaction.

EXCHANGE RATIO

     Pursuant to the Exchange Agreement, 2,000,000 shares of the Company's Class
A Common Stock (equivalent to 200,000 shares of New Common Stock) were issued in
exchange for  6,250,000  shares of Neo Vision Common  Stock.  Additionally,  the
Exchange Agreement provides that an additional 4,577,560 shares New Common Stock
will be issued to former Neo Vision  shareholders  upon stockholder  approval of
the  reclassification  of the Company's  Class A Common Stock and Class B Common
Stock.  These  shares will be  apportioned  among these former  shareholders  in
proportion to their ownership interest in Neo Vision prior to its acquisition by
the Company,  except that Anthony Christopher,  the former principal shareholder
of Neo Vision,  has agreed to waive  receipt of 600,000 of such  shares.  If the
proposal to  reclassify  the  Company's  Class A Common Stock and Class B Common
Stock is adopted,  the Class A Common Stock will be reclassified into New Common
Stock on the basis of 10 shares  of Class A Common  Stock  into one share of New
Common Stock and the Class B Common Stock will be  reclassified  on the basis of
13 shares of the Class B Common Stock into one share of New Common  Stock.  Each
holder of shares of the  Company's  Class A Common Stock or Class B Common Stock
exchanged  pursuant  to the  reclassification  who  would  have  otherwise  been
entitled  to receive a fraction  of a share of the  Company's  New Common  Stock
(after  taking into  account all  certificates  delivered  by such  holder) will
receive,  in lieu  thereof  cash  (without  interest) in an amount equal to such
fractional portion of the closing price per share at the Effective Time.

EFFECTIVE TIME; EXCHANGE OF CERTIFICATES FOR CERTIFICATES REPRESENTING THE
COMPANY'S NEW COMMON STOCK

     The Exchange  Agreement was approved by the  Company's  Board of Directors,
executed,  and  became  effective  on June  30,  1998.  As  soon  as  reasonably
practicable after the stockholders' approval of the amendment and restatement of
the Company's  Certificate  of  Incorporation  and the filing of the amended and
restated  Certificate of Incorporation  reflecting the  reclassification  of the
Company's  Class A Common  Stock and  Class B Common  Stock  into  shares of the
Company's New Common Stock (the "Effective Time"), the Company will mail to each
holder a record of the  Company's  Class A Common Stock and Class B Common Stock
as of the date of the reclassification, a letter of transmittal and instructions
for surrendering certificates formerly representing the Company's Class A Common
Stock and Class B Common Stock in exchange  for a  certificate  or  certificates
representing  the number of shares of the  Company's New Common Stock into which
such shares were reclassified.

FAILURE OF STOCKHOLDERS TO APPROVE THE PROPOSALS

     If the  stockholders  do not approve the amendment and  restatement  of the
Company's Certificate of Incorporation  resulting in the reclassification of the
Company's  Class A Common Stock and Class B Common Stock into New Common  Stock,
then  each of the  former  shareholders  of Neo  Vision  will  have the right to
rescind the Exchange  Agreement.  The Company  believes that in view of the fact

                                       12
<PAGE>
that more than 90% of the shares of New Common  Stock  which  would be issued to
the former  shareholders  of Neo Vision depend on such approval,  and in view of
the fact that there will be no other  consideration  in lieu thereof if there is
no  such  stockholder  approval,  then  in  the  event  of  the  failure  of the
stockholders   to  approve  the  amendment  and  restatement  of  the  Company's
Certificate of Incorporation,  each of the shareholders likely would rescind the
Exchange  Agreement.  In such event, the acquisition of the shares of Neo Vision
acquired  by the  Company  with  respect  to  each  such  shareholder  would  be
rescinded.  Depending on the number of  shareholders  who rescinded the Exchange
Agreement,  it is possible that the Company would become a minority  shareholder
of Neo Vision.  The Company  would,  however,  be required to bear the costs and
expenses of its transactions  with Neo Vision,  including the cost of this Proxy
Statement,  even if every  shareholder  of Neo  Vision  rescinded  the  Exchange
Agreement.

     If the  Company's  stockholders  do not ratify  and  approve  the  Exchange
Agreement,  then  the  Company's  board  of  directors  reserves  the  right  to
reconsider  any one or more of the terms of the Exchange  Agreement,  apart from
the financial terms of the Exchange. However, the failure of the stockholders to
ratify and approve the Exchange  Agreement  will not result in the rescission of
the Exchange Agreement.

                                       13
<PAGE>
                             SPECIAL CONSIDERATIONS

     INFORMATION  CONTAINED OR  INCORPORATED  BY REFERENCE IN THIS ANNUAL REPORT
ARE  FORWARD-LOOKING  STATEMENTS  WITHIN THE MEANING OF THE  PRIVATE  SECURITIES
LITIGATION  REFORM ACT OF 1995, WHICH STATEMENTS CAN BE IDENTIFIED BY THE USE OF
FORWARD-LOOKING   TERMINOLOGY  SUCH  AS  "MAY,"  "WILL,"  "BELIEVE,"   "EXPECT,"
"ANTICIPATE,"  "ESTIMATE,"  "PROJECT" OR "CONTINUE"  OR THE NEGATIVE  THEREOF OR
OTHER COMPARABLE  TERMINOLOGY.  THE FOLLOWING  MATTERS AND CERTAIN OTHER FACTORS
NOTED  THROUGHOUT THIS ANNUAL REPORT AND EXHIBITS HERETO AND THERETO  CONSTITUTE
CAUTIONARY  STATEMENTS  IDENTIFYING  IMPORTANT  FACTORS WITH RESPECT TO ANY SUCH
FORWARD-LOOKING  STATEMENTS,  INCLUDING  CERTAIN RISKS AND  UNCERTAINTIES,  THAT
COULD CAUSE THE ACTUAL RESULTS TO DIFFER  MATERIALLY FROM THOSE PREDICTED IN ANY
SUCH FORWARD-LOOKING STATEMENTS.

     The following  factors,  in addition to those  discussed  elsewhere in this
Annual Report,  should be carefully considered in evaluating the Company and its
business.

                       RISKS ASSOCIATED WITH THE EXCHANGE

LACK OF FAIRNESS OPINION

     The Company has not obtained an opinion or any independent financial advice
that the consideration received by the Company's stockholders in connection with
the Exchange Agreement and the  reclassification of the Company's Class A Common
Stock and Class B Common  Stock into New Common  Stock is fair to the  Company's
stockholders from a financial point of view. In particular,  the Company did not
obtain  any  independent  evaluation  of the  terms of the  Exchange  Agreement,
including the exchange  ratio of shares of Neo Vision Common Stock for shares of
the Company's Class A Common Stock and New Common Stock contained  therein.  The
Company also did not obtain any  independent  evaluation in determining  whether
the 10/13  exchange  ratio  between the Class A Common  Stock and Class B Common
Stock was fair from a financial point of view. Therefore,  each stockholder must
make his or her own  determination as to the fairness of the Exchange  Agreement
and the  reclassification  of the  Company's  Class A Common  Stock  and Class B
Common Stock without any expert advice.  Stockholders should consider consulting
their own financial advisors prior to voting on the ratification and approval of
the Exchange  Agreement  and the  amendment  and  restatement  of the  Company's
Certificate  of  Incorporation.  There can be no assurance that the terms of the
Exchange Agreement or the reclassification of the Class A Common Stock and Class
B Common Stock into New Common Stock are fair to  stockholders  from a financial
point of view.

CONFLICTS OF INTEREST

     The  approval by the Board of  Directors  of the  Exchange  Agreement,  the
reclassification of the Company's Class A Common Stock and Class B Common Stock,
and the  adoption  of the 1998 Stock  Option  Plan are  subject  to  substantial
conflicts of interest.  Messrs.  Albert Lundstrom and Jack Eberenz,  both former
shareholders  of  Neo  Vision  or  their  affiliates,   will  receive  1,405,311
additional  shares of New Common Stock upon the ratification and approval of the
Exchange  Agreement  and the approval of the  reclassification  of the Company's
Class A Common Stock and Class B Common Stock. Further, such former shareholders

                                       14
<PAGE>
of Neo  Vision,  as well as Harry  Eastlick,  the  former  President  and  Chief
Executive  Officer of the Company,  and now its Chief  Financial  Officer,  were
granted  options to acquire a total of 825,000  shares of New Common Stock at an
exercise price of $1.00 per share. Mr. Anthony Christopher, the former principal
shareholder  of Neo Vision,  will receive  2,676,450  shares of New Common Stock
upon  the  approval  of  the  reclassification.   Moreover,  Messrs.  Lundstrom,
Eastlick,  and Eberenz have entered into employment  agreements through December
31,  2003,  providing  for annual  salaries of  $150,000,  $120,000 and $60,000,
respectively.  In  addition,  the three  non-officer  directors  of the Company,
Messrs.  Cline,  Manning,  and Thomas,  each  received  options to acquire 5,000
shares of New Common Stock at $1.00 per share.  Thus, in determining  whether to
approve the Exchange Agreement,  all of such current directors and officers were
subject to  substantial  conflicts of interest.  There can be no assurance  that
such  conflicts of interest did not have a material  adverse effect on the terms
of the Exchange Agreement or the Exchange thereunder.

DEPENDENCE UPON MANAGEMENT

     Prior to the Exchange Agreement, the Company's Board of Directors consisted
of Harry Eastlick, Donald Cline, Whipple Manning, and John Thomas. In accordance
with the Exchange  Agreement,  the Company's Board of Directors  elected Anthony
Christopher,  Albert  Lundstrom,  and Jack  Eberenz as directors  and  executive
officers of the  Company.  In  addition,  the Company  entered  into  employment
agreements  with Messrs.  Christopher,  Lundstrom,  Eberenz,  and Eastlick.  Mr.
Christopher,  the  former  principal  shareholder  of Neo  Vision,  subsequently
resigned as both an employee and as a director. He has entered into a separation
agreement  with the Company and Neo Vision.  However,  Mr.  Christopher  will no
longer be  available  to  assist  the  Company,  except  at his  discretion.  In
addition,  there will likely be a period of adjustment for both the officers and
employees  of the  Company  as new  management  of the  Company  is  instituted.
Further, the education,  training, and experience of each officer engaged in the
management and operation of each line of business for the Company is critical to
the success of the Company. Thus, the loss of any of the current officers at the
Company  could result in a significant  decrease in the Company's  prospects for
success. In addition,  there is no assurance that this new management group will
be able to achieve profitability for the Company.

RESIGNATION OF ANTHONY CHRISTOPHER

     In accordance with the Exchange Agreement,  Anthony Christopher, the former
principal  shareholder  of Neo  Vision,  was  elected a director  and  executive
officer of the Company.  Mr. Christopher  subsequently  resigned his position as
both a director  and as an employee on November 9, 1998.  Mr.  Christopher,  the
Company,  and Neo Vision  entered  into a  separation  agreement on December 17,
1998.  The  separation   agreement  provides  that  the  Company  will  pay  Mr.
Christopher  $41,250 in accrued  compensation.  Payments will be $2000 per month
commencing  February 1, 1999, and increase to $5000 per month  commencing May 1,
1999,  continuing  at that rate until the entire  $41,250 has been paid.  If the
Company fails to pay this accrued  compensation within the specified  timeframe,
the  agreement  provides  that Mr.  Christopher  is entitled to treble  damages.
However,  if the  stockholders  do not  approve the  reclassification,  then Mr.
Christopher  is not  entitled  to any payment of accrued  compensation  from the
Company.  Under the  agreement,  Mr.  Christopher  waived  his rights to receive
600,000  of New  Common  Stock to  which  he was  entitled  under  the  Exchange
Agreement. Of these shares, 400,000 are to be issued to the Debenture holders on

                                       15
<PAGE>
a pro rata basis and 200,000 are to be issued to a financial  consultant  to Neo
Vision for past services rendered to Neo Vision.  Further,  Mr.  Christopher may
not compete with Neo Vision in the video wall business  until December 17, 1999.
If Neo Vision has twelve video walls in operation by December 17, 1999, then Mr.
Christopher cannot compete for another one year period. The separation agreement
provides that Mr. Christopher will consult with the Company and Neo Vision on an
informal basis at his discretion.  In addition,  the agreement provides that Mr.
Christopher will vote in favor of the amendment and restatement of the Company's
certificate of incorporation.  Finally,  each party to the separation  agreement
released each other party from all past or present claims and obligations.

CONTINUING LOSSES; NEED FOR ADDITIONAL FUNDING

     Company's  business  activities prior to the acquisition of Neo Vision have
suffered  continuing  losses and Neo Vision has incurred losses since inception.
See "RISK  FACTORS - "Risks  Associated  with Neo Vision" and "Risks  Associated
with of the Company." As a result,  the Company had outstanding  indebtedness of
approximately  $519,000 at September  30, 1998,  and Neo Vision had  outstanding
indebtedness of approximately $1,268,000 at such date. Although the Company will
not assume the Neo Vision indebtedness,  that indebtedness will not be repaid as
a result of the merger and will remain the  obligation  of Neo Vision  after the
merger.  The Company  expects that $800,000 of Neo Vision  indebtedness  will be
converted into New Common Stock upon the approval of the Exchange  Agreement and
registration  of such  shares  under the  Securities  Act of 1933,  as  amended.
Currently,  neither  the  Company  nor Neo Vision has the  ability to repay such
debt.  Further,  the Company may experience  increased losses as a result of the
anticipated  expansion  of Neo  Vision's  business.  The  Company  will  require
substantial  additional  funding to cover these losses and expand its  business.
This funding may include debt and equity  financing,  all of which may be highly
dilutive to the stockholders of the Company. No assurance can be given as to the
ability  of the  Company  to  obtain  needed  financing  or the  terms  of  such
financing.  The  inability of the Company to obtain  necessary  financing  could
result in the  inability of the Company to expand its business or even  continue
its  operations.  See  "CONSOLIDATED  FINANCIAL  STATEMENTS"  AND  "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS."

CONTROL BY EXISTING STOCKHOLDERS

     As of the date hereof, the former  shareholders of Neo Vision own 2,000,000
shares of Class A Common  Stock  (equivalent  to  200,000  shares of New  Common
Stock)  representing  approximately 20% of the outstanding shares of the Class A
Common Stock. Subsequent to the reclassification of the Company's Class A Common
Stock and Class B Common  Stock and the  issuance  of the  3,977,560  additional
shares of New Common Stock  pursuant to the Exchange  Agreement  (as adjusted to
reflect Anthony  Christopher's  waiver of rights to receive 600,000 shares), the
former  shareholders of Neo Vision will own  approximately  70% of the Company's
outstanding  New Common Stock.  As a result,  former  shareholders of Neo Vision
will be able to effectively  control matters requiring  approval by stockholders
of the Company, including the election of the Company's Board of Directors.

                                       16
<PAGE>
RISKS ASSOCIATED WITH ISSUANCE OF PREFERRED STOCK

     Approval of the amendment and  restatement of the Company's  Certificate of
Incorporation  will  enable  the  Company  to issue up to  75,000,000  shares of
preferred  stock.  While  providing  flexibility  in  connection  with  possible
financings,   acquisitions,  and  other  corporate  purposes,  the  issuance  of
Preferred Stock, among other things,  could adversely affect the relative voting
power of the holders of common stock,  could have a dilutive  effect on earnings
per share, and under certain circumstances,  be used as a means of discouraging,
delaying,  or  preventing  a change  in  control  of the  Company.  There are no
outstanding  shares of Preferred Stock at the present time, or any  commitments,
options or other  rights  presently  outstanding  for the  issuance of Preferred
Stock.  The Company has no present plan to issue shares of its Preferred  Stock,
although the Company's  need for additional  financing  increases the likelihood
the Company may find it necessary or desirable to issue Preferred Stock.

RIGHTS TO ACQUIRE SHARES

     A total of  967,500  shares of New  Common  Stock  have been  reserved  for
issuance upon exercise of options  previously  granted under the Company's  1998
Stock Option Plan (the "1998 Plan"),  at an exercise price of $1.00 per share, a
total of 160,150 shares of New Common Stock have been reserved for issuance upon
exercise  of  warrants  previously  granted by Neo Vision at a weighted  average
exercise price of $3.00 per share,  and, based on the outstanding  principal and
accrued  interest of Neo Vision  debentures (the  "Debentures")  at December 31,
1998,  1,156,818  shares  have  been  reserved  for  issuance  pursuant  to such
Debentures. In addition,  Anthony Christopher agreed to waive receipt of 600,000
shares of New Common  Stock,  400,000 of which are to be made  available  to the
Debenture  holders and  convertible  into New Common Stock.  During the terms of
such  options,  warrants,  and  Debentures,  the  holders  thereof  will have an
opportunity  to profit from an increase in the market price of Common Stock with
resulting dilution in the interests of holders of Common Stock. The existence of
such stock  options and  warrants  may  adversely  affect the terms on which the
Company can obtain  additional  financing,  and the holders of such  options and
warrants can be expected to exercise such options at a time when the Company, in
all likelihood, would be able to obtain additional capital by offering shares of
its Common Stock on terms more  favorable to the Company than those  provided by
the exercise of such options and warrants.

SHARES ELIGIBLE FOR FUTURE SALE

     Sales of  substantial  amounts of Common Stock of the Company in the public
market  following the Exchange and  reclassification  of the  Company's  Class A
Common  Stock and Class B Common  Stock into New Common  Stock  could  adversely
affect  prevailing market prices. Of the 7,220,608 shares of New Common Stock to
be outstanding after the Exchange and  reclassification of the Company's Class A
Common Stock and Class B Common Stock,  assuming the maximum  issuance of shares
under the Exchange  Agreement and the  conversion of all New Vision  debentures,
approximately  2,176,000 shares will be eligible for resale in the public market
without restriction. Upon completion of the Exchange and reclassification of the
Company's Class A Common Stock and Class B Common Stock, approximately 5,045,000
shares will be eligible for resale in the public  market after a one year period
subject to  compliance  with Rule 144 under the  Securities  Act.  Further,  the

                                       17
<PAGE>
Company  will have  outstanding  options  and  warrants  convertible  into up to
1,127,650  shares of New Common Stock.  These  outstanding  options and warrants
will be immediately exercisable.

CHANGE IN CONTROL PROVISIONS

     The Company's  proposed First Restated  Certificate of  Incorporation  (the
"Restated  Certificate") and the Delaware General  Corporation Law (the "General
Corporation  Law")  contain  provisions  that may have the effect of making more
difficult or delaying attempts by others to obtain control of the Company,  even
when these attempts may be in the best interests of  stockholders.  The Restated
Certificate  also  authorizes  the  Board  of  Directors,   without  stockholder
approval, to issue one or more series of preferred stock which could have voting
and  conversion  rights that adversely  affect the relative  voting power of the
holders of Common Stock. The General  Corporation Law also imposes conditions on
certain business  combination  transactions  with "interested  stockholders" (as
defined therein).

ABSENCE OF LIQUID PUBLIC MARKET

     The Company's  Class B Common Stock is not publicly  traded.  The Company's
Class A Common Stock is traded on the NASDAQ OTC Bulletin  Board on an extremely
limited basis. As a result of the Company having two classes of Common Stock and
the extremely  limited  trading  market for the Company's  Class A Common stock,
trading  in  the  Class  A  Common  Stock  has  been   subject  to   substantial
fluctuations.  Moreover,  in view of such a limited  market it may be  extremely
difficult  for any  owner of the  Class A Common  Stock to sell  shares  without
having  an  adverse  effect  on the  market  price  of  the  Common  Stock.  The
reclassification  of both Class A Common  Stock and Class B Common  Stock into a
single new class of Common Stock may decrease the liquidity of any stockholder's
investment,  especially  since the  reclassification  will  reduce the number of
freely  tradable  shares of Class A Common  Stock to  one-tenth  of their former
number. Further, the Company's New Common Stock will not be traded on the NASDAQ
SmallCap  market,  and it is unlikely  that such stock would be so traded in the
foreseeable  future. The Company's New Common Stock also may constitute a "penny
stock"  under  the  rules  and   regulations  of  the  Securities  and  Exchange
Commission, and such designation may have an adverse effect on the market in the
Company's New Common Stock.

LACK OF DIVIDENDS

     The Company  intends to employ all available  funds for the  development of
its business and, accordingly,  does not intend to declare or pay cash dividends
in the foreseeable future.

                                       18
<PAGE>
                        RISKS ASSOCIATED WITH NEO VISION

NEW BUSINESS CONCEPT; LIMITED OPERATING HISTORY; CONTINUING LOSSES;
GOING-CONCERN CONSIDERATIONS

     The Company intends to make the Neo Vision video wall  advertising  line of
business its primary focus in the immediate future.  Neo Vision was incorporated
in June 1997 and completed its development  stage in June 1998. Neo Vision has a
limited  operating history with respect to the distribution and marketing of its
video wall advertising business.  Thus, Neo Vision will be subject to all of the
risks  inherent  with a start-up  business.  In  particular,  Neo Vision has had
negative cash flow and operating losses since  inception.  Neo Vision reported a
net loss of approximately  $(675,865) for the year ended September 30, 1998. Neo
Vision  will  require  capital  provided  by  securities  offerings,  and in all
likelihood,  significant additional capital to fully implement its business plan
and expand its  operations.  There can be no  assurance  that Neo Vision will be
able to achieve, or maintain, profitable operations or positive cash flow at any
time  in the  future.  In  addition,  the  report  by Neo  Vision's  independent
certified public accountants on Neo Vision's financial statements for the fiscal
year ended  September  30, 1998 states that Neo Vision's  significant  operating
losses raise substantial doubt about Neo Vision's ability to continue as a going
concern. See "CONSOLIDATED  FINANCIAL  STATEMENTS" AND "MANAGEMENT'S  DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS."

NEED FOR ADDITIONAL CAPITAL; RISK OF SUBSTANTIAL DILUTION

     The Company anticipates that Neo Vision will require substantial additional
funding to adequately meet  management's  growth  objectives and fully implement
its  business  plan.  Further,  in the event that Neo Vision is unable to obtain
sufficient  financing,  there is no  assurance  that Neo Vision  will be able to
successfully  penetrate  the video wall  advertising  marketplace,  and  achieve
widespread acceptance.  The Company may seek additional debt or equity financing
through  banks,  other  financial   institutions,   companies,  or  individuals.
Management has engaged financial  consultants to assist in obtaining  $3,000,000
to  $5,000,000  in  additional  capital and Neo Vision has  received a letter of
intent for a $250,000 sale and  leaseback of the  installed  equipment at one of
its locations. No assurance can be given that the Company will be able to obtain
any such additional equity or debt financing on satisfactory terms or at all. No
assurance can be given that any such financing, if obtained, will be adequate to
meet Neo Vision's needs for the foreseeable  future.  If the Company is not able
to successfully obtain sufficient capital, through securities offerings and from
additional  sources,  Neo  Vision's  ability  to  continue  as a viable  line of
business for the Company will be substantially impaired.

EXISTING DEBT OBLIGATIONS

     As of  September  30,  1998,  Neo  Vision  had  approximately  $800,000  in
outstanding  convertible  debt obligations with interest at rates of 10% and 12%
per annum with total  interest  accrued at December  31,  1998 of  $61,230.  The
debentures  and accrued  interest are  convertible  into  approximately  999,990
shares of New Common Stock at December 31, 1998 which includes 400,000 shares of
New Common Stock which have been waived by Anthony  Christopher  for issuance to

                                       19
<PAGE>
such  Debenture  holders.  There is no  assurance  that  Neo  Vision  will  have
sufficient funds to satisfy or extend the debt obligations.  No assurance can be
given that the Company or Neo Vision can achieve, or maintain, profitability. If
it cannot, Neo Vision will be unable to pay its debt obligations.

UNCERTAINTY OF WIDESPREAD MARKET ACCEPTANCE OF PRODUCTS; LIMITED MARKETING
EXPERIENCE

     Neo Vision has just started  marketing its video wall advertising  service.
Neo Vision has  entered  into two  agreements,  both in Las  Vegas,  Nevada,  to
provide its video wall  advertising  service.  Neo Vision is  negotiating  other
agreements  to offer its service to various  malls and airports  throughout  the
country.  However,  there can be no assurance that additional agreements will be
executed in the near future or that existing  agreements will be profitable.  As
is typical  with new  services,  demand and market  acceptance  for Neo Vision's
services are subject to a high level of uncertainty.  The profitability  will be
highly dependent on its ability to persuade its potential customers to implement
the use of its video wall  technology  rather than more  traditional  methods of
advertising.   Achieving   widespread  market  acceptance  for  the  video  wall
advertising  service  will  require   substantial   marketing  efforts  and  the
expenditure of sufficient  funds to create brand  recognition,  customer demand,
and to cause  potential  customers  to consider  the  potential  benefits of Neo
Vision's service as against more traditional  advertising  methods to which they
have long been accustomed.  Moreover, Neo Vision's ability to achieve widespread
market  acceptance will depend in part on Neo Vision's ability to locate,  hire,
and  retain  sufficient  qualified  marketing  personnel  and to fund  marketing
efforts.  There can be no assurance that the video wall advertising service will
achieve widespread market acceptance or that Neo Vision's marketing efforts will
result in profitable operations.

CERTAIN FACTORS AFFECTING OPERATING RESULTS

     Neo  Vision's  operating  results  will be  affected  by a wide  variety of
factors that could adversely affect its total revenue and  profitability.  These
factors,  many of which are beyond the  control of the  Company  and Neo Vision,
include creating and continuing interest in video wall advertising; Neo Vision's
success in  obtaining  and  maintaining  customer  satisfaction  with video wall
advertising;  the level and timing of the demand for Neo  Vision's  services and
Neo Vision's  ability to expand its  personnel,  equipment,  and  administrative
support  functions;  changes in the mix of services it  provides;  technological
changes;  and  competition  and  competitive  pressures on prices.  Neo Vision's
revenue and results of operations also may be subject to fluctuations based upon
general economic conditions.  If there were to be a general economic downturn or
a recession,  there would be a material adverse effect on Neo Vision's business,
operating results, and financial condition.

LACK OF DIVERSIFICATION; RISKS OF INVESTING IN LIMITED PRODUCTS

     The success of Neo Vision's business,  and thus of the Company, will depend
almost  entirely  on  the  market   acceptance  of  the  video  wall  method  of
advertising.  The plan of  operation,  therefore,  subjects  Neo  Vision  to the
economic  fluctuations  within the  advertising  industry and increases the risk
associated with its operations.  This primary  dependence on one type of service
(a situation  the Company  expects will  continue  for the  foreseeable  future)
renders  Neo Vision  more  vulnerable  than  companies  with a more  diversified
offering of services. Significant delays in development could greatly affect Neo

                                       20
<PAGE>
Vision's competitiveness. There can be no assurance that Neo Vision's video wall
method of advertising will not become obsolete earlier than  anticipated.  There
also can be no  assurance  that the  Company  will be able to devote  sufficient
resources to the research and  development  effort required to enable Neo Vision
to meet  future  technological  changes.  An  investment  in any  aspect  of the
technological  industry is  speculative  and  historically  has  involved a high
degree of risk.

RISK OF LONG TERM ACCEPTANCE OF VIDEO WALL ADVERTISING

     Because Neo Vision's video wall advertising  method is new, it is difficult
to estimate the acceptance by potential  advertising  service users and in turn,
rates of rejection or dissatisfaction with the video wall method of advertising.
The  failure  of Neo Vision to achieve  long-term  acceptance  of the video wall
method of advertising would have a material adverse effect upon Neo Vision,  and
thus the Company's business.

MANAGEMENT OF GROWTH

     The Company plans to expand Neo Vision's  business  significantly  over the
next 12 months.  The  expansion  of Neo  Vision's  business  will  require it to
enhance its operational,  financial,  and information  systems;  to motivate and
manage its existing  personnel and to attract and retain additional  managerial,
technical,  and marketing personnel; to enhance its technical equipment;  and to
expand the development  and marketing of video wall method of  advertising.  The
failure  of  Neo  Vision  to  expand  its  systems,  personnel,  equipment,  and
administrative  resources  on an effective  basis could have a material  adverse
effect on Neo Vision's  business,  and thus the  Company's  business,  operating
results, and financial condition.

NEED FOR ADDITIONAL DEVELOPMENT OF CERTAIN PRODUCTS

     The Company  anticipates  that Neo Vision's future research and development
activities  combined with experience  gained from future users of its video wall
advertising  service  could  result  in the  need  for  further  refinement  and
development.  The Company  also  expects Neo Vision to modify its  services  for
particular  locations.  There can be no assurance that unforeseen  circumstances
will not require  expensive  additional  development  of Neo Vision's video wall
advertising  service.  In  addition,  the Company may in the future need to make
improvements  of its video  wall  advertising  service in order for it to remain
competitive. The costs for any such improvements may be substantial.

COMPETITION

     Neo Vision's business is primarily  proprietary in nature.  Neo Vision does
not have patent  protection for any of its  proprietary  technology and does not
believe that such protection is available.  Thus,  potential  competitors  could
implement  advertising services similar to Neo Vision's video walls.  Therefore,
no  assurance  can be given that Neo Vision's  method of video wall  advertising
will be able to successfully compete with these potential competitors.  Further,
Neo Vision will be  competing  against  advertising  companies  who utilize more

                                       21
<PAGE>
traditional  methods of  advertising  and have  established  relationships  with
potential  Neo Vision  clients.  In addition,  Anthony  Christopher,  the former
principal  shareholder of Neo Vision,  may compete against the Company after one
year, or two years if Neo Vision has a specified number of video walls operating
at the end of the first year.

YEAR 2000 COMPLIANCE

     Neo Vision has  assessed  its Year 2000 issues and its  readiness  for this
potential  problem.  Neo Vision has examined its information  technology systems
and  believes  that,  given that its  operations  do not  depend on  information
technology  as such,  the Year 2000  should  have no  effect on its  information
technology systems.

     Further, Neo Vision has assessed its non-information technology systems and
believes  that Neo Vision is Year 2000  compliant  because it is operated  using
personal, as opposed to mainframe, computer technology. These personal computers
were purchased in the last three years and run on a standard  operating  system.
In addition, all software run by Neo Vision is standard,  off-the-shelf software
purchased  in the last three  years.  Thus,  due to the dates of purchase of its
systems,  Neo Vision  believes that all of its systems are Year 2000  compliant.
Beginning  in January  1999,  Neo  Vision  plans to obtain  assurances  from the
manufacturers of its personal computers that such computers are indeed Year 2000
compliant.  This will complete Neo Vision's  internal  examination  of Year 2000
issues.

     In establishing a Year 2000 remediation program, Neo Vision intends to soon
enter  its  next  phase  by  implementing  an  examination   procedure  for  its
third-party suppliers and vendors. As a component of this program,  beginning in
January 1999 Neo Vision  intends to send written  requests for  assurances  that
these  third  parties  are   addressing   their  own  Year  2000  issues.   Most
significantly,  Neo Vision intends to address the Year 2000  readiness  state of
the providers of its satellite delivery system by requesting a written Year 2000
compliance program which these providers are implementing.

     The cost of Neo Vision's Year 2000  compliance  program has not had, and is
not expected to have, a material impact on its results of operations,  financial
condition, or liquidity. Neo Vision has not been required to prematurely replace
equipment due to Year 2000 issues,  nor has it needed to hire Year 2000 solution
providers.  Further,  Neo  Vision  does not  anticipate  the  necessity  of such
expenses  in the  future.  Finally,  Neo  Vision  anticipates  that  the cost of
ensuring compliance of third parties will be minimal.

     Neo  Vision  anticipates,  in its  reasonably  likely  worst case Year 2000
scenario,  that the failure of its clients and suppliers to  adequately  address
their own Year 2000 issues  could  impact such  parties'  ability to provide the
materials  used in  constructing  new video  walls or to make  payments  for Neo
Vision's  services.  In addition,  the failure of the providers of the satellite
delivery system to address Year 2000 issues could negatively impact Neo Vision's
ability to transmit  signals onto its video  walls,  which could  interrupt  the
images  displayed  on these  walls.  This could  adversely  affect Neo  Vision's
business, financial condition, cash flows, and results of operations.

     Neo Vision's greatest Year 2000 concern is the transmission of signals onto
its video  walls.  Neo Vision is in the process of  completing  its  contingency
plans  for such an  event.  In the  event of an  interruption  of the  satellite

                                       22
<PAGE>
delivery system,  Neo Vision  anticipates  being able to reroute the signals for
delivery over conventional landlines at little additional cost. Neo Vision feels
that the cost to engage  stand-by  providers for signal  delivery  outweighs the
potential benefit of such contracts at this time. If Neo Vision is not satisfied
with the steps taken by the satellite provider to prepare for the Year 2000, Neo
Vision  will  contract  for  additional  providers  at  that  time.  Neo  Vision
anticipates  receiving this  information and making this  determination  by July
1999.  This analysis,  and any action taken as a result of this  analysis,  will
complete Neo Vision's contingency plans. Even if action is necessary, Neo Vision
anticipates that its contingency plans will be completed by August 1999.

                        RISKS ASSOCIATED WITH THE COMPANY

LACK OF PROFITABLE OPERATIONS

     The Company's real estate school,  travel agency,  and real estate lines of
business  experienced a net loss of  $(189,484)  and a net loss of $(49,922) for
the fiscal years ended September 30, 1998 and 1997,  respectively.  No assurance
can be given that the Company  will be able to attain or  maintain a  profitable
level of operations  for these lines of business in the future,  or that it will
not continue to incur operating losses.  Management  expects the addition of Neo
Vision ultimately will improve its operating results;  however, since Neo Vision
has just completed its development stage, no assurance can be given that it will
contribute to the  profitability  of the Company or that the  Company's  non-Neo
Vision lines of business will not cause additional losses.

GOING-CONCERN CONSIDERATIONS

     At September  30, 1998,  the Company was in default on certain  convertible
debentures,  and had a working  capital  deficiency  of $414,921.  Management is
taking  actions to alleviate  these  conditions,  including  seeking  additional
financing,  which the Company's management believes will provide the opportunity
for the Company to continue as a going  concern.  However,  no assurance  can be
given that the Company will be  successful in obtaining  necessary  financing or
that the  Company  will  continue  as an  operating  entity  without  additional
financing. In addition, the report by the Company's independent certified public
accountants  on the  Company's  financial  statements  for the fiscal year ended
September 30, 1998 states that the Company's  significant operating losses raise
substantial  doubt about the Company's  ability to continue as a going  concern.
See  "CONSOLIDATED  FINANCIAL  STATEMENTS"  AND  "MANAGEMENT'S   DISCUSSION  AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS."

CURRENT DEFAULTS ON EXISTING OBLIGATIONS

     The Company  currently is in default on the payment of various  convertible
debentures  in the  outstanding  principal  amount of  $56,450  that  matured in
December  1996 plus related  accrued  interest  payable at September 30, 1998 of
approximately  $33,600.  The  Company  has had no  contact  from  the  debenture
holders,  who if they elected not to convert the  debentures  into common shares
pursuant to the  debentures,  could bring legal action against the Company.  The
debentures and accrued  interest would be converted into  approximately  120,067
Class A Shares  (12,007 New Common Shares) if the debenture  holders  elected to
convert.  The  Company  currently  does not have the  ability  to pay any of the
defaulted  debentures  and no assurance  can be given that the Company will have
sufficient capital to pay such debts.

                                       23
<PAGE>
DEPENDENCY ON ECONOMIC CONDITIONS ON THE ADULT EDUCATION AND TRAVEL SERVICE
BUSINESS

     The  Company's  real  estate  school and travel  agency line of business is
largely  dependent  on economic  growth in its market  area.  At present,  adult
education  serves the real estate  industry,  which is experiencing  significant
growth.  Real estate  education  generally  declines  when real estate  activity
declines.  Travel services also generally follow general economic trends. If the
current economic  activity slows, the depressed  economy could slow and possibly
frustrate the Company's operations.

COMPETITION

     The  markets in which the Company  sells its real estate  school and travel
agency services are highly  competitive.  In the travel services  industry,  the
Company faces competition from larger and better capitalized companies,  such as
American Express and Thomas Cook,  which are better able to withstand  operating
losses and the effects of a cyclical market. In the real estate school industry,
the Company  competes with numerous local real estate schools  offering  similar
instructional courses.

YEAR 2000 COMPLIANCE

     The Company has  assessed its Year 2000 issues and its  readiness  for this
potential problem.  The Company has examined its information  technology systems
and  believes  that,  given  that the  Company's  operations  do not  depend  on
information  technology  as such,  the Year  2000  should  have no effect on its
information technology systems.

     Further,  the Company has assessed its  non-information  technology systems
and  believes  that it is Year 2000  compliant  because  the Company is operated
using personal,  as opposed to mainframe,  computer  technology.  These personal
computers were purchased in the last three years and run on a standard operating
system. In addition, all software run by the Company is standard,  off-the-shelf
software  purchased in the last three years.  Thus, due to the dates of purchase
of its  systems,  the  Company  believes  that all of its  systems are Year 2000
compliant.  Beginning in January 1999,  the Company  plans to obtain  assurances
from the manufacturers of its personal  computers that such computers are indeed
Year 2000 compliant.  This will complete the Company's  internal  examination of
Year 2000 issues.

     In  establishing a Year 2000  remediation  program,  the Company intends to
soon enter its next  phase by  implementing  an  examination  procedure  for its
third-party suppliers and vendors. As a component of this program,  beginning in
January 1999 the Company  intends to send written  requests for assurances  that
these  third  parties  are   addressing   their  own  Year  2000  issues.   Most
significantly,  the Company  intends to address the Year 2000 readiness state of
its reservations system provider,  which is operated using mainframe technology,
by  requesting a written Year 2000  compliance  program  which this  provider is
implementing.

     The cost of the Company's Year 2000 compliance  program has not had, and is
not expected to have, a material impact on the Company's  results of operations,
financial  condition,  or  liquidity.  The  Company  has not  been  required  to
prematurely  replace  equipment  due to Year 2000  issues,  nor has the  Company

                                       24
<PAGE>
needed to hire Year 2000  solution  providers.  Further,  the  Company  does not
anticipate  the necessity of such expenses in the future.  Finally,  the Company
anticipates  that the cost of  ensuring  compliance  of  third  parties  will be
minimal.

     The Company  anticipates,  in its  reasonably  likely  worst case Year 2000
scenario,  that the failure of its clients and suppliers to  adequately  address
their own Year 2000 issues  could  impact such  parties'  ability to provide the
information  used in booking travel  arrangements or to make payments for travel
agency services to the Company. In addition, the failure of the providers of the
travel agency  reservations system could negatively impact the Company's ability
to  make  reservations  for its  customers.  This  could  adversely  affect  the
Company's business, financial condition, cash flows, and results of operations.

     The Company's greatest Year 2000 concern is the travel agency  reservations
system. The Company has considered  contingency plans for such an event, but has
ultimately  concluded  that no such plans are  feasible  due to the  centralized
nature of the airline  reservations  system.  However,  due to the importance of
this system to the entire industry,  the Company  anticipates that the providers
of this system will provide  assurances  of their own Year 2000  compliance.  If
this system  fails as a result of a Year 2000  problem,  the Company  could lose
revenue generated from booking reservations.  If such failure was prolonged, the
Company's financial condition could be negatively impacted.

LIQUIDITY

     The Company had a working  capital  deficiency of $414,921 at September 30,
1998.  Obtaining  positive  working  capital and the completion of the Company's
expansion is dependent on the  successful  expansion of Neo Vision's  video wall
advertising  business,   renegotiations  of  certain  current  liabilities,  and
obtaining other long-term financing.

                                       25
<PAGE>
ITEM 2. PROPERTIES

     Neo Vision leases approximately 700 square feet of office space in Phoenix,
Arizona where its administrative,  production,  and transmission  facilities are
located, at an annual rent of approximately $12,720.

     The Company  maintains is corporate  offices within the Westford  campus at
3121 East Greenway Road, Suite 201 in Phoenix, Arizona 85032.

     Westford  maintains two  campuses.  The West campus is located at 4425 West
Olive,  Suite 128 in  Glendale,  Arizona.  The campus has three  classrooms  and
office space and is leased  pursuant to a lease  expiring in May 2001. The lease
rental is paid at $2,182  per month for eleven  months  each year with no rental
paid in December of each year.

     The Northeast  campus is located at 3121 East Greenway  Road,  Suite 201 in
Phoenix, Arizona. The campus has three classrooms and office space and is leased
pursuant to a five year lease expiring July 31, 2001. The monthly rent is $1,689
increasing  to $2,343 over the term of the lease,  plus common area charges that
approximate $585 per month.

     FirsTravel  maintains its office at 4700 North Central Avenue, Suite 205 in
Phoenix,  Arizona.  The  office  space is leased  pursuant  to a two year  lease
expiring on December 31, 1999, the monthly rent is currently $333.

ITEM 3. LEGAL PROCEEDINGS

     The Company is not a party to any legal proceeding.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

     None.

                                       26
<PAGE>
                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's  Class B Common Stock is not publicly  traded.  The Company's
Class A Common Stock is traded on the NASDAQ OTC Bulletin Board under the symbol
"UAIRA". At September 30, 1998 and for the eight prior quarters,  no significant
market has existed for the Company's Class A Common Stock. However, a diminutive
number of shares have traded during the last eight quarters at a low of $.01 and
a high of $.15. On January 5, 1999,  the closing price of the Company's  Class A
Common Stock was $0.05 per share. As of January 5, 1999 there were approximately
850 holders of record of the Company's Class A Common Stock and approximately 40
holders of record of the Company's Class B Common Stock.

DIVIDEND POLICY

     The Company has not declared or paid any cash dividends on its Common Stock
and does not  intend to  declare  or pay any cash  dividend  in the  foreseeable
future. The payment of dividends,  if any, is within the discretion of the Board
of  Directors  and will depend on the  Company's  earnings,  if any, its capital
requirements,  and  financial  condition  and such other factors as the Board of
Directors may consider.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

     The selected consolidated financial data should be read in conjunction with
and is qualified in its entirety by, the respective audited financial statements
and notes  thereto of the  Company,  included  on pages F-1  through  F-24,  the
audited  financial  statement  and note thereto as of September 30, 1998 and for
the year then ended of Neo Vision, Inc. on pages F-25 through F-35.

                                       27
<PAGE>
                        FOR THE YEAR ENDED SEPTEMBER 30,

                        1994       1995        1996        1997         1998
                        ----       ----        ----        ----         ----
STATEMENT OF
OPERATIONS DATA:

Revenues              $110,480   $193,640   $ 386,173   $1,222,243   $1,875,354

Gross profit                --         --          --       76,875      117,864

Income (loss)
before interest
expense, dep. and
amortization             7,011     48,509      33,604      (66,770)    (129,582)

Depreciation and
Amortization             9,629      7,729      15,281       26,412       39,766

Interest Expense        37,950      9,819      12,979       14,933       20,136

(Loss) from Write
Off of Plans and
Spec                        --         --    (649,999)          --           --

Income (loss) from
Discontinued
Operations(1)           (4,373)    (2,356)     11,671       58,193(2)        --

Net Income (loss)      (44,941)    28,605    (632,984)     (49,922)    (189,484)

Net Income (loss)
per share                 (.01)       .00        (.06)        (.00)        (.01)

BALANCE SHEET DATA:

Total Assets           802,690    803,169     278,669    1,066,159      504,833

Long-term debt         404,307    127,933      31,967      620,979        5,360

Total Liabilities      622,161    220,008     240,992      941,404      519,097

Shareholders'
Investment             180,529    583,161      36,677      124,755      (14,264)

CASH FLOW DATA:

Cash provided
(used) in operating
activities             (11,187)     3,690      (8,534)      34,025       (6,142)

Cash used in
investing
activities                (606)   (24,895)     (9,080)    (117,264)      13,076

Cash provided by
financing activities     2,599     25,663      22,092       93,529      (19,291)

----------
(1)  The four years  ended  September  30,  1996 have been  restated  to reflect
     Hansen & Associates, Inc. dba Property Masters as a discontinued operation.

(2)  Includes  the $53,796 gain on the sale of Hansen and  Associates,  Inc. dba
     Property Masters.

                                       28
<PAGE>
                             SUMMARY PER SHARE DATA

                        FOR THE YEAR ENDED SEPTEMBER 30,


                            1994       1995       1996        1997       1998
                            ----       ----       ----        ----       ----
PER SHARE DATA:
UNITED STATES AIRCRAFT
 CORP & SUBSIDIARIES
Net Income (loss)
   Historical               (.01)       .00       (.06)        .00       (.00)
   Pro Forma(1)             (.01)       .01       (.11)       (.01)      (.01)

Book Value
   Historical                 --         --         --          --       (.01)
   Pro Forma(2)               --         --         --          --        .02 

NEO VISION, INC.
Net Income (loss)
   Historical Equivalent      --         --         --          --       (.00)
   Pro Forma(3)               --         --         --          --       (.00)

Book Value
   Historical Equivalent      --         --         --          --       (.00)
   Pro Forma(3)               --         --         --          --       (.00)

----------
(1)  Pro forma net  income  (loss)  per share for each of the five  years  ended
     September  30,  is based on the  weighted  average  shares  outstanding  as
     adjusted  for the Exchange of the Class A and Class B shares into shares of
     New Common Stock of 5,575,258;  5,575,258;  5,650,063; 5,743,918; 5,802,147
     respectively.  Pro forma weighted  average shares  outstanding for the year
     ended September 30, 1997 and 1998 is 5,812,471 and 5,941,230.

(2)  Book value per share is based on the shares  outstanding  at September  30,
     1997 and September 30, 1998 and Pro forma Book value is based on the shares
     outstanding adjusted for the Exchange of the Class A and Class B shares for
     the New Common Stock.

(3)  Equivalent pro forma net income (loss) per share for each of the five years
     ended September 30 is based on the net income (loss) per share and the book
     value per share of the registrant multiplied by the exchange ratio of .2436
     (1,163,670 to 4,777,560).

(4)  Dividends  per share are not  presented  as neither  entity has  previously
     declared any dividends.

                                       29
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     THE FOLLOWING  DISCUSSION OF THE COMPANY'S  FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS  AS WELL AS  CERTAIN  STATEMENTS  AND  INFORMATION  UNDER  ITEM 1
"BUSINESS" INCLUDE CERTAIN FORWARD LOOKING STATEMENTS. WHEN USED IN THIS REPORT,
THE WORDS "EXPECTS,"  "INTENDS," "PLANS" AND "ANTICIPATES" AND SIMILAR TERMS ARE
INTENDED TO IDENTIFY  FORWARD  LOOKING  STATEMENTS  THAT RELATE TO THE COMPANY'S
FUTURE  PERFORMANCE.  SUCH  STATEMENTS  INVOLVE  RISKS  AND  UNCERTAINTIES.  THE
COMPANY'S ACTUAL RESULTS MAY DIFFER  MATERIALLY FROM THE RESULTS DISCUSSED HERE.
FACTORS  THAT MIGHT  CAUSE SUCH A  DIFFERENCE  INCLUDE,  BUT ARE NOT LIMITED TO,
THOSE DISCUSSED UNDER "BUSINESS - SPECIAL CONSIDERATIONS."

RESULTS OF OPERATIONS

     COMPARISON 1998 TO 1997

     The total  revenue of $1,875,354  for the year ended  September 30, 1998 is
made up of $494,258 or 26% from the real estate education segment and $1,281,689
or 68%  from  the  travel  agency  segment  with  the  remaining  $99,407  or 6%
consisting of consulting and  miscellaneous  income.  Total revenue increased by
$630,122 in 1998 compared to a $836,070 increase in 1997.

     The loss before interest,  depreciation and amortization  expense increased
by $62,812. The increased loss consists of the following:

     Increase in Real Estate Education 1998 operating
      income over 1997                                                $  39,313
     Increases in Travel Agency 1998 operating loss over 1997         $  (3,395)
     Increase in consulting and other income                          $  90,418
     Increase in general corporate overhead                           $(189,148)

     The  increase  in real estate  education  1998  operating  income over 1997
consists of the following:

                                                                    INCREASE
                                          1998          1997       (DECREASE)
                                          ----          ----       ----------

     Revenue                            $494,258      $436,710      $57,548
                                        --------      --------      -------
     Costs and expenses
       Personnel expense                 251,414       245,085        6,329
       Facility cost                      61,553        54,659        6,894
       Other operating cost               91,772        86,760        5,012
                                        --------      --------      -------
          Total                          404,739       386,504       18,235
                                        --------      --------      -------

     Operating income                   $ 89,519      $ 50,206      $39,313
                                        ========      ========      =======

     The operating income from the adult education division improved by $39,313.
The improvement  was due to an $57,548  increase in revenues offset by a $18,235
increase in operating  costs.  The revenue  increase is the result of additional
enrollments including those at the new East campus, and due to a $6,320 increase

                                       30
<PAGE>
in  advertising  revenue  related to the  publication  of the Renewal News.  The
operating  cost increase  consists of an $6,329  increase in personnel  expense,
$6,894 increase in facility costs and $5,012 increase in other operating costs.

     The travel services operation was started on July 1, 1997 with the purchase
of an existing travel agency and the operating results are included for the year
ended September 30, 1998 with  comparable  amounts for the three months from the
date of acquisition to September 30, 1997 as follows:
                                                                 INCREASE
                                        1998          1997      (DECREASE)
                                        ----          ----      ----------

     Sales                           $ 1,281,689    $ 776,544    $ 505,145

     Cost of sales                     1,163,825      699,669      464,156
                                     -----------    ---------    ---------
     Gross profit                        117,864       76,875       40,989
                                     -----------    ---------    ---------
     Operating costs
       Personnel expense                  99,811       48,553       51,258
       Facility cost                       8,297        2,534        5,763
       Other operating costs              29,184       41,821      (12,637)
                                     -----------    ---------    ---------
         Total                           137,292       92,908       44,384
                                     -----------    ---------    ---------

     Operating income (loss)         $   (19,428)   $ (16,033)   $   3,395
                                     ===========    =========    =========

     Sales for the travel  agency  operation  increased by $505,145 for the year
ended  September  30, 1998 over the  agencies  sales for the three  months ended
September  30, 1997 with a gross  profit  increase of $40,989.  The gross profit
percentage  declined  from  9.9% to 9.2%  primarily  due to an  increase  in the
portion of sales  attributable  to airline  ticket  sales where the gross profit
percentage is generally at 8%.  Operating costs for the year ended September 30,
1998 were $137,292  compared to $92,908 for the three months ended September 30,
1997, which reflects the restructuring of travel agency operations to reduce the
fixed operating costs to approximate $30,000 per quarter.

     The  Company  has  earned a  consulting  fee of  $412,999  relating  to its
research  project  on  the  recreational   vehicle  park  industry  net  of  its
contribution to RVP-L.L.C.  The Company for over two years has  investigated the
recreational vehicle park industry and instituted a program to establish a chain
of RV parks.  In connection  therewith  the Company has earned a consulting  fee
from an unrelated individual, who desires to participate in the RV Park program,
for its research and  development,  from which it will contribute  $1,700,000 to
RVP-L.L.C.  The  net  consulting  fee at  September  30,  1998  consists  of the
following:

      + Fee, net of contribution to RVP-L.L.C.                 $300,000
      + Equity in RVP-L.L.C.                                    112,999
                                                               --------
                                                               $412,999
                                                               ========

                                       31
<PAGE>
     The consulting  fee revenue was earned upon  completion of the research and
the agreement with the unrelated  individual.  However,  for financial reporting
purposes the consulting fee revenue will not be recognized until it is received.
The costs related to earning the consulting fee consisted primarily of executive
compensation  and travel,  all of which has been expensed over the period of the
project.

     Other revenue  includes  $90,000 of management fees from Neo Vision,  Inc.,
the unconsolidated  subsidiary acquired on June 30, 1998 and other miscellaneous
income of $9,407 which exceeded other miscellaneous income for 1997 by $418.

     General  corporate   overhead   increased  by  $189,148  primarily  due  to
management  compensation  increases  resulting  primarily from the June 30, 1998
acquisition of Neo Vision,  Inc. of $140,265 and  professional  fee increases of
$19,368.

     Depreciation  and  amortization  increased  by  $13,354  primarily  due  to
increased  amortization  related to the  amortization of the goodwill related to
the travel agency acquisitions.

     On September 30, 1997 the company sold its wholly-owned  subsidiary  Hansen
and Associates, Inc. d/b/a Property Masters after determining to discontinue its
real estate  brokerage and property  management line of business.  The financial
statements  have been restated to reflect the  operations of the subsidiary as a
discontinued  operation  reflecting  a 1997  operating  loss of  $4,079  with no
comparable amount for 1998.

     COMPARISON 1997 TO 1996

     The total  revenue of $1,222,243  for the year ended  September 30, 1997 is
made up of $436,710 or 36% from the real estate  education  segment and $776,544
or 63%  from  the  travel  agency  segment  with the  remaining  1% being  other
miscellaneous  income. Total revenue increased by $836,070 in 1997 compared to a
$192,533 increase in 1996.

     The loss before interest,  depreciation and amortization  expense increased
by $100,374. The increased loss consists of the following:

         Reduction in Real Estate Education 1997
            Operating Income Over 1996                  $22,820

         Operating Loss From
            Travel Agency Operation During
            the Three Months from Acquisition
            on July 1, 1997                             $16,033

         Increase in General Corporate Overhead         $28,125

         Decrease in Other Revenue                      $33,396

                                       32
<PAGE>
     The  reduction in real estate  education  1997  operating  income over 1996
consists of the following:

                                                                  INCREASE
                                         1997         1996       (DECREASE)
                                         ----         ----       ----------

     REVENUE                           $436,710     $343,788     $  92,922
                                       --------     --------     ---------
     Costs & expenses
     Personnel expense                  245,085      186,406        58,679
     Facility cost                       54,659       20,026        34,633
     Other operating costs               86,760       64,320        22,430
                                       --------     --------     ---------
        Total                           386,504      270,762       115,742
                                       --------     --------     ---------
     Operating income                  $ 50,206     $ 73,026     $ (22,820)
                                       ========     ========     =========

     The operating income from the adult education division declined by $22,820.
The decline  was due to an $115,742  increase  in  operating  costs  offset by a
$92,922  increase in revenues.  The revenue increase is the result of additional
enrollment including those at the new East campus, and due to a $18,035 increase
in  advertising  revenue  related to the  publication  of the Renewal News.  The
operating  cost increase  consists of a $58,679  increase in personnel  expense,
$34,633  increase in facility  cost,  and  $22,430  increase in other  operating
costs, all of which increased primarily due to the opening of the East campus in
August 1996.

     The travel services operation was started on July 1, 1997 with the purchase
of an existing  travel  agency and the  operating  results are included from the
acquisition  date  through  September  30, 1997 with no  comparable  amounts for
fiscal 1996 as follows:

                                                    AMOUNT
                                                    ------

     Sales                                         $776,544
     Cost of Sales                                  699,669
                                                   --------
     Gross Profit                                    76,875
     Personal Expense                   $ 48,553
     Facility Cost                         2,534
     Other Operating Costs                41,821
                                        --------
     Total Operating Costs                         $ 92,908
                                                   --------
     Income (loss) before interest
     depreciation and amortization                 $(16,033)
                                                   ========

     General corporate overhead increased by $28,125 primarily due to management
compensation  increases of $16,108 and an increase of legal and accounting  fees
of $6,884.

     Other revenue  declined by $33,396  primarily due to revenue in fiscal 1996
of  $30,000  related  to a  reduction  of certain  accrued  obligations  with no
comparable amount in 1997.

     Depreciation  and  amortization  increased  by  $11,131  primarily  due  to
equipment and business acquisitions. Interest increased by $1,953.

                                       33
<PAGE>
     On September 30, 1997, the Company sold its wholly-owned  subsidiary Hansen
and Associates,  Inc. dba Property Masters after  determining to discontinue its
real estate  brokerage and property  management line of business.  The financial
statements  have been restated to reflect the  operations of the subsidiary as a
discontinued operations reflecting a 1997 operating profit of $4,397 compared to
$11,671 in 1996. The sale of Hansen and  Associates,  Inc. dba Property  Masters
resulted in a gain of $53,796 in 1997 with no comparable amount in 1996.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

     The working capital deficit  decreased  $386,966 from September 30, 1997 to
$414,921 at September 30, 1998. Current assets decreased by $20,722 from 1997 to
$98,816 at September 30, 1998.  The decrease  consists of a $12,357  decrease in
cash,  a $6,591  increase in  accounts  receivable,  a $1,000  decrease in notes
receivable  related to the sale of Hansen &  Associates,  Inc.,  d/b/a  Property
Masters, and a $13,956 decrease in prepaid expenses.

     Current liabilities decreased $407,688 from 1997 to $513,737.  The decrease
consists of a $11,775  decrease  in the current  portion of  long-term  debt,  a
$30,000  increase in notes  payable  related to a one year line of credit with a
bank, a decrease of the trust deeds  payable to the  transfer of the  California
land to  RVP-LLC,  a $7,103  increase  related to the  accrued  interest  on the
debentures,  a $4,575  increase in accounts  payable and a $145,799  increase in
accrued  expenses  which  consisted  of  the  $153,805   increase  in  estimated
compensation  due  executive  officers  offset by decreases  in other  accruals.
Unearned tuition increased by $17,610 due to the increased enrollments.

     Advances to an officer made pursuant to the officer's  compensation program
decreased  by  $27,769  to zero at  September  30,  1998.  The  long  term  note
receivable  of $39,544 at  September  30, 1998 related to the sale of Hansen and
Associates,  Inc.  decreased  by $12,500.  At September  30, 1998,  property and
equipment  decreased by $9,541 as a result of equipment  acquisitions  of $3,520
offset by depreciation of $13,061. In 1998, goodwill increased by $16,031 with a
$20,000  addition  due  to the  Western  College,  Inc.  acquisition  offset  by
amortization  for  1998.  Course  materials  decreased  by  $1,964  due  to  the
amortization recorded for 1998. Other assets decreased by $18,455.

     The Company has formed RVP-LLC,  an Arizona limited  liability  company for
the  purpose  of owning  recreational  vehicle  parks that will be leased to and
operated by the Company.

     The Company for over two years has investigated  the  recreational  vehicle
park  industry and  instituted  a program to  establish a chain of RV Parks.  In
connection  therewith,  the Company has earned a consulting fee for its research
and development of the RV Park program from which it will contribute  $1,700,000
to RVP-LLC leaving $300,000 of consulting revenue which, for financial reporting
purposes, will be recognized when it is received.

     On June 30, 1998 the Company  approved the transfer to RVP-LLC of the 35.66
acres of land in Glenn County,  California subject to trust deeds payable in the
amount of  $601,000.  The land was acquired  for the purpose of  developing  the
initial  recreational  vehicle park of the planned chain of RV parks. The holder
of the  second  trust  deed  filed a notice of  default  due to  non-payment  of

                                       34
<PAGE>
interest.  The LLC determined  not to reinstate the defaulted  trust deed and in
August 1998 RVP-LLC lost the California land in a foreclosure sale.

     At September  30, 1998,  the members  equity of RVP-LLC is  $1,707,500  and
consists  primarily of the $1,700,000  capital  contribution to be received from
the  consulting  fee. The Company will not recognize any equity in RVP-LLC until
the capital  contribution of $1,700,000 is received.  The Company's  interest in
RVP-LLC, if the capital contributions were recognized, would be $135,988.

     The July  1997 and  August  1997  purchase  price  of the  travel  agencies
exceeded  the  identifiable  tangible  assets of the  agencies by  $110,288  and
relates primarily to the value of the income production of the approximately 175
Home Based Travel  Agents who place their travel sales through  FirsTravel.  The
original cost has been reduced by  amortization of $5,514 in 1997 and $26,397 in
1998.

     Long-term  debt  decreased  by $14,619 due to payments of $26,394  less the
$11,775  decrease in the current portion in 1998. The convertible  debentures of
$56,450 of United States Aircraft  Corporation plus the related accrued interest
are  classified  as current  liabilities  as they were due on December 31, 1996.
Currently,  the debentures remain unpaid and the Company believes that they will
eventually  be retired  through  conversion  to the  Company's New Common Stock,
although no assurance  that such a conversion  will be elected by the  debenture
holders. If the debenture holders do not elect to convert into the Company's New
Common  Stock,  they could demand  payment and seek  enforcement  through  legal
action; however, the Company has had no contact from the debenture holders.

     The Company's  management  has continued its program to expand the services
operations  through  further  expansion  of its  existing  operations  plus  the
acquisition of other service  organizations.  The working capital deficiency has
continued to limit the expansion of the Company.  The acquisition of Neo Vision,
the collection of the net consulting fee, and the anticipated  conversion of the
convertible  debentures  is  expected to resolve  the  current  working  capital
deficiency.  However,  the Company  intends to rapidly expand its newly acquired
Neo Vision  operation by the expected  installation  of 21 and 36 video walls in
the years ended September 30, 1999 and 2000, respectively at a projected cost of
$250,000 for each wall. The planned expansion will require additional capital of
approximately  $3,000,000 to  $5,000,000  by early 1999.  Neo Vision has engaged
financial advisors to assist in the funding of its capital needs for the planned
expansion,  including private  placements.  Management believes that the funding
will be a combination of long-term lease and convertible debt financing and that
it will be funded in time to complete the expected  installation  of video walls
in the year ended  September 30, 1999.  However,  the Company does not intend to
make material  commitments  for further  capital  expenditures  until  financing
becomes  available.  Additionally,  the  Company is  aggressively  investigating
acquisitions of adult education,  travel services,  or other operations that are
compatible  with  the  existing  operations  and that  can be  acquired  for the
Company's  common stock or with debt that is retired from the cash flow from the
acquired  operation.  No  assurance  can  be  given  that  the  acquisitions  or
installation  of the video walls will be completed  or the private  placement to
obtain the required capital infusion will be successful.

                                       35
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      Reference is made to the financial  statements,  the report  thereon,  the
notes thereto,  and the supplemental  data commencing at page F-1 of this Annual
Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

      On December 18, 1998, the Company  engaged Semple & Cooper,  LLP Certified
Public  Accountant  to examine  their  financial  statements  for the year ended
September 30, 1998.  There were no disagreements  with the former  accountant on
any matter of accounting principles,  financial statement disclosure or auditing
scope or  procedure.  The change of  accountants  was  approved  by the Board of
Directors.

                                       36
<PAGE>
                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

     The following table sets forth information concerning each of the directors
and executive officers of the Company:

        NAME                   AGE                 POSITION
        ----                   ---                 --------
Albert C. Lundstrom..........  58  President, Chief Executive Officer, and
                                   Director

Harry V. Eastlick............  59  Executive Vice President, Treasurer, Chief
                                   Operating Officer, Chief Financial Officer,
                                   and Director

Jack Eberenz.................  56  Executive Vice President, Secretary, and
                                   Director

Donald E. Cline..............  72  Director

Whipple H. Manning...........  62  Director

John R. Thomas...............  67  Director

     ALBERT C. LUNDSTROM has served as President,  Chief Executive Officer and a
Director of the Company since June 30, 1998.  Mr.  Lundstrom has served as Chief
Executive Officer of Neo Vision since its inception in June 1997. From September
1997 to present,  he has served as the Managing  Partner of LEC and  Associates,
LLC, a business consulting firm owned by Mr. Eberenz and Mr. Lundstrom. Prior to
September 1997, for a period in excess of five years,  Mr.  Lundstrom acted as a
sole proprietor  business  consultant with clients that included,  among others,
Rockwell International and TSM Technical Services & Marketing.

     HARRY V. EASTLICK, a certified public accountant, served as Chairman of the
Board,  President and Chief  Executive  Officer of the Company from October 1988
until June 30,  1998.  Mr.  Eastlick  has served as  Executive  Vice  President,
Treasurer,  Chief Financial Officer,  Chief Operating Officer, and a Director of
the Company since June 30, 1998.

     JON G. (JACK) EBERENZ has served as Executive Vice President and a Director
of the Company since June 30, 1998 and has served as the Secretary of Neo Vision
since its inception. From September 1997 to present, he has served as the senior
partner of LEC and  Associates,  LLC, a  business  consulting  firm owned by Mr.
Eberenz and Mr. Lundstrom.  From August 1992 to September 1997, he served as the
Senior  Consultant  in Arizona for MAP,  Inc.  of Sherman  Oaks,  California,  a
business  consulting  firm.  From January 1985 until August 1992, he served as a
principal of Impac International, Inc., a business consulting firm.

     DONALD E. CLINE has  served as a Director  of the  Company  since  November
1989. Mr. Cline has served as a business  consultant since March 1991 and as the
Director of the State of Arizona  Department  of Commerce  from February 1990 to
March  1991.  Mr.  Cline  served as  Chairman  of the Board and Chief  Executive

                                       37
<PAGE>
Officer of First  National  Utilities,  Inc.,  an Arizona  based  water  utility
holding company,  from September 1987 to February 1990. Prior thereto, Mr. Cline
served as Vice President and Chief Executive  Officer of the Arizona  operations
of US West. He retired from US West after 37 years of employment.

     WHIPPLE H.  MANNING  has served as a Director  of the  Company  since April
1997.  Prior thereto,  Mr. Manning served as director from November 1989 to July
1995. Mr. Manning has been an independent  real estate  consultant since January
1989.  From 1983 through 1988 Mr.  Manning served as Executive Vice President of
Coast Savings and Loan in charge of the  Commercial/Industrial  Real Estate Loan
Division.  From 1978 to 1983,  Mr.  Manning  was the Senior  Vice  President  of
California  Federal Savings and Loan in charge of the Income Property  Division.
Prior thereto, Mr. Manning spent 17 years in commercial real estate lending with
Pacific Mutual Life Insurance.

     JOHN R. THOMAS, a certified public accountant,  has served as a Director of
the Company since November 1989. Mr. Thomas has served as a business  consultant
since 1993.  From  September  1990 to December 1993 he served as the Chairman of
the Board of Directors of G.T.  Products,  Inc., a  manufacturer  of  flashlight
products and from September 1987 to September  1990, he served as Executive Vice
President,  Chief  Operating  Officer,  and  Chief  Financial  Officer  of  T.G.
Environmental,  Inc., a California based  construction  firm that specialized in
environmental  projects.  Prior thereto, for a period of 26 years Mr. Thomas was
with the  national  accounting  firm of  Coopers & Lybrand  where he served as a
partner for the last 16 years.

     There currently are no Committees of the Board of Directors.

ITEM 11. EXECUTIVE COMPENSATION

     The following table sets forth the total compensation received for services
rendered in all  capacities to the Company for the fiscal years ended  September
30, 1996, 1997, and 1998.
<TABLE>
<CAPTION>
                                                                                    LONG TERM COMPENSATION
                                                                                    ----------------------
                                                                                      AWARDS     PAYOUTS      ALL
                                        ANNUAL COMPENSATION                           ------     -------      OTHER
                                        -------------------            RESTRICTED    SECURITIES               COMPEN
     NAME AND                                         OTHER ANNUAL       STOCK      UNDERLYING     LTIP      -SATION
PRINCIPAL POSITION        YEAR(1)  SALARY($)  BONUS  COMPENSATION($)   AWARD(S)($)  OPTIONS(#)   PAYOUTS($)     ($)
------------------        -------  ---------  -----  ---------------   -----------  ----------   ----------  -------
<S>                       <C>     <C>         <C>     <C>             <C>            <C>        <C>          <C>
Albert C. Lundstrom        1998    37,500(2)    --        --              --         300,000         --         --
  President and Chief
  Executive Officer

Harry V. Eastlick(3)       1998    75,000       --        --              --         300,000         --         --
  Chief Financial          1997    51,000(4)    --        --              --              --         --         --
  Officer                  1996    36,000(4)    --        --              --              --         --         --
</TABLE>
----------
(1)  Fiscal Year Ended September 30.
(2)  For the period from July 1, 1998 through September 30, 1998.
(3)  Harry Eastlick served as Chief Executive  Officer of the Company until June
     30, 1998.
(4)  Mr. Eastlick received 200,000 shares of Class A Common Stock in each of the
     fiscal  years 1996 and 1997 as partial  payment of the  salaries  for those
     years. The value of these shares was $20,000 in each of those years.

                                       38
<PAGE>
                        OPTION GRANTS IN LAST FISCAL YEAR

     There were no options outstanding held by any director or executive officer
to acquire the  Company's  Class A Common Stock or Class B Common Stock prior to
June 30, 1998.  On June 30,  1998,  the Board of  Directors  granted  options to
acquire  shares of New Common Stock to the executive  officers of the Company as
follows:
<TABLE>
<CAPTION>
                                        INDIVIDUAL GRANTS
                      -------------------------------------------------------   POTENTIAL REALIZABLE VALUE
                       NUMBER OF       % OF TOTAL                                AT ASSUMED ANNUAL RATES
                       SECURITIES        OPTIONS                               OF STOCK PRICE APPRECIATION
                       UNDERLYING        GRANTED       EXERCISE                       FOR OPTION TERM
                        OPTIONS       TO EMPLOYEES      PRICE     EXPIRATION   ----------------------------
      NAME            GRANTED(#)(1)  IN FISCAL YEAR     ($/SH)       DATE          5%               10%
      ----            -------------  --------------     ------       ----          --               ---
<S>                     <C>                <C>         <C>      <C>            <C>              <C>
Anthony Christopher     375,000(2)         28%          $1.00    June 30, 2008  $236,250         $603,750
Albert C. Lundstrom     300,000            22%          $1.00    June 30, 2008  $189,000         $483,000
Harry V. Eastlick       300,000            22%          $1.00    June 30, 2008  $189,000         $483,000
Jack Eberenz            225,000            17%          $1.00    June 30, 2008  $141,750         $362,250
</TABLE>
----------
(1)  The options  were  granted  under the  Company's  1998 Stock  Option  Plan,
     adopted by the board of Directors on June 30, 1998,  subject to stockholder
     approval. See "PROPOSAL TO APPROVE THE 1998 STOCK OPTION PLAN."

(2)  These options have expired as a result of Mr. Christopher's  resignation as
     a director and officer of the Company subsequent to fiscal year end.

DIRECTOR COMPENSATION

     The three non-officer directors of the Company, Donald E. Cline, Whipple H.
Manning, and John R. Thomas, each received 50,000 shares of Class A Common Stock
during the fiscal year ended  September 30, 1997,  and Messrs.  Cline and Thomas
each received 50,000 shares of Class A Common Stock during the fiscal year ended
September 30, 1996, as director compensation. Each of these three directors also
received  15,000 shares of Class A Common Stock for  guaranteeing a bank loan to
the Company during the fiscal year ended September 30, 1997.

EMPLOYMENT AGREEMENTS

     Messrs.  Lundstrom,  Eastlick,  and Eberenz have  entered  into  employment
agreements  with the  Company  providing  for  them to  serve  in their  current
executive positions. The agreements continue until December 31, 2003 and provide
for annual salaries of $150,000, $120,000, and $60,000,  respectively,  together
with expense reimbursement.

                                       39
<PAGE>
     Mr. Anthony  Christopher  previously  had an employment  agreement with the
Company  providing  for annual  compensation  of $150,000 as the Chairman of the
Board of the Company.  On November 9, 1998,  Mr.  Christopher  resigned from the
Company  as an  employee  and as a  director.  Mr.  Christopher  entered  into a
separation  agreement on December 17, 1998  providing  for,  among other things,
payment of accrued compensation of $41,250 beginning February 1, 1999.

     Each employment  agreement  provides that the executive will receive 75% of
his base salary plus certain  benefits to the end of the term of  employment  if
the  executive's  employment  is  terminated  by the Company  without  cause or,
ownership or control of the Company,  including illustratively,  the majority of
the Board of Directors of the Company becomes vested, directly or indirectly, in
individuals other than individuals approved by the executive.  In addition, each
employment  agreement  contains  restrictive  covenants  pursuant  to which  the
executive  has agreed not to compete  with the Company or to solicit any clients
or employees of the Company during the term of the agreement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table  sets  forth  certain  information  with  respect  to
beneficial  ownership of the  Company's  Class A Common Stock and Class B Common
Stock as of December 31, 1998,  held by each director and  executive  officer of
the Company,  all directors and executive officers as a group,  persons known by
the Company to hold more than 5% of the Company's  Class A Common Stock or Class
B  Common  Stock,  and  three  former  shareholders  of Neo  Vision  who are not
directors or officers of the Company.  The table also provides  information with
respect to the pro forma beneficial  ownership of the Company's New Common Stock
held by each  director and executive  officer of the Company,  all directors and
executive  officers as a group,  and all persons expected by the Company to hold
on a pro forma basis more than 5% of the New Common Stock,  assuming the maximum
number of shares are issued under the Exchange Agreement:

                                       40
<PAGE>
<TABLE>
<CAPTION>
                             AMOUNT OF              AMOUNT OF              AMOUNT OF
                              CLASS A                CLASS B                  NEW        PERCENT
                              COMMON                 COMMON                  COMMON      WITHOUT    PERCENT UPON
                              STOCK                  STOCK                   STOCK      NEO VISION   NEO VISION
                           BENEFICIALLY           BENEFICIALLY            BENEFICIALLY  DEBENTURE     DEBENTURE
NAME OF BENEFICIAL OWNER      OWNED      PERCENT     OWNED      PERCENT     OWNED(1)    CONVERSION   CONVERSION(2)
------------------------      -----      -------     -----      -------     --------    ----------   ------------
<S>                       <C>            <C>       <C>          <C>      <C>               <C>          <C>
Albert C. Lundstrom        614,000(3)     6.1%            --        --    1,766,711(4)      28.3%        23.8%

Harry V. Eastlick          603,708        6.0%     2,600,000(5)   52.3%     560,371(6)       8.9%         7.6%

Jack Eberenz               102,400(7)     1.0%            --        --      469,611(8)       7.6%         6.4%

Donald E. Cline            115,000        1.1%        50,000       1.0%      20,346(9)         *%           *%

Whipple H. Manning          65,000         .6%        50,000       1.0%      15,346(10)        *%           *%

John R. Thomas             115,000        1.1%        50,000       1.1%      20,346(11)        *%           *%

Former Neo Vision
Shareholders(12)            14,400          *%            --        --       34,399(13)        *%           *%

Anthony Christopher(14)  1,371,600       13.8%            --        --    2,676,450(15)     45.0%        37.6%

Directors and Executive
Officers as a group
(six persons)            1,512,708       15.2%     2,750,000      55.4%   2,608,120(16)     38.4%        32.8%
</TABLE>
----------
*     Less than one percent.
**    All of the  officers  and  directors  of the Company can be reached at the
      offices of the Company c/o United  States  Aircraft  Corporation,  3121 E.
      Greenway, Suite 201, Phoenix, Arizona 85082; (602) 765-0500.
(1)   In calculating the percentage or ownership,  shares issuable upon exercise
      of options are deemed to be  outstanding  for the purpose of computing the
      percentage of shares of New Common Stock owned by each person, but are not
      deemed to be  outstanding  for the purpose of computing the  percentage of
      shares of New Common Stock owned by any other person.
(2)   Assumes  conversion of Neo Vision  Debentures,  and payment to a financial
      consultant  to Neo Vision for past  services  rendered to Neo  Vision,  of
      approximately  1,156,000 shares of Neo Vision Common Stock at December 31,
      1998.
(3)   Includes  102,400 shares of Class A Common Stock held by LEC & Associates,
      L.L.C. of which Mr. Lundstrom and Mr. Eberenz are members.
(4)   Includes  1,405,311  additional shares of New Common Stock to be issued to
      Mr.  Lundstrom  and LEC &  Associates,  L.L.C.  pursuant  to the  Exchange
      Agreement  and  300,000  shares  of New  Common  Stock  issuable  upon the
      exercise of options.
(5)   Includes  2,475,000  shares held in escrow by Security  Pacific  Bank (now
      Bank of America).
(6)   Includes  300,000 shares of New Common Stock issuable upon the exercise of
      options.
(7)   Includes  102,400 shares of Class A Common Stock held by LEC & Associates,
      L.L.C. of which Mr. Lundstrom and Mr. Eberenz are members.
(8)   Includes 234,371 additional shares of New Common Stock to be issued to LEC
      & Associates, L.L.C. pursuant to the Exchange Agreement and 225,000 shares
      of New Common Stock issuable upon the exercise of options.
(9)   Includes  5,000 shares of New Common Stock  issuable  upon the exercise of
      options.
(10)  Includes  5,000 shares of New Common Stock  issuable  upon the exercise of
      options.
(11)  Includes  5,000 shares of New Common Stock  issuable  upon the exercise of
      options.
(12)  Three former shareholders of Neo Vision, who are not directors or officers
      of the Company, and excluding Anthony Christopher.
(13)  Includes 32,959  additional shares of New Common Stock to be issued to the
      three former shareholders pursuant to the Exchange Agreement.
(14)  Mr. Christopher's address is 6632 E. Moreland, Scottsdale, Arizona 85257.
(15)  Includes  2,539,290  additional shares of New Common Stock to be issued to
      Mr. Christopher  pursuant to the Exchange Agreement.  Mr. Christopher will
      allocate an  additional  600,000  shares of New Common  Stock to debenture
      holders  and to a  financial  consultant  to Neo Vision for past  services
      rendered to Neo Vision.
(16)  Includes  840,000 shares of New Common Stock issuable upon the exercise of
      options.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The information required by Item 13 is incorporated herein by reference to
information  contained  elsewhere in this Annual  Report  regarding the Exchange
Agreement as set forth in Exhibit 10.5 to this Annual Report.

      There were no other transactions  required to be reported pursuant to Item
13.

                                       41
<PAGE>
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)            3.1   Certificate of Incorporation (1)
               3.2   Bylaws (1)
              10.1   Agreement between the shareholders of Western college, Inc.
                     and United States  Aircraft  Corporation  dated January 29,
                     1996 (2)
              10.2   Employment  Agreement  between Harry V. Eastlick and United
                     States Aircraft Corporation dated April 22, 1997 (2)
              10.3   Employment  Agreement  between  Andrew  Israel  and  United
                     States Aircraft Corporation dated December 31, 1995 (2)
              10.4   Employment  Agreement  between  Stuart  Israel  and  United
                     States Aircraft Corporation dated December 31, 1995 (2)
              10.5   Exchange  Agreement  dated as of June 30, 1998 among United
                     States Aircraft Corporation, Anthony Christopher, Albert C.
                     Lundstrom,  LEC & Associates,  L.L.C., Eugene Johnson, Brad
                     Peterson, and A. Frederick Schaffer, Jr. (3)
              10.6   Separation of Employment,  Consulting,  Settlement, Release
                     and  Share   Waiver   Agreement   by  and   among   Anthony
                     Christopher,  United States Aircraft  Corporation,  and Neo
                     Vision, Inc. dated December 17, 1998 (4)
              21     Subsidiaries of the Registrant
              27     Financial Data Schedule

        ----------

     (1)  Incorporated  by  reference to  Registrant's  Form 10-K for the fiscal
          year ended  September  30, 1984 filed with the  Commission on or about
          February 24, 1989.
     (2)  Incorporated  by  reference to  Registrant's  Form 10-K for the fiscal
          year ended  September  30, 1996 filed with the  Commission on or about
          September 29, 1997.
     (3)  Incorporated  by  reference  to  Registrant's  Form 8-K filed with the
          Commission on or about July 15, 1998.
     (4)  Incorporated  by  reference  to  Registrant's  Form 8-K filed with the
          Commission on or about December 23, 1998.

(b)  Financial Statements filed as part of this Report:

     Consolidated  Financial Statements and Supplemental  Schedules as listed in
the Index to Consolidated Financial Statements on Page F-1 of this Report.

(c)  Reports on Form 8-K:

     The  Registrant  filed a Current  Report on Form 8-K on July 15,  1998 with
respect to the acquisition of Neo Vision, Inc. by the Registrant.


(d)  Financial Statement Schedules:

     None

                                       42
<PAGE>
                                   SIGNATURES

     Pursuant  to the  requirement  of  Section  13 or 15(d)  of the  Securities
Exchange Act of 1934,  Registrant has duly caused this Form 10-K to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                         U.S. AIRCRAFT CORPORATION


Date: January 15, 1999                   By: /s/ Harry V. Eastlick
                                            -----------------------------
                                                 Harry V. Eastlick
                                                 Chief Financial Officer

     Pursuant to the requirements of the Securities Act of 1934, this Report has
been signed below by the following  persons on behalf of  Registrant  and in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
          SIGNATURE                         TITLE                             DATE
          ---------                         -----                             ----
<S>                              <C>                                  <C>
By: /s/ Albert C. Lundstrom       President, Chief Executive            January 15, 1999
   ----------------------------   Officer and Director (Principal
        Albert C. Lundstrom       Executive Officer)

By: /s/ Harry V. Eastlick         Executive Vice President, Chief       January 15, 1999
   ----------------------------   Financial Officer, and Director
        Harry V. Eastlick         (Principal Financial and
                                  Accounting Officer)

   By: /s/ Jack Eberenz           Executive Vice President,
   ----------------------------   Secretary, and Director               January 15, 1999
           Jack Eberenz


   By: /s/ Donald E. Cline        Director                              January 15, 1999
   ----------------------------
           Donald E. Cline


   By: /s/ Whipple H. Manning     Director                              January 15, 1999
   ----------------------------
           Whipple H. Manning


   By: /s/ John R. Thomas         Director                              January 15, 1999
   ----------------------------
           John R. Thomas
</TABLE>

                                       43
<PAGE>
                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF
                       UNITED STATES AIRCRAFT CORPORATION


                                                                Page
                                                                ----
Reports of Independent Certified Public Accountant.             F-2 and F-3

Balance sheets as of September 30, 1998 and 1997.               F-4 and F-5

Statements of operations for each of the three years
in the period ended September 30, 1998.                         F-6

Statements of shareholders' equity for each of the
three years in the period ended September 30, 1998.             F-7

Statements of cash flows for each of the three years
in the period ended September 30, 1998.                         F-8

Notes to the Financial Statements.                              F-9 through F-24



         INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF NEO VISION, INC.
                   (A WHOLLY-OWNED UNCONSOLIDATED SUBSIDIARY)

Report of Independent Certified Public Accountant               F-25

Consolidated Balance Sheet as of September 30, 1998             F-26

Consolidated Statement of Operations for the year
ended September 30, 1998                                        F-27

Consolidated Statement of Changes in Stockholders'
Equity for the year ended September 30, 1998                    F-28

Consolidated Statement of Cash Flows for the year ended
September 30, 1998                                              F-29

Notes to Consolidated Financial Statements                      F-31

                                       F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To The Shareholders and Board of Directors of
United States Aircraft Corporation and Subsidiaries

We have audited the  accompanying  consolidated  balance  sheet of United States
Aircraft  Corporation and Subsidiaries as of September 30, 1998, and the related
consolidated statements of operations,  shareholders' equity (deficit), and cash
flows for the year then ended. These consolidated  financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in All material  respects,  the  financial  position,  of United States
Aircraft  Corporation and Subsidiaries as of September 30, 1998, and the results
of its operations,  changes in shareholders'  equity, and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 18 to the
financial   statements,   the  Company's   signiicant   operating  losses  raise
substantial  doubt  about  its  ability  to  continue  as a going  concern.  The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


                                                  /s/ Sempel & Cooper, LLP

Certified Public Accountants

Phoenix, Arizona
December 22, 1998

                                      F-2
<PAGE>
                          INDEPENDENT AUDITOR'S REPORT

The Stockholders and Board of Directors
United States Aircraft Corporation

I have audited the  accompanying  consolidated  balance  sheets of United States
Aircraft Corporation, and subsidiaries as of September 30, 1997, and the related
consolidated statements of operations,  stockholders' equity, and cash flows for
each of the  years  in the two year  period  ended  September  30,  1997.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  My  responsibility  is to express an opinion on these  consolidated
financial statements based on my audits.

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

In my opinion,  the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated financial position of United
States Aircraft Corporation,  and subsidiaries as of September 30, 1997, and the
results  of their  operations  and their cash flows for each of the years in the
two year period ended September 30, 1997, in conformity with generally  accepted
accounting principles.

                                 /s/ ROBERT MARTIN

Mesa, Arizona
March 19, 1998

                                      F-3
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                           SEPTEMBER 30, 1998 AND 1997

                                     ASSETS

                                                         1998            1997
                                                      ----------      ----------
Current assets
  Cash                                                $    8,070      $   20,427
  Accounts receivable, less
  allowance for doubtful accounts
  of $7,500 (1997)                                        75,902          69,311
  Notes receivable                                         7,000           8,000
  Prepaid expenses                                         7,844          21,800
                                                      ----------      ----------
        Total current assets                              98,816         119,538

Advance to officer                                                        27,769

Notes receivable, net of current
    portion                                               39,544          52,044

Land held for future development                                         577,327
Investment
    RVP- LLC
    Neo Vision, Inc.                                     103,338
Property and equipment, net of
    accumulated depreciation of
    $79,023 (1998) and $ 65,962 (1997)                    47,613          57,154

Goodwill, net of accumulated
    amortization of $26,397 (1998) and
    $22,428 (1997)                                       103,339          87,308

Agency acquisitions-goodwill, net of
    accumulated amortization of $25,733
    (1998) and $5,514 (1997)                              84,555         104,774

Course materials                                          13,754          15,718

Other                                                     13,874          24,527
                                                      ----------      ----------

        Total assets                                  $  504,833      $1,066,159
                                                      ==========      ==========

   The accompanying notes are an integral part of these financial statements.

                                      F-4
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                           SEPTEMBER 30, 1998 AND 1997

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                       1998            1997
                                                   -----------      -----------
Current liabilities
   Current portion of long term debt               $    26,000      $    37,775
   Notes Payable, bank, with interest at
    10 1/2% due March 1999                              30,000
   Trust deed notes payable                                             601,000
   Convertible debentures and
     related accrued interest                           90,041           82,938
   Accounts payable                                     90,734           86,159
   Accrued expenses                                    214,062           68,263
   Unearned tuition                                     62,900           45,290
                                                   -----------      -----------
       Total current liabilities                       513,737          921,425

Long term debt, net of
   current portion                                       5,360           19,979
                                                   -----------      -----------
       Total liabilities                               519,097          941,404
                                                   -----------      -----------
Commitments

Stockholders' equity (deficit)
   Common Stock
     Class A: $.50 par value
       10,000,000 shares authorized,
       9,927,504 (1998) and
       7,652,504 (1997) shares
       issued and outstanding                        4,963,752        3,826,252
     Class B: $.001 par value,
       5,000,000 shares authorized
       4,962,801 shares issued and
       outstanding                                       4,963            4,963
Paid-in-capital (deficit)                           (1,838,862)        (751,827)
Accumulated (deficit)                               (3,144,117)      (2,954,633)
                                                   -----------      -----------
                                                       (14,264)         124,755
                                                   -----------      -----------
       Total liabilities and
         Stockholders' equity (deficit)            $   504,833      $ 1,066,159
                                                   ===========      ===========

   The accompanying notes are an integral part of these financial statements.

                                      F-5
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES
                      Consolidated Statement of Operations
                            For the Three Years Ended
                       September 30, 1998, 1997, and 1996


                                          1998           1997           1996
                                          ----           ----           ----
Revenue
  Real estate education               $   494,258    $   436,710    $   343,788
  Travel agency                         1,281,689        776,544
  Other                                    99,407          8,989         42,385
                                      -----------    -----------    -----------
        Total revenue                   1,875,354      1,222,243        386,173

Operating costs and expenses
  Cost of sales - travel agency         1,163,825        699,669
  Personnel expenses                      351,224        292,437        183,700
  Facility cost                            69,851         57,192         22,025
  Other operating costs                   120,249        129,076         64,330
  General and administrative              299,787        110,639         82,514
  Interest                                 20,136         14,933         12,979
  Loss from write off of plans and
    Specifications                                                      649,999
  Depreciation and amortization            39,766         26,412         15,281
                                      -----------    -----------    -----------
                                        2,064,838      1,330,358      1,030,828
                                      -----------    -----------    -----------
    Income (loss) from continuing
      operations                         (189,484)      (108,115)      (644,655)

Discontinued operations
  Income of Hansen & Associates, Inc.
    dba Property Masters                                   4,397         11,671
  Gain on disposal of Hansen &
    Associates, Inc. dba Property
    Masters                                               53,796
                                      -----------    -----------    -----------

      Net income (loss)               $  (189,484)   $   (49,922)   $  (632,984)
                                      -----------    -----------    -----------
Basic Net income (loss) per share 
 from continuing operations           $      (.01)   $      (.01)   $      (.06)
Basic Net income (loss) per share 
 from discontinued operations         $              $       .01    $
                                      -----------    -----------    -----------

Basic Net income (loss) per share     $      (.01)   $        --    $      (.06)
                                      -----------    -----------    -----------
Weighted average number of shares
   outstanding                         13,309,055     11,391,138     10,808,846
                                      -----------    -----------    -----------

   The accompanying notes are an integral part of these financial statements.

                                      F-6
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES
            Consolidated Statements of Stockholders' Equity (Deficit)
                            For the Three Years Ended
                       September 30, 1998, 1997, and 1996

<TABLE>
<CAPTION>
                                                                Capital Stock
                                                                -------------
                                            Class A                Class B
                                     ----------------------  -----------------    Paid-in
                                       Number                  Number             Capital     Accumulated
                                     of Shares     Amount    of Shares  Amount   (Deficit)     (Deficit)
                                     ---------     ------    ---------  ------   ---------     ---------
<S>                                <C>         <C>         <C>        <C>     <C>           <C>
Balance, September 30, 1995          4,907,504   $2,453,752  4,962,801  $4,963  $   396,173   $(2,271,727)

Year ended September 30, 1996
  Shares issued in acquisition
   of Western College, Inc.          1,000,000      500,000                        (450,000)
  Shares issued in payment for
   services rendered                   375,000      187,500                        (150,000)
  Net (loss)                                                                                     (632,984)
                                     ---------   ----------  ---------  ------  -----------   -----------
Balance, September 30, 1996          6,282,504   $3,141,252  4,962,801  $4,963  $  (203,827)  $(2,904,711)

Year ended September 30, 1997
  Shares issued in acquisition of
    Western College, Inc.              200,000      100,000                         (80,000)

  Shares issued in travel agency
    operations acquisition             500,000      250,000                        (200,000)

  Shares issued in acquisition of
    land held for future development   250,000      125,000                        (100,000)

  Shares issued in payment for
   services rendered                   420,000      210,000                        (168,000)

  Net (loss)                                                                                      (49,922)
                                     ---------   ----------  ---------  ------  -----------   -----------
  Balance, September 30, 1997        7,652,504   $3,826,252  4,962,801  $4,963  $  (751,827)  $(2,954,633)
  Year ended September 30, 1998
    Shares issued in acquisition of
    Western College, Inc,              200,000      100,000                         (80,000)

    Shares issued for loan guarantee    75,000       37,500                         (30,000)
    Shares issued in acquisition of
    Neo Vision, Inc.                 2,000,000    1,000,000                        (977,035)
    Net Income                                                                                   (189,484)
                                     ---------   ----------  ---------  ------  -----------   -----------
  Balance September 30, 1998         9,927,504   $4,963,752  4,962,801  $4,963  $(1,838,862)   (3,144,117)
                                     ---------   ----------  ---------  ------  -----------   -----------
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F-7
<PAGE>
                       UNITED STATES AIRCRAFT CORPORATION
                      Consolidated Statements of Cash Flows
                            For the Three Years Ended
                       September 30, 1998, 1997, and 1996

                                                 1998        1997        1996
                                                 ----        ----        ----
Cash flows from operating activities
Net income, (loss)                            $(189,484)  $ (49,922)  $(632,984)
 Adjustments to reconcile net
 income, (loss) to cash provided
 by (used in) operating activities
  (Income) loss from discontinued operations                 (4,397)    (11,671)
  Depreciation                                   13,061      10,788       8,792
  Amortization                                   26,705      15,624       8,079
  Allowance for doubtful accounts                             7,500
  Gain on disposal of operations                            (53,796)
  Class A Shares issued in payment
    for services rendered                         7,500      42,000      37,500
  Gain from write off of long term debt                                 (30,000)
  Loss from write off of plans
    and specifications                                                  649,999
  Change in assets and liabilities
   net of effects from acquisition
     Accounts receivable                         (5,591)    (21,977)    (31,661)
     Other                                      (70,273)     (3,069)    (15,466)
     Prepaid expenses                            13,956     (14,609)     (5,939)
     Notes payable                               30,000
     Accounts payable                             4,575      63,839       6,338
     Accrued expenses                           145,799      32,052     (14,678)
     Unearned tuition                            17,610       9,992      20,240
                                              ---------   ---------   ---------
Net cash provided by (used in) operating
 activities of continuing operations             (6,142)     34,025     (11,451)
Net cash provided by (used in) discontinued
  operations                                                              2,917
                                              ---------   ---------   ---------
Net cash provided by (used in) operating
  activities                                     (6,142)     34,025      (8,534)

Cash flows from investing activities
  Changes in advance to officer                  27,769       2,815      (4,399)
  Decrease in notes receivable                   12,500
  Cash provided from acquisition of
   Western College, Inc.                                                  4,145
  Addition to land for future development                   (51,327)      
  Investment in RVP-LLC                         (23,673)
  Additions to intangible assets, net                       (61,172)
  Additions to property and equipment            (3,520)     (7,580)     (8,826)
                                              ---------   ---------   ---------
Net cash provided by (used in) 
 investing activities                            13,076    (117,264)     (9,080)

Cash flows from financing activities
  Increase in convertible debentures
    and related accrued interest                  7,103       8,879      17,609
  Increase in trust deed notes payable                      100,000
  Proceeds from long term debt                                           36,822
 Decrease in long term debt                     (26,394)    (15,350)    (32,339)
                                              ---------   ---------   ---------
   Net cash provided by (used in)
    financing activities                        (19,291)     93,529      22,092
                                              ---------   ---------   ---------
Net increase (decrease) in cash and
 cash equivalents                               (12,357)     10,290       4,478
Cash, beginning of year                          20,427      10,137       5,659
                                              ---------   ---------   ---------
Cash, end of year                             $   8,070   $  20,427   $  10,137
                                              ---------   ---------   ---------

   The accompanying notes are an integral part of these financial statements.

                                      F-8
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NATURE OF OPERATIONS AND
         USE OF ESTIMATES

NATURE OF OPERATIONS

Unites States  Aircraft  Corporation  (Company) was  incorporated in Delaware on
October 6, 1978, and commenced operations in April, 1980. The Company, operating
solely in Arizona provides real estate  educational  services through its wholly
owned subsidiaries Western College,  Inc. and Ford Schools,  Inc. doing business
as Westford  College.  Travel  agency  services are provided  through its wholly
owned operating division FirsTravel.

PRINCIPLES OF CONSOLIDATION

The  consolidated  financial  statements  include the accounts of United  States
Aircraft  Corporation and its wholly owned subsidiaries  except Neo Vision, Inc.
whose exchange agreement was entered into on June 30, 1998. Neo Vision, Inc. has
not been consolidated until its acquisition has been fully assured.  See Note 6.
All significant  intercompany  transactions and balances have been eliminated in
consolidation.

RECOGNITION OF REVENUE

Real estate  education  services  tuition fees are generally paid in advance and
recorded as unearned tuition. Tuition revenue is recognized when students attend
classes.  Travel agency  revenues are  recognized at the time of booking  travel
arrangements.

Included in revenue during the year ended September 30, 1996, is $30,000 related
to the reduction of certain accrued obligations recorded in prior years.

INDUSTRY SEGMENTS

During 1998 and 1997, approximately 53% and 44%, respectively,  of the Company's
travel agency revenue was received from the airline industry. In 1997, the major
airlines  reduced their  commission rate from ten percent to eight percent,  and
set a maximum  amount  paid on certain  commissions.  The  company  subsequently
adopted a policy of charging a service fee for airline tickets issued,  and will
continue to promote  other forms of leisure  travel,  such as tours and cruises,
where the commissions are generally higher.  However,  any adverse change in the
airline  industry could have a material  effect on the future  operations of the
Company.

                                      F-9
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

             Notes to Consolidated Financial statements (continued)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NATURE OF OPERATIONS AND
         USE OF ESTIMATES (CONTINUED)

INCOME TAXES

Deferred tax assets and  liabilities  are recognized for the expected future tax
consequences  of events that have been included in the  financial  statements or
income tax returns.  Deferred tax assets and liabilities are determined based on
the  difference  between  the  financial  statement  and tax basis of assets and
liabilities  using  enacted tax rates  expected to be recovered or settled.  The
effect  on  deferred  tax  assets  and  liabilities  of a change in tax rates is
recognized in income in the period that includes the enactment date.

PROPERTY AND EQUIPMENT

Property and equipment  consists of office  furniture and equipment  recorded at
cost,  and is  depreciated  using the straight line method over their  estimated
useful lives ranging from five to ten years.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

The allowance for doubtful  accounts  represents an amount which, in managements
judgement,  will be adequate  to absorb  probable  losses on  existing  accounts
receivable that may become uncollectible.

PLANS AND SPECIFICATIONS

The Company owns plans and  specifications  for the turbo-prop engine conversion
for the  DC-3/C-47  aircraft,  and has  investigated  methods of realizing  this
investment.  Possible  methods to realize the Company's  investment in the plans
and  specifications  include a new  licensing  agreement,  sale of the plans and
specifications,  acquisition  or by obtaining  financing and  successful  future
development.  As of September  30, 1996,  the Company was unable to identify any
cash flows from its investment in the plans and specifications.  Accordingly, an
impairment  loss of $649,999,  that represents the excess of the carrying amount
over the present value of the  identifiable  net cash flow, has been included in
operations for the year ended September 30, 1996.

                                      F-10
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NATURE OF OPERATIONS AND
         USE OF ESTIMATES (CONTINUED)

IMPAIRMENT OF LONG-LIVED ASSETS

The Company requires that long-lived assets and certain identifiable intangibles
be reviewed for impairment whenever events or changes in circumstances  indicate
that the carrying amount of an asset may not be recoverable.  Recoverability  of
assets to be held and used is measured by a comparison of the carrying amount of
an asset to future  undiscounted  net cash flows expected to be generated by the
asset and a review of industry  conditions.  If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceed the fair value of the assets.  Assets to be
disposed of are reported at the lower of the carrying  amount or net  realizable
value.  As  more  fully  described  in  the  preceding  paragraph,   "plans  and
specifications",  the Company recorded an impairment loss of $649,999 during the
year ended September 30, 1996.

GOODWILL

Goodwill results from acquisitions of subsidiaries in which the acquisition cost
exceeded the book value of the net assets acquired.  Goodwill is being amortized
using the straight line method over 25 years.

AGENCY ACQUISITIONS

Agency acquisitions result from acquiring travel agency operations and assets in
which the  acquisition  cost exceeded the book value of net assets  acquired and
represent the travel  agency's base of customers and  home-based  travel agents.
Agency acquisitions are being amortized using the straight line method over five
years.

COURSE MATERIALS

Course  materials  represent  the initial cost of the  Principles of Real Estate
textbook.  The textbook is updated annually and the annual costs are expensed as
incurred.  Due to the  acquisition  of Western  College,  Inc. and the resulting
change in the use of the textbook,  the Company is  amortizing  the initial cost
over a ten year period.

EARNINGS PER SHARE

Basic  earnings  per share  amounts are based upon the average  number of shares
outstanding.  The effect of debentures  convertible into Class A common stock on
the earnings per share  calculations  are  antidilutive  and  therefore  diluted
earnings per share are not presented.

ADVERTISING

The Company expenses  advertising  costs when the  advertisement  occurs.  Total
advertising  expenses amounted to $14,417,  $11,308 and $8,045 in 1998, 1997 and
1996, respectively.  There were no capitalized advertising costs for the periods
presented.

                                      F-11
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NATURE OF OPERATIONS AND
         USE OF ESTIMATES (CONTINUED)

USE OF ESTIMATES

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

RECLASSIFICATION

Certain  items  included  in  prior  years'   financial   statements  have  been
reclassified to conform to the current year financial statement classification.

NOTE 2 - INCOME TAXES

At September 30, 1998,  the Company had the  following  net  operating  loss and
credit carryovers for income tax purposes:

                         Taxable       Year of            Net
                          Year       Expiration      Operating Loss
                         -------     ----------      --------------
                          1996          2011             556,000
                          1997          2012              77,000

The income tax effect of the net  operating  loss  carryforward  gives rise to a
deferred income tax asset as follows:

                                               1998            1997
                                            ----------      ----------
Net operating loss carryforwards            $  663,000      $2,654,000
                                            ----------      ----------

Gross deferred tax assets                      316,000      $1,327,000
Deferred tax asset valuation allowance         316,000       1,327,000
                                            ----------      ----------

          Net deferred tax asset            $     --        $     --
                                            ----------      ----------

                                      F-12
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

             Notes to consolidated Financial Statements (continued)

NOTE 2 - INCOME TAXES (CONTINUED)

The gross  deferred tax  deferred tax asset is reduced by a valuation  allowance
based when upon  management's  estimate  it is more likely than not that the tax
benefits will not be realized.  The decrease in the valuation  allowance  during
the year ended September 30, 1998, is $1,011,000.

NOTE 3 - ADVANCES TO OFFICER

Advances to officer represent non-interest bearing advances with no stated terms
of repayment.

NOTE 4 - NOTES RECEIVABLE

The Company has notes receivable from the sale of Hansen & Associates,  Inc. dba
Property Masters consisting of the following:

            Note receivable from individual due
            in semi-annual payments plus interest
            at 7 1/2%                                        $26,500
            Non-Compete payments due in monthly
            installments of $500 net of imputed interest
            by $4,956                                         20,044
                                                             -------
                                                              46,544
            Less current portion                               7,000
                                                             -------
            Balance September 30, 1998                       $39,544
                                                             -------

NOTE 5 - INVESTMENTS - RVP-LLC

The Company has formed  RVP-LLC,  an Arizona limited  liability  company for the
purpose of owning recreational vehicle parks that will be leased to and operated
by the company.

The Company for over two years has investigated  the  recreational  vehicle park
industry  and  instituted  a  program  to  establish  a Chain  of RV  Parks.  In
connection  therewith,  the Company has earned a consulting fee for its research
and development of the RV Parks program from which it will contribute $1,700,000
to RVP-LLC leaving $300,000 of consulting revenue which for financial  reporting
purposes will be recognized when it is received.

On June 30, 1998 the Company approved the transfer to RVP-LLC of the 35.66 acres
of land in Glenn County, California subject to trust deeds payable in the amount
of $601,000.  The land was acquired  for the purpose of  developing  the initial
recreational  vehicle park of the planned  chain of RV parks.  The holder of the
second trust deed filed a notice of default due to non payment of interest.  The
LLC  determined  not to reinstate  the  defaulted  trust deed and in August 1998
RVP-LLC lost the California land in a foreclosure sale.

At September 30, 1998,  the members equity of RVP-LLC is $1,707,500 and consists
primarily of the  $1,700,000  capital  contribution  to be received  from the
consulting fee. For financial  reporting purposes The Company has not recognized
any equity in RVP-LLC until the capital  contribution of $1,700,000 is received.
The  Company's  interest  in the  RVP-LLC  if  the  capital  contributions  were
recognized would be approximately $135,988.

                                      F-13
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

NOTE 6 - ACQUISITIONS

Effective January 1, 1996 the Company acquired all of the outstanding  shares of
Western College,  Inc. a real estate training organization whose operations have
been combined with the Company's wholly owned subsidiary, Ford Schools, Inc. The
acquisition was through a tax-free exchange of stock,  resulting in the issuance
of 1,000,000  shares of the Company's  Class A common stock plus an agreement to
issue an  additional  600,000  Class A shares  over the  following  three  years
contingent on the gross tuition revenue equaling or exceeding $250,000 per year.

The  acquisition is being  accounted for by the purchase  method.  The 1,000,000
shares of Class A common  stock has been  recorded  for  accounting  purposes at
$50,000.  During  each of the  years  ended  September  30,  1998 and  1997,  an
additional  200,000  shares of Class A common stock were issued  pursuant to the
acquisition  agreement  and recorded  for  accounting  purposes at $20,000.  The
$90,000  purchase  price  exceeds  the book  value of the net  assets of Western
College, Inc. by $99,361 which has been allocated as follows:

                       Property and equipment          $31,713
                       Goodwill                         67,648

The  property  and  equipment  is being  depreciated  over  seven  years and the
goodwill is being  amortized over 25 years.  Operations of Western  College have
been  included in the  consolidated  statement  of  operations  from the date of
acquisition.

Supplemental   cash  flow  information   related  to  the  assets  acquired  and
liabilities  assumed  from the  acquisition  of  Western  College,  Inc.,  is as
follows:

              Assets
                Accounts receivable                        $ 4,500
                Property and equipment                      31,713
                Goodwill                                    47,648
                Deposits                                     1,904
                                                           -------
                                                            85,765
              Liabilities
                Current liabilities                         13,587
                Long-term debt                               6,323
                                                           -------
                                                            19,910
              Class A common shares of
                the Company issued for
                acquisition                                 70,000
                                                           -------

              Cash provided from acquisition               $ 4,145
                                                           -------

The  Company,  through  asset  acquisitions,  implemented  its  travel  services
division on July 1, 1997.  Effective July 1, 1997, the Company purchased certain
assets of Travel Easy Inc., and in August, 1997, the assets of FirsTravel,  both
of which were full  service  travel  agencies.  The Travel  Easy agency has been
closed and its approximately 175 independent contractor Home Based Travel Agents
became affiliated with the Company's travel agency operated as FirsTravel.

                                      F-14
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

NOTE 6 - ACQUISITIONS (CONTINUED)

The acquisitions are being accounted for by the purchase method. The acquisition
price of  $160,643  included  the  assumption  of certain  liabilities  totaling
$110,643  and the  issuance of 500,000  shares of Class A common stock which has
been  recorded  for  accounting  purposes at  $50,000.  The  acquisition  of the
Company's  travel agency  operations  resulted in the acquisition cost exceeding
the cost of the assets  acquired by  $110,288.  The excess has been  recorded as
agency  acquisitions-goodwill.  At  September  30,  1998 and  1997,  accumulated
amortization on the agency acquisition is $25,733 and $5,514, respectively.

The  results of  operations  of  Western  College,  Inc.,  are  included  in the
consolidated  statement  of  operations  since  January  1,  1996,  the  date of
acquisition.  The results of  operations  of the travel  services  division  are
included in the consolidated statement of operations beginning July 1, 1997, the
date of acquisition.

The following  supplemental  unaudited pro forma  information  has been prepared
assuming Western College,  Inc., and the predecessor travel services  operations
had been acquired as of the start of the years ended September 30:

                                          1997                1996
                                          ----                ----
Revenue                                $5,727,606          $2,874,314
                                       ----------          ----------

Net income (loss)                      $  102,887          $ (472,461)
                                       ----------          ----------
Per share based on weighted
  average shares of 10,870,305         $      .01          $     (.04)
                                       ----------          ----------

At June 30,  1998 the  Company  acquired  all of the  outstanding  shares of Neo
Vision,  Inc.  whose  principal  business  purpose  is to  provide  advertising,
programming  and  information  to remote  audiences  using  computer,  video and
transmission technology throughout the United States. The merger was closed with
the exchange of 2,000,000  shares of the Company's  Class A common stock for all
of the outstanding  shares of Neo Vision,  Inc. The exchange  agreement requires
that an amendment and restatement of the Company's  Certificate of Incorporation
be approved by the  stockholders  authorizing  (i) the  reclassification  of the
Company's Class A Common Stock and Class B Common Stock in a single new class of
Common Stock ("New Common Stock,") pursuant to the following  ratios:  shares of
Class A Common Stock will be reclassified into shares of New Common Stock on the
basis of 10 shares of Class A Common  Stock into one share of New  Common  Stock
and 13 shares of Class B Common Stock into one share of New Common  Stock;  (ii)
the issuance of up to 100,000,000 shares of New Common Stock: (iii) the issuance
of up to 75,000,000  shares of preferred  stock:  (iv) the change of the name of
the Company from United States Aircraft Corporation to Neo Vision Systems,  Inc.
and (v) make  certain  technical  amendments  to the  Company's  Certificate  of
Incorporation.  The  exchange  agreement  provides  that  if the  amendment  and
restatement of the Certificate of Incorporation is not approved by a majority of
each of the Class A and Class B  stockholders  then the Neo Vision  stockholders
can each elect to rescind their exchange of shares with the Company.

                                      F-15
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

NOTE 6 - ACQUISITIONS (CONTINUED)

The financial  statements of Neo Vision,  Inc. will not be consolidated with the
Company,  until approval of the amendment and  restatement of the Certificate of
incorporation  is fully  assured.  At September 30, 1998,  the investment in Neo
Vision,  Inc.  representing  the initial  2,000,000  Class A Common Stock shares
issued  for all of the  outstanding  shares  of Neo  Vision,  Inc.  and has been
recorded  for  financial  reporting  purposes at $22,965.  The  investment,  Neo
Vision, Inc, includes the following:

               Acquisition of Neo Vision, Inc
                 common shares                          $ 22,965

               Receivable from Neo Vision Inc.            80,373
                                                        --------
                                                        $103,338
                                                        --------

Upon  approval  of  the  amendment  and   restatement  of  the   Certificate  of
Incorporation  an  additional  3,977,560  shares of the New Common Stock will be
issued to the former  stockholders of Neo Vision,  Inc.,  approximately  973,000
shares of the New  Common  Stock will be in  exchange  for the  outstanding  Neo
Vision,  Inc  convertible  debentures and 753,000 shares of the New Common Stock
issued in payments of fees to a Neo Vision,  Inc.  financial  advisor.  When the
acquisition  of Neo Vision,  Inc is fully assured it will be accounted for under
the purchase  method of  accounting  as a reverse  merger with Neo Vision,  Inc.
being the acquirer for financial reporting  purposes.  See Note 16 for pro forma
financial  information  showing the  consolidated  pro forma  balance  sheet and
operating  statements as if the  acquisition was fully assured and consumated at
September 30, 1998.

NOTE 7 - GOODWILL

The acquisition of the Company's  wholly owned  subsidiaries,  Western  College,
Inc. and Ford Schools,  Inc. each resulted in the acquisition cost exceeding the
book value of the net assets acquired.  The excess has been recorded as goodwill
and is summarized as follows:

          Ford Schools, Inc.             $62,088          25 years
          Western College, Inc.           67,648          25 years
                                       ---------
                                         129,736
          Less accumulated
            amortization                  26,397
                                       ---------
                                       $ 103,339
                                       ---------

NOTE 8 - CONVERTIBLE DEBENTURES

The  convertible  debentures of $56,450 and accrued  interest of $33,591 in 1998
and $26,488 in 1997 that were due in December, 1996, are convertible into common
shares at $.75 per share.  The  debentures  bear interest at rates of 12% to 14%
per annum. Currently, the debentures remain unpaid and are in default.

                                      F-16
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

NOTE 9 - LONG TERM DEBT

At September 30, 1998 and 1997, long term debt consists of the following:

                                                   1998             1997
                                                 -------          -------
Note payable, bank, due in monthly
  principal payments of $833 plus
  interest at 10.5% per annum                    $ 8,333          $16,665

Notes and payables to trade creditors
  with interest ranging from 10% to 18%           23,027           41,089
                                                 -------          -------
                                                  31,360           57,754
Less current portion                              26,000           37,775
                                                 -------          -------

                                                 $ 5,360          $19,979
                                                 -------          -------

At September 30, 1998, maturities of long term debt are as follows:

                     Year ended
                    September 30,
                    -------------
                        1998                    $26,000
                        1999                      5,000
                        2000                        360
                                                -------
                                                $31,360
                                                -------

Substantially all assets are pledged as collateral for long term debt.

NOTE 10 - TRUST DEED NOTES PAYABLE

At September 30, 1997, trust deed notes payable consist of the following:

First trust deed, bearing interest at 14.5% per annum, payable in
$2,066 monthly installments of interest only, due February, 1999       $171,000

Second trust deed, bearing interest at 16% per annum, payable in
$1,333 monthly installments of interest only, due February, 1999        100,000

Seller carryback, bearing interest at 10% per annum, payable in
$2,750 monthly installments of interest only, due February, 2001        330,000
                                                                       --------
                                                                       $601,000
                                                                       --------

On June 30, 1998 the land held for future development subject to the trust deeds
payable was  transferred  to RVP-LLC a limited  liability  company formed by the
Company. See note 5.

                                      F-17
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

NOTE 11 - COMMITMENTS AND CONTINGENCIES

The real estate training  services  operation  leases two classroom  facilities,
which include an office facility, pursuant to long term leases with monthly rent
of $4,500.  The travel agency operation leases office  facilities  pursuant to a
long term lease with monthly rent of $333.  The Company also has leased  certain
computer equipment at a monthly rental of $450 plus taxes and insurance.

Minimum lease payments on long term operating leases are as follows:

                     Year ended
                    September 30,
                    -------------
                        1999               40,154
                        2000               35,812
                        2001               30,445
                                         --------
                                         $106,411
                                         ========

Rent expense under these operating leases totaled  $73,022,  $59,002 and $17,800
for the years ended September 30, 1998, 1997 and 1996 respectively.

The Company is not currently involved in any material litigation.

NOTE 12 - CAPITAL STOCK

The Company's  articles of  incorporation  authorize  issuance of two classes of
stock,  Class A common stock and Class B common stock. The rights of the Class A
and Class B stockholders differ in the following respects:

                The  Class A  stock  has a  preference  in  distribution  of the
                Company's  assets  upon  liquidation  in the  amount of $.50 per
                share. The liquidation  preference is to be reduced by $.005 for
                each $.01 of dividends paid on the Class A stock.

                Dividends  are  not  to be  paid  on the  Class  B  stock  until
                dividends aggregating $.50 per share have been paid on the Class
                A stock. Thereafter,  both classes of stock are to share ratably
                in dividends.

                When an aggregate of $1.00 per share in dividends  has been paid
                on the  Class A stock,  the  Class A stock and the Class B stock
                are to be identical in all respects.

The Company intends to request  stockholder  authorization for New Common Shares
and the  reclassification  of the Class A and Class B shares into the New Common
shares. See Note 6.

                                      F-18
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

NOTE 13 - DISCONTINUED OPERATIONS

On September 30, 1997,  the Company sold its  wholly-owned  subsidiary  Hansen &
Associates,  Inc. dba Property  Masters to the President of Hansen & Associates,
Inc. Operating results of Hansen & Associates,  Inc. are shown separately in the
accompanying  income statements as discontinued  operations for the years ending
September 30, 1997 and 1996.

NOTE 14 - DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The  carrying  amounts  of cash,  accounts  receivable,  accounts  payable,  and
unearned  tuition  approximate fair value because of the short maturity of those
instruments.  Financial  instruments  in notes  receivable  has no quoted market
prices and, accordingly, a reasonable estimate of fair market value could not be
made  without  incurring  excessive  costs.  However,  the  Company  believes by
reference  to stated  interest  rates and land held,  that the fair value of the
assets would not differ significantly from the carrying value.

Based on prevailing interest rates, the Company estimates that the fair value of
the  Company's  long-term  debt,  convertible  debentures  and  related  accrued
interest, and trust deed notes payable, approximates carrying value.

NOTE 15 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

The following is the cash paid for interest for the three years ended  September
30, 1998, 1997, and 1996:

                        1996             $ 6,841
                        1997             $27,106
                        1998             $ 8,783

Supplementary schedule of non-cash activities:

For the year ended September 30, 1996:
  Class A shares issued in payment for services rendered                $ 37,500

For the year ended September 30, 1997:
  Class A shares issued in payment for services rendered                $ 42,000
  Acquisition of land held for future development:
    Class A shares issued                                                 25,000
    Assumption of trust deed notes payable                               501,000
  Class A shares issued in acquisition of Western College, Inc.           20,000
  Class A shares issued in acquisition of travel agency operations        50,000
  Notes receivable received as consideration for sale of business         60,044

                                      F-19
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

NOTE 15 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (CONTINUED)

For the year ended September 30, 1998:

Class A shares issued in acquisition of Western College, Inc             20,000
Class A shares issued in acquisition of Neo Vision, Inc.                 22,965
Class A shares issued for loan guarantee                                  7,500

The Class A shares issued for services during the years ended September  30,1997
and 1996 were to the board of directors,  and an officer and  shareholder of the
Company.

NOTE 16 - BUSINESS SEGMENTS

In 1996, the Company's operations consisted of real estate educational services.
In 1997, it expanded into the travel services  business,  and certain  financial
information  related  to  these  two  business  segments  for  1998  and 1997 is
summarized as follows:

                             Real Estate    Travel     Corporate &
                              education    services   eliminations  Consolidated
                              ---------    --------   ------------  ------------
Year ended September 30, 1997
  Sales                       $436,710   $  776,544    $   8,989     $1,222,243
  Operating income (loss)       38,713      (27,113)    (119,715)      (108,115)
  Identifiable assets          216,583      164,256      685,320      1,066,159
  Capital expenditures           4,248       11,570       (8,238)         7,580
  Depreciation and
    amortization                12,519       10,023        3,870         26,412

Year ended September 30, 1998
  Sales                       $494,258   $1,281,689    $  99,407     $1,875,354
  Operating income (loss)       76,910      (44,111)     162,381       (129,582)
  Identifiable assets          240,871      102,946      597,004        940,821
  Capital expenditures           3,520
  Depreciation and
    Amortization                12,877       22,534        4,355         39,766

                                      F-20
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

NOTE 17 - PRO FORMA FINANCIAL INFORMATION

The following  unaudited Pro forma Consolidated  Balance Sheets of United Stated
Aircraft  Corporation as of September 30, 1998 sets forth the  consolidation  of
United States  Aircraft  Corporation  with Neo Vision,  Inc.  under the purchase
method of  accounting  with a reverse  merger  and Neo  Vision,  Inc.  being the
acquirer for financial reporting purposes.  The pro forma adjustments report the
exchange  of the  Class A and  Class B  shares  for the New  Common  stock,  the
issuance of  4,577,560  additional  New Common  shares  pursuant to the Exchange
Agreement and approximately 1,126,000 of New Common shares for the conversion of
the Neo Vision, Inc convertible debentures.

      UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS - September 30, 1998

<TABLE>
<CAPTION>
                                   United States
                                   Aircraft Corp.     Neo Vision                     Pro Forma          Neo Vision
ASSETS                            And Subsidiaries  Incorporation     Combined      Adjustments         Systems Inc.
                                  ----------------  -------------     --------      -----------         ------------
<S>                                    <C>            <C>            <C>            <C>               <C>
Current Assets
  Cash                               $     8,070    $   83,577    $    91,647                            $   91,647
  Accounts Receivable                     75,902        22,699         98,601                                98,601
  Notes Receivable                         7,000                        7,000                                 7,000
  Prepaid expenses                         7,844         1,349          9,193                                 9,193
                                     -----------    ----------    -----------                            ----------
       Total current assets               98,816       107,625        206,441                               206,441
Investment, Neo Vision, Inc.             103,338                      103,338      (103,338)(3)(4)(5)
Note receivable, net of current
  portion                                 39,544                       39,544                                39,544
Property & equipment, net                 47,613       584,094        631,707                               631,707
Investment in RVP-LLC
Agency acquisition, net of
  amortization                            84,555                       84,555                                84,555
Goodwill, net                            103,339                      103,339                               103,339
Course materials                          13,754                       13,754                                13,754
Other                                     13,874        18,768         32,642                                32,642
                                     -----------    ----------    -----------                            ----------
      Total assets                       504,833       710,487      1,215,320                             1,111,982
                                     -----------    ----------    -----------                            ----------

LIABILITIES & STOCKHOLDER'S EQUITY
Current Liabilities
  Note Payable, bank                 $    30,000        15,000         45,000                                45,000
  Current portion of
    long-term debt                        26,000                       26,000                                26,000
  Convertible debentures &
    related accrued interest              90,041       746,164        836,205      (746,164)                 90,041
  Accounts payable                        90,734       273,721        364,455                               364,455
  Accrued expenses                       214,062       119,259        333,321      (100,301)                233,020
  Unearned revenue                        62,900        15,148         78,048                                78,048
                                     -----------    ----------    -----------                            ----------
       Total current liabilities         513,737     1,169,292      1,683,029                               836,564

Due to United States Aircraft Corp.                     80,373         80,373       (80,373)
Long term debt, net                        5,360                        5,360                                 5,360
Minority Interest in NV-1, LLC                         130,436        130,436                               130,436
Stockholders' Equity - Capital stock
  Class A: $.50 par value,
  9,927,504 issued                     4,963,752                    4,963,752    (4,963,752)
  Class B: $.001 par value,
  4,962,801 issued                         4,963                        4,963        (4,963)
  Common Stock, Neo Vision, Inc                          6,250          6,250        (6,250)
  New Common Shares
  $.001 par value, 7,078,303 issued                                                   7,078(1)(2)(3)(6)       7,078
  Paid in Capital                     (1,838,862)                  (1,838,862)    2,647,270(1)(2)(3)(6)     808,408
  Retained earnings (deficit)         (3,144,117)     (675,864)    (3,819,981)    3,144,117                (675,864)
                                     -----------    ----------    -----------                            ----------
                                         (14,264)     (669,614)      (683,878)                              139,622
                                     -----------    ----------    -----------                            ----------
Total liabilities and
  stockholders' equity               $   504,833    $  710,487    $ 1,215,320                            $1,111,982
                                     ===========    ==========    ===========                            ==========
</TABLE>

          See explanation of pro forma adjustments on following page.

                                      F-21
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


NOTE 17 - PRO FORMA FINANCIAL INFORMATION (CONTINUED)

Pro Forma Adjustments:

     1.   To  record  the  exchange  of Class A shares  outstanding  for the New
          Common  shares  on the  basis of 10 Class A  shares  for 1 New  Common
          Share.

     2.   To  record  the  exchange  of Class B shares  outstanding  for the New
          Common  shares  on the  basis of 13 Class B  shares  for 1 New  Common
          shares.

     3.   To record the 4,577,560  additional  New Common shares to be issued to
          the former Neo Vision, Inc. shareholders pursuant to the June 30, 1998
          exchange agreement.

     4.   To record  elimination of intercompany  investment on Neo Vision,  Inc
          using the purchase  method of accounting with a reverse merger and Neo
          Vision, Inc being the acquirer for financial reporting purposes.

     5.   To eliminate intercompany receivables and payables.

     6.   To record the conversion of the Neo Vision, Inc convertible debentures
          and the payment of financial  consulting fees all through the issuance
          of approximately 1,126,000 shares of New Common stock.

                                      F-22
<PAGE>
              UNITED STATES AIRCRAFT CORPORATION, AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

NOTE 17 - PRO FORMA FINANCIAL INFORMATION (CONTINUED)

The following unaudited  consolidated  statements of operations of Unites States
Aircraft  Corporation  for the year  ended  September  30,  1998 sets  forth the
consolidation of United States Aircraft  Corporation  with the Neo Vision,  Inc.
under the purchase  method of accounting as of the  acquisition  was competed on
October 1, 1998.

                   UNAUDITED PROFORMA STATEMENTS OF OPERATIONS
                      FOR THE YEAR ENDED SEPTEMBER 30, 1998

<TABLE>
<CAPTION>
                                             United States                                   Neo Vision
                                            Aircraft Corp.                      Pro Forma      Systems
                                          And Subsidiaries   Neo Vision, Inc.  Adjustments  Consolidated
                                          ----------------   ----------------  -----------  ------------
<S>                                        <C>               <C>               <C>          <C>
Revenue
 Real estate education                     $   494,258                                      $  494,258
 Travel Agency                               1,281,689                                       1,281,689
 Video Wall advertising                                           102,209                      102,209
 Other                                          99,407                745      (90,000)(1)      10,152
                                           -----------          ---------                   ----------
     Total revenue                           1,875,354            102,954                    1,888,308
                                           -----------          ---------                   ----------
Expenses
 Cost of sales travel agency                 1,163,825                                       1,163,825
 Personnel expenses                            351,224            297,029                      648,253
 Facility cost                                  69,851             81,360                      151,211
 Other operating cost                          120,249            181,725                      301,974
 General and administration                    299,787             90,000      (90,000)(1)     299,787
                                           -----------          ---------                   ----------
   Total expenses                            2,004,936            650,114                    2,565,050
                                           -----------          ---------                   ----------
 Income (loss) before interest
  Expense; Minority interest,
  depreciation and amortization               (129,582)          (547,160)                    (676,742)
Interest expense                                20,136             61,008                       81,144

Minority interest in NV-1 LLC loss                                (44,564)                     (44,564)
Depreciation and amortization                   39,766            112,260                      152,026
                                           -----------          ---------                   ----------
Net income (loss)                          $  (189,484)         $(675,864)                  $ (865,348)
                                           -----------          ---------                   ----------
Pro forma net income (loss) per
New common shares (2)                                                                             (.12)
                                                                                            ----------
</TABLE>
----------
(1)  To eliminate intercompany management fees.
(2)  Based on pro forma shares of 7,078,303 to be outstanding after the exchange
     of Class A and B shares for the New Common shares to be authorized  and the
     New Common shares to be issued in the acquisition of Neo Vision,  Inc., the
     conversion of the Neo Vision, Inc.  convertible  debentures and the payment
     of financial consulting fees.

                                      F-23
<PAGE>
18 - GOING CONCERN

         The accompanying  financial statements have been prepared in conformity
with generally accepted accounting principles,  which contemplates  continuation
of the Company as a going concern. However, the Company has sustained continuing
operating losses.

As shown in the accompanying statement of operations, the Company has incurred a
net  loss  of  $189,484  for  the  year  ended  September  30,  1998.  Unaudited
information   subsequent  to  September  30,  1998  indicates  that  losses  are
continuing.  As of September 30, 1998, the  accompanying  balance sheet reflects
$14,264 in net stockholders' deficit and negative working capital of $414,921.

The above  conditions  indicate  that the  Company  may be unable to continue in
existence.  The financial  statements do not include any adjustments relating to
the recoverability and classification of recorded asset amounts,  or the amounts
and  classification of liabilities that might be necessary should the Company be
unable to continue in existence.

                                      F-24
<PAGE>
                          INDEPENDENT AUDITORS' REPORT


To The Shareholders and Board of Directors of
Neo Vision, Inc. and Subsidiary


We have audited the accompanying  consolidated balance sheet of Neo Vision, Inc.
and Subsidiary as of September 30, 1998, and the related consolidated statements
of operations, changes in shareholders' equity (deficit), and cash flows for the
year then ended. These consolidated  financial statements are the responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these consolidated financial statements based on our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of Neo Vision, Inc. and
Subsidiary as of September 30, 1998, and the results of its operations,  changes
in shareholders'  equity (deficit),  and its cash flows for the year then ended,
in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 8 to the
financial   statements,   the  Company's   significant  operating  losses  raise
substantial  doubt  about  its  ability  to  continue  as a going  concern.  The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


                                                /s/ SEMPLE & COOPER, LLP
Certified Public Accountants

Phoenix, Arizona
December 2, 1998


                                      F-25
<PAGE>
                         NEO VISION, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                               September 30, 1998

                                     ASSETS
Current Assets:
  Cash and cash equivalents (Note 1)                                $    83,577
  Accounts receivable, net (Note 1)                                      22,699
  Debt issue costs, net (Note 1)                                         18,588
  Prepaid expenses                                                        1,349
                                                                    -----------
     Total Current Assets                                               126,213
                                                                    -----------
Property and Equipment: (Note 1)
  Furniture and fixtures                                                  9,783
  Home office equipment                                                  92,565
  Video walls                                                           519,655
                                                                    -----------
                                                                        622,003
Less: accumulated depreciation                                          (37,909)
                                                                    -----------
                                                                        584,094
                                                                    -----------
Deposits                                                                 10,000
Deferred Financing costs (Note 1)                                         8,768
                                                                    -----------

     Total Assets                                                        18,768
                                                                    -----------
                                                                    $   729,075
                                                                    ===========
                 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
  Note payable (Note 2)                                             $    15,000
  Convertible debentures (Note 3)                                       800,750
  Accounts payable                                                      273,721
  Accrued taxes and other                                                25,950
  Accrued interest payable                                               57,312
  Deferred revenue                                                       15,148
  Due to a related entity (Note 4)                                       80,373
                                                                    -----------

     Total Current Liabilities                                        1,268,254
                                                                      =========

Commitments (Note 5)                                                         --

Minority Interests (Note 1)                                             130,436
                                                                    -----------
Shareholders' Equity (Deficit):
  Common stock, $.001 par value, 25,000,000
   shares authorized, 6,250,000 shares issued
   and outstanding                                                        6,250
  Accumulated deficit                                                  (675,865)
                                                                    -----------
                                                                       (669,615)
                                                                    -----------
     Total Liabilities and Shareholders'
       Equity (Deficit)                                             $   729,075
                                                                    ===========

                  The Accompanying Notes are an Integral Part
                    of the Consolidated Financial Statements

                                      F-26
<PAGE>
                         NEO VISION, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF OPERATIONS
                     For The Year Ended September 30, 1998



Revenues                                                              $ 102,954

Operating Costs and Expenses:
  Personnel expenses                                                    271,888
  Facility costs                                                         73,480
  Sales and marketing expense                                            60,341
  General and administrative expenses                                   244,406
  Depreciation and amortization                                         112,260
                                                                      ---------

Loss from Operations                                                   (659,421)

Interest expense                                                        (61,008)

Minority Interest in NV-1, LLC Loss                                      44,564
                                                                      ---------

Net Loss                                                              $(675,865)
                                                                      =========


                  The Accompanying Notes are an Integral Part
                    of the Consolidated Financial Statements

                                      F-27
<PAGE>
                         NEO VISION, INC. AND SUBSIDIARY
       CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY(DEFICIT)
                      For The Year Ended September 30, 1998


                                                                       Total
                                                                       Share-
                                      Common Stock                     Holders'
                                      ------------      Accumulated    Equity
                                   Shares     Amount      Deficit     (Deficit)
                                   ------     ------      -------     ---------

Balance at September 30, 1997           --    $   --    $      --     $      --

Stock issued for services        6,250,000     6,250           --         6,250

Net loss for the year ended
September 30, 1998                      --        --     (675,865)     (675,865)
                                 ---------    ------    ---------     --------- 

Balance at September 30, 1998    6,250,000    $6,250    $(675,865)    $(669,615)
                                 =========    ======    =========     ========= 



                   The Accompanying Notes are an Integral Part
                    of the Consolidated Financial Statements

                                      F-28
<PAGE>
                         NEO VISION, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                     For The Year Ended September 30, 1998

Increase (Decrease) in Cash and Cash Equivalents:

Cash flows from operating activities:
  Cash received from customers                                        $  80,255
  Cash paid to suppliers and employees                                 (349,163)
  Interest paid                                                          (3,696)
                                                                      ---------
     Net cash used by operating
      activities                                                       (272,604)
                                                                      ---------
Cash flows from investing activities:
  Purchase of fixed assets                                             (622,003)
                                                                      ---------
     Net cash used by investing
      activities                                                       (622,003)
                                                                      ---------
Cash flows from financing activities:
  Proceeds from debt                                                     25,000
  Proceeds from convertible debentures                                  707,811
  Capital contributions of minority interests                           175,000
  Advances from parent company                                           80,373
  Repayment of debt                                                     (10,000)
                                                                      ---------
     Net cash provided by financing
      activities                                                        978,184
                                                                      ---------

Net increase in cash and cash equivalents                                83,577

Cash and cash equivalents at beginning of year                               --
                                                                      ---------

Cash and cash equivalents at end of year                              $  83,577
                                                                      =========

                   The Accompanying Notes are an Integral Part
                    of the Consolidated Financial Statements

                                      F-29
<PAGE>
                         NEO VISION, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
                     For The Year Ended September 30, 1998


Reconciliation of Net Loss to Net Cash
Used by Operating Activities:

Net Loss                                                              $(675,865)
                                                                      ---------
Adjustments to reconcile net loss to
 net cash used by operating activities:

  Depreciation and amortization                                         112,260
  Minority interest in NV-1, LLC Loss                                   (44,564)
  Stock issued for services                                               6,250

Changes in Assets and Liabilities:
  Accounts receivable, net                                              (22,699)
  Prepaid expenses                                                       (1,349)
  Deposits                                                              (10,000)
  Financing costs                                                        (8,768)
  Accounts payable                                                      273,721
  Accrued taxes and other                                                25,950
  Accrued interest payable                                               57,312
  Deferred revenue                                                       15,148
                                                                      ---------

                                                                        403,261
                                                                      ---------
Net cash used by operating activities                                 $(272,604)
                                                                      =========


                  The Accompanying Notes are an Integral Part
                    of the Consolidated Financial Statements

                                      F-30
<PAGE>
                         NEO VISION, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Summary of Significant Accounting Policies, Nature of Operations and Use of
     Estimates:

     Nature of Operations:

     Neo Vision, Inc. is a Corporation which was duly formed and organized under
     the laws of the State of Arizona on June 29, 1997.  The Company was dormant
     until October 1, 1997 when  operations  commenced.  The principal  business
     purpose  of  the  Company  is  to  provide  advertising,   programming  and
     information to remote  audiences  using  computer,  video and  transmission
     technology throughout the United States.

     NV-1, LLC, is a limited liability company which was formed in August, 1997.
     The Company was dormant  until October 1, 1997 when  operations  commenced.
     Neo Vision, Inc. owns an approximate seventy-five percent (75%) interest in
     the company.  The principal  business  purpose of the Company is to own and
     operate a video screen,  using Neo Vision,  Inc.'s  technology,  at Meadows
     Mall  in  Las  Vegas,   Nevada.   Minority  Interests   represents  capital
     contributions  of NV-1,  LLC's minority  partners less their  proportionate
     share of that entities losses.

     Merger:

     On June 30, 1998, the Company  entered into a merger  agreement with United
     States  Aircraft  Corporation  by  exchanging  all of its common  stock for
     2,000,000  shares  of  Class A  common  stock  of  United  States  Aircraft
     Corporation (USAC). Up to an additional  4,577,560 shares will be exchanged
     upon USAC's shareholders  approving a change in their equity structure,  as
     well as  several  other  conditions  occurring.  The merger  constituted  a
     tax-free  reorganization and will be accounted for as a reverse merger with
     Neo Vision,  Inc. as the accounting  acquirer.  The consolidated  financial
     statements  include  only  the  results  of  the  Company  for  the  period
     presented,  as the  transaction can be reversed if the approval of the USAC
     shareholders is not received.

     Principles of Consolidation:

     The consolidated  financial  statements include the accounts of Neo Vision,
     Inc., and its subsidiary,  NV-1, LLC. All significant intercompany accounts
     and  transactions  have been  eliminated in the  accompanying  consolidated
     financial statements.

     Pervasiveness of Estimates:

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

     Cash Equivalents:

     Cash  equivalents  are  considered  to be  all  highly  liquid  investments
     purchased with an initial maturity of three (3) months or less.

     Accounts Receivable:

     The  Company  follows the  allowance  method of  recognizing  uncollectible
     accounts receivable.  The allowance method recognizes bad debt expense as a
     percentage  of  accounts  receivable  based on a review  of the  individual
     accounts  outstanding,  and the Company's  prior  history of  uncollectible
     accounts  receivable.   At  September  30,  1998,  no  allowance  has  been
     established for potentially  uncollectible  accounts receivable,  as in the
     opinion of management, all amounts are considered fully collectible.

                                      F-31
<PAGE>
                         NEO VISION, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1.   Summary of Significant Accounting Policies, Nature of Operations and Use of
     Estimates: (Continued)

     Debt Issue Costs:

     Debt issue costs  represent costs incurred in connection with the Company's
     convertible  debenture  offering.  Debt  issue  costs are  being  amortized
     ratably over the life of the debentures.  Amortization expense for the year
     ended September 30, 1998 was $74,351.

     Property and Equipment:

     Propertyand  equipment are recorded at cost.  Depreciation  is provided for
     using the  straight-line  method  over the  estimated  useful  lives of the
     assets. Maintenance and repairs that neither materially add to the value of
     the  property  nor  appreciably  prolong its life are charged to expense as
     incurred.  Betterments or renewals are capitalized  when incurred.  For the
     year ended September 30, 1998, depreciation expense was $37,909.

     A summary of the estimated useful lives is as follows:

     Furniture and fixtures                          5 years
     Home office equipment                           5 years
     Video walls                                     10 years

     Deferred Financing Costs:

     Deferred financing costs  represent  costs incurred in connection  with the
     Company's  attempt to secure a bank loan.  Financing  costs will be charged
     ratably  over  the life of the loan if  successfully  completed  or will be
     charged as a period cost if the loan is not secured (See Note 8).

     Income Taxes:

     For the year ended  September 30, 1998, no provisions were made for federal
     or state income tax expense due to the net operating loss.

     Deferred income taxes arise from timing differences resulting from revenues
     and expenses reported for financial  accounting and tax reporting  purposes
     in different  periods.  Deferred  income taxes  represent the estimated tax
     asset or liability from different  depreciation  methods used for financial
     accounting  and tax reporting  purposes and for timing  differences  in the
     utilization of net operating loss carryforwards and valuation allowances.

     Fair Value of Financial Instruments:

     The fair value of the Company's notes payable and convertible debentures is
     based on rates  currently  available  from the bank for debt  with  similar
     terms and maturities.  The carrying  amounts of accounts  receivable,  debt
     issue costs,  and deferred  revenue  approximate  fair value because of the
     short-term maturity of these items.

2.   Note Payable:

     At September 30, 1998, note payable consisted of the following:

     $25,000 note payable to a bank, bearing interest
     at the bank's Index Rate plus 3%, due on demand;
     guaranteed by officers of the Corporation.                       $15,000
                                                                      =======

                                      F-32
<PAGE>
                         NEO VISION, INC.AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.   Convertible Debentures:

     At September 30, 1998, convertible debentures consisted of the following:

     Series A, bearing  interest at 12%, payable in common stock,
     convertible  at a rate of $1.00  per  share,  due  December,
     1998.                                                              $472,000

     Series B, bearing  interest at 10%, payable in common stock,
     convertible  at a rate of $1.00 per  share,  due May,  1999.        190,000
                                                                         

     Series C, bearing  interest at 12%, payable in common stock,
     convertible  at a rate of $1.25 per  share,  due May,  1999.        138,750
                                                                        --------
                                                                        $800,750
                                                                        ========

     The debentures  further provide for automatic  conversion into common stock
     of the Company upon completion of a merger with a public reporting  entity.
     If all of the  debentures  convert,  Neo Vision,  Inc.  would issue 833,325
     shares of its  common  stock as of  September  30,  1998,  to  convert  the
     outstanding principal balance of $800,750 and accrued interest of $57,312.

     As of the date of this report, the Series A convertible debentures have not
     been paid. The conversion is pending completion of the merger (See Note 1).

     The  Company  further  agreed  to  engage a  consultant  to  assist  in the
     placement of the debentures. The agreement provides for the payment of a 5%
     finders fee, plus the issuance of 756,828 shares of Neo Vision, Inc. common
     stock when certain  provisions  are met,  plus warrants for the purchase of
     160,150 shares of Neo Vision, Inc. at $3.00 per share. None of the warrants
     have been exercised as of September 30, 1998.  Issuance of the common stock
     has been held in abeyance pending the merger.

4.   Due to a Related Entity:

     At  September  30,  1998,  $80,373 is due to USAC.  The  amount  represents
     advances  received  from USAC,  is  non-interest  bearing,  and  considered
     short-term in nature.

5.   Lease Obligations:

     The Company  leases  office  space in Phoenix,  Arizona  under  cancellable
     operating lease agreements with a related entity.  Rent expense under these
     lease agreements for the year ended September 30, 1998 was $17,610.

     The Company also leases wall space for its video walls at McCarran  Airport
     and Meadows Mall in Las Vegas, Nevada under non-cancellable operating lease
     agreements,  expiring in June, 2003 and September, 2002, respectively.  The
     base rent under the McCarran lease is increased  annually by the greater of
     five percent (5%) per annum,  or base rent plus twenty percent (20%) of the
     gross  billings  for  advertising  on the video  walls.  The  Meadows  Mall
     agreement  provides  for the  payment of rent at a rate of fifteen  percent
     (15%) of the gross  consideration  received  for  advertising  on the video
     walls.  Rent  expense  under  these  lease  agreements  for the year  ended
     September 30, 1998 was $87,818.

     In  addition,   the  Company  is  currently  leasing  a  computer  under  a
     cancellable  operating  lease  agreement.  Rent  expense  under  the  lease
     agreement for the year ended September 30, 1998 was $1,320.

                                      F-33
<PAGE>
                         NEO VISION, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.   Lease Obligations: (Continued)

     A schedule of future minimum lease  payments due under the  non-cancellable
     operating leases at September 30, 1998, is as follows:

                Year
               Ending                  Amount
               ------                  ------
                1999                 $  243,250
                2000                    255,412
                2001                    268,183
                2002                    281,592
                2003                    212,714
                                     ----------
                                     $1,261,151
                                     ==========
                          
6.   Income Taxes and Deferred Income Taxes:

     For the year ended September 30, 1998, components of deferred income taxes,
     are as follows:

     Long-Term Asset(Liability):

     Net operating loss carryforward                  $ 290,000
     Accumulated depreciation                            (1,000)
                                                      --------- 
                                                        289,000
     Less: valuation allowance                         (289,000)
                                                      --------- 
                                                      $      --
                                                      =========

     At September 30, 1998, the Company had federal and state net operating loss
     carryforwards  available to offset future federal and state taxable income,
     in the approximate  amount of $680,000 expiring primarily through September
     30, 2013 and 2003, respectively.

     Management has  established a valuation  allowance  equal to the benefit of
     the net  operating  loss  carryforward  as  utilization  of that benefit is
     uncertain.

7.   Consolidated Statement of Cash Flows:

     Non-Cash Investing and Financing Activities:

     The Company  recognized  investing and financing  activities  that affected
     assets and liabilities, but did not result in cash receipts or payments:

     For the year ended  September 30, 1998,  these  non-cash  activities are as
     follows:

          Stock in the amount of $6,250 was issued for services performed.

          The minority interest loss in NV-1, LLC was $44,564.

          Convertible debentures were issued net of costs of $92,939.

                                      F-34
<PAGE>
                         NEO VISION, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


8.   Going Concern:

     The accompanying financial statements have been prepared in conformity with
     generally accepted accounting principles,  which contemplates  continuation
     of the Company as a going  concern.  However,  the  Company  has  sustained
     continuing operating losses.

     The primary business of the Company is to provide advertising, programming,
     and information to remote audiences using video walls. Three of these video
     walls began operating  primarily in June,  1998, the end of the development
     phase, and were not yet profitable in the year ended September 30, 1998.

     As shown in the  accompanying  statement  of  operations,  the  Company has
     incurred a net loss of  $675,865  for the year ended  September  30,  1998.
     Unaudited  information  subsequent  to September  30, 1998  indicates  that
     losses are continuing.  As of September 30, 1998, the accompanying  balance
     sheet reflects $669,615 in net  stockholders'  deficit and negative working
     capital of $1,142,041.

     The above conditions indicate that the Company may be unable to continue in
     existence. The financial statements do not include any adjustments relating
     to the recoverability and classification of recorded asset amounts,  or the
     amounts and  classification  of liabilities  that might be necessary should
     the Company be unable to continue in existence.

     Management has received  agreements  from most of the debenture  holders to
     convert their  convertible  debentures  and related  accrued  interest into
     shares  of USAC  upon  completion  of the  merger.  The  conversion  of the
     debentures  results  in a pro forma net equity of  approximately  $175,000.
     Further,  the Company has  received a letter of intent for a $250,000  sale
     and leaseback of the  installed  equipment at one of its  locations,  which
     management  expects to be funded  before  mid-February,  1999,  pending the
     completion  of the  lender's due  diligence  procedures.  In addition,  the
     monthly  sales of  advertising  have been  increasing  since the end of the
     development  phase,  resulting  in  management's  expectation  of attaining
     positive cash flow from operations commencing in 1999.

                                      F-35